Document:

EX-10.1

 Exhibit 10.1 

Execution Version 
 THIRD
AMENDMENT AND LIMITED WAIVER 
 TO CREDIT AGREEMENT 

This THIRD AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT (this “Limited Waiver”), entered into as of
August 16, 2017 but with an effective date as of August 15, 2017 (the “Effective Date”), is entered into by and among STONEMOR OPERATING LLC, a Delaware limited liability company (the “Administrative
Borrower”), the other Borrowers party hereto, the Lenders party hereto and CAPITAL ONE, NATIONAL ASSOCIATION, as Administrative Agent (in such capacity, the “Administrative Agent”). 

WHEREAS, the Borrowers, the Lenders party thereto and the Administrative Agent entered into that certain Credit Agreement dated as of
August 4, 2016 (as amended by that certain First Amendment to Credit Agreement dated as of March 15, 2017 and by that certain Second Amendment and Limited Waiver to Credit Agreement (the “Second Amendment”) dated as of
July 26, 2017, the “Credit Agreement”; unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in the Credit Agreement), whereby the Lenders have extended credit to the Borrowers
on the terms and subject to the conditions described therein; 
 WHEREAS, an Event of Default (the “Financial Statement Delivery
Event of Default”) exists under clause (d) of Article VII of the Credit Agreement and Section 4 of the Second Amendment, in each case, resulting from the failure of the Administrative Borrower to timely deliver the financial
statements required under Section 5.01(a) of the Credit Agreement and the related Compliance Certificate required under Section 5.01(c) of the Credit Agreement, in each case, for the period ending December 31, 2016; 

WHEREAS, one or more Events of Default exist or may exist under (i) clause (c) of Article VII of the Credit Agreement resulting from the
delivery by the Administrative Borrower of unaudited financial statements and a related Compliance Certificate solely for the period ending June 30, 2017 and (ii) clause (d) of Article VII of the Credit Agreement resulting from the
Partnership’s failure to comply with the financial covenants set forth in Section 6.12 solely for the period ending June 30, 2017 due to calculations based upon unaudited financial statements (collectively with the Financial Statement
Delivery Event of Default, the “Existing Events of Default”); and 
 WHEREAS, the Borrowers have requested that the
Administrative Agent and the Lenders, and the Administrative Agent and the Lenders party hereto have agreed to, waive the Existing Events of Default and to make certain other modifications to the Credit Agreement subject to the terms and conditions
as set forth in this Limited Waiver. 
 NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the
parties hereto hereby agree as follows: 
 1.    Limited Waiver. Subject to the terms, and the timely
satisfaction of each of the conditions precedent and conditions subsequent in Section 3 and Section 4 of this Limited Waiver, the Administrative Agent and the Lenders party hereto hereby waive the
Existing Events of Default. 
 2.    Amendments to the Credit Agreement. As of the Effective Date: 

(a)    Clause (v) of the definition of “Consolidated EBITDA” is hereby amended and restated in its entirety
by deleting the text thereof and replacing it with the following: 
  
 Third Amendment
and Limited Waiver – StoneMor Operating LLC 
 66328901 

 “(v) any extraordinary losses and, solely for the periods ending
March 31, 2017 and June 30, 2017, any extraordinary, unusual or non-recurring losses, charges or expenses; provided, that the amount of losses, charges or expenses for the period ending June 30,
2017 shall not exceed $14,316,000 in the aggregate,” and 
 (b)    Section 5.01(b)(i) of the Credit Agreement is
hereby amended by deleting the reference to “November 15, 2017” and replacing it with “December 15, 2017”. 

3.    Conditions Precedent. The effectiveness of this Limited Waiver is subject to the following conditions
precedent: 
 (a)    receipt by the Administrative Agent of a copy of this Limited Waiver, duly executed
and delivered by the Borrowers and the Required Lenders; 
 (b)    receipt by the Administrative Agent of
a copy of the attached Reaffirmation of Guaranty, duly executed and delivered by each Guarantor; 

(c)    the truth and accuracy of the representations and warranties contained in
Section 6 of this Limited Waiver; and 
 (d)    receipt by the Administrative
Agent of all fees and expenses due and payable on or before the Effective Date. 
 4.    Conditions Subsequent.
The effectiveness of this Limited Waiver is subject to the fulfillment by the Borrowers, on or before September 15, 2017 of the conditions subsequent set forth below (the failure by the Borrowers to so perform or cause to be performed
constituting an Event of Default under the Credit Agreement): 
 (a)    the Administrative Borrower shall
furnish to the Administrative Agent (for distribution to each Lender) the audited consolidated balance sheet and related statements of income or operations, shareholders’ equity or partners’ capital and cash flows of the Partnership and
its consolidated Subsidiaries as of the end of and for the Fiscal Year ending December 31, 2016, setting forth in each case in comparative form the figures for the previous Fiscal Year, all reported on by Deloitte & Touche LLP or other
independent public accountants reasonably acceptable to the Administrative Agent (without a “going concern” or like qualification or exception (other than a qualification in respect of any Fiscal Year in which the Maturity Date is
scheduled to occur, due solely to the maturity of the Obligations) and without any qualification or exception as to the scope of such audit) to the effect that such consolidated financial statements present fairly in all material respects the
financial condition and results of operations of the Partnership and its consolidated Subsidiaries on a consolidated basis in accordance with GAAP consistently applied; and 

(b)    the Administrative Borrower shall furnish to the Administrative Agent (for distribution to each
Lender) a Compliance Certificate (i) certifying as to whether a Default has occurred and is continuing and, if a Default has occurred and is continuing, specifying the details thereof and any action taken or proposed to be taken with respect
thereto and (ii) setting forth reasonably detailed calculations demonstrating compliance with the financial covenants set forth in Section 6.12 for the Measurement Period ending December 31, 2016. 

  
 2 

 5.    Reaffirmation. Each Borrower hereby (a) ratifies and
reaffirms all of its respective payment and performance obligations, contingent or otherwise, under each of the Loan Documents to which it is a party and (b) ratifies and reaffirms each grant of a Lien on its property made pursuant to the Loan
Documents and confirms that such Liens continue to secure the Secured Obligations under the Loan Documents, subject to the terms thereof. 

6.    Representations, Warranties, Covenants and Acknowledgments. To induce the Administrative Agent and the
Lenders to enter into this Limited Waiver, each Borrower hereby: 
 (a)    represents and warrants that
(i) as of the Effective Date, after giving effect to this Limited Waiver, the representations and warranties of such Borrower set forth in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as
of the Effective Date; provided, that to the extent any such representation or warranty specifically refers to an earlier date, such representation and warranty was true and correct in all material respects on and as of such earlier date;
provided, further, that any representation or warranty that is qualified as to “materiality” or “Material Adverse Effect” or similar language was true and correct (after giving effect to any qualification therein)
in all respects on such respective dates, (ii) as of the Effective Date, after giving effect to this Limited Waiver, no Default or Event of Default has occurred and is continuing, (iii) the execution and delivery of this Limited Waiver is
within each Borrower’s organizational powers and has been duly authorized by all necessary organizational actions and, if required, actions by equity holders and (iv) this Limited Waiver has been duly executed and delivered by such
Borrower and constitutes a legal, valid and binding obligation of such Borrower, enforceable in accordance with its terms, subject to applicable Debtor Relief Laws and subject to general principles of equity, regardless of whether considered in a
proceeding in equity or at law; 
 (b)    acknowledges and agrees that (i) this Limited Waiver is
not intended, and should not be construed, except as expressly set forth herein, as an amendment of, or any kind of waiver or consent related to, the Credit Agreement or the other Loan Documents, (ii) this Limited Waiver shall not represent an
amendment, consent, or waiver related to any future actions of any Borrower or any Subsidiary and (iii) except as expressly set forth in this Limited Waiver, the Administrative Agent and each Lender reserves all of their respective rights
pursuant to the Credit Agreement and the other Loan Documents; 
 (c)    further acknowledges and agrees
that the Administrative Agent’s and the Lenders’ agreement to waive the specific matters addressed in this Limited Waiver, do not and shall not create (nor shall any Borrower or any Subsidiary rely upon the existence of or claim or assert
that there exists) any obligation of the Administrative Agent or any Lender to consider or agree to any further waivers, consents or amendments and, in the event that the Administrative Agent or any Lender subsequently agrees to consider any further
waivers, consents or amendments, neither this Limited Waiver nor any other conduct of the Administrative Agent or any Lender shall be of any force or effect on the Administrative Agent’s or any Lender’s consideration or decision with
respect to any such requested waiver, consent or amendment; 
 (d)    further acknowledges and agrees
that this Limited Waiver shall be deemed a Loan Document for all purposes under the Credit Agreement and the other Loan Documents; and 

  
 3 

 (e)    further acknowledges and agrees that, after giving
effect to this Limited Waiver, no right of offset, recoupment, defense, counterclaim, claim, cause of action or objection in favor of any Borrower against the Administrative Agent or any Lender exists as of the Effective Date arising out of or with
respect to this Limited Waiver, the Credit Agreement or any other Loan Document. 
 7.    Effect of Limited Waiver;
Effect of Non-Compliance. Except as expressly set forth herein, this Limited Waiver shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies
of the Lenders or the Administrative Agent under the Credit Agreement or any other Loan Document, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other provision of the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. This Limited Waiver is a “Loan Document” for all
purposes of the Credit Agreement and the other Loan Documents. To the extent any representation or warranty made in this Limited Waiver shall be untrue in any material respect (without duplication of any materiality qualifier) or if any Borrower
fail to timely satisfy any of the conditions listed above (whether conditions precedent or conditions subsequent) to the satisfaction of the Administrative Agent, in its sole discretion, such occurrence shall be deemed an Event of Default pursuant
to the terms of the Credit Agreement and other Loan Documents. 
 8.    Release; Indemnitees. 

(a)    In further consideration of the execution of this Limited Waiver by the Administrative Agent and
each Lender, each Borrower, individually and on behalf of its successors (including, without limitation, any trustees acting on behalf of such Borrower and any
debtor-in-possession with respect to such Borrower), assigns, subsidiaries and Affiliates, hereby forever releases the Administrative Agent, each Lender and their
respective successors, assigns, parents, subsidiaries, Affiliates, officers, employees, directors, agents and attorneys (collectively, the “Releasees”) from any and all debts, claims, demands, liabilities, responsibilities,
disputes, causes, damages, actions and causes of actions (whether at law or in equity) and obligations of every nature whatsoever, whether liquidated or unliquidated, whether known or unknown, matured or unmatured, fixed or contingent (collectively,
“Claims”) that such Borrower may have against the Releasees which arise from or relate to any actions which the Releasees may have taken or omitted to take in connection with the Credit Agreement or the other Loan Documents prior to
the Effective Date, including, without limitation, with respect to the Obligations, any Collateral, the Credit Agreement, any other Loan Document and any third parties liable in whole or in part for the Obligations. This provision shall survive and
continue in full force and effect whether or not each Borrower shall satisfy all other provisions of this Limited Waiver, the Loan Documents or the Credit Agreement, including payment in full of all Obligations. 

(b)    Each Borrower hereby further agrees to indemnify and hold the Releasees harmless with respect to any
and all liabilities, obligations, losses, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind or nature whatsoever incurred by the Releasees, or any of them, whether direct, indirect or consequential, as a result of or
arising from or relating to any proceeding by, or on behalf of any Person, including, without limitation, officers, directors, agents, trustees, creditors, partners or shareholders of any Borrower or any parent, Subsidiary or Affiliate of any
Borrower, whether threatened or initiated, asserting any claim for legal or equitable remedy under 

  
 4 

 
any statutes, regulation or common law principle arising from or in connection with the negotiation, preparation, execution, delivery, performance, administration and enforcement of this Limited
Waiver. The foregoing indemnity shall survive the payment in full of the Obligations and the termination of this Limited Waiver, the Credit Agreement and the other Loan Documents. 

9.    Miscellaneous. 

(a)    Counterparts; Integration; Effectiveness. This Limited Waiver may be executed in counterparts
(and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Limited Waiver, the other Loan Documents and any separate letter
agreements with respect to fees payable to the Administrative Agent constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to
the subject matter hereof. Subject to the terms of Section 3 of this Limited Waiver, this Limited Waiver shall become effective when it shall have been executed by the Borrower, the Administrative Agent and the Required
Lenders and when the Administrative Agent shall have received counterparts hereof which, when taken together, bear the signatures of each of the other parties hereto, and thereafter shall be binding upon and inure to the benefit of the parties
hereto, the Lenders and their respective successors and assigns. Delivery of an executed counterpart of a signature page of this Limited Waiver by telecopy, e-mailed .pdf or any other electronic means that
reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Limited Waiver. The words “execution,” “signed,” “signature,” “delivery,” and
words of like import in or relating to any document to be signed in connection with this Limited Waiver and the transactions contemplated hereby shall be deemed to include Electronic Signatures, deliveries or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in
any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act. 

(b)    Severability. Any provision of this Limited Waiver held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof; and the
invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. 

(c)    Governing Law. THIS LIMITED WAIVER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAW OF THE STATE OF NEW YORK. 
 (d)    Jurisdiction. Each Borrower hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County, Borough of Manhattan, and of the United States District Court for the Southern District of
New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Limited Waiver, or for recognition or enforcement of any judgment, and each of the parties hereto hereby

  
 5 

 
irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such
Federal court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this
Limited Waiver or any other Loan Document shall affect any right that the Administrative Agent, the Issuing Bank or any Lender may otherwise have to bring any action or proceeding relating to this Limited Waiver or any other Loan Document against
any Borrower or its properties in the courts of any jurisdiction. 
 (e)    Each Borrower hereby
irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Limited
Waiver or any other Loan Document in any court referred to in Section 9(d). Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court. 
 (f)    WAIVER OF JURY TRIAL. EACH
PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS LIMITED WAIVER OR THE TRANSACTIONS CONTEMPLATED
HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (1) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (2) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS LIMITED WAIVER BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
9(f). 
 (g)    Headings. Article and Section headings used herein are for convenience of
reference only, are not part of this Limited Waiver and shall not affect the construction of, or be taken into consideration in interpreting, this Limited Waiver. 

  
 6 

 IN WITNESS WHEREOF, the parties hereto have caused this Limited Waiver to be duly executed by
their respective authorized officers as of the day and year first above written. 
  

			
	Administrative Borrower:
	
	STONEMOR OPERATING LLC
		
	By:	 	 /s/ Mark L. Miller

	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP
	
	Partnership:
	
	STONEMOR PARTNERS L.P.
	By: STONEMOR GP LLC, as its General Partner
		
	By:	 	 /s/ Mark L. Miller

	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 Alleghany Memorial Park Subsidiary, Inc. 

Altavista Memorial Park Subsidiary, Inc. 
 Arlington Development
Company 
 Augusta Memorial Park Perpetual Care Company 

Birchlawn Burial Park Subsidiary, Inc. 
 Bronswood Cemetery, Inc.

 Cedar Hill Funeral Home, Inc. 
 Cemetery Investments
Subsidiary, Inc. 
 Chapel Hill Associates, Inc. 
 Chapel Hill
Funeral Home, Inc. 
 Columbia Memorial Park Subsidiary, Inc. 

Cornerstone Family Insurance Services, Inc. 
 Cornerstone Family
Services of New Jersey, Inc. 
 Cornerstone Family Services of West Virginia Subsidiary, Inc. 

Covenant Acquisition Subsidiary, Inc. 
 Covington Memorial Funeral
Home, Inc. 
 Covington Memorial Gardens, Inc. 
 Eloise B. Kyper
Funeral Home, Inc. 
 Forest Lawn Gardens, Inc. 
 Forest Lawn
Memory Gardens, Inc. 
 Forest Lawn Memorial Chapel, Inc. 
 Glen
Haven Memorial Park Subsidiary, Inc. 
 Henry Memorial Park Subsidiary, Inc. 

KIRIS Subsidiary, Inc. 
 Kirk & Nice, Inc. 

Kirk & Nice Suburban Chapel, Inc. 
 Lakewood/Hamilton
Cemetery Subsidiary, Inc. 
 Lakewood Memory Gardens South Subsidiary, Inc. 

Laurel Hill Memorial Park Subsidiary, Inc. 
 Laurelwood Holding
Company 
 Legacy Estates, Inc. 
 Loewen [Virginia] Subsidiary,
Inc. 
 Lorraine Park Cemetery Subsidiary, Inc. 
  

			
	By:	 	 /s/ Mark L.
Miller    

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 Modern Park Development Subsidiary, Inc. 

Oak Hill Cemetery Subsidiary, Inc. 
 Osiris Holding Finance
Company 
 Osiris Holding of Maryland Subsidiary, Inc. 
 Osiris
Holding of Rhode Island Subsidiary, Inc. 
 Osiris Management, Inc. 

Osiris Telemarketing Corp. 
 Perpetual Gardens.Com, Inc. 

Prince George Cemetery Corporation 
 PVD Acquisitions Subsidiary,
Inc. 
 Rockbridge Memorial Gardens Subsidiary Company 
 Rose
Lawn Cemeteries Subsidiary, Incorporated 
 Roselawn Development Subsidiary Corporation 

Russell Memorial Cemetery Subsidiary, Inc. 
 Shenandoah Memorial
Park Subsidiary, Inc. 
 Sierra View Memorial Park 
 Southern
Memorial Sales Subsidiary, Inc. 
 Springhill Memory Gardens Subsidiary, Inc. 

Stephen R. Haky Funeral Home, Inc. 
 Star City Memorial Sales
Subsidiary, Inc. 
 Stitham Subsidiary, Incorporated 
 StoneMor
Alabama Subsidiary, Inc. 
 StoneMor California, Inc. 
 StoneMor
California Subsidiary, Inc. 
 StoneMor Georgia Subsidiary, Inc. 

StoneMor Hawaii Subsidiary, Inc. 
 StoneMor North Carolina Funeral
Services, Inc. 
 StoneMor Ohio Subsidiary, Inc. 
 StoneMor
Puerto Rico Cemetery and Funeral, Inc. 
 StoneMor Tennessee Subsidiary, Inc. 

StoneMor Washington, Inc. 
 Sunset Memorial Gardens Subsidiary,
Inc. 
 Sunset Memorial Park Subsidiary, Inc. 
 Temple Hill
Subsidiary Corporation 
 The Valhalla Cemetery Subsidiary Corporation 

Virginia Memorial Service Subsidiary Corporation 
 W N C
Subsidiary, Inc. 
 Wicomico Memorial Parks Subsidiary, Inc. 

Willowbrook Management Corp. 
  

			
	By:	 	 /s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 Alleghany Memorial Park LLC 

Altavista Memorial Park LLC 
 Birchlawn Burial Park LLC 

CMS West LLC 
 CMS West Subsidiary LLC 

Cemetery Investments LLC 
 Cemetery Management Services, L.L.C.

 Cemetery Management Services of Ohio, L.L.C. 
 Columbia
Memorial Park LLC 
 Cornerstone Family Services of West Virginia LLC 

Cornerstone Funeral and Cremation Services LLC 
 Covenant
Acquisition LLC 
 Glen Haven Memorial Park LLC 
 Henlopen
Memorial Park LLC 
 Henlopen Memorial Park Subsidiary LLC 

Henry Memorial Park LLC 
 Juniata Memorial Park LLC 

KIRIS LLC 
 Lakewood/Hamilton Cemetery LLC 

Lakewood Memory Gardens South LLC 
 Laurel Hill Memorial Park LLC

 Loewen [Virginia] LLC 
 Lorraine Park Cemetery LLC 

Modern Park Development LLC 
 Oak Hill Cemetery LLC 

Osiris Holding of Maryland LLC 
 Osiris Holding of Pennsylvania
LLC 
 Osiris Holding of Rhode Island LLC 
 Plymouth Warehouse
Facilities LLC 
 PVD Acquisitions LLC 
 Rolling Green Memorial
Park LLC 
 Rockbridge Memorial Gardens LLC 
 Rose Lawn
Cemeteries LLC 
 Roselawn Development LLC 
 Russell Memorial
Cemetery LLC 
 Shenandoah Memorial Park LLC 
 Southern Memorial
Sales LLC 
 Springhill Memory Gardens LLC 
 Star City Memorial
Sales LLC 
 Stitham LLC 
  

			
	By:	 	 /s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 StoneMor Alabama LLC 

StoneMor Arkansas Subsidiary LLC 
 StoneMor Cemetery Products LLC

 StoneMor Colorado LLC 
 StoneMor Colorado Subsidiary LLC 

StoneMor Georgia LLC 
 StoneMor Hawaiian Joint Venture Group LLC

 StoneMor Hawaii LLC 
 StoneMor Holding of Pennsylvania LLC

 StoneMor Illinois LLC 
 StoneMor Illinois Subsidiary LLC 

StoneMor Indiana LLC 
 StoneMor Indiana Subsidiary LLC 

StoneMor Iowa LLC 
 StoneMor Iowa Subsidiary LLC 

StoneMor Kansas LLC 
 StoneMor Kansas Subsidiary LLC 

StoneMor Kentucky LLC 
 StoneMor Kentucky Subsidiary LLC 

StoneMor Michigan LLC 
 StoneMor Michigan Subsidiary LLC 

StoneMor Mississippi LLC 
 StoneMor Mississippi Subsidiary LLC

 StoneMor Missouri LLC 
 StoneMor Missouri Subsidiary LLC 

StoneMor North Carolina LLC 
 StoneMor North Carolina Subsidiary
LLC 
 StoneMor Ohio LLC 
 StoneMor Oklahoma LLC 

StoneMor Oklahoma Subsidiary LLC 
 StoneMor Oregon LLC 

StoneMor Oregon Subsidiary LLC 
 StoneMor Pennsylvania LLC 

StoneMor Pennsylvania Subsidiary LLC 
 StoneMor Puerto Rico LLC

 StoneMor Puerto Rico Subsidiary LLC 
 StoneMor South Carolina
LLC 
 StoneMor South Carolina Subsidiary LLC 
 StoneMor
Washington Subsidiary LLC 
 StoneMor Wisconsin LLC 
 StoneMor
Wisconsin Subsidiary LLC 
  

			
	By:	 	 /s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 Sunset Memorial Gardens LLC 

Sunset Memorial Park LLC 
 Temple Hill LLC 

The Valhalla Cemetery Company LLC 
 Tioga County Memorial Gardens
LLC 
 Virginia Memorial Service LLC 
 WNCI LLC 

Wicomico Memorial Parks LLC 
 Woodlawn Memorial Park Subsidiary
LLC 
  

			
	By:	 	 /s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 Cornerstone Trust Management Services LLC 

 

			
	By:	 	 /s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 StoneMor Florida LLC 

StoneMor Florida Subsidiary LLC 
  

			
	By:	 	 /s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 
			
	 CAPITAL ONE, NATIONAL ASSOCIATION,

as the Administrative Agent

 
			
		
	By:	 	/s/ Allison Sardo
	Name:	 	Allison Sardo
	Title:	 	Senior Vice President

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 
			
	CAPITAL ONE, NATIONAL ASSOCIATION

 
			
		
	By:	 	/s/ Allison Sardo
	Name:	 	Allison Sardo
	Title:	 	Senior Vice President

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 
			
	RAYMOND JAMES BANK, N.A.

 
			
		
	By:	 	/s/ H. Fred Coble, Jr.
	Name:	 	H. Fred Coble, Jr.
	Title:	 	Senior Vice President

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 
			
	JPMorgan Chase Bank, N.A.

 
			
		
	By:	 	/s/ Daniel K. Reagle
	Name:	 	Daniel K. Reagle
	Title:	 	Authorized Officer

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 
			
	Univest Bank and Trust Co

 
			
		
	By:	 	/s/ Paul A. Pyfer
	Name:	 	Paul A. Pyfer
	Title:	 	S.V.P.

 Signature Page to Third Amendment and Limited Waiver 

[StoneMor Operating LLC] 

 REAFFIRMATION OF GUARANTY 

August 16, 2017 
 In
connection with that certain Credit Agreement dated as of August 4, 2016 (as amended, the “Credit Agreement”; unless otherwise defined herein, capitalized terms used herein shall have the meanings assigned to them in the Credit
Agreement) by and among STONEMOR OPERATING LLC, a Delaware limited liability company (the “Administrative Borrower”), the other Borrowers party thereto, the LENDERS party thereto and CAPITAL ONE, NATIONAL ASSOCIATION, as
Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”), the undersigned entered into that certain Guaranty and Collateral Agreement dated as of August 4, 2016 or a supplement or joinder thereto
(collectively, the “Guaranty Agreement”) for the benefit of the Administrative Agent and the other Secured Parties to guaranty the payment and performance of the Secured Obligations pursuant to the terms of the Guaranty Agreement.

 The undersigned now hereby (i) acknowledges the terms of the attached Third Amendment and Limited Waiver dated as of the date hereof
by and among the Administrative Borrower, the other Borrowers thereto, the Lenders party thereto and the Administrative Agent, (ii) ratifies and reaffirms all of its obligations, contingent or otherwise, under the Guaranty Agreement and each of
the other Loan Documents to which it is a party and (iii) ratifies and reaffirms each grant of a Lien on its property made pursuant to the Loan Documents and confirms that such Liens continue to secure the Secured Obligations under the Loan
Documents, subject to the terms thereof. 
 [remainder of page intentionally blank] 

 IN WITNESS WHEREOF, the parties hereto have caused this Reaffirmation of Guaranty to be duly
executed by their respective authorized officers as of the day and year first above written. 
  

			
	Partnership:
	
	 STONEMOR PARTNERS L.P.
 By: STONEMOR
GP LLC, as its General Partner

 
			
		
	By:	 	/s/ Mark L. Miller
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Reaffirmation of Guaranty 

[StoneMor Operating LLC] 

 Alleghany Memorial Park Subsidiary, Inc. 

Altavista Memorial Park Subsidiary, Inc. 
 Arlington Development
Company 
 Augusta Memorial Park Perpetual Care Company 

Birchlawn Burial Park Subsidiary, Inc. 
 Bronswood Cemetery, Inc.

 Cedar Hill Funeral Home, Inc. 
 Cemetery Investments
Subsidiary, Inc. 
 Chapel Hill Associates, Inc. 
 Chapel Hill
Funeral Home, Inc. 
 Columbia Memorial Park Subsidiary, Inc. 

Cornerstone Family Insurance Services, Inc. 
 Cornerstone Family
Services of New Jersey, Inc. 
 Cornerstone Family Services of West Virginia Subsidiary, Inc. 

Covenant Acquisition Subsidiary, Inc. 
 Covington Memorial Funeral
Home, Inc. 
 Covington Memorial Gardens, Inc. 
 Eloise B. Kyper
Funeral Home, Inc. 
 Forest Lawn Gardens, Inc. 
 Forest Lawn
Memory Gardens, Inc. 
 Forest Lawn Memorial Chapel, Inc. 
 Glen
Haven Memorial Park Subsidiary, Inc. 
 Henry Memorial Park Subsidiary, Inc. 

KIRIS Subsidiary, Inc. 
 Kirk & Nice, Inc. 

Kirk & Nice Suburban Chapel, Inc. 
 Lakewood/Hamilton
Cemetery Subsidiary, Inc. 
 Lakewood Memory Gardens South Subsidiary, Inc. 

Laurel Hill Memorial Park Subsidiary, Inc. 
 Laurelwood Holding
Company 
 Legacy Estates, Inc. 
 Loewen [Virginia] Subsidiary,
Inc. 
 Lorraine Park Cemetery Subsidiary, Inc. 

			
		
	By: 	 	/s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Reaffirmation of Guaranty 

[StoneMor Operating LLC] 

 Modern Park Development Subsidiary, Inc. 

Oak Hill Cemetery Subsidiary, Inc. 
 Osiris Holding Finance
Company 
 Osiris Holding of Maryland Subsidiary, Inc. 
 Osiris
Holding of Rhode Island Subsidiary, Inc. 
 Osiris Management, Inc. 

Osiris Telemarketing Corp. 
 Perpetual Gardens.Com, Inc. 

Prince George Cemetery Corporation 
 PVD Acquisitions Subsidiary,
Inc. 
 Rockbridge Memorial Gardens Subsidiary Company 
 Rose
Lawn Cemeteries Subsidiary, Incorporated 
 Roselawn Development Subsidiary Corporation 

Russell Memorial Cemetery Subsidiary, Inc. 
 Shenandoah Memorial
Park Subsidiary, Inc. 
 Sierra View Memorial Park 
 Southern
Memorial Sales Subsidiary, Inc. 
 Springhill Memory Gardens Subsidiary, Inc. 

Stephen R. Haky Funeral Home, Inc. 
 Star City Memorial Sales
Subsidiary, Inc. 
 Stitham Subsidiary, Incorporated 
 StoneMor
Alabama Subsidiary, Inc. 
 StoneMor California, Inc. 
 StoneMor
California Subsidiary, Inc. 
 StoneMor Georgia Subsidiary, Inc. 

StoneMor Hawaii Subsidiary, Inc. 
 StoneMor North Carolina Funeral
Services, Inc. 
 StoneMor Ohio Subsidiary, Inc. 
 StoneMor
Puerto Rico Cemetery and Funeral, Inc. 
 StoneMor Tennessee Subsidiary, Inc. 

StoneMor Washington, Inc. 
 Sunset Memorial Gardens Subsidiary,
Inc. 
 Sunset Memorial Park Subsidiary, Inc. 
 Temple Hill
Subsidiary Corporation 
 The Valhalla Cemetery Subsidiary Corporation 

Virginia Memorial Service Subsidiary Corporation 
 W N C
Subsidiary, Inc. 
 Wicomico Memorial Parks Subsidiary, Inc. 

Willowbrook Management Corp. 

			
		
	By: 	 	/s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Reaffirmation of Guaranty 

[StoneMor Operating LLC] 

 Alleghany Memorial Park LLC 

Altavista Memorial Park LLC 
 Birchlawn Burial Park LLC 

CMS West LLC 
 CMS West Subsidiary LLC 

Cemetery Investments LLC 
 Cemetery Management Services, L.L.C.

 Cemetery Management Services of Ohio, L.L.C. 
 Columbia
Memorial Park LLC 
 Cornerstone Family Services of West Virginia LLC 

Cornerstone Funeral and Cremation Services LLC 
 Covenant
Acquisition LLC 
 Glen Haven Memorial Park LLC 
 Henlopen
Memorial Park LLC 
 Henlopen Memorial Park Subsidiary LLC 

Henry Memorial Park LLC 
 Juniata Memorial Park LLC 

KIRIS LLC 
 Lakewood/Hamilton Cemetery LLC 

Lakewood Memory Gardens South LLC 
 Laurel Hill Memorial Park LLC

 Loewen [Virginia] LLC 
 Lorraine Park Cemetery LLC 

Modern Park Development LLC 
 Oak Hill Cemetery LLC 

Osiris Holding of Maryland LLC 
 Osiris Holding of Pennsylvania
LLC 
 Osiris Holding of Rhode Island LLC 
 Plymouth Warehouse
Facilities LLC 
 PVD Acquisitions LLC 
 Rolling Green Memorial
Park LLC 
 Rockbridge Memorial Gardens LLC 
 Rose Lawn
Cemeteries LLC 
 Roselawn Development LLC 
 Russell Memorial
Cemetery LLC 
 Shenandoah Memorial Park LLC 
 Southern Memorial
Sales LLC 
 Springhill Memory Gardens LLC 
 Star City Memorial
Sales LLC 
 Stitham LLC 

			
		
	By: 	 	/s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Reaffirmation of Guaranty 

[StoneMor Operating LLC] 

 StoneMor Alabama LLC 

StoneMor Arkansas Subsidiary LLC 
 StoneMor Cemetery Products LLC

 StoneMor Colorado LLC 
 StoneMor Colorado Subsidiary LLC 

StoneMor Georgia LLC 
 StoneMor Hawaiian Joint Venture Group LLC

 StoneMor Hawaii LLC 
 StoneMor Holding of Pennsylvania LLC

 StoneMor Illinois LLC 
 StoneMor Illinois Subsidiary LLC 

StoneMor Indiana LLC 
 StoneMor Indiana Subsidiary LLC 

StoneMor Iowa LLC 
 StoneMor Iowa Subsidiary LLC 

StoneMor Kansas LLC 
 StoneMor Kansas Subsidiary LLC 

StoneMor Kentucky LLC 
 StoneMor Kentucky Subsidiary LLC 

StoneMor Michigan LLC 
 StoneMor Michigan Subsidiary LLC 

StoneMor Mississippi LLC 
 StoneMor Mississippi Subsidiary LLC

 StoneMor Missouri LLC 
 StoneMor Missouri Subsidiary LLC 

StoneMor North Carolina LLC 
 StoneMor North Carolina Subsidiary
LLC 
 StoneMor Ohio LLC 
 StoneMor Oklahoma LLC 

StoneMor Oklahoma Subsidiary LLC 
 StoneMor Oregon LLC 

StoneMor Oregon Subsidiary LLC 
 StoneMor Pennsylvania LLC 

StoneMor Pennsylvania Subsidiary LLC 
 StoneMor Puerto Rico LLC

 StoneMor Puerto Rico Subsidiary LLC 
 StoneMor South Carolina
LLC 
 StoneMor South Carolina Subsidiary LLC 
 StoneMor
Washington Subsidiary LLC 
 StoneMor Wisconsin LLC 
 StoneMor
Wisconsin Subsidiary LLC 

			
		
	By: 	 	/s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Reaffirmation of Guaranty 

[StoneMor Operating LLC] 

 Sunset Memorial Gardens LLC 

Sunset Memorial Park LLC 
 Temple Hill LLC 

The Valhalla Cemetery Company LLC 
 Tioga County Memorial Gardens
LLC 
 Virginia Memorial Service LLC 
 WNCI LLC 

Wicomico Memorial Parks LLC 
 Woodlawn Memorial Park Subsidiary
LLC 

			
		
	By: 	 	/s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Reaffirmation of Guaranty 

[StoneMor Operating LLC] 

 Cornerstone Trust Management Services LLC 

			
		
	By: 	 	/s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Reaffirmation of Guaranty 

[StoneMor Operating LLC] 

 StoneMor Florida LLC 

StoneMor Florida Subsidiary LLC 

			
		
	By: 	 	/s/ Mark L. Miller

			
	Name:	 	Mark L. Miller
	Title:	 	CFO & Sr. VP

 Signature Page to Reaffirmation of Guaranty 

[StoneMor Operating LLC]Exhibit 4.7

 

Ranger Energy Services, Inc.

 

2017 Long Term Incentive Plan

 

1.                                      Purpose.  The purpose of the Ranger Energy Services, Inc. 2017 Long Term Incentive Plan (the “Plan”) is to provide a means through which (a) Ranger Energy Services, Inc., a Delaware corporation (the “Company”), and its Affiliates may attract, retain and motivate qualified persons as employees, directors and consultants, thereby enhancing the profitable growth of the Company and its Affiliates and (b) persons upon whom the responsibilities of the successful administration and management of the Company and its Affiliates rest, and whose present and potential contributions to the Company and its Affiliates are of importance, can acquire and maintain stock ownership or awards the value of which is tied to the performance of the Company, thereby strengthening their concern for the Company and its Affiliates. Accordingly, the Plan provides for the grant of Options, SARs, Restricted Stock, Restricted Stock Units, Stock Awards, Dividend Equivalents, Other Stock-Based Awards, Cash Awards, Substitute Awards, Performance Awards, or any combination of the foregoing, as determined by the Committee in its sole discretion.

 

2.                                      Definitions.  For purposes of the Plan, the following terms shall be defined as set forth below:

 

(a)                                 “Affiliate” means any corporation, partnership, limited liability company, limited liability partnership, association, trust or other organization that, directly or indirectly, controls, is controlled by, or is under common control with, the Company.  For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of the controlled entity or organization or (ii) to direct or cause the direction of the management and policies of the controlled entity or organization, whether through the ownership of voting securities, by contract, or otherwise.

 

(b)                                 “ASC Topic 718” means the Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation — Stock Compensation, as amended or any successor accounting standard.

 

(c)                                  “Award” means any Option, SAR, Restricted Stock, Restricted Stock Unit, Stock Award, Dividend Equivalent, Other Stock-Based Award, Cash Award, Substitute Award or Performance Award, together with any other right or interest, granted under the Plan.

 

(d)                                 “Award Agreement” means any written instrument (including any employment, severance or change in control agreement) that sets forth the terms, conditions, restrictions and/or limitations applicable to an Award, in addition to those set forth under the Plan.

 

(e)                                  “Board” means the Board of Directors of the Company.

 

 

(f)                                   “Cash Award” means an Award denominated in cash granted under Section 6(i).

 

(g)                                  “Change in Control” means, except as otherwise provided in an Award Agreement, the occurrence of any of the following events after the Effective Date:

 

(i)                                     any Person or any group of Persons acting together which would constitute a “group” for purposes of Section 13(d) of the Exchange Act (excluding a corporation or other entity owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company) is or becomes the “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding voting securities; or

 

(ii)                                  there is consummated a merger or consolidation of the Company with any other corporation or other entity, and, immediately after the consummation of such merger or consolidation, the voting securities of the Company immediately prior to such merger or consolidation do not continue to represent or are not converted into more than 50% of the combined voting power of the then-outstanding voting securities of the Person resulting from such merger or consolidation or, if the surviving company is a Subsidiary, the ultimate parent thereof; or

 

(iii)                               the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement or series of related agreements for the sale or other disposition, directly or indirectly, by the Company of all or substantially all of the Company’s assets, other than such sale or other disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 50% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

 

Notwithstanding the foregoing, except with respect to clause (ii) above, a “Change of Control” shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the shares of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in, and own substantially all of the shares of, an entity which owns, either directly or through a subsidiary, all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

 

(h)                                 “Change in Control Price” means the amount determined in the following clause (i), (ii), (iii), (iv) or (v), whichever the Committee determines is applicable, as follows:  (i) the price per share offered to holders of Stock in any merger or consolidation, (ii) the per share Fair Market Value of the Stock immediately before the Change in Control or other event without regard to assets sold in the Change in Control or other event and assuming the Company has received the consideration paid for the assets in the case of a sale of the assets, (iii) the amount distributed per share of Stock in a dissolution transaction, (iv) the price per share offered to holders of Stock in any tender offer or exchange offer whereby a Change in Control or other

 

2

 

event takes place, or (v) if such Change in Control or other event occurs other than pursuant to a transaction described in clauses (i), (ii), (iii), or (iv) of this Section 2(h), the value per share of the Stock that may otherwise be obtained with respect to such Awards or to which such Awards track, as determined by the Committee as of the date determined by the Committee to be the date of cancellation and surrender of such Awards.  In the event that the consideration offered to stockholders of the Company in any transaction described in this Section 2(h) or in Section 8(e) consists of anything other than cash, the Committee shall determine the fair cash equivalent of the portion of the consideration offered which is other than cash and such determination shall be binding on all affected Participants to the extent applicable to Awards held by such Participants.

 

(i)                                     “Code” means the Internal Revenue Code of 1986, as amended from time to time, including the guidance and regulations promulgated thereunder and successor provisions, guidance and regulations thereto.

 

(j)                                    “Committee” means a committee of two or more directors designated by the Board to administer the Plan; provided, however, that, unless otherwise determined by the Board, the Committee shall consist solely of two or more Qualified Members.

 

(k)                                 “Covered Employee” means an Eligible Person who is (i) a “covered employee” within the meaning of Section 162(m) or (ii) designated by the Committee, at the time of grant of a Performance Award or at any subsequent time, as reasonably expected to be a “covered employee” with respect to the taxable year of the Company in which any applicable Award will be paid.

 

(l)                                     “Dividend Equivalent” means a right, granted to an Eligible Person under Section 6(g), to receive cash, Stock, other Awards or other property equal in value to dividends paid with respect to a specified number of shares of Stock, or other periodic payments.

 

(m)                             “Effective Date” means August 10, 2017.

 

(n)                                 “Eligible Person” means any individual who, as of the date of grant of an Award, is an officer or employee of the Company or of any of its Affiliates, and any other person who provides services to the Company or any of its Affiliates, including directors of the Company; provided, however, that, any such individual must be an “employee” of the Company or any of its parents or subsidiaries within the meaning of General Instruction A.1(a) to Form S-8 if such individual is granted an Award that may be settled in Stock.  An employee on leave of absence may be an Eligible Person.

 

(o)                                 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, including the guidance, rules and regulations promulgated thereunder and successor provisions, guidance, rules and regulations thereto.

 

(p)                                 “Fair Market Value” of a share of Stock means, as of any specified date, (i) if the Stock is listed on a national securities exchange, the closing sales price of the Stock, as reported on the stock exchange composite tape on that date (or if no sales occur on such date, on the last preceding date on which such sales of the Stock are so reported); (ii) if the Stock is not traded on a national securities exchange but is traded over the counter on such date, the average between the reported high and low bid and asked prices of Stock on the most recent date on

 

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which Stock was publicly traded on or preceding the specified date; or (iii) in the event Stock is not publicly traded at the time a determination of its value is required to be made under the Plan, the amount determined by the Committee in its discretion in such manner as it deems appropriate, taking into account all factors the Committee deems appropriate, including the Nonqualified Deferred Compensation Rules.  Notwithstanding this definition of Fair Market Value, with respect to one or more Award types, or for any other purpose for which the Committee must determine the Fair Market Value under the Plan, the Committee may elect to choose a different measurement date or methodology for determining Fair Market Value so long as the determination is consistent with the Nonqualified Deferred Compensation Rules and all other applicable laws and regulations.

 

(q)                                 “ISO” means an Option intended to be and designated as an “incentive stock option” within the meaning of Section 422 of the Code.

 

(r)                                    “Nonqualified Deferred Compensation Rules” means the limitations or requirements of Section 409A of the Code, as amended from time to time, including the guidance and regulations promulgated thereunder and successor provisions, guidance and regulations thereto.

 

(s)                                   “Nonstatutory Option” means an Option that is not an ISO.

 

(t)                                    “Option” means a right, granted to an Eligible Person under Section 6(b), to purchase Stock at a specified price during specified time periods, which may either be an ISO or a Nonstatutory Option.

 

(u)                                 “Other Stock-Based Award” means an Award granted to an Eligible Person under Section 6(h).

 

(v)                                 “Participant” means a person who has been granted an Award under the Plan that remains outstanding, including a person who is no longer an Eligible Person.

 

(w)                               “Performance Award” means an award granted to an Eligible Person under Section 6(k), the grant, vesting, exercisability and/or settlement of which (and/or the timing or amount thereof) is subject to the achievement of one or more performance goals specified by the Committee.

 

(x)                                 “Person” means any individual, corporation, firm, partnership, joint venture, limited liability company, estate, trust, business association, organization, governmental entity or other entity.

 

(y)                                 “Qualified Member” means a member of the Board who is (i) a “non-employee director” within the meaning of Rule 16b-3(b)(3), (ii) following expiration of the Transition Period (as defined below), an “outside director” within the meaning of Section 162(m), and (iii) “independent” under the listing standards or rules of the securities exchange upon which the Stock is traded, but only to the extent such independence is required in order to take the action at issue pursuant to such standards or rules.

 

4

 

(z)                                  “Restricted Stock” means Stock granted to an Eligible Person under Section 6(d) that is subject to certain restrictions and to a risk of forfeiture.

 

(aa)                          “Restricted Stock Unit” means a right, granted to an Eligible Person under Section 6(e), to receive Stock, cash or a combination thereof at the end of a specified period (which may or may not be coterminous with the vesting schedule of the Award).

 

(bb)                          “Rule 16b-3” means Rule 16b-3, promulgated by the SEC under Section 16 of the Exchange Act.

 

(cc)                            “SAR” means a stock appreciation right granted to an Eligible Person under Section 6(c).

 

(dd)                          “SEC” means the Securities and Exchange Commission.

 

(ee)                            “Section 162(m)” means Section 162(m) of the Code and Treasury Regulation § 1.162-27, as amended from time to time, and any other guidance and regulations promulgated thereunder and successor provisions, guidance and regulations thereto.

 

(ff)                              “Section 162(m) Award” means a Performance Award granted under Section 6(k)(i) to a Covered Employee that is intended to satisfy the requirements for “performance-based compensation” within the meaning of Section 162(m).

 

(gg)                            “Securities Act” means the Securities Act of 1933, as amended from time to time, including the guidance, rules and regulations promulgated thereunder and successor provisions, guidance, rules and regulations thereto.

 

(hh)                          “Stock” means the Company’s Class A common Stock, par value $0.01 per share, and such other securities as may be substituted (or re-substituted) for Stock pursuant to Section 8.

 

(ii)                                  “Stock Award” means unrestricted shares of Stock granted to an Eligible Person under Section 6(f).

 

(jj)                                “Subsidiary” means, with respect to any Person, as of any date of determination, any other Person as to which such Person, owns, directly or indirectly, or otherwise controls more than 50% of the voting power or other similar interests or the sole general partner interest or managing member or similar interest of such Person.

 

(kk)                          “Substitute Award” means an Award granted under Section 6(j).

 

3.                                      Administration.

 

(a)                                 Authority of the Committee.  The Plan shall be administered by the Committee except to the extent the Board elects to administer the Plan, in which case references herein to the “Committee” shall be deemed to include references to the “Board.”  Subject to the express provisions of the Plan, Rule 16b-3 and other applicable laws, the Committee shall have the authority, in its sole and absolute discretion, to:

 

5

 

(i) designate Eligible Persons as Participants;

 

(ii) determine the type or types of Awards to be granted to an Eligible Person;

 

(iii) determine the number of shares of Stock or amount of cash to be covered by Awards;

 

(iv) determine the terms and conditions of any Award, including whether, to what extent and under what circumstances Awards may be vested, settled, exercised, cancelled or forfeited (including conditions based on continued employment or service requirements or the achievement of one or more performance goals);

 

(v) modify, waive or adjust any term or condition of an Award that has been granted, which may include the acceleration of vesting, waiver of forfeiture restrictions, modification of the form of settlement of the Award (for example, from cash to Stock or vice versa), early termination of a performance period, or modification of any other condition or limitation regarding an Award;

 

(vi) determine the treatment of an Award upon a termination of employment or other service relationship;

 

(vii) impose a holding period with respect to an Award or the shares of Stock received in connection with an Award;

 

(viii) interpret and administer the Plan and any Award Agreement;

 

(ix) correct any defect, supply any omission or reconcile any inconsistency in the Plan, in any Award, or in any Award Agreement; and

 

(x) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan.

 

The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee.  Any action of the Committee shall be final, conclusive and binding on all persons, including the Company, its Affiliates, stockholders, Participants, beneficiaries, and permitted transferees under Section 7(a) or other persons claiming rights from or through a Participant.

 

(b)                                 Exercise of Committee Authority.  At any time that a member of the Committee is not a Qualified Member, any action of the Committee relating to (i) an Award granted or to be granted to an Eligible Person who is then subject to Section 16 of the Exchange Act in respect of the Company where such action is not taken by the full Board, or (ii) a Section 162(m) Award, may be taken either (A) by a subcommittee, designated by the Committee, composed solely of two or more Qualified Members, or (B) by the Committee but with each such member who is not a Qualified Member abstaining or recusing himself or herself from such action; provided, however, that upon such abstention or recusal, the Committee remains composed solely of two or more Qualified Members.  Such action, authorized by such a subcommittee or by the Committee upon the abstention or recusal of such non-Qualified Member(s), shall be the action of the Committee for purposes of the Plan.  For the avoidance of

 

6

 

doubt, the full Board may take any action relating to an Award granted or to be granted to an Eligible Person who is then subject to Section 16 of the Exchange Act in respect of the Company, so long as such Award is not a Section 162(m) Award.

 

(c)                                  Delegation of Authority.  The Committee may delegate any or all of its powers and duties under the Plan to a subcommittee of directors or to any officer of the Company, including the power to perform administrative functions and grant Awards; provided, however, that such delegation does not (i) violate state or corporate law, (ii) result in the loss of an exemption under Rule 16b-3(d)(1) for Awards granted to Participants subject to Section 16 of the Exchange Act in respect of the Company, or (iii) cause Section 162(m) Awards to fail to so qualify.  Upon any such delegation, all references in the Plan to the “Committee,” other than in Section 8, shall be deemed to include any subcommittee or officer of the Company to whom such powers have been delegated by the Committee.  Any such delegation shall not limit the right of such subcommittee members or such an officer to receive Awards; provided, however, that such subcommittee members and any such officer may not grant Awards to himself or herself, a member of the Board, or any executive officer of the Company or an Affiliate, or take any action with respect to any Award previously granted to himself or herself, a member of the Board, or any executive officer of the Company or an Affiliate. The Committee may also appoint agents who are not executive officers of the Company or members of the Board to assist in administering the Plan, provided, however, that such individuals may not be delegated the authority to (A) grant or modify any Awards that will, or may, be settled in Stock or (B) take any action that would cause Section 162(m) Awards to fail to so qualify, if applicable.

 

(d)                                 Limitation of Liability.  The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him or her by any officer or employee of the Company or any of its Affiliates, the Company’s legal counsel, independent auditors, consultants or any other agents assisting in the administration of the Plan.  Members of the Committee and any officer or employee of the Company or any of its Affiliates acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the fullest extent permitted by law, be indemnified and held harmless by the Company with respect to any such action or determination.

 

(e)                                  Participants in Non-U.S. Jurisdictions. Notwithstanding any provision of the Plan to the contrary, to comply with applicable laws in countries other than the United States in which the Company or any of its Affiliates operates or has employees, directors or other service providers from time to time, or to ensure that the Company complies with any applicable requirements of foreign securities exchanges, the Committee, in its sole discretion, shall have the power and authority to: (i) determine which of the Company’s Affiliates shall be covered by the Plan; (ii) determine which Eligible Persons outside the United States are eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to Eligible Persons outside the United States to comply with applicable foreign laws or listing requirements of any foreign exchange; (iv) establish sub-plans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such sub-plans and/or modifications shall be attached to the Plan as appendices), provided, however, that no such sub-plans and/or modifications shall increase the share limitations contained in Section 4(a); and (v) take any action, before or after an Award is granted, that it deems advisable to comply with any

 

7

 

applicable governmental regulatory exemptions or approval or listing requirements of any such foreign securities exchange.  For purposes of the Plan, all references to foreign laws, rules, regulations or taxes shall be references to the laws, rules, regulations and taxes of any applicable jurisdiction other than the United States or a political subdivision thereof.

 

4.                                      Stock Subject to Plan.

 

(a)                                 Number of Shares Available for Delivery.  Subject to adjustment in a manner consistent with Section 8, 1,250,000 shares of Stock are reserved and available for delivery with respect to Awards, and such total shall be available for the issuance of shares upon the exercise of ISOs.

 

(b)                                 Application of Limitation to Grants of Awards.  Subject to Section 4(c), no Award may be granted if the number of shares of Stock that may be delivered in connection with such Award exceeds the number of shares of Stock remaining available under the Plan minus the number of shares of Stock issuable in settlement of or relating to then-outstanding Awards.  The Committee may adopt reasonable counting procedures to ensure appropriate counting, avoid double counting (as, for example, in the case of tandem or Substitute Awards) and make adjustments if the number of shares of Stock actually delivered differs from the number of shares previously counted in connection with an Award.

 

(c)                                  Availability of Shares Not Delivered under Awards.  If all or any portion of an Award expires or is cancelled, forfeited, exchanged, settled in cash or otherwise terminated, the shares of Stock subject to such Award (including (i) shares forfeited with respect to Restricted Stock, and (ii) the number of shares withheld or surrendered to the Company in payment of any exercise or purchase price of an Award or taxes relating to Awards) shall not be considered “delivered shares” under the Plan, shall be available for delivery with respect to Awards, and shall no longer be considered issuable or related to outstanding Awards for purposes of Section 4(b), except that if any such shares could not again be available for Awards granted to a particular Participant under any applicable law or regulation, such shares shall be available exclusively for Awards to Participants who are not subject to such limitation. If an Award may be settled only in cash, such Award need not be counted against any share limit under this Section 4, but will remain subject to the limitations in Section 5 to the extent required to preserve the status of any Award intended to be a Section 162(m) Award.

 

(d)                                 Stock Offered.  The shares of Stock to be delivered under the Plan shall be made available from (i) authorized but unissued shares of Stock, (ii) Stock held in the treasury of the Company, or (iii) previously issued shares of Stock reacquired by the Company, including shares purchased on the open market.

 

5.                                      Eligibility; Per Person Award Limitations.

 

(a)                                 Awards may be granted under the Plan only to Eligible Persons.

 

(b)                                 Beginning with the calendar year in which the Transition Period expires and for each calendar year thereafter, a Covered Employee may not be granted Awards intended to be Section 162(m) Awards (i) to the extent such Award is based on a number of shares of Stock (including Awards that may be settled in either cash or shares of Stock) relating to more

 

8

 

than 1,000,000 shares of Stock, subject to adjustment in a manner consistent with any adjustment made pursuant to Section 8, and (ii) to the extent such Award is designated to be paid only in cash and is not based on a number of shares of Stock, having a maximum value determined on the date of grant in excess of $5,000,000, in each case multiplied by the number of full or partial fiscal or calendar years, as applicable, in any performance period established with respect to an Award, if applicable, up to a maximum of five fiscal or calendar years.  If an Award is cancelled, then the cancelled Award shall continue to be counted toward the applicable limitation in this paragraph to the extent required by Section 162(m).

 

(c)                                  In each calendar year during any part of which the Plan is in effect, a non-employee member of the Board may not be granted Awards (i) relating to more than 100,000 shares of Stock, subject to adjustment in a manner consistent with any adjustment made pursuant to Section 8, or (ii) if greater, Awards having a value (determined, if applicable, pursuant to ASC Topic 718) on the date of grant in excess of $500,000, in each case multiplied by the number of full or partial calendar years in any performance period established with respect to an Award, if applicable; provided, that, for the calendar year in which a non-employee member of the Board first commences service on the Board only, the foregoing limitations shall be doubled; provided, further that, the limits set forth in this Section 5(c) shall be without regard to grants of Awards, if any, made to a non-employee member of the Board during any period in which such individual was an employee of the Company or of any of its Affiliates or was otherwise providing services to the Company or to any of its Affiliates other than in the capacity as a director of the Company.

 

6.                                      Specific Terms of Awards.

 

(a)                                 General.  Awards may be granted on the terms and conditions set forth in this Section 6.  Awards granted under the Plan may, in the discretion of the Committee, be granted either alone, in addition to, or in tandem with any other Award.  In addition, the Committee may impose on any Award or the exercise thereof, at the date of grant or thereafter (subject to Section 10), such additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee shall determine.

 

(b)                                 Options.  The Committee is authorized to grant Options, which may be designated as either ISOs or Nonstatutory Options, to Eligible Persons on the following terms and conditions:

 

(i)                                     Exercise Price.  Each Award Agreement evidencing an Option shall state the exercise price per share of Stock (the “Exercise Price”) established by the Committee; provided, however, that except as provided in Section 6(j) or in Section 8, the Exercise Price of an Option shall not be less than the greater of (A) the par value per share of the Stock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of the Option (or in the case of an ISO granted to an individual who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or its parent or any of its subsidiaries, 110% of the Fair Market Value per share of the Stock on the date of grant).  Notwithstanding the foregoing, the Exercise Price of a Nonstatutory Option may be less than 100% of the Fair Market Value per share of Stock as of the date of grant of the Option if the Option (1) does not provide for a deferral of compensation by reason of satisfying the short-term deferral exception set forth in the Nonqualified Deferred Compensation Rules or (2) provides for

 

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a deferral of compensation and is compliant with the Nonqualified Deferred Compensation Rules.

 

(ii)                                  Time and Method of Exercise; Other Terms.  The Committee shall determine the methods by which the Exercise Price may be paid or deemed to be paid, the form of such payment, including cash or cash equivalents, Stock (including previously owned shares or through a cashless exercise, i.e., “net settlement”, a broker-assisted exercise, or other reduction of the amount of shares otherwise issuable pursuant to the Option), other Awards or awards granted under other plans of the Company or any Affiliate, other property, or any other legal consideration the Committee deems appropriate (including notes or other contractual obligations of Participants to make payment on a deferred basis), the methods by or forms in which Stock will be delivered or deemed to be delivered to Participants, including the delivery of Restricted Stock subject to Section 6(d), and any other terms and conditions of any Option.  In the case of an exercise whereby the Exercise Price is paid with Stock, such Stock shall be valued based on the Stock’s Fair Market Value as of the date of exercise.  No Option may be exercisable for a period of more than ten years following the date of grant of the Option (or in the case of an ISO granted to an individual who owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or its parent or any of its subsidiaries, for a period of more than five years following the date of grant of the ISO).

 

(iii)                               ISOs.  The terms of any ISO granted under the Plan shall comply in all respects with the provisions of Section 422 of the Code.  ISOs may only be granted to Eligible Persons who are employees of the Company or employees of a parent or any subsidiary corporation of the Company.  Except as otherwise provided in Section 8, no term of the Plan relating to ISOs (including any SAR in tandem therewith) shall be interpreted, amended or altered, nor shall any discretion or authority granted under the Plan be exercised, so as to disqualify either the Plan or any ISO under Section 422 of the Code, unless the Participant has first requested the change that will result in such disqualification.  ISOs shall not be granted more than ten years after the earlier of the adoption of the Plan or the approval of the Plan by the Company’s stockholders. Notwithstanding the foregoing, to the extent that the aggregate Fair Market Value of shares of Stock subject to an ISO and the aggregate Fair Market Value of shares of stock of any parent or subsidiary corporation (within the meaning of Sections 424(e) and (f) of the Code) subject to any other incentive stock options of the Company or a parent or subsidiary corporation (within the meaning of Sections 424(e) and (f) of the Code) that are exercisable for the first time by a Participant during any calendar year exceeds $100,000, or such other amount as may be prescribed under Section 422 of the Code, such excess shall be treated as Nonstatutory Options in accordance with the Code.  As used in the previous sentence, Fair Market Value shall be determined as of the date the ISO is granted.  If a Participant shall make any disposition of shares of Stock issued pursuant to an ISO under the circumstances described in Section 421(b) of the Code (relating to disqualifying dispositions), the Participant shall notify the Company of such disposition within the time provided to do so in the applicable award agreement.

 

(c)                                  SARs.  The Committee is authorized to grant SARs to Eligible Persons on the following terms and conditions:

 

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(i)                                     Right to Payment.  An SAR is a right to receive, upon exercise thereof, the excess of (A) the Fair Market Value of one share of Stock on the date of exercise over (B) the grant price of the SAR as determined by the Committee.

 

(ii)                                  Grant Price. Each Award Agreement evidencing an SAR shall state the grant price per share of Stock established by the Committee; provided, however, that except as provided in Section 6(j) or in Section 8, the grant price per share of Stock subject to an SAR shall not be less than the greater of (A) the par value per share of the Stock or (B) 100% of the Fair Market Value per share of the Stock as of the date of grant of the SAR.  Notwithstanding the foregoing, the grant price of an SAR may be less than 100% of the Fair Market Value per share of Stock subject to an SAR as of the date of grant of the SAR if the SAR (1) does not provide for a deferral of compensation by reason of satisfying the short-term deferral exception set forth in the Nonqualified Deferred Compensation Rules or (2) provides for a deferral of compensation and is compliant with the Nonqualified Deferred Compensation Rules.

 

(iii)                               Method of Exercise and Settlement; Other Terms. The Committee shall determine the form of consideration payable upon settlement, the method by or forms in which Stock (if any) will be delivered or deemed to be delivered to Participants, and any other terms and conditions of any SAR.  SARs may be either free-standing or granted in tandem with other Awards.  No SAR may be exercisable for a period of more than ten years following the date of grant of the SAR.

 

(iv)                              Rights Related to Options.  An SAR granted in connection with an Option shall entitle a Participant, upon exercise, to surrender that Option or any portion thereof, to the extent unexercised, and to receive payment of an amount determined by multiplying (A) the difference obtained by subtracting the Exercise Price with respect to a share of Stock specified in the related Option from the Fair Market Value of a share of Stock on the date of exercise of the SAR, by (B) the number of shares as to which that SAR has been exercised.  The Option shall then cease to be exercisable to the extent surrendered.  SARs granted in connection with an Option shall be subject to the terms and conditions of the Award Agreement governing the Option, which shall provide that the SAR is exercisable only at such time or times and only to the extent that the related Option is exercisable and shall not be transferable except to the extent that the related Option is transferrable.

 

(d)                                 Restricted Stock.  The Committee is authorized to grant Restricted Stock to Eligible Persons on the following terms and conditions:

 

(i)                                     Restrictions.  Restricted Stock shall be subject to such restrictions on transferability, risk of forfeiture and other restrictions, if any, as the Committee may impose.  Except as provided in Section 7(a)(iii) and Section 7(a)(iv), during the restricted period applicable to the Restricted Stock, the Restricted Stock may not be sold, transferred, pledged, hedged, hypothecated, margined or otherwise encumbered by the Participant.

 

(ii)                                  Dividends and Splits.  As a condition to the grant of an Award of Restricted Stock, the Committee may allow a Participant to elect, or may require, that any cash dividends paid on a share of Restricted Stock be automatically reinvested in additional shares of Restricted Stock, applied to the purchase of additional Awards or deferred without interest to the

 

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date of vesting of the associated Award of Restricted Stock.  Unless otherwise determined by the Committee and specified in the applicable Award Agreement, Stock distributed in connection with a Stock split or Stock dividend, and other property (other than cash) distributed as a dividend, shall be subject to restrictions and a risk of forfeiture to the same extent as the Restricted Stock with respect to which such Stock or other property has been distributed.

 

(e)                                  Restricted Stock Units.  The Committee is authorized to grant Restricted Stock Units to Eligible Persons on the following terms and conditions:

 

(i)                                     Award and Restrictions.  Restricted Stock Units shall be subject to such restrictions (which may include a risk of forfeiture) as the Committee may impose.

 

(ii)                                  Settlement.  Settlement of vested Restricted Stock Units shall occur upon vesting or upon expiration of the deferral period specified for such Restricted Stock Units by the Committee (or, if permitted by the Committee, as elected by the Participant).  Restricted Stock Units shall be settled by delivery of (A) a number of shares of Stock equal to the number of Restricted Stock Units for which settlement is due, or (B) cash in an amount equal to the Fair Market Value of the specified number of shares of Stock equal to the number of Restricted Stock Units for which settlement is due, or a combination thereof, as determined by the Committee at the date of grant or thereafter.

 

(f)                                   Stock Awards.  The Committee is authorized to grant Stock Awards to Eligible Persons as a bonus, as additional compensation, or in lieu of cash compensation any such Eligible Person is otherwise entitled to receive, in such amounts and subject to such other terms as the Committee in its discretion determines to be appropriate.

 

(g)                                  Dividend Equivalents.  The Committee is authorized to grant Dividend Equivalents to Eligible Persons, entitling any such Eligible Person to receive cash, Stock, other Awards, or other property equal in value to dividends or other distributions paid with respect to a specified number of shares of Stock.  Dividend Equivalents may be awarded on a free-standing basis or in connection with another Award (other than an Award of Restricted Stock or a Stock Award).  The Committee may provide that Dividend Equivalents shall be paid or distributed when accrued or at a later specified date and, if distributed at a later date, may be deemed to have been reinvested in additional Stock, Awards, or other investment vehicles or accrued in a bookkeeping account without interest, and subject to such restrictions on transferability and risks of forfeiture, as the Committee may specify.  With respect to Dividend Equivalents granted in connection with another Award, absent a contrary provision in the Award Agreement, such Dividend Equivalents shall be subject to the same restrictions and risk of forfeiture as the Award with respect to which the dividends accrue and shall not be paid unless and until such Award has vested and been earned.

 

(h)                                 Other Stock-Based Awards.  The Committee is authorized, subject to limitations under applicable law, to grant to Eligible Persons 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, Stock, as deemed by the Committee to be consistent with the purposes of the Plan, including convertible or exchangeable debt securities, other rights convertible or exchangeable into Stock, purchase rights for Stock, Awards with value and payment contingent upon

 

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performance of the Company or any other factors designated by the Committee, and Awards valued by reference to the book value of Stock or the value of securities of, or the performance of, specified Affiliates of the Company.  The Committee shall determine the terms and conditions of such Other Stock-Based Awards.  Stock delivered pursuant to an Other-Stock Based Award in the nature of a purchase right granted under this Section 6(h) shall be purchased for such consideration, paid for at such times, by such methods, and in such forms, including cash, Stock, other Awards, or other property, as the Committee shall determine.

 

(i)                                     Cash Awards.  The Committee is authorized to grant Cash Awards, on a free-standing basis or as an element of, a supplement to, or in lieu of any other Award under the Plan to Eligible Persons in such amounts and subject to such other terms as the Committee in its discretion determines to be appropriate.

 

(j)                                    Substitute Awards; No Repricing.  Awards may be granted in substitution or exchange for any other Award granted under the Plan or under another plan of the Company or an Affiliate or any other right of an Eligible Person to receive payment from the Company or an Affiliate.  Awards may also be granted under the Plan in substitution for awards held by individuals who become Eligible Persons as a result of a merger, consolidation or acquisition of another entity or the assets of another entity by or with the Company or an Affiliate.  Such Substitute Awards referred to in the immediately preceding sentence that are Options or SARs may have an exercise price that is less than the Fair Market Value of a share of Stock on the date of the substitution if such substitution complies with the Nonqualified Deferred Compensation Rules and other applicable laws and exchange rules.  Except as provided in this Section 6(j) or in Section 8, without the approval of the stockholders of the Company, the terms of outstanding Awards may not be amended to (i) reduce the Exercise Price or grant price of an outstanding Option or SAR, (ii) grant a new Option, SAR or other Award in substitution for, or upon the cancellation of, any previously granted Option or SAR that has the effect of reducing the Exercise Price or grant price thereof, (iii) exchange any Option or SAR for Stock, cash or other consideration when the Exercise Price or grant price per share of Stock under such Option or SAR exceeds the Fair Market Value of a share of Stock or (iv) take any other action that would be considered a “repricing” of an Option or SAR under the applicable listing standards of the national securities exchange on which the Stock is listed (if any).

 

(k)                                 Performance Awards. The Committee is authorized to designate any of the Awards granted under the foregoing provisions of this Section 6 as Performance Awards.  The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance goals applicable to a Performance Award, and may exercise its discretion to reduce or increase the amounts payable under any Performance Award, except as limited under Section 6(k)(i).  Performance goals may differ among Performance Awards granted to any one Participant or to different Participants.  The performance period applicable to any Performance Award shall be set by the Committee in its discretion but shall not exceed ten years.

 

(i)                                     Section 162(m) Awards.  If the Committee determines in its discretion that a Performance Award granted to a Covered Employee shall be designated as a Section 162(m) Award, the grant, exercise, vesting and/or settlement of such Performance Award shall be contingent upon achievement of a pre-established performance goal or goals and

 

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other terms set forth in this Section 6(k)(i); provided, however, that nothing in this Section 6(k) or elsewhere in the Plan shall be interpreted as preventing the Committee from granting Performance Awards or other Awards to Covered Employees that are not intended to constitute Section 162(m) Awards or from determining that it is no longer necessary or appropriate for a Section 162(m) Award to qualify as such.

 

(A)                               Performance Goals Generally.  The performance goals for Section 162(m) Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria as specified by the Committee.  Performance goals shall be objective and shall otherwise meet the requirements of Section 162(m), including the requirement that the level or levels of performance targeted by the Committee must be “substantially uncertain” at the time the Committee actually establishes the performance goal or goals.

 

(B)                               Business Criteria for Performance Goals.  One or more of the following business criteria for the Company, on a consolidated basis, and/or for specified subsidiaries, business or geographical units or operating areas of the Company (except with respect to the total stockholder return and earnings per share criteria), shall be used by the Committee in establishing performance goals for Section 162(m) Awards: (1) revenues, sales or other income; (2) cash flow, discretionary cash flow, cash flows from operations, cash flows from investing activities, and/or cash flows from financing activities; (3) return on net assets, return on assets, return on investment, return on capital, return on capital employed or return on equity; (4) income, operating income or net income; (5) earnings or earnings margin determined before or after any one or more of depletion, depreciation and amortization expense; exploration and abandonments; impairment of oil and gas properties; impairment of inventory and other property and equipment; accretion of discount on asset retirement obligations; interest expense; net gain or loss on the disposition of assets; income or loss from discontinued operations, net of tax; noncash derivative related activity; amortization of stock-based compensation; income taxes; or other items; (6) equity; net worth; tangible net worth; book capitalization; debt; debt, net of cash and cash equivalents; capital budget or other balance sheet goals; (7) debt or equity financings or improvement of financial ratings; (8) general and administrative expenses; (9) net asset value; (10) Fair Market Value of the Stock, share price, share price appreciation, total stockholder return or payments of dividends; (11) achievement of savings from business improvement projects and achievement of capital projects deliverables; (12) working capital or working capital changes; (13) operating profit or net operating profit; (14) internal research or development programs; (15) geographic business expansion; (16) corporate development (including licenses, innovation, research or establishment of third party collaborations); (17) performance against environmental, ethics or sustainability targets; (18) safety performance and/or incident rate; (19) human resources management targets, including medical cost reductions, employee satisfaction or retention, workforce diversity and time to hire; (20) satisfactory internal or external audits; (21) consummation, implementation or completion of a Change in Control or other strategic partnerships, transactions, projects, processes or initiatives or other goals relating to acquisitions or divestitures (in whole or in part), joint ventures or strategic alliances; (22) regulatory approvals or other regulatory milestones; (23) legal compliance or risk reduction; (24) market share; (25) economic value added; or (26) cost reduction targets. Any of the above goals may be determined pre-tax or post-tax, on an absolute or relative basis, as compared to the performance of a published or special index deemed

 

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applicable by the Committee including the Standard & Poor’s 500 Stock Index or a group of comparable companies, as a ratio with other business criteria, as a ratio over a period of time or on a per unit of measure (such as per day, or per barrel, a volume or thermal unit of gas or a barrel-of-oil equivalent), on a per-share basis (basic or diluted), and on a basis of continuing operations only. The terms above may, but shall not be required to be, used as applied under generally accepted accounting principles, as applicable.

 

(C)                               Effect of Certain Events. The Committee may, at the time the performance goals in respect of a Section 162(m) Award are established, provide for the manner in which actual performance and performance goals with regard to the business criteria selected will reflect the impact of specified events or occurrences during the relevant performance period, which may mean excluding the impact of one or more events or occurrences, as specified by the Committee, for such performance period so long such events are objectively determinable. The adjustments described in this paragraph shall only be made, in each case, to the extent that such adjustments in respect of a Section 162(m) Award would not cause the Section 162(m) Award to fail to qualify as “performance-based compensation” under Section 162(m).

 

(D)                               Timing for Establishing Performance Goals.  No later than 90 days after the beginning of any performance period applicable to a Section 162(m) Award, or at such other date as may be required or permitted for “performance-based compensation” under Section 162(m), the Committee shall establish (i) the Eligible Persons who will be granted Section 162(m) Awards, and (ii) the objective formula used to calculate the amount of cash or Stock payable, if any, under such Section 162(m) Awards, based upon the level of achievement of a performance goal or goals with respect to one or more of the business criteria selected by the Committee from the list set forth in Section 6(k)(i)(B) and, if desired, the effect of any events set forth in Section 6(k)(i)(C).

 

(E)                                Performance Award Pool.  The Committee may establish an unfunded pool, with the amount of such pool calculated using an objective formula based upon the level of achievement of one or more performance goals with respect to business criteria selected from the list set forth in Section 6(k)(i)(B) during the given performance period, as specified by the Committee in accordance with Section 6(k)(i)(D).  The Committee may specify the amount of the pool as a percentage of any of such business criteria, a percentage in excess of a threshold amount with respect to such business criteria, or as another amount which need not bear a direct relationship to such business criteria but shall be objectively determinable and calculated based upon the level of achievement of pre-established goals with regard to the business criteria.  If a pool is established, the Committee shall also establish the maximum amount payable to each Covered Employee from the pool for each performance period.

 

(F)                                 Settlement or Payout of Awards; Other Terms.  Except as otherwise permitted under Section 162(m), after the end of each performance period and before any Section 162(m) Award is settled or paid, the Committee shall certify the level of performance achieved with regard to each business criteria established with respect to each Section 162(m) Award and shall determine the amount of cash or Stock, if any, payable to each Participant with respect to each Section 162(m) Award.  The Committee may, in its discretion,

 

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reduce the amount of a payment or settlement otherwise to be made in connection with a Section 162(m) Award, but may not exercise discretion to increase any such amount.

 

(G)                               Written Determinations.  With respect to each Section 162(m) Award, all determinations by the Committee as to (1) the establishment of performance goals and performance period with respect to the selected business criteria, (2) the establishment of the objective formula used to calculate the amount of cash or Stock payable, if any, based on the level of achievement of such performance goals, and (3) the certification of the level of performance achieved during the performance period with regard to each business criteria selected, shall each be made in writing.

 

(H)                              Options and SARs.  Notwithstanding the foregoing provisions of this Section 6(k)(i), Options and SARs with an Exercise Price or grant price not less than the Fair Market Value on the date of grant awarded to Covered Employees are intended to be Section 162(m) Awards even if not otherwise contingent upon achievement of one or more pre-established performance goal or goals with respect to business criteria set forth in Section 6(k)(i)(B).

 

(ii)                                  Status of Section 162(m) Awards.  The terms governing Section 162(m) Awards shall be interpreted in a manner consistent with Section 162(m), in particular the prerequisites for qualification as “performance-based compensation,” and, if any provision of the Plan as in effect on the date of adoption of any Award Agreement relating to a Section 162(m) Award does not comply or is inconsistent with the requirements of Section 162(m), such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.  Notwithstanding anything to the contrary in Section 6(k)(i) or elsewhere in the Plan, the Company intends to rely on the transition relief set forth in Treasury Regulation § 1.162-27(f), which may be relied upon until the earliest to occur of (i) the material modification of the Plan within the meaning of Treasury Regulation § 1.162-27(h)(1)(iii); (ii) the delivery of the total number of shares of Stock set forth in Section 4(a); or (iii) the first meeting of stockholders of the Company at which directors are to be elected that occurs after December 31, 2020 (the “Transition Period”), and during the Transition Period, Awards granted to Covered Employees under the Plan shall only be required to comply with the transition relief described in Treasury Regulation § 1.162-27(f).

 

7.                                      Certain Provisions Applicable to Awards.

 

(a)                                 Limit on Transfer of Awards.

 

(i)                                     Except as provided in Sections 7(a)(iii) and (iv), each Option and SAR shall be exercisable only by the Participant during the Participant’s lifetime, or by the person to whom the Participant’s rights shall pass by will or the laws of descent and distribution. Notwithstanding anything to the contrary in this Section 7(a), an ISO shall not be transferable other than by will or the laws of descent and distribution.

 

(ii)                                  Except as provided in Sections 7(a)(i), (iii) and (iv), no Award, other than a Stock Award, and no right under any such Award, may be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant and any such

 

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purported assignment, alienation, pledge, attachment, sale, transfer or encumbrance shall be void and unenforceable against the Company or any Affiliate.

 

(iii)                               To the extent specifically provided by the Committee, an Award may be transferred by a Participant without consideration to immediate family members or related family trusts, limited partnerships or similar entities or on such terms and conditions as the Committee may from time to time establish.

 

(iv)                              An Award may be transferred pursuant to a domestic relations order entered or approved by a court of competent jurisdiction upon delivery to the Company of a written request for such transfer and a certified copy of such order.

 

(b)                                 Form and Timing of Payment under Awards; Deferrals.  Subject to the terms of the Plan and any applicable Award Agreement, payments to be made by the Company or any of its Affiliates upon the exercise or settlement of an Award may be made in such forms as the Committee shall determine in its discretion, including cash, Stock, other Awards or other property, and may be made in a single payment or transfer, in installments, or on a deferred basis (which may be required by the Committee or permitted at the election of the Participant on terms and conditions established by the Committee); provided, however, that any such deferred or installment payments will be set forth in the Award Agreement.  Payments may include, without limitation, provisions for the payment or crediting of reasonable interest on installment or deferred payments or the grant or crediting of Dividend Equivalents or other amounts in respect of installment or deferred payments denominated in Stock.

 

(c)                                  Evidencing Stock. The Stock or other securities of the Company delivered pursuant to an Award may be evidenced in any manner deemed appropriate by the Committee in its sole discretion, including in the form of a certificate issued in the name of the Participant or by book entry, electronic or otherwise, and shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations, and other requirements of the SEC, any stock exchange upon which such Stock or other securities are then listed, and any applicable federal, state or other laws, and the Committee may cause a legend or legends to be inscribed on any such certificates to make appropriate reference to such restrictions.  Further, if certificates representing Restricted Stock are registered in the name of the Participant, the Company may retain physical possession of the certificates and may require that the Participant deliver a stock power to the Company, endorsed in blank, related to the Restricted Stock.

 

(d)                                 Consideration for Grants. Awards may be granted for such consideration, including services, as the Committee shall determine, but shall not be granted for less than the minimum lawful consideration.

 

(e)                                  Additional Agreements.  Each Eligible Person to whom an Award is granted under the Plan may be required to agree in writing, as a condition to the grant of such Award or otherwise, to subject an Award that is exercised or settled following such Eligible Person’s termination of employment or service to a general release of claims and/or a noncompetition or other restricted covenant agreement in favor of the Company and its

 

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Affiliates, with the terms and conditions of such agreement(s) to be determined in good faith by the Committee.

 

8.                                      Subdivision or Consolidation; Recapitalization; Change in Control; Reorganization.

 

(a)                                 Existence of Plans and Awards.  The existence of the Plan and the Awards granted hereunder shall not affect in any way the right or power of the Company, the Board or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of debt or equity securities ahead of or affecting Stock or the rights thereof, the dissolution or liquidation of the Company or any sale, lease, exchange or other disposition of all or any part of its assets or business or any other corporate act or proceeding.

 

(b)                                 Additional Issuances.  Except as expressly provided herein, the issuance by the Company of shares of stock of any class, including upon conversion of shares or obligations of the Company convertible into such shares or other securities, and in any case whether or not for fair value, shall not affect, and no adjustment by reason thereof shall be made with respect to, the number of shares of Stock subject to Awards theretofore granted or the purchase price per share of Stock, if applicable.

 

(c)                                  Subdivision or Consolidation of Shares.  The terms of an Award and the share limitations under the Plan shall be subject to adjustment by the Committee from time to time, in accordance with the following provisions:

 

(i)                                     If at any time, or from time to time, the Company shall subdivide as a whole (by reclassification, by a Stock split, by the issuance of a distribution on Stock payable in Stock, or otherwise) the number of shares of Stock then outstanding into a greater number of shares of Stock or in the event the Company distributes an extraordinary cash dividend, then, as appropriate (A) the maximum number of shares of Stock available for delivery with respect to Awards and applicable limitations with respect to Awards provided in Section 4 and Section 5 (other than cash limits) shall be increased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any then outstanding Award shall be increased proportionately, and (C) the price (including the Exercise Price or grant price) for each share of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be reduced proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions; provided, however, that in the case of an extraordinary cash dividend that is not an Adjustment Event, the adjustment to the number of shares of Stock and the Exercise Price or grant price, as applicable, with respect to an outstanding Option or SAR may be made in such other manner as the Committee may determine that is permitted pursuant to applicable tax and other laws, rules and regulations.

 

(ii)                                  If at any time, or from time to time, the Company shall consolidate as a whole (by reclassification, by reverse Stock split, or otherwise) the number of shares of Stock then outstanding into a lesser number of shares of Stock, then, as appropriate (A) the

 

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maximum number of shares of Stock available for delivery with respect to Awards and applicable limitations with respect to Awards provided in Section 4 and Section 5 (other than cash limits) shall be decreased proportionately, and the kind of shares or other securities available for the Plan shall be appropriately adjusted, (B) the number of shares of Stock (or other kind of shares or securities) that may be acquired under any then outstanding Award shall be decreased proportionately, and (C) the price (including the Exercise Price or grant price) for each share of Stock (or other kind of shares or securities) subject to then outstanding Awards shall be increased proportionately, without changing the aggregate purchase price or value as to which outstanding Awards remain exercisable or subject to restrictions.

 

(d)                                 Recapitalization.  In the event of any change in the capital structure or business of the Company or other corporate transaction or event that would be considered an “equity restructuring” within the meaning of ASC Topic 718 and, in each case, that would result in an additional compensation expense to the Company pursuant to the provisions of ASC Topic 718, if adjustments to Awards with respect to such event were discretionary or otherwise not required (each such an event, an “Adjustment Event”), then the Committee shall equitably adjust (i) the aggregate number or kind of shares that thereafter may be delivered under the Plan, (ii) the number or kind of shares or other property (including cash) subject to an Award, (iii) the terms and conditions of Awards, including the purchase price or Exercise Price of Awards and performance goals, as applicable, and (iv) the applicable limitations with respect to Awards provided in Section 4 and Section 5 (other than cash limits) to equitably reflect such Adjustment Event (“Equitable Adjustments”).  In the event of any change in the capital structure or business of the Company or other corporate transaction or event that would not be considered an Adjustment Event, and is not otherwise addressed in this Section 8, the Committee shall have complete discretion to make Equitable Adjustments (if any) in such manner as it deems appropriate with respect to such other event.

 

(e)                                  Change in Control and Other Events.  Except to the extent otherwise provided in any applicable Award Agreement, vesting of any Award shall not occur solely upon the occurrence of a Change in Control and, in the event of a Change in Control or other changes in the Company or the outstanding Stock by reason of a recapitalization, reorganization, merger, consolidation, combination, exchange or other relevant change occurring after the date of the grant of any Award, the Committee, acting in its sole discretion without the consent or approval of any holder, may exercise any power enumerated in Section 3 (including the power to accelerate vesting, waive any forfeiture conditions or otherwise modify or adjust any other condition or limitation regarding an Award) and may also effect one or more of the following alternatives, which may vary among individual holders and which may vary among Awards held by any individual holder:

 

(i) accelerate the time of exercisability of an Award so that such Award may be exercised in full or in part for a limited period of time on or before a date specified by the Committee, after which specified date all unexercised Awards and all rights of holders thereunder shall terminate;

 

(ii) redeem in whole or in part outstanding Awards by requiring the mandatory surrender to the Company by selected holders of some or all of the outstanding Awards held by such holders (irrespective of whether such Awards are then vested or exercisable) as of a

 

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date, specified by the Committee, in which event the Committee shall thereupon cancel such Awards and pay to each holder an amount of cash or other consideration per Award (other than a Dividend Equivalent or Cash Award, which the Committee may separately require to be surrendered in exchange for cash or other consideration determined by the Committee in its discretion) equal to the Change in Control Price, less the Exercise Price with respect to an Option and less the grant price with respect to a SAR, as applicable to such Awards; provided, however, that to the extent the Exercise Price of an Option or the grant price of an SAR exceeds the Change in Control Price, such Award may be cancelled for no consideration;

 

(iii) cancel Awards that remain subject to a restricted period as of the date of a Change in Control or other such event without payment of any consideration to the Participant for such Awards; or

 

(iv) make such adjustments to Awards then outstanding as the Committee deems appropriate to reflect such Change in Control or other such event (including the substitution, assumption, or continuation of Awards by the successor company or a parent or subsidiary thereof);

 

provided, however, that so long as the event is not an Adjustment Event, the Committee may determine in its sole discretion that no adjustment is necessary to Awards then outstanding.  If an Adjustment Event occurs, this Section 8(e) shall only apply to the extent it is not in conflict with Section 8(d).

 

9.                                      General Provisions.

 

(a)                                 Tax Withholding.  The Company and any of its Affiliates are authorized to withhold from any Award granted, or any payment relating to an Award, including from a distribution of Stock, taxes due or potentially payable in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company, its Affiliates and Participants to satisfy the payment of withholding taxes and other tax obligations relating to any Award in such amounts as may be determined by the Committee.  The Committee shall determine, in its sole discretion, the form of payment acceptable for such tax withholding obligations, including the delivery of cash or cash equivalents, Stock (including previously owned shares, net settlement, a broker-assisted sale, or other cashless withholding or reduction of the amount of shares otherwise issuable or delivered pursuant to the Award), other property, or any other legal consideration the Committee deems appropriate.  Any determination made by the Committee to allow a Participant who is subject to Rule 16b-3 to pay taxes with shares of Stock through net settlement or previously owned shares shall be approved by either a committee made up of solely two or more Qualified Members or the full Board.  If such tax withholding amounts are satisfied through net settlement or previously owned shares, the maximum number of shares of Stock that may be so withheld or surrendered shall be the number of shares of Stock that have an aggregate Fair Market Value on the date of withholding or surrender equal to the aggregate amount of such tax liabilities determined based on the greatest withholding rates for federal, state, foreign and/or local tax purposes, including payroll taxes, that may be utilized without creating adverse accounting treatment for the Company with respect to such Award, as determined by the Committee.

 

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(b)                                 Limitation on Rights Conferred under Plan.  Neither the Plan nor any action taken hereunder shall be construed as (i) giving any Eligible Person or Participant the right to continue as an Eligible Person or Participant or in the employ or service of the Company or any of its Affiliates, (ii) interfering in any way with the right of the Company or any of its Affiliates to terminate any Eligible Person’s or Participant’s employment or service relationship at any time, (iii) giving an Eligible Person or Participant any claim to be granted any Award under the Plan or to be treated uniformly with other Participants and/or employees and/or other service providers, or (iv) conferring on a Participant any of the rights of a stockholder of the Company unless and until the Participant is duly issued or transferred shares of Stock in accordance with the terms of an Award.

 

(c)                                  Governing Law; Submission to Jurisdiction.  All questions arising with respect to the provisions of the Plan and Awards shall be determined by application of the laws of the State of Delaware, without giving effect to any conflict of law provisions thereof, except to the extent Delaware law is preempted by federal law.  The obligation of the Company to sell and deliver Stock hereunder is subject to applicable federal and state laws and to the approval of any governmental authority required in connection with the authorization, issuance, sale, or delivery of such Stock.  With respect to any claim or dispute related to or arising under the Plan, the Company and each Participant who accepts an Award hereby consent to the exclusive jurisdiction, forum and venue of the state and federal courts located in Houston, Texas.

 

(d)                                 Severability and Reformation.  If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable law or, if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. If any of the terms or provisions of the Plan or any Award Agreement conflict with the requirements of Rule 16b-3 (as those terms or provisions are applied to Eligible Persons who are subject to Section 16 of the Exchange Act), Section 162(m) (with respect to any Section 162(m) Award) or Section 422 of the Code (with respect to ISOs), then those conflicting terms or provisions shall be deemed inoperative to the extent they so conflict with the requirements of Rule 16b-3 or Section 162(m) (unless the Board or the Committee, as appropriate, has expressly determined that the Plan or such Award should not comply with Rule 16b-3 or Section 162(m)) or Section 422 of the Code, in each case, only to the extent Rule 16b-3 and such sections of the Code are applicable.  With respect to ISOs, if the Plan does not contain any provision required to be included herein under Section 422 of the Code, that provision shall be deemed to be incorporated herein with the same force and effect as if that provision had been set out at length herein; provided, further, that, to the extent any Option that is intended to qualify as an ISO cannot so qualify, that Option (to that extent) shall be deemed a Nonstatutory Option for all purposes of the Plan.

 

(e)                                  Unfunded Status of Awards; No Trust or Fund Created.  The Plan is intended to constitute an “unfunded” plan for certain incentive awards. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Affiliate and a Participant or any other person.  To the

 

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extent that any person acquires a right to receive payments from the Company or any Affiliate pursuant to an Award, such right shall be no greater than the right of any general unsecured creditor of the Company or such Affiliate.

 

(f)                                   Nonexclusivity of the Plan.  Neither the adoption of the Plan by the Board nor its submission to the stockholders of the Company for approval shall be construed as creating any limitations on the power of the Board or a committee thereof to adopt such other incentive arrangements as it may deem desirable, including incentive arrangements and awards which do not constitute “performance-based compensation” under Section 162(m).  Nothing contained in the Plan shall be construed to prevent the Company or any of its Affiliates from taking any corporate action which is deemed by the Company or such Affiliate to be appropriate or in its best interest, whether or not such action would have an adverse effect on the Plan or any Award made under the Plan. No employee, beneficiary or other person shall have any claim against the Company or any of its Affiliates as a result of any such action.

 

(g)                                  Fractional Shares.  No fractional shares of Stock shall be issued or delivered pursuant to the Plan or any Award, and the Committee shall determine in its sole discretion whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional shares of Stock or whether such fractional shares of Stock or any rights thereto shall be cancelled, terminated, or otherwise eliminated with or without consideration.

 

(h)                                 Interpretation.  Headings are given to the Sections and subsections of the Plan solely as a convenience to facilitate reference.  Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof. Words in the masculine gender shall include the feminine gender, and, where appropriate, the plural shall include the singular and the singular shall include the plural. In the event of any conflict between the terms and conditions of an Award Agreement and the Plan, the provisions of the Plan shall control. The use herein of the word “including” following any general statement, term or matter shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation”, “but not limited to”, or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such general statement, term or matter.  References herein to any agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and not prohibited by the Plan.

 

(i)                                     Facility of Payment.  Any amounts payable hereunder to any individual under legal disability or who, in the judgment of the Committee, is unable to manage properly his financial affairs, may be paid to the legal representative of such individual, or may be applied for the benefit of such individual in any manner that the Committee may select, and the Company shall be relieved of any further liability for payment of such amounts.

 

(j)                                    Conditions to Delivery of Stock.  Nothing herein or in any Award Agreement shall require the Company to issue any shares with respect to any Award if that issuance would, in the opinion of counsel for the Company, constitute a violation of the

 

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Securities Act, any other applicable statute or regulation, or the rules of any applicable securities exchange or securities association, as then in effect.  In addition, each Participant who receives an Award under the Plan shall not sell or otherwise dispose of Stock that is acquired upon grant, exercise or vesting of an Award in any manner that would constitute a violation of any applicable federal or state securities laws, the Plan or the rules, regulations or other requirements of the SEC or any stock exchange upon which the Stock is then listed.  At the time of any exercise of an Option or SAR, or at the time of any grant of any other Award, the Company may, as a condition precedent to the exercise of such Option or SAR or settlement of any other Award, require from the Participant (or in the event of his or her death, his or her legal representatives, heirs, legatees, or distributees) such written representations, if any, concerning the holder’s intentions with regard to the retention or disposition of the shares of Stock being acquired pursuant to the Award and such written covenants and agreements, if any, as to the manner of disposal of such shares as, in the opinion of counsel to the Company, may be necessary to ensure that any disposition by that holder (or in the event of the holder’s death, his or her legal representatives, heirs, legatees, or distributees) will not involve a violation of the Securities Act, any other applicable state or federal statute or regulation, or any rule of any applicable securities exchange or securities association, as then in effect.  Stock or other securities shall not be delivered pursuant to any Award until payment in full of any amount required to be paid pursuant to the Plan or the applicable Award Agreement (including any Exercise Price, grant price, or tax withholding) is received by the Company.

 

(k)                                 Section 409A of the Code.  It is the general intention, but not the obligation, of the Committee to design Awards to comply with or to be exempt from the Nonqualified Deferred Compensation Rules, and Awards will be operated and construed accordingly. Neither this Section 9(k) nor any other provision of the Plan is or contains a representation to any Participant regarding the tax consequences of the grant, vesting, exercise, settlement, or sale of any Award (or the Stock underlying such Award) granted hereunder, and should not be interpreted as such.  In no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by the Participant on account of non-compliance with the Nonqualified Deferred Compensation Rules.  Notwithstanding any provision in the Plan or an Award Agreement to the contrary, in the event that a “specified employee” (as defined under the Nonqualified Deferred Compensation Rules) becomes entitled to a payment under an Award that would be subject to additional taxes and interest under the Nonqualified Deferred Compensation Rules if the Participant’s receipt of such payment or benefits is not delayed until the earlier of (i) the date of the Participant’s death, or (ii) the date that is six months after the Participant’s “separation from service,” as defined under the Nonqualified Deferred Compensation Rules (such date, the “Section 409A Payment Date”), then such payment or benefit shall not be provided to the Participant until the Section 409A Payment Date.  Any amounts subject to the preceding sentence that would otherwise be payable prior to the Section 409A Payment Date will be aggregated and paid in a lump sum without interest on the Section 409A Payment Date.  The applicable provisions of the Nonqualified Deferred Compensation Rules are hereby incorporated by reference and shall control over any Plan or Award Agreement provision in conflict therewith.

 

(l)                                     Clawback.  The Plan and all Awards granted hereunder are subject to any written clawback policies that the Company, with the approval of the Board or an authorized committee thereof, may adopt either prior to or following the Effective Date, including any

 

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policy adopted to conform to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and rules promulgated thereunder by the SEC and that the Company determines should apply to Awards.  Any such policy may subject a Participant’s Awards and amounts paid or realized with respect to Awards to reduction, cancelation, forfeiture or recoupment if certain specified events or wrongful conduct occur, including an accounting restatement due to the Company’s material noncompliance with financial reporting regulations or other events or wrongful conduct specified in any such clawback policy.

 

(m)                             Status under ERISA.  The Plan shall not constitute an “employee benefit plan” for purposes of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended.

 

(n)                                 Plan Effective Date and Term.  The Plan was adopted by the Board to be effective on the Effective Date. No Awards may be granted under the Plan on and after the tenth anniversary of the Effective Date, which is August 10, 2027. However, any Award granted prior to such termination (or any earlier termination pursuant to Section 10), and the authority of the Board or Committee to amend, alter, adjust, suspend, discontinue, or terminate any such Award or to waive any conditions or rights under such Award in accordance with the terms of the Plan, shall extend beyond such termination until the final disposition of such Award.

 

10.                               Amendments to the Plan and Awards.  The Committee may amend, alter, suspend, discontinue or terminate any Award or Award Agreement, the Plan or the Committee’s authority to grant Awards without the consent of stockholders or Participants, except that any amendment or alteration to the Plan, including any increase in any share limitation, shall be subject to the approval of the Company’s stockholders not later than the annual meeting next following such Committee action if such stockholder approval is required by any federal or state law or regulation or the rules of any stock exchange or automated quotation system on which the Stock may then be listed or quoted, and the Committee may otherwise, in its discretion, determine to submit other changes to the Plan to stockholders for approval; provided, that, without the consent of an affected Participant, no such Committee action may materially and adversely affect the rights of such Participant under any previously granted and outstanding Award.  For purposes of clarity, any adjustments made to Awards pursuant to Section 8 will be deemed not to materially and adversely affect the rights of any Participant under any previously granted and outstanding Award and therefore may be made without the consent of affected Participants.

 

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