Document:

Exhibit

Execution Version

BEIGENE, LTD.
AMENDMENT NO. 2 TO SHARE PURCHASE AGREEMENT
THIS AMENDMENT NO. 2 (this “Amendment”) to the SHARE PURCHASE AGREEMENT, dated as of October 31, 2019, as amended on December 6, 2019 (the “Agreement”), is made and entered into as of March 17, 2020, by and among BeiGene, Ltd., an exempted company incorporated in the Cayman Islands (the “Company”), and Amgen Inc., a Delaware corporation (the “Investor”). Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Agreement.
RECITALS
WHEREAS, pursuant to the Agreement, the Investor purchased and subscribed for Two Hundred Six Million Six Hundred Thirty-Five Thousand Thirteen (206,635,013) Ordinary Shares in the form of Fifteen Million Eight Hundred Ninety-Five Thousand One (15,895,001) American Depositary Shares of the Company at a purchase price of $13.45 per share, or $174.85 per American Depositary Share, at the Closing, which represented approximately twenty point five percent (20.5%) of the Company’s outstanding share capital as of that date;
WHEREAS, in order to account for periodic dilution from the issuance of the Company’s shares under its equity incentive plans, the Company and the Investor would like to provide for the option to purchase by the Investor of such supplemental amount of Ordinary Shares in the form of American Depositary Shares on a monthly basis such that the Investor will hold approximately twenty point six percent (20.6%) of the Company’s outstanding share capital immediately following each such purchase in order to maintain the Investor’s equity method accounting treatment for its investment in the Company;
WHEREAS, pursuant to Section 8.9 of the Agreement, no provision in the Agreement may be supplemented, deleted or amended except in a writing executed by an authorized representative of each of the Investor and the Company; and
WHEREAS, the Company will seek all approvals of the Company’s shareholders required for the Company to (i) enter into this Amendment and (ii) issue the Monthly Firm Shares (as defined below), in each case in accordance with the HK Listing Rules.
NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1.    Addition of Section 2.4. The following shall be inserted as a new Section 2.4 of the Agreement:
“2.4 Monthly Sale of Additional Shares. 
(a)    Subject to the Subsequent Shareholder Approval, purchases and sales under this Section 2.4 shall commence on the first (1st) day of the month following the Subsequent 

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Shareholder Approval (or if the Company’s American Depositary Shares are not trading on NASDAQ on such day, the next trading day) (the “Commencement Date”) and shall continue until the earliest of (i) the date on which the Investor and its Affiliates collectively own less than twenty percent (20%) of the outstanding share capital of the Company as a result of the Investor’s sale of Shares, (ii) written notice from either the Investor or the Company that such party wishes to terminate such monthly purchases and sales, which notice shall be provided at least sixty (60) days in advance of the termination of such monthly purchases and sales or such longer period as reasonably required, upon advice of Investor’s counsel, to permit the Investor to commence market purchases under a trading plan in accordance with Rule 10b5-1 under the Exchange Act, and (iii) the third anniversary of the Commencement Date (the “Monthly Sale Period”). Upon mutual agreement by the parties and subject to approval by the Company’s shareholders if required by the HK Listing Rules, this Amendment shall be extended for additional three-year terms upon expiration of the then current term. 
(b)    During the Monthly Sale Period, on the first (1st) day of each month (or if the Company’s American Depositary Shares are not trading on NASDAQ on such day, the next trading day), the Company shall send or cause to be sent via e-mail to the Investor the following information (such  notice, the “Monthly Firm Shares Notice”): (i) the number of ADSs Outstanding as of the applicable Reference Date, (ii) the Amgen Percentage as of such Reference Date based on the latest information provided by the Investor (which shall be confirmed by the Investor and revised if inaccurate), (iii) the volume weighted average price of one Company American Depositary Share on NASDAQ for the ninety (90) calendar days preceding such Reference Date, as reported by Bloomberg (each, a “Monthly Firm Shares Purchase Price”) and (iv) an updated Company Disclosure Schedule as of the applicable Reference Date in accordance with Section 2.4(d), if any.  If the Amgen Percentage is less than the Trigger Percentage as of such Reference Date, then,  upon the Investor’s written request (the “Investor Request”) delivered within two (2) Business Days following Investor’s receipt of the Monthly Firm Shares Notice, the Company hereby agrees to sell to the Investor and the Investor agrees to subscribe for such additional number of Ordinary Shares in the form of American Depositary Shares (the “Monthly Firm Shares”) equal to: (x) the number of ADSs Outstanding multiplied by (y) a percentage equal to the Target Percentage minus the Amgen Percentage, based on the Monthly Firm Shares Notice, at a purchase price per Monthly Firm Share equal to the Monthly Firm Shares Purchase Price; provided, however, that in no event shall the aggregate number of Monthly Firm Shares issued during the Monthly Sale Period, exceed Seventy-Five Million (75,000,000) Ordinary Shares (subject to appropriate adjustment in the event of any share dividend, share split, combination or other similar recapitalization with respect to the Ordinary Shares). If the Amgen Percentage in any such Monthly Firm Shares Notice is equal to or greater than the Trigger Percentage, then the Company shall not issue, and the Investor shall not have the option to subscribe for, any Monthly Firm Shares for such month.  The Monthly Firm Shares shall be in the form of American Depositary Shares, unless the Investor requests in writing that the Monthly Firm Shares be delivered in the form of Ordinary Shares, in which case the number of shares and purchase price shall be adjusted accordingly based on the ADS to Ordinary Share ratio.  Any Monthly Firm Shares purchased hereunder shall be “Shares” or “Deposit Shares” as the context shall so require for purposes of Article 1, Article 3, Article 4, Article 5 and Article 8 of the Agreement.  Until such time as the Investor elects to cease equity method accounting for its investment in the Company, the Investor and Company acknowledge and agree that the Investor’s direct purchase of 

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Ordinary Shares in the form of American Depositary Shares from the Company on a monthly basis hereunder shall be the primary means for the Investor to purchase shares in order to maintain such equity method accounting treatment.   
(c)    Subject to the terms and conditions hereof, the closing of the purchase and sale of Monthly Firm Shares, if any, shall take place each month within seven (7) Business Days following the Reference Date, or at such other time as mutually agreed by the Company and the Investor (the “Monthly Closing”). At each Monthly Closing, the Company will instruct the Transfer Agent to deliver to the Investor, via book entry to the applicable balance account registered in the name of the Investor, the Monthly Firm Shares for such month, against payment of the aggregate Monthly Firm Share Purchase Price for such Monthly Firm Shares in U.S. dollars by wire transfer of immediately available funds to the order of the Company. 
(d)    For purposes of Article 3 and Article 4 of the Agreement, the representations and warranties contained therein shall be deemed made as of the date of the applicable Monthly Closing, as supplemented by, in the case of Article 3, (i) the Company’s most recent Form 10-K (including any information incorporated by reference therein from the Company’s definitive proxy statement on Schedule 14A) and any subsequent Form 10-Q and Form 8-K filed with or furnished to the SEC and made publicly available prior to the date of delivery of the Monthly Firm Shares Notice (other than (x) any information that is contained in the “Risk Factors” or “Note Regarding Forward-Looking Statements” or similar sections of such Company SEC Documents and (y) any forward-looking statements, or other statements that are similarly predictive or forward-looking in nature, contained in such Company SEC Documents), and (ii) any update to the Company Disclosure Schedule as of the applicable Reference Date provided by the Company to Investor in accordance with Section 2.4(b); provided that the Company shall not be required to provide any updates to (x) Section 3.2 (Subsidiaries) to list any newly formed subsidiaries since the most recent disclosures in the Form 10-K or any Form 10-Q, or (y) Section 3.3 (Capitalization) other than the updated number of outstanding shares included in the Monthly Firm Shares Notice, which shall constitute a representation and warranty of the Company under the Agreement; and provided, further, that if there are any material updates to the Company Disclosure Schedule following delivery of the Investor Request, the Investor Request may be revoked prior to the issuance of the shares in the Investor’s sole discretion. 
(e)    For purposes of this Section 2.4:
(i)    “ADSs Outstanding” means the total number of the Company’s Ordinary Shares outstanding prior to NASDAQ market opening on the Reference Date, expressed in terms of American Depositary Shares.
(ii)    “Amgen Percentage” means the percentage of the ADSs Outstanding held by the Investor as of the latest Reference Date.
(iii)    “Reference Date” means the day on which the Company’s ADSs are trading on NASDAQ immediately preceding the first (1st) day of each calendar month during the Monthly Sale Period.

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(iv)    “Subsequent Shareholder Approval” means all approvals of the Company’s shareholders required for the Company to (i) enter into Amendment No. 2 to the Share Purchase Agreement and (ii) issue the Monthly Firm Shares, in each case in accordance with the HK Listing Rules.
(v)    “Target Percentage” means 20.6% of the Company’s outstanding share capital after giving effect to the issuance of the Monthly Firm Shares hereunder.” 
(vi)    “Trigger Percentage” means 20.4% of the Company’s outstanding share capital.
2.    Amendment to Section 5.16(a). The first sentence of Section 5.16(a) is deleted in its entirety and replaced with:
“If the Company proposes to offer or sell any Ordinary Shares, American Depositary Shares or Ordinary Share Equivalents after the Closing Date, other than pursuant to the Plans (“New Securities”), and at the time immediately prior to such offer or sale the Investor holds no more than twenty one percent (21.0%) of the Company’s outstanding share capital, the Company shall use reasonable best efforts to provide the Investor with an opportunity to participate in such offering or sale and purchase upon the same terms and conditions as other purchasers in the offering or sale of the New Securities, up to that portion of such New Securities as is necessary to allow the Investor to hold approximately twenty point six percent (20.6%) of the Company’s share capital after the sale of New Securities, so long as the Investor’s ownership percentage prior to such sale has not decreased as a result of the Investor’s sale of Shares or the Investor’s failure to participate in future offerings or sales of New Securities in which Investor is given the opportunity to participate pursuant to this Section 5.16(a), subject to applicable Law, HK Listing Rules and any waiver therefrom granted by the HK Stock Exchange.”
3.    Addition of Section 5.21. The following shall be inserted as a new Section 5.21 of the Agreement:
“5.21 Preparation of Proxy; Shareholders Meeting; Board Recommendation.

(a)     As promptly as reasonably practicable after the execution of this Amendment, the Company shall prepare and cause to be filed with the SEC and the HK Stock Exchange a proxy circular relating to the Subsequent Shareholder Approval (such proxy circular, and any amendments or supplements thereto, the “Supplemental Proxy Statement”). The Investor shall assist and cooperate with the Company in the preparation of the Supplemental Proxy Statement and the resolution of any comments to the Supplemental Proxy Statement received from the SEC or HK Stock Exchange. The Company shall promptly correct any information in the Supplemental Proxy Statement if and to the extent such information becomes false or misleading in any material respect. The Company shall notify the Investor upon the receipt of any comments from the SEC or HK Stock Exchange, as applicable, and of any request by the SEC or HK Stock Exchange, as applicable, for amendments or supplements to the Supplemental Proxy Statement. The Company shall use its reasonable best efforts to (i) respond as promptly as reasonably practicable to any comments received from the SEC or HK Stock Exchange, as applicable, concerning the Supplemental Proxy Statement 

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and to resolve such comments with the SEC or HK Stock Exchange, as applicable, and (ii) to cause the Supplemental Proxy Statement to be disseminated to its shareholders as promptly as reasonably practicable after the resolution of any such comments.

(b)     The Company shall take all necessary actions in accordance with applicable Law, the governing documents of the Company and the rules of NASDAQ and the HK Stock Exchange, as applicable, to duly call, give notice of, convene and hold a special shareholders meeting (the “Supplemental Meeting”) for the purpose of obtaining the Subsequent Shareholder Approval, as soon as reasonably practicable after the SEC or HK Stock Exchange, as applicable, confirms that it has no further comments on the Supplemental Proxy Statement. Notwithstanding any provision of this Agreement to the contrary, the Company may adjourn, recess or postpone the Supplemental Meeting (i) to the extent necessary to ensure that any required supplement or amendment to the Supplemental Proxy Statement is provided to the shareholders of the Company within a reasonable amount of time in advance of the Supplemental Meeting, (ii) if as of the time for which the Supplemental Meeting is originally scheduled (as set forth in the Supplemental Proxy Statement) there are insufficient shares of capital stock of the Company represented (either in person or by proxy) to constitute a quorum necessary to conduct the business of the Supplemental Meeting or (iii) as may be required by applicable Law.”

4.    General
A.    Except as expressly modified by this Amendment, the terms and provisions of the Agreement shall remain unchanged and in full force and effect in accordance with its terms.
B.    Each of the parties hereto shall bear its respective costs, including legal fees, and expenses incurred in connection with the preparation of this Amendment and the activities incurred in connection therewith.
C.    This Amendment may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which shall constitute one and the same agreement.
D.    This Amendment shall be governed by and construed in accordance with the Laws of the State of New York, without regard to the conflict of laws principles thereof that would require the application of the Law of any other jurisdiction.
E.    The Agreement and this Amendment constitute the full and entire understanding and agreement between the Company and the Investor with regard to the subject matter hereof and neither the Company nor the Investor shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein.
F.    This Amendment shall become effective immediately upon execution by the Company and the Investor.
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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
THE COMPANY:
BEIGENE, LTD.
By:  /s/ Scott A. Samuels    
Name:    Scott A. Samuels
Title:    Senior Vice President, General Counsel

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.
INVESTOR:
AMGEN INC.
By:  /s/ Robert A. Bradway    
Name:    Robert A. Bradway
Title:    Chairman of the Board, President & CEO

7amendedandrestated2018eq

                 KNOWLES CORPORATION 2018 EQUITY AND CASH INCENTIVE PLAN                           (As Amended and Restated Effective April 28, 2020)   I.    INTRODUCTION   1.1 Purposes. The  purposes  of  the  Knowles  Corporation  2018  Equity  and  Cash  Incentive  Plan,  as  amended  and  restated effective as of April 28, 2020 (this "Plan") are (i) to align the interests of the Company's stockholders and the  recipients of awards under this Plan by increasing the proprietary interest of such recipients in the Company's growth  and success, (ii) to advance the interests of the Company by attracting and retaining officers, other employees, and  Non-Employee Directors and (iii) to motivate such persons to act in the long-term best interests of the Company and  its  stockholders,  and  thereby  to  enhance  stockholder  returns.   On  March  6,  2020,  the  Board  of  Directors  of  the  Company adopted this amendment and restatement of the Plan which will be effective as of the date that the Company's  stockholders approve the Plan.  1.2 Certain Definitions.       "Affiliate" shall mean any (i) Subsidiary, or (ii) any corporation, trade or business (including without limitation,  a partnership or limited liability company) that is directly or indirectly controlled (whether by ownership of stock,  assets or an equivalent ownership interest or voting interest) by the Company or one of its Subsidiaries, and any other  entity in which the Company or any of its Subsidiaries has a material equity interest and that is designated as an  Affiliate by the Committee.       "Agreement"  shall  mean  the  written  or  electronic  agreement  evidencing  an  award  hereunder  between  the  Company and the recipient of such award.       "Automatic Exercise Date" shall have the meaning set forth in Section 2.5.       "Board" shall mean the Board of Directors of the Company.       "Cause" shall mean a participant (i) engages in conduct that constitutes willful misconduct, dishonesty, or gross  negligence in the performance of his or her duties and results in material detriment to the Company or an Affiliate;  (ii) breaches his or her fiduciary duties to the Company or an Affiliate; (iii) willfully fails to carry out the lawful and  ethical directions of the person(s) to whom he or she reports, which failure is not promptly corrected after notification;  (iv) engages in conduct that is demonstrably and materially injurious to the Company or an Affiliate, or that materially  harms the reputation, goodwill, or business of the Company or an Affiliate; (v) engages in conduct that is reported in  the  general  or  trade  press  or  otherwise  achieves  general  notoriety  and  that  is  scandalous,  immoral  or  illegal  and  materially harms the reputation, goodwill, or business of the Company or an Affiliate; (vi) is convicted of, or enters a  plea of guilty or nolo contendere (or similar plea) to, a crime that constitutes a felony, or a crime that constitutes a  misdemeanor involving  moral turpitude, dishonesty or fraud; (vii) is found liable in any  Securities and Exchange  Commission or other civil or criminal securities law action, or any cease and desist order applicable to him or her is  entered (regardless of  whether or not the Participant admits or denies liability); (viii) uses,  without authorization,  confidential or proprietary information of the Company or an Affiliate or information which the Company or Affiliate  is obligated not to use or disclose, or discloses such information without authorization and such disclosure results in  material detriment to the Company or an Affiliate; (ix) breaches any written or electronic agreement with the Company  or an Affiliate not to disclose any information pertaining to the Company or an Affiliate or their customers, suppliers  and businesses and such breach results in material detriment to the Company or an Affiliate; (x) materially breaches  any agreement relating to non-solicitation, non-competition, or the ownership or protection of the intellectual property  of the Company or an Affiliate; or (xi) breaches any of the Company's or an Affiliate's policies applicable to him or  her, whether currently in effect or adopted after the Effective Date, and such breach, in the Committee's judgment,  could result in material detriment to the Company or an Affiliate.                                                  A-1 

 

         "Change of Control" shall have the meaning set forth in Section 6.9(g).       "Code" shall mean the Internal Revenue Code of 1986, as amended.       "Committee" shall mean the Compensation Committee of the Board, or a subcommittee thereof, consisting of  two or more members of the Board, each of whom is intended to be (i) a "Non-Employee Director" within the meaning  of Rule 16b-3 under the Exchange Act and (ii) "independent within the meaning of the rules of the New York Stock  Exchange or, if the Common Stock is not listed on the New York Stock Exchange, within the meaning of the rules of  the principal stock exchange on which the Common Stock is then traded.       "Common Stock" shall mean the common stock, par value $0.01 per share, of the Company, and all rights  appurtenant thereto.       "Company" shall mean Knowles Corporation, a Delaware corporation, or any successor thereto.       "Deferred  Stock  Unit"  shall  mean  a  bookkeeping  entry  representing  a  right  granted  to  a  Non-Employee  Director pursuant to Section 5.2 of the Plan to receive a deferred payment of Directors' Awards to be issued and  delivered at the end of the deferral period elected by the Non-Employee Director, as described in Article V of the Plan.       "Deferred Stock Unit Award" shall mean an award of Deferred Stock Units under this Plan.       "Directors' Awards" shall mean the annual awards granted to eligible Non-Employee Directors as provided in  Section 5.1 of the Plan.       "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.       "Fair Market Value" shall mean, with respect to any share of Common Stock as of any date of reference, the  closing price for a share of Common Stock as reported on such day (or, if such day is not a trading day, on the next  trading day) as reported on the principal United States exchange on which the Common Stock then regularly trades;  provided, however, that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for  any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or  methods as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate and in  compliance with Section 409A of the Code to the extent relevant.       "Free-Standing SAR" shall mean an SAR which is not granted in tandem with, or by reference to, an option,  which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock)  or, to the extent provided in the applicable Agreement, cash or a combination thereof, with an aggregate value equal  to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of  such SAR, multiplied by the number of such SARs which are exercised.       "Good Reason" shall mean any one or more of the following events that occur on or following a Change of  Control, unless the participant has consented to such action in writing: (i) a material reduction in (A) the rate of the  participant's annual base salary (other than a salary reduction not to exceed 10% that applies to all other similarly- situated employees), (B) a material adverse change in the participant's title, (iii) any material adverse reduction in the  participant's authorities, responsibilities or reporting relationships, or (iv) the relocation of the participant's principal  place of employment to a location more than fifty (50) miles from the participant's principal place of employment  (unless  such  relocation  does  not  increase  the  participant's  commute  by  more  than  twenty  (20)  miles),  except  for  required travel on the Company's business; provided, however, that (y) Good Reason shall not be deemed to exist  unless written notice of termination on account thereof is given by the participant to the Company no later than sixty  (60) days after the time at which the event or condition purportedly giving rise to Good Reason first occurs or arises;  and  (z) if  there  exists  (without  regard  to  this  clause  (z))  an  event  or  condition  that  constitutes  Good  Reason,  the  Company shall have thirty (30) days from the date notice of such a termination is given to cure such event or condition  and, if the Company does so, such event or condition shall not constitute Good Reason hereunder. The participant's  right to resign from employment for a Good Reason event or condition shall be waived if the participant fails to resign                                                  A-2 

 

    within  sixty  (60) days  following  the  last  day  of  the  Company's  cure  period.  Notwithstanding  the  foregoing,  if  a  participant and the Company (or any of its Affiliates) have entered into an employment agreement or other similar  agreement that specifically defines "Good Reason", then with respect to such participant, "Good Reason" shall have  the meaning defined in that employment agreement or other agreement.       "Incentive  Stock  Option"  shall  mean  an  option  to  purchase  shares  of  Common  Stock  that  meets  the  requirements of Section 422 of the Code, or any successor provision, which is intended by the Committee to constitute  an Incentive Stock Option.       "Non-Employee Director" shall mean any director of the Company who is not an officer or employee of the  Company or any Affiliate.       "Nonqualified  Stock Option" shall  mean an option to purchase shares of  Common Stock  which is  not an  Incentive Stock Option.       "Performance Award" shall mean a right to receive an amount of cash, Common Stock, or a combination of  both, contingent upon the attainment of specified Performance Measures within a specified Performance Period.       "Performance Measures" shall mean the criteria and objectives, established by the Committee, which shall be  satisfied or met (i) as a condition to the grant or exercisability of all or a portion of an option or SAR or (ii) during the  applicable Restriction Period or Performance Period as a condition to the vesting of the holder's interest, in the case  of a Restricted Stock Award, of the shares of Common Stock subject to such award, or, in the case of a Restricted  Stock Unit Award or Performance Award, to the holder's receipt of the shares of Common Stock subject to such award  or of payment with respect to such award.       "Performance Period" shall mean any period designated by the Committee during which (i) the Performance  Measures applicable to an award shall be measured and (ii) the conditions to vesting applicable to an award shall  remain in effect.       "Prior Plan" shall  mean the Knowles  Corporation 2016 Equity and Cash Incentive Plan and the Knowles  Corporation 2014 Equity and Cash Incentive Plan.       "Restricted Stock" shall mean shares of Common Stock which are subject to a Restriction Period and which  may,  in  addition  thereto,  be  subject  to  the  attainment  of  specified  Performance  Measures  within  a  specified  Performance Period.       "Restricted Stock Award" shall mean an award of Restricted Stock under this Plan.       "Restricted Stock Unit" shall mean a right to receive one share of Common Stock or, in lieu thereof and to the  extent provided in the applicable Agreement, the Fair Market Value of such share of Common Stock in cash, which  shall  be  contingent  upon  the  expiration  of  a  specified  Restriction  Period  and  which  may,  in  addition  thereto,  be  contingent upon the attainment of specified Performance Measures within a specified Performance Period.       "Restricted Stock Unit Award" shall mean an award of Restricted Stock Units under this Plan.       "Restriction Period" shall mean any period designated by the Committee during which (i) the Common Stock  subject  to  an  award  may  not  be  sold,  transferred,  assigned,  pledged,  hypothecated  or  otherwise  encumbered  or  disposed of, except as provided in this Plan or the Agreement relating to such award, or (ii) the conditions to vesting  applicable to an award shall remain in effect.       "SAR" shall mean a stock appreciation right which may be a Free-Standing SAR or a Tandem SAR.       "Specified Minimum Value" shall have the meaning set forth in Section 2.5       "Stock Award" shall mean a Restricted Stock Award, Restricted Stock Unit Award or Unrestricted Stock Award.                                                   A-3 

 

         "Subsidiary" shall mean any corporation, limited liability company, partnership, joint venture or similar entity  in which the Company owns, directly or indirectly, an equity interest possessing 50% or more of the combined voting  power of the total outstanding equity interests of such entity.  Notwithstanding the foregoing, in the case of an Incentive  Stock Option, the term "Subsidiary" means a corporation that is a subsidiary of the Company within the meaning of  section 424(f) of the Code.       "Substitute Award" shall mean an award granted under this Plan upon the assumption of, or in substitution for,  outstanding equity awards previously granted by a company or other entity in connection with a corporate transaction,  including a merger, combination, consolidation or acquisition of property or stock; provided, however, that in no event  shall the term "Substitute Award" be construed to refer to an award made in connection with the cancellation and  repricing of an option or SAR.       "Tandem SAR" shall mean an SAR which is granted in tandem with, or by reference to, an option (including a  Nonqualified Stock Option granted prior to the date of grant of the SAR), which entitles the holder thereof to receive,  upon exercise of such SAR and surrender for cancellation of all or a portion of such option, shares of Common Stock  (which may be Restricted Stock) or, to the extent provided in the applicable Agreement, cash or a combination thereof,  with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of  exercise over the base price of such SAR, multiplied by the number of shares of Common Stock subject to such option,  or portion thereof, which is surrendered.       "Tax Date" shall have the meaning set forth in Section 6.6.       "Ten Percent Holder" shall have the meaning set forth in Section 2.1(a).       "Termination of Service" shall have the meaning set forth in Section 6.9(a).       "Unrestricted Stock" shall mean shares of Common Stock which are not subject to a Restriction Period or  Performance Measures.       "Unrestricted Stock Award" shall mean an award of Unrestricted Stock under this Plan.  1.3 Administration. This Plan shall be administered by the Committee. Any one or a combination of the following  awards may be made under this Plan to eligible persons: (i) options to purchase shares of Common Stock in the form  of Incentive Stock Options or Nonqualified Stock Options; (ii) SARs in the form of Tandem SARs or Free-Standing  SARs; (iii) Stock Awards; (iv) Performance Awards and (v) Deferred Stock Units. The Committee shall, subject to the  terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount and timing of  each award to such persons and, if applicable, the number of shares of Common Stock subject to an award, the number  of SARs, the number of Restricted Stock Units or Deferred Stock Units, the dollar value subject to a Performance  Award, the purchase price or base price associated with the award, the time and conditions of exercise or settlement  of the award and all other terms and conditions of the award, including, without limitation, the form of the Agreement  evidencing  the  award.  Notwithstanding  anything  contained  herein  to  the  contrary,  including  Section 6.3,  the  Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding  options and SARs shall become exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable  to any outstanding awards shall lapse, (iii) all or a portion of the Performance Period applicable to any outstanding  awards shall lapse and (iv) the Performance Measures (if any) applicable to any outstanding awards shall be deemed  to be satisfied at the target, maximum or any other level. The Committee shall, subject to the terms of this Plan,  interpret this Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the  administration of this Plan and may impose, incidental to the grant of an award, conditions with respect to the award,  such as limiting competitive employment or other activities. All such interpretations, rules, regulations and conditions  shall be conclusive and binding on all parties.       The Committee may delegate some or all of its power and authority under the Plan to the Board or, subject to  applicable law, to the Chief Executive Officer or such other executive officer of the Company as the Committee deems                                                  A-4 

 

    appropriate; provided, however, that the Committee may not delegate its power and authority to the Chief Executive  Officer or other executive officer of the Company  with regard to the selection for participation in this Plan of an  officer, director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing  or amount of an award to such an officer, director or other person.       No member of the Board or Committee, and neither the Chief Executive Officer nor any other executive officer  to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission,  interpretation, construction or determination made in connection with this Plan in good faith, and the members of the  Board  and  the  Committee  and  the  Chief  Executive  Officer  or  other  executive  officer  shall  be  entitled  to  indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including  attorneys' fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the  Company's Certificate of Incorporation and/or By-laws) and under any directors' and officers' liability insurance that  may be in effect from time to time.       A majority of the Committee shall constitute a quorum. The acts of the Committee shall be either (i) acts of a  majority of the members of the Committee present at any meeting at which a quorum is present or (ii) acts approved  in writing by all of the members of the Committee without a meeting.  1.4 Eligibility. Participants in this Plan shall consist of such officers, other employees, Non-Employee Directors, and  persons expected to become officers, other employees, or Non-Employee Directors of the Company and its Affiliates  as the Committee in its sole discretion may select from time to time; provided, however, that no Award may be effective  unless the participant has commenced the provision of services for the Company or its Affiliates. The Committee's  selection of a person to participate in this Plan at any time shall not require the Committee to select such person to  participate in this Plan at any other time. Except as provided otherwise in an Agreement, for purposes of this Plan,  references to employment by the Company shall also mean employment by an Affiliate, and references to employment  shall include service as a Non-Employee Director. The Committee shall determine, in its sole discretion, the extent to  which a participant shall be considered employed during any periods during which such participant is on a leave of  absence. The aggregate value of cash compensation and the grant date fair value of shares of Common Stock that may  be granted during any fiscal year of the Company to any Non-Employee Director shall not exceed $500,000; provided,  however, that the limit set forth in this sentence shall be multiplied by two in the year in which a Non-Employee  Director commences service on the Board.  1.5 Shares Available. Subject to adjustment as provided in Section 6.8 and to all other limits set forth in this Section  1.5, 16,100,000 shares of Common Stock shall initially be available for all awards under this Plan and no more than  1,000,000 shares of Common Stock in the aggregate may be issued under the Plan in connection with Incentive Stock  Options. To the extent the Company grants an option or a Free-Standing SAR under the Plan, the number of shares of  Common Stock that remain available for future grants under the Plan shall be reduced by an amount equal to the  number of shares subject to such option or Free-Standing SAR. To the extent the Company grants a Stock Award, a  stock-settled Performance Award or a Deferred Stock Unit Award (on a stand-alone basis and not in connection with  the vesting of an award), the number of shares of Common Stock that remain available for future grants under the  Plan shall be reduced by an amount equal to 1.75 times the number of shares subject to such Stock Award, Deferred  Stock Unit Award or stock-settled Performance Award.       To the extent that shares of Common Stock subject to an outstanding option, SAR, Stock Award, Deferred Stock  Unit Award or Performance Award granted under the Plan or the Prior Plan are not issued or delivered by reason of  (i) the expiration, termination, cancellation or forfeiture of such award (excluding shares subject to an option canceled  upon settlement in shares of a related Tandem SAR or shares subject to a Tandem SAR canceled upon exercise of a  related option) or (ii) the settlement of such award in cash, such shares of Common Stock shall again be available for  re-issuance under this Plan. In addition, shares of Common Stock subject to an award under this Plan shall not again  be available for issuance under this Plan if such shares are (x) shares that were subject to an option or a SAR and were  not issued or delivered upon  the  net settlement or  net exercise of  such option or SAR,  (y) shares delivered to or                                                  A-5 

 

    withheld  by  the  Company  to  pay  the  purchase  price  or  the  withholding  taxes  related  to  an  outstanding  award  or  (z) shares repurchased by the Company on the open market with the proceeds of an option exercise.       The number of shares of Common Stock available for awards under this Plan shall not be reduced by (i) the  number of shares of Common Stock subject to Substitute Awards or (ii) available shares under a stockholder approved  plan of a company or other entity which was a party to a corporate transaction with the Company (as appropriately  adjusted to reflect such corporate transaction) which become subject to awards granted under this Plan (subject to  applicable stock exchange requirements).       Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued  shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares  or otherwise or a combination thereof.  1.6  Certain Limitations.  The maximum number of shares of Common Stock subject to any Award that may be  granted under this Plan during any fiscal year of the Corporation to any participant shall be as follows:  (a) 2,000,000  Stock Options or SARs, (b) 500,000 shares of Restricted Stock, and (c) 500,000 Restricted Stock Units. No employee  shall be granted any Performance Share that could result in the Participant receiving more than 500,000 shares of  Common  Stock  for  any  Performance  Period.  The  share  limits  in  this Section  1.6 shall  be  subject  to  adjustment  pursuant to Section 6.8.   II.    STOCK OPTIONS AND STOCK APPRECIATION RIGHTS   2.1 Stock Options. The Committee may, in its discretion, grant options to purchase shares of Common Stock to such  eligible persons as may be selected by the Committee; provided, however, that a participant may be granted an option  only if the underlying Common Stock qualifies, with respect to such participant, as "service recipient stock" within  the meaning set forth in Section 409A of the Code. Each option, or portion thereof, that is not an Incentive Stock  Option shall be a Nonqualified Stock Option. To the extent that the aggregate Fair Market Value (determined as of the  date of grant) of shares of Common Stock with respect to which options designated as Incentive Stock Options are  exercisable  for  the  first  time  by  a  participant  during  any  calendar  year  (under  this  Plan  or  any  other  plan  of  the  Company, or any parent or Subsidiary) exceeds the amount (currently $100,000) established by the Code, such options  shall constitute Nonqualified Stock Options.  Options shall be subject to the following terms and conditions and shall  contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem  advisable.  Incentive Stock Options may only be granted to employees of the Company and its corporate subsidiaries  within the meaning of Section 424(f) of the Code.       (a) Number of Shares and Purchase Price. The number of shares of Common Stock subject to an option and the  purchase price per share purchasable upon exercise of the option shall be determined by the Committee; provided,  however, that the purchase price per share purchasable upon exercise of an option shall not be less than 100% of the  Fair Market Value of a share of Common Stock on the date of grant of such option; provided further, that if an Incentive  Stock Option shall be granted to any person who, at the time such option is granted, owns capital stock possessing  more than 10 percent of the total combined voting power of all classes of capital stock of the Company (or of any  parent or Subsidiary) (a "Ten Percent Holder"), the purchase price per share shall not be less than the price (currently  110% of Fair Market Value) required by the Code in order to constitute an Incentive Stock Option.       Notwithstanding the foregoing, in the case of an option that is a Substitute Award, the purchase price per share  of the shares subject to such option may be less than 100% of the Fair Market Value per share on the date of grant,  provided, that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of  the shares subject to the Substitute Award, over (b) the aggregate purchase price thereof does not exceed the excess  of:  (x) the  aggregate  fair  market  value  (as  of  the  time  immediately  preceding  the  transaction  giving  rise  to  the  Substitute Award, such fair market value to be determined by the Committee) of the shares of the predecessor company                                                  A-6 

 

    or  other  entity  that  were  subject  to  the  grant  assumed  or  substituted  for  by  the  Company,  over  (y) the  aggregate  purchase price of such shares.       (b) Option Period and Exercisability. The period during which an option may be exercised shall be determined  by the Committee; provided, however, that no option shall be exercised later than ten (10) years after its date of grant;  provided further, that if an Incentive Stock Option shall be granted to a Ten Percent Holder, such option shall not be  exercised later than five years after its date of grant. The Committee may, in its discretion, establish Performance  Measures which shall be satisfied or met as a condition to the exercisability of all or a portion of an option. The  Committee shall determine whether an option shall become exercisable in cumulative or non-cumulative installments  and in part or in full at any time. An exercisable option, or portion thereof, may be exercised only with respect to  whole shares of Common Stock.       (c) Method of Exercise. An option may be exercised (i) by giving written notice to the Company specifying the  number of whole shares of Common Stock to be purchased and accompanying such notice with payment thereof in  full (or arrangement made for such payment to the Company's satisfaction) either (A) in cash, (B) by delivery (either  actual delivery or by attestation procedures established by the Company) of shares of Common Stock having a Fair  Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such  exercise,  (C) authorizing  the  Company  to  withhold  whole  shares  of  Common  Stock  which  would  otherwise  be  delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary  to  satisfy  such  obligation,  (D) in  cash  by  a  broker-dealer  acceptable  to  the  Company  to  whom  the  optionee  has  submitted an irrevocable notice of exercise or (E) a combination of (A), (B) and (C), in each case to the extent set  forth in the Agreement relating to the option, (ii) if applicable, by surrendering to the Company any Tandem SARs  which are canceled by reason of the exercise of the option and (iii) by executing such documents as the Company may  reasonably request. No shares of Common Stock shall be issued and no certificate representing shares of Common  Stock shall be delivered until the  full purchase price therefor and any  withholding taxes thereon, as described in  Section 6.6, have been paid (or arrangement made for such payment to the Company's satisfaction).   2.2 Stock Appreciation Rights. The Committee may, in its discretion, grant SARs to such eligible persons as may be  selected  by  the  Committee; provided, however,  that a  participant  may  be  granted  a  SAR  only  if  the  underlying  Common Stock qualifies, with respect to such participant, as "service recipient stock" within the meaning set forth in  Section 409A of the Code. The Agreement relating to an SAR shall specify whether the SAR is a Tandem SAR or a  Free-Standing SAR.       SARs  shall  be  subject  to  the  following  terms  and  conditions  and  shall  contain  such  additional  terms  and  conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:       (a) Number of SARs and Base Price. The number of SARs subject to an award shall be determined by the  Committee. Any  Tandem  SAR  related  to  an  Incentive  Stock  Option  shall  be  granted  at  the  same  time  that  such  Incentive Stock Option is granted. The base price of a Tandem SAR shall be the purchase price per share of the related  option. The base price of a Free-Standing SAR shall be determined by the Committee; provided, however, that such  base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of  such SAR (or, if earlier, the date of grant of the option for which the SAR is exchanged or substituted).       Notwithstanding the foregoing, in the case of an SAR that is a Substitute Award, the base price per share of the  shares subject to such SAR may be less than 100% of the Fair Market Value per share on the date of grant, provided,  that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares  subject  to  the  Substitute Award,  over  (b) the  aggregate  base  price  thereof  does  not  exceed  the  excess  of:  (x) the  aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award,  such fair market value to be determined by the Committee) of the shares of the predecessor company or other entity  that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate base price of such  shares.                                                  A-7 

 

         (b) Exercise  Period  and  Exercisability.  The  period  for  the exercise  of  an  SAR  shall  be  determined  by  the  Committee; provided, however, that no SAR shall be exercised later than ten (10) years after its date of grant; provided  further, that no Tandem SAR shall be exercised later than the expiration, cancellation, forfeiture or other termination  of the related option. The Committee may, in its discretion, establish Performance Measures which shall be satisfied  or met as a condition to the exercisability of all or a portion of an SAR. The Committee shall determine whether an  SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time. An exercisable  SAR, or portion thereof, may be exercised, in the case of a Tandem SAR, only with respect to whole shares of Common  Stock and, in the case of a Free-Standing SAR, only with respect to a whole number of SARs. If an SAR is exercised  for  shares  of  Restricted  Stock,  a  certificate  or  certificates  representing  such  Restricted  Stock  shall  be  issued  in  accordance with Section 3.3(c), or such shares shall be transferred to the holder in book entry form with restrictions  on  the  shares  duly  noted,  and  the  holder  of  such  Restricted  Stock  shall  have  such  rights  of  a  stockholder  of  the  Company as determined pursuant to Section 3.3(d). Prior to the exercise of a stock-settled SAR, the holder of such  SAR shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to  such SAR.       (c) Method of Exercise. A Tandem SAR may be exercised (i) by giving written notice to the Company specifying  the number of whole SARs which are being exercised, (ii) by surrendering to the Company any options which are  canceled by reason of the exercise of the Tandem SAR and (iii) by executing such documents as the Company may  reasonably request. A Free-Standing SAR may be exercised (A) by giving written notice to the Company specifying  the whole number of SARs which are being exercised and (B) by executing such documents as the Company may  reasonably request. No shares of Common Stock shall be issued and no certificate representing shares of Common  Stock  shall  be  delivered  until  any  withholding  taxes  thereon,  as  described  in Section 6.6,  have  been  paid  (or  arrangement made for such payment to the Company's satisfaction).  2.3 No Repricing. The Committee shall not without the approval of the stockholders of the Company, (i) reduce the  purchase price or base price of any previously granted option or SAR, (ii) cancel any previously granted option or  SAR in exchange for another option or SAR with a lower purchase price or base price or (iii) cancel any previously  granted option or SAR in exchange for cash or another award if the purchase price of such option or the base price of  such SAR exceeds the Fair Market Value of a share of Common Stock on the date of such cancellation, in each case,  other than in connection with a Change of Control or the adjustment provisions set forth in Section 6.8  2.4 Dividend Equivalents. Notwithstanding anything in an Agreement to the contrary, the holder of an option or SAR  shall not be entitled to receive dividend equivalents with respect to the number of shares of Common Stock subject to  such option or SAR.  2.5 Automatic Exercise. The Committee may, in its discretion, provide in an option or SAR Agreement or adopt  procedures  that  an  option  or  SAR  outstanding  on  the  last  business  day  of  the  term  of  such  option  or  SAR  (the  "Automatic Exercise Date") that has a "Specified Minimum Value" shall be automatically and without further action  by the participant (or in the event of the participant's death, the participant's personal representative or estate), be  exercised on the Automatic Exercise Date. Payment of the exercise price of such option may be made pursuant to such  procedures as may be approved by the Committee from time to time and the Company shall deduct or withhold an  amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 6.6. For purposes of  this Section 2.5, the term "Specified Minimum Value" means that the Fair Market Value per share of Common Stock  exceeds the exercise price or base price, as applicable, of a share subject to an expiring option or SAR by at least $0.50  cents per share or such other amount as the Committee shall determine from time to time. The Company may elect to  discontinue the automatic exercise of options and SARs pursuant to this Section 2.5 at any time upon notice to a  participant or to apply the automatic exercise feature only to certain groups of participants. The automatic exercise of  an option or SAR pursuant to this Section 2.5 shall apply only to an option or SAR that has been timely accepted by  a participant under procedures specified by the Company from time to time.                                                   A-8 

 

    III.    STOCK AWARDS   3.1 Stock Awards. The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be  selected by the Committee. The Agreement relating to a Stock Award shall specify  whether the Stock Award is a  Restricted Stock Award, Restricted Stock Unit Award or Unrestricted Stock Award.  3.2 Terms of Unrestricted Stock Awards. The number of shares of Common Stock subject to an Unrestricted Stock  Award  shall  be  determined  by  the  Committee.  Unrestricted  Stock Awards shall  not  be  subject  to  any  Restriction  Periods or Performance Measures; provided, however, Unrestricted Stock Awards shall be limited so that the Common  Stock subject to all Unrestricted Stock Awards, combined with all awards granted under the Plan that do not include  the minimum vesting provisions set forth in Section 6.3 of the Plan, does not exceed 5% of the total number of shares  available for awards under this Plan. Upon the grant of an Unrestricted Stock Award, subject to the Company's right  to require payment of any taxes in accordance with Section 6.6, a certificate or certificates evidencing ownership of  the requisite number of shares of Common Stock shall be delivered to the holder of such award or such shares shall  be transferred to the holder in book entry form.   3.3 Terms  of  Restricted  Stock Awards.  Restricted  Stock  Awards  shall  be  subject  to  the  following  terms  and  conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the  Committee shall deem advisable.       (a) Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock  Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a  Restricted Stock Award shall be determined by the Committee.       (b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Award shall provide, in the manner  determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares  of Common Stock subject to such award (i) if the holder of such award remains continuously in the employment of  the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied  or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such  award (x) if the holder of such award does not remain continuously in the employment of the Company during the  specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified  Performance Period.       (c) Stock Issuance. During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in  book entry form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing  a Restricted Stock Award shall be registered in the holder's name and may bear a legend, in addition to any legend  which  may  be  required  pursuant  to Section 6.7,  indicating  that  the  ownership  of  the  shares  of  Common  Stock  represented by such certificate is subject to the restrictions, terms and conditions of this Plan and the Agreement  relating to the Restricted Stock Award. All such certificates shall be deposited with the Company, together with stock  powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee  of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the  shares of Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in  part.  Upon  termination  of  any  applicable  Restriction  Period  (and  the  satisfaction  or  attainment  of  applicable  Performance Measures), subject to the Company's right to require payment of any taxes in accordance with Section  6.6, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book  entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be  delivered to the holder of such award.       (d) Rights with Respect to Restricted Stock Awards. Unless otherwise set forth in the Agreement relating to a  Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award  shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive                                                  A-9 

 

    dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided,  however,  that  any  distributions  or  dividends  with  respect  to  shares  of  Common  Stock,  including  regular  cash  dividends, shall be deposited with the Company and shall be subject to the same restrictions as the shares of Common  Stock with respect to which such distributions or dividends were made.  3.4 Terms of Restricted Stock Unit Awards. Restricted Stock Unit Awards shall be subject to the following terms  and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as  the Committee shall deem advisable.       (a) Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock  Unit Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to  a Restricted Stock Unit Award shall be determined by the Committee.       (b) Vesting and Forfeiture. The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner  determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such  Restricted Stock Unit Award (i) if the holder of such award remains continuously in the employment of the Company  during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during  a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the  holder of such award does not remain continuously in the employment of the Company during the specified Restriction  Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period.       (c) Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to a Restricted Stock Unit Award  shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and  (ii) whether the holder thereof shall be entitled to receive dividend equivalents and, if determined by the Committee,  interest on, or the deemed reinvestment of, any dividend equivalents, with respect to the number of shares of Common  Stock subject to such award. Any dividend equivalents with respect to Restricted Stock Units that are subject to vesting  conditions shall be subject to the same restrictions as such Restricted Stock Units. Prior to the settlement of a Restricted  Stock Unit Award, the holder of such award shall have no rights as a stockholder of the Company with respect to the  shares of Common Stock subject to such award.   IV.    PERFORMANCE AWARDS   4.1 Performance Awards. The Committee may, in its discretion, grant Performance Awards to such eligible persons  as may be selected by the Committee.  4.2 Terms of Performance Awards. Performance Awards shall be subject to the following terms and conditions and  shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall  deem advisable.       (a) Value  of  Performance Awards  and  Performance  Measures. The  method  of  determining  the  value  of  the  Performance Award and the Performance Measures and Performance Period applicable to a Performance Award shall  be determined by the Committee.       (b) Vesting  and  Forfeiture.  The Agreement  relating  to a  Performance Award  shall  provide,  in  the  manner  determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such  Performance Award  if  the  specified  Performance  Measures  are  satisfied  or  met  during  the  specified  Performance  Period and for the forfeiture of such award if the specified Performance Measures are not satisfied or met during the  specified Performance Period.       (c) Settlement of Vested Performance Awards. The Agreement relating to a Performance Award shall specify  whether such award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a                                                 A-10 

 

    combination thereof. If a Performance Award is settled in shares of Restricted Stock, such shares of Restricted Stock  shall be issued to the holder in book entry form or a certificate or certificates representing such Restricted Stock shall  be  issued  in  accordance  with Section 3.3(c) and  the  holder  of  such  Restricted  Stock  shall  have  such  rights  as  a  stockholder of the Company as determined pursuant to Section 3.3(d). Any dividends or dividend equivalents with  respect to a Performance Award shall be subject to the same restrictions as such Performance Award. Prior to the  settlement of a Performance Award in shares of Common Stock, including Restricted Stock, the holder of such award  shall have no rights as a stockholder of the Company.   V.     NON-EMPLOYEE DIRECTOR COMPENSATION   5.1 Directors' Awards. As of or as soon as administratively practicable following the date of each annual meeting of  the Company's stockholders, each director who is a Non-Employee Director immediately following the date of such  annual  meeting  shall  be  granted  a  Directors' Award  in  the  form  of  an  Unrestricted  Stock Award,  Options,  SARs,  Restricted Stock, Restricted Stock Units and/or Deferred Stock Units, in such amount and subject to such terms and  conditions as shall be determined by the Board for such year, subject to the limit set forth in Section 1.4. In addition  to the annual compensation of Non-Employee Directors, the Board may also authorize one-time Directors' Awards to  Non-Employee Directors, or to an individual upon joining the Board, on such terms as it shall deem appropriate,  subject to the limit set forth in Section 1.4.  5.2 Deferred Stock Units. Subject to Section 409A of the Code, a Non-Employee Director may elect to defer receipt  of his or her Directors' Awards, other than options and SARs, in accordance with such procedures as may from time  to time be prescribed by the Committee. A deferral election shall be valid only if it is delivered prior to the first day  of the calendar year in which the services giving rise to the Directors' Awards are to be performed (or such other date  as the Committee may determine for the year in which an individual first becomes a Non-Employee Director and to  the extent permitted by Section 409A of the Code). A participant's deferral election shall become irrevocable as of the  last date the deferral could be delivered or such earlier date as may be established by the Committee. A Non-Employee  Director may revoke or change a deferral election at any time prior to the date the election becomes irrevocable,  subject to such restrictions as the Committee may establish from time to time. Any such revocation or change shall be  in a form and manner determined by the Committee. A Non-Employee Director's deferral election shall remain in  effect and will apply to Directors' Awards in subsequent years unless and until the Non-Employee Director timely  revokes the deferral election in accordance with such procedures as the Committee shall determine. The Committee  may adopt procedures for the extension of any deferral period. If a valid deferral election is filed by a Non-Employee  Director, Deferred Stock Units shall be credited as a bookkeeping entry in the name of the Non-Employee Director to  an account maintained by the Company on the basis of one Deferred Stock Unit for each Directors' Award deferred.  No shares of Common Stock shall be issued to the Non-Employee Director in respect of Deferred Stock Units at the  time  such  shares  would  be  issued  absent  such  deferral.  Shares  of  Common  Stock  shall  be  issuable  to  the  Non- Employee Director in a lump sum upon the termination of services as a Non-Employee Director (but only if such  termination constitutes a separation from service within the meaning of Code Section 409A, if applicable) or such  other specified date elected by the Non-Employee Director at the time of the deferral election. Dividend Equivalents  shall be credited on Deferred Stock Units and distributed at the same time that shares of Common Stock are delivered  to a Non-Employee Director in settlement of the Deferred Stock Units.  5.3 Delivery of Shares. Shares of Common Stock shall be issued to a Non-Employee Director at the time Directors'  Awards' are paid or Deferred Stock Units are settled by a issuing a stock certificate, or making an appropriate entry in  the Company's stockholder records, in the name of the Non-Employee Director. A Non-Employee Director shall not  have  any  rights  of  a  stockholder  with  respect  to  Directors' Awards  or  Deferred  Stock  Units  until  such  shares  of  Common Stock are issued and then only from the date of issuance of such shares.   VI.    GENERAL                                                 A-11 

 

    6.1 Effective Date and Term of Plan. This Plan shall be submitted to the stockholders of the Company for approval  at the Company's 2020 annual meeting of stockholders and, if so approved, the Plan shall become effective as of the  date on which the Plan was approved by the Company's stockholders (the "Effective Date"). Awards granted under  the Plan prior to the Effective Date shall be subject to the terms and conditions of the Plan in effect prior to the  Effective Date.  This Plan shall terminate as of the first annual meeting of the Company's stockholders to occur on or  after the tenth anniversary of its Effective Date, unless terminated earlier by the Board; provided, however, that no  Incentive Stock Options shall be granted after the tenth anniversary of the date on which the Plan was approved by  the Board. Termination of this Plan shall not affect the terms or conditions of any award granted prior to termination.  Awards hereunder may be made at any time prior to the termination of this Plan.  6.2 Amendments. The Board may amend this Plan as it shall deem advisable; provided, however, that no amendment  to the Plan shall be effective without the approval of the Company's stockholders if (i) stockholder approval is required  by applicable law, rule or regulation, including any rule of the New York Stock Exchange, or any other stock exchange  on which the Common Stock is then traded, or (ii) such amendment modifies the prohibitions on the repricing or  discounting of options and SARs contained in Section 2.3; provided further, that no amendment may materially impair  the rights of a holder of an outstanding award without the consent of such holder.  6.3 Minimum Vesting Requirements. The Committee shall determine the vesting schedule and Performance Period,  if applicable, for each award; provided that no award shall become fully exercisable or vested prior to the one-year  anniversary of the date of grant; provided, however, that, such restrictions shall not apply to awards granted under this  Plan with respect to the number of shares of Common Stock which, in the aggregate, does not exceed five percent  (5%) of the total number of shares available for awards under this Plan; provided, further, that the minimum vesting  requirement set forth in this Section 6.3 shall not apply to Deferred Stock Unit Awards received upon the vesting of  an award granted under the Plan that was subject to the minimum vesting requirements set forth in this Section 6.3.  This Section 6.3 shall not restrict the right of the Committee to accelerate or continue the vesting or exercisability of  an award upon or after a Change of Control or termination of employment or otherwise pursuant to Section 1.3 of the  Plan.  6.4 Agreement. The Company may condition an award holder's right (a) to exercise, vest or settle the award and (b) to  receive delivery of shares, on the execution and delivery to the Company of the Agreement and the completion of  other requirements, including, but not limited to, the execution of a nonsolicitation agreement by the recipient and  delivery thereof to the Company. Terms relating to the vesting, exercisability and satisfaction of any Performance  Measures relating to an award, or any forfeiture and cancellation of such award (i) upon a termination of employment  with or service to the Company of the holder of such award, whether by reason of disability, retirement, death or any  other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in  the applicable award Agreement.  6.5 Non-Transferability. No award shall be transferable other than by will, the laws of descent and distribution or  pursuant to beneficiary designation procedures approved by the Company or, to the extent expressly permitted in the  Agreement relating to such award, to the holder's family members, a trust or entity established by the holder for estate  planning purposes or a charitable organization designated by the holder, in each case, without consideration. Except  to the extent permitted by the foregoing sentence or the Agreement relating to an award, each award may be exercised  or settled during the holder's lifetime only by the holder or the holder's legal representative or similar person. Except  as permitted by the second preceding sentence, no award may be sold, transferred, assigned, pledged, hypothecated,  encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment  or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose  of any award, such award and all rights thereunder shall immediately become null and void.  6.6 Tax Withholding. The Company shall have the right to require, prior to the issuance or delivery of any shares of  Common Stock or the payment of any cash pursuant to an award made hereunder, payment by the holder of such  award of any federal, state, local, foreign or other taxes which may be required to be withheld or paid in connection                                                 A-12 

 

    with such award. An Agreement may provide that (i) the Company shall withhold whole shares of Common Stock  which would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the date the  obligation to withhold or pay taxes arises in connection with an award (the "Tax Date"), or withhold an amount of  cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the  holder  may  satisfy  any  such  obligation  by  any  of  the  following  means:  (A) a  cash  payment  to  the  Company;  (B) delivery  (either  actual  delivery  or  by  attestation  procedures  established  by  the  Company)  to  the  Company  of  previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax  Date, equal to the amount necessary to satisfy any such obligation; (C) authorizing the Company to withhold whole  shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as  of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount  necessary to satisfy any such obligation; (D) in the case of the exercise of an option, a cash payment by a broker- dealer acceptable to the Company to whom the optionee has submitted an irrevocable notice of exercise or (E) any  combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the award. Shares of  Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount  determined by applying the minimum statutory withholding rate (or, if permitted by the Company, such other rate as  will not cause adverse accounting consequences under the accounting rules then in effect, and is permitted under  applicable IRS withholding rules).  6.7 Restrictions on Shares. Each award made hereunder shall be subject to the requirement that if at any time the  Company determines that the listing, registration or qualification of the shares of Common Stock subject to such award  upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of  any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder,  such shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall  have been effected or obtained, free of any conditions not acceptable to the Company. The Company may require that  certificates  evidencing  shares  of  Common  Stock  delivered  pursuant  to  any  award  made  hereunder  bear  a  legend  indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the  Securities Act of 1933, as amended, and the rules and regulations thereunder.  6.8 Adjustment. In the event of any equity restructuring (within the  meaning of Financial Accounting Standards  Board Accounting Standards Codification Topic 718, Compensation -Stock Compensation) that causes the per share  value  of  shares  of  Common  Stock  to  change,  such  as  a  stock dividend,  stock  split,  spinoff,  rights  offering  or  recapitalization through an extraordinary cash dividend, the number and class of securities available under this Plan,  the terms of each outstanding option and SAR (including the number and class of securities subject to each outstanding  option or SAR and the purchase price or base price per share), the terms of each outstanding Restricted Stock Award  and Restricted Stock Unit Award (including the number and class of securities subject thereto), the terms of each  outstanding  Performance Award  (including  the  number  and  class  of  securities  subject  thereto),  the  terms  of  each  outstanding Deferred Stock Unit Award (including the number and class of securities subject thereto), the maximum  number of securities with respect to which options or SARs may be granted during any fiscal year of the Company to  any one grantee, the maximum number of shares of Common Stock that may be awarded during any fiscal year of the  Company to any one grantee pursuant to a Stock Award that is subject to Performance Measures or a Performance  Award shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding  options  and  SARs  without  an  increase  in  the  aggregate  purchase  price  or  base  price  and in  accordance  with  Section 409A  of  the  Code.  In  the  event  of  any  other  change  in  corporate  capitalization,  including  a  merger,  consolidation, reorganization, or partial or complete liquidation of the Company, such equitable adjustments described  in the foregoing sentence may be made as determined to be appropriate and equitable by the Committee to prevent  dilution or enlargement of rights of participants. In either case, the decision of the Committee regarding any such  adjustment shall be final, binding and conclusive.  6.9 Change of Control.                                                 A-13 

 

         (a) In the event a Change of Control occurs and, during the period commencing on the date that is three (3)  months prior to the date of the Change of Control and ending eighteen (18) months following the date of the Change  of Control, (i) an award holder experiences an involuntary termination of employment (other than for Cause, death or  disability) such that he or she is no longer in the employ or service of the Company or an Affiliate, (ii) an event or  condition that constitutes "Good Reason" occurs and the award holder subsequently resigns for Good Reason pursuant  to a resignation that meets the requirements set forth in the definition of "Good Reason" in Section 1.2 above, or  (iii) an award holder who is a Non-Employee Director ceases to serve on the Board or the board of directors of any  successor corporation (each of the events described in (i), (ii) and (iii) a "Termination of Service"; provided, however,  that in the case of a termination in pursuant to an event described in (i), (ii) or (iii) that occurs prior to the Change of  Control, the "Termination of Service" shall occur on the later of (y) the date of the Change of Control or (z) the date  that the participant's employment terminates as a result of one of the applicable events):             (i)  all  Options  and  SARs  to  purchase  or  acquire  shares  of  Common  Stock  of  the  Company  shall  immediately vest and become exercisable on the date of such Termination of Service and shall remain exercisable in  accordance  with  the  terms  of  the  applicable  Agreement  until  the  earlier  of  (A) twelve  (12) months  after  such  Termination of Service or (B) the expiration of the term of such Option or SAR;             (ii) the Restriction Period with respect to all awards shall immediately lapse or expire on the date of such  Termination of Service and, in the case of performance-based vesting conditions, the "performance targets" shall be  achieved as determined pursuant to the terms of the applicable Agreement and such awards shall be settled pursuant  to the terms of the applicable Agreement; and             (iii)  all  Performance  Awards  outstanding  shall  be  earned  and  settled  pursuant  to  the  terms  of  the  applicable Agreement.       (b)  In  the  event  a  Change  of  Control  occurs  and  outstanding  awards  are  (i) impaired  in  value  or  rights, as  determined solely in the discretionary judgment of the Board (as constituted prior to the Change of Control), (ii) not  assumed by a successor corporation or an affiliate thereof, or (iii) not replaced with an award or grant that, solely in  the discretionary judgment of the Board (as constituted prior to the Change of Control), preserves the existing value  of the outstanding awards at the time of the Change of Control:             (i)  all  Options  and  SARs  to  purchase  or  acquire  shares  of  Common  Stock  of  the  Company shall  immediately vest on the date of such Change of Control and become exercisable in accordance with the terms of the  applicable Agreement;             (ii) the Restriction Period with respect to all awards shall immediately lapse or expire on the date of such  Change  of  Control  and,  in  the  case  of  performance-based  vesting  conditions,  the  "performance  targets"  shall  be  achieved as determined pursuant to the terms of the applicable Agreement and such awards shall be settled pursuant  to the terms of the applicable Agreement;             (iii) all Performance Awards outstanding shall be earned, shall immediately vest and shall be settled  pursuant to the terms of the applicable Agreement; and              (iv)  the  Board  (as  constituted  prior  to  the  Change  of  Control)  may,  in  its  sole  discretion,  require  outstanding awards to be surrendered (or deemed surrendered) to the Company by the holder, and to be immediately  canceled by the Company, and to provide for the holder to receive a cash payment in an amount equal to (A) in the  case of an option or an SAR, the aggregate number of shares of Common Stock then subject to the portion of such  option or SAR surrendered (or deemed surrendered) multiplied by the excess, if any, of the Fair Market Value of a  share of Common Stock as of the date of the Change of Control, over the exercise price or base price per share of  Common Stock subject to such option or SAR, (B) in the case of a Stock Award or a Performance Award denominated  in shares of Common Stock, the aggregate number of shares of Common Stock then subject to the portion of such  award surrendered (or deemed surrendered) to the extent the Performance Measures applicable to such award have                                                 A-14 

 

    been satisfied or are deemed satisfied pursuant to this Section 6.9(b), multiplied by the Fair Market Value of a share  of Common Stock as of the date of the Change of Control, and (C) in the case of a Performance Award denominated  in  cash,  the  value  of  the  Performance Award  then subject  to  the  portion  of  such  award  surrendered  (or  deemed  surrendered) to the extent the Performance Measures applicable to such award have been satisfied or are deemed  satisfied pursuant to this Section 6.9(b).       (c) The Board (as constituted prior to the Change of Control) shall have the sole and complete authority and  discretion to decide any questions concerning the application, interpretation or scope of any of the terms and conditions  of any Award or participation under the Plan in connection with a Change of Control, and their decisions shall be  binding and conclusive upon all interested parties; and       (d) Other than as set forth above, the terms and conditions of all awards shall remain unchanged.       (e) Notwithstanding the provisions of this Section 6.9, the Committee may, in its discretion, take such other  action with respect to Awards in connection with a Change of Control as it shall determine to be appropriate.       (f) If a change in the ownership or effective control of the Company or in the ownership of a substantial portion  of the assets of the Company occurs (as defined in Section 409A of the Code), Deferred Stock Units shall be settled  on the date of such Change of Control by the delivery of shares of Common Stock to the extent permitted under  Section 409A of the Code.       (g) A "Change of Control" shall be deemed to have taken place upon the occurrence of any of the following  events:             (i) any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or  indirectly,  of  securities  of  the  Company  (not  including  in  the  securities  beneficially  owned  by  such  Person  any  securities acquired directly from the Company or its Affiliates (as defined below)) representing 20% or more of either  the then outstanding shares of Common Stock of the Company or the combined voting power of the Company's then  outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction  described in clause (A) of paragraph (iii) below; or             (ii) the following individuals cease for any reason to constitute a majority of the number of directors  then serving: individuals who, on the Effective Date, constituted the Board and any new director (other than a director  whose initial assumption of office is in connection with an actual or threatened election contest, including but not  limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election  by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of  at least two-thirds (2/3) of the directors in office at the time of such approval or recommendation who either were  directors on the Effective Date or whose appointment, election or nomination for election was previously so approved  or recommended; or             (iii) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary  of the Company with any other corporation, other than (A) any such merger or consolidation after the consummation  of which the voting securities of the Company outstanding immediately prior to such merger or consolidation continue  to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or  any  parent  thereof)  at  least 50%  of  the  combined  voting  power  of  the  voting  securities  of  the  Company  or  such  surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) any such  merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no  Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the  securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates)  representing 20% or more of either the then outstanding shares of Common Stock of the Company or the combined  voting power of the Company's then outstanding securities; or                                                  A-15 

 

               (iv)  the  stockholders  of  the  Company  approve  a  plan of  complete  liquidation  or  dissolution  of  the  Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all  of the Company's assets, other than a sale or 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 transaction or series of transactions; or             (v)  Notwithstanding  the  foregoing,  with  respect  to  an  Award  that  is  determined  to  be  deferred  compensation subject to the requirements of Section 409A of the Code, the Company will not make a payment upon  the happening of a Change of Control unless the Company is deemed to have undergone a change in the ownership or  effective control of the Company or in the ownership of a substantial portion of the assets of the Company (within the  meaning of Section 409A of the Code).       (h) For purposes of this Section 6.9, the following terms shall have the meanings indicated:             (i) "Affiliate" shall have the meaning set forth in Rule 12b-2 under Section 12 of the Exchange Act.             (ii) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act, except  that a Person shall not be deemed to be the Beneficial Owner of any securities that are properly filed on a Form 13-F.             (iii) "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used  in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Affiliates,  (ii) a  trustee  or  other  fiduciary  holding  securities  under  an  employee  benefit  plan  of  the  Company  or  any  of  its  Affiliates,  (iii) an  underwriter  temporarily  holding  securities  pursuant  to  an  offering  of  such  securities  or  (iv) a  corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions  as their ownership of stock of the Company.  6.10 Deferrals. The Committee may determine that the delivery of shares of Common Stock or the payment of cash,  or a combination thereof,  upon the exercise or settlement of all or a portion of any award (other than awards of  Incentive Stock Options, Nonqualified Stock Options and SARs) made hereunder shall be deferred, or the Committee  may, in its sole discretion, approve deferral elections made by holders of awards. Deferrals shall be for such periods  and  upon  such  terms  as  the  Committee  may  determine  in  its  sole  discretion,  subject  to  the  requirements  of  Section 409A of the Code.  6.11 No Right of Participation, Employment or Service. Unless otherwise set forth in an employment agreement,  no person shall have any right to participate in this Plan. Neither this Plan nor any award made hereunder shall confer  upon any person any right to continued employment by or service with the Company or any Affiliate of the Company  or affect in any manner the right of the Company or any Affiliate of the Company to terminate the employment or  service of any person at any time without liability hereunder.  6.12 Rights as Stockholder. No person shall have any right as a stockholder of the Company with respect to any  shares of Common Stock or other equity security of the Company which is subject to an award hereunder unless and  until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security.  6.13 Designation of Beneficiary. To the extent permitted by the Company, a holder of an award may file with the  Company a written designation of one or more persons as such holder's beneficiary or beneficiaries (both primary and  contingent)  in  the  event  of  the  holder's  death  or  incapacity. To  the  extent  an  outstanding  option  or  SAR  granted  hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such option or SAR pursuant  to procedures prescribed by the Company. Each beneficiary designation shall become effective only when filed in  writing with the Company during the holder's lifetime on a form prescribed by the Company. The spouse of a married  holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such  spouse. The filing with the Company of a new beneficiary designation shall cancel all previously filed beneficiary  designations. If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the                                                 A-16 

 

    holder, then each outstanding award held by such holder, to the extent vested or exercisable, shall be payable to or  may be exercised by such holder's executor, administrator, legal representative or similar person.  6.14 Governing Law. This Plan, each award hereunder and the related Agreement, and all determinations made and  actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall  be governed by the laws of the State of Delaware and construed in accordance therewith without giving effect to  principles of conflicts of laws.  6.15 Foreign Employees. Without amending this Plan, the Committee may grant awards to eligible persons who are  foreign nationals and/or reside outside the U.S. on such terms and conditions different from those specified in this  Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the  purposes of this Plan and, in furtherance of such purposes the Committee may make such modifications, amendments,  procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries  or jurisdictions in which the Company or its Affiliates operates or has employees.  6.16 Awards Subject to Clawback. The awards granted under this Plan and any cash payment or shares of Common  Stock delivered pursuant to an award shall be subject to forfeiture, recovery by the Company or other action pursuant  to the applicable Agreement or any clawback or recoupment policy which the Company may adopt from time to time,  including without limitation the Knowles Corporation Policy on Recoupment of Incentive Compensation, as in effect  from time to time,, and any clawback or recoupment policy which the Company may be required to adopt under the  Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or  as otherwise required by applicable law.  6.17 Section 409A.       (a) To the extent that the Committee determines that any award granted under the Plan is, or may reasonably be,  subject to Section 409A of the Code, the Agreement evidencing such award shall incorporate the terms and conditions  necessary to avoid the adverse consequences described in Section 409A(a)(1) of the Code (or any similar provision).  To  the  extent  applicable  and  permitted  by  law,  the  Plan  and Agreements  shall  be  interpreted  in  accordance  with  Section 409A and other interpretive guidance issued thereunder, including without limitation any other guidance that  may be issued or amended after the date of grant of any award hereunder. Notwithstanding any provision of the Plan  to  the  contrary,  in  the  event  that  the  Committee  determines  that  any  award  is,  or may  reasonably  be,  subject  to  Section 409A, the  Committee  may,  without the participant's consent, adopt such amendments to the Plan and the  applicable Agreement or adopt other policies and procedures (including amendments, policies and procedures with  retroactive effect), or take any other actions, that the Committee determines are necessary or appropriate to (A) exempt  the Award from Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the  Award,  or  (B) comply  with  the  requirements  of  Section 409A.  Where  applicable,  the  requirement  that  Awards  constituting  deferred  compensation  under  Section 409A  that  are  payable  upon  termination  of  a  participant's  employment  or  services  not  be  paid  prior  to  the  participant's  "separation  from  service"  within  the  meaning  of  Section 409A are incorporated herein.       (b) In addition, and except as otherwise set forth in the applicable Agreement, if the Company determines that  any  award  granted  under  this  Plan  constitutes,  or  may  reasonably  constitute,  "deferred  compensation"  under  Section 409A and the participant is a "specified employee" of the Company at the relevant date, as such term is defined  in Section 409A(a)(2)(B)(i), then any payment or benefit resulting from such award that is scheduled to be paid on  such participant's "separation from service" will be delayed until the first day of the seventh month following the  participant's "separation from service" with the Company or its "affiliates" within the meaning of Section 409A (or  following the date of participant's death, if earlier), with all payments or benefits due thereafter occurring in accordance  with the original schedule.       (c) Notwithstanding anything to the contrary contained herein, neither the Company nor any of its Affiliates  shall be responsible for, or required to reimburse or otherwise make any participant whole for, any tax or penalty                                                 A-17 

 

    imposed on, or losses incurred by, any participant that arises in connection with the potential or actual application of  Section 409A to any award granted hereunder.                                                  A-18

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