Document:

Exhibit

Exhibit 10.1

                            
	
		
	 
	Board Approved
November 15, 2019

Federal Home Loan Bank of Indianapolis
Incentive Plan

1

Exhibit 10.1

ESTABLISHMENT OF ANNUAL AND LONG-TERM  2020 - 2023
INCENTIVE PLAN GOALS FOR THE
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
INCENTIVE PLAN
Pursuant to resolutions adopted by the Board of Directors of the Federal Home Loan Bank of Indianapolis (the "Bank"), the undersigned hereby execute the Federal Home Loan Bank of Indianapolis Incentive Plan, effective as of January 1, 2012, and setting forth goals effective as of January 1, 2020, on behalf of the Bank, in the form attached hereto.
Dated this 15th day of November, 2019.
FEDERAL HOME LOAN BANK OF INDIANAPOLIS
By: /s/ Dan L. Moore                
Dan L. Moore, Chair
By: /s/ James L. Logue, III                
James L. Logue, III, Vice Chair
ATTEST:
By: /s/ Matthew R. St. Louis        
Matthew St. Louis, Corporate Secretary

2

Exhibit 10.1

FEDERAL HOME LOAN BANK OF INDIANAPOLIS
INCENTIVE PLAN
TABLE OF CONTENTS
	
				
	 
	 
	PAGE

	Article I
	INTRODUCTION
	5
	

	 
	 
	 

	Section 1.1
	Purpose
	5
	

	Section 1.2
	Effective Date
	5
	

	Section 1.3
	Administration
	5
	

	Section 1.4
	Supplements
	5
	

	Section 1.5
	Definitions
	5
	

	 
	 
	 

	Article II
	ELIGIBILITY AND PARTICIPATION
	6
	

	 
	 
	 

	Section 2.1
	Eligibility
	6
	

	Section 2.2
	Participation
	6
	

	 
	 
	 

	Article III
	AWARDS AND EXTRAORDINARY OCCURENCE
ADDITIONS/REDUCTIONS
	6
	

	 
	 
	 

	Section 3.1
	Awards
	6
	

	Section 3.2
	Performance Goals
	8
	

	Section 3.3
	Earning and Vesting of Awards for Level I Participants
	9
	

	Section 3.4
	Earning and Vesting of Awards for Level II Participants
	10
	

	Section 3.5
	Reserved
	10
	

	Section 3.6
	Effect of Termination of Service
	10
	

	Section 3.7
	Effect of Reorganization
	13
	

	Section 3.8
	Payment of Awards
	14
	

	Section 3.9
	Reduction or Forfeiture of Awards
	15
	

	 
	 
	 

	Article IV
	ADMINISTRATION
	16
	

	 
	 
	 

	Section 4.1
	Appointment of the Committee
	16
	

	Section 4.2
	Powers and Responsibilities of the Committee
	16
	

	Section 4.3
	Income and Employment Tax Withholding
	16
	

	Section 4.4
	Plan Expenses
	16
	

	 
	 
	 

	Article V
	BENEFIT CLAIMS
	17
	

	 
	 
	 

	Article VI
	AMENDMENT AND TERMINATION OF THE PLAN
	17
	

	 
	 
	 

	Section 6.1
	Amendment of the Plan
	17
	

	Section 6.2
	Termination of the Plan
	17
	

	 
	 
	 

	 
	 
	 

	Article VII
	MISCELLANEOUS
	17
	

3

Exhibit 10.1

	
				
	 
	 
	 

	Section 7.1
	Governing Law
	17
	

	Section 7.2
	Headings and Gender
	17
	

	Section 7.3
	Spendthrift Clause
	18
	

	Section 7.4
	Counterparts
	19
	

	Section 7.5
	No Enlargement of Employment Rights
	19
	

	Section 7.6
	Limitations on Liability
	19
	

	Section 7.7
	Incapacity of Participant
	20
	

	Section 7.8
	Evidence
	20
	

	Section 7.9
	Action by Bank
	20
	

	Section 7.10
	Severability
	20
	

	Section 7.11
	Information to be Furnished by a Participant
	20
	

	Section 7.12
	Attorneys' Fees
	20
	

	Section 7.13
	Binding on Successors
	20
	

	 
	 
	 

	APPENDIX I - 2020 PERFORMANCE PERIOD AWARDS FOR
LEVEL II PARTICIPANTS 
	23
	

	APPENDIX II - 2020 PERFORMANCE PERIOD AWARDS FOR
LEVEL I PARTICIPANTS 
	29
	

	APPENDIX III - FORM OF NON-SOLICITATION AND
NON-DISCLOSURE AGREEMENT
	33
	

4

Exhibit 10.1

ARTICLE I
INTRODUCTION
Section 1.1    Purpose. The purpose of the Federal Home Loan Bank of Indianapolis Incentive Plan (the "Plan") is to attract, retain and motivate employees of the Federal Home Loan Bank of Indianapolis (the "Bank") and to focus their efforts on continued improvement in the profitability of the Bank while maintaining the Bank's safety and soundness. The Plan is a cash-based incentive plan that provides award opportunities based on achievement of performance goals.

Section 1.2    Effective Date. The "Effective Date" of the Plan is January 1, 2012.

Section 1.3    Administration. The Plan will be administered by an administrative committee (the "Committee") appointed by the Bank's Board of Directors (the "Board"), which initially will be the Human Resources Committee of the Board. Notwithstanding the foregoing, the term Committee shall also refer to the Executive Governance Committee of the Board who will administer the Plan with respect to the Bank's Chief Executive Officer. The Committee, from time to time, may adopt any rules and procedures it deems necessary or desirable for the proper and efficient administration of the Plan that are consistent with the terms of the Plan. Any notice or document required to be given or filed with the Committee will be properly given or filed if delivered to or mailed by registered mail, postage paid, to the General Counsel, Federal Home Loan Bank of Indianapolis, 8250 Woodfield Crossing Boulevard, Indianapolis, Indiana 46240.

Section 1.4    Supplements. The provisions of the Plan may be modified by supplements to the Plan with Board approval. The terms and provisions of each supplement are a part of the Plan and supersede any other provisions of the Plan to the extent necessary to update or eliminate any inconsistencies between the supplement and any other Plan provisions. Any substantive supplement to the Plan shall be submitted to the FHFA for non-objection after full review prior to implementation.

Section 1.5    Definitions. The following terms are defined in the Plan in the following Sections:
	
		
	Term
	Plan Sections

	Annual Award
	3.3(a), 3.4(a)

	Award
	3.1

	Bank
	1.1

	Board
	1.3

	Cause
	3.6(d)(i)

	Committee
	1.3

	Compensation
	3.1

	Deferral Performance Period
	3.1(a)

	Deferred Award
	3.3(b)

	Disability
	3.6(d)(ii)

	Discretionary Award
	3.1(d)

	Effective Date
	1.2

	Extraordinary Occurrences
	3.1(e)

	FHFA
	3.6(d)(i)

	Final Award
	3.1(e)

	Good Reason
	3.6(d)(iii)

5

Exhibit 10.1

	
		
	Level I Participant
	3.1(c)

	Level II Participant
	3.1(c)

	Maximum
	3.2(b)(iii)

	Non-Solicitation Agreement
	2.1

	Participant
	2.1

	Performance Goals
	3.2

	Performance Period
	3.1(a)

	Plan
	1.1

	Position
	3.6(d)(iii)(A)

	Reduction in Force
	3.6(d)(iv)

	Reorganization
	3.7(b)

	Retirement
	3.6(d)(v)

	Termination of Service
	3.6(d)(vi)

	Target
	3.2(b)(ii)

	Threshold
	3.2(b)(i)

ARTICLE II

ELIGIBILITY AND PARTICIPATION

Section 2.1    Eligibility. Any employee of the Bank, hired before October 1st of the calendar year, will become a "Participant" in the Plan for that calendar year, provided the employee is not classified as a "temporary," an "intern," "contract" or "temporary agency" employee, and does not participate in the Federal Home Loan Bank of Indianapolis Internal Audit Incentive Plan. Level I Participants, as defined in subsection 3.1(c), must have an executed agreement on file with the Bank containing non-solicitation and non-disclosure provisions in a form similar to the form provided in Appendix III to the Plan ("Non-Solicitation Agreement").

Section 2.2    Participation. A designated employee or otherwise eligible employee will become a Participant as of the later of the Effective Date, the employee's date of hire, or the date on or after the Effective Date the employee satisfies the automatic eligibility provisions described in Section 2.1. Any Participant may be removed as an active Participant by the Board effective as of any date.

ARTICLE III

AWARDS AND EXTRAORDINARY OCCURRENCE ADDITIONS/REDUCTIONS

Section 3.1    Awards. At the beginning of each Performance Period (and at such other times as it may designate as to Discretionary Awards), the Board will make an "Award" to eligible Participants. As described in this Article, Awards may be Annual Awards (as defined in subsection 3.3(a)), Deferred Awards (as defined in subsection 3.3(b)), or Discretionary Awards (as defined in subsection 3.1(d)). Each Award (other than Discretionary Awards) will be equal to a percentage of the Participant's annual Compensation, as described in the applicable Appendices for Level I Participants and Level II Participants, multiplied by the achievement level of the applicable Performance Goals (as defined in Section 3.2). "Compensation" means 

6

Exhibit 10.1

the Participant's annual earned base salary or wages for hours worked, including overtime, and hours paid under the Bank's paid-time-off policies, as applicable, but in any case excluding any bonus, incentive compensation, deferred compensation payments, lump sum payouts for accrued but unused vacation time, or long-term disability insurance payments paid for the current or a prior year. In the event a Participant receives a raise during a calendar year, the Participant's Compensation for the year will reflect the actual wages paid to the Participant for the year.

		
	(a)
	Performance Periods. A "Performance Period" is the one-calendar year period over which an Annual Award can be earned and vested pursuant to subsections 3.3(a) and 3.4(a). A "Deferral Performance Period" is the three-calendar year period over which a Deferred Award can be earned and vested pursuant to subsection 3.3(b). A Deferral Performance Period begins on the January 1st immediately following the Performance Period to which such Deferred Award applies.

		
	(b)
	Award Notification. Participants will be notified of an Annual Award, a Deferred Award or Discretionary Award by the Bank by posting the Performance Goals and other necessary terms and conditions applicable to the Annual Award, Deferred Award or Discretionary Award on SharePoint on the Bank's intranet.

		
	(c)
	Award Levels. Participants will receive varying Awards for each Performance Period based on their position with the Bank, as set out in the applicable Appendix. A "Level I Participant" is the Bank's President and Chief Executive Officer, Executive Vice President or Senior Vice President of the Bank or any other individual designated as a Level I Participant by the Board. A "Level II Participant" is any participating employee who is not a Level I Participant. If a Participant receives a new position within the Bank which position changes the Participant's Award eligibility, level, or opportunity, each of the Awards for which Participant is or was eligible during the calendar year will be prorated to reflect the portion of the calendar year during which the Participant was eligible for each such Award, level, or opportunity.

		
	(d)
	Discretionary Award. The President may recommend to the Board that additional discretionary Awards (each, a "Discretionary Award") be made to one or more Level II Participants to address external market considerations, recruiting needs, special projects and extraordinary individual or team efforts. The aggregate pool of funds available for all Discretionary Awards to Level II Participants in a calendar year will be determined by the Board and will not exceed 20 percent of the sum of all Final Awards of any kind paid to Level I Participants during such year.

The following hypothetical example illustrates how the aggregate pool of funds for Discretionary Awards in a year is determined and awarded:

In year 5, all of the Level I Participants receive: (i) total Annual Awards attributable to year 4 of $700,000, and (ii) total Deferred Awards attributable to year 1 of $600,000.  In year 5, the sum of all Final Awards paid to Level I Participants is $1,300,000.  Therefore, at any time during year 5, the President may recommend payment of Discretionary Awards to Level II Participants, the sum of which cannot exceed $260,000.  The Board may authorize the payment of up to $260,000 for Discretionary Awards.  The President may allocate the Discretionary Awards to one or more Level II Participants in her or his discretion, up to the maximum 

7

Exhibit 10.1

amount authorized by the Board (and in any event less than or equal to $260,000 in total).  Payment must be made during year 5.

		
	(e)
	Final Award and Extraordinary Occurrences. The "Final Award" is the amount of an earned and vested Annual Award, Deferred Award, or Discretionary Award, as adjusted based upon the level at which the Performance Goals have been achieved, that is ultimately paid to a Participant under the Plan. The amount of a Final Award may be increased or decreased at the Board's discretion to account for performance that is not captured in the Performance Goals. The Board, in its discretion, may also consider Extraordinary Occurrences when assessing performance results and determining Final Awards. "Extraordinary Occurrences" mean those events that, in the opinion and discretion of the Board, are outside the significant influence of the Participant or the Bank and are likely to have a significant unanticipated effect, whether positive or negative, on the Bank's operating and/or financial results. Examples of Extraordinary Occurrences include, but are not limited to, change in law, regulation, or regulatory policy, or systemic macroeconomic events outside of management's control.

Section 3.2    Performance Goals. "Performance Goals" are the performance factors established by the Board for each Performance Period and Deferral Performance Period, as set forth in the applicable Appendices to the Plan, which are taken into consideration in determining the value of an Annual Award or Deferred Award. The Board may, for any reason or for an Extraordinary Occurrence, adjust the Performance Goals for a Performance Period or Deferral Performance Period to ensure the purposes of the Plan are served. Any such adjustment to Performance Goals shall be submitted to the FHFA for review prior to implementation.

		
	(a)
	Establishment of Performance Goals. Performance Goals for Performance Periods, Deferral Performance Periods commencing on and after January 1, 2012, will be communicated to Participants via SharePoint on the Bank's intranet after they have been established by the Board.

		
	(b)
	Achievement Level. Three achievement levels will be defined for each Performance Goal in determining how much of an Award is earned.

		
	i.
	Threshold. The "Threshold" achievement level is the minimum achievement level accepted for a Performance Goal.

		
	ii.
	Target. The "Target" achievement level is the planned achievement level for a Performance Goal.

		
	iii.
	Maximum. The "Maximum" achievement level is achievement that substantially exceeds the Target achievement level.

The Bank will measure the achievement level for each Performance Goal on a uniform basis, and may assign different values for achievement levels depending on the Participant’s position.  The relative weights assigned to achievement levels and to Performance Goals will be set forth in the applicable Appendix.

8

Exhibit 10.1

		
	(c)
	Interpolation. Achievement levels that discreetly fall in between Threshold-, Target-, and Maximum, will be interpolated, unless otherwise described in a Performance Goal.

		
	(d)
	Considerations in Establishing Performance Goals. In determining appropriate Performance Goals and the relative weight accorded each Performance Goal, the Committee must:

		
	i.
	Balance risk and financial results in a manner that does not encourage Participants to expose the Bank to imprudent risks;

		
	ii.
	Make such determination in a manner designed to ensure that Participants' overall compensation is balanced and not excessive in amount and that the Annual Awards and Deferred Awards are consistent with the Bank's policies and procedures regarding such compensation arrangements; and

		
	iii.
	Monitor the success of the Performance Goals and weighting established in prior years, alone and in combination with other incentive compensation awarded to the same Participants, and make appropriate adjustments in future calendar years as needed so that payments appropriately incentivize Participants and appropriately reflect risk.

Section 3.3    Earning and Vesting of Awards for Level I Participants.

		
	(a)
	Earning and Vesting of Annual Awards. Fifty percent of an Award to a Level I Participant will become earned and vested on the last day of the Performance Period, provided the following requirements are met (an "Annual Award"):

		
	i.
	At least one of the applicable Performance Goals for the Performance Period are satisfied at or above the Threshold level;

		
	ii.
	The Participant received (or, in the case of a Termination of Service described in Section 3.6(b) or Section 3.6(c) or a Reorganization described in Section 3.7, the President-CEO determines that the Participant would have received) an overall weighted performance rating for the Performance Period of 2.5 or greater on a scale of 1-5 (with 5 being the highest rating), or equivalent measure; and

		
	iii.
	The Participant is actively employed on the last day of the Performance Period, unless otherwise provided in Section 3.6 or Section 3.7.

		
	(b)
	Earning and Vesting of Deferred Awards. The remaining 50 percent of an Award to a Level I Participant will become earned and vested on the last day of the Deferral Performance Period, provided the following requirements are met (a "Deferred Award"):

		
	i.
	At least one of the applicable Performance Goals for the Deferral Performance Period are satisfied at or above the Threshold level;

9

Exhibit 10.1

		
	ii.
	The Participant received (or, in the case of a Termination of Service described in Section 3.6(b) or Section 3.6(c) or a Reorganization described in Section 3.7, the President-CEO determines that the Participant would have received) an average overall weighted performance rating for each year of the Deferral Performance Period of 2.5 or greater on a scale of 1-5 (with 5 being the highest rating), or equivalent measure; and

		
	iii.
	The Participant is actively employed on the last day of the Deferral Performance Period, unless otherwise provided in Section 3.6 or Section 3.7.

		
	(c)
	Calculation of Awards. The value of Awards to Level I Participants will be calculated in accordance with the applicable Appendix to the Plan.

Section 3.4    Earning and Vesting of Awards for Level II Participants.

		
	(a)
	Earning and Vesting of Awards. An Award to a Level II Participant will become earned and vested on the last day of the Performance Period provided the following requirements are met (also an "Annual Award"):

		
	i.
	At least one of the applicable Performance Goals for the Performance Period are satisfied at or above the Threshold level;

		
	ii.
	The Participant received (or, in the case of a Termination of Service described in Section 3.6(b) or Section 3.6(c), the President-CEO determines that the Participant would have received) an overall weighted performance rating for the Performance Period of 2.5 or greater on a scale of 1-5 (with 5 being the highest rating), or equivalent measure; and

		
	iii.
	The Participant is actively employed on the last day of the Performance Period, unless otherwise provided in Section 3.6.

		
	(b)
	Calculation of Awards. The value of Awards to Level II Participants will be calculated in accordance with the applicable Appendix to the Plan.

Section 3.5    Reserved.
    
Section 3.6    Effect of Termination of Service.

		
	(a)
	In General. If a Level I Participant incurs a Termination of Service for any reason other than a reason set forth in subsection 3.6(b), 3.6(c), or Section 3.7, the Level I Participant's Award will be forfeited, effective as of the date of such Termination of Service.

10

Exhibit 10.1

If a Level II Participant incurs a Termination of Service for any reason other than a reason set forth in subsection 3.6(b) or 3.6(c), the Level II Participant's Award will be forfeited effective as of the date of such Termination of Service.

		
	(b)
	Termination Due to Death, Disability, or by the Bank without Cause due to a Reduction in Force.

		
	i.
	Notwithstanding the provisions of Section 3.3 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to death or Disability or by the Bank without Cause due to a Reduction in Force, then the Participant's Deferred Awards (including, without limitation, the Deferred Award attributable to the calendar year in which the Termination of Service occurs) will be treated as earned and vested based on the assumption the Bank would have achieved the applicable Performance Goals at the Target achievement level for the Deferral Performance Period(s).

		
	ii.
	Notwithstanding the provisions of Section 3.3 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to death or Disability or by the Bank without Cause due to a Reduction in Force, any Annual Award which has not been earned and vested will be treated as earned and vested based on the assumption the Bank would have achieved the Performance Goals at the Target achievement level for the Performance Period.

		
	iii.
	Notwithstanding the provisions of Section 3.4 and subsection 3.6(a), if a Level II Participant incurs a Termination of Service during a Performance Period due to death, Disability, or by the Bank without Cause due to a Reduction in Force, an Annual Award will be treated as earned and vested based on the assumption the Bank would have achieved the Performance Goals at the Target achievement level for the Performance Period.

		
	(c)
	Termination Due to Other Events.

		
	i.
	Termination of Service for Good Reason. Notwithstanding the provisions of Section 3.3 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to Good Reason, an Annual Award or Deferred Award (including, without limitation, the Deferred Award attributable to the calendar year in which the Termination of Service occurs), as the case may be, will be treated as earned and vested to the extent the Performance Goals for the Performance Period and/or Deferral Performance Period(s) are satisfied.

		
	ii.
	Termination of Service due to Retirement.

		
	(A)
	Notwithstanding the provisions of Section 3.3 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to Retirement, any Annual Award which has not been earned and vested will be treated as earned and vested to the extent the Performance Goals for the Performance Period are satisfied.  

11

Exhibit 10.1

		
	(B)
	Notwithstanding the provisions of Section 3.3 and subsection 3.6(a), if a Level I Participant incurs a Termination of Service due to Retirement, any Deferred Award (including, without limitation, the Deferred Award attributable to the calendar year in which the Termination of Service occurs) will be treated as earned and vested to the extent the Performance Goals for each applicable Deferral Performance Period are satisfied.

		
	iii.
	Notwithstanding the provisions of Section 3.4 and subsection 3.6(a), if a Level II Participant incurs a Termination of Service during a Performance Period due to Retirement, an Annual Award will be treated as earned and vested to the extent the Performance Goals for the Performance Period are satisfied.

		
	(d)
	Definitions.

		
	i.
	"Cause" means (A) continued failure of a Participant to perform his or her duties with the Bank (other than any such failure resulting from Disability), after a written demand for performance is delivered to the Participant, which specifically identifies the manner in which the Participant has not performed his or her duties, (B) personal dishonesty, incompetence, willful misconduct, breach of fiduciary duty involving personal profit, intentional failure or omission to perform stated duties, or willful violation of any law, rule or regulation (other than routine traffic violations or similar offenses), or (C) removal of the Participant for cause by the Federal Housing Finance Agency ("FHFA") or at the direction of the FHFA pursuant to 12 U.S.C. 1422b(a)(2), or by any successor agency to the FHFA pursuant to a similar statute.

		
	ii.
	"Disability" means, as a result of the Participant's incapacity due to physical or mental illness, the Participant has been absent from his or her duties with the Bank for an aggregate of 12 out of 15 consecutive months and, within 30 days after a written notice of termination is thereafter given by the Bank to the Participant, the Participant does not return to the full-time performance of the Participant's duties.

		
	iii.
	"Good Reason" means a Termination of Service by a Level I Participant under any of the following circumstances:

		
	(A)
	a material change in the Participant's status, position, job title or principal duties and responsibilities as a key employee of the Bank which does not represent a promotion from the Participant's status and position immediately prior to the change ("Position");

		
	(B)
	the assignment to the Participant of any duties or responsibilities (or removal of any duties or responsibilities), which assignment or removal is materially inconsistent with such Position;

12

Exhibit 10.1

		
	(C)
	any removal of the Participant from such Position (including, without limitation, all demotions and harassing assignments), except in connection with the termination of the Participant's employment for Cause or Disability, or as a result of the Participant's death;

		
	(D)
	any material breach by the Bank of any provisions of this Plan or any other agreement with the Participant; or

		
	(E)
	any failure by the Bank or its successors and assigns to obtain the assumption of this Plan by any successor or assign of the Bank.

		
	iv.
	"Reduction in Force" means an involuntary Termination of Service of a Participant by the Bank in connection with a financial decision by the Board to reduce the number of Bank employees, not due to the Participant's performance, and not due to a Reorganization.

		
	v.
	"Retirement" means the Participant's planned and voluntary termination of employment after the Participant has delivered timely advance written notice of intent to retire to the Bank and has either: (A) attained age 60 with five "Years of Service," or (B) attained the "Rule of 85," which means the Participant has attained a combined age and Years of Service that mathematically is equal to or exceeds the number 85. A "Year of Service" will be calculated in the same manner as under the Pentegra Defined Benefit Pension Plan for Financial Institutions. Advance written notice will be deemed timely given if it is given at least four weeks in advance, as to Vice Presidents, First Vice Presidents, Senior Vice Presidents, Executive Vice Presidents, and the Chief Executive Officer, and at least two weeks in advance, as to all other employees.

		
	vi.
	"Termination of Service" means the occurrence of any act or event or any failure to act, that actually or effectively causes or results in a Participant ceasing, for whatever reason, to be an employee of the Bank, including, but not limited to, death, Disability, Retirement, termination of the Participant's employment by the Bank (whether for Cause or otherwise), termination by the Participant of his or her employment with the Bank for Good Reason and voluntary resignation or termination by the Participant of his or her employment.

Section 3.7    Effect of Reorganization. The following provision applies to Level I Participants only.

		
	(a)
	Notwithstanding the provisions of Sections 3.3 and 3.6, if a Reorganization of the Bank occurs, then any portion of an Annual Award or Deferred Award (including, without limitation, the Deferred Award attributable to the calendar year in which the Termination of Service occurs) which has not otherwise become earned and vested as of the date of the Reorganization will be treated as 100 percent earned and vested effective as of the date of the Reorganization.  The amount of the Awards will be equal to the greater of:  (i) the amount determined based on the assumption that the Bank would have achieved the Performance Goals at the Target achievement level for the Performance Period and Deferral Performance Period; or (ii) the amount determined based on the assumption that the Bank would have achieved the Performance Goals at the 

13

Exhibit 10.1

achievement level for the Performance Period and the Deferral Performance Period that the Bank had actually achieved as of the date of the Reorganization.

		
	(b)
	"Reorganization" of the Bank will mean the occurrence at any time of any of the following events:

		
	i.
	The Bank is merged or consolidated with or reorganized into or with another bank or other entity, or another bank or other entity is merged or consolidated into the Bank;

		
	ii.
	The Bank sells or transfers all, or substantially all of its business and/or assets to another bank or other entity;

		
	iii.
	More than 50 percent of the total market value or total voting power of all ownership interests in the Bank is acquired, within any 12-month period, by one person or entity or by more than one person or entity acting as a group; or

		
	iv.
	The liquidation or dissolution of the Bank.

The term "Reorganization" shall not include any Reorganization that is mandated by federal statute, rule, regulation, or directive, including 12 U.S.C. § 1421, et seq., as amended, and 12 U.S.C. § 4501 et seq., as amended, and which the Director of the FHFA (or successor agency) has determined should not be a basis for accelerating vesting under this Plan, by reason of the capital condition of the Bank or because of unsafe or unsound acts, practices, or condition ascertained in the course of the Agency's supervision of the Bank or because any of the conditions identified in 12 U.S.C. § 4617(a)(3) are met with respect to the Bank (which conditions do not result solely from the mandated reorganization itself, or from action that the Agency has required the Bank to take under 12 U.S.C. § 1431(d)).
Section 3.8    Payment of Awards.
		
	(a)
	Payments Related to Termination of Service. The following provisions apply to Final Awards payable as a result of a Termination of Service.

		
	i.
	In the event of a Termination of Service due to (a) a termination by the Bank without Cause due to a Reduction in Force, (b) death, or (c) Disability, 100 percent of a Final Award will be paid in a single sum within 75 days of the date of Termination of Service. Notwithstanding the foregoing, in the event of a Reduction in Force, a Participant must execute the severance agreement offered by the Bank in order to be eligible to receive payment.

		
	ii.
	In the event of a Termination of Service due to Retirement or a termination by a Level I Participant for Good Reason, payment of a Final Award will be made in a single sum within 75 days following the end of the Performance Period or Deferral Performance Period, as applicable.  

14

Exhibit 10.1

		
	(b)
	Payments Not Related to a Termination of Service. Final Awards which become vested for reasons other than a Termination of Service will be paid in a single sum within 75 days following the end of the Performance Period or Deferral Performance Period, as applicable.  Notwithstanding the foregoing, Discretionary Awards granted pursuant to Section 3.1(d) may be awarded and paid at any time during the year that funds are available for such Discretionary Awards.

		
	(c)
	Notwithstanding the foregoing provisions of this Section, Final Awards will be paid upon approval by the Board and after review of the calculations by the Bank's Internal Audit department. However, in the event of a Reorganization, payment of a Final Award will be made in a single sum on the date on which the Reorganization occurs.

Section 3.9    Reduction or Forfeiture of Awards.

		
	(a)
	If during the Deferral Performance Period actual losses or other measures or aspects of performance related to the Performance Period or Deferral Performance Period are realized which would have caused a reduction in amount of the Final Award calculated for the Performance Period or Deferral Performance Period, then the remaining amount of the Final Award to be paid at the end of the Deferral Performance Period will be reduced to reflect this additional information.

		
	(b)
	Notwithstanding any other provision of the Plan, if a Participant violates a Non-Solicitation Agreement, all of his unpaid vested and unvested Awards will be forfeited effective as of the date the Board determines such violation has occurred and gives written notice to the Participant of such determination. Any future payments for a vested Award will cease and the Bank will have no further obligation to make such payments.

		
	(c)
	Notwithstanding any other provision of the Plan, if during the most recent examination of the Bank by the FHFA, the FHFA identified an unsafe or unsound practice or condition that is material to the financial operation of the Bank within the Participant's area(s) of responsibility and such unsafe or unsound practice or condition is not subsequently remediated to the satisfaction of the Board as determined by the Board after reviewing the findings or input from the FHFA, then all (or a portion) of a Participant's vested and unvested Awards will be forfeited as determined by the Board and directed to the participant in writing. Any future payments for a vested Award will, if directed by the Board, cease and the Bank will have no further obligation to make such payments.

		
	(d)
	By resolution, the Board may reduce or eliminate an Award that is otherwise earned under this Plan but not yet paid, if the Board finds that a serious, material safety-soundness problem, or a serious, material risk-management deficiency exists at the Bank, or if: (i) operational errors or omissions result in material revisions to: (A) the financial results, (B) information submitted to the FHFA, or (C) data used to determine incentive payouts; (ii) submission of material information to the SEC, Office of Finance, and/or FHFA is significantly past due, or (iii) the Bank fails to make sufficient progress, as determined by the Board, in the timely remediation of significant examination, monitoring and other supervisory findings.

15

Exhibit 10.1

ARTICLE IV

ADMINISTRATION

Section 4.1    Appointment of the Committee. The Committee, or a duly authorized officer or officers of the Bank empowered by the Committee to act on its behalf under sub-section 4.2(d), will be responsible for administering the Plan, and the Committee will be charged with the full power and the responsibility for administering the Plan in all its details; provided that the power to determine eligibility pursuant to Article II is reserved to the Board.

Section 4.2    Powers and Responsibilities of the Committee. The Committee will have all powers necessary to administer the Plan, including the power to construe and interpret the Plan document; to decide all questions relating to an individual's eligibility to participate in the Plan; to determine the amount, manner and timing of any distribution of benefits under the Plan; to resolve any claim for benefits in accordance with Article V, and to appoint or employ advisors, including legal counsel, to render advice with respect to any of the Committee's responsibilities under the Plan. Any construction, interpretation, or application of the Plan by the Committee will be final, conclusive and binding.

		
	(a)
	Records and Reports. The Committee will be responsible for maintaining sufficient records to determine each Participant's eligibility to participate in the Plan.

		
	(b)
	Rules and Decisions. The Committee may adopt such rules as it deems necessary, desirable, or appropriate in the administration of the Plan. All rules and decisions of the Committee will be applied uniformly and consistently to all Participants in similar circumstances. When making a determination or calculation, the Committee will be entitled to rely upon information furnished by a Participant, the Bank or the legal counsel of the Bank.

		
	(c)
	Application for Benefits. The Committee may require a Participant to complete and file with it an application for a benefit, and to furnish all pertinent information requested by it. The Committee may rely upon all such information so furnished to it, including the Participant's current mailing address.

		
	(d)
	Delegation. The Committee hereby delegates, authorizes, and directs the President-CEO to perform administrative responsibilities on its behalf under the Plan.  The Committee may also authorize one or more additional officers or employees of the Bank to perform administrative responsibilities on its behalf under the Plan. All duly authorized officers and employees of the Bank will have all powers necessary to carry out the administrative duties delegated to such persons by the Committee.

Section 4.3    Income and Employment Tax Withholding. The Bank will withhold from payments to Participants of their Awards, to the extent required by law, all applicable federal, state, city and local taxes.

Section 4.4    Plan Expenses. The expenses incurred for the administration and maintenance of the Plan will be paid by the Bank.

16

Exhibit 10.1

ARTICLE V

BENEFIT CLAIMS

If the Committee requires a Participant to file a claim to receive his or her benefit under the Plan, or if he or she wishes to apply for a benefit, the claim must be made in writing and filed with the Committee. If a claim is denied, the Committee will furnish the claimant with written notice of its decision. A claimant may request a full and fair review of the denial of a claim for benefits by filing a written request with the Committee.
ARTICLE VI

AMENDMENT AND TERMINATION OF THE PLAN

Section 6.1    Amendment of the Plan. The Bank, acting through the Board, may amend the Plan at any time in its sole discretion. Notwithstanding the foregoing, the Bank may not amend the Plan to reduce a Participant's Award as determined on the day preceding the effective date of the amendment or to otherwise retroactively impair or adversely affect the rights of a Participant. Any substantive amendment to the Plan shall be submitted to the FHFA for review prior to implementation.

Section 6.2    Termination of the Plan. The Bank, acting through the Board, may terminate the Plan at any time in its sole discretion. Absent an amendment to the contrary, Plan benefits that were earned and vested prior to the termination will be paid at the times and in the manner provided for by the Plan at the time of the termination.

ARTICLE VII

MISCELLANEOUS

Section 7.1    Governing Law. Except to the extent superseded by laws of the United States, the laws of Indiana will be controlling in all matters relating to the Plan without regard to the choice of law principles therein. The Plan and all Awards are intended to comply, and will be construed by the Bank in a manner in which they are exempt from or comply with the applicable provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"). To the extent there is any conflict between a provision of the Plan or an Award and a provision of Code Section 409A, the applicable provision of Code Section 409A will control.

Section 7.2    Headings and Gender. The headings and subheadings in the Plan have been inserted for convenience of reference only and will not affect the construction of the Plan provisions. In any necessary construction, the masculine will include the feminine and the singular the plural, and vice versa. All calculations of events that last a portion of a calendar year or are to be determined pro rata as to a calendar year will be determined by the actual number of days the condition or event existed and assuming a 365-day year.

17

Exhibit 10.1

Section 7.3    Spendthrift Clause. No benefit or interest available under the Plan will be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or attachment by creditors of a Participant, either voluntarily or involuntarily.  Notwithstanding the foregoing, a Participant may, by completing and signing a written beneficiary designation form which is delivered to and accepted by the Bank, designate a beneficiary to receive any payment and/or exercise any rights with respect to outstanding Awards upon the Participant’s death.  If at the time of the Participant’s death there is not on file a fully effective beneficiary designation form, or if the designated beneficiary did not survive the Participant, the person or persons surviving at the time of the Participant’s death in the first of the following classes of beneficiaries in which there is a survivor, shall have the right to receive any payment and/or exercise any rights with respect to outstanding Awards:

(a)Participant’s surviving spouse.

(b)Participant’s surviving domestic partner.

(c)Equally to the Participant’s children, except that if any of the Participant’s children predecease the Participant but leave descendants surviving, such descendants shall take by right of representation the share their parent would have taken if living. 

(d)Participant’s estate. 

If a person in the class surviving dies before receiving any payment and/or exercising any rights with respect to outstanding Awards (or the person’s share of any payment and/or rights in case of more than one person in the class), that person’s right to receive any payment and/or exercise any rights with respect to outstanding Awards will lapse and the determination of who will be entitled to receive any payment and/or exercise any rights with respect to outstanding Awards will be determined as if that person predeceased the Participant.

For purposes of this Section 7.3, the following terms have the meanings assigned to them below:

(e)The term “spouse” means:  (i) a person of the opposite gender from the Participant who is legally married to the Participant at the relevant time under the laws of the state in which they reside and who meets applicable requirements for being treated as a spouse for purposes of federal law; or (ii) a person of the same gender as the Participant who at the relevant time either (1) is recognized as being legally married to the Participant under federal law or the laws of the state or country in which the relationship was created, or (2) is a person who has joined with the Participant in a civil union that is recognized as creating some or all of the rights of marriage under the laws of the state or country in which the relationship was created.

(f)The term “domestic partner” means a person who is not the spouse of the Participant as defined in subsection (a) above, but who at the relevant time is the Participant’s significant other (together referred to as “partners”) with whom the Participant lives and shares financial responsibility.  A domestic partner may be the same gender or opposite gender.  A person will not be considered a domestic partner unless the Participant and/or domestic partner provides sufficient evidence to the Bank that all of the following requirements are satisfied: 

18

Exhibit 10.1

		
	i.
	Both partners are at least 18 years of age.

		
	ii.
	Neither partner is married to another person under either statutory or common law, neither has another spouse, and neither is a member of another domestic partnership or has been a member of another domestic partnership within the prior 6 months.

		
	iii.
	The partners have shared the same residence for at least 6 months, and continue to do so.

		
	iv.
	The partners are not blood relatives.

		
	v.
	Each of the partners is the other's sole life partner, and intend to remain so indefinitely.

		
	vi.
	The partners are jointly responsible for each other's financial welfare and are able to prove at least three of the following situations to demonstrate such financial interdependence:

		
	(A)
	Common ownership of real property or a common leasehold interest in property; 

		
	(B)
	Joint checking account;

		
	(C)
	Joint credit cards; 

		
	(D)
	Designation of one another as primary beneficiary for life insurance or retirement benefits, or primary beneficiary designation under partner's will;

		
	(E)
	Joint ownership of a motor vehicle; or 

		
	(F)
	Designation of partner under power of attorney.

Section 7.4    Counterparts. This Plan may be executed in any number of counterparts, each one constituting but one and the same instrument, and may be sufficiently evidenced by any one counterpart.

Section 7.5    No Enlargement of Employment Rights. Nothing contained in the Plan may be construed as a contract of employment between the Bank and any person, nor may the Plan be deemed to give any person the right to be retained in the employ of the Bank or limit the right of the Bank to employ or discharge any person with or without cause.

Section 7.6    Limitations on Liability. The individual members of the Board will, in accordance with the Bank's by-laws, be indemnified and held harmless by the Bank with respect to any alleged breach of responsibilities performed or to be performed hereunder. In addition, notwithstanding any other provision of the Plan, neither the Bank nor any individual acting as an employee or agent of the Bank will be liable to a Participant for any claim, loss, liability or expense incurred in 

19

Exhibit 10.1

connection with the Plan, except when the same has been affirmatively determined by a court order or by the affirmative and binding determination of an arbitrator, to be due to the gross negligence or willful misconduct of that person.

Section 7.7    Incapacity of Participant. If any person entitled to receive a distribution under the Plan is physically or mentally incapable of personally receiving and giving a valid receipt for any payment due (unless a prior claim for the distribution has been made by a duly qualified guardian or other legal representative), then, unless and until a claim for the distribution has been made by a duly appointed guardian or other legal representative of the person, the Committee may provide for the distribution to be made to any other individual or institution then contributing toward or providing for the care and maintenance of the person. Any payment made for the benefit of the person under this Section will be a payment for the account of such person and a complete discharge of any liability of the Bank and the Plan.

Section 7.8    Evidence. Evidence required of anyone under the Plan may be by certificate, affidavit, document or other information which the person relying on the evidence considers pertinent and reliable, and signed, made or presented by the proper party or parties.

Section 7.9    Action by Bank. Any action required of or permitted by the Bank under the Plan will be by resolution of the Board or by a person or persons authorized by resolution of the Board.

Section 7.10    Severability. In the event any provisions of the Plan are held to be illegal or invalid for any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and endorsed as if the illegal or invalid provisions had never been contained in the Plan.

Section 7.11    Information to be Furnished by a Participant. A Participant, or any other person entitled to benefits under the Plan, must furnish the Committee with any and all documents, evidence, data or other information the Committee considers necessary or desirable for the purpose of administering the Plan. Benefit payments under the Plan are conditioned on a Participant (or other person who is entitled to benefits) furnishing full, true and complete data, evidence or other information to the Committee, and on the prompt execution of any document reasonably related to the administration of the Plan requested by the Committee.

Section 7.12    Attorneys' Fees. If any action is commenced to enforce the provisions of the Plan, payment of attorneys' fees will be governed by the terms set forth in the mandatory "Agreement to Arbitrate" entered into between the Bank and the Participant.

Section 7.13    Binding on Successors. The Plan will be binding upon and inure to the benefit of the Bank and its successors and assigns, and the successors, assigns, designees and estates of a Participant. The Plan will also be binding upon and inure to the benefit of any successor organization succeeding to substantially all of the assets and business of the Bank, but nothing in the Plan will preclude the Bank from merging or consolidating into or with, or transferring all or substantially all of its assets to, another organization which assumes the Plan and all obligations of the Bank hereunder. The Bank agrees that it will make appropriate provision for the preservation of a Participant's rights under the Plan in any agreement or plan which it may enter into to effect any merger, consolidation, reorganization or transfer of assets. Upon such a merger, consolidation, 

20

Exhibit 10.1

reorganization or transfer of assets and assumption of Plan obligations of the Bank, the term "Bank" will refer to such other organization and the Plan will continue in full force and effect.

    

21

Exhibit 10.1

2020 PERFORMANCE GOALS AS APPROVED BY THE BOARD OF DIRECTORS:

Pursuant to Section 3.2 of the Federal Home Loan Bank of Indianapolis ("Bank") Incentive Plan, effective as of January 1, 2012, and as amended (the "Plan"), the following Appendices were adopted by the Board of Directors (the "Board") of the Bank on November 15, 2019, after consideration and review by the Human Resources Committee of the Board. These Appendices to the Plan are effective as of January 1, 2020. All capitalized terms not otherwise defined herein shall have the meaning ascribed to them in the Plan.

22

Exhibit 10.1

APPENDIX I

2020 PERFORMANCE PERIOD AWARDS FOR LEVEL II PARTICIPANTS
Federal Home Loan Bank of Indianapolis

A.    Incentive Opportunities for Level II Participants
Annual Awards payable to Level II Participants are calculated by multiplying (a) the Compensation (as defined in Section 3.1 of the Federal Home Loan Bank of Indianapolis Incentive Plan) available to the Participant, by (b) the percentages as set forth below, and by (c) the sum of the applicable weighted values of the achievement level for all Performance Goals.
	
		
	 
	TOTAL INCENTIVE
AS % OF COMPENSATION

	Position
	Maximum Percentage of Compensation

	1st VP
	30%

	Member Outreach(1)
	40%

	VP
	25%

	AVP
	15%

	Other Employees
	10%

(1) The "Member Outreach" group includes the Marketing Director, Member Research & Strategies Director, Senior Account Directors, Senior Account Managers, Account Managers, Business Development Analysts, Member Research & Strategies Analysts, MPP Business Development Managers, and all persons performing similar functions to any of the foregoing, but excludes individuals who provide administrative support for the foregoing.
B.     2020 Performance Goals
Performance Goal achievement will be determined for all Level II Participants based on the following values for the different achievement levels:
	
			
	PERCENTAGE VALUE FOR ACHIEVEMENT OF PERFORMANCE GOALS

	Threshold
	Target
	Maximum

	50%
	75%
	100%

23

Exhibit 10.1

The Bank's 2020 Performance Goals are as follows: 

	
								
	MISSION GOALS
	WEIGHTED VALUE
	THRESHOLD
	TARGET
	MAXIMUM

	Bank (1)
	ERM
	Sales (2)

	PROFITABILITY AND FINANCIAL PERFORMANCE
	 
	 
	 
	 
	 
	 

	 
	(a) Profitability (3)
	15%
	10%
	10%
	269 bps
	342 bps
	432 bps

	 
	(b) Market Value of Equity (MVE) to Capital Stock (CS) (4)
	10%
	10%
	10%
	110%
	130%
	160%

	MEMBER ACTIVITY
	 
	 
	 
	 
	 
	 

	 
	(a) Member Advances Growth (5)
	10%
	5%
	15%
	0.5%
	1.00%
	3.00%

	 
	(b) Member Education and Outreach (6)
	10%
	5%
	15%
	40% of All Members
	Achieve Threshold and:
75% of Tier 1
	Achieve Threshold and:
50% of Tier 2 Members

	 
	(c) Recruit new and/or reactivate inactive Participating Financial Institutions into the bank's MPP Program (7)
	5%
	5%
	15%
	3 new or reactivated PFIs
	4 new or reactivated PFIs
	5 or more new or reactivated PFIs

	 
	(d) CIP Advances Originated (8)
	10%
	5%
	15%
	$37.5 MM
	$75 MM
	$150 MM

	ENTERPRISE RISK MANAGEMENT
	10%
	30%
	0%
	Enhance the existing assessment of market valuation assumptions for assets and liabilities while researching and reviewing valuation comparability with other FHLBanks.
	Complete Threshold, and: 
Execute Corporate Priority to support the transition of ERM’s Market Risk Modeling from QRM to PolyPaths.
	Complete Target, and:
ERM Market Risk staff will become proficient in the fundamentals of PolyPaths, including current Treasury Risk Analytics team EUCs, data extracts, and other related PolyPaths processes.

	 
	Market Risk Excellence (9)

	MINORITY AND WOMEN INCLUSION
	 
	 
	 
	 
	 
	 

	 
	(a) Promote inclusion within the organization through cultural awareness events/activities.
	5%
	5%
	5%
	Host 2 events/activities
	Host 4 events/activities
	Host 6 events/activities

	 
	(b) Increase Diverse Vendor pool(10)
	5%
	5%
	5%
	16 new diverse suppliers 
(25% Increase)
	24 new diverse suppliers 
(37.5% Increase)
	33 new diverse suppliers
(50% Increase)

	OPERATIONAL EXCELLENCE
	 
	 
	 
	 
	 
	 

	 
	(a) Transition to New Primary Data Center (11)
	10%
	10%
	0%
	Achieve Technical Readiness
	Complete Threshold and: Achieve Operational Readiness
	Complete Target and: Transition Site of Record

	 
	(b) Implement Enterprise Content Management Platform (12)
	10%
	10%
	10%
	Achieve Technical Readiness
	Complete Threshold and: Achieve Operational Readiness
	Complete Target and: Transition System of Record

  

24

Exhibit 10.1

		
	(1) 
	For all Level II Participants, excluding those addressed in the ERM and Sales columns, and excluding those in the Internal Audit department.  "ERM" means the Bank's Enterprise Risk Management department.

		
	(2) 
	Applies to individuals included in the "Member Outreach" group above. Administrative support staff for individuals in the Member Outreach group are included in the Bank column for weighted value determination.

		
	(3) 
	For purposes of this goal, profitability is defined as the Bank’s profitability rate in excess of the Bank’s cost of funds rate. Profitability is the Bank’s adjusted net income reduced by the portion of net income to be added to restricted retained earnings under the Joint Capital Enhancement Agreement dated August 5, 2011, as amended, by and among the Federal Home Loan Banks and increased by the Bank’s accruals for incentive compensation net of the AHP assessment.  Adjusted net income represents GAAP Net Income adjusted: (i) for the net impact of certain current and prior period Advance prepayments and debt extinguishments, net of the AHP assessment, (ii) to exclude mark-to-market adjustments on derivatives and certain other effects from derivatives and hedging activities, net of the AHP assessment, and (iii) to exclude interest expense on mandatorily redeemable capital stock. The Bank’s profitability rate is profitability, as defined above, as a percentage of average total regulatory capital stock (B1 weighted at 100% and B2 weighted at 80% to reflect the relative weights of the Bank’s dividend). Assumes no material change in investment authority under the FHFA's regulation, policy, directive, guidance, or law.  

		
	(4)  
	The metric that will be used to determine performance on this goal will be the twelve (12) month simple average of the MVE/BV Capital Stock ratio as reported in the monthly Market Risk Monitor Report.

		
	(5) 
	Member advances growth is calculated as the growth in the average daily balance of advances outstanding to members at par.  Average daily balances are used instead of point-in-time balances to eliminate point-in-time activity that may occur and to reward for the benefit of the income earned on advances balances while outstanding.  Members that become non-members during 2020 and all captive insurance company members will be excluded from the calculation.  Goal assumes no material change in membership eligibility under FHFA’s regulation, policy, directive, guidance or law.

		
	(6) 
	Member education and outreach events for purposes of threshold achievement include symposia, conferences, workshops, webinars , educational events, presentations at trade conferences, presentation to member Boards of Directors or Committees thereof or to management committees, in-person joint presentations to members (where a subject matter expert or senior officer of the Bank participates) and other events educating Bank members about Advances, MPP, the Bank’s community investment products and activities, industry trends, and other products and services.  For purposes of Target and Maximum achievement, member education and outreach events include presentations to member Boards of Directors or committees thereof, presentations to member management committees or in-person joint presentations to members (where a subject matter expert or senior officer of the Bank participates) to discuss or educate regarding Advances, MPP, the Bank’s community investment products, industry trends or other products and services.  Member tiers are defined by management based upon core business levels or the capacity to engage in core business with the Bank and are established annually.    Status and reporting on this Goal and its attainment will be supported by the Bank’s Customer Relationship Management (CRM) system.  Achievement towards this goal will be calculated by dividing the number of members that participated in one of the above events (defined as a member at the time of participation in the event) during the calendar year by the total number of members of the Bank at December 31, 2020.

		
	(7) 
	For purposes of this goal, in order for a PFI to qualify as a new or reactivated PFI the member has never sold loans into the Mortgage Purchase Program (MPP) or as of their application for approval has not settled a trade into the MPP within the past 24 months.

25

Exhibit 10.1

		
	(8) 
	"CIP" means Community Investment Program.  "CIP Advances" are newly originated Community Investment Cash Advances, including CIP and other qualifying Advances and CIP qualified letters of credit, provided in support of targeted projects as defined in 12 C.F.R. Part 1291 and the Federal Home Loan Bank Act.

		
	(9) 
	Market Risk Excellence Enhancement:  

Threshold:
Written analysis, recommendations and implementation plan presented at Risk Committee.
Target:
Complete operational readiness for transition and submit documentation to a) Finance Agency for non-objection and b) ERM Model Risk Management Group for model validation.
 [“Operational readiness” defined as being able to generate market risk metrics that are reported to the Finance Agency.]
Maximum:
Independent completion of market risk report by ERM following successful completion of Target goal.  [“Market risk reports” to be defined as reports on market value sensitivity.]
		
	(10) 
	“Increase Diverse Vendor Pool” means new registration(s) on the Bank’s Supplier Registration Portal in 2020 of vendors that qualify as minorities, women, veterans, individuals with disabilities, and minority-, women-, veteran-, and disabled-owned businesses that were not previously registered.

		
	(11) 
	Status and reporting of this goal, and its attainment will be provided in writing to the Information Technology Steering Committee.   Threshold, Target, and Maximum performance achievement levels are as follows:

Technical Readiness:
“Technical Readiness” is defined as the installation, configuration and readiness of technology installed at the new data center.  The criteria and milestones to achieve technical readiness will be reviewed and approved by the Information Technology Steering Committee.
Operational Readiness:
“Operational Readiness” is defined as ensuring data replication is established across the primary and secondary data centers, and the bank can operate a set of non-production systems out of the new data center.  The criteria and milestones to achieve operational readiness will be reviewed and approved by the Information Technology Steering Committee.
Transition Site of Record:
“Transition Site of Record” is defined as receiving Information Technology Steering Committee approval to transition the bank’s primary data center from Woodfield Crossing to the new co-location data center, after successfully achieving technical and operational readiness.  The criteria and milestones to transition the side of record will be reviewed and approved by the Information Technology Steering Committee.
		
	 (12) 
	Status and reporting of this goal, and its attainment will be provided in writing to the Information Technology Steering Committee.   Threshold, Target, and Maximum performance achievement levels are as follows:

Technical Readiness:
“Technical readiness” is defined as the acquisition, and installation of an Enterprise Content Management (ECM) platform.  The criteria and milestones to achieve technical readiness will be reviewed and approved by the Information Technology Steering Committee.

26

Exhibit 10.1

Operational Readiness:
“Operational Readiness” is defined as the governance, training and operational activities required to support the operational of the new Enterprise Content Management platform.   The criteria and milestones to achieve operational readiness will be reviewed and approved by the Information Technology Steering Committee. 
Transition System of Record:
“Transition System of Record” is defined as transitioning the system of record for electronic records from Oracle Universal Content Management (UCM) to the new Enterprise Content Management platform.  The criteria and milestones to achieve the transition will be reviewed and approved by the Information Technology Steering Committee.

27

Exhibit 10.1

 C.    Hypothetical Example Calculations

Assume that the Bank achieved the following on its Performance Goals for year 1:
	
									
	MISSION GOALS
	WEIGHTED VALUE
	Achievement
	Achievement Percentage Value
	Bank Result
	ERM Result
	Sales Result

	Bank
	ERM
	Sales

	1. Performance Goal 1
	25%
	25%
	20%
	Target
	75%
	18.75%
	18.75%
	15.00%

	 
	 
	 
	 
	 
	 
	 
	 
	 

	2. Performance Goal 2
	50%
	45%
	65%
	Threshold
	50%
	25%
	22.50%
	32.50%

	 
	 
	 
	 
	 
	 
	 
	 
	 

	3. Performance Goal 3
	10%
	10%
	3%
	Over Maximum
	100%
	10%
	10.00%
	3.00%

	 
	 
	 
	 
	 
	 
	 
	 
	 

	4. Performance Goal 4
	10%
	10%
	10%
	Below Threshold
	—%
	—%
	—%
	—%

	 
	 
	 
	 
	 
	 
	 
	 
	 

	5. Performance Goal 5
	5%
	10%
	2%
	50% between Target and Maximum
	87.5%
	4.375%
	8.75%
	1.75%

	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	Total:
	58.125%
	60%
	52.25%

A Vice President is eligible to receive an Annual Award of up to a maximum of 25% of his or her Compensation.  Depending on the Vice President's business unit, the Annual Award will be equal to the following proportion of the Vice President's Compensation (rounded to 2 decimal places):
	
			
	Bank Vice President
	ERM Vice President
	Sales Vice President (in Member Outreach group)

	25%*58.13%=14.53%
	25%*60%=15.00%
	40%*52.25%=20.09%

Assuming the Vice President's Compensation is $80,000, his or her Annual Award will equal the following, depending on the Vice President's business unit:
	
			
	Bank Vice President
	ERM Vice President
	Sales Vice President (in Member Outreach group)

	$80,000*14.53%=$11,624
	$80,000*15.00%=$12,000
	$80,000*20.09%=$16,072

28

Exhibit 10.1

APPENDIX II

 2020 PERFORMANCE PERIOD AWARDS FOR LEVEL I PARTICIPANTS
Federal Home Loan Bank of Indianapolis

A.    Incentive Opportunities for Level I Participants
Annual Awards payable to Level I Participants are calculated by multiplying (a) the Compensation (as defined in Section 3.1 of the Federal Home Loan Bank of Indianapolis Incentive Plan) available to the Participant, by (b) the percentages as set forth below, and by (c) the sum of the applicable weighted values of the achievement level for all Performance Goals.
	
				
	Position
	TOTAL INCENTIVE AS % OF COMPENSATION
	INCENTIVE AS % OF COMPENSATION, EARNED & VESTED AT YEAR-END
	INCENTIVE AS % OF COMPENSATION, DEFERRED FOR 3 YEARS

	CEO
	100%
	50%
	50%

	EVP
	80%
	40%
	40%

	SVP
	70%
	35%
	35%

Deferred Awards are subject to additional Performance Goals during the Deferral Performance Period, as described in Section C below.
B.    2020 Performance Goals for Level I Participants
Performance Goal achievement will be determined for Level I Participants based on the following values for the different achievement levels:
	
				
	PERCENTAGE VALUE FOR ACHIEVEMENT OF PERFORMANCE GOALS

	Position
	Threshold
	Target
	Maximum

	CEO
	50%
	80%
	100%

	EVP
	50%
	75%
	100%

	SVP
	50%
	75%
	100%

The Mission Goals, Weighted Values, Thresholds, Targets, Maximums, and notes set forth in Appendix I.B. above shall also apply to Level I Participants, and are incorporated herein by this reference.  For purposes of this Appendix II.B., "Bank" shall refer to Level I Participants other than those in ERM and Internal Audit, and "ERM" shall refer to Level I Participants in ERM.  No Level I Participant qualifies for "Sales."

C.    2021 - 2023 Performance Goals for Level I Participants
Deferred Awards are subject to additional Performance Goals during the Deferral Award Performance Period.  The achievement levels for Deferral Performance Period Performance Goals for all Level I Participants are:

29

Exhibit 10.1

	
			
	DEFERRAL PERFORMANCE PERIOD

	PERFORMANCE GOAL PERCENTAGE VALUES

	Threshold
	Target
	Maximum

	75%
	100%
	125%

The Bank's Deferral Performance Period Performance Goals are:
	
						
	MISSION GOALS
	WEIGHTED VALUE
	THRESHOLD
	TARGET
	MAXIMUM

	Bank (1)
	ERM

	1. PROFITABILITY (2)
	35%
	35%
	25 bps
	50 bps
	150 bps

	 
	 
	 
	 
	 
	 

	2. RETAINED EARNINGS (3)
	35%
	35%
	3.5%
	3.9%
	4.3%

	 
	 
	 
	 
	 
	 

	3. PRUDENTIAL
	30%
	30%
	Achieve 1 Prudential Standard
	__
	Achieve 2 Prudential Standards

	 
	 
	 
	 
	 
	 

	A.  Maintain a regulatory capital-to-assets ratio of at least 4.16% as measured on each quarter-end in 2021 through 2023.
	 
	 
	 
	 
	 

	B.  Award to FHLBI members the annual AHP Competitive funding requirement in each plan year.
	 
	 
	 
	 
	 

		
	(1) 
	For Level I Participants other than those in ERM and Internal Audit.

		
	(2) 
	For purposes of this goal, profitability is defined as the Bank’s profitability rate in excess of the Bank’s cost of funds rate. Profitability is the Bank’s adjusted net income reduced by the portion of net income to be added to restricted retained earnings under the Joint Capital Enhancement Agreement dated August 5, 2011, as amended, by and among the Federal Home Loan Banks and increased by the Bank’s accruals for incentive compensation. Adjusted net income represents GAAP Net Income adjusted: (i) for the net impact of certain current and prior period Advance prepayments and debt extinguishments, net of the AHP assessment, (ii) to exclude mark-to-market adjustments on derivatives and certain other effects from derivatives and hedging activities, net of the AHP assessment, and (iii) to exclude the effects from interest expense on mandatorily redeemable capital stock. The Bank's profitability rate is profitability, as defined above, as a percentage of average total regulatory capital stock (B1 weighted at 100% and B2 weighted at 80% to reflect the relative weights of the Bank’s dividend). Assumes no material change in investment authority under the FHFA's regulation, policy, directive, guidance, or law. Attainment of this goal will be computed using the simple average of annual profitability measures over the three-year period.

		
	(3) 
	Total Retained Earnings divided by the sum of the carrying value of the MBS and AMA assets portfolios, measured at the end of each month. The calculation will be the simple average of 36 month-end calculations.

D.    Hypothetical Example Calculations

Assume that the Bank achieved the following on its Performance Goals for year 1 (calculated using weighting for Senior Vice Presidents):

30

Exhibit 10.1

	
							
	MISSION GOALS
	WEIGHTED VALUE
	Achievement
	Achievement Percentage Value
	Bank Result
	ERM Result

	Bank
	ERM

	1. Performance Goal 1
	25%
	25%
	Target
	75%
	18.75%
	18.75%

	 
	 
	 
	 
	 
	 
	 

	2. Performance Goal 2
	50%
	45%
	Threshold
	50%
	25%
	22.5%

	 
	 
	 
	 
	 
	 
	 

	3. Performance Goal 3
	10%
	10%
	Over Maximum
	100%
	10%
	10%

	 
	 
	 
	 
	 
	 
	 

	4. Performance Goal 4
	10%
	10%
	Below Threshold
	—%
	—%
	—%

	 
	 
	 
	 
	 
	 
	 

	5. Performance Goal 5
	5%
	10%
	50% between Target and Maximum
	87.5%
	4.375%
	8.75%

	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	Total:
	58.125%
	60.00%

A Senior Vice President is eligible to receive an Annual Award of up to a maximum of 70% of his or her Compensation.  Depending on the Senior Vice President's business unit, the Annual Award will be equal to the following proportion of the Senior Vice President's Compensation (rounded to 2 decimal places):

	
		
	Bank Senior Vice President
	ERM Senior Vice President

	70%*58.13%=40.69%
	70%*60%=42%

Assuming the Senior Vice President's Compensation is $200,000, his or her total incentive will equal the following, depending on the Senior Vice President's business unit:
	
		
	Bank Senior Vice President
	ERM Senior Vice President

	$200,000*40.69%=$81,380
	$200,000*42%=$84,000

50% of this amount will be paid after year 1 as an Annual Award, and the other 50% will be deferred until after the Deferral Performance Period.
	
			
	 
	Bank Senior Vice President
	ERM Senior Vice President

	Annual Award
	$81,380*50%=$40,690
	$84,000*50%=$42,000

Assume the Bank achieved the following Performance Goals during the Deferral Award Performance Period:

31

Exhibit 10.1

	
							
	MISSION GOALS
	WEIGHTED VALUE
	Achievement
	Achievement Percentage Value
	Bank Result
	ERM Result

	Bank
	ERM

	1. Goal 1
	35%
	35%
	Target
	100%
	35%
	35%

	 
	 
	 
	 
	 
	 
	 

	2. Goal 2
	35%
	35%
	Maximum
	125%
	43.75%
	43.75%

	 
	 
	 
	 
	 
	 
	 

	3. Goal 3
	30%
	30%
	50% between Threshold and Target
	87.5%
	26.25%
	26.25%

	 
	 
	 
	 
	Total:
	105%
	105%

After the Deferral Performance Period, the Senior Vice President would receive the following as a Deferred Award, depending on the Senior Vice President's business unit:

	
			
	 
	Bank Senior Vice President
	ERM Senior Vice President

	Deferred Award
	$40,690*105%=$42,724.50
	$42,000*105%=$44,100

32

Exhibit 10.1

APPENDIX III

FORM OF NON-SOLICITATION AND NON-DISCLOSURE AGREEMENT

This Agreement is entered into as of the ____ day of _____________, 201_, by and between the FEDERAL HOME LOAN BANK OF INDIANAPOLIS, a corporation organized under the laws of the United States (the "Bank") and ____________________ (the "Executive").
WHEREAS, the Bank sponsors the Federal Home Loan Bank of Indianapolis Incentive Plan (the "Plan"); and
WHEREAS, as a condition of participation in the Plan, the Bank requires that the Executive agree to the terms and conditions found within this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual promises and agreements contained herein and other good and valuable consideration, the receipt, legal adequacy and sufficiency of which are hereby acknowledged, the parties agree as follows:

1.    Non-Disclosure; Return of Confidential Information and Other Property.

		
	(a)
	Access to Confidential Information. The Executive understands, acknowledges and agrees that during the course of his or her employment with the Bank he or she has gained or will gain information regarding, knowledge of, and familiarity with, the Confidential Information of the Bank (as defined in subsection (c)) that would cause irreparable damage and harm to the Bank if it was disclosed. The Executive understands, acknowledges and agrees that the Confidential Information has substantial economic value because it is not known or readily ascertainable by proper means by others who could obtain economic value from it. The Executive also acknowledges and agrees that the Bank uses reasonable means to maintain the secrecy and confidentiality of the Confidential Information.

		
	(b)
	Non-Disclosure. At all times while the Executive is employed by the Bank, and at all times thereafter, the Executive will not (i) directly or indirectly disclose, provide or discuss any Confidential Information with or to any Person (as defined in subsection (d)) other than those directors, officers, employees, representatives and agents of the Bank who need to know such Confidential Information for a proper corporate purpose, and (ii) directly or indirectly use any Confidential Information (A) to compete against the Bank, or (B) for the Executive's own benefit, or for the benefit of any Person other than the Bank.

		
	(c)
	Confidential Information Defined. For purposes of this Agreement, the term "Confidential Information" means any and all:

		
	(i)
	materials, records, data, documents, lists, writings and information (in each case, whether in writing, printed, verbal, electronic, computerized or otherwise) (A) relating or referring in any manner to the business, operations, affairs, financial condition, results of operation, cash flow, assets, liabilities, sales, revenues, income, estimates, projections, policies, strategies, techniques, methods, products, 

33

Exhibit 10.1

developments, suppliers, regulators, members, relationships and/or customers of the Bank that are confidential, proprietary or not otherwise publicly available, in any event not without a breach of this Agreement, or (B) that the Bank has deemed confidential, proprietary, nonpublic or not otherwise publicly available without breaching this Agreement;

		
	(ii)
	trade secrets of the Bank, as defined in Indiana Code Section 24-2-3-2, as amended, or any successor statute; and

		
	(iii)
	any and all copies, summaries, analyses and extracts which relate or refer to or reflect any of the items set forth in (i) or (ii) above. The Executive agrees that all Confidential Information is confidential and is and at all times will remain the property of the Bank.

		
	(d)
	Person Defined. For purposes of this Agreement, the term "Person" will mean any natural person, proprietorship, partnership, corporation, limited liability company, bank, organization, firm, business, joint venture, association, trust or other entity and any government agency, body or authority.

		
	(e)
	Return of Confidential Information and Other Property. The Executive covenants and agrees:

		
	(i)
	to keep all Confidential Information subject to the Bank's custody and control and to promptly return to the Bank all Confidential Information that is still in the Executive's possession or control at the termination of the Executive's employment with the Bank; and

		
	(ii)
	promptly upon termination of the Executive's employment with the Bank, to return to the Bank, at the Bank's principal office, all vehicles, equipment, computers, credit cards and other property of the Bank and to cease using any of the foregoing.

		
	(f)
	Exceptions from Confidentiality Obligations. Section 1 shall not be deemed to prevent the Executive from making disclosures required by applicable regulation, law, agency order, or court order, to the extent the Executive provides reasonable written notice of such disclosure requirement to the Bank prior to such disclosure, to the extent such prior notice is not prohibited, to permit the Bank to contest the disclosure of such information.

    
2.    Non-Disparagement. The Executive agrees to not communicate disparaging remarks to third parties about the Bank, its directors, officers or employees. Likewise, the Bank agrees not to disparage the Executive or his or her skills or job performance to third parties. However, nothing in this paragraph shall prohibit the Bank or the Executive from testifying truthfully under oath.

3.    Non-Solicitation and No-Hire. The Executive hereby understands, acknowledges and agrees that, by virtue of his or her position with the Bank, the Executive has and will have advantageous familiarity and personal contacts with the employees of the Bank and has and will have advantageous familiarity with the business, operations and affairs of the Bank. In 

34

Exhibit 10.1

addition, the Executive understands, acknowledges and agrees that the business of the Bank is highly competitive. Accordingly, at all times while the Executive is employed by the Bank and for a twelve-month period following Termination of Service, the Executive will not, directly or indirectly, or individually or together with any other Person, as owner, shareholder, investor, member, partner, proprietor, principal, director, officer, Executive, manager, agent, representative, independent contractor, consultant or otherwise induce, request or attempt to influence any Bank employee who was employed by the Bank during the twelve-month period prior to Termination of Service, to terminate his or her employment with the Bank. In addition, the Executive agrees that for a period of twelve months following the Executive's Termination of Service, Executive will not hire any Bank employee who was employed by the Bank during the twelve-month period prior to the Executive's Termination of Service.

4.    Periods of Noncompliance and Reasonableness of Periods. The restrictions and covenants contained in Section 3 will not run during all periods of noncompliance and will apply during the Term of this Agreement and for the full periods specified in Section 3. The Bank and the Executive understand, acknowledge and agree that the restrictions and covenants contained in Section 3 are reasonable in view of the nature of the business in which the Bank is engaged, the Executive's position with the Bank and the Executive's advantageous knowledge and familiarity with, the Bank's employees, business, operations, affairs and customers.

The Bank's obligation to pay an award to the Executive pursuant to the Federal Home Loan Bank of Indianapolis Incentive Plan will immediately terminate in the event the Executive breaches any of the provisions of Section 1 or 3 and all outstanding awards will be forfeited. Notwithstanding the foregoing:
		
	(a)
	the Executive's covenants set forth in Sections 1 or 3 will continue in full force and effect and be binding upon the Executive;

		
	(b)
	the Bank will be entitled to the remedies specified in Section 6; and

		
	(c)
	the Bank will be entitled to its damages, costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) resulting from or relating to the successful prosecution of the Executive's breach of any of the provisions of Section 1 or 3.

5.    Survival of Certain Provisions. Upon any termination of the Executive's employment with the Bank, the Executive and the Bank hereby expressly agree that the provisions of Sections 1, 3, 4 and 6 will continue to be in full force and effect and binding upon the Executive and the Bank in accordance with the applicable respective provisions of such Sections.
    
6.    Remedies. The Executive agrees that the Bank will suffer irreparable damage and injury and will not have an adequate remedy at law in the event of any actual, threatened or attempted breach by the Executive of any provision of Section 1 or 3. Accordingly, in the event of a threatened, attempted or actual breach by the Executive of any provision of Section 1 or 3, in addition to all other remedies to which the Bank is entitled at law, in equity or otherwise, the Bank may be entitled to a temporary restraining order and a permanent injunction or a decree of specific performance of any provision of Section 1 or 3. The foregoing remedies will not be deemed to be the exclusive rights or remedies of the Bank for any breach of or noncompliance with this Agreement by the Executive but will be in addition to all other rights and remedies available to the Bank at law, in equity or otherwise.

35

Exhibit 10.1

7.    Severability. In case any one or more of the provisions (or any portion thereof) contained herein will, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability will not affect any other provision of this Agreement, but this Agreement will be construed as if such invalid, illegal or unenforceable provision or provisions (or portion thereof) had never been contained herein. If any provision of this Agreement will be determined by a court of competent jurisdiction to be unenforceable because of the provision's scope, duration or other factor, then such provision will be considered divisible and the court making such determination will have the power to reduce or limit (but not increase or make greater) such scope, duration or other factor or to reform (but not increase or make greater) such provision to make it enforceable to the maximum extent permitted by law, and such provision will then be enforceable against the appropriate party hereto in its reformed, reduced or limited form; provided, however, that a provision will be enforceable in its reformed, reduced or limited form only in the particular jurisdiction in which a court of competent jurisdiction makes such determination.

8.    Entire Agreement. This Agreement sets forth the entire understanding of the parties hereto with respect to its subject matter, merges and supersedes all prior and contemporaneous understandings with respect to its subject matter, and may not be waived or modified, in whole or in part, except in writing signed by each of the parties hereto. No waiver of any provision of this Agreement in any instance will be deemed to be a waiver of the same or any other provision in any other instance. The recitals set forth above are incorporated herein by this reference.

9.    Effect and Modification. No statement or promise, except as set forth herein, has been made with respect to the subject matter of this Agreement. No modification or amendment will be effective unless in writing and signed by the Executive and an officer of the Bank (other than the Executive).

10.    Non-Waiver. The Bank's or the Executive's failure or refusal to enforce all or any part of, or the Bank's or the Executive's waiver of any breach of this Agreement, will not be a waiver of the Bank's or the Executive's continuing or subsequent rights under this Agreement, nor will such failure or refusal or waiver have any effect on the subsequent enforceability of this Agreement.

11.    Non-Assignability. This Agreement contemplates that the Executive will personally provide the services described herein, and accordingly, the Executive may not assign the Executive's rights or obligations hereunder, whether by operation of law or otherwise, in whole or in part, without the prior written consent of the Bank.
    
12.    Notice. Any notice, request, instruction or other document to be given hereunder to any party will be in writing and delivered by hand, telegram, registered or certified United States mail return receipt requested, or other form of receipted delivery, with all expenses of delivery prepaid, as follows:

If to the Executive:        _________________________
_________________________
_________________________
_________________________

36

Exhibit 10.1

		
	If to the Bank: 
	Federal Home Loan Bank of Indianapolis

c/o General Counsel
8250 Woodfield Crossing Boulevard
Indianapolis, IN 46240
13.    Governing Law. This Agreement is being delivered in and will be governed by the laws of the State of Indiana without regard to the choice of law principles thereof. Any dispute regarding this Agreement will be brought in any Indiana state or federal court having jurisdiction in the matter and located in Marion County, Indiana, and the Executive expressly consents to the jurisdiction of such courts.

14.    Prior Agreements. The Executive represents and warrants to the Bank that the Executive is not a party to or otherwise bound by any agreement that would restrict in any way the performance by the Executive of the Executive's duties, services and obligations under this Agreement, that the Executive has disclosed to the Bank all employment type agreements to which the Executive has been bound, including without limitation employment agreements, consulting agreements, non-compete agreements or covenants, confidentiality or non-disclosure agreements or covenants, and intellectual property assignment agreements, and that the Bank will not have any liability to any third party arising out of the Executive entering into this Agreement or performing hereunder.

15.    Effect of Headings. The descriptive headings of the Sections and, where applicable, subsections, of this Agreement are inserted for convenience and identification only and do not constitute a part of this Agreement for purposes of interpretation.

16.    Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which collectively will constitute one and the same instrument.

17.    Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings ascribed to them in the Plan.

37

Exhibit 10.1

IN WITNESS WHEREOF, the Bank, by its officer thereunder duly authorized, and the Executive, have caused this Non-Competition, Non-Solicitation and Non-Disclosure Agreement to be executed as of the day and year first above written.
FEDERAL HOME LOAN BANK
OF INDIANAPOLIS                EXECUTIVE
By: __________________________        _____________________________________            
Its:  __________________________    
By:  __________________________        
Its:  __________________________        

38EX-4.1

 Exhibit 4.1 

Execution Version 
  

 
 RIGHTS AGREEMENT 

Dated as of January 27, 2020 

between 
 AVIS BUDGET GROUP, INC.

 and 
 COMPUTERSHARE INC.,

 as Rights Agent 
  

 

 TABLE OF CONTENTS 

 

									
				
	 	 	 	  	 	  	Page	 
	 Section
	 	1.	  	Definitions	  	 	1	 
				
	 Section
	 	2.	  	Appointment of Rights Agent	  	 	6	 
				
	 Section
	 	3.	  	Issue of Right Certificates	  	 	7	 
				
	 Section
	 	4.	  	Form of Right Certificates	  	 	9	 
				
	 Section
	 	5.	  	Countersignature and Registration	  	 	9	 
				
	 Section
	 	6.	  	Transfer, Split-up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates	  	 	9	 
				
	 Section
	 	7.	  	Exercise of Rights; Purchase Price; Expiration Date of Rights	  	 	10	 
				
	 Section
	 	8.	  	Cancellation and Destruction of Right Certificates	  	 	12	 
				
	 Section
	 	9.	  	Status and Availability of Common Shares	  	 	12	 
				
	 Section
	 	10.	  	Common Shares Record Date	  	 	13	 
				
	 Section
	 	11.	  	Adjustment of Purchase Price, Number of Shares or Number of Rights	  	 	13	 
				
	 Section
	 	12.	  	Certificate of Adjustment	  	 	18	 
				
	 Section
	 	13.	  	Consolidation, Merger, Sale or Transfer of Assets or Earning Power	  	 	19	 
				
	 Section
	 	14.	  	Fractional Rights and Fractional Shares	  	 	20	 
				
	 Section
	 	15.	  	Rights of Action	  	 	21	 
				
	 Section
	 	16.	  	Agreement of Right Holders	  	 	21	 
				
	 Section
	 	17.	  	Right Certificate Holder Not Deemed a Stockholder	  	 	22	 
				
	 Section
	 	18.	  	Concerning the Rights Agent	  	 	22	 
				
	 Section
	 	19.	  	Merger or Consolidation or Change of Name of Rights Agent	  	 	23	 
				
	 Section
	 	20.	  	Rights and Duties of Rights Agent	  	 	23	 
				
	 Section
	 	21.	  	Change of Rights Agent	  	 	26	 
				
	 Section
	 	22.	  	Issuance of New Right Certificates	  	 	26	 
				
	 Section
	 	23.	  	Redemption	  	 	27	 
				
	 Section
	 	24.	  	Exchange	  	 	27	 
				
	 Section
	 	25.	  	Notice of Certain Events	  	 	29	 
				
	 Section
	 	26.	  	Notices	  	 	30	 
				
	 Section
	 	27.	  	Supplements and Amendments	  	 	30	 
				
	 Section
	 	28.	  	Successors	  	 	31	 
				
	 Section
	 	29.	  	Benefits of this Agreement	  	 	31	 

  
 -i- 

 TABLE OF CONTENTS 

(continued) 
  

									
				
	 	 	 	  	 	  	Page	 
	 Section
	 	30.	  	Severability	  	 	31	 
				
	 Section
	 	31.	  	Governing Law	  	 	31	 
				
	 Section
	 	32.	  	Counterparts	  	 	31	 
				
	 Section
	 	33.	  	Descriptive Headings	  	 	31	 
				
	 Section
	 	34.	  	Administration	  	 	31	 
				
	 Section
	 	35.	  	Force Majeure	  	 	32	 

  
 - ii - 

 RIGHTS AGREEMENT 

This Rights Agreement (this “Agreement”), dated as of January 27, 2020, is between Avis Budget Group, Inc., a Delaware
corporation (the “Company”), and Computershare Inc., a Delaware corporation, as rights agent (the “Rights Agent”). 

A duly authorized committee of the Board of Directors of the Company (the “Board of Directors”) has authorized and declared a
dividend of one common share purchase right (a “Right”) for each share of common stock, par value $0.01 per share, of the Company outstanding on the Close of Business on February 7, 2020 (the “Record Date”) and has
authorized the issuance of one Right with respect to each additional Common Share issued by the Company between the Record Date and the earliest of (i) the Distribution Date, (ii) the Redemption Date, (iii) the Qualifying Offer
Expiration Date and (iv) the Final Expiration Date, and additional Common Shares that shall become outstanding after the Distribution Date as provided in Section 22 of this Agreement, each Right initially representing the right to purchase
one Common Share, subject to adjustment, upon the terms and subject to the conditions hereof. 
 Accordingly, in consideration of the
premises and the mutual agreements herein set forth, the parties agree as follows: 
 1. Definitions. For purposes of this Agreement, the following terms
have the meanings indicated: 
 1.1 “Acquiring Person” means any Person (other than an Exempt Person) who or
which, together with all Affiliates and Associates of such Person, shall be the Beneficial Owner of 20 % or more of the Common Shares then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of the Company,
(iii) any employee benefit plan of the Company or of any Subsidiary of the Company, (iv) any entity holding Common Shares for or pursuant to the terms of any such employee benefit plan or (v) any Person who or which, together with all
Affiliates and Associates of such Person, at the time of the first public announcement of this Agreement, is a Beneficial Owner of 20% or more of the Common Shares then outstanding (a “Grandfathered Stockholder”); provided,
that (A) for the avoidance of doubt, any Derivative that is not by its express terms capable of being settled directly into Common Shares and does not otherwise directly or indirectly convey any voting rights in Common Shares to any Person
shall not be included in the calculation of Beneficial Ownership for purposes of determining whether and the extent to which a Person may be deemed to be a Grandfathered Stockholder and (B) if a Grandfathered Stockholder becomes, after such
time, the Beneficial Owner (other than pursuant to the vesting or exercise of any equity awards issued to a member of the Board of Directors or pursuant to additional grants of any such equity awards to a member of the Board of Directors) of any
additional Common Shares (regardless of whether, thereafter or as a result thereof, there is an increase, decrease or no change in the percentage of Common Shares then outstanding Beneficially Owned by such Grandfathered Stockholder) then such
Grandfathered Stockholder shall be deemed to be an Acquiring Person unless, upon such acquisition of Beneficial Ownership of additional Common Shares, such Person is not the Beneficial Owner of 20% or more of the Common Shares then outstanding;
provided, further, that upon the first decrease of a Grandfathered Stockholder’s Beneficial Ownership below 20%, such Grandfathered Stockholder shall no 

  
 - 1 - 

 
longer be deemed to be a Grandfathered Stockholder and this clause (v) shall have no further force or effect with respect to such Person. For the avoidance of doubt, in the event that after
the time of the first public announcement of this Agreement, any agreement, arrangement or understanding pursuant to which any Grandfathered Stockholder is deemed to be the Beneficial Owner of Common Shares expires, is settled in whole or in part,
terminates or no longer confers any benefit to or imposes any obligation on the Grandfathered Stockholder, any direct or indirect replacement, extension or substitution of such agreement, arrangement or understanding with respect to the same or
different Common Shares that confers Beneficial Ownership of Common Shares shall be considered the acquisition of Beneficial Ownership of additional Common Shares by the Grandfathered Stockholder and render such Grandfathered Stockholder an
Acquiring Person for purposes of this Agreement unless, upon such acquisition of Beneficial Ownership of additional Common Shares, such person is not the Beneficial Owner of 20% or more of the Common Shares then outstanding.  

Notwithstanding the foregoing, no Person shall become an Acquiring Person as the result of an acquisition or redemption of Common Shares by
the Company which, by reducing the number of shares outstanding, increases the proportionate number of shares Beneficially Owned by such Person to 20% (or such other percentage as would otherwise result in such Person becoming an Acquiring Person)
or more of the Common Shares then outstanding; provided, that if a Person would, but for the provisions of this paragraph, become an Acquiring Person by reason of an acquisition of Common Shares by the Company and shall, after such share
purchases by the Company, become the Beneficial Owner of any additional Common Shares at any time such that the Person is or thereby becomes the Beneficial Owner of 20% (or such other percentage as would otherwise result in such Person becoming an
Acquiring Person) or more of the Common Shares then outstanding (other than Common Shares acquired solely as a result of corporate action of the Company not caused, directly or indirectly, by such Person), then such Person shall be deemed to be an
Acquiring Person. 
 Notwithstanding the foregoing, if the Board of Directors, with the concurrence of a majority of the members of the
Board of Directors who are not, and are not representatives, nominees, Affiliates or Associates of, such Person or an Acquiring Person, determines in good faith that a Person that would otherwise be an Acquiring Person has become such inadvertently
(including because (i) such Person was unaware that it beneficially owned a percentage of Common Shares that would otherwise cause such Person to be an Acquiring Person or (ii) such Person was aware of the extent of its Beneficial
Ownership of Common Shares but had no actual knowledge of the consequences of such Beneficial Ownership under this Agreement) and without any intention of changing, obtaining, or influencing control of the Company, and such Person divests as
promptly as practicable a sufficient number of Common Shares so that such Person would no longer be an Acquiring Person, then such Person shall not be deemed to have become an Acquiring Person. Notwithstanding the foregoing, if a bona fide swaps
dealer who would otherwise be an “Acquiring Person” has become so as a result of its actions in the ordinary course of its business that the Board of Directors determines, in its sole discretion, were taken without the intent or effect of
evading or assisting any other Person to evade the purposes and intent of this Agreement, or otherwise seeking to control or influence the management or policies of the Company, then, and unless and until the Board of Directors shall otherwise
determine, such Person shall not be deemed to be an “Acquiring Person”. 

  
 - 2 - 

 Notwithstanding the foregoing, no Person shall become an Acquiring Person solely as a result
of an Exempt Transaction. 
 1.2 “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act, as in effect on the date of this Agreement. 

1.3 A Person shall be deemed the “Beneficial Owner” of and shall be deemed to “Beneficially Own”, or have
“Beneficial Ownership” of, any securities: 
 1.3.1 which such Person or any of such Person’s Affiliates or Associates
beneficially owns, directly or indirectly, within the meaning of Rules 13d-3 or 13d-5 promulgated under the Exchange Act, as in effect on the date of this Agreement;

 1.3.2 which such Person or any of such Person’s Affiliates or Associates has (i) the right or ability to vote, cause to be voted
or control or direct the voting of pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, that a Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, any security if the agreement,
arrangement or understanding to vote such security (A) arises solely from a revocable proxy or consent given to such Person in response to a public proxy or consent solicitation made pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (B) is not also then reportable on a statement on Schedule 13D under the Exchange Act (or any comparable or successor report) or (ii) the right or the obligation to become the
Beneficial Owner (whether such right is exercisable or such obligation is required to be performed immediately or only after the passage of time, the occurrence of conditions, the satisfaction of regulatory requirements or otherwise) pursuant to any
agreement, arrangement or understanding, whether or not in writing (other than customary agreements with and between underwriters and selling group members with respect to a bona fide public offering of securities), written or otherwise, or upon the
exercise of conversion rights, exchange rights, rights (other than the Rights), warrants or options, or otherwise, through conversion of a security, pursuant to the power to revoke a trust, discretionary account or similar arrangement, pursuant to
the power to terminate a repurchase or similar so-called “stock-borrowing” agreement or arrangement, or pursuant to the automatic termination of a trust, discretionary account or similar arrangement;
provided, that a Person shall not be deemed to be the Beneficial Owner of, or to Beneficially Own, securities tendered pursuant to a tender or exchange offer made pursuant to, and in accordance with, the applicable rules and regulations
promulgated under the Exchange Act until such tendered securities are accepted for purchase or exchange; 
 1.3.3 which are Beneficially
Owned (within the meaning of the preceding subsections of this Section 1.3), directly or indirectly, by any other Person with which such Person or any of such Person’s Affiliates or Associates has any agreement, arrangement or
understanding, whether or not in writing, for the purpose of acquiring, holding, voting or disposing of any securities of the Company or cooperating in obtaining, changing or influencing the control of the Company; or 

  
 - 3 - 

 1.3.4 which are the subject of, or the reference securities for, or that underlie, any
Derivative Position of such Person or any of such Person’s Affiliates or Associates, with the number of Common Shares deemed Beneficially Owned in respect of a Derivative Position being the notional or other number of Common Shares in respect
of such Derivative Position (without regard to any short or similar position) that is specified in (i) one or more filings with the Securities and Exchange Commission by such Person or any of such Person’s Affiliates or Associates or
(ii) the documentation evidencing such Derivative Position as the basis upon which the value or settlement amount of such Derivative Position, or the opportunity of the holder of such Derivative Position to profit or share in any profit, is to
be calculated in whole or in part (whichever of (i) or (ii) is greater), or if no such number of Common Shares is specified in such filings or documentation (or such documentation is not available to the Board of Directors), as determined by
the Board of Directors in its reasonable discretion. 
 Notwithstanding anything in this definition of Beneficial Owner to the contrary, the
phrase “then outstanding,” when used with reference to a Person’s Beneficial Ownership of securities of the Company, means the number of such securities then issued and outstanding together with the number of such securities
not then actually issued and outstanding which such Person would be deemed to Beneficially Own hereunder. 
 1.4 “Business
Day” means any day other than a Saturday, a Sunday or a day on which banking institutions in the state of New York are authorized or obligated by law or executive order to close. 

1.5 “Close of Business” on any given date means 5:00 p.m., New York time, on such date; provided, that if such
date is not a Business Day, it means 5:00 p.m., New York time, on the next succeeding Business Day. 
 1.6 “Common
Shares” means the shares of common stock, par value $0.01 per share, of the Company. “Common Shares,” when used with reference to any Person other than the Company, means the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a Subsidiary of another Person, the Person or Persons which ultimately control such first-mentioned Person. 

1.7 “Common Stock Equivalents” has the meaning set forth in Section 11.1.3(ii)(C). 

1.8 “Current Per Share Market Price” has the meaning set forth in Section 11.4.1. 

1.9 “Current Value” has the meaning set forth in Section 11.1.3(i)(A). 

1.10 “Derivative” has the meaning set forth in Section 1.11. 

1.11 “Derivative Position” shall mean any option, warrant, convertible security, stock appreciation right, or other security,
contract right or derivative position or similar right (including any “swap” transaction with respect to any security, other than a broad based market basket or index) (any of the foregoing, a “Derivative”), whether or not
presently exercisable, that (i) has an exercise or conversion privilege or a settlement payment or mechanism at a price related to the value of the Common Shares or a value determined in whole or in part with reference to, or derived in whole
or in part from, the value of the Common Shares and that increases in value as the market price or value of the Common Shares increases or that provides an opportunity, directly or indirectly, to profit or share in any profit derived from any
increase in 

  
 - 4 - 

 
the value of the Common Shares and (ii) is capable of being settled, in whole or in part, through delivery of Common Shares (whether on a required or optional basis, and whether such
settlement may occur immediately or only after the passage of time, the occurrence of conditions, the satisfaction of regulatory requirements or otherwise), in each case regardless of whether (A) it conveys any voting rights in such Common
Shares to any Person or (B) any Person (including the holder of such Derivative Position) may have entered into other transactions that hedge its economic effect. 

1.12 “Distribution Date” has the meaning set forth in Section 3.1. 

1.13 “Earning Power” has the meaning set forth in Section 13.3. 

1.14 “Equivalent Common Shares” has the meaning set forth in Section 11.2. 

1.15 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 

1.16 “Exchange Property” has the meaning set forth in Section 24.6. 

1.17 “Exchange Ratio” has the meaning set forth in Section 24.1. 

1.18 “Exchange Recipients” has the meaning set forth in Section 24.6. 

1.19 “Exempt Person” means any Person that the Board of Directors determines is exempt from this Agreement, which
determination shall be made in the sole and absolute discretion of the Board of Directors; provided, that such determination is made, and no Person shall qualify as an Exempt Person unless such determination is made, prior to such time as any
Person becomes an Acquiring Person; provided, further, that any Person will cease to be an Exempt Person if the Board of Directors makes a contrary determination with respect to such Person regardless of the reason therefor.

 1.20 “Exempt Transaction” means any transaction that the Board of Directors determines is exempt from this Agreement,
which determination shall be made in the sole and absolute discretion of the Board of Directors; provided, that such determination is made, and no transaction shall qualify as an Exempt Transaction unless such determination is made, prior to
such time as any Person becomes an Acquiring Person. 
 1.21 “Final Expiration Date” means the Close of Business on
January 26, 2021. 
 1.22 “Grandfathered Stockholder” has the meaning set forth in Section 1.1. 

1.23 “NASDAQ” means the NASDAQ Stock Market. 

1.24 “Person” means any individual, firm, corporation, partnership, limited partnership, limited liability partnership,
business trust, limited liability company, unincorporated association or other entity, and shall include any successor (by merger or otherwise) of such entity. 

1.25 “Purchase Price” has the meaning set forth in Section 7.2. 

  
 - 5 - 

 1.26 “Qualifying Offer” means a tender offer or an exchange offer, or a
combination thereof, in each such case for all of the Common Shares then outstanding for the same per share consideration; provided, that the Company and its stockholders have received (and the offeror has publicly disclosed in the applicable
offer documents filed with the Securities and Exchange Commission) an irrevocable, legally binding written commitment of the offeror to consummate, as promptly as practicable upon successful completion of the offer, a second step transaction whereby
all Common Shares not purchased in the offer will be acquired for the same per share consideration actually paid pursuant to the offer, subject to stockholders’ statutory appraisal rights, if any. 

1.27 “Qualifying Offer Expiration Date” has the meaning set forth in Section 7.1. 

1.28 “Redemption Date” has the meaning set forth in Section 23.2. 

1.29 “Redemption Price” has the meaning set forth in Section 23.1. 

1.30 “Right Certificate” means a certificate evidencing a Right substantially in the form of
Exhibit A hereto. 
 1.31 “Spread” has the meaning set forth in Section 11.1.3(i). 

1.32 “Stock Acquisition Date” means the earliest of the date of (i) the public announcement by the Company or an
Acquiring Person that an Acquiring Person has become such (which, for purposes of this definition, shall include a statement on Schedule 13D filed pursuant to the Exchange Act), (ii) the public disclosure of facts by the Company or an Acquiring
Person that reveals the existence of an Acquiring Person or indicating that an Acquiring Person has become an Acquiring Person and (iii) the Board of Directors becoming aware of the existence of an Acquiring Person. 

1.33 “Subsidiary” of any Person means any Person of which a majority of the voting power of the voting equity securities or
equity interest is owned, directly or indirectly, by such Person. 
 1.34 “Summary of Rights” means the Summary of Rights to
Purchase Common Shares substantially in the form of Exhibit B hereto. 
 1.35 “Trading Day” means
a day on which the principal national securities exchange on which a security is listed or admitted to trading is open for the transaction of business or, if a security is not listed or admitted to trading on any national securities exchange, a
Business Day. 
 1.36 “Trust” has the meaning set forth in Section 24.6. 

2. Appointment of Rights Agent. The Company hereby appoints the Rights Agent to act as rights agent for the Company in accordance with the express terms and
conditions hereof (and no implied terms or conditions), and the Rights Agent hereby accepts such appointment. The Company may from time to time appoint such co-rights agents as it may deem necessary or
desirable, upon 10 days’ prior written notice to the Rights Agent. The Rights Agent shall have no duty to supervise, and shall in no event be liable for, the acts or omissions of any such co-

  
 - 6 - 

 
rights agent. In the event that the Company appoints one or more co-rights agents, the respective duties of the Rights Agent and any co-rights agent shall be as the Company shall reasonably determine, provided that such duties and determination are consistent with the terms and provisions of this Agreement and that contemporaneously with such
appointment, if any, the Company shall notify the Rights Agent in writing thereof. 
 3. Issue of Right Certificates. 

3.1 Until the earlier of (i) the Close of Business on the 10th day after the Stock Acquisition Date (or, in the event that the Board of
Directors determines on or before such 10th day to effect an exchange in accordance with Section 24 and determines that a later date is advisable, such later date) and (ii) the Close of Business on the 10th Business Day (or such later date
as may be determined by action of the Board of Directors prior to such time as any Person becomes an Acquiring Person) after the date of the commencement by any Person (other than the Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company, any entity holding Common Shares for or pursuant to the terms of any such benefit plan or any Exempt Person) of, or the first public announcement of the intention of any Person (other than any of
the Persons referred to in the preceding parenthetical) to commence, a tender or exchange offer the consummation of which would result in any Person becoming an Acquiring Person (such date being herein referred to as the “Distribution
Date”) (provided, that if such tender or exchange offer is terminated prior to the occurrence of a Distribution Date, then no Distribution Date shall occur as a result of such tender or exchange offer), (A) the Rights will be
evidenced by the certificates (or other evidence of book-entry or other uncertificated ownership) for Common Shares registered in the names of the holders thereof (which shall also be deemed to be Right Certificates) and not by separate Right
Certificates (provided, that each certificate (or other evidence of book-entry or other uncertificated ownership) representing Common Shares outstanding as of the Close of Business on the Record Date evidencing the Rights shall be deemed to
incorporate by reference the terms of this Agreement, as amended from time to time), and (B) the right to receive Right Certificates will be transferable only in connection with the transfer of Common Shares. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent will countersign, and the Company will send or cause to be sent (and the Rights Agent will, if requested, at the expense of the Company and upon receipt of all relevant
information, send) by first-class, postage-prepaid mail, to each record holder of Common Shares as of the Distribution Date (other than any Acquiring Person or any Associate or Affiliate of any Acquiring Person), at the address of such holder shown
on the records of the Company, a Right Certificate, substantially in the form of Exhibit A hereto, evidencing one Right for each Common Share so held, subject to adjustment as provided herein; provided, that the
Rights may instead be recorded in book-entry or other uncertificated form, in which case such book-entries or other evidence of ownership shall be deemed to be Right Certificates for all purposes of this Agreement; provided, further,
that all procedures relating to actions to be taken or information to be provided with respect to such Rights recorded in book-entry or other uncertificated forms, and all requirements with respect to the form of any Right Certificate set forth in
this Agreement, may be modified as necessary or appropriate to reflect book-entry or other uncertificated ownership. As of the Distribution Date, the Rights will be evidenced solely by such Right Certificates. 

  
 - 7 - 

 3.2 As soon as practicable after the Record Date, the Company will make available a copy of
the Summary of Rights to any holder of Rights who may request it prior to the Final Expiration Date or the Qualifying Offer Expiration Date. The Company shall provide the Rights Agent with written notice of the occurrence of the Final Expiration
Date or the Qualifying Offer Expiration Date and the Rights Agent shall not be deemed to have knowledge of the occurrence of the Final Expiration Date or the Qualifying Offer Expiration Date, unless and until it shall have received such written
notice. 
 3.3 Certificates for Common Shares which become outstanding (including reacquired Common Shares referred to in the last sentence
of this Section 3.3) after the Record Date but prior to the earliest of (i) the Distribution Date, (ii) the Redemption Date, (iii) or the Qualifying Offer Expiration Date and (iv) the Final Expiration Date shall have
impressed on, printed on, written on or otherwise affixed to them a legend in substantially the following form: 
 This certificate also
evidences and entitles the holder hereof to certain Rights (as defined in the Rights Agreement) as set forth in a Rights Agreement between Avis Budget Group, Inc. and Computershare Inc., as Rights Agent (or any successor rights agent), dated as of
January 27, 2020, as it may from time to time be amended or supplemented pursuant to its terms (the “Rights Agreement”), the terms of which are hereby incorporated herein by reference and a copy of which is on file at the
principal executive offices of Avis Budget Group, Inc. and the office or offices of Computershare Inc. designated for such purpose. The Rights are not exercisable prior to the occurrence of certain events specified in the Rights Agreement. Under
certain circumstances, as set forth in the Rights Agreement, such Rights will be evidenced separately and will no longer be evidenced by this certificate. Avis Budget Group, Inc. will mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor. Under certain circumstances, Rights that are or were acquired or Beneficially Owned by an Acquiring Person (or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement)), including such Rights held by a subsequent holder, may become null and void. 
 Notwithstanding this Section 3.3,
the omission of a legend shall not affect the enforceability of any part of this Agreement or the rights of any holder of the Rights. If the Company purchases or acquires any Common Shares after the Record Date but prior to the Distribution Date,
any Rights associated with such Common Shares shall be deemed canceled and retired so that the Company shall not be entitled to exercise any Rights associated with the Common Shares which are no longer outstanding. Rights shall be issued in respect
of all Common Shares issued or disposed of (including upon issuance or reissuance of Common Shares out of authorized but unissued shares) after the Record Date but prior to the earliest of the Distribution Date, the Redemption Date, the 

Qualifying Offer Expiration Date and the Final Expiration Date, or in certain circumstances provided in Section 22 hereof, after the Distribution Date.

  
 - 8 - 

 4. Form of Right Certificates. Right Certificates (and the forms of election to purchase Common Shares and
of assignment to be printed on the reverse thereof) shall be substantially the same as Exhibit A hereto and may have such marks of identification or designation and such legends, summaries or endorsements printed thereon as
the Company may deem appropriate and as are not inconsistent with the provisions of this Agreement (but which do not affect the rights, duties, liabilities or responsibilities of the Rights Agent), or as may be required to comply with any applicable
law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Rights may from time to time be listed, or to conform to usage. Subject to the other provisions of this Agreement, the Right
Certificates shall entitle the holders thereof to purchase such number of Common Shares as shall be set forth therein at the Purchase Price, but the amount and type of securities purchasable upon exercise and the Purchase Price shall be subject to
adjustment as provided herein. 
 5. Countersignature and Registration. Right Certificates shall be duly executed on behalf of the Company by its Chairman of
the Board of Directors, its Chief Executive Officer, its President or any of its Vice Presidents, either manually or by facsimile signature, and shall be attested by the Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, either manually or by facsimile signature or by other customary means of electronic transmission. Upon written request by the Company, the Right Certificates shall be countersigned by the Rights Agent, either manually or by facsimile
signature or by other customary means of electronic transmission, by an authorized signatory of the Rights Agent, but it shall not be necessary for the same signatory to countersign all of the Right Certificates hereunder. No Right Certificate shall
be valid for any purpose unless so countersigned, either manually or by facsimile or by other customary means of electronic transmission. If any officer of the Company who shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and issuance and delivery by the Company, such Right Certificates nevertheless may be countersigned by the Rights Agent and issued and delivered by the Company with the same force
and effect as though the Person that signed such Right Certificates had not ceased to be such officer of the Company. Any Right Certificate may be signed on behalf of the Company by any Person that, at the actual date of the execution of such Right
Certificate, is a proper officer of the Company to sign such Right Certificate, even if at the date of the execution of this Agreement such Person was not such an officer. 

Following the Distribution Date, and receipt by the Rights Agent of written notice to that effect and all other relevant information referred
to in this Agreement, the Rights Agent will keep or cause to be kept, at its office or offices designated for such purpose, books for registration of the transfer of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of Rights evidenced on its face by each of the Right Certificates, and the date of each of the Right Certificates. 

6. Transfer, Split-up, Combination and Exchange of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates. 
 6.1 Subject to the provisions of Section 14, at any time after the Distribution Date, and prior to the earliest of the
Redemption Date, the Qualifying Offer Expiration Date and or the Final Expiration Date, any Right Certificate (other than a Right Certificate representing Rights that have become null and void pursuant to Section 11.1.2 or that have been
exchanged pursuant to Section 24) may be transferred, split up, combined or exchanged for another Right 

  
 - 9 - 

 
Certificate, entitling the registered holder to purchase a like number of Common Shares as the Right Certificate surrendered then entitled such holder to purchase. Any registered holder desiring
to transfer, split up, combine or exchange any Right Certificate shall make such request in writing delivered to the Rights Agent, and shall surrender (together with any required form of assignment and certificate duly executed and properly
completed) the Right Certificate to be transferred, split up, combined or exchanged at the office or offices of the Rights Agent designated for such purpose, accompanied by a signature guarantee and such other documentation as the Rights Agent may
reasonably request. Neither the Rights Agent nor the Company shall be obligated to take any action whatsoever with respect to the transfer of any such surrendered Right Certificate until the registered holder shall have properly completed and duly
executed the certificate contained in the form of assignment on the reverse side of such Right Certificate and shall have provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) of the Rights
represented by such Right Certificates or the Affiliates or Associates thereof, or of any other Person with which such Beneficial Owner or any of such Beneficial Owner’s Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding, voting or disposing of any securities of the Company, as the Company or the Rights Agent shall reasonably request. Thereupon, the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the case may be, as so requested. The Company or the Rights Agent may require payment from the holders of the Right Certificates of a sum sufficient for any tax or governmental
charge that may be imposed in connection with any transfer, split-up, combination or exchange of Right Certificates. The Rights Agent shall not have any duty or obligation to take any action under any section
of this Agreement that requires the payment of taxes and/or charges unless and until it is satisfied that all such payments have been made. 

6.2 Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a Right Certificate (other than any Right Certificate representing Rights that have become null and void pursuant to Section 11.1.2 hereof, that have been redeemed pursuant to Section 23 hereof or that have been exchanged pursuant to
Section 24 hereof), the identity of the Beneficial Owner (or former Beneficial Owner) (including a signature guarantee and such other documentation as the Rights Agent may reasonably request) and, in case of loss, theft or destruction, of
indemnity or security satisfactory to them, and, at the Company’s or the Rights Agent’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses incidental thereto, and, in case of mutilation, upon surrender to
the Rights Agent and cancellation of the Right Certificate, the Company will make and deliver a new Right Certificate of like tenor to the Rights Agent for countersignature and delivery to the registered holder in lieu of the Right Certificate so
lost, stolen, destroyed or mutilated. 
 7. Exercise of Rights; Purchase Price; Expiration Date of Rights. 

7.1 The registered holder of any Right Certificate (other than a holder whose Rights have become void pursuant to Section 11.1.2, have
been redeemed pursuant to Section 23 or have been exchanged pursuant to Section 24) may exercise the Rights evidenced thereby in whole or in part at any time after the Distribution Date upon surrender of the Right Certificate, with the
appropriate form of election to purchase on the reverse side thereof properly completed 

  
 - 10 - 

 
and duly executed, to the Rights Agent at the offices of the Rights Agent designated for such purpose, accompanied by a signature guarantee and such other documentation as the Rights Agent may
reasonably request, together with payment of the Purchase Price for each Common Share represented by a Right that is exercised and an amount equal to any applicable transfer tax or charges required to be paid pursuant to Section 9, prior to the
earliest of (i) the Final Expiration Date, (ii) the time at which the Rights are redeemed pursuant to Section 23, (iii) the time at which the Rights are exchanged pursuant to Section 24 and (iv) the time, which shall
not be earlier than the 90th Business Day after the commencement of a Qualifying Offer, at which a Person accepts, pursuant to such Qualifying Offer, for purchase or exchange at the same per share consideration such number of Common Shares as would
represent, following such acceptance for purchase or exchange by such Person, more than two-thirds of the Common Shares then outstanding on a fully diluted basis (excluding from the calculation of the number
of Common Shares accepted for purchase or exchange by such Person any Common Shares Beneficially Owned by such Person or its Affiliates and Associates immediately prior to such acceptance for purchase or exchange) (the “Qualifying Offer
Expiration Date”). 
 7.2 The purchase price to be paid upon the exercise of each Right to purchase one Common Share represented by
a Right shall initially be $110 (the “Purchase Price”) and shall be payable in lawful money of the United States of America in accordance with Section 7.3. Each Right shall initially entitle the holder to acquire one Common
Share upon exercise of the Right. The Purchase Price and the number of Common Shares or other securities for which a Right is exercisable shall be subject to adjustment from time to time as provided in Sections 11 and 13. 

7.3 Upon receipt of a Right Certificate representing exercisable Rights, with the form of election to purchase and certificate properly
completed and duly executed, accompanied by payment of the Purchase Price for the number of Rights exercised and an amount equal to any applicable transfer tax required to be paid by the holder of such Right Certificate in accordance with
Section 9 by cash, certified check, cashier’s check or money order payable to the order of the Company, the Rights Agent shall thereupon promptly (i)(A) requisition from any transfer agent of the Common Shares (or from the Company if
there shall be no such transfer agent, or make available, if the Rights Agent is the transfer agent) certificates for the number of Common Shares to be purchased, and the Company hereby irrevocably authorizes its transfer agent to comply with all
such requests, or (B) requisition from any depositary agent for the Common Shares depositary receipts representing such number of Common Shares as are to be purchased (in which case certificates for the Common Shares represented by such
receipts shall be deposited by the transfer agent with the depositary agent), and the Company hereby directs any such depositary agent to comply with such request; (ii) when necessary to comply with this Agreement, requisition from the Company
the amount of cash to be paid in lieu of issuance of fractional Common Shares in accordance with Section 14 or Section 24; (iii) after receipt of such certificates or depositary receipts, cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate, registered in such name or names as may be designated in writing by such holder; and (iv) when necessary to comply with this Agreement, after receipt, deliver such cash to or upon the
order of the registered holder of such Right Certificate. In the event that the Company is obligated to issue other securities of the Company, pay cash and/or distribute other property pursuant to this Agreement, the Company will make all
arrangements necessary so that such other securities, cash and/or other property are available for distribution by the Rights Agent, if and when necessary to comply with this Agreement. 

  
 - 11 - 

 7.4 If the registered holder of any Right Certificate shall exercise less than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent to the Rights remaining unexercised shall be issued by the Rights Agent and delivered to the registered holder of such Right Certificate or to such holder’s duly
authorized assigns, subject to the provisions of Section 14. 
 7.5 Notwithstanding anything in this Agreement or the Right Certificate
to the contrary, neither the Rights Agent nor the Company shall be obligated to undertake any action with respect to a registered holder of Rights or other securities of the Company upon the occurrence of any purported transfer or exercise as set
forth in this Section 7 unless such registered holder shall have (i) properly completed and duly executed the certificate contained in the appropriate form of election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates thereof, as the Company and the Rights Agent shall reasonably request.

 8. Cancellation and Destruction of Right Certificates. All Right Certificates surrendered for the purpose of exercise, transfer, split-up, combination or exchange shall, if surrendered to the Company or to any of its agents (other than the Rights Agent), be delivered to the Rights Agent for cancellation or in canceled form, or, if surrendered
to the Rights Agent, shall be canceled by it, and no Right Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Rights Agent for cancellation and
retirement, and the Rights Agent shall so cancel and retire, any other Right Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. At the expense of the Company, the Rights Agent shall deliver all canceled Right
Certificates which have been canceled by the Rights Agent to the Company, or shall, at the written request of the Company, destroy such canceled Right Certificates, and in such case shall deliver a certificate of destruction thereof to the Company.

 9. Status and Availability of Common Shares. 

9.1 The Company covenants and agrees that it will take all such action as may be necessary to ensure that all Common Shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates (or entry in the book-entry account system of the Company) for such Common Shares (subject to payment of the Purchase Price and compliance with all other applicable provisions of
this Agreement), be duly and validly authorized and issued and fully paid and non-assessable shares. 

9.2 The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Right Certificates or of any Common Shares upon the exercise of Rights. The Company shall not, however, be required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Right Certificates to a Person other than, or the issuance or delivery of certificates or depositary receipts for the Common Shares in a name other 

  
 - 12 - 

 
than that of, the registered holder of the Right Certificate evidencing Rights surrendered for exercise, and shall not be required to issue or deliver any certificates or depositary receipts for
Common Shares upon the exercise of any Rights until any such tax or charge shall have been paid (any such tax or charge being payable by the holder of such Right Certificate at the time of surrender) or until it has been established to the
Company’s and the Rights Agent’s reasonable satisfaction that no such tax is due. 
 10. Common Shares Record Date. Each Person in whose name any
certificate (or entry in the book-entry account system of the Company) for Common Shares is issued upon the exercise of Rights shall for all purposes be deemed to have become the holder of record of the Common Shares represented thereby on, and such
certificate or book entry shall be dated, the date upon which the Right Certificate evidencing such Rights was duly surrendered and payment of the Purchase Price (and any applicable transfer taxes) was made; provided, that, if the date of
such surrender and payment is a date upon which the Common Shares transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Common Shares transfer books of the Company are open. Prior to the exercise of the Rights evidenced thereby, the holder of a Right Certificate shall not be entitled to any rights of a holder of Common Shares for which the
Rights shall be exercisable, including the right to vote, to receive dividends or other distributions, or to exercise any preemptive rights, and shall not be entitled to receive any notice of any proceedings of the Company, except as provided
herein. 
 11. Adjustment of Purchase Price, Number of Shares or Number of Rights. 

11.1 General. 
 11.1.1 In
the event that the Company shall at any time after the date of this Agreement (i) declare a dividend on the Common Shares payable in Common Shares, (ii) subdivide the outstanding Common Shares, (iii) combine the outstanding Common
Shares into a smaller number of Common Shares or (iv) issue any shares of its capital stock in a reclassification of the Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the
continuing or surviving Person), except as otherwise provided in this Section 11.1, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such subdivision, combination or reclassification, and
the number and kind of shares of capital stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to such date, the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, that in no
event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs that would require an adjustment under
both this Section 11.1.1 and Section 11.1.2 hereof, the adjustment provided for in this Section 11.1.1 shall be in addition to, and shall be made prior to, the adjustment required pursuant to Section 11.1.2 hereof. 

  
 - 13 - 

 11.1.2 Subject to the second paragraph of this Section 11.1.2 and to Section 24,
from and after the Stock Acquisition Date, each holder of a Right shall have a right to receive, upon exercise of each Right, in accordance with the terms of this Agreement, such number of Common Shares as shall equal the result obtained by dividing
the current Purchase Price by 50% of the then Current Per Share Market Price of the Company’s Common Shares (determined pursuant to Section 11.4) on the Stock Acquisition Date. 

From and after the Stock Acquisition Date, any Rights that are or were acquired or Beneficially Owned by (i) an Acquiring Person (or any
Associate or Affiliate of such Acquiring Person), (ii) a transferee of any Acquiring Person (or of any such Associate or Affiliate) who becomes such a transferee after the Acquiring Person becomes an Acquiring Person or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes such a transferee prior to or concurrently with the Acquiring Person becoming an Acquiring Person and who receives such Rights (A) with actual knowledge that the transferor is
or was an Acquiring Person or (B) pursuant to either (x) a transfer (whether or not for consideration) from the Acquiring Person (or any such Associate or Affiliate) to holders of equity interests in such Acquiring Person (or any such
Associate or Affiliate) or to any Person with whom the Acquiring Person (or such Associate or Affiliate) has any continuing agreement, arrangement, understanding or relationship (whether or not in writing) regarding the transferred Rights or
(y) a transfer which the Board of Directors has determined is part of a plan, arrangement or understanding (whether or not in writing) which has as a primary purpose or effect of the avoidance of this Section 11.1.2, (each such Person
described in (i)-(iii) above, an “Excluded Person”) shall, in each such case, be null and void, and any holder of such Rights (whether or not such holder is an Acquiring Person or an Associate or Affiliate of an Acquiring Person)
shall thereafter have no right to exercise such Rights under any provision of this Agreement. No Right Certificates shall be issued pursuant to Sections 3, 6, 7.4 or 11 or otherwise hereof that represents Rights that are or have become null and void
pursuant to the provisions of this paragraph and any Right Certificate delivered to the Rights Agent that represents Rights that are or have become null and void pursuant to the provisions of this paragraph shall, upon receipt of written notice
directing it to do so, be canceled by the Rights Agent. 
 11.1.3 If there are not sufficient authorized but unissued Common Shares to permit
the exercise in full of the Rights in accordance with Section 11.1.2 or the exchange of the Rights in accordance with Section 24, or should the Board of Directors so elect, the Company may with respect to such deficiency,
(i) determine the excess (the “Spread”) of (A) the value of the Common Shares issuable upon the exercise of a Right as provided in Section 11.1.2 (the “Current Value”) over (B) the Purchase
Price, and (ii) with respect to each Right, make adequate provision to substitute for such Common Shares, upon payment of the applicable Purchase Price, any one or more of the following having an aggregate value determined by the Board of
Directors to be equal to the Current Value: (A) cash, (B) a reduction in the Purchase Price, (C) Common Shares or other equity securities of the Company (including shares, or units of shares, of preferred stock which the Board of
Directors has determined to have the same value as Common Shares (“Common Stock Equivalents”)), (D) debt securities of the Company or (E) other assets, property or instruments. The Company shall provide the Rights Agent
with prompt reasonably detailed written notice of any final determination under the previous sentence. 

  
 - 14 - 

 If the Board of Directors shall determine in good faith that additional Common Shares should
be authorized for issuance upon exercise in full of the Rights, the Company may suspend the exercisability of the Rights in order to seek any authorization of additional shares, decide the appropriate form of distribution to be made, and
determine the value thereof. If the exercisability of the Rights is suspended pursuant to this Section 11.1.3, the Company shall make a public announcement, and shall promptly deliver to the Rights Agent a statement, stating that the
exercisability of the Rights has been temporarily suspended. When the suspension is no longer in effect, the Company shall make another public announcement, and promptly deliver to the Rights Agent a statement, so stating. For purposes of this
Section 11.1.3, the value of the Common Shares shall be the Current Per Share Market Price of Common Shares (as determined pursuant to Section 11.4.1) as of the Stock Acquisition Date, and the value of any Common Stock Equivalent shall be
deemed to have the same value as the Common Shares on such date. 
 11.2 If the Company fixes a record date for the issuance of rights,
options or warrants to all holders of Common Shares entitling them (for a period expiring within 45 days after such record date) to subscribe for or purchase Common Shares (or shares having the same rights, privileges and preferences as the Common
Shares (“Equivalent Common Shares”)) or securities convertible into Common Shares or Equivalent Common Shares at a price per Common Share or Equivalent Common Share (or having a conversion price per share, if a security
convertible into Common Shares or Equivalent Common Shares) less than the then Current Per Share Market Price of the Common Shares (as determined pursuant to Section 11.4.1) on such record date, the Purchase Price to be in effect after such
record date shall be adjusted by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, (i) the numerator of which shall be (A) the number of Common Shares outstanding on such record date plus
(B) the number of Common Shares which the aggregate offering price of the total number of Common Shares or Equivalent Common Shares to be offered (or the aggregate initial conversion price of the convertible securities to be offered) would
purchase at such Current Per Share Market Price and (ii) the denominator of which shall be (A) the number of Common Shares outstanding on such record date plus (B) the number of additional Common Shares or Equivalent Common Shares to
be offered for subscription or purchase (or into which the convertible securities to be offered are initially convertible); provided, that in no event shall the consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the Common Shares issuable upon exercise of one Right. If such subscription price may be paid in a consideration part or all of which shall be in a form other than cash, the value of such consideration shall be as determined
in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent. Common Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record date is fixed. If such rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price that would then be in effect if such
record date had not been fixed. 
 11.3 If the Company fixes a record date for the making of a distribution to all holders of the Common
Shares (including any distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving Person) or evidences of indebtedness or assets (other than a regular quarterly cash dividend or a dividend
payable in Common Shares) or subscription rights or warrants (excluding those referred to in Section 11.2), 

  
 - 15 - 

 
the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, (i) the
numerator of which shall be the then Current Per Share Market Price of the Common Shares (as determined pursuant to Section 11.4.1) on such record date, less the fair market value (as determined in good faith by the Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness to be distributed or of such subscription rights or warrants applicable to one Common Share and (ii) the
denominator of which shall be the then Current Per Share Market Price of the Common Shares (as determined pursuant to Section 11.4.1); provided, that in no event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the Common Shares to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed. If such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed. 
 11.4 Current Per Share Market
Price. 
 11.4.1 For the purpose of any computation hereunder, the “Current Per Share Market Price” of any security on
any date shall be deemed to be the average of the daily closing prices per share of such security for the 30 consecutive Trading Days immediately prior to such date; provided, that if the Current Per Share Market Price of the security is
determined during a period (i) following the announcement by the issuer of such security of (A) a dividend or distribution on such security payable in shares of such security or other securities convertible into such shares, or
(B) any subdivision, combination or reclassification of such security, and (ii) prior to the expiration of 30 Trading Days after the ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combination or reclassification, then, and in each such case, the Current Per Share Market Price shall be appropriately adjusted to reflect the current market price per share equivalent of such security. The closing price
for each day shall be the last sale price or, if no such sale takes place on such day, the average of the closing bid and asked prices, in either case as reported by NASDAQ, or, if on any such date the security is not listed on NASDAQ, the average
of the closing bid and asked prices as furnished by a professional market maker making a market in the security selected by the Board of Directors. If on any such date no such market maker is making a market in the security, the fair value of the
security on such date as determined in good faith by the Board of Directors shall be used. 
 11.4.2 For the purpose of any computation
hereunder, the “Current Per Share Market Price” of the Common Shares shall be determined in accordance with the method set forth in Section 11.4.1. If the Common Shares are not publicly traded, publicly held or so listed or
traded, “Current Per Share Market Price” means the fair value per share as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes. 
 11.5 No adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease
of at least 1% in the Purchase Price; provided, that any adjustments which by reason of this Section 11.5 are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or one one-thousandth of any share or security, as the case may be. Notwithstanding the first sentence of this Section 11.5, any adjustment required
by this Section 11 shall be made no later than three years from the date of the transaction which requires such adjustment. 

  
 - 16 - 

 11.6 If, as a result of an adjustment made pursuant to Section 11.1, the holder of any
Right thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than Common Shares, the number of such other shares so receivable upon exercise of any Right shall thereafter be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Shares contained in Sections 11.1 through 11.3, inclusive, and the provisions of Sections 7, 9, 10 and 13 with
respect to the Common Shares shall apply on like terms to any such other shares. 
 11.7 All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the number of Common Shares purchasable from time to time hereunder upon exercise of the Rights, all subject to
further adjustment as provided herein. 
 11.8 Unless the Company exercises its election as provided in Section 11.9, upon each
adjustment of the Purchase Price as a result of the calculations made in Sections 11.2 and 11.3, each Right outstanding immediately prior to the making of such adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of Common Shares obtained by (i) multiplying the number of Common Shares covered by a Right immediately prior to this adjustment by the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price in effect immediately after such adjustment of the Purchase Price. 

11.9 The Company may elect on or after the date of any adjustment of the Purchase Price to adjust the number of Rights in substitution for any
adjustment in the number of Common Shares purchasable upon the exercise of a Right. Each of the Rights outstanding after such adjustment of the number of Rights shall be exercisable for the number of Common Shares for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such adjustment of the number of Rights shall become that number of Rights (calculated to the nearest one one-thousandth) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase Price in effect immediately after adjustment of the Purchase Price. The Company shall make a public announcement (with prompt written notice
thereof to the Rights Agent) of its election to adjust the number of Rights, indicating the record date for the adjustment and, if known at the time, the amount of the adjustment to be made. The record date may be the date on which the Purchase
Price is adjusted or any day thereafter but, if the Right Certificates have been distributed, shall be at least 10 days after the date of the public announcement. If Right Certificates have been distributed, upon each adjustment of the number of
Rights pursuant to this Section 11.9, the Company shall, as promptly as practicable, cause to be distributed to holders of record of Right Certificates on such record date Right Certificates evidencing, subject to Section 14, the
additional Rights to which such holders shall be entitled as a result of such adjustment or, at the option of the Company, shall cause to be distributed to such holders of record in substitution and replacement for the Right Certificates held by
such holders prior to the date of adjustment, and upon surrender thereof if required by the Company, new Right Certificates evidencing all the Rights to which 

  
 - 17 - 

 
such holders shall be entitled after such adjustment. Right Certificates to be so distributed shall be issued, executed and countersigned in the manner provided for herein and shall be registered
in the names of the holders of record of Right Certificates on the record date specified in the public announcement. 
 11.10 Irrespective of
any adjustment or change in the Purchase Price or the number of Common Shares issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the Purchase Price and the number of Common
Shares which were expressed in the initial Right Certificates issued hereunder. 
 11.11 Before taking any action that would cause an
adjustment reducing the Purchase Price below the then par value of the Common Shares issuable upon exercise of the Rights, the Company shall take any corporate action which may, in the opinion of its counsel, be necessary in order that the Company
may validly and legally issue fully paid and non-assessable Common Shares at such adjusted Purchase Price. 

11.12 If this Section 11 requires that an adjustment in the Purchase Price be made effective as of a record date for a specified event,
the Company may defer, until the occurrence of such event, issuing to the holder of any Right exercised after such record date Common Shares and other capital stock or securities of the Company, if any, issuable upon such exercise over and above the
Common Shares and other capital stock or securities of the Company, if any, issuable upon such exercise on the basis of the Purchase Price in effect prior to such adjustment; provided, that the Company shall deliver to such holder a due bill
or other appropriate instrument evidencing such holder’s right to receive such additional shares upon the occurrence of the event requiring adjustment. 

11.13 Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this Section 11, as and to the extent that it in its sole discretion shall determine to be advisable in order that any (i) combination or subdivision of the Common Shares,
(ii) issuance wholly for cash of any Common Shares at less than the Current Per Share Market Price, (iii) issuance wholly for cash of Common Shares or securities which by their terms are convertible into or exchangeable for Common Shares,
(iv) dividends on Common Shares payable in Common Shares, or (v) issuance of any rights, options or warrants referred to in Section 11.2 made by the Company after the date of this Agreement to holders of its Common Shares shall not be
taxable to such stockholders. 
 12. Certificate of Adjustment. Whenever an adjustment is made as provided in Sections 11 and 13, the Company shall
promptly (i) prepare a certificate setting forth such adjustment and a reasonably detailed statement of the facts, computation, methodology and accounting for such adjustment, (ii) promptly file with the Rights Agent and with each transfer
agent for the Common Shares a copy of such certificate, and (iii) if such adjustment occurs following a Distribution Date, mail a brief summary thereof to each holder of a Right Certificate in accordance with Section 25. The Rights Agent
shall be fully protected in relying on any such certificate and on any adjustment or statement therein contained and shall not be obligated or responsible for calculating any adjustment, nor shall the Rights Agent be deemed to have knowledge of such
an adjustment or any such event, unless and until it shall have received such 

  
 - 18 - 

 
certificate. Notwithstanding the foregoing sentence, but without limiting any of the rights or immunities of the Rights Agent, the failure of the Company to make such certification or give such
notice shall not affect the validity of, or the force or effect of, the requirement for such adjustment. Any adjustment to be made pursuant to Section 11 or 13 hereof shall be effective as of the date of the event giving rise to such
adjustment. 
 13. Consolidation, Merger, Sale or Transfer of Assets or Earning Power. 

13.1 If, at any time after a Stock Acquisition Date, (i) the Company consolidates with, or merges with and into, any other Person;
(ii) any Person consolidates with the Company, or merges with and into the Company, and the Company is the continuing or surviving Person of such merger and, in connection with such merger, all or part of the Common Shares are or will be
changed into or exchanged for stock or other securities of any other Person (or the Company) or cash or any other property; or (iii) the Company sells or otherwise transfers (or one or more of its Subsidiaries sell or otherwise transfer), in
one or more transactions, assets or Earning Power aggregating 50% or more of the assets or Earning Power of the Company and its Subsidiaries (taken as a whole) to any other Person other than the Company or one or more of its wholly owned
Subsidiaries, then proper provision shall be made so that (A) each holder of a Right (except as otherwise provided herein) shall have the right to receive, upon the exercise of each Right in accordance with the terms of this Agreement, such
number of Common Shares of such other Person (including the Company as successor thereto or as the surviving Person) equal to the result obtained by dividing the then current Purchase Price by 50% of the then Current Per Share Market Price of the
Common Shares of such other Person (determined pursuant to Section 11.4) on the date of consummation of such consolidation, merger, sale or transfer; (B) the issuer of such Common Shares shall thereafter be liable for, and shall assume, by
virtue of such consolidation, merger, sale or transfer, all the obligations and duties of the Company pursuant to this Agreement; (C) the term “Company” shall thereafter be deemed to refer to such issuer; and (D) such issuer
shall take steps (including the reservation of a sufficient number of shares of its common stock in accordance with Section 9) in connection with such consummation as may be necessary to ensure that the provisions hereof shall thereafter be
applicable in relation to the common stock thereafter deliverable upon the exercise of the Rights. 
 13.2 The Company shall not consummate
any such consolidation, merger, sale or transfer unless prior thereto the Company and such issuer shall have executed and delivered to the Rights Agent a supplemental agreement providing for such issuer’s compliance with this Section 13.
The Company shall not enter into any transaction of the kind referred to in this Section 13 if, at the time of such transaction, there are any rights, warrants, instruments or securities outstanding or any agreements or arrangements which, as a
result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights. The provisions of this Section 13 shall apply to successive mergers or consolidations or sales or
other transfers. 
 13.3 For purposes of this Agreement, the “Earning Power” of the Company and its Subsidiaries shall be
determined in good faith by the Company’s Board of Directors on the basis of the operating earnings of each business operated by the Company and its Subsidiaries during the three fiscal years preceding the date of such determination (or, in the
case of any business not operated by the Company or any Subsidiary during three full fiscal years preceding such date, during the period such business was operated by the Company or any Subsidiary). 

  
 - 19 - 

 14. Fractional Rights and Fractional Shares. 

14.1 The Company shall not be required to issue fractions of Rights or to distribute Right Certificates which evidence fractional Rights. In
lieu of such fractional Rights, the Company may instead pay to the registered holders of the Right Certificates with regard to which such fractional Rights would otherwise be issuable an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14.1, the current market value of a whole Right shall be the closing price of the Rights (as determined pursuant to the second sentence of Section 11.4.1) for the Trading Day
immediately prior to the date on which such fractional Rights would have been otherwise issuable. 
 14.2 The Company shall not be required
to issue fractions of Common Shares or to distribute certificates which evidence fractional Common Shares. In lieu of issuing fractional Common Shares, the Company may instead pay to the registered holders of the Right Certificates with regard to
which such fractional Common Shares would otherwise be issuable an amount in cash equal to the same fraction of the current per share market value of a whole Common Share. For the purposes of this Section 14.2, the current per share market
value of a whole Common Share shall be the closing price of a Common Share (pursuant to Section 11.4.1) for the Trading Day immediately prior to the date of such exercise or exchange. 

14.3 For purposes of this Section 14, the closing price for any day shall be the last quoted price or, if not so quoted, the average of
the high bid and low asked prices as reported by NASDAQ, or if on any such date the Rights or Common Shares, as applicable, are not listed on NASDAQ, the average of the closing bid and asked prices as furnished by a professional market maker making
a market in the Rights or Common Shares, as applicable, selected by the Board of Directors. If on any such date no such market maker is making a market in the Rights or Common Shares, as applicable, the fair value of the Rights or Common Shares, as
applicable, on such date as determined in good faith by the Board of Directors shall be used. 
 14.4 The holder of a Right by the acceptance
of the Right expressly waives any right to receive fractional Rights or fractional shares upon exercise of a Right (except as provided in this Section 14). 

14.5 Whenever a payment for fractional Rights or fractional shares is to be made by the Rights Agent under any section of this Agreement, the
Company shall (i) promptly prepare and deliver to the Rights Agent a certificate setting forth in reasonable detail the facts related to such payments and the prices and formulas utilized in calculating such payments, and (ii) provide
sufficient monies to the Rights Agent in the form of fully collected funds to make such payments. The Rights Agent shall be fully protected in relying upon such a certificate and shall have no duty with respect to, and shall not be deemed to have
knowledge of, any payment for fractional Rights or fractional shares under any section of this Agreement relating to the payment of fractional Rights or fractional shares unless and until the Rights Agent shall have received such a certificate and
sufficient monies. 

  
 - 20 - 

 15. Rights of Action. All rights of action in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18, are vested in the respective registered holders of the Right Certificates. Any registered holder of any Right Certificate may, without the consent of the Rights Agent or of the holder of any other
Right Certificate, on such holder’s own behalf and for such holder’s own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company to enforce, or otherwise act in respect of, such holder’s
right to exercise the Rights evidenced by such Right Certificate in the manner provided in such Right Certificate and in this Agreement. Without limiting the foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law for any breach of this Agreement by the Company and will be entitled to specific performance of the obligations hereunder, and injunctive relief against actual or
threatened violations of the obligations hereunder, of the Company. 
 16. Agreement of Right Holders. Every holder of a Right, by accepting the same,
consents and agrees with the Company and the Rights Agent and with every other holder of a Right that: 
 16.1 prior to the Distribution
Date, the Rights will be transferable only in connection with the transfer of the Common Shares; 
 16.2 after the Distribution Date, the
Right Certificates are transferable only on the registry books maintained by the Rights Agent if surrendered at the office or offices of the Rights Agent designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer
with the appropriate form of certification, properly completed and duly executed, accompanied by a signature guarantee and such other documentation as the Rights Agent may reasonably request; 

16.3 the Company and the Rights Agent may deem and treat the Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate or, in the case of uncertificated Common Shares, by the book-entry that evidences record ownership of such Common Shares) is registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Right Certificates or the associated Common Shares certificate or book-entry made by anyone other than the Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary; and 
 16.4 notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to any holder of a Right or other Person as a result of the inability of the Company or the Rights Agent to perform any of its or their obligations under this Agreement by
reason of any preliminary or permanent injunction or other order, decree, judgment or ruling issued by a court of competent jurisdiction or by a governmental, regulatory or administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority prohibiting or otherwise restraining performance of such obligation. 

  
 - 21 - 

 17. Right Certificate Holder Not Deemed a Stockholder. No holder, as such, of any Right Certificate shall be
entitled to vote or receive dividends, or be deemed for any purpose the holder of the Common Shares or any other securities of the Company that may at any time be issuable on the exercise or exchange of the Rights represented thereby, nor shall
anything contained herein or in any Right Certificate be construed to confer upon the holder of any Right Certificate, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, to give or withhold consent to any corporate action, to receive notice of meetings or other actions affecting stockholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by such Right Certificate shall have been exercised or exchanged in accordance with the provisions hereof. 

18. Concerning the Rights Agent. The Company agrees to pay to the Rights Agent reasonable compensation for all services rendered by it hereunder in accordance
with a fee schedule to be mutually agreed upon, and, from time to time, on demand of the Rights Agent, to reimburse the Rights Agent for all of its reasonable expenses and counsel fees and other disbursements incurred in the preparation, delivery,
negotiation, administration, execution and amendment, of this Agreement and the exercise and performance of its duties hereunder. The Company also covenants and agrees to indemnify the Rights Agent for, and to hold it harmless against, any and all
loss, liability, damage, judgment, fine, penalty, claim, demand, settlement, cost or expense (including the reasonable fees and expenses of legal counsel) that may be paid, incurred or suffered by it, or which it may become subject, without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent (which gross negligence, bad faith, or willful misconduct must be determined by a final, non-appealable judgment of a court of
competent jurisdiction), for any action taken, suffered or omitted to be taken by the Rights Agent in connection with the execution, acceptance and, administration of, exercise and performance of its duties under this Agreement, including the costs
and expenses of defending against any claim or liability arising therefrom or in connection therewith, directly or indirectly. The provisions under this Section 18 and Section 20 below shall survive the expiration of the Rights and the
termination of this Agreement and the resignation, replacement or removal of the Rights Agent. The reasonable costs and expenses incurred in enforcing this right of indemnification shall be paid by the Company to the extent that the Rights Agent is
successful in so enforcing its right of indemnification. 
 The Rights Agent shall be fully authorized and protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in connection with its acceptance and administration of this Agreement and the exercise and performance of its duties hereunder, in each case in reliance upon any Right
Certificate or certificate for Common Shares or for other securities of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit, letter, notice, instruction, direction, consent, certificate, statement, or other
paper or document believed by it to be genuine and to be signed, executed and, where necessary, verified or acknowledged by the proper Person or Persons, or otherwise upon the advice of counsel as set forth in Section 20. The Rights Agent shall
not be deemed to have knowledge of any event of which it was supposed to receive notice thereof hereunder, and the Rights Agent shall be fully protected and shall incur no liability for failing to take action in connection therewith, unless and
until it has received such notice in writing. 
 Notwithstanding anything in this Agreement to the contrary, in no event will the Rights
Agent be liable for special, punitive, indirect, incidental or consequential loss or damage of any kind whatsoever (including to lost profits), even if the Rights Agent has been advised of the likelihood of such loss or damage and regardless of the
form of action. 

  
 - 22 - 

 19. Merger or Consolidation or Change of Name of Rights Agent. Any Person into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to the stock
transfer or other stockholder services business of the Rights Agent or any successor Rights Agent, shall be the successor to the Rights Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of
the parties hereto; provided that such Person would be eligible for appointment as a successor Rights Agent under the provisions of Section 21. The purchase of all or substantially all of the Rights Agent’s assets employed in the
performance of transfer agent activities shall be deemed a merger or consolidation for purposes of this Section 19. If, at the time such successor Rights Agent shall succeed to the agency created by this Agreement, any of the Right Certificates
shall have been countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Right Certificates so countersigned. If, at that time, any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign such Right Certificates either in the name of the predecessor Rights Agent or in the name of the successor Rights Agent. In all such cases such Right Certificates shall
have the full force provided in the Right Certificates and in this Agreement. 
 If, at any time, the name of the Rights Agent changes and
any of the Right Certificates have been countersigned but not delivered, the Rights Agent may adopt the countersignature under its prior name and deliver Right Certificates so countersigned. If, at that time, any of the Right Certificates have not
been countersigned, the Rights Agent may countersign such Right Certificates either in its prior name or in its changed name. In all such cases such Right Certificates shall have the full force provided in the Right Certificates and in this
Agreement. 
 20. Rights and Duties of Rights Agent. The Rights Agent undertakes to perform only the duties and obligations expressly set forth in this
Agreement and no implied duties or obligations shall be read into this Agreement against the Rights Agent. The Rights Agent shall perform its duties and obligations hereunder upon the following terms and conditions, by all of which the Company and
the holders of Right Certificates, by their acceptance thereof, shall be bound: 
 20.1 The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company or an employee or legal counsel of the Rights Agent), and the advice or opinion of such counsel shall be full and complete authorization and protection to the Rights Agent and the Rights Agent shall incur no
liability for or in respect of as to any action taken or omitted by it in the absence of bad faith and in accordance with such advice or opinion. 

20.2 Whenever in the performance of its duties under this Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking, suffering or omitting to take any action hereunder, such fact or matter (unless other evidence in respect thereof is specifically prescribed herein) may be deemed to be conclusively
proved and established by a certificate signed by a Person reasonably believed by the Rights Agent to be any one of the Chief Executive Officer, the Chairman of the Board of 

  
 - 23 - 

 
Directors, the President, a Vice President, the Treasurer or the Secretary of the Company and delivered to the Rights Agent, and such certificate shall be full authorization to the Rights Agent
and the Rights Agent shall incur no liability for or in respect of any action taken, suffered or omitted to be taken by it in the absence of bad faith under the provisions of this Agreement in reliance upon such certificate. The Rights Agent shall
have no duty to act without such a certificate as set forth in this Section 20.2. 
 20.3 The Rights Agent shall be liable to the
Company and any other Person hereunder only for its own gross negligence, bad faith or willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a final, non-appealable
judgment of a court of competent jurisdiction). Notwithstanding anything in this Agreement to the contrary, any liability of the Rights Agent under this Agreement will be limited to the amount of annual fees paid by the Company to the Rights Agent
(but not including reimbursable expenses) during the 12 months immediately preceding the event for which recovery from the Rights Agent is being sought. 

20.4 The Rights Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except as to its countersignature thereof) or be required to verify the same. All such statements and recitals are and shall be deemed to have been made by the Company only. 

20.5 The Rights Agent shall not have any liability for or be under any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights Agent) or in respect of the legality or validity or execution of any Right Certificate (except its countersignature thereof); nor shall it be responsible for any
determination by the Board of Directors with respect to the Rights or breach by the Company of any covenant or failure by the Company to satisfy any condition contained in this Agreement or in any Right Certificate; nor shall it be liable or
responsible for any modification by or order of any court, tribunal or governmental authority in connection with the foregoing, any change in the exercisability of the Rights or any adjustment required under the provisions of Sections 11
or 13 or for the manner, method or amount of any such adjustment or the ascertaining of the existence of facts that would require any such adjustment (except with respect to the exercise of Rights evidenced by Right Certificates after receipt
of a certificate furnished pursuant to Section 12 describing such adjustment); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Shares to be issued
pursuant to this Agreement or any Right Certificate or as to whether any Common Shares will, when so issued, be validly authorized and issued, fully paid, and non-assessable. 

20.6 The Company agrees that it will perform, execute, acknowledge and deliver, or cause to be performed, executed, acknowledged and delivered,
all such further and other acts, instruments and assurances as may reasonably be required or reasonably requested by the Rights Agent for the carrying out or performing by the Rights Agent of the provisions of this Agreement. 

  
 - 24 - 

 20.7 The Rights Agent is hereby authorized and directed to accept written instructions with
respect to the performance of its duties hereunder and certificates delivered pursuant to any provision hereof from any Person reasonably believed by the Rights Agent to be any one of the Chairman of the Board, the Chief Executive Officer, the
President, a Vice President, the Treasurer or the Secretary of the Company, and to apply to such officers for advice or instructions in connection with its duties under this Agreement, and such advice or instructions shall provide full authorization
and protection to the Rights Agent, and the Rights Agent shall not be liable for any action taken, suffered or omitted to be taken by it in accordance with the written advice or instructions of any such officer or for any delay in acting while
waiting for these instructions. The Rights Agent shall be fully authorized and protected in relying upon the most recent advice or instructions received by any such officer. Any application by the Rights Agent for written instructions from the
Company may, at the option of the Rights Agent, set forth in writing any action proposed to be taken or omitted by the Rights Agent with respect to its duties or obligations under this Agreement. 

20.8 The Rights Agent and any affiliate, stockholder, director, officer, agent, representative or employee of the Rights Agent may buy, sell or
deal in any of the Rights or other securities of the Company, or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company, or otherwise act as fully and freely as though
it were not the Rights Agent under this Agreement, in each case in compliance with applicable laws. Nothing herein shall preclude the Rights Agent and such other Persons from acting in any other capacity for the Company or for any other legal
entity. 
 20.9 The Rights Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents. The Rights Agent shall not be answerable or accountable for any act, omission, default, neglect, or misconduct of any such attorneys or agents or for any loss to the Company or any other Person
resulting from any such act, omission, default, neglect or misconduct, absent gross negligence or bad faith in the selection and continued employment of such attorneys or agents thereof (which gross negligence or bad faith must be determined by a
final, non-appealable judgment of a court of competent jurisdiction). 
 20.10 No provision of this
Agreement shall require the Rights Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder or in the exercise of its rights if the Rights Agent believes that repayment of
such funds or adequate indemnification against such risk or liability is not reasonably assured to it. 
 20.11 The Rights Agent shall not be
required to take notice or be deemed to have notice of any fact, event or determination (including any dates or events defined in this Agreement or the designation of any Person as an Acquiring Person, Affiliate or Associate) under this Agreement
unless and until the Rights Agent shall be specifically notified in writing by the Company of such fact, event or determination, and all notices or other instruments required by this Agreement to be delivered to the Rights Agent must, in order to be
effective, be received by the Rights Agent as specified in Section 26, and in the absence of such notice so delivered, the Rights Agent may conclusively assume no such event or condition exists. 

20.12 The Rights Agent shall have no responsibility to the Company or any holders of the Right Certificates for interest or earnings on any
moneys held by the Rights Agent pursuant to this Agreement. 

  
 - 25 - 

 21. Change of Rights Agent. The Rights Agent or any successor Rights Agent may resign and be discharged from
its duties under this Agreement upon 30 days’ notice in writing mailed to the Company and, in the event that the Rights Agent or one of its Affiliates is not also the transfer agent for the Company, to each transfer agent of the Common Shares
in accordance with Section 26. The Company may remove the Rights Agent or any successor Rights Agent upon 30 days’ notice in writing, mailed to the Rights Agent or successor Rights Agent in accordance with Section 26 hereof, as the
case may be, and to each transfer agent of the Common Shares by registered or certified mail, and, after the Distribution Date, to the holders of the Right Certificates by first-class mail. In the event that the transfer agency relationship in
effect between the Company and the Rights Agent terminates, the Rights Agent will be deemed to have resigned automatically and be discharged from its duties as Rights Agent under this Agreement as of the effective date of such termination, and the
Company shall be responsible for sending any required notice. If the Rights Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Rights Agent, then the incumbent Rights Agent or registered
holder of any Right Certificate may apply to any court of competent jurisdiction for the appointment of a new Rights Agent. Any successor Rights Agent, whether appointed by the Company or by such a court, shall be (i) a Person (other than a
natural person) organized and doing business under the laws of the United States or of any state of the United States, in good standing, which is authorized under such laws to exercise stock transfer powers, is subject to supervision or examination
by federal or state authority, and has, along with its Affiliates, at the time of its appointment as Rights Agent a combined capital and surplus of at least $50 million or (ii) an Affiliate of a Person described in clause (i) of this
sentence. After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Rights Agent without further act or deed, and the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held by it hereunder, and shall execute and deliver any further assurance, conveyance, act or deed necessary for the purpose but such predecessor Rights Agent shall not be
required to make any additional expenditure or assume any additional liability in connection with the foregoing, and shall thereafter be discharged from all duties and obligations hereunder. Not later than the effective date of any such appointment
the Company shall file notice thereof in writing with the predecessor Rights Agent and each transfer agent of the Common Shares, and, after the Distribution Date, mail a notice in writing to the registered holders of the Right Certificates. Failure
to give any notice provided for in this Section 21, however, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may
be. 
 22. Issuance of New Right Certificates. Notwithstanding any of the provisions of this Agreement or of the Right Certificates to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in accordance with the provisions of this Agreement. In addition, in connection with the issuance or sale of Common Shares following the Distribution Date and prior to the earliest
of the Redemption Date, the Qualifying Offer Expiration Date and the Final Expiration Date, the Company may, with respect to Common Shares so issued or sold, issue Right Certificates representing the appropriate number of Rights in connection with
such issuance or sale. 

  
 - 26 - 

 23. Redemption. 

23.1 The Board of Directors may, at its option, at any time prior to such time as any Person becomes an Acquiring Person, redeem all, but not
less than all, of the then outstanding Rights at a redemption price of $0.001 per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the “Redemption
Price”). The redemption of the Rights by the Board of Directors may be made effective at such time, on such basis and subject to such conditions as the Board of Directors in its sole discretion may establish. 

23.2 Immediately upon the time of the effectiveness of the redemption of the Rights or such earlier time as may be determined by the Board of
Directors in the action ordering such redemption (although not earlier than the time of such action) (the “Redemption Date”), and without any further action and without any notice, the right to exercise the Rights shall terminate
and the only right thereafter of the holders of Rights shall be to receive the Redemption Price. The Company shall promptly give public notice of any such redemption (with prompt written notice to the Rights Agent); provided, that the failure
to give, or any defect in, any such notice shall not affect the validity of such redemption. Within 10 Business Days after action of the Board of Directors ordering the redemption of the Rights, the Company shall mail, or cause the Rights Agent to
mail (at the expense of the Company), a notice of redemption to the holders of the then outstanding Rights at their last addresses as they appear upon the registry books of the Rights Agent or, prior to the Distribution Date, on the registry books
of the transfer agent for the Common Shares. Any notice mailed in the manner herein provided shall be deemed given, whether or not the holder receives the notice. If the payment of the Redemption Price is not included with such notice, each such
notice shall state the method by which the payment of the Redemption Price will be made. Neither the Company nor any of its Affiliates or Associates may redeem, acquire or purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24, other than in connection with the purchase of Common Shares prior to the Distribution Date. 

24. Exchange. 
 24.1 The Board of Directors may,
at its option, at any time after a Stock Acquisition Date, mandatorily exchange all or part of the then outstanding and exercisable Rights (which excludes Rights that have become void pursuant to Section 11.1.2) for Common Shares at an exchange
ratio of one Common Share per Right, appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof (the “Exchange Ratio”). From and after the occurrence of an event
specified in Section 13.1, any Right that theretofore has not been exchanged pursuant to this Section 24 shall thereafter be exercisable only in accordance with Section 13 and may not be exchanged pursuant to this Section 24. The
exchange of the Rights by the Board of Directors may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish. 

  
 - 27 - 

 24.2 Immediately upon the action of the Board of Directors ordering the exchange of any
Rights pursuant to Section 24.1, and without any further action and without any notice, the right to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights shall be to receive that number of Common Shares
equal to the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall promptly give reasonably detailed written notice of any such exchange to the Rights Agent, and shall promptly give public notice of any such
exchange; provided, that the failure to give, or any defect in, any such notice shall not affect the validity of such exchange. Within ten Business Days after action by the Board of Directors ordering the exchange of any Rights pursuant to
Section 24.1, the Company shall mail, or cause the Rights Agent to mail, a notice of any such exchange to the holders of such Rights at their last addresses as they appear upon the registry books of the Rights Agent. Any notice mailed in the
manner herein provided shall be deemed given, whether or not the holder receives the notice. Each such notice of exchange will state the method by which the exchange of the Common Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights which have become void pursuant to the provisions of Section 11.1.2) held by
each holder of Rights. 
 24.3 In any exchange pursuant to this Section 24, the Company, at its option, may substitute Common Stock
Equivalents for Common Shares exchangeable for Rights. 
 24.4 If there shall not be sufficient Common Shares or Common Stock Equivalents
authorized but unissued to permit any exchange of Rights as contemplated in accordance with this Section 24, the Company may authorize additional Common Shares or Common Stock Equivalents for issuance upon exchange of the Rights. 

24.5 The Company shall not be required to issue fractions of Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of issuing fractional Common Shares, the Company may instead pay to the registered holders of the Right Certificates with regard to which such fractional Common Shares would otherwise be issuable an amount in cash equal to the same
fraction of the current per share market value of a whole Common Share. For the purposes of this Section 24.5, the current per share market value of a whole Common Share shall be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 11.4.1) for the Trading Day immediately prior to the date of exchange pursuant to this Section 24. 

24.6 Notwithstanding anything in this Section 24 to the contrary, the exchange of the Rights may be made effective at such time, on such
basis and subject to such conditions as the Board of Directors in its sole discretion may establish. Without limiting the preceding sentence, the Board of Directors may (i) in lieu of issuing Common Shares or any other securities contemplated
by this Section 24 to the Persons entitled thereto in connection with the exchange (such Persons, the “Exchange Recipients,” and such shares and other securities, together with any dividends or distributions made on such shares
or other securities, the “Exchange Property”) issue, transfer or deposit the Exchange Property to or into a trust or other entity (the “Trust”) created upon such terms as the Board of Directors may determine to hold
all or a portion of the Exchange Property for the benefit of the Exchange Recipients, (ii) permit the Trust to exercise all of the rights that a stockholder of record would possess with respect to any shares

  
 - 28 - 

 
deposited in the Trust and (iii) direct that all holders of Rights entitled to receive Exchange Property shall be entitled to receive such Exchange Property only from the Trust and only upon
compliance with the relevant terms and provisions of the Trust and subject to such conditions as the Board of Directors in its sole discretion may establish. Prior to effecting an exchange of Rights, the Company may require (or cause the trustee or
other governing body of the Trust to require), as a condition thereof, that any Exchange Recipient provide evidence that it is not an Acquiring Person, including evidence of the identity of the current or former Beneficial Owners thereof and their
Affiliates and Associates. If any Person shall fail to comply with any request to provide such evidence, the Company shall be entitled conclusively to deem the Rights held by such Person to be null and void pursuant to Section 11.1.2 and not
transferable or exercisable or exchangeable in connection herewith. In the event the Board of Directors determines, before the Distribution Date, to effect an exchange, the Board of Directors may delay the occurrence of the Distribution Date to such
time as the Board of Directors deems advisable. 
 25. Notice of Certain Events. 

25.1 If the Company shall after the Distribution Date propose (i) to pay any dividend payable in stock of any class to the holders of its
Common Shares or to make any other distribution to the holders of its Common Shares (other than a regular quarterly cash dividend); (ii) to offer to the holders of its Common Shares rights or warrants to subscribe for or to purchase any
additional Common Shares or shares of stock of any class or any other securities, rights or options; (iii) to effect any reclassification of its Common Shares (other than a reclassification involving only the subdivision of outstanding Common
Shares); (iv) to effect any consolidation or merger into or with any other Person, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to effect any sale or other transfer), in one or more transactions, of 50%
or more of the assets or Earning Power of the Company and its Subsidiaries (taken as a whole) to any other Person; (v) to effect the liquidation, dissolution or winding-up of the Company; or (vi) to
declare or pay any dividend on the Common Shares payable in Common Shares, or to effect a subdivision, combination or consolidation of the Common Shares (by reclassification or otherwise than by payment of dividends in Common Shares), then, in each
such case, the Company shall give to each holder of a Right Certificate and the Rights Agent, in accordance with Section 26, a reasonably detailed notice of such proposed action, which shall specify the record date for the purposes of such
stock dividend, or distribution of rights or warrants, or the date on which such reclassification, consolidation, merger, sale, transfer, liquidation, dissolution or winding-up is to take place and the date of
participation therein by the holders of the Common Shares or Common Shares or both, if any such date is to be fixed, and such notice shall be so given in the case of any action covered by clause (i) or (ii) above at least 10 days prior to
the record date for determining holders of the Common Shares for purposes of such action, and in the case of any such other action, at least 10 days prior to the date of the taking of such proposed action or the date of participation therein by the
holders of the Common Shares or Common Shares or both, whichever shall be the earlier. 
 25.2 The Company shall, as soon as practicable
after a Stock Acquisition Date, give to the Rights Agent and each holder of a Right Certificate, in accordance with Section 26, a notice that describes the transaction in which a Person became an Acquiring Person and the consequences of the
transaction to holders of Rights under Section 11.1.2. 

  
 - 29 - 

 26. Notices. Notices or demands authorized by this Agreement to be given or made by the Rights Agent or by
the holder of any Right Certificate to or on the Company shall be sufficiently given or made if in writing and when sent by overnight delivery service or first-class mail, postage prepaid, properly addressed (until another address is filed in
writing with the Rights Agent) as follows: 
 Avis Budget Group, Inc. 

6 Sylvan Way 
 Parsippany, New
Jersey 07054 
 Attention: Jean M. Sera 

Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be deemed given upon receipt and shall be sufficiently given or made if in writing when sent by overnight delivery service or registered or certified mail properly addressed (until another address is
filed in writing with the Company) as follows: 
 Computershare Inc. 

150 Royall Street 
 Canton, MA
02021 
 Attention: Client Services 
 Notices
or demands authorized by this Agreement to be given or made by the Company or the Rights Agent to the holder of any Right Certificate shall be sufficiently given or made if in writing, when sent by first-class mail, postage prepaid, addressed to
such holder at the address of such holder as shown on the registry books of the Company. 
 27. Supplements and Amendments. The Company, acting at the
direction of the Board of Directors, or a duly authorized committee of the Board of Directors, may from time to time, and the Rights Agent shall if the Company so directs in writing, supplement or amend this Agreement without the approval of any
holders of Right Certificates in order to cure any ambiguity, to correct or supplement any provision contained herein which may be defective or inconsistent with any other provisions herein, or to make any change to or delete any provision hereof or
to adopt any other provisions with respect to the Rights which the Company may deem necessary or desirable; provided, that, from and after such time as any Person becomes an Acquiring Person, this Agreement shall not be amended or
supplemented in any manner which would adversely affect the interests of the holders of Rights (other than an Acquiring Person and its Affiliates and Associates). For the avoidance of doubt, the Company shall be entitled to adopt and implement such
procedures and arrangements (including with third parties) as it may deem necessary or desirable to facilitate the exercise, exchange, trading, issuance or distribution of the Rights (and Common Shares) as contemplated hereby and to ensure that an
Excluded Person does not obtain the benefits thereof, and amendments in respect of the foregoing shall not be deemed to adversely affect the interests of the holders of Rights. Any supplement or amendment authorized by this Section 27 will be
evidenced by a writing signed by the Company and the Rights Agent, subject to certification by any of the officers of the Company listed in Section 20.2 that any such supplement or amendment complies with this Section 27. Notwithstanding
anything in this Agreement to the contrary, the Rights Agent shall not be required to execute any supplement or amendment to this Agreement that it has reasonably determined would adversely affect its own rights, duties, obligations or immunities
hereunder. No supplement or amendment to this Agreement shall be effective unless duly executed by the Rights Agent. 

  
 - 30 - 

 28. Successors. All the covenants and provisions of this Agreement by or for the benefit of the Company or
the Rights Agent shall bind and inure to the benefit of their respective successors and assigns hereunder. 
 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person or entity other than the Company, the Rights Agent and the registered holders of the Right Certificates any legal or equitable right, remedy or claim under this Agreement. This Agreement shall be
for the sole and exclusive benefit of the Company, the Rights Agent and the registered holders of the Right Certificates. 
 30. Severability. If any term,
provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected, impaired or invalidated; provided, that if such excluded provision shall affect the rights, immunities, liabilities, duties or obligations of the Rights Agent, the Rights Agent
shall be entitled to resign immediately upon written notice to the Company. 
 31. Governing Law. This Agreement and each Right Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall be governed by and construed in accordance with the laws of such state applicable to contracts to be made and performed entirely within such
state; provided, that all provisions regarding the rights, duties, liabilities and obligations of the Rights Agent shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be
performed entirely within the State of New York. 
 32. Counterparts. This Agreement may be executed in any number of counterparts, and each of such
counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument. A signature to this Agreement transmitted electronically shall have the same authority, effect and
enforceability as an original signature. 
 33. Descriptive Headings and Construction. Descriptive headings of the sections of this Agreement are inserted
for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. In this Agreement, (i) the word “including” (in its various forms) means “including, without limitation,” and
(ii) the words “hereunder,” “hereof,” “hereto” and words of similar import are references to this Agreement as a whole and not to any particular provision of this Agreement. 

34. Administration. Other than with respect to rights, duties, obligations and immunities of the Rights Agent, the Board of Directors, or a duly authorized
committee of the Board of Directors, shall have the exclusive power and authority to administer and interpret the provisions of this Agreement and to exercise all rights and powers specifically granted to the Board of

  
 - 31 - 

 
Directors or the Company or as may be necessary or advisable in the administration of this Agreement. All such actions, calculations, determinations and interpretations (a) which are done or
made by the Board of Directors shall (x) prior to the Company’s first annual meeting of stockholders to be held after the date hereof, be taken by action of a majority of the “entire Board” (as such term is defined in Article
III, Section 1 of the Company’s Amended and Restated Bylaws in effect as of the date hereof) and (y) thereafter, be taken by action of the Board, and (b) which are done or made by the Board of Directors (or a duly authorized
committee of the Board of Directors) in good faith shall be final, conclusive and binding on the Company, the Rights Agent, holders of the Rights and all other parties and shall not subject the Board of Directors (or a duly authorized committee of
the Board of Directors) to any liability to the holders of the Rights. The Rights Agent is entitled always to assume that the Board of Directors (or a duly authorized committee of the Board of Directors) acted in good faith and shall be fully
protected and incur no liability in reliance thereon. 
 35. Force Majeure. Notwithstanding anything to the contrary contained herein, the Rights Agent shall
not be liable for any delays or failures in performance resulting from acts beyond its reasonable control including acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions, interruptions or malfunction of any utilities,
communications, or computer facilities, or loss of data due to power failures or mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or civil unrest. 

[Signature Pages Follow] 

  
 - 32 - 

 The parties hereto have caused this Agreement to be duly executed as of the day and year
first above written. 
  

			
	Avis Budget Group, Inc.

 
			
		
	By:	 	 /s/ Jean M. Sera

	Name:	 	Jean M. Sera
	Title:	 	Senior Vice President and Secretary

  
 [Signature Page
to Rights Agreement] 

 The parties hereto have caused this Agreement to be duly executed as of the day and year
first above written. 
  

			
	Computershare Inc.

 
			
		
	By:	 	 /s/ Joe Varca

	Name:	 	Joe Varca
	Title:	 	Vice President

  
 [Signature Page to
Rights Agreement] 

 EXHIBIT A 

Form of Right Certificate 
  

			
	Certificate No. R-_______	  	_____ Rights

 NOT EXERCISABLE AFTER THE FINAL EXPIRATION DATE OR THE QUALIFYING OFFER EXPIRATION DATE (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR EARLIER IF REDEMPTION, EXCHANGE OR TERMINATION OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
THAT ARE OR WERE ACQUIRED OR BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR AFFILIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS, MAY BECOME NULL AND VOID. 

Right Certificate 
 AVIS BUDGET
GROUP, INC. 
 This certifies that ___________________________, or his, her or its registered assigns, is the registered owner of the number
of Rights set forth above, each of which entitles the owner thereof, subject to the terms, provisions and conditions of the Rights Agreement (as may be amended from time to time, the “Rights Agreement”), dated as of January 27,
2020, between Avis Budget Group, Inc., a Delaware corporation (the “Company”), and Computershare Inc., a Delaware corporation, as rights agent (or any successor rights agent) (the “Rights Agent”), to purchase from
the Company at any time after the Distribution Date (as such term is defined in the Rights Agreement) and prior to the Final Expiration Date (as such term is defined in the Rights Agreement) or earlier under certain circumstances set forth in the
Rights Agreement, at the office or offices of the Rights Agent designated for such purpose, or at the office of its successor as Rights Agent, one share of common stock, par value $0.01 per share (the “Common Shares”), of

 
the Company, at a purchase price of $110 per Common Share (the “Purchase Price”), upon presentation and surrender of this Right Certificate with the Form of Election to Purchase
properly completed and duly executed, accompanied by such documentation as the Rights Agent may reasonably request. The number of Rights evidenced by this Right Certificate (and the number of Common Shares which may be purchased upon exercise
hereof) set forth above, and the Purchase Price set forth above, are the number and Purchase Price as of January 27, 2020, based on the Common Shares as constituted at such date. As provided in the Rights Agreement, the Purchase Price and the
number of Common Shares which may be purchased upon the exercise of the Rights evidenced by this Right Certificate are subject to modification and adjustment upon the happening of certain events. 

From and after the occurrence of a Stock Acquisition Date (as defined in the Rights Agreement), if the Rights evidenced by this Right
Certificate are or were acquired or Beneficially Owned by an Acquiring Person or an Associate or Affiliate of an Acquiring Person, such Rights shall become void, and any holder of such Rights shall thereafter have no right to exercise such Rights.

 This Right Certificate is subject to all of the terms, provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are incorporated herein by this reference and made a part hereof, and to which Rights Agreement reference is made for a full description of the rights, limitations of rights, obligations, duties and immunities hereunder of the Rights
Agent, the Company and the holders of the Right Certificates. Copies of the Rights Agreement are on file at the principal executive offices of the Company and the office or offices of the Rights Agent designated for such purpose. 

This Right Certificate, with or without other Right Certificates, upon surrender at the office or offices of the Rights Agent designated for
such purpose, accompanied by such documentation as the Rights Agent may reasonably request, may be exchanged for another Right Certificate or Right Certificates of like tenor and date evidencing Rights entitling the holder to purchase a like
aggregate number of Common Shares as the Rights evidenced by the Right Certificate or Right Certificates surrendered shall have entitled such holder to purchase. If this Right Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right Certificates for the number of whole Rights not exercised. 
 Subject to
the provisions of the Rights Agreement, at the Company’s option, the Rights evidenced by this Certificate (i) may be redeemed by the Company at a redemption price of $0.001 per Right or (ii) may be exchanged in whole or in part for
shares of common stock, par value $0.01 per share, of the Company, preferred shares, cash, debt securities, or other assets, property or instruments. The shares and other securities transferred as part of the exchange may be transferred to a trust
created upon such terms as the Board of Directors of the Company may determine. 
 No fractional Common Shares will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash payment will be made, as provided in the Rights Agreement. 

  
 A-2 

 No holder of this Right Certificate, as such, shall be entitled to vote or receive dividends
or be deemed for any purpose the holder of the Common Shares or of any other securities of the Company which may at any time be issuable on the exercise or exchange hereof, nor shall anything contained in the Rights Agreement or herein be construed
to confer upon the holder hereof, as such, any of the rights of a stockholder of the Company or any right to vote for the election of directors or upon any matter submitted to stockholders at any meeting thereof, or to give or withhold consent to
any corporate action, or to receive notice of meetings or other actions affecting stockholders (except as provided in the Rights Agreement), or to receive dividends or subscription rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised or exchanged as provided in the Rights Agreement. 
 This Right Certificate shall not be valid
or obligatory for any purpose until it shall have been countersigned by the Rights Agent. 

  
 A-3 

 WITNESS the facsimile signature of the proper officers of the Company and its corporate
seal. Dated as of ____________. 
  

									
	Attest:	  	            	  	Avis Budget Group, Inc.
				
	  
	  		  	By:	  	  

				
	Countersigned:	  		  		  	
				
	  
	  		  		  	
	Rights Agent	  		  		  	
					
	By:	  	  
	  		  		  	
		  	Authorized Signature	  		  		  	

  
 A-4 

 Form of Reverse Side of Right Certificate 

FORM OF ASSIGNMENT 
 (To be
executed by the registered holder if such holder desires to transfer the Right Certificate.) 
 FOR VALUE RECEIVED,
___________________________________ hereby sells, assigns and transfers unto 
  

                         
                                         
                                         
                                         
                                         
                                    

(Please print name and address of transferee) 

this Right Certificate, together with all right, title and interest therein, and does hereby irrevocably constitute and appoint
                                    
                            , Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution. 
  

					
	Date:                                     
   	  	  
	  	
		  	Signature	  	

 Signature Guaranteed: 

Signatures must be guaranteed by an eligible guarantor institution (bank, stock broker or savings and loan association with membership in an
approved signature medallion program). 

——————————————————————————

 The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by, were not acquired by
the undersigned from, and are not being assigned to an Acquiring Person or an Affiliate or Associate thereof and are not issued with respect to Common Shares underlying a Derivative Position described in the definition of Beneficial Owner (as such
terms are defined in the Rights Agreement). 
  

			
		  	  

		  	                            Signature

————————————————————————————————
 

  
 A-5 

 Form of Reverse Side of Right Certificate — continued 

FORM OF ELECTION TO PURCHASE 

(To be executed if holder desires to exercise the Right Certificate.) 

TO AVIS BUDGET GROUP, INC.: 
 The undersigned
hereby irrevocably elects to exercise _______________ Rights represented by this Right Certificate to purchase the Common Shares issuable upon the exercise of such Rights and requests that certificates for such Common Shares be issued in the name
of: 
  

			
	Please insert Social Security or other identifying
number:                                        
                                         
                                         
                        .
	
	  

	(Please print name and address)
	
	  

 If such number of Rights shall not be all the Rights evidenced by this Right Certificate, a new Right Certificate for the
balance remaining of such Rights shall be registered in the name of and delivered to:  
  

							
	Please insert Social Security or other identifying
number:                                        
                                         
                                         
                        .
	
	  

	(Please print name and address)	  	
	
	  

				
	Dated:	 	                             ,
                	 	                                      
                                         
             	  	
		 		 	Signature	  	

 (Signature must conform to the holder specified on the Right Certificate) 

Signature Guaranteed: 
 Signatures must be
guaranteed by an eligible guarantor institution (bank, stock broker or savings and loan association with membership in an approved signature medallion program). 

  
 A-6 

 Form of Reverse Side of Right Certificate — continued 

————————————————————————————————
 
 The undersigned hereby certifies that the Rights evidenced by this Right Certificate are not Beneficially Owned by, were not acquired by
the undersigned from, and are not being assigned to an Acquiring Person or an Affiliate or Associate thereof and are not issued with respect to Common Shares underlying a Derivative Position described in the definition of Beneficial Owner (as such
terms are defined in the Rights Agreement). 
  

					
		  	  
	  	
		  	            Signature	  	

————————————————————————————————
 
 NOTICE 
 The
signature in the foregoing Forms of Assignment and Election to Purchase must conform to the name as written upon the face of this Right Certificate in every particular, without alteration or enlargement or any change whatsoever. 

In the event that the certification set forth above in the Form of Assignment or the Form of Election to Purchase, as the case may be, is not
completed, such assignment or election to purchase will not be honored. 

  
 A-7 

 EXHIBIT B 

UNDER CERTAIN CIRCUMSTANCES, RIGHTS THAT ARE OR WERE ACQUIRED OR BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR AFFILIATES
THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT), OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS, MAY BECOME NULL AND VOID 
 SUMMARY OF
RIGHTS TO PURCHASE 
 COMMON SHARES 

On January 27, 2020, a duly authorized committee of the Board of Directors of Avis Budget Group, Inc. (the “Company”)
declared a dividend of one common share purchase right (a “Right”) for each outstanding share of common stock, par value $0.01 per share, of the Company (the “Common Shares”), outstanding on February 7, 2020 (the
“Record Date”) to the stockholders of record on that date. Each Right entitles the registered holder to purchase from the Company one share of common stock, par value $0.01 per share, of the Company, at a price of $110 per Common
Share represented by a Right (the “Purchase Price”), subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement (the “Rights Agreement”), dated as of January 27, 2020,
between the Company and Computershare Inc., a Delaware corporation, as Rights Agent. Capitalized terms used but not defined in this summary have the meanings ascribed to such terms in the Rights Agreement. 

Until the earlier to occur of (i) the Close of Business on the 10th day following the acquisition of Beneficial Ownership of 20% or more
of the outstanding Common Shares (including ownership of a Derivative Position) by a Person or group of affiliated or associated Persons (an “Acquiring Person”) (or, in the event that an exchange is effected in accordance with
Section 24 of the Rights Agreement and the Board of Directors determines that a later date is advisable, then such later date) and (ii) 10 Business Days (or such later date as may be determined by action of the Board of Directors
prior to such time as any Person becomes an Acquiring Person) following the commencement of, or of the first public announcement of the intention to commence, a tender offer or exchange offer the consummation of which would result in the Beneficial
Ownership by a Person or group of 20% or more of the outstanding Common Shares (the earlier of such dates, the “Distribution Date”), the Rights will be evidenced by Common Share certificates with a copy of this Summary of Rights
attached thereto (unless such Rights are recorded in book-entry); provided, that each certificate (or other evidence of book-entry or other uncertificated ownership) representing Common Shares outstanding as of the Close of Business on the
Record Date evidencing the Rights shall be deemed to incorporate by reference the terms of the Rights Agreement. 
 A Person shall not be
deemed to be an Acquiring Person if such Person, together with all Affiliates and Associates of such Person, at the time of the first public announcement of the Rights Agreement, is a Beneficial Owner of 20% or more of the Common Shares then
outstanding (a “Grandfathered Stockholder”); provided, that (A) for the avoidance of doubt, 

 
any Derivative that is not by its express terms capable of being settled directly into Common Shares and does not otherwise directly or indirectly convey any voting rights in Common Shares to any
Person shall not be included in the calculation of Beneficial Ownership for purposes of determining whether and the extent to which a Person may be deemed to be a Grandfathered Stockholder and (B) if a Grandfathered Stockholder becomes (other
than pursuant to the vesting or exercise of any equity awards issued to a member of the Board of Directors or pursuant to additional grants of any such equity awards to a member of the Board of Directors), after the date of the Rights Agreement, the
Beneficial Owner of any additional Common Shares (regardless of whether, thereafter or as a result thereof, there is an increase, decrease or no change in the percentage of Common Shares then outstanding Beneficially Owned by such Grandfathered
Stockholder) then such Grandfathered Stockholder shall be deemed to be an Acquiring Person unless, upon such acquisition of Beneficial Ownership of additional Common Shares, such Person is not the Beneficial Owner of 20% or more of the Common Shares
then outstanding; provided, further, that upon the first decrease of a Grandfathered Stockholder’s Beneficial Ownership below 20%, such Grandfathered Stockholder shall no longer be deemed to be a Grandfathered Stockholder. For the
avoidance of doubt, in the event that after the time of the first public announcement of the Rights Agreement, any agreement, arrangement or understanding pursuant to which any Grandfathered Stockholder is deemed to be the Beneficial Owner of Common
Shares expires, is settled in whole or in part, terminates or no longer confers any benefit to or imposes any obligation on the Grandfathered Stockholder, any direct or indirect replacement, extension or substitution of such agreement, arrangement
or understanding with respect to the same or different Common Shares that confers Beneficial Ownership of Common Shares shall be considered the acquisition of Beneficial Ownership of additional Common Shares by the Grandfathered Stockholder and
render such Grandfathered Stockholder an Acquiring Person for purposes of the Rights Agreement unless, upon such acquisition of Beneficial Ownership of additional Common Shares, such Person is not the Beneficial Owner of 20% or more of the Common
Shares then outstanding. 
 “Beneficial Ownership” shall include any securities (i) which a Person or any of such
Person’s Affiliates or Associates beneficially owns, directly or indirectly, within the meaning of Rules 13d-3 or 13d-5 promulgated under the Exchange Act, or has
the right or ability to vote, or the right to acquire, pursuant to any agreement, arrangement or understanding (except under limited circumstances), (ii) which are directly or indirectly Beneficially Owned by any other Person with which a Person has
any agreement, arrangement or understanding for the purpose of acquiring, holding or voting such securities, or changing, obtaining, or influencing control of the Company or (iii) in respect of which a Person or any of such Person’s
Affiliates or Associates has a derivative position which is capable of being settled, in whole or in part, through delivery of Common Shares (whether on a required or optional basis, and whether such settlement may occur immediately or only after
the passage of time, the occurrence of conditions, the satisfaction of regulatory requirements or otherwise). 
 The Rights Agreement
provides that, until the Distribution Date (or the earlier expiration or redemption of the Rights), the Rights will be transferred with and only with the Common Shares. New Rights will accompany any new Common Shares issued by the Company after the
Record Date, until the Distribution Date (or the earlier expiration or redemption of the Rights). Until the Distribution Date (or earlier redemption or expiration of the Rights), new Common Share certificates issued after the Record Date or upon
transfer or new issuance of Common Shares will 

  
 B-2 

 
contain a notation incorporating the Rights Agreement by reference. Until the Distribution Date (or earlier redemption or expiration of the Rights), the surrender for transfer of any certificates
for Common Shares outstanding as of the Record Date, even without such notation or a copy of this Summary of Rights being attached thereto, will also constitute the transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate certificates evidencing the Rights (“Right Certificates”) will be mailed to holders of record of the Common Shares as of the Distribution Date, and such
separate Right Certificates alone will evidence the Rights (unless such Rights are recorded in book entry). 
 The Rights are not
exercisable until the Distribution Date. The Rights will expire on the Close of Business on January 26, 2021 (the “Final Expiration Date”). 

The Rights Agreement includes a “qualifying offer” provision, whereby the Rights will automatically expire concurrently with (but no
earlier than 90 Business Days after the commencement of a Qualifying Offer) the acceptance, for purchase or exchange, of more than two-thirds of the Common Shares then outstanding on a fully diluted basis
(excluding from the calculation of the number of Common Shares purchased or exchanged any Common Shares Beneficially Owned by the offeror or its Affiliates and Associates) pursuant to a tender or exchange offer for all of the Common Shares then
outstanding for the same consideration; provided, that the offeror irrevocably commits to purchase all remaining untendered Common Shares for the same per share consideration actually paid pursuant to the offer. 

The Purchase Price payable, and the number of Common Shares or other securities or property issuable, upon exercise of the Rights is subject
to adjustment from time to time to prevent dilution (i) in the event of a stock dividend on, or a subdivision, combination or reclassification of, the Common Shares; (ii) upon the grant to holders of the Common Shares of certain rights or
warrants to subscribe for or purchase Common Shares at a price, or securities convertible into Common Shares with a conversion price, less than the then current market price of the Common Shares; or (iii) upon the distribution to holders of the
Common Shares of evidences of indebtedness or assets (excluding regular periodic cash dividends paid out of earnings or retained earnings or dividends payable in Common Shares) or of subscription rights or warrants (other than those referred to
above). 
 The number of outstanding Rights and the number of Common Shares issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock dividend on the Common Shares payable in Common Shares or subdivisions, consolidations or combinations of the Common Shares occurring, in any such case, prior to the
Distribution Date. 
 From and after the time any Person becomes an Acquiring Person, if the Rights evidenced by this Right Certificate are
or were acquired or Beneficially Owned by an Acquiring Person or an Associate or Affiliate of an Acquiring Person (as such terms are defined in the Rights Agreement), such Rights shall become void, and any holder of such Rights shall thereafter have
no right to exercise such Rights. 

  
 B-3 

 If any Person becomes an Acquiring Person, proper provision shall be made so that each
holder of a Right, other than Rights Beneficially Owned by the Acquiring Person and its Affiliates and Associates (all of which will thereafter be void), will thereafter have the right to receive upon exercise that number of Common Shares having a
market value of two times the exercise price of the Right. If the Board of Directors so elects, the Company may deliver upon payment of the exercise price of a Right an amount of cash, securities, or other property equivalent in value to the Common
Shares issuable upon exercise of a Right. 
 If, at any time after a Person becomes an Acquiring Person, the Company is acquired in a merger
or other business combination transaction or 50% or more of its consolidated assets or Earning Power (as defined in the Rights Agreement) are sold, proper provision will be made so that each holder of a Right will thereafter have the right to
receive, upon the exercise thereof at the then current exercise price of the Right, that number of shares of common stock of the acquiring company which at the time of such transaction will have a market value of two times the exercise price of the
Right. 
 At any time after any Person becomes an Acquiring Person and prior to the acquisition by any Person or group of a majority of the
outstanding Common Shares, the Board of Directors may exchange the Rights (other than Rights owned by such Person or group which have become void), in whole or in part, at an exchange ratio of one Common Share per Right (subject to adjustment). The
shares and other securities transferred as part of the exchange may be transferred to a trust created upon such terms as the Board of Directors of the Company may determine. 

With certain exceptions, no adjustment in the Purchase Price will be required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional Common Shares will be issued, and in lieu thereof, an adjustment in cash will be made based on the market price of the Common Shares on the last trading day prior to the date of exercise. 

At any time prior to the time any Person becomes an Acquiring Person, the Board of Directors may redeem the Rights in whole, but not in part,
at a price of $0.001 per Right (the “Redemption Price”). The redemption of the Rights may be made effective at such time, on such basis and with such conditions as the Board of Directors in its sole discretion may establish.
Immediately upon any redemption of the Rights, the right to exercise the Rights will terminate and the only right of the holders of Rights will be to receive the Redemption Price. 

The terms of the Rights may be amended by the Board of Directors without the consent of the holders of the Rights. However, from and after
such time as any Person becomes an Acquiring Person, the Rights Agreement shall not be amended or supplemented in any manner which would adversely affect the interests of the holders of Rights (other than an Acquiring Person and its Affiliates and
Associates). 
 Until a Right is exercised, the holder thereof, as such, will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends. 
 A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K. A copy of the Rights Agreement is available free of charge from the Company. The foregoing summary of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement, which is hereby incorporated herein by reference. 

  
 B-4

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00303-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00303-of-00352.parquet"}]]