Document:

Exhibit

DESCRIPTION OF THE CAPITAL STOCK OF PLANTRONICS, INC.

The following description of the material provisions of the capital stock and other material terms of the certificate of incorporation and bylaws of Plantronics, Inc. (the “Company”), the Stockholder Agreement (the “Stockholder Agreement”), dated July 2, 2018, between the Company and Triangle Private Holdings II, LLC (“Triangle”) and certain provisions of Delaware law, are summaries only.  These summaries do not purport to be complete and are qualified in their entirety by reference to the Company’s certificate of incorporation, bylaws, the Stockholder Agreement and by the provisions of applicable law.
Authorized Capital
The Company’s authorized capital stock consists of 100,000,000 shares of common stock, $.01 par value per share (“Common Stock”), 100,000 shares of Series A Participating Preferred Stock, $.01 par value per share (“Series A Preferred”), and 900,000 shares of Undesignated Preferred Stock, $.01 par value per share (“Undesignated Preferred Stock”).
Common Stock
Voting.  Except as otherwise required by Delaware law, or as specifically set forth in the provisions of the Company’s certificate of incorporation or bylaws, at every annual or special meeting of stockholders, every holder of Common Stock is entitled to one vote per share. When a quorum is present, the affirmative vote of the holders of the shares representing a majority of the voting power at the meeting and entitled to vote on the subject matter shall be the act of the stockholders, unless the question is one upon which by express provisions of an applicable law or of the Company’s certificate of incorporation or bylaws a different vote is required, in which case such express provision shall govern and control. 
Board of Directors.  At any meeting for the election of directors at which a quorum is present, each director is elected by the vote of the majority of the votes cast with respect to the nominee, provided that, the directors are elected by the vote of a plurality of the votes cast on the election of directors at any meeting for which the Company Secretary receives a notice of a stockholder’s intention to nominate a person or persons for election to the Board in compliance with the advance notice provisions of our bylaws. There is no cumulative voting in the election of directors. The number of directors serving on the Company’s board of directors (“Board”) may be changed by a resolution adopted by the affirmative vote of a majority of the directors then in office, provided that, pursuant to the Company’s bylaws, the number of directors shall be no less than six and no more than 11.  

Dividends Rights. Subject to the rights of holders of any then outstanding shares of the Company’s preferred stock (discussed below), holders of Common Stock are entitled to receive ratably any dividends that may be declared by the Board out of funds legally available therefor.

Liquidation Rights. In the event of the Company’s liquidation, dissolution or winding up, holders of Common Stock are entitled to share ratably in all assets available for distribution to stockholders after the payment of or provision for all of the Company’s debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then outstanding shares of preferred stock.

Other Rights.  Except as provided in the Stockholder Agreement, holders of Common Stock do not have preemption, conversion or redemption rights. The rights, preferences and privileges of holders of Common Stock will be subject to those of the holders of any shares of the Company’s preferred stock the Company may issue in the future.
Listing. The Common Stock is listed on the NYSE under the ticker symbol "PLT."
Transfer Agent and Registrar. The transfer agent and registrar for our common stock is Computershare, Inc.
Preferred Stock
There are currently no shares of preferred stock outstanding, and the Company has no present plans to issue any shares of preferred stock.  However, under the terms of the Company’s certificate of incorporation, the Board has the authority, without further action by the Company’s stockholders, to issue the following classes of Preferred Stock:

Undesignated Preferred Stock. The Board may issue not more than an aggregate of 900,000 shares of Undesignated Preferred Stock in one or more series, without stockholder approval, and to establish, from time to time, the number of shares to be included in each series of preferred stock, to fix the designation, powers, preferences, and rights of the shares of each series of preferred stock, and to specify any qualifications, limitations or restrictions.  
Series A Preferred.  The Board is authorized to issue 100,000 shares of Series A Preferred without stockholder approval.  The Series A Preferred shall have the rights and privileges set forth below subject to any limitations on the Board under applicable law, the certificate of incorporation or the bylaws, to amend or establish, from time to time, other designations, powers, preferences, and rights of the shares of the Series A Preferred, and any of its qualifications, limitations or restrictions.
Dividends.  Subject to the rights of holders of any then outstanding shares of the Company’s preferred stock holding prior or superior rights, holders of Series A Preferred are entitled to receive quarterly dividends declared by the Board out of funds legally available at a per share rate 1,000 times that of the holders of Common Stock.  Moreover, whenever any dividends or other distributions are in arrears to the Series A Preferred, the Company will not:
		
	(i)
	Declare or pay dividends on, make any distributions, or redeem or purchase or otherwise acquire on any shares of stock ranking junior to the Series A Preferred;

		
	(ii)
	Declare or pay dividends on or make any distributions on any shares of stock ranking on parity with the Series A Preferred, except dividends paid ratably in proportion to the total amounts to which the holders of all such shares are entitled;

		
	(iii)
	Redeem, purchase or otherwise acquire for consideration shares of any stock ranking on parity with the Series A Preferred;

		
	(iv)
	Purchase or otherwise acquire for consideration any shares of Series A Preferred or any shares on parity with Series A Preferred, except pursuant to a purchase offer made in writing to all holders of Series A Preferred on terms the Board has determined in good faith will result in fair and equitable treatment of the respective series or classes of stock.

Voting Rights.  Except as otherwise required by Delaware law, or as specifically set forth in the provisions of the Company’s certificate of incorporation or bylaws, at every annual or special meeting of stockholders, every holder of Series A Preferred is entitled to 1,000 votes per share and shall vote together as one class with all holders of Common Stock on all matters submitted to the vote of the stockholders of the Company.
Liquidation Rights. In the event of the Company’s liquidation, dissolution or winding up, holders of Series A Preferred are entitled to receive a per share amount 1,000 times the aggregate amount to be distributed per share to holders of Common Stock, plus an amount equal to any accrued and unpaid dividends.
Consolidation and Merger.  In the event of a consolidation, merger, combination or other similar transaction in which the shares of Common Stock are exchanged for cash, equity or any other property, the holders of Series A Preferred shall be exchanged at a rate 1,000 times the per share rate of Common Stock.
Redemption.  Holders of Series A Preferred do not have any redemption rights.
Other Rights.  Holders of Series A Preferred shall rank junior to other shares of preferred stock as to dividends and asset distribution unless the series of preferred shares sets forth otherwise. Additionally, the Company’s certificate of incorporation may not be amended in any manner that would materially adversely alter or change the powers, preference or special rights of the Series A Preferred without the affirmative vote of a majority of the outstanding shares of Series A Preferred voting separately as a series.

The purpose of authorizing the Board to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could make it more difficult for a third party to acquire control of the Company, or could adversely affect the rights of the Company’s common stockholders.

Stockholder Agreement

In connection with the acquisition of Polycom, Inc. from Triangle, the Company entered into the Stockholder Agreement.  The Stockholder Agreement provides for certain rights and obligations relative to Triangle’s ownership of Common Stock.

Board Representation. Pursuant to the Stockholder Agreement, the Company agreed to appoint two representatives of Triangle to the Board at the closing of the acquisition of Polycom, Inc.  The Company has further agreed to continue to nominate, and use commercially reasonable efforts to cause to be elected (or appointed, as applicable), representatives selected by Triangle to serve on the Board based on Triangle’s percentage ownership of Common Stock (as calculated pursuant to the Stockholder Agreement) and the overall size of the Board (assuming that there are 11 or fewer directors), with the number of such representatives being determined in accordance with the following table:
	
				
	Ten (10) Company Directors
	Eleven (11) Company Directors

	Triangle Percentage Ownership
	Triangle Directors
	Triangle Percentage Ownership
	Triangle Directors

	14% or greater
	2
	13% or greater
	2

	9% to 14%
	1
	8% to 13%
	1

	Less than 9%
	0
	Less than 8%
	0

Pursuant to the Stockholder Agreement, one or more of the Triangle directors will be required to resign from the Board upon a change in Triangle’s percentage ownership of Common Stock (as calculated pursuant to the Stockholder Agreement) that causes the number of Triangle directors serving on the Board to exceed the number the Company would be required to nominate in accordance with the table above.

Standstill Restrictions. The Stockholder Agreement contains a standstill covenant, which prohibits Triangle and its affiliates from taking certain actions until the third anniversary of the date of the Stockholder Agreement (July 2, 2021) and for such period thereafter as a Triangle selected director serves on the Board (the “Standstill Period”).  This covenant has the effect of limiting Triangle’s ability to, among other things, acquire additional shares of Common Stock, participate in solicitations of proxies, “proxy access” proposals or proxy contests, participate in tender offers, act in concert with others to accomplish the foregoing or otherwise seek to acquire control of the Company and Board.

The Stockholder Agreement provides that, under limited circumstances, Triangle may participate in a tender offer or exchange offer of Common Stock or any acquisition proposal involving the Company or its subsidiaries and not recommended by the Board, provided that prior to such participation, all then-serving directors selected by Triangle must resign and the Company will have no further obligation to nominate representatives of Triangle to the Board.

Transfer Restrictions. Pursuant to the Stockholder Agreement, and except as otherwise provided therein, Triangle cannot, without the Company’s prior written consent, directly or indirectly transfer (as defined in the Stockholder Agreement) all or any part of its Common Stock or any right or economic interest pertaining thereto, including the right to vote or consent on any matter or to receive or have any economic interest in distributions or advances from the Company pursuant thereto (the “Lock-up Restriction”); provided, however, that the Lock-up Restriction shall not apply with respect to certain transfers to any affiliate of Triangle that is not a portfolio company of Triangle in accordance with the Stockholder Agreement.

As further set forth in the Stockholder Agreement, the Lock-Up Restriction shall be phased out as follows: (i) on and after July 2, 2019 until January 2, 2020, Triangle may transfer up to one-third of the total number of shares of Common Stock subject to the Lock-Up Restriction; (ii) on and after January 2, 2020 until July 2, 2020, Triangle may transfer up two-thirds of the total number of shares of Common Stock subject to the Lock-Up Restriction; and (iii) on and after July 2, 2020, the Lock-Up Restriction shall no longer apply.  

In addition, subject to limited exceptions, Triangle is generally prohibited from transferring its shares of Common Stock to any person or group of persons who, based on the reasonable inquiry of Triangle, is or would be, as a result of the proposed transfer or a series of transactions involving Common Stock, required under Section 13(d) of the Exchange Act to file a Schedule 13D with the SEC upon such person or group of persons acquiring an ownership stake (whether direct or beneficial) in the Company that equals or exceeds 5% of the then-outstanding shares of Common Stock.

Preemptive Rights.  For so long as Triangle’s percentage ownership interest in the Company (as calculated pursuant to the Stockholder Agreement) is equal to five percent (5%) or greater, the Company has granted Triangle the right to purchase shares of Common Stock in certain transactions where the Company issues new shares of Common Stock (or securities convertible into Common Stock) at a price lower than Triangle’s basis in the shares issued at the closing of the acquisition of Polycom, Inc. ($56.961).  The selling stockholder may exercise this pre-emptive right to purchase up to its proportionate share of the common stock being issued in a qualifying transaction.

Registration Rights.  Pursuant to the Stockholder Agreement, the Company has granted Triangle customary registration rights where the Company has agreed to file and maintain a registration statement for sales of the Common Stock issued to Triangle in connection with the acquisition of Polycom.  In addition, Triangle has the right (subject to certain limitations, including the transfer restrictions described above) to participate in, or “piggyback” on, certain public equity offerings the Company seeks to effect. 

Anti-Takeover Effects of Certain Provisions of Delaware Law, the Certificate of Incorporation and the Bylaws

The Company’s certificate of incorporation and bylaws contain provisions that are intended to enhance the likelihood of continuity and stability in the composition of the Board and that could make it more difficult to acquire control of the Company by means of a tender offer, open market purchases, a proxy contest or otherwise. The Company expects that these provisions, which are summarized below, will discourage coercive takeover practices or inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of the Company to first negotiate with the Board, which the Company believes may result in an improvement of the terms of any such acquisition in favor of the Company’s stockholders. However, they also give the Board the power to discourage acquisitions that some stockholders may favor. A description of these provisions is set forth below.

No Cumulative Voting. Under Delaware law, the right to vote cumulatively does not exist unless the certificate of incorporation specifically authorizes cumulative voting. The Company’s certificate of incorporation does not grant stockholders the right to vote cumulatively; therefore stockholders holding a majority of the shares of common stock outstanding will be able to elect all of the Company’s directors.

Stockholder Action by Written Consent and Special Meetings of Stockholders.  The Company’s certificate of incorporation and bylaws provides that all stockholder action must be affected at a duly called meeting of stockholders and not by written consent, and that only the Board or chief executive officer may call a special meeting of stockholders.

Requirements for Advance Notification of Stockholder Meetings, Nominations and Proposals.  The Company’s bylaws include an advance notice procedure for stockholder proposals to be brought before an annual meeting of stockholders, including proposed nominations of candidates for election to the Board. Stockholders at an annual meeting will only be able to consider proposals or nominations specified in the notice of meeting or brought before the meeting by or at the direction of the Board, or by a stockholder of record on the record date for the meeting, who is entitled to vote at the meeting and who has delivered timely written notice in proper form to the Company’s secretary of the stockholder’s intention to bring such business before the meeting. These provisions could have the effect of delaying stockholder actions until the next stockholder meeting that are favored by the holders of a majority of the Company’s outstanding voting securities or may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect its own slate of directors or otherwise attempt to obtain control of the Company.

Super-Majority Voting.  The certificate of incorporation requires a 66-2/3% stockholder vote for the amendment, repeal or modification of certain provisions of the Company’s certificate of incorporation and bylaws relating to the size, 

nomination, election and appointment of members to Board, the requirement that stockholder actions be effected at a duly called meeting and the designated parties entitled to call a special meeting of the stockholders. In addition, the authorization of blank check preferred stock makes it possible for the Board to issue preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of the Company.
Delaware Takeover Statute
We are subject to the provisions of Section 203 of the General Corporation Law of the State of Delaware. Subject to certain exceptions, Section 203 of the Delaware General Corporation Law prohibits a Delaware corporation from engaging in any "business combination" with any "interested stockholder" for a period of three years after the date of the transaction in which the person or entity became an interested stockholder. A "business combination" includes certain mergers, asset sales or other transactions resulting in a financial benefit to the interested stockholder. Subject to various exceptions, an "interested stockholder" is a person who, together with his or her affiliates and associates, owns, or within the past three years has owned, 15% or more of our outstanding voting stock. This provision could discourage mergers or other takeover or change in control attempts, including attempts that might result in the payment of a premium over the market price for shares of our common stock.
Limitation of Directors' Liability and Indemnification
The Company’s certificate of incorporation limits the liability of directors to the fullest extent permitted by Delaware law. The effect of these provisions is to eliminate the rights of the Company and its stockholders, through stockholders’ derivative suits on behalf of the Company, to recover monetary damages from a director for breach of fiduciary duty as a director, including breaches resulting from grossly negligent behavior.  However, exculpation does not apply to any director if the director has acted in bad faith, knowingly or intentionally violated the law, authorized illegal dividends or redemptions or derived an improper benefit from his or her actions as a director.

In addition, the certificate of incorporation and bylaws provide that the Company will indemnify the Company’s directors and officers to the fullest extent permitted by Delaware law. The Company also expects to continue to maintain directors’ and officers’ liability insurance. The Company believes that these indemnification provisions and insurance are useful to attract and retain qualified directors and executive officers.

The limitation of liability and indemnification provisions in the certificate of incorporation and bylaws may discourage stockholders from bringing a lawsuit against directors for breach of their fiduciary duty. These provisions may also have the effect of reducing the likelihood of derivative litigation against directors and officers, even though such an action, if successful, might otherwise benefit the Company and its stockholders.

In addition to the indemnification required in the certificate of incorporation and bylaws, the Company enters into indemnification agreements with each of its directors and executive officers. These agreements provide for the indemnification of the Company’s directors and executive officers for all reasonable expenses and liabilities incurred in connection with any action or proceeding brought against them by reason of the fact that they are or were the Company’s agents. The Company believes that these bylaw provisions and indemnification agreements, as well as its maintaining directors’ and officers’ liability insurance, help to attract and retain qualified persons as directors and officers.Exhibit

PLANTRONICS, INC.
INCENTIVE COMPENSATION PLAN
Adopted by the Compensation Committee of the Board of Directors on March 12, 2018
1.Purposes of the Plan. The Plan is intended to increase stockholder value and the success of the Company by motivating Associates to (a) perform to the best of their abilities, and (b) achieve the Company’s objectives.
2.Definitions.
(a)    “Actual Award” means as to any Performance Period, the actual award (if any) payable to a Participant for the Performance Period, subject to the Committee’s authority under Section 3(d) to modify the award.
(b)    “Affiliate” means any corporation or other entity (including, but not limited to, partnerships and joint ventures) controlled by the Company.
(c)    “Associate” means any employee of the Company or of an Affiliate, whether such individual is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan.
(d)    “Board” means the Board of Directors of the Company.
(e)    “Bonus Pool” means the pool of funds available for distribution to Participants.  Subject to the terms of the Plan, the Committee establishes the Bonus Pool for each Performance Period.
(f)    “Code” means the Internal Revenue Code of 1986, as amended.  Reference to a specific section of the Code or regulation thereunder will include such section or regulation, any valid regulation promulgated thereunder, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
(g)    “Committee” means the committee appointed by the Board (pursuant to Section 5) to administer the Plan.  Unless and until the Board otherwise determines, the Board’s Compensation Committee will administer the Plan overall and as to Executive Participants exclusively.  The Committee may appoint Management to administer the Plan as to Non-Executive Participants in which case the term “Committee” as used in this Plan shall mean and refer to Management. 
(h)    “Company” means Plantronics, Inc., a Delaware corporation, or any successor thereto.
(i)    “Disability” means a permanent and total disability determined in accordance with uniform and nondiscriminatory standards adopted by the Committee from time to time.
(j)    “Executive Participant” means any Committee identified or declared executive, officer, or key Associate Participant under the Plan.
(k)    “Fiscal Year” means the fiscal year of the Company.
(l)    “Management” means the CEO, CFO and senior executive officers of the Company.
(m)    “Non-Executive Participant” means any Participant who is not an Executive Participant under the Plan.
(n)    “Participant” means as to any Performance Period, an Associate who has been selected by the Committee for participation in the Plan for that Performance Period.
(o)    “Performance Period” means the period of time for the measurement of the performance criteria that must be met to receive an Actual Award, as determined by the Committee in its sole discretion.  A Performance Period may be divided into one or more shorter periods if, for example, but not by way of limitation, the Committee desires to measure some performance criteria over 12 months and other criteria over 3 months.
(p)    “Plan” means this Incentive Compensation Plan, as set forth in this instrument and as hereafter amended from time to time.
(q)    “Target Award” means the target award, at 100% performance achievement, payable under the Plan to a Participant for the Performance Period, as determined by the Committee in accordance with Section 3(b).
(r)    “Termination of Service” means a cessation of the employee-employer relationship between an Associate and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability, retirement, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous reemployment by the Company or an Affiliate.
3.Selection of Participants and Determination of Awards.
(a)    Selection of Participants.  The Committee, in its sole discretion, will select the Associates who will be Executive Participants for any Performance Period and Management, in its sole discretion, will select the Associates who will be Non-Executive Participants, each during all or any portion of a Performance Period.  Participation in the Plan is in the sole discretion of the Committee, on a Performance Period by Performance Period basis.  Accordingly, an Associate who is a Participant for a given Performance Period in no way is guaranteed or assured of being selected for participation in any subsequent Performance Period or Performance Periods.
(b)    Determination of Target Awards.  The Committee, in its sole discretion, will establish a Target Award for each Participant (each award may be expressed as a percentage of a Participant’s average annual base salary for the Performance Period or actual base salary on the last day of the Performance Period, as the Committee deems appropriate).
(c)    Bonus Pool.  Each Performance Period, the Committee, in its sole discretion, will establish a Bonus Pool, which pool may be established before, during or after the applicable Performance Period.  Actual Awards will be paid from the Bonus Pool.
(d)    Discretion to Modify Awards.  Notwithstanding any contrary provision of the Plan, the Committee may, in its sole discretion and at any time, (i) increase, reduce or eliminate a Participant’s Actual Award, and/or (ii) increase, reduce or eliminate the amount allocated to the Bonus Pool.  The Actual Award may be below, at or above the Target Award, in the Committee’s discretion.  The Committee may determine the amount of any reduction on the basis of such factors as it deems relevant, and will not be required to establish any allocation or weighting with respect to the factors it considers.
(e)    Discretion to Determine Criteria.  Notwithstanding any contrary provision of the Plan, the Committee will, in its sole discretion, determine the performance goals applicable to any Target Award which requirement may include, without limitation, (stock price, revenue, profit, bookings, cash flow, customer development, customer retention, customer satisfaction, sales channel retention, sales channel satisfaction, sales channel development, associate retention, associate satisfaction, associate development, net bookings, net income, net profit, operating cash flow, operating expenses, total earnings, earnings per share, diluted or basic, earnings per share from continuing operations, diluted or basic, earnings before interest and taxes, earnings before interest, taxes, depreciation and amortization, pre-tax profit, net asset turnover, asset utilization, inventory turnover, capital expenditures, net earnings, operating earnings, gross or operating margin, profit margin, debt, working capital, return on equity, return on net assets, return on total assets, return on capital, return on investment, return on sales, net or gross sales, market share, economic value added, cost of capital, change in assets, technical development, expense reduction levels, debt reduction, productivity, new product introductions, delivery performance, implementation or improvement of new or existing business systems, individual objectives, and total stockholder return.  As determined by the Committee, the performance goals may be based on generally accepted accounting principles (“GAAP”) or non-GAAP results and any actual results may be adjusted by the Committee for one-time items or unbudgeted or unexpected items when determining whether the performance goals have been met.  The goals may be on the basis of any factors the Committee determines relevant, and may be on an individual, divisional, business unit or Company-wide basis.  Any criteria used may be measured on such basis as the Committee determines, including but not limited to, as applicable, (A) in absolute terms, (B) in combination with another performance goal or goals (for example, but not by way of limitation, as a ratio or matrix), (C) in relative terms (including, but not limited to, results for other periods, passage of time and/or against another company or companies or an index or indices), (D) on a per-share basis, (E) against the performance of the Company as a whole or a segment of the Company and/or (F) on a pre-tax or after-tax basis.  The performance goals may differ from Participant to Participant and from award to award.  Failure to meet the goals will result in a failure to earn the Target Award, except as provided in Section 3(d).
4.Payment of Awards.
(a)    Right to Receive Payment.  Each Actual Award will be paid solely from the general assets of the Company.  Nothing in this Plan will be construed to create a trust or to establish or evidence any Participant’s claim of any right other than as an unsecured general creditor with respect to any payment to which he or she may be entitled.
(b)    Timing of Payment.  Payment of each Actual Award shall be made as soon as practicable after the end of the Performance Period during which the Actual Award was earned and after the Actual Award is approved by the Committee, but in no event following the later of (i) the fifteenth (15th) day of the third (3rd) month of the Fiscal Year immediately following the Fiscal Year in which the Participant’s Actual Award has been earned and no longer is subject to a substantial risk of forfeiture, and (ii) March 15 of the calendar year immediately following the calendar year in which the Participant’s Actual Award has been earned and no longer is subject to a substantial risk of forfeiture.  Unless otherwise determined by the Committee, to earn an Actual Award a Participant must be employed by the Company or any Affiliate on the date the Actual Award is paid.
It is the intent that this Plan comply with the requirements of Code Section 409A so that none of the payments to be provided hereunder will be subject to the additional tax imposed under Code Section 409A, and any ambiguities herein will be interpreted to so comply.
(c)    Form of Payment.  Each Actual Award will be paid in cash (or its equivalent) in a single lump sum.
(d)    Payment in the Event of Death or Disability.  If a Participant dies or becomes Disabled prior to the payment of an Actual Award earned by him or her prior to death or Disability for a prior Performance Period, the Actual Award will be paid to his or her estate or to the Participant, as the case may be, subject to the Committee’s discretion to reduce or eliminate any Actual Award otherwise payable.
5.Plan Administration.
(a)    Committee is the Administrator.  The Plan will be administered solely by the Committee as to Executive Participants.  The Committee will consist of not less than two (2) members of the Board.  The members of the Committee will be appointed from time to time by, and serve at the pleasure of, the Board.
(b)    Committee Authority.  It will be the duty of the Committee to administer the Plan in accordance with the Plan’s provisions.  The Committee will have all powers and discretion necessary or appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (i) determine which Associates will be granted awards, (ii) prescribe the terms and conditions of awards, (iii) interpret the Plan and the awards, (iv) adopt such procedures and subplans as are necessary or appropriate to permit participation in the Plan by Associates who are foreign nationals or employed outside of the United States, (v) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, and (vi) interpret, amend or revoke any such rules.
(c)    Decisions Binding.  All determinations and decisions made by the Committee, the Board, and any delegate of the Committee, including Management, pursuant to the provisions of the Plan will be final, conclusive, and binding on all persons, and will be given the maximum deference permitted by law.
(d)    Delegation by Committee.  The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or part of its authority and powers under the Plan to one or more directors and/or officers of the Company.
(e)    Indemnification.  Each person who is or will have been a member of the Committee will be indemnified and held harmless by the Company against and from (i) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any award, and (ii) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she will give the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification will not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless.
6.General Provisions.
(a)    Tax Withholding.  The Company will withhold all applicable taxes from any Actual Award, including any federal, state and local taxes (including, but not limited to, the Participant’s FICA and SDI obligations).
(b)    No Effect on Employment or Service.  Nothing in the Plan will interfere with or limit in any way the right of the Company to terminate any Participant’s employment or service at any time, with or without cause.  For purposes of the Plan, transfer of employment of a Participant between the Company and any one of its Affiliates (or between Affiliates) will not be deemed a Termination of Service.  Employment with the Company and its Affiliates is on an at‐will basis only.  The Company expressly reserves the right, which may be exercised at any time and without regard to when during a Performance Period such exercise occurs, to terminate any individual’s employment with or without cause, and to treat him or her without regard to the effect that such treatment might have upon him or her as a Participant.
(c)    Participation.  No Associate will have the right to be selected to receive an award under this Plan, or, having been so selected, to be selected to receive a future award.
(d)    Successors.  All obligations of the Company under the Plan, with respect to awards granted hereunder, will be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company.
(e)    Beneficiary Designations.  If permitted by the Committee, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid award will be paid in the event of the Participant’s death.  Each such designation will revoke all prior designations by the Participant and will be effective only if given in a form and manner acceptable to the Committee.  In the absence of any such designation, any vested benefits remaining unpaid at the Participant’s death will be paid to the Participant’s estate.
(f)    Nontransferability of Awards.  No award granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 6(e).  All rights with respect to an award granted to a Participant will be available during his or her lifetime only to the Participant.
7.Amendment, Termination, and Duration.
(a)    Amendment, Suspension, or Termination.  The Board, in its sole discretion, may amend or terminate the Plan, or any part thereof, at any time and for any reason. The amendment, suspension or termination of the Plan will not, without the consent of the Participant, alter or impair any rights or obligations under any Actual Award theretofore earned by such Participant.  No award may be granted during any period of suspension or after termination of the Plan.
(b)    Duration of Plan.  The Plan will commence on the date specified herein, and subject to Section 7(a) (regarding the Board’s right to amend or terminate the Plan), will remain in effect thereafter.
8.Legal Construction.
(a)    Gender and Number.  Except where otherwise indicated by the context, any masculine term used herein also will include the feminine; the plural will include the singular and the singular will include the plural.
(b)    Severability.  In the event any provision of the Plan will be held 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 enforced as if the illegal or invalid provision had not been included.
(c)    Requirements of Law.  The granting of awards under the Plan will be subject to all applicable laws, rules and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(d)    Governing Law.  The Plan and all awards will be construed in accordance with and governed by the laws of the State of California, but without regard to its conflict of law provisions.
(e)    Bonus Plan.  The Plan is intended to be a “bonus program” as defined under U.S. Department of Labor regulation 2510.3-2(c) and will be construed and administered in accordance with such intention.
(f)    Captions.  Captions are provided herein for convenience only, and will not serve as a basis for interpretation or construction of the Plan.

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