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EXHIBIT 10.3

NEWMONT 
EQUITY BONUS PROGRAM FOR GRADES E-5 TO E-6

(Effective January 1, 2022)

NEWMONT 
EQUITY BONUS 
PROGRAM FOR GRADES E-5 TO E-6
(Effective January 1, 2022)
PURPOSE
This Equity Bonus Program for Grades E5 to E6 includes the Restricted Stock Unit Bonus program and Performance Stock Bonus program for the eligible Employees.  This program is a restatement of the Newmont Equity Bonus Program for Grades E-5 to E-6 effective January 1, 2021.  The purpose of this program is to provide to Employees of Newmont Corporation (“Newmont”) and its Affiliated Entities that participate in this program a more direct interest in the success of the operations of Newmont.  The eligible Employees will be rewarded in accordance with the terms and conditions described below.
This program is intended to be a program described in Department of Labor Regulation Sections 2510.3-1(b) and 2510.3-2(c) and shall not be considered a plan subject to the Employee Retirement Income Security Act of 1974, as amended.

SECTION I-DEFINITIONS
The capitalized terms used in this program shall have the same meaning as the capitalized terms in the Short-Term Incentive Program (“STIP”), unless otherwise stated herein.  In addition, the terms set forth in this Section shall have the meaning set forth below.
1. 1    “Absolute Total Shareholder Return” means; (a) the average closing price of Common Stock for the 30 trading days, excluding the final 5 trading days for administrative purposes, on the New York Stock Exchange of the Extended Performance Period, minus (b) the share price used to determine the Target Performance  Stock Unit Award, assuming dividends are reinvested as of the ex-dividend date, divided by (c) the share price used to determine the Target Performance  Stock Unit Award. The Leadership Development and Compensation Committee of the Board of Directors (“LDCC”) retains authority to make adjustments for extraordinary events affecting the calculations.
1.2    “Cause” means  a) engagement in illegal conduct or gross negligence or willful misconduct, provided that if the Employee acted in accordance with an authorized written opinion of Newmont’s, or an affiliated entity’s, legal counsel, such action will not constitute “Cause;” b) any dishonest or fraudulent activity by the Employee or the reasonable belief by Newmont or an affiliated entity of the Employee’s breach of any contract, agreement or representation with the Newmont or an affiliated entity, or c) violation, or Newmont’s or an affiliated entity’s belief of Employee’s violation, of Newmont Corporation’s Code of Conduct and/or underlying policies and standards.
1.3    “Change of Control Price” means the price per share of Common Stock offered to a holder thereof in conjunction with any transaction resulting in a Change of Control on a fully-diluted basis (as determined by the LDCC as constituted before the Change of Control, if any part of the offered price is payable other than in cash), or, in the case of a Change of Control 
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occurring solely by reason of a change in the composition of the Board, the highest Fair Market Value of a share of Common Stock on any of the 30 trading days immediately preceding the date on which such Change of Control occurs.
1.4    “Common Stock” means the $1.60 par value common stock of Newmont Corporation.
1.5     “Extended Performance Period” means the time frame between the beginning and ending average closing prices (generally deemed to be three years with adjustments for administrative purposes) over which the LDCC will calculate and determine the Performance Stock Bonus.
1.6    “Fair Market Value” has the meaning given such term in the 2020 Stock Incentive Compensation Plan.
1.7     “Performance  Stock Bonus” means the bonus payable to an eligible Employee in the form of Common Stock under this compensation program with respect to an Extended Performance Period (or portion thereof as provided in Section 4.4) and is calculated as described in Section 4.2.  
1.8     “Performance Period” means the calendar year over which the LDCC will calculate and determine the Restricted Stock Unit Bonus.  
1.9    “Performance Stock” means the right to receive from Newmont, Common Stock or restricted stock units under terms and conditions defined in a restricted stock unit or other award agreement, as determined by the LDCC.   
1.10       “Relative Total Shareholder Return” means Newmont’s total shareholder return, defined as the change in the closing price of a share of Common Stock, assuming dividends are reinvested as of the ex-dividend date,  between the share price used to determine the Target Performance  Stock Unit Award and the average closing price of Common Stock for the 30 trading days, excluding the final 5 trading days, on the New York Stock Exchange of the Extended Performance Period; as compared to the total shareholder return, assuming dividends are reinvested as of the ex-dividend date, of an index of peer companies selected and determined by the LDCC. The LDCC retains authority to make adjustments for extraordinary events affecting the calculations.
1.11     “Restricted Stock Unit Bonus” means the bonus payable to an eligible Employee in the form of restricted stock units under this compensation program annually (or portion of a year as provided in Section 3.2), which shall be determined by dividing the eligible Employee’s Target Restricted Stock Unit Bonus by Fair Market Value, on the date of grant of the Restricted Stock Unit Bonus.  The restricted stock units granted as a Restricted Stock Unit Bonus shall have terms and conditions, and shall be subject to such restrictions as defined by the LDCC.
1.12    “Retirement” means at least age 55, and, at least 5 years of continuous employment with Newmont and/or an Affiliated Entity, and, a total of at least 65 when adding age plus years of employment. This definition differs from the definition of retirement in other benefits plans, such as pension plans of Newmont, and shall not alter those definitions.  
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1.13     “Target Performance  Stock Bonus”  means the number of shares of Common Stock equivalent to the percentage of base salary (for calculation purposes, base salary shall be the applicable base salary of the Employee as of March 1 (or the effective date of the annual merit compensation process if different than March 1) for the year in which the target number of shares is calculated) set by the LDCC which is set forth in Appendix B, using the average closing price of Common Stock for the 25 trading days on the New York Stock Exchange prior to the grant date of the Target Performance Leverage Stock Unit Bonus.  

1.14      “Target Restricted Stock Unit Bonus” means the percentage of base salary (for calculation purposes, base salary shall be the applicable base salary of the eligible Employee as of March 1 (or the effective date of the annual merit compensation process if different than March 1) for the year in which the target number of shares is calculated) set by the LDCC which is set forth in Appendix A.  
1.15     “Terminated Eligible Employee” for purposes of the Performance Stock Bonus means executive grade level Employee of a Participating Employer at an executive grade level during the relevant Extended Performance Period, who terminates employment with Newmont and/or a Participating Employer as provided in Section 4.4. 
1.16     “2020   Stock Incentive Compensation Plan” means the Newmont Corporation 2020 Stock Incentive Compensation Plan (or any successor plan), as amended from time to time.

SECTION II-ELIGIBILITY
All Employees of a Participating Employer in an executive grade level, except any Employee who is eligible for the Senior Executive Compensation Program, are eligible to receive a  Performance  Stock Bonus under this program, provided (i) they are on the payroll of a Participating Employer as of the last day of the relevant Extended Performance Period for the Performance  Stock Bonus, and at the time the award is vested, or (ii) they are a Terminated Eligible Employee with respect to Extended Performance Period for the Performance  Stock Bonus.  All executive grade level Employees of a Participating Employer, except any Employee who is eligible for the Senior Executive Compensation Program, are eligible to receive a Restricted Stock Unit Bonus under this compensation program, provided they are on the payroll of a Participating Employer at the time the award is granted. Eligible Employees who are on short-term disability under the Short-Term Disability Plan of Newmont, or a successor plan, or not working because of a work-related injury as of the last day of the Extended Performance Period for the Performance  Stock Bonus, but are still on the payroll of a Participating Employer shall be eligible to receive a Performance  Stock Bonus.  Notwithstanding the foregoing provisions of this Section II, the LDCC or the Executive Vice President of Human Resources of Newmont (or his or her delegate) may, prior to the end of any Performance Period, or Extended Performance Period for the Performance  Stock Bonus, exclude from or include in eligibility for participation under this compensation program with respect to such Performance Period, or Extended Performance Period for the Performance  Stock Bonus, any executive grade level Employee of a Participating Employer.   
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SECTION III-RESTRICTED STOCK UNIT BONUS
3.1    Determination of Restricted Stock Unit Bonus—In General.  The Restricted Stock Unit Bonus shall be calculated by determining the Target Restricted Stock Unit Bonus and modifying such amount by the eligible Employee’s personal performance for the Performance Period based upon manager discretion and guidance from the human resources department.  Such calculations shall be done as soon as reasonably practicable after the Performance Period.  Following such determination, payment of the Restricted Stock Unit Bonus shall be made to eligible Employees as soon as reasonably practicable, in accordance with Section 3.3 below.
3.2    Separation of Employment and Payment of Restricted Stock Unit Bonus.  An eligible Employee shall not be entitled to payment of a Restricted Stock Unit Bonus as a result of any separation of employment, voluntary or involuntary, except as provided in Section 5.1 below.  
3.3    Form of Payment.  The amount of Restricted Stock Unit Bonus payable under this compensation program shall be paid in restricted stock units (payable in whole units only rounded down to the nearest share).  The restricted stock units shall have a three-year vesting period, with one-third of the restricted stock units vesting each year on the anniversary of the date of grant, all subject to the terms of the applicable award agreement.  
IV.    PERFORMANCE  STOCK BONUS
4.1    Determination of Performance  Stock—In General.  The Performance Stock Bonus shall be calculated as soon as reasonably practicable after the LDCC determines the Performance  Stock Bonus Payout Factor as described in Section 4.3 below.  Following such determination, payment of the Performance  Stock Bonus shall be made to eligible Employees as soon as reasonably practicable, in accordance with Section 4.5 below.
4.2       Calculation of Performance  Stock Bonus.  The Performance  Stock Bonus equals the Target Performance  Stock Bonus times the percentage dictated by the Performance  Stock Bonus Payout Factor and corresponding schedule in Appendix C.
4.3    Calculation of the Performance  Stock Bonus Payout Factor.   The Performance  Stock Bonus Payout Factor will be calculated by determining the Relative Total Shareholder Return and the corresponding percentage payout based on the schedule adopted by the LDCC, attached hereto in Appendix C.  In the event that Absolute Total Shareholder Return over the Extended Performance Period is negative, the Performance Stock Bonus Payout Factor shall be capped at 100%.  Additionally, the total value maximum of any calculated Performance Stock Unit Bonus shall not exceed four times the dollar value of the Target Performance Stock Unit Bonus.  In the event, this maximum amount is exceeded, the Performance  Stock Unit Bonus shall be reduced to a number of shares equaling four times the dollar value of the Target Performance  Stock Unit Bonus divided by the average closing price of Common Stock for the 30 trading days, excluding the final 5 trading days, on the New York Stock Exchange of the Extended Performance Period, rounded down to the nearest share. 
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4.4    Separation of Employment and Payment of Performance  Stock Bonus. Unless otherwise stated in this Section 4.4, an eligible Employee shall not be entitled to payment of a Performance Stock Bonus on or after any separation of employment, voluntary or involuntary. In the event an eligible Employee separates employment from a Participating Employer prior to payment of the Performance  Stock Bonus, for which the Employee has already received a notice of grant and award agreement, as a result of: (a) Retirement, (b) death, (c) termination of employment entitling Employee to benefits under the Executive Severance Plan of Newmont, or separation benefits for any involuntary termination, other than for Cause, for Employees not eligible for benefits under the Severance Plan of Newmont or the Executive Severance Plan of Newmont, or (d) circumstances entitling eligible Employee to long-term disability benefits of the Company, such eligible Employee is a Terminated Eligible Employee and shall receive a Performance  Stock Bonus for each of the outstanding awards calculated separately to the most recent fiscal quarter end prior to the termination date, with each separate award pro-rated based on the time he or she was actually employed by a Participating Employer during the Extended Performance Period.  For avoidance of doubt and by way of example only, if a Terminated Eligible Employee terminates on April 1, or May 1, or June 30, the calculation shall be based on the performance as of March 31. Further, a Terminated Eligible Employee who has an involuntary termination entitling the employee to benefits under the Severance Plan of Newmont or the Executive Severance Plan of Newmont must execute a Waiver and Release pursuant to Section 2.01 of such applicable plan in order to receive payment under this Section 4.4.
4.5    Form of Payment.  The amount of Performance Stock Bonus payable under this compensation program shall be paid in Common Stock (payable in whole shares only rounded down to the nearest share). Upon the payment of the Performance Stock Bonus in Common Stock, an eligible Employee shall also be entitled to a cash payment equal to any dividends paid with respect to the Common Stock delivered for the Performance Stock Bonus for the Extended Performance Period, minus any applicable taxes.  
4.6    Timing of Payment.  Except as otherwise provided in Section 4.4 above, payment of the Performance Stock Bonus will be made as soon as reasonably practicable during the calendar year following the Extended Performance Period to which such Performance Stock Bonus relates. Upon the payment of the Performance Stock Bonus in Common Stock, an eligible Employee shall also be entitled to a cash payment equal to any dividends paid with respect to the Common Stock delivered for the Performance Stock Bonus for the Extended Performance Period, minus any applicable taxes.
4.7    Performance  Stock Bonus for Newly Hired or Newly Promoted eligible Employees.  In the event an individual is hired as an eligible Employee, or promoted into an eligible Employee position, such eligible Employee may be eligible for payment of a pro-rated Performance  Stock Bonus, as determined in the sole discretion of the Company or the LDCC for Section 16 Officers, at each date of payment of a Performance  Stock Bonus after the date of hire or after the date of promotion.    
V . CHANGE OF CONTROL
      5.1    Restricted Stock Unit Bonus. In the event of a Change of Control (as defined in the STIP) each Restricted Stock Unit Bonus for the current year shall immediately be granted at target level in the form of a restricted stock unit award vesting 1/3 on January 1 of the year immediately following the year in which the Change of Control occurred, and another 1/3 on each of the following two January 1 anniversaries.  The restricted stock unit award agreement shall provide for immediate vesting of all outstanding restricted stock units upon a termination of employment 
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entitling the grantee to benefits under the applicable Executive Change of Control Plan of Newmont.  
      5.2    Performance  Stock Bonus. In the event of a Change of Control (as defined in the STIP), each eligible Employee or a Terminated Eligible Employee who terminated employment on account of Retirement (all other Terminated Eligible Employees who terminated employment prior to the Change of Control shall be excluded), shall become entitled to the payment of a Performance  Stock Bonus for an Extended Performance Period.  The Performance  Stock Bonus shall be calculated in the manner stated in Section 4.2 above, with the exception that (i) the Extended Performance Period shall be deemed to end on the date of the Change of Control, (ii) the Change of Control Price shall be substituted for the closing price for the end of the Extended Performance Period for purposes of Section 4.3 above, and (iii) the Performance Stock Bonus Payout Factor for purposes of Section 4.3 above will be based on Relative Total Shareholder Return utilizing the Change of Control Price as the final closing price of a share of Common Stock.  The Performance  Stock Bonus shall be paid out as follows: (A) the percentage of the Performance  Stock Bonus equal to the percentage of the Extended Performance Period that elapsed up to the Change of Control shall be paid in a number of shares of common stock of the acquiring or resulting corporation or any parent or subsidiary thereof or that may be issuable by another corporation that is a party to the transaction resulting in such Change of Control received in such transaction by holders of Common Stock (such common stock, “Acquirer Stock”) equal to (x) the number of shares of Acquirer Stock received by such a holder for each share of Common Stock held by such holder in such transaction multiplied by (y) the number of shares of Common Stock subject to such percentage of the Performance  Stock Bonus, or (B) if Acquirer Stock is not issued in connection with such transaction, cash in an amount equal to the Change of Control Price multiplied by the number of shares of Common Stock subject to such percentage of the Performance  Stock Bonus, within 5 days following the date of the Change of Control (provided, however, that if such Change of Control does not constitute a change in the ownership or effective control of Newmont or of a substantial portion of the assets of Newmont, pursuant to Treasury Regulations Section 1.409A-3(i)(5) (a “409A CoC”), such percentage of the Performance  Stock Bonus shall be so paid when the Performance  Stock Bonus would otherwise have been paid in accordance with Article IV), and b) the percentage of the Performance  Stock Bonus equal to the percentage of the Extended Performance Period that did not elapse prior to the Change of Control shall be paid in the form of (A) restricted stock units covering a number of shares of Acquirer Stock equal to (x) the number of shares of Acquirer Stock received by a holder of Common Stock for each share of Common Stock held by such holder in such transaction multiplied by (y) the number of shares of Common Stock subject to such percentage of the Performance  Stock Bonus, that will have a vesting period equal to the Extended Performance Period otherwise remaining as of the date of the Change of Control, or (B) if Acquirer Stock is not issued in connection with such transaction, a deferred compensation arrangement with a balance initially equal to the Change of Control Price multiplied by the number of shares of Common Stock subject to such percentage of the Performance  Stock Bonus, that will have a vesting period equal to the Extended Performance Period otherwise remaining as of the date of the Change of Control and a value from time to time as if such initial balance were invested in such deemed investment as the LDCC as constituted before the Change of Control shall determine in its discretion.  The portion of the Performance  Stock Bonus described in clause (b) of the preceding sentence shall vest upon any termination of employment of the eligible Employee with a Participating Employer prior to the expiration of the vesting period, with the exception of voluntary termination or termination for Cause, as defined in Newmont’s Executive Change of Control Plan.  Such portion shall be paid in cash within 5 days following vesting; provided, however, that if such Change of Control does not constitute a 409A CoC, such 
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portion, to the extent vested in accordance with this sentence, shall be so paid when they would otherwise have been paid in accordance with Article IV.
VI. GENERAL PROVISIONS
6.1    Administration. This compensation program shall be administered by the LDCC or its delegee.  All actions by Newmont under this program shall be taken by the LDCC Committee or its delegee.  The LDCC Committee shall interpret the provisions of this program in its full and absolute discretion.  All determinations and actions of the LDCC with respect to this program shall be taken or made in its full and absolute discretion in accordance with the terms of this program and shall be final, binding and conclusive on all persons. 
6.2    Plan Unfunded. This compensation program shall be unfunded and no trust or other funding mechanism shall be established for this program. All benefits to be paid pursuant to this program shall be paid by Newmont or another Participating Employer from its respective general assets, and an eligible Employee or Terminated Eligible Employee (or his or her heir or devisee) shall not have any greater rights than a general, unsecured creditor against Newmont or another Participating Employer, as applicable, for any amounts payable hereunder.

6.3    Amount Payable Upon Death of Employee.  If an eligible Employee who is entitled to payment hereunder dies after becoming eligible for payment but before receiving full payment of the amount due, or if an eligible Employee dies and becomes a Terminated Eligible Employee, all amounts due shall be paid as soon as practicable after the death of such eligible Employee or Terminated Eligible Employee to the beneficiary or beneficiaries designated by such eligible Employee or Terminated Eligible Employee to receive life insurance proceeds under Newmont’s life insurance plan. In the absence of an effective beneficiary designation under such plan, any amount payable hereunder following the death of such eligible Employee or Terminated Eligible Employee shall be paid to his or her estate.

6.4    Reimbursement.  The LDCC, to the full extent permitted by governing law, shall have the discretion to require reimbursement of any portion of a Performance  Stock Bonus previously paid to an eligible Employee pursuant to the terms of this compensation program if: a) the amount of such Performance  Stock Bonus was calculated based upon the achievement of certain financial results that were subsequently the subject of a restatement, and b) the amount of such Performance  Stock Bonus that would have been awarded to the eligible Employee had the financial results been reported as in the restatement would have been lower than the Performance  Stock Bonus actually awarded.  The approach used to determine the amount of reimbursement will be based on commonly used valuation methodologies or those as supported or validated by an independent third party with expertise in related matters.  Additionally, the LDCC, to the full extent permitted by governing law, shall have the discretion to require reimbursement of any portion of a Performance  Stock Bonus previously paid to an eligible Employee pursuant to the terms of this compensation program if the eligible employee is terminated for Cause. 
6.5    Withholding Taxes.  All bonuses payable hereunder shall be subject to the withholding of such amounts as Newmont or a Participating Employer may determine is required to be withheld pursuant to any applicable federal, state or local law or regulation.  The LDCC may, in its sole discretion, permit eligible Employees to satisfy withholding applicable to the portion of the bonus payable in shares of Common Stock or Performance Stock by causing Newmont to withhold or sell the appropriate number of shares of Common Stock or Performance Stock from the bonus otherwise payable and to make the requisite withholding payments on behalf of the eligible Employee.
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6.6    Issuance of Stock.  Shares of Common Stock and Performance Stock issued under this compensation program may be issued pursuant to the provisions of any stock plan of Newmont or as otherwise determined in the sole discretion of the LDCC.  All awards under this compensation program that consist of Common Stock or that are valued in whole or in part by reference to, or are otherwise based on, Common Stock, shall be treated as made under the 2020 Stock Incentive Plan as well as this compensation program and thereby subject to the applicable terms and conditions of the 2020 Stock Incentive Compensation Plan.
6.7    General Operation and Amendment.  Notwithstanding anything contained in this compensation program to the contrary, this compensation program shall be administered and operated in accordance with any applicable laws and regulations including but not limited to laws affecting the timing of payment of any bonus under this compensation program.  
6.8    Right of Offset.  To the extent permitted by applicable law, Newmont or a Participating Employer may, in its sole discretion, apply any bonus payments otherwise due and payable under this compensation program against debts of an eligible Employee to Newmont or an Affiliated Entity.  By accepting payments under this compensation program, all eligible Employees shall consent to the reduction of any compensation paid to the eligible Employee by Newmont or an Affiliated Entity to the extent the eligible Employee receives an overpayment from this compensation program.
6.9    Termination and Amendment.  The Board may at any time amend, modify, suspend or terminate this compensation program; provided, however, that the LDCC may, consistent with its administrative powers, waive or adjust provisions of this compensation program as it determines necessary from time to time.  The LDCC may amend the terms of any award theretofore granted hereunder, but no such amendment shall be inconsistent with the terms and conditions of this compensation program or materially impair the previously accrued rights of the eligible Employee to whom such award was granted with respect to such award without his or her consent, except such an amendment made to cause this program or such award to comply with applicable law, tax rules, stock exchange rules or accounting rules.  Further, upon or following a Change of Control, Section V of this program may not be amended, suspended, or terminated until the obligations of Section V of this program have been fully satisfied with respect to such Change of Control.
6.10    Severability.  If any section, subsection or specific provision is found to be illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining provisions of this compensation program, and this compensation program shall be construed and enforced as if such illegal and invalid provision had never been set forth in this compensation program.
6.11    No Right to Employment.  The establishment of this compensation program shall not be deemed to confer upon any eligible Employee any legal right to be employed by, or to be retained in the employ of, Newmont, a Participating Employer or any Affiliated Entity, or to give any eligible Employee any right to receive any payment whatsoever, except as provided under this compensation program.  All eligible Employees shall remain subject to discharge from employment to the same extent as if this compensation program had never been adopted.
6.12    Transferability.  Any bonus payable hereunder is personal to the eligible Employee and may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of except by will or by the laws of descent and distribution.
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6.13    Successors.  This compensation program shall be binding upon and inure to the benefit of Newmont and eligible Employees and their respective heirs, representatives and successors.
6.14    Governing Law.  This compensation program and all agreements hereunder shall be construed in accordance with and governed by the laws of the State of Colorado, unless superseded by federal law.
6.15    Section 409A.  It is the intention of Newmont that awards and payments under this compensation program comply with or be exempt from Section 409A of the Code and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”), and Newmont shall have complete discretion to interpret and construe this program and any related plan or agreement in any manner that establishes an exemption from (or compliance with) the requirements of Code Section 409A.  If for any reason, such as imprecision in drafting, any provision of this program and/or any such plan or agreement does not accurately reflect its intended establishment of an exemption from (or compliance with) Code Section 409A, as demonstrated by consistent interpretations or other evidence of intent, such provision shall be considered ambiguous as to its exemption from (or compliance with) Code Section 409A and shall be interpreted by Newmont in a manner consistent with such intent, as determined in the discretion of Newmont.  None of Newmont nor any other Participating Employer shall be liable to any eligible Employee or any other person (i) if any provisions of this program do not satisfy an exemption from, or the conditions of, Code Section 409A, or (ii) as to any tax consequence expected, but not realized, by any eligible Employee or other person due to the receipt or payment of any award under this program.
    

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APPENDIX A
Target Restricted Stock Unit Bonus
						
	Grade	Percentage of Base Salary1
	E-5	60%
	E-6	40%

1 Target amounts may vary at levels E-5 and E-6 for individuals who work in a country other than the United States.
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APPENDIX B 
Target Performance Stock Bonus
						
	Grade	Percentage of Base Salary2
	E-5	60%
	E-6	40%

2 Target amounts may vary at levels E-5 and E-6 for individuals who work in a country other than the United States.

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APPENDIX C 
Performance Stock Bonus Payout Factor Schedule:

Newmont grants Performance Stock Bonus awards that vest dependent on Total Shareholder Return (“TSR”) relative to the components of the VanEck Vectors Gold Miners ETF (GDX) at the end of the Extended Performance Period. The components are determined at the start of the Extended Performance Period. Any company that goes bankrupt will have a TSR of -100%. Acquired companies will be excluded. A payout will be based on the following payout factor schedule:
						
	Percentile
	Payout

	100th percentile
	200%

	75th percentile
	150%

	50th percentile
	100%

	25th percentile
	50%

	Below 25th percentile
	0%

Interpolation shall be used between the above percentiles. 

13EX-4.4

  Exhibit 4.4

   

   

  Taro Pharmaceutical Industries Ltd. 

  Compensation Policy for Office Holders

   

  (effective December 14, 2020)

   

  1. Introduction and Establishment

    

  1.1 Taro Pharmaceutical Industries Ltd. (hereinafter: “Taro” or the “Company”) is a multinational, science-based pharmaceutical company, operating primarily in the United States, Canada and Israel, through three entities: (i) Taro Israel, and two of its subsidiaries, (ii) Taro Pharmaceuticals Inc. (Taro’s indirect Canadian subsidiary) and (iii) Taro Pharmaceuticals U.S.A., Inc. (Taro’s U.S. subsidiary). Operating in an intensely competitive pharmaceutical industry, the Company develops, manufactures and markets generic and branded prescription and over-the-counter pharmaceutical products. Taro competes with the original manufacturers of the brand-name, other generic drug manufacturers and manufacturers of new drugs that may compete with the Company’s generic drugs. Many of Taro’s competitors have greater financial, production and research and development resources, substantially larger sales and marketing organizations, and substantially greater name recognition. Because the pharmaceutical industry in which Taro operates is science based, it is imperative that Taro attract and retain qualified personnel, including management personnel, in order to develop new products and compete effectively. The Company’s compensation practices are therefore aimed at retaining key personnel, including management members.

    

  1.2 Taro’s 2020 Compensation Policy for Office Holders (this “Compensation Policy” or this “Policy”) is set forth in this document.  Upon approval at the 2020 Annual General Meeting of Shareholders, the Policy will become effective as of December 14, 2020 (the “Effective Date”) and will remain in effect for a maximum period of three years from the Effective Date, as provided under the Israeli Companies Law, 5759-1999 (the “Companies Law”), unless terminated earlier by the Company’s board of directors (the “Board”).

    

  2. Purpose

    

  2.1 The Compensation Policy seeks to promote the Company’s objectives and its short and long term business plans, and create appropriate incentives for the Company’s Office Holders (as defined in Section 3.1), by:

    

  2.1.1 Linking pay to performance, thereby aligning the Office Holders’ interests with those of the Company and its stakeholders;

    

  2.1.2 Acting to ensure that the Office Holders are aligned in achieving the Company’s short and long term financial and strategic objectives; and

    

  2.1.3 Enabling the Company to attract, retain, reward and motivate highly skilled Office Holders.

    

  3. Applicability

    

  3.1 The Compensation Policy shall apply to any “Office Holder”, as defined under the Companies Law (each, an “Office Holder”), consisting of the following: a Director, the chief executive officer, an executive or senior vice president, a vice president, any person fulfilling or assuming any of the foregoing positions without regard to such person’s title and any manager who is directly subordinate to the chief executive officer. As of the adoption of this Policy, in addition to the seven non-employee members of our Board, the Company considers an additional sixteen individuals to be Office Holders, subject to change based on the approval of the compensation committee of the Board (the “Compensation Committee” or “Committee”) and the Board in the event of any Company organizational structure change.

    

  3.2 The Compensation Policy is intended to apply to the Office Holders serving in the Company at the date of its entry into force and all Office Holders who will commence their service with the Company while the Policy is in effect.

    

  3.3 For clarity, Section 6 of this Compensation Policy is intended to apply to all Officer Holders other than non-management Directors (each, a “Management Office Holder”) and Section 8 of this Compensation Policy is intended to apply to all Officer Holders that are non-management Directors (each, a “Non-Management Director”).  The chief executive officer of the Company is intended to be Management Officer Holder and not a Non-Management Director as referenced above, whether or not a director of the Company.

    

  4. Principles of the Compensation Policy

   

  

   

    

  4.1 The Company has established this Compensation Policy in accordance with the following considerations:

    

  4.1.1 Promoting the Company’s strategic objectives, work plans and policies in order to enhance both long term and short term value for all of Taro’s stakeholders.

    

  4.1.2 Creating appropriate incentives for the Office Holders of the Company, taking into consideration the Company’s risk management strategies.

    

  4.1.3 The size of the Company and the nature and scope of its activities.

    

  4.1.4 With respect to variable components – the contribution of the Office Holder to the achievement of the Company’s objectives and the maximization of its profits, by balancing long term considerations with short term considerations and in accordance with the position of the Office Holder.

    

  4.2 In determining an Office Holder’s compensation, the following criteria, among others, will be examined:

    

  · The Office Holder’s education, qualifications, skills, professional experience and achievements.

    

  · The Office Holder’s position and areas of responsibility, the impact associated with, and scope of, the Office Holder’s position, and the Office Holder’s previous salary arrangements with the Company.

    

  · The difference between the annual cost of the employment terms of the Office Holder and the average and median annual salary of Taro’s employees and outsourced service providers, by geographic location, as well as whether such disparity has an effect on employment relations at the Company.

    

  · The ratio between the variable compensation components and the fixed compensation components.

    

  · Compensation practices of other companies that are active in similar markets.

    

  4.3 As of the Effective Date of this Compensation Policy, all existing employment agreements and employment terms of the Company’s Office Holders are consistent with this Compensation Policy, its principles and guidelines.

    

  5. Compensation Committee Responsibility

    

  5.1 The Compensation Committee of the Board is responsible for reviewing the Company’s compensation policies (including the Compensation Policy) in light of the Company’s compensation philosophy expressed and adopted by the Board from time to time. The Committee also evaluates the performance of the Company’s Office Holders, makes recommendations to the Board regarding the compensation of the Office Holders  (including Directors), and reviews any organizational restructuring pertaining to the roles, responsibilities and selection of Office Holders.

    

  5.2 The Committee is responsible for ensuring that any arrangement between the Company and a Director as to such Director’s terms of service (including, if applicable, employment),  is generally consistent with this Compensation Policy. Any such arrangement generally requires the approval of the Committee, and subject to such approval and a favorable recommendation by the Committee, also requires Board and shareholder approval.

    

  6. Components of the compensation of Management Office Holders

    

  The compensation of Management Office Holders may include the following components:

    

  6.1 Base salary, social and other benefits (“Fixed Compensation”)

    

  6.2 The base salary of Management Office Holders shall be determined based on the following:

    

  6.2.1 The factors specified in Section 4.2 above.

    

  6.2.2 Executive compensation survey (benchmark) of companies operating in similar industries and/or with similar financial performance, per geographic location.

    

  6.2.3 A performance review and performance based merit increase process conducted by the Committee, which, subject to the parameters specified in Section 4.2 and Section 6.2.2, may result in an adjustment to base salary in an amount that does not exceed 20% of the base salary prior to such adjustment.

    

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  6.3 Fixed Compensation may include additional benefits. In light of the Company’s global nature and the fact that its Management Office Holders are employed in geographic locations worldwide (US, Canada and Israel), under different legal systems, social benefits shall be adjusted according to the local laws, and customary employment terms. Management Office Holders shall be eligible to participate in and receive benefits from the standard and customary benefit plans provided to the Company’s employees.

    

  Fixed Compensation may include any of the following additional benefits (including gross-up of the benefit value of any of the following for tax purposes):

    

  (a)              Pension

    

  (b)              Education fund

    

  (c)              Severance pay

    

  (d)              Manager's insurance (for Israel employees)

    

  (e)          Employer’s allocations for 401(k) funds (for US employees) or RRSP funds (for Canada employees)

    

  (f)          Medical insurance (general, prescription, vision and dental), life insurance, including with respect to immediate family members, and accidental death/dismemberment insurance

    

  (g)              Disability insurance

    

  (h)              Periodic medical examination

    

  (i)           Leased car or company car (as well as related expenses), or the value of the use of a car, or transportation allowance

    

  (j)           Telecommunication and electronic devices and communication expenses, including cellular telephone and other devices, personal computer/laptop, internet, etc. or the value of the use of such device

    

  (k)               Paid vacation, including, if applicable, redemption of accrued unused vacation

    

  (l)                Sick days

    

  (m)             Holiday and special occasion gifts

    

  (n)              Recuperation pay

    

  (o)              Expense reimbursement

    

  (p)         Payments or participation in relocation and related costs, perquisites and expenses

    

  (q)              COBRA (for US employees)

    

  (r)              Change-of-control provisions

    

  (s)              Loans or advances (to the extent permitted under applicable law)

    

  (t)              Professional or academic courses or studies

    

  (u)              Newspaper or online subscriptions

    

  (v)              Professional membership dues or subscription fees

    

  (w)              Professional advice or analysis (such as pension, insurance and tax)

    

  (x)          Other benefits generally provided to Company employees (or any applicable affiliate or division)

   

  (y)              Other benefits or entitlements mandated by applicable law

    

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  6.4 In addition, to attract qualified talent in the competitive employment markets in which the Company operates, on a limited, case by case basis, an Management Office Holder may be eligible to receive a sign-on bonus, at the discretion of the Committee and the Board, that is generally three (3) months or less of base salary, but in no event shall exceed six (6) months’ base salary, and, subject to applicable law, the Company will have the authority to recover all or a portion of any sign-on bonus paid to an Management Office Holder in the event of the Management Office Holder’s voluntary separation within a specified period of time of joining the Company.

    

  6.5 Annual Cash Bonus Plan

    

  6.5.1 An Management Office Holder’s compensation may include an annual cash bonus (“Bonus”) based upon the Company’s, business unit’s (if applicable), and individual’s, achievement of defined performance objectives for each Performance Period, as defined in Section 6.5.2, subject to the receipt of all approvals required by applicable law and to the terms of the Compensation Policy.

    

  6.5.2 The “Performance Period” shall mean April 1 through March 31 of each applicable fiscal year (which dates represent the start and finish of the Company’s fiscal year).

    

  6.5.3 Subject to the parameters specified in Section 4.1.4, the target annual cash bonus for Management Office Holders, excluding the chief executive officer, for one hundred percent (100%) achievement of Company, business unit, as applicable, and individual performance objectives (the “Target Bonus”) will be no less than fifteen percent (15%) and no more than forty percent (40%) of base salary, calculated on a pro-rata basis for any partial Performance Period worked.

    

  6.5.4 The Target Bonus for the chief executive officer will be no more than fifty percent (50%) of base salary, calculated on a pro-rata basis for any partial Performance Period worked.

    

  The Target Bonus Amounts of Management Office Holders can be summarized as follows:

   

  		
	Target Bonus Amounts of Management Office Holders

	Title of Officer
	Target Bonus (as a % of Base Salary)

	Chief Executive Officer
	Up to 50% of Base Salary

	All Other Management Office Holders
	15%-40% of Base Salary

   

  6.5.5 The Target Bonus for an Management Office Holder, other than one who serves in a sales and marketing leadership capacity having profit and loss responsibility for a defined commercial segment(s) of the Company’s business and as designated by the Compensation Committee as such  (such excluded Management Office Holders, “Commercial Office Holders”), is comprised of two components (which shall be allocated relative proportional weight as described in Section 6.5.6 below): (i) Company achievement of budgeted net sales, budgeted earnings before taxes (“EBT”), and percent of relative sales growth as compared to market peers (these three types of Company-wide achievement, collectively, “Company Performance”) and (ii) individual achievement of personal objectives (“Individual Performance”) as specified in Section 6.5.12.4.

    

  6.5.6 The Bonus for an Management Office Holder, other than a Commercial Office Holder, will be based seventy-five percent (75%) on Company Performance and twenty-five percent (25%) on Individual Performance, which proportions may be adjusted at the discretion of the Compensation Committee, subject to Board approval.

   

  6.5.7 The Target Bonus for a Commercial Office Holder is based on achievement in each of the following three categories (based on the relative proportions described in Section 6.5.8 below): (i) Assigned business unit(s) achievement of the combined parameters of budgeted net sales, budgeted earnings before taxes (“EBT”), and percent of relative sales growth as compared to business unit(s) peers,  (these three types of business-unit(s) wide achievement, collectively, “Business Unit Performance”), as described in Section 6.5.10, (ii) Company achievement of budgeted net sales, budgeted earnings before taxes (“EBT”), and percent of relative sales growth as compared to market peers (these three types of Company-wide achievement, collectively, “Company Performance”), as described in Section 6.5.9, and (iii) individual achievement of personal objectives (“Individual Performance”) as specified in Section 6.5.11.

    

  6.5.8 The Bonus for a Commercial Office Holder will be based fifty percent (50%) on Business Unit Performance, twenty-five percent (25%) on Company Performance, and twenty-five percent (25%) on Individual Performance, which proportions may be adjusted at the discretion of the Compensation Committee, subject to Board approval.

    

  The criteria used for calculating Target Bonus Amounts of Management Office Holders can be summarized as follows:

    

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	Performance Criteria for Calculating Target Bonus Amounts of Management Officers

	Category of Office Holder
	Criteria

	Commercial Office Holders
 
	Business Unit Performance: 50%;
Company Performance: 25%
Individual Performance: 25%

	All Other Management Office Holders
 
	Company Performance: 75%
Individual Performance: 25%

   

  6.5.9 Determining Bonus Linked to Company Performance

    

  6.5.9.1 A minimum of 90% achievement of a combination of the Company’s budgeted net sales and budgeted EBT targets, with each given equal weight, (“Company Threshold Performance”) must be met for Management Office Holders to be eligible to receive the Company Performance component of the Bonus.  If the Company Threshold Performance is not met, then the Management Office Holder, other than Commercial Office Holders, will only be eligible for the Individual Performance component of the Bonus, subject to and determined by achievement of defined individual objectives as specified in Section 6.5.11.  For Commercial Office Holders, if the Company Threshold Performance is not met, then the Commercial Office Holder will be eligible for the Business Unit Performance component of the Bonus (subject to the achievement of BU Threshold Performance as specified in Section 6.5.10.1), and for the Individual Performance component of the Bonus, subject to and determined by achievement of defined individual objectives as specified in Section 6.5.11.

     

  6.5.9.2 Subject to Company Threshold Performance achievement, a payout multiplier will be applied to the Company Performance component of the Target Bonus based on two linked parameters: (i) level of achievement at or greater than Company Threshold Performance and (ii) the percent of relative sales growth as compared to market peers (“Relative Sales Growth”), as specified in Section 6.5.9.6.

    

  6.5.9.3 A minimum payout multiplier of twenty percent (20%) will be applied to the Company Performance component of the Target Bonus for Company Threshold Performance coupled with less than zero percent (0%) of Relative Sales Growth.

    

  6.5.9.4 A maximum payout multiplier of one hundred and fifty percent (150%) will be applied to the Company Performance component of the Target Bonus for combined achievement of budgeted net sales and budgeted EBT, with each given equal weight, of greater than one hundred percent (100%), coupled with a maximum level of achievement of a pre-defined Relative Sales Growth target, as determined annually by the Compensation Committee and the Board.

    

  6.5.9.5 Payouts for Company Performance between the threshold (range from 20% to 75% of the Company Performance component of the Target Bonus, based on Relative Sales Growth achievement), target, and maximum will be determined using a slab approach with payout multipliers applied in a stepwise manner for achievement from threshold to maximum, with accelerated stepwise payout multipliers from target to maximum, subject to the maximum payout multiplier specified in Section 6.5.9.4.

    

  6.5.9.6 The Company will consider the following factors in determining comparable market peer companies for purposes of calculating Relative Sales Growth: (i) annual revenues, (ii) product portfolio, and (iii) markets in which the peer company operates.

    

  6.5.9.7 Consistent with the Compensation Policy, and subject to the limitations set forth herein, the Company may determine the Relative Sales Growth targets each year to accurately reflect market conditions or factors, subject to the approval of the Compensation Committee and Board.

    

  6.5.10 Determining Bonus Linked to Business Unit Performance (Commercial Office Holders)

    

  6.5.10.1 A minimum of 90% achievement of Business Unit Performance (“BU Threshold Performance”) must be met for Commercial Office Holders to be eligible to receive the Business Unit Performance component of the Bonus.  If the Business Unit Threshold Performance is not met, then a Commercial Office Holder may be eligible for: (i) the Company Performance component of Bonus, subject to the Company Threshold Performance being met, and (ii) the Individual Performance component of Bonus, subject to and determined by achievement of defined individual objectives as specified in Section 6.5.11.4.

    

  6.5.10.2 Subject to BU Threshold Performance achievement, a payout multiplier will be applied to the Business Unit Performance component of the Target Bonus based on two linked parameters: (i) level of achievement at or greater than BU Threshold Performance and (ii) the percent of relative sales growth as compared to business unit peer(s) (“BU Relative Sales Growth”), as specified in Section 6.5.10.6.

    

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  6.5.10.3 A minimum payout multiplier of twenty percent (20%) will be applied to the Business Unit Performance component of the Target Bonus for BU Threshold Performance coupled with less than zero percent (0%) BU Relative Sales Growth.

    

  6.5.10.4 A maximum payout multiplier of one hundred fifty percent (150%) will be applied to the Business Unit Performance component of the Target Bonus for combined achievement of budgeted net sales and budgeted EBT, with each given equal weight, of greater than one hundred percent (100%), coupled with maximum level of achievement of a pre-defined BU Relative Sales Growth target, as determined annually by the Compensation Committee and the Board.

    

  6.5.10.5 Payouts for Business Unit Performance between the threshold (range from 20% to 75% of the Business Unit Performance component of the Target Bonus, based on BU Relative Sales Growth achievement), target, and maximum will be determined using a slab approach with payout multipliers applied in a stepwise manner for achievement from threshold to maximum, with accelerated stepwise payout multipliers from target to maximum, subject to the maximum payout multiplier specified in Section 6.5.10.4.

    

  6.5.10.6 The Company will consider the following factors in determining comparable business unit(s) peer companies for purposes of calculating BU Relative Sales Growth: (i) annual revenues, (ii) product portfolio, and (iii) markets in which the business unit peer company operates.

    

  6.5.10.7 Consistent with this Compensation Policy, and subject to the limitations set forth herein, the Company may determine the BU Relative Sales Growth targets each year to accurately reflect market conditions or factors, subject to the approval of the Compensation Committee and Board.

    

  6.5.11 Determining Bonus Linked to Individual Performance

    

  6.5.11.1 A Management Office Holder’s Bonus will be linked to attainment of individual performance objectives as specified in Section 6.5.11.4.

    

  6.5.11.2 Individual performance objectives for the chief executive officer are determined and approved by the Compensation Committee and the Board based on general objectives approved for the Company as part of its annual work plan.

    

  6.5.11.3 Individual performance objectives for the all other Management Office Holders are directly linked to the general objectives approved for the Company as part of its annual work plan and are approved by the chief executive officer.

    

  6.5.11.4 Individual performance objectives include specified targets or levels of change in one or more of the following business criteria: (i) earnings, including net earnings, total earnings, operating earnings, earnings growth, operating income, earnings before or after taxes, earnings before or after interest, depreciation, amortization, or extraordinary or special items; (ii) revenue, revenue growth, or rate of revenue growth; (iii) sales or sales growth; (iv) operating expenses; (v) cash flow (including, but not limited to, operating cash flow and free cash flow); (vi) operating margin, profit margin, or gross margin; (vii) balance sheet requirements; (viii) implementation or completion of critical projects or processes; (ix) cost or expense targets, reductions and savings, productivity and efficiencies; (x) strategic business criteria, consisting of one or more objectives based on meeting specified market penetration, market share, geographic expansion, customer satisfaction, research and development collaboration, employee engagement, human resources management, information technology, compliance or litigation and goals related to acquisitions, joint ventures and similar transactions; (xi) personal and professional objectives; or (xii) other measures of performance selected by the Compensation Committee and Board.

    

  6.5.11.5 A Management Office Holder’s achievement of Individual Performance Objectives determines his or her performance evaluation score, defined on a multi point scale, for the Performance Period.  A payout multiplier, with a minimum of zero percent (0%) and a maximum of one hundred and twenty percent (120%), will be applied to the Individual Performance component of the Target Bonus based on the performance evaluation score.  If a Management Office Holder receives a performance evaluation score in the lowest scoring tier for the Performance Period, then he or she will not be entitled to any Bonus for the Performance Period.

    

  6.5.12 Amendment and Termination

    

  6.5.12.1 The Board at any time, and from time to time, may amend the Annual Cash Bonus Plan.  The Board or the Compensation Committee at any time, and from time to time, may amend the terms of any Bonus.

    

  6.6 Discretionary Bonus Payments

    

  6.6.1 Notwithstanding the performance criteria specified in Section 6.5 for payment of a Bonus, the Compensation Committee in its sole discretion may  grant a smaller Bonus, or no Bonus at all, instead of the Bonus amount determined 

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  under Section 6.5, for partial achievement of performance criteria or based on other performance criteria or discretionary criteria, but may not, in any case, grant a Bonus in excess of the maximum Bonus determined under Section 6.5.

    

  6.6.2 In the following situations the Compensation Committee may approve a discretionary bonus payment to a Management Office Holder not to exceed three (3) months of the Management Office Holder’s base salary, upon the recommendation of the Chairman of the Board and subject to approval of the Board of Directors: (i) extraordinary contribution to achievement of Company Performance, (ii) exceptional execution of a business strategy or initiative, (iii) attainment of significant project milestones, and/or (iv) other similar exceptional achievement that creates sustainable value for the Company.

    

  6.6.3 In all events, the final Bonus granted to an Management Office Holder for an applicable Performance Period will be consistent with and subject to the Company’s Compensation Policy then in effect.

    

  6.7 Treatment of Bonus in Case of Separation, Accident, Illness or Death

    

  6.7.1 In the event an of a Management Office Holder’s termination for any reason prior to the payment of the Bonus other than (i) the Management Office Holder’s disabling illness, accident or death,  or (ii) involuntary termination due to restructuring, reorganization, reduction in force, or any other reason as determined by the Company, subject to the approval of the Compensation Committee, not by the Employer for Cause, as defined in Section 6.7.3, the Bonus for such Performance Period will be forfeited.

    

  6.7.2 Subject to applicable law, if the Compensation Committee shall find that any Management Office Holder to whom any amount is payable under the annual cash bonus plan is unable to care for his or her affairs because of illness, accident or death, then any payment due to such Management Office Holder or his or her estate (unless a prior claim has been made by a duly appointed legal representative) may, if the Compensation Committee so directs the Company, be paid to his or her spouse, child, relative, an institution maintaining or having custody of such Management Office Holder, or any other person deemed by the Compensation Committee to be an appropriate recipient on behalf of such Management Office Holder otherwise entitled to payment.  Any such payment shall be complete discharge of the liability of the Compensation Committee and the Company thereafter.

    

  6.7.3 As used in this Compensation Policy, “Cause” means a good faith determination by the Company of: (i) gross negligence, willful misconduct, or neglect in the performance of the Management Office Holders duties and services as an employee; (b) violation of any material policy of the Company; (c) violation of any federal, state, or local law or regulation in the performance of your employment duties; or (d) conviction of a felony or other crime involving moral turpitude.

    

  6.7.4 In the event of a Management Office Holder’s termination prior to Bonus payment by reason of the Management Office Holder’s voluntary retirement, such Management Office Holder will be eligible to receive the Bonus accordance with the terms set forth in this Compensation Policy and the Bonus payment will be paid to such Management Office Holder at the same time as paid to active Management Office Holders.

    

  6.8 Long Term Variable Compensation

    

  6.8.1 In addition to the annual cash bonus, a Management Office Holder’s compensation may include a long term cash incentive (“Long Term Incentive” or “LTI”) which will consist of a cash award based on achievement of long term performance goals of the Company, subject to the receipt of all approvals required by applicable law and to the terms of the Compensation Policy.

    

  6.8.2 The inclusion of a Long Term Incentive for Management Office Holders shall be determined on a limited case by case basis and, if granted, may differ from one Management Office Holder to another based on the parameters specified in Section 4.2.

    

  6.8.3 The target Long Term Incentive for eligible Management Office Holders will be no less than twenty percent (20%) and no more than forty percent (40%) of base salary, calculated on a pro-rata basis for any partial Performance Period worked, for one hundred percent (100%) achievement of Company and individual performance objectives determined as follows: (i) the achievement of a combination of budgeted net sales and budgeted EBT targets, with each given equal weight, over not less than a three year Performance Period (“LTI Company Performance”), and (ii) individual performance as defined in Section 6.5.11.4 and scored over the same not-less-than three year Performance Period (“LTI Individual Performance”), with the LTI Company Performance and LTI Individual Performance given equal weight.

    

  6.8.4 The LTI Company Performance and LTI Individual Performance payout multipliers applied to the target Long Term Incentive will be capped at a maximum of one hundred and fifty percent (150%).

    

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  6.8.5 For eligible Management Office Holders, following the close of each Performance Period, the Company may award a Long Term Incentive for such Performance Period, as determined by the Company, with the approval of the Compensation Committee and the Board.  Such Long Term Incentive, to the extent earned, will be paid to the eligible Management Office Holder no earlier than following the financial close of the third Performance Period following the Performance Period for which the Long Term Incentive was awarded.

    

  6.8.6 Except as otherwise provided by the Company, an eligible Management Office Holder will not be entitled to receive any Long Term Incentive cash payment if the Management Office Holder is not employed by and actively working for the Company at the time such Long Term Incentive cash payment is to be paid.

    

  6.8.7 Notwithstanding the above, the Management Office Holder will forfeit all accrued Long Term Incentive cash payments if the Management Office Holder is terminated by the Company for Cause.

    

  6.9 Maximum Variable Compensation

    

  6.9.1 The maximum variable compensation, including the annual cash Bonus, Long Term Incentive and any discretionary payment awarded pursuant to Section 6.6.1, as a percentage of the base salary, may differ from one Management Office Holder to another based on the criteria specified in Section 4.2 above, but, in any case, will not exceed one hundred and fifty percent (150%) of base salary, for each Performance Period.

    

  6.10 Ratio of the Management Office Holder’s compensation to the average and median salary in the  Company

    

  6.10.1 Due to the Company’s global operations, the Compensation Committee has taken and will take into consideration while determining the Management Office Holders’ compensation, the fact that the Company’s employees are employed in various countries worldwide, under different terms of employment. Therefore, the Compensation Committee shall consider the relationship between the terms of service and employment of the Management Office Holder and the salary of the other employees of the Company in each Management Office Holder’s geographic location, and in particular the ratio of the total compensation for the Management Office Holders of the Company to the average and median salary of the Company’s employees in each geographic location. The Company estimates that the gap between the compensation of Management Office Holders and other employees, assuming implementation of this Policy, will have no adverse effect on the working relationships in the Company. The possible ramifications of that gap on the daily working environment in the Company were examined and will continue to be examined by the Compensation Committee from time to time in order to ensure that levels of executive compensation, as compared to those of the overall workforce, will not have a negative impact on work relations in the Company.

    

  6.11 Termination Related Terms

    

  6.11.1 Statutory Severance related terms and payments will be made in accordance and subject to the applicable law in each geographic location of the Company’s Management Office Holders, and according to the actual terms of termination determined for each Management Office Holder in his or her employment agreement.

    

  6.11.2 Subject to applicable law, should the Company decide to make termination payments to a departing Management Office Holder, such payments may include, but not exceed an aggregate of fifteen (15) months’ pay for the combined advanced notice period and severance pay.

    

  6.11.3 When considering any termination payments, the Compensation Committee may consider certain criteria, including, but not limited to, the length of the Management Office Holder’s employment period, his or her performance during his or her employment, the circumstances surrounding the termination of employment, etc.

    

  7. Non-Material Amendments to Existing Compensation

    

  7.1 In accordance with Section 1B3 to the Companies Law Regulations (Relief in Transactions With Related Parties), 2000, a non-material change in the terms of compensation of an Office Holder who reports to the chief executive officer will not require the approval of the Compensation Committee, as stated in Section 272(C) to the Companies Law, so long as the change in compensation does not exceed 5% of the annual cost of the Fixed Compensation component, has been approved by the chief executive officer, and is consistent with the terms of this Compensation Policy.

    

  8. Compensation of Non-Management Directors

    

  8.1 The Companies Law regulations generally require an Israeli public company to have at least two external directors with no prior linkage to the company or to any controlling shareholder (“External Directors”).

    

  8.2 External Directors are elected by shareholders for terms of three years.

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  8.3 For so long as the Company is required to, and actually does, elect External Directors, the compensation of the External Directors shall be fixed in accordance with the Companies Law Regulations (Rules Regarding Remuneration and Expenses for an External Director) 5760-2000 (such compensation, the “External Director Fees”).

    

  8.4 The compensation paid to Non-Management Directors, excluding External Directors governed by External Director Fees, in their capacity as such shall be determined, taking into account: (i) the field in which the Company operates, (ii) comparison with companies of a similar size with global operations and structure of a similar magnitude, whether listed for trading in Israel or overseas, or privately-held, and (iii) the contribution and active involvement in the business of the Company. Such compensation may be paid to the Director or to a company controlled by such Director.

    

  8.5 The Company shall reimburse, or cover in advance for, its Non-Management Directors, expenses (including travel expenses) incurred in connection with attending meetings of the Board and its committees or performing other services for the Company in their capacity as Non-Management Directors in accordance with this Policy and Israeli law.

    

  8.6 Non-Management Directors (other than External Directors, whose compensation is fixed in accordance with the Companies Law regulations) who provide additional professional and/or consulting services outside of their capacity as Non-Management Directors may be entitled to additional compensation as shall be determined by the Company, consisting of: (i) management or consulting fees, and/or (ii) annual cash bonus.

    

  8.7 Mr. Dilip Shanghvi (a Director and Chairman of the Board) and Mr. Sudhir Valia (a Director) are eligible to participate in the Company’s annual cash bonus plan based upon the Company’s achievement of defined performance objectives, subject to the receipt of all approvals required by applicable law and to the terms of this Compensation Policy.

    

  8.7.1 The Target Bonus for Mr. Dilip Shanghvi shall be equal to one hundred percent (100%) of his annual director fee.

    

  8.7.2 The Bonus for Mr. Dilip Shanghvi will be based one hundred percent (100%) on Company Performance.

    

  8.7.3 The Target Bonus for Mr. Sudhir Valia shall be equal to one hundred percent (100%) of his annual director fee.

    

  8.7.4 The Bonus for Mr. Sudhir Valia will be based one hundred percent (100%) on Company Performance.

    

  8.7.5 The Bonuses that may be paid to  Mr. Dilip Shanghvi and Mr. Sudhir Valia shall be determined in accordance with same process for Management Office Holders set forth in Section 6.5.9 of this Policy.

    

  9. Clawback/Recoupment

    

  9.1 Notwithstanding anything contained herein to the contrary, the Company shall have the authority to recover all or a portion of any compensation paid to an Office Holder that was paid on the basis of financial data included in its financial statements, in any Performance Period, that were found to be inaccurate and were subsequently restated.

    

  9.2 In such event, the Company will seek reimbursement from the Office Holder to the extent such Office Holder would not have been entitled to all or a portion of such compensation, based on the financial data included in the restated financial statements. The Compensation Committee will be responsible for approving the amounts to be recouped and for setting terms for such recoupment from time to time.

    

  10. Withholding Obligations

    

  10.1 Any tax consequences arising from any grant or payment of any cash compensation award or from any other event or act of the Company hereunder shall be borne solely by the Office Holder.  The Company shall withhold taxes according to the requirements under the applicable laws, rules, and regulations.

    

  11. No Limitation on Compensation

    

  11.1 Subject to receipt of the requisite approvals under the Companies Law, nothing in this Policy shall be construed to limit the right of the Company to establish other incentive plans or to pay compensation to its employees, Office Holders (including Directors) in cash or property, that are aimed at the achievement of short and/or long-term Company objectives, in a manner that is not expressly authorized under this Policy.

   

  12. Office Holders Insurance, Indemnification and Exemption.

   

  12.1	The Company may exempt its Office Holders from liability and provide them with indemnification to the fullest extent permitted by law and its Articles of Association, and may provide them with indemnification and release agreement 

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  providing for same. In addition, the Company’s Office Holders may be covered by the Company’s directors’ and officers’ liability insurance policies. The coverage under the Company’s directors’ and officers’ liability insurance policies — both per claim and in the aggregate— will be no more than $100 million, in the aggregate, including directors’ and officers’ insurance coverage, any Side A -DIC policy covering directors and officers individually or any other type of directors’ and officers’ liability insurance. The coverage, including the limit of liability, the premiums and the deductibles, and each extension or renewal of such coverage, shall be approved by the Committee (and, if required by law, by the Board) which shall determine that (x) the total amount of the coverage is reasonable considering the Company’s exposures, the scope of coverage and the market conditions, and (y) the amounts of the premiums and the deductibles for such insurance coverage reflect then-current market conditions and shall not materially affect the Company’s profitability, assets or liabilities.

    

  12.2	The Committee and the Board may review, from time to time, the Company’s indemnification and release agreements and its directors’ and officers’ liability insurance policies, in order to ascertain whether they provide appropriate coverage. However, the Committee and the Board will not be obligated to recommend amendments to the Company’s Articles of Association or to its indemnification and release agreements, nor shall they be required to recommend procurement of additional insurance for Office Holders.  

   

  13. Reliance on Reports

    

  13.1 Each member of the Compensation Committee and each member of the Board shall be fully justified in relying, acting or failing to act, and shall not be liable for having so relied, acted, or failed to act in good faith, upon any report made by the independent public accountants of the Company and upon any information furnished in connection with the Compensation Policy by any person or persons other than such member.

    

  14. Processes for the supervision and control of the Compensation Policy.

    

  14.1 The responsibility for determining the rules for interpreting the Compensation Policy, the control thereof and the updating thereof shall rest with the Compensation Committee and the Board, based on the Compensation Committee’s recommendations.

    

  14.2 The Compensation Committee shall periodically review the Policy and monitor its implementation, and recommend to the Board and shareholders to amend the Policy as it deems necessary from time to time.

    

  14.3 Other than as permitted otherwise under the Companies Law, the approval of compensation for an Office Holder shall be determined by the Compensation Committee, and subsequently approved by the Board; the Company shall be subject to any existing and future provision of applicable law which relates to the Compensation Policy of the Company. Further to the foregoing, it is hereby clarified that in case of any amendment made to provisions of the Companies Law and any other applicable rules and regulations in a manner that will facilitate the Company’s ability to more readily approve or pay Office Holder compensation, the Company shall be entitled to follow those provisions even if they contradict the principles of this Compensation Policy.

    

  14.4 The Compensation Committee and the Board of the Company based on the Committee’s recommendations shall reserve the possibility of reducing the variable components or setting maximum amounts with respect thereto, provided that these changes shall be in accordance with the considerations and the criteria which have been set forth in Section 2 above, according to law and subject to the circumstances of the matter.

    

  14.5 Stringent control procedures shall be exercised in order to ensure that the Compensation Policy is appropriately implemented.

   

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