Document:

mksi-ex102_144.htm

Exhibit 10.2

 

MKS Instruments, Inc. 

Annual Profit Improvement Bonus Plan 

(as approved by the Board of Directors on February 10, 2020)

 

	
1.
	
Purpose:

The Annual Profit Improvement Bonus Plan (the “Profit Improvement Bonus Plan”) provides those employees of MKS Instruments, Inc. and its affiliates (“MKS” or the “Company”) who are eligible to participate in the MKS Instruments, Inc. Management and Key Employee Bonus Plan (the “Annual Bonus Plan”) for the applicable calendar year (the “Participants”) with the opportunity to benefit financially for achieving specified Company profit enhancements or cost reductions for such year (the “Performance Period”).    

 

	
2.
	
Annualized Profitability Initiative: 

In order to receive any payout under this Profit Improvement Bonus Plan, the Company must achieve specified profit enhancements or cost reductions by the end of the Performance Period. Subject to certain limitations set forth in Section 3 below, Participants will be eligible to receive the maximum payout under this Profit Improvement Bonus Plan if the Company achieves the then applicable annual goal (“Annual Goal”)1 (which shall be determined annually by the Compensation Committee of the Board of Directors of the Company (the “Compensation  Committee”)) of Annualized Profitability Initiatives by the conclusion of the Performance Period.  An Annualized Profitability Initiative is defined as any profit enhancement or cost reduction program approved by the Company’s Chief Executive Officer that results, on an annualized basis, in a quantified and measured benefit to the Company’s financial performance.

 

	
3.
	
Determination of a Participant’s Bonus Amount:

A Participant’s payout under this Profit Improvement Bonus Plan will be determined by multiplying the Participant’s Target Bonus Amount, as defined in the Annual Bonus Plan, by a percentage equal to the dollar value of the Annualized Profitability Initiatives achieved during the Performance Period (up to the applicable Annual Goal) divided by 1 million. For example, if the Company achieves $13 million in Annualized Profitability Initiatives for the Performance Period, a Participant’s bonus amount under this plan would equal the Participant’s Target Bonus Amount multiplied by 13% ($13 million/$1 million).  Subject to the limitation set forth below, payouts are capped when the Company achieves the then applicable Annual Goal of Annualized Profitability Initiatives.  Notwithstanding the above, a Participant is only eligible to receive a payout under this plan if Company performance achievement under the Annual Bonus Plan is less than 100% for the Performance Period, and any payout under this plan shall be further capped such that a Participant’s combined payout under the Annual Bonus Plan plus this plan shall not exceed an amount equal to 100% of a Participant’s target bonus under the Annual Bonus Plan.  Following the conclusion of the Performance Period, the Compensation Committee shall review and approve the Company’s performance achievement under the Annual Bonus Plan and the Company’s achievement of Annualized Profitability Initiatives under this plan.

 

	
	 

	
1 
	
 For 2020, the Annual Goal shall be $25 million.

 

 

	
4.
	
Clawback:

Any bonus payment made hereunder shall be subject to potential cancellation, recoupment, rescission, payback or other action in accordance with the terms of any applicable Company clawback policy (the “Clawback Policy”) or any applicable law, as may be in effect from time to time.  The Participant hereby acknowledges and consents to the Company’s application, implementation and enforcement of (i) any applicable Clawback Policy in effect at the time the Participant is notified of his or her eligibility to receive the award under this Plan and (ii) any provision of applicable law relating to cancellation, recoupment, rescission or payment of compensation, and agrees that the Company may take such actions as may be necessary to effectuate the Clawback Policy without further consideration or action.

	
5.
	
Bonus Payment Date:

Bonus payouts hereunder shall be made as soon as possible after the performance assessment has been completed with respect to the applicable Performance Period and reviewed by the Compensation Committee, but in no event later than March 15th following the applicable Performance Period. 

 

	
6.
	
 Administration:

The Profit Improvement Bonus Plan will be administered by the Compensation Committee.  The Compensation Committee shall have authority to adopt, amend and repeal such administrative rules, guidelines and practices relating to the Plan as it shall deem advisable.  The Compensation Committee may construe and interpret the terms of the Profit Improvement Bonus Plan.  The Compensation Committee may correct any defect, supply any omission or reconcile any inconsistency in the Profit Improvement Bonus Plan in the manner and to the extent it shall deem expedient and it shall be the sole and final judge of such expediency.  All decisions by the Compensation Committee shall be made in the Compensation Committee’s sole discretion and shall be final and binding on all persons having or claiming any interest in this Profit Improvement Bonus Plan.  

 

	
7.
	
Amendment and Termination:

The Compensation Committee may amend, suspend or terminate the Profit Improvement Bonus Plan or any portion thereof at any time.  The Profit Improvement Bonus Plan shall remain in effect until terminated.

 

	
8.
	
Miscellaneous:

 

	
8.1
	
No Right to Employment:

In no way does participation in the Profit Improvement Bonus Plan create a contract or a right of employment.

 

	
8.2
	
Tax Withholding:

The Company shall have the right to deduct from all payments under the Profit Improvement Bonus Plan any federal, state or local taxes required by law to be withheld with respect to such payments.

 

2

 

	
8.3
	
Governing Law:  

The provisions of the Profit Improvement Bonus Plan and all awards made hereunder shall be governed by and interpreted in accordance with the laws of the Commonwealth of Massachusetts, excluding choice-of-law principles of the law of such state that would require the application of the laws of a jurisdiction other than the Commonwealth of Massachusetts.

 

	
8.4
	
Limitations on Liability: 

Notwithstanding any other provisions of the Profit Improvement Bonus Plan, no individual acting as a director, officer, employee or agent of the Company will be liable to any Participant, former Participant, spouse, beneficiary, or any other person for any claim, loss, liability, or expense incurred in connection with the Profit Improvement Bonus Plan, nor will such individual be personally liable with respect to the Profit Improvement Bonus Plan because of any contract or other instrument he or she executes in his or her capacity as a director, officer, employee or agent of the Company.  The Company will indemnify and hold harmless each director, officer, employee or agent of the Company to whom any duty or power relating to the administration or interpretation of the Profit Improvement Bonus Plan has been or will be delegated, against any cost or expense (including attorneys’ fees) or liability (including any sum paid in settlement of a claim with the approval of the Company’s Board of Directors) arising out of any act or omission to act concerning the Profit Improvement Bonus Plan unless arising out of such person’s own fraud or bad faith.

 

	
8.5
	
Participants are Unsecured Creditors:

Participants and their heirs, successors and assigns shall have no legal or equitable rights, interest or claims in any property or assets of the Company by virtue of participation in the Profit Improvement Bonus Plan.  The Company’s obligation under the Profit Improvement Bonus Plan shall be that of an unfunded and unsecured promise of the Company to pay money in the future.

 

	
8.6
	
IRC Section 409A:

The Profit Improvement Bonus Plan is intended to either be exempt from, or to comply with, all provisions of IRC Section 409A and to the maximum extent possible shall be so interpreted and administered.  Without limiting the generality of the foregoing, to the extent that any amount that becomes payable to any Participant by reason of such Participant’s separation from service, as defined in the IRC Section 409A, is subject to IRC Section 409A, and that such Participant is a “specified employee” as defined in IRC Section 409A at the time of such separation from service, such amount shall not be paid until the earlier of (i) the first day of the seventh month following the month that includes the separation from service or (ii) the date of the Participant’s death.  Notwithstanding the foregoing, in no event shall the Company be liable to any Participant for any tax or penalty imposed upon the Participant pursuant to IRC Section 409A or otherwise.

3exhibit442020omnibusshar

                     THE BANK OF N.T. BUTTERFIELD & SON LIMITED                          2020 OMNIBUS SHARE INCENTIVE PLAN               Section 1.  General Purpose of Plan; Definitions.               The name of this plan is The Bank of N.T. Butterfield & Son Limited (the “Company”)  2020 Omnibus Share Incentive Plan (the “Plan”).  The Plan was approved and adopted by the Board on  April 30, 2020 (the “Effective Date”).  The purpose of the Plan is to enable the Company to attract and  retain highly qualified personnel who will contribute to the Company’s success and to provide incentives  to Participants that are linked directly to increases in shareholder value and will therefore inure to the  benefit of all shareholders of the Company.  This Plan will replace the Company’s 2010 Omnibus Share  Incentive Plan (the “2010 Plan”).  No new awards will be issued under the 2010 Plan, although the 2010  Plan will remain in effect with respect to awards previously made under the 2010 Plan.               For purposes of the Plan, the following terms shall be defined as set forth below:                     (a)   “Administrator” means the Board or, if and to the extent the Board does  not administer the Plan, the Committee in accordance with Section 2 below.                     (b)   “Award” means any award granted under the Plan.                     (c)   “Award  Agreement”  means,  with  respect  to  each  Award,  the  signed  written  agreement  between  the  Company  and  the Participant  setting  forth  the  terms  and  conditions  applicable to the Award.                     (d)   “Board” means the Board of Directors of the Company.                     (e)   “Cause” means (a) with respect to a Participant employed pursuant to a  written employment agreement which agreement includes a definition of “Cause,” “Cause” as defined in  that agreement or (b) with respect to any other Participant, the occurrence of any of the following: (i)  the conviction of, or plea of guilty or nolo contendere  by, the Participant to any indictable only offence   or other criminal offence involving fraud, dishonesty or moral turpitude; (ii) the commission of any act   involving fraud, embezzlement or theft in dealings by the Participant with the Company or its affiliates;   (iii)  gross  negligence  or  gross  misconduct  by  the  Participant  in  the  course  of  carrying  out  his  or  her   duties which causes material financial or reputational harm to the Company; provided, however, that  any  act or  failure  to  act  by  the Participant  shall not  constitute  Cause  for the purposes of  this  Plan if  committed,  or  omitted,  by  the  Participant  in  good  faith  and  in  a  manner  the  Participant  reasonably  believed to be in the best interests of the Company; (iv) the material breach by the Participant of the  Company’s policies that have been provided to the Participant in writing; or (v) the willful failure of the  Participant to substantially perform his or her duties under any agreement between the Participant and  the Company that is not cured after written notice and a reasonable opportunity to cure.                      (f)   “Change in Control” means the occurrence of any of the following: (i) a  merger,  amalgamation,  consolidation,  recapitalization,  reorganization  or  other  business  combination  (each,  a  “Business  Combination”)  involving  the  Company,  other  than  a  Business  Combination  which  would  result  in  the  Common  Shares  issued  and  outstanding  immediately  prior  thereto  continuing  to  represent (either by remaining issued and outstanding or by being converted into voting securities of  the  surviving  entity)  a  majority of  the  total  voting  power  represented  by  the voting  securities of  the         SC1:5034743.8 

 

Company  or  such  surviving  entity  outstanding  immediately  after  such  Business  Combination;  (ii)  any  person, entity or “group” (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange  Act of 1934, as amended (the “Exchange Act”)) acquires forty percent (40%) or more of the then-issued  and outstanding Common Shares; (iii) the individuals who, as of the date hereof, constitute the Board  (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided,  however, that any individual becoming a director after the date hereof whose election, or nomination  for  election,  was  approved  by  a  vote  of  at  least  a majority  of  the  directors  then  comprising  the  Incumbent  Board  shall  be  considered  a  member  of  the  Incumbent  Board,  but  excluding,  for  this  purpose,  any  such  individual  whose  initial  assumption  of  office  occurs  as  a  result  of  an  actual  or  threatened  election  contest  with  respect  to  the  election  or  removal  of  directors  or  other  actual  or  threatened solicitation of proxies or consents by or on behalf of a person other than the Board; (iv) the   consummation of the sale (in one transaction or a series of transactions) of all or substantially all of the   assets of the Company (determined on a consolidated basis); (v) the approval by the shareholders of the   Company of a liquidation or dissolution of the Company; or (vi) the sale, disposition, or winding down of   substantially all of the Company assets in or relating to a Material Jurisdiction or a Material Business.    For purposes of this Plan, a “Material Jurisdiction” means Bermuda, the Channel Islands or the Cayman  Islands  and  a  “Material  Business”  means  the  Company’s  Banking,  Trust,  Asset  Management,  Private  Banking or Custody business.                     (g)   “Code”  means  the  United  States  Internal  Revenue  Code  of  1986,  as  amended from time to time, or any successor thereto.                     (h)   “Committee”  means  the  Human  Resources  and  Compensation  Committee or any committee the Board may appoint to administer the Plan.  If at any time or to any  extent the Board shall not administer the Plan, then the functions of the Board specified in the Plan shall  be exercised by the Committee.                     (i)   “Common Shares” means the ordinary voting shares, par value BD$0.01  per share (as may be amended from time to time), of the Company.                     (j)   “Company”  means  The  Bank  of  N.T.  Butterfield  &  Son Limited,  a  Bermuda company (or any successor company).                     (k)    “Eligible  Recipient”  means  any  (i)  officer,  director,  employee  or  consultant  of  the  Company  or  any  Parent  or  Subsidiary,  or  (ii)  any  prospective  officer,  director  or  employee who  has  accepted  an  offer of  employment  or  a  role  as  director  from  the  Company or  any  Parent or Subsidiary.                     (l)   “Exercise  Price”  means  the  per  Share  price  at  which  (i)  a  Participant  holding an Award of Options may purchase Shares issuable with respect to such Award of Options or (ii)  a Participant holding an Award of Share Appreciation Rights may exercise the right to receive the SAR  Spread, if any.                     (m)   “Fair  Market  Value”  shall  mean,  with  respect  to  Common  Shares,  the  closing price reported for the Common Shares on the applicable date as reported on the Bermuda Stock  Exchange or the New York Stock Exchange or, if not so reported, as determined in accordance with a  valuation  methodology  approved  by  the  Administrator,  unless  determined  as  otherwise  specified  herein.  For purposes of the grant of any Award, the applicable date will be the trading day on which the  Award is granted or, if the date the Award is granted is not a trading day, the trading day immediately                                          -2-   

 

prior to the date the Award is granted.  For purposes of the exercise of any Award, the applicable date is  the date a notice of exercise is received by the Company or, if such date is not a trading day, the trading  day immediately following the date a notice of exercise is received by the Company.                     (n)    “Option”  means  an  option  to  purchase  Shares  granted  pursuant  to  Section 6 of the Plan.                     (o)   “Other Share-Based or Cash-Based Awards” has the meaning set forth in  the Section 11 herein.                     (p)   “Parent” means any company (other than the Company) in an unbroken  chain of companies ending with the Company, if each of the companies in the chain (other than the  Company) owns shares possessing 50% or more of the combined voting power of all classes of shares in  one of the other companies in the chain.                     (q)   “Participant”  means  any  Eligible  Recipient  selected  by  the  Administrator, pursuant to the Administrator’s authority in Section 2 of the Plan, to receive an Award.                     (r)    “Restricted  Shares”  means  Shares  subject  to  certain  restrictions  granted pursuant to Section 7 of the Plan.                     (s)    “Restricted Share Unit” or “RSU” means the right, granted pursuant to  Section 8 of the Plan, to receive a number of Shares (or an amount in cash equal to the Fair Market  Value thereof) equal to the number of RSUs that are released from the Restricted Period as of such date.                     (t)   “SAR Spread” means the amount equal to the excess, if any, of (i)  the  aggregate Fair Market Value, as of the date a SAR or portion thereof is exercised, of the Shares subject   to such SAR or such portion thereof, over (ii) the aggregate Exercise Price of such SAR or such portion   thereof.                      (u)   “Securities Act” means the Securities Act of 1933, as amended.                     (v)   “Share Appreciation Right” or “SAR” means the right, granted pursuant  to Section 9 of the Plan, to receive an amount equal to the SAR Spread, if any, as of the date such SAR or  portion thereof is exercised.                     (w)    “Shares” means Common Shares reserved for issuance under the Plan,  as adjusted pursuant to Section 3 or Section 4 of the Plan, and any successor security.                     (x)     “Subsidiary”  means  any  company  (other  than  the  Company)  in  an  unbroken chain of companies beginning with the Company, if each of the companies (other than the last  company)  in  the  unbroken  chain  owns  shares  possessing  fifty  percent  (50%)  or  more  of  the  total  combined voting power of all classes of shares in one of the other companies in the chain.               Section 2.  Administration.               The Plan shall be administered by the Board or, at the Board’s sole discretion, by the  Committee,  which  shall  be  appointed  by  the  Board  and  shall  serve  at  the  direction  of  the  Board.                                            -3-   

 

Pursuant to the terms of the Plan, the Board or the Committee, as the case may be, shall serve as the  Administrator and shall have the power and authority to:                     (a)   exercise all of the powers granted to it under the Plan;                     (b)   select those Eligible Recipients who shall be Participants;                     (c)   determine whether and the extent to which Awards are to be granted  to Participants under the Plan;                     (d)   determine when such Awards will be granted;                     (e)   determine  the  number  of Shares  to  be  covered  by or subject  to  each  Award granted under the Plan;                     (f)   determine the terms and conditions, not inconsistent with the terms of  the Plan, of each Award granted under the Plan, including setting forth provisions with regard to the  effect of a termination of employment on such Awards and conditioning the vesting of, or the lapsing of  any  applicable  vesting  restrictions  or  other  vesting  conditions  on,  Awards  upon  the  attainment  of  performance goals or upon continued service;                      (g)   determine the terms and conditions, not inconsistent with the terms of  the Plan, that shall govern all written instruments evidencing Awards granted under the Plan, including  Award Agreements;                     (h)   make  all  determinations  necessary  or  advisable  in  administering  the  Plan;                     (i)   correct any defect, supply any omission and reconcile any inconsistency  in the Plan;                     (j)   amend the Plan to reflect changes in applicable law;                     (k)   amend  any  outstanding  Award  Agreement  in  any  respect,  including,   without limitation, to:                           (i)   accelerate  the  time  or  times  at  which  the  Award  becomes               vested, unrestricted or may be exercised (and, in connection with such acceleration, to               provide  that  any  Shares  acquired  pursuant  to  such  Award  will  be  restricted  shares,               which are subject to vesting, transfer, acquisition by the Company for no consideration               or repayment provisions similar to those in the Participant’s underlying Award);                           (ii)  accelerate  the  time  or  times  at  which  Shares  are  delivered               under the Award (and, without limitation on the Committee’s rights, in connection with               such acceleration, to provide that any Shares delivered pursuant to such Award will be               restricted shares, which are subject to vesting, transfer, acquisition by the Company for               no consideration or repayment provisions similar to those in the Participant’s underlying               Award);                                           -4-   

 

                        (iii)  waive  or  amend  any  goals,  restrictions,  vesting  provisions  or              conditions set forth in such Award Agreement, or impose new goals, restrictions, vesting              provisions and conditions; or                           (iv)  reflect a change in the Participant’s circumstances, including a              change  to  part-time  employment  status  or  a  change  in  position,  duties  or              responsibilities; and                     (l)   determine  at  any  time  whether,  to  what  extent  and  under  what  circumstances and method or methods:                           (i)   Awards  may  be:  (A)  settled  in  cash,  Shares,  other  securities,              other Awards or other property (in which event, the Committee may specify what other              effects such settlement will have on the Participant’s Award, including the effect on any              repayment  provisions  under  the  Plan  or  Award  Agreement);  (B)  exercised,  or  (C)              cancelled, forfeited, acquired by the Company for no consideration or suspended;                           (ii)  Shares,  other  securities,  other  Awards  or  other  property  and              other amounts payable with respect to an Award may be deferred either automatically              or at the election of the Participant thereof or of the Committee;                           (iii)  to the extent permitted under applicable law, loans (whether or              not secured by Common Shares) may be extended by the Company with respect to any              Awards;                           (iv)  Awards may be settled by the Company, any of its subsidiaries              or affiliates or any of their designees; and                           (v)   the  exercise  price  for  any  Option  or  Share  Appreciation  Right              may be reset.                 The  Administrator  shall  have  the  authority,  in  its sole  discretion,  to:  adopt,  alter  and  repeal such administrative rules, guidelines and practices governing the Plan as it shall from time to time  deem advisable; interpret the terms and provisions of the Plan and any Award issued under the Plan  (and any Award Agreement relating thereto); and otherwise supervise the administration of the Plan.   All decisions made by the Administrator pursuant to the provisions of the Plan shall be final, conclusive  and binding on all persons, including the Company and the Participants.               Section 3.  Shares Reserved.                     (a)   Subject to Section 4(a) of the Plan, the total number of Common Shares  reserved  and  available  for  issuance  in  respect  of  Awards  under  the  Plan  shall  be  3,000,000  (three  million) Common Shares.  Shares subject to awards that are assumed, converted or substituted under  the  Plan  as  a  result  of  the  Company’s  acquisition  of  another  company  (including  by  way  of  merger,  amalgamation, combination or similar transaction) will not count against the number of Shares that may  be granted under the Plan. Available shares under a shareholder approved plan of an acquired company  (as appropriately adjusted to reflect the transaction) may be used for Awards under the Plan and do not                                           -5-   

 

reduce the maximum number of Shares available for grant under the Plan, subject to applicable stock  exchange requirements.                     (b)   Shares  subject  to  an  Award  that  is  forfeited  (including  any  Restricted  Shares  acquired  by  the  Company  for  no  consideration  so  that  such  Shares  are  returned  to  the  Company), expires or is settled for cash (in whole or in part), to the extent of such forfeiture, expiration  or cash settlement, will be available for future grants of Awards under the Plan and will be added back in  the same number of Shares as were deducted in respect of the grant of such Award.  The payment of  dividend  equivalent  rights  in  cash  in  conjunction  with  any  outstanding  Awards  will  not  be  counted  against the Shares available for issuance under the Plan.  Shares tendered by a Participant or withheld  by  the  Company  in  payment  of  the  exercise  price  of an  Option  or  to  satisfy  any  tax  withholding  obligation with respect to an Award will again be available for Awards.               Section 4.  Corporate Transactions.                     (a)   In the event of any amalgamation, merger, consolidation, combination,  reorganization,  recapitalization,  reclassification,  extraordinary  cash  dividend,  bonus  share  issue  dividend, share subdivision, consolidation, share split, reverse share split, reduction in share capital or  other  change  in  corporate  structure,  the  Administrator  shall  make  an  equitable  substitution  or  proportionate adjustment in (i) the aggregate number of Shares reserved for issuance under the Plan,  and (ii) the kind, number and Exercise Price of Shares (or other cash or property) issuable with respect to  outstanding Options and SARs granted under the Plan, and (iii) the kind and number of Shares subject to  any other outstanding Awards granted under the Plan.                     (b)   Unless  the  Administrator  determines  otherwise  or  as  otherwise  provided  in  the  applicable  Award  Agreement,  if  a  Participant’s  employment  with  or  service  to  the  Company or any successor entity thereto is terminated without Cause, or the Participant, if party to a  written  employment  agreement  with  the  Company  which  agreement  includes  a  definition  for  “good  reason”, resigns for “good reason”  (as defined in such employment agreement), on or within two (2)  years  after  a  Change  in  Control,  (i)  each  Award  granted  to  such  Participant  prior  to  such  Change  in  Control  will  become  fully  vested  (including  the  lapsing  of  all  restrictions  and  conditions)  and,  as  applicable, exercisable, and (ii) any Common Shares deliverable pursuant to Restricted Share Units will   be delivered promptly (but no later than fifteen (15) days) following such Participant’s termination of   employment or service.  As of the Change in Control date, any outstanding performance-based Awards   shall be deemed earned in full with respect to all open performance periods and will cease to be subject   to any further performance conditions but will continue to be subject to time-based vesting following   the Change in Control in accordance with the original performance period.                      (c)   Notwithstanding the foregoing, in the event of a Change in Control, a   Participant’s Award will be treated, subject to Annex A, as applicable, in accordance with one of more of   the following methods as determined by the Administrator in its sole discretion:                            (i)   settle such Awards for an amount of cash or securities equal to               their value, where in the case of Options and Share Appreciation Rights, the value of               such  awards,  if  any,  will  be  equal  to  their  in-the-money  spread  value  (if  any),  as               determined by the Administrator in its sole discretion;                            (ii)  provide  for  the  assumption  of  or  the  issuance  of  substitute               awards that will substantially preserve the otherwise applicable terms of any affected                                          -6-   

 

            Awards  previously  granted  under  the  Plan,  as  determined  by  the  Administrator  in  its              sole discretion;                           (iii)  modify the terms of such awards to add events, conditions or              circumstances (including termination of employment or service within a specified period              after a Change in Control) upon which the vesting of such Awards or lapse of restrictions              thereon will accelerate; or                           (iv)  provide that for a period of at least twenty (20) days prior to the              Change in Control, any Options or Share Appreciation Rights that would not otherwise              become exercisable prior to the Change in Control will be exercisable as Shares subject              thereto (but any such exercise will be contingent upon and subject to the occurrence of              the Change in Control and if the Change in Control does not take place within a specified              period after giving such notice for any reason whatsoever, the exercise will be null and              void)  and  that  any  Options  or  Share  Appreciation  Rights  not  exercised  prior  to  the              consummation of the Change in Control will terminate and be of no further force and              effect as of the consummation of the Change in Control.   In  the  event  that  the  consideration  paid  in  the  Change  in  Control  includes  contingent  value  rights,  earnout or indemnity payments or similar payments, then the Administrator will determine if Awards  settled under clause (i) above are (a) valued at closing taking into account such contingent consideration  (with the value determined by the Committee in its sole discretion) or (b) entitled to a share of such  contingent consideration.  For the avoidance of doubt, in the event of a Change in Control where all  Options and Share Appreciation Rights are settled for an amount (as determined in the sole discretion of  the  Administrator)  of  cash  or  securities,  the  Administrator  may,  in  its  sole  discretion,  terminate  any  Option or  Share  Appreciation  Right  for which  the exercise  price  is equal  to or  exceeds  the  per share  value  of  the  consideration  to  be  paid  in  the  Change  in  Control  transaction  without  payment  of  consideration therefor.  Similar actions to those specified in this Section 4 may be taken in the event of a  merger or other corporate reorganization that does not constitute a Change in Control.               Section 5.  Eligibility.               The  Participants  under  the  Plan  shall  be  selected  from  time  to  time  by  the  Administrator, in its sole discretion, from among the Eligible Recipients.  The Administrator shall have   the authority to grant Awards under the Plan to the Eligible Recipients.                Section 6.  Options.                Options may be granted alone or in addition to other Awards granted under the Plan.    Any Option granted under the Plan shall be in such form as the Administrator may from time to time   approve,  and  the  provisions  of  each  Option  need  not  be  the  same  with  respect  to  each  Participant.    Participants who are granted Options shall enter into an Award Agreement with the Company, in such   form as the Administrator shall determine, which Award Agreement shall set forth, among other things,   the Exercise Price of the Option, the term of the Option and provisions regarding the exercisability of the   Option.  More than one Option may be granted to the same Participant and be outstanding concurrently   under the Plan.                                           -7-   

 

            Options granted under the Plan shall be subject to the following terms and conditions  and shall contain such additional terms and conditions, not inconsistent with the terms of the Plan, as  the Administrator shall deem desirable:                     (a)   Option Exercise Price.  The Exercise Price of Shares issuable with respect  to an Option shall be determined by the Administrator in its sole discretion at or after the date of grant;  provided, however, that, to the extent required to avoid the imposition of taxes under Section 409A for  a specific Award, such Exercise Price shall not be less than 100% of the Fair Market Value on the date of  grant.                     (b)   Option  Term.   The  term  of  each  Option  shall  be  fixed  by  the  Administrator, but no Option shall be exercisable more than ten (10) years after the date such Option is  granted.                     (c)   Exercisability.   Options  shall  be  exercisable  at  such  time  or  times  and  subject to such terms and conditions as shall be determined by the Administrator at or after the time of  grant.  The Administrator may provide that any Option shall be exercisable only in installments, and the  Administrator may waive such installment exercise provisions at any time, in whole or in part, based on  such factors as the Administrator may determine, all in its sole discretion.                     (d)   Method  of  Exercise.   Subject  to  Section 6(c)  and  Section 13,  Options  may be exercised in whole or in part at any time during the Option term, by giving written notice of  exercise to the Administrator specifying the number of Shares underlying the Option to be exercised by  means of a net-settlement basis pursuant to which the Company shall withhold the number of Shares  underlying the Option sufficient to cover the Exercise Price or by means of a cashless exercise procedure  established by the Administrator.                     (e)   Shareholder  Rights.   A  Participant  shall  generally have  the  rights  to  dividends and any other rights of a shareholder with respect to the Shares under the bye-laws of the  Company subject to the Option only after the Participant has given written notice of exercise.               Section 7.  Restricted Shares.                Awards of Restricted Shares may be granted either alone or in addition to other Awards  granted under the Plan.  The Administrator shall determine the Eligible Recipients to whom, and the  time or times at which, awards of Restricted Shares shall be made; the number of Shares to be awarded  with  respect  to  an  Award  of  Restricted  Shares;  and the  Restricted Period  (as defined  in  Section 7(b))  applicable to an Award of Restricted Shares.  The provisions of Awards of Restricted Shares need not be  the same with respect to each Participant.  An Award of Restricted Shares shall be subject to such terms  and conditions not inconsistent with the Plan as the Administrator shall impose and shall be evidenced  by an Award Agreement.                      (a)   Restricted  Shares  to  be  issued  in  book  entry  form.   Subject  to  Section 7(b) below, with respect to each Participant who is granted an Award of Restricted Shares, the  Company  shall  enter  such  Award  of  Restricted  Shares  in  book  entry  form,  by  such  method  as  determined by the Administrator in its sole discretion.                                             -8-   

 

                  (b)   Restrictions and Conditions Applicable to Restricted Shares.  An Award  of Restricted Shares granted pursuant to this Section 7 shall be subject to the following restrictions and  conditions:                           (i)   Subject to the provisions of the Plan and the Award Agreement              governing any such Award of Restricted Shares, during such period as may be set by the              Administrator commencing on the date of grant of the Award, the Participant shall not              be  permitted  to  sell,  transfer,  pledge,  charge  or  assign  such  Restricted  Shares  (such              period, the “Restricted Period”); provided, however, that the Administrator may, in its              sole  discretion,  provide  for  the  lapse  of  such  restrictions  in  installments  and  may              accelerate or waive such restrictions in whole or in part based on such factors and such              circumstances as the Administrator may determine, in its sole discretion.                           (ii)  Subject  to  this  Section  7(b)  and  Section 16  and/or unless              otherwise  provided  in  an  Award  Agreement,  a  Participant  awarded  Restricted  Shares              under the Plan generally shall have the rights of a shareholder of the Company under              the  bye-laws  of  the  Company  with  respect  to  such  Restricted  Shares  during  the              Restricted Period, including the right to vote and the right to receive dividends.               Section 8.  Restricted Share Units.               Awards  of  RSUs  may  be  granted  either  alone  or  in  addition  to  other  Awards  granted  under  the  Plan.  The  Administrator shall  determine the  Eligible  Recipients to whom,  and  the  time or  times at which, awards of RSUs shall be made; the number of Shares to be awarded upon settlement of  RSUs; and the RSU Restricted Period (as defined in Section 8(a)) applicable to an Award of RSUs.  The  provisions of Awards of RSUs need not be the same with respect to each Participant.  An Award of RSUs  shall be subject to such terms and conditions not inconsistent with the Plan as the Administrator shall  impose and shall be evidenced by an Award Agreement.                     (a)   Restrictions  and  Conditions  Applicable  to  RSUs.   An  Award  of  RSUs  granted pursuant to this Section 8 shall be subject to the following restrictions and conditions:                           (i)   Subject to the provisions of the Plan and the Award Agreement              governing  any  such  Award  of  RSUs,  during  such  period  as  may  be  set  by  the              Administrator commencing on the date of grant of the Award, the Participant shall not              be  permitted  to  sell,  transfer,  pledge  or  assign  such  RSUs  (such  period,  the  “RSU              Restricted  Period”);  provided,  however,  that  the  Administrator  may,  in  its  sole              discretion, provide for the lapse of such restrictions in installments and may accelerate              or  waive  such  restrictions  in  whole  or  in  part  based  on  such  factors  and  such              circumstances as the Administrator may determine, in its sole discretion.                           (ii)  Unless  otherwise  provided  in  an  Award  Agreement,  a              Participant awarded RSUs will have no rights of a shareholder until Shares are issued to              the Participant upon vesting and settlement of the Award of RSUs.                     (b)   Settlement  of  Restricted  Share  Units.   Unless  the  Award  Agreement  provides otherwise, following the lapse of any applicable RSU Restricted Period of an Award of RSUs, the  Participant  awarded  such  RSUs  shall  be  entitled  to receive  (i)  one  Share  for  each  RSU  that  has  been                                           -9-   

 

released from the RSU Restricted Period, (ii) a cash payment equal to the aggregate Fair Market Value of  such RSUs or (iii) a combination of (i) and (ii) as determined by the Administrator in its sole discretion.               Section 9.  Share Appreciation Rights.                     (a)   Grant  of  Share  Appreciation  Rights.   Awards  of  Share  Appreciation  Rights  may  be  granted  either  alone  or  in  addition  to  other  Awards  granted  under  the  Plan.   The  Administrator shall determine the Eligible Recipients to whom and the time or times at which Awards of  SARs shall be made.  A SAR shall be subject to such terms and conditions not inconsistent with the Plan  as the Administrator shall impose and shall be evidenced by an Award Agreement.                     (b)   Terms and Conditions Applicable to SARs.                           (i)   A  SAR  shall:  (x)  have  a  term  set  by  the  Administrator;  (y)   be              exercisable in such installments as the Administrator may determine; and (z)  cover such              number of Shares as the Administrator may determine.                           (ii)  A SAR shall entitle the Participant to exercise all or a specified              portion of the SAR (to the extent then exercisable pursuant to its terms) and to receive              from the Company the SAR Spread with respect thereto, subject to any limitations the              Administrator may impose.                     (c)   Payment and Limitations on Exercise.                           (i)   Payment of the amounts determined under Section 9(b) above              shall  be  in  cash,  in  Shares  (based  on  the  Fair  Market  Value  as of  the  date  the  SAR  is              exercised),  or  a  combination  of  both,  as  determined  by  the  Administrator  in  its  sole              discretion.                           (ii)  Participants awarded SARs may be required to comply with any              timing or other restrictions with respect to the settlement or exercise of a SAR, including              a window-period limitation, as may be imposed in the discretion of the Administrator.               Section 10.  Dividend Equivalent Rights.               The Administrator may include in the Award Agreement with respect to any Award a  dividend equivalent right entitling the Participant to receive amounts equal to all or any portion of the  regular cash dividends that would be paid on the Shares covered by such Award if such Shares had been  delivered  pursuant  to  such  Award.   The  Participant will  have  only  the  rights  of  a  general  unsecured  creditor of the Company until payment of such amounts is made as specified in the applicable Award  Agreement.  In the event such a provision is included in an Award Agreement, the Administrator will  determine whether such payments will be made in cash, in Shares or in another form, whether they will  be conditioned upon the exercise of the Award to which they relate (subject to compliance with Section  409A),  the  time  or  times  at  which  they  will  be  made,  and  such  other  terms  and  conditions  as  the  Administrator will deem appropriate; provided that in no event may such payments be made unless and  until the Award to which they relate vests.                                                        -10-   

 

            Section 11.  Other Share-Based and Cash-Based Awards.               The Administrator is authorized to grant other types of equity-based, equity-related or  cash-based  Awards  (including  the  grant  or  offer  for  sale  of  unrestricted  Shares,  performance  share  awards, performance units settled in cash and cash retainers for non-employee directors) (“ Other Stock- Based or Cash-Based Awards ”), as deemed by the Administrator to be consistent with the purposes of  the Plan.  The Administrator shall determine the terms and conditions of such Awards, consistent with  the terms of the Plan, at the date of grant or thereafter, including, where applicable, performance goals  and performance periods, if any.  Shares or other securities or property delivered pursuant to an Award  in  the  nature  of  a  purchase  right  granted  under  this  Section 11  shall  be  purchased  for  such  consideration, paid for at such times, by such methods, and in such forms, including, without limitation,   Common Shares, other Awards, notes or other property, as the Administrator shall determine, subject   to any required corporate action.                 Section 12.  Repayment.                If  the  Administrator  determines  that  all  terms  and conditions  of  the  Plan  and  a   Participant’s  Award  Agreement  were  not  satisfied,  and  that  the  failure  to  satisfy  such  terms  and   conditions  is  material,  then  the  Participant  will  be  obligated  to  pay  the  Company  immediately  upon   demand therefor, (a) with respect to an Option or Share Appreciation Right, an amount equal to the   excess of the Fair Market Value (determined at the time of exercise) of the Shares that were delivered in   respect of such exercised Option or Share Appreciation Right, as applicable, over the exercise price paid   therefor, (b) with respect to Restricted Shares, an amount equal to the Fair Market Value (determined at   the time such shares became vested) of such Restricted Shares and (c) with respect to Restricted Share   Units,  an  amount  equal  to  the  Fair  Market  Value  (determined  at  the  time  of  delivery)  of  the  Shares   delivered with respect to the applicable delivery date, in each case with respect to clauses (a), (b) and (c)   of  this  Section 12,  without  reduction  for  any  amount  applied  to  satisfy  withholding  tax  or  other   obligations in respect of such Award.                              Section 13.  Termination of Employment or Service.                Except  as  otherwise  set  forth  in  the  Participant’s Award  Agreement,  if  a  Participant’s   employment with or service to the Company or to any Subsidiary or Parent terminates by reason of his   or her death or for any other reason, an Award granted to such Participant may (if an Option or a SAR)   thereafter  be  exercised  to  the  extent  such  Award  is  vested,  to  the  extent  provided  in  the  Award   Agreement evidencing such Award, or as otherwise determined by the Administrator, but, subject to the   ten (10) year term set forth in Section 6(b) herein, in no event shall the exercise period be less than   ninety (90) days (or six (6) months in the event of termination by reason of death or as determined by   the Administrator) following termination of employment or service.  If, after termination of employment   or  service,  the  Participant  does  not  exercise  his  or  her  Award  within  the  time  specified  by  the   Administrator,  the  Award  shall  terminate,  and  the  Shares  issuable  with  respect  to  such  Award  shall   revert to the Plan.                Section 14.  Amendment and Termination.                      (a)   The  Board  may  amend,  alter  or  discontinue  the  Plan,  but  no   amendment, alteration or discontinuation that would materially impair the rights of a Participant under                                          -11-   

 

any  Award  granted  or  Award  Agreement  in  effect  under  the  Plan  shall  be  made  without  such  Participant’s consent.                      (b)   The Administrator may amend the terms of any Award granted under  the Plan, prospectively or retroactively, but, subject to Section 4 of the Plan, no such amendment shall  impair the rights of any Participant without his or her consent.  Notwithstanding the previous sentence,   the Administrator reserves the right to amend the terms of any Award or Award Agreement as may be   necessary or appropriate to avoid adverse tax consequences under Section 409A, if applicable.                Section 15.  Required Consents and Legends.                      (a)   If  the  Administrator  at  any  time  determines  that  any  Consent  (as   defined in Section 15(b)) is necessary or desirable as a condition of, or in connection with, the granting   of any Award, the delivery of Shares or the delivery of any cash, securities or other property under the  Plan, or the taking of any other action thereunder (each such action, a “Plan Action”), then, subject to  Annex A, as applicable, such Plan Action will not be taken, in whole or in part, unless and until such  Consent  will  have  been  effected  or  obtained  to  the full  satisfaction  of  the  Administrator.   The  Administrator may direct that any certificate evidencing Shares delivered pursuant to the Plan will bear  a  legend  setting  forth  such  restrictions  on  transferability  as  the  Administrator  may  determine  to  be  necessary or desirable, and may advise the transfer  agent  to  place  a  stop  transfer  order  against  any  legended shares.                     (b)   The term “Consent” as used in this Plan with respect to any Plan Action  includes:                           (i)   any  and  all  listings,  registrations  or  qualifications  in  respect              thereof upon any securities exchange or under any federal, state or local law, or law,              rule or regulation of a jurisdiction outside the United States;                            (ii)  any  and  all  written  agreements  and  representations by  the              Participant  with  respect  to  the  disposition  of  Shares,  or  with  respect  to  any  other              matter,  which  the  Committee  may  deem  necessary  or  desirable  to  comply  with  the              terms of any such listing, registration or qualification or to obtain an exemption from              the requirement that any such listing, qualification or registration be made;                            (iii)  any and all other consents, clearances and approvals in respect              of a Plan Action by any governmental or other regulatory body or any stock exchange or              self-regulatory agency;                            (iv)  any and all consents by the Participant to:                                  (1)     the  Company’s  supplying  to  any  third-party                                        recordkeeper  of  the  Plan  such  personal  information                                        as  the  Administrator  deems  advisable  to  administer                                        the Plan,                                  (2)     the  Company’s  deducting  amounts  from  the                                        Participant’s  wages,  or  another  arrangement                                        satisfactory  to  the  Administrator,  to  reimburse  the                                         -12-   

 

                                      Company  for  advances  made  on  the  Participant’s                                        behalf  to  satisfy  certain  withholding  and  other  tax                                        obligations in connection with an Award, and                                  (3)     the  Company’s  imposing  sales  and  transfer                                        procedures  and  restrictions  and  hedging  restrictions                                        on Shares delivered under the Plan; and                           (v)   any and all consents or authorizations required to comply with,              or  required  to  be  obtained  under,  applicable  local law  or  otherwise  required  by  the              Administrator.               Section 16.  Unfunded Status of Plan.               The Plan is intended to constitute an “unfunded” plan for incentive compensation.  With  respect to any payments not yet made to a Participant by the Company, nothing contained herein shall  give any such Participant any rights that are greater than those of a general unsecured creditor of the  Company.               Section 17.  General Provisions.                     (a)   Nothing  contained  in  the  Plan  shall  prevent  the  Board  from  adopting  other  or  additional  compensation  arrangements,  and such  arrangements  may  be  either  generally  applicable  or  applicable  only  in  specific  cases.   The  adoption  of  the  Plan  shall  not  confer  upon  any  Eligible Recipient any right to continued employment with or service to the Company or any Subsidiary,  as the case may be, nor shall it interfere in any way with the right of the Company or any Subsidiary or  Parent to terminate the employment or service of any Eligible Recipient at any time.                     (b)   Each Participant shall, no later than the date as of which the value of an  Award first becomes includible in the gross income of the Participant for Federal income tax purposes,  be solely responsible for any applicable taxes (including, without limitation, income and excise taxes)  and  penalties,  and  any  interest  that  accrues  thereon,  that  he  or  she  incurs  in  connection  with  the  receipt, vesting or exercise of any Award.  As a condition to the delivery of any Shares, cash or other  securities or property pursuant to any Award or the lifting or lapse of restrictions on any Award, or in  connection  with  any  other  event  that  gives  rise  to a  Federal  or  other  governmental  tax  withholding  obligation on the part of the Company relating to an Award (including, without limitation, the Federal  Insurance Contributions Act tax), (i) the Company may deduct or withhold (or cause to be deducted or  withheld)  from  any  payment  or  distribution  to  a  Participant  whether  or  not  pursuant  to  the  Plan  (including  Shares  otherwise  deliverable),  (ii)  the Administrator  will  be  entitled  to  require  that  the  Participant remit cash to the Company (through payroll deduction or otherwise) or (iii)  the Company  may enter into any other suitable arrangements to withhold, in each case in the Company’s discretion,  the amounts of such taxes to be withheld based on the individual tax rates applicable to the Participant.                     (c)   No  member  of  the  Board  or  the  Administrator,  nor  any  officer  or  employee of the Company acting on behalf of the Board or the Administrator, shall be personally liable  for any action, determination or interpretation taken or made in good faith with respect to the Plan, and  all members of the Board or the Administrator and each and any officer or employee of the Company  acting on their behalf shall, to the extent permitted by law, be fully indemnified and protected by the  Company in respect of any such action, determination or interpretation.                                         -13-   

 

                  (d)   The  Company  will  have  the  right  to  offset  against  its  obligation  to  deliver  Shares  (or  other  property  or  cash)  under  the  Plan  or  any  Award  Agreement  any  outstanding  amounts (including, without limitation, travel and entertainment or advance account balances, loans,  repayment  obligations  under  any  Awards,  or  amounts repayable  to  the  Company  pursuant  to  tax  equalization, housing, automobile or other employee programs) that the Participant then owes to the  Company  and  any  amounts  the  Administrator  otherwise  deems  appropriate  pursuant  to  any  tax  equalization policy or agreement.  Notwithstanding the foregoing, if an Award provides for the deferral  of  compensation  within  the  meaning  of  Section  409A,  the  Administrator  will  have  no  right  to  offset  against  its  obligation  to  deliver  Shares  (or  other property  or  cash)  under  the  Plan  or  any  Award  Agreement if such offset could subject the Participant to the additional tax imposed under Section 409A  in respect of an outstanding Award.                     (e)   Unless otherwise provided in an Award Agreement, no Award (or any  rights and obligations thereunder) granted to any Participant under the Plan may be sold, exchanged,  transferred,  assigned,  charged,  pledged,  hypothecated  or  otherwise  disposed  of  or  hedged,  in  any  manner (including through the use of any cash-settled instrument), whether voluntarily or involuntarily  and  whether  by  operation  or  law  or  otherwise,  other  than  by  will  or  by  the  laws  of  descent  and  distribution, and all such Awards (and any rights thereunder) will be exercisable during the life of the  Grantee only by the Grantee or the Grantee’s legal representative.  Notwithstanding the foregoing, the  Committee may permit, under such terms and conditions that it deems appropriate in its sole discretion,  a Grantee to transfer any Award to any person or entity that the Committee so determines.  Any sale,  exchange, transfer, assignment, charge, pledge, hypothecation, or other disposition in violation of the  provisions of this Section 17(e) will be null and void and any Award which is hedged in any manner will  immediately be forfeited or , in the case of Award of Restricted Shares, acquired by the Company for no  consideration, as applicable.  All of the terms and conditions of the Plan and the Award Agreements will  be binding upon any permitted successors and assigns.                     (f)   Any  and  all  grants  of  Awards  and  deliveries  of  Common  Shares,  cash,  securities  or  other  property  under  the  Plan  will  be  in  consideration  of  services  performed  or  to  be  performed for the Company by the Participant and upon any issuance of Common Shares pursuant to  the terms hereof, such Common Shares shall be validly issued, fully paid and non-assessable.  Awards  under the Plan may, in the discretion of the Administrator, be made in substitution in whole or in part  for cash or other compensation otherwise payable to a Participant.  Only whole Shares will be delivered  under the Plan.  Awards will, to the extent reasonably practicable, be aggregated in order to eliminate  any fractional shares.  Fractional shares may, in the discretion of the Administrator, be acquired by the  Company for no consideration or be settled in cash or otherwise as the Administrator may determine.                     (g)   Awards  under  the  Plan  will  be  subject  to  any  clawback  or  recapture  policy  that  the  Company  may  adopt  from  time  to  time  to  the  extent  provided  in  such  policy  and,  in  accordance  with  such  policy,  may  be  subject  to  the requirement  that  the  Awards  be  repaid  to  the  Company after they have been distributed to the Participant.               Section 18.  Governing Law.               The  Plan  and  all  agreements  entered  into  under  the Plan  shall  be  construed  in  accordance with and governed under Bermuda law.                                          -14-   

 

            Section 19.  Disputes; Choice of Forum.                     (a)   The Company and each Participant, as a condition to such Participant’s  participation  in  the  Plan,  hereby  irrevocably  agree  that  the  courts  of  Bermuda  shall  have  exclusive  jurisdiction in respect of any dispute, suit, action, arbitration or proceedings (“Proceedings”) which may  arise  out  of  or  in  connection  with  this  Plan  or  any  Award  Agreement  and  waive  any  objection  to  Proceedings in the courts of Bermuda on the grounds of venue or on the basis that the Proceedings have  been brought in an inconvenient forum.                      (b)   Each Participant, as a condition to such Participant’s participation in the  Plan, hereby irrevocably appoints the General Counsel of the Company as such Participant’s agent for  service  of  process  in  connection  with  any  action,  suit  or  proceeding  arising  out  of  or  relating  to  or  concerning the Plan, who will promptly advise such Participant of any such service of process.                     (c)   Each Participant, as a condition to such Participant’s participation in the  Plan,  agrees  to  keep  confidential  the  existence  of,  and  any  information  concerning,  a  dispute,  controversy  or  claim  described  in  Section 20,  except  that  a  Participant  may  disclose  information  concerning such dispute, controversy or claim to the court that is considering such dispute, controversy  or claim or to such Participant’s legal counsel (provided that such counsel agrees not to disclose any  such information other than as necessary to the prosecution or defense of the dispute, controversy or  claim or as required by applicable law).               Section 20.  Waiver of Claims.               Each Participant of an Award recognizes and agrees that before being selected by the  Committee  to  receive  an  Award,  the  Participant  has no  right  to  any  benefits  under  the  Plan.   Accordingly,  in  consideration  of  the  Participant’s receipt  of  any  Award  hereunder,  the  Participant  expressly waives any right to contest the amount of any Award, the terms of any Award Agreement, any  determination, action or omission hereunder or under any Award Agreement by the Administrator, the  Committee, the Company or the Board, or any amendment to the Plan or any Award Agreement (other  than  an  amendment  to  the  Plan  or  an  Award  Agreement  to  which  his  or  her  consent  is  expressly  required by the express terms of an Award Agreement).  Nothing contained in the Plan, and no action  taken pursuant to its provisions, will create or be construed to create a trust of any kind or a fiduciary  relationship between the Company and any Participant.                Section 21.  No Repricing or Reloads.               Except  as  otherwise  permitted  by  Section 4(a),  reducing  the  exercise  price  of Options  issued and outstanding under the Plan, including through amendment, cancellation in exchange for the  grant of a substitute Award or repurchase for cash or other consideration (in each case that has the  effect of reducing the exercise price) will require the approval of the Administrator.  The Company will  not grant any Options or Share Appreciation Rights with automatic reload features.               Section 22.  Severability; Entire Agreement.                If any of the provisions of the Plan or any Award Agreement is finally held to be invalid,  illegal or unenforceable (whether in whole or in part), such provision will be deemed modified to the  extent,  but  only  to  the  extent,  of  such  invalidity,  illegality  or  unenforceability  and  the  remaining  provisions  will  not  be  affected  thereby;  provided  that  if  any  of  such  provisions  is  finally  held  to  be                                         -15-   

 

invalid, illegal or unenforceable because it exceeds the maximum scope determined to be acceptable to  permit such provision to be enforceable, such provision will be deemed to be modified to the minimum  extent  necessary  to modify  such  scope  in  order  to make  such  provision  enforceable  hereunder.   The  Plan and any Award Agreements contain the entire agreement of the parties with respect to the subject  matter  thereof  and  supersede  all  prior  agreements, promises,  covenants,  arrangements,  communications, representations and warranties between them, whether written or oral, with respect  to the subject matter thereof.               Section 23.  No Liability With Respect to Tax Qualification or Adverse Tax                     Treatment.               Notwithstanding  anything  to  the  contrary  contained herein,  in  no  event  will  the  Company be liable to a Participant on account of an Award’s failure to (a) qualify for favorable United  States or foreign tax treatment or (b) avoid adverse tax treatment under United States or foreign law,  including, without limitation, Section 409A.               Section 24.  No Third-Party Beneficiaries.               Except as expressly provided in an Award Agreement, neither the Plan nor any Award  Agreement will confer on any person other than the Company and the Participant of any Award any  rights or remedies thereunder.               Section 25.  Successors and Assigns of the Company.               The terms of the Plan will be binding upon and inure to the benefit of the Company and  any successor entity, including as contemplated by Section 4.                              Section 26.  Term of Plan.                The Plan shall be effective as of the Effective Date.  No Award shall be granted pursuant   to the Plan on or after the tenth (10th) anniversary of the Effective Date, but Awards granted under the   Plan  prior  to  the  Effective  Date  may  extend  beyond the  Effective  Date  pursuant  to  the  terms  of  the   Award as provided for under the Plan and the terms of the applicable Award Agreement.                Section 27.  Directors.                During a calendar year, no Participant who is a non-employee director of the Company   may  be  granted  Awards  having  an  aggregate  fair  market value in excess of $500,000 on the date of   grant.  For purposes of this Section 27, notwithstanding anything else in this Plan, the fair market value  of an Option or Share Appreciation Right shall be determined in accordance with the Black-Scholes or  other pricing model used to determine Option values in the Company’s most recent publicly filed annual  report, and the value of any other Award shall be determined based on the Fair Market Value on the  grant               date              of               the               Award.                                         -16-   

 

                                       Annex A                                        409A                        (a)   All  Awards  made  under  the  Plan  that  are  intended  to  be  “deferred  compensation” subject to Section 409A will be interpreted, administered and construed to comply with  Section 409A, and all Awards made under the Plan that are intended to be exempt from Section 409A  will  be  interpreted,  administered  and  construed  to comply  with  and  preserve  such  exemption.  The  Board and the Committee will have full authority to give effect to the intent of the foregoing sentence.   To the extent necessary to give effect to this intent, in the case of any conflict or potential inconsistency  between the Plan and a provision of any Award or Award Agreement with respect to an Award, the Plan  will govern.                     (b)   Without limiting the generality of (a) above, with respect to any Award  made under the Plan that is intended to be “deferred compensation” subject to Section 409A:                           (i)   any  payment  due  upon  a  Participant’s  termination  of              employment or service will be paid only upon such Participant’s separation from service              from the Company within the meaning of Section 409A;                           (ii)  any payment due upon a Change in Control of the Company will              be paid only if such Change in Control constitutes a “change in ownership” or “change in              effective  control”  within  the  meaning  of  Section  409A,  and  in  the  event  that  such              Change in Control does not constitute a “change in the ownership” or “change in the              effective control” within the meaning of Section 409A, such Award will vest upon the              Change in Control and any payment will be delayed until the first compliant date under              Section 409A;                           (iii)  any  payment  to  be  made  with  respect  to  such  Award  in              connection with the Participant’s separation from service from the Company within the              meaning  of  Section  409A  (and  any  other  payment  that  would  be  subject  to  the              limitations in Section 409A(a)(2)(B) of the Code) will be delayed until six (6) months after              the  Participant’s  separation  from  service  (or  earlier  death)  in  accordance  with  the              requirements of Section 409A;                           (iv)  if any payment to be made with respect to such Award would              occur at a time when the tax deduction with respect to such payment would be limited              or  eliminated  by  Section  162(m)  of  the  Code,  such  payment  may  be  deferred  by  the              Company under the circumstances described in Section 409A until the earliest date that              the Company reasonably anticipates that the deduction or payment will not be limited              or eliminated;                           (v)   to the extent necessary to comply with Section 409A, any other              securities,  other  Awards  or  other  property  that  the  Company  may  deliver  in  lieu  of              Shares in respect of an Award will not have the effect of deferring delivery or payment              beyond the date on which such delivery or payment would occur with respect to the              Shares that would otherwise have been deliverable (unless the Committee elects a later              date for this purpose in accordance with the requirements of Section 409A);         SC1:5034743.8 

 

                        (vi)  with respect to any required Consent described in Section 15 or              the applicable Award Agreement, if such Consent has not been effected or obtained as              of the latest date provided by such Award Agreement for payment in respect of such              Award  and  further  delay  of  payment  is  not  permitted  in  accordance  with  the              requirements  of  Section  409A,  such  Award  or  portion  thereof,  as  applicable,  will  be              forfeited and terminate notwithstanding any prior earning or vesting;                            (vii)  if the Award includes a “series of installment payments” (within              the meaning of Section 1.409A-2(b)(2)(iii) of the Treasury Regulations), the Participant’s              right  to  the  series  of  installment  payments  will  be  treated  as  a  right  to  a  series  of              separate payments and not as a right to a single payment;                            (viii)  if  the  Award  includes  “dividend  equivalents”  (within  the              meaning of Section 1.409A-3(e) of the Treasury Regulations), the Participant’s right to              the  dividend  equivalents  will  be  treated  separately  from  the  right  to  other  amounts              under the Award; and                            (ix)  for  purposes  of  determining  whether  the  Participant  has              experienced a separation from service from the Company within the meaning of Section              409A, “subsidiary” will mean a corporation or other entity in a chain of corporations or              other entities in which each corporation or other entity, starting with the Company, has              a controlling interest in another corporation or other entity in the chain, ending with              such  corporation  or  other  entity.   For  purposes  of the  preceding  sentence,  the  term              “controlling interest” has the same meaning as provided in Section 1.414(c)-2(b)(2)(i) of              the  Treasury  Regulations,  provided  that  the  language  “at  least  20  percent”  is  used              instead of “at least 80 percent” each place it appears in Section 1.414(c)-2(b)(2)(i) of the              Treasury Regulations.                                                         -18-    SC1:5034743.8

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