Document:

Exhibit 10.27

COTY INC.

ANNUAL PERFORMANCE PLAN

(As Amended and Restated April 8, 2013)

	
  

 	
  

 
	
 SECTION 1. Purpose.
 The purpose of the Coty Inc. Annual Performance Plan, as Amended and Restated
 on April 8, 2013 (the “Plan”) is to promote the profitability of Coty Inc.,
 its subsidiaries and affiliates (the “Company”) by providing senior
 executives and top line managers with incentive awards based on the
 achievement of annual goals that are aimed at increasing shareholder value.
 The effective date of this Plan is the Effective Date. 

 
	
  

 
	
 SECTION 2. Definitions.
 For the purposes of the Plan, the following terms shall have the meanings
 indicated: 

 
	
  

 
	
  

 	
           “Affiliate”
 shall mean (i) any entity that, directly or indirectly, controls or is
 controlled by the Company and (ii) any entity in which the Company has a
 significant equity or other ownership interest, in either case as determined
 by the Committee.

 
	
  

 	
  

 
	
  

 	
           “Award”
 shall mean the grant of an award by the Committee to a Participant. An Award
 shall represent the opportunity to qualify for an Incentive Award in
 accordance with the terms of the Plan. 

 
	
  

 	
  

 
	
  

 	
           “Award Year”
 shall mean any fiscal year with respect to the Company’s performance in which
 an Award is granted, or such other 12-month period as determined by the
 Committee. The first Award Year for which an Incentive Award may be earned
 under this Plan is with respect to the Company’s fiscal year beginning July
 1, 2013 and ending June 30, 2014. 

 
	
  

 	
  

 
	
  

 	
           “Base
 Salary” shall mean a Participant’s annual salary rate in effect at the end of
 an Award Year.

 
	
  

 	
  

 
	
  

 	
           “Board”
 shall mean the Board of Directors of the Company.

 
	
  

 	
  

 
	
  

 	
           “Cause”
 shall have the meaning set forth in any employment, severance or other
 agreement between the Company or an Affiliate and the Participant. If there
 is no employment, severance or other agreement between the Company or an
 Affiliate and the Participant, or if such agreement does not define “Cause,”
 then “Cause” shall mean the occurrence of any of the following, as determined
 by the Committee in its sole discretion: 

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (A)
 a Participant’s willful and continued failure substantially to perform his
 duties (other than as a result of total or partial incapacity due to physical
 or mental illness or as a result of voluntary termination of employment by
 such Participant) which failure continues for more than 30 days after receipt
 by the Participant of written notice setting forth the facts and
 circumstances identified by the Company as constituting adequate grounds for
 termination under this clause (A),

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (B)
 any willful act or omission by a Participant constituting dishonesty, fraud
 or other malfeasance, and any act or omission by a Participant constituting 

 
	
  

 	
  

 	
  

 

1

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 immoral
 conduct, which in any such case is injurious to the financial condition or
 business reputation of the Company or any of its Affiliates,

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (C)
 a Participant’s indictment for a felony under the laws of the United States
 or any state thereof or a similar event in any other jurisdiction in which
 the Company or its Affiliates conduct business, or 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           (D)
 a Participant’s breach of any restrictive covenants by which he or she is
 bound. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
           For
 purposes of this definition, no act or failure to act shall be deemed
 “willful” unless effected by a Participant not in good faith and without a
 reasonable belief that such action or failure to act was in or not opposed to
 the Company’s best interests.

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
“Change in
 Control” shall be deemed to have occurred if:

 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (A)

 	
 Any Person
 or “group” (as such term is used in Sections 13(d) and 14(d) of the Exchange
 Act) that is not the Majority Shareholder is or becomes the “beneficial
 owner” (as defined below), directly or indirectly, of securities representing
 either (i) more than 50% of the combined voting power of the Company’s then
 outstanding securities, or (ii) 20% or more of the combined voting power of
 the Company’s then outstanding securities at a time when the Majority
 Shareholder holds less than 30% of such combined voting power. For purposes
 of this clause (A), “beneficial owner” has the meaning given that term in
 Rule 13d-3 under the Exchange Act, except that a Person shall be deemed to be
 the “beneficial owner” of all shares that any such Person has the right to
 acquire pursuant to any agreement or arrangement or upon exercise of
 conversion rights, warrants, options or otherwise, without regard to the
 60-day period referred to in such Rule;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (B)

 	
 Individuals
 who constitute the Board on the Restatement Effective Date (the “Incumbent
 Board”) cease for any reason to constitute at least a majority thereof, provided, that
 any Person becoming a director subsequent to such date whose election, or
 nomination for election by the Company’s shareholders, was approved by a vote
 of at least three-quarters of the directors then comprising the Incumbent
 Board shall be, for purposes of this clause (B), considered as though such
 Person were a member of the Incumbent Board; and provided, further,
 that this clause (B) shall not apply as long as the Majority Shareholder is
 the beneficial owner of a majority of the Company’s Common Stock;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (C)

 	
 The Majority
 Shareholder enters into any joint venture, joint operating arrangement,
 partnership, standstill agreement or other 

 

2

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 arrangement
 similar to any of the foregoing with any other Person or group, pursuant to
 which such Person or group assumes significant operational or managerial
 control of the Company; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (D)

 	
 The
 shareholders of the Company approve a plan or agreement providing (i) for a
 merger or consolidation of the Company other than with a wholly owned
 subsidiary and other than a merger or consolidation that would result in the
 voting securities of the Company outstanding immediately prior thereto
 continuing to represent (either by remaining outstanding or by being
 converted into voting securities of the surviving entity) more than 51% of
 the combined voting power of the voting securities of the Company or such
 surviving entity outstanding immediately after such merger or consolidation,
 or (ii) for a sale, exchange or other disposition of all or substantially all
 of the business or assets of the Company. If any of the events enumerated in
 this clause (D) occurs, the Board shall determine the effective date of the
 Change in Control resulting therefrom for purposes of this Plan.

 

	
  

 	
  

 
	
  

 	
           “Committee”
 shall mean the Remuneration and Nominating Committee of the Board or any
 successor committee with responsibility for compensation, or any
 subcommittee, as long as the number of Committee members and their
 qualifications shall at all times be sufficient to meet the independence
 requirements of the New York Stock Exchange, Inc. or any other applicable
 exchange on which the Company’s common equity is at the time listed. With
 respect to any Incentive Award that is intended to qualify as
 “performance-based compensation” for purposes of Section 162(m), the
 Committee shall be constituted to comply with the applicable requirements for
 “outside directors” under Section 162(m). 

 
	
  

 	
  

 
	
  

 	
           “Determination
 Date” shall mean the date that is 90 days after the beginning of an Award
 Year or, if earlier, the date on which no more than 25% of the Award Year has
 elapsed. 

 
	
  

 	
  

 
	
  

 	
           “Disability”
 shall mean either (i) disability as defined for purposes of the Company’s
 disability benefit plan, or (ii) a Participant’s inability, as a result of
 physical or mental incapacity, to perform the duties of his or her
 position(s) for a period of six consecutive months or for an aggregate of six
 months in any consecutive 12-month period. 

 
	
  

 	
  

 
	
  

 	
           “Effective
 Date” means the day immediately prior to the date of the underwritten initial
 public offering of the Company’s Common Stock pursuant to a registration
 statement that is declared effective by the SEC, 2013.

 
	
  

 	
  

 
	
  

 	
           “Employment
 Agreement” shall mean, with respect to a Participant, any employment
 agreement by and between the Company and such Participant as in effect from
 time to time.

 

3

	
  

 	
  

 
	
  

 	
           “Executive
 Officer” means any Company employee who is an “executive officer” as defined
 in Rule 3b-7 promulgated under the Securities Exchange Act of 1934, as
 amended.

 
	
  

 	
  

 
	
  

 	
           “Incentive
 Award” shall mean the incentive compensation payable to a Participant, as
 determined by the Committee pursuant to the terms of the Plan. 

 
	
  

 	
  

 
	
  

 	
           “Majority
 Shareholder” means (i) the Company’s majority shareholder as of the Effective
 Date or (ii) a Benckiser Permitted Holder as defined in the Company’s
 Certificate of Incorporation effective on the Effective Date or any other
 similarly situated Person as determined by the Committee.

 
	
  

 	
  

 
	
  

 	
           “Maximum
 Award” means, with respect any Participant for any Performance Period,
 $8,000,000. 

 
	
  

 	
  

 
	
  

 	
 “Participant”
 shall mean an Executive Officer or other key employee of the Company selected
 by the Committee in accordance with Section 4 who receives an Award.

 
	
  

 	
  

 
	
  

 	
           “Performance
 Criteria” shall mean objective criteria selected by the Committee, which may
 be based on the relative or
 comparative attainment of one or more of the following criteria during an
 Award Year, whether in absolute terms or relative to the performance of one
 or more similarly situated companies or a published index covering the
 performance of a number of companies: total stockholder return (inclusive or
 exclusive of dividends paid); stock price; gross, operating or net earnings
 or margins; approved rate increases; earnings before interest and taxes;
 earnings before interest, taxes, depreciation and amortization (“EBITDA”); EBITDA
 excluding traditional working media; earnings
 per share; economic value added; ratio of operating earnings to capital
 spending; net sales; sales growth; return on assets, capital or equity;
 income; market share; level of expenses; revenue; revenue growth; cash flow;
 increases in customer base; capital expenditures; cost reductions and expense
 control objectives; compliance with environmental or regulatory goals or
 requirements; conservation; budget objectives; working capital; mergers,
 acquisitions and divestitures; attainment of objectives measured in terms of
 quality or safety; talent management; customer complaints or customer
 satisfaction; and improvements in financial controls; and, in the case of
 persons who are not Executive Officers, such other criteria as may be
 determined by the Committee. Performance Criteria may be established on a
 Company-wide basis or with respect to one or more business units, divisions,
 subsidiaries, or geographic locations, or on an individual basis.

 
	
  

 	
  

 
	
  

 	
           At the
 time the Committee establishes Performance Criteria for an Award Year, the
 Committee may exclude any or all “extraordinary items” as determined under
 U.S. generally accepted accounting principles including, without limitation,
 the charges or costs associated with restructurings of the Company or any
 subsidiary, discontinued operations, other unusual or non-recurring items,
 the cumulative effects of accounting changes or such other objective factors
 as the Committee deems appropriate. Unless otherwise explicitly stated by the
 Committee at the time Performance Criteria are established, each
 applicable performance goal shall be appropriately adjusted for one or 

 

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 more of the
 following items: (i) asset impairments or write downs; (ii) litigation
 judgments or claim settlements; (iii) the effect of changes in tax law,
 accounting principles or such laws or provisions affecting reported results;
 (iv) accruals for reorganization and restructuring programs; (v) any
 extraordinary nonrecurring items as described in Accounting Standards
 Codification (ASC) 225-20 and/or in management’s discussion and analysis of
 financial condition and results of operations appearing in the Company’s
 annual report to shareholders for the applicable year; (vi) the operations of
 any business acquired by the Company or any affiliate or of any joint venture
 in which the Company or affiliate participates; (vii) the divestiture of one
 or more business operations or the assets thereof; or (viii) the costs
 incurred in connection with such acquisitions or divestitures; and (ix)
 charges for stock based compensation.

 
	
  

 	
  

 
	
  

 	
           Except in
 the case of Awards to Executive Officers intended to be ‘performance-based
 compensation’ under Section 162(m), the Committee may at any time adjust the
 Performance Criteria for any Award Year as it deems equitable. The
 Committee shall have no obligation to treat Participants uniformly.

 
	
  

 	
  

 
	
  

 	
 “Person”
 means any individual, partnership, corporation, limited liability company,
 association, joint stock company, trust, joint venture, unincorporated
 organization or any other entity, whether foreign or domestic, including any
 governmental entity or any department, agency or political subdivision
 thereof.

 
	
  

 	
  

 
	
  

 	
           “Retirement”
 shall mean a termination of
 employment (other than a termination of employment for Cause):

 
	
  

 	
  

 
	
  

 	
           (A) after
 attaining age 60, but only if the Company or the employing Affiliate consents
 to the treatment of such termination as a “Retirement” for purposes of this
 Plan; or

 
	
  

 	
  

 
	
  

 	
           (B)
 qualifying as a retirement at normal retirement age under the laws and/or
 arrangements applicable to the Participant, as reasonably determined by the
 Committee.

 
	
  

 	
  

 
	
  

 	
           “Section
 162(m)” means Section 162(m) of the Internal Revenue Code of 1986, as
 amended, and any regulations or governing authority promulgated thereunder,
 as in effect from time to time. 

 
	
  

 	
  

 
	
 SECTION 3. Administration.
 

 
	
  

 
	
           (a)
 The Plan shall be administered by the Committee, which shall have full
 authority to interpret the Plan and from time to time to adopt such rules and
 regulations for carrying out the Plan as it may deem best. 

 
	
  

 	
  

 
	
           (b) All
 determinations by the Committee shall be made by the affirmative vote of a
 majority of its members, but any determination reduced to writing and signed
 by a majority of the members shall be fully as effective as if it had been
 made at a meeting duly called and held. All decisions by the Committee (or if
 applicable, the Board) pursuant to the provisions of the Plan shall be final,
 conclusive and binding on all persons, including the Participants, the
 Company 

 
			

5

and
shareholders. The Committee may delegate to the Company’s Executive Committee
its authority under the Plan with respect to Participants who are not Executive
Officers; provided that all such Awards and payments in the aggregate do not
exceed the total Awards and payments approved by the Committee for such
Participants for the Award Year.

SECTION 4. Eligibility.
Subject to the provisions of the Plan, the Committee may select at the outset
of each Award Year those Executive Officers, officers or employees (including
those who are also directors) of the Company who will be granted Awards under
the Plan with respect to such Award Year. No member of the Committee shall be
eligible to receive an Award under the Plan. 

          SECTION
5. Amount and Payment of Incentive Award

          (a)
No later than the Determination Date, the Committee shall establish the
applicable Performance Criteria and relevant levels of achievement that will be
used to calculate an Incentive Award, if any, based on a percentage of the
Participant’s Base Salary. Such performance levels may be expressed as a target
level, minimum level, maximum level, or such other levels as determined by the
Board and communicated in writing to the Participant. For avoidance of doubt,
electronic transmission shall be considered in writing for all purposes under
the Plan.

          (b)
Within a reasonable time after the close of an Award Year, the Committee (or
solely with respect to Participants who are not Executive Officers, the
Committee’s delegate, if any) shall determine whether the objective Performance
Criteria and applicable levels of achievement established for that Award Year
have been met by the respective Participants. If the objective Performance
Criteria and any other material terms established by the Committee have been
met by a Participant, the Committee shall so certify in writing with respect to
such Participant.

          (c)
If the Committee has made the written certification under Section 5(a) for an
Award Year, each Participant to whom the certification applies shall be
eligible for an Incentive Award for the Award Year. The Incentive Award for
each such Participant shall not exceed the Maximum Award. For any Award Year,
however, the Committee shall have sole and absolute discretion to adjust the
amount of, or eliminate entirely, the Incentive Award to one or more of the
Participants based upon the Committee’s review of the objective performance
goals for each Participant; provided, however, that for any Incentive Award
that is intended to qualify as “performance-based compensation” under Section
162(m), the Committee shall have discretion to reduce the amount of such
Incentive Award or eliminate the Incentive Award entirely, but not to increase
the amount of any Award. 

          (d)
Any amounts a Participant has qualified to receive in respect of an Award as
determined by the Committee (or, as applicable, its delegate) shall be paid to
Participants on or before March 15 of the year immediately following the Award
Year. Payment shall be in cash or in shares of Company or Affiliate stock
pursuant to a long term incentive compensation plan that has been approved by
shareholders. 

          (e)
Participation in the program ends when Participant’s employment ends. Except as
otherwise provided in Section 5(f) or in an Employment Agreement or as
determined by the

6

Committee, the
Participant must be actively employed by the Company on the payment date in
order to qualify for payment with respect to an Award. 

          (f)
If a Participant’s employment terminates by reason of Retirement, Disability or
death, the Participant shall be entitled to payment, at the same time as
payment to other Award holders is made, of a prorated Award reflecting the
portion of the Award Year during which he or she was employed, based on actual
results achieved for such Award Year. 

          (g)
With respect to any Award or portion of an Award that is not to an Executive
Officer or not intended to qualify as “performance-based compensation” under
Section 162(m), the Committee may determine an Incentive Award based on factors
other than Performance Criteria. 

SECTION 6. General
Provisions. 

          (a) No portion
of any Award under the Plan may be assigned or transferred prior to the payment
thereof.

          (b) All
payments made pursuant to the Plan shall be subject to withholding in respect
of income and other taxes required by law to be withheld or to withholding and
offset by the Company in respect of any other amounts due and owing the Company
by a Participant, in accordance with procedures to be established by the
Committee.

          (c) The
selection of an individual for participation in the Plan shall not give such
Participant any right to be retained in the employ of the Company, and the
right of the Company to dismiss or discharge any such Participant, or to
terminate any arrangement pursuant to which any such Participant provides
services to the Company, is specifically reserved. The benefits provided for
Participants under the Plan shall be in addition to, and shall in no way
preclude, the payment of other forms of compensation to or in respect of such
Participants.

          (d) The Board
and the Committee shall be entitled to rely on the advice of counsel and other
experts, including the independent public accountants for the Company. No
member of the Board or of the Committee or any officers of the Company shall be
liable for any act or failure to act under the Plan.

          (e) Nothing
contained in the Plan shall prevent the Company or any Affiliate from adopting
or continuing in effect other compensation arrangements, which arrangements may
be either generally applicable or applicable only in specific cases.

          (f) No member
of the Committee or the Board shall participate in any action of the Committee
or the Board involving that member.

          (g)
The Committee may cancel, withhold, defer or reduce the amount to be paid under
any Award, and no Participant shall have any contractual right under the Plan
to the Award of any amount hereunder, if the Committee determines to do so, in
its absolute discretion, for any reason, including but not limited to a breach
by a Participant of any agreement with or obligation to the Company.

7

          (h)
Notwithstanding any provision in the Plan to the contrary, Awards granted or
paid under the Plan will be subject to recoupment by the Company pursuant to
any “clawback” or similar compensation recoupment policy that may be
established by the Company.

          SECTION 7. Change
in Control. Upon a Change in Control of the Company, the Board may, in its
discretion, deem Performance Criteria to have been achieved at such level of
performance as designated by the Committee with respect to any applicable
Performance Criteria under any outstanding Award relating to the Award Year in
which the Change in Control occurs. Any such Award shall be paid within five
business days following such Change in Control; provided, however, that any
such Award shall be reduced by the amount of any comparable benefit to which
the Participant would be entitled under applicable law upon termination of
employment.

          SECTION 8. Amendment
and Termination of the Plan. The Board may, at any time or from time to
time, terminate, in whole or in part, or amend the Plan. In the event of such
termination, in whole or in part, of the Plan, the Board may in its sole
discretion direct the payment to Participants of any Awards not theretofore
paid out prior to the respective dates upon which payments would otherwise be
made hereunder to such Participants, in a lump sum or installments as the Board
shall prescribe with respect to each such Participant, as permitted under
Section 409A of the Code. 

          SECTION 9. Governing
Law. The validity, construction, and effect of the Plan and any rules and
regulations relating to the Plan and any Award shall be determined in
accordance with the laws of the State of New York, without regard to its
conflicts of laws principles. 

          SECTION
10. Application of Section 162(m).

          (a)
The Plan is intended to be administered, interpreted and construed so that
Incentive Award payments remain tax deductible to the Company and unlimited by
Section 162(m), which restricts under certain circumstances the Federal income
tax deduction for compensation paid by a public company to Executive Officers
in excess of $1 million per year. As of the Plan’s effective date, the
exemption is based on Treasury Regulation Section 1.162-27(f), which generally
exempts from the application of Section 162(m) compensation paid pursuant to a
plan that existed before a company becomes publicly held. Under such Treasury
Regulation, this exemption is available to the Plan for the duration of the
period that lasts until the earlier of the expiration or material modification
of the Plan or the first meeting of stockholders at which directors are to be
elected that occurs after the close of the third calendar year following the
calendar year in which the Company first becomes subject to the reporting
obligations of Section 12 of the Exchange Act. 

          (b)
To the extent that the Committee determines that the exemption described in
Section 10(a) above is no longer available with respect to an Incentive Award,
such Incentive Award shall be intended to satisfy the applicable requirements
for the performance-based compensation exception under Section 162(m) and shall
be contingent upon shareholder approval of the Plan in accordance with Section
162(m), the regulations thereunder and other applicable U.S. Treasury
regulations. Unless and until such stockholder approval is obtained, no
Incentive Award shall be made under the Plan after the expiration of the
exemption described in Section 10(a) above. 

8

          SECTION
11. Duration of the Plan. The Plan is effective as of the Effective Date
and shall remain in effect until all Incentive Awards made under the Plan have
been paid or forfeited under the terms of the Plan, and all Award Years related
to Awards made under the Plan have expired. No Incentive Awards may be made
under the Plan for any Award Year that would end after the expiration of the
exemption referred to in Section 10, unless the Board, subject to any
stockholder approval that may then be required to continue to qualify the Plan
as a performance-based plan under Section 162(m), extends this Plan.

          SECTION
12. Application of Section 409A. Incentive Awards payable under the Plan
are intended to qualify for exemption from or, in the alternative, comply with,
Section 409A. The Plan shall be construed and interpreted in accordance with
such intent. If any provision of the Plan needs to be revised to satisfy the
requirements of Section 409A, then such provision shall be modified or
restricted to the extent and in the manner necessary to be in compliance with
such requirements of Section 409A and any such modification shall attempt to
maintain the same economic results as were intended under the Plan. The Company
makes no guarantee that payments under the Plan will satisfy all applicable
requirements for exemption from Section 409A. Payments made to a participant
under the Plan in error shall be returned to the Company and do not create a
legally binding right to such payments.

9Exhibit 10.28

	
  

 
	
 COTY
 INC.

 
	
 LONG-TERM
 INCENTIVE PLAN

 
	
  

 
	
 (as amended and
 restated April 8, 2013)

 
	
  

 
	
 SECTION
 1

 
	
 PURPOSE AND DURATION

 

	
  

 	
  

 	
  

 
	
 1.1

 	
 Purpose. The purpose of this Coty Inc.
 Long-Term Incentive Plan is to promote the interests of Coty Inc. and its
 shareholders by (i) attracting and retaining exceptional executive personnel
 and other key employees of the Company and its Affiliates; (ii) motivating
 such employees by means of performance-related incentives to achieve
 long-range performance goals; and (iii) enabling such employees to
 participate in the long-term growth and financial success of the Company. 

 
	
  

 	
  

 
	
 1.2

 	
 Effective Date and Term of the Plan. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 The original effective
 date of the Plan was December 10, 1996. The effective date of this amended
 and restated plan document is the Effective Date. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The Plan will terminate
 upon the earlier of (i) the date on which all Shares available for issuance
 under the Plan have been issued pursuant to the exercise of Stock Options or
 the Award of Shares under the Plan, or (ii) the date specified by action of
 the Board. Upon such Plan termination, all Awards outstanding under the Plan
 will continue to have full force and effect in accordance with the terms of
 the Terms and Conditions evidencing each Award.

 

	
  

 
	
 SECTION
 2

 
	
 DEFINITIONS

 

	
  

 	
  

 
	
  

 	
 Whenever used in the
 Plan, the following terms have the meanings set forth below:

 
	
  

 	
  

 
	
 2.1

 	
  “Affiliate” means any entity (i) that,
 directly or indirectly, is controlled by the Company, or in which the Company
 has a significant equity interest, and (ii) as to which the Company is an
 “eligible issuer of service recipient stock” within the meaning of Treas.
 Reg. 1.409A-1(b)(5)(iii)(E), in any such case as determined by the Committee.

 
	
  

 	
  

 
	
 2.2

 	
 “Applicable Fraction” means a fraction, the numerator of which is the number of days elapsed from
 the Grant Date of an Award to the date of the Participant’s termination of
 Service and the denominator of which is the number of days between the Grant
 Date and the date the Award was scheduled to become exercisable or otherwise
 vest.

 
	
  

 	
  

 
	
 2.3

 	
  “Award” means a grant under the Plan to a
 Participant of a Stock Option, Restricted Stock Award, or Other Stock-Based
 Award.

 

	
  

 	
  

 
	
 2.4

 	
  “Board” means the Board of Directors of
 the Company.

 
	
  

 	
  

 
	
 2.5

 	
  “Business Day” means any day other than a
 Saturday, Sunday, or legal holiday, or a day on which the national securities
 exchange that constitutes the principal market for the Shares is closed.

 
	
  

 	
  

 
	
 2.6

 	
  “Cause” has the meaning set forth in any
 employment, severance or other agreement between the Company or an Affiliate
 and the Participant. If there is no employment, severance or other agreement
 between the Company or an Affiliate and the Participant, or if such agreement
 does not define “Cause,” then “Cause” shall mean the occurrence of any of the
 following, as determined by the Committee in its sole discretion:

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 a Participant’s willful
 and continued failure substantially to perform his or her duties (other than
 as a result of total or partial incapacity due to physical or mental illness
 or as a result of termination by such Participant for Good Reason), which
 failure continues for more than 30 days after receipt by the Participant of
 written notice setting forth the facts and circumstances identified by the
 Company as constituting adequate grounds for termination under this clause
 (a);

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 any willful act or
 omission by a Participant constituting dishonesty, fraud or other
 malfeasance, and any act or omission by a Participant constituting immoral
 conduct, which in any such case is injurious to the financial condition or
 business reputation of the Company or any of its Affiliates;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 a Participant’s
 indictment for a felony under the laws of the United States or any state
 thereof or any other jurisdiction in which the Company conducts business; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 a Participant’s breach
 of any nonsolicitation, noncompetition, confidentiality, or other restrictive
 covenant by which he or she is bound.

 
	
  

 	
  

 	
  

 
	
  

 	
 For purposes of this
 definition, no act or failure to act shall be deemed “willful” unless
 effected by a Participant not in good faith and without a reasonable belief
 that such action or failure to act was in or not opposed to the Company’s
 best interests.

 
	
  

 	
  

 	
  

 
	
 2.7

 	
  “Change in Control” means the occurrence
 of any of the following:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Any Person or “group”
 (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), that
 is not the Majority Shareholder is or becomes the “beneficial owner” (as
 defined below), directly or indirectly, of securities representing either (i)
 more than 50% of the combined voting power of the Company’s then outstanding
 securities, or (ii) 20% or more of the combined voting power of the Company’s
 then outstanding securities at a time when the Majority Shareholder holds less
 than 30% of such combined voting power. For purposes of this clause (a),
 “beneficial owner” has the meaning given that term in Rule 13d-3 under the
 Exchange Act, except that a Person shall be deemed to be the “beneficial
 owner” of all shares that any such Person has the right to acquire pursuant
 to any agreement or arrangement or upon exercise of conversion rights,
 warrants, options or otherwise, without regard to the 60-day period referred
 to in such Rule;

 

-2-

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Individuals who
 constitute the Board on the Restatement Effective Date (the “Incumbent
 Board”) cease for any reason to constitute at least a majority thereof, provided, that
 any Person becoming a director subsequent to such date whose election, or
 nomination for election by the Company’s shareholders, was approved by a vote
 of at least three-quarters of the directors then comprising the Incumbent
 Board shall be, for purposes of this clause (b), considered as though such
 Person were a member of the Incumbent Board; and provided, further,
 that this clause (b) shall not apply as long as the Majority Shareholder is
 the beneficial owner of a majority of the voting power of the Company’s outstanding
 securities;

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 The Majority
 Shareholder enters into any joint venture, joint operating arrangement,
 partnership, standstill agreement or other arrangement similar to any of the
 foregoing with any other Person or group, pursuant to which such Person or
 group assumes significant operational or managerial control of the Company;
 or

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 The shareholders of the
 Company approve a plan or agreement providing (i) for a merger or
 consolidation of the Company other than with a wholly owned subsidiary and
 other than a merger or consolidation that would result in the voting
 securities of the Company outstanding immediately prior thereto continuing to
 represent (either by remaining outstanding or by being converted into voting
 securities of the surviving entity) more than 51% of the combined voting
 power of the voting securities of the Company or such surviving entity
 outstanding immediately after such merger or consolidation, or (ii) for a
 sale, exchange or other disposition of all or substantially all of the
 business or assets of the Company. If any of the events enumerated in this
 clause (d) occurs, the Board shall determine the effective date of the Change
 in Control resulting therefrom for purposes of this Plan.

 
	
  

 	
  

 	
  

 
	
 2.8

 	
  “Code” means the U.S. Internal Revenue
 Code of 1986, as amended from time to time.

 
	
  

 	
  

 
	
 2.9

 	
  “Committee” means the Remuneration and Nominating
 Committee of the Board or any
 successor committee with responsibility for compensation, or any
 subcommittee, as long as the number of Committee members and their
 qualifications shall at all times be sufficient to meet the independence
 requirements of the New York Stock Exchange, Inc. or any other applicable
 exchange on which the Company’s common equity is at the time listed and, as
 applicable, the requirements for “outside directors” under Section 162(m) and
 the regulations thereunder, as in effect from time to time.

 
	
  

 	
  

 
	
 2.10

 	
  “Company” means Coty Inc., a Delaware
 corporation, and any successor thereto as provided in Section 14.1. 

 
	
  

 	
  

 
	
 2.11

 	
  “Designated Beneficiary” means the Person
 or Persons the Participant designates from time to time on a signed form
 prescribed by the Committee, properly filed with the Committee during the
 Participant’s lifetime, as the beneficiary of any amounts or benefits the
 Participant owns or is to receive under the Plan, in accordance with Section
 10.1. A properly filed beneficiary designation will revoke all prior
 designations by the same Participant. If no such form has been filed with the
 Committee, the Designated Beneficiary shall be the beneficiary 

 

-3-

	
  

 	
  

 
	
  

 	
 named by the
 Participant in the Company’s qualified 401(k) savings plan or, if none, the
 Beneficiary’s estate.

 
	
  

 	
  

 
	
 2.12

 	
  “Disability” means either (i) disability
 as defined for purposes of the Company’s disability benefit plan, or (ii) a
 Participant’s inability, as a result of physical or mental incapacity, to
 perform the duties of his or her position(s) for a period of six consecutive
 months or for an aggregate of six months in any consecutive 12-month period.
 Any question as to the existence of the Disability of a Participant as to
 which the Participant and the Company cannot agree shall be determined in
 writing by a qualified independent physician mutually acceptable to the
 Participant and the Company. If the Participant and the Company cannot agree
 as to a qualified independent physician, each shall appoint such a physician
 and those two physicians shall select a third who shall make such
 determination in writing. The determination of Disability made in writing to
 the Company and the Participant shall be final and conclusive for all
 purposes of the Plan. Following a Change in Control, the Company shall pay
 all expenses incurred in the determination of whether a Participant is
 disabled.

 
	
  

 	
  

 
	
 2.13

 	
  “Effective Date” means the date on which
 the Amended and Restated Certificate of Incorporation of the Company that is
 contemplated to be adopted by the Company in connection with the first
 underwritten public offering of the Company’s common stock is filed with the
 Secretary of State of the State of Delaware.

 
	
  

 	
  

 
	
 2.14

 	
  “Employee” means an employee of the
 Company or an Affiliate (that is not a Joint Venture).

 
	
  

 	
  

 
	
 2.15

 	
  “Exchange Act” means the U.S. Securities
 Exchange Act of 1934, as amended from time to time, or any successor act
 thereto.

 
	
  

 	
  

 
	
 2.16

 	
  “Executive Officer” means any Company
 employees who is an “executive officer” as defined in Rule 3b-7 promulgated
 under the Exchange Act.

 
	
  

 	
  

 
	
 2.17

 	
 “Exercise Date” shall mean
 any Business Day.

 
	
  

 	
  

 
	
 2.18

 	
  “Exercise Price” means the price at which
 a Participant may purchase a Share pursuant to a Stock Option.

 
	
  

 	
  

 
	
 2.19

 	
  “Fair Market Value” as it relates to a
 Share means, unless otherwise determined by the Committee, the most recent
 closing price of a Share on the principal national securities exchange on
 which the Shares are then listed, or if there were no sales on such date, on
 the next preceding day on which there were sales, or if such Shares are not
 listed on a national securities exchange, the last reported bid price in the
 over-the-counter market. 

 
	
  

 	
  

 
	
 2.20

 	
  “Good Reason” shall have the meaning set
 forth in any employment, severance or other agreement between the Company or
 an Affiliate and the Participant. If there is no employment, severance or
 other agreement between the Company or an Affiliate and the Participant, or
 if such agreement does not define “Good Reason,” then “Good Reason” shall
 mean the occurrence of any of the following:

 

-4-

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Before a Change in
 Control:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 A Participant’s removal
 from, or the Company’s failure to reelect or reappoint the Participant to,
 his or her positions at the Company (other than as a result of a promotion).
 For purposes of this clause (i), a mere change of title shall not constitute
 removal from, or non-reelection to, such position, provided that a
 Participant’s new title is substantially equivalent to the Participant’s
 title as of the Grant Date and his or her position is otherwise not adversely
 affected; or

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 The relocation of a
 Participant’s principal workplace without his or her consent to a location
 more than 25 miles distant from its current location.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Following a Change in
 Control:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Any of the events
 described in clause (a) above,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 A material diminution
 in a Participant’s title, position, duties or responsibilities, or the
 assignment to a Participant of duties that are inconsistent, in a material
 respect, with the scope of duties and responsibilities associated with his or
 her position as of the Grant Date,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 The failure of the
 Company to continue a Participant’s participation in the Company’s Annual
 Performance Plan and in this Plan on a basis that is commensurate with his or
 her position, or

 

	
  

 	
  

 
	
 2.21

 	
  “Grant Date” means the date on which an
 Award is granted.

 
	
  

 	
  

 
	
 2.22

 	
 “Joint Venture” has the
 meaning given that term in Section 6.9.

 
	
  

 	
  

 
	
 2.23

 	
  “Majority Shareholder” means (i) the Company’s
 majority shareholder as of the Effective Date or (ii) a Benckiser Permitted
 Holder as defined in the Company’s Certificate of Incorporation effective on
 the Effective Date or any other similarly situated Person as determined by
 the Committee.

 
	
  

 	
  

 
	
 2.24

 	
  “Other Stock-Based Awards” has the
 meaning given that term in Section 8. 

 
	
  

 	
  

 
	
 2.25

 	
  “Owned Shares” means Shares that a
 Participant has acquired through the exercise of a Stock Option, the vesting
 of Restricted Stock or a distribution of Shares in connection with an Other
 Stock-Based Award.

 
	
  

 	
  

 
	
 2.26

 	
  “Participant” means an Employee selected
 by the Committee to receive an Award under the Plan pursuant to Section 5.2,
 or who has an outstanding Award granted under the Plan.

 
	
  

 	
  

 
	
 2.27

 	
  “Person” means any individual,
 partnership, corporation, limited liability company, association, joint stock
 company, trust, joint venture, unincorporated organization and any other
 entity, whether foreign or domestic, including any governmental entity or any
 department, agency or political subdivision thereof.

 

-5-

	
  

 	
  

 
	
 2.28

 	
  “Plan”
 means this Coty Inc. Long-Term Incentive Plan, as amended from time to time.

 
	
  

 	
  

 
	
 2.29

 	
  “Restricted
 Stock” means a contingent grant of Shares awarded to a
 Participant pursuant to Section 7.

 
	
  

 	
  

 
	
 2.30

 	
  “Restriction
 Period”
 means the period during which the transfer of Restricted Stock is limited in
 some way (based on the passage of time, the achievement of performance
 objectives, or the occurrence of other events as the Committee determines, in
 its sole discretion) and, except as provided in the Terms and Conditions, the
 Restricted Stock is not vested.

 
	
  

 	
  

 
	
 2.31

 	
  “Retirement” means a termination of Service (other than
 a termination of Service for Cause):

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 after attaining age 60,
 but only if the Company or the employing Affiliate consents to the treatment
 of such termination as a “Retirement” for purposes of this Plan; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 qualifying as a
 retirement at normal retirement age under the laws and/or arrangements
 applicable to the Participant, as reasonably determined by the Committee. 

 

	
  

 	
  

 
	
 2.32

 	
  “Section 409A” means Section 409A of the Code and the applicable regulations and other
 legal authority promulgated
 thereunder. 

 
	
  

 	
  

 
	
 2.33

 	
  “Service”
 means the provision of services in the capacity of an Employee or a Director
 of the Company or an Affiliate. A transfer of Service from the Company to an
 Affiliate or from an Affiliate to the Company or another Affiliate shall not
 constitute a termination of Service under the Plan or any Terms and
 Conditions. All determinations regarding Service, including whether any leave
 of absence is a termination of Service, shall be made by the Committee in its
 sole discretion. For purposes of this paragraph, a “Continuing Director”
 shall mean any individual who, upon his or her termination of employment with
 the Company or an Affiliate, continues to serve as a member of the Board or
 the board of directors of an Affiliate. The Service of a Continuing Director
 shall terminate when he or she ceases to serve as a member of the Board or on
 the board of directors of an Affiliate.

 
	
  

 	
  

 
	
 2.34

 	
  “Share” means a share of the Class A
 Common Stock, par value $.01 per share, of the Company, or such other
 securities of the Company as may be designated by the Committee from time to
 time. 

 
	
  

 	
  

 
	
 2.35

 	
  “Stock Option” means a nonqualified stock
 option, as described in Section 6, that is not intended to meet the
 requirements of Code Section 422. 

 
	
  

 	
  

 
	
 2.36

 	
  “Stock Option Spread” means the amount by
 which the Fair Market Value, as of the Exercise Date, of the Shares as to
 which a Stock Option is exercised exceeds the aggregate Exercise Price with
 respect to such Shares.

 
	
  

 	
  

 
	
 2.37

 	
  “Successor” means the Participant’s
 spouse, the Participant’s lineal descendants and/or any trust the
 beneficiaries of which consist only of the Participant, the Participant’s
 spouse and/or the Participant’s lineal descendants, or to a corporation in
 which the Participant, the 

 

-6-

	
  

 	
  

 
	
  

 	
 Participant’s spouse
 and/or the Participant’s lineal descendants own 100% of the economic interest
 and has the unfettered right to prevent further transfer or disposition of
 the Restricted Stock, Stock Option or Owned Shares, as applicable. The
 Committee may, in its discretion, deem other parties to qualify as a
 Successor for purposes of this Plan.

 
	
  

 	
  

 
	
 2.38

 	
  “Terms
 and Conditions” means
 any electronic or written agreement or other instrument or document
 evidencing an Award.

 
	
  

 	
  

 
	
 2.39

 	
  “Withholding Tax” means the aggregate
 federal, state and local taxes, domestic or foreign, required by law or
 regulation to be withheld with respect to any taxable event arising under the
 Plan.

 
	
  

 	
  

 
	
 SECTION
 3

 
	
 Administration

 
	
  

 	
  

 
	
 3.1

 	
 Plan Administration. The Plan shall be
 administered by the Committee.

 
	
  

 	
  

 
	
 3.2

 	
 Authority of the Committee. Except as
 limited by law or the by-laws of the Company, and subject to the provisions
 of the Plan, the Committee shall have full power and discretion to: (a)
 select eligible Employees to participate in the Plan; (b) determine the size
 and type of Awards; (c) determine the terms and conditions of Awards in a
 manner consistent with the Plan; (d) determine whether, to what extent, and
 under what circumstances Awards may be settled or exercised in Shares, or
 other property, and the method or methods by which Awards may be settled or
 exercised; (e) determine the Fair Market Value of a Share; (f) construe and
 interpret the Plan and any agreement or instrument entered into under the
 Plan; (g) establish, amend or waive rules and regulations for the Plan’s
 administration; (h) specify the Exercise Price; and (i) subject to the
 provisions of Section 13.1, amend the terms and conditions of any outstanding
 Award to the extent the amended terms are within the Committee’s authority
 under the Plan. Further, the Committee shall make all other determinations
 that may be necessary or advisable to administer the Plan. The Committee may
 delegate some or all of its authority under the Plan to officers or employees
 of the Company or other Persons, except with respect to Awards to Executive
 Officers.

 
	
  

 	
  

 
	
 3.3

 	
 Decisions Binding. All determinations and
 decisions made by the Committee or by a Person or Persons delegated authority
 by the Committee pursuant to the provisions of the Plan shall be final,
 conclusive and binding on all Persons, including, without limitation, the
 Company, its shareholders, all Affiliates, Employees, Participants and their
 estates and beneficiaries.

 
	
  

 	
  

 
	
 SECTION
 4

 
	
 Shares Subject to the Plan

 
	
  

 	
  

 
	
 4.1

 	
 Number of Shares Available for Grants.
 Subject to adjustment as provided in Section 4.3 the number of Shares with
 respect to which Awards (including for this purpose awards granted under the
 Plan prior to the Restatement Effective Date) may be granted under the Plan
 shall be as set forth in a resolution adopted by the Board and as authorized
 by the Company’s shareholders. 

 

-7-

	
  

 	
  

 
	
 4.2

 	
 Lapsed Awards. If any Award granted under
 the Plan is canceled, terminates, expires, lapses or is forfeited for any
 reason, any Shares subject to the Award shall again be available for the
 grant of an Award under the Plan.

 
	
  

 	
  

 
	
 4.3

 	
 Adjustments in Authorized Shares. If the
 Shares, as currently constituted, are changed into or exchanged for a
 different number or kind of shares of stock or other securities of the
 Company or of another corporation (whether because of a merger, consolidation,
 recapitalization, reclassification, split, reverse split, combination of
 shares, or otherwise, but not including an IPO or other capital infusion from
 any source) or if the number of Shares is increased through the payment of a
 stock dividend, then the Committee shall substitute for or add to each Share
 that may become subject to an Award the number and kind of shares of stock or
 other securities into which each outstanding Share was changed, for which
 each such Share was exchanged, or to which each such Share is entitled, as
 the case may be. 

 
	
  

 	
  

 
	
 4.4

 	
 Sources of Shares Deliverable Under Awards. Any
 Shares delivered pursuant to an Award may consist, in whole or in part, of
 authorized and unissued Shares or of treasury Shares.

 
	
  

 	
  

 
	
 4.5

 	
 Plan Frozen. As of November 8, 2012, no
 Awards may be granted under the Plan.

 
	
  

 	
  

 
	
 SECTION
 5

 
	
 Eligibility and Participation

 
	
  

 	
  

 
	
 5.1

 	
 Eligibility. Any Employee, including any
 officer or employee-director of the Company or an Affiliate, who is not a
 member of the Committee shall be eligible to be designated a Participant. To
 be eligible, a Participant shall have signed and delivered to the Company the
 Confidentiality and Non-Competition Agreement delivered by the Company to the
 Participant.

 
	
  

 	
  

 
	
 5.2

 	
 Actual Participation. The Committee shall
 determine the eligible Employees to whom it will grant Awards. 

 
	
  

 	
  

 
	
 SECTION
 6

 
	
 Stock Options

 
	
  

 
	
 6.1

 	
 Grant of Stock Options. 

 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Subject to the terms
 and provisions of the Plan, the Committee may grant Stock Options to any
 Employee in the number, and upon the terms, and at such time or times, as the
 Committee determines and sets forth in Terms and Conditions.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Each Stock Option grant
 shall be evidenced by Terms and Conditions that specify the duration of the
 Stock Option, the number of Shares to which the Stock Option pertains, the
 manner, time, and rate of exercise and vesting of the Stock Option, and such
 other provisions as the Committee determines. Vesting conditions may include,
 but not be limited to, the achievement of specific performance objectives
 (Company-wide, business unit, and/or individual) or continued Service.

 

-8-

	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 The Company’s Chief
 Executive Officer, as long as he or she is a member of the Board, may grant,
 upon the recommendation of the Company’s Vice President, Corporate Human
 Resources, Stock Options covering up to a total of 2,000,000 Shares to
 Employees for retention, recognition or other appropriate purposes, provided
 that a report of any such grant shall be provided to the Committee at its
 next meeting following the grant.

 

	
  

 	
  

 	
  

 
	
 6.2

 	
 Exercise Price. The Terms and Conditions
 shall specify the Stock Option’s Exercise Price, which shall be not less than
 the Fair Market Value of a Share on the Grant Date. 

 
	
  

 	
  

 	
  

 
	
 6.3

 	
 Duration of Stock Options. Each Stock Option
 will expire at the time determined by the Committee at the time of grant and
 set forth in the Terms and Conditions. 

 
	
  

 	
  

 	
  

 
	
 6.4

 	
 Exercise of Stock Options. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 Stock Options shall
 become exercisable at such times and be subject to such vesting and other
 restrictions and conditions as the Committee in each instance approves and
 sets forth in the Terms and Conditions. Restrictions and conditions on the
 exercise of a Stock Option need not be the same for each Award or for each
 Participant. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The holder of a Stock
 Option may exercise the Stock Option only by delivering a written notice of
 exercise to the Company setting forth the number of Shares as to which the
 Stock Option is to be exercised. Upon the Exercise Date, the holder shall pay
 or provide for the Exercise Price and applicable Withholding Tax in full,
 pursuant to such exercise procedures established by the Committee from time
 to time after giving consideration to applicable tax, securities and
 accounting rules. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Any exercisable Stock
 Option that has not been exercised by its holder shall be automatically
 exercised in accordance with subsection (a) hereof on the Exercise Date
 immediately prior to its expiration if, on such Exercise Date, there is a
 Stock Option Spread with respect to such Stock Option. 

 
	
  

 	
  

 	
  

 
	
 6.5

 	
 Termination of Service. Except as
 otherwise provided in the Terms and Conditions:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 In the event a
 Participant’s Service terminates by reason of death, Disability, or
 Retirement:

 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 The Applicable Fraction
 of the portion of any Stock Option held by such Participant which has not
 theretofore become exercisable shall immediately become vested and
 exercisable. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 All Stock Options held
 by the Participant, to the extent exercisable (including by application of
 clause (i) above) as of the Participant’s termination of Service shall remain
 exercisable through the second anniversary of the date of termination of
 Service.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 Any unvested portion of
 the Participant’s Stock Options as of the date of termination (other than any
 portion thereof that becomes vested pursuant to 

 

-9-

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 clause (i) above) shall
 be forfeited and canceled, without consideration, on the date of termination.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Except as provided in
 Section 6.8, in the event a Participant’s Service terminates other than by
 reason of death, Disability, or Retirement:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 Any unvested portion of
 the Participant’s Stock Options as of the date of termination shall be
 forfeited and canceled on the date of termination, and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 The vested portion, if
 any, of the Participant’s Stock Options shall remain exercisable until ninety
 (90) days after the Participant’s termination of Service. Any vested Stock
 Option remaining outstanding after such date shall be canceled without
 consideration.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Notwithstanding the
 foregoing, the Committee may, in its sole discretion, accelerate the vesting
 and exercisability, and/or extend the period of exercisability, of all or a
 portion of a Stock Option at any time.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 In no event shall a
 Stock Option be exercisable following its expiration date.

 
	
  

 	
  

 	
  

 
	
 6.6

 	
 Nontransferability of Stock Options. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Except as otherwise
 provided in Section 6.6(b), a Participant’s Terms and Conditions, or the
 Plan, during the Restriction Period, (i) no Stock Option granted under the
 Plan may be sold, transferred, pledged, assigned, or otherwise alienated or
 hypothecated, other than by will or by the laws of descent and distribution,
 and (ii) all Stock Options shall be exercisable during the Participant’s
 lifetime only by the Participant or his or her guardian or legal
 representative. The Committee may, in its sole discretion, require a
 Participant’s guardian or legal representative to supply it with the evidence
 the Committee deems necessary to establish the authority of the guardian or
 legal representative to act on behalf of the Participant.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Subject to applicable
 law, vested Stock Options may be transferred to a Successor. Such transferred
 Stock Options may only be further sold, transferred, pledged, assigned or
 otherwise alienated by the Successor in accordance with this Section 6.6, and
 shall be subject in all respects to the terms of the Terms and Conditions and
 the Plan. For a transfer to be effective, the Successor shall promptly
 furnish the Company with written notice thereof and a copy of such other
 evidence as the Committee may deem necessary to establish the validity of the
 transfer and the acceptance of the Successor of the terms and conditions of
 the Plan.

 
	
  

 	
  

 	
  

 
	
 6.7

 	
 Dividend Equivalents and Other Distributions.
 The Committee may, in its sole discretion, provide under an agreement for
 payments in connection with Stock Options that are equivalent to dividends or
 other distributions declared and paid on the Shares underlying the Stock
 Options prior to the date of exercise. Such dividend equivalent agreement, if
 any, shall be separate and apart from the Terms and Conditions and shall be
 designed to comply separately with Section 409A.

 

-10-

	
  

 	
  

 	
  

 
	
 6.8

 	
 Change in Control. If, within twelve
 months following a Change in Control, (i) a Participant is terminated by the
 Company or an employing Affiliate (that is not a Joint Venture) without Cause
 or (ii) such Participant resigns from the Company or an employing Affiliate
 (that is not a Joint Venture) for Good Reason, the unvested portion of any
 then outstanding Stock Option shall vest and become exercisable. 

 
	
  

 	
  

 
	
 6.9

 	
 Employment in a Joint Venture. If a
 Participant becomes an employee of certain joint ventures of the Company, as
 determined by the Board from time to time (a “Joint Venture”), during the
 Restriction Period, vesting of the Participant’s Stock Options shall be
 tolled beginning on the date such Participant becomes an employee of the
 Joint Venture until the date such Participant again becomes an Employee.
 Accordingly, the Restriction Period for such Participant’s Stock Options
 shall be extended by the number of days the Participant was an employee of
 the Joint Venture.

 
	
  

 	
  

 
	
 SECTION
 7

 
	
 Restricted Stock

 
	
  

 
	
 7.1

 	
 Grant of Restricted Stock. Subject to the
 terms and provisions of the Plan, the Committee may, at any time and from
 time to time, grant Restricted Stock to any Employee in such amounts as it
 determines and sets forth in Terms and Conditions.

 
	
  

 	
  

 
	
 7.2

 	
 Terms and Conditions. Each grant of
 Restricted Stock shall be evidenced by Terms and Conditions that specify the
 Restriction Period, the number of Shares granted, the purchase price, if any,
 and such other provisions as the Committee determines.

 
	
  

 	
  

 
	
 7.3

 	
 Nontransferability. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Except as provided in
 Section 7.3(b), during the Restricted Period, (i) no Restricted Stock granted
 under the Plan may be sold, transferred, pledged, assigned, or otherwise
 alienated or hypothecated, other than by will or by the laws of descent and
 distribution and (ii) all rights with respect to Restricted Stock shall be
 available during the Participant’s lifetime only to the Participant or the
 Participant’s guardian or legal representative. The Committee may, in its
 sole discretion, require a Participant’s guardian or legal representative to
 supply it with evidence the Committee deems necessary to establish the
 authority of the guardian or legal representative to act on behalf of the
 Participant.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Subject to applicable
 law, Restricted Stock may be transferred to a Successor. Such transferred
 Restricted Stock may only be further sold, transferred, pledged, assigned or
 otherwise alienated by the Successor in accordance with this Section 7.3, and
 shall be subject in all respects to the terms of the Terms and Conditions and
 the Plan. For a transfer to be effective, the Successor shall promptly
 furnish the Company with written notice thereof and a copy of such other
 evidence as the Committee may deem necessary to establish the validity of the
 transfer and the acceptance of the Successor of the terms and conditions of
 the Plan.

 
	
  

 	
  

 	
  

 
	
 7.4

 	
 Termination of Service. Except as
 provided in Section 7.5, if a Participant’s Service terminates,
 then except as otherwise provided in the Terms and Conditions all unvested

 

-11-

	
  

 	
  

 	
  

 
	
  

 	
 Restricted Stock held by such Participant will be forfeited and any vested
 Restricted Stock shall continue to be subject to the terms of the Plan and
 any applicable Award.

 
	
  

 	
  

 
	
 7.5

 	
 Change in Control. If, within twelve
 months following a Change in Control, (i) a Participant is terminated by the
 Company or an employing Affiliate (that is not a Joint Venture) without Cause
 or (ii) such Participant resigns from the Company or an employing Affiliate
 (that is not a Joint Venture) for Good Reason, all then outstanding
 Restricted Stock shall vest and become nonforfeitable.

 
	
  

 	
  

 
	
 7.6

 	
 Other Conditions. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 The Committee may
 impose such other conditions and restrictions on any Restricted Stock as it
 deems advisable and sets forth in the Terms and Conditions, including,
 without limitation, vesting restrictions based upon the achievement of
 specific performance objectives (Company-wide, business unit, and/or
 individual) or continued Service, and/or restrictions under applicable
 federal or state securities laws. The Committee may provide that restrictions
 established under this Section 7.6(a) as to any given Award will lapse all at
 once or in installments.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The Company may retain
 the certificates representing Shares of Restricted Stock in its possession until
 all conditions and/or restrictions applicable to the Shares have been
 satisfied.

 
	
  

 	
  

 	
  

 
	
 7.7

 	
 Voting Rights. Except as otherwise
 provided in the Terms and Conditions, a Participant holding Shares of
 Restricted Stock may exercise any voting rights that apply to those Shares
 during the Restriction Period. 

 
	
  

 	
  

 
	
 7.8

 	
 Dividends and Other Distributions. During
 the Restriction Period, a Participant holding Shares of Restricted Stock
 shall be credited with regular dividends and other distributions paid on
 those Shares. Such dividends and other distributions shall be subject to the
 same vesting conditions as the underlying Shares, and shall be paid within 30
 days following the end of the Restriction Period.

 
	
  

 	
  

 
	
 7.9

 	
 Section 83(b) Elections on Restricted Stock.
 The Participant, if subject to taxation in the United States with respect to
 any compensation derived under the Plan, shall indicate to the Company
 whether the Participant intends to make an election under Code Section 83(b)
 with respect to the Restricted Stock.

 
	
  

 	
  

 
	
 7.10

 	
 Employment in a Joint Venture. If a
 Participant becomes an employee of a Joint Venture during the Restriction
 Period, vesting of the Participant’s Restricted Stock shall be tolled
 beginning on the date such Participant becomes an employee of the Joint
 Venture and shall recommence on the date such Participant again becomes an
 Employee. Accordingly, the Restriction Period for such Participant’s
 Restricted Stock shall be extended by the number of days the Participant was
 an employee of the Joint Venture. 

 

-12-

	
  

 	
  

 	
  

 
	
 SECTION
 8

 
	
 Other Stock-Based Awards

 
	
  

 
	
 8.1

 	
 The Committee shall
 have authority to grant to eligible Employees an “Other Stock-Based Award,”
 which shall consist of any right which (i) is not a Stock Option or
 Restricted Stock, and (ii) is an Award of Shares or an Award denominated or
 payable in, valued in whole or in part by reference to, or otherwise based on
 or related to, Shares (including, without limitation, securities convertible
 into Shares), as deemed by the Committee to be consistent with the purposes
 of the Plan. Subject to the terms of the Plan and any applicable Terms and
 Conditions, the Committee shall determine the terms and conditions of any
 such Other Stock-Based Award.

 
	
  

 	
  

 
	
 SECTION
 9

 
	
 Share Restrictions and Purchase and Sale Rights

 
	
  

 
	
 9.1

 	
 Restrictions. The Committee may impose
 such restrictions on any Shares as it deems necessary or advisable,
 including, without limitation, restrictions under applicable federal
 securities laws, under the requirements of any stock exchange or market upon
 which the Shares are then listed and/or traded, and under any blue sky or
 state securities laws. 

 
	
  

 	
  

 
	
 9.2

 	
 Additional Conditions of Transfer. The
 Company shall not be required (i) to transfer on its books any Shares that
 have been sold or transferred, or (ii) to treat as owner of such Shares, to
 accord the right to vote as such owner, or to pay dividends to any transferee
 to whom such Shares have been transferred in violation of the Plan or any
 Terms and Conditions. 

 
	
  

 	
  

 
	
 SECTION
 10

 
	
 Beneficiary Designation

 
	
  

 
	
 10.1

 	
 Each Participant may,
 from time to time, name any Designated Beneficiary (who may be named
 contingently or successively) to whom any benefit under the Plan is to be
 paid in case the Participant should die before receiving any or all of his or
 her benefits under the Plan. Each beneficiary designation shall revoke all
 prior designations by the same Participant, must be in a form prescribed by
 the Committee and must be made during the Participant’s lifetime. If a
 Designated Beneficiary predeceases the Participant or no beneficiary has been
 designated, benefits remaining unpaid at the Participant’s death shall be
 paid to the Participant’s estate.

 
	
  

 	
  

 
	
 SECTION 11

 
	
 Breach of Restrictive Covenants

 
	
  

 
	
 11.1

 	
 The
 Terms and Conditions may provide that if the Participant breaches, whether
 during or after termination of Service, a nonsolicitation, noncompetition,
 confidentiality, or other restrictive covenant by which he or she is bound,
 then in addition to any other penalties or restrictions that may apply under
 any such agreement, state law, or otherwise, the Participant shall forfeit:

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Any
 Awards granted to him or her under the Plan, including Awards that have
 become exercisable;

 

-13-

	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 The
 profit the Participant realized from the exercise of any Stock Options that
 the Participant exercised after terminating Service and within the six-month
 period immediately preceding the Participant’s termination of Service, which
 is the Stock Option Spread associated with any Shares acquired by the Participant
 upon his or her exercise of such Stock Options; and

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 The
 Fair Market Value, as determined on the vesting date, of any Restricted Stock
 that vested within the six-month period immediately preceding the
 Participant’s termination of Service.

 
	
  

 	
  

 	
  

 
	
 SECTION
 12

 
	
 Rights of Participants

 
	
  

 
	
 12.1

 	
 Service. Nothing in the Plan shall
 interfere with or limit in any way the right of the Company or any Affiliate
 to terminate any Participant’s Service at any time, or confer upon any
 Participant any right to continue in the Service of the Company or any
 Affiliate. The grant of any Award under the Plan shall not in any way affect
 the right or power of the Company to make adjustments, reclassifications or
 changes in its capital or business structure, or to merge, consolidate,
 dissolve, liquidate, sell or transfer all or any part of its business or
 assets.

 
	
  

 	
  

 
	
 12.2

 	
 Participation. No Employee shall have the
 right to receive an Award under the Plan, or, having received any Award, to
 receive a future Award. 

 
	
  

 	
  

 
	
 SECTION
 13

 
	
 Amendment, Modification, Termination and Change in Control

 
	
  

 
	
 13.1

 	
 Amendment, Modification and Termination.
 The Board may at any time and from time to time alter, amend, modify or
 terminate the Plan in whole or in part, without the approval of the Company’s
 shareholders, except to the extent such approval is required by law. Subject
 to the terms and conditions of the Plan, the Committee may modify, extend or
 renew outstanding Awards under the Plan, or accept the surrender of
 outstanding Awards (to the extent not already exercised) and grant new Awards
 in substitution of them (to the extent not already exercised), in order to
 comply with the requirements of applicable law or otherwise. Notwithstanding
 the foregoing, no modification of an Award shall, without the prior written
 consent of the Participant, materially alter or impair any rights or
 obligations under any Award already granted under the Plan, except such an
 amendment made to comply with the requirements of applicable law.

 
	
  

 	
  

 
	
 13.2

 	
 Adjustment of Awards Upon the Occurrence of Certain Events.

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 In General.
 If the Shares, as currently constituted, are changed into or exchanged for a
 different number or kind of shares of stock or other securities of the
 Company or of another corporation (whether because of a merger,
 consolidation, recapitalization, reclassification, split, reverse split,
 combination of shares, or otherwise, but not including a capital infusion
 from any source) or if the number of Shares is increased through the payment
 of a stock dividend, then the Committee shall substitute for or add to each
 Share underlying an Award the number and kind of shares of stock or other
 securities into which each outstanding Share was changed, for which each such
 

 

-14-

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Share was exchanged, or
 to which each such Share is entitled, as the case may be, which shares or
 other securities shall be subject to the same terms and conditions as the
 underlying Award. Any such adjustment in an outstanding Stock Option shall be
 made without change in the aggregate purchase price applicable to the
 unexercised portion of such Stock Option but with a corresponding adjustment
 in the Exercise Price for each Share or other unit of any security covered by
 such Stock Option.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Reciprocal Transactions.
 The Committee may, but shall not be obligated to, make an appropriate and
 proportionate adjustment to an Award or to the Exercise Price of any
 outstanding Award, and/or grant an additional Award to the holder of any
 outstanding Award, to compensate for the diminution in the intrinsic value of
 the Shares resulting from any reciprocal transaction.

 
	
  

 	
  

 	
  

 
	
  

 	
 (c)

 	
 Certain Unusual or
 Nonrecurring Events. In recognition of unusual or
 nonrecurring events affecting the Company or its financial statements, or in
 recognition of changes in applicable laws, regulations, or accounting
 principles, and, whenever the Committee determines that adjustments are
 appropriate in order to prevent dilution or enlargement of the benefits or
 potential benefits intended to be made available under the Plan, the
 Committee may, using reasonable care, make adjustments in the terms and
 conditions of, and the criteria included in, Awards. In no event will the
 Committee, unless otherwise approved by shareholders, be permitted (i) to
 reduce the Exercise Price of any outstanding Stock Option, (ii) cancel a
 Stock Option in exchange for cash or other Awards (except as provided in
 Section 13.4), (iii) exchange or replace an outstanding Stock Option with a
 new Stock Option with a lower Exercise Price, or (iv) take any other action
 that would be a “repricing” of Stock Options.

 
	
  

 	
  

 	
  

 
	
  

 	
 (d)

 	
 Notice.
 The Committee shall give notice of any adjustment to each Participant who
 holds an Award that has been adjusted and the adjustment (whether or not such
 notice is given) shall be effective and binding for all Plan purposes.

 
	
  

 	
  

 	
  

 
	
  

 	
 (e)

 	
 Section 409A.
 Notwithstanding any provision herein to the contrary, no adjustment shall be
 made under this Section 13.2 to the extent it would give rise to adverse tax
 consequences under Section 409A.

 
	
  

 	
  

 	
  

 
	
 13.3

 	
 Fractional Shares. Fractional Shares,
 whether resulting from any adjustment in Awards pursuant to Section 13.2 or
 otherwise, may be settled in cash or otherwise as the Committee determines. 

 
	
  

 	
  

 
	
 13.4

 	
 Change
 in Control. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 If, within twelve
 months following a Change in Control, (i) a Participant is terminated by the
 Company or an employing Affiliate (that is not a Joint Venture) without Cause
 or (ii) such Participant resigns from the Company or an employing Affiliate
 (that is not a Joint Venture) for Good Reason, all then outstanding Awards
 shall become fully vested. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Any Award that has not
 been fully exercised before the date of a Change in Control may be settled or
 otherwise terminated on such date in the discretion of the 

 

-15-

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Committee, unless a
 provision has been made in writing in connection with such transaction for
 the assumption of all Awards theretofore granted, or the substitution for
 such Awards of awards to acquire the stock of the surviving, resulting or
 acquiring corporation, with any adjustments as the Committee determines
 appropriate, in which event the Awards theretofore granted shall continue in
 the manner and under the terms so provided. Notwithstanding anything in the
 Plan to the contrary, any underwater Award that has not been fully exercised,
 and any Award that the Committee determines cannot become vested, before the
 date of consummation of the Change in Control may be canceled without
 consideration in the discretion of the Committee.

 
	
  

 	
  

 	
  

 
	
 13.5

 	
 Tax Withholding. The Company shall have
 the right to deduct or withhold, or require a Participant to remit to the
 Company, an amount (either in cash or Shares) sufficient to satisfy any
 Withholding Tax.

 
	
  

 	
  

 
	
 SECTION
 14

 
	
 Miscellaneous Provisions

 
	
  

 
	
 14.1

 	
 Successors. All obligations of the
 Company under the Plan or the Terms and Conditions shall be binding on any
 successor to the Company, whether the existence of the successor results from
 a direct or indirect purchase of all or substantially all of the Company’s
 stock, or a merger or consolidation, or otherwise.

 
	
  

 	
  

 
	
 14.2

 	
 Legal Construction. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 Number.
 Except where otherwise indicated by the context, any plural term used in the
 Plan includes the singular and any singular term includes the plural.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 Severability.
 If any provision of the Plan is held illegal or invalid for any reason, the
 illegality or invalidity shall not affect the remaining parts of the Plan,
 and the Plan shall be construed and enforced as if the illegal or invalid
 provision had not been included.

 
	
  

 	
  

 	
  

 
	
 14.3

 	
 Business Day. In the event the day
 prescribed for the performance of any act under the Plan, or deadline by
 which such act must be performed, shall fall on a day other than a Business
 Day, such day or deadline shall be extended until the close of business on
 the next succeeding Business Day.

 
	
  

 	
  

 
	
 14.4

 	
 Requirements of Law. The granting of
 Awards, the issuance of Shares and the payment of cash under the Plan shall
 be subject to all applicable laws, rules and regulations, and to any
 approvals by governmental agencies or national securities exchanges as may be
 required.

 
	
  

 	
  

 
	
 14.5

 	
 Rights of a Shareholder. A Participant
 shall not be, nor shall a Participant have any of the rights and privileges
 of, a shareholder until certificates for the underlying Shares of Restricted
 Stock have been issued.

 

-16-

	
  

 	
  

 	
  

 
	
 14.6

 	
 Securities Law Compliance. 

 
	
  

 	
  

 
	
  

 	
 (a)

 	
 As to any individual
 who is, on the relevant date, an officer, director or greater than 10%
 percent beneficial owner of any class of the Company’s equity securities that
 is registered pursuant to Section 12 of the Exchange Act, all as defined
 under Section 16 of the Exchange Act, transactions under the Plan are
 intended to comply with all applicable conditions of Rule 16b-3 under the
 Exchange Act, or any successor rule. To the extent any provision of the Plan
 or action by the Committee fails to so comply, it shall be deemed null and
 void, to the extent permitted by law and deemed advisable by the Committee.

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 To the extent the
 Committee deems it necessary, appropriate or desirable to comply with state
 securities laws or practice and to further the purposes of the Plan, the
 Committee may, without amending the Plan, (i) establish rules applicable to
 Awards granted to Participants, including rules that differ from those set
 forth in the Plan, and (ii) grant Awards to such Participants in accordance
 with those rules that would require the application of the securities laws of
 any state.

 
	
  

 	
  

 	
  

 
	
 14.7

 	
 Unfunded Status of the Plan. The Plan is
 intended to constitute an “unfunded” plan for incentive compensation. With
 respect to any payments or deliveries of Shares not yet made to a Participant
 by the Company, the Participant’s rights are no greater than those of a
 general creditor of the Company. The Committee may authorize the
 establishment of trusts or other arrangements to meet the obligations created
 under the Plan, so long as the arrangement does not cause the Plan to lose
 its legal status as an unfunded plan.

 
	
  

 	
  

 
	
 14.8

 	
 Non-U.S. Based Employee. Notwithstanding
 any other provision of the Plan to the contrary, the Committee may make
 Awards to Employees who are not citizens or residents of the United States,
 or to Employees outside the United States, on terms and conditions that are
 different from those specified in the Plan as may, in the Committee’s
 judgment, be necessary or desirable to foster and promote achievement of the
 Plan’s purposes. In furtherance of such purposes, the Committee may, without
 amending the Plan, establish or modify rules, procedures and subplans as may
 be necessary or advisable to comply with provisions of laws in other
 countries or jurisdictions in which the Company operates or has employees.

 
	
  

 	
  

 
	
 14.9

 	
 Governing Law. To the extent not
 preempted by Federal law, the Plan and all agreements hereunder shall be
 construed and enforced in accordance with, and governed by, the laws of the
 State of New York, without giving effect to its conflicts of law principles
 that would require the application of the law of any other jurisdiction.

 

-17-

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