Document:

EX-10.3

Exhibit 10.3

BRIGHTPOINT, INC.

AMENDED AND RESTATED 2004 LONG-TERM INCENTIVE PLAN

(as adjusted for 3 for 2 stock splits in September and December 2005 and a 6 for 5 stock split in

May 2006 and as amended by vote of the shareholders on July 31, 2007, May 13, 2008

and May 5, 2009)

SECTION 1: PURPOSE.

     The purpose of the Brightpoint, Inc. 2004 Long-Term Incentive Plan is to enable Brightpoint,
Inc. to offer to those of its employees and to the employees of its Subsidiaries and directors,
consultants and other persons who are expected to contribute to the success of the Company and its
Subsidiaries Awards under the Plan, thereby enhancing the Company’s ability to attract, retain and
reward such key employees or other persons, and to increase the interest of those employees or
other persons in the welfare of the Company and its Subsidiaries.

SECTION 2: DEFINITIONS.

     For purposes of the Plan, unless the context requires otherwise, the following terms shall be
defined as set forth below:

     (a) “Award” means an award granted under the Plan in one of the forms provided in Section 3.

     (b) “Beneficiary” as applied to a participant in the Plan, means a person or entity (including
a trust or the estate of the participant) designated in writing by the participant on such forms as
the Committee may prescribe to receive benefits under the Plan in the event of the death of the
participant; provided, however, that if, at the death of a participant, there shall not be any
living person or entity in existence so designated, the term “beneficiary” shall mean the legal
representative of the participant’s estate.

     (c) “Board” means the Board of Directors of the Company.

     (d) “Cash Award” means an Award granted pursuant to Section 11.

     (e) “Cause” has the meaning ascribed thereto in Section 6(b)(ix).

     (f) “Change of Control” shall have the meanings set forth in Section 13A and Section 13B, as
applicable.

     (g) “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any
successor thereto.

     (h) “Committee” means the Compensation and Human Resources Committee of the Board or any other
committee of the Board which the Board may designate, consisting of two or more members of the
Board each of whom shall meet the definition of an “independent director” under the listing rules
of any securities exchange or national securities association on which the Stock is listed for
trading and the requirements set forth in any other law, rule or regulation applicable to the Plan
hereinafter enacted, provided, however, that (i) with respect to any Award that is intended to
satisfy the requirements of Rule 16b-3, such Award shall be granted and

 

 

administered by a committee of the Board consisting of at least such number of directors as are
required from time to time by Rule 16b-3, and each such committee member shall meet such
qualifications as are required by Rule 16b-3 and (ii) with respect to any Award that is intended to
satisfy the requirements of Section 162(m) of the Code, such Award shall be granted and
administered by a committee of the Board consisting of at least such number of directors as are
required from time to time by Section 162(m) of the Code, and each such committee member shall meet
such qualifications as are required by Section 162(m) of the Code.

     (i) “Company” means Brightpoint, Inc., a corporation organized under the laws of the State of
Delaware or any successor entity.

     (j) “Covered Employee” shall mean any employee of the Corporation or any of its Subsidiaries
who is deemed to be a “covered employee” within the meaning of Section 162(m) of the Code.

     (k) “Deferred Stock” means Stock to be received, under an Award made pursuant to Section 9, at
the end of a specified deferral period.

     (l) “Disability” “Disability” of a participant in the Plan shall mean the permanent and total
disability as defined by Section 22(e)(3) of the Code.

     (m) “Early Retirement” means retirement, with the approval of the Committee for purposes of
one or more Award(s) hereunder, from active employment with the Company or any Parent or Subsidiary
prior to age 65. (n) “Elective Deferral” has the meaning ascribed thereto in Section 19.

     (o) “Employee” means any common law employee of the Company, any Parent or any Subsidiary (as
defined in accordance with the Regulations and Revenue Rulings then applicable under Section
3401(c) of the Code), including any employee who is also a director and/or officer of such.

     (p) “Exchange Act” means the Securities Exchange Act of 1934, as amended, as in effect from
time to time.

     (q) “Fair Market Value”, unless otherwise required by any applicable provision of the Code or
any regulations issued thereunder, means, as of any given date: (i) if the principal market for the
Stock is a national securities exchange or the National Association of Securities Dealers Automated
Quotations System (“NASDAQ”), the closing sales price of the Stock on such day as reported by such
exchange or market system, or on a consolidated tape reflecting transactions on such exchange or
market system, or (ii) if the principal market for the Stock is not a national securities exchange
and the Stock is not quoted on NASDAQ, the arithmetic mean of the high and low prices on the
trading day of the grant of the Stock as reported by NASDAQ or the National Quotation Bureau, Inc.;
provided that if clauses (i) and (ii) of this paragraph are both inapplicable, or if no trades have
been made or no quotes are available for such day, the Fair Market Value of the Stock shall be
determined in good faith by the Board or the Committee, as the case may be, which determination
shall be conclusive as to the Fair Market Value of the Stock. In no event shall “Fair Market Value”
be less than the par value of the Stock.

     (r) “Non-Qualified Stock Option” means any Stock Option that is not an incentive stock option
within the meaning of Section 422 of the Code.

 

 

     (s) “Normal Retirement” means retirement from active employment with the Company or any Parent
or Subsidiary on or after age 65.

     (t) “Other Stock-Based Award” means an award under Section 10 that is valued in whole or in
part by reference to, or is otherwise based upon, Stock.

     (u) “Parent” means any present or future parent of the Company, as such term is defined in
Section 424(e) of the Code, or any successor thereto.

     (v) “Performance Cycle” means the period of time established by the Committee within which the
Performance Goals are required to be attained or satisfied.

     (w) “Performance Goals” means the performance goals established by the Committee with respect
to the Company or any Subsidiary, in the Committee’s sole discretion in writing, based upon any one
or any combination of the following business criteria or such other business criteria as the
Committee shall determine: (i) return on equity, (ii) operating income, (iii) earnings and (iv)
return on invested capital.

     (x) “Performance Unit” means a contingent right granted pursuant to Section 7 to receive an
award, payable either in cash and/or in Stock, if the Performance Goals established by the
Committee are attained.

     (y) “Plan” means this Brightpoint, Inc. 2004 Long-Term Incentive Plan, as hereinafter amended
from time to time.

     (z) “Restricted Stock” means Stock, received under an award made pursuant to Section 8, that
is subject to restrictions under said Section 8.

     (aa) “Restricted Stock Agreement” shall have the meaning set forth in Section 8(b)(iv).

     (bb) “Retirement” means Normal Retirement or Early Retirement.

     (cc) “Rule 16b-3” means Rule 16b-3 of the General Rules and Regulations under the Exchange
Act, as in effect from time to time.

     (dd) “Section 13B Effective Date” means the date the Company’s shareholders approve the
Amended and Restated 2004 Incentive Plan implementing Section 13B of the Plan.

     (ee) “Securities Act” means the Securities Act of 1933, as amended, as in effect from time to
time.

     (ff) “Stock” means the common stock of the Company, par value $.01 per share, which the
Company is currently authorized to issue or may in the future be authorized to issue or, in the
event that the outstanding shares of such common stock are hereinafter converted into or exchanged
for shares of a different stock or security of the Company or another corporation pursuant to the
terms of this Plan, such other stock or security.

     (gg) “Stock Option” or “Option” means any option to purchase shares of Stock which is granted
pursuant to the Plan.

     (hh) “Stock Option Agreement” has the meaning set forth in Section 6(b)(xi).

     (ii) “Subsidiary” means any present or future subsidiary corporation of the Company, as such
term is defined in Section 424(f) of the Code, or any successor thereto.

 

 

     (jj) “Termination of Service” occurs when a participant of the Plan who is an Employee shall
cease to serve as an Employee for any reason; or, when a participant in the Plan who is a
non-employee director shall cease to serve as a director of the Company, any Parent and any
Subsidiary for any reason. Except as may be necessary or desirable to comply with applicable
federal or state law, a “Termination of Service” shall not be deemed to have occurred when a
participant in the Plan changes his or her status as an Employee or non-employee director so long
as after such change in status, the participant is either an employee or non-employee director.

     SECTION 3: ADMINISTRATION; TYPES OF AWARDS; DELEGATION OF AUTHORITY BY THE COMMITTEE.

     The Plan shall be administered by the Committee.

     The Committee shall have the authority to grant, pursuant to the terms of the Plan, to
officers and other key employees or other persons eligible under Section 5 the following type of
Awards: (a) Stock Options, in accordance with Section 6, (b) Performance Units in accordance with
Section 7, (c) Restricted Stock, in accordance with Section 8, (d) Deferred Stock, in accordance
with Section 9, (e) Other Stock-Based Awards, in accordance with Section 10 and/or (f) Cash Awards
in accordance with Section 11.

     For purposes of illustration and not of limitation, the Committee shall have the authority
(subject to the express provisions of this Plan):

          (i) to select the officers, other employees of the Company or any Parent or Subsidiary and
other persons to whom Awards may be from time to time granted hereunder:

          (ii) to determine the Non-Qualified Stock Options, Performance Units, Restricted Stock,
Deferred Stock and/or Other Stock-Based Awards and/or Cash Awards, or any combination thereof, if
any, to be granted hereunder to one or more eligible Employees and other persons to whom Awards may
be from time to time granted hereunder;

          (iii) to determine the number of shares of Stock and/or the amount of any cash to be covered
by each Award granted hereunder;

          (iv) to determine the terms and conditions, not inconsistent with the terms of the Plan, of
any Award granted hereunder (including, but not limited to, share price, any restrictions or
limitations, and any vesting, acceleration or forfeiture provisions);

          (v) to determine the terms and conditions under which Awards granted hereunder are to operate
on a tandem basis and/or in conjunction with or apart from other awards made by the Company or any
Parent or Subsidiary outside of this Plan;

          (vi) to determine the extent and circumstances under which Stock and other amounts payable
with respect to an Award hereunder shall be deferred; and

          (vii) to substitute (A) new Stock Options for previously granted Stock Options, including
previously granted Stock Options having less favorable terms, provided, however, that without
stockholder approval, no such substitution shall result in the reduction of the exercise price of a
previously granted Stock Option, and (B) new awards of any other type for previously granted awards
of the same type, including previously granted awards which contain less

 

 

favorable terms, provided that the exercise price of any new Stock-based Award may not be reduced
without stockholder approval.

     Subject to Section 14 hereof, the Committee shall have the authority to adopt, alter and
repeal such administrative rules, guidelines and practices governing the Plan as it shall, from
time to time, deem advisable, to interpret the terms and provisions of the Plan and any Award
issued under the Plan (and to determine the form and substance of all agreements relating thereto),
and otherwise to supervise the administration of the Plan.

     Subject to the express provisions of the Plan, all decisions made by the Committee pursuant to
the provisions of the Plan shall be made in the Committee’s sole discretion and shall be final and
binding upon all persons, including the Company, its Parent and Subsidiaries and the Plan
participants.

     Subject to the provisions of the Plan and notwithstanding anything to the contrary above, the
Committee may, in its sole discretion, from time to time delegate to the Chief Executive Officer of
the Company (the “CEO”) the authority, subject to such terms as the Committee shall determine, to
determine and designate from time to time the eligible persons to whom Awards may be granted and to
perform other specified functions under the Plan; provided, however, that the CEO may not grant any
Award to, or perform any function related to an Award to, himself or any individual (i) then
subject to Section 16 of the Exchange Act or (ii) who is or, in the determination of the Board or
the Committee, may become a Covered Employee, and any such grant or function relating to such
individuals shall be performed solely by the Committee to ensure compliance with the applicable
requirements of the Exchange Act and the Code or (iii) where the grant or performance of such
function by the CEO will cause the Plan not to comply with any applicable regulation of any
securities exchange or automated quotation system where the Stock is listed for trading.

     Any such delegation of authority by the Committee shall be by a resolution adopted by the
Committee and shall specify all of the terms and conditions of the delegation. The resolution of
the Committee granting such authority may authorize the CEO to grant Awards pursuant to the Plan
and may set forth the types of Awards that may be granted; provided, however, that the resolution
shall (i) specify the maximum number of shares of Stock that may be awarded to any individual Plan
participant and to all participants during a specified period of time, (ii) specify the maximum
amount of any Cash Award and any conditions, limitations, or restrictions to be imposed on Cash
Awards, and (iii) specify the exercise price (or the method for determining the exercise price) of
an Award, the vesting schedule, and any other terms, conditions, or restrictions that may be
imposed by the Committee in its sole discretion. The resolution of the Committee shall also require
the CEO to provide the Committee, on at least a quarterly basis, a report that identifies the
Awards granted and, with respect to each Award: the name of the participant, the date of grant of
the Award, the number of shares of Stock subject to discretion as set forth in the resolutions of
the Committee granting such authority.

     The Committee may also delegate to other officers of the Company, pursuant to a written
delegation, the authority to perform specified functions under the Plan that are not inconsistent
with Rule 16b-3 or other rules or regulations applicable to the Plan. Any actions taken by any
officers of the Company pursuant to such written delegation of authority shall be deemed to have
been taken by the Committee.

 

 

SECTION 4: STOCK SUBJECT TO PLAN.

     The total number of shares of Stock reserved and available for distribution under the Plan
shall be 13,223,953 shares. Such shares may consist, in whole or in part, of authorized and
unissued shares or treasury shares.

     If any shares of Stock that have been optioned cease to be subject to a Stock Option for any
reason, or if any shares of Stock that are subject to any Restricted Stock Award, Deferred Stock
Award, Performance Unit or Other Stock-Based Award are forfeited or any such Award otherwise
terminates without the issuance of such shares, such shares shall again be available for
distribution under the Plan.

SECTION 5: ELIGIBILITY.

     Officers and other key employees of the Company or any Parent or Subsidiary (but excluding any
person whose eligibility would adversely affect the compliance of the Plan with the requirements of
Rule 16b-3) who are at the time of the grant of an Award under the Plan employed by the Company or
any Parent or Subsidiary and who are responsible for or contribute to the management, growth and/or
profitability of the business of the Company or any Parent or Subsidiary, are eligible to be
granted Awards under the Plan. In addition, Awards may be granted under the Plan to any person,
including, but not limited to, directors independent agents, consultants and attorneys who the
Committee believes has contributed or will contribute to the success of the Company. Eligibility
under the Plan shall be determined by the Committee.

SECTION 6: STOCK OPTIONS.

     (a) Grant and Exercise. Stock Options granted under the Plan shall be Non-Qualified
Stock Options. Any Stock Option granted under the Plan shall contain such terms as the Committee
may, from time to time approve. The Committee shall have the authority to grant to any optionee
Non-Qualified Stock Options, and they may be granted alone or in addition to other Awards granted
under the Plan. The grant of an Option shall be deemed to have occurred on the date on which the
Committee by resolution, designates an individual as a grantee thereof, and determines the number
of shares of Stock subject to, and the terms and conditions of, said Option.

     (b) Terms and Conditions. Stock Options granted under the Plan shall be subject to the
following terms and conditions:

          (i) Option Price. The option price per share of Stock purchasable under a Stock Option shall
be determined by the Committee, on the date of grant but shall be not less than 100% of the Fair
Market Value of the Stock on the date of grant.

          (ii) Option Term. The term of each Stock Option shall be fixed by the Committee.

          (iii) Exercisability. Stock Options shall be exercisable at such time or times and subject to
such terms and conditions as shall be determined by the Committee at the time of grant. If the
Committee provides that any Stock Option is exercisable only in installments, the Committee may
waive such installment exercise provisions at any time at or after the time of grant in whole or in
part.

          (iv) Method of Exercise. Subject to whatever installment, exercise and waiting period
provisions are applicable in a particular case, Stock Options may be exercised in whole or

 

 

in part at any time during the option period by giving written notice of exercise to the Company
specifying the number of shares of Stock to be purchased. Such notice shall be accompanied by
payment in full of the purchase price, which shall be in cash or, unless otherwise provided in the
Stock Option Agreement, in whole shares of Stock which are already owned by the holder of the
Option or, unless otherwise provided in the Stock Option Agreement, partly in cash and partly in
such Stock. Cash payments shall be made by wire transfer, certified or bank check or personal
check, in each case payable to the order of the Company; provided, however, that the Company shall
not be required to deliver certificates for shares of Stock with respect to which an Option is
exercised until the Company has confirmed the receipt of good and available funds in payment of the
purchase price thereof. Payments in the form of Stock (which shall be valued at the Fair Market
Value of a share of Stock on the date of exercise) shall be made by delivery of stock certificates
in negotiable form which are effective to transfer good and valid title thereto to the Company,
free of any liens or encumbrances. In addition, payment may be made by delivery by the holder to
the Company of an executed irrevocable option exercise form together with irrevocable instructions
from the holder to a broker or dealer, reasonably acceptable to the Company, to sell certain of the
shares of Stock purchased upon exercise of the Option with or to pledge such shares as collateral
for a loan and promptly deliver to the Company the amount of the sale and/or loan proceeds
necessary to pay such purchase price, and/or in any other form of valid consideration that is
acceptable to the Committee in its sole discretion. Except as otherwise expressly provided in the
Plan or the Stock Option Agreement or unless waived by the Committee at or after the time of grant,
no Option granted to an Employee may be exercised at any time unless the holder thereof is then an
Employee. The holder of an Option shall have none of the rights of a stockholder with respect to
the shares subject to the Option until the optionee has given written notice of exercise, has paid
in full for those shares of Stock and, if requested by the Committee has given the representation
described in Section 20(a) below.

          (v) Transferability; Exercisability. Unless otherwise set forth in the Stock Option Agreement
(or unless waived by the Committee at or after the time of grant), no Option shall be transferable
by the optionee other than by will or by the laws of descent and distribution, and all Options
shall be exercisable, during the optionee’s lifetime, only by the optionee or his or her guardian
or legal representative.

          (vi) Termination by Reason of Death. If an optionee’s Termination of Service occurs by reason
of death, any Stock Option held by such optionee may thereafter be exercised by the executor or
administrator of the estate of the optionee or the optionee’s legal representative, to the extent
it was exercisable at the time of the optionee’s Termination of Service or on such accelerated
basis as the Committee may determine at or after the time of grant. Such Option may be exercised
for a period of time as set forth in the Stock Option Agreement or as the Committee may determine
at or after the date of grant (in either case, not to exceed one year from Termination of Service)
or as until the expiration of the stated term of such Stock Option, whichever period is the
shorter.

          (vii) Termination by Reason of Disability. If an optionee’s Termination of Service occurs by
reason of Disability, any Stock Option held by such optionee may thereafter be exercised by the
optionee or his legal representative, to the extent it was exercisable at the time of the
optionee’s Termination of Service or on such accelerated basis as the Committee may determine at or
after the time of grant. Such Option may be exercised for a period of time as set forth in the
Stock Option Agreement or as the Committee may determine at or after the time of grant (in either
case, not to exceed one year from Termination of Service) or until the expiration

 

 

of the stated term of such Stock Option, whichever period is the shorter; provided, however, that
if the optionee dies within such specified period any unexercised Stock Option held by such
optionee shall thereafter be exercisable to the extent to which it was exercisable at the time of
death for a period of time from the date of death (not to exceed one year) as determined by the
Committee or until the expiration of the stated term of such Stock Option, whichever period is the
shorter.

          (viii) Termination by Reason of Retirement. If an optionee’s Termination of Service occurs by
reason of Normal Retirement, any Stock Option held by such optionee may thereafter be exercised by
the optionee, to the extent it was exercisable at the time of Termination of Service or on such
accelerated basis as the Committee may determine at or after the time of grant, for a period of
time set forth in the Stock Option Agreement or such other period as the Committee may specify at
or after the time of grant (in either case, not to exceed one year from the Termination of Service)
or the expiration of the stated term of such Stock Option, whichever period is the shorter;
provided, however, that if the optionee dies within such specified period any unexercised Stock
Option held by such optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of (not to exceed one year) from the date of death as
determined by the Committee or until the expiration of the stated term of such Stock Option,
whichever period is the shorter. If an optionee’s Termination of Service occurs by reason of Early
Retirement, the Stock Option shall thereupon terminate; provided, however, that if the Committee so
approves at the time of Early Retirement, any Stock Option held by the optionee may thereafter be
exercised by the optionee as provided above in connection with termination of employment by reason
of Normal Retirement.

          (ix) Other Termination. Subject to the provisions of Section 20(g) below and unless otherwise
determined by the Committee at or after the time of grant or otherwise set forth in the Stock
Option Agreement, if a holder’s Termination of Service occurs for any reason other than death,
Disability or Retirement or the voluntary resignation of the holder, the Stock Option shall
thereupon automatically terminate, except that (a) if the Termination of Service occurs as a result
of the holder’s voluntary resignation, such Stock Option may be exercised to the extent it was
exercisable at the time of Termination of Service for a period of thirty (30) days or the
expiration of the stated term of the Stock Option, whichever is shorter, and (b) if the optionee is
involuntarily terminated by the Company or a Subsidiary or Parent without Cause (as hereinafter
defined), such Stock Option may be exercised to the extent it was exercisable at the date of
Termination of Service for six months (or such other period set forth in the Stock Option Agreement
which period shall not exceed one year from the date of such Termination of Service) or until the
expiration of the stated term of such Stock Option, whichever period is the shorter. For purposes
of the Plan, “Cause” shall mean (A) the conviction of the optionee of a felony under Federal law or
the law of the state in which such action occurred, (B) dishonesty by the optionee in the course of
fulfilling his or her employment duties, or (C) the willful and deliberate failure on the part of
the optionee to perform his or her employment duties in any material respect. Notwithstanding the
foregoing, if the optionee has an employment agreement with the Company or a Subsidiary or Parent,
the definition of “Cause” shall have the meaning ascribed in such employment agreement.

          (x) Alternative Settlement of Option. Upon the receipt of written notice of exercise, the
Committee, may elect to settle all or part of any Stock Option by paying to the optionee an amount,
in cash and/or Stock (valued at Fair Market Value on the date of exercise),

 

 

equal to the product of the excess of the Fair Market Value of one share of Stock on the date of
exercise over the Option exercise price, multiplied by the number of shares of Stock with respect
to which the optionee proposes to exercise the Option. Any such settlements which relate to Options
which are held by optionees who are subject to Section 16(b) of the Exchange Act shall comply with
any existing provisions of Rule 16b-3, to the extent applicable.

          (xi) Stock Option Agreement. Each grant of a Stock Option shall be confirmed by, and shall be
subject to the terms of, an agreement executed by the Company and the participant.

SECTION 7: PERFORMANCE UNITS.

     Awards granted as Performance Units shall be subject to the following provisions:

     (a) The Performance Cycle for the attainment of the Performance Goals shall be determined by
the Committee. The Committee may establish more than one cycle for any particular Performance Unit.

     (b) The Committee shall establish a dollar value for each Performance Unit, the Performance
Goals to be attained in respect of the Performance Unit, the various percentages of the Performance
Unit value to be paid out upon the attainment, in whole or in part, of the Performance Goals and
such other Performance Unit terms, conditions and restrictions as the Committee deems appropriate.
Any Performance Goal may be modified by the Committee during the course of a Performance Cycle to
take into account changes in conditions that occur. Notwithstanding the foregoing, in the case of a
Performance Unit granted to a Covered Employee, no business criteria other than those enumerated in
Section 2(w) may be used in establishing the Performance Goals for such Performance Unit, and no
such Performance Goals may be modified by the Committee during the course of a Performance Cycle
except in accordance with Section 162(m) of the Code. As soon as practicable after the termination
of the Performance Cycle, the Committee shall determine what, if any, payment is due on the
Performance Unit in accordance with the terms thereof.

     (c) In the event of a participant’s Termination of Service prior to the expiration of the
Performance Cycle established for any Performance Unit he or she may have been awarded, the
Committee may, in its sole discretion provide for a full or partial credit and determine what
percentage, if any, of the Performance Unit is to be paid out. However, no unpaid portion of a
Performance Unit otherwise payable shall be paid to a Plan participant whose Termination of Service
is for Cause. Notwithstanding the foregoing, in the case of Performance Units granted to Covered
Employees, this paragraph 7.5(c) shall not be given effect if, as a result thereof, such
Performance Units shall lose the protection afforded by Section 162(m) of the Code.

     (d) Payment of Performance Units shall be made, at the sole discretion of the Committee,
either in cash in the amount of the dollar value of the Performance Units awarded and/or in Stock
having a Fair Market Value at the time such award is paid equal to the excess of such dollar amount
over the amount of such cash.

     (e) Except as otherwise set forth in the Plan, Performance Units are not transferable other
than by will or by the laws of descent and distribution and during a participant’s lifetime
payments in respect thereof shall be made only to the participant.

 

 

SECTION 8: RESTRICTED STOCK.

     (a) Grant and Exercise. Shares of Restricted Stock may be issued either alone or in
addition to or in tandem with other Awards granted under the Plan. The Committee shall determine
the eligible persons to whom, and the time or times at which, grants of Restricted Stock will be
made, the number of shares to be awarded, the price (if any) to be paid by the recipient, the time
or times within which such awards may be subject to forfeiture (the “Restriction Period”), the
vesting schedule and rights to acceleration thereof, and all other terms and conditions of the
Awards of Restricted Stock. Conditions of vesting that the Committee may impose may include, among
others, (i) length of continuous service, (ii) achievement of specific business objectives, (iii)
increases in specific indices, (iv) attainment of specified growth rates, or any other conditions
as determined by the Committee. The Committee may remove any or all of the restrictions on such
Restricted Stock whenever it may determine that, by reason of changes in applicable law or other
changes in circumstances arising after the date of the Award, such action is appropriate.

     (b) Terms and Conditions. Each Restricted Stock Award shall also be subject to the
following terms and conditions:

          (i) Restricted Stock, when issued, will be represented by a stock certificate or certificates
registered in the name of the holder to whom such Restricted Stock shall have been awarded. During
the Restriction Period, certificates representing the Restricted Stock and any securities
constituting Retained Distributions (as defined below) shall bear a restrictive legend to the
effect that ownership of the Restricted Stock (and such Retained Distributions), and the enjoyment
of all rights related thereto, are subject to the restrictions, terms and conditions provided in
the Plan and the Restricted Stock Agreement. Such certificates shall bear a legend restricting sale
or other disposition in accordance with the Plan and the applicable Restricted Stock Agreement.

          (ii) Restricted Stock shall constitute issued and outstanding shares of Common Stock for all
corporate purposes, and the issuance thereof shall be made for at least the minimum consideration
(if any) necessary to permit the shares of Restricted Stock to be deemed to be fully paid and
nonassessable. The holder will have the right to vote such Restricted Stock, to receive and retain
all regular cash dividends and other cash equivalent distributions as the Board may designate, pay
or distribute on such Restricted Stock and to exercise all other rights, powers and privileges of a
holder of Stock with respect to such Restricted Stock, with the exceptions that (A) other than
regular cash dividends and other cash equivalent distributions as the Board may designate, pay or
distribute, the Company will retain custody of all distributions (“Retained Distributions”) made or
declared with respect to the Restricted Stock (and such Retained Distributions will be subject to
the same restrictions, terms and conditions as are applicable to the Restricted Stock) until such
time, if ever, as the Restricted Stock with respect to which such Retained Distributions shall have
been made, paid or declared shall have become vested and with respect to which the Restriction
Period shall have expired; (B) the holder may not sell, assign, transfer, pledge, exchange,
encumber or dispose of the Restricted Stock or any Retained Distributions during the Restriction
Period; and (C) a breach of any of the restrictions, terms or conditions contained in the Plan or
the Restricted Stock agreement referred to in Section 8(b)(iv) below, or otherwise established by
the Committee with respect to any Restricted Stock or Retained Distributions will cause a
forfeiture of such Restricted Stock and any Retained Distributions with respect thereto.

 

 

          (iii) Upon the expiration of the Restriction Period with respect to each award of Restricted
Stock and the satisfaction of any other applicable restrictions, terms and conditions (A) all or
part of such Restricted Stock shall become vested in accordance with the terms of the Restricted
Stock Agreement, (B) any Retained Distributions with respect to such Restricted Stock shall become
vested to the extent that the Restricted Stock related thereto shall have become vested and (C) the
Company will return to the holder the certificates representing the Restricted Stock and any
Retained Distributions. Any such Restricted Stock and Retained Distributions that do not vest shall
be forfeited to the Company and the holder shall not thereafter have any rights with respect to
such Restricted Stock and Retained Distributions that shall have been so forfeited.

          (iv) Each Restricted Stock Award shall be confirmed by, and shall be subject to the terms of,
an agreement executed by the Company and the participant. The agreement shall require that each
participant irrevocably grant to the Company the power of attorney to transfer any shares of
Restricted Stock forfeited to the Company and agrees to execute any document required by the
Company in connection with such forfeiture and transfer.

SECTION 9: DEFERRED STOCK.

     (a) Grant and Exercise. Deferred Stock may be awarded either alone or in addition to
or in tandem with other Awards granted under the Plan. The Committee shall determine the eligible
persons to whom and the time or times at which Deferred Stock shall be awarded, the number of
shares of Deferred Stock to be awarded to any person, the duration of the period (the “Deferral
Period”) during which, and the conditions under which, receipt of the Deferred Stock will be
deferred, and all the other terms and conditions of the Awards.

     (b) Terms and Conditions. Each Deferred Stock Award shall be subject to the following
terms and conditions:

          (i) Subject to the provisions of this Plan and the Deferred Stock Agreement referred to in
Section 9(b)(vii) below, Deferred Stock Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered during the Deferral Period. At the expiration of the Deferral Period (or the
Additional Deferral Period referred to in Section 9(b)(vi) below, where applicable), share
certificates shall be delivered to the participant, or his legal representative, in a number equal
to the shares of Stock covered by the Deferred Stock Award.

          (ii) As determined by the Committee at the time of award, amounts equal to any dividends
declared during the Deferral Period (or the Additional Deferral Period referred to in Section
9(b)(vi) below, where applicable) with respect to the number of shares covered by a Deferred Stock
Award may be paid to the participant currently or deferred and deemed to be reinvested in
additional Deferred Stock.

          (iii) Subject to the provisions of the Deferred Stock Agreement referred to in Section
9(b)(vii) below and this Section 9 and Section 20(g) below, upon termination of a participant’s
employment with the Company or any Parent or Subsidiary for any reason during the Deferral Period
(or the Additional Deferral Period referred to in Section 9(b)(vi) below, where applicable) for a
given award, the Deferred Stock in question will vest or be forfeited in accordance with the terms
and conditions established by the Committee at the time of grant.

 

 

          (iv) The Committee may, after grant, accelerate the vesting of all or any part of any Deferred
Stock Award and/or waive the deferral limitations for all or any part of a Deferred Stock award.

          (v) In the event of hardship or other special circumstances of a participant whose employment
with the Company or any Parent or Subsidiary is involuntarily terminated (other than for Cause),
the Committee may waive in whole or in part any or all of the remaining deferral limitations
imposed hereunder or pursuant to the Deferred Stock Agreement referred to in Section 9(b)(vii)
below with respect to any or all of the participant’s Deferred Stock.

          (vi) Subject to the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended, and the regulations and guidance issued thereunder (“Code Section 409A”) and the
Committee’s adoption of procedures, a participant may defer the receipt of an Award (or an
installment of an Award) for an additional specified period or until a specified event as permitted
under Code Section 409(A) (the “Additional Deferral Period”).

          (vii) Each Deferred Stock Award shall be confirmed by, and shall be subject to the terms of,
an agreement executed by the Company and the participant.

SECTION 10: OTHER STOCK-BASED AWARDS.

     (a) Grant and Exercise. Other Stock-Based Awards may be granted either alone or in
addition to or in tandem with Stock Options, Performance Units, Restricted Stock, Deferred Stock
and/or Cash Awards.

     The Committee shall determine the eligible persons to whom, and the time or times at which,
such awards shall be made, the number of shares of Stock to be awarded pursuant to such awards, and
all other terms and conditions of the awards. The Committee may also provide for the grant of Stock
under such awards upon the completion of a specified performance period.

     (b) Terms and Conditions. Each Other Stock-Based Award shall be subject to the
following terms and conditions:

          (i) Shares of Stock subject to an Other Stock-Based Award may not be sold, assigned,
transferred, pledged or otherwise encumbered prior to the date on which the shares are issued, or,
if later, the date on which any applicable restriction or period of deferral lapses.

          (ii) The recipient of an Other Stock-Based Award shall be entitled to receive, currently or on
a deferred basis, dividends or dividend equivalents with respect to the number of shares covered by
the award, as determined by the Committee at the time of the award. The Committee may provide that
such amounts (if any) shall be deemed to have been reinvested in additional Stock.

          (iii) Any Other Stock-Based Award and any Stock covered by any Other Stock-Based Award shall
vest or be forfeited to the extent so provided in the award agreement referred to in Section
10(b)(v) below, as determined by the Committee.

          (iv) In the event of the participant’s Retirement, Disability or death, or in cases of special
circumstances, the Committee may waive in whole or in part any or all of the limitations imposed
hereunder (if any) with respect to any or all of an Other Stock-Based award.

          (v) Each Other Stock-Based Award shall be confirmed by, and shall be subject to the terms of,
an agreement executed by the Company and by the participant.

 

 

SECTION 11: CASH AWARDS.

     (a) Grant of Cash Awards. The Committee may, in its sole discretion, grant Cash Awards
in accordance with the terms and conditions set forth in the Plan and in an agreement executed by
the Company and the participant (“Cash Award Agreement”). Each Cash Award Agreement shall set forth
(i) the amount of the Cash Award, (ii) the time or times within which such Award may be subject to
forfeiture, if any, (iii) specified performance goals, or other criteria, if any, as the Committee
may determine must be met in order to remove any restrictions (including vesting) on such Award,
and (iv) any other terms, limitations, restrictions, and conditions of the Award that are
consistent with this Plan.

     The Cash Award Agreement shall also set forth the vesting period for the Cash Award, if any,
which shall commence on the date of grant of the Cash Award and, unless otherwise established by
the Committee in the Cash Award Agreement, shall expire upon satisfaction of the conditions set
forth in the Cash Award Agreement. Such conditions may provide for vesting based on (i) length of
continuous service, (ii) achievement of specific business objectives, (iii) increases in specified
indices, (iv) attainment of specified growth rates, or (v) other comparable measurements of Company
performance, as may be determined by the Committee in its sole discretion.

     (b) Termination of Service. Subject to the provisions of the particular Cash Award
Agreement, and unless otherwise permitted by the Committee, in its sole discretion, upon
termination of the participant’s service to the Company or its Parent and Subsidiaries for any
reason during a vesting period (if any), the nonvested portion of a Cash Award shall be forfeited
by the participant. Upon any forfeiture, all rights of a Participant with respect to the forfeited
Cash Award shall cease and terminate, without any further obligation on the part of the Company.

     (c) Form of Payment. In the sole discretion of the Committee, the Company may satisfy
its obligation under a Cash Award by the distribution of that number of shares of Common Stock or
Restricted Stock, or any combination thereof, having an aggregate Fair Market Value (as of the date
of payment) equal to the amount of cash otherwise payable to the participant, and/or by the
distribution of Stock Options having an aggregate Fair Market Value equal to the amount of cash
otherwise payable to the participant, with a cash settlement to be made for any fractional share
interests, or the Company may settle such obligation in part with shares of Common Stock and in
part with cash. If required by Rule 16b-3 at the time of distribution, any shares of Common Stock
distributed to a participant must be held by such participant for at least six (6) months from the
date of distribution.

SECTION 12: PERFORMANCE-BASED AWARDS

     (a) In General. All Stock Options and certain Restricted Stock Awards, Deferred Stock
Awards, Performance Units, Other Stock-Based Awards or Cash Awards granted under the Plan, are
intended to (i) qualify as Performance-Based Awards (as defined in the next sentence) or (ii) be
otherwise exempt from the deduction limitation imposed by Section 162(m) of the Code. Certain
Awards granted under the Plan may be granted in a manner such that Awards qualify as
“performance-based compensation” (as such term is used in Section 162(m) of the Code and the
regulations thereunder) and thus be exempt from the deduction limitation imposed by Section 162(m)
of the Code (“Performance-Based Awards”). Awards may only qualify as Performance-

 

 

Based Awards if at the time of grant the Committee is comprised solely of two or more “outside
directors” (as such term is used in Section 162(m) of the Code and the regulations thereunder).

     (b) Stock Options. Stock Options granted under the Plan with an exercise price at or
above the Fair Market Value of Common Stock on the date of grant should qualify as
Performance-Based Awards.

     (c) Other Performance-Based Awards. Restricted Stock Awards, Deferred Stock Awards,
Performance Units, Other Stock-Based Awards and Cash Awards granted under the Plan should qualify
as Performance-Based Awards if, as determined by the Committee, in its discretion, either the
granting or vesting of such Award is subject to the achievement of a performance target or targets
based on one or more of the performance measures specified in Section 12(d) below. With respect to
such Awards intended to qualify as Performance-Based Awards:

     (1) the Committee shall establish in writing (x) the objective performance-based goals
applicable to a given period and (y) the individual employees or class of employees to which such
performance-based goals apply no later than 90 days after the commencement of such period (but in
no event after 25 percent of such period has elapsed);

     (2) no Performance-Based Awards shall be payable to or vest with respect to, as the case may
be, any Participant for a given period until the Committee certifies in writing that the objective
performance goals (and any other material terms) applicable to such period have been satisfied; and

     (3) after the establishment of a performance goal, the Committee shall not revise such
performance goal or increase the amount of compensation payable thereunder (as determined in
accordance with Section 162(m) of the Code) upon the attainment of such performance goal.

     (d) Performance Measures. The Committee may use the following performance measures
(either individually or in any combination) to set performance targets with respect to Awards
intended to qualify as Performance-Based Awards: income from continuing operations; attainment of
strategic and operational objectives; return on invested capital; net sales; pretax income before
allocation of corporate overhead and bonus; budget; earnings per share; net income; division, group
or corporate financial goals; return on shareholders’ equity; return on assets; return on net
assets; gross margin return on investment; gross margin dollars or percent; inventory turnover;
employee turnover; sales, general and administrative expense; appreciation in and/or maintenance of
the price of Common Stock or any other publicly-traded securities of the Company, if any; market
share; gross profits; earnings before interest and taxes; earnings before interest, taxes,
depreciation and amortization; economic value-added models; comparisons with various stock market
indices; and/or reductions in costs. The foregoing criteria shall have any reasonable definitions
that the Committee may specify, which may include or exclude any or all of the following items as
the Committee may specify: extraordinary, unusual or non-recurring items; effects of accounting
changes; effects of financing activities; expenses for restructuring or productivity initiatives;
other non-operating items; spending for acquisitions; effects of divestitures; and effects of
litigation activities and settlements. Any such performance criterion or combination of such
criteria may apply to the participant’s Award opportunity in its entirety or to any designated
portion or portions of the Award opportunity, as the Committee may specify.

 

 

SECTION 13A: CHANGE OF CONTROL PROVISIONS PRIOR TO THE EFFECTIVE DATE.

     (a) With respect to Awards made prior to the Section 13B Effective Date, a “Change of Control”
shall be deemed to have occurred on the tenth day after:

     (i) any individual, firm, corporation or other entity, or any group (as defined in
Section 13(d)(3) of the Exchange Act) becomes, directly or indirectly, the beneficial owner
(as defined in the General Rules and Regulations of the Securities and Exchange Commission
with respect to Sections 13(d) and 13(g) of the Exchange Act) of more than 20% of the then
outstanding shares of the Company’s capital stock entitled to vote generally in the election
of directors of the Company; or

     (ii) the commencement of, or the first public announcement of the intention of any
individual, firm, corporation or other entity or of any group (as defined in Section
13(d)(3) of the Exchange Act) to commence, a tender or exchange offer subject to Section
14(d)(1) of the Exchange Act for any class of the Company’s capital stock; or

     (iii) the stockholders of the Company approve (A) a definitive agreement for the merger
or other business combination of the Company with or into another corporation pursuant to
which the stockholders of the Company do not own, immediately after the transaction, more
than 50% of the voting power of the corporation that survives, or (B) a definitive agreement
for the sale, exchange or other disposition of all or substantially all of the assets of the
Company, or (C) any plan or proposal for the liquidation or dissolution of the Company;
provided, however, that a “Change of Control” shall not be deemed to have taken place if
beneficial ownership is acquired by, or a tender or exchange offer is commenced or announced
by, the Company, any profit-sharing, employee ownership or other employee benefit plan of
the Company, any trustee of or fiduciary with respect to any such plan when acting in such
capacity, or by a person who is an officer or director of the Company on the effective date
of the Plan, or by any group comprised solely of such persons and/or entities.

     (b) Notwithstanding Section 13A(a) or any other provisions of this Plan, for purposes of
restricted stock units granted as Other Stock Based Awards under the Plan prior to the Section 13B
Effective Date, a “Change of Control” shall only be deemed to have occurred on the tenth day after:

     (i) any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by
such person or persons) ownership of stock of the Company possessing 30% or more of the
total voting power of the stock of the Company, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vi). If a person or group is considered to possess 30% or more of the total
voting power of the stock of the Company, and such person or group acquires additional stock
of the Company, the acquisition of additional stock by such person or group shall not be
considered to cause a “Change of Control” of the Company;

     (ii) any one person, or more than one person acting as a group, acquires ownership of
stock of the Company that, together with stock held by such person or group, constitutes
more than 50% of the total fair market value or total voting power of the stock of the
Company, as determined in accordance with Treas. Reg. §1.409A-

 

 

3(i)(5)(v). If a person or group is considered to own more than 50% of the total fair
market value or total voting power of the stock of the Company, and such person or group
acquires additional stock of the Company, the acquisition of additional stock by such person
or group shall not be considered to cause a “Change of Control” of the Company; or

     (iii) any one person, or more than one person acting as a group, acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition by
such person or persons) assets from the Company that have a total gross fair market value
equal to or more than 40% of the total gross fair market value of all of the assets of the
Company immediately before such acquisition or acquisitions, as determined in accordance
with Treas. Reg. §1.409A-3(i)(5)(vii). A transfer of assets shall not be treated as a
“Change of Control” when such transfer is made to an entity that is controlled by the
shareholders of the Company, as determined in accordance with Treas. Reg.
§1.409A-3(i)(5)(vii)(B).

     (c) In the event of a “Change of Control” as defined in Section 13A(a) or 13A(b), as
applicable, awards granted under the Plan prior to the Section 13B Effective Date will be subject
to the following provisions, unless the provisions of this Section 13A are suspended or terminated
by an affirmative vote of a majority of the Board prior to the occurrence of such a “Change of
Control”:

     (i) all outstanding Stock Options which have been outstanding for at least six months
shall become exercisable in full, whether or not otherwise exercisable at such time, and any
such Stock Option shall remain exercisable in full thereafter until it expires pursuant to
its terms; and

     (ii) all restrictions and deferral limitations contained in Restricted Stock Awards,
Deferred Stock Awards, Performance Units and Other Stock Based Awards granted under the Plan
shall lapse.

SECTION 13B: CHANGE OF CONTROL PROVISIONS ON AND AFTER THE SECTION 13B EFFECTIVE DATE.

     (a) With respect to Awards made on and after the Section 13B Effective Date, “Change of
Control” means a change of control of the Company of a nature that would be required to be reported
in response to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Exchange Act,
whether or not the Company is then subject to such reporting requirement; provided that, without
limitation, such a Change of Control shall be deemed to have occurred if:

     (i) Any Person becomes a Beneficial Owner of shares of one or more classes of stock of
the Company representing twenty percent (20%) or more of the total voting power of the
Company’s then outstanding voting stock; or

     (ii) The Company and any Person consummate a merger, consolidation, reorganization, or
other business combination; or

     (iii) The Board adopts resolutions authorizing the liquidation or dissolution, or sale
to any Person of all or substantially all of the assets, of the Company.

 

 

     (b) Notwithstanding the provisions of Section 13B(a) (i), (ii), and (iii) hereof, a Change of
Control shall not occur if:

     (i) The Company’s voting stock outstanding immediately before the consummation of
the transaction will represent no less than forty-five percent (45%) of the combined
voting power entitled to vote for the election of directors of the surviving parent
corporation immediately following the consummation of the transaction; and

     (ii) Members of the Incumbent Board will constitute at least one-half of the board
of directors of the surviving parent corporation; and

     (iii) The Chief Executive Officer of the Company will be the chief executive officer
or co-chief executive officer of the surviving parent corporation; and

     (iv) The headquarters of the surviving parent corporation will be located in
Indianapolis, Indiana.

     For the purposes of this Section 13B, “Person” means any corporation, partnership, firm, joint
venture, association, individual, trust, or other entity, but does not include the Company or any
of its wholly-owned or majority-owned subsidiaries, employee benefit plans, or related trusts;
“Incumbent Board” means those persons who either (A) have been members of the Board of Directors of
the Company since January 1, 2009, or (B) are new Directors whose election by the Board of
Directors or nomination for election by the shareholders of the Company was approved by a vote of
at least three-fourths of the members of the Incumbent Board then in office who either were
Directors described in clause (A) hereof or whose election or nomination for election was
previously so approved, but shall not include any Director elected as a result of an actual or
threatened solicitation of proxies by any Person; “Beneficial Owner” or “Beneficial Ownership” has
the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the
Exchange Act, as amended from time to time, or any successor rule.

     (c) Unless otherwise specified in a participant’s award agreement or employment agreement, no
outstanding Awards that have been granted after the Section 13B Effective Date of this amended and
restated Plan shall vest or become immediately payable or exercisable merely upon the occurrence of
a Change of Control. However, if within twelve (12) months following the occurrence of a Change of
Control, a Plan participant is involuntarily terminated without “Cause” or is deemed to have
separated from service as the result of a “Good Reason”, then all outstanding Options shall become
immediately exercisable, and any restriction periods and other restrictions imposed on
then-outstanding Awards shall lapse and will be paid at their targeted award level. Notwithstanding
the foregoing, such Awards shall not become payable until their regularly scheduled time as
specified under the terms and conditions of the applicable award agreement, except that, to the
extent an Award is exempt from Section 409A of the Code under the “short-term deferral rule,”
payment shall not be later than 2-1/2 months after the year in which it is no longer subject to a
substantial risk of forfeiture. Both “Cause” and “Good Reason” shall be as defined in the
applicable award agreement.

SECTION 14: AMENDMENTS AND TERMINATION.

     The Board or Committee may at any time, and from time to time, amend any of the provisions of
the Plan, and may at any time suspend or terminate the Plan; provided, however,

 

 

that no such amendment shall be effective unless and until it has been duly approved by the holders
of the outstanding shares of Stock if the failure to obtain such approval would adversely affect
the compliance of the Plan with the requirements of Rule 16b-3 of the Exchange Act, as in effect
from time to time, or with the requirements of any other applicable law, rule or regulation. The
Committee may amend the terms of any Stock Option or other award theretofore granted under the
Plan; provided, however, that subject to Section 3 above, no such amendment may be made by the
Committee which in any material respect impairs the rights of the optionee or participant without
the optionee’s or participant’s consent, except for such amendments which are made to cause the
Plan to qualify for the exemption provided by Rule 16b-3. No amendment to the terms of any Stock
Option shall result in (i) a reduction of the exercise price of any Stock Option, (ii) the
cancellation of Stock Options that are not “in the money” or (iii) a re-grant or exchange of Stock
Options for new Stock Options or Other Awards. Any amendment to the terms of a Stock Option the
purpose or result of which is the cash buyout of Stock Options that are not “in the money” is
prohibited.

SECTION 15: UNFUNDED STATUS OF PLAN.

     The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation.
With respect to any payments not yet made to a participant or optionee by the Company, nothing
contained herein shall give any such participant or optionee any rights that are greater than those
of a general creditor of the Company.

SECTION 16: SECTION 409A OF THE CODE.

     (a) Awards under the Plan are intended either to be exempt from the rules of Code Section 409A
or to satisfy those rules and shall be construed accordingly. If intended to satisfy the applicable
requirements of Code Section 409A, an Award and the Plan, as applicable, shall be performed and
interpreted consistent with such intent. If the Committee determines in good faith that any
provision of this Plan does not satisfy such requirements or could cause any person to recognize
additional taxes, penalties or interest under Code Section 409A, the Committee is empowered to
modify, to the extent practicable, the original intent of the applicable provision without
violation of Code Section 409A. In addition, notwithstanding any provision contained herein to the
contrary, the Committee shall have broad authority to amend or to modify the Plan, without advance
notice to or consent by any person, to the extent necessary or desirable to ensure compliance with
Code Section 409A. However, the Company shall not be liable to any participant or other holder of
an Award with respect to any Award-related adverse tax consequences arising under Code Section 409A
or other provision of the Internal Revenue Code of 1986, as amended.

     (b) If any provision of the Plan or an Award agreement contravenes any regulations or
Treasury guidance promulgated under Code Section 409A or could cause an Award to be subject to the
interest and penalties under Code Section 409A, such provision of the Plan or Award shall be deemed
automatically modified to maintain, to the maximum extent practicable, the original intent of the
applicable provision without violating the provisions of Code Section 409A and the Committee, in
its reasonable discretion, may take such actions as it determines to avoid contravention of Code
Section 409A. Moreover, any discretionary authority that the Committee may have pursuant to the
Plan shall not be applicable to an Award that is subject to

 

 

Code Section 409A to the extent such discretionary authority will contravene Code Section 409A or
the regulations or guidance promulgated thereunder.

     (c) Notwithstanding any provisions of this Plan or any Award granted hereunder to the
contrary, no acceleration shall occur with respect to any Award to the extent such acceleration
would cause the Plan or an Award granted hereunder to fail to comply with Code Section 409A.

     (d) Notwithstanding any provisions of this Plan or any applicable Award agreement to the
contrary, no payment shall be made with respect to any Award granted under this Plan to a
“specified employee” (as such term is defined for purposes of Code Section 409A) prior to the first
date that is at least six months after the employee’s separation of service to the extent such
six-month delay in payment is required to comply with Code Section 409A. To the extent required to
comply with Code Section 409A, a termination of employment shall not be deemed to have occurred for
purposes of any payment or distribution upon or following a termination of employment unless such
termination is also a “separation from service” within the meaning of Code Section 409A and
accordingly, a reference to termination of employment, Termination of Service or like terms shall
mean a “separation from service” as the context may require.

     (e) In the case of an Award providing for the payment of deferred compensation subject
to Code Section 409A, any payment of such deferred compensation by reason of a “change of control”
shall be made only if the “change of control” is (1) one described in Section 13A or 13B, as the
case may be, and (2) one described in Code Section 409A, and shall be paid consistent with the
requirements of Code Section 409A. If any deferred compensation that would otherwise be payable by
reason of a “change of control” cannot be paid by reason of the immediately preceding sentence, it
shall be paid as soon as practicable thereafter consistent with the requirements of Code Section
409A, as determined by the Committee.

SECTION 17: LIMIT ON AWARDS TO ANY INDIVIDUAL.

     Notwithstanding any provision contained herein but subject to the following sentence, no
participant may be granted under the Plan, during any year, Options or any other Awards relating to
more than 2,025,000 shares of Common Stock in the aggregate, subject to adjustment in accordance
with Section 18. With respect to an Award that may be settled in cash, no participant may be paid
in respect of any fiscal year an amount that exceeds the greater of the Fair Market Value of the
number of shares of Common Stock set forth in the preceding sentence at the date of grant or at the
date of settlement of the Award, provided that this limitation is separate from and not affected by
the number of Awards granted during such fiscal year subject to the limitation in the preceding
sentence.

SECTION 18: ADJUSTMENTS.

     In the event that the Committee shall determine that any dividend or other distribution
(whether in the form of cash, shares of Common Stock or other property), recapitalization, forward
or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase or share
exchange, or other similar corporate transaction or event, affects the shares of Stock such that an
adjustment is appropriate in order to prevent dilution or enlargement of the rights of participants
under the Plan, then the Committee shall, in such manner as it may deem equitable,

 

 

adjust any or all of (i) the number and kind of shares which may thereafter be delivered in
connection with Awards, (ii) the number and kind of shares that may be delivered or deliverable in
respect of outstanding Awards, (iii) the number of shares with respect to which Awards may be
granted to a given participant and (iv) the exercise price, grant price, or purchase price relating
to any Award or, if deemed appropriate, make provision for a cash payment with respect to any
outstanding Award, and, with respect to Awards granted to Covered Employees, no such adjustment
shall be authorized to the extent that such adjustment would cause such Award to lose the benefits
of Section 162(m) of the Code and that the number of shares of Stock subject to any award shall
always be a whole number. Such adjusted exercise price shall also be used to determine the amount
which is payable to the optionee upon the exercise by the Committee of the alternative settlement
right which is set forth in Section 6(b)(x) above.

SECTION 19: ELECTIVE DEFERRAL.

     Subject to the requirements of Code Section 409A and the Committee’s adoption of procedures, a
participant may defer the receipt of any of the cash or Stock to be received by the participant
under the terms of an Award (“Elective Deferral”).

     An Elective Deferral shall be irrevocable, except that the Committee, in its sole discretion,
may allow a participant to change or revoke such Elective Deferral in accordance with the
requirements of Code Section 409A.

     The Company shall establish an account for each participant who makes an Elective Deferral
reflecting Elective Deferrals made for such participant’s benefit together with any additions to
reflect any dividends paid upon any shares of Stock that have been deferred pursuant to an Elective
Deferral. The Company shall establish sub-accounts for each participant who has more than one
Elective Deferral in effect under the Plan and such other sub-accounts as are necessary for the
proper administration of the Plan. As of the last business day of each December 31 of each year,
the Company shall provide the participant with a statement of his or her account reflecting the
number of deferred shares or other deferred compensation under the Plan, and any dividends on such
shares credited thereto and distributions from such account since the prior statement.

     A participant who makes an Elective Deferral shall be immediately vested in, and shall have a
nonforfeitable right to, all deferred shares and other deferred compensation and all dividends, if
any, on any deferred shares credited to his or her account, except as otherwise provided by the
Committee. In the event of the Company’s insolvency, the participant shall have the same rights as
a general creditor of the Company with respect to his or her account balance.

     A participant who makes an Elective Deferral shall designate (on the election form used to
make Elective Deferrals under the Plan and as may be provided by the Committee) the date(s) or
events as permitted under Code Section 409A upon which the deferred shares and other deferred
compensation and any dividends credited to his or her account will be distributed to him or her, or
his or her designated beneficiary (in the event of death before full distribution), or estate if no
such beneficiary, or legal representative in the event of incompetence before full distribution.
The number of shares of Stock, if any, which are attributable to dividends and credited to his or
her account shall be based on the per share Fair Market Value on the date of such dividend.
Distributions shall be made in cash and/or Stock in the proportions deferred.

 

 

     Deferred shares and shares attributable to dividends on any Deferred Shares shall be subject
to adjustment as set forth in Section 18 of the Plan.

     Each such election regarding the date(s) for payments shall be irrevocable, except that the
Committee, in its sole discretion, may allow the participant to change or revoke such election.

SECTION 20: GENERAL PROVISIONS.

     (a) The Committee may require each person acquiring shares of Stock pursuant to a Stock Option
or other Award under the Plan to represent to and agree with the Company in writing that the
optionee or participant is acquiring the shares for investment without a view to distribution
thereof.

     All certificates for shares of Stock delivered under the Plan shall be subject to such stop
transfer orders and other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of the Securities and Exchange Commission, any stock exchange
or association upon which the Stock is then listed or traded, any applicable Federal or state
securities law, and any applicable corporate law, and the Committee may cause a legend or legends
to be put on any such certificates to make appropriate reference to such restrictions.

     (b) Nothing contained in the Plan shall prevent the Board or, where authorized by the Board,
the Committee, as the case may be, from adopting such other or additional incentive arrangements as
it may deem desirable, including, but not limited to, the granting of stock options and the
awarding of stock and cash otherwise than under the Plan; and such arrangements may be either
generally applicable or applicable only in specific cases.

     (c) NOTHING CONTAINED IN THE PLAN OR IN ANY AWARD HEREUNDER SHALL BE DEEMED TO CONFER UPON ANY
EMPLOYEE OF THE COMPANY OR ANY PARENT OR SUBSIDIARY ANY RIGHT TO CONTINUED EMPLOYMENT WITH THE
COMPANY OR ANY PARENT OR SUBSIDIARY, NOR SHALL IT INTERFERE IN ANY WAY WITH THE RIGHT OF THE
COMPANY OR ANY SUBSIDIARY TO TERMINATE THE EMPLOYMENT OF ANY OF ITS EMPLOYEES AT ANY TIME.

     (d) Not later than the date as of which an amount first becomes includable in the gross income
of the participant for Federal, state or local income tax purposes with respect to any Option or
other Award under the Plan, the participant shall pay to the Company, or make arrangements
satisfactory to the Committee, as the case may be, regarding the payment of, any Federal, state and
local taxes of any kind required by law to be withheld or paid with respect to such amount. If
permitted by the Committee, tax withholding or payment obligations may be settled with Stock,
including Stock that is part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional upon such payment or arrangements
and the Company or the participant’s employer (if not the Company) shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the
participant from the Company, its Parent or any Subsidiary.

     (e) The Plan and all Awards made and actions taken thereunder shall be governed by and
construed in accordance with the laws of the State of Indiana (without regard to choice of law
provisions).

     (f) Any Stock Option granted or other Award made under the Plan shall not be deemed
compensation for purposes of computing benefits under any retirement plan of the

 

 

Company or any Parent or Subsidiary and shall not affect any benefits under any other benefit plan
now or subsequently in effect under which the availability or amount of benefits is related to the
level of compensation (unless required by specific reference in any such other plan to Awards under
this Plan).

     (g) Subject to the requirements of Code Section 409A if applicable, a leave of absence, unless
otherwise determined by the Committee prior to the commencement thereof, shall not be considered a
termination of employment. Any Stock Option granted or awards made under the Plan shall not be
affected by any change of employment, so long as the holder continues to be an employee of the
Company, its Parent or any Subsidiary.

     (h) Except as otherwise expressly provided in the Plan or in any Stock Option Agreement,
Restricted Stock agreement, Deferred Stock Agreement, Performance Unit Agreement, Cash Award
Agreement or any Other Stock-Based Award agreement, no right or benefit under the Plan may be
alienated, sold, assigned, hypothecated, pledged, exchanged, transferred, encumbranced or charged,
and any attempt to alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or
charge the same shall be void. No right or benefit hereunder shall in any manner be subject to the
debts, contracts or liabilities of the person entitled to such benefit.

     (i) The obligations of the Company with respect to all Stock Options and Awards under the Plan
shall be subject to (A) all applicable laws, rules and regulations, and such approvals by any
governmental agencies as may be required, including, without limitation, the effectiveness of a
registration statement under the Securities Act, and (B) the rules and regulations of any
securities exchange or association on which the Stock may be listed or traded.

     (j) If any of the terms or provisions of the Plan conflict with the requirements of Rule 16b-3
as in effect from time to time, or with the requirements of any other applicable law, rule or
regulation then such terms or provisions shall be deemed inoperative to the extent they so conflict
with the requirements of said Rule 16b-3.

     (k) The Committee may terminate any Stock Option or other Award made under the Plan if a
written agreement relating thereto is not executed and returned to the Company within 30 days after
such agreement has been delivered to the optionee or participant for his or her execution.

SECTION 21: EFFECTIVE DATE OF PLAN.

     The Plan shall be effective as of the first business day following approval of the Plan by the
Company’s stockholders.

SECTION 22: TERM OF PLAN.

     No Stock Option, Restricted Stock Award, Deferred Stock Award, Performance Unit or Other
Stock-Based Award or Cash Award shall be granted pursuant to the Plan on or after the tenth
anniversary of the effective date of the Plan, but Awards granted prior to such tenth anniversary
may extend beyond that date.exv10w1

Exhibit 10.1

Re: Retention Agreement 

Dear Ray:

               Boston Scientific Corporation (the “Company”) considers it essential to the best
interests
of its stockholders to foster the continuous employment of key management personnel. Further,
the Board of Directors of the Company (the “Board”) recognizes that the possibility of a change
in control exists, and that such possibility, and the uncertainty and questions that it may raise
among management, may result in the departure or distraction of management personnel to the
detriment of the Company and its stockholders.

               The Board has determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the management of the Company, including yourself,
to their assigned duties without distraction in the face of potentially disturbing circumstances
arising from any possible change in control of the Company.

               In order to induce you to remain in the employ of the Company, the Company agrees that you
shall receive the severance benefits set forth in this letter agreement (this “Agreement”) in the
event your employment with the Company is terminated subsequent to a Change in Control (as
defined herein) under the circumstances described below.

     1. Termination Following Change in Control. If a Change in Control occurs, you will be
entitled to the benefits provided in Section 2 hereof upon the subsequent termination of your
employment by the Company without Cause (as defined herein) or by you for Good Reason (as defined
herein) during the two-year period following such Change in Control (the “Covered Period”). Any
purported termination of your employment by the Company or by you shall be communicated by a Notice
of Termination to the other party hereto in accordance with Section 7 hereof. For purposes of this
Agreement, (i) references to termination of employment mean a “separation from service” (as defined
in Section 1.409A-1(h) of the Treasury Regulations) from the Company, and (ii) a “Notice of
Termination” shall mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of your employment under the provision so indicated.

     2. Compensation upon Termination.

          (a) Severance Benefits. If your employment by the Company shall be terminated
during the Covered Period by the Company without Cause or by you for Good Reason, then you
shall be entitled to the following benefits:

               (i) Severance Payments.

     (1) Amount of Payment. The Company shall pay you in cash the full amount of any earned but
unpaid base salary through the Date of Termination at the rate in effect at the time of the Notice
of Termination, plus a cash payment for all unused vacation time which you may have accrued as of
the Date of Termination. The Company shall also pay you in cash a pro rata portion of the annual
bonus for the year in which your employment terminates, calculated on the basis of your target
bonus for that year and on the assumption that all performance targets have been or will be
achieved. In addition, the Company shall pay you in a cash lump sum, an amount (the “Severance

 

 

Payment”) equal to three times the sum of (A) your base salary on the Termination Date (without
giving effect to any salary reductions which satisfy the definition of “Good Reason”), (B) the
greater of (x) the most recent bonus paid to you (which shall be deemed to be the sum of (I) the
cash bonus amount most recently paid to you and (II) the value of restricted stock (calculated as
of the date of vesting) issued to you as bonus compensation that vested (other than restricted
stock that vested solely by virtue of the Change in Control) within the immediately preceding year)
plus the value of any other shares of stock issued to you without forfeiture provisions as bonus
compensation within the immediately preceding year and (y) your target bonus in effect for the year
in which the Change in Control occurred (calculated assuming that all performance targets have been
or will be achieved) and (C) $25,000. The Severance Payment shall be in lieu of any other
severance payments which you are entitled to receive under any other severance pay plan or
arrangement sponsored by the Company or any of its subsidiaries;.

     (2) Timing of Payment. Subject to Section 2(b), the Company shall pay the amounts due to you
under this Section 2 (a)(i) within 5 days of the Date of Termination, and in all events such
amounts shall be paid no later than 90 days after the Date of Termination.

	(ii)	 	Benefit Continuation. Subject to your compliance with the non-solicitation and
confidentiality provisions described in Section 5, you and your eligible dependents shall
continue to be eligible to participate during the Benefit Continuation Period (as hereinafter
defined) in the medical, dental, health, life and other welfare benefit plans and arrangements
applicable to you immediately prior to your termination of employment on the same terms and
conditions in effect for you and your dependents immediately prior to such termination;
provided that the provision of such benefits in each calendar year during the Benefit
Continuation Period does not affect the provision of such benefits in any other calendar year
during the Benefit Continuation Period. For purposes of the previous sentence, “Benefit
Continuation Period” means the period beginning on the Date of Termination and ending on the
earlier to occur of (i) the third anniversary of the Date of Termination and (ii) the date
that you and your dependents are eligible for coverage under the plans of a subsequent
employer which provide substantially equivalent or greater benefits to you and your
dependents. The right to participate in the benefit plans under this Section 2(a)(ii) is not
subject to liquidation or exchange for any other benefit;
	 
	(iii)	 	Legal Fees and Expenses. The Company shall also pay you in cash all legal fees and
expenses, if any, incurred by you in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement if such expenses
are incurred on or prior to the December 31 of the second calendar year following the calendar
year in which the Date of Termination occurs, such payment(s) to be made on or before the
December 31 of the third calendar year following the calendar year(s) in which the Date of
Termination occurs; provided, however, that the amount of the payments and reimbursements
under this Section 2(a)(iii) shall not exceed $100,000; and provided, further, that no such
legal fees or expenses shall be reimbursed if it is determined by the applicable arbitral
panel or other tribunal that your claim is entirely without merit. Furthermore, nothing shall
prohibit the arbitral panel or other tribunal from awarding legal fees in excess of $100,000
if, in the interests of fairness and equity, the arbitral panel or other tribunal deems such
award appropriate. The right to receive payments and reimbursements under this Section
2(a)(iii) is not subject to liquidation or exchange for any other benefit.

2

 

     (b) Specified Employee. Notwithstanding anything to the contrary in this Agreement, if
you are a “specified employee” as hereinafter defined at the time of the Date of Termination, any
and all amounts payable in connection with your termination of employment (including amounts
payable under this Section 2) that constitute deferred compensation subject to Section 409A of the
Code, as determined by the Committee in its sole discretion, and that would (but for this sentence)
be payable within six months following the Date of Termination, shall instead be paid on the date
that follows the Date of Termination by six months and one day (the “Specified Employee Payment
Date”). The provision of benefits pursuant to Section 2(a)(ii) that constitute deferred
compensation under Section 409A of the Code will not be provided in-kind during the first six
months following the Date of Termination, but rather will be continued by your payment of any
applicable premiums for which you will be reimbursed on the Specified Employee Payment Date. The
provision of in-kind benefits will commence on the Specified Employee Payment Date in accordance
with Section 2(a)(ii). For purposes of this Agreement, the term “specified employee” means an
individual who is determined by the Committee to be a specified employee as defined in Section
409A(a)(2)(B)(i) of the Code. The Committee may, but need not, elect in writing, subject to the
applicable limitations under Section 409A of the Code, any of the special elective rules prescribed
in Section 1.409A-1(i) of the Treasury Regulations for purposes of determining “specified employee”
status. Any such written election shall be deemed part of this Agreement.

     (c) No Mitigation. You shall not be required to mitigate the amount of any payment or
benefit provided for in this Section 2 by seeking other employment or otherwise.

     3. Equity Incentive Awards.

     (a) Options. All options granted to you under the Company’s equity incentive plans
will immediately become exercisable upon a Change in Control (as defined herein).

     (b) Restricted Stock Awards. All restricted stock awards will immediately become free
from restriction upon a Change in Control (as defined herein).

     4. Successors; Binding Agreement.

     (a) Assumption By Successor. The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of the Company to expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such assumption and agreement prior
to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle
you to compensation from the Company in the same amount and on the same terms as you would be
entitled hereunder if you had terminated your employment for Good Reason following a Change in
Control, except that for purposes of implementing the foregoing, the date on which any such
succession becomes effective shall be deemed the Date of Termination. As used in this Agreement,
“the Company” shall mean the Company as hereinbefore defined and any successor to its business or
assets which assumes and agrees to perform this Agreement by operation of law, by agreement or
otherwise.

3

 

     (b)  Enforceability By Beneficiaries. This Agreement shall inure to the benefit of
and be enforceable by your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while any amount would
still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to your devisee,
legatee or other designee or, if there is no such designee, to your estate.

     5. Nonsolicitation; Confidentiality

     (a) Nonsolicitation. For three years following your Date of Termination, you shall
not, without the prior written consent of the Company, directly or indirectly, as a sole
proprietor, member of a partnership, stockholder or investor, officer or director of a corporation,
or as an employee, associate, consultant, independent contractor or agent of any person,
partnership, corporation or other business organization or entity other than the Company: (i)
solicit or endeavor to entice away from the Company or any of its affiliates or subsidiaries, any
person or entity who is, or, during the then most recent 12-month period, was, employed by, or had
served as an agent or key consultant of, the Company or any of its subsidiaries, or (ii) solicit or
endeavor to entice away from the Company or any of its subsidiaries any person or entity who is, or
was within the then most recent 12-month period, a customer or client (or reasonably anticipated
(to your general knowledge or the public’s general knowledge) to become a customer or client) of
the Company or any of its subsidiaries.

     (b) Confidentiality. On and after the date of this Agreement, you will not, except in
the performance of your obligations to the Company hereunder or as may otherwise be approved in
advance by the Board, directly or indirectly, disclose or use (except for the direct benefit of the
Company) any confidential information that you may learn or have learned by reason of your
association with the Company, any customer or client of the Company or any of their respective
subsidiaries and affiliates. The term “confidential information” includes all data, analyses,
reports, interpretations, forecasts, documents and information in any form concerning or otherwise
reflecting information and concerning the Company and its affairs, including, without limitation,
with respect to clients, products, policies, procedures, methodologies, trade secrets and other
intellectual property, systems, personnel, confidential reports, technical information, financial
information, business transactions, business plans, prospects or opportunities, but shall exclude
any portion of such information that (i) was acquired by you prior to your employment by, or other
association with, the Company or any affiliated or predecessor entity, (ii) is or becomes generally
available to the public or is generally known in the industry or industries in which the Company or
any customer or client of the Company operates, in each case other than as a result of disclosure
by you in violation of this Section 5 or (iii) you are required to disclose under any applicable
laws, regulations or directives of any government agency, tribunal or authority having jurisdiction
in the matter or under subpoena or other process of law. As used in this Section 5, an “affiliate”
of a person or entity is a person or entity in control of, controlled by, or in common control
with, such first person or entity.

     6. Definitions. For purposes of this Agreement, the following capitalized words shall
have the meanings set forth below:

    
          “Cause” shall mean the willful engaging by you in criminal or fraudulent acts or gross

4

 

misconduct that is demonstrably and materially injurious to the Company, monetarily or
otherwise. No act or failure to act on your part shall be deemed “willful” unless done, or omitted
to be done, by you not in good faith and without reasonable belief that your action or omission was
in the best interest of the Company. Notwithstanding the foregoing, you shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered to you a copy of a
resolution duly adopted by the affirmative vote of not less than three quarters of the entire
membership of the Board at a meeting of the Board called and held for such purpose (after
reasonable notice to you and an opportunity for you, together with your counsel, to be heard before
the Board), finding that in the good faith opinion of the Board you were guilty of conduct set
forth above in the first sentence of this subsection and specifying the particulars thereof in
detail.

          “Change in Control” shall mean the happening of any of the following:

     (a) The acquisition, other than from the Company, by any individual, 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”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the election of
directors (the “Company Voting Securities”); provided, however, that any acquisition by (x) any
non-corporate shareholder of the Company as of the effective date of the initial registration of an
offering of Stock under the Securities Act of 1933, (y) the Company or any of its affiliates or
subsidiaries, or any employee benefit plan (or related trust) sponsored or maintained by the
Company or any of its subsidiaries or (z) any corporation with respect to which, following such
acquisition, more than 60% of, respectively, the then outstanding shares of common stock of such
corporation and combined voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Company Voting Securities
immediately prior to such acquisition in substantially the same proportion as their ownership,
immediately prior to such acquisition, of the Outstanding Common Stock and Company Voting
Securities, as the case may be, shall not constitute a Change in Control of the Company; or

     (b) Individuals who, as of the effective date of the initial registration of an offering of
Stock under the Securities Act of 1933, constitute the Board (the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board, provided that any individual becoming a
director subsequent to such effective date whose election or nomination for election by the
Company’s shareholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election contest relating to the election of
the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act); or

     (c) Consummation of a reorganization, merger, consolidation or similar transaction involving
the Company (a “Business Combination”), in each case, with respect to which all or

5

 

substantially all of the individuals and entities who were the respective beneficial owners of the
Outstanding Company Common Stock and Company Voting Securities immediately prior to such Business
Combination do not own beneficially, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination in substantially the same proportion as
their ownership immediately prior to such Business Combination of the Outstanding Company Common
Stock and Company Voting Securities, as the case may be; or

     (d) A complete liquidation or dissolution of the Company or a sale or other disposition of all
or substantially all of the assets of the Company other than to a corporation with respect to
which, following such sale or disposition, more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directions is then owned beneficially, directly or
indirectly, by all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Company Voting Securities
immediately prior to such sale or disposition in substantially the same proportion as their
ownership of the Outstanding Company Common Stock and Company Voting Securities, as the case may
be, immediately prior to such sale or disposition.

Notwithstanding the foregoing, with respect to any amounts payable under this Agreement that are
subject to Section 409A of the Code where the payment is to be accelerated in connection with the
Change of Control, no event(s) set forth above shall constitute a Change in Control for purposes of
the Agreement unless such event(s) also constitutes a “change in the ownership”, “change in the
effective control” or a “change in the ownership of a substantial portion of the assets” of the
Company as defined under Section 409A of the Code.

          “Code” shall mean the Internal Revenue Code of 1986, as amended, and any successor
provisions thereto.

          “Date of Termination” shall be the date on which you experience a “separation from service”
(as defined in Section 1.409A-1(h) of the Treasury Regulations) from the Company upon the
termination of your employment by the Company without Cause or by you for Good Reason. Such Date of
Termination shall be the date specified in the Notice of Termination (which, in the case of a
termination by the Company without Cause shall not be less than 30 days, and in the case of a
resignation by you for Good Reason shall not be less than 30 nor more than 60 days from the date
such Notice of Termination is given); provided, that if within 30 days after any Notice of
Termination is given the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of Termination shall be the date on which the
dispute is finally determined, either by mutual written agreement of the parties, by a binding
arbitration award, or by a final judgment, order or decree of a court of competent jurisdiction
(which is not appealable or the time for appeal therefrom having expired and no appeal having been
perfected); provided, further, that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such notice pursues the
resolution of such dispute with reasonable diligence. Notwithstanding the pendency of any such
dispute, the Company will continue to pay you your full compensation in effect when the notice
giving rise to the dispute was given and continue you as a participant in all compensation,
benefit,

6

 

and insurance plans and perquisites in which you were participating when the notice giving
rise to the dispute was given, until the dispute is finally resolved in accordance with this
Subsection. Amounts paid under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under this Agreement.

          “Good Reason” shall mean, without your express written consent, any of the following:

     (a) A meaningful and detrimental alteration in your position or in the nature or status of
your responsibilities (including those as a director of the Company, if any) from those in effect
immediately prior to the Change in Control;

     (b) A reduction by the Company in your annual base salary as in effect on the date hereof or
as the same may be increased from time to time; a failure by the Company to increase your salary at
a rate commensurate with that of other key executives of the Company; a reduction in your annual
bonus (expressed as a percentage of base salary) below the target in effect for you immediately
prior to the Change in Control; or any adverse change in your long-term incentive opportunities in
comparison to those in effect prior to the Change in Control.

     (c) The relocation of the office of the Company where you are employed at the time of the
Change in Control (the “CIC Location”) to a location which is more than 50 miles away from the CIC
Location or the Company’s requiring you to be based more than 50 miles away from the CIC Location
(except for required travel on the Company’s business to an extent substantially consistent with
your customary business travel obligations in the ordinary course of business prior to the Change
in Control);

     (d) The failure by the Company to continue in effect any incentive or deferred compensation
plan in which you participate or the failure by the Company to continue your participation therein
on at least as favorable a basis, both in terms of the amount of benefits provided and the level of
your participation relative to other participants, as existed at the time of the Change in Control;

     (e) The failure by the Company to continue to provide you with benefits at least as favorable
as those enjoyed by you under any of the Company’s retirement, life insurance, medical, health and
accident, disability or savings plans in which you were participating at the time of the Change in
Control; the taking of any action by the Company that would directly or indirectly materially
reduce any of such benefits or deprive you of any material perquisite enjoyed by you at the time of
the Change in Control including without limitation, the use of a car, secretary, office space,
telephones, expense reimbursement and club dues; or the failure by the Company to provide you with
the number of paid vacation days to which you are entitled on the basis of years of service with
the Company in accordance with the Company’s normal vacation policy in effect at the time of the
Change in Control;

     (f) The failure of the Company to pay you any amounts of salary, bonus or expense
reimbursement then owed to you or the failure of the Company to adhere to its payroll and other
compensation schedules in place just prior to the Change in Control;

     (g) The failure of the Company to obtain a satisfactory agreement from any successor

7

 

to assume and agree to perform this Agreement, as contemplated in Section 5 hereof or, if the
business of the Company for which your services are principally performed is sold at any time after
a Change in Control, the purchaser of such business shall fail to agree to provide you with the
same or a comparable position, duties, compensation and benefits (as described in subsections (iv)
and (v) above) as provided to you by the Company immediately prior to the Change in Control; or

     (h) Any purported termination of your employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 1 (and, if applicable, the requirements set out
in the definition of “Cause” above); for purposes of this Agreement, no such purported termination
shall be effective.

     7. Notice. For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered mail, return receipt requested, postage prepaid,
addressed to, General Counsel, Boston Scientific Corporation, One Boston Scientific Place, Natick,
MA 01760-1537, or to you at the address set forth on the signature page of this Agreement or to
such other address as either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only upon receipt.

     8. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing. No waiver by
either party hereto at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party that are not expressly set forth in this
Agreement and this Agreement shall supersede all prior agreements, negotiations, correspondence,
undertakings and communications of the parties, oral or written, with respect to the subject matter
hereof. The validity, interpretation, construction and performance of this Agreement shall be
governed by the laws of the Commonwealth of Massachusetts.

     9. Validity. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

     10. Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.

     11. Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award
in any court having jurisdiction; provided, however, that you shall be entitled to seek specific
performance of your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.

8

 

     12. No Contract of Employment. Nothing in this Agreement shall be construed as giving
you any right to be retained in the employ of the Company.

     13. Headings. The headings contained in this Agreement are intended solely
for convenience and shall not affect the rights of the parties to this Agreement.

If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the
Company the enclosed copy of this letter which will then constitute our agreement on this subject.

Sincerely,

BOSTON SCIENTIFIC CORPORATION

	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Peter M. Nicholas, Chairman of the Board
	 	 

The foregoing is accepted and agreed to.

    
              
            
            
             
              

J. Raymond Elliott

9

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