Document:

a20201231-exhibit105

      2020 Incentive  Compensation Plan  DISCOVERY INC         

 

          Discovery’s success depends on each employee working together to reach our strategic goals.  The Incentive Compensation Plan (ICP) is the variable component in your overall pay package,  providing you with an opportunity to receive an award that is tied to business success and your  contributions to those results. When Discovery succeeds, we all succeed.  This is a core tenet of our pay for performance philosophy. Discovery is committed to providing  employees with competitive, performance-based compensation and the opportunity to share in  the company’s success. The ICP is closely aligned with Discovery’s business strategy,  strengthening the link between our strategic goals and your compensation. An award under the  ICP is not guaranteed; awards will vary and may exceed or fall below individual incentive targets  depending upon business and individual performance for a given plan year.     Table of Contents                                  Page Section  3 The ICP at a Glance  3 Performance & Award  4 Financial Measures  5 Individual Performance  6 Performance Pool  6 Additional ICP Information  

 

  3 | Page      The ICP At a Glance    We recognize that the company’s success depends on each employee working together to reach our strategic goals.  The ICP is designed to strengthen the direct link between your incentive payments and the results of the business units  or functions with which you are aligned.    Performance & Award  Defining ICP Elements    The key elements of the ICP closely align performance and reward by creating a link between your influence, your  results and your incentive award.  Discovery Performance  This performance element applies to all eligible employees.  Employees who are not aligned to a specific Line of  Business (LOB) have 100% of their ICP aligned to the overall Discovery performance element.   Next Generation Digital Revenue  This performance element applies to all eligible employees.  This is revenue (advertising, distribution and other)  recorded and generated on Discovery’s global digital distribution platforms.    Line of Business (LOB) Performance  This performance element applies to employees who work for a LOB within Discovery (for example, a region within  Discovery Networks International, or a network or group of networks). These employees will have a portion of their  overall incentive pay tied to the performance of the LOB.   Individual Performance  Your individual performance is factored into the determination of your incentive pay in one of two ways – reduction  of the payout amount for employees who had significant gaps in performance during the year, or the award of  additional incentive pay from any available “performance pool” for individuals who delivered exceptional  performance during the year. Individual performance is assessed by management.  The following illustration shows how each of the ICP Performance Elements work together to create your total  reward: To see the make-up of your individual ICP target award, please see your Target Compensation Statement.   More information on access your statement can be found on the People and Culture Portal.          *Awards under the ICP are not guaranteed and may exceed or fall below individual targets depending on business and  individual performance for a given plan year.      Award*    Discovery Inc.  Performance    Next Gen  Digital  LOB Performance  (if applicable)  

 

  4 | Page      Financial Measures  You bring new ideas and fresh approaches that can ultimately affect the bottom line, whether you work in one of  Discovery’s dynamic networks or in a corporate function.  For this reason, the ICP rewards you not only for your own individual performance, but also for your impact on  the financial performance of the company and, if applicable, a LOB to which you are assigned.    There are two overall factors used when measuring financial performance: revenue and profitability.  Discovery measures financial performance by comparing the actual revenue and profitability results against  what was planned for the plan year.    Defining Revenue and Profitability  Revenue  The total amount of money received by the company for goods sold or services provided during the plan year.  Profitability  Within the profit-sharing portion of the plan, there are two measures, which are identified below:  Adjusted Free Cash Flow (AFCF)  Discovery defines FCF as cash from operations less capital expenditures. FCF may be adjusted (AFCF) to eliminate  the impact on FCF of various one-off items such as long-term incentive expenses arising from unbudgeted  movements in stock price, or unbudgeted M&A activity.  Adjusted Operating Income Before Depreciation and Amortization (AOIBDA)  AOIBDA is measured by revenue less cost of sales, operating expenses and selling, general and administrative  expenses (excluding long-term incentive compensation). This measure of profitability is used for all US and  International LOBs.       

 

  5 | Page      Individual Performance    Your individual performance is an important part of the ICP. Each year, Discovery sets its corporate goals, identifying  the priorities for the year that will help our company grow and achieve. The goals you set with your managers and  teams should support the company’s overall goals, and when you perform well against those goals, Discovery  performs well, too. So, whether you are assisting with international growth or focusing on quality content, your  individual performance ties directly to Discovery’s overall performance.  Your ICP award can be reduced if you are on a performance plan during the year or do not fully contribute to the  success of your LOB (if applicable) or the company overall as assessed by management. Extraordinary performance  can result in a higher ICP award through the performance pool as outlined below.      Performance Pool  The performance pool is a discretionary component of the ICP that may create an additional amount of funding based  on financial performance. If you performed particularly well as an individual for the year, and the financial performance  of Discovery and/or your LOB (if applicable) exceeds planned performance for the year, then, you may be eligible to  receive a performance pool payout. If a pool is available, a limited number of individual awards will be at the discretion  of senior management.    Additional ICP Information  Employment Changes During the Year  Any employment changes throughout the year may result in a blending of the salary used to calculate your ICP  award and/or the incentive target percentage.      

 

  6 | Page      (60,000 x  (122 days/365 days))  = $20,055  Example: Blended Salary  The following sample calculation shows how the blended base salary is derived:  Assume the salary on January 1 is $50,000, and on September 1, the employee is promoted and receives a salary increase to $60,000.               The blended incentive opportunity is the amount used for incentive purposes as a blend of an employee’s incentive  opportunity throughout the year weighted by time.    Example: Blended Incentive Opportunity  Here is an example of how the blended incentive opportunity percentage is derived:  Assume the incentive opportunity on January 1 is 10% and the employee is promoted on September 2 and is now entitled to receive a 15%  incentive opportunity. In this example, the employee was in a role with a 10% target for 244 days of the year and a 15% target for 121 days.                                                        (10% x  (244 days/365 days))  = 6.68%  (15% x  (121 days/365 days))  = 4.97%  Total Blended Incentive  = 11.65%  (50,000 x  (243 days/365 days))  = $33,288    Total Blended Salary  = $53,343  

 

  7 | Page      Discovery, Inc.  INCENTIVE COMPENSATION PROGRAM  Adopted effective January 1, 2009,  as amended in 2010, 2011, 2012, 2013, 2015, 2016, 2018, 2019, and 2020    ELIGIBILITY AND TERMS      Employees of Discovery, Inc. or a Participating Subsidiary (“the Company”) who are classified as regular  full-time employees of the Company are eligible to participate in the annual Incentive Compensation  Program (the “ICP”), subject to the discretion of management. Eligibility for part-time, less-than-full time  and temporary employees of the Company will be subject to the discretion of management and/or  determined by local legislation, country by country, as appropriate. The determination of participation by  any particular employee or subsidiary is made by the Company in its discretion. An employee who is  eligible for another Company sales or annual incentive award program generally is not eligible to  participate in the ICP, nor is an employee who begins employment in an ICP-eligible position on or after  October 1 of the Program Year. In this document, an employee who meets these eligibility requirements is  referred to as an “Eligible Employee.” “Participating Subsidiary” includes entities at least 80% of the  voting equity is owned by Discovery, Inc. or one or more of its 100% owned direct or indirect subsidiaries.    The ICP is an annual cash bonus program that rewards Eligible Employees for their individual  performance contribution and Company performance (measured and treated separately in relation to  revenue and profitability) for the entire Program Year, subject to the proration provisions set forth below.  The target award opportunity is expressed as a percentage of base salary. The Company performance  metrics may reflect Company-wide performance or a combination of overall Company performance and  performance of a specific Company division or business unit. An Eligible Employee’s payout, if any, is  based on the applicable Company performance measures (both revenue and profitability, measured  separately) and any other measures that may be applicable to an employee’s job level or role. The  calculated payout may be reduced if warranted by the employee’s individual performance or other  individual factors.    The ICP begins on January 1 and ends on December 31 each year (the “Program Year”). The Company  will comply with local legal requirements and any applicable contractual provisions in implementing these  Terms and Conditions; if a legal or contractual provision conflicts with this document, the legal or  contractual requirement will govern.  The payout, if any, under the ICP will occur in the first quarter of the  calendar year following the Program Year and, in the United States, on or before March 15.  

 

  8 | Page      TERMS AND CONDITIONS      1. Proration of Target or Payout: An Eligible Employee must be employed for the entire Program Year  (i.e. from January 1 up to and including to December 31) to be eligible for a payout, unless one of  the following exceptions applies to permit a prorated payout. The eligibility for and amount of any  payout will continue to be subject to the other terms and conditions of the ICP and the applicable  Company performance measures.  a. New Hires: An employee who is hired into a role that is ICP-eligible before October 1 of the  Program Year, will be eligible for a prorated payout under the ICP based on the date of hire,  subject to the terms and conditions of the ICP. An employee hired on or after October 1 of the  Program Year, will not be eligible to participate in that Program Year’s ICP.  b. Part-Time Employees: An Eligible Employee who works part-time or less-than- full time or  who is hired during the Program Year and who otherwise meets the eligibility requirements of  the Program will be eligible for an ICP target that is based on the percentage of applicable  salary, at the part-time level, during the Program Year.  c. Leave of Absence: An Eligible Employee who is in leave status for more than 90 consecutive  days during the Program Year will be eligible for a prorated ICP payout, subject to the terms and  conditions of the ICP. The proration calculation will be based on the number of days that the  Eligible Employee was actively working (including leave for 90 days or less). An Eligible  Employee who is in leave status for 90 consecutive days or less will not be subject to proration  under this subsection.  d. Termination for Cause: If an Eligible Employee’s employment with the Company terminates  prior to the date the ICP for the Program Year is actually paid out, for “Cause,” the Eligible  Employee will not be eligible for any payout, prorated or otherwise. “Cause” shall mean under  this paragraph: (i) the conviction of, or  nolo contendere or guilty plea, to a felony (whether any right to appeal has been or may be  exercised); (ii) conduct constituting embezzlement, material misappropriation or fraud, whether  or not related to the Eligible Employee’s employment with the Company; (iii) conduct  constituting a financial crime, material act of dishonesty or conduct in violation of Company’s  Code of Business Conduct and Ethics; (iv) improper conduct substantially prejudicial to the  Company’s business; (v) willful unauthorized disclosure or use of Company confidential  information; (vi) material improper destruction of Company property; (vii) willful misconduct in  connection with the performance of Executive's duties; and (vii) any other conduct that constitutes  Cause under the Company’s policies and procedures.  e. Resignation: If an Eligible Employee resigns from their employment (and their employment  ends) at any time in the Program Year, no payout prorated or otherwise shall be paid. For these  purposes, unless an Eligible Employee who is working under a fixed term employment contract  otherwise falls within one of the above exceptions set forth in these terms and conditions (as  applied to a resignation), a separation at the end of a fixed-term assignment because of the  natural expiration of the assignment shall be considered a resignation.    f. Death, Disability, Retirement or Termination without Cause: If an Eligible Employee separates  before December 31 due to death, disability, retirement, or to accept immediate employment with  

 

  9 | Page      an “Affiliate,” the employee will be eligible for a prorated payout if the employee was an  Eligible Employee for 180 days or more during the Program Year.  For these purposes,  “retirement” means separation from the Company for any reason other than Cause at a point at  which an Eligible Employee is at least age 60 and has been employed by the Company, or any of  its subsidiaries for at least ten years, where the Eligible Employee’s period of service is  determined using the Company’s Prior Employment Service Policy or a successor policy chosen  by the Administrator. Special treatment upon retirement shall be subject to local laws in those  countries subject to any EU Directive on Discrimination. If an Eligible Employee’s employment  is terminated by the Company without Cause, the employee will be eligible for a prorated payout  if the employee (a) was an Eligible Employee for 270 days or more during the Program Year, and  (b) if applicable, meets any requirement to sign a release of claims under a Company-sponsored  severance benefit plan or other applicable employment agreement or arrangement, provided that  the arrangement does not exclude the payout of the ICP. For purposes of this Section, an  “Affiliate” is an entity in which the Company has an ownership interest of 50% or more but  which is not considered a Participating Subsidiary under the ICP (e.g., OWN LLC).    g. Termination and Rehire During a Single Program Year:  If an Eligible Employee’s employment  is terminated by the Company without Cause and the Eligible Employee is rehired within the  same Program Year, the employee will be eligible for a prorated payout for that Program Year  provided that (i) the Eligible Employee has met any requirement to sign a release of claims  associated with the termination, and (ii) the Eligible Employee was actively employed for 180  days or more during the Program Year, including service prior to the termination and after the  rehire date.  The Company will determine the applicable Company performance metrics based  on the facts and circumstances of the Eligible Employee’s role(s) and duties during the Program  Year.    h. Transfer into Role under Separate Bonus Plan: If an Eligible Employee moves into a role that is  not ICP-eligible because the role is covered by another bonus plan (e.g., an advertising sales  role), the employee will be eligible for a prorated payout for that Program Year based on the  length of time that the Eligible Employee was in the ICP-eligible role.    2. No Additional Rights: The ICP shall not confer or be deemed to confer any right with respect to  continuance of employment by the Company, nor interfere in any way with the right of the Company  to separate an employee from employment.    3. Discretionary Program: Unless contrary to the express and unequivocal terms of applicable law,  regulations, or codetermination rights, any ICP payout is a strictly discretionary and conditional  payout, is made subject to the terms and conditions of these guidelines and the applicable ICP  Company performance measures (based on revenue and profitability) for each Eligible Employee,  and does not form a part of an employee’s regular base salary compensation. The operation or  continuance of the ICP through a Program Year gives no right or expectation to any ICP payout,  whether in same or similar form or at all, in any future Program Year. Company management also  reserves the sole discretion to determine the design, applicable criteria and the actual payout  percentages for each component of each target grid as it deems appropriate.    

 

  10 | Page      4. Profit Sharing: For those countries that legally require participation in profit sharing programs, an  addendum to these guidelines will be published. It is acknowledged that, for all countries, any ICP  payout is funded by two separate elements a) corporate revenue and b) a share of profits.    5. Timing of Payout:  If an Eligible Employee terminates employment with the Company before the  scheduled payout date of the ICP and is eligible for a prorated payout, the timing of any payout, if  legally allowable, will be determined under the normal course of the ICP and delivered on the scheduled  payment date for other Eligible Employees who remain employed by the Company. If local laws do not  permit a delay of the payment until the scheduled payment date under the ICP, the Company at its sole  discretion will determine the payment under the Program to be included in the pay for the last month of  employment.    6. Administration: The Senior Vice President for Total Rewards (“Administrator”) has the full power and  authority to construe, interpret and administer the ICP and the determinations of the Administrator are  final, conclusive and binding on all persons unless any such determination is otherwise expressly and  unequivocally prohibited by local laws and regulations or codetermination rights. For participants  employed in the United States, the ICP shall be construed, administered and governed under the laws of  the State of Maryland, without regard to its conflict of law rules.    7. Amendment, Modification, and Termination: The Company reserves the right to amend, modify or  terminate the ICP at any time in its sole discretion and will implement those changes respecting the  terms and conditions of local laws, works agreements or codetermination rights that expressly and  unequivocally conflict, in whole or in part, with any such action or decision. The ICP will be  implemented subject to and in accordance with local laws and regulations, which may require certain  actions in particular circumstances.    8. Clawback Policy: In addition to any other remedies available to the Company (but subject to applicable  law), if the Board, or the Compensation Committee, determines that an employee has engaged in fraud or  misconduct that resulted in a financial restatement, the Company may recover, in whole or in part, any  incentive compensation, equity award, and/or profit realized from the sale of Company securities,  including any payment under the ICP, made or received in the 12 months after the filing of the financial  statement that was found to be inaccurate.a20201231-exhibit106

DISCOVERY COMMUNICATIONS, LLC  SUPPLEMENTAL DEFERRED COMPENSATION PLAN  (Amended and Restated Effective as of January 1, 2021)  ARTICLE I  ESTABLISHMENT AND PURPOSE  Discovery Communications, LLC (the “Company”) hereby amends and restates the  Discovery Communications, LLC Supplemental Deferred Compensation Plan (the “Plan”) in its  entirety as set forth herein, effective as of the Effective Date (as defined below). Except as  otherwise provided herein, this amendment and restatement applies to all amounts previously or  hereafter deferred under the Plan, including amounts deferred under the Plan prior to January 1,  2005.  The purpose of the Plan is to attract and retain key employees by providing Participants  with an opportunity to defer receipt of a portion of their salary, bonus, and other specified  compensation.  The Plan is not intended to meet the qualification requirements of Section 401(a)  of the Code, but is intended to meet the requirements of Section 409A of the Code, and shall be  operated and interpreted consistent with that intent.  The Plan constitutes an unsecured promise by a Participating Employer to pay benefits in  the future.  Participants in the Plan shall have the status of general unsecured creditors of the  Company or the Adopting Employer, as applicable.  Each Participating Employer shall be solely  responsible for payment of the benefits of its employees and their beneficiaries.  The Plan is  unfunded for federal tax purposes and is intended to be an unfunded arrangement for eligible  employees who are part of a select group of management or highly compensated employees of the  Employer within the meaning of Sections 201(2), 301(a)(3), and 401(a)(1) of ERISA.  Any  amounts set aside to defray the liabilities assumed by the Company or an Adopting Employer will  remain the general assets of the Company or the Adopting Employer and shall remain subject to  the claims of the Company’s or the Adopting Employer’s creditors until such amounts are  distributed to the Participants.  ARTICLE II  DEFINITIONS  For purposes of the Plan, the following words and phrases shall have the meanings set forth  below, unless their context clearly requires a different meaning:   2.1 “Account” means the bookkeeping account maintained by the Committee on behalf  of each Participant pursuant to this Plan. The Account shall be a bookkeeping entry only and shall  be used solely as a device to measure and determine the amounts, if any, to be paid to a Participant  or the Participant’s Beneficiary under the Plan.  A Participant’s account may include one or more  sub-accounts, including, but not limited to, one or more sub-accounts attributable to deferrals for  Plan Years before 2021.  Accounts are intended to constitute unfunded obligations within the  meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.  

 

2    2.2 “Adopting Employer” means a member of the Affiliate Group that, with the  consent of the Company, has adopted the Plan (or has been deemed to adopt this Plan) pursuant to  Section 10.3 hereof for the benefit of its Eligible Employees.  2.3 “Affiliated Group” means (a) the Company, and (b) all entities with whom the  Company would be considered a single employer under Sections 414(b) and 414(c) of the Code,  such that in applying Section 1563(a)(1), (2), and (3) of the Code for purposes of determining a  controlled group of corporations under Section 414(b) of the Code, the language “at least 80  percent” shall be used each place it appears in Section 1563(a)(1), (2), and (3), and in applying  Treasury Regulation Section 1.414(c)-2 for purposes of determining trades or businesses (whether  or not incorporated) that are under common control for purposes of Section 414(c), the language  “at least 80 percent” shall be used each place it appears in that regulation.   2.4 “Base Salary” means the base “compensation” as defined in the Qualified Plan  payable by the Employer to an Eligible Employee in cash during a Plan Year, determined without  regard to the limitation of the amount of compensation that may be recognized under the Qualified  Plan due to the application of Section 401(a)(17) of the Code.  2.5 “Beneficiary” or “Beneficiaries” means the person or persons, including one or  more trusts, designated by a Participant in accordance with the Plan to receive payment of the  remaining balance of the Participant's Account in the event of the death of the Participant prior to  the Participant's receipt of the entire amount credited to the Participant’s Account.  2.6 “Beneficiary Designation” means a Participant’s written designation of one or  more Beneficiaries, made in such manner (which may include an electronic format or a paper form)  as designated by Committee.  2.7 “Business Day” means each day on which the United States securities markets are  open for business.  2.8 “Change in Control” means a “change in control event” within the meaning  Treasury Regulation 1.409A-3(i)(5).  2.9 “Claimant” Claimant means a Participant or Beneficiary filing a claim under  Section 8.2 of this Plan.  2.10 “Code” means the Internal Revenue Code of 1986, as amended.  2.11 “Committee” means the Retirement Plan Committee or such other committee  appointed by the Board of Directors of Discovery Communications, Inc. (or the appropriate  committee of such board) to administer the Plan. If no designation is in effect, the Senior Executive  Vice President of Human Resources of the Company or his or her delegate shall have and exercise  the powers of the Committee.  2.12 “Compensation” means the total of Base Compensation and Incentive  Compensation, to the extent such amounts constitute U.S.-source income.  Compensation shall not  include any compensation that has been previously deferred under this Plan or any other  arrangement subject to Code Section 409A.  

 

3    2.13 “Company” means Discovery Communications, LLC.  2.14 “Deferral Election” means a Participant's written election, made in such manner  as designated by the Committee (which may include an electronic format or a paper form), to defer  a portion of the Participant’s Base Salary and/or Incentive Compensation in accordance with the  provisions of Article IV, which deferral election, once it has become effective, shall be irrevocable  with respect to the Plan Year to which it applies.   2.15 “Discretionary Company Credit” means a credit by the Employer to a  Participant’s Account in accordance with the provisions of Article V of the Plan, whether as a  match of Participant deferrals or otherwise.  Discretionary Company Credits, if any, shall be  credited at the sole discretion of the Employer, and the fact that a Discretionary Company Credit  may be credited to a Participant’s Account in one year shall not obligate the Employer to continue  to make any such Discretionary Company Credit in any subsequent year.  2.16 “Effective Date” means January 1, 2021.  2.17 “Employer” means, with respect to Employees it employs, the Company and each  Affiliate.  2.18 “Eligible Employee” has the meaning given to such term in Section 3.1 hereof.   2.19 “Employee” means an active employee of a Participating Employer who is  classified as a regular full-time or regular part-time employee of a Participating Employer and is  paid by the Participating Employer and issued a W-2 by the Participating Employer with respect  to those wages.  For this purpose, a regular part-time employee is an employee who is classified  as benefits eligible and is regularly scheduled to work at least 30 hours per week.  2.20 “ERISA” means the Employee Retirement Income Security Act of 1974, as  amended.  2.21 “Incentive Compensation” means any incentive compensation, including  commissions under sales incentive plans, payable in cash to an Eligible Employee pursuant to any  incentive compensation plan or program in which Eligible Employees of an Employer are  participants and that is designated by the Committee as an eligible source of compensation for  deferral under this Plan.  2.22 “Participant” means any Eligible Employee who (a) at any time has elected to  defer the receipt of Base Salary and/or Incentive Compensation in accordance with the Plan or (b)  whose Account has been credited with a Discretionary Company Credit, and who, in any case, has  not received complete payment of the amount credited to the Participant’s Account.  2.23 “Participating Employer” means the Company and each Adopting Employer.  2.24 “Performance-Based Compensation” means Incentive Compensation that is  based on services performed over a period of at least 12 months and that constitutes “performance- based compensation” within the meaning of Section 409A of the Code.  In general, for purposes  of Section 409A of the Code, “performance-based compensation” means compensation the amount  

 

4    of which, or the entitlement to which, is contingent on the satisfaction of pre-established  organizational or individual performance criteria relating to a performance period of at least 12  consecutive months.  For such purposes, organizational or individual performance criteria are  considered pre-established if established in writing by not later than 90 days after the  commencement of the period of service to which the criteria relate, provided that the outcome is  substantially uncertain at the time the criteria are established.  Performance-Based Compensation  does not include any amount or portion of any amount that will be paid either regardless of  performance or based upon a level of performance that is substantially certain to be met at the time  the criteria are established.  2.25 “Plan” means this Discovery Communications, LLC Supplemental Deferred  Compensation Plan, as it may be amended from time to time.  2.26 “Plan Year” means the calendar year.  2.27 “Qualified Plan” means the Discovery Communications, LLC Retirement Savings  Plan, as amended from time to time.  2.28 “Separation from Service” means a Participant’s termination of employment or  service with the Affiliated Group, other than as a result of the Participant’s death, in such a manner  as to constitute a “separation from service” as defined under Section 409A of the Code.  2.29 “Specified Employee” means a “specified employee” as determined by the  Company in accordance with Section 409A of the Code.  2.30 “Unforeseeable Emergency” means an “unforeseeable emergency” as defined  under Section 409A of the Code.  In general, for purposes of Section 409A of the Code, an  “unforeseeable emergency” means a severe financial hardship to a Participant resulting from an  illness or accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary, or the  Participant’s dependent (as defined in Section 152 of the Code, without regard to Sections  152(b)(1), (b)(2), and (d)(1)(B)); loss of the Participant’s property due to casualty (including the  need to rebuild a home following damage to a home not otherwise covered by insurance, for  example, not as a result of a natural disaster); or other similar extraordinary and unforeseeable  circumstances arising as a result of events beyond the control of the Participant.  ARTICLE III  ELIGIBILITY AND PARTICIPATION    3.1 Eligibility and Participation. Participation in the Plan is limited to any employee  of an Employer who (i) is selected by the Committee, in its sole discretion, as eligible to participate  in the Plan, and (ii) is a member of a “select group of management or highly compensated  employees,” within the meaning of Sections 201, 301 and 401 of ERISA (each an “Eligible  Employee”).  In lieu of designating individual Eligible Employees for Plan participation, the  Committee may establish eligibility criteria (consistent with the requirements of this Section 3.1)  providing for participation of all Eligible Employees who satisfy such criteria. The Committee  may at any time, in its sole discretion, change the eligibility criteria for Eligible Employees, or  determine that one or more Participants will cease to be an Eligible Employee.  An Employee so  

 

5    selected shall become an Eligible Employee effective on the first day of the month immediately  following the month in which the Employee is designated by the Committee or satisfies the  eligibility criteria established by the Committee.  An Eligible Employee becomes a Participant  upon the earlier to occur of: (i) a credit of a Discretionary Company Credit under Article V, or (ii)  the date that the Eligible Employee’s initial election to defer Base Salary and/or Incentive  Compensation to the Plan becomes irrevocable.  An Eligible Employee who receives a credit of a  Discretionary Company Credit shall not be eligible to defer Compensation to the Plan unless the  Participant receives notice that he or she is eligible to defer.    3.2 Enrollment Requirements. Except as otherwise determined by the Committee, as  a condition to participation, each Eligible Employee shall make a Deferral Election no later than  the date or dates specified by the Committee in accordance with the Plan.  In addition, the  Committee may establish from time to time such other enrollment requirements as it determines  in its sole discretion are necessary.    3.3 Commencement Date.  Except as otherwise may be provided by the Committee  pursuant to Section 4.1, each Eligible Employee first shall be eligible to commence participation  in accordance with the terms and conditions of this Plan effective as of January 1 of the Plan Year  next following the Plan Year in which he or she becomes an Eligible Employee pursuant to Section  3.1. Notwithstanding the foregoing, the Committee, in its sole discretion, may permit an Eligible  Employee to commence participation in the Plan upon such earlier date as may be specified by the  Committee, consistent with the Plan and Section 409A of the Code.    3.4 Duration of Participation.  A Participant shall be eligible to defer Base Salary and  Incentive Compensation and, to the extent determined by the Employer, in its discretion, receive  allocations of Discretionary Company Credits, subject to the terms of the Plan, for as long as such  Participant remains an Eligible Employee.  A Participant who is no longer an Eligible Employee  but has not incurred a Separation from Service may not defer Base Salary or Incentive  Compensation under the Plan beyond the Plan Year in which he or she became ineligible but may  otherwise exercise all of the rights of a Participant under the Plan with respect to his or her  Account(s).  On and after a Separation from Service, a Participant shall remain a Participant as  long as the balance of his or her Account is greater than zero (0), and during such time may  continue to make allocation elections as provided in Article VI.  An individual shall cease being a  Participant in the Plan when all benefits under the Plan to which he or she is entitled have been  paid.     3.5 Delay in or Suspension of Status as Eligible Employee.  An individual who  would otherwise be in a category of Eligible Employees selected for participation by the  Committee shall not be treated as an Eligible Employee for purposes of a Deferral Election under  Section 4.1 or Section 4.2 if initially eligible in connection with a promotion that is coupled with  a work assignment outside of the United States that is designated as “long-term” (under the  Company’s normal procedures with respect to non-U.S. employment) but will be treated as eligible  for election under Section 4.1 when repatriated to the United States (if otherwise eligible for such  status pursuant to Treas. Reg. § 1.409A-2(a)(7) as someone not previously or recently eligible to  defer).  An individual who is otherwise an Eligible Employee may not make an election under of  

 

6    Section 4.2 with respect to the following calendar year if he or she is expected to be on a “long- term” work assignment outside of the United States during that year.      ARTICLE IV  DEFERRAL ELECTIONS    4.1 Certain Newly Eligible Participants.  Except as otherwise determined by the  Committee, in its sole discretion, newly Eligible Employees shall not be permitted to make a  Deferral Election with respect to Base Salary and/or Incentive Compensation earned during the  Plan Year in which the Eligible Employee is first eligible to participate in the Plan. However,  notwithstanding the foregoing, the Committee, in its sole discretion, may permit any Eligible  Employee to make a Deferral Election with respect to Base Salary earned for services performed  during the Plan Year in which the Eligible Employee is first eligible to participate in the Plan (and  in any other plan that would be aggregated with the Plan under Section 409A of the Code), as  determined in accordance with Treasury Regulation Section 1.409A-2(a)(7); provided, however,  that such Deferral Election (a) is made and becomes irrevocable no later than the 30th day (or such  earlier date as specified by the Committee) after the effective date that the Employee first becomes  an Eligible Employee pursuant to Section 3.1 of the Plan, and (b) shall apply only to Base Salary  earned for services performed after the date that the Deferral Election becomes irrevocable, as  determined by the Committee in accordance with Section 409A.    4.2 Annual Deferral Elections. Unless the Committee determines to permit an  election pursuant to Section 4.1, and except as otherwise determined by the Committee, each  Eligible Employee may elect to defer Base Salary and/or Incentive Compensation for a Plan Year  by filing a Deferral Election with the Committee only in accordance with the following rules:     (a) Base Salary. The Deferral Election with respect to Base Salary must be  made by such date as specified by the Committee that is not later than December 31 of the Plan  Year immediately preceding the Plan Year for which such Base Salary is earned.    (b) Incentive Compensation.      (i) In General.  With respect to any Incentive Compensation to which  neither Section 4.1 nor Section 4.2(b)(ii) applies, a Participant’s Deferral Election must be made  by such date as specified by the Committee that is not later than December 31 of the Plan Year  immediately preceding the Plan Year for which such Incentive Compensation is earned (meaning  the Plan Year in which or with which the applicable performance period begins, or, in the case of  Incentive Compensation consisting of sales commissions within the meaning of Treasury  Regulation 1.409A-2(a)(12)(i), the Plan Year in which the applicable sale occurs).      (ii) Certain Elections with Respect to Performance-Based  Compensation. To the extent permitted by the Committee in its sole discretion, a Deferral Election  with respect to Incentive Compensation that constitutes Performance-Based Compensation may  be made by such date as specified by the Committee that is not later than the date that is six (6)  months before the end of the applicable performance period, provided that in no event may such  

 

7    Deferral Election be made after such Incentive Compensation has become "readily ascertainable"  within the meaning of Section 409A of the Code. In order to make a Deferral Election under this  Section 4.2(b)(ii), the Participant must perform services continuously from the later of the  beginning of the performance period or the date the performance criteria are established through  the date the Deferral Election is made under this Section 4.2(b)(ii). A Deferral Election made under  this Section 4.2(b)(ii) shall not apply to any Incentive Compensation that becomes payable to a  Participant without regard to the satisfaction of the applicable performance criteria.    4.3 Amount Deferred. A Participant shall designate on a Deferral Election, as  applicable, the portion of his or her Base Salary and/or the portion of his or her Incentive  Compensation that is to be deferred with respect to the applicable Plan Year (or other applicable  performance period) in accordance with this Article IV.  The Participant may specify a different  portion to be deferred for each element of his or her deferrable Compensation (Base Salary and  Incentive Compensation). For each Plan Year, an Eligible Employee may defer (in 1% increments)  up to 50% of his or her Base Salary, and for each Plan Year (or other applicable performance  period), an Eligible Employee may defer (in 1% increments) up to 50% of his or her Incentive  Compensation.  Deferrals of Compensation shall be calculated with respect to the gross cash  Compensation payable to the Participant prior to any deductions or withholdings, but shall be  reduced by the Committee as necessary so as not to exceed 100% of the cash Compensation of the  Participant remaining after deduction of all required income and employment taxes, 401(k) and  other employee benefit deductions, and other deductions required by law.  Changes to payroll  withholdings that affect the amount of Compensation being deferred to the Plan shall be allowed  only to the extent permissible under Section 409A of the Code.    4.4 Elections as to Time and Form of Payment.  Each Deferral Election will specify  the time and form of payment for each element of Compensation (Base Salary and Incentive  Compensation) deferred by the Participant for the applicable Plan Year, subject to the provisions  of Article VII, as elected by the Participant from the following alternatives:    (a) Payment Following Separation from Service.  A Participant may elect to  receive payment of the amount deferred pursuant to the Deferral Election for a Plan Year in a  single lump sum payment, in sixty (60) substantially equal monthly installments, or in one hundred  twenty (120) substantially equal monthly installments, paid or commencing within ninety (90)  days after:    (i) the Participant’s Separation from Service,    (ii) the first (1st) anniversary of the Participant’s Separation from  Service, or    (ii) the fifth (5th) anniversary of the Participant’s Separation from  Service.    (b) In-Service Payments.  A Participant may elect to receive payment of the  amount deferred pursuant to the Deferral Election for a Plan Year following the earlier of:    

 

8    (i)  the first day of a specified month of a calendar year that is at least  two (2) calendar years after the Plan Year for which such Deferral Election is made, in which case  payment will be made or commence within ninety (90) days thereafter in a single lump sum  payment or in substantially equal annual installments over a period of from two (2) to five (5)  years, as elected by the Participant in the applicable Deferral Election; or    (ii)  the Participant’s Separation from Service, in which case payment  will be made in a single lump sum payment, in sixty (60) substantially equal monthly installments,  or in one hundred twenty (120) substantially equal monthly installments, paid or commencing  within ninety (90) days after the Participant’s Separation from Service, the first (1st) anniversary  of the Participant’s Separation from Service, or the fifth (5th) anniversary of the Participant’s  Separation from Service, as elected by the Participant in the applicable Deferral Election.    (c) Default Time and Form of Payment.  To the extent that a Participant does  not designate the time and form of payment on a Deferral Election as provided in Section 4.4 (or  such designation does not comply with the terms of the Plan), the Participant’s deferrals pursuant  to the applicable Deferral Election shall be paid, subject to the provisions of Article VII, in a single  lump sum payment within ninety (90) days after the Participant’s Separation from Service.    4.5 Duration and Cancellation of Deferral Elections.    (a) Duration. Once irrevocable, a Deferral Election shall be effective for the  Plan Year (or other applicable performance period, as the case may be) with respect to which such  election was timely filed with the Committee.  Notwithstanding the preceding sentence, the  Committee may provide, in its sole discretion, that any Deferral Elections shall continue to be  applied to future Deferral Election periods, until terminated or modified prospectively by a  Participant in accordance with the terms of this Article IV.    (b) Cancellation.    (i) The Committee may, in its sole discretion, cancel a Participant’s  Deferral Election where such cancellation occurs by the later of the end of the Plan Year in which  the Participant incurs a “disability” or the 15th day of the third month following the date the  Participant incurs a “disability.”  For purposes of this Section 4.5(b)(i), a “disability” refers to any  medically determinable physical or mental impairment resulting in the Participant’s inability to  perform the duties of his or her position or any substantially similar position, where such  impairment can be expected to result in death or can be expected to last for a continuous period of  not less than six months.    (ii) The Committee may, in its sole discretion, cancel a Participant’s  Deferral Election due to an Unforeseeable Emergency, a hardship distribution pursuant to Treasury  Regulation Section 1.401(k)-1(d)(3), or such other event or condition as may be permitted under  Section 409A of the Code pursuant to generally applicable guidance published in the Internal  Revenue Bulletin.    

 

9    (iii) If a Participant’s Deferral Election is cancelled with respect to a  particular Plan Year in accordance with this Section 4.5(b), such Participant may make a new  Deferral Election for a subsequent Plan Year, as the case may be, only in accordance with Section  4.2 hereof.    4.6 Vesting. Each Participant shall at all times have a fully vested interest in 100% of  the deferrals of Base Salary and Incentive Compensation credited to his or her Account.     ARTICLE V  DISCRETIONARY COMPANY CREDITS    5.1 In General.  In any Plan Year, the Employer, in its sole and absolute discretion,  may, but shall not be required to, credit Discretionary Company Credits to a Participant’s Account  in any amount determined by the Employer.    5.2 Vesting.  Except as otherwise may be provided in a vesting schedule established  by the Employer, in its sole and absolute discretion, any Discretionary Company Credits shall be  100% as of the date credited to a Participant’s Account.  In any event, notwithstanding any vesting  schedule that may be established hereunder with respect to Discretionary Company Credits, any  such unvested Discretionary Company Credits shall become fully vested upon the occurrence of a  Change in Control.    5.3 Time and Form of Payment.  Except as otherwise may be determined by the  Employer no later than the time of crediting to the Participant’s Account, any vested Discretionary  Company Credits contributed to a Participant’s Account for a Plan Year shall be payable, in  accordance with the default time and form of payment set out in Section 4.4(c), in a single lump  sum payment within ninety (90) days after the Participant’s Separation from Service.    ARTICLE VI  CREDITING OF GAINS, LOSSES AND EARNINGS TO ACCOUNTS    Each Participant’s Account will be credited with gains, losses and earnings based on  notional investment directions made by the Participant in accordance with notional investment  crediting options and procedures established from time to time by the Committee in its sole  discretion. The Committee specifically retains the right in its sole discretion to change the notional  investment crediting options and procedures from time to time. By electing to defer any amount  under the Plan, each Participant acknowledges and agrees that the Company is not and shall not  be required to make any investment in connection with the Plan, nor is it required to follow the  Participant’s notional investment directions in any actual investment it may make or acquire in  connection with the Plan.  Any amounts credited to a Participant’s Account with respect to which  a Participant does not provide notional investment direction shall be credited with gains, losses  and earnings as if such amounts were invested in a notional investment option selected by the  Committee in its sole discretion.    ARTICLE VII  PAYMENTS  

 

10      7.1 Payment of Participant Accounts. Except as otherwise provided in this Article  VII or Section 5.2, a Participant’s vested Account shall commence to be paid in accordance with  the applicable time and form of payment specified in the Participant’s Deferral Election for the  applicable Plan Year pursuant to Section 4.4.    7.2 Mandatory Six-Month Delay for Specified Employees.  Notwithstanding any  other provision of this Plan to the contrary, in no event may payments triggered by the Separation  from Service of a Specified Employee be paid or commence prior to the first Business Day of the  seventh month following the Specified Employee’s Separation from Service (or if earlier, within  90 days after the Specified Employee’s death), with such benefits being paid (if in a lump sum) or  commencing (if in substantially equal monthly installments) as soon as administratively  practicable after such date.    7.3 Death of Participant. Notwithstanding any other provision of this Plan, in the  event of the Participant’s death, the vested balance of the Participant’s Account shall be paid to  the Participant’s Beneficiary or Beneficiaries in accordance with the Participant’s Beneficiary  Designation (or, if there is no such Beneficiary, to the Participant’s estate) in a single lump sum as  soon as administratively practicable following the date of the Participant’s death.  A Participant’s  Beneficiary Designation may be changed at any time prior to his or her death by the execution and  delivery of a new Beneficiary Designation. The Beneficiary Designation on file with the  Committee that bears the latest date at the time of the Participant’s death shall govern.  If a  Participant fails to properly designate a Beneficiary in accordance with this Section 7.3 or if all  designated Beneficiaries have predeceased the Participant, then payment pursuant to this Section  7.3 shall be made to the Participant’s surviving spouse, if living, or if none, to the Participant’s  estate.    7.4 Unforeseeable Emergency. The Committee may, in its sole discretion, provide for  payment of the portion of a Participant’s vested Account that is reasonably necessary to satisfy a  need due to an Unforeseeable Emergency pursuant to Treasury Regulation Section 1.401(k)- 3(i)(3)(iii).  Any distributions because of Unforeseeable Emergency must be limited to the amount  reasonably necessary to satisfy the emergency need (which may include amounts necessary to pay  any federal, state, local, or foreign income taxes or penalties reasonably anticipated to result from  the distribution), determined by taking into account the additional compensation upon cancellation  of the Participant’s Deferral Election pursuant to Section 4.5(b).    7.5 Payment of Pre-2021 Deferrals.  Notwithstanding any other provisions of the Plan  (other than Sections 7.6 and 7.7), any deferrals credited to a Participant’s Account with respect to  any Plan Year prior to 2021 (which deferrals, for example, may be credited to sub-accounts for  “Retirement/Termination Accounts,” “Specified Date Accounts,” “Five Year Vesting Accounts”  and “DAP Transfer Accounts”) (“Pre-2021 Deferrals”) will remain subject to the payment terms  and Deferral Elections in effect under the terms of the Plan as in effect immediately prior to the  Effective Date.    7.6 Subsequent Deferral Elections. A Participant may elect, subject to such  administrative rules as may be prescribed by the Committee in accordance with this Section 7.6,  to change the time and/or form of payment with respect to one or more of his or her Deferral  

 

11    Elections for a Plan Year, to a later time in accordance with this Section 7.6 (a “Subsequent  Deferral Election”). A Participant may make no more than one (1) Subsequent Deferral Election  with respect to each such Deferral Election.  Any such Subsequent Deferral Election must be filed  with the Committee at least twelve (12) months prior to the date that the payment would otherwise  have been paid pursuant to the Deferral Election.  On each such Subsequent Deferral Election, the  Participant must delay the payment date for a period of at least five (5) years after the date that the  amount pursuant to the Deferral Election would otherwise have been paid under the Plan, except  with respect to payment in the event of the Participant’s death.    7.7 Small Balances of Pre-2021 Deferrals. Solely with respect to Pre-2021 Deferrals,  to the extent a Participant has elected to receive payment of his or her Retirement/ Termination  Accounts in installments, then, as of the date payment from such Account is scheduled to begin,  (i) the initial installment shall be no less than twenty-five thousand dollars ($25,000) or, if less,  the balance of such Account and each subsequent installment shall be no less than one thousand  dollars ($1,000) or, if less, the balance of such Account. In the event the balance of the  Retirement/Termination Account as of the date of Separation from Service does not exceed  twenty-five thousand dollars ($25,000), then such balance shall be paid in a single lump sum within  ninety (90) days following Separation from Service or, with respect to a Participant who is a  Specified Employee as of the date such Participant incurs a Separation from Service, in the seventh  month following the month in which such Separation from Service occurs, if later.  This Section  7.7 shall have no application to any deferrals for Plan Years after 2020.    7.8 Discretionary Acceleration of Payments. The Committee may, in its sole  discretion, accelerate the time or schedule of a payment under the Plan to a time or form otherwise  permitted under Section 409A of the Code in accordance with the requirements, restrictions and  limitations of Treasury Regulation Section 1.409A-3(j); provided that in no event may a payment  to a Specified Employee be accelerated following the Specified Employee’s Separation from  Service to a date that is prior to the first Business Day of the seventh month following the Specified  Employee’s Separation from Service (or if earlier, within 90 days after the Specified Employee’s  death) unless otherwise permitted under Section 409A of the Code.    7.9 Discretionary Delay of Payments. The Committee may, in its sole discretion,  delay the time or form of a payment under the Plan to a time or form otherwise permitted under  Section 409A of the Code in accordance with the requirements, restrictions and limitations of  Treasury Regulation Section 1.409A-2(b)(7).      7.10 Actual Date of Payment. To the extent permitted by Section 409A of the Code,  the Committee, in its sole discretion, may cause any payment under this Plan to be made or  commence on any later date that occurs in the same calendar year as the date on which payment  otherwise would be required to be made under this Plan, or, if later, by the 15th day of the third  month after the date on which payment would otherwise be required to be made under this Plan.  Further, to the extent permitted by Section 409A of the Code, the Committee may delay payment  in the event that it is not administratively possible to make payment on the date (or within the  periods) specified in this Article VII, or if making the payment would jeopardize the ability of the  Company (or any entity which would be considered to be a single employer with the Company  under Section 414(b) or Section 414(c) of the Code) to continue as a going concern.   

 

12    Notwithstanding the foregoing, payment must be made no later than the latest possible date  permitted under Section 409A of the Code.    7.11 Calculation of Installment Payments. In the event that any of the Participant’s  Account is paid in installments: (i) the first installment shall commence at the time specified  pursuant to Section 4.4(b), (ii) each subsequent installment shall be paid on or as soon as  practicable after the applicable anniversary of the payment commencement date, (iii) the amount  of each installment shall equal the quotient obtained by dividing the applicable portion of the  Participant’s vested Account balance as of the date of such installment payment (or as of such  earlier date as may be reasonably determined by the Committee to facilitate the administration of  the Plan) by the number of installment payments remaining to be paid at the time of the calculation;  and (iv) the amount remaining unpaid shall continue to be credited with gains, losses and earnings  as provided in Article VI hereof.  For purposes of Section 409A of the Code, each series of  installment payments under the Plan shall be treated as right to a single payment.    7.12 Discharge of Obligations. The payment to a Participant (or to his or her  Beneficiary, surviving spouse or estate) of an Account in a single lump sum or the number of  installments as provided pursuant to this Plan shall discharge all obligations of the Company and  any other Employer to such Participant (and such Participant’s Beneficiary, surviving spouse or  estate) under the Plan with respect to the Participant’s Account.  The Committee may require such  Participant, surviving spouse or Beneficiary, as a condition precedent to such payment, to execute  a receipt and release to such effect.  In the event that a Participant, surviving spouse or Beneficiary  is required to execute a release and the period to consider and revoke the release straddles two  calendar years, payment shall be made in the second calendar year in accordance with Article VII  of the Plan.    ARTICLE VIII  ADMINISTRATION AND CLAIMS PROCEDURES    8.1 General.  The Committee shall be responsible for the general administration of the  Plan and shall have the full power, discretion and authority to carry out the provisions of the Plan.   Without limiting the foregoing, the Committee shall have full discretion to (a) interpret all  provisions of the Plan; (b) resolve all questions relating to eligibility for participation in the Plan  and the amount in the Account of any Participant and all questions pertaining to claims for benefits  and procedures for claim review; (c) resolve all other questions arising under the Plan, including  any factual questions and questions of construction; (d) determine all claims for benefits; and (e)  adopt such rules, regulations or guidelines for the administration of the Plan and take such further  action as the Company shall deem advisable in the administration of the Plan.  Without limiting  the foregoing, to the extent permitted by Section 409A of the Code, the Committee may, in its sole  discretion, modify the rules applicable to Deferral Elections to the extent necessary to satisfy the  requirements of the Uniformed Service Employment and Reemployment Rights Act of 1994, as  amended, 38 U.S.C. 4301-4334. The actions taken and the decisions made by the Committee  hereunder shall be final, conclusive, and binding on all persons, including the Company, all other  Employers, Eligible Employees, Participants, and their estates and Beneficiaries. The Committee  may delegate to one or more officers of the Company, subject to such terms as the Committee shall  determine, the authority to administer all or any portion of the Plan, or the authority to perform  

 

13    certain functions, including administrative functions.  In the event of such delegation, all  references to the Committee in this Plan (other than such references in the immediately preceding  sentence) shall be deemed references to such officers as it relates to those aspects of the Plan that  have been delegated.    8.2 Claims Procedure.    (a) Filing a Claim. Any controversy or claim arising out of or relating to the  Plan shall be filed in writing with the Committee which shall make all determinations concerning  such claim. Any claim filed with the Committee and any decision by the Committee denying such  claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim  (the "Claimant").    (i) In General. Notice of a denial of benefits will be provided within 90  days of the Committee's receipt of the Claimant's claim for benefits. If the Committee determines  that it needs additional time to review the claim, the Committee will provide the Claimant with a  notice of the extension before the end of the initial 90-day period. The extension will not be more  than 90 days from the end of the initial 90-day period and the notice of extension will explain the  special circumstances that require the extension and the date by which the Committee expects to  make a decision.    (ii) Contents of Notice. If a claim for benefits is completely or partially  denied, notice of such denial shall be in writing and shall set forth the reasons for denial in plain  language. The notice shall: (A) cite the pertinent provisions of the Plan document, and (B) explain,  where appropriate, how the Claimant can perfect the claim, including a description of any  additional material or information necessary to complete the claim and why such material or  information is necessary. The claim denial also shall include an explanation of the claims review  procedures and the time limits applicable to such procedures, including a statement of the  Claimant's right to bring a civil action under Section 502(a) of ERISA following an adverse  decision on review.    (b) Appeal of Denied Claims. A Claimant whose claim has been completely or  partially denied shall be entitled to appeal the claim denial by filing a written appeal with the  Committee. A Claimant who timely requests a review of the denied claim (or his or her authorized  representative) may review, upon request and free of charge, copies of all documents, records and  other information relevant to the denial and may submit written comments, documents, records  and other information relevant to the claim to the Committee. All written comments, documents,  records, and other information shall be considered "relevant" if the information: (x) was relied  upon in making a benefits determination, (y) was submitted, considered or generated in the course  of making a benefits decision regardless of whether it was relied upon to make the decision, or (z)  demonstrates compliance with administrative processes and safeguards established for making  benefit decisions. The Committee may, in its sole discretion and if it deems appropriate or  necessary, decide to hold a hearing with respect to the claim appeal.    (i) In General. Appeal of a denied benefits claim must be filed in  writing with the Committee no later than 60 days after receipt of the written notification of such  

 

14    claim denial. The Committee shall make its decision regarding the merits of the denied claim  within 60 days following receipt of the appeal (or within 120 days after such receipt, in a case  where there are special circumstances requiring extension of time for reviewing the appealed  claim). If an extension of time for reviewing the appeal is required because of special  circumstances, written notice of the extension shall be furnished to the Claimant prior to the  commencement of the extension. The notice will indicate the special circumstances requiring the  extension of time and the date by which the Committee expects to render the determination on  review. The review will take into account comments, documents, records and other information  submitted by the Claimant relating to the claim without regard to whether such information was  submitted or considered in the initial benefit determination.    (ii) Contents of Notice. If a benefits claim is completely or partially  denied on review, notice of such denial shall be in writing and shall set forth the reasons for denial  in plain language.  The decision on review shall set forth: (A) the specific reason or reasons for  the denial, (B) specific references to the pertinent Plan provisions on which the denial is based,  (C) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable  access to and copies of all documents, records, or other information relevant (as defined above) to  the Claimant's claim, and (D) a statement describing any voluntary appeal procedures offered by  the plan and a statement of the Claimant's right to bring an action under Section 502(a) of ERISA.    (c) Legal Action. A Claimant may not bring any legal action, including  commencement of any arbitration, relating to a claim for benefits under the Plan unless and until  the Claimant has followed the claims procedures under the Plan and exhausted his or her  administrative remedies under such claims procedures. Any such legal action must be commenced  within one year of a final determination hereunder with respect to such claim, and Claimant shall  be prohibited from presenting in any such legal action any evidence that was not timely presented  to the Committee as part of the Plan’s administrative review process pursuant to the claims  procedures set forth herein.  If a Participant or Beneficiary prevails in a legal proceeding brought  under the Plan to enforce the rights of such Participant or any other similarly situated Participant  or Beneficiary, in whole or in part, the Participating Employer shall reimburse such Participant or  Beneficiary for all legal costs, expenses, attorneys' fees and such other liabilities incurred as a  result of such proceedings.     (d) Discretion of Committee. All interpretations, determinations and decisions  of the Committee with respect to any claim shall be made in its sole discretion, and shall be final  and conclusive.    (e) Arbitration.  If any claim or controversy between a Participating Employer  and a Participant or Beneficiary is not resolved through the claims procedure set forth in the  preceding provisions of this Section 8.2, such claim shall be submitted to and resolved exclusively  by expedited binding arbitration by a single arbitrator. Arbitration shall be conducted in  accordance with the following procedures:    The complaining party shall promptly send written notice to the other party identifying the matter  in dispute and the proposed remedy. Following the giving of such notice, the parties shall meet  and attempt in good faith to resolve the matter. In the event the parties are unable to resolve the  

 

15    matter within 21 days, the parties shall meet and attempt in good faith to select a single arbitrator  acceptable to both parties. If a single arbitrator is not selected by mutual consent within ten  Business Days following the giving of the written notice of dispute, an arbitrator shall be selected  from a list of nine persons each of whom shall be an attorney who is either engaged in the active  practice of law or recognized arbitrator and who, in either event, is experienced in serving as an  arbitrator in disputes between employers and employees, which list shall be provided by the main  office of either JAMS, the American Arbitration Association ("AAA") or the Federal Mediation  and Conciliation Service. If, within three Business Days of the parties' receipt of such list, the  parties are unable to agree on an arbitrator from the list, then the parties shall each strike names  alternatively from the list, with the first to strike being determined by the flip of a coin. After each  party has had four strikes, the remaining name on the list shall be the arbitrator. If such person is  unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected.    Unless the parties agree otherwise, within 60 days of the selection of the arbitrator, a hearing shall  be conducted before such arbitrator at a time and a place agreed upon by the parties. In the event  the parties are unable to agree upon the time or place of the arbitration, the time and place shall be  designated by the arbitrator after consultation with the parties. Within 30 days of the conclusion  of the arbitration hearing, the arbitrator shall issue an award, accompanied by a written decision  explaining the basis for the arbitrator's award.    In any arbitration hereunder, the Participating Employer shall pay all administrative fees of the  arbitration and all fees of the arbitrator. Each party shall pay its own attorneys' fees, costs, and  expenses, unless the arbitrator orders otherwise. The prevailing party in such arbitration, as  determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled,  to the extent permitted by law, to reimbursement from the other party for all of the prevailing  party's costs (including but not limited to the arbitrator's compensation), expenses, and attorneys'  fees. The arbitrator shall have no authority to add to or to modify this Plan, shall apply all  applicable law, and shall have no lesser and no greater remedial authority than would a court of  law resolving the same claim or controversy. The arbitrator shall, upon an appropriate motion,  dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that  it would be entitled to summary judgment if the matter had been pursued in court litigation.    Subject to Section 8.2(c) above, the parties shall be entitled to discovery as follows: Each party  may take no more than three depositions. The Participating Employer may depose the Participant  or Beneficiary plus two other witnesses, and the Participant or Beneficiary may depose the  Participating Employer, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, plus  two other witnesses. Each party may make such reasonable document discovery requests as are  allowed in the discretion of the arbitrator.    The decision of the arbitrator shall be final, binding, and non-appealable, and may be enforced as  a final judgment in any court of competent jurisdiction.    This arbitration provision of the Plan shall extend to claims against any parent, subsidiary, or  affiliate of each party, and, when acting within such capacity, any officer, director, shareholder,  Participant, Beneficiary, or agent of any party, or of any of the above, and shall apply as well to  

 

16    claims arising out of state and federal statutes and local ordinances as well as to claims arising  under the common law or under this Plan.    Notwithstanding the foregoing, and unless otherwise agreed between the parties, either party may  apply to a court for provisional relief, including a temporary restraining order or preliminary  injunction, on the ground that the arbitration award to which the applicant may be entitled may be  rendered ineffectual without provisional relief.    Any arbitration hereunder shall be conducted in accordance with the Federal Arbitration Act:  provided, however, that, in the event of any inconsistency between the rules and procedures of the  Act and the terms of this Plan, the terms of this Plan shall prevail.    If any of the provisions of this Section 8.2(e) are determined to be unlawful or otherwise  unenforceable, in the whole part, such determination shall not affect the validity of the remainder  of this section and this section shall be reformed to the extent necessary to carry out its provisions  to the greatest extent possible and to insure that the resolution of all conflicts between the parties,  including those arising out of statutory claims, shall be resolved by neutral, binding arbitration. If  a court should find that the provisions of this Section 8.2(e) are not absolutely binding, then the  parties intend any arbitration decision and award to be fully admissible in evidence in any  subsequent action, given great weight by any finder of fact and treated as determinative to the  maximum extent permitted by law.    The parties do not agree to arbitrate any putative class action or any other representative action.  The parties agree to arbitrate only the claims(s) of a single Participant or Beneficiary.      ARTICLE IX  AMENDMENT AND TERMINATION    9.1 Amendment.  The Company reserves the right to amend, terminate or freeze the  Plan, in whole or in part. In no event shall any such action by the Company reduce the vested  amount credited to any Participant’s Account, or result in any change in the timing or manner of  payment of the amount of any Account (except as otherwise permitted under the Plan, including  under Sections 7.8, 7.9 and 7.10), without the consent of the Participant, unless the Company  determines in good faith that such action is necessary to ensure compliance with Section 409A of  the Code.  Notwithstanding the foregoing, the Plan may not be terminated within twelve (12)  months after a Change in Control.    9.2 Payments Upon Termination of Plan.  Except as otherwise provided pursuant to  Sections 7.8, 7.9 and 7.10, in the event that the Plan is terminated, the amounts credited to a  Participant’s Account shall be paid to the Participant or the Participant’s Beneficiary, as applicable,  on the dates on which the Participant or his or her Beneficiary would otherwise receive payments  hereunder without regard to the termination of the Plan.    ARTICLE X  MISCELLANEOUS  

 

17      10.1 Non-Alienation of Deferred Compensation. Except as permitted by the Plan, no  right or interest under the Plan of any Participant or Beneficiary shall, without the written consent  of the Company, be (a) assignable or transferable in any manner, (b) subject to alienation,  anticipation, sale, pledge, encumbrance, attachment, garnishment or other legal process, or (c) in  any manner liable for or subject to the debts or liabilities of the Participant or Beneficiary.  Notwithstanding the foregoing, to the extent permitted by Section 409A of the Code and Sections  7.8 and 7.9 hereof, the Committee shall honor a judgment, order or decree from a state domestic  relations court which requires the payment of part or all of a Participant’s or Beneficiary’s interest  under this Plan to an “alternate payee” as defined in Section 414(p) of the Code.    10.2 Compliance with Section 409A of the Code. It is intended that the Plan comply  with the provisions of Section 409A of the Code, so as to prevent the inclusion in gross income of  any amounts deferred hereunder in a taxable year that is prior to the taxable year or years in which  such amounts would otherwise actually be paid or made available to Participants (or their  Beneficiaries or estates). Although the Committee shall use its best efforts to avoid the imposition  of taxation, interest and penalties under Section 409A of the Code, the tax treatment of deferrals  under this Plan is not warranted or guaranteed. Neither the Company nor any other Employer nor  the Committee shall be held liable for any taxes, interest, penalties or other monetary amounts  owed by any Participant, Beneficiary or other taxpayer as a result of the Plan.  Any reference in  this Plan to Section 409A of the Code will also include any proposed, temporary or final  regulations, or any other guidance, promulgated with respect to such Section 409A by the U.S.  Department of Treasury or the Internal Revenue Service. For purposes of the Plan, the phrase  “permitted by Section 409A of the Code,” or words or phrases of similar import, shall mean that  the event or circumstance shall only be permitted to the extent it would not cause an amount  deferred or payable under the Plan to be includible in the gross income of a Participant or  Beneficiary under Section 409A(a)(1) of the Code.    10.3 Participation by Employees of Other Members of the Affiliated Group. Any  member of the Affiliated Group other than the Company may, by action of the Adopting  Employer’s board of directors or equivalent governing body and with the consent of the  Committee, adopt the Plan; provided that the Committee may waive the requirement that such  board of directors or equivalent governing body of the Adopting Employer effect such adoption.  By its adoption of or participation in the Plan, such Adopting Employer shall be deemed to appoint  the Company its exclusive agent to exercise on its behalf all of the power and authority conferred  by the Plan upon the Company and accept the delegation to the Committee of all the power and  authority conferred upon it by the Plan. The authority of the Company to act as such agent shall  continue until the Plan is terminated as to the Adopting Employer. An Eligible Employee who is  employed by an Adopting Employer and who elects to participate in the Plan shall participate on  the same basis as an Eligible Employee of the Company. The Account of a Participant employed  by an Adopting Employer shall be paid in accordance with the Plan solely by such member to the  extent attributable to the Compensation that would have been paid by such Adopting Employer in  the absence of deferral pursuant to the Plan, unless the Committee otherwise determines that the  Company shall be the obligor.    

 

18    10.4 Interest of Participant. The obligation of the Company and any participating  Employer under the Plan to make payment of amounts reflected in an Account merely constitutes  the unsecured promise of the Company (or, if applicable, the participating Employer) to make  payments from their general assets, and no Participant or Beneficiary shall have any interest in, or  a lien or prior claim upon, any property of Company or any other Employer.  Nothing in the Plan  shall be construed as guaranteeing continued employment to any Eligible Employee. It is the  intention of the Company that the Plan be unfunded for tax purposes and for purposes of Title I of  ERISA. The Company may, but shall not be required to, create a trust to hold funds to be used in  payment of benefits under the Plan, and may fund such trust; provided, however, that any funds  contained therein shall remain liable for the claims of the general creditors of the Company and  the other participating Employers, and no assets shall be transferred to any such trust at a time or  in a manner that would cause an amount to be included in the income of a Participant pursuant to  Section 409A(b) of the Code.     10.5 Claims of Other Persons. The provisions of the Plan shall in no event be construed  as giving any other person any legal or equitable right as against the Company or any other  Employer or against the officers, employees or directors of the Company or any other Employer,  except any such rights as are specifically provided for in the Plan or are hereafter created in  accordance with the terms and provisions of the Plan.     10.6 Severability. The invalidity and unenforceability of any particular provision of the  Plan shall not affect any other provision hereof, and the Plan shall be construed in all respects as  if such invalid or unenforceable provision were omitted.    10.7 Governing Law. Except to the extent preempted by federal law, the provisions of  the Plan shall be governed, construed and interpreted in accordance with the laws of the State of  Maryland, without reference to any conflicts or choice of law rule or principle that might otherwise  refer governance, construction or interpretation of the Plan to the law of another jurisdiction.    10.8 Successors. The Company shall require any successor (whether direct or indirect,  by purchase, merger, consolidation, reorganization or otherwise) to all or substantially all of the  business and/or assets of the Company expressly to assume this Plan. This Plan shall be binding  upon and inure to the benefit of the Company and any successor of or to the Company, including  without limitation any persons acquiring directly or indirectly all or substantially all of the business  and/or assets of the Company whether by sale, merger, consolidation, reorganization or otherwise  (and such successor shall thereafter be deemed the “Company” for the purposes of this Plan), and  the heirs, beneficiaries, executors and administrators of each Participant.    10.9 Withholding of Taxes. The Company or any other Employer may withhold or  cause to be withheld from any amounts payable under the Plan, or to the extent permitted pursuant  to Section 409A of the Code and Section 7.8 of the Plan, from any amounts deferred under the  Plan, all federal, state, local and other taxes as shall be legally required to be withheld. Further, the  Company and each other Employer shall have the right to (a) require a Participant to pay or provide  for payment of the amount of any taxes that the Company other Employer may be required to  withhold with respect to amounts credited to a Participant’s Account under the Plan, or (b) deduct  from any amount otherwise payable in cash to the Participant the amount of any taxes that the  

 

19    Company or other Employer may be required to withhold with respect to amounts credited to a  Participant’s Account under the Plan.    10.10 Electronic or Other Media. Notwithstanding any other provision of the Plan to  the contrary, including any provision that requires the use of a written instrument, the Committee  may establish procedures for the use of electronic or other media in communications and  transactions between the Plan or the Committee and Participants and Beneficiaries.  Electronic or  other media may include, but are not limited to, e-mail, the Internet, intranet systems and  automated telephonic response systems.    10.11 Headings; Interpretation. Headings in this Plan are inserted for convenience of  reference only and are not to be considered in the construction of the provisions hereof.  Unless  the context clearly requires otherwise, the masculine pronoun wherever used herein shall be  construed to include the feminine pronoun.      10.12 Participants Deemed to Accept Plan. By accepting any benefit under the Plan,  each Participant and each person claiming under or through any such Participant shall be  conclusively deemed to have indicated his or her acceptance and ratification of, and consent to, all  of the terms and conditions of the Plan and any action taken under the Plan by the Committee, the  Company and each other Employer, in any case in accordance with the terms and conditions of  the Plan.    IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its  undersigned duly authorized officer, to be effective as of the Effective Date.  DISCOVERY COMMUNICATIONS, LLC     By:       Name:  Ralph Beidelman    Title: SVP, Global Total Rewards

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