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ex101mattharrisemploymen

   Argo Management Services Limited  Exchequer Court, 33 St Mary Axe  London, EC3A 8AA, UK  T +44 (0)20 7712 7600  F +44 (0)20 7712 7601  W www.argo-global.com  Registered in England and Wales Reg. No. 3795969. Registered Office is  as above. Authorised and regulated by the Financial Services Authority.                  DATED 1 AUGUST 2017                    (1) ARGO MANAGEMENT SERVICES LIMITED       and      (2) MATT HARRIS                                                                                                EMPLOYMENT CONTRACT      

 

    2    INDEX    Clauses  Page No.    INDEX ................................................................................................................................................. 3  1.  Interpretation ................................................................................................................................... 4  2.  Appointment .................................................................................................................................... 5  3.  Term and notice .............................................................................................................................. 5  4.  Duties .............................................................................................................................................. 6  5.  Salary .............................................................................................................................................. 7  6.  Sign On Bonus............................................................................................................7  7.  Expenses ........................................................................................................................................ 7  8.  Profit Sharing Plan .......................................................................................................................... 8  9.  Share schemes ............................................................................................................................... 9  10.    Pensions, health and medical insurance ....................................................................................... 10  11.    Illness ............................................................................................................................................ 10  12.    Holidays ......................................................................................................................................... 12  13.    Other business interests ................................................................................................................ 13  14.    Confidential and business information ........................................................................................... 13  15.    Non competition ............................................................................................................................ 15  16.    Termination and Suspension ......................................................................................................... 16  17. Events on Termination .................................................................................................................. 18  18.    Resignation of offices .................................................................................................................... 19  19.    Grievance and disciplinary procedures.......................................................................................... 20  20.    Inventions and improvements ........................................................................................................ 20  21.    General .......................................................................................................................................... 21  22.    Reconstruction or amalgamation ................................................................................................... 22  23.    Notices .......................................................................................................................................... 22  

 

    3    24.    Extent and subsistence of Agreement ................................................................................23  25.    Governing law and jurisdiction .......................................................................................23 

 

    4    EMPLOYMENT CONTRACT    DATE: 1 August 2017      PARTIES:    (1) Argo Management Services Limited, whose registered office is at Exchequer Court, 33  St Mary Axe, London, EC3A 8AA ("the Company"); and    (2) Matt Harris of 4 Treasure Island, Sentosa Cove, Singapore 098343 ("the Executive").      OPERATIVE PROVISIONS    1. Interpretation  1.1 In this Agreement the following words and expressions shall have the following  meanings:    "Group Company" means any company, which is the parent undertaking or a subsidiary  undertaking of the Company or other subsidiary undertaking of the Company’s parent  undertaking from time to time where the expressions “subsidiary undertaking” and  “parent undertaking” have the meanings given to them by section 1162 Companies Act  2006;    "Termination Date" means the date of the termination of the employment of the Executive  hereunder, howsoever caused.    1.2 In this Agreement (unless the context otherwise requires):    (a) any reference to any statute or statutory provision shall be construed as including  a reference to any modification, re-enactment or extension of such statute or  statutory provision for the time being in force or to any subordinate legislation  made under the same;    (b) any reference to a Clause is to a Clause of this Agreement;    

 

    5    (c) the expression "directly or indirectly" means (without prejudice to the generality  of the expression) either alone or jointly with or on behalf of any other person,  firm or body corporate and whether on his own account or in partnership with  another or others or     as the holder of any interest in or as officer, employee or agent of or consultant to any  other person, firm or body corporate.    1.3       The index and headings contained in this Agreement are for convenience only and  do not form part of and shall not affect the construction of this Agreement or any part  of it.    2. Appointment    2.1 The Company hereby appoints the Executive and the Executive agrees to serve the  Company as Head of Europe/Asia.    2.2 The Executive warrants that by virtue of entering into this Agreement he will not be  in breach of any express or implied terms of any contract with or of any other  obligation to any third party binding upon him.    2.3 The Executive warrants that he is entitled to work in the United Kingdom without any  additional approvals and will notify the Company immediately if he ceases to be so  entitled during his employment.    2.4 The Company will be entitled from time to time without any further consent from the  Executive to second the Executive to the employment of any other Group Company  without prejudice to the rights of the Executive under this Agreement or to the  provisions of this Agreement or to transfer this Agreement to any other Group  Company at any time and without prior notice to the Executive so that this Agreement  shall have effect after the transfer as if originally made between the Executive and  such Group Company.    

 

    6    3. Term and notice    3.1 The Executive’s employment is subject to a probationary period of 3 months, during  which time his performance and conduct will be appraised and monitored.  If his  performance is not satisfactory the Company reserves the right to extend the  probationary period or to terminate the Executive’s employment by giving one  month’s notice.  During the probationary period the Executive may terminate his  employment by giving the Company one month’s notice.  On successful completion  of the probationary period, the provisions of the rest of this Clause 3 and this  Agreement will apply in respect of the termination of the Executive’s employment.    3.2 Subject to the provisions of Clause 15, the employment of the Executive shall  commence 1 August 2017, following which the employment shall continue unless  and until terminated by either party giving the other not less than 6 months’ notice.    3.3 The Company reserves the option in its absolute discretion to terminate the  Executives’ employment by paying him in lieu of notice.  The payment shall be based  solely on the Executive’s basic salary under clause 5.1, without taking into account  any bonus, profit commission, holiday pay, pension contributions or benefits in kind,  and shall be subject to deductions for income tax and national insurance  contributions as appropriate.  The Executive will not, under any circumstances, have  any right to a payment in lieu of notice unless the Company has made an election by  written notice to make such a payment to the Executive.    3.4 The Executive’s employment under this Agreement will commence on 1 August  2017.  For the purposes of continuous employment in accordance with s.231(6)  Employment Rights Act 1996, the Executive’s continuous employment dates from 1  August 2017.    

 

    7    4. Duties    4.1 The Executive shall during the continuance of his employment:    4.1.1 exercise such powers and perform such duties in relation to the business of the  Company or of any Group Company as may from time to time be vested in or  assigned to him;     4.1.2 well and faithfully serve the Company and any relevant Group Companies to the best  of his ability and carry out his duties in a proper and efficient manner and use his  best endeavours to promote and maintain their interests and reputation;    4.1.3 unless prevented by sickness, injury or other incapacity or as otherwise agreed by  the Company devote the whole of his time, attention and abilities on a full time basis,  for such hours as may be necessary for the proper performance of his duties to the  business affairs of the Company and any relevant Group Company for which he is  required to perform duties.    4.2 In performance of his duties the Executive shall:    4.2.1 comply with the Company’s normal hours of work and will also work any additional  hours which are reasonably necessary to perform his duties.  The Executive will not  receive any further remuneration for any hours worked in addition to the normal  working hours.  Attached to this Agreement at Annex A is an opt-out agreement for  the purposes of the Working Time Regulations 1998 (“the Regulations”).  Although  the Executive may be exempt from the Regulations, the effect of signing an opt-out  would be to confirm that, until notice in accordance with the opt-out terms is given,  employment under this Agreement will not be covered by the 48 hour per week  maximum limit on working hours imposed by the Regulations.  The Executive is  hereby requested to sign the opt-out annexed to this Agreement at Annex A;    4.2.2 perform his duties at Exchequer Court, 33 St Mary Axe, London, EC3A 8AA or at  such other location as the Company shall reasonably require, whether on a  permanent or temporary basis;    4.2.3 travel to such places (whether inside or outside the United Kingdom) in such manner  and on such occasions as the Company may from time to time reasonably require;  

 

    8    and if so required by the Company, perform his duties hereunder jointly with such  other person or persons as the Company may from time to time reasonably require.    4.3        For the avoidance of doubt, subject always to the Executive retaining the same or a  similar level of responsibility, authority, remuneration and status, the Company may,  in its absolute discretion, reasonably vary from time to time the functions and job title  of the Executive.    5. Salary     5.1 The Company shall pay to the Executive by way of remuneration for his services  under this Agreement a basic salary of £375,000, which shall accrue from day to day  and be payable in arrears by equal monthly instalments on or around the 24th of each  month by credit transfer to your nominated bank or building society account.  Where  the Executive is only employed during part of a month the salary will be pro-rated.    5.2 Such salary shall be reviewed by the Company based on the Executive’s month of  hire with any adjustment being effective in the quarter during which the review took  place, but without any commitment to increase.     5.3 The Company shall be entitled to deduct from any sums payable to the Executive  (including salary) all sums from time to time owed to the Company or to any Group  Company by the Executive howsoever arising and the Executive expressly agrees to  such deductions, pursuant to Part II of the Employment Rights Act 1996.    6. Sign on Bonus    6.1 You will receive a sign on bonus of £60,000 which will be paid in the first payroll  following the end of the probationary period referenced in Section 3.1.  The payment  will be made subject to the requirement that on the Payment Date you must still be  employed by the Company, not be serving notice of termination of your employment  (whether given by you or the Company), or be under any disciplinary proceedings.     6.2 The net sign on bonus amount (after deductions for tax and national insurance) will  be fully repayable should your employment with the Company end or should you  have given notice before you have completed 12 months service.    

 

    9    7. Expenses  The Company shall reimburse the Executive all reasonable travelling, hotel, entertainment  and other out of pocket expenses properly incurred by him in or about the performance of his  duties under this Agreement subject to his compliance with the Company’s then current  guidelines, if any, relating to expenses and to the production of receipts, vouchers or other  supporting documents.  8. Profit Sharing Plan    8.1 At the absolute discretion of the Company the Executive may during the continuance  of his employment, in addition to the basic salary payable to him pursuant to Clause  5.1, be allowed to participate in such bonus schemes as the Company may operate  for employees of comparable status from time to time, subject to the rules of any  such schemes from time to time.  Any bonus shall not form part of the Executive’s  contractual remuneration under this agreement.  If the Company makes a bonus  payment to the Executive in respect of a particular financial year of the Company it  shall not be obliged to make subsequent bonus payments to him in respect of  subsequent financial years of the Company.  Your profit sharing target is 50% of your  annual base salary. Your profit share award will be calculated on a pro rata basis  according to your start date. For the avoidance of doubt, if your start date is after 1  October, you will not be eligible to participate in the profit sharing scheme in your  year of joining.    8.2 The Company may alter the terms of bonus targets or withdraw them altogether at  any time without prior notice.    8.3 The Executive will have no right to a bonus or time-apportioned bonus if his  employment terminates for any reason or he is under notice of termination (whether  given by the Executive or the Company) at or prior to the date when a bonus might  otherwise have been payable.    8.4 Any bonus payable in accordance with this clause 8 shall not be pensionable.    8.5 Solvency II – Personal Hedging Strategies    

 

    10    You agree that you will not use personal hedging strategies or remuneration or liability- related contracts of insurance to undermine the risk alignment effects embedded in your  remuneration arrangements.  “Personal hedging strategies” means: entering into an arrangement with a third party under  which the third party will make payments, directly or indirectly, to that person that are linked  to or commensurate with the amounts by which the person's remuneration is subject to  reductions.  9. Share Schemes    9.1 At the absolute discretion of the Company, the Executive may be allowed to  participate in such share schemes as the Company may operate for employees of  comparable status, subject to the rules of such schemes from time to time and upon  such terms as the Company may from time to time determine. In any such share  scheme, no shares, securities, option or rights to acquire the same shall vest or  accrue after notice of termination has been given by either party including where the  Executive is on garden leave.    9.2 The Executive shall have no claim against the Company or any Group Company in  connection with the termination of his employment in relation to the provision of any  written agreement which has the effect of requiring the Executive to sell or give up  shares, securities, option or rights to acquire the same and/or which causes any such  option or rights to lapse or reduce in value.     9.3 The Executive’s target participation in the Long Term Incentive Plan (“LTI Plan”)  £180,000 subject to the terms and conditions of the LTI Plan in place at time of  payment.    10. Pensions, health and medical insurance    10.1 The Executive shall during his employment, subject to the insurer in each case  accepting the Executive for cover under the relevant policy and at normal rates, be  entitled to participate in any:    

 

    11    10.1.1 permanent health insurance scheme;     10.1.2 arrangements for private medical treatment or medical health insurance;    10.1.3 life insurance scheme; and    10.1.4 critical illness insurance scheme;    10.2 operated from time to time by or for the Company for the benefit of employees of the  Company or any Group Company of equivalent status to the Executive, subject to  any applicable rules and conditions and subject to the Company’s right to substitute  other schemes for such schemes or amend the scale, and level of benefits provided  under such schemes provided that any such change or substitution provides a  comparable level of coverage.  The Executive understands and accepts that it is the  decision of the insurer whether benefits are to be paid under any of the schemes or  policies referred to in this clause and the Company shall have no liability or  responsibility for any decision that is made by the insurer.  For the avoidance of  doubt, the Company shall not be liable to make any payments unless it has received  appropriate payments from the insurer.    10.3 During his employment hereunder the Company shall each month pay into such  personal pension plan of the Executive as he shall direct an amount calculated (and  accruing on a daily basis) at an annual rate equivalent of fifteen (15) per cent of the  Executive’s salary for the time being payable under clause 5.1.    10.4 No contracting out certificate is in force in relation to this employment.    11. Illness    11.1 The Executive shall in the event of illness or other incapacity beyond his control as a  result of which he is unable to perform his duties remain entitled to receive his salary  in full for any continuous period of six months or an aggregate period of six months’  absence in any consecutive twelve month period subject to:    11.1.1 compliance with the Company's procedures relating to sickness notification, statutory  sick pay and self-certification to cover absence from work due to sickness or other  incapacity and to the provision of medical certificates and/or (at the Company's  

 

    12    discretion) undergoing a medical examination by a doctor appointed by the  Company.  The Executive shall co-operate in ensuring the prompt delivery of such  report to the Company subject to disclosure to the Executive or his General  Practitioner and authorise his own medical practitioner to supply all such information  as may be required by that doctor and, if so requested by the Company, authorise  his medical practitioner to disclose to the Company his opinion of the Executive’s  state of health;    11.1.2 a deduction (at the Company's discretion) from his salary of an amount or amounts  equal to any statutory sick pay or social security benefits to which the Executive is  entitled;      11.1.3 a deduction (at the Company's discretion) from his salary of an amount or amounts  equal to any payment made to the Executive under any health insurance  arrangements effected from time to time by the Company and/or any Group  Company on his behalf.    11.2 If the Executive is away from work due to illness or injury for a consecutive period of  40 working days, the Company may appoint another person or persons to perform  the Executive’s duties until he returns to work.    11.3 The Executive hereby covenants with the Company on behalf of himself/herself and his  personal representatives at all times fully and effectively to comply with the terms of any  insurance policy taken out by the Company or any Group Company on his life or in  respect of his position as a director and/or officer of the Company and further undertakes  to co-operate fully and assist the Company or the relevant Group Company in relation to  any claim(s) made or to be made in connection with such insurance policy (including  without limitation submitting to a medical examination) notwithstanding that this  Agreement has been terminated or has come to an end.     11.4    If the Executive is unable to perform his duties under this Agreement as a result of ill  health, accident or injury caused by a third party in respect of which damages may be  recoverable, the Executive shall immediately inform the Company of this fact and all  relevant particulars. The Executive shall (if requested to do so by the Company) pursue  a claim against the third party for damages and shall notify the Company of any  settlement, award or judgment. He shall, upon request from the Company, pay the  

 

    13    Company that part of any damages or compensation recovered by him which relates to  loss of earnings for the period during which he was unable to perform his duties under  this Agreement less any cost borne by him in connection with the recovery of the  damages and compensation provided that the payment to the Company will not exceed  the total remuneration paid to him by the Company in respect of the period during which  he was unable to perform his duties.    11.5 If the incapacity referred to in clause 11.2 continues for more than six months or for more  than 120 working days (whether consecutive or in aggregate) in any continuous period  of twelve months, then provided that such action does not prejudice the effect of any  Group permanent health insurance scheme, the Company may either terminate this  Agreement forthwith by written notice.    12. Holidays     12.1 The Executive shall be entitled to 25 working days’ holiday (in addition to the normal bank  and other public holidays and accruing on a weekly basis) in each calendar year  commencing on 1 January in each year (of which not more than 15 working days may be  taken consecutively) to be taken at such times as the Company shall consider most  convenient having regard to the requirements of the Company's business.    12.2 Save with the prior written consent of the Company, untaken holiday entitlement for any  one calendar year may not be carried forward to any subsequent year.  No payment shall  be made for any unused holiday entitlement.    12.3 The Company reserves the right, at its absolute discretion, to require the Executive to  take any outstanding holiday during any notice period or to make payment in lieu thereof  on termination as set out in clause 12.4 below.    12.4 On termination of the Executive's employment (howsoever occasioned), if the Executive  has taken more or less than his annual holiday entitlement an appropriate adjustment  shall be made to any payment of salary or benefits from the Company to the Executive  at the rate of 1/260th of the Executive’s gross basic salary as set out in clause 5.1 subject  to deductions of tax and national insurance per holiday day.  

 

    14      13. Other business interests    13.1 The Executive shall not during the continuance of his employment (whether during or  outside working hours) without the prior consent in writing of the Company, be directly or  indirectly engaged, concerned or interested in any business, profession or occupation  other than the Company provided that nothing in this Clause 14 shall prohibit the  Executive from being interested as a director or the holder of not more than ten per cent  of any class of stock, shares or debentures or other securities in any company or as the  Company from time to time agrees in writing such agreement not to be unreasonably  withheld or withdrawn so long as such interests of the Executive or any of them shall not  prejudice the business interests of the Company or of any Group Company and for so  long as the Executive shall during his employment comply with the provisions of this  Clause 14.    13.2 The Executive shall not during the continuance of his employment (except with the prior  written consent of the Company) introduce to any other person firm or company business  of any kind which could appropriately be dealt with by the Company or any Group  Company and/or have any financial interest in or derive any financial benefit from the  contracts made by the Company or any other Group Company with any third party.    14. Confidential and business information     14.1 In addition to and without prejudice to the Executive’s common law obligations to keep  information secret, the Executive shall not (except for the purpose of performing his  duties hereunder or unless ordered to do so by a court) during his employment or after  its termination directly or indirectly use, disclose or communicate Confidential Information  and he shall use his best endeavours to prevent the improper use, disclosure or  communication of Confidential Information, which for these purposes means:    14.1.1 any information of a confidential nature (whether private or secret information including  information relating to corporate strategy, business development plans, intellectual  property, business contacts, names and addresses of actual and potential customers and  their requirements, terms of business with such customers and potential customers,  annual budgets, management accounts and other financial information) of the Company  or any Group Company or of any client or prospective client of the Company or of any  

 

    15    Group Company or of any person or entity which shall have disclosed information to any  member of the Company or any Group Company; and/or    14.1.2 any confidential report or research undertaken by or for the Company or any Group  Company before or during the course of his employment; and/or    14.1.3 information so designated by the Company or any Group Company or which to the  Executive’s knowledge has been supplied to the Company or any Group Company  subject to any obligation of confidentiality.    14.2 The restrictions contained in this Clause 14 shall cease to apply with respect to any  information, confidential report or research which comes into the public domain otherwise  that through an unauthorised disclosure by the Executive or a third party.  This clause is  not intended to exclude or restrict the Executive’s right to make a protected disclosure  under the Public Interest Disclosure Act 1998 if the Executive reasonably believes a  harmful or illegal activity is being undertaken. In such a case, the Executive should refer  to the Company’s Whistle Blowing Policy, which can be found in the Employee  Handbook.    14.3 By signing this Agreement the Executive consents:    14.3.1 to the Company holding and processing any information about him which he may provide  to the Company or which it may acquire as a result of his employment providing such use  is in accordance with the Data Protection Act 1998;    14.3.2 to the Company holding and processing any “sensitive personal data” (as defined in the  Data Protection Act 1998) relating to him (including, for example, information relating to  his health or racial or ethnic origin); and    14.3.3 to the transfer of all or any part of the information that the Company holds relating to him  outside the European Economic Area.  

 

    16      15. Non competition      15.1 For the purposes of this Clause the following expressions shall have the following  meanings:  (a) "Relevant Employee" means:  any senior employee or consultant to the Company or any Group Company with  whom the Executive has been personally involved or any director, employee or  consultant of the Company or any Group Company who at any time during the  12 months immediately prior to the Termination Date was employed by the  Company or any Group Company in a senior managerial, senior sales or  technical position or who was in a position from which he had access to  confidential information of the Company or any Group Company to a material  extent and with whom the Executive has had dealings;    (b) "Relevant Customer" means a person, firm or company:    who at any time during the twelve months prior to the Termination Date was a  customer of the Company or any Group Company (whether or not services were  actually provided during such period) with whom the Executive had material  contact or about whom he became aware or informed in the course of his  employment or intermediary of such customer with whom the Executive had  material contact or about whom he became aware or informed in the course of  his employment or to whom at the Termination Date the Executive on behalf of  the Company or any Group Company was actively and directly seeking to supply  services in either case for the purpose of a Relevant Business;    (c) "Relevant Business" means:    a syndicate, managing agency at Lloyd's or insurance company;    (d) "Restricted Goods and/or Services" means:    any services with the provision of which the Executive was materially concerned on behalf of the  Company and/or any Group Company during the period of twelve months immediately prior to  the Termination Date; and  

 

    17      (e) “Restricted Period” means:     the period of 12 months following the date of termination of this employment.    15.2 In order to safeguard the legitimate business interests of the Company and any  Group Company and particularly the goodwill of the Company and any Group  Company in connection with its clients, suppliers and employees the Executive  hereby undertakes with the Company (for itself and as trustee for each Group  Company) that, he will not directly or indirectly (without the prior consent in writing of  the Company), during the Restricted Period:    (a) entice or solicit or endeavour to entice or solicit away from the Company or any  Group Company any Relevant Employee;    (b) in competition with the Company or any Group Company supply or seek to  supply Restricted Goods and/or Services to any Relevant Customer;    5.1 The Executive shall not (except with the prior written consent of the Company) at any time  after the termination of his employment represent himself/herself to be connected with or  interested in the business of or employed by the Company or any Group Company or use  for any purpose the name or style of the Company or any Group Company or any name or  style capable of confusion therewith or likely to cause an assumption of association with the  Company or any Group Company.    15.3 The Executive acknowledges that the provisions of this clause 14 are fair and  reasonable and necessary to protect the goodwill and interests of the Company and  any Group Company and shall constitute separate and severable undertakings given  for the benefit of each of the Company and each Group Company and may be  enforced by the Company on behalf of any Group Company.  The Executive further  acknowledges that damages may not be an adequate remedy in respect of a breach  of clause 14.2 and accordingly that injunctive relief or other equitable remedies may  be sought and obtained by the Company acting on its behalf and/or on behalf of any  Group Companies.    

 

    18    15.4 If any of the restrictions or obligations contained in this clause 14 is found to be invalid  as going beyond what is reasonable for the protection of the goodwill and interest of  the Company and any Group Company this will not affect the validity or enforceability  of any of the other restrictions or obligations.  Further if any of the restrictions shall  be adjudged to be void or ineffective for whatever reason but would be judged valid  and effective if part of the wording thereof was deleted they shall apply with such  modifications as may be necessary to make them valid and effective.      15.5 The Executive agrees that the Company may enforce the covenants (or any of them)  set out in clause 14.2 after it has exercised its right to place the Executive on garden  leave, but time spent on garden leave will be deducted from the Restricted Period.   Provisions relating to garden leave are set out in clause 16.2 below, the Employee  Handbook and on the Company Intranet.     15.6 The Executive agrees that in the event of him receiving from any person, company,  business entity or other organisation an offer of employment or engagement either  during the continuance of this Agreement or during the continuance in force of any  of the restrictions set out in this clause 14, he will forthwith provide to such person,  company, business entity or other organisation making the offer of employment or  engagement a full and accurate copy of this Agreement signed by the parties hereto  and will notify the Company of such offer of employment or engagement.    15.7 The Executive agrees that if he becomes aware of any employees that are  considering leaving the Company, or if he is approached by another employee or  other employees to discuss leaving the Company, that he will report these events to  Human Resources forthwith.    16. Termination and Suspension    16.1 Notwithstanding clause 3, the employment of the Executive may be terminated by  the Company without notice or payment in lieu of notice if the Executive is guilty of  gross misconduct or commits any serious or (having been given notice in writing)  persistent breach of any of his obligations to the Company or any Group Company  (whether under this Agreement or otherwise).  The following is a non-exhaustive list  of circumstances in which the Company may terminate the Executive’s employment  without notice or payment in lieu of notice:  

 

    19      16.1.1 the Executive refuses or neglects to comply with any reasonable lawful acts or  directions given to him by the Company;    16.1.2 the Executive is guilty of dishonesty or is convicted of any criminal offence by a court  of competent jurisdiction (other than a minor motoring offence for which a fine or  other non-custodial penalty is imposed) whether in connection with his employment  or not;    16.1.3 the Executive is unable to perform his duties hereunder through illness or other  incapacity (including, but not limited to, where the Executive becomes of unsound  mind or a patient for the purpose of any statute relating to mental health) for any  continuous period of 6 months or an aggregate period exceeding 6 months in any  period of twelve months;      16.1.4 the Executive fails or ceases to meet the requirements of any regulatory body whose  consent is required to enable him to undertake all or any of his duties under this  Agreement or is guilty of serious breach of the rules and regulations of such  regulatory body or of any compliance manual of the Company or any Group  Company;    16.1.5 the Executive is guilty of a serious breach of any rules issued by the Company from  time to time regarding its electronic communications systems;    16.1.6 the Executive is adjudged bankrupt or enters into any composition or arrangement  with or for the benefit of his creditors including a voluntary arrangement under the  Insolvency Act 1986;    16.1.7 the Executive is convicted of an offence under the Criminal Justice Act 1993 or under  any other present or future statutory enactment or regulation relating to insider  dealing;    16.1.8 the Executive becomes prohibited by law or is disqualified or is liable to be  disqualified from being a director or becomes of unsound mind or a patient under any  statute relating to mental health;  

 

    20      16.1.9 the Executive resigns as a director of the Company other than at the request of the  Company where the Executive is currently a director of the Company;    16.1.10 the Executive is required to vacate his office as a director of the Company where the  Executive is currently a director of the Company and/or any Group Company for  whom he performs executive duties by virtue of any provision of the Articles of  Association of the Company or any Group Company;    16.1.11 the Executive commits and serious or persistent breach of any of the terms,  conditions or stipulations contained in this Agreement;    16.1.12 the Executive is guilty of any serious negligence or gross misconduct in connection  with or affecting the business or affairs of the Company or any Group Company for  which he is required to perform duties; or    16.1.13 the Executive is guilty of conduct which is likely to bring himself/herself or the  Company or any Group Company into disrepute.    16.2 The Company may suspend the Executive from his employment on full salary and  benefits at any time for a reasonable period to investigate any matter in which the  Executive is implicated or involved (whether directly or indirectly).  During this time  the Company may exclude the Executive from all or any premises of the Company  or any Group Company and require the Executive to refrain from any contact with  directors, employees, consultants, partners, officers, customers, clients, agents or  suppliers of the Company or any Group Company (except as necessary in  connection with any such investigation) during any period in which the Company is  carrying out their investigation.  During such suspension the Executive will continue  to be bound by all of his obligations under this Agreement insofar as they are  compatible with him being suspended, including his duties of good faith and fidelity.    16.3 The Company shall not be liable for breach of any of its obligations hereunder  including, without limitation, its obligations as set out in Clauses 2 and 3 if either:    16.3.1 the members of the Company in general meeting vote that the Executive be removed  from office as a director of the Company; or    

 

    21    16.3.2 the Executive, upon retiring as a director by rotation pursuant to the Articles of  Association of the Company, is not re-elected by members of the Company in general  meeting.    16.4 The termination of the Executive’s employment hereunder for whatsoever reason  shall not affect those terms of this Agreement, which are expressed to have effect  after such termination and shall be without prejudice to any accrued rights or  remedies of the parties.    17. Events on Termination    17.1 On the termination of the Executive’s employment, or at any other time in accordance  with instructions given to him by the Company, the Executive will immediately return  to the Company all equipment, correspondence, records, specifications, software,  models, notes, reports, documents and other information and any copies thereof,  including, without limitation, aural, visual or electronic form or on any magnetic or  optical disk or memory and wherever located and any other property belonging to the  Company (including but not limited to the Company car keys, credit cards, keys and  passes and any mobile phone, blackberry, home computer or lap-top which the  Company has provided the Executive with for the performance of his duties under  this Agreement) which are in the Executive’s possession or under his control.    17.2 After notice of termination has been given by either party or if the Executive seeks to  resign without notice or by giving shorter notice than is required under Clause 3,  provided that the Company continues to pay the Executive his basic salary, and to  provide all contractual benefits until his employment terminates in accordance with  the terms of this Agreement, the Company has absolute discretion for all or part of  the notice period:    17.2.1 to exclude the Executive from such of the premises and IT and telecommunications  systems of the Company and/or Group Company as the Company may direct;    17.2.2 to instruct him not to communicate with suppliers, customers, employees, agents or  representatives of the Company or Group Company.    17.2.3 not to provide any work to or vest any powers in the Executive.    

 

    22    17.2.4 (except during any periods taken as holiday in the usual way) to require the Executive  to ensure that he can be contacted during each working day and comply with any  written requests to contact a specified employee of the Company.    Any accrued but unused holiday entitlement shall be deemed to be taken during any period  of garden leave.    18. Resignation of offices  The Executive shall immediately upon the earlier of termination of his employment or notice  of termination being served by either party in accordance with this Agreement give written  notice resigning forthwith as a director or trustee or from any other office he may hold from  time to time with the Company and/or any Group Company or arising from his engagement  by the Company and/or any Group Company without any further compensation.  19. Grievance and disciplinary procedures    19.1 If the Executive wishes to seek redress of any grievance relating to his employment  (other than one relating to a disciplinary decision) he shall apply to the Human  Resources Manager and refer to the Company’s grievance procedures.    19.2 If the Executive wishes to seek redress of any grievance relating to a disciplinary  decision he shall refer such grievance to the Company’s chairman.    19.3 The Company’s disciplinary and grievance procedures from time to time in force shall  apply to the Executive but shall not form part of his contract of employment.    20. Inventions and improvements    20.1 It shall be part of the normal duties of the Executive at all times to consider in what  manner and by what new methods any devices, goods, products, services,  processes, equipment or systems of the Company and each Group Company might  be improved and/or extended and/or promoted and promptly to give to the Company  full details of any invention, discovery, design, improvement or other matter or work  whatsoever (the "Inventions") which he may from time to time make or discover  during his employment and to further the interests of the Company and/or any Group  Company with regard thereto. The Executive hereby acknowledges and agrees that  

 

    23    the sole ownership of the Inventions and all proprietary rights therein discovered or  made by him (whether alone or jointly with others) at any time during his engagement  hereunder shall (subject to any contrary provisions of the Patents Act 1977 and the  Copyright, Designs and Patents Act 1988 and to any rights of a joint inventor thereof)  belong free of charge and exclusively to the Company or as it may direct.    20.2 All records, documents, papers (including all copies and summaries thereof) and  copyright protected works made or acquired by the Executive in the course of his  employment and all worldwide copyright and design rights in all the Inventions, shall  be and remain the property of the Company.    20.3 For the avoidance of doubt the Executive irrevocably and unconditionally waives all  rights granted by Chapter IV of Part I of the Copyright, Designs and Patents Act 1988  that vests in the Executive the authorship of any copyright works in respect of the  Inventions by the Executive in the course of his employment with the Company or  any Group Company including without limitation the right to be identified as the author  of any such works and the right not to have any such works subjected to derogatory  treatment.    20.4 The Executive hereby agrees (at any time during his employment or thereafter and  at the Company's expense) to do all such acts and things (including without limitation  making application for letters patent) as the Company may reasonably request to  vest effectually any Invention (whether owned by the Company in accordance with  Clause 20.1 or owned by the Executive) and any protection as to ownership or use  (in any part of the world) of the same in the Company or in any Group Company or  as it may direct, jointly if necessary with any joint inventor thereof, and the Executive  hereby irrevocably appoints the Company for the purposes aforesaid to be his  attorney in his name and on his behalf to execute and do any such documents acts  and things aforesaid.    20.5 The Executive shall not knowingly do or omit to do anything which will or may have  the result of imperilling any such protection aforesaid or any application thereof.    21. General    21.1 No failure or delay by either party in exercising any right, power or privilege under  this Agreement shall operate as a waiver thereof nor shall any single or partial  

 

    24    exercise by either party of any right, power or privilege hereunder preclude any  further exercise thereof or the exercise of any other right, power or privilege.    21.2 The Executive hereby irrevocably and by way of security appoints the Company and  each Group Company now or in the future existing to be his attorney and in his name  and on his behalf and as his act and deed to sign, execute and do all acts, things  and documents which he is obliged to execute and do under the provisions of this  Agreement (and in particular, but without limitation, Clauses 18 and 20) and the  Executive hereby agrees forthwith on the request of the Company to ratify and  confirm all such acts, things and documents signed, executed or done in pursuance  of this power.    21.3 There are no collective agreements, which affect the terms and conditions of the  employment of the Executive hereunder.    21.4 The Executive is required, as a condition of his employment, to observe all Company  policies and procedures as advised to him by the Company from time to time.  These  policies and procedures are summarised in the Employee Handbook, and set out in  full on the Company’s Intranet.    21.5 This Agreement may only be modified by the written agreement of the parties.    21.6 The Executive cannot assign this Agreement to anyone else.    21.7 If either party agrees to waive their rights under a provision of this Agreement, that  waiver will only be effective if it is in writing and it is signed by the relevant party.  A  party’s agreement to waive any breach of any term or condition of this Agreement  will not be regarded as a waiver of any subsequent breach of the same term of  condition or a different term or condition.    22. Reconstruction or amalgamation  If this Agreement is terminated because of the liquidation of the Company for the purpose of  amalgamation or reconstruction and the Executive is offered employment with such  amalgamated or reconstructed company on terms no less favourable in all material respects  

 

    25    than the terms of this Agreement the Executive shall have no claim against the Company in  respect of such termination.  23. Notices    23.1 Any notice or communication given or required under this Agreement may be served  by personal delivery or by leaving the same at or by sending the same through the  post addressed in the case of the Company to its registered office from time to time  and in the case of the Executive to his aforesaid address or to the address provided  from time to time by the Executive to the Company for the purposes of its employment  records.  Any notice sent by post shall be deemed to have been served 48 hours after the time of posting  by first class mail and service thereof shall be sufficiently proved by proving that the notice was  duly despatched through the post in a pre-paid envelope addressed as aforesaid.      24. Extent and subsistence of Agreement  This Agreement supersedes all other agreements other than those expressly referred to in this  Agreement between the Company or any Group Company and the Executive relating to the  employment of the Executive (which shall be deemed to have been terminated by mutual  consent). The Executive acknowledges and warrants to the Company that he is not entering into  this Agreement in reliance upon any representation not expressly set out herein.    25. Governing law and jurisdiction  This Agreement shall be governed by and construed in accordance with English law and the  parties agree to submit to the exclusive jurisdiction of the English Courts as regards any claim,  dispute or matter arising out of or relating to this Agreement.      IN WITNESS whereof a duly authorised representative of the Company has executed this  Agreement and the Executive has executed this Agreement as his Deed on the date of this  Agreement.    

 

    26      Signed as a deed Jose Hernandez   )  (Head of International)     )  on behalf of Argo Management Services Limited  )  in the presence of:     )    Witness name: ............................................  Address: ............................................    ............................................  Occupation: ............................................          Signed as a deed by Matt Harris   )  (Head of Europe/Asia)    )  in the presence of:    )    Witness name: ............................................  Address: ............................................    ............................................  Occupation: ............................................       

 

    27    ANNEX A      The Working Time Regulations 1998        To: Argo Management Services Ltd   Exchequer Court   33 St Mary Axe   London   EC3A 8AA      I understand that, amongst other matters, the Working Time Regulations 1998 (the “Regulations”) provide  that a worker’s working time should not exceed on average 48 hours for each 7 days over a 17 week  reference period.  I hereby agree that, in accordance with Regulation 4 of the Regulations, the limit on  working time of an average of 48 hours for each 7 days over a 17 week reference period shall not  apply to me unless and until I shall give at least 3 months' written notice to the Company      Signed ......................................    Dated  ......................................Document

EXHIBIT 10.1

VECTOR GROUP LTD. 
AMENDED & RESTATED 2014 MANAGEMENT INCENTIVE PLAN
(as amended May 25, 2021) 

1. Establishment, Purpose and Duration. Vector Group Ltd. (referred to below as the “Company”) previously established an incentive compensation plan to be known as the 2014 Management Incentive Plan. The 2014 Management Incentive Plan was originally adopted by the Company’s Board on February 26, 2014 (the “Effective Date”), and approved by the Company’s stockholders on May 16, 2014. The 2014 Management Incentive Plan is hereby amended as the Amended & Restated 2014 Management Incentive Plan (the “Plan”), effective as of May 25, 2021. The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units, Performance Share Awards, Other Stock-Based Awards and Cash-Based Awards. The purpose of the Plan is to attract and retain Employees, Non-Employee Directors, and Consultants and to provide additional incentives for these persons consistent with the long-term success of the Company’s business. Unless sooner terminated as provided herein, the Plan shall terminate ten (10) years from the Effective Date. After the Plan is terminated, no further Awards may be granted but Awards previously granted shall remain outstanding in accordance with their applicable terms and conditions and the Plan’s terms and conditions.

2. Definitions. As used in the Plan, the following terms shall be defined as set forth below:

2.1 “Act” means the Securities Exchange Act of the 1934, as amended.

2.2 “Affiliate” means any corporation or any other entity (including, but not limited to, a partnership) that is affiliated with the Company through stock ownership or otherwise. For avoidance of doubt, an Affiliate shall include a Subsidiary.

2.3 “Award” or “Awards” means, individually or collectively, except where referring to a particular category of grant under the Plan, a grant under the Plan of Nonqualified Stock Options, Incentive Stock Options, Stock Appreciation Rights, Restricted Shares, Restricted Stock Units, Performance Share Awards, Cash-Based Awards, or Other Stock-Based Awards, in each case subject to the terms of the Plan.

2.4 “Award Agreement” means an agreement, certificate, resolution or other form of writing or other evidence approved by the Committee which sets forth the terms and conditions of an Award. An Award Agreement may be in an electronic medium, may be limited to a notation on the Company’s books and records and, if approved by the Committee, need not be signed by a representative of the Company or a Participant.

2.5 “Base Price” means the price to be used as the basis for determining the Spread upon the exercise of a Stock Appreciation Right.

2.6 “Beneficial Owner” or “Beneficial Ownership” shall have the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Act.

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

2.8 “Cash-Based Award” means an Award granted to a Participant as described in Section 11.

2.9 “Change in Control” shall have the meaning given to it in Section 13.3.

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

2.11 “Committee” means the committee of the Board described in Section 4.

2.12 “Consultant” means any natural person, including an advisor, engaged by the Company or any Subsidiary to render bona fide services to such entity (other than in connection with the offer or sale of securities in a capital-raising transaction or to promote or maintain a market for the Company’s securities).

2.13 “Company” means Vector Group Ltd. or its successor.

2.14 “Covered Employee” shall have the meaning given to it under Section 14.1.

2.15 “Deferred Stock Unit” means an Award that is vested on the Grant Date and entitles the recipient to receive Shares after a designated period of time. Deferred Stock Units shall be subject to such restrictions and conditions as set forth in the Award Agreement, which shall be consistent with the provisions for Restricted Stock Units set forth in Section 8 below except for the requirement to have a Restricted Period or Performance Goals.

2.16 “Effective Date” shall have the meaning set forth in Section 1 above.

2.17 “Employee” means any person designated as an employee of the Company, any of its Affiliates, and/or any of its or their Subsidiaries on the payroll records thereof.

2.18 “Executive Officer” means an “executive officer” of the Company as defined by Rule 3b-7 under the Act. To the extent that the Board takes action to designate the persons who are the “executive officers” of the Company, the persons so designated (and no others) shall be deemed to be the “executive officers” of the Company for all purposes of the Plan.

2.19 “Family Member” means a Participant’s spouse, parents, children and grandchildren.

2.20 “Fair Market Value” means a price that is based on the opening, closing, actual, high, low, or average selling prices of a Share reported on the New York Stock Exchange or other established stock exchange (or exchanges) on the applicable date, the preceding trading day, the next succeeding trading day, an average of trading days or on any other basis consistent with the requirements of the stock rights exemption under Section 409A of the Code using actual transactions involving Shares, as determined by the Committee in its discretion. In the event Shares are not publicly traded at the time a determination of their value is required to be made hereunder, the determination of their Fair Market Value shall be made by the Committee in such manner as it deems appropriate. Such definition(s) of Fair Market Value shall be specified in each Award Agreement and may differ depending on whether Fair Market Value is in reference to the grant, exercise, vesting, settlement, or payout of an Award; provided, however, that upon a broker-assisted exercise of an Option, the Fair Market Value shall be the price at which the Shares are sold by the broker.

2.21 “Grant Date” means the date specified by the Committee on which a grant of an Award shall become effective, which shall not be earlier than the date on which the Committee takes action with respect thereto.

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2.22 “Incentive Stock Option” means any Option that is intended to qualify as an “incentive stock option” under Section 422 of the Code or any successor provision.

2.23 “Non-Employee Director” means a member of the Board who is not an Employee.

2.24 “Nonqualified Stock Option” means an Option that is not intended to qualify as an Incentive Stock Option.

2.25 “Option” means any option to purchase Shares granted under Section 5.

2.26 “Option Price” means the purchase price payable upon the exercise of an Option.

2.27 “Other Stock-Based Awards” means an equity-based or equity-related Award not otherwise described by the terms of this Plan granted under Section 10.

2.28 “Participant” means an Employee, Non-Employee Director or a Consultant who is selected by the Committee to receive benefits under the Plan, provided that only Employees shall be eligible to receive grants of Incentive Stock Options.

2.29 “Performance-Based Awards” means Restricted Shares, Restricted Stock Units, Performance Share Awards or Cash-Based Awards granted to a Covered Employee that are designated by the Committee as being intended to qualify as “performance-based compensation” under Section 162(m) of the Code. 

2.30 “Performance Cycle” means one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Criteria will be measured for the purpose of determining a grantee’s right to and the payment of a Restricted Share Award, Restricted Stock Unit, Performance Share Award or Cash-Based Award. A Performance Cycle shall not be less than 12 months.

2.31 “Performance Criteria” means the criteria that the Committee selects for purposes of establishing the Performance Goal or Performance Goals for a Participant with respect to the Performance Cycle for a Performance-Based Award. The Performance Criteria may be described in terms of Company-wide objectives or objectives that are related to the performance of the individual Covered Employee or an organizational level specified by the Committee, including, but not limited to, a Subsidiary or unit, division, group of the Company or a Subsidiary. Performance Criteria may be measured on an absolute or relative basis, including but not limited to performance as measured against a group of peer companies or by a financial market index.

2.32 “Performance Goals” means, with respect to a Restricted Share Award, a Restricted Stock Unit Award, a Performance Share Award or a Cash-Based Award, the specific goal or goals established in writing by the Committee for the Performance Cycle applicable to such Award. Performance Goals with respect to a Performance-Based Award granted to a Covered Employee shall only be based upon one or more Performance Criteria as permitted under Section 14.

2.33 “Performance Share Award” means an Award denominated in either Shares or share units granted pursuant to Section 9. 

2.34 “Plan” shall have the meaning set forth in Section 1 above.
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2.35 “Restricted Period” means a period of time established under Section 8 with respect to Restricted Stock Units.

2.36 “Restricted Shares” means Shares granted under Section 7 subject to a substantial risk of forfeiture.

2.37 “Restricted Stock Units” means an Award pursuant to Section 8 of the right to receive Shares at the end of a specified period.

2.38 “Share Authorization” means the maximum number of Shares available for grant under the Plan, as described in Section 3.

2.39 “Shares” means the common stock of the Company.

2.40 “Spread” means, in the case of a Stock Appreciation Right, the amount by which the Fair Market Value on the date when any such right is exercised exceeds the Base Price specified in such right.

2.41 “Stock Appreciation Right” means a right granted under Section 6.

2.42 “Subcommittee” means the Performance-Based Compensation Subcommittee of the Board of Directors of the Company which shall be composed of at least two directors who are “outside directors” as defined for purposes of section 162(m) of the Code and “non-employee” directors as defined in Rule 16b-3 under the Securities Exchange Act of 1934, as amended.

2.43 “Subsidiary” means any corporation or other entity, whether domestic or foreign, in which the Company has or obtains, directly or indirectly, a proprietary interest of more than fifty percent (50%) by reason of stock ownership or otherwise.

2.44 “Substitute Award” means any Award granted or issued to a Participant in assumption or substitution of either outstanding awards or the right or obligation to make future awards by an entity acquired by the Company or a Subsidiary or with which the Company or a Subsidiary combines.

2.45 “Unrestricted Shares” means a grant of Shares free of any Restricted Period, Performance Goals or any substantial risk of forfeiture. Unrestricted Shares may be granted in respect of past services or other valid consideration, or in lieu of cash compensation due to an Employee.

3. Award Limits Under the Plan.

3.1 Number of Shares Reserved for Awards. 
(a) Subject to adjustments as provided in Section 12, the Share Authorization shall be: 10,000,000 Shares.
(b) No individual Participant may receive in any calendar year equity Awards exceeding 2,000,000 underlying Shares. In addition, during the term of the Plan, no individual Participant may receive equity Awards exceeding one-half of the maximum number of shares of Common Stock in respect of which equity Awards may be granted or paid out under the Plan. 
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(c) Subject to the limits set forth in Section 3.1(a) on the number of Shares that may be granted in the aggregate under the Plan, a Non-Employee Director may not receive Awards exceeding 25,000 Shares in any calendar year, plus any unused limit from a prior year.

3.2 Share Usage.
(a) Any Shares related to Awards that terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such Shares, are settled in cash in lieu of Shares, or are exchanged with the Committee’s permission, prior to the issuance of Shares, for Awards not involving Shares, shall be available again for grant under the Plan. In addition, Restricted Shares that are forfeited shall again be available for grant under the Plan.
(b) The full number of Nonqualified Stock Options, Incentive Stock Options and Stock Appreciation Rights granted that are to be settled by the issuance of Shares shall be counted against the number of Shares available for award under the Plan, regardless of the number of Shares actually issued upon settlement of any such Award.
(c) Any Shares withheld to satisfy tax withholding obligations on an Award issued under the Plan, Shares tendered to pay the exercise price of an Award under the Plan, and Shares repurchased on the open market with the proceeds of an Option exercise will not be eligible to be again available for grant under the Plan.
(d) Substitute Awards shall not be counted against the Shares available for granting Awards under the Plan.

3.3 Cash-Based Award Limit. The maximum aggregate amount awarded or credited with respect to a Cash-Based Award to any Covered Employee in any calendar year that is subject to a Performance Cycle that is twelve (12) months or more may not exceed five million dollars ($5,000,000).

4. Plan Administration. 

4.1 Board Committee Administration. The Plan shall be administered by the Compensation Committee appointed by the Board from among its members, provided that the full Board may at any time act as the Committee. In the case of Awards intended to be deductible under Section 162(m) of the Code, references in this Plan to the Committee shall mean the Subcommittee, unless the functions of the Subcommittee have been assumed by the Committee. The interpretation and construction by the Committee of any provision of the Plan or of any Award Agreement and any determination by the Committee pursuant to any provision of the Plan or any such agreement, notification or document shall be final and conclusive. No member of the Committee or the Subcommittee shall be liable to any person for any such action taken or determination made in good faith.

4.2 Terms and Conditions of Awards. The Committee shall have final discretion, responsibility, and authority to:
(a) grant Awards;
(b) determine the Participants to whom and the times at which Awards shall be granted;
(c) determine the type and number of Awards to be granted, the number of Shares to which an Award may relate, and the applicable terms, conditions, and restrictions, including the length of time for which any restriction shall remain in effect;
(d) establish and administer Performance Goals and Performance Cycles relating to any Award;
(e) determine the rights of Participants with respect to an Award upon termination of employment or service as a director; 
(f) determine whether, to what extent, and under what circumstances an Award may be settled, cancelled, forfeited, exchanged, or surrendered; 
(g) accelerate the vesting of an Award;
(h) interpret the terms and provisions of Award Agreements;
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(i) provide for forfeiture of outstanding Awards and recapture of realized gains and other realized value in such events as determined by the Committee; and
(j) make all other determinations deemed necessary or advisable for the administration of the Plan. 
The Committee may solicit recommendations from the Company’s Chief Executive Officer with respect to the grant of Awards under the Plan. The Committee (or, as permitted under Section 4.3, the Company’s Chief Executive Officer) shall determine the terms and conditions of each Award at the time of grant. No Participant or any other person shall have any claim to be granted an Award under the Plan at any time, and the Company is not obligated to extend uniform treatment to Participants under the Plan. The terms and conditions of Awards need not be the same with respect to each Participant.

4.3 Committee Delegation. The Committee may delegate to the Company’s Chief Executive Officer the authority to grant Awards to Participants who are not Non-Employee Directors or Executive Officers and to interpret and administer Awards for such Non-Employee Directors and Executive Officers. Any such delegation shall be subject to the limitations of Section 157(c) of the Delaware General Corporate Law. The Committee may also delegate the authority to grant Awards to any subcommittee(s) consisting of members of the Board.

4.4 Awards to Non-Employee Directors. Notwithstanding any other provision of the Plan to the contrary, all Awards to Non-Employee Directors must be authorized by the Board.

4.5 Employee’s Service as Non-Employee Director or Consultant. An Employee who receives an Award, terminates employment, and immediately thereafter begins performing service as a Non-Employee Director or Consultant shall have such service treated as service as an Employee for purposes of the Award. The previous sentence shall not apply when (a) the Award is an Incentive Stock Option or (b) prohibited by law.

5. Options. The Committee may authorize grants to Participants of Options to purchase Shares upon such terms and conditions as the Committee may determine in accordance with the following provisions:

5.1 Number of Shares. Each grant shall specify the number of Shares to which it pertains.

5.2 Option Price. Each grant shall specify an Option Price per Share, which shall be equal to or greater than the Fair Market Value per Share on the Grant Date, except in the case of Substitute Awards as provided in Section 12. In the event of Awards that are contingent on stockholder approval of the Plan, the Committee shall provide for adjustment to the Option Price or Base Price to ensure that that price is not lower than the closing selling price of a Share reported on the New York Stock Exchange on the date of stockholder approval of the Plan.

5.3 Consideration. Each grant shall specify the form of consideration to be paid in satisfaction of the Option Price and the manner of payment of such consideration, which may include in the Committee’s sole discretion: (a) cash in the form of currency or check or other cash equivalent acceptable to the Company, (b) non-forfeitable, unrestricted Shares owned by the Participant which have a value at the time of exercise that is equal to the Option Price, (c) a reduction in Shares issuable upon exercise which have a value at the time of exercise that is equal to the Option Price (a “net exercise”), (d) to the extent permitted by applicable law, the proceeds of sale from a broker-assisted cashless exercise, (e) any other legal consideration that the Committee may deem appropriate on such basis as the Committee may determine in accordance with the Plan or (f) any combination of the foregoing. For the avoidance of doubt, Participants who receive Options to purchase Shares shall have no legal right to own or receive Shares withheld from delivery upon exercise pursuant to Section 5.3(c), and otherwise shall have no rights in respect of such Shares whether as a stockholder or otherwise. 
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5.4 Vesting. Any grant may specify (a) a waiting period or periods before Options shall become exercisable and (b) permissible dates or periods on or during which Options shall be exercisable, and any grant may provide for the earlier exercise of such rights in the event of a termination of employment. Vesting may be further conditioned upon the attainment of Performance Goals established by the Committee. 

5.5 Dividend Equivalents and Other Ownership Rights. During the period prior to exercise of an Option, the Participant shall not have any right to transfer any rights under the subject Award and shall not have any rights of ownership in the Shares underlying the Option, including the right to vote such Shares, but the Committee may on or after the Grant Date authorize the payment of dividend equivalents on such Shares in cash or securities (including securities of another issuer) on a current, deferred or contingent basis with respect to any or all dividends or other distributions paid by the Company. Unless otherwise provided by the Committee, any dividend equivalents paid or adjustments made with respect to dividends paid in Shares shall be subject to the same restrictions as the underlying Award.

5.6 Provisions Governing ISOs. Options granted under the Plan may be Incentive Stock Options, Nonqualified Stock Options or a combination of the foregoing, provided that only Nonqualified Stock Options may be granted to Non-Employee Directors. Each grant shall specify whether (or the extent to which) the Option is an Incentive Stock Option or a Nonqualified Stock Option. Notwithstanding any such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Options designated as Incentive Stock Options are exercisable for the first time by an Participant during any calendar year (under all plans of the Company) exceeds $100,000, such Options shall be treated as Nonqualified Stock Options. Options failing to qualify as Incentive Stock Options for any reason will be treated as Nonqualified Stock Options, rather than being forfeited.

5.7 Exercise Period. 
(a) Subject to Section 18.9, no Option granted under the Plan may be exercised more than ten years from the Grant Date. 
(b) If the Fair Market Value exceeds the Option Price on the last day that an Option may be exercised under an Award Agreement, the affected Participant shall be deemed to have exercised the vested portion of such Option in a net exercise under Section 5.3(c) above without the requirement of any further action.

5.8 Award Agreement. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine consistent with the Plan.

6. Stock Appreciation Rights. The Committee may authorize grants to Participants of Stock Appreciation Rights. A Stock Appreciation Right is the right of the Participant to receive from the Company an amount, which shall be determined by the Committee and shall be expressed as a percentage (not exceeding 100 percent) of the Spread at the time of the exercise of such right. Any grant of Stock Appreciation Rights under the Plan shall be upon such terms and conditions as the Committee may determine in accordance with the following provisions:

6.1 Payment in Cash or Shares. Any grant may specify that the amount payable upon the exercise of a Stock Appreciation Right will be paid by the Company in cash, Shares or any combination thereof or may grant to the Participant or reserve to the Committee the right to elect among those alternatives. 

6.2 Vesting. Any grant may specify (a) a waiting period or periods before Stock Appreciation Rights shall become exercisable and (b) permissible dates or periods on or during which Stock Appreciation Rights shall be 
7

exercisable, and any grant may provide for the earlier exercise of such rights in the event of a termination of employment. Vesting may be further conditioned upon the attainment of Performance Goals established by the Committee.

6.3 Exercise Period. Subject to Section 18.9, no Stock Appreciation Right granted under the Plan may be exercised more than ten years from the Grant Date. If a Spread exists on the last day that a Stock Appreciation Right may be exercised under an Award Agreement, the affected Participant shall be deemed to have exercised the vested portion of such Stock Appreciation Right without the requirement of any further action.

6.4 Award Agreement. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine consistent with the Plan.

7. Restricted Shares. The Committee may authorize grants to Participants of Restricted Shares upon such terms and conditions as the Committee may determine in accordance with the following provisions:

7.1 Transfer of Shares. Each grant shall constitute an immediate transfer of the ownership of Shares to the Participant in consideration of the performance of services, subject to the substantial risk of forfeiture and restrictions on transfer hereinafter referred to.

7.2 Consideration. To the extent permitted by Delaware law, each grant may be made without additional consideration from the Participant or in consideration of a payment by the Participant that is less than the Fair Market Value on the Grant Date.

7.3 Substantial Risk of Forfeiture. Each grant shall provide that the Restricted Shares covered thereby shall be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code for a period to be determined by the Committee on the Grant Date, and any grant or sale may provide for the earlier termination of such risk of forfeiture in the event of a termination of employment. 

7.4 Dividend, Voting and Other Ownership Rights. During the period for which a substantial risk of forfeiture is to continue, the Participant shall not have any right to transfer any rights under the subject Award but the Participant shall have voting and other ownership rights (except for any rights to a liquidating distribution). The Committee may on or after the Grant Date authorize the payment of dividend equivalents on such Restricted Shares in cash or securities (including securities of another issuer) on a current, deferred or contingent basis with respect to any or all dividends or other distributions paid by the Company. Unless otherwise provided by the Committee, any dividend equivalents paid or adjustments made respect to dividends or other distributions paid in Shares shall be subject to the same restrictions as the underlying Award.

7.5 Performance-Based Restricted Shares. Any grant or the vesting thereof may be further conditioned upon the attainment of Performance Goals established by the Committee in accordance with the applicable provisions of Section 9 regarding Performance Share Awards and, if any such Award is intended to be a Performance-Based Award, in accordance with the provisions of Section 14.

7.6 Award Agreement; Certificates. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine consistent with the Plan. Unless otherwise directed by the Committee, all certificates representing Restricted Shares, together with a stock power that shall be endorsed in 
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blank by the Participant with respect to such Shares, shall be held in custody by the Company until all restrictions thereon lapse.

8. Restricted Stock Units. The Committee may authorize grants of Restricted Stock Units to Participants upon such terms and conditions as the Committee may determine in accordance with the following provisions:

8.1 Restricted Period. Each grant shall provide that the Restricted Stock Units covered thereby shall be subject to a Restricted Period, which shall be fixed by the Committee on the Grant Date, and any grant or sale may provide for the earlier termination of such period in the event of a termination of employment. 

    8.2 Dividend Equivalents and Other Ownership Rights. During the Restricted Period, the Participant shall not have any right to transfer any rights under the subject Award and shall not have any rights of ownership in the Shares underlying the Restricted Stock Units, including the right to vote such Shares, but the Committee may on or after the Grant Date authorize the payment of dividend equivalents on such shares in cash or securities (including securities of another issuer) on a current, deferred or contingent basis with respect to any or all dividends or other distributions paid by the Company. Unless otherwise provided by the Committee, any dividend equivalents paid or adjustments made with respect to dividends paid in Shares shall be subject to the same restrictions as the underlying Award.

8.3 Performance-Based Restricted Share Units. Any grant or the vesting thereof may be further conditioned upon the attainment of Performance Goals established by the Committee in accordance with the applicable provisions of Section 9 regarding Performance Share Awards and, if any such Award is intended to be a Performance-Based Award, in accordance with the provisions of Section 14.

8.4 Award Agreement. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine consistent with the Plan.

9. Performance Share Awards. The Committee shall determine whether and to whom Performance Share Awards shall be granted and such terms, limitations and conditions as it deems appropriate in its sole discretion in accordance with the following provisions:

9.1 Number of Performance Share Awards. Each grant shall specify the number of Shares or share units to which it pertains, which may be subject to adjustment to reflect changes in compensation or other factors.

9.2 Performance Cycle. The Performance Cycle with respect to each Performance Share Award shall be determined by the Committee and set forth in the Award Agreement and may be subject to earlier termination in the event of a termination of employment.

9.3 Performance Goals. Each grant shall specify the Performance Goals that are to be achieved by the Participant and a formula for determining the amount of any payment to be made if the Performance Goals are achieved. 

9.4 Payment of Performance Share Awards. Each grant shall specify the time and manner of payment of Performance Share Awards that shall have been earned.

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9.5 Dividend Equivalents and Other Ownership Rights. Prior to payment of a Performance Share Award, the Participant shall not have any right to transfer any rights under the subject Award and shall not have any rights of ownership in the Shares underlying the Award, including the right to vote such Shares, but the Committee may on or after the Grant Date authorize the payment of dividend equivalents on such Shares in cash or securities (including securities of another issuer) on a current, deferred or contingent basis with respect to any or all dividends or other distributions paid by the Company. Unless otherwise provided by the Committee, any dividend equivalents paid or adjustments made with respect to dividends paid in Shares shall be subject to the same restrictions as the underlying Award.

9.6 Adjustments. If the Committee determines after the Performance Goals have been established that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Performance Goals unsuitable, the Committee shall have sole discretion to modify such Performance Goals, in whole or in part, as the Committee deems appropriate and equitable. The Committee shall also have the right in its sole discretion to increase or decrease the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment of individual or corporate performance for the Performance Cycle. The provisions of this Section 9.6 shall not apply with respect to Performance-Based Awards and any adjustments with respect to such Awards shall be made solely to the extent permitted under Section 14.4.

9.7 Award Agreement. Each grant shall be evidenced by an Award Agreement containing such terms and provisions as the Committee may determine consistent with the Plan.

9.8 Performance-Based Awards. Notwithstanding anything to the contrary in this Section 9, Performance Share Awards granted to Covered Employees that are intended to be Performance-Based Awards shall only be granted, administered and paid in compliance with all the requirements for Performance-Based Awards set forth in Section 14 below.

10. Other Equity Awards. The Committee may grant other types of equity-based or equity-related Awards not otherwise described by the terms of the Plan (including the grant or offer for sale of unrestricted Shares and grant of Deferred Stock Units) in such amounts and subject to such terms and conditions, as the Committee shall determine. Such Awards may involve the transfer of actual Shares to Participants, or payment in cash or otherwise of amounts based on the value of Shares and may include, without limitation, Awards designed to comply with or take advantage of the applicable local laws of jurisdictions other than the United States.

11. Cash-Based Awards. The Committee may, in its sole discretion, grant Cash-Based Awards to Executive Officers and key employees in such amounts and upon such terms, and subject to such conditions, as the Committee shall determine at the time of grant. The Committee shall determine the maximum duration of the Cash-Based Award, the amount of cash to which the Cash-Based Award pertains, the conditions upon which the Cash-Based Award shall become vested or payable, and such other provisions as the Committee shall determine. Each Cash-Based Award shall specify a cash-denominated payment amount, formula or payment ranges as determined by the Committee. Payment, if any, with respect to a Cash-Based Award shall be made in accordance with the terms of the Award and shall be made in cash. Notwithstanding anything to the contrary in this Section 11, all Cash-Based Awards that are Performance-Based Awards shall only be granted, administered and paid in compliance with all the requirements for Executive Officer Awards set forth in Section 14 below.

12. Adjustments. The Committee shall make or provide for such adjustments in the (a) aggregate and per-person limitations specified in Section 3, (b) number of Shares covered by outstanding Awards, (c) Option Price or 
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Base Price applicable to outstanding Options and Stock Appreciation Rights, and (d) kind of shares available for grant and covered by outstanding Awards (including shares of another issuer), as the Committee in its sole discretion may in good faith determine to be equitably required in order to prevent dilution or enlargement of the rights of Participants that would otherwise result from (x) any stock dividend, stock split, combination or exchange of Shares, recapitalization, extraordinary cash dividend, or other change in the capital structure of the Company, (y) any merger, consolidation, spin-off, spin-out, split-off, split-up, reorganization, partial or complete liquidation or other distribution of assets (other than a normal cash dividend), issuance of rights or warrants to purchase securities, or (z) any other corporate transaction or event having an effect similar to any of the foregoing. However, in the event that such transaction or event results in the distribution to the Company’s stockholders of securities of another issuer, the Committee may provide with respect to any Award that includes the right to dividend equivalents that, instead of an adjustment to that Award, that holder of such Award will receive the number of securities of the other issuer that they would have been entitled to if they held the Shares underlying their Award. In addition, in the event of any such transaction or event, the Committee may provide in substitution for any or all outstanding Awards under the Plan such alternative consideration as it may in good faith determine to be equitable under the circumstances and may require in connection therewith the cancellation or surrender of all Awards so replaced. In the case of Substitute Awards, the Committee may make such adjustments, not inconsistent with the terms of the Plan, in the terms of Awards as it shall deem appropriate in order to achieve reasonable comparability or other equitable relationship between the assumed awards and the Awards granted under the Plan as so adjusted. 

13. Change in Control. 

13.1 General Rule. Except as otherwise provided in an Award Agreement, in the event of a Change in Control, the Committee may, but shall not be obligated to do any one or more of the following, in each case without Participant consent: (a) accelerate, vest or cause the restrictions to lapse with respect to, all or any portion of an Award, (b) cancel Awards for a cash payment equal to their fair value (as determined in the sole discretion of the Committee) which, in the case of Options and Stock Appreciation Rights, shall be deemed to be equal to the excess, if any, of the consideration to be paid in connection with the Change in Control to holders of the same number of Shares subject to such Options or Stock Appreciation Rights (or, if no consideration is paid in any such transaction, the Fair Market Value of the Shares subject to such Options or Stock Appreciation Rights) over the aggregate Option Price (in the case of Options) or Base Price (in the case of Stock Appreciation Rights), (c) provide for the issuance of replacement awards that will substantially preserve the otherwise applicable terms of any affected Awards previously granted hereunder as determined by the Committee in its sole discretion, (d) terminate Options without providing accelerated vesting or (e) take any other action with respect to the Awards the Committee deems appropriate. For avoidance of doubt, the treatment of Awards upon a Change in Control may vary among Participants and Types of Awards in the Committee’s sole discretion.

13.2 Settlement of Awards Subject to Performance Goals Upon a Change in Control. Awards subject to satisfying a Performance Goal or Goals shall be settled upon a Change in Control. The settlement amount shall be determined by the Committee in its sole discretion based upon the extent to which the Performance Goals for any such Awards have been achieved after evaluating actual performance from the start of the Performance Cycle until the date of the Change in Control and the level of performance anticipated with respect to such Performance Goals as of the date of the Change in Control.

13.3 Change in Control shall mean the earliest to occur of the following events:

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(a) Any holder acquires Beneficial Ownership of any securities of the Company which generally entitles the holder thereof to vote for the election of directors of the Company (the "Voting Securities"), which, when added to the Voting Securities then Beneficially Owned by such holder, would result in such holder Beneficially Owning forty percent (40%) or more of the combined voting power of the Company's then outstanding Voting Securities; provided, however, that for purposes of this paragraph (a), a holder shall not be deemed to have made an acquisition of Voting Securities if such holder: (i) acquires Voting Securities as a result of a stock split, stock dividend or other corporate restructuring in which all stockholders of the class of such Voting Securities are treated on a pro rata basis; (ii) acquires the Voting Securities directly from the Company; (iii) becomes the Beneficial Owner of more than the permitted percentage of Voting Securities solely as a result of the acquisition of Voting Securities by the Company, which, by reducing the number of Voting Securities outstanding, increases the proportional number of shares Beneficially Owned by such holder; (iv) is the Company or any corporation or other holder of which a majority of its voting power or its equity securities or equity interest is owned directly or indirectly by the Company (a "Controlled Entity"); or (e) acquires Voting Securities in connection with a "Non-Control Transaction" (as defined in subparagraphs (c)(i)(1)-(3) below); or

(b) The individuals who, as of January 1, 2014 are members of the Board (the "Incumbent Board"), cease for any reason to constitute at least two-thirds of the Incumbent Board, provided, however, that if either the election of any new director or the nomination for election of any new director was approved by a vote of more than two-thirds of the Incumbent Board, such new director shall be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of either an actual or threatened "Election Contest" (as described in Rule 14a-11 promulgated under the Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a "Proxy Contest"), including by reason of any agreement intended to avoid or settle any Election Contest or Proxy Contest; or

(c) Stockholder approval of:

(i) A merger, share exchange, consolidation or reorganization involving the Company (a "Business Combination"), unless:
(1) the stockholders of the Company immediately before the Business Combination, own, directly or indirectly immediately following the Business Combination, at least fifty-one percent (51%) of the combined voting power of the outstanding Voting Securities of the corporation resulting from the Business Combination (the "Surviving Corporation"), and

(2) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for the Business Combination constitute at least a majority of the members of the Board of Directors of the relevant Surviving Corporation, and

(3) no holder (other than the Company, or any Controlled Entity, a trustee or other fiduciary holding securities under one or more employee benefit plans or arrangements (or any trust forming a part thereof) maintained by the Company, the Surviving Corporation or any Controlled Entity, or any Person who, immediately prior to the Business Combination, had Beneficial Ownership of forty percent (40%) or more of the then outstanding Voting Securities) has Beneficial Ownership of forty percent (40%) or more of the combined voting power of the Surviving Corporation's then outstanding voting securities (a transaction described in these subparagraphs (c)(i)(1)-(3) shall be referred to as a "Non-Control Transaction");

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(ii) A complete liquidation or dissolution of the Company; or

(iii) The sale or other disposition of all or substantially all of the assets of the Company to any holder (other than a transfer to a Controlled Entity).

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because forty percent (40%) or more of the then outstanding Voting Securities is Beneficially Owned by (A) a trustee or other fiduciary holding securities under one or more employee benefit plans or arrangements (or any trust forming a part thereof) maintained by the Company or any Controlled Entity or (B) any corporation which, immediately prior to its acquisition of such interest, is owned directly or indirectly by the stockholders of the Company in the same proportion as their ownership of stock in the Company, immediately prior to such acquisition.

14. Requirements for Performance-Based Awards

14.1 In General. Any Executive Officer or other key employee providing services to the Company and/or its Subsidiaries and Affiliates and who is selected by the Committee (hereinafter referred to as a “Covered Employee”) may be granted one or more Performance-Based Awards in the form of a Restricted Stock Award, Restricted Stock Units, Performance Share Award, Other Stock-Based Award and/or Cash-Based Award payable upon the attainment of Performance Goals that are established by the Committee and relate to one or more of the Performance Criteria, in each case on a specified date or dates or over any period or periods determined by the Committee, as permitted under this Section 14. For the avoidance of doubt, a Covered Employee may receive as Performance-Based Awards a Cash-Based Award subject to Performance Cycle that is twelve months and a Cash-Based Award subject to a Performance Cycle that is more than twelve months in the same calendar year. The Committee shall define in an objective fashion the manner of calculating the Performance Criteria it selects to use for any Performance Cycle. Depending on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, or an individual. Each Performance-Based Award shall also comply with the provisions set forth below.

14.2 Grant Procedure. With respect to each Performance-Based Award, the Committee shall select, within the first 90 days of a Performance Cycle, the Performance Criteria for such grant and the Performance Goals with respect to each Performance Criterion (including a threshold level of performance below which no amount will become payable with respect to such Award). Each Performance-Based Award will specify the amount payable, or the formula for determining the amount payable, upon achievement of the various applicable performance targets. The Performance Criteria established by the Committee may be (but need not be) different for each Performance Cycle and different Performance Goals may be applicable to Performance-Based Awards to different Covered Employees. The Committee shall designate whether an Award granted to an Executive Officer or key employee is intended to be a Performance-Based Award at the time of grant. Notwithstanding anything to the contrary in the Plan, the Committee shall have no obligation to grant any Award in the form of “performance-based compensation” under Section 162(m) of the Code.

14.3 Permissible Performance Criteria. The Committee will establish Performance Criteria for a Performance-Based Award. These criteria may include, but is not limited to, one or a combination of the following financial and non-financial metrics, with respect to the entire Company or a business unit: 

Financial Metrics:
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	•	net sales or revenue;

						
		
	•	unit sales;
		
	•	return measures (including, but not limited to, return on invested capital, assets, net assets, capital, equity and sales);

						
		
	•	gross or net profit margin;

						
		
	•	operating expense ratios;

						
		
	•	operating expense targets;

						
		
	•	productivity ratios;

						
		
	•	operating income or earnings;

						
		
	•	gross or operating margins;

						
		
	•	adjusted earnings before or after taxes, interest, depreciation and/or amortization;

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	•	net earnings or net income (before or after taxes);

						
		
	•	earnings per share;

						
		
	•	cash flow (including, but not limited to, operating cash flow, free cash flow, cash flow return on equity, and cash flow return on investment);

						
		
	•	funds from operations or similar measures, capital expenditures;

						
		
	•	share price (including, but not limited to, growth measures and total stockholder return);

						
		
	•	appreciation in the fair market value or book value of the Shares;

						
		
	•	cash dividends declared per Share;

						
		
	•	stockholder returns, dividends and other distributions;

						
		
	•	economic value added (net operating profit after tax minus the sum of capital multiplied by the cost of the capital);

						
		
	•	debt to equity ratio;

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	•	debt levels;

						
		
	•	budget achievement;

						
		
	•	expense reduction or cost savings; and

						
		
	•	operating margins.

Non-financial Metrics:
						
		
	•	quantitative measures of customer satisfaction;

						
		
	•	quantitative measures of employee satisfaction/engagement;

						
		
	•	market share and/or new or expanded market penetration;

						
		
	•	acquisitions, strategic transactions or business expansion;

						
		
	•	product line diversification;

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	•	employee retention/attrition;

						
		
	•	safety;

						
		
	•	productivity improvements; and

						
		
	•	inventory control/efficiency.

14.4 Permitted Adjustments. The Committee, in its discretion, may measure performance against Performance Goals under a Performance-Based Award by taking one or more of the following actions: (a) excluding each of following items: (i) any unusual or extraordinary corporate item, transaction or development restructuring and/or other nonrecurring and/or extraordinary charges (as reported in the Company’s financial statements for the Performance Cycle), (ii) exchange rate effects, as applicable, for non-U.S. dollar denominated operating earnings, (iii) the effects to any statutory adjustments to corporate tax rates, (iv) the impact of discontinued operations, (v) losses from discontinued operations, (vi) restatements and other unplanned special charges such as acquisitions and acquisition expenses (including, without limitation, expenses relating to goodwill and other intangible assets), (vi) divestitures, (vii) expenses for restructuring, productivity initiatives or new business initiatives, (viii) impairment of tangible or intangible assets, (ix) litigation or claim judgments or settlements, (x) non-operating items, (xi) stock offerings and effects of other financing activities, (xii) stock repurchases, (xiii) strategic loan loss provisions and (b) not adjusting for changes in accounting principles. Any such action with respect to a Performance-Based Award must be taken by the Committee within the first ninety (90) days applicable to the Performance Cycle or such later time as may be permitted under Section 162(m) of the Code. 

14.5 Certification of Performance Goals and Payment. Following the completion of a Performance Cycle, the Committee shall meet to review and certify in writing whether, and to what extent, the Performance Goals for the Performance Cycle have been achieved and, if so, to also calculate and certify in writing the amount of the Performance-Based Awards earned for the Performance Cycle. The Committee shall then determine the actual size of each Covered Employee’s Performance-Based Award, and, in doing so with respect to a Cash-Based Award, may reduce or eliminate the amount of such Award if, in its sole judgment, such reduction or elimination is appropriate. 

14.6 Interpretation. All Performance-Based Awards and the provisions hereunder applicable to such Awards shall be interpreted consistent with the requirements of Section 162(m). 

15. Withholding.

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15.1 Tax Withholding. The Company shall have the power and the right to deduct or withhold, or require a Participant to remit to the Company, the maximum statutory amount to satisfy federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event arising as a result of this Plan prior to making any payments hereunder.

15.2 Share Withholding. With respect to withholding required upon the exercise of Options or Stock Appreciation Rights, upon the lapse of restrictions on Restricted Shares and Restricted Stock Units, or upon the achievement of performance goals related to Performance Share Awards, or any other taxable event arising as a result of an Award granted hereunder, Participants may elect, subject to the approval of the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having a Fair Market Value on the date the tax is to be determined equal to the maximum statutory total tax that could be imposed on the transaction. All such elections shall be irrevocable, made in writing or electronically, and signed or acknowledged electronically by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.

16. Certain Terminations of Employment, Hardship and Approved Leaves of Absence. Notwithstanding any other provision of the Plan to the contrary, in the event of a Participant’s termination of employment (including by reason of death, disability or retirement) or in the event of hardship or other special circumstances, the Committee may in its sole discretion take any action that it deems to be equitable under the circumstances or in the best interests of the Company, including, without limitation, waiving or modifying any limitation or requirement with respect to any Award under the Plan. The Committee shall have the discretion to determine whether and to what extent the vesting of Awards shall be tolled during any leave of absence, paid or unpaid; provided however, that in the event of military leave, vesting shall toll during any unpaid portion of such leave, provided that, upon a Participant’s returning from military leave (under conditions that would entitle him or her to protection upon such return under the Uniform Services Employment and Reemployment Rights Act), he or she shall be given vesting credit with respect to the Award to the same extent as would have applied had the Participant continued to provide services to the Company throughout the leave on the same terms as he or she was providing services immediately prior to such leave. Any actions taken by the Committee shall be taken consistent with the requirements of Section 409A of the Code and, with respect to Performance-Based Awards, Section 162(m) of the Code.

17. Authorization of Sub-Plans. The Committee may from time to time establish one or more sub-plans under the Plan for purposes of satisfying applicable blue sky, securities, and/or tax laws of various jurisdictions. The Committee shall establish such sub-plans by adopting supplements to the Plan containing (a) such limitations as the Committee deems necessary or desirable, and (b) such additional terms and conditions not otherwise inconsistent with the Plan as the Committee shall deem necessary or desirable. All sub-plans adopted by the Committee shall be deemed to be part of the Plan, but each sub-plan shall apply only to Participants within the affected jurisdiction and the Company shall not be required to provide copies of any sub-plans to Participants in any jurisdiction which is not the subject of such sub-plan.

18. Amendments and Other Matters.

18.1 Plan Amendments. The Board may amend, suspend or terminate the Plan or the Committee’s authority to grant Awards under the Plan at any time. Notwithstanding the foregoing, no amendments shall be effective without approval of the Company’s stockholders if (a) stockholder approval of the amendment is then required pursuant to the Code, the rules of the primary stock exchange or stock market on which the Shares are then 
18

traded, applicable U.S. state corporate laws or regulations, applicable U.S. federal laws or regulations, and the applicable laws of any foreign country or jurisdiction where Awards are, or shall be, granted under the Plan, or (b) such amendment would (i) modify Section 18.4, (ii) materially increase benefits accruing to Participants, (iii) increase the aggregate number of Shares issued or issuable under the Plan, (iv) increase any limitation set forth on the number of Shares which may be issued or the aggregate value of Awards or the per-person limits under Section 3 except as provided in Section 12, (v) modify the eligibility requirements for Participants in the Plan, or (vi) reduce the minimum Option Price and Base Price as set forth in Sections 5 and 6, respectively. Notwithstanding any other provision of the Plan to the contrary, except as provided in Section 18.8, no termination, suspension or amendment of the Plan may adversely affect any outstanding Award without the consent of the affected Participant.

18.2 Award Deferrals. The Committee may permit Participants to elect to defer the issuance of Shares or the settlement of Awards in cash under the Plan pursuant to such rules, procedures or programs as it may establish for purposes of the Plan. However, any Award deferrals which the Committee permits must comply with the provisions of Section 22 and the requirements of Section 409A of the Code.

18.3 Conditional Awards. The Committee may condition the grant of any award or combination of Awards under the Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or any Affiliate to the Participant, provided that any such grant must comply with the provisions of Section 22 and the requirements of Section 409A of the Code.

18.4 Repricing. The terms of outstanding Awards may not be amended to reduce the Option Price of outstanding Options or Base Price of outstanding Stock Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights in exchange for cash, other Awards or Options or Stock Appreciation Rights with an Option Price or Base Price that is less than the Option Price or Base Price of the original Options or Stock Appreciation Rights without stockholder approval, provided that nothing herein shall prevent the Committee from taking any action provided for in Section 12 above. 

18.5 No Employment Rights. Nothing in the Plan or an Award Agreement shall interfere with or limit in any way the right of the Company, its Affiliates, and/or its Subsidiaries to terminate any Participant’s employment or service on the Board or to the Company at any time or for any reason not prohibited by law, nor confer upon any Participant any right to continue his employment or service as a director for any specified period of time. Neither an Award nor any benefits arising under the Plan shall constitute an employment contract with the Company, its Affiliates, and/or its Subsidiaries and, accordingly, subject to Section 18.1, the Plan and the benefits hereunder may be terminated at any time in the sole and exclusive discretion of the Committee without giving rise to any liability on the part of the Company, its Affiliates, and/or its Subsidiaries.

18.6 Tax Qualification. To the extent that any provision of the Plan would prevent any Option that was intended to qualify under particular provisions of the Code from so qualifying, such provision of the Plan shall be null and void with respect to such Option, provided that such provision shall remain in effect with respect to other Options, and there shall be no further effect on any provision of the Plan.

18.7 Leave of Absence or Transfer. A transfer between the Company and any Affiliate or between Affiliates, or a leave of absence duly authorized by the Company, shall not be deemed to be a termination of employment. Periods of time while on a duly authorized leave of absence shall be disregarded for purposes of determining whether a Participant has satisfied a Restricted Period or Performance Cycle under an Award.

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18.8 Amendments to Comply with Laws, Regulations or Rules. Notwithstanding any other provision of the Plan or any Award Agreement to the contrary, in its sole and absolute discretion and without the consent of any Participant, the Board may amend the Plan, and the Committee may amend any Award Agreement, to take effect retroactively or otherwise as it deems necessary or advisable for the purpose of conforming the Plan or such Award Agreement to any present or future law, regulation or rule applicable to the Plan, including, but not limited to, Section 409A of the Code.

18.9 Tolling. In the event a Participant is prevented from exercising an Option or the Company is unable to settle an Award due to either any trading restrictions applicable to the Company’s Shares, the Participant’s physical infirmity or administrative error by the Company relied upon and not caused by the Participant, then unless otherwise determined by the Committee, the length of time applicable to any such restriction, condition or event shall toll any exercise period (i) until such restriction lapses, (ii) until the Participant (or his representative) is able to exercise the Award or (iii) until such error is corrected, as applicable. 

18.10 No Duty to Inform Regarding Exercise Rights. Neither the Company, any Affiliate, the Committee nor the Board shall have any duty to inform a Participant of the pending expiration of the period in which a Stock Appreciation right may be exercised or in which an Option may be exercised.

19. Issuance of Shares; Fractional Shares.

19.1 Form for Issuing Shares; Legends. Shares may be issued on a certificated or uncertificated basis. Shares may include any legend which the Committee deems appropriate to reflect any restrictions on transfer of such Shares. 

19.2 Delivery of Title. The Company shall have no obligation to issue or deliver evidence of title for Shares issued under the Plan prior to: (i) obtaining any approvals from governmental agencies that the Company determines are necessary or advisable; and (ii) completing any registration or other qualification of the Shares under any applicable national or foreign law or ruling of any governmental body that the Company determines to be necessary or advisable. 

19.3 Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained.

19.4 Investment Representations. The Committee may require any individual receiving Shares pursuant to an Award under the Plan to represent and warrant in writing that the individual is acquiring the Shares for investment and without any present intention to sell or distribute such Shares,

19.5 Fractional Shares. The Company shall not be required to issue any fractional Shares pursuant to the Plan. The Committee may provide for the elimination of fractions or for the settlement thereof in cash. 

20. Limitations Period. Any person who believes he or she is being denied any benefit or right under the Plan may file a written claim with the Committee. Any claim must be delivered to the Committee within forty-five (45) days of the specific event giving rise to the claim. Untimely claims will not be processed and shall be deemed denied. The Committee, or its designated agent, will notify the Participant of its decision in writing as soon as administratively practicable. Claims not responded to by the Committee in writing within ninety (90) days of the 
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date the written claim is delivered to the Committee shall be deemed denied. The Committee’s decision shall be final, conclusive and binding on all persons. No lawsuit relating to the Plan may be filed before a written claim is filed with the Committee and is denied or deemed denied, and any lawsuit must be filed within one year of such denial or deemed denial or be forever barred. The venue for any lawsuit shall be Wilmington, Delaware.

21. Governing Law. The validity, construction and effect of the Plan and any Award hereunder will be determined in accordance with the State of Delaware except to the extent governed by applicable federal law. 

22. Compliance with Section 409A.

22.1 In General. The Plan is intended to be administered in a manner consistent with the requirements, where applicable, of Section 409A. For avoidance of doubt, Stock Options and Stock Appreciation Rights are intended to qualify for the stock rights exemptions from Section 409A. Where reasonably possible and practicable, 
the Plan shall be administered in a manner to avoid the imposition on Participants of immediate tax recognition and additional taxes pursuant to such Section 409A. Notwithstanding the foregoing, neither the Company nor the Committee shall have any liability to any person in the event Section 409A applies to any such Award in a manner that results in adverse tax consequences for the Participant or any of his or her transferees.

22.2 Elective Deferrals. No elective deferrals or re-deferrals other than in regard to Restricted Stock Units are permitted under the Plan.

22.3 Applicable Requirements. To the extent any of the Awards granted under the Plan are deemed “deferred compensation” and hence subject to Section 409A, the following rules shall apply to such Awards:
(a) Mandatory Deferrals. If the Company decides that the payment of compensation under the Plan shall be deferred within the meaning of Section 409A, then, except as provided under Treas. Reg. Section 1.409A-1(b)(4)(ii), on granting of the Award to which such compensation payment relates, the Company shall specify the date(s) at which such compensation will be paid in the Award Agreement.
(b) Initial Deferral Elections. For Awards of RSUs where the Committee provides the opportunity to elect the timing and form of the payment of the underlying Shares at some future time once any requirements have been satisfied, the Participant must make his or her initial deferral election for such Award in accordance with the requirements of Section 409A, i.e., within thirty (30) days of first becoming eligible to receive such award or prior to the start of the year in which the Award is granted to the Participant, in each case pursuant to the requirements of Section 409A and Treas. Reg. Section 1.409A-2.
(c) Subsequent Deferral Elections. To the extent the Company or Committee decides to permit compensation subject to Section 409A to be re-deferred pursuant to Treas. Reg. Section 1.409A-2(b), then the following conditions must be met: (i) such election will not take effect until at least 12 months after the date on which it is made; (ii) in the case of an election not related to a payment on account of disability, death or an unforeseeable emergency, the payment with respect to which such election is made must be deferred for a period of not less than five years from the date such payment would otherwise have been paid; and (iii) any election related to a payment at a specified time or pursuant to a fixed schedule (within the meaning of Treas. Reg. Section 1.409A-3(a)(4)) must be made not less than 12 months before the date the payment is scheduled to be paid.
(d) Timing of Payments. Payment(s) of compensation that is subject to Section 409A shall only be made upon an event or at a time set forth in Treas. Reg. Section 1.409A-3, i.e., the Participant’s separation from service, the Participant’s becoming disabled, the Participant’s death, at a time or a fixed schedule specified in the Plan or an Award Agreement, a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company, or the occurrence of an unforeseeable emergency.
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(e) Certain Delayed Payments. Notwithstanding the foregoing, to the extent an amount was intended to be paid such that it would have qualified as a short-term deferral under Section 409A and the applicable regulations, then such payment is or could be delayed if the requirements of Treas. Reg. 1.409A-1(b)(4)(ii) are met.
(f) Acceleration of Payment. Any payment made under the Plan to which Section 409A applies may not be accelerated, except in accordance with Treas. Reg. 1.409A-3(j)(4), i.e., upon a Participant’s separation from service, the Participant becoming disabled, the Participant’s death, a change of ownership or effective control, or in the ownership of a substantial portion of the assets, or upon an unforeseeable emergency (all as detailed in Treas. Reg. Section 1.409A-3(a)).
(g) Payments upon a Change in Control. Notwithstanding any provision of the Plan to the contrary, to the extent an Award subject to Section 409A shall be deemed to be vested or restrictions lapse, expire or terminate upon the occurrence of a Change in Control and such Change in Control does not constitute a “change in the ownership or effective control” or a “change in the ownership of a substantial portion of the assets” of the Company within the meaning of Section 409A(a)(2)(A)(v), then even though such Award may be deemed to be vested or restrictions lapse, expire or terminate upon the occurrence of the Change in Control or any other provision of the Plan, payment will be made, to the extent necessary to comply with the provisions of Section 409A, to the Participant on the earliest of (i) the Participant’s “separation from service” with the Company (determined in accordance with Section 409A), (ii) the date payment otherwise would have been made pursuant to the regular payment terms of the Award in the absence of any provisions in the Plan to the contrary (provided such date is permissible under Section 409A) or (iii) the Participant’s death.
(h) Payments to Specified Employees. Payments due to a Participant who is a “specified employee” within the meaning of Section 409A on account of the Participant’s “separation from service” with the Company (determined in accordance with Section 409A) shall be made on the date that is six months after the date of the Participant’s separation from service or, if earlier, the Participant’s date of death.

22.4 Deferrals to Preserve Deductibility under Section 162(m). The Committee may postpone the exercising of Awards, the issuance or delivery of Shares under any Award or any action permitted under the Plan to prevent the Company or any Affiliate from being denied a Federal income tax deduction with respect to any Award other than an ISO as a result of Section 162(m) in accordance with IRS regulations. In such case, payment of such deferred amounts must be made as soon as reasonably practicable following the first date on which the Company and/or Affiliate anticipates or reasonably should anticipate that, if the payment were made on such date, the Company’s and/or Subsidiary’s deduction with respect to such payment would no longer be restricted due to the application of Section 162(m).

22.5 Determining “Controlled Group”. In order to determine for purposes of Section 409A whether a Participant or eligible individual is employed by a member of the Company’s controlled group of corporations under Section 414(b) of the Code (or by a member of a group of trades or businesses under common control with the Company under Section 414(c) of the Code) and, therefore, whether the Shares that are or have been purchased by or awarded under the Plan to the Participant are shares of “service recipient” stock within the meaning of Section 409A, a Participant or eligible employee of a Subsidiary shall be considered employed by the Company’s controlled group (or by a member of a group of trades or businesses under common control with the Company, as applicable). Notwithstanding the above, to the extent that the Company finds that legitimate business criteria exist within the meaning of Treas. Reg. Section 1.409A-1(b)(5)(iii)(E)(1), then, solely for purposes of this Section 22.5, “at least 50 percent” in the definition of “Subsidiary” shall instead be “at least 20 percent”.

23. Transferability.

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23.1 Transfer Restrictions. Except as provided in Sections 23.2 and 23.4, no Award granted under the Plan shall be transferable by a Participant other than upon death by will or the laws of descent and distribution, and Options and Stock Appreciation Rights shall be exercisable during a Participant’s lifetime only by the Participant or, in the event of the Participant’s legal incapacity, by his guardian or legal representative acting in a fiduciary capacity on behalf of the Participant under state law. Any attempt to transfer an Award in violation of the Plan shall render such Award null and void.

23.2 Limited Transfer Rights. The Committee may expressly provide in an Award Agreement that a Participant may transfer such Award (other than an Incentive Stock Option), in whole or in part, to a Family Member, a trust for the exclusive benefit of Family Members, a partnership or other entity in which all the beneficial owners are Family Members, or any other entity affiliated with the Participant that may be approved by the Committee. Subsequent transfers of Awards shall be prohibited except in accordance with this Section 23.2. All terms and conditions of the Award, including provisions relating to the termination of the Participant’s employment or service with the Company or a Subsidiary, shall continue to apply following a transfer made in accordance with this Section 23.2.

23.3 Additional Restrictions on Transfer. Any Award made under the Plan may provide that all or any part of the Shares that are to be issued or transferred by the Company upon exercise, vesting or settlement shall be subject to further restrictions upon transfer.

23.4 Domestic Relations Orders. Notwithstanding the foregoing provisions of this Section 23, any Award made under the Plan may be transferred as necessary to fulfill any domestic relations order as defined in Section 414(p)(1)(B) of the Code.

24. Forfeiture and Recoupment. Without limiting in any way the generality of the Committee’s power to specify any terms and conditions of an Award consistent with law, and for greater clarity, the Committee may specify in an Award Agreement that the Participant’s rights, payments and benefits with respect to an Award, including any payment of Shares received upon exercise or in satisfaction of an Award under the Plan shall be subject to reduction, cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition to any otherwise applicable vesting or performance conditions, without limit as to time. Such events shall include, but not be limited to, failure to accept the terms of the Award Agreement, termination of service under certain or all circumstances, violation of material Company policies, misstatement of financial or other material information about the Company, fraud, misconduct, breach of noncompetition, confidentiality, nonsolicitation, noninterference, corporate property protection, or other agreements that may apply to the Participant, or other conduct by the Participant that the Committee determines is detrimental to the business or reputation of the Company and its Affiliates, including facts and circumstances discovered after termination of service. Awards granted under the Plan shall be subject to any compensation recovery policy or minimum stock holding period requirement as may be adopted or amended by the Company from time to time.

25. No Constraint on Corporate Action. Nothing in the Plan shall be construed to: (i) limit, impair, or otherwise affect the Company’s or an Affiliate’s or a Subsidiary’s right or power to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or dissolve, liquidate, sell, or transfer all or any part of its business or assets; or, (ii) limit the right or power of the Company or an Affiliate or a Subsidiary to take any action which such entity deems to be necessary or appropriate.

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26. Effect of Disposition of Operating Unit. If the Company or any of its Affiliates diminishes or eliminates ownership interests in any operating unit of the Company or any of its Affiliates so that such operating unit ceases to be majority owned by the Company or any of its Affiliates then, with respect to Awards held by Participants who subsequent to such event will not be Employees, the Committee may, to the extent consistent with Section 409A (if applicable), take any of the actions described in Section 13.1 with respect to a Change in Control. If the Committee takes no special action with respect to any disposition of a facility or an operating unit, then the Participant shall be deemed to have terminated his or her employment with the Company and its Subsidiaries and Affiliates and the terms and conditions of the Award Agreement and the other terms and conditions of the Plan shall control. 

27. Indemnification. Subject to requirements of applicable state law, each individual who is or shall have been a member of the Board, or a Committee appointed by the Board, or an officer of the Company to whom authority was delegated in accordance with Section 3, shall be indemnified and held harmless by the Company against and from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him in connection with or resulting from any claim, action, suit, or proceeding to which he may be a party or in which he or she may be involved by reason of any action taken or failure to act under the Plan and against and from any and all amounts paid by him in settlement thereof, with the Company’s approval, or paid by him in satisfaction of any judgment in any such action, suit, or proceeding against him, provided he shall give the Company an opportunity, at its own expense, to handle and defend the same before he undertakes to handle and defend it on his own behalf, unless such loss, cost, liability, or expense is a result of his own willful misconduct or except as expressly provided by statute. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such individuals may be entitled under the Company’s Certificate of Incorporation or by-laws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

28. Non-exclusivity of the Plan. The adoption of the Plan shall not be construed as creating any limitations on the power of the Board or Committee to adopt such other compensation arrangements as it may deem desirable for any Participant.

29. Miscellaneous. 

29.1 Gender and Number. Except where otherwise indicated by the context, any masculine term used herein also shall include the feminine, the plural shall include the singular, and the singular shall include the plural. 

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

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

29.4 Successors. All obligations of the Company under the Plan with respect to Awards granted hereunder shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.

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29.5 Payment Following a Participant’s Death. Any remaining vested rights or benefits under the Plan upon a Participant’s death shall be paid or provided to the Participant’s legal spouse or, if no such spouse survives the Participant, to the Participant’s estate.

29.6 Rights as a Stockholder. Except as otherwise provided herein, a Participant shall have none of the rights of a stockholder with respect to Shares covered by any Award until the Participant becomes the record holder of such Shares.
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