Document:

clearwayllcex10510-q2022

    272779514v.5  Clearway Energy, Inc. Involuntary Severance Plan  (Amended and Restated as of January 1, 2022) 

 

   i     272779514v.5  Contents    Article 1. Establishment and Purpose. .....................................................................................1  Article 2. Definitions................................................................................................................1  Article 3. Eligibility and Participation. ....................................................................................3  Article 4. Severance Benefits. ..................................................................................................5  Article 5. Continuation of Certain Welfare Benefits. ..............................................................6  Article 6. Taxes. .......................................................................................................................6  Article 7. Amendment and Termination. .................................................................................7  Article 8. Administration and Claims. .....................................................................................7  Article 9. General Provisions. ..................................................................................................9      

 

        272779514v.5  Clearway Energy, Inc.    Involuntary Severance Plan  Article 1. Establishment and Purpose.    1.1. Establishment.  Clearway Energy, Inc., a Delaware corporation, (hereinafter  referred to as the “Company”) originally adopted this plan known as the “Clearway Energy, Inc.  Involuntary Severance Plan” (the “Plan”), effective as of January 1, 2017.  The Plan was amended  and restated by the Company as of January 1, 2018, again as of January 1, 2019 and February 18,  2020, and is hereby further amended and restated as of January 1, 2022.  The Plan provides  severance benefits for certain employees of the Company and its participating Affiliates whose  employment is terminated due to reductions in force or as a result of the Company’s restructuring.    1.2. Purpose.  The purpose of the Plan is to provide severance benefits to Eligible  Employees in order to maintain the focus of Eligible Employees on the business of the Company  and to mitigate the distractions caused by the possibility that the Eligible Employee’s employment  may be terminated due to reductions in force or as a result of the Company’s restructuring.    Article 2. Definitions.    The following terms shall have the meanings set forth below and, when so intended, the terms  shall be capitalized.  Except when otherwise indicated by the context, the plural shall include the  singular and the singular shall include the plural.    2.1. Administrator means an individual or committee designated by the Company to  administer the Plan.  In the absence of a formal designation, the Administrator shall be the Vice  President, Human Resources for the Company.    2.2. Affiliate means (i) any subsidiary corporation of the Company, (ii) any corporation,  trade or business (including, without limitation, a partnership or limited liability company) which  is directly or indirectly controlled fifty percent (50%) or more (whether by ownership of stock,  assets or an equivalent ownership interest or voting interest) by the Company (or its successors),  or (iii) any other entity (including its successors) which is designated as an Affiliate by the Board.   2.3. Board means the Board of Directors of the Company.    2.4. Code means the Internal Revenue Code of 1986, as amended, and the Department  of Treasury regulations and other official guidance promulgated thereunder.    2.5. Company means Clearway Energy, Inc., a Delaware corporation, or any successor  as provided in Article 9.    2.6. Delay Period shall have the meaning set forth in Section 4.5.1.  2.7. Eligible Employee means persons in the employment of the Company or its  Affiliates who are classified as common law employees, excluding, however, the following  classifications:  

 

   2   272779514v.5  (a) employees whose terms and conditions of employment are subject to a  collective bargaining agreement,  (b) employees who are covered under other severance arrangements,  (c) employees who are employed outside the United States, and  (d) persons who are classified as part-time, temporary, leased, or contract and  other similar classifications even if it is subsequently determined that the  classification is incorrect.    2.8. ERISA means the Employee Retirement Income Security Act of 1974, including  applicable Department of Labor regulations and other official guidance promulgated thereunder.    2.9. Participant means an Eligible Employee who satisfies the participation  requirements of the Plan in accordance with Article 3.    2.10. Plan shall have the meaning set forth in Section 1.1.  2.11. Period of Severance means the period commencing on the Participant’s  Termination Date and ending on the date on which the Participant receives the last severance  payment or severance benefit hereunder.  The duration of the Participant’s Period of Severance  shall be determined by the number of Severance Weeks for that Participant.    2.12. Plan Year means the consecutive twelve (12)-month period beginning each  January 1 and ending the following December 31.    2.13. Release means a general waiver and release of claims in favor of the Company, in  a form drafted by and acceptable to the Company, that must be executed by a Participant as a  condition to receipt of severance benefits and payments under the Plan.    2.14. Salary means the Participant’s annual base salary as of the Participant’s  Termination Date.  The following rules shall apply in determining the Participant’s annual base  salary:  (a) Excluded Items.  In determining a Participant’s Salary, there shall be  excluded all of the following: (i) overtime and shift differential pay, (ii)  expense allowances, (iii) deferred compensation at the time it is paid, or  deferred, including pay for any accrued but unused paid time off, (iv) long  term disability pay, (v) bonus or other incentive pay, (vi) payments,  discounts or grants under any stock purchase, stock option, phantom stock  unit or restricted stock plan, (vii) severance pay, (viii) contributions or  benefits under any other employee benefit or fringe benefit plan (except as  provided in subsection (b)), (ix) tax gross-ups, or (x) other payments of a  similar nature.    (b) Included Items.  Elective contributions made by the Company or its  Affiliates on behalf of a Participant, which are part of a salary reduction  

 

   3   272779514v.5  agreement, that are not includable in gross income under Code Sections 125  or 402(e)(3), including elective contributions authorized by the Participant  under a cafeteria plan or any qualified cash or deferred arrangement under  Code Section 401(k), and short term disability payments shall be included  in Salary.    (c) Post-Termination Pay.  Amounts received after the Participant’s  Termination Date shall not be taken into account in determining a  Participant’s Salary.    2.15. Severance Weeks means the number of weeks according to a Participant’s job  level and personnel subarea, if applicable, as indicated in the Company’s human resources  information systems, per the table below:   Assignment Severance Weeks  Non-Exempt Professional; or,  Plant Professional  The greater of 8 weeks of base pay or 1.5 weeks of base  pay per Year of Service.  Maximum 52 weeks.  Exempt Professional The greater of 12 weeks of base pay or 1.5 weeks of base  pay per Year of Service.  Maximum 52 weeks.    Manager or Senior Manager The greater of 16 weeks of base pay or 1.5 weeks of base  pay per Year of Service.  Maximum 52 weeks.    Director  The greater of 24 weeks of base pay or 1.5 weeks of base  pay per Year of Service.  Maximum 52 weeks.   2.16. Termination Date means the date on which the Participant’s employment with the  Company or its Affiliates terminates and such termination is also a “separation from service” for  purposes of Code Section 409A.  2.17. Weekly Compensation means the Participant’s Salary divided by fifty-two (52).  2.18. Years of Service means a Participant’s completed and partial calendar years of  continuous service for the Company and its Affiliates (including with any predecessor thereof).   Years of Service shall include time on a leave of absence to the extent required by law.  Years of  Service shall not include any accrued but unused paid time off benefits as of the Participant’s  Termination Date.  Service as a temporary or temporary/part-time employee will not be considered  a termination or interruption of employment, but will not count toward Years of Service.  Years  of Service will terminate on the Participant’s Termination Date.  An employee who terminates  employment and is rehired by the Company or an Affiliate will not receive credit for any prior  Years of Service.  Article 3. Eligibility and Participation.    3.1. Eligibility.  Persons eligible to participate in the Plan shall be limited to Eligible  Employees whose positions are eliminated or consolidated with another position due to reductions  in force or as a result of the Company’s restructuring and such position elimination also constitutes  a “separation from service” for purposes of Code Section 409A.  No such person is eligible unless  

 

   4   272779514v.5  he or she has received a written notice from the Company informing him/her that he/she qualifies  for benefits under the Plan.  Furthermore, to become a Participant, an Eligible Employee must sign  and not revoke an effective Release, and such Release shall no longer be subject to revocation, in  each case within sixty (60) days of the Termination Date.   3.2. Commencement of Participation.  An Eligible Employee shall commence  participation in the Plan, as a Participant, upon the later of the Eligible Employee’s Termination  Date or the date the Eligible Employee’s timely signed Release becomes irrevocable.    3.3. Cessation of Participation.  Participation in the Plan shall end on the earliest of:  (a) when the Participant’s Period of Severance ends,  (b) when the Participant has received full payment of the Participant’s benefit  under the Plan, or  (c) the Participant is rehired by the Company or Affiliate (whether directly,  indirectly or through an employment agency or contractor).    3.4. Ineligibility  (a) Comparable Position.  The Company may offer an employee a comparable  position, may require an employee to apply for a comparable position with  the Company or any Affiliate, or may reassign an employee to a new  position or a reclassification of the employee’s current position; provided  that all such positions shall be located within reasonably the same  geographic area where the employee is located on the Termination Date.   The Administrator shall determine, in its sole and reasonable discretion,  what constitutes a comparable position under this Section 3.4(a). The failure  of an employee to accept the position, or apply for the position when  required by the Company will render the employee ineligible for benefits  under the Plan.    (b) Other Circumstances.  An employee shall also be ineligible for benefits  under the Plan if the employee voluntarily terminates employment or retires  prior to the position elimination effective date; is receiving long-term  disability benefits under a Company sponsored long-term disability plan; is  a rehired Company retiree; is entitled to any other compensation or benefit  which is determined, in the Administrator sole discretion, to supersede the  severance benefits offered under the Plan; is discharged under  circumstances that the Administrator determines, in its sole discretion, to  involve unacceptable performance or failure to perform, misconduct,  negligence, dishonesty, violation of Company policy, or the inability (with  or without reasonable accommodation) to perform the essential functions of  the employee’s position; or is offered employment by a successor employer  or by a purchaser in the event of a sale of the Company or a spin-off or sale  of a subsidiary, business unit or business assets of the Company or its  subsidiaries, where employment terms and conditions, in the aggregate, are  

 

   5   272779514v.5  of a comparable or more favorable nature, whether or not the employee  accepts or declines the offer of employment.  For the avoidance of doubt,  employees in positions that are transitioned to a third-party administrator,  outsourcing partner, or strategic business partner, where employment terms  and conditions, in the aggregate, are of a comparable or more favorable  nature, and where employment is substantially continuous and  uninterrupted from the Company to a third-party administrator, outsourcing  partner, or strategic business party are not eligible for benefits under the  Plan.  3.5. No Duplication of Severance Benefits; Reduction of Other Benefits.  For the  avoidance of doubt, if a Participant is eligible for severance benefits under the Plan, such benefits  shall be in lieu of all other severance benefits for which the Participant may be eligible under any  other Company-related severance plans, programs, or other agreements.  Any benefits provided  under the Plan will, to the extent permitted by law, be reduced by the value of any severance benefit  required to be paid to the Participant under federal, state or local statute, ordinance or regulation,  including any payments or extended periods of employment required to comply with any law  governing plant closings, layoffs or similar events.  If benefits are paid under the Plan, and,  subsequent to such payment, an amount is determined to be payable to the Participant which would  under the terms of this section reduce the benefit payable under the Plan, the Company shall be  entitled to recover from the Participant the overpayment made under the Plan and shall, to the  extent permitted by law, be entitled to offset such overpayment against any amount owed to the  Participant (other than any amount that constitutes “deferred compensation” for purposes of Code  Section 409A).  Article 4. Severance Benefits.    4.1. Lump Sum Payment.  The Participant shall receive a lump sum payment, paid in  the standard bi-weekly payroll cycle for the Participant (determined as of the Participant’s  Termination Date), promptly after the Release is executed and no longer subject to revocation.   Notwithstanding the foregoing, in the event the period during which the Participant may adopt the  Release and its applicable revocation period cross calendar years, such lump sum payment under  the Plan shall be made in the succeeding calendar year.  The lump sum payment shall equal the  Participant’s Weekly Compensation multiplied by the Participant’s number of Severance Weeks.    4.2. Death Benefit.  An Eligible Employee who is otherwise eligible under Section 3.1  will cease to be eligible to receive severance benefits on his or her death, unless the death occurs  after the date the Release is executed and not revoked, in which case the remaining benefits, if any,  will be paid to the Eligible Employee in accordance with the Company’s regular payroll practices  or to the Eligible Employee’s estate, as applicable.    4.3. Outplacement Benefits.  The Company shall provide Participants who are entitled  to severance benefits with outplacement services through the Company’s contracted provider or  one selected by the Participant and approved in advance by the Company.    4.4. Failure to Sign (or Revocation of) Release.  An Eligible Employee who, for  whatever reason, either fails to sign the Release form, or after signing the Release, revokes the  

 

   6   272779514v.5  Release within the time period prescribed by law, in each case such that the Release is not effective  and irrevocable within sixty (60) days of the Termination Date, shall not be eligible for benefits  under the Plan.    4.5. Specified Employees.  Notwithstanding any other payment schedule provided  herein to the contrary, if the Participant is deemed on the date of termination to be a “specified  employee” within the meaning of that term under Code Section 409A(a)(2)(B), then each of the  following shall apply:  4.5.1 With regard to any payment that is considered deferred compensation under  Code Section 409A payable on account of a “separation from service,” such payment shall be  made on the date which is the earlier of (A) the expiration of the six (6)-month period measured  from the date of such “separation from service” of the Participant, and (B) the date of the  Participant’s death (the “Delay Period”) to the extent required under Code Section 409A.  Upon  the expiration of the Delay Period, all payments delayed pursuant to this Section 4.5.1 shall be  paid to the Participant in a lump sum.    4.5.2 To the extent that any benefit to be provided during the Delay Period is  considered deferred compensation under Code Section 409A provided on account of a “separation  from service,” and such benefits are not otherwise exempt from Code Section 409A, the Participant  shall pay the cost of such benefits during the Delay Period, and the Company shall reimburse the  Participant, to the extent that such costs would otherwise have been paid by the Company or to the  extent that such benefits would otherwise have been provided by the Company at no cost to the  Participant, the Company’s share of the cost of such benefits upon expiration of the Delay Period,  and any remaining benefits shall be reimbursed or provided by the Company in accordance with  the procedures specified herein.    Article 5. Continuation of Certain Welfare Benefits.    In the event that the Participant is, and remains, eligible for COBRA continuation coverage and  elects to receive such coverage, the Company shall pay for all or a portion of his or her cost to  participate in COBRA health and/or dental continuation coverage for the Participant’s Period of  Severance following the Participant’s Termination Date, such that the Participant maintains the  same coverage level and cost, on an after tax basis, as in effect immediately prior to the  Participant’s Termination Date.  Notwithstanding the above, these health and/or dental benefits shall be discontinued prior to the  end of the stated continuation period in the event the Participant receives substantially similar  benefits from a subsequent employer, as determined solely by the Administrator in good faith.  For  purposes of enforcing this offset provision, the Participant shall be deemed to have a duty to keep  the Company informed as to the terms and conditions of any subsequent employment and the  corresponding benefits earned from such employment, and shall provide, or cause to provide, to  the Company in writing correct, complete, and timely information concerning the same.  Article 6. Taxes.    The Company shall withhold from the Participant’s severance benefit payment an amount  sufficient to satisfy any federal, state, and/or local tax withholding requirements.  The intent of the  

 

   7   272779514v.5  parties is that payments and benefits under the Plan be exempt from Code Section 409A and the  regulations and guidance promulgated thereunder and, accordingly, to the maximum extent  permitted, in the event Code Section 409A applies to the Plan, the Plan shall be interpreted to be  in compliance therewith.  In no event whatsoever shall the Company be liable for any additional  tax, interest or penalty that may be imposed on a Participant by Code Section 409A or damages  for failing to comply with Code Section 409A.  For purposes of Code Section 409A, the  Participant’s right to receive any installment payment pursuant to the Plan shall be treated as a  right to receive a series of separate and distinct payments.  Notwithstanding any other provision  of the Plan to the contrary, in no event shall any payment under the Plan that constitutes “deferred  compensation” for purposes of Code Section 409A be subject to offset, counterclaim or  recoupment by any other amount payable to the Participant unless otherwise permitted by Code  Section 409A.  Article 7. Amendment and Termination.    The Company reserves the rights to amend, modify, or terminate the Plan at any time, or for  whatever reason, without advance notice.  In the event the Company exercises its right to terminate  the Plan, however, the Company shall use commercially reasonable efforts to give notice of its  intent to terminate to all Eligible Employees.  No amendment or termination, however, shall in  any manner adversely affect the severance benefits of any Participant who has become eligible for  benefits under Article 3.    Article 8. Administration and Claims.    8.1. The Administrator.  The Plan shall be administered by the Administrator.  The  Administrator may delegate any or all of its administrative responsibilities to employees of the  Company or to third parties.    8.2. Authority of the Administrator.  The Administrator shall have the full power and  discretion to determine the terms and conditions of each employee’s participation, to construe and  interpret the Plan and any agreement or instrument entered into under the Plan, and to establish,  amend, or waive procedures for the Plan’s administration.  Further, the Administrator shall have  full power and discretion to make any other determination that may be necessary or advisable for  the Plan’s administration.  The Administrator shall have the authority and responsibilities to assist  with the administration of the Plan as may be designated by the Company.    8.3. Decisions Binding.  All determinations and decisions made by the Administrator  and all related orders or resolutions of the Administrator shall be final, conclusive, and binding on  all persons, including the Company, its employees, the Participants, and their estates and  beneficiaries.    8.4. Claims Procedure.  Unless modified by the Administrator, the claims procedure  set forth in this Section 8.4 shall be the exclusive procedure for the disposition of claims for  benefits arising under the Plan.    8.4.1 Original Claim.  Any employee or former employee, who believes they are  entitled to benefits under the Plan that have not been provided to such employee or former  employee, may, if the person so desires, file with the Administrator a written claim for benefits  

 

   8   272779514v.5  under the Plan.  Within ninety (90) days after the filing of the claim, the Administrator shall notify  the claimant in writing whether the claim is upheld or denied in whole or in part or shall furnish  the claimant a written notice describing specific special circumstances requiring a specified  amount of additional time (but not more than one hundred eighty (180) days from the date the  claim was filed) to reach a decision on the claim.  If the claim is denied in whole or in part, the  Administrator shall state in writing:  (a) the specific reason or reasons for the denial;  (b) the specific references to the pertinent provision of the Plan document on  which the denial is based;  (c) a description of any additional material or information necessary for the  claimant to perfect the claim and an explanation of why the material or  information is necessary; and  (d) an explanation of the claims review procedure set forth in Section 8.4.2,  including a statement of the claimant’s right to bring a civil action under  ERISA Section 502(a) following a denial of the claimant’s claim for  benefits on review.  8.4.2 Claims Review Procedure.  Within sixty (60) days after receipt of notice  that the claim has been denied in whole or in part, the claimant may file with the Administrator a  written request for a review and may, in conjunction with the filing, submit written issues and  comments.  Within sixty (60) days after the filing of a request for review, the Administrator may  furnish the claimant a written notice describing specific special circumstances requiring a specified  amount of additional time (but not more than one hundred twenty (120) days from the date the  request for review was filed) to reach a decision on the request for review.  If the claim on review  is denied in whole or in part, the Administrator shall state in writing:  (a) the specific reason or reasons for the denial;  (b) the specific references to the pertinent provision of the Plan document on  which the denial is based;  (c) a statement that the claimant is entitled to receive, upon request and free of  charge, reasonable access to, and copies of, all documents, records, and  other information relevant to the claimant’s claim for benefits; and  (d) a statement of the claimant’s right to bring a civil action under ERISA  Section 502(a) following a denial of the claimant’s claim for benefits on  review.  8.4.3 General Rules  (a) No inquiry or question shall be deemed to be a claim or a request for a  review of a denied claim unless made in accordance with the claims  procedure.  The Administrator may require that any claim for benefits and  

 

   9   272779514v.5  any request for a review of a denied claim be filed on forms to be furnished  by the Administrator upon request.    (b) All decisions on claims and on requests for a review of denied claims shall  be made by the Administrator.    (c) The Administrator may, in its discretion, hold one or more hearings on a  claim or request for a review of a denied claim.    (d) A claimant may be represented by a lawyer or other representative (at the  claimant’s own expense), but the Administrator reserves the right to require  the claimant to furnish written authorization.  A claimant’s representative  shall be entitled to copies of all notices given to the claimant.    (e) The decision of the Administrator on a claim and on a request for a review  of a denied claim shall be provided to the claimant in writing.  If a claimant  does not receive a decision or notice within the time specified, the claim or  request for a review of a denied claim shall be deemed to have been denied.    (f) Prior to filing a claim or a request for a review of a denied claim, the  claimant or the claimant’s representative shall have a reasonable  opportunity to review a copy of the Plan document and all other pertinent  documents in the possession of the Administrator.    Article 9. General Provisions.    9.1. Unfunded Welfare Plan.  The Plan is intended to be an unfunded welfare plan  maintained to provide severance pay within the meaning of Title I of ERISA.  Participants and  their heirs, successors, and assigns shall have no secured legal or equitable rights, interest, or  claims in any property or assets of the Company.    9.2. No Assignment.  Participants’ rights to benefits provided under the Plan may not  be sold, transferred, assigned, or otherwise alienated or mortgaged.  In no event shall the Company  make any payment under the Plan to any assignee or creditor of a Participant.    9.3. Successors.  All obligations of the Company under the Plan shall be binding upon  any successor to the Company, whether the existence of the successor is the result of a direct or  indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or  assets of the Company.    9.4. No Rights as Employee.  Nothing in the Plan shall interfere with or limit in any  way the right of the Company to terminate any Participant’s employment at any time or confer  upon any Participant a right to continue in the employ of the Company.    9.5. 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 the  Plan shall be construed and enforced as if the illegal or invalid provision had not been included.    

 

   10   272779514v.5  9.6. Applicable Law.  To the extent not preempted by federal law, the Plan shall be  governed by and construed in accordance with the laws of the state of New Jersey without giving  effect to principles of conflicts of laws.    9.7. Entire Agreement.  The Plan constitutes the entire understanding and agreement  with respect to the subject matter contained herein, and there are no agreements, understandings,  restrictions, representations or warranties among any Participant and the Company other than those  as set forth or provided for herein.clearwayllcex10610-q2022

      274448334v.4        Clearway Energy, Inc.      Key Management Change-in-Control and General Severance Plan       (Amended and Restated as of January 1, 2022)     

 

 i       274448334v.4  Table of Contents            Article 1. Establishment and Term of the Plan ....................................................................1  Article 2. Definitions ...............................................................................................................2  Article 3. Severance Benefits .................................................................................................7  Article 4. Ineligibility ............................................................................................................12  Article 5. Restrictive Covenants ..........................................................................................12  Article 6. Certain Change in Control Payments ................................................................15  Article 7. Legal Fees and Notice ..........................................................................................16  Article 8. Successors and Assignment .................................................................................16  Article 9. Miscellaneous........................................................................................................17                                       

 

   1     274448334v.4  Clearway Energy, Inc.    Key Management Change-in-Control and General Severance Plan  Article 1. Establishment and Term of the Plan   Establishment of the Plan  Clearway Energy, Inc. (hereinafter referred to as the “Company”) originally adopted this  plan known as the “Key Management Change-in-Control and General Severance Plan” (the  “Plan”) effective January 1, 2017.  The Plan was amended and restated by the Company as of  January 1, 2018, again as of January 1, 2019, February 18, 2020 and January 1, 2021, and is hereby  further amended and restated as of January 1, 2022.  The Plan provides Severance Benefits to Vice  Presidents and Senior Directors of the Company (each an “Executive” and collectively the  “Executives”) upon certain terminations of employment from the Company.     The Board of Directors of the Company (the “Board”) considers the establishment and  maintenance of a sound and vital management to be essential to protecting and enhancing the best  interests of the Company and its stockholders.  In this connection, the Board recognizes that, as is  the case with many publicly held corporations, the possibility of a Change in Control (as defined  below) may arise and that such possibility, and the uncertainty and questions which it may raise  among management, may result in the departure or distraction of management personnel to the  detriment of the Company and its stockholders.  Accordingly, the Board has determined that appropriate steps should be taken to reinforce  and encourage the continued attention and dedication of members of the Company’s management  to their assigned duties without distraction in circumstances arising from the possibility of a  Change in Control of the Company.   Initial Term  This Plan commenced on January 1, 2017 (the “Effective Date”) and continued in effect  for a period of three (3) years (the “Initial Term”).   Successive Periods  Following completion of the Initial Term, the term of this Plan shall automatically be  extended for one (1) additional year at the end of the Initial Term, and then again after each  successive one (1) year period thereafter (each such one (1) year period following the Initial Term  is referred to as a “Successive Period”).  However, the Committee (as defined below) may  terminate this Plan at the end of the Initial Term, or at the end of any Successive Period thereafter,  by causing the Company to provide the Executives written notice of intent to terminate the Plan,  delivered at least six (6) months prior to the end of such Initial Term or Successive Period.  If such  notice is properly delivered by the Company, this Plan, along with all corresponding rights, duties,  and covenants, shall automatically expire at the end of the Initial Term or Successive Period then  in progress.  

 

   2   274448334v.4   Change-in-Control Renewal  Notwithstanding the provisions of Section 1.3 above, in the event that a Change in Control  of the Company occurs during the Initial Term or any Successive Period, upon the effective date  of such Change in Control, the term of this Plan shall automatically and irrevocably be renewed  for a period of two (2) years from the effective date of such Change in Control.  Further, this Plan  shall be assigned to the successor in such Change in Control, as further provided in Article 8 herein.   This Plan shall thereafter automatically terminate following such two (2) year Change-in-Control  renewal period; provided that such termination shall not affect or diminish the rights of the  Executives who become entitled to benefits or payments under this Plan.  Article 2. Definitions  Whenever used in this Plan, the following terms shall have the meanings set forth below  and, when the meaning is intended, the initial letter of the word is capitalized.  (a) “Accountants” shall have the meaning set forth in Article 6.  (b) “Affiliate” means (i) any subsidiary corporation of the Company (or its successors),  (ii) any corporation, trade or business (including, without limitation, a partnership  or limited liability company) which is directly or indirectly controlled fifty percent  (50%) or more (whether by ownership of stock, assets or an equivalent ownership  interest or voting interest) by the Company (or its successors), or (iii) any other  entity (including its successors) which is designated as an Affiliate by the Board.   (c) “Base Salary” means the greater of the Executive’s annual rate of salary, whether  or not deferred, at: (i) the Effective Date of Termination or (ii) at the date of the  Change in Control.    (d) “Beneficiary” means the persons or entities designated or deemed designated by  the Executive pursuant to Section 9.6 herein.  (e) “Board” shall have the meaning set forth in Section 1.1.  (f) “Cause” means, as to any Executive (i) “Cause”, as defined in any employment,  consulting or similar agreement between the Executive and the Company or an  Affiliate in effect at the time of the Executive’s separation, or (ii) in the absence of  any such employment, consulting or similar agreement (or the absence of any  definition of “Cause” contained therein), the occurrence of any of the following:  (i) the Executive’s willful misconduct or gross negligence in the performance  of the Executive’s duties to the Company or an Affiliate that has or could  reasonably be expected to have an adverse effect on the Company or an  Affiliate;  (ii) the Executive’s willful failure to perform the Executive’s duties to the  Company or an Affiliate (other than as a result of death or a physical or  mental incapacity);  

 

   3   274448334v.4  (iii) indictment for, conviction of, or pleading of guilty or nolo contendere to, a  felony or any crime involving moral turpitude;  (iv) the Executive’s performance of any material act of theft, fraud, malfeasance  or dishonesty in connection with the performance of the Executive’s duties  to the Company or an Affiliate;   (v) breach of any written agreement between the Executive and the Company  or an Affiliate, or a violation of the Company’s code of conduct or other  written policy; or  (vi) any other material breach of Article 5 of this Plan.  For purposes of this Plan, there shall be no termination for Cause pursuant  to subsections (i) through (vi) above, unless a written notice, containing a  detailed description of the grounds constituting Cause hereunder, is  delivered to the Executive stating the basis for the termination.  Upon  receipt of such notice, the Executive shall be given thirty (30) days to fully  cure and remedy the neglect or conduct that is the basis of such claim;  provided that the Executive’s right to cure shall not apply if there are  egregious, habitual or repeated breaches by the Executive or if the condition  or act is not curable.   (g) “Change-in-Control Severance Benefits” means the Severance Benefits  described in Section 3.2.  (h) “Change in Control” means the first to occur of any of the following events:    (i) Any “person” (as that term is used in Sections 13 and 14(d)(2) of the  Securities Exchange Act of 1934 (“Exchange Act”)) other than Clearway  Energy Group LLC or one of its subsidiaries or affiliates (A) becomes the  “beneficial owner” (as that term is used in Section 13(d) of the Exchange  Act), directly or indirectly, of fifty percent (50%) or more of either (x) the  Company’s then-outstanding common stock (“Outstanding Common  Stock”), or (y) the Company’s then-outstanding capital stock entitled to  vote in the election of directors (“Outstanding Voting Stock”), excluding  any “person” who becomes a “beneficial owner” in connection with a  Business Combination (as defined in paragraph (iii) below) which does not  constitute a Change in Control under said paragraph (iii); or (B) obtains the  power to, directly or indirectly, vote or cause to be voted fifty percent (50%)  or more of the Company’s capital stock entitled to vote in the election of  directors, including by contract or through proxy; or  (ii) Persons who on the Effective Date constitute the Board (the “Incumbent  Directors”) cease for any reason, including without limitation, as a result of  a tender offer, proxy contest, merger, or similar transaction, to constitute at  least a majority thereof; provided that any person becoming a director of the  Company subsequent to the Effective Date shall be considered an  

 

   4   274448334v.4  Incumbent Director if such person’s election or nomination for election was  approved by a vote of at least a majority of the Incumbent Directors; but  provided further, that any such person whose initial assumption of office is  in connection with an actual or threatened election contest relating to the  election of members of the Board or other actual or threatened solicitation  of proxies or consents by or on behalf of a “person” (as defined in Sections  13(d) and 14(d) of the Exchange Act) other than the Board, including by  reason of agreement intended to avoid or settle any such actual or threatened  contest or solicitation, shall not be considered an Incumbent Director; or  (iii) Consummation of a reorganization, merger, consolidation, or sale or other  disposition of all or substantially all of the assets of the Company (a  “Business Combination”), in each case, unless, following such Business  Combination, all or substantially all of the individuals and entities who were  the beneficial owners, respectively, of Outstanding Common Stock and the  combined voting power of Outstanding Voting Stock immediately prior to  such Business Combination beneficially own, directly or indirectly, more  than fifty percent (50%) of the combined voting power of the then  outstanding shares of common stock and voting securities entitled to vote  generally in the election of directors, as the case may be, of the company  resulting from such Business Combination (including, without limitation, a  company which, as a result of such transaction, owns the Company or all or  substantially all of the Company’s assets either directly or through one or  more subsidiaries) in the same proportions as their ownership, immediately  prior to such Business Combination, of the Outstanding Common Stock and  Outstanding Voting Stock of the Company; or  (iv) The stockholders of the Company approve any plan or proposal for the  liquidation or dissolution of the Company.  (i) “Code” means the Internal Revenue Code of 1986, as amended, and the treasury  regulations and other official guidance promulgated thereunder.  (j) “Committee” means the Compensation Committee of the Board or any other  committee appointed by the Board to perform the functions of the Compensation  Committee.  (k) “Company” means Clearway Energy, Inc., a Delaware corporation, or any  successor thereto as provided in Section 8.1 herein.  (l) “Confidential Information” shall have the meaning set forth in Section 5.1.  (m) “Delay Period” shall have the meaning set forth in Section 3.4(b).  (n) “Disability” means a disability that would entitle an Executive to payment of  monthly disability payments under any Company long-term disability plan.  

 

   5   274448334v.4  (o) “Effective Date” means the commencement date of this Plan as specified in Section  1.2 of this Plan.  (p) “Effective Date of Termination” means the date on which a Qualifying  Termination occurs, which triggers the payment of Severance Benefits hereunder.  (q) “Executive” shall have the meaning set forth in Section 1.1.   (r) “General Severance Benefits” means the Severance Benefits described in  Section 3.3.  (s) “Good Reason” means without the Executive’s express written consent the  occurrence of any one or more of the following:  (i) The Company reduces the amount of the Executive’s then current Base  Salary or target total compensation by more than fifteen percent (15%),  excluding across-the-board reductions to the Executive’s then current Base  Salary or annual bonus target pursuant to a compensation reduction program  that applies to substantially all similarly situated executives of the  Company; provided that, if any reduction of Base Salary or target total  compensation occurs during the thirty (30)-month period described in  Article 2(y)(i) (without regard to whether the reduction applies on an across- the-board basis as described above), then such reduction shall be deemed to  constitute Good Reason at the time of the Change in Control or thereafter,  as applicable, for purposes of the Plan; or  (ii) A material reduction in the Executive’s benefits under, or relative level of  participation in, the Company’s employee benefit or retirement plans,  policies, practices, or arrangements in which the Executive participates as  of the Effective Date of this Plan, or as of the commencement of Executive’s  participation in this Plan, as applicable; or  (iii) A material diminution in the Executive’s title, authority, duties, or  responsibilities or the assignment of duties to the Executive which are  materially inconsistent with his or her position; or  (iv) Any relocation of the Executive’s principal place of employment to a  location that is more than fifty (50) miles from the Executive’s place of  employment as of the Effective Date of this Plan, or as of the  commencement of the Executive’s participation in this Plan, as applicable,  but only if such new location is not closer to the Executive’s primary  residence; or  (v) The failure of the Company to obtain in writing the obligation to perform  or be bound by the terms of this Plan by any successor to the Company or a  purchaser of all or substantially all of the assets of the Company within  fifteen (15) days after a merger, consolidation, sale, or similar transaction.  

 

   6   274448334v.4  For purposes of this Plan, the Executive is not entitled to assert that his or her  termination is for Good Reason unless the Executive gives the Board written notice  of the event or events which are the basis for such claim within ninety (90) days  after the event or events occur, describing such claim in reasonably sufficient detail  to allow the Board to address the event or events and a period of not less than thirty  (30) days after to cure or fully remedy the alleged condition.  (t) “Initial Term” shall have the meaning set forth in Section 1.2.  (u) “Nonsolicitation Period” shall have the meaning set forth in Section 5.3.  (v) “Notice of Termination” means a written notice which shall indicate the specific  termination provision in this Plan relied upon, and shall set forth in reasonable  detail the facts and circumstances claimed to provide a basis for termination of the  Executive’s employment under the provision so indicated.  (w) “Parachute Payment Ratio” shall have the meaning set forth in Article 6.  (x) “Plan” shall have the meaning set forth in Section 1.1.    (y) “Qualifying Termination” means:  (i) If such event occurs within the time period that is six (6) months  immediately prior to, or two (2) years immediately following a Change in  Control:  (A) An involuntary termination of the Executive’s employment by the  Company for reasons other than Cause, death, or Disability pursuant  to a Notice of Termination delivered to the Executive by the  Company; or  (B) A voluntary termination by the Executive for Good Reason pursuant  to a Notice of Termination delivered to the Company by the  Executive; or  (ii) If such event occurs at any other time:  (A) An involuntary termination of the Executive’s employment by the  Company due to reductions in force or other factors as a result of a  Company restructuring.   (z) “Release Effective Date” shall have the meaning set forth in Section 3.1(d).  (aa) “Senior Director” shall include those employees of the Company with the Job  Level of Senior Director immediately prior to the Change in Control, or such other  employee who is designated as a Senior Director in the Company’s human  resources information system immediately prior to the Change in Control.   

 

   7   274448334v.4  (bb) “Severance Benefits” means the payment of Change-in-Control or General (as  appropriate) Severance compensation as provided in Article 3 herein.  (cc) “Severance Weeks” means the greater of (i) twenty-four (24) or (ii) the product of  one and one half (1.5) and the number of the Executive’s Years of Service; provided  that the maximum number of Severance Weeks shall be fifty-two (52).   (dd) “Specified Employee” means any Executive described in Code Section  409A(a)(2)(B)(i).  (ee) “Successive Period” shall have the meaning set forth in Section 1.3.  (ff) “Third Party Information” shall have the meaning set forth in Section 5.1.   (gg) “Vice President” shall include those employees of the Company with the Job Level  of VP immediately prior to the Change in Control, or such other employee who is  designated as a VP in the Company’s human resources information system  immediately prior to the Change in Control.   (hh) “Weekly Compensation” means the Executive’s Base Salary divided by fifty-two  (52).  (ii) “Total Payments” shall have the meaning set forth in Article 6.  (jj) “Work Product” shall have the meaning set forth in Section 5.2.  (kk) “Year of Service” means an Executive’s completed and partial calendar years of  continuous service for the Company and its Affiliates (including with any  predecessor thereof).  Years of Service shall include time on a leave of absence to  the extent required by law.  Years of Service shall not include any accrued but  unused paid time off benefits as of the Executive’s Qualifying Termination.   Service as a temporary or temporary/part-time employee will not be considered a  termination or interruption of employment, but will not count toward Years of  Service.  Years of Service will terminate on the Executive’s Qualifying  Termination.  An Executive who terminates employment and is rehired by the  Company or an Affiliate will not receive credit for any prior Years of Service.  Article 3. Severance Benefits   Right to Severance Benefits  (a) Change-in-Control Severance Benefits.  The Executive shall be entitled to  receive from the Company Change-in-Control Severance Benefits, as described in  Section 3.2 herein, if a Qualifying Termination of the Executive’s employment has  occurred within six (6) months immediately prior to, or two (2) years immediately  following, a Change in Control of the Company.  

 

   8   274448334v.4  (b) General Severance Benefits.  The Executive shall be entitled to receive from the  Company General Severance Benefits, as described in Section 3.3 herein, if a  Qualifying Termination of the Executive’s employment has occurred other than  during the six (6) months immediately prior to, or two (2) years immediately  following, a Change in Control.  (c) No Severance Benefits.  The Executive shall not be entitled to receive Severance  Benefits if the Executive’s employment with the Company ends for reasons other  than a Qualifying Termination.  (d) General Release and Acknowledgement of Restrictive Covenants.  As a  condition to receiving Severance Benefits under either Section 3.2 or 3.3 herein,  the Executive shall be obligated to execute a general waiver and release of claims  in favor of the Company, its current and former affiliates and stockholders, and the  current and former directors, officers, employees, and agents of the Company in a  form drafted by and acceptable to the Committee, and any revocation period for  such release must have expired, in each case within sixty (60) days of the date of  termination.  The date upon which the executed release is no longer subject to  revocation shall be referred to herein as the “Release Effective Date”.  The  Executive must also execute a notice acknowledging the restrictive covenants in  Article 5 within sixty (60) days of the date of termination.  Any payments under  Section 3.2 or 3.3 shall commence only after execution of the release and  acknowledgement, and in the manner provided in Section 3.4.  Notwithstanding the  foregoing, in any instance in which the period in which the Executive could adopt  a release (along with its accompanying revocation period) crosses calendar years,  no payments shall be made until the succeeding calendar year.  (e) No Duplication of Severance Benefits; Reduction of Other Benefits.  If the  Executive becomes entitled to Change-in-Control Severance Benefits, the  Severance Benefits provided for under Section 3.2 hereunder shall be in lieu of all  other Severance Benefits provided to the Executive under the provisions of this  Plan and any other Company-related severance plans, programs, or agreements  including, but not limited to, the Severance Benefits under Section 3.3 herein.   Likewise, if the Executive becomes entitled to General Severance Benefits, the  Severance Benefits provided under Section 3.3 hereunder shall be in lieu of all other  Severance Benefits provided to the Executive under the provisions of this Plan and  any other Company-related severance plans, programs, or other agreements  including, but not limited to, the Severance Benefits under Section 3.2 herein.  Any  benefits provided under this Plan will, to the extent permitted by law, be reduced  by the value of any severance benefit required to be paid to the Executive under  federal, state or local stature, ordinance or regulation, including any payments or  extended periods of employment required to comply with any law governing plant  closings, layoffs or similar events.  If benefits are paid under this Plan, and,  subsequent to such payment, an amount is determined to be payable to the  Executive which would under the terms of this Section 3.1(e) reduce the benefit  payable under the Plan, the Company shall be entitled to recover from the Executive  the overpayment made under this Plan and shall, to the extent permitted by law, be  

 

   9   274448334v.4  entitled to offset such overpayment against any amount owed to the Executive  (other than any amount that constitutes “deferred compensation” for purposes of  Code Section 409A).   Description of Change-in-Control Severance Benefits  In the event the Executive becomes entitled to receive Change-in-Control Severance  Benefits, as provided in Section 3.1(a) herein, the Company shall provide the Executive with the  following:  (a) A lump-sum amount, paid upon the date that is sixty (60) calendar days following  the Effective Date of Termination, equal to the Executive’s unpaid Base Salary,  accrued vacation pay, unreimbursed business expenses, and all other items earned  by and owed to the Executive through and including the Effective Date of  Termination; provided that to the extent the payment of any amounts pursuant to  this Section 3.2(a) does not constitute “deferred compensation” for purposes of  Code Section 409A, such amounts shall be paid upon the Release Effective Date.   Notwithstanding the foregoing, in any instance in which the period in which the  Executive could adopt a release (along with its accompanying revocation period)  crosses calendar years, no payments shall be made until the succeeding calendar  year.  (b) A lump-sum amount, paid upon the date that is sixty (60) calendar days following  the Effective Date of Termination, equal to: (i) one and one-half (1.5) for VPs, (ii)  one (1) for Senior Directors times the sum of the following: (A) the Executive’s  Base Salary and (B) the Executive’s annual target bonus opportunity in the year of  termination; provided that to the extent the payment of any amounts pursuant to  this Section 3.2(b) does not constitute “deferred compensation” for purposes of  Code Section 409A, such amounts shall be paid upon the Release Effective Date.   Notwithstanding the foregoing, in any instance in which the period in which the  Executive could adopt a release (along with its accompanying revocation period)  crosses calendar years, no payments shall be made until the succeeding calendar  year.  (c) A lump-sum amount, paid upon the date that is sixty (60) calendar days following  the Effective Date of Termination, equal to the Executive’s then current target  bonus opportunity established under the bonus plan in which the Executive is then  participating, for the plan year in which a Qualifying Termination occurs, adjusted  on a pro rata basis based on the number of days the Executive was actually  employed during the bonus plan year in which the Qualifying Termination occurs;  provided that to the extent the payment of any amounts pursuant to this Section  3.2(c) does not constitute “deferred compensation” for purposes of Code Section  409A, such amounts shall be paid upon the Release Effective Date.   Notwithstanding the foregoing, in any instance in which the period in which the  Executive could adopt a release (along with its accompanying revocation period)  crosses calendar years, no payments shall be made until the succeeding calendar  year.  

 

   10   274448334v.4  (d) Payment of all or a portion of the Executive’s cost to participate in COBRA health  and/or dental continuation coverage for a period equal to (i) eighteen (18) months  for VPs and (ii) twelve (12) months for Senior Directors, in each case following the  Executive’s Effective Date of Termination, such that the Executive maintains the  same coverage level and cost, on an after tax basis, as in effect immediately prior  to the Executive’s Effective Date of Termination.  Notwithstanding the above, these health and/or dental benefits shall be  discontinued prior to the end of the stated continuation period in the event the  Executive is eligible to receive substantially similar benefits from a subsequent  employer, as determined solely by the Committee in good faith.  For purposes of  enforcing this offset provision, the Executive shall be deemed to have a duty to  keep the Committee informed as to the terms and conditions of any subsequent  employment and the corresponding benefits earned from such employment, and  shall provide, or cause to provide, to the Committee in writing correct, complete,  and timely information concerning the same.    (e) Treatment of outstanding long-term incentives shall be in accordance with the  governing plan document and award agreements, if any.   Description of General Severance Benefits  In the event the Executive becomes entitled to receive General Severance Benefits as  provided in Section 3.1(b) herein, the Company shall provide the Executive with the following:  (a) A lump-sum amount equal to the Executive’s unpaid Base Salary, accrued vacation  pay, unreimbursed business expenses, and all other items earned by and owed to  the Executive through and including the Effective Date of Termination; provided  that to the extent the payment of any amounts pursuant to this Section 3.3(a) does  not constitute “deferred compensation” for purposes of Code Section 409A, such  amounts shall be paid under the Company’s policies as if the Executive’s  employment had not terminated, but no later than sixty (60) calendar days following  the Effective Date of Termination, and in any event, as of such earlier time if  required by applicable law.  For the avoidance of doubt, the payment of any  amounts pursuant to this Section 3.3(a) that constitute “deferred compensation” for  purposes of Code Section 409A shall be payable in accordance with the governing  plan, program, policy agreement, or similar arrangement that applies to such  “deferred compensation” amounts.    (b) A lump-sum amount, paid upon the date that is sixty (60) calendar days following  the Effective Date of Termination, equal to the product of (i) the Executive’s  Weekly Compensation and (ii) the Executive’s Severance Weeks; provided that to  the extent the payment of any amounts pursuant to this Section 3.3(b) does not  constitute “deferred compensation” for purposes of Code Section 409A, such  amounts shall be paid upon the Release Effective Date.  Notwithstanding the  foregoing, in any instance in which the period in which the Executive could adopt  

 

   11   274448334v.4  a release (along with its accompanying revocation period) crosses calendar years,  no payments shall be made until the succeeding calendar year.  (c) Payment of all or a portion of the Executive’s cost to participate in COBRA health  and/or dental continuation coverage for a number of weeks equal to the Executive’s  Severance Weeks commencing upon the Executive’s Effective Date of  Termination, such that the Executive maintains the same coverage level and cost,  on an after tax basis, as in effect immediately prior to the Executive’s Effective  Date of Termination.  Notwithstanding the above, these health and/or dental insurance benefits shall be  discontinued prior to the end of the stated continuation period in the event the  Executive is eligible to receive substantially similar benefits from a subsequent  employer, as determined solely by the Committee in good faith.  For purposes of  enforcing this offset provision, the Executive shall be deemed to have a duty to  keep the Committee informed as to the terms and conditions of any subsequent  employment and the corresponding benefits earned from such employment, and  shall provide, or cause to provide, to the Committee in writing correct, complete,  and timely information concerning the same.    (d) Treatment of outstanding long-term incentives shall be in accordance with the  governing plan document and award agreements, if any.   Coordination with Release and Delay Required by Code Section 409A  (a) To the extent any continuing benefit (or reimbursement thereof) to be provided is  not “deferred compensation” for purposes of Code Section 409A, then such benefit  shall commence or be made immediately after the Release Effective Date.  To the  extent any continuing benefit (or reimbursement thereof) to be provided is  “deferred compensation” for purposes of Code Section 409A, then such benefits  shall be reimbursed or commence upon the sixtieth (60) day following the  Executive’s termination of employment.  The delayed benefits shall in any event  expire at the time such benefits would have expired had the benefits commenced  immediately upon the Executive’s termination of employment.  (b) Notwithstanding any other payment schedule provided herein to the contrary, if the  Executive is deemed on the date of termination to be a Specified Employee, then,  once the release and acknowledgement required by Section 3.1(d) is executed and  delivered and no longer subject to revocation, any payment that is considered  deferred compensation under Code Section 409A payable on account of a  “separation from service” shall be made on the date which is the earlier of (A) the  expiration of the six (6)-month period measured from the date of such “separation  from service” of the Executive, and (B) the date of the Executive’s death (the  “Delay Period”) to the extent required under Code Section 409A.  Upon the  expiration of the Delay Period, all payments delayed pursuant to this Section 3.4(b)  (whether they would have otherwise been payable in a single sum or in installments  in the absence of such delay) shall be paid to the Executive in a lump sum, and any  

 

   12   274448334v.4  remaining payments due under this Plan shall be paid or provided in accordance  with the normal payment dates specified for them herein.  Article 4. Ineligibility   Comparable Position  Subject to the provisions of Article(2)(y)(i)(B), the Company may offer, or cause to be  offered, an Executive a comparable position, may require an Executive to apply for a comparable  position with the Company, any Affiliate or Clearway Energy Group LLC, or a successor of the  Company, any Affiliate or Clearway Energy Group LLC, or may promote an Executive to a new  position or undertake a reclassification of an Executive’s current position.  The Committee shall  determine, in its sole and reasonable discretion, what constitutes a comparable position under this  Section 4.1.  The failure of the Executive to accept the position, or apply for the position when  required by the Company will render the Executive ineligible for benefits under this Plan.   Other Circumstances  Unless otherwise determined by the Committee, an Executive shall also be ineligible for  benefits under this Plan if the Executive:  (a) voluntarily terminates employment or retires prior to the Qualifying Termination;   (b) is receiving long-term Disability benefits;   (c) is entitled to any other compensation or benefit which is determined, in the  Committee’s sole discretion, to supersede the Severance Benefits offered under this  Plan;  (d) was discharged for Cause; and   (e) was offered employment by a successor employer or by a purchaser in the event of  a spin-off or sale of a subsidiary, business unit or business assets of the Company  or its subsidiaries, whether or not the Executive accepts or declines the offer of  employment.    Article 5. Restrictive Covenants  In the event the Executive becomes entitled to receive Change-in-Control Severance  Benefits as provided in Section 3.2 herein or General Severance Benefits as provided in Section 3.3  herein, the following shall apply:   Confidential Information  The Executive acknowledges that the information, observations, and data (including trade  secrets) obtained by him or her while employed by the Company concerning the business or affairs  of the Company or any of its affiliates (“Confidential Information”) are the property of the  Company or such affiliate.  Therefore, except in the course of the Executive’s duties to the  

 

   13   274448334v.4  Company or as may be compelled by law or appropriate legal process, the Executive agrees that  he or she shall not disclose to any person or entity or use for his or her own purposes any  Confidential Information or any confidential or proprietary information of other persons or entities  in the possession of the Company and its affiliates (“Third Party Information”), without the prior  written consent of the Board, unless and to the extent that the Confidential Information or Third  Party Information becomes generally known to and available for use by the public other than as a  result of the Executive’s acts or omissions.  Except in the course of the Executive’s duties to the  Company or as may be compelled by law or appropriate legal process, the Executive will not,  during his or her employment with the Company, or permanently thereafter, directly or indirectly  use, divulge, disseminate, disclose, lecture upon, or publish any Confidential Information, without  having first obtained written permission from the Board to do so.  As of the Effective Date of  Termination, the Executive shall deliver to the Company, or at any other time the Company may  reasonably request, all memoranda, notes, plans, records, reports, computer files, disks and tapes,  printouts and software and other documents and data (and copies thereof) embodying or relating  to Third Party Information, Confidential Information, or the business of the Company, or its  affiliates which he or she may then possess or have under his or her control.  In addition, the  Executive is hereby advised that in accordance with the Defend Trade Secrets Act of 2016, an  individual may not be held criminally or civilly liable under any federal or state trade secret law  for the disclosure of a trade secret that (i) is made in confidence to a federal, state, or local  government official, either directly or indirectly, or to an attorney, solely for the purpose of  reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other  document filed in a lawsuit or other proceeding, if such filing is made under seal.   Intellectual Property, Inventions, and Patents  The Executive acknowledges that all discoveries, concepts, ideas, inventions, innovations,  improvements, developments, methods, trade secrets, designs, analyses, drawings, reports, patent  applications, copyrightable work and mask work (whether or not including any Confidential  Information), and all registrations or applications related thereto, all other proprietary information  and all similar or related information (whether or not patentable) which may relate to the  Company’s or any of its affiliates’ actual or anticipated business, research and development, or  existing or future products or services and which are conceived, developed, or made by the  Executive (whether alone or jointly with others) while employed by the Company and its affiliates  (“Work Product”), belong to the Company or such affiliate.  The Executive shall promptly disclose  such Work Product to the Board and, at the Company’s expense, perform all actions reasonably  requested by the Board (whether during or after the Executive’s employment with the Company)  to establish and confirm such ownership (including, without limitation, assignments, consents,  powers of attorney, and other instruments).  The Executive acknowledges that all applicable Work  Product shall be deemed to constitute “works made for hire” under the U.S. Copyright Act of 1976,  as amended.  To the extent any Work Product is not deemed a work made for hire, then the  Executive hereby assigns to the Company or such affiliate all right, title, and interest in and to such  Work Product, including all related intellectual property rights.  The Executive is hereby advised that the above paragraph regarding the Company’s and its  affiliates’ ownership of Work Product does not apply to any invention for which no equipment,  supplies, facilities, or trade secret information of the Company or any affiliate was used and which  was developed entirely on the Executive’s own time, unless: (i) the invention relates to the business  

 

   14   274448334v.4  of the Company or any affiliate or to the Company’s or any affiliate’s actual or demonstrably  anticipated research or development, or (ii) the invention results from any work performed by the  Executive for the Company or any affiliate.    Nonsolicitation  During the Executive’s employment with the Company and for one (1) year thereafter (the  “Nonsolicitation Period”), the Executive shall not directly or indirectly through another person or  entity: (i) induce or attempt to induce any employee of the Company or any of its affiliates to leave  the employ of the Company or such affiliate, or in any way interfere with the relationship between  the Company or any affiliate and any employee thereof; (ii) hire any person who was an employee  of the Company or any affiliate during the last six (6) months of the Executive’s employment with  the Company; or (iii) induce or attempt to induce any customer, supplier, licensee, licensor,  franchisee, or other business relation of the Company or any affiliate to cease doing business with  the Company or such affiliate, or in any way interfere with the relationship between any such  customer, supplier, licensee, or business relation and the Company or any affiliate (including,  without limitation, making any negative or disparaging statements or communications regarding  the Company or its affiliates).   Nondisparagement  During the Nonsolicitation Period, the Executive shall not disparage the Company, its  subsidiaries and parents, and their respective officers, managers and employees, or make any  public statement (whether written or oral) reflecting negatively on the Company, its subsidiaries  and parents, and their respective officers, managers, and employees, including, but not limited to,  any matters relating to the operation or management of the Company, irrespective of the  truthfulness or falsity of such statement, except as may otherwise be required by applicable law or  compelled by process of law.  By way of example and not limitation, the Executive agrees that he  or she will not make any written or oral statements that cast in a negative light the services,  qualifications, business operations or business ethics of the Company or its employees.  During  the Nonsolicitation Period, the Company shall not disparage the Executive, or make any public  statement (whether written or oral) reflecting negatively on the Executive, including, but not  limited to, any matters relating to the operation or management of the Company, irrespective of  the truthfulness or falsity of such statement, except as may otherwise be required by applicable  law or compelled by process of law.  Nothing in this Section 5.4 shall restrict either party’s ability  to: (i) consult with counsel, (ii) make truthful statements under oath or to a government agency or  official, or (iii) take any legal action with respect to his or her employment or termination of  employment with the Company.    Duration, Scope, or Area  If, at the time of enforcement of this Article 5, a court shall hold that the duration, scope,  or area restrictions stated herein are unreasonable under circumstances then existing, the parties  agree that the maximum duration, scope, or area reasonable under such circumstances shall be  substituted for the stated duration, scope, or area and that the court shall be allowed to revise the  restrictions contained herein to cover the maximum period, scope, and area permitted by law.   

 

   15   274448334v.4  Section 5.3 shall not apply to any Executive whose principal work location for the Company at the  time of termination was in the State of California.   Company Enforcement  In the event of a breach or a threatened breach by the Executive of any of the provisions of  this Article 5, the Company would suffer irreparable harm, and in addition and supplementary to  other rights and remedies existing in its favor, the Company shall, in addition to any recovery of  monetary amounts, including any severance amounts provided hereunder, be entitled to specific  performance and/or injunctive or other equitable relief from a court of competent jurisdiction in  order to enforce or prevent any violations of the provisions hereof (without posting a bond or other  security).  Article 6. Certain Change in Control Payments  Notwithstanding any provision of the Plan to the contrary, if any payments or benefits an  Executive would receive from the Company under the Plan or otherwise in connection with the  Change in Control (the “Total Payments”) (a) constitute “parachute payments” within the meaning  of Code Section 280G, and (b) but for this Article 6, would be subject to the excise tax imposed  by Code Section 4999, then such Executive will be entitled to receive either (i) the full amount of  the Total Payments or (ii) a portion of the Total Payments having a value equal to One Dollar ($1)  less than three (3) times such individual’s “base amount” (as such term is defined in Code  Section 280G(b)(3)(A)), whichever of (i) and (ii), after taking into account applicable federal,  state, and local income taxes and the excise tax imposed by Code Section 4999, results in the  receipt by such employee on an after-tax basis, of the greatest portion of the Total Payments.  Any  determination required under this Article 6 shall be made in writing by the Company’s independent  certified public accountants appointed prior to any change in ownership (as defined under Code  Section 280G(b)(2)) or tax counsel selected by such accountants (the “Accountants”), whose  determination shall be conclusive and binding for all purposes upon the applicable Executive.  For  purposes of making the calculations required by this Article 6, the Accountants may make  reasonable assumptions and approximations concerning applicable taxes and may rely on  reasonable, good-faith interpretations concerning the application of Code Sections 280G and 4999.   If there is a reduction pursuant to this Article 6 of the Total Payments to be delivered to the  applicable Executive, the payment reduction contemplated by the preceding sentence shall be  implemented by determining the Parachute Payment Ratio (as defined below) for each “parachute  payment” and then reducing the “parachute payments” in order beginning with the “parachute  payment” with the highest Parachute Payment Ratio.  For “parachute payments” with the same  Parachute Payment Ratio, such “parachute payments” shall be reduced based on the time of  payment of such “parachute payments,” with amounts having later payment dates being reduced  first.  For “parachute payments” with the same Parachute Payment Ratio and the same time of  payment, such “parachute payments” shall be reduced on a pro rata basis (but not below zero) prior  to reducing “parachute payments” with a lower Parachute Payment Ratio.  For purposes hereof,  the term “Parachute Payment Ratio” shall mean a fraction the numerator of which is the value of  the applicable “parachute payment” for purposes of Code Section 280G and the denominator of  which is the actual present value of such payment.  

 

   16   274448334v.4  Article 7. Legal Fees and Notice   Payment of Legal Fees  Except as otherwise agreed to by the parties, the Company shall pay the Executive for costs  of litigation or other disputes including, without limitation, reasonable attorneys’ fees incurred by  the Executive in asserting any claims or defenses under this Plan, except that the Executive shall  bear his or her own costs of such litigation or disputes (including, without limitation, attorneys’  fees) if the court (or arbitrator) finds in favor of the Company with respect to any claims or defenses  asserted by the Executive.   Notice  Any notices, requests, demands, or other communications provided for by this Plan shall  be sufficient if in writing and if sent by registered or certified mail to the Executive at the last  address he or she has filed in writing with the Company or, in the case of the Company, at its   principal offices.  Article 8. Successors and Assignment   Successors to the Company  The Company shall require any successor (whether direct or indirect, by purchase, merger,  reorganization, consolidation, acquisition of property or stock, liquidation, or otherwise) of all or  a significant portion of the assets of the Company by agreement, in form and substance satisfactory  to the Executive, to expressly assume and agree to perform under this Plan in the same manner  and to the same extent that the Company would be required to perform if no such succession had  taken place.  Regardless of whether such agreement is executed, the terms of this Plan shall be  binding upon any successor in accordance with the operation of law and such successor shall be  deemed the “Company” for purposes of this Plan.   Assignment by the Executive  This Plan shall inure to the benefit of and be enforceable by the Executive’s personal or  legal representatives, executors, administrators, successors, heirs, distributees, devisees, and  legatees.  If the Executive dies while any amount would still be payable to him or her hereunder  had he or she continued to live, all such amounts, unless otherwise provided herein, shall be paid  in accordance with the terms of this Plan to the Executive’s Beneficiary.  If the Executive has not  

 

   17   274448334v.4  named a Beneficiary, then such amounts shall be paid to the Executive in accordance with the  Company’s regular payroll practices or to the Executive’s estate, as applicable.  Article 9. Miscellaneous   Employment Status  Except as may be provided under any other agreement between the Executive and the  Company, the employment of the Executive by the Company is “at will” and may be terminated  by either the Executive or the Company at any time, subject to applicable law.   Code Section 409A  (a) All expenses or other reimbursements under this Plan shall be made on or prior to  the last day of the taxable year following the taxable year in which such expenses  were incurred by the Executive (provided that if any such reimbursements  constitute taxable income to the Executive, such reimbursements shall be paid no  later than March 15th of the calendar year following the calendar year in which the  expenses to be reimbursed were incurred), and no such reimbursement or expenses  eligible for reimbursement in any taxable year shall in any way affect the expenses  eligible for reimbursement in any other taxable year.  (b) For purposes of Code Section 409A, the Executive’s right to receive any installment  payment pursuant to this Plan shall be treated as a right to receive a series of  separate and distinct payments.  (c) Whenever a payment under this Plan specifies a payment period with reference to  a number of days (e.g., “payment shall be made within thirty (30) days following  the date of termination”), the actual date of payment within the specified period  shall be within the sole discretion of the Committee.  (d) A termination of employment shall not be deemed to have occurred for purposes of  any provision of this Plan providing for the payment of any amounts or benefits  upon or following a termination of employment unless such termination is also a  “separation from service” within the meaning of Code Section 409A and, for  purposes of any such provision of this Plan, references to a “termination,”  “termination of employment” or like terms shall mean “separation from service.”  (e) Notwithstanding any other provision of this Plan to the contrary, in no event shall  any payment under this Plan that constitutes “deferred compensation” for purposes  of Code Section 409A be subject to offset unless otherwise permitted by Code  Section 409A.  (f) Notwithstanding any provisions in this Plan to the contrary, whenever a payment  under this Plan may be made upon the Release Effective Date, and the period in  which the Executive could adopt the release (along with its accompany revocation  period) crosses calendar years, no payments shall be made until the succeeding  calendar year.  

 

   18   274448334v.4   Entire Plan  This Plan supersedes any prior agreements or understandings, oral or written, between the  parties hereto, with respect to the subject matter hereof, and constitutes the entire agreement of the  parties with respect thereto.  Without limiting the generality of the foregoing sentence, this Plan  completely supersedes any and all prior employment agreements entered into by and between the  Company and the Executive, and all amendments thereto, in their entirety.  Notwithstanding the  foregoing, if the Executive has entered into any agreements or commitments with the Company  with regard to Confidential Information, noncompetition, nonsolicitation, or nondisparagement,  such agreements or commitments will remain valid and will be read in harmony with this Plan to  provide maximum protection to the Company.     Severability  In the event that any provision or portion of this Plan shall be determined to be invalid or  unenforceable for any reason, the remaining provisions of this Plan shall be unaffected thereby  and shall remain in full force and effect.     Tax Withholding  The Company may withhold from any benefits payable under this Plan all federal, state,  city, or other taxes as may be required pursuant to any law or governmental regulation or ruling.   Beneficiaries  The Executive may designate one (1) or more persons or entities as the primary and/or  contingent beneficiaries of any amounts to be received under this Plan.  Such designation must be  in the form of a signed writing acceptable to the Board or the Board’s designee.  The Executive  may make or change such designation at any time.   Payment Obligation Absolute  The Company’s obligation to make the payments provided for herein shall be absolute and  unconditional, and shall not be affected by any circumstances, including, without limitation, any  offset, counterclaim, recoupment, defense, or other right which the Company may have against the  Executive or anyone else.  The Executive shall not be obligated to seek other employment in mitigation of the amounts  payable or arrangements made under any provision of this Plan, and except as provided in Article  3 of this Plan, the obtaining of any such other employment shall in no event effect any reduction  of the Company’s obligations to make the payments and arrangements required to be made under  this Plan.   Contractual Rights to Benefits  Subject to approval and ratification by the Board, this Plan establishes and vests in the  Executive a contractual right to the benefits to which he or she is entitled hereunder.  However,  nothing herein contained shall require or be deemed to require, or prohibit or be deemed to prohibit,  

 

   19   274448334v.4  the Company to segregate, earmark, or otherwise set aside any funds or other assets, in trust or  otherwise, to provide for any payments to be made or required hereunder.   Modification  No provision of this Plan may be modified, waived, or discharged with respect to any  particular Executive unless such modification, waiver, or discharge is agreed to in writing and  signed by such Executive and by an authorized member of the Committee, or by the respective  parties’ legal representatives and successors; provided, however, that the Committee may  unilaterally amend this Plan without the Executive’s consent if such amendment does not  materially adversely alter or impair in any significant manner any rights or obligations of the  Executive under the Plan.   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.   Applicable Law  To the extent not preempted by the laws of the United States, the laws of the state of New  Jersey shall be the controlling law in all matters relating to this Plan.

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