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Exhibit 4.3  

 
 

STOCK PURCHASE AGREEMENT    
    
    by and among    
    
    PRICESMART, INC.,    
    
    ISLAND FOOD AND DISTRIBUTORS, N.V.    
    
    and    
    
    NITHYANANDA ENT. LTD.
 
  

        This STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered into effective as of June 24, 2002 by and among PriceSmart, Inc., a Delaware
corporation ("PriceSmart"), Island Food and Distributors, N.V., an Aruba limited liability company ("PSMT Aruba"), and Nithyananda Ent. Ltd., an Nevis company ("NEL"). For
purposes of this Agreement, each of PriceSmart and NEL are referred to as a "Party," and collectively, as the "Parties." 

W I T N E S S E T H: 

        WHEREAS,
NEL desires to sell sixty thousand (60,000) shares (the "Purchased Shares") of capital stock, without nominal or par value, of PSMT Aruba, to PriceSmart and PriceSmart desires
to purchase from NEL those shares by exchanging those shares for nine thousand three hundred fifty-three (9,353)
shares of PriceSmart common stock, par value $0.0001 per share ("PriceSmart Common Stock"), on the terms and conditions set forth in this Agreement; 

        WHEREAS,
pursuant to the Shareholders' Agreement (the "Shareholders' Agreement") dated March 1, 2000 between PriceSmart and Ashok Ramchandani, an individual and
predecessor-in-interest to NEL under the Shareholders' Agreement, NEL is obligated to make capital contributions to PSMT Aruba in exchange for the shares of capital stock of
PSMT Aruba held by NEL; 

        WHEREAS,
NEL has made loans to PSMT Aruba in the aggregate principal amount of two hundred twenty thousand two hundred forty-four United Stated Dollars (USD$220,244)
represented by promissory notes dated            and            made by PSMT Aruba in favor of NEL (collectively, the "NEL
Notes"); 

        WHEREAS,
for purposes of this Agreement, the NEL Notes will be canceled and the outstanding principal amount loaned by NEL to PSMT Aruba thereunder shall be considered a capital
contribution by NEL to PSMT Aruba under the Shareholders' Agreement; 

        WHEREAS,
for the purposes of this Agreement, the Parties have agreed that the purchase price for the Purchased Shares shall be three hundred sixty-nine thousand four hundred
forty-one United States Dollars (USD$369,441), which is equal to the agreed upon value of the Purchased Shares of one million six hundred ninety-three thousand two hundred eight United
States Dollars (USD$1,693,208) less the capital contributions due from NEL under the Shareholders' Agreement of one million three hundred twenty-three thousand seven hundred sixty-seven United States
Dollars (USD$1,323,767) after converting the outstanding principal amount under the NEL Notes to a capital contribution, and have agreed that payment of the purchase price for the Purchased Shares
shall terminate NEL's obligations to make further capital contributions to PSMT Aruba under the Shareholders' Agreement; 

        WHEREAS,
for the purposes of this Agreement, the Parties have agreed to value the PriceSmart Common Stock at thirty-nine dollars and fifty cents United States Dollars
(USD$39.50) per share; 

        WHEREAS,
for purposes of this Agreement, the Parties have agreed that PriceSmart shall have the right to purchase NEL's remaining twenty thousand (20,000) shares (the
"Remaining Shares") of capital stock of PSMT Aruba at any time during the two-year period beginning May 25, 2004 and ending on May 25, 2006 (the "Option Period") for an
initial purchase price on May 25, 2004 of six hundred seventy-seven thousand two hundred four United Stated Dollars (USD$677,284), which will 

 

increase thereafter at an annual, non-compounding rate of ten percent (10%), to be calculated upon the actual number of days elapsed through the date the purchase price for the Remaining
Shares is received, with the method of final payment to be agreed upon by the Parties at a later date; 

        WHEREAS,
for purposes of this Agreement, the Parties have agreed that Ashok Ramchandani shall serve as Chairman of the Board of Directors of PSMT Aruba until the Remaining Shares have
been purchased by PriceSmart; and 

        WHEREAS,
the Parties have agreed that PriceSmart and PSMT Aruba shall use their reasonable best efforts to obtain a release of the assets of an Aruba limited liability company N.V.
Exploitatie Maatschappij "Reveillon Aruba" pledged as collateral for a loan from Caribbean Mercantile Bank NV ("CMB") to PSMT Aruba in the aggregate principal amount of seven hundred thousand United
States Dollars (USD$700,000) (the "CMB Loan") as soon as reasonably practicable, but in any event within [sixty (60)] days, after the purchase and sale of the Purchased Shares. 

        NOW,
THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: 

        1.    AGREEMENT
TO PURCHASE AND SELL STOCK; OPTION; LOAN CONVERSION; COLLATERAL RELEASE.    

        1.1    AGREEMENT
TO PURCHASE AND SELL STOCK.    NEL agrees to sell the Purchased Shares to PriceSmart at the Closing (as defined in Section 2), and PriceSmart
agrees to purchase the Purchased Shares from NEL at the Closing, for nine thousand three hundred fifty-three (9,353) newly issued shares of PriceSmart Common Stock (the "Issued Shares"). 

        1.2    NEL
LOAN CONVERSION AND RELEASE OF CAPITAL CONTRIBUTION OBLIGATIONS.    NEL agrees to cancel the NEL Notes at the Closing and PriceSmart and PSMT Aruba agree
that the aggregate principal amount of two hundred twenty thousand two hundred forty-four United Stated Dollars (USD$220,244) borrowed by PSMT Aruba under the NEL Notes shall be considered
a capital contribution by NEL to PSMT Aruba under the Shareholders' Agreement. Upon the conversion of the NEL Notes into a capital contribution and the issuance of the Issued Shares as consideration
for the Purchased Shares at the Closing, (1) NEL shall be released by PriceSmart and PSMT Aruba from any further obligation to make capital contributions to PSMT Aruba under the Shareholders'
Agreement and (2) NEL shall have released any rights it may have to acquire additional shares of capital stock of PSMT Aruba under the Shareholders' Agreement. 

        1.3    OPTION
TO PURCHASE REMAINING SHARES.    

        (a)  NEL
agrees that PriceSmart shall have the right (the "Purchase Option") to purchase the Remaining Shares during the Option Period. On May 25, 2004, the purchase
price for the Remaining Shares shall be six hundred seventy-seven thousand two hundred eighty-four United Stated Dollars (USD$677,284), and shall increase thereafter at an annual,
non-compounding rate of ten percent (10%), to be calculated upon the basis of a 360-day year and the actual number of days elapsed through the date the purchase price for the
Remaining Shares is received by NEL. The form of consideration in which the purchase price is to be paid for the Remaining Shares shall be agreed upon by the Parties at a later date; PROVIDED,
HOWEVER, if the Parties have not agreed to the form of consideration prior to the Option Closing (as defined in Section 2), the purchase price for the Remaining Shares shall be paid by
PriceSmart to NEL by wire transfer of United States Dollars. 

        (b)  PriceSmart
may exercise the Purchase Option by delivery of written notice (the "Option Notice") to NEL at any time during the Option Period. 

        1.4    RELEASE
OF COLLATERAL.    PriceSmart and PSMT Aruba shall use their reasonable best efforts to release the assets of NEL pledged as collateral for the CMB
Loan. Such 

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release shall be completed as soon as practicable after the Closing, but in any event within [sixty (60)] days of the Closing. If the assets of NEL pledged as collateral for
the CMB Loan have not been released as collateral within [sixty (60)] days of the Closing, PriceSmart and PSMT Aruba shall be required to immediately pay to CMB the outstanding
principal amount and any accrued interest due under the CMB Loan. 

        2.    CLOSING.    The
purchase and sale of the Purchased Shares will take place at the offices of PriceSmart at 4649 Morena Boulevard, San Diego, CA 92117, on June
    , 2002, or at such other time and place as PriceSmart and NEL may mutually agree (which time and place are referred to in this Agreement as the "Closing"). The purchase and sale of the
Remaining Shares will take place at the offices of PriceSmart at 4649 Morena Boulevard, San Diego, CA 92117, within five (5) business days of receipt of the Option Notice by NEL, or at such
other time and place as PriceSmart and NEL may mutually agree (which time and place are referred to in this Agreement as the "Option Closing"). 

        2.1  At
the Closing, NEL will deliver to PriceSmart or its designee (a) a properly endorsed certificate representing the Purchased Shares, and/or any other document(s)
required under Aruba law to effectuate the transfer of the Purchased Shares to PriceSmart or its designee, (b) the NEL Notes stamped "canceled" and (c) an executed copy of the Voting
Agreement attached hereto as Exhibit A (the "Voting Agreement"). 

        2.2  At
the Closing, PriceSmart will deliver to NEL (a) a certificate representing the Issued Shares, (b) a written resolution of the Board of Directors of PSMT
Aruba approving the treatment of the cancellation of the NEL Notes as a capital contribution by NEL to PSMT Aruba under the
Shareholders' Agreement in an amount equal to the aggregate principal amount of the NEL Notes and (c) an executed copy of the Voting Agreement. 

        2.3  At
the Option Closing, NEL will deliver to PriceSmart or its designee a properly endorsed certificate representing the Remaining Shares, and/or any other document(s)
required under Aruba law to effectuate the transfer of the Remaining Shares to PriceSmart or its designee. 

        2.4  At
the Option Closing, PriceSmart will deliver to NEL the purchase price for the Remaining Shares in the form and by the method determined under Section 1.3(a)
hereof. 

        3.    MUTUAL
REPRESENTATIONS AND WARRANTIES.    With respect to the Issued Shares, NEL hereby represents and warrants to PriceSmart, and with respect to the Purchased
Shares and the Remaining Shares, PriceSmart hereby represents and warrants to NEL, as follows: 

        3.1    PURCHASE
FOR OWN ACCOUNT.    The Issued Shares, the Purchased Shares or the Remaining Shares, as the case may be, to be purchased by such Party hereunder will
be acquired for investment for such Party's own account, not as a nominee or agent, and not with a view to the resale or distribution thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"). Such Party also represents that such Party has not been formed for the specific purpose of acquiring the Issued Shares, the Purchased Shares or the Remaining Shares, as
the case may be. 

        3.2    DISCLOSURE
OF INFORMATION.    Such Party has received or has had full access to all the information it considers necessary or appropriate to make an informed
investment decision with respect to the Issued Shares, the Purchased Shares or the Remaining Shares, as the case may be, to be purchased by such Party under this Agreement. Such Party further has had
an opportunity to ask questions and receive answers from PriceSmart, PSMT Aruba or NEL, as the case may be, regarding the terms and conditions of the Issued Shares, the Purchased Shares or the
Remaining Shares and to obtain additional information (to the extent PriceSmart, PSMT Aruba or NEL possessed such information or could acquire it without unreasonable effort or expense) necessary to
verify any information furnished to such Party or to which such Party had access. The 

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foregoing, however, does not in any way limit or modify the representations and warranties made by such Party in this Agreement. 

        3.3    INVESTMENT
EXPERIENCE.    Such Party understands that the purchase of the Issued Shares, the Purchased Shares or the Remaining Shares involves substantial
risk. Such Party has experience as an investor in securities of companies in the development stage and acknowledges that such Party is able to fend for itself, can bear the economic risk of such
Party's investment in the Issued Shares, the Purchased Shares or the Remaining Shares and has such knowledge and experience in financial or business matters that such Party is capable of evaluating
the merits and risks of this investment in the
Issued Shares, the Purchased Shares or the Remaining Shares and protecting its own interests in connection with this investment. 

        3.4    ACCREDITED
INVESTOR STATUS.    Such Party is an "accredited investor" within the meaning of Regulation D promulgated under the Securities Act. 

        3.5    RESTRICTED
SECURITIES.    NEL understands that the Issued Shares are characterized as "restricted securities" under the Securities Act. NEL further understands
that the Issued Shares will be issued in a transaction not involving a public offering and that under the Securities Act and applicable regulations thereunder such securities may be resold without
registration under the Securities Act only in certain limited circumstances. In this connection, NEL represents that it is familiar with Rule 144 ("Rule 144") of the Securities and
Exchange Commission (the "Commission") as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act. NEL understands that, other than as set forth in
Section 8 of this Agreement, PriceSmart is under no obligation to register any of the Issued Shares. 

        3.6    LEGEND.    NEL
understands that the certificates evidencing the Issued Shares will bear the legend set forth below: 

"THE
SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. THE INVESTOR SHOULD BE AWARE THAT IT MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS." 

        The
legend set forth above shall be removed by PriceSmart from any certificate evidencing the Issued Shares upon (i) a sale by the holder pursuant to Rule 144 or pursuant
to an effective registration statement or (ii) delivery to PriceSmart of an opinion of counsel, reasonably satisfactory to PriceSmart, that a registration statement under the Securities Act is
at that time in effect with respect to the legended security or that such security can be freely transferred in a public sale without such a registration statement being in effect and that such
transfer will not jeopardize the exemption or exemptions from registration pursuant to which PriceSmart issued the Issued Shares. 

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        4.    REPRESENTATIONS
AND WARRANTIES OF PRICESMART.    PriceSmart hereby represents and warrants to NEL as follows: 

        4.1    ORGANIZATION,
GOOD STANDING AND QUALIFICATION.    PriceSmart is a corporation duly organized, validly existing and in good standing under the laws of the State
of Delaware and has all requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted. PriceSmart is duly qualified to transact business and is in
good standing in each jurisdiction in which the failure so to qualify would have a material adverse effect on its business or properties. 

        4.2    VALID
ISSUANCE OF STOCK.    The Issued Shares, when issued, sold and delivered in accordance with the terms of this Agreement for the consideration provided
herein, will be duly and validly issued, fully paid and nonassessable. 

        4.3    AUTHORIZATION;
ENFORCEABILITY.    All corporate action on the part of PriceSmart and its officers, directors and stockholders, necessary for the authorization,
execution and delivery of this Agreement and the performance of all obligations of PriceSmart hereunder and the transactions contemplated hereby have been taken or will be taken prior to the Closing
or the Option Closing, as the case may be, and this Agreement has been duly executed and delivered by PriceSmart and constitutes a valid and legally binding obligation of PriceSmart, enforceable in
accordance with its terms, except as may be limited by (i) applicable bankruptcy, insolvency, reorganization or other laws of general application relating to or affecting the enforcement of
creditors' rights generally; (ii) the effect of rules of law governing the availability of equitable remedies; and (iii) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the indemnification of or contribution to a party with respect to a liability where such indemnification or contribution is contrary to public policy or
prohibited by law. 

        4.4    NONCONTRAVENTION.    The
execution, delivery and performance by PriceSmart of this Agreement will not violate or be in conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default under (i) any provision of PriceSmart's certificate of incorporation or bylaws as they shall be in effect; (ii) any
provision of any judgment, decree or order to which PriceSmart is a party or by which it is bound; (iii) any material contract, obligation or commitment to which PriceSmart is a party or by
which it is bound; or (iv) any statute, rule or governmental regulation applicable to PriceSmart. 

        4.5    ACCURACY
OF EXCHANGE ACT REPORTS.    PriceSmart has timely filed all reports required to be filed by PriceSmart under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). All such reports filed by PriceSmart in the preceding twelve (12) months contain all statements required to be stated therein in accordance with the Exchange Act
and do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. 

        5.    REPRESENTATIONS
AND WARRANTIES OF NEL.    NEL hereby represents and warrants to PriceSmart as follows: 

        5.1    ORGANIZATION,
GOOD STANDING AND QUALIFICATION.    NEL is a company duly organized, validly existing and in good standing under the laws of Nevis and has all
requisite corporate power and authority to carry on its business as now conducted and as proposed to be conducted. NEL is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse effect on its business or properties. 

        5.2    AUTHORIZATION;
ENFORCEABILITY.    All action on the part of NEL necessary for its authorization, execution and delivery of this Agreement and the performance
of all obligations of NEL hereunder have been taken or will be taken prior to the Closing or the Option Closing, as the case may be. This Agreement has been duly executed and delivered by NEL and 

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this Agreement constitutes a valid and legally binding obligation of NEL, enforceable against it in accordance with its terms, except as may be limited by (i) applicable bankruptcy,
insolvency, reorganization or other laws of general application relating to or affecting the enforcement of creditors' rights generally; (ii) the effect of rules of law governing the
availability of equitable remedies; and (iii) the unenforceability under certain circumstances under law or court decisions of provisions providing for the indemnification of or contribution to
a party with respect to a liability where such indemnification or contribution is contrary to public policy or prohibited by law. 

        5.3    NONCONTRAVENTION.    The
execution, delivery and performance by NEL of this Agreement will not violate or be in conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default under (i) any provision of NEL's certificate of incorporation, bylaws or other governing documents as they
shall be in effect; (ii) any provision of any judgment, decree or order to which NEL is a party or by which it is bound; (iii) any material contract, obligation or commitment to which
NEL is a party or by which it is bound; or (iv) any applicable statute, rule or governmental regulation. 

        5.4    TITLE
TO PURCHASED SHARES.    NEL owns exactly eighty thousand (80,000) shares of capital stock of PSMT Aruba of which sixty thousand shares (60,000) represent
the Purchased Shares and twenty thousand (20,000) shares represent the Remaining Shares, all of which are free and clear of all liens, encumbrances and any liabilities, except as may be created
hereby. Other than the Purchased Shares, the Remaining Shares and the NEL Notes, NEL owns no shares of capital stock of, or any other interest in, PSMT Aruba. In addition, NEL has no options, warrants
or other rights to acquire shares of capital stock of, or any other interest in, PSMT Aruba. Following the Closing, NEL will have transferred all of its right, title and interest in PSMT Aruba, other
than the Remaining Shares, to PriceSmart. 

        6.    ADDITIONAL
PROVISIONS REGARDING THE ISSUED SHARES.    

        6.1    FURTHER
LIMITATIONS ON DISPOSITION.    Without in any way limiting the representations set forth above, NEL further agrees not to make any disposition of all
or any portion of the Issued Shares unless and until: 

        (a)  There
is then in effect a registration statement under the Securities Act covering such proposed disposition and such disposition is made in accordance with such
registration statement; or 

        (b)  NEL
shall have notified PriceSmart of the proposed disposition and shall have furnished PriceSmart with a statement of the circumstances surrounding the proposed
disposition, and NEL shall have furnished PriceSmart, at NEL's expense, with an opinion of counsel, reasonably satisfactory to PriceSmart, that such disposition will not require
registration of such securities under the Securities Act. 

        Notwithstanding
the provisions of paragraphs (a) and (b) above, no such registration statement or opinion of counsel shall be required: (i) for any transfer of any
Issued Shares in compliance with Rule 144 or (ii) for any transfer of any Issued Shares by a Party that is a partnership or a corporation to (A) a partner of such partnership or
shareholder of such corporation, (B) a retired partner of such partnership who retires after the date hereof or (C) the estate of any such partner or shareholder, or (iii) for the
transfer by gift, will or intestate succession by any Party to his or her spouse or lineal descendants or ancestors or any trust for any of the foregoing; provided that in each of the foregoing cases
the transferee agrees in writing to be subject to the terms of this Section 6.1 to the same extent as if the transferee were an original Party hereunder. 

        7.    CONDITIONS
TO CLOSING.    

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        7.1    CONDITIONS
TO OBLIGATIONS OF PRICESMART AT CLOSING.    PriceSmart's obligation to purchase the Purchased Shares at the Closing or the Remaining Shares at the
Option Closing, is subject to the fulfillment to PriceSmart's satisfaction, on or prior to the Closing or the Option Closing, as the case may be, of all of the following conditions, any of which may
be waived by PriceSmart: 

        (a)    REPRESENTATIONS
AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS.    The representations and warranties made by NEL in Sections 3 and 5 hereof shall be true and
correct in all material respects at the Closing or the Option Closing, as the case may be, with the same force and effect as if they had been made on and as of the date thereof, and NEL shall have
performed and
complied in all material respect with all obligations and conditions herein required to be performed or complied with by it on or prior to the Closing or the Option Closing, as the case may be, and a
certificate duly executed by an officer of NEL, to the effect of the foregoing, shall have been delivered to PriceSmart. 

        (b)    QUALIFICATIONS,
LEGAL INVESTMENT.    All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States
or of any state or country that are required in connection with the lawful sale and issuance of the Purchased Shares and the Issued Shares shall have been duly obtained and shall be effective on and
as of the Closing. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state or country that are required in connection
with the lawful sale and issuance of the Remaining Shares shall have been duly obtained and shall be effective on and as of the Option Closing. At the time of the Closing, the sale and issuance of the
Purchased Shares and the Issued Shares shall be legally permitted by all laws and regulations to which PriceSmart, PSMT Aruba and NEL are subject. At the time of the Option Closing, the sale and
issuance of the Remaining Shares shall be legally permitted by all laws and regulations to which PriceSmart, PSMT Aruba and NEL are subject. 

        (c)    OPINION
OF COUNSEL.    PriceSmart shall have received an opinion of counsel (of its choice) confirming: (i) that all documents have been executed and
all other acts and formalities have been properly complied with, pursuant to any applicable law and regulation, to effectuate the transfer of NEL's right, title and interest in the
Purchased Shares or the Remaining Shares, as the case may be, to PriceSmart (or to any of its subsidiaries); and (ii) that 90% or 100% ownership, as the case may be, of PSMT Aruba by PriceSmart
(or any of its subsidiaries) does not violate any law or regulation of any applicable jurisdiction. 

        (d)    NEL
DELIVERIES.    NEL shall have made the Closing deliveries contemplated by Section 2.1 hereof or the Option Closing deliveries contemplated by
Section 2.3 hereof, as the case may be. 

        7.2    CONDITIONS
TO OBLIGATIONS OF NEL AT CLOSING.    The obligations of NEL to sell the Purchased Shares to be sold at the Closing or the Remaining Shares to be
sold at the Option Closing is subject to the fulfillment, to NEL's satisfaction, on or prior to the Closing or the Option Closing, as the case may be, of the following conditions, any
of which may be waived by NEL: 

        (a)    REPRESENTATIONS
AND WARRANTIES TRUE; PERFORMANCE OF OBLIGATIONS.    The representations and warranties made by PriceSmart in Sections 3 and 4 hereof shall be
true and correct in all material respects at the date of the Closing or the Option Closing, as the case may be, with the same force and effect as if they had been made on and as of the date thereof.
PriceSmart shall have performed and complied with all agreements and conditions herein required to be performed or complied with by it on or before the Closing or the Option Closing, as the case may
be, and a certificate duly executed by an officer of PriceSmart, to the effect of the foregoing, shall be delivered to NEL. 

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        (b)    QUALIFICATIONS,
LEGAL INVESTMENT.    All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States
or of any state or country that are required in connection with the lawful sale and issuance of the Purchased Shares and the Issued Shares shall have been duly obtained and shall be effective on and
as of the Closing. All authorizations, approvals, or permits, if any, of any governmental authority or regulatory body of the United States or of any state or country that are required in connection
with the lawful sale and issuance of the Remaining Shares shall have been duly obtained and shall be effective on and as of the Option Closing. At the time of the Closing the sale and issuance of the
Purchased Shares and the Issued Shares shall be legally permitted by all laws and regulations to which PriceSmart, PSMT Aruba and NEL are subject. At the time of the Option Closing the sale and
issuance of the Remaining Shares shall be legally permitted by all laws and regulations to which PriceSmart, PSMT Aruba and NEL are subject. 

        (c)    PRICESMART
DELIVERIES.    PriceSmart shall have made the Closing deliveries contemplated by Section 2.2 hereof or the Option Closing deliveries
contemplated by Section 2.4 hereof, as the case may be. 

        8.    REGISTRATION
STATEMENT FOR RESALE OF THE ISSUED SHARES.    

        8.1    SHELF
REGISTRATION STATEMENT.    As promptly as practicable but in no event later than thirty (30) days after the Closing, PriceSmart will prepare and
file with the Commission a registration statement under the Securities Act registering all of the Issued Shares sold to NEL pursuant to this Agreement for resale to the public by NEL pursuant to such
registration statement (the "Shelf Registration Statement") and the prospectus included therein, free and clear of any restrictions under the Securities Act except for prospectus delivery
requirements. For purposes of this Section 8, the term "Issued Shares" shall be deemed to include shares of PriceSmart Common Stock issued as a dividend or other distribution with respect to or
in replacement of the Issued Shares. PriceSmart shall use all reasonable efforts to cause the Shelf Registration Statement to become effective as promptly as practicable thereafter and, subject to
Sections 8.2(b) and 8.3, to remain effective until the earlier of (i) two years from the Closing and (ii) such time as the Issued Shares may be freely sold to the public without
registration and without regard to volume or manner of sale (the "Registration Period"). 

        8.2    PRICESMART
OBLIGATIONS.    In connection with the registration of the Issued Shares pursuant to this Section 8, PriceSmart shall do the following: 

        (a)  Prepare
and deliver to NEL as many copies of the Prospectus (as hereafter defined) as NEL may reasonably request; 

        (b)  Use
its best efforts to comply with all requirements imposed upon it by the Securities Act, by the Exchange Act and by the undertakings in any registration statement
filed pursuant to this Section 8 (any such registration statement, including the Shelf Registration Statement, the "Registration Statement") so far as is necessary to permit the continuance of
resales of the Issued Shares by NEL to the public, free and clear of any restrictions under the Securities Act except for prospectus delivery requirements. If, at any time during the Registration
Period, an event shall occur which makes it necessary to amend or supplement the Registration Statement or the Prospectus to comply with law or with the rules and regulations of the Commission,
PriceSmart shall promptly notify NEL of the proposed amendment or supplement and promptly prepare and furnish to NEL such number of copies of an amended or supplemented Registration Statement and/or
Prospectus that complies with law and with such rules and regulations as NEL may reasonably request. NEL shall suspend its sales of the Issued Shares pending the preparation and delivery of such
amendment or supplement and until such time as each such amendment or amendments to the Registration Statement have been declared effective by the Commission. PriceSmart authorizes NEL, and any
brokers or 

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dealers effecting sales of the Issued Shares for the account of NEL, to use the Prospectus, as from time to time amended or supplemented, in connection with the sale of the Issued Shares in
accordance with applicable provisions of the Securities Act and state securities laws. For purposes of this Agreement, the term "Prospectus" means the final prospectus relating to the Issued Shares
most recently included in the Registration Statement or filed by PriceSmart pursuant to Rule 424 of the Securities Act and any amendments or supplements thereto filed by PriceSmart pursuant to
Rule 424 of the Securities Act and shall include all documents or information incorporated in any such prospectus by reference; 

        (c)  Promptly
advise NEL (i) when any post-effective amendment of the Registration Statement is filed with the Commission and when any
post-effective amendment becomes effective; (ii) of any request made by the Commission for any amendment of or supplement to the Registration Statement or the Prospectus or for
additional information relating thereto; (iii) of any suspension or threatened suspension of the use of any Prospectus in any state; and (iv) of any proceedings commenced or threatened
to be commenced by the Commission or any state securities commission that would result in the issuance of any stop order or other order or suspension of use. PriceSmart agrees to use its reasonable
efforts to prevent or promptly remove any stop order or other order preventing or suspending the use of the Prospectus during the Registration Period and to comply with any such request by the
Commission to amend or supplement the Prospectus; 

        (d)  Take
such action as shall be necessary to qualify and maintain the qualification of the Issued Shares covered by such registration under such state securities or "blue
sky" laws for offers and sales to the public during the Registration Period as NEL shall reasonably request; PROVIDED, HOWEVER, that PriceSmart shall not be obligated to qualify as a foreign
corporation to do business under the laws of or become subject to taxation in, any jurisdiction in which it shall not be then qualified, or to file any general consent to service of process; 

        (e)  Permit
counsel designated by NEL to review the Registration Statement and all amendments and supplements thereto a reasonable time prior to their filing with the
Commission; 

        (f)    Provide
a transfer agent and registrar, which may be a single entity, for the Issued Shares not later than the effective date of the Registration Statement; 

        (g)  Prepare
and file with the Commission, at the request of NEL, such amendments (including post-effective amendments) and supplements to a Registration
Statement and the prospectus used in connection therewith as may be reasonably necessary or appropriate to change the plan of distribution set forth in the Registration Statement; and 

        (h)  Cause
the Issued Shares to be registered pursuant to Section 12(b) or 12(g) of the Exchange Act and continually quoted or listed, subject to notice of issuance,
on the Nasdaq National Market or a national securities exchange, if such exchange is the principal market on which the Issued Shares are traded, and not subject to any restriction or suspension from
trading on the Nasdaq National Market or such national securities exchange; PROVIDED, HOWEVER, that PriceSmart may deregister PriceSmart Common Stock registered pursuant to Section 12(b) or
12(g) of the Exchange Act if such deregistration is in connection with a merger, dissolution or other transaction in which the stockholders of PriceSmart receive prior to such deregistration either
cash or securities that are listed on the Nasdaq National Market or a national securities exchange or some combination of cash and such securities; PROVIDED, FURTHER, that PriceSmart may delist the
Issued Shares from trading on the Nasdaq National Market or national securities exchange if PriceSmart is concurrently listing such stock on the New York Stock Exchange or the American Stock Exchange. 

9

  

        (i)    With
a view to making available to NEL the benefits of certain rules and regulations of the Commission that at any time permit the sale of the Issued Shares to the
public without registration, PriceSmart agrees to: 

        (i)    make
and keep public information available, as those terms are understood and defined in Rule 144; 

        (ii)  file
with the Commission in a timely manner all reports and other documents required of PriceSmart under the Exchange Act; and 

        (iii)  so
long as NEL owns any unregistered Issued Shares, furnish to NEL upon any reasonable request a written statement by PriceSmart as to its compliance with the public
information requirements of Rule 144, and of the Exchange Act, a copy of the most recent annual or quarterly report of PriceSmart, and the other Commission reports and documents of PriceSmart
as NEL may reasonably request in availing itself of any rule or regulation of the Commission allowing an NEL to sell any Issued Shares without registration (excluding any reports or documents of
PriceSmart that PriceSmart, in its sole discretion, deems confidential). 

        8.3    RESTRICTIONS
ON REGISTRATIONS.    If at any time or from time to time after the effective date of the Registration Statement, PriceSmart notifies NEL in
writing of the existence of a Potential Material Event (as defined below), NEL shall not offer or sell any Issued Shares or engage in any other transaction involving or relating to Issued Shares from
the time of the giving of notice with respect to a Potential Material Event until NEL receives written notice from PriceSmart that such Potential Material Event either has been disclosed to the public
or no longer constitutes a Potential Material Event. If a Potential Material Event shall occur prior to the date the Registration Statement is filed, then notwithstanding Section 8.1,
PriceSmart's obligation to file the Registration Statement shall be delayed without penalty until such Potential Material Event either has been disclosed to the public or no longer constitutes a
Potential Material Event. "Potential Material Event" means any of the following: (i) the possession by PriceSmart of material information not ripe for disclosure in the Registration Statement,
as determined in good faith by the Chief Executive Officer or the Board of Directors of PriceSmart that disclosure of such information in the Registration Statement would be detrimental to the
business and affairs of PriceSmart; or (ii) any material engagement or activity by PriceSmart which would, in the good faith determination of the Chief Executive Officer or the Board of
Directors of PriceSmart, be adversely affected by disclosure in the Registration Statement at such time, which determination shall be accompanied by a good faith determination by the Chief Executive
Officer or the Board of Directors of PriceSmart that the Registration Statement would be materially misleading absent the inclusion of such information. In no event shall the suspension of the
Registration Statement (or the permissible delay in filing the Registration Statement) exceed ninety (90) days as a result of a Potential Material Event. 

        8.4    CERTAIN
OBLIGATIONS OF INVESTOR.    In connection with the registration of the Issued Shares pursuant to this Section 8: 

        (a)  NEL
shall cooperate as reasonably requested by PriceSmart with PriceSmart in connection with the preparation of the Registration Statement, and for so long as PriceSmart
is obligated to file and keep effective the Registration Statement, shall provide to PriceSmart, in writing, for use in the Registration Statement, all such information regarding NEL and its plan of
distribution of the Issued Shares as may be reasonably necessary to enable PriceSmart to prepare the Registration Statement and the Prospectus, to maintain the currency and effectiveness thereof and
otherwise to comply with all applicable requirements of law in connection therewith. 

10

 

        (b)  NEL
agrees to promptly furnish additional information required to be disclosed in order to make the information previously furnished to PriceSmart by NEL not materially
misleading. NEL agrees to furnish all such information and to cooperate with and provide assistance to PriceSmart, as PriceSmart may reasonably request, in connection with any registration and sale of
the Issued Shares. 

        (c)  NEL
hereby covenants with PriceSmart not to make any sale of the Issued Shares without effectively causing the prospectus delivery requirements under the Securities Act
to be satisfied unless the sale is made pursuant to an exemption from registration. 

        (d)  NEL
acknowledges and agrees that the Issued Shares sold pursuant to the Registration Statement are not transferable on the books of PriceSmart unless the stock
certificate submitted to the transfer agent evidencing the Issued Shares is accompanied by a certificate reasonably satisfactory to PriceSmart to the effect that (i) the Issued Shares have been
sold in accordance with this Agreement and the Registration Statement and (ii) the requirement of delivering a current prospectus has been satisfied. 

        (e)  NEL
is hereby advised that the anti-manipulation provisions of Regulation M under the Exchange Act may apply to sales of the Issued Shares offered
pursuant to the Registration Statement and agrees not to take any action with respect to any distribution deemed to be made pursuant to the Registration Statement that constitutes a violation of
Regulation M under the Exchange Act or any other applicable rule, regulation or law. 

        (f)    At
the end of the Registration Period, NEL shall discontinue sales of Issued Shares pursuant to the Shelf Registration Statement upon receipt of notice from PriceSmart
of its intention to remove from registration the Issued Shares covered thereby which remain unsold, and NEL shall promptly notify PriceSmart of the number of Issued Shares registered that remain
unsold immediately upon receipt of the notice from PriceSmart. 

        8.5    INDEMNIFICATION
OF NEL.    PriceSmart shall indemnify, defend and hold harmless NEL, its officers and its directors and any controlling persons of NEL against
and in respect of any losses, claims, damages or liabilities, joint or several (including legal or other fees and expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage or liability) to which NEL or any such persons may become subject under the Securities Act or otherwise insofar as such losses, claims, damages or liabilities
(or actions with respect thereto) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement or Prospectus, or arise
out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, except to the
extent that any such untrue statement or omission is based upon written information supplied by NEL or by any of its representatives for use in such Registration Statement; PROVIDED, HOWEVER, this
indemnity agreement shall not inure to the benefit of NEL on account of any loss, claim, damage, liability or action arising from the sale of the Issued Shares to any person if NEL fails to send or
give a copy of the Prospectus (as amended or supplemented) to such person. 

        8.6    INDEMNIFICATION
OF PRICESMART.    NEL shall indemnify, defend and hold harmless PriceSmart, its officers and its directors and any controlling persons of
PriceSmart against and in respect of any losses, claims, damages or liabilities, joint or several (including legal or other fees and expenses reasonably incurred by any of them in connection with
investigating or defending any such loss, claim, damage or liability) to which PriceSmart or any such persons may become subject under the Securities Act or otherwise insofar as such losses, claims,
damages or liabilities (or actions with respect thereto) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in the Registration Statement,
or arise out of or are based upon the omission or alleged omission to state therein a material fact required to 

11

 

be stated therein or necessary to make the statements therein not misleading, but only in each case to the extent that any such untrue statement or omission is based upon written information supplied
by NEL or its representatives for use in such Registration Statement; PROVIDED that in no event shall any indemnification obligation on the part of NEL under this Section 8.6 exceed the net
proceeds from the offering received by NEL. 

        8.7    CONTRIBUTION.    If
for any reason the indemnification provided for in the preceding Sections 8.5 or 8.6 is unavailable to an indemnified party as contemplated
by such clauses, then the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such loss, claim, damage or liability in such proportion as is
appropriate to reflect not only the relative benefits received by the indemnified party and the indemnifying party, but also the relative fault of the indemnified party and the indemnifying party, as
well as any other relevant equitable considerations; PROVIDED that in no event shall any contribution obligation on the part of NEL under this Section 8.7 exceed the net proceeds from the
offering received by NEL. 

        8.8    PROCEDURE
FOR INDEMNIFICATION.    The procedure for indemnification under this Section 8 shall be as follows: 

        (a)    NOTICE.    The
indemnified party shall promptly give notice to the indemnifying party of any pending or threatened claim giving rise to indemnification under
Sections 8.5 or 8.6 (a "Claim"), specifying the factual basis for the Claim and the approximate amount thereof. 

        (b)    CONTROL
OF CLAIM AND SETTLEMENT.    With respect to any Claim as to which a person is entitled to indemnification hereunder, the indemnifying party shall have
the right at its own expense to participate in or assume control of the defense of the Claim, and the indemnified party shall cooperate fully with the indemnifying party, subject to reimbursement for
actual out-of-pocket expenses incurred by the indemnified party as the result of a request by the indemnifying party; PROVIDED, HOWEVER, that such indemnifying party shall not
be entitled to assume such defense and an indemnified party shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the indemnifying party, if, in the
reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the indemnified party and the indemnifying party would be inappropriate due to actual or
potential conflicts of interest between such indemnified party and any other party represented by such counsel in such proceeding or the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and any such indemnified party reasonably determines that there may be legal defenses available to such indemnified party which are
in conflict with those available to such indemnifying party. If the indemnifying party elects to assume control of the defense of any Claim, the indemnified party shall have the right to participate
in the defense of the Claim at its own expense. If the indemnifying party does not elect to assume control or otherwise participate in the defense of any Claim, it shall be bound by the results
obtained by the indemnified party with respect to the Claim. No indemnifying party shall be liable for any settlement effected without its written consent, not to be unreasonably withheld or delayed. 

        (c)    SURVIVAL.    Notwithstanding
any other provision of this Agreement, the indemnification and contribution obligations of the parties hereunder shall survive
indefinitely. 

        8.9    EXPENSES.    PriceSmart
shall pay all expenses incident to the registration of the Issued Shares under this Section 8, including without limitation, all
registration and filing fees, all fees and expenses of complying with securities or blue sky laws, all word processing, duplicating and printing expenses, and the fees and disbursements of counsel for
PriceSmart and its independent public accountants. With respect to sales of the Issued Shares, NEL shall pay all underwriting 

12

 

discounts and commissions and fees of underwriters, selling brokers, dealer managers or similar securities industry professionals relating to any resale of the Issued Shares by NEL, and transfer
taxes, if any. 

        8.10    COMPLIANCE.    NEL
will observe and comply with the Securities Act, the Exchange Act and the general rules and regulations thereunder, as now in effect and as
from time to time amended and including those hereafter enacted or promulgated, in connection with any offer, sale, pledge, transfer or other disposition of the Issued Shares or any part thereof. 

        9.    MISCELLANEOUS.    

        9.1    SURVIVAL
OF WARRANTIES.    The representations, warranties and covenants of the Parties contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for a period of one (1) year with respect to the transactions completed at the Closing and shall survive the execution and delivery of
this Agreement and the Option Closing for a period of one (1) year with respect to the transactions completed at the Option Closing, and shall in no way be affected by any investigation of the
subject matter thereof made by or on behalf of PriceSmart or NEL, as the case may be. 

        9.2    SUCCESSORS
AND ASSIGNS.    Neither Party shall assign or transfer any of its rights or obligations under this Agreement without the other Party's prior written
consent which shall not be unreasonably withheld, except that PriceSmart may assign its rights hereunder to any subsidiary without the consent of any other Party and except NEL may assign its rights
under Section 8 hereof to any person or entity to whom NEL transfers at least twenty-five percent (25%) of the Issued Shares. Subject to the restrictions on assignment set forth in
this Section 9.2, this Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns. 

        9.3    GOVERNING
LAW.    This Agreement shall be governed by and construed under the internal laws of the State of California, U.S.A. as applied to agreements among
California residents entered into and to be performed entirely within California, without reference to principles of conflict of laws or choice of law. 

        9.4    COUNTERPARTS.    This
Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. 

        9.5    HEADINGS.    The
headings and captions used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this
Agreement. All references in this Agreement to sections, paragraphs, exhibits and schedules shall, unless otherwise provided, refer to sections and paragraphs hereof and exhibits and schedules
attached hereto, all of which exhibits and schedules are incorporated herein by this reference. 

        9.6    NOTICES.    Unless
otherwise provided, any notice required or permitted under this Agreement shall be given in writing and shall be mailed, telecopied, sent by
overnight courier or delivered to the Party to receive such notice at the address specified on the signature page hereto or at such other address as
any Party may designate by giving ten (10) days advance written notice to all other Parties. All such notices and communications shall, when mailed, telecopied or sent by overnight courier, be
effective when deposited in the mails, delivered to the courier, or transmitted by telecopier with confirmation of transmission, respectively. 

        9.7    NO
FINDER'S FEES.    PriceSmart and NEL represent that they neither are, nor will be, obligated for any finder's or broker's fee or commission in connection
with this transaction. NEL agrees to indemnify and to hold harmless PriceSmart from any liability for any commission or compensation in the nature of a finders' or broker's fee (and any asserted
liability) for which NEL 

13

 

is responsible. PriceSmart agrees to indemnify and hold harmless NEL from any liability for any commission or compensation in the nature of a finder's or broker's fee (and any asserted liability) for
which PriceSmart or any of its officers, employees or representatives is responsible. 

        9.8    AMENDMENTS
AND WAIVERS.    Any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the written consent of PriceSmart and NEL. Any amendment or waiver effected in accordance with this Section shall be binding
upon each holder of any Issued Shares at the time outstanding, each future holder of such securities, and PriceSmart. 

        9.9    EXPENSES
AND TAXES.    Each of the Parties shall pay its own fees and expenses incurred in entering into this Agreement. Transfer taxes are to be paid by the
entity responsible under the law. If any arbitration or other action at law or equity is necessary to enforce or interpret the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 

        9.10    SEVERABILITY.    If
one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision(s) shall be excluded from this
Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with its terms. 

        9.11    ENTIRE
AGREEMENT.    This Agreement, together with all exhibits and schedules hereto, constitutes the entire agreement and understanding of the Parties with
respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings duties or obligations between the Parties with respect to the subject
matter hereof. 

        9.12    FURTHER
ASSURANCES.    From and after the date of this Agreement, upon the request of any of the Parties, the other Parties shall execute and deliver such
instruments, documents or other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement. 

        9.13    ARBITRATION.    All
disputes and claims concerning the validity, interpretation, performance, termination and/or breach of this Agreement shall be referred
for final resolution to arbitration in Miami, Florida, U.S.A. under the UNCITRAL Rules ("Rules") as administered by the American Arbitration Association. The Parties hereby agree that arbitration
hereunder shall be the Parties' exclusive remedy and that the arbitration decision and award, if any, shall be final, binding upon, and enforceable against, the Parties, and may be confirmed by the
judgment of a court of competent jurisdiction. In the event of any conflict between the Rules and this Section, the provisions of this Section shall govern. 

        9.14    CONFIDENTIALITY.    The
Parties agree not to disclose the price and related terms of the purchase and sale affected hereby, unless disclosure of the same is
required by any applicable law. 

[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK] 

14

 

        IN
WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first above written. 

	PriceSmart, Inc.,

a Delaware corporation	 	Nithyananda Ent. Ltd.,

an Nevis company
	

/s/  GILBERT A. PARTIDA      
	
 	

/s/

	Name:	 	Gilbert A. Partida	 	Name:	 	 
	Title:	 	Chief Executive Officer	 	Title:	 	 
	

Address for Notice:	
 	

Address for Notice:
	

4649 Morena Boulevard

San Diego, CA 92117

Telecopy: (858) 581-4707	
 	

P.O. Box 624,

Curagua
	

Attn: General Counsel	
 	

 	
 	

 
	

    	
 	

 	
 	

 	
 	

 
	

    	
 	

 	
 	

 	
 	

 
	

Island Food and Distributors, N.V.,

an Aruba limited liability company	
 	

 	
 	

 
	

/s/  ASHOK RAMCHANDANI      
	
 	

 	
 	

 
	Name:	 	Mr. Ashok Ramchandani	 	 	 	 
	Title:	 	Managing Director	 	 	 	 
	    	 	 	 	 	 	 
	

Address for Notice: Fergusonstraat #103	
 	

 	
 	

 

15

 
 

EXHIBIT A    
    
    FORM OF VOTING AGREEMENT    
  

        This Voting Agreement (the "Agreement") is made as of June    , 2002 by and among PriceSmart, Inc., a Delaware corporation (the "PriceSmart"),
and Nithyananda Ent. Ltd., an Aruba company ("NEL"). 

 
 

RECITALS    
  

        PriceSmart, Island Food and Distributors, N.V., an Aruba limited liability company ("PSMT Aruba"), and NEL have entered into a Stock Purchase Agreement (the
"Purchase Agreement") dated June    , 2002 pursuant to which NEL has agreed to sell to PriceSmart and PriceSmart has agreed to purchase from NEL shares of capital stock of PSMT Aruba. A
condition to NEL's obligations under the Purchase Agreement is that PriceSmart and NEL enter into this Agreement for the purpose of setting forth the terms and conditions pursuant to
which PriceSmart and NEL shall vote their shares of PSMT Aruba's voting stock in favor of a certain designee to the Board of Directors of PSMT Aruba (the "Board of Directors"). PriceSmart and NEL each
desire to facilitate the voting arrangements set forth in this Agreement, and the sale and purchase of shares of capital stock of PSMT Aruba pursuant to the Purchase Agreement, by agreeing to the
terms and conditions set forth below. 

 
 

AGREEMENT    
  

        The parties agree as follows: 

        1.    Election of Chairman.    

        1.1.    Election of Chairman.    During the term of this Agreement, at each annual meeting of the shareholders of PSMT
Aruba, or at any meeting of the shareholders of PSMT Aruba at which members of the Board of Directors are to be elected, or whenever members of the Board of Directors are to be elected by written
consent, PriceSmart and NEL agree to vote or act with respect to their shares so as to elect Ashok Ramchandani ("Ramchandani") to be Chairman of the Board of Directors. PriceSmart further agrees that
during the term of this Agreement it will cause its designees on the Board of Directors to vote to elect Ramchandani Chairman of the Board of Directors and to nominate Ramchandani for election at
future meetings of the shareholders of PSMT Aruba. 

        1.2.    Appointment Following Resignation, Death, Incapacity or Disqualification.    In the event of the resignation,
death, incapacity or disqualification of Ramchandani, the remaining members of the Board of Directors shall promptly nominate a new director, and, after written notice of the nomination has been given
by the Board of Directors to PriceSmart and NEL, PriceSmart and NEL shall vote their shares of capital stock of PSMT Aruba to elect such nominee to the Board of Directors. 

        1.3.    Duties as Chairman.    At each annual meeting of the shareholders of PSMT Aruba, or at any meeting of the
shareholders of PSMT Aruba at which amendments to the governing documents of PSMT Aruba may be voted upon, or whenever amendments to the governing documents of PSMT Aruba are to be voted upon by
written consent, PriceSmart and NEL agree to vote or act with respect to their shares so as to allow the duties of the Chairman of the Board of Directors to be limited solely to presiding at all
meetings of the shareholders and the Board of Directors and to exercising and performing such other powers and duties as may be from time to time assigned to him by the Board of Directors, which
duties and powers shall not in any way restrict a majority of the Board of Directors from calling meetings of the shareholders or the Board of Directors, or setting the agenda for such meetings. 

        2.    Additional Representations and Covenants.    

        2.1.    No Revocation.    The voting agreements contained herein are coupled with an interest and may not be revoked
during the term of this Agreement. 

        2.2.    Legends.    

        (a)  Each
certificate representing shares of PSMT Aruba's capital stock held by PriceSmart or NEL or any assignee of PriceSmart or NEL shall bear the following legend: 

"THE
SHARES EVIDENCED HEREBY ARE SUBJECT TO A VOTING AGREEMENT BY AND AMONG THE COMPANY AND CERTAIN SHAREHOLDERS OF THE COMPANY (A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY), AND BY ACCEPTING ANY
INTEREST IN SUCH SHARES THE PERSON ACCEPTING SUCH INTEREST SHALL BE DEEMED TO AGREE TO AND SHALL BECOME BOUND BY ALL THE PROVISIONS OF SAID VOTING AGREEMENT." 

        (b)  Each
of PriceSmart and NEL shall submit their certificates representing shares of capital stock of PSMT Aruba to PSMT Aruba promptly after the Closing (as defined in the
Purchase Agreement) to have the legend set forth in Section 2.2(a) hereof affixed thereto. 

        3.    Termination.    

        3.1.    Termination Event.    This Agreement shall terminate upon the sale of any of the Remaining Shares (as defined
in the Purchase Agreement) by NEL. 

        3.2.    Removal of Legend.    At any time after the termination of this Agreement in accordance with
Section 3.1, any holder of a stock certificate legended pursuant to Section 2.2 may surrender such certificate to PSMT Aruba for removal of the legend, and PSMT Aruba will duly reissue a
new certificate without the legend. 

        4.    Miscellaneous.    

        4.1.    Successors and Assigns.    No party shall assign or transfer any of its rights or obligations under this
Agreement without the other parties' prior written consent, except that PriceSmart may assign its rights hereunder to any subsidiary without the consent of any other party. Subject to the restrictions
on assignment set forth in this Section 4.1, this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement. 

        4.2.    Amendments and Waivers.    Any term hereof may be amended or waived only with the written consent of
PriceSmart and NEL. Any amendment or waiver effected in accordance with this Section 4.2 shall be binding upon PriceSmart and NEL, and each of their respective successors and assigns. 

        4.3.    Notices.    Unless otherwise provided, any notice required or permitted under this Agreement shall be given in
writing and shall be mailed, telecopied, sent by overnight courier or delivered to the party to receive such notice at the address specified on the signature page hereto or at such other address as
any party may designate by giving ten (10) days advance written notice to all other parties. All such notices and communications shall, when mailed, telecopied or sent by overnight courier, be
effective when deposited in the mails, delivered to the courier, or transmitted by telecopier with confirmation of transmission, respectively. 

        4.4.    Severability.    If one or more provisions of this Agreement are held to be unenforceable under applicable
law, such provision(s) shall be excluded from this Agreement and the balance of the Agreement shall be interpreted as if such provision(s) were so excluded and shall be enforceable in accordance with
its terms. 

        4.5.    Governing Law.    This Agreement shall be governed by and construed under the internal laws of the State of
California, U.S.A. as applied to agreements among California residents entered into and to be performed entirely within California, without reference to principles of conflict of laws or choice of
law. 

        4.6.    Counterparts.    This Agreement may be executed in two or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same instrument. 

        4.7.    Titles and Subtitles.    The titles and subtitles used in this Agreement are used for convenience only and are
not to be considered in construing or interpreting this Agreement. 

        4.8.    Entire Agreement.    This Agreement, together with all exhibits and schedules hereto, constitutes the entire
agreement and understanding of the parties with respect to the subject matter hereof and supersedes any and all prior negotiations, correspondence, agreements, understandings duties or obligations
between the parties with respect to the subject matter hereof. 

        4.9.    Attorneys' Fees.    If any arbitration or other action at law or equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and necessary disbursements in addition to any other relief to which such party may be
entitled. 

        4.10.    Arbitration.    All disputes and claims concerning the validity, interpretation, performance, termination
and/or breach of this Agreement shall be referred for final resolution to arbitration in Miami, Florida, U.S.A. under the UNCITRAL Rules ("Rules") as administered by the American Arbitration
Association. The parties hereby agree that arbitration hereunder shall be the parties' exclusive remedy and that the arbitration decision and award, if any, shall be final, binding upon, and
enforceable against, the parties, and may be confirmed by the judgment of a court of competent jurisdiction. In the event of any conflict between the Rules and this Section, the provisions of this
Section shall govern. 

[Signature
Page Follows] 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. 

	PriceSmart, Inc.,

a Delaware corporation	 	Nithyananda Ent. Ltd.,

an Aruba company
	

    
	
 	

    

	Name:	 	Allan Youngberg

Chief Financial Officer	 	Name:	 	Ashok Ramchandani
	

Address for Notice:	
 	

Address for Notice:
	

4649 Morena Boulevard

San Diego, CA 92117

Telecopy: (858) 581-4707	
 	

 	
 	

 
	

Attn: General Counsel	
 	

 	
 	

 

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STOCK PURCHASE AGREEMENT by and among PRICESMART, INC., ISLAND FOOD AND DISTRIBUTORS, N.V. and NITHYANANDA ENT. LTD.

EXHIBIT A FORM OF VOTING AGREEMENT

RECITALS

AGREEMENTQuickLinks
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Exhibit 10.1  

 
  1994 STOCK AWARD PLAN
  
  
  (Amended and Restated as of October 25, 2001)    
  

        1.    Purpose.    The purpose of this 1994 Stock Award Plan (the "Plan") is to motivate key
personnel to produce a superior return to the shareholders of Medtronic, Inc. (the "Company") and its Affiliates by offering such individuals an opportunity to realize Stock appreciation, by
facilitating Stock ownership, and by rewarding them for achieving a high level of corporate performance. This Plan is also intended to facilitate recruiting and retaining key personnel of outstanding
ability. 

        2.    Definitions.    The capitalized terms used in this Plan have the meanings set forth
below. 

        (a)  "Affiliate"
means any corporation that is a "parent corporation" or "subsidiary corporation" of the Company, as those terms are defined in Sections 424(e) and
(f) of the Code, or any successor provision, and, for purposes other than the grant of Incentive Stock Options, any joint venture in which the Company or any such "parent corporation" or
"subsidiary corporation" owns an equity interest. 

        (b)  "Agreement"
means the agreement, whether in written or electronic form, between the Company or an Affiliate and a Participant containing the terms and conditions of an
Award (not inconsistent with this Plan), together with all amendments to such agreement, which amendments may be unilaterally made by the Company unless such amendments are deemed by the Committee to
be materially adverse to the Participant or are not required as a matter of law. The Agreement and any amendments thereto shall be deemed accepted and agreed upon by the Participant upon receipt,
without the necessity of obtaining the Participant's signature. 

        (c)  "Award"
means a grant made under this Plan in the form of Options, Stock Appreciation Rights, Restricted Stock, Performance Shares or any Other Stock-Based Award. 

        (d)  "Board"
means the Board of Directors of the Company. 

        (e)  "Change
in Control" means: 

        (i)    Any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 30% or more of either (A) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock") or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); provided, however, that, for purposes of this Section 2(e)(i), the following
acquisitions shall not constitute a Change in Control: (1) any acquisition directly from the Company (2) any acquisition by the Company or any of its subsidiaries, (3) any
acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries, (4) any acquisition by an underwriter temporarily holding
securities pursuant to an offering of such securities or (5) any acquisition pursuant to a transaction that complies with clauses (A), (B) and (C) of clause (iii); or 

        (ii)  Individuals
who, as of the date hereof, constitute the Board (the "Incumbent Directors") cease for any reason to constitute at least a majority of the Board;  provided, however, that any individual becoming a
director subsequent to the date hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the Incumbent Directors then on the Board (either by a specific vote or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without written objection to such nomination) shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a result of either an actual or 

threatened election contest or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or 

        (iii)  Consummation
of a reorganization, merger, statutory share exchange or consolidation (or similar corporate transaction) involving the Company or any of its
subsidiaries, a sale or other disposition of all or substantially all of the assets of the Company, or the acquisition of assets or stock of another entity (a "Business Combination"), in each case,
unless, immediately following such Business Combination, (A) substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 55% of, respectively, the then outstanding shares
of common stock and the total voting power of (1) the corporation resulting from such Business Combination (the "Surviving Corporation") or (2) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial ownership of 80% or more of the voting securities eligible to elect directors of the Surviving Corporation (the "Parent Corporation"), in
substantially the same proportion as their ownership, immediately prior to the Business Combination, of the Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case
may be, (B) no person (other than any employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or the Parent Corporation) is or becomes the beneficial owner
of 30% or more of the outstanding shares of common stock and the total voting power of the outstanding voting securities eligible to elect directors of the Parent Corporation (or, if
there is no Parent Corporation, the Surviving Corporation) and (C) at least a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation,
the Surviving Corporation) following the consummation of the Business Combination were Incumbent Directors at the time of the Board's approval of the execution of the initial agreement providing for
such Business Combination; or 

        (iv)  Approval
by the shareholders of the Company of a complete liquidation or dissolution of the Company. 

Notwithstanding
the foregoing provisions of this definition, a Change in Control shall not be deemed to occur with respect to a Participant if the acquisition of the 30% or greater interest referred
to in clause (i) is by a group, acting in concert, that includes the Participant or if at least 40% of the then outstanding common stock or combined voting power of the then outstanding voting
securities (or voting equity interests) of the Surviving Corporation or, if applicable, the Parent Corporation shall be beneficially owned, directly or indirectly, immediately after a Business
Combination by a group, acting in concert, that includes that Participant. 

        (f)    "Code"
means the Internal Revenue Code of 1986, as amended and in effect from time to time, or any successor statute. 

        (g)  "Committee"
means the persons designated by the Board to administer this Plan under Section 3 hereof. The Committee shall consist of not less than three members
of the Board and, except as otherwise determined by the Board, such persons shall be "non-employee directors" under Exchange Act Rule 16b-3 and "outside directors" under
Section 162(m) of the Code. 

        (h)  "Company"
means Medtronic, Inc., a Minnesota corporation, or any successor to all or substantially all of its businesses by merger, consolidation, purchase of
assets or otherwise. 

        (i)    "Disability"
means the disability of a Participant such that the Participant is considered disabled under any retirement plan of the Company which is qualified under
Section 401 of the Code, or, in the case of a Participant employed by a non-U.S. Affiliate or in a non-U.S. location, under any retirement plan or long-term
disability plan of the Company or such Affiliate applicable to such Participant, or as otherwise determined by the Committee. 

        (j)    "Employee"
means any full-time or part-time regular employee (including officers) of the Company or an Affiliate. For purposes of this Plan, a
regular employee is an employee who is on 

the regular payroll of the Company or an Affiliate and who is identified in the personnel records of the Company or an Affiliate as being an employee. Except with respect to grants of Incentive Stock
Options, "Employee" shall also include other individuals who are not regular employees of the Company or an Affiliate but who provide services to the Company or an Affiliate in the capacity of an
independent contractor and to whom the Company specifically chooses to grant an Award and therefore treat as a Participant. References in this Plan to "employment" and related terms shall include the
providing of services in any such capacity. 

        (k)  "Exchange
Act" means the Securities Exchange Act of 1934, as amended; "Exchange Act Rule 16b-3" means Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Exchange Act as in effect with respect to the Company or any successor regulation. 

        (l)    "Fair
Market Value" as of any date means, unless otherwise expressly provided in this Plan: 

        (i)    the
closing sale price of a Share (A) on the composite tape for New York Stock Exchange ("NYSE") listed shares, or (B) if the Shares are not quoted on the
NYSE composite tape, on the principal United States securities exchange registered under the Exchange Act on which the Shares are listed, or (C) if the Shares are not listed on any such
exchange, on the National Association of Securities Dealers, Inc. Automated Quotation System National Market System, on that date, or, if no sale of Shares shall have occurred on that date, on
the next preceding day on which a sale of Shares occurred, or 

        (ii)  if
clause (i) is not applicable, what the Committee determines in good faith to be 100% of the fair market value of a Share on that date. In the case of an
Incentive Stock Option, if such determination of Fair Market Value is not consistent with the then current regulations of the Secretary of the Treasury, Fair Market Value shall be determined in
accordance with said regulations. The determination of Fair Market Value shall be subject to adjustment as provided in Section 14(f) hereof. 

        (m)  "Fundamental
Change" means a dissolution or liquidation of the Company, a sale of substantially all of the assets of the Company, a merger or consolidation of the
Company with or into any other corporation, regardless of whether the Company is the surviving corporation, or a statutory share exchange involving capital stock of the Company. 

        (n)  "Incentive
Stock Option" means any Option designated as such and granted in accordance with the requirements of Section 422 of the Code or any successor to such
section. 

        (o)  "Non-Employee
Director" means a member of the Board who is not an employee of the Company or any Affiliate. 

        (p)  "Non-Qualified
Stock Option" means an Option other than an Incentive Stock Option. 

        (q)  "Other
Stock-Based Award" means an Award of Stock or an Award based on Stock other than Options, Stock Appreciation Rights, Restricted Stock or Performance Shares. 

        (r)  "Option"
means a right to purchase Stock, including both Non-Qualified Stock Options and Incentive Stock Options. 

        (s)  "Participant"
means an Employee to whom an Award is made. 

        (t)    "Performance
Period" means the period of time as specified in an Agreement over which Performance Shares are to be earned. 

        (u)  "Performance
Shares" means a contingent award of a specified number of Performance Shares, with each Performance Share equivalent to one Share, a variable percentage of
which may vest depending upon the extent of achievement of specified performance objectives during the applicable Performance Period. 

        (v)  "Plan"
means this 1994 Stock Award Plan, as amended and in effect from time to time. 

        (w)  "Restricted
Stock" means Stock granted under Section 10 hereof so long as such Stock remains subject to one or more restrictions. 

        (x)  "Retirement"
means retirement of an Employee as defined under any retirement plan of the Company which is qualified under Section 401 of the Code (which currently
provides for retirement on or after age 55, provided the Employee has been employed by the Company and/or one or more Affiliates for at least ten years, or retirement on or after age 62), or under any
retirement plan of the Company or any Affiliate applicable to the Employee due to employment by a non-U.S. Affiliate or employment in a non-U.S. location, or as otherwise
determined by the Committee. 

        (y)  "Share"
means a share of Stock. 

        (z)  "Stock"
means the common stock, $.10 par value per share (as such par value may be adjusted from time to time), of the Company. 

        (aa) "Stock
Appreciation Right" means a right, the value of which is determined relative to appreciation in value of Shares pursuant to an Award granted under
Section 8 hereof. 

        (bb) "Subsidiary"
means a "subsidiary corporation," as that term is defined in Section 424(f) of the Code, or any successor provision. 

        (cc) "Successor"
with respect to a Participant means the legal representative of an incompetent Participant or, if the Participant is deceased, the legal representative of
the estate of the Participant or the person or persons who may, by bequest or inheritance, or valid beneficiary designation under Section 14(i) hereof, acquire the right to exercise an
Option or Stock Appreciation Right or receive cash and/or Shares issuable in satisfaction of an Award in the event of a Participant's death. 

        (dd) "Term"
means the period during which an Option or Stock Appreciation Right is outstanding or the period during which the restrictions placed on Restricted Stock or any
other Award are in effect. 

        Except
when otherwise indicated by the context, reference to the masculine gender shall include, when used, the feminine gender and any term used in the singular shall also include the
plural. 

        3.    Administration.    

        (a)  Authority of Committee.    The Committee shall administer this Plan. The Committee shall have exclusive power
to make Awards and to determine when and to whom Awards will be granted, and the form, amount and other terms and conditions of each Award, subject to the provisions of this Plan. The Committee may
determine whether, to what extent and under what circumstances Awards may be settled, paid or exercised in cash, Shares or other Awards or other property, or cancelled, forfeited or suspended. The
Committee shall have the authority to interpret this Plan and any Award or Agreement made under this Plan, to establish, amend, waive and rescind any rules and regulations relating to the
administration of this Plan, to determine the terms and provisions of any Agreements entered into hereunder (not inconsistent with this Plan), and to make all other determinations necessary or
advisable for the administration of this Plan. The Committee may correct any defect, supply any omission or reconcile any inconsistency in this Plan or in any Award in the manner and to the extent it
shall deem desirable. The determinations of the Committee in the administration of this Plan, as described herein, shall be final, binding and conclusive. 

        (b)  Delegation of Authority.    The Committee may delegate all or any part of its authority under this Plan to
(i) one or more subcommittees which may consist solely of "non-employee directors" under Exchange Act Rule 16b-3 and "outside directors" under
Section 162(m) of the Code and (ii) persons who are not non-employee directors for purposes of determining and administering Awards solely to Employees who are not then
subject to the reporting requirements of Section 16 of the Exchange Act. 

        (c)  Rule 16b-3.    It is the intent that this Plan and all Awards granted pursuant to it shall
be administered by the Committee (or a subcommittee thereof) so as to permit this Plan and Awards to comply with Exchange Act Rule 16b-3. If any provision of this Plan or of any
Award would otherwise frustrate or conflict with the intent expressed in this Section 3(c), that provision to the extent possible shall be interpreted and deemed amended in the manner
determined by the Committee so as to avoid such conflict. 

        (d)  Indemnification.    To the full extent permitted by law, each member and former member of the Committee and
each person to whom the Committee delegates or has delegated authority under this Plan shall be entitled to indemnification by the Company against and from any loss, liability, judgment, damages, cost
and reasonable expense incurred by such member, former member or other person by reason of any action taken, failure to act or determination made in good faith under or with respect to this Plan. 

        4.    Shares Available; Maximum Payouts.    

        (a)  Shares Available.    The number of additional Shares available for distribution under this Plan as of
April 30, 2000 is 58,000,000 (which brings the total number of shares authorized for distribution under this Plan since inception to 102,800,000, as adjusted to date pursuant to
Section 14(f)). All shares are subject to adjustment under Section 14(f) hereof. 

        (b)  Shares Again Available.    Any Shares subject to the terms and conditions of an Award under this Plan which are
not used because the terms and conditions of the Award are not met may again be used for an Award under this Plan. 

        (c)  Unexercised Awards.    Any unexercised or undistributed portion of any terminated, expired, exchanged, or
forfeited Award or any Award settled in cash in lieu of Shares shall be available for further Awards. 

        (d)  No Fractional Shares.    No fractional Shares may be issued under this Plan. Fractional Shares will be rounded
to the nearest whole Share. 

        (e)  Maximum Payouts.    No more than 35% of all Shares subject to this Plan may be granted in the aggregate
pursuant to Restricted Stock, Performance Share and Other Stock-Based Awards. No Participant may be granted Options, Stock Appreciation Rights, Performance Shares or any combination thereof relating
to more than 2,000,000 Shares over a one-year period under this Plan. 

        5.    Eligibility.    Awards may be granted under this Plan to any Employee at the discretion
of the Committee. 

        6.    General Terms of Awards.    

        (a)  Awards.    Awards under this Plan may consist of Options (either Incentive Stock Options or
Non-Qualified Stock Options), Stock Appreciation Rights, Performance Shares, Restricted Stock and Other Stock-Based Awards. Awards of Restricted Stock may, in the discretion of the
Committee, provide the Participant with dividends or dividend equivalents and voting rights prior to vesting (whether vesting is based on a period of time during which employment must continue or on
attainment of specified performance conditions). 

        (b)  Amount of Awards.    Each Agreement shall set forth the number of Shares of Restricted Stock, Stock or
Performance Shares subject to such Agreement, or the number of Shares to which the Option applies or with respect to which payment upon the exercise of the Stock Appreciation Right is to be
determined, as the case may be, as determined by the Committee in its sole discretion. 

        (c)  Term.    Each Agreement, other than those relating solely to Awards of Stock without restrictions, shall set
forth the Term of the Award and any applicable Performance Period for Performance Shares, as the case may be, but in no event shall the Term of an Award (other than Awards granted in lieu of cash
compensation) or the Performance Period be longer than ten years 

after the date of grant. In addition to the accelerated vesting provided pursuant to Sections 7(c), 8(b), 9(b), 10(b) and 11(b) hereof in the event of a Change in Control, an Agreement with a
Participant may permit acceleration of vesting and of the expiration of the applicable Term upon such terms and conditions as shall be set forth in the Agreement, which may, but need not, include,
without limitation, acceleration resulting from the occurrence of a Fundamental Change, or the Participant's death, Disability or Retirement. Acceleration of the Performance Period of Performance
Shares shall be subject to Sections 9(b) and 9(c) hereof. 

        (d)  Agreements.    Each Award under this Plan shall be evidenced by an Agreement setting forth the terms and
conditions, as determined by the Committee, which shall apply to such Award in addition to the terms and conditions specified in this Plan. All provisions of the Plan, which by their terms apply to an
Award, shall apply regardless of whether such terms are expressly set forth in the Award Agreement, except to the extent that the Agreement for that Award expressly provides otherwise. 

        (e)  Transferability.    During the lifetime of a Participant to whom an Award is granted, only such Participant (or
such Participant's legal representative or, if so provided in the applicable Agreement in the case of a Non-Qualified Stock Option, a permitted transferee as hereafter described) may
exercise an Option or Stock Appreciation Right or receive payment with respect to Performance Shares or any other Award. No Award of Restricted Stock (prior to the expiration of the restrictions),
Options, Stock Appreciation Rights, Performance Shares or other Award (other than an award of Stock without restrictions) may be sold, assigned, transferred, exchanged, or otherwise encumbered, and
any attempt to do so shall be of no effect. Notwithstanding the immediately preceding sentence, (i) an Award shall be transferable to a Successor in the event of a Participant's legal
incompetency or death and (ii) an Agreement may provide that a Non-Qualified Stock Option shall be transferable to any member of a Participant's "immediate family" (as such term is
defined in Rule 16a-1(e) promulgated under the Exchange Act, or any successor rule or regulation) or to one or more trusts whose beneficiaries are members of such Participant's
"immediate family" or partnerships in which such family members are the only partners; provided, however, that (1) the Participant receives no consideration for the transfer and (2) such
transferred Non-Qualified Stock Option shall continue to be subject to the same terms and conditions as were applicable to such Non-Qualified Stock Option immediately prior to
its transfer. 

        (f)    Termination of Employment.    Except as otherwise determined by the Committee or provided by the Committee in
an applicable Agreement, in case of termination of employment, the following provisions shall apply: 

        (1)  Options and Stock Appreciation Rights.

        (i)    Death.    If a Participant who has been granted an Option or Stock Appreciation Rights shall die before such
Option or Stock Appreciation Rights have expired, the Option or Stock Appreciation Rights shall become exercisable in full, and may be exercised by the Participant's Successor at any time, or from
time to time, within three years after the date of the Participant's death, in the case of an Option or Stock Appreciation Right granted before April 30, 2000 and within five years after the
date of the Participant's death in the case of an Option or Stock Appreciation Right granted on or after April 30, 2000. 

        (ii)  Disability or Retirement.    If a Participant's employment terminates because of Disability or Retirement, the
Option or Stock Appreciation Rights shall become exercisable in full, and the Participant may exercise his or her Options or Stock Appreciation Rights at any time, or from time to time, within three
years after the date of such termination, in the case of an Option or Stock Appreciation Right granted before April 30, 2000, and within five years after the date of such termination in the
case of an Option or Stock Appreciation Right granted on or after April 30, 2000. 

        (iii)  Reasons other than Death, Disability or Retirement.    If a Participant's employment terminates for any
reason other than death, Disability or Retirement, the unvested or unexercised portion of any Award held by such Participant shall terminate (a) on the date of termination of employment for
Awards granted before April 30, 2000, and (b) at the close of business on the date 30 days after the date of termination of employment for Awards granted on or after
April 30, 2000, provided, however, that no further vesting shall occur after the date of termination of employment. 

        (iv)  Expiration of Term.    Notwithstanding the foregoing paragraphs (i)-(iii), in no event shall an Option or a
Stock Appreciation Right be exercisable after expiration of the Term of such Award. 

        (2)  Performance Shares.    If a Participant's employment with the Company or any of its Affiliates terminates
during a Performance Period because of death, Disability or Retirement, or under other circumstances provided by the Committee in its discretion in the applicable Agreement, the Participant shall be
entitled to a payment of Performance Shares at the end of the Performance Period based upon the extent to which achievement of performance targets was satisfied at the end of such period (as
determined at the end of the Performance Period) and prorated for the portion of the Performance Period during which the Participant was employed by the Company or any Affiliate. Except as provided in
this Section 6(f)(2), in the applicable Agreement, or in Section 9(b) or 9(c) hereof, if a Participant's employment terminates with the Company or any of its Affiliates during a
Performance Period, then such Participant shall not be entitled to any payment with respect to that Performance Period. 

        (3)  Restricted Stock.    In case of a Participant's death, Disability or Retirement, the Participant shall be
entitled to receive that number of shares of Restricted Stock under outstanding Awards that has been pro rated for the portion of the Term of the Awards during which the Participant was employed by
the Company or any Affiliate, and with respect to such Shares all restrictions shall lapse. Upon termination of employment for any reason other than death, Disability or Retirement, any shares of
Restricted Stock whose restrictions have not lapsed (including pursuant to Section 10(b) hereof) will automatically be forfeited in full and cancelled by the Company upon such termination of
employment. 

        (g)  Rights as Shareholder.    A Participant shall have no rights as a shareholder with respect to any securities
covered by an Award until the date the Participant becomes the holder of record. 

        7.    Stock Options.    

        (a)  Terms and Exercisability of All Options.    Each Option shall be granted pursuant to an Agreement as either an
Incentive Stock Option or a Non-Qualified Stock Option. Only Non-Qualified Stock Options may be granted to Employees who are not regular employees of the Company or an
Affiliate. The purchase price of each Share subject to an Option shall be determined by the Committee and set forth in the Agreement, but shall not be less than 100% of the Fair Market Value of a
Share on the date the Option is granted. The Agreement shall specify a vesting schedule under which the Option becomes available to exercise, subject to any acceleration that may be provided in the
Agreement or in this Plan. Only the vested portion of an Option may be exercised. When exercising an Option, the purchase price of the Shares shall be paid in full at the time of exercise, provided
that, to the extent permitted by law, Participants may simultaneously exercise Options and sell the Shares thereby acquired pursuant to a brokerage or similar relationship and use the proceeds from
such sale to pay the purchase price of such Shares. The purchase price may be paid in cash, or by delivery of cash proceeds of such a simultaneous exercise and sale or by delivery to the Company,
physically or by attestation, of Shares already owned by such Participant, provided that any such Shares not acquired on the open market shall have been owned for at least 6 months (with such
Shares having a total fair market value as of the date the Option is exercised equal to the total exercise cost of the Shares being purchased pursuant to the Option), or a combination thereof, unless
otherwise provided in the Agreement. Each Option shall be exercisable in whole or in part on the terms provided in the Agreement. In 

no event shall any Option be exercisable at any time after its Term. When an Option is no longer exercisable, it shall be deemed to have lapsed or terminated. 

        (b)  Incentive Stock Options.    In addition to the other terms and conditions applicable to all Options: 

        (i)    the
aggregate Fair Market Value (determined as of the date the Option is granted) of the Shares with respect to which Incentive Stock Options held by an individual first
become exercisable in any calendar year (under this Plan and all other incentive stock option plans of the Company and its Affiliates) shall not exceed $100,000 (or such other limit as may be required
by the Code), if such limitation is necessary to qualify the Option as an Incentive Stock Option, and to the extent an Option or Options granted to a Participant exceed such limit, such Option or
Options shall be treated as a Non-Qualified Stock Option; 

        (ii)  an
Incentive Stock Option shall not be exercisable and the Term of the Award shall not be more than ten years after the date of grant (or such other limit as may be
required by the Code) if such limitation is necessary to qualify the Option as an Incentive Stock Option; 

        (iii)  the
Agreement covering an Incentive Stock Option shall contain such other terms and provisions which the Committee determines necessary to qualify such Option as an
Incentive Stock Option; and 

        (iv)  notwithstanding
any other provision of this Plan to the contrary, no Participant may receive an Incentive Stock Option under this Plan if, at the time the Award is
granted, the Participant owns (after application of the rules contained in Section 424(d) of the Code, or its successor provision) Shares
possessing more than ten percent of the total combined voting power of all classes of stock of the Company or its subsidiaries, unless (A) the option price for such Incentive Stock Option is at
least 110% of the Fair Market Value of the Shares subject to such Incentive Stock Option on the date of grant and (B) such Option is not exercisable after the date five years from the date such
Incentive Stock Option is granted. 

        (c)  Change in Control.    For all Options granted prior to October 25, 2001, and for all Options granted
after such date except in the latter case where otherwise expressly provided in the Agreement relating to an Option, upon the occurrence of a Change in Control, each then-outstanding
Option, whether or not previously exercisable, shall vest and be exercisable in full. 

        8.    Stock Appreciation Rights.    

        (a)  In General.    An Award of a Stock Appreciation Right shall entitle the Participant, subject to terms and
conditions determined by the Committee, to receive upon exercise of the Stock Appreciation Right all or a portion of the excess of (i) the Fair Market Value of a specified number of Shares on
the date of exercise of the Stock Appreciation Right over (ii) a specified price which shall not be less than 100% of the Fair Market Value of such Shares on the date of grant of the Stock
Appreciation Right. A Stock Appreciation Right may be granted in connection with a previously or contemporaneously granted Option, or independent of any Option. If issued in connection with an Option,
the Committee may impose a condition that exercise of a Stock Appreciation Right cancels the Option with which it is connected and exercise of the connected Option cancels the Stock Appreciation
Right. Each Stock Appreciation Right may be exercisable in whole or in part on the terms provided in the Agreement. No Stock Appreciation Right shall be exercisable at any time after its Term. When a
Stock Appreciation Right is no longer exercisable, it shall be deemed to have lapsed or terminated. Except as otherwise provided in the applicable Agreement, upon exercise of a Stock Appreciation
Right, payment to the Participant (or to his or her Successor) shall be made in the form of cash, Stock or a combination of cash and Stock as promptly as practicable after such exercise. The Agreement
may provide for a limitation upon the amount or percentage of the total appreciation on which payment (whether in cash and/or Stock) may be made in the event of the exercise of a Stock Appreciation
Right. 

        (b)  Change in Control.    For all Stock Appreciation Rights granted prior to October 25, 2001, and for all
Stock Appreciation Rights granted after such date except in the latter case where otherwise expressly provided in the Agreement relating to a Stock Appreciation Right, upon the occurrence of a Change
in Control, each then-outstanding Stock Appreciation Right, whether or not previously exercisable, shall vest and be exercisable in full. 

        9.    Performance Shares.    

        (a)  Initial Award.    An Award of Performance Shares shall entitle a Participant (or a Successor) to future
payments based upon the achievement of performance targets established in writing by the Committee. Payment shall be made in Stock, or a combination of cash and Stock, as determined by the Committee,
provided that at least 25% of the value of the vested Performance Shares shall be distributed in the form of Stock. With respect to those Participants who are "covered employees" within the meaning of
Section 162(m) of the Code and the regulations thereunder, such performance targets shall consist of one or any combination of two or more of revenue, revenue per employee, earnings before
income tax (profit before taxes), earnings before interest and income tax, net earnings (profits after tax), earnings per employee, tangible, controllable or total asset turnover, earnings per share,
operating income, total shareholder return, market share, return on equity, before- or after-tax return on net assets, distribution expense, inventory turnover, or economic value added
(economic profit), and any such targets may relate to one or any combination of two or more of corporate, group, unit, division, Affiliate or individual performance. The Agreement may establish that a
portion of the maximum amount of a Participant's Award will be paid for performance, which exceeds the minimum target but falls below the maximum target applicable to such Award. The Agreement shall
also provide for the timing of such payment. The Committee shall determine the extent to which (i) performance targets have been attained, (ii) any other terms and conditions with
respect to an Award relating to such Performance Period have been satisfied, and (iii) payment is due with respect to a Performance Share Award. 

        (b)  Change in Control.    For all Performance Share Awards granted prior to October 25, 2001, and for all
Performance Share Awards granted after such date except in the latter case where otherwise expressly provided in the Agreement relating to a Performance Share Award, upon the occurrence of a Change in
Control, a Participant who has been awarded Performance Shares (but has not yet received payment of such shares) shall be entitled to a pro rata payment of such Performance Shares. The pro rata
payment shall be made to the Participant as of the date of the Change in Control, in shares or cash (at the election of the Company) equal to the number of Shares covered by the Performance Shares
multiplied by the performance-based accrual percentage pertaining to such Performance Shares as of the Change in Control, multiplied by a fraction the numerator of which is the number of months
elapsed from the date the Performance Shares were granted through the date of the Change in Control and the denominator of which is the number of months from the date the Performance Shares were
granted through the Performance Shares' scheduled maturity date. 

        (c)  Acceleration and Adjustment for Other Reasons.    In addition to the acceleration upon a Change in Control
provided pursuant to Section 9(b) hereof, the Agreement may permit an acceleration of the Performance Period and an adjustment of performance targets and payments with respect to some or all of
the Performance Shares awarded to a Participant, upon such terms and conditions as shall be set forth in the Agreement, upon the occurrence of certain events, which may, but need not, include without
limitation a Fundamental Change, the Participant's death, Disability or Retirement, a change in accounting practices of the Company or its Affiliates, or, with respect to payments in Stock for
Performance Share Awards, a reclassification, stock dividend, stock split or stock combination as provided in Section 14(f) hereof. 

        (d)  Valuation.    Each Performance Share earned after conclusion of a Performance Period shall have a value equal
to the average of the Fair Market Values of a Share for the 20 consecutive business days ending on and including the last day of such Performance Period. 

        10.    Restricted Stock.    

        (a)  In General.    Restricted Stock may be granted in the form of Shares registered in the name of the Participant
but held by the Company until the end of the Term of the Award. Any employment conditions, performance conditions and the Term of the Award shall be established by the Committee in its discretion and
included in the applicable Agreement. The Committee may provide in the applicable Agreement for the lapse or waiver of any such restriction or condition based on such factors or criteria as the
Committee, in its sole discretion, may determine. No Award of Restricted Stock may vest earlier than one year from the date of grant, except as provided in the applicable Agreement or in
Section 10(b) hereof. 

        (b)  Change in Control.    For all Restricted Stock Awards granted prior to October 25, 2001, and for all
Restricted Stock Awards granted after such date except in the latter case where otherwise expressly provided in the Agreement relating to a Restricted Stock Award, upon the occurrence of a Change in
Control, all restrictions with respect to shares of Restricted Stock shall lapse. 

        11.    Other Stock-Based Awards.    

        (a)  In General.    The Committee may from time to time grant Awards of Stock, and other Awards under this Plan
(collectively herein defined as "Other Stock-Based Awards"), including, without limitation, those Awards pursuant to which Shares may be acquired in the future, such as Awards denominated in Stock
units, securities convertible into Stock and phantom securities. The Committee, in its sole discretion, shall determine the terms and conditions of such Awards provided that such Awards shall not be
inconsistent with the terms and purposes of this Plan. The Committee may, in its sole discretion, direct the Company to issue Shares subject to restrictive legends and/or stop transfer instructions
which are consistent with the terms and conditions of the Award to which such Shares relate. 

        (b)  Change in Control.    Unless otherwise specifically provided in the Agreement related to the grant of an Other
Stock-Based Award, upon a Change in Control any such Award shall vest and/or pay out in full, as applicable, as if the award had continued to maturity with all applicable conditions and targets
satisfied. 

        12.    Prior Automatic Grants to Non-Employee Directors.    The provisions of
Section 12 of the Plan as in effect prior to April 30, 2000 shall be applicable to automatic grants of Non-Qualified Stock Options (and related Limited Rights) made prior to
March 5, 1998 to Non-Employee Directors. 

        13.    Prior Elective Grants to Non-Employee Directors.    The provisions of
Section 13 of the Plan as in effect prior to April 30, 2000 shall be applicable to grants of Restricted Stock made prior to March 5, 1998 to Non-Employee Directors
pursuant to their elections to receive such grants in lieu of all or a portion of their annual fees for their services as Non-Employee Directors. 

        14.    General Provisions.    

        (a)  Effective Date of this Plan.    This Plan shall become effective as of April 29, 1994, provided that
this Plan is approved and ratified by the affirmative vote of the holders of a majority of the outstanding Shares of Stock present or represented and entitled to vote in person or by proxy at a
meeting of the shareholders of the Company no later than August 31, 1994. This Plan, as amended and restated, is effective as of April 30, 2000. 

        (b)  Duration of this Plan.    This Plan shall remain in effect until all Stock subject to it shall be distributed
or all Awards have expired or lapsed, whichever is latest to occur, or this Plan is terminated pursuant to Section 14(e) hereof. No Award of an Incentive Stock Option shall be made more than
ten years after the effective date provided in the second sentence of Section 14(a) hereof (or such other limit as may be required by the Code) if such limitation is necessary to qualify the
Option as an Incentive Stock Option. The date and time of approval by the Committee of the granting of an Award shall be considered the date and time at which such Award is made or granted,
notwithstanding the date of any Agreement with respect to such Award; provided, however, 

that the Committee may grant Awards other than Incentive Stock Options to be effective and deemed to be granted on the occurrence of certain specified contingencies. 

        (c)  Right to Terminate Employment.    Nothing in this Plan or in any Agreement shall confer upon any Participant
who is an Employee the right to continue in the employment of the Company or any Affiliate or affect any right which the Company or any Affiliate may have to terminate or modify the employment of the
Participant with or without cause. 

        (d)  Tax Withholding.    The Company may withhold from any payment of cash or Stock to a Participant or other person
under this Plan an amount sufficient to cover any required withholding taxes, including the Participant's social security and Medicare taxes (FICA) and federal, state and local income tax with respect
to income arising from payment of the Award. The Company shall have the right to require the payment of any such taxes before issuing any Stock pursuant to the Award. In lieu of all or any part of a
cash payment from a person receiving Stock under this Plan, the individual may elect to cover all or any part of the minimum statutory FICA, federal, state and local income tax withholdings required
under the applicable tax laws through a reduction of the number of Shares delivered to such individual, with such Shares valued in the same manner as used in computing such minimum withholding taxes. 

        (e)  Amendment, Modification and Termination of this Plan.    Except as provided in this Section 14(e), the
Board may at any time amend, modify, terminate or suspend this Plan. Except as provided in this Section 14(e), the Committee may at any time alter or amend any or all Agreements under this Plan
to the extent permitted by law. Plan amendments are subject to approval of the shareholders of the Company only if such approval is necessary to maintain this Plan in compliance with the requirements
of Exchange Act Rule 16b-3, Section 422 of the Code, their successor provisions, or any other applicable law or regulation. No termination, suspension or modification of this
Plan may materially and adversely affect any right acquired by any Participant (or a Participant's legal representative) or any Successor under an Award granted before the date of termination,
suspension or modification, unless otherwise agreed by the Participant in the Agreement or otherwise or required as a matter of law. It is conclusively presumed that any adjustment for changes in
capitalization provided for in Section 9(c) or 14(f) hereof does not adversely affect any right of a Participant under an Award. 

        (f)    Adjustment for Changes in Capitalization.    In the event of any change in corporate capitalization (including,
but not limited to, a change in the number of Shares outstanding), arising from a stock split, Fundamental Change, Change in Control, or other corporate transaction, including, without limitation, any
merger, consolidation, separation, spin-off, distribution of stock or property of the Company, share exchange, reorganization (whether or not such reorganization comes within the
definition of such term in Section 368 of the Code) or any partial or complete liquidation of the Company, the Committee or Board may make such substitution or adjustments in the aggregate
number and type of shares reserved for issuance under the Plan, and the maximum limitation upon Awards to be granted to any Participant, in the number, type and option price of shares subject to
outstanding Stock Options and Stock Appreciation Rights, in outstanding Performance Shares and payments with respect to outstanding Performance Shares in the number and type of shares subject to other
outstanding Awards granted under the Plan and/or such other equitable substitution or adjustments as it may determine to be appropriate in its sole discretion; provided
however,    that the number of shares subject to any Award shall always be a whole number. Such adjusted option price shall also be used to
determine the amount payable by the Company upon the exercise of any Stock Appreciation Right connected with any Stock Option. 

        (g)  Fundamental Change.    In the event of a proposed Fundamental Change: (a) involving a merger,
consolidation or statutory share exchange, unless appropriate provision shall be made (which the Committee may, but shall not be obligated to, make) for the protection of the outstanding Options and
Stock Appreciation Rights by the substitution of options, stock appreciation rights and appropriate voting common stock of the corporation surviving any such merger or consolidation or, if
appropriate, the parent corporation of the Company or such 

surviving corporation, to be issuable upon the exercise of options or used to calculate payments upon the exercise of stock appreciation rights in lieu of Options, Stock Appreciation Rights and
capital stock of the Company, or (b) involving the dissolution or liquidation of the Company, the Committee may, but shall not be obligated to, declare, at least twenty days prior to the
occurrence of the Fundamental Change, and provide written notice to each holder of an Option or Stock Appreciation Right of the declaration, that each outstanding Option and Stock Appreciation Right,
whether or not then exercisable, shall be cancelled at the time of, or immediately prior to the occurrence of, the Fundamental Change in exchange for payment to each holder of an Option or Stock
Appreciation Right, within 20 days after the Fundamental Change, of cash equal to (i) for each Share covered by the
cancelled Option, the amount, if any, by which the Fair Market Value (as defined in this Section 14(g)) per Share exceeds the exercise price per Share covered by such Option or (ii) for
each Stock Appreciation Right, the price determined pursuant to Section 8 hereof, except that Fair Market Value of the Shares as of the date of exercise of the Stock Appreciation Right, as used
in clause (i) of Section 8, shall be deemed to mean Fair Market Value for each Share with respect to which the Stock Appreciation Right is calculated determined in the manner hereinafter
referred to in this Section 14(g). At the time of the declaration provided for in the immediately preceding sentence, each Stock Appreciation Right and each Option shall immediately become
exercisable in full and each person holding an Option or a Stock Appreciation Right shall have the right, during the period preceding the time of cancellation of the Option or Stock Appreciation
Right, to exercise the Option as to all or any part of the Shares covered thereby or the Stock Appreciation Right in whole or in part, as the case may be. In the event of a declaration pursuant to
this Section 14(g), each outstanding Option and Stock Appreciation Right that shall not have been exercised prior to the Fundamental Change shall be cancelled at the time of, or immediately
prior to, the Fundamental Change, as provided in the declaration. Notwithstanding the foregoing, no person holding an Option or Stock Appreciation Right shall be entitled to the payment provided for
in this Section 14(g) if such Option or Stock Appreciation Right shall have expired or terminated. For purposes of this Section 14(g) only, "Fair Market Value" per Share means the cash
plus the fair market value, as determined in good faith by the Committee, of the non-cash consideration to be received per Share by the shareholders of the Company upon the occurrence of
the Fundamental Change, notwithstanding anything to the contrary provided in this Plan. 

        (h)  Other Benefit and Compensation Programs.    Payments and other benefits received by a Participant under an
Award shall not be deemed a part of a Participant's regular, recurring compensation for purposes of any termination, indemnity or severance pay laws and shall not be included in, nor have any effect
on, the determination of benefits under any other employee benefit plan, contract or similar arrangement provided by the Company or an Affiliate, unless expressly so provided by such other plan,
contract or arrangement or the Committee determines that an Award or portion of an Award should be included to reflect competitive compensation practices or to recognize that an Award has been made in
lieu of a portion of competitive cash compensation. 

        (i)    Beneficiary Upon Participant's Death.    A Participant may designate a beneficiary to succeed to the
Participant's Awards under the Plan in the event of the Participant's death by filing a beneficiary form with the Company and, upon the death of the Participant, such beneficiary shall succeed to the
rights of the Participant to the extent permitted by law and the terms of this Plan and the applicable Agreement. In the absence of a validly designated beneficiary who is living at the time of the
Participant's death, the Participant's executor or administrator of the Participant's estate shall succeed to the Awards, which shall be transferable by will or pursuant to laws of descent and
distribution. 

        (j)    Forfeitures.    In the event an Employee has received or been entitled to payment of cash, delivery of Stock or
a combination thereof pursuant to an Award within the period beginning six months prior to the Employee's termination of employment with the Company and its Affiliates and ending when the Award
terminates or is cancelled, the Company, in its sole discretion, may 

require the Employee to return or forfeit the cash and/or Stock received with respect to the Award (or its economic value as of (i) the date of the exercise of Options or Stock Appreciation
Rights, (ii) the date of, and immediately following, the lapse of restrictions on Restricted Stock or the receipt of Stock
without restrictions, or (iii) the date on which the right of the Employee to payment with respect to Performance Shares vests, as the case may be) in the event of any of the following
occurrences: performing services for or on behalf of a competitor of, or otherwise competing with, the Company or any Affiliate, unauthorized disclosure of material proprietary information of the
Company or any Affiliate, a violation of applicable business ethics policies or business policies of the Company or any Affiliate, or any other occurrence specified in the related Agreement. The
Company's right to require forfeiture must be exercised not later than 90 days after discovery of such an occurrence but in no event later than 15 months after the Employee's termination
of employment with the Company and its Affiliates. Such right shall be deemed to be exercised upon the Company's mailing written notice to the Employee of such exercise, at the Employee's most recent
home address as shown on the personnel records of the Company. In addition to requiring forfeiture as described herein, the Company may exercise its rights under this Section 14(j) by
preventing or terminating the exercise of any Awards or the acquisition of Shares or cash thereunder. In the event an Employee fails or refuses to forfeit the cash and/or Shares demanded by the
Company (adjusted for any intervening stock splits), the Employee shall be liable to the Company for damages equal to the number of Shares demanded times the highest closing price per share of the
Stock during the period between the applicable date specified in (i) through (iii) above and the date of any judgment or award to the Company, together with all costs and attorneys' fees
incurred by the Company to enforce this provision. 

        (k)  Unfunded Plan.    This Plan shall be unfunded and the Company shall not be required to segregate any assets
that may at any time be represented by Awards under this Plan. Neither the Company, its Affiliates, the Committee, nor the Board shall be deemed to be a trustee of any amounts to be paid under this
Plan nor shall anything contained in this Plan or any action taken pursuant to its provisions create or be construed to create a fiduciary relationship between the Company and/or its Affiliates, and a
Participant or Successor. To the extent any person acquires a right to receive an Award under this Plan, such right shall be no greater than the right of an unsecured general creditor of the Company. 

        (l)    Limits of Liability.

        (i)    Any
liability of the Company to any Participant with respect to an Award shall be based solely upon contractual obligations created by this Plan and the Agreement. 

        (ii)  Except
as may be required by law, neither the Company nor any member or former member of the Board or of the Committee, nor any other person participating (including
participation pursuant to a delegation of authority under Section 3(b) hereof) in any determination of any question under this Plan, or in the interpretation, administration or application of
this Plan, shall have any liability to any party for any action taken, or not taken, in good faith under this Plan. 

        (m)  Compliance with Applicable Legal Requirements.    No certificate for Shares distributable pursuant to this Plan
shall be issued and delivered unless the issuance of such certificate complies with all applicable legal requirements including, without limitation, compliance with the provisions of applicable state
securities laws, the Securities Act of 1933, as amended and in effect from time to time or any successor statute, the Exchange Act and the requirements of the exchanges on which the Company's Shares
may, at the time, be listed. 

        (n)  Deferrals and Settlements.    The Committee may require or permit Participants to elect to defer the issuance
of Shares or the settlement of Awards in cash under such rules and procedures as it may establish under this Plan. It may also provide that deferred settlements include the payment or crediting of
interest on the deferral amounts. Participants who are eligible to participate in the Medtronic, Inc. Capital Accumulation Plan Deferral Program ("CAP") shall 

be entitled to defer some or all of the cash portion of any Performance Shares granted to them hereunder in accordance with the terms of the CAP. 

        15.    Governing Law.    To the extent that federal laws do not otherwise control, this Plan
and all determinations made and actions taken pursuant to this Plan shall be governed by the laws of Minnesota, without giving effect to conflicts of law provisions, and construed accordingly. 

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

        17.    Termination of Prior Plans.    Effective upon the approval of this Plan by the
Company's shareholders as provided by Section 14(a) hereof, no further grants of options, performance shares or restricted stock or any other awards shall be made under the Company's 1979
Restricted Stock and Performance Share Award Plan, 1979 Nonqualified Stock Option Plan, 1989 Phantom Stock Award Plan or 1991 Restricted Stock Plan for Non-Employee Directors (the "Prior
Plans"). Thereafter, all grants and awards made under the Prior Plans prior to such approval by the shareholders shall continue in accordance with the terms of the Prior Plans. 

QuickLinks

1994 STOCK AWARD PLAN (Amended and Restated as of October 25, 2001)

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