Document:

2012 Collective Brands, Inc. Stock Incentive Plan

 Exhibit 10.6 
 2012 COLLECTIVE BRANDS, INC. STOCK INCENTIVE PLAN 
 Section 1: Purpose

 The purpose of the 2012 Collective Brands, Inc. Stock Incentive Plan (the “Plan”) is to promote the interests of Collective
Brands, Inc. (the “Company”), its Subsidiaries and stockholders by (i) attracting and retaining individuals eligible to participate in the Plan; (ii) motivating such individuals by providing incentive compensation; and
(iii) aligning the interests of such individuals with the interests of the Company’s stockholders. 
 Section 2: Definitions

 The following terms, as used in the Plan, shall have the meanings specified below. Other capitalized terms shall have the meanings
specified in the Plan. 
  

	 	a.	“Acquisition Award” means an Award granted under this Plan in substitution for options, rights and such other Awards with respect to the capital stock
of another corporation which is merged into, consolidated with, or all or a substantial portion of the property or stock of which is acquired by, the Company or one of its Subsidiaries. 

 

	 	b.	“Appreciation Right” means a right to receive an amount that is based on the increase in the Stock’s Fair Market Value after the grant date, and
that is payable entirely in cash, entirely in Stock or partly in cash and partly in Stock and exercisable at such time or times and subject to such conditions as the Committee may determine in its sole discretion subject to the Plan, including but
not limited to the achievement of specific Performance Goals. 

  

	 	c.	“Appreciation Value Award Vehicle” means an Award type structured to correlate the realization of gains based on absolute Stock price appreciation. May
include, but not be limited to, Options, cash-settled stock appreciation rights and stock-settled stock appreciation rights. 

  

	 	d.	“Award” means an award granted pursuant to Section 4. 

 

	 	e.	“Award Agreement” means a document setting forth the terms and conditions applicable to the Award granted to the Participant. 

 

	 	f.	“Board of Directors” or “Board” means the Board of Directors of the Company, as it may be comprised from time to time.

  

	 	g.	“Capitalization Adjustment” has the meaning ascribed to that term in Section 8. 

 

	 	h.	“Change of Control” means: 

  

	 	(1)	 Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) acquires
beneficial ownership 

  
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(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% 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 definition, none of the following shall constitute a Change of Control: (a) any acquisition directly from the Company of 30% or less of Outstanding Company Common Stock or Outstanding Company Voting Securities
provided that at least a majority of the members of the Board of Directors of the Company following such acquisition were members of the incumbent Board at the time of the Board’s approval of such acquisition, (b) any acquisition by the
Company, (c) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliated company, or (d) any acquisition by the Company which by reducing the number of shares of Outstanding
Company Common Stock or Outstanding Company Voting Securities, increases the proportionate number of shares of Outstanding Company Common Stock or Outstanding Company Voting Securities beneficially owned by any Person to 20% or more of the
Outstanding Company Common Stock or Outstanding Company Voting Securities; provided, however, that, if such Person shall thereafter become the beneficial owner of any additional shares of Outstanding Company Common Stock or Outstanding Company
Voting Securities and beneficially owns 20% or more of either the Outstanding Company Common Stock or the Outstanding Company Voting Securities, then such additional acquisition shall constitute a Change of Control; or 

 

	 	(2)	Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) 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 stockholders, was approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or 

 

	 	(3)	 A reorganization, merger, consolidation or sale or other disposition of all or substantially all of the assets of the Company (a “Business
Combination”) is consummated, in each case, unless, immediately following such Business Combination, (A), more than 50%, respectively, of the then-outstanding shares of common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as the case may be, of (x) the corporation resulting from such Business Combination or (y) a corporation that, as a result of such transaction, owns the Company or all or
substantially all of the Company’s assets whether 

  
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directly or through one or more Subsidiaries, is represented by the Outstanding Company Common Stock and the Outstanding Company Voting Securities (or, if applicable, is represented by shares
into which Outstanding Company Common Stock or Outstanding Company Voting Securities were converted pursuant to such Business Combination) in substantially the same proportions as their ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any corporation resulting from such Business Combination or any employee benefit plan (or related trust) of the Company
or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common stock of the corporation resulting from such Business Combination or the
combined voting power of the then-outstanding voting securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (C) at least a majority of the members of the Board of Directors of the
corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement or of the action of the Board providing for such Business Combination; or 

 

	 	(4)	The stockholders of the Company approve of a complete liquidation or dissolution of the Company. 

 

	 	i.	“Code” means the Internal Revenue Code of 1986, and any successor statute, as it or they may be amended from time to time. 

 

	 	j.	“Committee” means the Compensation, Nominating & Governance Committee of the Board of Directors or such other committee as may be designated
by the Board of Directors from time to time. To the extent that compensation realized in respect of Awards is intended to be “performance based” under Section 162(m) of the Code and the Committee is not comprised solely of individuals
who are “outside directors” within the meaning of section 162(m) of the Code, or that any member of one Committee is not a “non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, the Committee may from
time to time delegate some or all of its functions under the Plan to a committee or subcommittee composed of members that meet the relevant requirements. The term “Committee” includes only such committee or subcommittee, to the extent of
the Committee’s delegation. 

  

	 	k.	“Company” means Collective Brands, Inc., a Delaware corporation, and any successor thereto. 

 

	 	l.	 “Confidential Information” means any and all non-public information pertaining to the Company’s business. Confidential
Information includes information disclosed by the Company and its Subsidiaries or affiliates to Participants, and information developed or learned by Participants during the 

  
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course of or as a result of employment with the Company, or one of its Subsidiaries. The Confidential Information includes, without limitation, information and documents concerning the
Company’s processes; suppliers (including terms, conditions and other business arrangements with suppliers); supplier and customer lists; advertising and marketing plans and strategies; profit margins; seasonal plans, goals, objectives and
projections; compilations, analyses and projections regarding the Company and/or its Subsidiaries divisions, stores, product segments, product lines, suppliers, sales and expenses; files; trade secrets and patent applications (prior to their being
public); salary, staffing and employment information (including information about performance of other employees); and “know-how,” techniques or any technical information not of a published nature relating, for example, to how the Company
and its subsidiaries or affiliates conducts its business. 

  

	 	m.	“Continuous Service” means that the Participant’s service with the Company or a Subsidiary as an Employee is not interrupted or terminated. A
change in the capacity in which the Participant renders service to the Company or a Subsidiary as an Employee or a change in the entity for which the Participant renders such service, provided that there is no interruption or termination of the
Participant’s service with the Company or an Subsidiary, shall not terminate a Participant’s Continuous Service. Notwithstanding the foregoing, unless otherwise determined by the Committee, a leave of absence shall be treated as Continuous
Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy or in the written terms of the Award Agreement. 

 

	 	n.	“Covered Employee” means a covered employee within the meaning of Code section 162(m)(3). 

 

	 	o.	“Disability” means a permanent and total disability which enables the Participant to be eligible for and receive a disability benefit under the Federal
Social Security Act. 

  

	 	p.	“Dividend Equivalent” means an amount equal to the amount of cash dividends, if any, payable in accordance with Section 9, with respect to a share
of Stock after the date an Award is granted. 

  

	 	q.	“Employee” means any person employed by Collective Brands, Inc. or any of its Subsidiaries and classified as a common law employee. Employee does not
include independent contractors or leased employees from third parties. 

  

	 	r.	“Exchange Act” means the Securities Exchange Act of 1934, and any successor statute, as it may be amended from time to time. 

 

	 	s.	“Fair Market Value” of a Stock (as defined below) means, unless otherwise determined by the Committee: 

  
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	 	(i)	The closing price of the Stock on the New York Stock Exchange Composite Transaction Tape on the date in question, (or if the Stock is not then traded on the New York
Stock Exchange, the closing price of the Stock on the stock exchange or over-the-counter market on which the Stock is principally trading on such date) or, if no sale of the Stock occurred on such exchange on that day, the closing price of the Stock
on the last preceding day when the Stock was sold on such exchange; or 

  

	 	(ii)	If the Stock is no longer traded on the New York Stock Exchange and if there is no public market for the Stock, “Fair Market Value” shall be determined in
good faith by the Committee using other reasonable means. 

  

	 	t.	“Full Value Award Vehicle” means an Award type structured to provide equivalent value of a share of Stock based on a ratio of 1:1. Full Value Award
Vehicles may include but not be limited to restricted Stock and other Stock Awards such as unrestricted Stock, Restricted Stock, Restricted Stock Unit grants and performance based shares. 

 

	 	u.	“Incentive Stock Option” means an Option that is intended to qualify as an “incentive stock option” under Section 422 of the Code and
which is so designated in the applicable Award Agreement. Under no circumstances shall an Option that is not specifically designated as an Incentive Stock Option be considered an Incentive Stock Option. 

 

	 	v.	“Insider” means any person who is subject to Section 16 of the Exchange Act, and any successor statutory provision, as it may be amended from time
to time. 

  

	 	w.	“Non-Qualified Stock Option” means an Option that is not intended to qualify as an “incentive stock option” under Section 422 of the
Code. 

  

	 	x.	“Option” means a right or rights (either an Incentive Stock Option or a Non-Qualified Stock Option) to purchase a specific number of shares of Stock
exercisable at such time or times and subject to such terms and conditions as the Committee may determine in its sole discretion subject to the Plan, including but not limited to the achievement of specific Performance Goals. Options may be settled
in cash or Stock or both. Options may be granted to Employees subject to the terms and conditions of an Award Agreement and the Plan. 

  

	 	y.	“Participant” means any Employee who has been granted an Award. 

 

	 	z.	“Performance Goal” means with respect to the Performance Measure(s) selected by the Committee, the goal or goals established by the Committee, for an
Award, for a particular Performance Period. Performance Goals may vary from Performance Period to Performance Period and from Participant to Participant and may be established on a stand-alone basis, in tandem or in the alternative.

  
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	 	aa.	“Performance Measure” means one or more of the following, either alone or in combination, selected by the Committee to measure individual Participant,
Company or one or more operating units, groups or any Subsidiary performance for a Performance Period, whether in absolute or relative terms: cash flow; cash flow from operations; total earnings; earnings per share, diluted or basic; earnings
per share from continuing operations, diluted or basic; earnings before interest and taxes; earnings before interest, taxes, depreciation, and amortization; earnings from continuing operations; net asset turnover; inventory turnover; net earnings;
operating earnings; operating margin; return on equity; return on assets or net assets; return on total assets; return on capital; return on investment; return on investment capital; return on sales; revenues; sales; store for store sales; net or
gross sales; income or net income; operating income or net operating income; operating profit or net operating profit; gross margin; operating margin or profit margin; market share; economic value added; expense reduction levels; cost of capital;
change in assets; stock price; total shareholder return; capital expenditures; debt; debt reduction; working capital, completion of acquisitions; business expansion; product diversification; productivity; new or expanded market penetration and other
financial and non-financial operating and management performance objectives. For any Performance Period, Performance Measures may be determined on an absolute basis or relative to internal goals or relative to levels attained in a year or years
prior to such Performance Period or relative to other companies or indices or as ratios expressing relationships between two or more Performance Measures. For any Performance Period, the Committee shall provide how any Performance Measure shall be
adjusted to the extent necessary to prevent dilution or enlargement of any Award as a result of extraordinary events or circumstances, as determined by the Committee, or to exclude the effects of extraordinary, unusual, or non-recurring items;
changes in applicable laws, regulations, or accounting principles; currency fluctuations; discontinued operations; non-cash items, such as amortization, depreciation, or reserves; or any recapitalization, restructuring, reorganization, merger,
acquisition, divestiture, consolidation, spin-off, split-up, combination, liquidation, dissolution, sale of assets, or other similar corporate transaction, or stock dividends, or stock splits or combinations. Unless otherwise specified by the
Committee, each such measure shall be determined in accordance with generally accepted accounting principles as consistently applied by the Company. Performance Measures may vary from Performance Period to Performance Period and from Participant to
Participant and may be established on a stand-alone basis, in tandem or in the alternative. Other Performance Measures may be used by the Committee in its sole discretion, except that the Performance Measures set forth above in this paragraph 2aa.
shall be used if the compensation under the Award (other than an Option or Appreciation Right) is intended to qualify as performance based under Section 162(m) of the Code. 

 

	 	bb.	“Performance Period” means one or more periods of time, as the Committee may designate, over which the attainment of one or more Performance Goals will
be measured for the purpose of determining a Participant’s rights in respect of an Award. 

  
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	 	cc.	“Performance Unit” means an Award denominated in cash and/or shares of Stock, the amount of which may be based on the achievement of specific
Performance Goals subject to terms and conditions established by the Committee. Performance Units may be settled in Stock or cash or both. 

  

	 	dd.	“Plan” means the 2012 Collective Brands, Inc. Stock Incentive Plan, as amended from time to time. 

 

	 	ee.	“Restricted Stock” means Stock that is issued to a Participant subject to restrictions on transfer and such other restrictions on incidents of
ownership, and/or other terms and conditions as the Committee may determine, including but not limited to the achievement of specific Performance Goals. 

  

	 	ff.	“Retirement” means a Participant’s termination of employment on or after age 55 and after completing at least five (5) years of service with
the Company or a Subsidiary of the Company. 

  

	 	gg.	“Section 409A Rules” means the provisions of Section 409A of the Code and Treasury Regulations and other Internal Revenue Service guidance
promulgated thereunder. 

  

	 	hh.	“Stock” means common stock of the Company, $.01 par value, or any other equity securities of the Company designated by the Committee, including any
attached rights. 

  

	 	ii.	“Stock Award” means a grant of Stock with or without restrictions. 

 

	 	jj.	“Stock Equivalent Unit” means an Award based on the Fair Market Value of one share of Stock. All or part of any Stock Equivalent Unit Award may be
subject to conditions and restrictions established by the Committee, including but not limited to the achievement of specific Performance Goals. Stock Equivalent Units may be settled in Stock or cash or both as determined by the Committee.

  

	 	kk.	“Subsidiary” means (i) any corporation or other entity in which the Company, directly or indirectly, controls fifty percent (50%) or more of
the total combined voting power of such corporation or other entity or (ii) any other corporation or other entity in which the Company has a significant equity interest, in either case as determined by the Committee. With respect to Incentive
Stock Options, the term “Subsidiary” shall have the meaning set forth in Section 424(f) of the Code. 

  

	 	ll.	“Ten-percent Stockholder” means any person who owns, directly or indirectly, on the relevant date, securities having ten percent (10%) or more of
the combined voting power of all classes of the Company’s securities or of its parent or subsidiaries. For purposes of applying the foregoing ten percent (10%) limitation, the rules of Code section 424(d) shall apply.

  
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 Section 3: Eligibility 
 The Committee may grant one or more Awards to any Employee designated by it to receive an Award as the Committee shall select in its sole discretion. To the extent permitted under Delaware law, the
Committee may delegate to any Employee or Director of the Company the authority to grant Awards to any Employee; provided, however, any grant of “performance based compensation” to a Covered Employee must satisfy the requirement of Code
section 162(m). 
 Section 4: Awards 
 The Committee may grant any one or more of the following types of Awards either singly, in tandem or in combination with other types of Awards: 

APPRECIATION VALUE AWARD VEHICLES 
 A. Options  
  

	 	1.	Non-qualified Stock Options 

  

	 	2.	Incentive Stock Options 

  

	 	a.	Incentive Stock Options shall be subject to the following provisions: 

 

	 	i.	The aggregate Fair Market Value (determined on the date that such Option is granted) of the shares of Stock subject to Incentive Stock Options which are exercisable by
one person for the first time during a particular calendar year shall not exceed $100,000. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Stock with respect to which Incentive Stock Options are exercisable
for the first time by any Option holder during any calendar year (under all plans of the Company and its Subsidiaries) exceeds $100,000, or such other limit as may be set by applicable law, the Options or portions thereof which exceed such limit
(according to the order in which they were granted) shall be treated as Non-Qualified Stock Options. 

  

	 	ii.	Each Award Agreement with respect to an Incentive Stock Option shall set forth the periods during which the Option shall be exercisable, whether in whole or in part.
Such periods shall be determined by the Committee in its discretion. No Incentive Stock Option may be exercisable more than: 

  

	 	(aa)	in the case of an Employee who is not a Ten-Percent Stockholder on the date that such Option is granted, seven (7) years from the date the Option is granted or
such earlier period as otherwise specified in the Plan or an Award Agreement, and 

  
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	 	(bb)	in the case of an Employee who is a Ten-Percent Stockholder on the date such Option is granted, five (5) years from the date the Option is granted.

  

	 	b.	Each Award Agreement with respect to an Incentive Stock Option shall set forth the price at which a share of Stock may be acquired under the Option (the “Exercise
Price”), which shall be at least 100% of the Fair Market Value of a share of Stock on the date the option is granted (except as permitted under Section 424(a) of the Code with respect to Acquisition Awards). In the case of an Employee who
is a Ten-Percent Stockholder on the date that such Option is granted, the Exercise Price of any Incentive Stock Option shall not be less than 110% of the Fair Market Value of the Stock subject to such Option on such date. 

 

	 	c.	No Incentive Stock Option may be granted to an Employee who is not an Employee of the Company or a Subsidiary of the Company on the date that such Option is granted.

  

	 	d.	Notwithstanding any other provision of the Plan to the contrary, the maximum aggregate number of shares of Stock that may be issued under the Plan pursuant to Incentive
Stock Options is 1 million shares of Stock (the “ISO Limit”), subject to adjustments provided for in Section 8 of the Plan. 

  

	B.	Appreciation Rights 

  

	C.	Other Appreciation Vehicle Value Awards. Subject to limitations under applicable law, the Committee may from time to time grant other Awards under this
Plan, using Appreciation Value Award Vehicles, that provide the Participant with Stock, or the right to purchase Stock, or provide other incentive Awards that have a value derived from the value of Stock, or an exercise or conversion privilege at a
price related to Stock, or that are otherwise payable in or convertible into shares of Stock. These Awards shall be in a form and based upon the terms and conditions determined by the Committee (including but not limited to the achievement of
specific Performance Goals if determined by the Committee), provided that the Award shall not be inconsistent with the other terms of this Plan. 

 FULL VALUE AWARD VEHICLES  
  

	D.	Stock Award 

  

	E.	Restricted Stock 

  

	F.	Stock Equivalent Units 

  

	G.	 Other Full Value Award Vehicles. Subject to limitations under applicable law, the Committee may from time to time grant other Full Value
Awards under this Plan that provide the Participants with Stock or the right to purchase Stock, or provide 

  
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other incentive Awards that have a value derived from the value of Stock, or an exercise or conversion privilege at a price related to Stock, or that are otherwise payable in or convertible into
shares of Stock. These Awards shall be in a form and based upon the terms and conditions determined by the Committee (including but not limited to the achievement of specific Performance Goals if determined by the Committee), provided that the Award
shall not be inconsistent with the other terms of this Plan. 

 OTHER AWARD VEHICLES  

 

	H.	Performance Units 

  

	I.	Acquisition Awards 

  

	J.	Other Award Vehicles. Subject to limitations under applicable law and the Plan, the Committee may from time to time grant other Awards under this Plan that
provide the Participants with Stock or the right to purchase Stock, or provide other incentive Awards that have a value derived from the value of Stock, or an exercise or conversion privilege at a price related to Stock, or that are otherwise
payable in or convertible into shares of Stock. The Awards shall be in the form and based upon the terms and conditions determined by the Committee (including but not limited to the achievement of specific Performance Goals), provided that the
Awards shall not be inconsistent with the other terms of this Plan. 

 Section 5: Award Agreements 

Each Award granted under the Plan shall be evidenced by an Award Agreement. Each Award Agreement shall set forth the terms and conditions applicable to
the Award, as determined by the Committee in its discretion and subject to the Plan, including but not limited to provisions describing the treatment of an Award in the event of the termination of a Participant’s status as an Employee for
reasons of Retirement, death or otherwise, or in the event of Participant’s Disability, in the event the Participant engages in a “competing business” as such term shall be defined in the Award Agreement or in the event there is a
restatement of the Company’s financial statements. The Committee may deliver the Award Agreement by interoffice mail, U.S. mail, email or other electronic means (including posting on a web site maintained by the Company or by a third party
under contract with the Company) all documents relating to the Plan or any Award thereunder and other documents that the Company is required to deliver to its security holders unless otherwise prohibited by law. A Participant shall have no rights
with respect to an Award unless such Participant accepts the Award within such period as the Committee shall specify by executing an Award Agreement in such form as the Committee shall determine and, if the Committee shall so require, makes payment
to the Company in such amount as the Committee may determine. 
 Section 6: Prohibition on Re-pricing 

Except in connection with a corporate transaction involving the Company as described in Section 8, the terms of outstanding Appreciation Value Award
Vehicles may not be amended to be repriced, replaced, regranted through cancellation or modified without stockholder approval, if the effect of such change in terms would be to reduce the exercise price for the Shares underlying such Appreciation
Value Awards. 

  
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 Section 7: Claw Back Provision 
 If the Company restates its financial statements, and as a result, the amount of compensation that would have been paid or payable to the Employee pursuant to the Award had the financial results been
properly reported would have been lower than the amount actually paid or payable, then the Company, by action of the Committee, may, in whole or in part, amend, cancel or rescind any prior delivery of shares of Stock or value of shares of Stock or
cash or property granted within the three year period preceding the date on which the Company is required to prepare the restatement. 

Section 8: Adjustment Provisions 
  

	 	a.	Capital Adjustments. 

  

	 	(i)	If the Company subdivides its outstanding shares of Stock into a greater number of shares of Stock (including, without limitation, by stock dividend or stock split) or
combines its outstanding shares of Stock into a smaller number of shares of Stock (by reverse stock split, reclassification or otherwise), or the Committee determines that any stock dividend, extraordinary cash dividend, reclassification,
recapitalization, reorganization, split-up, spin-off, combination, exchange of shares of Stock, warrants or rights offering to purchase shares of Stock, or other similar corporate event (including mergers or consolidations) affects the share of
Stock such that an adjustment is required in order to preserve the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem equitable and appropriate, make such adjustments
to any or all of (i) the aggregate number and/or kind of shares of Stock reserved for the Plan (including without limitation the ISO Limit), (ii) the number and/or kind of shares of Stock subject to outstanding Awards, (iii) the
exercise price with respect to outstanding Appreciation Value Award Vehicles, (iv) any individual Participant share limitations set forth herein and (v) any other adjustment that the Committee determines to be equitable; provided, however,
that the number of shares of Stock subject to any Option shall be rounded down to the nearest whole number; provided, further, that no such adjustment shall be made if or to the extent that it would cause an outstanding Award to cease to be exempt
from, or to fail to comply with, Section 409A of the Code. The Committee may provide for a cash payment to any Participant of a Plan Award in connection with any adjustment made pursuant to this Section 8. Any such adjustment shall be
final and binding upon all Participants, the Company, their representatives, and all other interested persons. No such adjustment shall be made by the Committee, however, for any of the following corporate transactions: 

  
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	 	(1)	The issuance of Stock as compensation to any Company Employee, director, consultant or other service provider; 

 

	 	(2)	The issuance of Stock pursuant to an “Incentive Stock Option” under Section 422 of the Code; 

 

	 	(3)	The issuance or sale of Stock to a third-party at an arm’s length price that is negotiated and agreed to between the Company and such third-party;

  

	 	(4)	The issuance or sale of Stock to a Company Employee or director at a discount pursuant to a plan maintained in accordance with, and to the extent permitted under,
Section 423 of the Code; or 

  

	 	(5)	A redemption of Stock by the Company at a price equal to the Fair Market Value of the Stock on the date of such redemption. 

Any adjustment made pursuant to this Section 8 shall be made in accordance with the rules of any securities exchange, stock market or
stock quotation system to which the Company is subject. Any adjustment made by the Committee under this Section 8 shall be final, binding and conclusive on all persons. 

 

	 	b.	Other Adjustments. The existence of the Plan and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Board of
Directors or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other capital structure of its business, any merger or consolidation of the Company, any issuance of bonds, debentures, preferred
or prior preference stock ahead of or affecting the Stock or the rights thereof, the dissolution or liquidation of the Company or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, or any
similar transaction. 

  

	 	c.	Fractional Shares. No fractional shares of Stock will be issued or accepted. Any fractional shares will be paid in the equivalent amount of cash. The
Committee may impose such other conditions, restrictions and contingencies with respect to shares of Stock delivered pursuant to the exercise of an Award as it deems desirable. 

 Section 9: Other General Terms and Conditions for Awards 
  

	 	a.	The term of an Award shall not exceed seven (7) years. 

  

	 	b.	Unless otherwise provided under the Plan or by the Committee, no Award (or any rights or obligations thereunder) may be sold, exchanged, transferred, assigned, pledged,
hypothecated hedged, or otherwise disposed of (other than upon the death of the Participant, by beneficiary designation, by last will and testament or by the laws of descent and distribution) and shall be exercisable and subject to receipt during
the Participant’s lifetime only by the Participant. 

  
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	 	c.	The Exercise Price for each Award that allows for the purchase of a share of Stock under an Award shall be specified in an Award Agreement containing the terms and
conditions as determined by the Committee and subject to the provisions of Section 8, shall not be less than Fair Market Value on the date the Award is granted; provided, however, that in no event shall the Exercise Price per share be less than
the par value thereof. The Exercise Price, as applicable, of an Award shall not be less than 100% of the Fair Market Value of the Stock on the date such Award is granted and the exercise opportunity may be capped if the Committee determines
appropriate and so specifies in the Award Agreement pertaining thereto. 

  

	 	d.	The Exercise Price, as applicable, of an Award may be paid in cash, personal check (subject to collection), bank draft or such other method as the Committee may
determine from time to time. The Exercise Price may also be paid by the tender, by either actual delivery or attestation, of Stock acceptable to the Committee and valued at its Fair Market Value on the date of exercise; through a combination of
Stock and cash. Without limiting the foregoing, to the extent permitted by applicable law: the Committee may, on such terms and conditions as it may determine, permit a Participant to elect to pay the Exercise Price by authorizing a third party,
pursuant to a brokerage or similar arrangement approved in advance by the Committee, to simultaneously sell all (or a sufficient portion) of the Stock acquired upon exercise of such Award and to remit to the Company a sufficient portion of the
proceeds from such sale to pay the entire Exercise Price of such Award and any required tax withholding resulting there from. If a Participant utilizes any proceeds from the exercise of an Award to pay the Exercise Price, taxes or any other amounts
owed, such proceeds shall count against the Maximum Limit as if they were received by the Participant. 

  

	 	e.	No Award may be granted under this Plan on or after the tenth anniversary of the date this Plan is approved by stockholders. 

 

	 	f.	The exercise or delivery of Stock or payment of cash pursuant to an Award shall be subject to the condition that if at any time the Company shall determine in its
discretion that the satisfaction of withholding tax or other withholding liabilities under any state or Federal law, or that the listing, registration or qualification of any shares of Stock otherwise deliverable upon any securities exchange or
under any state or Federal Law, or that the consent or approval of any regulatory body, is necessary or desirable as a condition of, or in connection with, such exercise or the delivery or purchase of shares thereunder, then in any such event such
exercise or delivery shall not be effective unless such withholding, listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Company. 

 

	 	g.	Each Participant shall agree that, subject to the provisions of Section 9(i) below, 

 

	 	(1)	no later than the date as of which the restrictions mentioned in the instrument evidencing the Award shall lapse, such Participant will pay to the Company in cash, or,
if the Committee approves, in Stock or make other arrangements satisfactory to the Committee regarding payment of, any Federal, state or local taxes of any kind required by law to be withheld with respect to such Award, and 

  
 13 

	 	(2)	the Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct from any payment of any kind otherwise due to the Participant any
Federal, state or local taxes of any kind required by law to be withheld with respect to the Award. 

  

	 	h.	If any Participant properly elects, as permitted by Code Section 83b (or any successor Code provisions) within thirty (30) days of the date of the grant, to
include in gross income for Federal income tax purposes, an amount equal to the Fair Market Value of the shares of Stock granted pursuant to an Award, such Participant shall pay to the Company, or make arrangements satisfactory to the Committee to
pay to the Company, any Federal, state or local taxes required to be withheld with respect to such shares. If such Participant shall fail to make such payments, the Company and its Subsidiaries shall, to the extent permitted by law, have the right
to deduct from any payment of any kind otherwise due to the employee any Federal, state or local taxes of any kind required by law to be withheld with respect to such shares. 

 

	 	i.	Dividends or Dividend Equivalents may be granted with respect to all or part of an Award to the extent the shares underlying the Award are deemed vested and outstanding
on the record date as determined by the Committee. If dividends are granted they may be paid, as determined by the Committee, currently or on a deferred basis (i) in cash, (ii) in Dividend Equivalents or (iii) accumulated or
reinvested in Stock and held subject to the same restrictions as the Stock under the Award. Neither dividends nor Dividend Equivalents will be paid on unvested Awards. Dividends attributable to unvested Awards shall be credited in respect of such
Award and paid when and only if the Award vests. All dividends or Dividend Equivalents which are not paid currently will not accrue interest. Dividends or Dividend Equivalents due and owing as stated herein, will be credited to a Participant’s
account or distributed to a Participant in an amount equal to the cash dividends paid on one share of Stock for each share of Stock vested by an Award and held by such Participant. No dividends or Dividend Equivalents will be awarded on Appreciation
Value Award Vehicles. 

  

	 	j.	Unless expressly provided otherwise in the Award Agreement, no Participant shall have any rights as a stockholder with respect to any Stock covered by an Award until
the date the Participant becomes the holder of record thereof. 

  

	 	k.	 With respect to each type of Award, the Committee may designate such Award as a “performance based compensation award” in order that such
Award constitute qualified performance based compensation under Code Section 162(m). With respect to each Award intended to qualify as performance based compensation under Section 162(m), the Committee shall on or before 25% of the
applicable 

  
 14 

	 	
Performance Period has elapsed or if shorter, within such time period as required to constitute performance based compensation under 162(m), establish in writing, the Performance Goal or
Goals. A Participant shall be eligible to receive payment in respect of a “performance based compensation award” only to the extent that the Performance Goal(s) for such Award are achieved as certified by the Committee. Based on the
achievement of the Performance Goal or Goals, the Committee shall then determine the actual amount of the “performance based compensation Award” to be paid to the Participant. In so doing, the Committee may use negative discretion to
decrease any Participant Award based upon such performance, but may not increase the amount of the Award otherwise payable to a Covered Employee based upon such performance. If Performance Goals are established for an Award to a Covered Employee,
once established for a Performance Period, such Performance Goals shall not be amended or otherwise modified to the extent such amendment or modification would cause the compensation payable pursuant to the Award to fail to constitute qualified
performance based compensation under Code section 162(m). 

  

	 	l.	Unless an Award Agreement specifies otherwise, the Committee may cancel at any time any Award or rescind any prior delivery of shares or value of shares, cash or
property, if the Participant is not in compliance with all other applicable provisions of the Award Agreement or the Plan or if, within six months or such longer period as specified with respect to the Participant, in any noncompete entered into
between the Participant and the Company, after exercise, as applicable, the Participant: 

  

	 	(i)	Engages in a Competing Business, as such term is defined in the Award Agreement; or 

 

	 	(ii)	Solicits for employment, hires or offers employment to, or discloses information to or otherwise aids or assists any other person or entity other than the Company in
soliciting for employment, hiring or offering employment to, any employee of the Company; or 

  

	 	(iii)	Takes any action which is intended to harm the Company or its reputation, which the Company reasonably concludes could harm the Company or its reputation or which the
Company reasonably concludes could lead to unwanted or unfavorable publicity to the Company; or 

  

	 	(iv)	Discloses to anyone outside of the Company, or uses in other than the Company’s business, any Confidential Information. 

 

	 	(v)	 The Company shall immediately notify the Participant in writing of any cancellation of any unexercised or unvested Award. Following such notice, the
Participant shall have no further rights with respect to such Award. In the event of the rescission of the exercise of an Award within six months (or such longer period specified in any agreement between Participant and Company) after the activity
referred to above in this Section 9(l), the 

  
 15 

	 	
Company shall notify the Participant in writing. Within ten (10) days after receiving such notice from the Company, the Participant shall either (i) pay to the Company the excess of the
Fair Market Value of the Stock on the date of exercise of an Award over the exercise price for the Award or the Fair Market Value of the Stock and/or cash distributed to the Participant as a result of the exercise of an Award or (ii) return the
Stock received upon the exercise of an Award (in which case the Company will return the exercise price to the Participant) or return the Stock and/or cash delivered upon the exercise of this Award. 

 

	 	m.	The Participant shall agree and consent to a deduction from any amounts the Company owes to the Participant from time to time (including amounts owed as wages or other
compensation, fringe benefits, or vacation pay, as well as any other amounts owed to the Participant by the Company), to the extent the Participant owes the Company under Section 9(l) above. Whether or not the Company elects to make any set-off
in whole or in part, if the Company does not recover by means of set-off the full amount owed by the Participant, calculated as set forth in Section 9(l) above, then the Participant agrees to pay immediately the unpaid balance to the Company

  

	 	n.	The Committee may establish such other terms and conditions for an Award as it deems appropriate. 

 

	 	o.	The Committee may, at any time and in its sole discretion, determine that any outstanding Awards granted under the Plan will be canceled and terminated and that in
connection with such cancellation and termination the holder of such Awards may receive for each share of Stock subject to such Award a cash payment (or the delivery of shares of stock, other securities or a combination of cash, stock and securities
equivalent to such cash payment) as follows: 

  

	 	(1)	Appreciation Right Vehicle Awards – whether or not exercisable, a cash payment (or the delivery of shares of stock, other securities or a combination of
cash, stock, and securities equivalent to such cash payment) equal to the difference, if any, between the amount determined by the Committee to be the Fair Market Value of the Stock and the exercise price per share multiplied by the number of shares
of Stock subject to such Award; provided that if such product is zero or less, or to the extent that the Award is not then exercisable, the Awards will be canceled and terminated without payment therefore. 

 

	 	(2)	Full Value Award Vehicle – a cash payment equal to the Fair Market Value of the shares of Stock under the Award, as designated by the Committee.

  

	 	(3)	Other Awards – a payment amount as determined in the sole discretion of the Committee. 

  
 16 

 Section 10: Stock Available Under Plan 

 

	 	a.	Subject to the adjustment provisions of Section 8, the maximum number of shares of Stock with respect to which Awards may be granted (or, in the cases of Awards
that may be settled in cash or Stock) under the Plan shall not exceed 3,375,000 shares of Stock (the “Maximum Limit”). Subject to adjustment in accordance with Section 8, no Participant shall be granted, during any one (1) year
period, Options to purchase Stock and Appreciation Rights or other Appreciation Value Award Vehicles with respect to more than 350,000 shares of Stock in the aggregate or any other Awards with respect to more than 350,000 shares of Stock in the
aggregate. Notwithstanding anything to the contrary contained in the Plan, the maximum number of shares of Stock with respect to which Full Value Award Vehicles may be granted to an Employee for any 12-month period contained in the performance
period for such Award shall be 350,000 (as adjusted pursuant to the provisions of Section 8 of the Plan), and the maximum payment under any Full Value Award Vehicles granted to an Employee (valued as of the date of grant of such Award(s)) shall
be $5,000,000 for each 12-month period contained in the performance period for such Award. The grant limits under the preceding sentence shall (i) apply to Full Value Award Vehicles only if the Full Value Award Vehicles are intended to be
“performance based compensation” as that term is used in Section 162(m) of the Code and (ii) be adjusted on a pro-rata basis for each full or partial 12-month period in the applicable Performance Period. With respect to any Award
which, in whole or in part, is terminated, surrendered, cancelled or forfeited, new Awards may be granted under the Plan with respect to the number of shares of Stock as to which such termination, surrender, cancellation or forfeiture has occurred.

  

	 	b.	Upon the grant of any Stock Award other than an Appreciation Value Award Vehicle, 1.61 multiplied by the maximum number of shares of Stock that may be issued for the
Award shall be reserved against the Maximum Limit. Upon vesting of any Stock Award other than an Appreciation Value Award Vehicle, 1.61 multiplied by the number of shares of Stock issued for such Award shall decrease the shares available under
the Maximum Limit. Upon grant of an Appreciation Value Award Vehicle (to the extent delivered to be in Stock), one share of stock shall be reserved for each share of Stock subject to the Appreciation Value Award Vehicle. Upon exercise of
an Appreciation Value Award Vehicle, regardless of the gain, (to the extent delivered to be in Stock), the shares available under the Maximum limit shall be decreased by one share of stock for each share of Stock subject to the Appreciation Value
Award Vehicle that is exercised. If the number of shares reserved is greater than the number of shares used to decrease the shares available under the Maximum Limit, such shares shall be available for future Awards. 

 

	 	c.	Shares of Stock covered by the unexercised or terminated or forfeited portion of any Award that did not result in the delivery of Stock shall be available for further
Awards. Subject to Section 8, additional rules for determining the number of shares of Stock granted under an Award type under the Plan may be adopted by the Committee, as it deems necessary and appropriate and consistent with the overall
limits set forth in the Plan. 

  
 17 

	 	d.	The Stock that may be issued pursuant to an Award under the Plan may be authorized and issued Stock held in the Company’s treasury or authorized but unissued
Stock, or Stock may be acquired, subsequently or in anticipation of the transaction, in the open market to satisfy the requirements of the Plan. 

  

	 	e.	Any shares of Stock delivered by the Company, any shares of Stock with respect to which Awards are made by the Company and any shares of Stock with respect to which the
Company becomes obligated to make Awards, through the assumption of, or in substitution for, outstanding awards previously granted by an acquired entity, shall not be counted against the shares of Stock available for Awards under this Plan.

  

	 	f.	The Committee may direct that any stock certificate evidencing shares issued pursuant to the Plan shall be registered in the name of the Participant, shall bear a
legend setting forth such restrictions on transferability as may apply to such shares pursuant to the Plan and shall be subject to appropriate stop transfer orders; provided, however, that the certificates representing shares of Restricted Stock
shall be held in custody by the Company until the restrictions relating thereto otherwise lapse, and the Participant shall deliver to the Company a stock power endorsed in blank relating to the Restricted Stock or other form as appropriate.

 Section 11: Amendment and Termination 
 The Board of Directors may at any time amend, suspend or terminate the Plan, in whole or in part, and the Committee may, subject to the Plan, at any time alter or amend any or all Award Agreements to the
extent permitted by applicable law and the Plan; provided that no such action shall materially impair the rights of any holder of an Award without the holder’s consent. For purposes of the Plan, any action of the Board of Directors or the
Committee that alters or affects the tax treatment of any Award shall not be considered to materially impair any rights of any holder. Notwithstanding the foregoing, neither the Board of Directors nor the Committee shall (except pursuant to
Section 8) amend the Plan or any Award Agreement, without the approval of the stockholders of the Company to (i) increase the number of shares of Stock available for Awards as set forth in Section 10, (ii) decrease the Exercise
Price of any Award or (iii) make any other amendments to the Plan or Award Agreement which would require stockholder approval under the General Corporation Law of the State of Delaware, New York Stock Exchange Rules or such other rules as may
govern the trading or quotation of the Company’s Stock, Rule 16b-3 of the Securities Exchange Act of 1934, as amended, or Section 162(m) of the Code. 
 Notwithstanding the above, the Board may, by resolution, amend the Plan in any way that it deems necessary or appropriate in order to make income with respect to the Plan deductible for Federal income tax
purposes under Section 162(m) of the Code and any such amendment shall be effective as of such date as is necessary to make such income 

  
 18 

 
under the Plan so deductible. Notwithstanding anything to the contrary in this Section 11, the Board of Directors or the Committee shall have full discretion to amend the Plan to the extent
necessary to preserve fixed accounting treatment with respect to any Award and any outstanding Award Agreement shall be deemed to be so amended to the same extent, without obtaining the consent of any holder, without regard to whether such amendment
adversely affects a holder’s rights under the Plan or such Award Agreement. 
 Section 12: Administration 

 

	 	a.	The Plan and all Awards shall be administered by the Committee, provided that, in the absence of the Committee or to the extent determined by the Board of Directors,
any action that could be taken by the Committee may be taken by the non-employee members of the Board of Directors. A majority of the members of the Committee shall constitute a quorum. The majority of non-employee Board of Director members shall
constitute a quorum of the Board. The vote of a majority of a quorum shall constitute action by the Committee and/or the Board. 

  

	 	b.	The Committee shall have full and complete authority, in its sole and absolute discretion, (i) to exercise all of the powers granted to it under the Plan,
(ii) to construe, interpret and implement the Plan, any Award Agreement and any related document, (iii) to prescribe, amend and rescind rules relating to the Plan including rules governing its own operation, (iv) to make all
determinations necessary or advisable in administering the Plan, (v) to correct any defect, supply any omission and reconcile any inconsistency in the Plan, (vi) to authorize any person to execute on behalf of the Company any instrument
required to effect the grant of an Award previously granted by the Committee, (vii) to impose such restrictions, conditions or limitations as it determines appropriate as to the timing and manner of any resales by a Participant or other
subsequent transfers by the Participant of any shares of Stock issued as a result of or under an Award, including without limitation, restrictions under the Company’s Trading in Securities Policy as may be amended from time to time,
(viii) to amend the Plan to reflect changes in applicable law and (ix) to determine whether, to what extent and under what circumstances Awards may be settled or exercised in cash, shares of Stock, other securities, other Awards or other
property, or canceled, forfeited or suspended and the method or methods by which Awards may be settled, canceled, forfeited or suspended. The actions and determinations of the Committee on all matters relating to the Plan and any Awards will be
final and conclusive. The Committee’s determinations under the Plan need not be uniform and may be made by it selectively among Employees and Participants who receive, or who are eligible to receive, Awards under the Plan, whether or not such
persons are similarly situated. 

  

	 	c.	The Committee and others to whom the Committee has allocated or delegated authority or duties shall keep a record of all their proceedings and actions and shall
maintain all such books of account, records and other data as shall be necessary for the proper administration of the Plan. 

  
 19 

	 	d.	The Committee may appoint such accountants, counsel, and other experts as it deems necessary or desirable in connection with the administration of the Plan.

  

	 	e.	The Company shall pay all reasonable expenses of administering the Plan, including, but not limited to, the payment of professional fees. 

 

	 	f.	It is the intent of the Company that this Plan and Awards hereunder satisfy, and be interpreted in a manner that satisfy, (i) in the case of Participants who are
or may be Insiders, the applicable requirements of Rule 16b-3 of the Exchange Act, so that such persons will be entitled to the benefits of Rule 16b-3, or other exemptive rules under Section 16, and will not be subjected to avoidable liability
thereunder and (ii) in the case of Performance Compensation Awards, the applicable requirements of Code section 162(m). If any provision of this Plan or of any Award Agreement would otherwise frustrate or conflict with the intent expressed in
this Section 12(f), that provision to the extent possible shall be interpreted and deemed amended so as to avoid such conflict. To the extent of any remaining irreconcilable conflict with such intent, such provision shall be deemed void as
applicable to Insiders and/or Covered Employees, as applicable. 

  

	 	g.	It is the intent of the Company that this Plan and Awards hereunder are exempt from or comply with the Section 409A Rules and the Committee shall exercise its
discretion in granting Awards hereunder (and the terms of such grants) accordingly. The Plan and any grant of any Award hereunder may be amended from time to time as may be necessary or appropriate to comply with the Section 409A Rules.

  

	 	h.	Except to the extent prohibited by applicable law or otherwise, the Committee may from time to time allocate to one or more of its members and delegate to one or more
Employees all or any portion of its authority and duties, provided that the Committee may not allocate or delegate any discretionary authority with respect to substantive decisions or functions regarding the Plan or Awards to the extent inconsistent
with the intent expressed in Section 12(f) and 12(g). 

  

	 	i.	 No member of the Board of Directors or the Committee or any employee of the Company or any of its subsidiaries or affiliates (each such person a
“Covered Person”) shall have any liability to any person (including, without limitation, any Participant) for any action taken or omitted to be taken or any determination made in good faith with respect to the Plan or any Award. Each
Covered Person shall be indemnified and held harmless by the Company against and from any loss, cost, liability or expense (including attorneys’ fees) that may be imposed upon or incurred by such Covered Person in connection with or resulting
from any action, suit or proceeding to which such Covered Person may be a party or in which such Covered Person may be involved by reason of any action taken or omitted to be taken under the Plan and against and from any and all amounts paid by such
Covered Person, with the Company’s approval, in settlement thereof, or paid by such Covered Person in satisfaction of any judgment in any such action, suit or proceeding against such Covered Person, provided that the Company shall have the
right, at its own expense, to assume and defend any such action, suit or 

  
 20 

	 	
proceeding and, once the Company gives notice of its intent to assume the defense, the Company shall have sole control over such defense with counsel of the Company’s choice. The foregoing
right of indemnification shall not be available to a Covered Person to the extent that a court of competent jurisdiction in a final judgment or other final adjudication, in either case, not subject to further appeal, determines that the acts or
omissions of such Covered Person giving rise to the indemnification claim resulted from such Covered Person’s bad faith, fraud or willful criminal act or omission. The foregoing right of indemnification shall not be exclusive of any other
rights of indemnification to which Covered Persons may be entitled under the Company’s Certificate of Incorporation or By-Laws, as a matter of law, or otherwise, or any other power that the Company may have to indemnify such persons or hold
them harmless. 

 Section 13: Change of Control 

 

	 	a.	In the event of a Change of Control, in addition to any action required or authorized by the terms of an Award Agreement, the Committee may, in its sole discretion,
take any of the following actions as a result, of any such event to assure fair and equitable treatment of Participants: 

  

	 	(1)	require provisions be made in connection with such Change in Control for the assumption of Awards theretofore granted under the Plan, or the substitution/replacement of
such Awards with new Awards (with similar vesting conditions) of the successor corporation (such new Awards may be denominated in cash, property or equity of the successor corporation), with appropriate adjustment as to the number and/or kind of
shares and the purchase price for shares thereunder; 

  

	 	(2)	determine that any or all outstanding Awards granted under the Plan, whether or not exercisable, will be canceled and terminated and that in connection with such
cancellation and termination the holder of such Award may receive for each share of Stock subject to such Awards a cash payment (or the delivery of shares of Stock, other securities or a combination of cash, stock and securities equivalent to such
cash payment) equal to the difference, if any, between the consideration received by shareholders of the Company in respect of a share of Stock in connection with such transaction and the exercise price per share, if any, under the Award multiplied
by the number of shares of Stock subject to such Award; provided that if such product is zero or less, or to the extent that the Award is not then exercisable, the Awards will be canceled and terminated without payment therefor;

  

	 	(3)	accelerate time periods for purposes of vesting in, or realizing gain from, any outstanding Award made pursuant to this Plan following the Change of Control and the
involuntary termination (as determined by the Committee in its sole discretion) of the Participant as an Employee of the Company or any Subsidiary or a successor corporation; and/or 

  
 21 

	 	(4)	extend the time during which an Award may be exercised following a Participant’s termination of employment; and/or 

 

	 	(5)	make adjustments or modifications to outstanding Awards as the Committee deems appropriate to maintain and protect the rights and interests of Participants following
such Change of Control. 

 Section 14: Miscellaneous 

 

	 	a.	Other Payments or Awards. Nothing contained in the Plan shall be deemed in any way to limit or restrict the Company or an Subsidiary from making any award
or payment to any person under any other plan, arrangement or understanding, whether now existing or hereafter in effect. 

  

	 	b.	Unfunded Plan. The Plan shall be unfunded. No provision of the Plan or any Award Agreement shall require the Committee, the Company or a Subsidiary, for the
purpose of satisfying any obligations under the Plan, to purchase assets or place any assets in a trust or other entity to which contributions are made or otherwise to segregate any assets, nor shall the Company or a Subsidiary maintain separate
bank accounts, books, records or other evidence of the existence of a segregated or separately maintained or administered fund for such purposes. Participants shall have no rights under the Plan other than as unsecured general creditors of the
Company or a Subsidiary. 

  

	 	c.	Limits of Liability. Any liability of the Company or an affiliate to any Participant with respect to an Award shall be based solely upon contractual
obligations created by the Plan and the Award Agreement. 

  

	 	d.	Rights of Employees. Status as an eligible Employee shall not be construed as a commitment that any Award shall be made under this Plan to such eligible
Employee or to eligible Employees generally. Nothing contained in this Plan or in any Award Agreement shall confer upon any Employee or Participant any right to continue in the employ or other service of the Company or a Subsidiary or constitute any
contract or limit in any way the right of the Company or a Subsidiary to change such person’s compensation or other benefits or to terminate the employment or other service of such person with or without cause. Except as provided otherwise in
an Award Agreement, an Employee’s (i) transfer from the Company to a Subsidiary or affiliate of the Company, whether or not incorporated, or visa versa, or from one Subsidiary to another or (ii) leave of absence, duly authorized in
writing by the Company or a Subsidiary, shall not be deemed a termination of such Employee’s employment or other service. 

  

	 	e.	Section Headings. The section headings contained herein are for the purpose of convenience only, and in the event of any conflict, the text of the Plan,
rather than the section headings, shall control. 

  

	 	f.	Construction. In interpreting the Plan, the masculine gender shall include the feminine, the neuter gender shall include the masculine or feminine, and the
singular shall include the plural unless the context clearly indicates otherwise. 

  
 22 

	 	g.	Invalidity. If any term or provision contained herein or in any Award Agreement shall to any extent be invalid or unenforceable, such term or provision will
be reformed so that it is valid, and such invalidity or unenforceability shall not affect any other provision or part thereof. 

  

	 	h.	Applicable Law. The Plan, the Award Agreements and all actions taken hereunder or thereunder shall be governed by, and construed in accordance with, the
laws of the State of Delaware without regard to the conflict of law principles thereof. 

  

	 	i.	Supplementary Plans. The Committee may authorize Supplementary Plans applicable to Employees subject to the tax laws of one or more countries other than the
United States and providing for the grant of Awards to such Employees on terms and conditions, consistent with the Plan, determined by the Committee which may differ from the term and conditions of such Awards pursuant to the Plan for the purpose of
complying with the conditions for qualification of Awards for favorable treatment under foreign tax and/or securities laws. Notwithstanding any other provision hereof, Options granted under any Supplementary Plan shall include provisions that
conform with Section 4; and Restricted Stock granted under any Supplementary Plan shall include provisions that conform with Section 4. 

  

	 	j.	Effective Date and Term. The Plan was adopted by the Board of Directors effective as of March 20, 2012, subject to approval by the Company’s
stockholders. The Committee may grant Awards prior to stockholder approval, provided, however, that Awards granted prior to such stockholder approval are automatically canceled if stockholder approval is not obtained at or prior to the period ending
twelve months after the date the Plan is effective and provided further that no Award may be settled prior to the date stockholder approval is obtained. Unless sooner terminated, the Plan shall remain in effect until March 20, 2022. Termination
of the Plan shall not affect any Award previously made. 

  

	 	k.	No Third Party Beneficiaries. Except as expressly provided therein, neither the Plan nor any Award Agreement shall confer on any person other than the
Company and the grantee of any Award any rights or remedies thereunder. 

  

	 	l.	Successors and Assigns. The terms of this Plan shall be binding upon and inure to the benefit of the Company and its successors and assigns.

  
 23Agreement Containing Consent Orders

 Exhibit 10.1 
  

UNITED STATES OF AMERICA 
 BEFORE FEDERAL TRADE COMMISSION 
  

					
	 	 	)	  	
	 In the Matter of
	 	)	  	
		 	)	  	
	 GRACO INC.,
	 	)	  	    Docket No. 9350
	 a corporation,
	 	)	  	
		 	)	  	
	 ILLINOIS TOOL WORKS INC.,
	 	)	  	
	 a corporation, and
	 	)	  	
		 	)	  	
	 ITW FINISHING LLC,
	 	)	  	
	 a limited liability company.
	 	)	  	
	 	 	)	  	

 AGREEMENT CONTAINING CONSENT ORDERS 

This Agreement Containing Consent Orders (“Consent Agreement”), by and among Graco Inc. (“Graco”), Illinois Tool
Works Inc., and ITW Finishing LLC (“ITW”), hereinafter referred to as Respondents, by their duly authorized officers and attorneys, and counsel for the Federal Trade Commission (“Commission”), is entered into in accordance with
the Commission’s Rules governing consent order procedures. In accordance therewith the parties hereby agree that: 
  

	1.	Respondent Graco Inc. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Minnesota, with its office and principal
place of business located at 88-11th Avenue Northeast, Minneapolis, Minnesota 55413. 

  

	2.	Respondent Illinois Tool Works Inc. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its office
and principal place of business located at 3600 West Lake Avenue, Glenview, Illinois 60026. 

  

	3.	Respondent ITW Finishing LLC is a limited liability company organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its
office and principal place of business located at 3600 West Lake Avenue, Glenview, Illinois 60026. ITW Finishing LLC is indirectly wholly-owned by Illinois Tool Works Inc. 

 

	4.	Respondents have been served with a copy of the administrative Complaint (“Complaint”) issued by the Commission in this matter, charging the Respondents with
violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45 (“FTC Act”), and have filed answers to the Complaint denying those
charges. 

  

 Exhibit 10.1 
  

 

	5.	Respondents admit all the jurisdictional facts set forth in the Complaint. 

 

	6.	Respondents waive: 

  

	 	a.	any further procedural steps; 

  

	 	b.	the requirement that the Commission’s Decision and Order and Order to Hold Separate and Maintain Assets (collectively, the “Orders”), attached hereto and
made a part hereof, contain a statement of findings of fact and conclusions of law; 

  

	 	c.	all rights to seek judicial review or otherwise challenge or contest the validity of the Orders; and 

 

	 	d.	any claim under the Equal Access to Justice Act. 

  

	7.	In order to avoid the possibility of interim competitive harm while the Commission considers this Consent Agreement, the Commission may issue and serve the Order to
Hold Separate and Maintain Assets in this matter at any time after the Respondents and Complaint Counsel sign this Consent Agreement, as the Commission may deem appropriate. 

 

	8.	This Consent Agreement shall not become part of the public record of the proceeding unless and until it is accepted by the Commission. If this Consent Agreement is
accepted by the Commission, it will be placed on the public record, in whole or in part, and information in respect thereto publicly released, at such time and in such manner as the Commission may deem appropriate pursuant to the provisions of
Commission Rule 3.25(f), 16 C.F.R. § 3.25(f). The Commission thereafter may either withdraw its acceptance of this Consent Agreement and so notify the Respondents, in which event it will take such action as it may consider appropriate, or issue
and serve its Decision and Order (and if appropriate, amend the Order to Hold Separate and Maintain Assets) in disposition of the proceeding. 

  

	9.	This Consent Agreement is for settlement purposes only and does not constitute an admission by the Respondents that the law has been violated as alleged in the
Complaint, or that the facts as alleged in the Complaint, other than jurisdictional facts, are true. 

  

	10.	 This Consent Agreement contemplates that, if it is accepted by the Commission, and if such acceptance is not subsequently withdrawn by the Commission
pursuant to the provisions of Commission Rule 3.25(f), 16 C.F.R. § 3.25(f), the Commission may, without further notice to Respondents: (a) issue the Decision and Order (and if appropriate, amend the Order to Hold Separate and Maintain
Assets) and (b) make information public with respect thereto, or (c) take such other action as the Commission may deem appropriate. When final, each of the Orders shall have the same force and effect, and may be altered, modified or set
aside in the same manner and within the same time provided by statute for other orders. Each of the Orders shall become final upon service. Delivery of each of the Orders to Respondents by any means provided in

  
 2 

 Exhibit 10.1 
  

	 	
Commission Rule 4.4(a), 16 C.F.R. § 4.4(a), or by delivery to Respondents’ counsel of record, shall constitute service. Respondents waive any right they may have to any other manner of
service. 

  

	11.	The Complaint may be used in construing the terms of the Orders, and no agreement, understanding, representation, or interpretation not contained in the Orders or the
Consent Agreement may be used to vary or contradict the terms of the Orders. 

  

	12.	By signing this Consent Agreement, Respondents represent and warrant that they can accomplish the full relief contemplated by the Consent Agreement and the attached
Orders, and that all parents, subsidiaries, affiliates, and successors necessary to effectuate the full relief contemplated by this Consent Agreement and the Orders are bound thereby as if they had signed this Consent Agreement and were made parties
to this proceeding and to the Orders. 

  

	13.	Each Respondent shall submit an initial report, pursuant to Section 2.33 of the Commission’s Rules, 16 C.F.R. § 2.33, within thirty (30) days of the
date on which it executes this Consent Agreement, and Respondent Graco shall submit subsequent reports every thirty (30) days thereafter until the Order to Hold Separate and Maintain Assets becomes final and effective, at which time the
reporting obligations contained in the Order to Hold Separate and Maintain Assets shall control. Such reports shall be signed by the respective Respondent and set forth in detail the manner in which such Respondent has complied and will comply with
the Order to Hold Separate and Maintain Assets. Such reports will not become part of the public record unless and until the Consent Agreement is accepted by the Commission for public comment. 

 

	14.	Respondents have read the Orders contemplated hereby. Respondents understand that once both Orders have been issued, they will be required to file one or more
compliance reports showing that they have fully complied with the Orders. 

  

	15.	Respondents agree to comply with the terms of both Orders from the date they sign this Consent Agreement. Respondents further understand that they may be liable for
civil penalties in the amount provided by law for each violation of each Order after it becomes final. 

[continued on next page] 

  
 3 

 Exhibit 10.1 
  

 
  

									
	 GRACO INC.
	  		  	FEDERAL TRADE COMMISSION
					
	 By:
	 	/s/ Patrick J. McHale            	  		  	By:	 	/s/ Marc Schneider / by Peter Richman
		 	Patrick J. McHale	  		  		 	Marc W. Schneider
		 	President and Chief Executive Officer	  		  		 	Counsel Supporting the Complaint
		 	Graco Inc.	  		  		 	
		 		  		  		 	Date:  3/12/12                         
                               
		 		  		  		 	
		 	Date:  3/12/12                         
                                   	  		  		 	
				
		 		  		  	APPROVED:
					
		 	/s/ Richard G. Parker            	  		  		 	
		 	Richard G. Parker	  		  		 	
		 	O’Melveny & Meyers LLP	  		  		 	/s/ Peter Richman
		 	Counsel for Graco Inc.	  		  		 	Peter Richman
		 		  		  		 	Deputy Assistant Director
				
	 ILLINOIS TOOL WORKS INC. and
	  		  		 	
	 ITW FINISHING LLC
	  		  		 	
		 		  		  		 	/s/ Phillip L. Broyles
		 		  		  		 	Phillip L. Broyles
		 		  		  		 	Assistant Director
	 By:
	 	/s/ David B. Speer            	  		  		 	
		 	David B. Speer	  		  		 	
		 	Chairman and Chief Executive Officer	  		  		 	
		 	Illinois Tool Works Inc.	  		  		 	/s/ Norman Armstrong, Jr. (by RAF)
		 		  		  		 	Norman A. Armstrong, Jr.
	
Date: 03/12/12                     
                                         
    
	  		  		 	Deputy Director
					
		 	/s/ J. Robert Robertson            	  		  		 	/s/ Richard A. Feinstein
		 	J. Robert Robertson	  		  		 	Richard A. Feinstein
		 	Hogan Lovells US LLP	  		  		 	Director
		 	Counsel for Illinois Tool Works Inc. and	  		  		 	
		 	ITW Finishing LLC	  		  		 	Bureau of Competition
		 		  		  		 	Federal Trade Commission
		 		  		  		 	Washington, D.C. 20580

  
 4 

 Exhibit 10.1 
  

UNITED STATES OF AMERICA 
 BEFORE FEDERAL TRADE COMMISSION 
  

							
	COMMISSIONERS:	 	 Jon Leibowitz, Chairman

J. Thomas Rosch
 Edith
Ramirez
 Julie Brill

Maureen K. Ohlhausen
	  		  	

  

					
	 	 	)	  	
	 In the Matter of
	 	)	  	
		 	)	  	
	 GRACO INC.,
	 	)	  	
	 a corporation,
	 	)	  	    Docket No. 9350
		 	)	  	
	 ILLINOIS TOOL WORKS INC.,
	 	)	  	    PUBLIC
	 a corporation, and
	 	)	  	
		 	)	  	
	 ITW FINISHING LLC,
	 	)	  	
	 a limited liability company.
	 	)	  	
	 	 	)	  	

 DECISION AND ORDER 
 The Federal Trade Commission (“Commission”), having heretofore issued its administrative Complaint charging Respondents Graco Inc. (“Graco”), Illinois Tool Works Inc., and ITW
Finishing LLC (“ITW”), hereinafter referred to as the Respondents, with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. §
45, and the Respondents having been served with a copy of the Complaint, together with a notice of contemplated relief, and the Respondents having answered the Complaint denying said charges; and 

The Respondents, their attorneys, and counsel for the Commission having thereafter executed an Agreement Containing Consent Orders
(“Consent Agreement”), containing an admission by the Respondents of all the jurisdictional facts set forth in the aforesaid Complaint, a statement that the signing of said Consent Agreement is for settlement purposes only and does not
constitute an admission by the Respondents that the law has been violated as alleged in such Complaint, or that the facts as alleged in such Complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the
Commission’s Rules; and 
 The Secretary of the Commission having thereafter withdrawn the matter from adjudication in
accordance with § 3.25(c) of its Rules; and 
 The Commission having thereafter considered the matter and the executed
Consent Agreement, and thereupon issued its Order to Hold Separate and Maintain Assets, and having 

  

 Exhibit 10.1 
  

accepted the executed Consent Agreement and placed such agreement on the public record for a period of thirty (30) days, and having duly considered
the comments filed by interested persons pursuant to Commission Rule 2.34, 16 C.F.R. § 2.34, now in further conformity with the procedure prescribed in § 3.25(f) of its Rules, the Commission hereby makes the following jurisdictional
findings and issues the following Decision and Order (“Order”): 
  

	1.	Respondent Graco Inc. is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of Minnesota, with its office and
principal place of business located at 88-11th Avenue Northeast, Minneapolis, Minnesota 55413. 

  

	2.	Respondent Illinois Tool Works Inc. is a corporation organized, existing, and doing business under, and by virtue of, the laws of the State of Delaware, with its office
and principal place of business located at 3600 West Lake Avenue, Glenview, Illinois 60026. 

  

	3.	Respondent ITW Finishing LLC is a limited liability company organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its
office and principal place of business located at 3600 West Lake Avenue, Glenview, Illinois 60026. ITW Finishing LLC is indirectly wholly-owned by Illinois Tool Works Inc. 

 

	4.	The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the Respondents, and the proceeding is in the public interest.

 ORDER 
 I. 
 IT IS HEREBY ORDERED that, as used in this Order, the following
definitions shall apply: 
  

	A.	“Graco” means Graco Inc., its directors, officers, employees, agents, representatives, successors, and assigns; and its subsidiaries, divisions, groups and
affiliates in each case controlled by Graco, and the respective directors, officers, employees, agents, representatives, successors, and assigns of each. After the Acquisition Date, Graco includes the Liquid Finishing Business Assets.

  

	B.	“ITW” means Illinois Tool Works Inc., its directors, officers, employees, agents, representatives, successors, and assigns; and its subsidiaries, divisions,
groups and affiliates in each case controlled by ITW (including, but not limited to, Respondent ITW Finishing LLC), and the respective directors, officers, employees, agents, representatives, successors, and assigns of each.

  

	C.	“Commission” means the Federal Trade Commission. 

  

	D.	“Acquisition” means the acquisition described in the Asset Purchase Agreement, by and among Graco Inc., Graco Holdings Inc., Graco Minnesota Inc., Illinois
Tool Works Inc., and ITW Finishing LLC, dated April 14, 2011 (the “Asset Purchase Agreement”). 

  
 2 

 Exhibit 10.1 
  

 

	E.	“Acquisition Date” means April 2, 2012, the date the Acquisition was consummated. 

 

	F.	“Business Records” means all originals and all copies of any operating, financial or other information, documents, data, computer files (including files
stored on a computer’s hard drive or other storage media), electronic files, books, records, ledgers, papers, instruments, and other materials, whether located, stored or maintained in traditional paper format or by means of electronic,
optical, or magnetic media or devices, photographic or video images, or any other format or media, including, without limitation: distributor files and records; customer files and records, customer lists, customer product specifications, customer
purchasing histories, customer service and support materials, customer approvals and other information; credit records and information; correspondence; referral sources; supplier and vendor files and lists; advertising, promotional and marketing
materials, including website content; sales materials; research and development data, files and reports; technical information; data bases; studies; drawings, specifications and creative materials; production records and reports; service and
warranty records; equipment logs; operating guides and manuals; employee and personnel records; educational materials; tax returns; financial and accounting records; and other documents, information, and files of any kind. 

 

	G.	“Commission-approved Acquirer” means any Person that receives the prior approval of the Commission to acquire the Liquid Finishing Business Assets pursuant to
Paragraph II. (or Paragraph V.) of this Order. 

  

	H.	“Confidential Business Information” means competitively sensitive, proprietary and all other business information of any kind, except for any information that
Respondents demonstrate (i) was or becomes generally available to the public other than as a result of a disclosure by Respondents, or (ii) was available, or becomes available, to Respondents on a non-confidential basis, but only if, to
the knowledge of Respondents, the source of such information is not in breach of a contractual, legal, fiduciary, or other obligation to maintain the confidentiality of the information. 

 

	I.	“Direct Cost” means an amount not to exceed the cost of labor, material, travel, and other expenditures to the extent such costs are directly incurred to
provide the relevant assistance, support, or service. The cost of labor shall not exceed the hourly wage rate for any of Respondent’s employees who provide such labor. 

 

	J.	“Divestiture Agreement” means any agreement that receives the prior approval of the Commission between Respondent Graco (or between a Divestiture Trustee
appointed pursuant to Paragraph V. of this Order) and a Commission-approved Acquirer to purchase the Liquid Finishing Business Assets, and all amendments, exhibits, attachments, agreements, and schedules thereto that have been approved by the
Commission. 

  

	K.	“Divestiture Date” means the date on which Respondent Graco (or the Divestiture Trustee) and a Commission-approved Acquirer consummate a transaction to
divest, 

  
 3 

 Exhibit 10.1 
  

license, assign, grant, transfer, deliver and otherwise convey the Liquid Finishing Business Assets completely and as required by
Paragraph II. (or Paragraph V.) of this Order. 
  

	L.	“Gema Powder Finishing Business” means the worldwide business of developing, assembling, manufacturing, distributing, selling, or servicing powder finishing
systems and products conducted prior to the Acquisition by Respondent ITW, including all business activities relating to the development, manufacture, and sale of products under the brand name Gema. 

 

	M.	“Hold Separate” means the Order to Hold Separate and Maintain Assets issued by the Commission in this matter. 

 

	N.	“Hold Separate Business” means the (i) Liquid Finishing Business Assets and (ii) Liquid Finishing Business. 

 

	O.	“Intellectual Property” means all intellectual property owned or licensed (as licensor or licensee) by Respondent Graco (after the Acquisition) in which Graco
has a proprietary interest, and all associated rights thereto, including all of the following in any jurisdiction throughout the world: (i) all brand names, commercial names, trade names, “doing business as” (d/b/a) names, registered
and unregistered trademarks, trade dress, logos, slogans, service marks, internet website content and internet domain names presently used by Respondent ITW, together with all translations, adaptions, derivations, and combinations thereof, and
including all goodwill associated therewith, and all applications, registrations, and renewals in connection therewith; (ii) all patents, patent applications, and patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, and all inventions and discoveries (whether patentable or unpatentable and whether or not reduced to practice), and all improvements thereto; (iii) all copyrightable
works, all registered and unregistered copyrights in both published works and unpublished works, and all applications, registrations and renewals in connection therewith; (iv) all mask works and all applications, registrations, and renewals in
connection therewith; (v) all know-how, trade secrets, and confidential or proprietary information (including ideas, research and development, formulas, compositions, manufacturing and production processes and techniques, technical data and
information, blue prints, designs, drawings, specifications, protocols, quality control information, customer and supplier lists, pricing and cost information, business and marketing plans and proposals, and all other data, technology, and plans);
(vi) all computer software (including source code, executable code, data, databases and related documentation); (vii) all advertising and promotional materials; (viii) all other proprietary rights; and (ix) all copies and
tangible embodiments thereof (in whatever form or medium). 

  

	P.	“Liquid Finishing Business” means the worldwide business of developing, assembling, manufacturing, distributing, selling, or servicing liquid finishing
systems and products conducted prior to the Acquisition by Respondent ITW, including all business activities relating to the development, manufacture, and sale of products under the brand names 

  
 4 

 Exhibit 10.1 
  

Binks, DeVilbiss, Ransburg, and BGK. “Liquid Finishing Business” does not include the Gema Powder Finishing Business.

  

	Q.	“Liquid Finishing Business Assets” means all of Graco’s (after the Acquisition) rights, title, and interest in and to all property and assets, tangible
and intangible, of every kind and description, wherever located, and any improvements or additions thereto, relating to the Liquid Finishing Business, including but not limited to: 

 

	 	1.	All real property interests (including fee simple interests and real property leasehold interests), including all easements, appurtenances, licenses, and permits,
together with all buildings and other structures, facilities, and improvements located thereon, owned, leased, or otherwise held; 

  

	 	2.	All Tangible Personal Property, including any Tangible Personal Property removed from any location of the Liquid Finishing Business since the date of the announcement
of the Acquisition, and not replaced, if such property was used in connection with the operation of the Liquid Finishing Business prior to the Acquisition; 

 

	 	3.	All inventories, wherever located, including all finished product, work in process, raw materials, spare parts, and all other materials and supplies to be used or
consumed in the production of finished products; 

  

	 	4.	All (a) trade accounts receivable and other rights to payment from customers of Respondents and the full benefit of all security for such accounts or rights to
payment, (b) all other accounts or notes receivable by Respondents and the full benefit of all security for such accounts or notes, and (c) any claim, remedy or other right related to any of the foregoing; 

 

	 	5.	All agreements and contracts (including but not limited to agreements and contracts with customers, distributors, suppliers, vendors, sales representatives, agents,
licensees and licensors), purchase orders, sales orders, leases, mortgages, notes, bonds and other binding commitments, whether written or oral, and all rights thereunder and related thereto; 

 

	 	6.	All consents, licenses, certificates, registrations or permits issued, granted, given or otherwise made available by or under the authority of any governmental body or
pursuant to any legal requirement, and all pending applications therefor or renewals thereof; 

  

	 	7.	All intangible rights and property, including Intellectual Property, going-concern value, goodwill, telephone, telecopy and e-mail addresses and listings;

  

	 	8.	 All Business Records; provided, however, that where documents or other materials included in the Business Records to be divested contain
information: (a) that relates both to the Liquid Finishing Business Assets to be divested and to 

  
 5 

 Exhibit 10.1 
  

	 	
Respondent Graco’s retained assets or other products or businesses and cannot be segregated in a manner that preserves the usefulness of the information as it relates to the Liquid Finishing
Business Assets to be divested; or (b) for which the relevant party has a legal obligation to retain the original copies, the relevant party shall be required to provide only copies or relevant excerpts of the documents and materials containing
this information. In instances where such copies are provided to the Commission-approved Acquirer, the relevant party shall provide the Commission-approved Acquirer access to original documents under circumstances where copies of the documents are
insufficient for evidentiary or regulatory purposes; 

  

	 	9.	All insurance benefits, including rights and proceeds; 

  

	 	10.	All rights under warranties and guarantees, express or implied; and 

  

	 	11.	All rights relating to deposits and prepaid expenses, claims for refunds and rights to offset in respect thereof. 

Provided, however, that the Liquid Finishing Business Assets need not include any part of such assets that the Commission-approved
Acquirer determines it does not need, or that the Commission otherwise determines need not be divested, and the Commission approves the divestiture without such assets. 

 

	R.	“Liquid Finishing Business Employees” means any full-time, part-time, or contract employee(s) of the Liquid Finishing Business, immediately prior to the
Acquisition. 

  

	S.	“Person” means any individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust,
unincorporated association, joint venture or other entity or a governmental body. 

  

	T.	“Prospective Acquirer” means a Person that Respondent Graco (or a Divestiture Trustee) intends to submit as a Commission-approved Acquirer to the Commission
for its prior approval pursuant to Paragraph II. (or Paragraph V.) of this Order. 

  

	U.	“Respondents” means Graco and ITW, individually and collectively. 

 

	V.	“Tangible Personal Property” means all machinery, equipment, tools, furniture, office equipment, computer hardware, supplies, materials, vehicles, rolling
stock, and other items of tangible personal property (other than inventories) of every kind owned or leased, together with any express or implied warranty by the manufacturers or sellers or lessors of any item or component part thereof and all
maintenance records and other documents relating thereto. 

  

	W.	“Transitional Services” means any transitional assistance, support or services necessary to enable the Commission-approved Acquirer to continue the
development, manufacturing, distribution, sales, and services related to operation of the Liquid 

  
 6 

 Exhibit 10.1 
  

Finishing Business Assets, including, but not limited to, the provision of administrative services, consultation and advice, technical
assistance, and training. 
 II. 
  

	    	IT IS FURTHER ORDERED that: 

  

	A.	Respondent Graco shall divest the Liquid Finishing Business Assets, absolutely and in good faith, at no minimum price, as an on-going business, no later than 180 days
after the date this Order becomes final, to a Commission-approved Acquirer that receives the prior approval of the Commission, and only in a manner (and pursuant to a Divestiture Agreement with the Commission-approved Acquirer) that receives the
prior approval of the Commission. 

  

	B.	No later than the Divestiture Date, Respondent Graco shall secure all consents, assignments, waivers, licenses, certificates, registrations, permits, or other
authorizations from all Persons that are necessary for the divestiture and operation of the Liquid Finishing Business Assets to the Commission-approved Acquirer; provided, however, that Respondent Graco may satisfy this requirement by
certifying that the Commission-approved Acquirer has executed appropriate agreements directly with each of the relevant Persons. 

  

	C.	In the event Respondent Graco is unable to obtain any consent(s), assignment(s), waiver(s), license(s), certificate(s), registration(s), permit(s), or other
authorization(s) necessary for the divestiture and/or operation of the Liquid Finishing Business Assets from any Person, Respondent Graco shall: 

  

	 	1.	Provide such assistance as the Commission-approved Acquirer may reasonably request in its efforts to obtain a comparable license, certificate, registration, permit, or
other authorization; and 

  

	 	2.	With the acceptance of the Commission-approved Acquirer and the prior approval of the Commission, substitute equivalent assets or arrangements.

  

	D.	At the request of the Commission-approved Acquirer, pursuant to an agreement that receives the prior approval of the Commission, Respondent Graco shall, for a period
not to exceed twelve (12) months from the Divestiture Date, or as otherwise approved by the Commission, provide Transitional Services to the Commission-approved Acquirer: 

 

	 	1.	Sufficient to enable the Commission-approved Acquirer to operate the divested assets and business in substantially the same manner as they were operated prior to the
Acquisition; and 

  

	 	2.	At substantially the same level and quality as such services were provided by Respondents in connection with the operation of the divested assets and business prior to
the Acquisition. 

  
 7 

 Exhibit 10.1 
  

 

	    	Provided, however, that Respondent Graco shall not (i) require the Commission-approved Acquirer to pay compensation for Transitional Services that exceeds
the Direct Cost of providing such goods and services, (ii) terminate its obligation to provide Transitional Services because of a material breach by the Commission-approved Acquirer of any agreement to provide such assistance, in the absence of
a final order of a court of competent jurisdiction, except if Respondent Graco is unable to provide such services due to such material breach, or (iii) seek to limit the damages (such as indirect, special, and consequential damages) which a
Commission-approved Acquirer would be entitled to receive in the event of Respondent Graco’s breach of any agreement to provide Transitional Services. 

 

	E.	Respondent ITW shall provide the Commission-approved Acquirer, at the request of the Commission-approved Acquirer, the transition and support services Respondent ITW
has agreed to provide to Respondent Graco in the Asset Purchase Agreement on the terms and subject to the conditions contemplated by the Asset Purchase Agreement. 

 

	F.	Respondent Graco shall provide the Commission-approved Acquirer with the opportunity to identify, recruit and employ any Liquid Finishing Business Employee in
conformance with the following: 

  

	 	1.	No later than ten (10) days after a request from a Prospective Acquirer, or staff of the Commission, Respondents shall provide the Prospective Acquirer with the
following information for each Liquid Finishing Business Employee, as and to the extent permitted by law: 

  

	 	(a)	name, job title or position, date of hire and effective service date; 

	 	(b)	a specific description of the employee’s responsibilities; 

	 	(c)	the base salary or current wages; 

	 	(d)	the most recent bonus paid, aggregate annual compensation for Respondent ITW’s last fiscal year and current target or guaranteed bonus, if any;

	 	(e)	employment status (i.e., active or on leave or disability; full-time or part-time); 

	 	(f)	any other material terms and conditions of employment in regard to such employee that are not otherwise generally available to similarly-situated employees; and

	 	(g)	at the Prospective Acquirer’s option, copies of all employee benefit plans and summary plan descriptions (if any) applicable to the relevant Liquid Finishing
Business Employee. 

  

	 	2.	No later than thirty (30) days before the Divestiture Date, after a request from a Prospective Acquirer, Respondent Graco shall provide the Prospective Acquirer
with (i) an opportunity to meet, personally and outside the presence or hearing of any employee or agent of any Respondent, with any Liquid Finishing Business Employee for the purpose of discussing potential employment, (ii) an opportunity
to inspect the personnel files and other documentation relating to any such 

  
 8 

 Exhibit 10.1 
  

employee, to the extent permissible under applicable laws such employee, and iii) to make offers of employment to any Liquid Finishing
Business Employee. 
  

	 	3.	Respondent Graco shall (i) not interfere, directly or indirectly, with the hiring or employing by the Prospective Acquirer of any Liquid Finishing Business
Employee, (ii) not offer any incentive to any Liquid Finishing Business Employee to decline employment with the Prospective Acquirer, (iii) not make any counteroffer to any Liquid Finishing Business Employee who receives a written offer of
employment from the Prospective Acquirer; provided, however, that nothing in this Order shall be construed to require Respondent Graco to terminate the employment of any employee or prevent Respondent Graco from continuing the employment of
any employee; (iv) remove any impediments within the control of Respondent Graco that may deter any Liquid Finishing Business Employee from accepting employment with the Prospective Acquirer, including, but not limited to, any non-compete or
confidentiality provisions of employment or other contracts with Respondent Graco that would affect the ability of such employee to be employed by the Prospective Acquirer, and (v) not otherwise interfere with the recruitment of any Liquid
Finishing Business Employee by the Prospective Acquirer. 

  

	G.	Until the Divestiture Date, Respondent Graco shall provide each Liquid Finishing Business Employee with reasonable financial incentives to continue in his or her
position consistent with past practices and/or as may be necessary to preserve the marketability, viability and competitiveness of the Liquid Finishing Business Assets pending divestiture. Such incentives shall include employee benefits, including
regularly scheduled raises, bonuses, vesting of current and accrued retirement benefits (as permitted by law), on the same basis as provided under the Asset Purchase Agreement to other employees hired by Respondent Graco in the Acquisition, and such
additional incentives as may be necessary to assure the continuation and to prevent any diminution of the viability, marketability and competitiveness of the Liquid Finishing Business Assets until the Divestiture Date, and as may otherwise be
necessary to achieve the purposes of this Order and the Hold Separate. 

  

	H.	For a period of two (2) years after the Divestiture Date, Respondent Graco shall not, directly or indirectly, solicit, induce or attempt to solicit or induce any
Liquid Finishing Business Employee who has accepted an offer of employment with the Commission-approved Acquirer, or who is employed by the Commission-approved Acquirer, to terminate his or her employment relationship with the Commission-approved
Acquirer; provided, however, Respondent Graco may: 

  

	 	1.	Advertise for employees in newspapers, trade publications, or other media, or engage recruiters to conduct general employee search activities, so long as these actions
are not targeted specifically at any Liquid Finishing Business Employees; and 

  
 9 

 Exhibit 10.1 
  

 

	 	2.	Hire Liquid Finishing Business Employees who apply for employment with Respondent Graco, so long as such individuals were not solicited by Respondent Graco in violation
of this paragraph; provided further, that this sub-Paragraph shall not prohibit Respondent Graco from making offers of employment to or employing any Liquid Finishing Business Employees if the Commission-approved Acquirer has notified
Respondent Graco in writing that the Commission-approved Acquirer does not intend to make an offer of employment to that employee, or where such an offer has been made and the employee has declined the offer, or where the individual’s
employment has been terminated by the Commission-approved Acquirer. 

  

	I.	The purpose of the divestiture of the Liquid Finishing Business Assets is to ensure the continuation of the Liquid Finishing Business Assets as an ongoing, viable
business operating in the same relevant markets in which such assets were competing at the time of the announcement of the Acquisition by Respondents, and to remedy the lessening of competition resulting from the Acquisition as alleged in the
Commission’s Complaint. 

 III. 

 

	    	IT IS FURTHER ORDERED that: 

  

	A.	Respondents shall (i) keep confidential and not disclose (including with respect to Respondents’ employees) and (ii) not use for any reason or purpose,
any Confidential Business Information pertaining to the Liquid Finishing Business and Liquid Finishing Business Assets; provided, however, that the Respondents may disclose or use such Confidential Business Information:

  

	 	1.	In the course of performing their obligations as permitted under this Order or the Hold Separate, including as necessary to effect the marketing and divestiture of the
Liquid Finishing Business Assets pursuant to Paragraph II. of this Order and the provision of Transitional Services; provided further, that Respondents’ employees who provide support services under the Hold Separate or Transitional
Services under the Divestiture Agreement, or who staff the Hold Separate Business, shall be deemed to be performing obligations under this Order or the Hold Separate. 

 

	 	2.	In the course of performing their obligations under the Divestiture Agreement; 

 

	 	3.	To enforce the terms of the Divestiture Agreement or to prosecute or defend against any dispute or legal proceeding; 

 

	 	4.	To comply with financial reporting requirements, obtain legal advice, defend legal claims, enforce actions threatened or brought against the Liquid Finishing Business
or Liquid Finishing Business Assets, or as required by applicable law, regulations and other legal requirements (including in connection with tax returns, reports required by securities laws and payroll, benefits or personnel reports or

  
 10 

 Exhibit 10.1 
  

 

	 	    	information) or in overseeing compliance with policies and standards concerning health, safety and environmental aspects of the operation of the Liquid Finishing
Business and the integrity of the Liquid Finishing Business financial controls; 

  

	 	5.	To Respondent Graco’s lenders and auditors; and 

  

	 	6.	As otherwise permitted by the Commission staff. 

  

	B.	If the disclosure or use of any Confidential Business Information is permitted to Respondents’ employees or to any other Person under Paragraph III.A. of this
Order, then Respondents shall limit such information (i) only to those employees or other Persons who require such information for the purposes permitted under Paragraph III.A., (ii) only to the extent such information is required, and
(iii) only after such employees or other Persons have signed an agreement in writing to maintain the confidentiality of such information. 

  

	C.	Respondents shall enforce the terms of this Paragraph III. as to their employees and any other Person and take such action as is necessary to cause each of their
employees and any other Person to comply with the terms of this Paragraph III., including implementation of access and data controls, training of their employees, and all other actions that Respondents would take to protect their own trade secrets
and proprietary information. 

 IV. 

 

	    	IT IS FURTHER ORDERED that: 

  

	A.	The Divestiture Agreement shall not limit or contradict, or be construed to limit or contradict, the terms of this Order, it being understood that nothing in this Order
shall be construed to reduce any rights or benefits of the Commission-approved Acquirer or to reduce any obligations of the Respondents under such agreements. 

 

	B.	The Divestiture Agreement shall be incorporated by reference into this Order and made a part hereof. 

 

	C.	Respondent Graco shall comply with all provisions of the Divestiture Agreement, and any breach by Respondent Graco of any term of such agreement shall constitute a
violation of this Order. If any term of the Divestiture Agreement varies from the terms of this Order (“Order Term”), then to the extent that Respondent Graco cannot fully comply with both terms, the Order Term shall determine Respondent
Graco’s obligations under this Order. Any failure by Respondent Graco to comply with any term of such Divestiture Agreement shall constitute a failure to comply with this Order. 

 

	D.	Respondent Graco shall not modify or amend any of the terms of the Divestiture Agreement without the prior approval of the Commission, except as otherwise provided in
Rule 2.41(f)(5) of the Commission’s Rules of Practice and Procedure, 16 C.F.R. 

  
 11 

 Exhibit 10.1 
  

 

	    	§ 2.41(f)(5). Notwithstanding any paragraph, section, or other provision of the Divestiture Agreement, any modification of the Divestiture Agreement without the
prior approval of the Commission, or as otherwise provided in Rule 2.41(f)(5), shall constitute a failure to comply with this Order. 

 V. 
  

	    	IT IS FURTHER ORDERED that: 

  

	A.	If Respondent Graco has not divested the Liquid Finishing Business Assets and otherwise fully complied with the obligations as required by Paragraph II.A. of this
Order, the Commission may appoint a trustee (“Divestiture Trustee”) to divest the Liquid Finishing Business Assets and/or perform Respondent Graco’s other obligations in a manner that satisfies the requirements of this Order. The
Divestiture Trustee appointed pursuant to this Paragraph may be the same Person appointed as Hold Separate Trustee pursuant to the relevant provisions of the Hold Separate entered in this matter. 

 

	B.	In the event that the Commission or the Attorney General brings an action pursuant to § 5(l) of the Federal Trade Commission Act, 15 U.S.C. § 45(l), or any
other statute enforced by the Commission, Respondent Graco shall consent to the appointment of a Divestiture Trustee in such action to divest the relevant assets in accordance with the terms of this Order. Neither the appointment of a Divestiture
Trustee nor a decision not to appoint a Divestiture Trustee under this Paragraph shall preclude the Commission or the Attorney General from seeking civil penalties or any other relief available to it, including a court-appointed Divestiture Trustee,
pursuant to § 5(l) of the Federal Trade Commission Act, or any other statute enforced by the Commission, for any failure by the Respondents to comply with this Order. 

 

	C.	The Commission shall select the Divestiture Trustee, subject to the consent of Respondent Graco, which consent shall not be unreasonably withheld. The Divestiture
Trustee shall be a person with experience and expertise in acquisitions and divestitures. If Respondent Graco has not opposed, in writing, including the reasons for opposing, the selection of any proposed Divestiture Trustee within ten
(10) days after notice by the staff of the Commission to Respondent Graco of the identity of any proposed Divestiture Trustee, Respondent Graco shall be deemed to have consented to the selection of the proposed Divestiture Trustee.

  

	D.	Within ten (10) days after appointment of a Divestiture Trustee, Respondent Graco shall execute a trust agreement that, subject to the prior approval of the
Commission, transfers to the Divestiture Trustee all rights and powers necessary to permit the Divestiture Trustee to effect the relevant divestiture or transfer required by this Order. 

 

	E.	If a Divestiture Trustee is appointed by the Commission or a court pursuant to this Order, Respondents shall consent to the following terms and conditions regarding the
Divestiture Trustee’s powers, duties, authority, and responsibilities: 

  
 12 

 Exhibit 10.1 
  

 

	 	1.	Subject to the prior approval of the Commission, the Divestiture Trustee shall have the exclusive power and authority to divest, assign, grant, license, transfer,
deliver or otherwise convey the relevant assets that are required by this Order to be divested, assigned, granted, licensed, transferred, delivered or otherwise conveyed. 

 

	 	2.	The Divestiture Trustee shall have twelve (12) months from the date the Commission approves the trust agreement described herein to accomplish the divestiture,
which shall be subject to the prior approval of the Commission. If, however, at the end of the twelve (12) month period, the Divestiture Trustee has submitted a plan of divestiture or believes that the divestiture can be achieved within a
reasonable time, the divestiture period may be extended by the Commission, or, in the case of a court-appointed Divestiture Trustee, by the court; provided, however, that the Commission may extend the period only two (2) times.

  

	 	3.	Subject to any demonstrated legally recognized privilege, the Divestiture Trustee shall have full and complete access to the personnel, books, records, and facilities
related to the relevant assets that are required to be divested, assigned, granted, licensed, delivered or otherwise conveyed by this Order and to any other relevant information, as the Divestiture Trustee may request. Respondents shall develop such
financial or other information as the Divestiture Trustee may request and shall cooperate with the Divestiture Trustee. Respondents shall take no action to interfere with or impede the Divestiture Trustee’s accomplishment of the divestiture.
Any delays in divestiture caused by Respondents shall extend the time for divestiture under this Paragraph V in an amount equal to the delay, as determined by the Commission or, for a court-appointed Divestiture Trustee, by the court.

  

	 	4.	The Divestiture Trustee shall use commercially reasonable best efforts to negotiate the most favorable price and terms available in each contract that is submitted to
the Commission, subject to Respondent Graco’s absolute and unconditional obligation to divest expeditiously and at no minimum price. The divestiture shall be made in the manner and to a Commission-approved Acquirer as required by this Order;
provided, however, if the Divestiture Trustee receives bona fide offers from more than one acquiring entity, and if the Commission determines to approve more than one such acquiring entity, the Divestiture Trustee shall divest to the
acquiring entity selected by Respondent Graco from among those approved by the Commission; provided further, however, that Respondent Graco shall select such entity within five (5) days of receiving notification of the Commission’s
approval. 

  

	 	5.	 The Divestiture Trustee shall serve, without bond or other security, at the cost and expense of Respondent Graco, on such reasonable and customary
terms and conditions as the Commission or a court may set. The Divestiture Trustee shall have the authority to employ, at the cost and expense of Respondent Graco, such 

  
 13 

 Exhibit 10.1 
  

	 	
consultants, accountants, attorneys, investment bankers, business brokers, appraisers, and other representatives and assistants as are necessary to carry out the Divestiture Trustee’s duties
and responsibilities. The Divestiture Trustee shall account for all monies derived from the divestiture and all expenses incurred. After approval by the Commission and, in the case of a court-appointed Divestiture Trustee, by the court, of the
account of the Divestiture Trustee, including fees for the Divestiture Trustee’s services, all remaining monies shall be paid at the direction of Respondent Graco, and the Divestiture Trustee’s power shall be terminated. The compensation
of the Divestiture Trustee shall be based at least in significant part on a commission arrangement contingent on the divestiture of all of the relevant assets that are required to be divested by this Order. 

 

	 	6.	Respondent Graco shall indemnify the Divestiture Trustee and hold the Divestiture Trustee harmless against any losses, claims, damages, liabilities, or expenses arising
out of, or in connection with, the performance of the Divestiture Trustee’s duties, including all reasonable fees of counsel and other expenses incurred in connection with the preparation for, or defense of, any claim, whether or not resulting
in any liability, except to the extent that such losses, claims, damages, liabilities, or expenses result from gross negligence or willful misconduct by the Divestiture Trustee. For purposes of this Paragraph V.E.6., the term “Divestiture
Trustee” shall include all Persons retained by the Divestiture Trustee pursuant to Paragraph V.E.5. of this Order. 

  

	 	7.	The Divestiture Trustee shall have no obligation or authority to operate or maintain the relevant assets required to be divested by this Order.

  

	 	8.	The Divestiture Trustee shall report in writing to Respondent Graco and to the Commission every sixty (60) days concerning the Divestiture Trustee’s efforts
to accomplish the divestiture. 

  

	 	9.	Respondents may require the Divestiture Trustee and each of the Divestiture Trustee’s consultants, accountants, attorneys, and other representatives and assistants
to sign a customary confidentiality agreement; provided, however, such agreement shall not restrict the Divestiture Trustee from providing any information to the Commission. 

 

	F.	If the Commission determines that a Divestiture Trustee has ceased to act or failed to act diligently, the Commission may appoint a substitute Divestiture Trustee in
the same manner as provided in this Paragraph V. 

  

	G.	The Commission or, in the case of a court-appointed Divestiture Trustee, the court, may on its own initiative or at the request of the Divestiture Trustee issue such
additional orders or directions as may be necessary or appropriate to accomplish the divestiture required by this Order. 

  
 14 

 Exhibit 10.1 
  

VI. 
  

	    	IT IS FURTHER ORDERED that: 

  

	A.	Within thirty (30) days after the date this Order becomes final and every thirty (30) days thereafter until Respondents have fully complied with the
provisions of Paragraph II of this Order, Respondents shall submit to the Commission a verified written report setting forth in detail the manner and form in which they intend to comply, are complying, and have complied with this Order, and the Hold
Separate. Respondent Graco shall include in its compliance reports, among other things that are required from time to time, a full description of the efforts being made to comply with this Order and with the Hold Separate, including a description of
all substantive contacts or negotiations relating to the divestiture and approval, and the identities of all parties contacted. Respondents shall include in their compliance reports copies, other than of privileged materials, of all written
communications to and from such parties, all internal memoranda, and all reports and recommendations concerning the divestiture and approval, and, as applicable, a statement that the divestiture approved by the Commission has been accomplished,
including a description of the manner in which Respondent Graco completed such divestiture and the date the divestiture was accomplished. 

  

	B.	One (1) year after the date this Order becomes final, Respondents, and annually thereafter for the next five (5) years on the anniversary of the date this
Order becomes final, and at such other times as the Commission may request, Respondent Graco shall file a verified written report with the Commission setting forth in detail the manner and form in which it has complied and is complying with the
Order and any Divestiture Agreement. 

 VII. 

IT IS FURTHER ORDERED that Respondent Graco shall notify the Commission at least thirty (30) days prior to: 

 

	A.	Any proposed dissolution of Respondent Graco; 

  

	B.	Any proposed acquisition, merger or consolidation of Respondent Graco; or 

 

	C.	Any other change in Respondent Graco, including, but not limited to, assignment and the creation or dissolution of subsidiaries, if such change might affect compliance
obligations arising out of this Order. 

  
 15 

 Exhibit 10.1 
  

VIII. 

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Order, subject to any legally
recognized privilege, upon written request and five (5) days’ notice to the relevant Respondent, with respect to any matter contained in this Order, the relevant Respondent shall permit any duly authorized representative of the Commission:

  

	A.	Access, during business office hours of the relevant Respondent(s) and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers,
accounts, correspondence, memoranda and all other records and documents in the possession or under the control of the relevant Respondent(s) related to compliance with the Consent Agreement and/or the Orders, which copying services shall be provided
by such Respondent(s) at the request of the authorized representative(s) of the Commission and at the expense of such Respondent(s); and 

  

	B.	Without restraint or interference from such Respondent(s), to interview officers, directors, or employees of such Respondent(s), who may have counsel present.

 IX. 
 IT IS FURTHER ORDERED that this Order shall terminate ten (10) years from the date this Order becomes final. 
 By the Commission. 
  

			
		  	Donald S. Clark
	 SEAL
	  	Secretary
	 ISSUED:
	  	

  
 16 

 Exhibit 10.1 
  

UNITED STATES OF AMERICA 
 BEFORE FEDERAL TRADE COMMISSION 
  

							
	COMMISSIONERS:	 	 Jon Leibowitz, Chairman

J. Thomas Rosch
 Edith
Ramirez
 Julie Brill
	  		  	

  

					
	 	 	)	  	
	 In the Matter of
	 	)	  	
		 	)	  	
	 GRACO INC.,
	 	)	  	
	 a corporation,
	 	)	  	    Docket No. 9350
		 	)	  	
	 ILLINOIS TOOL WORKS INC.,
	 	)	  	    PUBLIC
	 a corporation, and
	 	)	  	
		 	)	  	
	 ITW FINISHING LLC,
	 	)	  	
	 a limited liability company.
	 	)	  	
	 	 	)	  	

 ORDER TO HOLD SEPARATE AND MAINTAIN ASSETS 

The Federal Trade Commission (“Commission”), having heretofore issued its administrative Complaint charging Respondents Graco
Inc. (“Graco”), Illinois Tool Works Inc., and ITW Finishing LLC (“ITW”), hereinafter referred to as Respondents, with violations of Section 7 of the Clayton Act, as amended, 15 U.S.C. § 18, and Section 5 of the
Federal Trade Commission Act, as amended, 15 U.S.C. § 45, and Respondents having been served with a copy of the Complaint, together with a notice of contemplated relief, and the Respondents having answered the Complaint denying said charges;
and 
 Respondents, their attorneys, and counsel for the Commission having thereafter executed an Agreement Containing Consent
Orders (“Consent Agreement”), containing an admission by Respondents of all the jurisdictional facts set forth in the aforesaid Complaint, a statement that the signing of said Consent Agreement is for settlement purposes only and does not
constitute an admission by Respondents that the law has been violated as alleged in such Complaint, or that the facts as alleged in such Complaint, other than jurisdictional facts, are true, and waivers and other provisions as required by the
Commission’s Rules; and 
 The Secretary of the Commission having thereafter withdrawn the matter from adjudication in
accordance with § 3.25(c) of its Rules; and 
 The Commission having thereafter considered the matter and the executed
Consent Agreement, now in further conformity with the procedure described in § 3.25(f) of its Rules, the 

  

 Exhibit 10.1 
  

Commission hereby makes the following jurisdictional findings and issues this Order to Hold Separate and Maintain Assets (“Hold Separate”):

  

	1.	Respondent Graco Inc. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Minnesota, with its office and principal
place of business located at 88-11th Avenue Northeast, Minneapolis, Minnesota 55413. 

  

	2.	Respondent Illinois Tool Works Inc. is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its office
and principal place of business located at 3600 West Lake Avenue, Glenview, Illinois 60026. 

  

	3.	Respondent ITW Finishing LLC is a limited liability company organized, existing, and doing business under and by virtue of the laws of the State of Delaware, with its
office and principal place of business located at 3600 West Lake Avenue, Glenview, Illinois 60026. ITW Finishing LLC is indirectly wholly-owned by Illinois Tool Works Inc. 

 

	4.	The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the Respondents, and the proceeding is in the public interest.

 ORDER 
 I. 
 IT IS ORDERED that, as used in this Hold Separate, the
following definitions, and all other definitions used in the Consent Agreement and the proposed Decision and Order (and when made final, the Decision and Order), shall apply: 

 

	A.	“Acquisition” means the proposed acquisition described in the Asset Purchase Agreement by and among Graco Inc., Graco Holdings Inc., Graco Minnesota Inc.,
Illinois Tool Works Inc., and ITW Finishing LLC, dated April 14, 2011 (the “Asset Purchase Agreement”). 

  

	B.	“Acquisition Date” means the date the Acquisition is consummated. 

 

	C.	“Commission-approved Acquirer” means any Person that receives the prior approval of the Commission to acquire the Liquid Finishing Business Assets pursuant to
the Decision and Order. 

  

	D.	“Confidential Business Information” means competitively sensitive, proprietary and all other business information of any kind, except for any information that
Respondents demonstrate (i) was or becomes generally available to the public other than as a result of a disclosure by Respondents, or (ii) was available, or becomes available, to Respondents on a non-confidential basis, but only if, to
the knowledge of Respondents, the source of such information is not in breach of a contractual, legal, fiduciary, or other obligation to maintain the confidentiality of the information. 

 

	E.	 “Decision and Order” means (i) the proposed Decision and Order contained in the Consent Agreement in this matter until the issuance and
service of a final Decision and 

  
 2 

 Exhibit 10.1 
  

	 	
Order by the Commission; and (ii) the final Decision and Order issued by the Commission following the issuance and service of a final Decision and Order by the Commission.

  

	F.	“Divestiture Date” means the date on which Respondent Graco (or the Divestiture Trustee) and a Commission-approved Acquirer consummate a transaction to
divest, license, assign, grant, transfer, deliver and otherwise convey the Liquid Finishing Business Assets completely and as required by Paragraph II. (or Paragraph V.) of Decision and Order. 

 

	G.	“Gema Powder Finishing Business” means the worldwide business of developing, assembling, manufacturing, distributing, selling, or servicing powder finishing
systems and products conducted prior to the Acquisition by Respondent ITW, including all business activities relating to the development, manufacture, and sale of products under the brand name Gema. “Gema Powder Finishing Business” does
not include the Liquid Finishing Business. 

  

	H.	“Hold Separate” means this Order to Hold Separate and Maintain Assets. 

 

	I.	“Hold Separate Business” means the (i) Liquid Finishing Business Assets and (ii) Liquid Finishing Business. 

 

	J.	“Hold Separate Business Employees” means the Liquid Finishing Business Employees, the Hold Separate Gema Employees, and the Hold Separate Gema Shared
Employees. 

  

	K.	“Hold Separate Gema Employees” means employees located in the United Kingdom, Germany, France, Italy, Australia, Japan, and Mexico in facilities shared with
the Liquid Finishing Business or Liquid Finishing Business Assets whose job responsibilities relate exclusively to Gema powder finishing products. 

  

	L.	“Hold Separate Gema Shared Employees” means employees located in the United Kingdom, Germany, France, Italy, Australia, Japan, and Mexico in facilities shared
with the Liquid Finishing Business or Liquid Finishing Business Assets whose job responsibilities relate to both the liquid finishing and powder finishing businesses. 

 

	M.	“Hold Separate Period” means the time period during which the Hold Separate is in effect, which shall begin on the date this Hold Separate becomes a final and
effective order, which shall occur on or prior to the Acquisition Date, and terminate pursuant to Paragraph V. of this Hold Separate. 

  

	N.	“Hold Separate Manager(s)” means the Person(s) appointed pursuant to Paragraph II.C.2. of this Hold Separate. 

 

	O.	“Hold Separate Trustee” means the Person appointed pursuant to Paragraph II.C.l. of this Hold Separate. 

 

	P.	 “Liquid Finishing Business” means the worldwide business of developing, assembling, manufacturing, distributing, selling, or servicing liquid
finishing systems and products 

  
 3 

 Exhibit 10.1 
  

	 	
conducted prior to the Acquisition by Respondent ITW, including all business activities relating to the development, manufacture, and sale of products under the brand names Binks, DeVilbiss,
Ransburg, and BGK. “Liquid Finishing Business” does not include the Gema Powder Finishing Business. 

  

	Q.	“Liquid Finishing Business Assets” means all rights, title, and interest in and to all property and assets, tangible and intangible, of every kind and
description, wherever located, and any improvements or additions thereto, relating to the Liquid Finishing Business. 

  

	R.	“Liquid Finishing Business Employees” means any full-time, part-time, or contract employee(s) of the Liquid Finishing Business, including the Hold Separate
Gema Shared Employees, immediately prior to the Acquisition. 

  

	S.	“Orders” means the Decision and Order and this Hold Separate. 

  

	T.	“Person” means any individual, partnership, firm, corporation, association, trust, unincorporated organization or other business entity.

  

	U.	“Prospective Acquirer” means a Person that Graco (or a Divestiture Trustee appointed under the Decision and Order) intends to submit as a Commission-approved
Acquirer to the Commission for its prior approval pursuant to the Decision and Order. 

 II. 

 

	    	IT IS FURTHER ORDERED that: 

  

	A.	During the Hold Separate Period, Respondent Graco shall: 

  

	 	1.	Hold the Hold Separate Business separate, apart, and independent as required by this Hold Separate and shall vest the Hold Separate Business with all rights, powers,
and authority necessary to conduct its business. 

  

	 	2.	Not exercise direction or control over, or influence directly or indirectly, the Hold Separate Business or any of its operations, the Hold Separate Trustee, or the Hold
Separate Managers, except to the extent that Respondent Graco must exercise direction and control over the Hold Separate Business as is necessary to assure compliance with this Hold Separate, the Consent Agreement, the Decision and Order, and all
applicable laws. Nothing herein shall limit taking such action as may be required to ensure compliance with financial reporting requirements, with all applicable laws, regulations, and other legal requirements, or with policies and standards
concerning health, safety, and environmental aspects of the Hold Separate Business or with the integrity of the Hold Separate Business financial controls. 

 

	 	3.	 Take such actions as are necessary to maintain and assure the continued viability, marketability, and competitiveness of the Hold Separate Business,
and to prevent the destruction, removal, wasting, deterioration, or impairment of any of the 

  
 4 

 Exhibit 10.1 
  

	 	
assets, except for ordinary wear and tear, and shall not sell, transfer, encumber, or otherwise impair the Hold Separate Business (except as required by the Decision and Order).

  

	B.	From the time Respondents execute the Consent Agreement until the Acquisition Date, Respondent ITW shall take such actions as are necessary to maintain and assure the
continued maintenance of the full economic viability, marketability, and competitiveness of the Hold Separate Business, and prevent the destruction, removal, wasting, deterioration, or impairment of any of the assets, except for ordinary wear and
tear. 

  

	C.	Respondent Graco shall hold the Hold Separate Business separate, apart, and independent of Respondent Graco on the following terms and conditions:

  

	 	1.	At any time after the Respondents sign the Consent Agreement, the Commission may appoint a Hold Separate Trustee to monitor the operations of the Hold Separate Business
and to ensure that the Respondents comply with their obligations as required by this Hold Separate and the Decision and Order. The Hold Separate Trustee shall serve as Hold Separate Trustee pursuant to the agreement executed by the Hold Separate
Trustee and Respondent Graco (“Hold Separate Trustee Agreement”). 

  

	 	(a)	The Commission shall select the Hold Separate Trustee, subject to the consent of Respondent Graco, which consent shall not be unreasonably withheld. If Respondent Graco
has not opposed, in writing, including the reasons for opposing, the selection of the proposed Hold Separate Trustee within ten (l0) days after notice by the staff of the Commission to Respondent Graco of the identity of the proposed Hold Separate
Trustee, Respondent Graco shall be deemed to have consented to the selection of the proposed Hold Separate Trustee. 

  

	 	(b)	The Hold Separate Trustee shall have the responsibility for monitoring the organization of the Hold Separate Business; supervising the management of the Hold Separate
Business by the Hold Separate Managers; maintaining the independence of the Hold Separate Business; and monitoring Respondents’ compliance with their respective obligations pursuant to the Orders, including, without limitation, maintaining the
viability, marketability, and competitiveness of the Hold Separate Business pending divestiture. 

  

	 	(c)	No later than one (1) day after the appointment of the Hold Separate Trustee, Respondent Graco shall enter into an agreement (“Hold Separate Trustee
Agreement”) that, subject to the prior approval of the Commission, transfers to and confers upon the Hold Separate Trustee all rights, powers, and authority necessary to permit the Hold Separate Trustee to perform his or her duties and
responsibilities pursuant to this Hold Separate, in a manner consistent with the purposes of the Orders and in consultation with Commission staff, and shall require that the Hold 

  
 5 

 Exhibit 10.1 
  

Separate Trustee shall act in a fiduciary capacity for the benefit of the Commission. 

 

	 	(d)	Subject to all applicable laws and regulations, the Hold Separate Trustee shall have full and complete access to all personnel, books, records, documents, and
facilities of the Hold Separate Business, and to any other relevant information as the Hold Separate Trustee may reasonably request including, but not limited to, all documents and records kept by Respondents in the ordinary course of business that
relate to the Hold Separate Business. Respondents shall develop such financial or other information as the Hold Separate Trustee may reasonably request and shall cooperate with the Hold Separate Trustee. 

 

	 	(e)	Respondents shall take no action to interfere with or impede the Hold Separate Trustee’s ability to monitor Respondents’ compliance with this Hold Separate,
the Consent Agreement, or the Decision and Order, or otherwise to perform his or her duties and responsibilities consistent with the terms of this Hold Separate. 

 

	 	(f)	The Hold Separate Trustee shall have the authority to employ, at the cost and expense of Respondent Graco, such consultants, accountants, attorneys, and other
representatives and assistants as are reasonably necessary to carry out the Hold Separate Trustee’s duties and responsibilities. 

  

	 	(g)	The Commission may require the Hold Separate Trustee and each of the Hold Separate Trustee’s consultants, accountants, attorneys, and other representatives and
assistants to sign an appropriate confidentiality agreement relating to materials and information received from the Commission in connection with performance of the Hold Separate Trustee’s duties. 

 

	 	(h)	Respondents may require the Hold Separate Trustee and each of the Hold Separate Trustee’s consultants, accountants, attorneys, and other representatives and
assistants to sign an appropriate confidentiality agreement; provided, however, such agreement shall not restrict the Hold Separate Trustee from providing any information to the Commission. 

 

	 	(i)	Thirty (30) days after the Acquisition Date, and every thirty (30) days thereafter until the Hold Separate terminates, the Hold Separate Trustee shall report
in writing to the Commission concerning the efforts to accomplish the purposes of this Hold Separate and Respondents’ compliance with their obligations under the Hold Separate and the Decision and Order. Included within that report shall be the
Hold Separate Trustee’s assessment of the extent to which the businesses comprising the Hold Separate Business are meeting (or exceeding) their 

  
 6 

 Exhibit 10.1 
  

projected goals as are reflected in operating plans, budgets, projections, or any other regularly prepared financial statements.

  

	 	(j)	If the Hold Separate Trustee ceases to act or fails to act diligently and consistent with the purposes of this Hold Separate, the Commission may appoint a substitute
Hold Separate Trustee consistent with the terms of this Hold Separate, subject to the consent of Respondent Graco, which consent shall not be unreasonably withheld. If Respondent Graco has not opposed, in writing, including the reasons for opposing,
the selection of the substitute Hold Separate Trustee within ten (l0) days after notice by the staff of the Commission to Respondent Graco of the identity of any substitute Hold Separate Trustee, Respondent Graco shall be deemed to have consented to
the selection of the proposed substitute Hold Separate Trustee. Respondent Graco and the substitute Hold Separate Trustee shall execute a Hold Separate Trustee Agreement, subject to the approval of the Commission, consistent with this paragraph.

  

	 	(k)	The Hold Separate Trustee shall serve until the day after the Divestiture Date; provided, however, that the Commission may extend or modify this period as may be
necessary or appropriate to accomplish the purposes of the Orders. 

  

	 	2.	No later than five (5) days after the Acquisition Date, Respondent Graco shall appoint one or more Hold Separate Managers (collectively the “Hold Separate
Managers”), subject to the approval of the Hold Separate Trustee in consultation with Commission staff, to manage and maintain the Hold Separate Business in the regular and ordinary course of business and in accordance with past practice.

  

	 	(a)	The Hold Separate Managers shall be responsible for the operation of the Hold Separate Business and shall report directly and exclusively to the Hold Separate Trustee,
and shall manage the Hold Separate Business independently of the management of Respondent Graco. The Hold Separate Managers shall not be involved, in any way, in the operations of the other businesses of Respondent Graco during the term of this Hold
Separate. 

  

	 	(b)	No later than three (3) days after appointment of the Hold Separate Manager(s), Respondent Graco shall enter into a management agreement with each such manager
that, subject to the prior approval of the Hold Separate Trustee, in consultation with the Commission staff, transfers all rights, powers, and authority necessary to permit each such Hold Separate Manager to perform his or her duties and
responsibilities pursuant to this Hold Separate, in a manner consistent with the purposes of the Orders. 

  

	 	(c)	 Respondents shall provide the Hold Separate Managers with reasonable financial incentives to undertake this position. Such incentives shall include
employee benefits, including regularly scheduled raises, bonuses, 

  
 7 

 Exhibit 10.1 
  

	 	
vesting of retirement benefits (as permitted by law) on the same basis as provided for under the Asset Purchase Agreement for other employees hired by Respondent Graco, and additional incentives
as may be necessary to assure the continuation and prevent any diminution of the Hold Separate Business’s viability, marketability, and competitiveness until the end of the Hold Separate Period, and as may otherwise be necessary to achieve the
purposes of this Hold Separate. 

  

	 	(d)	The Hold Separate Managers shall make no material changes in the ongoing operations of the Hold Separate Business except with the approval of the Hold Separate Trustee,
in consultation with the Commission staff. 

  

	 	(e)	The Hold Separate Managers shall have the authority, with the approval of the Hold Separate Trustee, to remove Hold Separate Business Employees and replace them with
others of similar experience or skills. If any Person ceases to act or fails to act diligently and consistent with the purposes of this Hold Separate, the Hold Separate Managers, in consultation with the Hold Separate Trustee, may request Respondent
Graco to, and Respondent Graco shall, appoint a substitute Person, which Person the respective manager shall have the right to approve. 

  

	 	(f)	In addition to Hold Separate Business Employees, the Hold Separate Managers may, with the approval of the Hold Separate Trustee and at the cost and expense of
Respondent Graco, employ such consultants, accountants, attorneys, and other representatives and assistants as are reasonably necessary to assist the respective manager in managing the Hold Separate Business and in carrying out the manager’s
duties and responsibilities. Nothing contained herein shall preclude a Hold Separate Manager from contacting or communicating directly with the staff of the Commission, either at the request of the staff of the Commission or in the discretion of the
manager. 

  

	 	(g)	The Hold Separate Trustee shall be permitted, in consultation with the Commission staff, to remove any Hold Separate Manager for cause. Within three (3) days after
such removal, Respondent Graco shall appoint a replacement manager, subject to the approval of the Hold Separate Trustee in consultation with Commission staff, on the same terms and conditions as provided in this paragraph. 

 

	 	3.	The Hold Separate Trustee and the Hold Separate Managers shall serve, without bond or other security, at the cost and expense of Respondent Graco, on reasonable and
customary terms commensurate with the person’s experience and responsibilities. 

  

	 	4.	 Respondent Graco shall indemnify the Hold Separate Trustee and Hold Separate Managers and hold each harmless against any losses, claims, damages,
liabilities, 

  
 8 

 Exhibit 10.1 
  

	 	
or expenses arising out of, or in connection with, the performance of the Hold Separate Trustee’s or the Hold Separate Managers’ duties, including all reasonable fees of counsel and
other expenses incurred in connection with the preparation for, or defense of any claim, whether or not resulting in any liability, except to the extent that such liabilities, losses, damages, claims, or expenses result from gross negligence or
willful misconduct by the Hold Separate Trustee or the Hold Separate Managers. 

  

	 	5.	The Hold Separate Business shall be staffed with sufficient employees (including any full-time, part-time, or contract employee of the Hold Separate Business) to
maintain the viability and competitiveness of the Hold Separate Business. To the extent that such employees leave or have left the Hold Separate Business prior to the Divestiture Date, the Hold Separate Managers, with the approval of the Hold
Separate Trustee, may replace departing or departed employees with persons who have similar experience and expertise or determine not to replace such departing or departed employees. 

 

	 	6.	In connection with support services or products not included within the Hold Separate Business, Respondent Graco shall continue to provide, or offer to provide, the
same support services to the Hold Separate Business as customarily have been or were being provided to such businesses by ITW prior to the Acquisition Date. For any services or products that Respondents may provide to the Hold Separate Business,
Respondents may charge no more than the same price they charge others for the same services or products (or a commercially reasonable rate if ITW had not previously charged for such services). Respondents’ personnel providing such services or
products must retain and maintain all Confidential Business Information of or pertaining to the Hold Separate Business on a confidential basis, and, except as is permitted by this Hold Separate, such persons shall be prohibited from disclosing,
providing, discussing, exchanging, circulating, or otherwise furnishing any such information to or with any person whose employment involves any of Respondents’ businesses, other than the Hold Separate Business. Such personnel shall also
execute confidentiality agreements prohibiting the disclosure of any Confidential Business Information of the Hold Separate Business. 

  

	 	(a)	Respondent Graco shall offer to the Hold Separate Business, directly or through Respondent ITW, any services and products that Respondent ITW provided, in the ordinary
course of business directly or through third party contracts to the business constituting the Hold Separate Business at any time since December 31, 2011, or such services that Respondent ITW is obligated to provide under Schedule 1.2 of the
Asset Purchase Agreement. Respondent ITW shall treat the Hold Separate Business as a Graco Subsidiary, as that term is defined in the Asset Purchase Agreement. Subject to the foregoing, the services and products that Respondent Graco shall offer the
Hold Separate Business shall include, but shall not be limited to, the following: 

  
 9 

 Exhibit 10.1 
  

 

	 	(1)	human resources and administrative services, including but not limited to payroll processing, labor relations support, retirement administration, and procurement and
administration of employee benefits, including health benefits; 

  

	 	(2)	federal and state regulatory compliance and policy development services; 

  

	 	(3)	environmental health and safety services, which are used to develop corporate policies and insure compliance with federal and state regulations and corporate policies;

  

	 	(4)	financial accounting services; 

  

	 	(5)	preparation of tax returns; 

  

	 	(6)	audit services; 

  

	 	(7)	information technology support services; 

  

	 	(8)	processing of accounts payable and accounts receivable; 

  

	 	(9)	technical support; 

  

	 	(10)	procurement of supplies; 

  

	 	(11)	maintenance and repair of facilities; 

  

	 	(12)	procurement of goods and services utilized in the ordinary course of business by the Hold Separate Business; 

 

	 	(13)	legal services; and 

  

	 	(14)	cash management services in the ordinary course of business, including cash sweeps, consistent with the cash management services provided by Respondent ITW prior to the
Acquisition Date. 

  

	 	(b)	The Hold Separate Business shall have, at the option of the Hold Separate Managers with the approval of the Hold Separate Trustee, the ability to acquire services and
products from third parties (including Respondent ITW) unaffiliated with Respondent Graco. 

  

	 	7.	Respondent Graco shall provide the Hold Separate Business with sufficient financial and other resources: 

 

	 	(a)	as are appropriate in the judgment of the Hold Separate Trustee to operate the Hold Separate Business as it is currently operated (including efforts to

  
 10 

 Exhibit 10.1 
  

generate new business) consistent with the practices of the Hold Separate Business in place prior to the Acquisition; 

 

	 	(b)	to perform all maintenance to, and replacements of, the assets of the Hold Separate Business in the ordinary course of business and in accordance with past practice and
current plans; 

  

	 	(c)	to carry on during the Hold Separate Period such capital projects, physical plant improvements, and business plans as are already underway for which all necessary
regulatory and legal approvals have been obtained, including but not limited to existing or planned renovation or expansion projects; and 

  

	 	(d)	to maintain the viability, competitiveness, and marketability of the Hold Separate Business. 

 

	 	    	Such financial resources to be provided to the Hold Separate Business shall include, but shall not be limited to, (i) general funds, (ii) capital,
(iii) working capital, and (iv) reimbursement for any operating losses, capital losses, or other losses; provided, however, that, consistent with the purposes of the Decision and Order and in consultation with the Hold Separate
Trustee: (i) the Hold Separate Managers may reduce in scale or pace any capital or research and development project, or substitute any capital or research and development project for another of the same cost; and (ii) to the extent that
the Hold Separate Business generates financial funds in excess of financial resource needs, Respondent Graco shall have availability to such excess funds consistent with practices in place for the Hold Separate Business prior to the Acquisition.

  

	 	8.	Respondent Graco shall cause the following individuals that have access to Confidential Business Information of or pertaining to the Hold Separate Business to submit to
the Hold Separate Trustee, or Commission staff as appropriate, a signed statement that the individual will maintain the confidentiality required by the terms and conditions of this Hold Separate: (i) the Hold Separate Trustee, (ii) the
Hold Separate Managers, (iii) each of Respondent Graco’s employees not subject to the Hold Separate, (iv) the Hold Separate Gema Employees, (v) the Hold Separate Gema Shared Employees, and (vi) such additional Persons that
the Hold Separate Trustee, in consultation with Commission staff, may identify. These individuals must retain and maintain all Confidential Business Information of, or pertaining to, the Hold Separate Business on a confidential basis and, except as
is permitted by this Hold Separate, such Persons shall be prohibited from disclosing, providing, discussing; exchanging, circulating, or otherwise furnishing any such information to or with any other Person whose employment involves any of
Respondents’ businesses or activities other than the Hold Separate Business. 

  

	 	9.	Except for the Hold Separate Managers, Hold Separate Business Employees, and support services employees involved in providing services to the Hold Separate Business
pursuant to this Hold Separate, and except to the extent provided in this 

  
 11 

 Exhibit 10.1 
  

 

	 	    	Hold Separate, Respondent Graco shall not permit any other of its employees, officers, or directors to be involved in the operations of the Hold Separate Business.

  

	 	10.	Respondents’ employees (other than the Liquid Finishing Business Employees, the Hold Separate Gema Shared Employees, and Graco employees involved in providing
support services to the Hold Separate Business pursuant to Paragraph II.C.6.) shall not receive, or have access to, or use or continue to use any Confidential Business Information of the Hold Separate Business except: 

 

	 	(a)	as required by law; and 

  

	 	(b)	to the extent that necessary information is exchanged: 

  

	 	(1)	in the course of consummating the Acquisition in compliance with the terms of the Asset Purchase Agreement; 

 

	 	(2)	as necessary to effect the divestiture of the Hold Separate Business, including in connection with the marketing of the divested assets pursuant to the Consent
Agreement, in negotiating agreements to divest assets pursuant to the Consent Agreement and engaging in related due diligence; 

  

	 	(3)	in complying with this Hold Separate or the Consent Agreement; 

  

	 	(4)	in overseeing compliance with policies and standards concerning the safety, health, and environmental aspects of the operations of the Hold Separate Business and the
integrity of the financial controls of the Hold Separate Business; 

  

	 	(5)	in defending legal claims, investigations, or enforcement actions threatened or brought against or related to the Hold Separate Business; 

 

	 	(6)	to lenders and auditors; or 

  

	 	(7)	in obtaining legal advice. 

  

	 	    	Nor shall the Hold Separate Managers or any Hold Separate Business Employees receive or have access to, or use or continue to use, any Confidential Business Information
about Respondents and relating to Respondents’ businesses, except such information as is necessary to maintain and operate the Hold Separate Business. 

 

	 	    	 In addition to the foregoing, Respondent Graco may receive aggregate financial and operational information relating to the Hold Separate Business to
the extent necessary to allow Respondent Graco to comply with the requirements and obligations of the laws of the United States and other countries, to prepare 

  
 12 

 Exhibit 10.1 
  

	 	
consolidated financial reports, tax returns, reports required by securities laws, payroll and benefits information, and personnel reports, and to comply with this Hold Separate. Any such
information that is obtained pursuant to this subparagraph shall be used only for the purposes set forth in this subparagraph. 

  

	 	11.	Subject to all other provisions in this Hold Separate, the: 

  

	 	(a)	Hold Separate Gema Employees (i) may receive or have access to, use or continue to use, or disclose any Confidential Business Information pertaining to the Gema
Powder Finishing Business; (ii) shall not seek, receive, have access to, or disclose any Confidential Business Information pertaining to the Liquid Finishing Business; and (iii) shall provide the signed confidentiality statement required
by Paragraph II.C.8. of this Hold Separate. 

  

	 	(b)	Hold Separate Gema Shared Employees (i) may receive or have access to, use or continue to use, or disclose any Confidential Business Information pertaining to the
Gema Powder Finishing Business and to the Liquid Finishing Business; (ii) shall not disclose, provide, discuss, exchange, circulate, or otherwise furnish any such information pertaining to the Liquid Finishing Business to or with any other
Person whose employment involves any of Respondent Graco’s competing liquid finishing businesses; and (iii) shall provide the signed confidentiality statement required by Paragraph II.C.8. of this Hold Separate. 

 

	 	12.	Respondent Graco and the Hold Separate Business shall jointly implement, and at all times during the Hold Separate Period maintain in operation, a system, as approved
by the Hold Separate Trustee, of access and data controls to prevent unauthorized access to or dissemination of Confidential Business Information of the Hold Separate Business, including, but not limited to, the opportunity by the Hold Separate
Trustee, on terms and conditions agreed to with Respondents, to audit Respondents’ networks and systems to verify compliance with this Hold Separate. 

 

	 	13.	No later than five (5) days after the Acquisition Date, Respondent Graco shall establish written procedures, subject to the approval of the Hold Separate Trustee,
covering the management, maintenance, and independence of the Hold Separate Business consistent with the provisions of this Hold Separate. 

  

	 	14.	No later than five (5) days after the date this Hold Separate becomes final, Respondent Graco shall circulate to persons who are employed in Respondent
Graco’s businesses that compete with the Hold Separate Business, and shall circulate on the Acquisition Date to employees of the Hold Separate Business, a notice of this Hold Separate, in a form approved by the Hold Separate Trustee in
consultation with Commission staff. 

  
 13 

 Exhibit 10.1 
  

 

	D.	Until the Divestiture Date, Respondent Graco shall provide each Hold Separate Employee with reasonable financial incentives to continue in his or her position
consistent with past practices and/or as may be necessary to preserve the marketability, viability, and competitiveness of the Liquid Finishing Business and the Liquid Finishing Business Assets pending divestiture. Such incentives shall include
employee benefits, including regularly scheduled raises, bonuses, vesting of retirement benefits (as permitted by law) on the same basis as provided for under the Asset Purchase Agreement for other employees hired by Respondent Graco, and additional
incentives as may be necessary to assure the continuation and prevent any diminution of the viability, marketability, and competitiveness of the Liquid Finishing Business Assets until the Divestiture Date, and as may otherwise be necessary to
achieve the purposes of this Hold Separate. 

  

	E.	From the date the Respondents execute the Consent Agreement until this Hold Separate terminates, Respondent Graco shall not, directly or indirectly, solicit, induce, or
attempt to solicit or induce any Hold Separate Employee for a position of employment with Respondent Graco. A Prospective Acquirer or the Commission-approved Acquirer shall have the option of offering employment to any Hold Separate Employee.
Respondent Graco shall not interfere with the employment by a Prospective Acquirer or the Commission-approved Acquirer of such employee; shall not offer any incentive to such employee to decline employment with a Prospective Acquirer or the
Commission- Acquirer or to accept other employment with the Respondent Graco; and shall remove any impediments that may deter such employee from accepting employment with a Prospective Acquirer or the Commission-approved Acquirer including, but not
limited to, any non-compete or confidentiality provisions of employment or other contracts that would affect the ability of such employee to be employed by a Prospective Acquirer or the Commission-approved Acquirer. 

 

	F.	Respondent Graco shall not, directly or indirectly, solicit, induce, or attempt to solicit or induce any Hold Separate Employee who has accepted an offer of employment
with a Prospective Acquirer or the Commission-approved Acquirer to terminate his or her employment relationship with such Person; provided, however, Respondent Graco may: 

 

	 	1.	advertise for employees in newspapers, trade publications, or other media, or engage recruiters to conduct general employee search activities, so long as these actions
are not targeted specifically at any Hold Separate Business Employees; and 

  

	 	2.	hire Hold Separate Business Employees who apply for employment with Respondent Graco, so long as such individuals were not solicited by the Respondent Graco in
violation of this paragraph; provided further, that this sub- Paragraph shall not prohibit Respondent Graco from making offers of employment to or employing any Hold Separate Business Employees if a Prospective Acquirer or the
Commission-approved Acquirer has notified Respondent Graco in writing that a Prospective Acquirer or the Commission- approved Acquirer does not intend to make an offer of employment to that employee, or where such an offer has been made and the
employee has declined 

  
 14 

 Exhibit 10.1 
  

the offer, or where the individual’s employment has been terminated by a Prospective Acquirer or the Commission-approved Acquirer.

  

	G.	The purpose of this Hold Separate is to: (1) preserve the assets and businesses within the Hold Separate Business as viable, competitive, and ongoing businesses
independent of Respondent Graco until the divestiture required by the Decision and Order is achieved; (2) assure that no Confidential Business Information is exchanged between the Respondents and the Hold Separate Business, except in accordance
with the provisions of this Hold Separate; (3) prevent interim harm to competition pending the relevant divestitures and other relief; and (4) maintain the full economic viability, marketability, and competitiveness of the Hold Separate
Business, and prevent the destruction, removal, wasting, deterioration, or impairment of any of the assets or businesses within the Hold Separate Business except for ordinary wear and tear. 

III. 

IT IS FURTHER ORDERED that Respondent Graco shall notify the Commission at least thirty (30) days prior to: 

 

	A.	Any proposed dissolution of Respondent Graco; 

  

	B.	Any proposed acquisition, merger, or consolidation of Respondent Graco; or 

 

	C.	Any other change in Respondent Graco, including, but not limited to, assignment and the creation or dissolution of subsidiaries, if such change might affect compliance
obligations arising out of this Order. 

 IV. 

IT IS FURTHER ORDERED that, for the purpose of determining or securing compliance with this Hold Separate, and subject to any
legally recognized privilege, and upon written request and upon five (5) days’ notice to the relevant Respondent, relating to compliance with this Hold Separate, Respondents shall permit any duly authorized representative of the
Commission: 
  

	A.	Access, during business office hours of the relevant Respondent(s) and in the presence of counsel, to all facilities and access to inspect and copy all books, ledgers,
accounts, correspondence, memoranda, and all other records and documents in the possession or under the control of the relevant Respondent(s) related to compliance with the Consent Agreement and/or the Orders, which copying services shall be
provided by such Respondent(s) at the request of the authorized representative(s) of the Commission and at the expense of such Respondent(s); and 

  

	B.	Without restraint or interference from such Respondent(s), to interview officers, directors, or employees of such Respondent(s), who may have counsel present.

  
 15 

 Exhibit 10.1 
  

V. 

IT IS FURTHER ORDERED that this Hold Separate shall terminate at the earlier of: 

 

	A.	Three (3) business days after the Commission withdraws its acceptance of the Consent Agreement pursuant to the provisions of Commission Rule 3.25(f), 16 C.F.R.
§ 3.25(f); or 

  

	B.	The day after the Divestiture Date of the Hold Separate Assets required to be divested pursuant to the Decision and Order. 

By the Commission. 
 /s/ Donald S. Clark 
 Donald S. Clark 

Secretary 

SEAL: 
 ISSUED: March 26, 2012

  
 16

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