Document:

Exhibit

Exhibit 10.1
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND LIMITED CONSENT 
This FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT AND LIMITED CONSENT (this “First Amendment”), dated as of May 24, 2017 and, made by and among KADANT INC., a Delaware corporation (the “Borrower”), the Subsidiary Guarantors parties hereto, the Foreign Subsidiary Borrowers parties hereto, the several banks and other financial institutions or entities parties hereto (the “Lenders”), CITIZENS BANK, N.A., as administrative agent (the “Administrative Agent”) and CITIZENS BANK, N.A., as multicurrency administrative agent (the “Multicurrency Administrative Agent”; together with the Administrative Agent, the “Agents”).  
Background
The Borrower, the Subsidiary Guarantors, the Foreign Subsidiary Borrowers, the Agents and the Lenders entered into an Amended and Restated Credit Agreement dated as of March 1, 2017 (the “Original Credit Agreement”), as amended by this First Amendment and as further amended, modified or supplemented from time to time, the “Credit Agreement”.
The Borrower has informed the Agents and the Lenders that it or its Subsidiaries intends to acquire all of the Capital Stock of one or more entities that have been identified to the Agents (the “Acquisition Target”) (and delivered a copy of a letter of intent regarding such transaction dated March 16, 2017) through the Borrower or one or more of the Borrower’s wholly-owned subsidiaries (individually, and collectively, the “Kadant Purchaser”) (such acquisition transaction, the “ Identified Acquisition”) which Identified Acquisition shall be funded, in part, with Loans to be advanced under the Credit Agreement (such extension of credit by the Lenders, the “Acquisition Advance”).
The Borrower has requested that the Agents and the Lenders (a) agree that the conditions to each extension of credit to the Borrower and/or a Foreign Subsidiary Borrower set forth in Sections 5.2 and 5.3 of the Original Credit Agreement, as applicable, shall be limited as set forth herein with respect to the Acquisition Advance and (b) amend the Original Credit Agreement to increase the Revolving Commitments from $200,000,000 to $300,000,000.
Capitalized terms not defined herein shall have the meanings given such terms in the Original Credit Agreement.  This First Amendment constitutes a Loan Document for all purposes under the Credit Agreement and the other Loan Documents.
NOW, THEREFORE, in consideration of the promises and the agreements, provisions and covenants herein contained, the Borrower, the Subsidiary Guarantors, the Foreign Subsidiary Borrowers, the Agents and the Lenders hereby agree as follows:
1.     Limited Consent and Agreement.  Subject to the terms and conditions herein contained and in reliance upon the representations and warranties of the Borrower herein contained, effective upon satisfaction of the conditions precedent contained in Section 3 below, the Agents and the Lenders hereby agree that the conditions to each extension of credit to the Borrower and/or a Foreign Subsidiary Borrower set forth in Sections 5.2 and 5.3 of the Credit Agreement, as applicable, shall be limited as set forth below with respect to the Acquisition Advance to the extent that the Identified Acquisition is consummated in connection therewith and the Revolving Commitments have not otherwise terminated prior to the date of the consummation of the Identified Acquisition in accordance with the terms of the Credit Agreement (other than a termination resulting from any Disregarded Default occurring after the execution of the definitive purchase agreement for the Identified Acquisition (the conditions to the Acquisition Advance being referred to herein as the “Limited Funding Conditions”):

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(A)    The representations and warranties referenced in Section 5.2(a) of the Credit Agreement shall be limited to (x) those representations and warranties set forth in Sections 4.3(a), 4.3(e), 4.4, 4.5, 4.11, 4.14, 4.19 and 4.21 of the Credit Agreement as those representations and warranties relate to the Borrower and Kadant Purchaser, and (y) (limited to the best of Kadant Purchaser’s knowledge) those representations and warranties made by or with respect to the Acquisition Target in the acquisition agreement entered into in connection with the Identified Acquisition as are material to the interests of the Lenders, but only to the extent Kadant Purchaser is entitled to terminate such acquisition agreement on the basis of such representations and warranties.
(B)    The Defaults and Events of Default referred to in Section 5.2(b) of the Credit Agreement shall be limited to those Events of Default which are not Disregarded Defaults.
The parties hereto acknowledge and agree to the following in connection with the consent granted pursuant to this Section 1:
(i)    The Limited Funding Conditions apply solely to the Acquisition Funding to the extent consummated on or before 120 days after the LCT Test Date and not to any other funding under the Credit Agreement.
(ii)    The Acquisition Funding shall also be subject to the following conditions: (x) the Identified Acquisition shall constitute a “Permitted Acquisition” under (and as defined in) the Credit Agreement except that (I) the occurrence of a Disregarded Default shall be disregarded for the purposes of determining compliance with clause (c) of the definition of “Permitted Acquisition,” and (II) compliance with clauses (d) and (e) of the definition of “Permitted Acquisition” shall be subject to Section 1.9 of the Original Credit Agreement and (y) on the date of the Acquisition Funding, the Borrower shall (I) certify that no Default or Event of Default (based on the Borrower’s knowledge with respect to the Acquisition Target) has occurred or is continuing both before and after giving effect to the Acquisition Funding and the Acquisition, or (II) certify that no Default or Event of Default other than a Disregarded Default has occurred or is continuing both before and after giving effect to the Acquisition Funding and the Identified Acquisition and provide a list of all such Disregarded Defaults (based on the Borrower’s knowledge with respect to the Acquisition Target) that have occurred and are continuing as of such date.
(iii)    The Lenders’ agreement to fund the Acquisition Advance subject to the Limited Funding Conditions is not intended (and should not be construed) as a waiver of any Disregarded Default existing at the time of such Acquisition Advance or of any of the Agents’ or the Lenders’ rights and remedies with respect thereto, all of which are hereby reserved and preserved in their entirety by the Agents and the Lenders.
The foregoing limited consent and limited waiver is limited to the Identified Acquisition as set forth herein and is not a commitment or agreement to grant any consent or waiver in the future.
2.    Amendments to Original Credit.  Subject to the terms and conditions herein contained and in reliance on the representations and warranties of the Borrower herein contained, effective upon satisfaction of the conditions precedent contained in Section 3 below, the following amendments are incorporated into the Original Credit Agreement
(A)    Section 1.1 of the Original Amended Credit Agreement is hereby amended to delete the text in the definition of “Revolving Commitment” and to insert the following in lieu thereof:
    

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“Revolving Commitment”:  as to any Lender, the obligation of such Lender, if any, to make Revolving Loans (which includes Multicurrency Revolving Loans and participate in Swingline Loans and Letters of Credit (which includes Multicurrency L/C Obligations) in an aggregate principal and/or face amount not to exceed the amount set forth under the heading “Revolver” opposite such Lender’s name on Schedule 1.1 or in the Assignment and Assumption pursuant to which such Lender became a party hereto, as the same may be changed from time to time pursuant to the terms hereof.  The original amount of the Total Revolving Commitments on the First Amendment Effective Date is $300,000,000.
(B)    Schedule 1.1 of the Original Credit Agreement is hereby deleted and the Schedule 1.1 attached to this First Amendment is inserted in lieu thereof.
(C)    Section 1.1 of the Original Credit Agreement is hereby amended to add the following new definition:
“First Amendment Effective Date”: the date all of the conditions precedent in that certain First Amendment to Amended and Restated Credit Agreement dated as of  May 24, 2017, entered into among the Agents, the Borrower, the Foreign Subsidiary Borrowers and the Subsidiary Guarantors, are satisfied. 
The foregoing amendments are limited to those set forth herein and is not a commitment or agreement to grant any amendment in the future
3.    Conditions Precedent.  
The provisions of this First Amendment shall be effective as of the date on which all of the following conditions shall be satisfied:
(a)    the Borrower, each Subsidiary Guarantor and each Foreign Subsidiary Borrower shall have delivered to the Agents an executed counterpart of this First Amendment; 
(b)    the Agents and the Lenders shall have indicated their consent and agreement by executing this First Amendment; and 
(c)    the Borrower shall have paid all of the Agents’ fees and expenses and all amounts required under that certain fee letter dated as of April 7, 2017 between the Administrative Agent and the Borrower.
5.    Miscellaneous.
(a)    Ratification.  The terms and provisions set forth in this First Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Original Credit Agreement and except as expressly modified and superseded by this First Amendment, the terms and provisions of the Original Credit Agreement and the other Loan Documents are ratified and confirmed and shall continue in full force and effect.  The Borrower, the Foreign Subsidiary Borrowers, the Agents and the Lenders agree that the Original Credit Agreement as amended hereby and the other Loan Documents shall continue to be legal, valid, binding and enforceable in accordance with their respective terms.  For all matters arising prior to the effective date of this First Amendment, the Original Credit Agreement (as unmodified by this First Amendment) shall control.

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(b)    Representations and Warranties.  The Borrower hereby represents and warrants to the Agents that the representations and warranties set forth in the Loan Documents, after giving effect to this First Amendment, are true and correct in all material respects (or all respects to the extent already qualified by materiality or the occurrence of a Material Adverse Effect) on and as of the date hereof, with the same effect as though made on and as of such date except with respect to any representations and warranties limited by their terms to a specific date.  The Borrower further represents and warrants to the Agents and the Lenders that the execution and delivery of this First Amendment (i) are within the Borrower’s and each Foreign Subsidiary Borrower’s organizational power and authority; (ii) have been duly authorized by all necessary organizational action of the Borrower and each Foreign Subsidiary Borrower; (iii) is not in contravention of any provision of the Borrower’s or any Foreign Subsidiary Borrower’s organizational documents; (iv) do not violate any law or regulation, or any order or decree of any Governmental Authority; (v) do not conflict with or result in the breach or termination of, constitute a default under or accelerate any performance required by, any material indenture, mortgage, deed of trust, lease, agreement or other material instrument to which either the Borrower or any Foreign Subsidiary Borrower is a party or by which Borrower, any Foreign Subsidiary Borrower or any of their property is bound.  All representations and warranties made in this First Amendment shall survive the execution and delivery of this First Amendment.  
(c)    Expenses of the Agent.  As provided in the Credit Agreement, the Borrower agrees to pay all reasonable costs and expenses incurred by the Agents in connection with the preparation, negotiation, and execution of this First Amendment, including without limitation, the reasonable costs and fees of the Agents’ legal counsel.
(d)    Severability.  Any provision of this First Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this First Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.
(e)    Applicable Law.  This First Amendment shall be governed by and construed in accordance with the laws of the State of New York.
(f)    Successors and Assigns.  This First Amendment is binding upon and shall inure to the benefit of the Agents, the Lenders and the Borrower, the Foreign Subsidiary Borrowers and their respective successors and assigns.
(g)    Counterparts.  This First Amendment may be executed in one or more counterparts and on facsimile counterparts or other electronic transmission, as permitted under the Original Credit Agreement, each of which when so executed shall be deemed to be an original, but all of which when taken together shall constitute one and the same agreement.
(h)    Headings.  The headings, captions, and arrangements used in this First Amendment are for convenience only and shall not affect the interpretation of this First Amendment.
(i)    ENTIRE AGREEMENT.  THIS FIRST AMENDMENT EMBODIES THE ENTIRE AGREEMENT AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER THEREOF, AND SUPERSEDES ANY AND ALL PRIOR REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THIS AMENDMENT. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO WITH RESPECT TO THE SUBJECT MATTER HEREOF.

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(j)    Acknowledgement and Reaffirmation.  Each of the Borrower, as a guarantor, and Kadant Black Clawson LLC, Kadant Johnson China – WX Holding Inc., Kadant International Holdings LLC and Kadant Johnson LLC (collectively, the “Subsidiary Guarantors” and together with the Borrower, the “Guarantors”), hereby acknowledges the consents granted, and amendments effected, pursuant to this First Amendment and reaffirms its guaranty of the Borrower Obligations and the Foreign Subsidiary Borrower Obligations (each as defined in the Guarantee) pursuant to that certain Amended and Restated Guarantee Agreement, dated as of March 1, 2017 (as amended, supplemented or otherwise modified from time to time, the “Guarantee”), among the Guarantors and the Administrative Agent.
[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written. 
	
		
	KADANT INC.

	 
	 

	By:
	/s/ Daniel J. Walsh

	 
	Name:  Daniel J. Walsh

	 
	Title:    Treasurer

	 
	 

	 
	 

	KADANT U.K. LIMITED

	 
	 

	By:
	/s/ Kevin Callus

	 
	Name:  Kevin Callus

	 
	Title:    Managing Director

	 
	 

	 
	 

	KADANT CANADA CORP.

	 
	 

	By:
	/s/ Daniel J. Walsh

	 
	Name: Daniel J. Walsh

	 
	Title:  Treasurer

	 
	 

	 
	 

	KADANT JOHNSON EUROPE B.V.

	 
	 

	By:
	/s/ Fredrik H. Westerhout

	 
	Name:  Fredrik H. Westerhout

	 
	Title:    Managing Director

	 
	 

	 
	 

	KADANT INTERNATIONAL LUXEMBOURG SCS

	 
	 

	By:
	/s/ Michael J. McKenney

	 
	Name: Michael J. McKenney

	 
	Title:    Manager

[Signature Page-First Amendment to Amended and Restated Credit Agreement and Limited Consent]
(S-1)

	
		
	KADANT JOHNSON DEUTSCHLAND GmbH

	 
	 

	 
	 

	By:
	/s/ Jörg Krischer

	 
	Name:  Jörg Krischer

	 
	Title:    Managing Director

	 
	 

	Subsidiary Guarantors:

	 
	 

	Kadant Black Clawson LLC

	By: Kadant Inc., its sole member

	 
	 

	By: /s/ Daniel J. Walsh

	Name:  Daniel J. Walsh

	Title:    Treasurer

	 
	 

	Kadant Johnson China WX Holding Inc.

	 
	 

	By: /s/ Daniel J. Walsh

	Name:  Daniel J. Walsh

	Title:    Treasurer

	 
	 

	Kadant International Holdings LLC

	By: Kadant Inc., its sole member

	 
	 

	 
	 

	By: /s/ Daniel J. Walsh

	Name:  Daniel J. Walsh

	Title:    Treasurer

	 
	 

	Kadant Johnson LLC

	By: Kadant Inc., its sole member

	 

	By: /s/ Daniel J. Walsh

	Name:  Daniel J. Walsh

	Title:    Treasurer

	 
	 

	 
	 

[Signature Page-First Amendment to Amended and Restated Credit Agreement and Limited Consent]
(S-2)

	
		
	CITIZENS BANK, N.A., as Administrative Agent and 

	as a Lender

	 
	 

	By:
	/s/ Seth Rogers

	 
	Name:  Seth Rogers

	 
	Title:    Vice President 

	 
	 

[Signature Page-First Amendment to Amended and Restated Credit Agreement and Limited Consent]
(S-3)

	
		
	CITIZENS BANK, N.A., as Multicurrency

	Administrative Agent and as a Lender

	 
	 

	By:
	/s/ Seth Rogers

	 
	Name:  Seth Rogers

	 
	Title:    Vice President 

	 
	 

[Signature Page-First Amendment to Amended and Restate Credit Agreement and Limited Consent]
(S-4)

	
		
	CITIZENS BANK, N.A., as a Lender

	 
	 

	 
	 

	By:
	/s/ Seth Rogers

	 
	Name:  Seth Rogers

	 
	Title:    Vice President 

	 
	 

[Signature Page-First Amendment to Amended and Restated Credit Agreement and Limited Consent]
(S-5)

	
		
	WELLS FARGO BANK, NATIONAL ASSOCIATION

	 
	 

	 
	 

	By:
	/s/ David M. Crane

	 
	Name:  David M. Crane

	 
	Title:    Senior Vice President

	 
	 

[Signature Page-First Amendment to Amended and Restated Credit Agreement and Limited Consent]
(S-6)

	
		
	U.S. BANK, NATIONAL ASSOCIATION

	 
	 

	 
	 

	By:
	/s/ Ken Gorski

	 
	Name:  Ken Gorski

	 
	Title:    Vice President

	 
	 

[Signature Page-First Amendment to Amended and Restated Credit Agreement and Limited Consent]
(S-7)

	
		
	HSBC BANK USA, N.A.

	 
	 

	By:
	/s/ Pablo Pena

	 
	Name:  Pablo Pena

	 
	Title:    Vice President

	 
	 

[Signature Page-First Amendment to Amended and Restated Credit Agreement and Limited Consent]
(S-8)

	
		
	SANTANDER BANK, N.A.

	 
	 

	 
	 

	By:
	/s/ Karen Ng

	 
	Name:  Karen Ng

	 
	Title:    Senior Vice President

	 
	 

[Signature Page-First Amendment to Amended and Restated Credit Agreement and Limited Consent]
(S-9)

	
		
	JPMORGAN CHASE BANK, N.A.

	 
	 

	 
	 

	By:
	/s/ Brian Keenan

	 
	Name:  Brian Keenan

	 
	Title:    Vice President

	 
	 

[Signature Page-First Amendment to Amended and Restated Credit Agreement and Limited Consent]
(S-10)

	
		
	HSBC BANK CANADA

	 
	 

	 
	 

	By:
	/s/ Joseph Millott

	 
	Name:  Joseph Millott

	 
	Title:     Relationship Manager

	 
	 

	By:
	/s/ Derek Bin Li

	 
	Name:  Derek Bin Li

	 
	Title:    Relationship Support Manager

[Signature Page-First Amendment to Amended and Restated Credit Agreement and Limited Consent]
(S-12)

Schedule 1.1

	
		
	

Lender
	Total Revolving
Commitment

	Citizens Bank, N.A.
	$60,000,000

	Wells Fargo Bank, National Association
	$60,000,000

	HSBC Bank USA, N.A
	$27,000,000

	HSBC Bank Canada
	$18,000,000

	U.S. Bank National Association
	$45,000,000

	

JPMorgan Chase Bank, National Association
	$45,000,000

	Santander Bank, N.A.
	$45,000,000

	 
	 

	 
	 

	Total Allocation
	$300,000,000Exhibit

Exhibit 10.2

KADANT INC.
CASH INCENTIVE PLAN

(As reapproved and effective as of May 17, 2017)

1.    Purposes

The purposes of the Cash Incentive Plan of Kadant Inc. are (i) to enable the Company to attract, retain, motivate and reward employees by providing an opportunity to earn incentive compensation under the Plan related to the performance of the Company and its subsidiaries and (ii) to qualify such compensation paid as performance-based compensation within the meaning of Section 162(m) of the Code, as required for employees subject to Section 162(m) of the Code.

2.    Definitions

Terms used in the Plan, and not otherwise defined, are defined as follows:

“Award” means a contingent award made to a Participant in accordance with the Plan that provides the Participant with the opportunity to earn cash compensation based on the relative level of attainment of Performance Goals established by the Committee for a Performance Period and on such other terms and conditions as the Committee shall determine.

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

“Code” means the U.S. Internal Revenue Code of 1986, as amended.

“Committee” means the Compensation Committee of the Board, or any other committee appointed by the Board to administer the Plan, so long as the committee is comprised of solely of two or more members of the Board who are “outside directors” within the meaning of Section 162(m).

“Company” means Kadant Inc., a Delaware corporation, or any successor to all or substantially all of the Company’s business.

“Eligible Employee” means each executive officer, officer, or other key employee of the Company or any Subsidiary designated from time to time by the Committee as eligible to participate in the Plan.

“Participant” means any Eligible Employee who receives an Award under the Plan for a specified Performance Period.

“Performance Goals” means any one or a combination of the following: (i) earnings per share, (ii) return on average shareholders’ equity or average assets, (iii) earnings, (iv) earnings or earnings per share growth, (v) earnings before interest, taxes and amortization (EBITA), (vi) earnings before interest, taxes, depreciation and amortization (EBITDA), (vii) operating income, (viii) operating margins, (ix) division income, (x) revenues, (xi) expenses, (xii) stock price, (xiii) market share, (xiv) return on sales, assets, equity, or investment, (xv) achievement of balance sheet or income statement objectives, (xvi) cash provided from operations, (xvii) stock price appreciation, (xviii) shareholder return, (xix) strategic initiatives, (xx) cost control, (xxi) net operating profit after tax, (xxii) pre-tax or after-tax income, (xxiii) cash flow, (xxiv) financial ratios contained in the Company’s debt instruments, and (xxv) any other objective goals established by the Committee, with respect to Awards not required to qualify under Section 162(m). 

“Performance Period” for an Award means the fiscal year of the Company, unless another period of time for the measurement of the extent to which the applicable Performance Goals are attained is designated by the Committee at the time the Award is made.

“Plan” means the Kadant Inc. Cash Incentive Plan, as amended from time to time.

“Section 162(m)” means Section 162(m) of the Code.

“Subsidiary” means (i) a corporation or other entity with respect to which the Company, directly or indirectly, has the power, whether through the ownership of voting securities, by contract or otherwise, to elect at least a majority of the members of such corporation’s board of directors or analogous governing body or (ii) any other corporation or other entity in which the Company, directly or indirectly, has at least a majority equity or similar interest.

3.    Administration

The Plan shall be administered by the Committee which shall have full power and authority, in its discretion, but subject to the express provisions of this Plan, to:

		
	•
	select Participants from Eligible Employees;

		
	•
	establish the terms and conditions of Awards, including the times at which Awards are made, the Performance Period to which an Award relates, and the Performance Goals to which an Award is subject;

		
	•
	determine the extent to which cash payments are actually earned pursuant to Awards and the amounts to be paid;

		
	•
	prescribe, amend and rescind rules and regulations relating to the Plan; and

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	•
	interpret this Plan and make all determinations necessary or advisable for the administration of the Plan.

The determinations of the Committee pursuant to its authority under the Plan shall be conclusive, final and binding.    No member of the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award.

4.    Eligibility

Awards may be granted to any Eligible Employee.  

5.    Awards

The Committee shall, in its sole discretion, determine which Eligible Employees shall receive Awards and shall determine the Performance Period relating to each Award. For each Performance Period applicable to an Award, the Committee shall establish one or more Performance Goals, or any combination of Performance Goals, applicable to such Award and the other terms and conditions of the Award.  Such Performance Goals and other terms and conditions shall be established by the Committee in its sole discretion as it shall deem appropriate and in the best interests of the Company and shall be established (i) within 90 days after the first day of the Performance Period and (ii) before 25% of the Performance Period has elapsed.

Performance Goals may take the form of absolute goals or goals relative to past performance of the Company  or the current or past performance of one or more other companies comparable or similarly situated to the Company or of an index covering multiple companies. To the extent not inconsistent with qualification for an exemption from the deduction limit under Section 162(m), the Committee may specify that the Performance Goals exclude or be adjusted to reflect any one or more of (i) extraordinary items or other unusual or non-recurring items, (ii) discontinued operations, (iii) gains or losses on the dispositions of operations, (iv) effects of changes in accounting principles, (v) the write down of any asset or other impairment, (vi) the effect of foreign currency fluctuations, and (vii) charges for restructuring and rationalization programs. The Committee may establish Performance Goals that are particular to a Participant, or the department, branch, line of business, subsidiary, segment or other unit in which the Participant is employed or for which the Participant has supervisory responsibility and may cover such Performance Period as specified by the Committee.

After the end of each Performance Period for which the Committee has granted Awards, the Committee shall certify in writing the extent to which the Performance Goals established by the Committee for the Performance Period have been achieved and shall authorize the Company to make Award payments to Participants in accordance with the terms of the Awards.  In no event shall the amount paid to a Participant in accordance with the terms of an Award by reason of Performance Goal achievement exceed $5,000,000 in any calendar year.  Award payments shall be made to a Participant only upon the achievement of the applicable Performance Goals, except that the Committee  

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may waive the achievement of Performance Goals in the event of the death, disability, a change in control of the Company or, for Awards not required to qualify under Section 162(m), such other event as the Committee may deem appropriate. Award payments to a Participant with respect to a Performance Period shall be made no later than the 15th day of the third month following the end of the taxable year of the Participant within which the last day of such Performance Period occurs.
                    
The Committee may at any time, in its sole discretion, cancel an Award or eliminate or reduce (but not increase) the amount payable pursuant to the terms of an Award without the consent of a Participant. 

The Committee shall have the power to impose such other restrictions on Awards as it may deem necessary or appropriate to ensure that such Awards satisfy all requirements for “performance-based compensation” within the meaning of Section 162(m)(4)(C), or any successor provision to such section of the Code.

6.    Transferability

Awards shall not be subject to the claims of creditors and may not be assigned, alienated, transferred or encumbered in any way other than by will or the laws of descent and distribution.

7.    Withholding Taxes

The Company may withhold or cause to be withheld from any and all cash payments made under this Plan such amounts as are necessary to satisfy all U.S. federal, state and local withholding tax requirements related to Awards or in accordance with the Company’s payroll practices as from time to time in effect.

8.    Amendment and Termination

The Committee may amend, modify or terminate the Plan in any respect at any time without the consent of Participants, provided that (i) no amendment or termination of the Plan may adversely affect any previously-granted Award without the consent of the affected Participant, except to the extent necessary to comply with Section 409A of the Code, and (ii) no amendment which would require shareholder approval under Section 162(m) may be effected without such shareholder approval.

9.    Effective Date and Term of the Plan

This Plan shall be effective for the 2007 fiscal year of the Company, which begins December 31, 2006; provided however, that the Plan shall be void ab initio unless approved by a vote of the Company’s Shareholders at the annual shareholders’ meeting of the Company following adoption of the Plan by the Board and Committee.

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Unless terminated earlier by action of the Board, the Plan shall expire on the date of the annual meeting of the Company’s shareholders held in 2022, unless the Plan is extended and reapproved by a vote of the Company’s shareholders at the annual shareholders’ meeting held in 2022. Expiration of the Plan shall not affect any Awards outstanding on the date of the expiration and  such Awards shall continue to be subject to the terms of the Plan, notwithstanding its termination. Upon expiration of the Plan, no further Awards may be granted under the Plan.

10.    Miscellaneous

(a)  No Rights to Awards or Employment. This Plan is not an employment contract between the Company and an Eligible Employee or Participant. No Eligible Employee shall have any claim or right to receive Awards under the Plan. Nothing in the Plan shall confer upon any employee of the Company any right to continued employment with the Company or any Subsidiary or interfere in any way with the right of the Company or a Subsidiary to terminate the employment of any of its employees at any time, with or without cause, including, without limitation, any individual who is then a Participant in the Plan.

(b)  Other Compensation. Nothing in this Plan shall preclude or limit the ability of the Company to pay any compensation to a Participant under any other additional compensation and benefits plans, programs and arrangements, including, without limitation, any employee benefit plan, equity plan, or bonus plan, program or arrangement.

(c)  Severability.  If any provision of this Plan is held unenforceable, the remainder of the Plan shall continue in full force and effect without regard to such unenforceable provision and shall be applied as though the unenforceable provision were not included in the Plan. In addition, if any provision of this Plan would cause Awards not to constitute “qualified performance-based compensation” under Section 162(m), that provision shall be severed from, and shall be deemed not to be part of, the Plan, but the other provisions hereof shall remain in full force and effect. Any specific action by the Committee that would violate Section 162(m) and regulations thereunder shall be void.
    
(d) Governing Law. The Plan and all actions taken under the Plan shall be governed by and construed in accordance with the laws of the State of Delaware.

As reapproved and in effect 5/17/2017

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