Exhibit 10.1
THE J. M. SMUCKER COMPANY
2010 EQUITY AND INCENTIVE COMPENSATION PLAN
1.
Purpose.
The purpose of The J. M. Smucker Company 2010 Equity and Incentive Compensation
Plan is to attract and retain Directors, consultants, officers and other employees of The J. M.
Smucker Company, an Ohio corporation, and its Subsidiaries and to provide to such persons
incentives and rewards for performance.
2.
Definitions.
As used in this Plan,
(a) Appreciation Right means a right granted pursuant to Section 5 or Section 9 of this
Plan, and will include both Free-Standing Appreciation Rights and Tandem Appreciation Rights.
(b) Base Price means the price to be used as the basis for determining the Spread upon the
exercise of a Free-Standing Appreciation Right or a Tandem Appreciation Right.
(c) Board means the Board of Directors of the Company and, to the extent of any delegation
by the Board to a committee (or subcommittee thereof) pursuant to Section 11 of this Plan, such
committee (or subcommittee).
(d) Cash Incentive Award means a cash award granted pursuant to Section 8 of this Plan.
(e) Change in Control has the meaning set forth in Section 13 of this Plan.
(f) Code means the Internal Revenue Code of 1986, as amended from time to time.
(g) Common Shares means the shares of common stock, without par value, of the Company or any
security into which such common shares may be changed by reason of any transaction or event of the
type referred to in Section 12 of this Plan.
(h) Company means The J. M. Smucker Company, an Ohio corporation, and its successors.
(i) Covered Employee means a Participant who is, or is determined by the Board to be likely
to become, a covered employee within the meaning of Section 162(m) of the Code (or any successor
provision).
(j) Date of Grant means the date specified by the Board on which a grant of Option Rights,
Appreciation Rights, Performance Shares, Performance Units, Cash Incentive Awards or other awards
contemplated by Section 10 of this Plan, or a grant or sale of Restricted Stock, Restricted Stock
Units, or other awards contemplated by Section 10 of this Plan will
become effective (which date will not be earlier than the date on which the Board takes action
with respect thereto).
(k) Detrimental Activity means:
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(i)
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Engaging in any activity, as an employee, principal, agent, or
consultant for another entity that competes with the Company in any actual,
researched, or prospective product, service, system, or business activity for
which the Participant has had any direct responsibility during the last two
years of his or her employment with the Company or a Subsidiary, in any
territory in which the Company or a Subsidiary manufactures, sells, markets,
services, or installs such product, service, or system, or engages in such
business activity.
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(ii)
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Soliciting any employee of the Company or a Subsidiary to
terminate his or her employment with the Company or a Subsidiary.
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(iii)
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The disclosure to anyone outside the Company or a Subsidiary,
or the use in other than the Companys or a Subsidiarys business, without
prior written authorization from the Company, of any confidential, proprietary
or trade secret information or material relating to the business of the Company
or its Subsidiaries, acquired by the Participant during his or her employment
with the Company or its Subsidiaries or while acting as a consultant for the
Company or its Subsidiaries thereafter.
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(iv)
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The failure or refusal to disclose promptly and to assign to
the Company upon request all right, title and interest in any invention or
idea, patentable or not, made or conceived by the Participant during employment
by the Company or any Subsidiary, relating in any manner to the actual or
anticipated business, research or development work of the Company or any
Subsidiary or the failure or refusal to do anything reasonably necessary to
enable the Company or any Subsidiary to secure a patent where appropriate in
the United States and in other countries.
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(v)
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Activity that results in Termination for Cause. For the
purposes of this Section, Termination for Cause will mean a termination:
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(A)
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due to the Participants willful and continuous
gross neglect of his or her duties for which he or she is employed; or
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(B)
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due to an act of dishonesty on the part of the
Participant constituting a felony resulting or intended to result,
directly or indirectly, in his or her gain for personal enrichment at
the expense of the Company or a Subsidiary.
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(vi)
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Any other conduct or act determined to be injurious,
detrimental or prejudicial to any significant interest of the Company or any
Subsidiary unless the Participant acted in good faith and in a manner he or she
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reasonably believed to be in or not opposed to the best interests of the
Company.
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(l) Director means a member of the Board.
(m) Effective Date means, with respect to Cash Incentive Awards, the date this Plan is
approved by the shareholders of the Company and, with respect to all other awards under this Plan,
November 7, 2010 provided that this Plan is approved by the shareholders of the Company prior to or
on such date.
(n) Evidence of Award means an agreement, certificate, resolution or other type or form of
writing or other evidence approved by the Board that sets forth the terms and conditions of the
awards granted under the Plan. An Evidence of Award may be in an electronic medium, may be limited
to notation on the books and records of the Company and, with the approval of the Board, need not
be signed by a representative of the Company or a Participant.
(o) Exchange Act means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder, as such law, rules and regulations may be amended from time to time.
(p) Existing Plan means The J. M. Smucker Company 2006 Equity Compensation Plan.
(q) Free-Standing Appreciation Right means an Appreciation Right granted pursuant to Section
5 or Section 9 of this Plan that is not granted in tandem with an Option Right.
(r) Incentive Stock Options means Option Rights that are intended to qualify as incentive
stock options under Section 422 of the Code or any successor provision.
(s) Management Objectives means the measurable performance objective or objectives
established pursuant to this Plan for Participants who have received grants of Performance Shares
or Performance Units or, when so determined by the Board, Cash Incentive Awards, Option Rights,
Appreciation Rights, Restricted Stock, Restricted Stock Units, dividend credits and other awards
pursuant to this Plan. Management Objectives may be described in terms of Company-wide objectives
or objectives that are related to the performance of the individual Participant or of the
Subsidiary, division, department, region or function within the Company or Subsidiary in which the
Participant is employed. The Management Objectives may be made relative to the performance of
other companies or subsidiaries, divisions, departments, regions or functions within such other
companies, and may be made relative to an index or one or more of the performance criteria
themselves. The Board may grant awards subject to Management Objectives that are either Qualified
Performance-Based Awards or are not Qualified Performance-Based Awards. The Management Objectives
applicable to any Qualified Performance-Based Award to a Covered Employee will be based on one or
more, or a combination, of the following metrics:
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(i)
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Profits
(
e.g.
, operating income, income from continuing
operations, EBIT, EBT, net income, earnings per share, segment profit,
residual or
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economic earnings these profitability metrics could be measured before
certain specified special items and subject to GAAP definition);
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(ii)
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Cash Flow
(
e.g.
, EBITDA, adjusted EBITDA, operating
cash flow, cash from operations, total cash flow, free cash flow, cash flow in
excess of cost of capital, residual cash flow, or cash flow return on
investment);
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(iii)
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Returns
(
e.g.
, profits or cash flow returns on:
assets, invested capital, net capital employed, and equity);
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(iv)
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Working Capital
(
e.g.
, working capital divided by
sales, days sales outstanding, days sales in inventory, and days sales in
payables);
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(v)
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Profit Margins
(
e.g.
, profits divided by net sales);
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(vi)
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Liquidity Measures
(
e.g.
, debt-to-capital,
debt-to-EBITDA, total debt ratio);
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(vii)
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Sales Growth, Cost Initiative and Stock Price Metrics
(
e.g.
, net sales, net sales growth, stock price appreciation, total
return to shareholders, administrative costs divided by net sales, cost
reduction targets, and selling, administrative and distribution costs divided
by net sales); and
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(viii)
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Strategic Initiatives Key Deliverable Metrics
consisting of one or more of
the following: product development, strategic partnering, research and
development, market penetration, geographic business expansion goals, cost
targets, customer satisfaction, employee satisfaction, management of employment
practices and employee benefits, supervision of litigation and information
technology, and goals relating to acquisitions or divestitures of subsidiaries,
affiliates and joint ventures.
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If the Board determines that a change in the business, operations, corporate structure or
capital structure of the Company, or the manner in which it conducts its business, or other events
or circumstances render the Management Objectives unsuitable, the Board may in its discretion
modify such Management Objectives or the related minimum acceptable level of achievement, in whole
or in part, as the Board deems appropriate and equitable, except in the case of a Qualified
Performance-Based Award (other than in connection with a Change in Control) where such action would
result in the loss of the otherwise available exemption of the award under Section 162(m) of the
Code. In such case, the Board will not make any modification of the Management Objectives or
minimum acceptable level of achievement with respect to such Covered Employee.
(t) Market Value per Share means, as of any particular date, the average of the high and low
sales prices of the Common Shares as reported on the New York Stock Exchange Composite Tape or, if
not listed on such exchange, on any other national securities exchange on which the Common Shares
are listed, or if there are no sales on such day, on the next preceding trading day during which a
sale occurred. If there is no regular trading market for such Common Shares, the Market Value per
Share will be determined by the Board.
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(u) Non-Employee Director means a person who is a Non-Employee Director of the Company
within the meaning of Rule 16b-3 of the Securities and Exchange Commission promulgated under the
Exchange Act and an outside director within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder by the U.S. Department of the Treasury.
(v) Optionee means the optionee named in an Evidence of Award evidencing an outstanding
Option Right.
(w) Option Price means the purchase price payable on exercise of an Option Right.
(x) Option Right means the right to purchase Common Shares upon exercise of an option
granted pursuant to Section 4 or Section 9 of this Plan.
(y) Participant means a person who is selected by the Board to receive benefits under this
Plan and who is at the time a consultant, an officer, or other employee of the Company or any one
or more of its Subsidiaries, or who has agreed to commence serving in any of such capacities within
90 days of the Date of Grant, and will also include each non-employee Director who receives an
award under this Plan. The term Participant will also include any person who provides services
to the Company or a Subsidiary that are equivalent to those typically provided by an employee.
(z) Performance Period means, in respect of a Performance Share or Performance Unit, a
period of time established pursuant to Section 8 of this Plan within which the Management
Objectives relating to such Performance Share or Performance Unit are to be achieved.
(aa) Performance Share means a bookkeeping entry that records the equivalent of one Common
Share awarded pursuant to Section 8 of this Plan.
(bb) Performance Unit means a bookkeeping entry awarded pursuant to Section 8 of this Plan
that records a unit equivalent to $1.00 or such other value as is determined by the Board.
(cc) Plan means The J. M. Smucker Company 2010 Equity and Incentive Compensation Plan, as
may be amended from time to time.
(dd) Qualified Performance-Based Award means any award of Cash Incentive Awards, Performance
Shares, Performance Units, Restricted Stock, Restricted Stock Units or other awards contemplated
under Section 10 of this Plan, or portion of such award, to a Covered Employee that is intended to
satisfy the requirements for qualified performance-based compensation under Section 162(m) of the
Code.
(ee) Restricted Stock means Common Shares granted or sold pursuant to Section 6 or Section 9
of this Plan as to which neither the substantial risk of forfeiture nor the prohibition on
transfers has expired.
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(ff) Restriction Period means the period of time during which Restricted Stock Units are
subject to restrictions, as provided in Section 7 or Section 9 of this Plan.
(gg) Restricted Stock Unit means an award made pursuant to Section 7 or Section 9 of this
Plan of the right to receive Common Shares or cash at the end of a specified period. An award of
Restricted Stock Units may be described as an award of Deferred Stock Units.
(hh) Spread means the excess of the Market Value per Share on the date when an Appreciation
Right is exercised over the Option Price or Base Price provided for in the related Option Right or
Free-Standing Appreciation Right, respectively.
(ii) Subsidiary means a corporation, company or other entity (i) at least 50 percent of
whose outstanding shares or securities (representing the right to vote for the election of
directors or other managing authority) are, or (ii) which does not have outstanding shares or
securities (as may be the case in a partnership, joint venture or unincorporated association), but
at least 50 percent of whose ownership interest representing the right generally to make decisions
for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the
Company except that for purposes of determining whether any person may be a Participant for
purposes of any grant of Incentive Stock Options, Subsidiary means any corporation in which at
the time the Company owns or controls, directly or indirectly, at least 50 percent of the total
combined voting power represented by all classes of stock issued by such corporation.
(jj) Tandem Appreciation Right means an Appreciation Right granted pursuant to Section 5 or
Section 9 of this Plan that is granted in tandem with an Option Right.
3.
Shares Available Under the Plan.
(a)
Maximum Shares Available Under Plan
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(i)
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Subject to adjustment as provided in Section 12 of this Plan,
the number of Common Shares that may be issued or transferred (A) upon the
exercise of Option Rights or Appreciation Rights, (B) in payment of Restricted
Stock and released from substantial risks of forfeiture thereof, (C) in payment
of Restricted Stock Units, (D) in payment of Performance Shares or Performance
Units that have been earned, (E) as awards to non-employee Directors, (F) as
awards contemplated by Section 10 of this Plan, or (G) in payment of dividend
equivalents paid with respect to awards made under the Plan will not exceed in
the aggregate 7,000,000 Common Shares plus, as of the Effective Date, the
number of Common Shares available for awards under the Existing Plan on the
Effective Date. Such shares may be shares of original issuance or treasury
shares or a combination of the foregoing.
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(ii)
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Common Shares covered by an award granted under the Plan will
not be counted as used unless and until they are actually issued and delivered
to a Participant and, therefore, the total number of shares available under the
Plan as of a given date will not be reduced by any shares relating to prior
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awards that have expired or have been forfeited or cancelled. Upon payment
in cash of the benefit provided by any award granted under the Plan, any
Common Shares that were covered by that award will again be available for
issue or transfer hereunder. Notwithstanding anything to the contrary
contained herein: (A) if Common Shares are tendered or otherwise used in
payment of the Option Price of an Option Right the total number of shares
covered by the Option Right being exercised will reduce the aggregate plan
limit described above; (B) Common Shares withheld by the Company to satisfy
the tax withholding obligation will count against the plan limit described
above; and (C) the number of Common Shares covered by an Appreciation Right,
to the extent that it is exercised and settled in Common Shares, and whether
or not shares are actually issued to the Participant upon exercise of the
right, will be considered issued or transferred pursuant to the Plan. In
the event that the Company repurchases shares with Option Right proceeds,
those shares will not be added to the aggregate plan limit described above.
If, under this Plan, a Participant has elected to give up the right to
receive compensation in exchange for Common Shares based on fair market
value, such Common Shares will not count against the aggregate plan limit
described above.
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(b)
Life of Plan Limits
. Notwithstanding anything in this Section 3, or elsewhere in
this Plan, to the contrary and subject to adjustment as provided in Section 12 of this Plan:
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(i)
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The aggregate number of Common Shares actually issued or
transferred by the Company upon the exercise of Incentive Stock Options will
not exceed 7,000,000 Common Shares.
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(ii)
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Awards will not be granted under Section 9 or Section 10 of the
Plan to the extent they would involve the issuance of more than 350,000 shares
in the aggregate.
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(c)
Individual Participant Limits
. Notwithstanding anything in this Section 3, or
elsewhere in this Plan to the contrary, and subject to adjustment as provided in Section 12 of this
Plan:
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(i)
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No Participant will be granted Option Rights or Appreciation
Rights, in the aggregate, for more than 1,000,000 Common Shares during any
calendar year.
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(ii)
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No Participant will be granted Qualified Performance-Based
Awards of Restricted Stock, Restricted Stock Units, Performance Shares or other
awards under Section 10 of this Plan, in the aggregate, for more than 400,000
Common Shares during any calendar year.
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(iii)
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Notwithstanding any other provision of this Plan to the
contrary, in no event will any Participant in any calendar year receive a
Qualified
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Performance-Based Award of Performance Units having an aggregate maximum
value as of their respective Dates of Grant in excess of $7,000,000.
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(iv)
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In no event will any Participant in any calendar year receive a
Qualified Performance-Based Award that is a Cash Incentive Award having an
aggregate maximum value in excess of $7,000,000.
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4.
Option Rights.
The Board may, from time to time and upon such terms and conditions as it
may determine, authorize the granting to Participants of options to purchase Common Shares. Each
such grant may utilize any or all of the authorizations contained in the following provisions:
(a) Each grant will specify the number of Common Shares to which it pertains subject to the
limitations set forth in Section 3 of this Plan.
(b) Each grant will specify an Option Price per share, which may not be less than the Market
Value per Share on the Date of Grant.
(c) Each grant will specify whether the Option Price will be payable (i) in cash or by check
acceptable to the Company or by wire transfer of immediately available funds, (ii) by the actual or
constructive transfer to the Company of Common Shares owned by the Optionee for at least six months
(or other consideration authorized pursuant to Section 4(d) of this Plan) having a value at the
time of exercise equal to the total Option Price, (iii) by a combination of such methods of
payment, or (iv) by such other methods as may be approved by the Board.
(d) To the extent permitted by law, any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a bank or broker on a date satisfactory to the Company of
some or all of the shares to which such exercise relates.
(e) Successive grants may be made to the same Participant whether or not any Option Rights
previously granted to such Participant remain unexercised.
(f) Each grant will specify the period or periods of continuous service by the Optionee with
the Company or any Subsidiary that is necessary before the Option Rights or installments thereof
will become exercisable. A grant of Option Rights may provide for the earlier exercise of such
Option Rights in the event of the retirement, the attainment of reasonable age and service
requirements approved by the Board, death or disability of a Participant or a Change in Control.
(g) Any grant of Option Rights may specify Management Objectives that must be achieved as a
condition to the exercise of such rights.
(h) Option Rights granted under this Plan may be (i) options, including, without limitation,
Incentive Stock Options, that are intended to qualify under particular provisions of the Code, (ii)
options that are not intended so to qualify, or (iii) combinations of the
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foregoing. Incentive Stock Options may only be granted to Participants who meet the
definition of employees under Section 3401(c) of the Code.
(i) The exercise of an Option Right will result in the cancellation on a share- for-share
basis of any Tandem Appreciation Right authorized under Section 5 of this Plan.
(j) No Option Right will be exercisable more than 10 years from the Date of Grant.
(k) Each grant of Option Rights will be evidenced by an Evidence of Award. Each Evidence of
Award will be subject to this Plan and will contain such terms and provisions, consistent with this
Plan, as the Board may approve.
5.
Appreciation Rights.
(a) The Board may, from time to time and upon such terms and conditions as it may determine,
authorize the granting (i) to any Optionee, of Tandem Appreciation Rights in respect of Option
Rights granted hereunder, and (ii) to any Participant, of Free-Standing Appreciation Rights. A
Tandem Appreciation Right will be a right of the Optionee, exercisable by surrender of the related
Option Right, to receive from the Company an amount determined by the Board, which will be
expressed as a percentage of the Spread (not exceeding 100 percent) at the time of exercise.
Tandem Appreciation Rights may be granted at any time prior to the exercise or termination of the
related Option Rights;
provided
,
however
, that a Tandem Appreciation Right awarded
in relation to an Incentive Stock Option must be granted concurrently with such Incentive Stock
Option. A Free-Standing Appreciation Right will be a right of the Participant to receive from the
Company an amount determined by the Board, which will be expressed as a percentage of the Spread
(not exceeding 100 percent) at the time of exercise.
(b) Each grant of Appreciation Rights may utilize any or all of the authorizations contained
in the following provisions:
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(i)
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Each grant will specify that the amount payable on exercise of
an Appreciation Right will be paid by the Company in cash, Common Shares or in
any combination thereof.
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(ii)
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Any grant may specify that the amount payable on exercise of an
Appreciation Right may not exceed a maximum specified by the Board at the Date
of Grant.
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(iii)
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Any grant may specify waiting periods before exercise and
permissible exercise dates or periods.
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(iv)
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Any grant may specify that such Appreciation Right may be
exercised only in the event of, or earlier in the event of, the retirement, the
attainment of reasonable age and service requirements approved by the Board,
death or disability of a Participant or a Change in Control.
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(v)
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Any grant of Appreciation Rights may specify Management
Objectives that must be achieved as a condition of the exercise of such
Appreciation Rights.
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(vi)
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Each grant of Appreciation Rights will be evidenced by an
Evidence of Award, which Evidence of Award will describe such Appreciation
Rights, identify the related Option Rights (if applicable), and contain such
other terms and provisions, consistent with this Plan, as the Board may
approve.
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(c) Any grant of Tandem Appreciation Rights will provide that such Tandem Appreciation Rights
may be exercised only at a time when the related Option Right is also exercisable and at a time
when the Spread is positive, and by surrender of the related Option Right for cancellation.
Successive grants of Tandem Appreciation Rights may be made to the same Participant regardless of
whether any Tandem Appreciation Rights previously granted to the Participant remain unexercised.
(d) Regarding Free-Standing Appreciation Rights only:
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(i)
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Each grant will specify in respect of each Free-Standing
Appreciation Right a Base Price, which may not be less than the Market Value
per Share on the Date of Grant;
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(ii)
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Successive grants may be made to the same Participant
regardless of whether any Free-Standing Appreciation Rights previously granted
to the Participant remain unexercised; and
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(iii)
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No Free-Standing Appreciation Right granted under this Plan
may be exercised more than 10 years from the Date of Grant.
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6.
Restricted Stock.
The Board may, from time to time and upon such terms and conditions as it
may determine, also authorize the grant or sale of Restricted Stock to Participants. Each such
grant or sale may utilize any or all of the authorizations contained in the following provisions:
(a) Each such grant or sale will constitute an immediate transfer of the ownership of Common
Shares to the Participant in consideration of the performance of services, entitling such
Participant to voting, dividend and other ownership rights, but subject to the substantial risk of
forfeiture and restrictions on transfer hereinafter referred to.
(b) Each such grant or sale may be made without additional consideration or in consideration
of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.
(c) Each such grant or sale will provide that the Restricted Stock covered by such grant or
sale that vests upon the passage of time will be subject to a substantial risk of forfeiture
within the meaning of Section 83 of the Code for a period to be determined by the Board at the Date
of Grant or upon achievement of Management Objectives referred to in subparagraph (e) below. If the
elimination of restrictions is based only on the passage of time
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rather than the achievement of Management Objectives, the period of time will be no shorter
than three years, except that the restrictions may be removed ratably during the three-year period,
on at least an annual basis, as determined by the Board.
(d) Each such grant or sale will provide that during or after the period for which such
substantial risk of forfeiture is to continue, the transferability of the Restricted Stock will be
prohibited or restricted in the manner and to the extent prescribed by the Board at the Date of
Grant (which restrictions may include, without limitation, rights of repurchase or first refusal in
the Company or provisions subjecting the Restricted Stock to a continuing substantial risk of
forfeiture in the hands of any transferee).
(e) Any grant of Restricted Stock may specify Management Objectives that, if achieved, will
result in termination or early termination of the restrictions applicable to such Restricted Stock;
provided
,
however
, that notwithstanding subparagraph (c) above, restrictions
relating to Restricted Stock that vests upon the achievement of Management Objectives may not
terminate sooner than one year from the Date of Grant. Each grant may specify in respect of such
Management Objectives a minimum acceptable level of achievement and may set forth a formula for
determining the number of shares of Restricted Stock on which restrictions will terminate if
performance is at or above the minimum or threshold level or levels, or is at or above the target
level or levels, but falls short of maximum achievement of the specified Management Objectives.
The grant of a Qualified Performance-Based Award of Restricted Stock will specify that, before the
termination or early termination of restrictions applicable to such Restricted Stock, the Board
must determine that the Management Objectives have been satisfied.
(f) Notwithstanding anything to the contrary contained in this Plan, any grant or sale of
Restricted Stock may provide for the earlier termination of restrictions on such Restricted Stock
in the event of the retirement, the attainment of reasonable age and service requirements approved
by the Board, death or disability of a Participant or a Change in Control.
(g) Any such grant or sale of Restricted Stock may require that any or all dividends or other
distributions paid thereon during the period of such restrictions be automatically deferred and
reinvested in additional shares of Restricted Stock, which may be subject to the same restrictions
as the underlying award;
provided
,
however
, that dividends or other distributions
on Restricted Stock with restrictions that lapse as a result of the achievement of Management
Objectives will be deferred until and paid contingent upon the achievement of the applicable
Management Objectives.
(h) Each grant or sale of Restricted Stock will be evidenced by an Evidence of Award and will
contain such terms and provisions, consistent with this Plan, as the Board may approve. Unless
otherwise directed by the Board, (i) all certificates representing shares of Restricted Stock will
be held in custody by the Company until all restrictions thereon will have lapsed, together with a
stock power or powers executed by the Participant in whose name such certificates are registered,
endorsed in blank and covering such shares or (ii) all shares of Restricted Stock will be held at
the Companys transfer agent in book entry form with appropriate restrictions relating to the
transfer of such shares of Restricted Stock.
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7.
Restricted Stock Units.
The Board may, from time to time and upon such terms and conditions
as it may determine, also authorize the granting or sale of Restricted Stock Units (which may also
be referred to as Deferred Stock Units) to Participants. Each such grant or sale may utilize any
or all of the authorizations contained in the following provisions:
(a) Each such grant or sale will constitute the agreement by the Company to deliver Common
Shares or cash to the Participant in the future in consideration of the performance of services,
but subject to the fulfillment of such conditions (which may include the achievement of Management
Objectives) during the Restriction Period as the Board may specify. If a grant of Restricted Stock
Units specifies that the Restriction Period will terminate only upon the achievement of Management
Objectives, then, notwithstanding anything to the contrary contained in subparagraph (c) below,
such Restriction Period may not terminate sooner than one year from the Date of Grant. Each grant
may specify in respect of such Management Objectives a minimum acceptable level of achievement and
may set forth a formula for determining the number of Restricted Stock Units on which restrictions
will terminate if performance is at or above the minimum or threshold level or levels, or is at or
above the target level or levels, but falls short of maximum achievement of the specified
Management Objectives. The grant of Qualified Performance-Based Awards of Restricted Stock Units
will specify that, before the termination or early termination of restrictions applicable to such
Restricted Stock Units, the Board must determine that the Management Objectives have been
satisfied.
(b) Each such grant or sale may be made without additional consideration or in consideration
of a payment by such Participant that is less than the Market Value per Share at the Date of Grant.
(c) If the Restriction Period lapses only by the passage of time rather than the achievement
of Management Objectives as provided in subparagraph (a) above, each such grant or sale will be
subject to a Restriction Period of not less than three years, except that a grant or sale may
provide that the Restriction Period will expire ratably during the three-year period, on an annual
basis, as determined by the Board.
(d) Notwithstanding anything to the contrary contained in this Plan, any grant or sale of
Restricted Stock Units may provide for the earlier lapse or other modification of the Restriction
Period in the event of the retirement, the attainment of reasonable age and service requirements
approved by the Board, death or disability of a Participant or a Change in Control.
(e) During the Restriction Period, the Participant will have no right to transfer any rights
under his or her award and will have no rights of ownership in the Common Shares deliverable upon
payment of the Restricted Stock Units and will have no right to vote them, but the Board may, at
the Date of Grant, authorize the payment of dividend equivalents on such Restricted Stock Units on
either a current or deferred or contingent basis, either in cash or in additional Common Shares;
provided
,
however
, that dividends or other distributions on Common Shares
underlying Restricted Stock Units with restrictions that lapse as a result of the achievement of
Management Objectives will be deferred until and paid contingent upon the achievement of the
applicable Management Objectives.
12
(f) Each grant or sale will specify the time and manner of payment of the Restricted Stock
Units that have been earned. Each grant or sale will specify that the amount payable with respect
thereto will be paid by the Company in Common Shares or cash.
(g) Each grant or sale of Restricted Stock Units will be evidenced by an Evidence of Award and
will contain such terms and provisions, consistent with this Plan, as the Board may approve.
8.
Cash Incentive Awards, Performance Shares and Performance Units.
The Board may, from time
to time and upon such terms and conditions as it may determine, also authorize the granting of Cash
Incentive Awards, Performance Shares and Performance Units. Each such grant may utilize any or all
of the authorizations contained in the following provisions:
(a) Each grant will specify the number of Performance Shares or Performance Units, or amount
payable with respect to Cash Incentive Awards, to which it pertains, which number or amount may be
subject to adjustment to reflect changes in compensation or other factors;
provided
,
however
, that no such adjustment will be made in the case of a Qualified Performance-Based
Award (other than in connection with the death or disability of the Participant or a Change in
Control) where such action would result in the loss of the otherwise available exemption of the
award under Section 162(m) of the Code.
(b) The Performance Period with respect to each Cash Incentive Award, Performance Share or
Performance Unit will be such period of time (not less than one year) as will be determined by the
Board at the time of grant, which may be subject to earlier lapse or other modification in the
event of the retirement, death or disability of a Participant or a Change in Control;
provided
,
however
, that no such adjustment will be made in the case of a Qualified
Performance-Based Award (other than in connection with the death or disability of the Participant
or a Change in Control) where such action would result in the loss of the otherwise available
exemption of the award under Section 162(m) of the Code.
(c) Any grant of Cash Incentive Awards, Performance Shares or Performance Units may specify
Management Objectives which, if achieved, will result in payment or early payment of the award, and
each grant may specify in respect of such specified Management Objectives a minimum acceptable
level or levels of achievement and will set forth a formula for determining the number of
Performance Shares or Performance Units, or amount payable with respect to Cash Incentive Awards,
that will be earned if performance is at or above the minimum or threshold level or levels, or is
at or above the target level or levels, but falls short of maximum achievement of the specified
Management Objectives. The grant of a Qualified Performance-Based Award of a Cash Incentive Award,
Performance Shares or Performance Units will specify that, before the Cash Incentive Award,
Performance Shares or Performance Units will be earned and paid, the Board must determine that the
Management Objectives have been satisfied.
(d) Each grant will specify the time and manner of payment of Cash Incentive Awards,
Performance Shares or Performance Units that have been earned. Any grant may specify that the
amount payable with respect thereto may be paid by the Company in cash, in Common Shares, in
Restricted Stock or Restricted Stock Units or in any combination thereof.
13
(e) Any grant of Cash Incentive Awards, Performance Shares or Performance Units may specify
that the amount payable or the number of Common Shares, shares of Restricted Stock or Restricted
Stock Units with respect thereto may not exceed a maximum specified by the Board at the Date of
Grant.
(f) The Board may, at the Date of Grant of Performance Shares, provide for the payment of
dividend equivalents to the holder thereof either in cash or in additional Common Shares, subject
in all cases to deferral and payment on a contingent basis based on the Participants earning of
the Performance Shares with respect to which such dividend equivalents are paid.
(g) Each grant of Cash Incentive Awards, Performance Shares or Performance Units will be
evidenced by an Evidence of Award and will contain such other terms and provisions, consistent with
this Plan, as the Board may approve.
9.
Awards to Non-Employee Directors.
Subject to the limit set forth in Section 3(b)(ii) of
this Plan, the Board may, from time to time and upon such terms and conditions as it may determine,
authorize the granting to non-employee Directors of Option Rights, Appreciation Rights or other
awards contemplated by Section 10 of this Plan and may also authorize the grant or sale of Common
Shares, Restricted Stock or Restricted Stock Units (which may also be referred to as Deferred Stock
Units) to non-employee Directors. Each grant of an award to a non-employee Director will be upon
such terms and conditions as approved by the Board and will be evidenced by an Evidence of Award in
such form as will be approved by the Board. Each grant will specify in the case of an Option Right
an Option Price per share, and in the case of a Free-Standing Appreciation Right, a Base Price per
share, which will not be less than the Market Value per Share on the Date of Grant. Each Option
Right and Free-Standing Appreciation Right granted under the Plan to a non-employee Director will
expire not more than 10 years from the Date of Grant and will be subject to earlier termination as
hereinafter provided. Non-employee Directors, pursuant to this Section 9, may be awarded, or may
be permitted to elect to receive, pursuant to procedures established by the Board, all or any
portion of their annual retainer, meeting fees or other fees in Common Shares, Restricted Stock,
Restricted Stock Units or other awards under the Plan in lieu of cash.
10.
Other Awards.
(a) Subject to limitations under applicable law and to the limit set forth in Section 3(b)(ii)
of this Plan, the Board may grant to any Participant such other awards that may be denominated or
payable in, valued in whole or in part by reference to, or otherwise based on, or related to,
Common Shares or factors that may influence the value of such shares, including, without
limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable
into Common Shares, purchase rights for Common Shares, awards with value and payment contingent
upon performance of the Company or specified Subsidiaries, affiliates or other business units
thereof or any other factors designated by the Board, and awards valued by reference to the book
value of Common Shares or the value of securities of, or the performance of specified Subsidiaries
or affiliates or other business units of the Company. The Board will determine the terms and
conditions of such awards. Common Shares delivered pursuant to an award in the nature of a
purchase right granted under this Section 10 will be purchased for such
14
consideration, paid for at such time, by such methods, and in such forms, including, without
limitation, Common Shares, other awards, notes or other property, as the Board determines.
(b) The Board may grant Common Shares as a bonus, or may grant other awards in lieu of
obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or
under other plans or compensatory arrangements, subject to such terms as will be determined by the
Board.
(c) Share-based awards pursuant to this Section 10 are not required to be subject to any
minimum vesting period.
11.
Administration of the Plan.
(a) This Plan will be administered by the Board, which may from time to time delegate all or
any part of its authority under this Plan to the Executive Compensation Committee of the Board or
any other committee of the Board (or a subcommittee thereof), as constituted from time to time. To
the extent of any such delegation, references in this Plan to the Board will be deemed to be
references to such committee or subcommittee.
(b) The interpretation and construction by the Board of any provision of this Plan or of any
agreement, notification or document evidencing the grant of Option Rights, Appreciation Rights,
Restricted Stock, Restricted Stock Units, Performance Shares, Performance Units or other awards
pursuant to Section 10 of this Plan and any determination by the Board pursuant to any provision of
this Plan or of any such agreement, notification or document will be final and conclusive.
(c) The Board or, to the extent of any delegation as provided in Section 11(a), the committee,
may delegate to one or more of its members or to one or more executive officers of the Company, or
to one or more agents or advisors, such administrative duties or powers as it may deem advisable,
and the Board, the committee, or any person to whom duties or powers have been delegated as
aforesaid, may employ one or more persons to render advice with respect to any responsibility the
Board, the committee or such person may have under the Plan. The Board or the committee may, by
resolution, authorize one or more executive officers of the Company to do one or both of the
following on the same basis as the Board or the committee: (i) designate employees to be recipients
of awards under this Plan; (ii) determine the size of any such awards;
provided
,
however
, that (A) the Board or the Committee will not delegate such responsibilities to any
such executive officer for awards granted to an employee who is an executive officer, Director, or
more than 10% beneficial owner of any class of the Companys equity securities that is registered
pursuant to Section 12 of the Exchange Act, as determined by the Board in accordance with Section
16 of the Exchange Act, or any Covered Employee; (B) the resolution providing for such
authorization sets forth the total number of Common Shares such executive officer(s) may grant; and
(C) the executive officer(s) will report periodically to the Board or the committee, as the case
may be, regarding the nature and scope of the awards granted pursuant to the authority delegated.
12.
Adjustments.
The Board will make or provide for such adjustments in the numbers of Common
Shares covered by outstanding Option Rights, Appreciation Rights,
15
Restricted Stock Units, Performance Shares and Performance Units granted hereunder and, if
applicable, in the number of Common Shares covered by other awards granted pursuant to Section 10
hereof, in the Option Price and Base Price provided in outstanding Option Rights and Appreciation
Rights, and in the kind of shares covered thereby, as the Board, in its sole discretion, may
determine is equitably required to prevent dilution or enlargement of the rights of Participants or
Optionees that otherwise would result from (a) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the Company, (b) any merger,
consolidation, spin-off, split- off, spin-out, split-up, reorganization, partial or complete
liquidation or other distribution of assets, issuance of rights or warrants to purchase securities,
or (c) any other corporate transaction or event having an effect similar to any of the foregoing.
Moreover, in the event of any such transaction or event or in the event of a Change in Control, the
Board, in its discretion, may provide in substitution for any or all outstanding awards under this
Plan such alternative consideration (including cash), if any, as it, in good faith, may determine
to be equitable in the circumstances and may require in connection therewith the surrender of all
awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each
Option Right or Appreciation Right with an Option Price or Base Price greater than the
consideration offered in connection with any such transaction or event or Change in Control, the
Board may in its sole discretion elect to cancel such Option Right or Appreciation Right without
any payment to the person holding such Option Right or Appreciation Right. The Board will also
make or provide for such adjustments in the numbers of shares specified in Section 3 of this Plan
as the Board in its sole discretion, exercised in good faith, may determine is appropriate to
reflect any transaction or event described in this Section 12;
provided
,
however
,
that any such adjustment to the number specified in Section 3(b)(i) will be made only if and to the
extent that such adjustment would not cause any option intended to qualify as an Incentive Stock
Option to fail to so qualify.
13.
Change in Control.
For purposes of this Plan, except as may be otherwise prescribed by
the Board in an Evidence of Award made under this Plan, a Change in Control will be deemed to
have occurred upon the occurrence of any of the following events:
(a) The consummation of a merger, consolidation, combination (as defined in Section
1701.01(Q), Ohio Revised Code), or majority share acquisition (as defined in Section 1701.01(R),
Ohio Revised Code) involving the Company and as a result of which the securities of the Company
entitled to vote generally in the election of Directors that are outstanding immediately prior to
the transaction do not continue to represent, directly or indirectly (either by remaining
outstanding or by being converted into securities of the surviving entity or any parent thereof
entitled to vote in the election of directors of such entity), one-third or more of the voting
power of the surviving entity or any parent thereof;
(b) The consummation of the sale of all or substantially all of the assets of the Company;
(c) The adoption of any resolution of reorganization or dissolution of the Company by the
shareholders;
(d) If during any period of two consecutive years, individuals who at the beginning of such
period constitute the Directors of the Company cease for any reason to
16
constitute a majority thereof;
provided
,
however
, that any individual who
becomes a Director during such period whose election, or nomination for election by the Companys
shareholders, was approved by a vote of at least two-thirds of the Directors then still in office
who were Directors of the Company at the beginning of such period (either by specific vote or by
approval of the proxy statement of the Company in which such individual is named as a nominee for
Director, without objection to such nomination) will be considered as though such individual were a
Director of the Company at the beginning of such period, 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 any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) other than the Board; or
(e) The acquisition by any person (including a group within the meaning of Sections 13(d)(3)
or 14(d)(2) of the Exchange Act other than the Company (or any of its Subsidiaries) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of
the Companys then outstanding securities, unless such acquisition is approved by the vote of at
least two-thirds of the Directors of the Company then in office.
14.
Detrimental Activity.
Any Evidence of Award may provide that if a Participant, either
during employment by the Company or a Subsidiary or within a specified period after termination of
such employment, will engage in any Detrimental Activity, and the Board will so find, forthwith
upon notice of such finding, the Participant will:
(a) Forfeit any award granted under this Plan then held by the Participant;
(b) Return to the Company, in exchange for payment by the Company of any amount actually paid
therefor by the Participant, all Common Shares that the Participant has not disposed of that were
offered pursuant to this Plan within a specified period prior to the date of the commencement of
such Detrimental Activity, and
(c) With respect to any Common Shares so acquired that the Participant has disposed of, pay to
the Company in cash the difference between:
|
(i)
|
|
Any amount actually paid therefor by the Participant pursuant
to this Plan, and
|
|
(ii)
|
|
The Market Value per Share of the Common Shares on the date of
such disposition.
|
(d) To the extent that such amounts are not paid to the Company, the Company may set off the
amounts so payable to it against any amounts that may be owing from time to time by the Company or
a Subsidiary to the Participant, whether as wages, deferred compensation or vacation pay or in the
form of any other benefit or for any other reason.
In addition, notwithstanding anything in the Plan to the contrary, any Evidence of Award may
provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the
17
Company of any gain related to an award, or other provisions intended to have a similar effect,
upon such terms and conditions as may be determined by the Board from time to time.
15.
Non U.S. Participants.
In order to facilitate the making of any grant or combination of
grants under this Plan, the Board may provide for such special terms for awards to Participants who
are foreign nationals or who are employed by the Company or any Subsidiary outside of the United
States of America or who provide services to the Company under an agreement with a foreign nation
or agency, as the Board may consider necessary or appropriate to accommodate differences in local
law, tax policy or custom. Moreover, the Board may approve such supplements to or amendments,
restatements or alternative versions of this Plan (including, without limitation, sub-plans) as it
may consider necessary or appropriate for such purposes, without thereby affecting the terms of
this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the
Company may certify any such document as having been approved and adopted in the same manner as
this Plan. No such special terms, supplements, amendments or restatements, however, will include
any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan
could have been amended to eliminate such inconsistency without further approval by the
shareholders of the Company.
16.
Transferability.
(a) Except as otherwise determined by the Board, no Option Right, Appreciation Right,
Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Cash Incentive Award,
award contemplated by Section 9 or 10 of this Plan or dividend equivalents paid with respect to
awards made under the Plan will be transferable by the Participant except by will or the laws of
descent and distribution, and in no event will any such award granted under the Plan be transferred
for value. Except as otherwise determined by the Board, Option Rights and Appreciation Rights will
be exercisable during the Participants lifetime only by him or her or, in the event of the
Participants legal incapacity to do so, by his or her guardian or legal representative acting on
behalf of the Participant in a fiduciary capacity under state law or court supervision.
(b) The Board may specify at the Date of Grant that part or all of the Common Shares that are
(i) to be issued or transferred by the Company upon the exercise of Option Rights or Appreciation
Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon
payment under any grant of Performance Shares or Performance Units or (ii) no longer subject to the
substantial risk of forfeiture and restrictions on transfer referred to in Section 6 of this Plan,
will be subject to further restrictions on transfer.
17.
Withholding Taxes.
To the extent that the Company is required to withhold federal, state,
local or foreign taxes in connection with any payment made or benefit realized by a Participant or
other person under this Plan, and the amounts available to the Company for such withholding are
insufficient, it will be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory to the Company for
payment of the balance of such taxes required to be withheld, which arrangements (in the discretion
of the Board) may include relinquishment of a portion of such benefit. If a Participants benefit
is to be received in the form of Common Shares, and such
18
Participant fails to make arrangements for the payment of tax, the Company will withhold such
Common Shares having a value equal to the amount required to be withheld. Notwithstanding the
foregoing, when a Participant is required to pay the Company an amount required to be withheld
under applicable income and employment tax laws, the Participant may elect to satisfy the
obligation, in whole or in part, by electing to have withheld, from the shares required to be
delivered to the Participant, Common Shares having a value equal to the amount required to be
withheld (except in the case of Restricted Stock where an election under Section 83(b) of the Code
has been made), or by delivering to the Company other Common Shares held by such Participant. The
shares used for tax withholding will be valued at an amount equal to the Market Value per Share of
such Common Shares on the date the benefit is to be included in Participants income. In no event
will the Market Value per Share of the Common Shares to be withheld and delivered pursuant to this
Section to satisfy applicable withholding taxes in connection with the benefit exceed the minimum
amount of taxes required to be withheld. Participants will also make such arrangements as the
Company may require for the payment of any withholding tax obligation that may arise in connection
with the disposition of Common Shares acquired upon the exercise of Option Rights.
18.
Compliance with Section 409A of the Code.
(a) To the extent applicable, it is intended that this Plan and any grants made hereunder
comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of
Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made
hereunder will be administered in a manner consistent with this intent. Any reference in this Plan
to Section 409A of the Code will also include any regulations or any other formal guidance
promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal
Revenue Service.
(b) Neither a Participant nor any of a Participants creditors or beneficiaries will have the
right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable
under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code,
any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant
or for a Participants benefit under this Plan and grants hereunder may not be reduced by, or
offset against, any amount owing by a Participant to the Company or any of its Subsidiaries.
(c) If, at the time of a Participants separation from service (within the meaning of
Section 409A of the Code), (i) the Participant will be a specified employee (within the meaning of
Section 409A of the Code and using the identification methodology selected by the Company from time
to time) and (ii) the Company makes a good faith determination that an amount payable hereunder
constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of
which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of
the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will
not pay such amount on the otherwise scheduled payment date but will instead pay it, without
interest, on the tenth business day of the seventh month after such separation from service.
19
(d) Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light
of the uncertainty with respect to the proper application of Section 409A of the Code, the Company
reserves the right to make amendments to this Plan and grants hereunder as the Company deems
necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the
Code. In any case, a Participant will be solely responsible and liable for the satisfaction of all
taxes and penalties that may be imposed on a Participant or for a Participants account in
connection with this Plan and grants hereunder (including any taxes and penalties under
Section 409A of the Code), and neither the Company nor any of its affiliates will have any
obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or
penalties.
19.
Amendments.
(a) The Board may at any time and from time to time amend this Plan in whole or in part;
provided
,
however
, that if an amendment to this Plan (i) would materially increase
the benefits accruing to participants under this Plan, (ii) would materially increase the number of
Common Shares which may be issued under this Plan, (iii) would materially modify the requirements
for participation in this Plan, or (iv) must otherwise be approved by the shareholders of the
Company in order to comply with applicable law or the rules of the New York Stock Exchange or, if
the Common Shares are not traded on the New York Stock Exchange, the principal national securities
exchange upon which the Common Shares are traded or quoted, then, such amendment will be subject to
shareholder approval and will not be effective unless and until such approval has been obtained.
(b) Except in connection with a corporate transaction or event described in Section 12 of this
Plan, the terms of outstanding awards may not be amended to reduce the Option Price of outstanding
Option Rights or the Base Price of outstanding Appreciation Rights, or cancel outstanding Option
Rights or Appreciation Rights in exchange for cash, other awards or Option Rights or Appreciation
Rights with an Option Price or Base Price, as applicable, that is less than the Option Price of the
original Option Rights or Base Price of the original Appreciation Rights, as applicable, without
shareholder approval. This Section 19(b) is intended to prohibit the repricing of underwater
Option Rights and Appreciation Rights and will not be construed to prohibit the adjustments
provided for in Section 12 of this Plan.
(c) If permitted by Section 409A of the Code and Section 162(m) of the Code, but subject to
the paragraph that follows, in the case of involuntary termination of employment or
termination of employment by reason of death, disability, retirement, closing of business or
operation units, or elimination of job position, or in the case of unforeseeable emergency or other
special circumstances (including reaching reasonable age and service requirements approved by the
Board from time to time), of or relating to a Participant who holds an Option Right or Appreciation
Right not immediately exercisable in full, or any shares of Restricted Stock as to which the
substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any
Restricted Stock Units as to which the Restriction Period has not been completed, or any Cash
Incentive Awards, Performance Shares or Performance Units which have not been fully earned, or any
other awards made pursuant to Section 10 subject to any vesting schedule or transfer restriction,
or who holds Common Shares subject to any transfer restriction imposed pursuant to Section 16(b) of
this Plan, the Board may, in its sole discretion, accelerate the time at
20
which such Option Right, Appreciation Right or other award may be exercised or the time at
which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or
the time when such Restriction Period will end or the time at which such Cash Incentive Awards,
Performance Shares or Performance Units will be deemed to have been fully earned or the time when
such transfer restriction will terminate or may waive any other limitation or requirement under any
such award except in the case of a Qualified Performance-Based Award where such action would result
in the loss of the otherwise available exemption of the award under Section 162(m) of the Code.
Subject to Section 19(b) hereof, the Board may amend the terms of any award theretofore granted
under this Plan prospectively or retroactively, except in the case of a Qualified Performance-Based
Award (other than in connection with the Participants death or disability, or a Change of Control)
where such action would result in the loss of the otherwise available exemption of the award under
Section 162(m) of the Code. In such case, the Board will not make any modification of the
Management Objectives or the level or levels of achievement with respect to such Qualified
Performance-Based Award. Subject to Section 12 above, no such amendment will impair the rights of
any Participant without his or her consent. The Board may, in its discretion, terminate this Plan
at any time. Termination of this Plan will not affect the rights of Participants or their
successors under any awards outstanding hereunder and not exercised in full on the date of
termination.
20.
Governing Law.
This Plan and all grants and awards and actions taken hereunder will be
governed by and construed in accordance with the internal substantive laws of the State of Ohio.
21.
Effective Date/Termination.
This Plan will be effective as of the Effective Date. No
grants will be made on or after November 7, 2010 (provided that this Plan is approved by the
shareholders of the Company prior to or on such date) under the Existing Plan, except that
outstanding awards granted under the Existing Plan will continue unaffected following such date.
No grant will be made under this Plan more than 10 years after November 7, 2010, but all grants
made on or prior to such date will continue in effect thereafter subject to the terms thereof and
of this Plan.
22.
Miscellaneous Provisions.
(a) The Company will not be required to issue any fractional Common Shares pursuant to this
Plan. The Board may provide for the elimination of fractions or for the settlement of fractions in
cash.
(b) This Plan will not confer upon any Participant any right with respect to continuance of
employment or other service with the Company or any Subsidiary, nor will it interfere in any way
with any right the Company or any Subsidiary would otherwise have to terminate such Participants
employment or other service at any time.
(c) To the extent that any provision of this Plan would prevent any Option Right that was
intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be
null and void with respect to such Option Right. Such provision, however, will
21
remain in effect for other Option Rights and there will be no further effect on any provision
of this Plan.
(d) No award under this Plan may be exercised by the holder thereof if such exercise, and the
receipt of stock thereunder, would be, in the opinion of counsel selected by the Board, contrary to
law or the regulations of any duly constituted authority having jurisdiction over this Plan.
(e) Absence on leave approved by a duly constituted officer of the Company or any of its
Subsidiaries will not be considered interruption or termination of service of any employee for any
purposes of this Plan or awards granted hereunder, except that no awards may be granted to an
employee while he or she is absent on leave.
(f) No Participant will have any rights as a stockholder with respect to any shares subject to
awards granted to him or her under this Plan prior to the date as of which he or she is actually
recorded as the holder of such shares upon the stock records of the Company.
(g) The Board may condition the grant of any award or combination of awards authorized under
this Plan on the surrender or deferral by the Participant of his or her right to receive a cash
bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant.
(h) Except with respect to Option Rights and Appreciation Rights, the Board may permit
Participants to elect to defer the issuance of Common Shares under the Plan pursuant to such rules,
procedures or programs as it may establish for purposes of this Plan and which are intended to
comply with the requirements of Section 409A of the Code. The Board also may provide that deferred
issuances and settlements include the payment or crediting of dividend equivalents or interest on
the deferral amounts.
(i) If any provision of this Plan is or becomes invalid, illegal or unenforceable in any
jurisdiction, or would disqualify this Plan or any award under any law deemed applicable by the
Board, such provision will be construed or deemed amended or limited in scope to conform to
applicable laws or, in the discretion of the Board, it will be stricken and the remainder of this
Plan will remain in full force and effect.
22