Cardtronics, Inc.

2014 Annual Bonus Pool Allocation Plan

Stockholders of Cardtronics, Inc. (the “Company”) approved the Amended and Restated 2007 Stock Incentive Plan (the “Plan”).  The principal objectives of the Plan were to provide a means through which the Company: (i) could attract able persons to serve as employees or directors of the Company; and (ii) provide such individuals with incentive and reward opportunities designed to enhance the long term profitable growth of the Company and its Affiliates.  In furtherance of those objectives, the Compensation Committee (the “Committee”) has adopted by resolution the following 2014 Annual Bonus Pool Allocation Plan (the “Pool Plan”) consistent with Section IX. (b) of the Plan to provide funding of and limits to awards granted to participants of the Annual Executive Cash Incentive Plan (the “AECIP”). This Pool Plan is not intended to provide additional compensation to participants but simply to ensure incentives paid to participants are qualified performance-based compensation under IRC 162(m).

All capitalized terms used herein that are not otherwise defined shall have the meanings ascribed to such terms in the Plan.  Members of the Cardtronics, Inc. (Cardtronics or the Company) executive leadership team that are designated in Exhibit A of this Pool Plan are the participants.

I. Performance Metrics

The Pool Plan rewards the achievement of a key performance metric that is critical to Cardtronics’ continued success as follows:

A. Global Pre-Tax Earnings EBITA: Defined as EBITDA less depreciation expenses as adjusted for non-controlling interests, both of which are reported in the Company’s 10-K for the fiscal year. 

II. Calculation of Earned Incentives

A. The calculation of incentive funding under this Pool Plan shall not infer any participant’s right to an incentive award for 2014.  Rather, this Pool Plan provides only the funding for the participants awards which will be determined by the results of the 2014 Annual Executive Cash Incentive Plan (“AECIP”) per the terms and conditions of the AECIP .

III. Effective Date

The Pool Plan is effective as of January 1, 2014.  Pool Plan funding will be based on audited financial results for the fiscal year ended December, 31, 2014.

 

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Cardtronics, Inc.

Annual Executive Cash Incentive Plan

Stockholders of Cardtronics, Inc. (the “Company”) approved the Amended and Restated 2007 Stock Incentive Plan (the “Plan”).  The principal objectives of the Plan were to provide a means through which the Company: (i) could attract able persons to serve as employees or directors of the Company; and (ii) provide such individuals with incentive and reward opportunities designed to enhance the long term profitable growth of the Company and its Affiliates.  In furtherance of those objectives, the Compensation Committee (the “Committee”) has adopted the following Annual Executive Cash Incentive Plan (the “AECIP”) to provide for annual incentive awards pursuant to the Plan .

All capitalized terms used herein that are not otherwise defined shall have the meanings ascribed to such terms in the Plan.

Members of the Cardtronics, Inc. (Cardtronics or the Company) executive leadership team that are designated as Section 16 Officers and designated as participants by the Company are eligible to participate in the AECIP.  The AECIP has been designed to include certain performance thresholds and metrics focused on Company, Division, and Individual performance to ensure the Company is measuring and rewarding its executive leadership team on critical business drivers that they influence. In addition, designated executives who are participants in the 2014 Annual Bonus Pool Allocation Plan (“Pool Plan”) shall have their AECIP incentives funded by and limited to the funding a llocation of such Pool Plan.

I. Plan Mechanics

Two components factor into the calculation of a participant’s earned AECIP award:

A. Performance Qualifiers:  Minimum levels of Company performance that must be attained in order for AECIP payouts to occur.

B. Performance Metrics:  Specific levels of Company, Division or Individual performance achievement that the AECIP is designed to reward.

i. Each Metric will be expressed in terms of Threshold, Target, and Maximum Performance achievement levels. 

ii. Performance below Threshold will result in no incentive earned for that metric.  Performance at threshold will result in 50% of designated incentive to be earned for that metric. 

iii. Performance at Target will result in 100% of incentive to be earned for that metric. 

iv. Performance at Maximum achievement will result in 150% to 200% of incentive to be earned by the individual for that metric based on participant responsibilities, achievement difficulty and impact on company performance. 

v. Results will be interpolated between achievement levels.

II. Performance Qualifiers

For any AECIP to be payable, both of the following performance qualifiers must be met:

A. Cardtronics must be compliant with all material public company regulations and reporting requirements for its fiscal year.

B. The participant must achieve the minimum performance standards established by his superior and/or the Board.

Upon attainment of these qualifiers, each Plan metric is then evaluated independently for achievement and earnings under this Plan.

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III. Participants & Groupings

A member of the Company’s designated Section 16 Officers shall become an eligible participant in the AECIP immediately upon being designated by the Company to participate in the AECIP.  Eligibility for, or participation in, the AECIP shall in no way guarantee an individual’s eligibility for, or participation in, any subsequent year cash incentive plan, if any.

The Cardtronics AECIP participants have been placed into one of three groups, which reflect their ability to control the results of the metrics assigned to each group.  The three participant groups are: 

A. Global Only.  These metrics represent the consolidated fiscal year results as per the Company’s public reporting.

i. Metrics for this Group are Global Adjusted Pre-Tax Earnings defined as Adjusted EBITA (50% weight) and Global Adjusted Total Revenues (50% weight).

B. Global/Division. These metrics represent performance of Global results and designated Division results.

i. Division Management: Metrics for this Group will be equally weighted between Global (50% weight) and Designated Division Business Results (50% weight).

C. For other Executives, metrics will be weighted 70% Global Results and 30% Individual Goals/Objectives.

IV. Performance Metrics

The AECIP rewards the achievement of performance on key metrics that are critical to Cardtronics’ continued success.  For the AECIP, metrics are:

A. Global Metrics:

i. Global Total Revenues: Defined as “Total Revenues” per GAAP as reported in the Company’s 10-K for the calendar year as adjusted per Section VII. of this Plan.

ii. Global Pre-Tax Earnings: Defined as Adjusted EBITDA less depreciation expenses as adjusted for non-controlling interests, both of which are reported in the Company’s 10-K for the calendar year as adjusted per Section VII. of this Plan.  This measure shall be referred to as “Adjusted EBITA”. 

B. Division Metrics:

i. Division Adjusted Total Revenues: Defined as “Total Revenues” per GAAP as reported in the divisional financial statements for the calendar year, calculated in the same fashion as in the consolidated financial statements in the Company’s 10-K as adjusted by Section VII. Of this Plan.

ii. Division Pre-Tax Earnings: Defined as Adjusted EBITA and calculated in the same manner and with the same adjustments as used in Global (consolidated) Pre-Tax Earnings metric, less Division depreciation expense.

C. Individual Goals-Measurable performance based objectives contributing to overall business performance.

V. Recoupment Policy

It is Cardtronics’ policy that cash bonuses paid to executives are subject to recoupment if the operating or financial results used to calculate the bonus are later restated.  Under this policy, an executive who engages in fraud or other misconduct leading to the restatement is required to repay any cash bonus paid for the period in question.

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VI. Discretion and Administrative Authority

While the intent is to determine bonuses in accordance with the calculations defined by the AECIP, the Committee retains the discretion to adjust the bonus determinations for the performance period relative to the performance targets.  However, with respect to persons determined to be Covered Employees by the Committee, the Committee shall have the authority to use negative discretion to reduce final payouts based on other factors such as total individual performance but the Committee may not exercise discretion to increase the amount payable to a Covered Employee (in excess of the amount payable in accordance with the calculations defined by the AECIP) with the exception of using upward discretion in the event of a significant management action, whereby the impact of such action is beneficial to the long term interests of the shareholders but causes material adverse impact to the current year's financial performance (i.e., major client renewal.)  Final bonus awards will be determined based on the funds available.

The Committee shall generally oversee the administration of the Plan.  The Committee shall have complete control and authority to determine the rights and benefits of all claims, demands and actions arising out of the provisions of the AECIP of any participant, deceased participant, or other person having or claiming to have any interest under the AECIP.  The Committee shall have complete discretion to interpret the AECIP and to decide all matters under the plan.  Such interpretation and decision shall be final, conclusive and binding on all participants and any person claiming under or through any participant, in the absence of clear and convincing evidence that the Committee acted arbitrarily and capriciously.  Any individual serving as a member of the Committee who is a participant will not vote or act on any matter pertaining solely to himself.  When making a determination or calculation, the Committee shall be entitled to rely on information furnished by a participant, a participant’s estate, or the Company.

VII. Performance Level Achievement Calculation

The Performance Levels described in the AECIP represent the Company’s business as of January 1 st of the calendar year.  The Committee has approved the following categories of Adjustments to Actual Performance for the purpose of calculating performance under this Plan. However , the Committee will review and approve all Adjustments to Actual Performance prior to the completion of the calculation of incentives earned under this Plan .   Certain adjustments may already be incorporated in Adjusted Operating Income, and it is not intended that the same adjustment be made twice.

A. Currency Exchange Rate Adjustments—Currency Exchange Rate Adjustments will be applied to actual results having the effect of neutralizing changes (i.e., no positive or negative impact) in exchange rates when results are determined as compared to exchange rates in effect when Targets (budgets) were established.  Adjustment will be applied to both Total Revenues and Adjusted EBITA metrics.

B. Acquisition and Strategic Investment Performance Adjustments—Actual results relative to any acquisitions involving annual revenues in excess of 1% of prior year consolidated revenues, or Strategic Investments involving capital expenditures in excess of 10% of the current year capital budget, or other Strategic acquisitions or Investments as approved by the Board, will be adjusted by subtracting the Board approved business case for each acquisition/investment under procedures approved by the Compensation Committee, thus rewarding management for better than business case performance and holding management accountable for less than business case performance in calculating incentives earned.  Adjustment will be applied as required to both Total Revenues and Adjusted EBITA metrics. Transaction costs for such acquisitions will be considered as an add-back to profitability.

C. Unbudgeted acquisition-related costs, inclusive of costs incurred to review and/or complete an acquisition such as legal, advisory, accounting, tax, other professional costs, and other expenses associated with recently completed/considered acquisitions will be considered add-backs to profitability consistent with the Company’s public reporting of such costs in its periodic earnings reports and filings with the SEC.

D. Employee termination related costs will only be considered an add-back to profitability in the case of the termination of a current Named Executive Officer or employee designated as such in the past three years or due to a broader reduction-in-force plan involving the termination of multiple employees with prior Committee approval.

E. To the extent there is a change in accounting presentation during the year, the effect of which changes the measurement of achievement of results under this Plan, either positively or negatively, the Committee shall neutralize the impact of such changes.

F. Other adjustments that the Compensation Committee deems appropriate.  Any specific adjustment to Company performance for the purpose of determining earned incentives under the AECIP must be approved by the Committee. 

The AECIP constitutes a mere promise by the Company to make payments in accordance with the terms of the AECIP, and participants and beneficiaries shall have the status of general unsecured creditors of the Company.  Nothing in the AECIP will be construed to give any employee or any other person rights to any specific assets of the Company or of any other person.

VIII. Taxation

The Company may, in its discretion, require the participant to pay in cash to the Company the amount that the Company deems necessary to satisfy its current or future obligation to withhold federal, state or local income or other taxes that the participant incurs as a result of a bonus payout pursuant to the AECIP.  With respect to any required tax withholding, the Company may withhold from the participant’s payment the amount necessary to satisfy its obligation to withhold taxes.  

IX. Limitation of Employee’s Rights

Nothing contained in the AECIP shall (a) confer upon any person a right to be employed or to continue in the employ of the Company, (b) interfere in any way with the right of the Company to terminate the employment of a participant at any time, with or without cause and with or without prior notice, without regard to the effect such discharge would have on the participant’s interest in the Plan, or (c) confer upon any participant any of the rights of a member or manager of the Company.

X. Release

Any payment to any participant in accordance with the provisions of the AECIP shall, to the extent thereof, be in full satisfaction of all claims against the Company and the Committee under the AECIP, and the Committee may require such participant, as a condition precedent to such payment, to execute a receipt and release to such effect.

XI. Effective Date

The AECIP is effective as of January 1 st of the calendar year.  If bonuses are paid, audited financial results for the year ended will be used to calculate the bonus payout.  As a result, any payment of bonuses will be made after the results of the Company’s audit are substantially finalized, but no later than March 15 th of the following year to meet corporate expense deductibility requirements, if applicable.  Participants are required to be employed by the Company or any of its affiliates through December 31 st of the calendar year in order to be eligible for payment.

 

 

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Cardtronics, Inc.

Long Term Incentive Plan

The stockholders of Cardtronics, Inc. (the “Company”) have approved an Amended and Restated 2007 Stock Incentive Plan (the “Plan”).  The principal objectives of the Plan are to provide a means through which the Company: (i) can attract able persons to serve as employees or directors of the Company; and (ii) provide such individuals with incentive and reward opportunities designed to enhance the long term profitable growth of the Company and its Affiliates.  In furtherance of those objectives, the Compensation Committee (the “Committee”) has adopted the following Long-Term Incentive Plan (the “LTIP”) to provide for long term incentive awards, a portion of which are Performance Awards, under the Plan.

All capitalized terms used herein that are not otherwise defined shall have the meanings ascribed to such terms in the Plan.

Pursuant to this LTIP and subject to its discretion, the Committee, or the Chief Executive Officer (“CEO”) with respect to employees who are not Section 16 Officers (subject to review by the Committee), will make annual equity grants equity to eligible employees (“Participants”).  Save and except for the CEO Pool as defined herein or other Committee approved grants, it is intended that in any given Plan year the Company will make equity grants will be made pursuant only to this LTIP. 

The terms and conditions of the LTIP are set forth below; provided, however, that prior to any grant, the Committee reserves the right to change any or all terms or conditions.

I. Participants : Participants will include designated employees, including the senior management team and other key contributors, as selected annually by the Committee as to Executive Officers and by the CEO as to all others.  No employee shall have a ‘right’ to be a Participant; but shall be selected for participation based upon merit and performance.  Accordingly, it is possible that a Participant in the LTIP this year will not be a Participant in any subsequent long term incentive plan.

II. Plan Design :     The Plan will be comprised of 25% Time-Restricted Stock Units and 75% Performance-Restricted Stock Units.     In any given year, the Committee in its sole discretion may elect to grant any one or more types of Awards permitted under the Plan.

A. Time Restricted Stock Units will be deemed earned as of the issue date; but not convertible into the Company’s company stock until the passage of the Vesting Periods (defined in Section IV below).

B. Performance-Restricted Stock Units granted under the LTIP will be earned only if the Company achieves certain minimum Performance Targets during the Performance Period (defined calendar year) that are established by the Committee prior to the grant date of the Award.

C. Metrics : Consistent with its desire to reward long term performance objectives, the Committee has selected:

i. Revenue, defined as “Global Total Revenues” (“Revenue”) per GAAP as reported in the Company’s 10-K for the calendar year as adjusted in Section III of this Plan.

ii. Global Adjusted Diluted Earnings Per Share (“EPS”), as reported in the Reconciliation of Non-GAAP Measures in the Company’s 10-K for the year as the metrics that will be used to measure performance over the Performance Period as adjusted in Section III of this Plan.

D. Weighting :  Each of the above metrics (Revenue and EPS) will be equally weighted to determine the “Payout multiple”. 

i. Each metric will be evaluated independently and as such, an Award may be earned for one metric even if threshold is not achieved for the other metric.

E. Performance Targets : In order to promote the desired activity on the part of the Participants in the LTIP, prior to March 31 of the Plan year, the Committee will establish the performance targets applicable only to the performance-restricted component including the Threshold, Target, and Maximum performance levels and corresponding earn out schedule, the Total Pool available to be awarded to participants and the allocation methodology for that Performance Period.

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i. Payout Multiples :   Under the LTIP, the number of performance-based restricted stock units earned will be a function of the level of performance achieved by the Company.  The Committee will establish the Threshold, Target, and Maximum performance levels (the “Performance Targets”) for each performance metric selected.  The Committee has also determined the payout multiples to be used for Threshold, Target, and Maximum performance achievement.  For any given Plan year, the metrics and associated payout multiples are attached hereto in Exhibit “A”.  If the Threshold level of performance is not achieved for a given Performance Period for a particular metric, the performance-restricted Stock Unit Awards granted for that metric will be forfeited and the recipients advised thereof. Results will be interpolated between achievement levels.

ii. Vesting following achievement of Earned Awards :  Earned Awards are then subject to time-based vesting restrictions.  Each Award will be evidenced by a written agreement by and between the Company and the applicable Participant.  On or before March 31 st following completion of the Performance Period, the Committee shall determine the extent to which the performance targets were met and the resulting number of restricted stock units earned for the Performance Period.  For performance levels between Threshold and Target and between Target and Maximum, the number of restricted stock units earned will be determined by interpolation.

III. Adjustment to Actual Performance for the Purpose of Incentive Earned Calculations: The Performance Levels described in the LTIP represent the Company’s business as of January 1 st of the calendar year.  The Committee has approved the following categories of Adjustments to Actual Performance for the purpose of calculating performance under this Plan. However , the Committee will review and approve all Adjustments to Actual Performance prior to the completion of the calculation of incentives earned under this Plan .   Certain adjustments may already be incorporated in Adjusted EPS, and it is not intended that the same adjustment be made twice.

A. Currency Exchange Rate Adjustments—Currency Exchange Rate Adjustments will be applied to actual results having the effect of neutralizing changes (i.e., no positive or negative impact) in exchange rates when results are determined as compared to exchange rates in effect when Targets (budgets) were established.  Adjustment will be applied to both Total Revenues and Adjusted EPS metrics.

B. Acquisition and Strategic Investment Performance Adjustments—Actual results relative to any acquisitions involving annual revenues in excess of 1% of prior year consolidated revenues, or Strategic Investments involving capital expenditures in excess of 10% of the current year capital budget, or other Strategic acquisitions or Investments as approved by the Board, will be adjusted by subtracting the Board approved business case for each acquisition/investment under procedures approved by the Compensation Committee, thus rewarding management for better than business case performance and holding management accountable for less than business case performance in calculating incentives earned.  Adjustment will be applied as required to both Total Revenues and Adjusted EPS metrics. Transaction costs for such acquisitions will be considered as an add-back to profitability.

C. Unbudgeted acquisition-related costs, inclusive of costs incurred to review and/or complete an acquisition such as legal, advisory, accounting, tax, other professional costs, and other expenses associated with recently completed/considered acquisitions will be considered   add-backs to profitability consistent with the Company’s public reporting of such costs in its periodic earnings reports and filings with the SEC.

D. Employee termination related costs will only be considered an add-back to profitability in the case of the termination of a current Named Executive Officer or employee designated as such in the past three years or due to a broader reduction-in-force plan involving the termination of multiple employees with prior Committee approval.

E. To the extent there is a change in accounting presentation during the year, the effect of which changes the measurement of achievement of results under this Plan, either positively or negatively, the Committee shall neutralize the impact of such changes.

F. Other adjustments that the Compensation Committee deems appropriate.  Any specific adjustment to Company performance for the purpose of determining earned awards under the LTIP must be approved by the Committee. 

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IV. Time-based Vesting (lapsing of restrictions) :     Subject to the exceptions set forth in Sections VI and VII below, all or a portion of a Participant’s Award shall remain subject to certain forfeiture restrictions until the passage of a prescribed amount of time.  Specifically, the Company has established three time periods (each a “Vesting Period”) over which a Participant shall become fully vested in his Award.  Those time periods shall be 24, 36, and 48 months from January 31 st of the Performance Period.  Accordingly, the forfeiture restrictions shall lapse as follows: 50% of any Award at the end of the first Vesting Period, an additional 25% at the end of the second Vesting Period, and the final 25% at the expiration of the third Vesting Period.  At the expiration of each Vesting Period, the Company shall convert each vested Restricted Stock Unit into one share of Common Stock of the Company (par value $0.0001) and will instruct its stock transfer agent to issue and to deliver such share of common stock to the Participant within 30 days following the vesting date or event.

V. All awards earned under this Plan may be subject to Cardtronics Stock Holding policy as it applies to certain Executive officers.   

VI. Termination of Employment :     The following provisions shall apply in the event of a termination of employment.

A. Termination of Employment During a Performance Period .  Unless otherwise provided for in a separate award agreement, in the event that a Participant’s employment with the Company shall terminate during a Performance Period, the following shall apply:

i. Death or Disability . In the event a Participant’s employment with the Company terminates as a result of death or Disability during a Performance Period, the Awards granted during that Performance Period shall be treated as earned at the Target level, but prorated based on the number of full and partial months employed during the Performance Period, divided by 12, with any such earned Awards becoming fully vested and paid out in shares of Company stock as soon as practicable (but no later than 30 days) following such employment termination.

ii. Qualified Retirement .  In the event that a Participant’s employment with the Company terminates as a result of a Qualified Retirement, the Awards granted during that Performance Period shall be earned based on the actual performance level obtained, but prorated based on the number of full and partial months employed during the Performance Period, divided by 12, with any such earned Awards becoming fully vested.  Vested Awards shall be paid out in shares of Company stock as soon as practicable (but no later than 30 days) following the determination of performance level achievement.

iii. Termination for Other Reasons .  In the event that a Participant’s employment with the Company terminates for any reason other than death, Disability, or Qualified Retirement, the Awards granted during that Performance Period shall be forfeited by the Participant.

B. Termination of Employment after a Performance Period but Prior to Vesting . Unless otherwise provided for in a separate award agreement, in the event that a Participant’s employment with the Company shall terminate following a completed Performance Period but prior to all earned Awards becoming fully vested, the following shall apply:

i. Death or Disability . In the event a Participant’s employment with the Company terminates as a result of death or Disability following a completed Performance Period but prior to full vesting, any unvested earned Awards shall become fully vested and paid out in shares of Company stock as soon as practicable (but no later than 30 days) following such employment termination.

ii. Qualified Retirement . In the event a Participant’s employment with the Company terminates as a result of a Qualified Retirement following a completed Performance Period but prior to full vesting, any unvested earned Awards shall become fully vested and paid out in shares of Company stock as soon as practicable (but no later than 30 days) following such employment termination.

iii. Termination for Other Reasons .  In the event that a Participant’s employment with the Company terminates for any reason other than death, Disability, or Qualified Retirement following a completed Performance Period but prior to vesting, any unvested earned Awards shall be forfeited by the Participant.

C. Six Month Delay for Specified Employees .  To the extent that the Participant is a “specified employee” within the meaning of Treasury Regulation Section 1.409A-1(i) as of the date of the Executive’s “separation from service” (within the meaning of  Treasury Regulation Section 1.409A-1(h)), such Participant shall not be entitled to receive shares of Company stock in settlement of restricted stock units until the earlier of (i) the date which is six (6) months after his or her “separation from service” for any reason other than death, or (ii) the date of the Participant’s death.  The provisions of this paragraph shall only apply if, and to the extent, required to avoid the imputation of any tax, penalty or interest pursuant to Section 409A of the Code. 

VII. Corporate Change :     Unless otherwise provided for in a separate award agreement, in the event of a Corporate Change (as defined in the Plan), the following shall apply:

A. Corporate Change During a Performance Period .  In the event that a Corporate Change occurs during a Performance Period, the Awards granted during the Performance Period shall be treated as earned at the Target level.

B. Treatment of Earned Awards .

i. Participants Eligible for Qualified Retirement.  In the event that a Participant is or becomes eligible for a Qualified Retirement after the conclusion of the Performance Period but prior to the date that is 12 months prior to the final Vesting Period, then, upon a Corporate Change that is also a “change in the ownership or effective control” of the Company or “a change in a substantial portion of the assets of the corporation” within the meaning of Treasury Regulation Section 1.409A-3(i)(5), the Participant’s then-outstanding earned Awards that are not yet fully vested shall immediately become fully vested and paid out in shares of Company stock.

ii. Participants Not Eligible for Qualified Retirement.

a. Earned Awards Exchanged For “Replacement Awards” . In connection with a Corporate Change, if an award meeting the definition of a “Replacement Award” (as defined below) is provided to a Participant to replace the Participant’s then-outstanding earned Awards (the “Replaced Awards”), then the Replaced Awards shall be deemed cancelled and shall have no further force and effect and the Company shall have no further obligation with respect to the Replaced Award.

b. Earned Awards Not Exchanged For “Replacement Awards” . In connection with a Corporate Change, to the extent a Participant’s then-outstanding earned Awards are not exchanged for Replacement Awards as provided for in paragraph (i) above, then such earned Awards shall immediately become fully vested and paid out in shares of Company stock.

C. Replacement Award .     An award shall qualify as a Replacement Award if: (i) it has a value at least equal to the value of the Replaced Award as determined by the Committee in its sole discretion; (ii) it relates to publicly traded equity securities of the Company or its successor in the Corporate Change or another entity that is affiliated with the Company or its successor following the Corporate Change; and (iii) its other terms and conditions are not less favorable to the Participant than the terms and conditions of the Replaced Award.  Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the preceding sentence are satisfied. The determination of whether the conditions of this Section VII.C. are satisfied shall be made by the Committee, as constituted immediately before the Corporate Change, in its sole discretion.

D. Termination of Employment In Connection With the Corporate Change . Upon an involuntary termination of employment of a Participant occurring in connection with or during the period of two years after such Corporate Change, other than for Cause, all Replacement Awards held by the Participant shall become fully vested and free of restrictions

VIII. Definitions :  For purposes of this LTIP, the following definitions shall apply:

A. “Disabled” or “Disability” shall mean that a Participant meets one of the following requirements: (i) the Participant is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months; or (ii) the Participant is, by reason of any medically determinable physical or mental impairment that can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering the Company’s employees.

B. “Qualified Retirement” shall mean the resignation of a Participant who meets each of the following requirements: (i) has a minimum of five (5) years of employment with the Company; and (ii) is at least sixty (60) years of age as of the date of his retirement.

IX. Pool Size :  The Committee has the authority to determine the size of the Award pool and the number of shares in the pool (the “Pool”) will not be increased or decreased, save and except as permitted by the application of the ‘payout multiples’ in Section II above as applied to the Performance-Restricted Stock Units only.  At such time, the number of shares ultimately earned may be adjusted up or down based on the Company’s performance with respect to the established performance metrics. 

X. Allocation Methodology :  Award amounts will be established for each Participant based upon various factors considered by the Committee relating to all Executive Officers and by the CEO with respect to all other Participants, including, but not limited to a Participant’s duties and responsibilities, specific performance objectives for 2014, and overall competitiveness of compensation.

Participants will be divided into participation tiers based upon their roles, responsibilities and performance.  Awards to the CEO shall be recommended and approved by the Committee.  With respect to all Section 16 Officers, other than the CEO, the CEO shall recommend award participation for approval by the Committee.  Other participants will be recommended by management and the CEO will have discretion to allocate shares among those Participants as he deems appropriate so long as the sum of all such allocations do not exceed the total number of shares allocated by the Committee.  The CEO may also withhold up to a maximum of   15% of the Pool allocated for discretionary awards until the Performance Period is completed to enable him to reward outstanding contributions.  Discretionary awards to Section 16 Officers require Committee approval.  Unallocated shares will be made available based on the extent to which performance targets are met as determined by the Committee.  Forfeited shares will not be available for distribution unless expressly approved by the Committee.

XI. CEO Pool :  In order to achieve the objective of attracting able employees and, retaining key employees, the Committee does hereby delegate the authority to the CEO to issue Awards in addition to the LTIP with the following limitations:

A. All such Awards will be time-based Restricted Stock Awards with four ‑year graded vesting (i.e., 25% at first four anniversaries of grant).  

B. That the maximum number of Awards that the CEO may unilaterally grant shall not exceed 50,000 shares.

C. The maximum Award to any new hire shall not exceed 20,000 shares.

D. The maximum award to a current employ ee may not exceed 5,000 shares.

E. The CEO may not grant awards to Executive Officers, Section 16 Officers, or Other Direct Report new hires without Committee approval.

Any Award granted by the CEO will be included in the calculation of the maximum shares allowed for 2014 under the CEO Pool.

XII. Restricted Stock Unit Agreement :     Attached hereto as Exhibit “B” is the form of the Restricted Stock Unit Agreement (the “RSU Agreement”) that each Participant must execute as a prerequisite of receiving any grant.  This RSU Agreement will be used to evidence Awards granted to all Participants and to establish the rights and obligations of any Participant with respect to such Award.  Any material and substantive modification to this form must be approved by the Committee.

In the event of a conflict between the provisions of the Plan and this LTIP, the terms and provisions of the Plan shall control and govern the rights and obligations of the parties.

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