Exhibit 10.1

MANITEX INTERNATIONAL, INC.

2019 EQUITY INCENTIVE PLAN

Section 1.    Purpose

The purpose of the Manitex International, Inc. 2019 Equity Incentive Plan is to
promote the best interests of Manitex International, Inc. (together with any
successor thereto, the “Company”) and its shareholders by providing Employees,
non-employee directors and consultants of the Company and its Affiliates (as
defined below) with an opportunity to acquire a proprietary interest in the
Company. It is intended that the Plan will promote continuity of management and
increased incentive and personal interest in the welfare of the Company by those
Employees and Consultants who are primarily responsible for shaping and carrying
out the long-range plans of the Company and securing the Company’s continued
growth and financial success. In addition, by encouraging stock ownership by
directors who are not employees of the Company or its Affiliates, the Company
seeks to attract and retain on its Board (as defined below) persons of
exceptional competence and to provide a further incentive to serve as a director
of the Company.

Section 2.    Definitions

As used in the Plan, the following terms shall have the respective meanings set
forth below:

(a) “409A Subsidiary” shall mean any entity that is controlled by the Company
within the meaning of Treasury Regulation Section 1.414(c)-2(b)(2)(i), except
that the phrase “at least 50 percent” shall be used in place of “at least 80
percent”, provided that the phrase “at least 20 percent” may be used in place of
“at least 80 percent” with respect to grants of Options or Stock Appreciation
Rights made to eligible individuals based on legitimate business criteria of the
Company within the meaning of Code Section 409A.

(b) “Affiliate” shall mean any entity that, directly or through one or more
intermediaries, is controlled by, controls, or is under common control with, the
Company.

(c) “Applicable Laws” shall mean the requirements related to or implicated by
the administration of the Plan under applicable state corporate law, United
States federal and state securities laws, the Code, any stock exchange or
quotation system on which the Shares are listed or quoted, and the applicable
laws of any foreign country or jurisdiction where Awards are granted under the
Plan.

(d) “Award” shall mean any Share, Option, Stock Appreciation Right, Restricted
Stock, Restricted Stock Unit, Performance Share or Performance Unit granted
under the Plan.

(e) “Award Agreement” shall mean any written agreement, contract, or other
instrument or document evidencing the terms and conditions of an individual
Award granted under the Plan which may, in the discretion of the Committee, be
transmitted electronically to any Participant. Each Award Agreement shall be
subject to the terms and conditions of the Plan.

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(f) “Beneficial Owner” shall have the meaning assigned to such term in Rule
13d-3 and 13d-5 under the Exchange Act, except that in calculating the
beneficial ownership of any particular Person, such Person shall be deemed to
have beneficial ownership of all securities that such Person has the right to
acquire by conversion or exercise of other securities, whether such right is
currently exercisable or is exercisable only after the passage of time. The
terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

(g) “Board” shall mean the Board of Directors of the Company, as constituted at
any time.

(h) “Cause” with respect to any Participant shall have the meaning specified in
the Award Agreement. In the absence of any definition of the Award Agreement,
“Cause” shall mean (i) the admission of, or conviction of any act of fraud,
embezzlement, or theft against the Company or any of its subsidiaries; (ii) a
plea of guilty or of no contest with respect to, admission of, or conviction
for, a felony or any crime involving moral turpitude, fraud, embezzlement,
theft, or misappropriation; (iii) violation of any non-competition,
non-solicitation, non-disclosure and/or other similar agreement with the Company
or an Affiliate; (iv) the misappropriation of the Company’s or any of its
subsidiaries’ funds or a corporate opportunity by the Participant;
(v) negligence, willful or reckless conduct that has brought or is reasonably
likely to bring the Company or any of its subsidiaries into public disgrace or
disrepute or which has had or is reasonably likely to have a materially adverse
effect on the Company’s business; (vi) any violation of any statutory or common
law duty of loyalty to the Company or any of its subsidiaries; or (vii) any
other material breach by either the Participating Employee of an employment
agreement or the Participating Consultant of a consulting agreement; provided,
that, the reasons set forth in clauses (iii), (vi), and (vii) shall constitute
Cause only upon the failure to correct such behavior prospectively within ten
(10) days following written notice thereof from, or on behalf of the independent
members of the Board.

(i) Change in Control” with respect to any Participant shall have the meaning
specified in the Award Agreement. In the absence of any definition of the Award
Agreement, “Change of Control” shall mean the occurrence of any of the
following:

(i) The acquisition by any Person of Beneficial Ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%)
of either (A) the value of then outstanding equity securities of the Company
(the “Outstanding Company Stock”) or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”) (the
foregoing Beneficial Ownership hereinafter being referred to as a “Controlling
Interest”); provided, however, that for purposes of this Plan, the following
acquisitions shall not constitute or result in a Change of Control: (v)

 

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any acquisition directly from the Company; (w) any acquisition by the Company;
(x) any acquisition by any Person that as of the Effective Date owns Beneficial
Ownership of a Controlling Interest; (y) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any Affiliate;
or (z) any acquisition by any entity pursuant to a transaction which complies
with clauses (A), (B), and (C) of subsection (iii) below; or

(ii) During any period of two (2) consecutive years (not including any period
prior to the Effective Date) individuals who constitute the Board on the
Effective Date (the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual becoming a
director subsequent to the Effective Date whose election or nomination for
election by the Company’s stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consent by or on behalf of a Person other than the
Board; or

(iii) Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar transaction involving the Company or any of its
Affiliates, a sale or other disposition of all or substantially all of the
assets of the Company, or the acquisition of assets or equity of another entity
by the Company or any of its Affiliates (each, a “Business Combination”), in
each case, unless following such Business Combination, (A) all or substantially
all of the individuals and entities who were the Beneficial Owners,
respectively, of the Outstanding Company Stock and Outstanding Company Voting
Securities immediately prior to such Business Combination beneficially own,
directly or indirectly, more than fifty percent (50%) of the value of the then
outstanding equity securities and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
members of the board of directors (or comparable governing board of any entity
that does not have such a board), as the case may be, of the entity resulting
from such Business Combination (including, without limitation, an entity which
as a result of such transaction owns the Company or all or substantially all of
the Company’s assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately prior to such
Business Combination of the Outstanding Company Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any employee
benefit plan (or related trust) of the Company or such entity resulting from
such Business Combination or any Person that as of the Effective Date owns
Beneficial Ownership of a Controlling Interest) beneficially owns, directly or
indirectly, fifty percent (50%) or more of the value of the then outstanding
equity securities of the entity resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of such entity
except to the extent that such ownership existed prior to the Business
Combination and (C) at least a majority of

 

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the members of the Board or other governing body of the entity resulting from
such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or

(iv) A complete liquidation or dissolution of the Company.

If required for compliance with Section 409A of the Code, in no event will a
Change of Control be deemed to have occurred if such transaction is not also a
“change in the ownership or effective control of” the Company or “a change in
the ownership of a substantial portion of the assets of” the Company as
determined under Treasury Regulation Section 1.409A-3(i)(5) (without regard to
any alternative definition thereunder). The Board may, in its sole discretion
and without the consent of a Participant, amend the definition of “Change of
Control” to conform to the definition of “Change in Control” under Section 409A
of the Code and the regulations thereunder.

(j) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time and the regulations promulgated thereunder. Any reference to a specific
provision of the Code shall also be deemed a reference to any successor
provision thereto.

(k) “Commission” shall mean the United States Securities and Exchange Commission
or any successor agency.

(l) “Committee” shall mean a committee of the Board of Directors of the Company
designated by such Board to administer the Plan and comprised solely of not less
than two directors, each of whom will be a “non-employee director” within the
meaning of Rule 16b-3 and each of whom will be an “outside director” within the
meaning of Section 162(m)(4)(C) of the Code; provided that the mere fact that
the Committee shall fail to qualify under the foregoing requirements shall not
invalidate any Award made by the Committee that is otherwise validly made under
the Plan, unless the Committee is aware at the time of the Award’s grant of the
Committee’s failure to so qualify.

(m) “Consultant” shall mean any individual or entity which performs bona fide
services to the Company or an Affiliate, other than as an Employee or
Non-Employee Director, and who may be offered securities registerable pursuant
to a registration statement on Form S-8 under the Securities Act.

(n) “Continuous Service” shall mean the Participant’s service with the Company
or an Affiliate, whether as an Employee, Consultant, or Non-Employee Director,
is not interrupted or terminated. The Participant’s Continuous Service shall not
be deemed to have terminated merely because of a change in the capacity in which
the Participant renders services to the Company or an Affiliate as an Employee,
Consultant or Director or a change in the entity for which the Participant
renders such service; provided that, there is no interruption or termination of
the Participant’s Continuous Service; provided further, if any Award is subject
to Section 409A of the Code, this

 

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sentence shall only be given effect to the extent consistent with Section 409A
of the Code. For example, a change in status from an Employee of the Company to
a Non-Employee Director of an Affiliate will not constitute an interruption of
Continuous Service. The Committee or its delegate, in its sole discretion, may
determine whether Continuous Service shall be considered interrupted in the case
of any leave of absence approved by that party, including sick leave, military
leave, or any other personal or family leave of absence. The Committee or its
delegate, in its sole discretion, may determine whether a Company transaction,
such as a sale or spin-off of a division or subsidiary that employs a
Participant, shall be deemed to result in a termination of Continuous Service
for purposes of the affected Awards, and such decision shall be final,
conclusive, and binding.

(o) “Disability” shall mean, unless the applicable Award Agreement says
otherwise, that the Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment;
provided, however, for purposes of determining the term under an Incentive Stock
Option pursuant to Section 6(b)(viii) hereof, the term Disability shall have the
meaning ascribed to it under Section 22(e)(3) of the Code. The determination as
to whether an individual has a Disability shall be determined under procedures
established by the Committee. Except in situations where the Committee is
determining Disability for purposes of the term of an Incentive Stock Option
pursuant to Section 6(b)(viii) hereof within the meaning of Section 22(e)(3) of
the Code, the Committee may rely on any determination that a Participant is
disabled for purposes of benefits under any long-term disability plan maintained
by the Company or any Affiliate in which a Participant participates.

(p) “Disqualifying Disposition” shall mean a “disposition” (as defined in
Section 424 of the Code) of all or any portion of shares of Common Stock
acquired upon exercise of an Incentive Stock Option within two (2) years from
the Grant Date of such Incentive Stock Option or within one (1) year after the
issuance of the Shares acquired upon exercise of such Incentive Stock Option.

(q) “Dividend Equivalent” shall mean a right, granted to a Participant under the
Plan, to receive cash equal to the cash dividends paid with respect to a
specified number of Shares. Dividend Equivalents shall not be deemed to be
Awards under the Plan.

(r) “Employee” shall mean any employee of the Company or any of its Affiliates
or subsidiaries including a 409A Subsidiary; provided that, for purposes of
determining eligibility to receive Incentive Stock Options, an Employee shall
mean an employee of the Company or a parent or subsidiary corporation within the
meaning of Code Section 424.

(s) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended
from time to time.

(t) “Excluded Items” shall mean any items which the Committee determines shall
be excluded in fixing Performance Goals, including, without limitation, any
gains or losses from discontinued operations, any extraordinary gains or losses
and the effects of accounting changes.

 

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(u) “Fair Market Value” shall mean, with respect to a share of Stock, (i) if the
Stock is readily tradable on one or more established stock exchanges or national
market systems, including, without limitation, the American Stock Exchange, The
NASDAQ Global Select Market, The NASDAQ Global Market or The NASDAQ Capital
Market of The NASDAQ Stock Market, or the New York Stock Exchange, its Fair
Market Value shall be the closing sales price for such Stock (or the closing
bid, if no sales were reported) as quoted on the principal exchange or system on
which the Stock is listed on the date of determination (or, if no closing sales
price or closing bid was reported on that date, as applicable, on the last
trading date such closing sales price or closing bid was reported), as reported
in The Wall Street Journal or such other source as the Committee deems reliable;
or (ii) if the Stock is regularly quoted on an automated quotation system
(including the OTC Bulletin Board) or by a recognized securities dealer, its
Fair Market Value shall be the closing sales price for such stock as quoted on
such system or by such securities dealer on the date of determination, but if
selling prices are not reported, the Fair Market Value of a share of Stock shall
be the mean between the high bid and low asked prices for the Stock on the date
of determination (or, if no such prices were reported on that date, on the last
date such prices were reported), as reported in The Wall Street Journal or such
other source as the Committee deems reliable; or (iii) in the absence of an
established market for the Stock of the type described in (i) and (ii), above,
the Fair Market Value shall be determined by the Committee in good faith by
reasonable application of a reasonable valuation method and in accordance with
Section 409A of the Code and the regulations promulgated thereunder as in effect
from time to time.

(v) “Good Reason” shall, with respect to any Participant, have the meaning
specified in the Award Agreement. In the absence of any definition in the Award
Agreement, “Good Reason” shall have the equivalent meaning or same meaning as
“good reason” or “for good reason” set forth in any employment, consulting or
other agreement for the performance of services between the Participant and the
Company or an Affiliate. In the absence of any such agreement or any definition
of “good reason” in such agreement with respect to an Employee, “Good Reason
shall mean (i) a material adverse change to the Employee in title, office,
status, rank, nature of responsibilities, or authority within the Company,
except in connection with termination of his employment or service for Cause or
Disability or as a result of action by the Employee; (ii) assignment of duties
to the Employee that are materially inconsistent with and adverse to his duties,
status, rank, nature of responsibilities, or authority; (iii) decrease in the
Employee’s base salary (other than any such decrease applicable to the Company’s
employees generally); and (iv) relocation of the Company’s place of business
more than fifty (50) miles from its location as of the date of the award. An
event or action will not give the Participant grounds for Good Reason unless
(1) the Participant gives the Company written notice within sixty (60) days
after the initial existence of the event or action that the Participant intends
to resign for Good Reason due to such event or action; (2) the event or action
is not reasonably cured by the Company within thirty (30) days after the Company
receives written notice from the Participant; and (3) the Participant terminates
service within thirty (30) days after the end of the cure period.

 

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(w) “Grant Date” means the date on which the Committee adopts a resolution, or
takes other appropriate action, expressly granting an Award to a Participant
that specifies the key terms and conditions of the Award or, if a later date is
set forth in such resolution, then such date as is set forth in such resolution.

(x) “Incentive Stock Option” shall mean an option granted under Section 6(b) of
the Plan that is designated by the Committee as an Incentive Stock Option within
the meaning of Section 422 of the Code and that meets the requirements set forth
herein.

(y) “Non-Employee Director” shall mean a director of the Company or any
Affiliate who is not an employee of the Company or any Affiliate.

(z) “Non-Qualified Stock Option” shall mean an option granted under Section 6(b)
of the Plan that does not qualify or is not intended to be an Incentive Stock
Option.

(aa) “Option” shall mean an Incentive Stock Option or a Non-Qualified Stock
Option granted pursuant to the Plan.

(bb) “Participant” shall mean each Participating Employee, Participating
Consultant, or Non-Employee Director to whom an Award is granted pursuant to the
Plan, or if applicable, such other person who holds an outstanding award.

(cc) “Participating Consultant” shall mean a Consultant designated by the
Committee to be granted an Award under the Plan.

(dd) “Participating Employee” shall mean an Employee designated by the Committee
to be granted an Award under the Plan.

(ee) “Performance Goals” shall mean each of, or a combination of one or more of,
the following (in all cases after excluding the impact of applicable Excluded
Items):

(i) Return on equity;

(ii) Return on investment;

(iii) Return on net assets;

(iv) Return on revenues;

(v) Operating income;

(vi) Pre-tax profits;

(vii) Net income;

 

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(viii) Net income per Share;

(ix) Working capital as a percent of net revenues;

(x) Net cash provided by operating activities;

(xi) Market price per Share;

(xii) Total shareholder return;

(xiii) Key operational measures, which shall be deemed to include new customer
origination, customer penetration, customer satisfaction, employee safety,
market share, plant utilization, cost containment, and cost structure reduction;

(xiv) Cash flow or cash flow per share;

(xv) Reserve value or reserve value per share;

(xvi) Net asset value or net asset value per share;

(xvii) Production volumes; and

(xviii) Product and technology developments and improvements.

measured in each case for the Performance Period (aa) for the Company on a
consolidated basis, (bb) for any one or more Affiliates or divisions of the
Company, where appropriate, and/or (cc) for any other business unit or units of
the Company or any Affiliate, where appropriate, as defined by the Committee at
the time of selection; provided that it shall only be appropriate to measure net
earnings per Share and market price per Share on a consolidated basis.

(ff) “Performance Period” shall mean, in relation to Performance Shares or
Performance Units, any period for which a Performance Goal or Goals have been
established; provided, however, that such period shall not be less than one
year.

(gg) “Performance Share” shall mean any right granted under Section 6(f) of the
Plan that will be paid out in cash, as a Share (which, in specified
circumstances, may be a Share of Restricted Stock) or as a Restricted Stock
Unit, which right is contingent on the achievement of one or more Performance
Goals during a specified Performance Period.

(hh) “Performance Unit” shall mean any right granted under Section 6(f) of the
Plan to receive a designated dollar value amount in cash, Shares (which, in
specified circumstances, may be a designated dollar value amount of Shares of
Restricted Stock) or Restricted Stock Units, which right is contingent on the
achievement of one or more Performance Goals during a specified Performance
Period.

 

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(ii) “Permitted Transferee” shall mean (a) a member of the Optionholder’s
immediate family (child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, including adoptive relationships), any person
sharing the Optionholder’s household (other than a tenant or employee), a trust
in which these persons have more than fifty percent (50%) of the beneficial
interest, a foundation in which these persons (or the Optionholder) control the
management of the assets, and any other entity in which these persons (or the
Optionholder) own more than 50% of the voting interests; (b) third parties
designated by the Committee in connection with a program established and
approved by the Committee pursuant to which Participants may receive a cash
payment or other consideration in consideration for the transfer of a
Non-Qualified Stock Option; and (c) other such transferees as may be permitted
by the Committee in its sole discretion.

(jj) “Person” shall mean any individual, corporation, partnership, association,
joint-stock company, trust, unincorporated organization, or government or
political subdivision thereof.

(kk) “Plan” shall mean the Manitex International, Inc. 2019 Equity Incentive
Plan, as amended and/or amended and restated from time to time.

(ll) “Predecessor Plan” shall mean the Second Amended and Restated Manitex
International, Inc. 2004 Equity Incentive Plan, as amended and/or restated.

(mm) “Released Securities” shall mean Shares of Restricted Stock with respect to
which all applicable restrictions have expired, lapsed, or been waived.

(nn) “Restricted Securities” shall mean Awards of Restricted Stock or other
Awards under which issued and outstanding Shares are held subject to certain
restrictions.

(oo) “Restricted Stock” shall mean any Share granted under Section 6(d) of the
Plan or, in specified circumstances, a Share paid in connection with another
Award, with such Share subject to risk of forfeiture and restrictions on
transfer or other restrictions that will lapse upon the achievement of one or
more goals relating to completion of service by the Participant or the
achievement of performance or other objectives, as determined by the Committee.

(pp) “Restricted Stock Unit” shall mean any right to receive Shares in the
future granted under Section 6(e) of the Plan or paid in connection with another
Award, with such right subject to risk of forfeiture and restrictions on
transfer or other restrictions that will lapse upon the achievement of one or
more goals relating to completion of service by the Participant or the
achievement of performance or other objectives, as determined by the Committee.

(qq) “Rule 16b-3” shall mean Rule 16b-3 as promulgated by the Commission under
the Exchange Act, or any successor rule or regulation thereto.

 

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(rr) “Shares” shall mean shares of common stock of the Company, no par value,
and such other securities or property as may become subject to Awards pursuant
to an adjustment made under Section 4(b) of the Plan.

(ss) “Stock Appreciation Right” shall mean any right granted under Section 6(c)
of the Plan.

(tt) “Ten Percent Shareholder” shall mean a person who owns (or is deemed to own
pursuant to Section 424(d) of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or of any of
its Affiliates.

Section 3.    Administration

(a) The Committee. The Plan shall be administered by the Committee; provided,
however, that if at any time the Committee shall not be in existence, the
functions of the Committee as specified in the Plan shall be exercised by a
committee consisting of those members of the Board who qualify as “non-employee
directors” under Rule 16b-3 and as “outside directors” under
Section 162(m)(4)(C) of the Code. To the extent permitted by applicable law, the
Board of Directors or the Committee may delegate to one or more executive
officers of the Company any or all of the authority and responsibility of the
Committee with respect to the Plan, other than with respect to Persons who are
subject to Section 16 of the Exchange Act. To the extent the Board of Directors
or the Committee has so delegated to one or more executive officers the
authority and responsibility of the Committee, all references to the Committee
herein shall include such officer or officers. For the avoidance of doubt, the
Board may abolish the Committee at any time and revest in the Board the
administration of the Plan. From time to time, the Board may increase or
decrease the size of the Committee, add additional members to, remove members
(with or without cause) from, appoint new members in substitution therefor, and
fill vacancies, however caused, in the Committee. The Committee shall act
pursuant to a vote of the majority of its members or, in the case of a committee
comprised of only two (2) members, the unanimous consent of its members, whether
present or not, or by the written consent of the majority of its members and
minutes shall be kept of all of its meetings and copies thereof shall be
provided to the Board. Subject to the limitations prescribed in the Plan and by
the Board, the Committee may establish and follow such rules and regulations of
conduct for the conduct of its business as it may determine to be advisable.

(b) Authority. Subject to the terms of the Plan and without limitation by reason
of enumeration, the Committee shall have full discretionary power and authority
to: (i) designate Participating Employees or Participating Consultants and
select Non-Employee Directors to be Participants; (ii) determine the type or
types of Awards to be granted to each Participant under the Plan;
(iii) determine the number of Shares to be covered by (or with respect to which
payments, rights, or other matters are to be calculated in connection with)
Awards granted to Participants; (iv) determine the terms and conditions of any
Award granted to a Participant; (v) determine whether, to what extent, and under
what circumstances Awards granted to Participants may be settled or

 

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exercised in cash, Shares, other securities, other Awards, or other property,
and the method or methods by which Awards may be settled, exercised, cancelled,
forfeited, or suspended; (vi) determine whether, to what extent, and under what
circumstances cash, Shares, other Awards, and other amounts payable with respect
to an Award granted to Participants under the Plan shall be deferred either
automatically or at the election of the holder thereof or of the Committee;
provided that cash or Shares issuable under Options and Stock Appreciation
Rights shall not be subject to deferral after exercise and all other deferrals
shall be made in a manner consistent with Code Section 409A; (vii) interpret and
administer the Plan and any instrument or agreement relating to, or Award made
under, the Plan (including, without limitation, any Award Agreement); (viii)
establish, amend, suspend, or waive such rules and regulations and appoint such
agents as it shall deem appropriate for the proper administration of the Plan;
(ix) determine the minimum period of service for the vesting of any Restricted
Stock or Restricted Stock Units; and (x) make any other determination and take
any other action that the Committee deems necessary or desirable for the
administration of the Plan. Unless otherwise expressly provided in the Plan, all
designations, determinations, interpretations, and other decisions made under or
with respect to the Plan or any Award shall be within the sole discretion of the
Committee, may be made at any time, and shall be final, conclusive, and binding
upon all Persons, including the Company, any Affiliate, any Participant, any
holder or beneficiary of any Award, any shareholder, and any employee of the
Company or of any Affiliate.

(c) Indemnity. In addition to such other rights of indemnification as they may
have as members of the Board or members of the Committee, and to the extent
allowed by Applicable Laws, the Committee shall be indemnified by the Company
against the reasonable expenses, including attorney’s fees, actually incurred in
connection with any action, suit or proceeding or in connection with any appeal
therein, to which the Committee may be party by reason of any action taken or
failure to act under or in connection with the Plan or any Award granted under
the Plan, and against all amounts paid by the Committee in settlement thereof
(provided, however, that the settlement has been approved by the Company, which
approval shall not be unreasonably withheld) or paid by the Committee in
satisfaction of a judgment in any such action, suit, or proceeding, except in
relation to matters as to which it shall be adjudged in such action, or
proceeding that such Committee did not act in good faith and in a manner which
such person reasonably believed to be in the best interests of the Company, or
in the case of a criminal proceeding, had no reason to believe that the conduct
complained of was unlawful; provided, however, that within sixty (60) days after
the institution of any such action, suit or proceeding, such Committee shall, in
writing, offer the Company the opportunity at its own expense to handle and
defend such action, suit, or proceeding.

Section 4.    Shares Available for Award

(a) Shares Available. Subject to adjustment as provided in Section 4(b):

(i) Number of Shares Available. The number of Shares with respect to which
Awards may be granted under the Plan shall be 279,315 Shares, consisting of
279,315 Shares available for issuance under the Predecessor Plan as of the
Effective Date and no additional Shares (collectively, the “Total Share
Reserve”).

 

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(ii) Share Recycling. If, after the effective date of the Plan, any Shares
covered by an Award granted under either the Predecessor Plan or this Plan, or
to which any such Award relates, are forfeited or if such an Award otherwise
terminates, expires or is cancelled prior to the delivery of all of the Shares
or of other consideration issuable or payable pursuant to such Award, then the
number of Shares counted against the number of Shares available under the Plan
in connection with the grant of such Award, to the extent of any such
forfeiture, termination, expiration or cancellation, shall again be available
for granting of additional Awards under the Plan, including pursuant to
Incentive Stock Options. Notwithstanding anything to the contrary contained
herein, Shares subject to an Award under the Plan shall not again be made
available for issuance or delivery under the Plan if such Shares are (a) Shares
tendered in payment of an Option, (b) Shares delivered or withheld by the
Company to satisfy any tax withholding, or (c) Shares covered by a stock-settled
Stock Appreciation Right or other Awards that were not issued upon the
settlement of the Award.

(iii) Limitations on Awards. No Participating Employee, Participating Consultant
or Director shall be granted, during any calendar year, more than 20,000 Shares,
Options for more than 15,000 Shares, Stock Appreciation Rights with respect to
more than 20,000 Shares, more than 20,000 Shares of Restricted Stock, Awards
with respect to more than 20,000 Restricted Stock Units, more than 10,000
Performance Shares nor more than 10,000 Performance Units (when a Performance
Unit is measured in relation to the Fair Market Value of a Share) under the
Plan.

(iv) Incentive Stock Option Limitation. Subject to adjustment in accordance with
Section 4(b), no more than 100,000 Shares may be issued in the aggregate
pursuant to the exercise of Incentive Stock Options (the “ISO Limit”).

(v) Accounting for Awards. The number of Shares covered by an Award under the
Plan, or to which such Award relates, shall be counted on the Grant Date of such
Award against the number of Shares available for granting Awards under the Plan.

(vi) Assumption or Substitution. Awards may, in the sole discretion of the
Committee, be granted under the Plan in assumption of, or in substitution for,
outstanding awards previously granted by an entity acquired by the Company or
with which the Company combines (“Substitute Awards”). Substitute Awards shall
not be counted against the Total Share Reserve; provided that, Substitute Awards
issued in connection with the assumption of, or in substitution for, outstanding
options intended to qualify as Incentive Stock Options shall be counted against
the ISO Limit. Subject to Applicable Law, available shares under a
stockholder-approved plan of an entity directly or indirectly acquired by the
Company or with which the Company combines (as appropriately adjusted to reflect
such acquisition or transaction) may be used for Awards under the Plan and shall
not count toward the Total Share Limit.

 

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(b) Adjustments. If (i) the Company shall at any time be involved in a merger or
other transaction in which Shares are changed or exchanged; (ii) the Company
shall subdivide or combine Shares or the Company shall declare a dividend
payable in Shares, other securities or other property; (iii) the Company shall
effect a cash dividend the amount of which, on a per Share basis, exceeds ten
percent (10%) of the Fair Market Value of a Share at the time the dividend is
declared, or the Company shall effect any other dividend or other distribution
on the Shares in the form of cash, or a repurchase of Shares, that the Board
determines by resolution is special or extraordinary in nature or that is in
connection with a transaction that is a recapitalization or reorganization
involving Shares; or (iv) any other event shall occur, which, in the case of
this subsection (iv), in the judgment of the Committee necessitates an
adjustment to prevent dilution or enlargement of the benefits or potential
benefits intended to be made available under this Plan, then the Committee
shall, in such manner as it may deem equitable, adjust any or all of (1) the
number and type of Shares subject to the Plan and which thereafter may be made
the subject of Awards under the Plan, (2) the number and type of Shares subject
to the individual participant limit of Section 4(a)(ii), (3) the number and type
of Shares subject to outstanding Awards, and (4) the grant, purchase, or
exercise price with respect to any Award to reflect such transaction or event;
or, if deemed appropriate, make provision for a cash payment to the holder of an
outstanding Award in exchange for cancellation of such Award or in lieu of any
or all of the foregoing adjustments. With respect to Awards of Incentive Stock
Options, no such adjustment shall be authorized to the extent that such
authority would cause the Plan to violate Section 422(b) of the Code or
constitute a modification, extension or renewal within the meaning of
Section 424(h)(3) of the Code. With respect to Awards of Options or Stock
Appreciation Rights that are exempt from Section 409A of the Code, such
adjustment does not constitute a modification of such Award under Treasury
Regulation Section 1.409A-1(b)(5)(v)(B). Any adjustments made under this
Section 4(b) shall be made in a manner which does not adversely affect the
exemption provided pursuant to Rule 16b-3. For the avoidance of doubt, the
number of Shares subject to any Award payable or denominated in Shares shall
always be a whole number. The Company shall give each Participant notice of an
adjustment hereunder and, upon notice, such adjustment shall be conclusive and
binding for all purposes.

Section 5.    Eligibility

(a) The Committee may designate any Employee as a Participating Employee. All
Participating Consultants and Non-Employee Directors shall be eligible to
receive, at the discretion of the Committee, Awards of Shares pursuant to
Section 6(a), Non-Qualified Stock Options pursuant to Section 6(b), Restricted
Stock pursuant to Section 6(d) and Restricted Stock Units pursuant to
Section 6(e). For the avoidance of doubt, Incentive Stock Options may only be
granted to Participating Employees.

(b) A Ten Percent Shareholder shall not be granted an Incentive Stock Option
unless the Exercise Price is at least 110% of the Fair Market Value of the
Shares on the Grant Date and the Option is not exercisable after the expiration
of five (5) years from the Grant Date.

 

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Section 6.    Awards

(a) Share Awards.

(i) Issuance. The Committee may grant Awards of Shares to Participants.

(ii) Registration. Any Shares granted under the Plan to a Participant may be
evidenced in such manner as the Committee may deem appropriate, including,
without limitation, book-entry registration or issuance of a stock certificate
or certificates.

(b) Option Awards. The Committee may grant Options to Employees, Consultants and
Non-Employee Directors with the terms and conditions as set forth below and with
such additional terms and conditions, in either case not inconsistent with the
provisions of the Plan, as the Committee shall determine.

(i) Type of Option. The Committee shall determine whether an Option granted to a
Participant is to be an Incentive Stock Option or Non-Qualified Stock Option;
provided, however, that Incentive Stock Options may be granted only to Employees
of the Company, a parent corporation (within the meaning of Code Section 424(e))
or a subsidiary corporation (within the meaning of Code Section 424(f)). All
Options granted to Non-Employee Directors and Consultants shall be Non-Qualified
Stock Options. Non-Qualified Stock Options granted to individuals who are not
Employees or Non-Employee Directors of the Company or any 409A Subsidiary may be
subject to Code Section 409A. Notwithstanding the foregoing, the Company shall
have no liability to any Participant or any other person if an Option designated
as an Incentive Stock Option fails to qualify as such at any time or if an
Option is determined to constitute “nonqualified deferred compensation” within
the meaning of Section 409A of the Code and the terms of such Option do not
satisfy the requirements of Section 409A of the Code.

(ii) Exercise Price. The exercise price per Share of an Option (the “Exercise
Price”) granted pursuant to this Section 6(a) shall be determined by the
Committee; provided, however, that such Exercise Price shall not be less than
100% of the Fair Market Value of a Share on the Grant Date of such Option.
Notwithstanding the foregoing, an Incentive Stock Option may be granted with an
Exercise Price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option
in a manner satisfying the provisions of Section 424(a) of the Code, and a
Non-Qualified Stock Option may be granted with an Exercise Price lower than set
forth in the preceding sentence if such Option is granted pursuant to an
assumption or substitution of another option in a manner satisfying the
provisions of Section 409A of the Code.

 

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(iii) Option Term. The term of each Option shall be fixed by the Committee;
provided, however, that in no event shall the term of any Option exceed a period
of ten (10) years from the Grant Date. For the avoidance of doubt, the term of
an Incentive Stock Option granted to a Ten Percent Shareholder shall not exceed
a period of five (5) years from the Grant Date.

(iv) Exercisability and Method of Exercise. An Option shall become exercisable
in such manner and within such period or periods and in such installments or
otherwise as shall be determined by the Committee; provided, however, that no
Option may vest and become exercisable within a period that is less than one
year from the Grant Date of such Option (subject to acceleration of vesting, to
the extent permitted by the Committee, in the event of the Participant’s death,
Disability, retirement or involuntary termination or in the event of a Change in
Control). The Committee also shall determine the method or methods by which, and
the form or forms, including, without limitation, (A) cash or certified check,
(B) delivery of other Shares duly endorsed for transfer to the Company or by
means of attestation whereby the Participant identifies for delivery specific
Shares that have an aggregate Fair Market Value on the date of attestation equal
to the Exercise Price (or portion thereof) and receives a number of Shares equal
to the difference between the number of Shares thereby purchased and the number
of identified attestation Shares (i.e., by means of a “stock for stock
exchange”); (C) if the Shares are listed on any established stock exchange or
national market system, through the delivery of irrevocable instructions to a
broker to deliver promptly to the Company an amount equal to the Exercise Price
(i.e., by means of a “cashless” exercise procedure); (D) by reduction in the
number of Shares otherwise deliverable upon the exercise of such Option with a
Fair Market Value equal to the aggregate Exercise Price at the time of exercise
(i.e., by means of a “net exercise”); or any combination thereof, having a Fair
Market Value on the exercise date equal to the relevant Exercise Price, in which
payment of the Exercise Price with respect to any Option may be made or deemed
to have been made. Unless otherwise specifically provided for in the Award
Agreement, the Exercise Price of Shares acquired pursuant to an Option that is
paid by delivery or attestation to the Company of other Shares acquired directly
or indirectly from the Company shall be paid only by Shares that have been held
for more than six (6) months (or such longer or shorter period of time required
to avoid a charge to earnings for financial accounting purposes).
Notwithstanding the foregoing, during any period for which the Shares are
publicly traded (i.e., listed on any established stock exchange or a national
market system), an exercise by a Non-Employee Director or officer of the Company
that involves or may involve a direct or indirect extension of credit or
arrangement of an extension of credit by the Company, directly or indirectly, in
violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be
prohibited with respect to any Award under this Plan.

 

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(v) Incentive Stock Options.

 

  (1)

General. The terms of any Incentive Stock Option granted to an Employee under
the Plan shall comply in all respects with the provisions of Section 422 of the
Code and any regulations promulgated thereunder. Notwithstanding any provision
in the Plan to the contrary, no Incentive Stock Option may be granted hereunder
after the tenth (10th) anniversary of the Effective Date hereof.

 

  (2)

Transferability. An Incentive Stock Option shall not be transferable except by
will or the laws of descent and distribution and shall be exercisable during the
life of the Optionholder only by the Optionholder. Notwithstanding the
foregoing, the Optionholder may, by delivering written notice to the Company, in
a form satisfactory to the Company, designate a third party who, in the event of
the death of the Optionholder, shall thereafter be entitled to exercise the
Option.

 

  (3)

Limitation. To the extent that the aggregate Fair Market Value (determined as of
the Grant Date) of Shares with respect to which Incentive Stock Options are
exercisable for the first time by any Optionholder during any calendar year
(under all plans of the Company and its Affiliates) exceeds $100,000, the
Options or portions thereof which exceed such limitation (according to the order
in which they were granted) shall be treated as Non-Qualified Stock Options.

(vi) Non-Qualified Stock Options Transferability. A Non-Qualified Stock Option
may, in the sole discretion of the Committee, be transferable to a Permitted
Transferee upon written approval by the Committee to the extent provided for in
the Award Agreement. If the Non-Qualified Stock Option does not provide for
transferability, then the Non-Qualified Stock Option shall not be transferable
except by will or by the laws of descent and distribution and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder.
Notwithstanding the foregoing, the Optionholder may, by delivering written
notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be
entitled to exercise the Option.

(vii) Termination of Continuous Service. At the Committee’s sole discretion,
unless otherwise provided in an Award Agreement or in an employment agreement
the terms of which have been approved by the Committee, in the event that an
Optionholder’s Continuous Service terminates (other than upon the Optionholder’s
death or Disability), the Optionholder may exercise his or her Option (to the
extent that the Optionholder was entitled to exercise such Option as of the date
of termination), but only within such period of

 

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time ending on the earlier of (a) the date three (3) months following the
termination of the Optionholder’s Continuous Service or (b) the expiration of
the term of the Option as set forth in the Award Agreement; provided that, if
the termination of Continuous Service is by the Company for Cause, all
outstanding Options (whether or not vested) shall immediately terminate and
cease to be exercisable. If, after termination, the Committee grants the
Optionholder such an ability to exercise his or her Option within the time
specified in the Award Agreement, and the Optionholder declines to do so, the
Option shall automatically terminate.

(viii) Disability of Optionholder. Unless otherwise provided in an Award
Agreement, in the event that an Optionholder’s Continuous Service terminates as
a result of the Optionholder’s Disability, the Optionholder may exercise his or
her Option (to the extent that the Optionholder was entitled to exercise such
Option as of the date of termination), but only within the period of time ending
on the earlier of (a) the date twelve (12) months following such termination or
(b) the expiration of the term of the Option as set forth in the Award
Agreement. If, after termination, the Optionholder does not exercise his or her
Option within the time specified herein or in the Award Agreement, the Option
shall terminate.

(ix) Death of Optionholder. Unless otherwise provided in an Award Agreement, in
the event that an Optionholder’s Continuous Service terminates as a result of
the Optionholder’s death, the Option may be exercised (to the extent that the
Optionholder was entitled to exercise such Option as of the date of termination)
by the Optionholder’s estate, by a person who acquired the right to exercise the
Option by bequest or inheritance or by a person designated to exercise the
Option upon the Optionholder’s death, but only the period of time ending on the
earlier of (a) the date twelve (12) months following the date of death or
(b) the expiration of the term of the Option as set forth in the Award
Agreement. If, after the Optionholder’s death, the Option is not exercised
within the time specified herein or in the Award Agreement, the Option shall
terminate.

(c) Stock Appreciation Rights. The Committee may grant Stock Appreciation Rights
to Participants. Non-Employee Directors are not eligible to be granted Stock
Appreciation Rights under the Plan. Stock Appreciation Rights granted to a
Participant who is not an employee of the Company or 409A Subsidiary shall be
subject to Section 409A of the Code. Subject to the terms of the Plan and any
applicable Award Agreement, a Stock Appreciation Right granted under the Plan
shall confer on the holder thereof a right to receive, upon exercise thereof,
the excess of (i) the Fair Market Value of one Share on the date of exercise
over (ii) the grant price of the Stock Appreciation Right as specified by the
Committee, which shall not be less than 100% of the Fair Market Value of one
Share on the Grant Date of the Stock Appreciation Right. Payment shall be made
in the form of Shares (with or without restrictions as to substantial risk of
forfeiture and transferability, as determined by the Committee in its sole
discretion), cash, or a combination thereof, as determined by the Committee. No
Stock Appreciation Right may be exercised for a fraction of a Share. Subject to
the terms of the Plan, the grant price,

 

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term, methods of exercise, methods of settlement (including whether the
Participant will be paid in cash, Shares, other securities, other Awards, or
other property, or any combination thereof), and any other terms and conditions
of any Stock Appreciation Right shall be determined by the Committee. The
Committee may impose such conditions or restrictions on the exercise of any
Stock Appreciation Right as it may deem appropriate.

(d) Restricted Awards.

(i) General. A Restricted Award is an Award of actual Shares (“Restricted
Stock”) or hypothetical common stock units (“Restricted Stock Units”) having a
value equal to the Fair Market Value of an identical number of Shares, which
may, but need not, provide that such Restricted Award may not be sold, assigned,
transferred or otherwise disposed of, pledged or hypothecated as collateral for
a loan or as security for the performance of any obligation or for any other
purpose for such period (the “Restricted Period”) as the Committee shall
determine. Each Restricted Award granted under the Plan shall be evidenced by an
Award Agreement. Each Restricted Award so granted shall be subject to the
conditions set forth in this Section 6(d) and to such other conditions not
inconsistent with the Plan as may be reflected in the applicable Award
Agreement.

(ii) Issuance. The Committee may grant Restricted Awards to Participants. If the
Committee determines that the Restricted Stock shall be held by the Company or
in escrow rather than delivered to the Participant pending the release of the
applicable restrictions, the Committee may require the Participant to execute
and deliver to the Company (A) an escrow agreement satisfactory to the
Committee, if applicable and (B) the appropriate blank stock power with respect
to the Restricted Stock covered by such agreement.

(iii) Payment. At the end of the applicable Restricted Period, one or more stock
certificates for the appropriate number of Shares or the number of Shares equal
to the corresponding number of Restricted Stock Units, as applicable, shall be
delivered to the Participant, or, if the Participant received stock certificates
representing Restricted Stock at the time of grant, the legends placed on such
certificates shall be removed.

(iv) Forfeiture. Except as otherwise determined by the Committee, upon
termination of employment of a Participating Employee, service as a consultant
of a Participating Consultant, or service as a director of a Non-Employee
Director (as determined under criteria established by the Committee) for any
reason during the applicable restriction period, all Shares of Restricted Stock
still subject to restriction and unvested Restricted Stock Units shall be
forfeited by the Participant; provided, however, that the Committee may, when it
finds that a waiver would be in the best interests of the Company, waive in
whole or in part any or all remaining restrictions with respect to Shares of
Restricted Stock or Restricted Stock Units held by a Participant.

 

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(v) Restricted Stock.

 

  (1)

Registration. Any Restricted Stock granted under the Plan to a Participant may
be evidenced in such manner as the Committee may deem appropriate, including,
without limitation, book-entry registration or issuance of a stock certificate
or certificates. In the event any stock certificate is issued in respect of
Shares of Restricted Stock granted under the Plan to a Participant, such
certificate shall be registered in the name of the Participant and shall bear an
appropriate legend (as determined by the Committee) referring to the terms,
conditions, and restrictions applicable to such Restricted Stock.

 

  (2)

Dividends. Subject to the restrictions set forth in the Award Agreement, the
Participant generally shall have rights and privileges of a stockholder as to
such Restricted Stock, including the right to vote and the right to receive
dividends; provided that, any cash dividends and stock dividends with respect to
the Restricted Stock shall be withheld by the Company for the Participant’s
account, and interest may be credited on the amount of the cash dividends
withheld at a rate and subject to the terms as determined by the Committee. The
cash dividends or stock dividends so withheld by the Committee and attributable
to any particular share of Restricted Stock (and earnings thereon, if
applicable) shall be distributed to the Participant in cash, or at the
discretion of the Committee, in Shares having a Fair Market Value equal to the
amount of such dividends, if applicable, upon the release of restrictions on
such share and, if such share is forfeited, the Participant shall have no right
to dividends.

(vi) Restricted Stock Unit Dividends. At the discretion of the Committee, each
Restricted Stock Unit (representing one Share) may be credited Dividend
Equivalents as discussed below in Section 6(g).

(e) Performance Shares and Performance Units.

(i) Issuance. The Committee may grant Awards of Performance Shares and/or
Performance Units to Participating Employees. Participating Consultants and
Non-Employee Directors are not eligible to be granted Performance Shares or
Performance Units under the Plan.

(ii) Performance Goals and Other Terms. The Committee shall determine the
Performance Period; the Performance Goal or Goals (and the performance level or
levels related thereto) to be achieved during any Performance Period; the
proportion of payments, if any, to be made for performance between the minimum
and full performance levels for any Performance Goal; and, if applicable, the
relative percentage weighting given to

 

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each of the selected Performance Goals. The Committee shall also determine the
restrictions applicable to Shares of Restricted Stock or Restricted Stock Units
received upon payment of Performance Shares or Performance Units if Performance
Shares or Performance Units are paid in such manner, and any other terms,
conditions and rights relating to a grant of Performance Shares or Performance
Units. The Committee shall have sole discretion to choose among the selected
Performance Goals set forth in Section 2(cc). The Committee shall have sole
discretion to choose Performance Goals in addition to those set forth in
Section 2(cc), or alter such Performance Goals.

(iii) No Voting Rights. Participants shall have no voting rights with respect to
Performance Shares or Shares underlying Performance Units held by them during
the applicable Performance Period.

(iv) Payment. As soon as is reasonably practicable following the end of the
applicable Performance Period, and subject to the Committee certifying in
writing as to the satisfaction of the requisite Performance Goal or Goals,
payment of earned Performance Shares and/or Performance Units shall be made. The
Committee, in its sole discretion, may pay earned Performance Shares and
Performance Units in the form of cash, Shares (which may be Shares of Restricted
Stock), Restricted Stock Units or a combination of cash, Shares (which may be
Shares of Restricted Stock) and/or Restricted Stock Units, which have an
aggregate Fair Market Value equal to the value of the earned Performance Shares
and Shares underlying earned Performance Units at the close of the applicable
Performance Period. Any Shares of Restricted Stock payable in connection with
Performance Shares or Performance Units shall, pending the expiration, lapse, or
waiver of the applicable restrictions, be evidenced in the manner as set forth
in Section 6(d)(ii) hereof.

(f) General.

(i) No Consideration for Awards. Awards shall be granted to Participants for no
cash consideration unless otherwise determined by the Committee.

(ii) Award Agreements. Each Award granted under the Plan shall be evidenced by
an Award Agreement in such form (consistent with the terms of the Plan) as shall
have been approved by the Committee.

(iii) Awards May Be Granted Separately or Together. Awards to Participating
Employees under the Plan may be granted either alone or in addition to, in
tandem with, or in substitution for any other Award or any award granted under
any other plan of the Company or any Affiliate. Awards granted in addition to or
in tandem with other Awards, or in addition to or in tandem with awards granted
under any other plan of the Company or any Affiliate, may be granted either at
the same time as or at a different time from the grant of such other Awards or
awards.

 

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(iv) Forms of Payment Under Awards. Subject to the terms of the Plan and of any
applicable Award Agreement, payments or transfers to be made by the Company or
an Affiliate upon the grant, exercise, or payment of an Award to a Participant
may be made in such form or forms as the Committee shall determine, and may be
made in a single payment or transfer, in installments, or on a deferred basis;
provided that deferrals shall not be permitted with respect to Options and Stock
Appreciation Rights; and further provided that any such deferrals shall be made
in a manner that complies with Section 409A of the Code, in each case in
accordance with rules and procedures established by the Committee. Such rules
and procedures may include, without limitation, provisions for the payment or
crediting of interest on installment or deferred payments.

(v) Limits on Transfer of Awards. Except as otherwise provided by the Committee,
no Award (other than Shares and Released Securities), and no right under any
such Award, shall be assignable, alienable, saleable, or transferable by a
Participant otherwise than by will or by the laws of descent and distribution
(or, in the case of an Award of Restricted Securities, to the Company);
provided, however, that a Participant at the discretion of the Committee may be
entitled, in the manner established by the Committee, to designate a beneficiary
or beneficiaries to exercise his or her rights, and to receive any property
distributable, with respect to any Award upon the death of the Participant, as
the case may be. Each Award and each right under any Award shall be exercisable
during the lifetime of the Participant only by such individual or, if
permissible under applicable law, by such individual’s guardian or legal
representative. Except as otherwise provided by the Committee, no Award (other
than Shares and Released Securities) and no right under any such Award may be
pledged, alienated, attached, or otherwise encumbered, and any purported pledge,
alienation, attachment, or encumbrance thereof shall be void and unenforceable
against the Company or any Affiliate. Notwithstanding any of the foregoing,
Incentive Stock Options shall not be transferable other than by will or the laws
of descent and distribution.

(vi) Term of Awards. Except as otherwise provided in the Plan, the term of each
Award shall be for such period as may be determined by the Committee.

(vii) Share Certificates; Representation. In addition to the restrictions
imposed pursuant to Section 6(d) and Section 6(e) hereof, all certificates for
Shares delivered under the Plan pursuant to any Award or the exercise thereof
shall be subject to such stop transfer orders and other restrictions as the
Committee may deem advisable under the Plan or the rules, regulations, and other
requirements of the Commission, any stock exchange or other market upon which
such Shares are then listed or traded, and any applicable federal or state
securities laws, and the Committee may cause a legend or legends to be put on
any such certificates to make appropriate reference to such restrictions. The
Committee may require each Participant or other Person who acquires Shares under
the Plan by means of an Award originally made to a Participant to represent to
the Company in writing that such Participant or other Person is acquiring the
Shares without a view to the distribution thereof.

 

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(g) Dividend Equivalents. In addition to Awards granted under the Plan, the
Committee may grant Dividend Equivalents to Participants, entitling the
Participants to receive cash equal to cash dividends paid with respect to a
specified number of Shares. Dividend Equivalents may only be granted in
connection with an Award granted to the Participant under the Plan. The
Committee may provide that Dividend Equivalents shall be paid or distributed
when accrued or shall be deemed to have been reinvested in such investment
vehicles as determined by the Committee, subject to such restrictions and risks
of forfeiture as the Committee may impose. Notwithstanding the foregoing,
Dividend Equivalents granted in connection with an Option or Stock Appreciation
Right that is intended to be exempt from Code Section 409A shall be set forth in
a separate Award Agreement and shall be payable at such time or times as are
permitted by Code Section 409A.

(h) No Repricing of Options or Stock Appreciation Rights. Except adjustments
made pursuant to Section 4(b) or adjustments made with prior approval of the
Company’s shareholders, and only in the manner that would be permitted by
Section 409A of the Code, the Committee shall not have the authority to effect
(i) the repricing of any outstanding Options or Stock Appreciation Rights under
the Plan or (ii) the modification of an Option or Stock Appreciation Rights or
entering into a transaction or series of transactions which modification or
transaction(s) would be deemed to constitute a repricing of an Option or Stock
Appreciation Right for financial accounting purposes. The provisions of this
Section 6(h) cannot be amended unless the amendment is approved by the Company’s
shareholders. Notwithstanding the foregoing, even with shareholder approval, for
purposes of Code Section 409A, the Exercise Price of an Option or the grant
price of a Stock Appreciation Right may not be reduced other than (i) pursuant
to Section 4(b) of the Plan, and in accordance with Section 1.409A-1(b)(5)(v)(B)
of the Treasury Regulations, or (ii) in connection with a transaction which is
considered the grant of a new award for purposes of Section 409A of the Code,
provided that the new Exercise Price or grant price is not less than Fair Market
Value of a Share on the new Grant Date.

Section 7.    Amendment and Termination of the Plan; Correction of Defects and
Omissions; Issuance or Assumption; Amendment, Modification or Cancellation of
Awards

(a) Amendments to and Termination of the Plan. Except as otherwise provided
herein, the Board or the Committee may at any time amend, alter, suspend,
discontinue, or terminate the Plan; provided, however, that shareholder approval
of any amendment of the Plan shall also be obtained (i) if such amendment
(A) increases the number of Shares with respect to which Awards may be granted
under the Plan (other than increases related to adjustments made as provided in
Section 4(b) hereof), (B) expands the class of persons eligible to participate
under the Plan or (C) otherwise increases in any material respect the benefits
payable under the Plan; or (ii) if otherwise required by (A) the Code or any
rules promulgated thereunder (in order to allow for Incentive Stock Options to
be granted under the Plan), or (B) the listing requirements of

 

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NASDAQ or any other principal securities exchange or market on which the Shares
are then traded (in order to maintain the listing of the Shares thereon). The
Plan shall automatically terminate on the tenth (10th) anniversary of the
Effective Date. No Award shall be granted pursuant to the Plan after such date.
Termination of the Plan shall not affect the rights of Participating Employees,
Participating Consultants or Non-Employee Directors with respect to Awards
previously granted to them, and all unexpired Awards shall continue in force and
effect after termination of the Plan except as they may lapse or be terminated
by their own terms and conditions.

(b) Correction of Defects, Omissions and Inconsistencies. The Committee may
correct any defect, supply any omission, or reconcile any inconsistency in the
Plan, any Award or any Award Agreement in the manner and to the extent it shall
deem desirable to carry the Plan into effect. It is expressly contemplated that
the Board or the Committee may amend the Plan in any respect the Board or the
Committee deems necessary or advisable to provide eligible Participating
Employees, Participating Consultants and Non-Employee Directors with the maximum
benefits provided or to be provided under the provisions of the Code and the
regulations promulgated thereunder relating to Incentive Stock Options or to the
nonqualified deferred compensation provisions of Section 409A of the Code and/or
to bring the Plan and/or Award granted under it into compliance therewith.

(c) Issuance or Assumption. Notwithstanding any other provision of this Plan,
and without affecting the number of Shares otherwise reserved or available under
this Plan, in connection with any merger, consolidation, acquisition of property
or stock, or reorganization, the Committee may authorize the assumption of
awards under this Plan, or the issuance of awards in replacement of awards
granted by the entity being merged, consolidated or acquired, upon such terms
and conditions as it may deem appropriate.

(d) Amendment, Modification or Cancellation of Awards. Except as provided in
Section 6(h) and subject to the requirements of the Plan, the Board or the
Committee may modify, amend or cancel any Award; or waive any restrictions or
conditions applicable to any Award or the exercise of the Award, provided that
any modification or amendment that materially diminishes the rights of the
Participant, or the cancellation of the Award, shall be effective only if agreed
to by the Participant or any other person(s) as may then have an interest in the
Award, but the Board or the Committee need not obtain the consent of the
Participant (or other interested party) for the adjustment or cancellation of an
Award pursuant to the provisions of Section 4(b) or the modification of an Award
to the extent deemed necessary to comply with any applicable law, the listing
requirements of any principal securities exchange or market on which the Shares
are then traded, or to preserve favorable accounting or tax treatment of any
Award for the Company. Notwithstanding the foregoing, unless determined
otherwise by the Board or the Committee, any such amendment shall be made in a
manner that will enable an Award intended to be exempt from Code Section 409A to
continue to be so exempt, or to enable an Award intended to comply with Code
Section 409A to continue to so comply.

 

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(e) No Impairment of Rights. Rights under any Award granted before amendment of
the Plan shall not be impaired by any amendment of the Plan unless (i) the
Company requests the consent of the Participant and (ii) the Participant
consents in writing.

Section 8.    Impact of Change in Control

(a) Unless otherwise provided in an Award Agreement, notwithstanding any
provision of the Plan to the contrary:

(i) Time-Based Awards. In the event of a Participant’s termination of Continuous
Service without Cause or for Good reason during the 12-month period following a
Change in Control, all outstanding Options and Stock Appreciation Rights shall
become immediately exercisable with respect to 100% of the Shares subject to
such Options or Stock Appreciation Rights, and/or the Restricted Period shall
expire immediately with respect to 100% of the outstanding Shares of Restricted
Stock or Restricted Stock Units as of the date of the Participant’s termination
of Continuous Service.

(ii) Performance-Based Awards. In the event of a Change in Control, all
incomplete Performance Periods with respect to Performance Shares and
Performance Units in effect on the date the Change in Control occurs shall end
on the date of such event and the Committee shall (A) determine the extent to
which Performance Goals with respect to each such Performance Period have been
met based upon such audited or unaudited financial information then available as
it deems relevant and (B) cause to be paid to the applicable Participant partial
or full Awards with respect to Performance Goals for each such Performance
Period based upon the Committee’s determination of the degree of attainment of
Performance Goals or, if not determinable, assuming that the applicable “target”
levels of performance have been attained, or on such other basis determined by
the Committee. In the event of a Participant’s termination of Continuous Service
without Cause or for Good Reason, in either case, during the 12-month period
following a Change in Control, all Performance Goals or other vesting criteria
will be deemed achieved at 100% of target levels and all other terms and
conditions will be deemed met as of the date of the Participant’s termination of
Continuous Service.

To the extent practicable, any actions taken by the Committee under the
immediately preceding clauses (i) and (ii) shall occur in a manner and at a time
which allows affected Participants the ability to participate in the Change in
Control with respect to the Shares subject to their Awards.

(b) Cancellation. In addition, in the event of a Change in Control, the
Committee may in its discretion and upon at least ten (10) days advance written
notice to the affected persons cancel any outstanding Awards and pay to the
holders thereof, in cash, stock, or any combination thereof, the value of such
Awards based upon the price per Share received or to be received by other
shareholders of the Company in the event. In the case of any Option or Stock
Appreciation Right with an Exercise Price that equals or exceeds the price paid
for each Share in connection with the Change in Control, the Committee may
cancel the Option or Stock Appreciation Right without the payment of
consideration therefor.

 

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(c) Successor Employer. The obligations of the Company under the Plan shall be
binding upon any successor corporation or organization resulting from the
merger, consolidation, or other reorganization of the Company, or upon any
successor corporation or organization succeeding to all or substantially all of
the assets and business of the Company and its Affiliates, taken as a whole.

Section 9.    General Provisions

(a) No Rights to Awards. No Employee, Participating Employee, Participating
Consultant, Non-Employee Director or other Person shall have any claim to be
granted any Award under the Plan, and there is no obligation for uniformity of
treatment of Employees, Participating Employees, Participating Consultants,
Non-Employee Directors or holders or beneficiaries of Awards under the Plan. The
terms and conditions of Awards need not be the same with respect to each
Participant.

(b) Regulations and Other Approvals.

(i) The obligation of the Company to sell or deliver Shares with respect to any
Award granted under the Plan shall be subject to all applicable laws, rules and
regulations, including all applicable federal and state securities laws and the
applicable laws, rules and regulations of non-U.S. jurisdictions, and the
obtaining of all such approvals by governmental agencies as may be deemed
necessary or appropriate by the Committee.

(ii) Each Award is subject to the requirement that, if at any time the Committee
determines, in its absolute discretion, that the listing, registration or
qualification of Shares issuable pursuant to the Plan is required by any
securities exchange or under any state or federal law or any applicable law,
rule or regulation of a non-U.S. jurisdiction, or the consent or approval of any
governmental regulatory body is necessary or desirable as a condition of, or in
connection with, the grant of an Award or the issuance of Shares, no such Award
shall be granted or payment made or Shares issued, in whole or in part, unless
listing, registration, qualification, consent or approval has been effected or
obtained free of any conditions not acceptable to the Committee. If, after
reasonable efforts, the Company is unable to obtain from any such governmental
regulatory body the authority which counsel for the Company deems necessary for
the lawful issuance and sale of Shares under the Plan, the Company shall be
relieved from any liability for failure to issue and sell Shares upon exercise
of such Awards unless and until such authority is obtained.

(iii) In the event that the disposition of a Share acquired pursuant to the Plan
is not covered by a then current registration statement under the Securities

 

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Act of 1933, as amended from time to time (the “Securities Act”) and is not
otherwise exempt from such registration, such Share shall be restricted against
transfer to the extent required by the Securities Act or regulations thereunder,
and the Company may require any individual receiving a Share pursuant to the
Plan, as a condition precedent to receipt of such Share, to represent to the
Company in writing that the Share acquired by such individual is acquired for
investment only and not with a view to distribution.

(iv) The Company may require an individual receiving a Share pursuant to the
Plan, as a condition precedent to receipt of such Share, to enter into a
stockholder agreement or “lock-up” agreement in such form as the Company shall
determine is necessary or desirable to further the Company’s interests.

(c) Withholding. No later than the date as of which tax withholding is first
required with respect to any Award under the Plan, the Participating Employee
shall pay to the Company, or make arrangements satisfactory to the Company
regarding the payment of, any federal, state, local or foreign taxes of any kind
required by Applicable Law to be withheld with respect to such amount. Unless
otherwise determined by the Committee, withholding obligations arising with
respect to Awards to Participating Employees under the Plan may be settled with
Shares (other than Restricted Securities), including Shares that are part of, or
are received upon exercise of, the Award that gives rise to the withholding
requirement. If the Shares are listed on any established stock exchange or a
national market system, then the withholding obligation may be satisfied through
the delivery of irrevocable instructions to a broker to deliver promptly to the
Company an amount equal to the tax required to be withheld by Applicable Law
(i.e., by means of a cashless exercise procedure). The obligations of the
Company under the Plan shall be conditional on such payment or arrangements, and
the Company and any Affiliate shall, to the extent permitted by law, have the
right to deduct any such taxes from any payment otherwise due to the
Participating Employee. The Committee may establish such procedures as it deems
appropriate for the settling of withholding obligations with Shares, including,
without limitation, the establishment of such procedures as may be necessary to
satisfy the requirements of Rule 16b-3.

(d) No Limit on Other Compensation Arrangements. Nothing contained in the Plan
shall prevent the Company or any Affiliate from adopting or continuing in effect
other or additional compensation arrangements, and such arrangements may be
either generally applicable or applicable only in specific cases.

(e) Rights and Status of Recipients of Awards. The grant of an Award shall not
be construed as giving a Participating Employee the right to be retained in the
employ of the Company or any Affiliate. Further, the Company or any Affiliate
may at any time dismiss a Participating Employee from employment, free from any
liability, or any claim under the Plan, unless otherwise expressly provided in
the Plan or in any Award Agreement. The grant of an Award pursuant to Section 6
of the Plan shall not be construed as giving a Participating Consultant the
right to be retained in the service of the Company or any Affiliate. The grant
of an Award to a Non-Employee Director pursuant

 

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to Section 6 of the Plan shall confer no right on such Non-Employee Director to
continue as a director of the Company or any Affiliate. Except for rights
accorded under the Plan and under any applicable Award Agreement, Participants
shall have no rights as holders of Shares as a result of the granting of Awards
hereunder.

(f)    No Compensation for Benefit Plans. No Award payable under this Plan shall
be deemed salary or compensation for the purpose of computing benefits under any
benefit plan or other arrangement of the Company or any Affiliate for the
benefit of its employees or directors unless the Company or appropriate
Affiliate shall determine otherwise.

(g)    Unfunded Status of the Plan. Unless otherwise determined by the
Committee, the Plan shall be unfunded and shall not create (or be construed to
create) a trust or a separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any Participant or other Person.
To the extent any Person holds any right by virtue of a grant under the Plan,
such right (unless otherwise determined by the Committee) shall be no greater
than the right of a general unsecured creditor of the Company. For the avoidance
of doubt, proceeds from the sale of Shares pursuant to Awards, or upon exercise
thereof, shall constitute general funds of the Company.

(h)    Governing Law. The validity, construction, and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with the internal laws of the State of Illinois, without reference to conflict
of law principles thereof, and applicable federal law.

(i)    Severability. If any provision of the Plan or any Award Agreement or any
Award is or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction, or as to any Person or Award, or would disqualify the Plan, any
Award Agreement or any Award under any law deemed applicable by the Committee,
such provision shall be construed or deemed amended to conform to applicable
laws, or if it cannot be so construed or deemed amended without, in the
determination of the Committee, materially altering the intent of the Plan, any
Award Agreement or the Award, such provision shall be stricken as to such
jurisdiction, Person, or Award, and the remainder of the Plan, any such Award
Agreement and any such Award shall remain in full force and effect.

(j)    No Fractional Shares. No fractional Shares or other securities shall be
issued or delivered pursuant to the Plan, any Award Agreement or any Award, and
the Committee shall determine (except as otherwise provided in the Plan) whether
cash, other securities, or other property shall be paid or transferred in lieu
of any fractional Shares or other securities, or whether such fractional Shares
or other securities or any rights thereto shall be canceled, terminated, or
otherwise eliminated.

(k)    Headings. Headings are given to the Sections and subsections of the Plan
solely as a convenience to facilitate reference. Such headings shall not be
deemed in any way material or relevant to the construction or interpretation of
the Plan or any provision thereof.

 

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(l) No Guarantee of Tax Treatment. Notwithstanding any provision of the Plan,
the Company does not guarantee to any Participant or any other Person with an
interest in an Award that (i) any Award intended to be exempt from Code
Section 409A shall be so exempt, (ii) any Award intended to comply with Code
Section 409A or Code Section 422 shall so comply, (iii) any Award shall
otherwise receive a specific tax treatment under any other applicable tax law,
nor in any such case will the Company or any Affiliate indemnify, defend or hold
harmless any individual with respect to the tax consequences of any Award.

(m) Acceleration of Exercisability and Vesting. The Committee has the power to
accelerate the time at which an Award may first be exercised or the time during
which an Award or any part thereof will vest in accordance with the Plan,
notwithstanding the provisions in the Award stating the time at which it may
first be exercised or the time during which it will vest.

(n) Stockholders Rights. Except as provided in the Plan or an Award Agreement,
no Participant shall be deemed to be the holder of, or to have any of the rights
of a holder with respect to, any Shares subject to such Award unless and until
such Participant has satisfied all requirements for exercise of the Award
pursuant to its terms and no adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or distributions
of other rights for which the record date is prior to the date such Share
certificate is issued, except as provided in Section 4(b) above.

(o) No Employment or Other Service Rights. Nothing in the Plan or any instrument
executed or Award granted pursuant thereto shall confer upon any Participant any
right to continue to serve the Company or an Affiliate in the capacity in effect
at the time the Award was granted or shall affect the right of the Company or an
Affiliate to terminate (i) the employment of an Employee or the service of a
Consultant with or without notice and with or without Cause or (ii) the service
of a Non-Employee Director pursuant to the Bylaws of the Company or an Affiliate
and any applicable provisions of the corporate law of the state in which the
Company or the relevant Affiliate is incorporated.

(p) Transfer; Approved Leave of Absence. For purposes of the plan, no
termination of employment by an Employee shall be deemed to result from either
(i) a transfer of employment to the Company from an Affiliate or from the
Company to an Affiliate, or from one Affiliate to another, or (ii) an approved
leave of absence for military service or sickness, or for any other purpose
approved by the Company, if the Employee’s right to reemployment is guaranteed
by a statute, by contract, under the policy pursuant to which the leave of
absence was granted, or if the Committee otherwise so provides in writing, in
each case, except to the extent inconsistent with Section 409A of the Code if
the applicable Award is subject thereto.

 

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(q) Forfeiture Events. The Committee may specify in an Award Agreement that the
Participant’s rights, payments and benefits with respect to an Award shall be
subject to reduction, cancellation, forfeiture, or recoupment upon the
occurrence of certain events, in addition to applicable vesting conditions of an
Award. Such events may include, without limitation, breach of non-competition,
non-solicitation, confidentiality, or other restrictive covenants that are
contained in the Award Agreement or otherwise applicable to the Participant; a
termination of the Participant’s Continuous Service for Cause; or other conduct
by the Participant that is detrimental to the business or reputation of the
Company and/or its Affiliates.

(r) Clawback. Notwithstanding any other provisions in the Plan, the Company may
cancel any Award, require reimbursement of any Award by a Participant, and
affect any other right of recoupment of equity or other compensation provided
under the Plan in accordance with any Company policies that may be adopted
and/or modified from time to time (the “Clawback Policy”). In addition, a
Participant may be required to repay to the Company previously paid
compensation, whether provided pursuant to the Plan or an Award Agreement, in
accordance with the Clawback Policy. By accepting an Award, the Participant is
agreeing to be bound by the Clawback Policy, as in effect or as may be adopted
and/or modified from time to time by the Company in its discretion (including,
without limitation, to comply with Applicable Law or stock exchange listing
requirements).

(s) Other Compensation Arrangements. Nothing contained in this Plan shall
prevent the Board from adopting other or additional compensation arrangements,
subject to shareholder approval if such approval is required; and such
arrangements may be either generally applicable or applicable only in specific
cases.

(t) Section 409A. The Plan is intended to comply with Section 409A of the Code
to the extent subject thereto and, accordingly, to the maximum extent permitted,
the Plan shall be interpreted and administered to be in compliance therewith.
Any payments described in the Plan that are due within the “short-term deferral
period” as defined in Section 409A of the Code shall not be treated as deferred
compensation unless Applicable Laws require otherwise. Notwithstanding anything
to the contrary in the Plan, to the extent required to avoid accelerated
taxation and tax penalties under Section 409A of the Code, amounts that would
otherwise be payable and benefits that would otherwise be provided pursuant to
the Plan during the six (6) month period immediately following the Participant’s
termination of Continuous Service shall instead be paid on the first payroll
date after the six-month anniversary of the Participant’s separation from
service (or the Participant’s death, if earlier). Notwithstanding the foregoing,
neither the Company nor the Committee shall have any obligation to take any
action to prevent the assessment of any additional tax or penalty on any
Participant under Section 409A of the Code and neither the Company nor the
Committee will have any liability to any Participant for such tax or penalty.

(u) Disqualifying Dispositions. Any Participant who shall make a Disqualifying
Disposition shall be required to immediately advise the Company in writing as to
the occurrence of the sale and the price realized upon the sale of such Shares.

 

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(v) Section 16. It is the intent of the Company that the Plan satisfy, and be
interpreted in a manner that satisfies, the applicable requirements of Rule
16b-3 as promulgated under Section 16 of the Exchange Act so that Participants
will be entitled to the benefit of Rule 16b-3, or any other rule promulgated
under Section 16 of the Exchange Act, and will not be subject to short-swing
liability under Section 16 of the Exchange Act. Accordingly, if the operation of
any provision of the Plan would conflict with the intent expressed in this
Section 9(w), such provision to the extent possible shall be interpreted and/or
deemed amended so as to avoid such conflict.

(w) Beneficiary Designation. Each Participant under the Plan may from time to
time name any beneficiary or beneficiaries by whom any right under the Plan is
to be exercised in case of such Participant’s death. Each designation will
revoke all prior designations by the same Participant, shall be in a form
reasonably prescribed by the Committee, and shall be effective only when filed
by the Participant in writing with the Company during the Participant’s
lifetime.

(x) Expenses. The costs of administering the Plan shall be borne by the Company.

(y) Severability. If any of the provisions of the Plan or any Award Agreement is
held to be invalid, illegal, or unenforceable, whether in whole or part, such
provision shall be deemed modified to the extent, but only to the extent, of
such invalidity, illegality, or unenforceability and the remaining provisions
shall not be affected thereby.

Section 10.    Effective Date of the Plan

The Plan shall be effective on the date of adoption of the Plan by the Board.

 

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