Exhibit 10.1

FOURTH AMENDED AND RESTATED

ANSYS, INC.

1996 STOCK OPTION AND GRANT PLAN

SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

The name of the plan is the Fourth Amended and Restated ANSYS, Inc. 1996 Stock
Option and Grant Plan (the “Plan”). The purpose of the Plan is to encourage and
enable the officers, employees, directors, consultants and key persons of ANSYS,
Inc. (the “Company”) and its Subsidiaries upon whose judgment, initiative and
efforts the Company largely depends for the successful conduct of its business
to acquire a proprietary interest in the Company. It is anticipated that
providing such persons with a direct stake in the Company’s welfare will assure
a closer identification of their interests with those of the Company, thereby
stimulating their efforts on the Company’s behalf and strengthening their desire
to remain with the Company.

The following terms shall be defined as set forth below:

“Act” means the Securities Exchange Act of 1934, as amended.

“Award” or “Awards,” except where referring to a particular category of grant
under the Plan, shall include Incentive Stock Options, Non-Qualified Stock
Options, Stock Appreciation Rights, Restricted Stock Awards, Unrestricted Stock
Awards, Cash–Based Awards, Performance Share Awards, Deferred Stock Awards and
Dividend Equivalent Rights.

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

“Cash Based Awards” means an Award entitling the recipient to receive a cash
denominated payment.

“Code” means the Internal Revenue Code of 1986, as amended, and any successor
Code, and related rules, regulations and interpretations.

“Committee” means the Committee of the Board referred to in Section 2.

“Covered Employee” means an employee who is a “Covered Employee” within the
meaning of Section 162(m) of the Code.

“Deferred Stock Award” means Awards granted pursuant to Section 11.

“Dividend Equivalent Right” means Awards granted pursuant to Section 12.

“Effective Date” means the date on which the Plan is approved by stockholders as
set forth in Section 21.

“Fair Market Value” of the Stock on any given date means (i) if the Stock is
admitted to quotation on the National Association of Securities Dealers
Automated Quotation System (“NASDAQ”), the Fair Market Value on any given date
shall not be less than the average of the highest bid and lowest asked prices of
the Stock reported for such date or, if no bid and asked prices were reported
for such date, for the last day preceding such date for which such prices were
reported, or (ii) if the Stock is admitted to trading on a national securities
exchange or the NASDAQ National Market System, then clause (i) shall not apply
and the Fair Market Value on any date shall not be less than the closing price
reported for the Stock on such exchange or system for such date or, if no sales
were reported for such date, for the last date preceding such date for which a
sale was reported.

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“Incentive Stock Option” means any Stock Option designated and qualified as an
“incentive stock option” as defined in Section 422 of the Code.

“Independent Director” means a member of the Board who is considered an
“Independent Director” as set forth in the Nasdaq listing requirements.

“Non-Qualified Stock Option” means any Stock Option that is not an Incentive
Stock Option.

“Option” or “Stock Option” means any option to purchase shares of Stock granted
pursuant to Section 5.

“Performance Based Award” means any Restricted Stock Award, Deferred Stock
Award, Performance Share Award or Cash-Based Award granted to a Covered Employee
that is intended to qualify as “performance-based compensation” under
Section 162(m) of the Code and the regulations promulgated thereunder.

“Performance Criteria” means the criteria that the Committee selects for
purposes of establishing the Performance Goal or Performance Goals for an
individual for a Performance Cycle. The Performance Criteria (which shall be
applicable to the organizational level specified by the Committee, including,
but not limited to, the Company or a unit, division, group, or Subsidiary of the
Company) that will be used to establish Performance Goals are limited to the
following: earnings before interest, taxes, depreciation and amortization, net
income (loss) (either before or after interest, taxes, depreciation and/or
amortization), changes in the market price of the Stock, economic value-added,
funds from operations or similar measure, sales or revenue, acquisitions or
strategic transactions, operating income (loss), cash flow (including, but not
limited to, operating cash flow and free cash flow), return on capital, assets,
equity, or investment, stockholder returns, return on sales, gross or net profit
levels, productivity, expense, margins, operating efficiency, customer
satisfaction, working capital, earnings (loss) per share of Stock, sales or
market shares and number of customers, any of which may be measured either in
absolute terms or as compared to any incremental increase or as compared to
results of a peer group.

“Performance Cycle” means one or more periods of time, which may be of varying
and overlapping durations, as the Committee may select, over which the
attainment of one or more Performance Criteria will be measured for the purpose
of determining a grantee’s right to and the payment of a Restricted Stock Award,
Deferred Stock Award, Performance Share Award or Cash-Based Award. Each such
period shall not be less than 12 months.

“Performance Goals” means, for a Performance Cycle, the specific goals
established in writing by the Committee for a Performance Cycle based upon the
Performance Criteria.

“Performance Share Award” means any Award granted pursuant to Section 10.

“Restricted Stock Award” means any Award granted pursuant to Section 7.

“Stock” means the Common Stock, par value $.01 per share, of the Company,
subject to adjustments pursuant to Section 3.

“Stock Appreciation Right” means an Award entitling the recipient to receive
shares of Stock having a value equal to the excess of the Fair Market Value of
the Stock on the date of exercise over the exercise price of the Stock
Appreciation Right multiplied by the number of shares of Stock with respect to
which the Stock Appreciation Right shall have been exercised.

“Subsidiary” means any corporation or other entity (other than the Company) in
any unbroken chain of corporations or other entities, beginning with the
Company, if each of the corporations or entities (other than the last
corporation or entity in the unbroken chain) owns stock or other interests
possessing 50% or more of the economic interest or the total combined voting
power of all classes of stock or other interests in one of the other
corporations or entities in the chain.

“Unrestricted Stock Award” means any Award granted pursuant to Section 8.

 

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SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
AND DETERMINE AWARDS

(a) Committee. The Plan shall be administered by the Compensation Committee of
the Board, or any other committee of not less than two Independent Directors
performing similar functions as appointed by the Board from time to time. Each
member of the Committee shall be an “Outside Director” within the meaning of
Section 162(m) of the Code and the regulations promulgated thereunder. The Plan
may be administered by either the Board or a committee of not less than two
“Independent Directors” and all references to the “Committee” shall also be
deemed to refer to the Board.

(b) Powers of Committee. The Committee shall have the power and authority to
grant Awards consistent with the terms of the Plan, including the power and
authority:

(i) to select the officers, employees, directors, consultants and key persons of
the Company and its Subsidiaries to whom Awards may from time to time be
granted;

(ii) to determine the time or times of grant, and the extent, if any, of
Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Restricted Stock Awards, Unrestricted Stock Awards, Cash Based Awards,
Performance Share Awards, Deferred Stock Awards and Dividend Equivalent Rights,
or any combination of the foregoing, granted to any one or more participants;

(iii) to determine the number of shares of Stock to be covered by any Award;

(iv) to determine and modify from time to time the terms and conditions,
including restrictions, not inconsistent with the terms of the Plan, of any
Award, which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards;

(v) to accelerate at any time the exercisability or vesting of all or any
portion of any Award and/or to include provisions in Awards providing for such
acceleration;

(vi) to impose any limitations on Awards granted under the Plan, including
limitations on transfers, repurchase provisions and the like;

(vii) subject to the provisions of Section 5(a)(ii), to extend at any time the
period in which Stock Options may be exercised;

(viii) to determine at any time whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award shall be
deferred either automatically or at the election of the participant and whether
and to what extent the Company shall pay or credit amounts constituting interest
(at rates determined by the Committee) or dividends or deemed dividends on such
deferrals; and

(ix) at any time to adopt, alter and repeal such rules, guidelines and practices
for administration of the Plan and for its own acts and proceedings as it shall
deem advisable; to interpret the terms and provisions of the Plan and any Award
(including related written instruments); to make all determinations it deems
advisable for the administration of the Plan; to decide all disputes arising in
connection with the Plan; and to otherwise supervise the administration of the
Plan.

All decisions and interpretations of the Committee shall be binding on all
persons, including the Company and Plan participants.

(c) Delegation of Authority to Grant Awards. The Committee, in its discretion,
may delegate to the Chief Executive Officer of the Company all or part of the
Committee’s authority and duties with respect to Awards, including the granting
thereof, to individuals who are not subject to the reporting and other
provisions of Section 16 of the Act or “covered employees” within the meaning of
Section 162(m) of the Code. The Committee may revoke or amend the terms of a
delegation at any time but such action shall not invalidate any prior actions of
the Committee’s delegate or delegates that were consistent with the terms of the
Plan.

 

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(d) Indemnification. Neither the Board nor the Committee, nor any member of
either or any delegate thereof, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with the Plan, and the members of the Board and the Committee (and any delegate
thereof) shall be entitled in all cases to indemnification and reimbursement by
the Company in respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorneys’ fees) arising or resulting therefrom to the
fullest extent permitted by law and/or under the Company’s articles or bylaws or
any directors’ and officers’ liability insurance coverage which may be in effect
from time to time and/or any indemnification agreement between such individual
and the Company.

(e) Foreign Award Recipients. Notwithstanding any provision of the Plan to the
contrary, in order to comply with the laws in other countries in which the
Company and its Subsidiaries operate or have employees or other individuals
eligible for Awards, the Committee, in its sole discretion, shall have the power
and authority to: (i) determine which Subsidiaries shall be covered by the Plan;
(ii) determine which individuals outside the United States are eligible to
participate in the Plan; (iii) modify the terms and conditions of any Award
granted to individuals outside the United States to comply with applicable
foreign laws; (iv) establish subplans and modify exercise procedures and other
terms and procedures, to the extent the Committee determines such actions to be
necessary or advisable (and such subplans and/or modifications shall be attached
to this Plan as appendices); provided, however, that no such subplans and/or
modifications shall increase the share limitations contained in Section 3(a)
hereof; and (v) take any action, before or after an Award is made, that the
Committee determines to be necessary or advisable to obtain approval or comply
with any local governmental regulatory exemptions or approvals. Notwithstanding
the foregoing, the Committee may not take any actions hereunder, and no Awards
shall be granted, that would violate the Act or any other applicable United
States securities law, the Code, or any other applicable United States governing
statute or law.

(f) Full Value Award Minimum Vesting Requirements. Notwithstanding any other
provision in the Plan to the contrary, the minimum restriction or vesting period
with respect to any Restricted Stock Award, Performance Share Award and Deferred
Stock Award granted to employees or consultants shall be no less than one year
in the case of a performance based restriction or vesting period and no less
than three years in the case of a time based restriction or vesting period;
provided, however, that an Award with a time based restriction or vesting period
may become unrestricted and vested incrementally over such three year period;
and provided further that, notwithstanding the foregoing, Restricted Stock
Awards, Performance Share Awards and Deferred Stock Awards that result in the
issuance of up to 5% of the shares of Stock available for issuance under the
Plan pursuant to Section 3(a) may be granted in the aggregate to any one or more
eligible participants in the Plan without respect to such minimum vesting
provisions.

SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

(a) Stock Issuable. The maximum number of shares of Stock reserved and available
for issuance under the Plan shall be 30,600,000 shares of Stock, subject to
adjustment provided in Section 3. For purposes of the foregoing limitation, the
shares of Stock underlying any Awards which are forfeited, canceled, or
otherwise terminated (other than by exercise) shall be added back to the shares
of Stock available for issuance under the Plan. Notwithstanding the foregoing,
the following shares shall not be added to the shares authorized for grant under
the Plan: (i) shares tendered or held back upon exercise of an Option or
settlement of an Award to cover the exercise price or tax withholding, and
(ii) shares subject to a Stock Appreciation Right that are not issued in
connection with the stock settlement of the Stock Appreciation Right upon
exercise thereof. In the event the Company repurchases shares of Stock on the
open market, such shares shall not be added to the shares of Stock available for
issuance under the Plan. Subject to such overall limitations, shares of Stock
may be issued up to such maximum number pursuant to any type or types of Award;
provided, however, that Stock Options and Stock Appreciation Rights with respect
to no more than 900,000 shares of Stock may be granted to any one individual
participant during any one calendar year period and no more than 30,600,000
shares of Stock may be issued in the form of Incentive Stock Options. The shares
available for issuance under the Plan may be authorized but unissued shares of
Stock or shares of Stock reacquired by the Company.

 

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(b) Recapitalizations. If, through or as a result of any merger, consolidation,
sale of all or substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar transaction, the outstanding shares of Stock are
increased or decreased or are exchanged for a different number or kind of shares
or other securities of the Company, or additional shares or new or different
shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Stock or other securities, the
Committee shall make an appropriate or proportionate adjustment in (i) the
maximum number of shares reserved for issuance under the Plan and maximum number
of shares that may be issued in the form of Incentive Stock Options, (ii) the
number of Stock Options and Stock Appreciation Rights that can be granted to any
one individual participant and the maximum number of shares that may be granted
under a Performance Based Award, (iii) the number and kind of shares or other
securities subject to any then outstanding Awards under the Plan, and (iv) the
exercise price for each share subject to any then outstanding Stock Options and
Stock Appreciation Rights under the Plan, without changing the aggregate
exercise price (i.e., the exercise price multiplied by the number of shares) as
to which such Stock Options and Stock Appreciation Rights remain exercisable.
The adjustment by the Committee shall be final, binding and conclusive. No
fractional shares of Stock shall be issued under the Plan resulting from any
such adjustment, but the Committee in its discretion may make a cash payment in
lieu of fractional shares.

(c) Mergers and Other Transactions. In the case of (i) the dissolution or
liquidation of the Company, (ii) a merger, reorganization or consolidation in
which the Company is acquired by another person or entity (other than a holding
company formed by the Company), (iii) the sale of all or substantially all of
the assets of the Company to an unrelated person or entity, or (iv) the sale of
all of the Stock of the Company to an unrelated person or entity (in each case,
a “Transaction”), the Plan and all outstanding Awards shall be assumed or
continued by the successor entity or parent thereof with appropriate adjustment
as to the number and kind of shares and, if appropriate, the per share exercise
prices, as provided in Section 3(b) above. In such event, except as the
Committee may otherwise specify with respect to particular Awards in the Award
agreements, if the employment or other service relationship of a holder of an
Award is terminated without cause on or within 18 months after a Transaction,
then all Awards held by such holder shall become fully exercisable and/or vested
at such time. In the event the successor entity or parent thereof refuses to
assume or continue outstanding Awards, then subject to the consummation of the
Transaction and to the extent Awards are not assumed or continued, (x) all
Awards with time-based vesting, conditions or restrictions shall become fully
vested, exercisable and nonforfeitable as of the effective time of the
Transaction and all Awards with conditions and restrictions relating to the
attainment of performance goals may become vested and nonforfeitable in
connection with the Transaction in the Committee’s discretion; and (y) upon the
effective time of the Transaction, the Plan and all Awards granted hereunder
shall terminate. In the event of such termination, (A) the Company shall have
the option (in its sole discretion) to make or provide for a cash payment to the
grantees holding Options and Stock Appreciation Rights, in exchange for the
cancellation thereof, in an amount equal to the difference between (1) the value
as determined by the Committee of the consideration payable per share of Stock
pursuant to the Transaction (the “Sale Price”) times the number of shares of
Stock subject to outstanding Options and Stock Appreciation Rights (to the
extent then exercisable (after taking into account any acceleration hereunder)
at prices not in excess of the Sale Price) and (2) the aggregate exercise price
of all such outstanding Options and Stock Appreciation Rights; or (B) each
grantee shall be permitted to exercise for a period of at least 15 days prior to
the date of such termination all outstanding Options and Stock Appreciation
Rights held by such grantee.

(d) Substitute Awards. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who become employees of the Company or a Subsidiary as the result of
a merger or consolidation of the employing corporation with the Company or a
Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The Committee may direct that the substitute
awards be granted on such terms and conditions as the Committee considers
appropriate in the circumstances.

(e) Effect of Awards. The grant of any full value Award (i.e., an Award other
than an Option or a Stock Appreciation Right) shall be deemed, for purposes of
determining the number of shares of Stock available for issuance under
Section 3(a), as an Award of 2.5 shares of Stock for each such share of Stock
actually subject to the Award. The grant of an Option or a Stock Appreciation
Right shall be deemed, for purposes of determining the number of shares of Stock
available for issuance under Section 3(a), as an Award for one share of Stock
for each such share of Stock actually subject to the Award. Any forfeitures,
cancellations or other terminations (other than by exercise) of such Awards
shall be returned to the reserved pool of shares of Stock under the Plan in the
same manner.

 

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SECTION 4. ELIGIBILITY

Participants in the Plan will be such directors, officers and other employees,
consultants and key persons of the Company and its Subsidiaries who are
responsible for or contribute to the management, growth or profitability of the
Company and its Subsidiaries as are selected from time to time by the Committee,
in its sole discretion.

SECTION 5. STOCK OPTIONS

Any Stock Option granted under the Plan shall be pursuant to a stock option
agreement which shall be in such form as the Committee may from time to time
approve. Option agreements need not be identical.

Stock Options granted under the Plan may be either Incentive Stock Options or
Non-Qualified Stock Options. Incentive Stock Options may be granted only to
employees of the Company or any Subsidiary that is a “subsidiary corporation”
within the meaning of Section 424(f) of the Code. Non-Qualified Stock Options
may be granted to officers, employees, directors, advisors, consultants and key
persons of the Company and its Subsidiaries. To the extent that any Option does
not qualify as an Incentive Stock Option, it shall be deemed a Non-Qualified
Stock Option.

(a) Terms of Stock Options. Stock Options granted under the Plan shall be
subject to the following terms and conditions and shall contain such additional
terms and conditions, not inconsistent with the terms of the Plan, as the
Committee shall deem desirable:

(i) Exercise Price. The exercise price per share for the Stock covered by a
Stock Option shall be determined by the Committee at the time of grant but shall
not be less than 100% of the Fair Market Value on the date of grant in the case
of Incentive Stock Options. If an employee owns or is deemed to own (by reason
of the attribution rules applicable under Section 424(d) of the Code) more than
10% of the combined voting power of all classes of stock of the Company or any
parent or subsidiary corporation and an Incentive Stock Option is granted to
such employee, the option price of such Incentive Stock Option shall be not less
than 110% of the Fair Market Value on the grant date.

(ii) Option Term. The term of each Stock Option shall be fixed by the Committee,
but no Option shall be exercisable more than ten years after the date the option
is granted. If an employee owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10% of the combined
voting power of all classes of stock of the Company or any parent or subsidiary
corporation and an Incentive Stock Option is granted to such employee, the term
of such option shall be no more than five years from the date of grant.

(iii) Exercisability; Rights of a Stockholder. Stock Options shall become vested
and exercisable at such time or times, whether or not in installments, as shall
be determined by the Committee at or after the grant date. The Committee may at
any time accelerate the exercisability of all or any portion of any Stock
Option. An optionee shall have the rights of a stockholder only as to shares
acquired upon the exercise of a Stock Option and not as to unexercised Stock
Options.

(iv) Method of Exercise. Stock Options may be exercised in whole or in part, by
giving written notice of exercise to the Company, specifying the number of
shares to be purchased. Payment of the purchase price may be made by one or more
of the following methods:

(A) In cash, by certified or bank check or other instrument acceptable to the
Committee;

(B) In the form of shares of Stock that are not then subject to restrictions
under any Company plan and that have been held by the optionee free of such
restrictions for at least six months, if permitted by the Committee in its
discretion. Such surrendered shares shall be valued at Fair Market Value on the
exercise date;

 

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(C) By the optionee delivering to the Company a properly executed exercise
notice together with irrevocable instructions to a broker to promptly deliver to
the Company cash or a check payable and acceptable to the Company to pay the
purchase price; provided that in the event the optionee chooses to pay the
purchase price as so provided, the optionee and the broker shall comply with
such procedures and enter into such agreements of indemnity and other agreements
as the Committee shall prescribe as a condition of such payment procedure; or

(D) With respect to Stock Options that are not Incentive Stock Options, by a
“net exercise” arrangement pursuant to which the Company will reduce the number
of shares of Stock issuable upon exercise by the largest whole number of shares
with a Fair Market Value that does not exceed the aggregate exercise price.

Payment instruments will be received subject to collection. The transfer to the
optionee on the records of the Company or of the transfer agent of the shares of
Stock to be purchased pursuant to the exercise of a Stock Option will be
contingent upon receipt from the optionee (or a purchaser acting in his stead in
accordance with the provisions of the Stock Option) by the Company of the full
purchase price for such shares and the fulfillment of any other requirements
contained in the Option award documentation or applicable provisions of laws
(including the satisfaction of any withholding taxes that the Company is
obligated to withhold with respect to the optionee). In the event that the
Company establishes, for itself or using the services of a third party, an
automated system for the exercise of Stock Options, such as a system using an
internet website or interactive voice response, then the paperless exercise of
Stock Options may be permitted through the use of such an automated system.

(v) Termination. Unless otherwise provided in the option agreement or determined
by the Committee, upon the optionee’s termination of employment (or other
business relationship) with the Company and its Subsidiaries, the optionee’s
rights in his Stock Options shall automatically terminate.

(vi) Annual Limit on Incentive Stock Options. To the extent required for
“incentive stock option” treatment under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the shares of Stock
with respect to which Incentive Stock Options granted under this Plan and any
other plan of the Company or its parent and subsidiary corporations become
exercisable for the first time by an optionee during any calendar year shall not
exceed $100,000. To the extent that any Stock Option exceeds this limit, it
shall constitute a Non-Qualified Stock Option.

SECTION 6. STOCK APPRECIATION RIGHTS

(a) Exercise Price of Stock Appreciation Rights. The exercise price of a Stock
Appreciation Right shall not be less than 100 percent of the Fair Market Value
of the Stock on the date of grant.

(b) Grant and Exercise of Stock Appreciation Rights. Stock Appreciation Rights
may be granted by the Committee independently of any Stock Option granted
pursuant to Section 5 of the Plan.

(c) Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights
shall be subject to such terms and conditions as shall be determined from time
to time by the Committee. The term of a Stock Appreciation Right may not exceed
ten years.

SECTION 7. RESTRICTED STOCK AWARDS

(a) Nature of Restricted Stock Awards. The Committee may grant Restricted Stock
Awards to any officer, employee, consultant or key person of the Company and its
Subsidiaries. A Restricted Stock Award is an Award entitling the recipient to
acquire, at par value or such other purchase price determined by the Committee,

 

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shares of Stock subject to such restrictions and conditions as the Committee may
determine at the time of grant (“Restricted Stock”). Conditions may be based on
continuing employment (or other business relationship) and/or achievement of
pre-established performance goals and objectives.

(b) Rights as a Stockholder. Upon execution of a written instrument setting
forth the Restricted Stock Award and paying any applicable purchase price, a
participant shall have the rights of a stockholder with respect to the voting of
the Restricted Stock, subject to such conditions contained in the written
instrument evidencing the Restricted Stock Award. Unless the Committee shall
otherwise determine, certificates evidencing the Restricted Stock shall remain
in the possession of the Company until such Restricted Stock is vested as
provided in Section 7(d) below.

(c) Restrictions. Restricted Stock may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as specifically provided
herein or in the written instrument evidencing the Restricted Stock Award. If a
participant’s employment (or other business relationship) with the Company and
its Subsidiaries terminates for any reason, the Company or its assigns shall
have the right or shall agree, as may be specified in the relevant restricted
stock agreement, to repurchase Restricted Stock with respect to which conditions
have not lapsed at their purchase price from the participant or the
participant’s legal representative.

(d) Vesting of Restricted Stock. The Committee at the time of grant shall
specify the date or dates and/or the attainment of pre-established performance
goals (including goals based on the Performance Criteria), objectives and other
conditions on which Restricted Stock shall become vested, subject to such
further rights of the Company or its assigns as may be specified in the
instrument evidencing the Restricted Stock Award.

(e) Waiver, Deferral and Reinvestment of Dividends. The written instrument
evidencing the Restricted Stock Award may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on the Restricted
Stock.

SECTION 8. UNRESTRICTED STOCK AWARDS

(a) Grant or Sale of Unrestricted Stock. The Committee may, in its sole
discretion, grant (or sell at a purchase price determined by the Committee) an
Unrestricted Stock Award to any officer, employee, consultant or key person of
the Company or its Subsidiaries, pursuant to which such individual may receive
shares of Stock free of any vesting restrictions (“Unrestricted Stock”) under
the Plan. Unrestricted Stock Awards may be granted or sold as described in the
preceding sentence in respect of past services or other valid consideration, or
in lieu of any cash compensation due to such individual.

SECTION 9. CASH BASED AWARDS

Grant of Cash-Based Awards. The Committee may, in its sole discretion, grant
Cash-Based Awards to any grantee in such number or amount and upon such terms,
and subject to such conditions, as the Committee shall determine at the time of
grant. The Committee shall determine the maximum duration of the Cash-Based
Award, the amount of cash to which the Cash-Based Award pertains, the conditions
upon which the Cash-Based Award shall become vested or payable (which may
included the achievement of Performance Goals), and such other provisions as the
Committee shall determine. Each Cash-Based Award shall specify a
cash-denominated payment amount, formula or payment ranges as determined by the
Committee. Payment, if any, with respect to a Cash-Based Award shall be made in
accordance with the terms of the Award and may be made in cash or in shares of
Stock, as the Committee determines.

SECTION 10. PERFORMANCE SHARE AWARDS

(a) Nature of Performance Share Awards. A Performance Share Award is an Award
entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals (including goals based on the Performance Criteria).
The Committee may make Performance Share Awards independent of or in connection
with the granting of any other Award under the Plan. Performance Share Awards
may be granted under the Plan to any officer, employee, consultant or key person
of the Company or its Subsidiaries, including those who qualify for

 

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awards under other performance plans of the Company. The Committee in its sole
discretion shall determine whether and to whom Performance Share Awards shall be
made, the performance goals applicable under each such Award, the periods during
which performance is to be measured, and all other limitations and conditions
applicable to the awarded Performance Shares; provided, however, that the
Committee may rely on the performance goals and other standards applicable to
other performance unit plans of the Company in setting the standards for
Performance Share Awards under the Plan.

(b) Restrictions on Transfer. Performance Share Awards and all rights with
respect to such Awards may not be sold, assigned, transferred, pledged or
otherwise encumbered.

(c) Rights as a Shareholder. A participant receiving a Performance Share Award
shall have the rights of a shareholder only as to shares actually received by
the participant under the Plan and not with respect to shares subject to the
Award but not actually received by the participant. A participant shall be
entitled to receive a stock certificate evidencing the acquisition of shares of
Stock under a Performance Share Award only upon satisfaction of all conditions
specified in the written instrument evidencing the Performance Share Award (or
in a performance plan adopted by the Committee).

(d) Termination. Except as may otherwise be provided by the Committee at any
time, a participant’s rights in all Performance Share Awards shall automatically
terminate upon the participant’s termination of employment (or business
relationship) with the Company and its Subsidiaries for any reason.

(e) Acceleration, Waiver, Etc. At any time prior to the participant’s
termination of employment (or other business relationship) by the Company and
its Subsidiaries, the Committee may in its sole discretion accelerate, waive or,
subject to Section 18, amend any or all of the goals, restrictions or conditions
imposed under any Performance Share Award.

SECTION 11. DEFERRED STOCK AWARDS

(a) Nature of Deferred Stock Awards. A Deferred Stock Award is an Award of
phantom stock units to a grantee, subject to restrictions and conditions as the
Committee may determine at the time of grant. Conditions may be based on
continuing employment (or other service relationship) and/or achievement of
pre-established performance goals and objectives (including goals based on the
Performance Criteria). The grant of a Deferred Stock Award is contingent on the
grantee executing the Deferred Stock Award agreement. The terms and conditions
of each such agreement shall be determined by the Committee, and such terms and
conditions may differ among individual Awards and grantees. At the end of the
deferral period, the Deferred Stock Award, to the extent vested, shall be paid
to the grantee in the form of shares of Stock.

(b) Election to Receive Deferred Stock Awards in Lieu of Compensation. The
Committee may, in its sole discretion, permit a grantee to elect to receive a
portion of future cash compensation otherwise due to such grantee in the form of
a Deferred Stock Award. Any such election shall be made in writing and shall be
delivered to the Company no later than the date specified by the Committee and
in accordance with Section 409A of the Code and such other rules and procedures
established by the Committee. The Committee shall have the sole right to
determine whether and under what circumstances to permit such elections and to
impose such limitations and other terms and conditions thereon as the Committee
deems appropriate. Any such deferred compensation shall be converted to a fixed
number of phantom stock units based on the Fair Market Value of Stock on the
date the compensation would otherwise have been paid to the grantee but for the
deferral.

(c) Rights as a Stockholder. During the deferral period, a grantee shall have no
rights as a stockholder; provided, however, that the grantee may be credited
with Dividend Equivalent Rights with respect to the phantom stock units
underlying his Deferred Stock Award, subject to such terms and conditions as the
Committee may determine.

(d) Termination. Except as may otherwise be provided by the Committee either in
the Award agreement or, subject to Section 18 below, in writing after the Award
agreement is issued, a grantee’s right in all Deferred Stock Awards that have
not vested shall automatically terminate upon the grantee’s termination of
employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.

 

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SECTION 12. DIVIDEND EQUIVALENT RIGHTS

(a) Dividend Equivalent Rights. A Dividend Equivalent Right is an Award
entitling the recipient to receive credits based on cash dividends that would be
paid on the shares of Stock specified in the Dividend Equivalent Right (or other
award to which it relates) if such shares were held by the recipient. A Dividend
Equivalent Right may be granted hereunder to any officer, employee, consultant
or key person, as a component of another Award or as a freestanding award. The
terms and conditions of Dividend Equivalent Rights shall be specified in the
grant. Dividend equivalents credited to the holder of a Dividend Equivalent
Right may be paid currently or may be deemed to be reinvested in additional
shares of Stock, which may thereafter accrue additional equivalents. Any such
reinvestment shall be at Fair Market Value on the date of reinvestment or such
other price as may then apply under a dividend reinvestment plan sponsored by
the Company, if any. Dividend Equivalent Rights may be settled in cash or shares
of Stock or a combination thereof, in a single installment or installments. A
Dividend Equivalent Right granted as a component of another Award may provide
that such Dividend Equivalent Right shall be settled upon exercise, settlement,
or payment of, or lapse of restrictions on, such other award, and that such
Dividend Equivalent Right shall expire or be forfeited or annulled under the
same conditions as such other award. A Dividend Equivalent Right granted as a
component of another Award may also contain terms and conditions different from
such other award.

(b) Interest Equivalents. Any Award under this Plan that is settled in whole or
in part in cash on a deferred basis may provide in the grant for interest
equivalents to be credited with respect to such cash payment. Interest
equivalents may be compounded and shall be paid upon such terms and conditions
as may be specified by the grant.

SECTION 13. PERFORMANCE BASED AWARDS TO COVERED EMPLOYEES

(a) Performance-Based Awards. Any employee or other key person providing
services to the Company and who is selected by the Committee may be granted one
or more Performance-Based Awards in the form of a Restricted Stock Award,
Deferred Stock Awards, Performance Share Awards or Cash-Based Award payable upon
the attainment of Performance Goals that are established by the Committee and
relate to one or more of the Performance Criteria, in each case on a specified
date or dates or over any period or periods determined by the Committee. The
Committee shall define in an objective fashion the manner of calculating the
Performance Criteria it selects to use for any Performance Cycle. Depending on
the Performance Criteria used to establish such Performance Goals, the
Performance Goals may be expressed in terms of overall Company performance or
the performance of a division, business unit, or an individual. The Committee,
in its discretion, may adjust or modify the calculation of Performance Goals for
such Performance Cycle in order to prevent the dilution or enlargement of the
rights of an individual (i) in the event of, or in anticipation of, any unusual
or extraordinary corporate item, transaction, event or development, (ii) in
recognition of, or in anticipation of, any other unusual or nonrecurring events
affecting the Company, or the financial statements of the Company, or (iii) in
response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions provided however, that the
Committee may not exercise such discretion in a manner that would increase the
Performance-Based Award granted to a Covered Employee. Each Performance-Based
Award shall comply with the provisions set forth below.

(b) Grant of Performance-Based Awards. With respect to each Performance-Based
Award granted to a Covered Employee, the Committee shall select, within the
first 90 days of a Performance Cycle (or, if shorter, within the maximum period
allowed under Section 162(m) of the Code) the Performance Criteria for such
grant, and the Performance Goals with respect to each Performance Criterion
(including a threshold level of performance below which no amount will become
payable with respect to such Award). Each Performance-Based Award will specify
the amount payable, or the formula for determining the amount payable, upon
achievement of the various applicable performance targets. The Performance
Criteria established by the Committee may be (but need not be) different for
each Performance Cycle and different Performance Goals may be applicable to
Performance-Based Awards to different Covered Employees.

 

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(c) Payment of Performance-Based Awards. Following the completion of a
Performance Cycle, the Committee shall meet to review and certify in writing
whether, and to what extent, the Performance Goals for the Performance Cycle
have been achieved and, if so, to also calculate and certify in writing the
amount of the Performance-Based Awards earned for the Performance Cycle. The
Committee shall then determine the actual size of each Covered Employee’s
Performance-Based Award, and, in doing so, may reduce or eliminate the amount of
the Performance-Based Award for a Covered Employee if, in its sole judgment,
such reduction or elimination is appropriate.

(d) Maximum Award Payable. The maximum Performance-Based Award payable to any
one Covered Employee under the Plan for a Performance Cycle is 900,000 shares of
Stock (subject to adjustment as provided in Section 3(b) hereof) or $2,500,000
in the case of a Performance-Based Award that is a Cash-Based Award.

SECTION 14. TRANSFERABILITY OF AWARDS

(a) Transferability. Except as provided in Section 14(b) below, during a
grantee’s lifetime, his or her Awards shall be exercisable only by the grantee,
or by the grantee’s legal representative or guardian in the event of the
grantee’s incapacity. No Awards shall be sold, assigned, transferred or
otherwise encumbered or disposed of by a grantee other than by will or by the
laws of descent and distribution or pursuant to a domestic relations order. No
Awards shall be subject, in whole or in part, to attachment, execution, or levy
of any kind, and any purported transfer in violation hereof shall be null and
void.

(b) Committee Action. Notwithstanding Section 14(a), the Committee, in its
discretion, may provide either in the agreement regarding a given Award or by
subsequent written approval that the grantee (who is an employee or director)
may transfer his or her Awards (other than any Incentive Stock Options or
Deferred Stock Awards) to his or her immediate family members, to trusts for the
benefit of such family members, or to partnerships in which such family members
are the only partners, provided that the transferee agrees in writing with the
Company to be bound by all of the terms and conditions of this Plan and the
applicable Award. In no event may an Award be transferred by a grantee for
value.

(c) Family Member. For purposes of Section 14(b), “family member” shall mean a
grantee’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, any person sharing the grantee’s household (other than a tenant
of the grantee), a trust in which these persons (or the grantee) have more than
50 percent of the beneficial interest, a foundation in which these persons (or
the grantee) control the management of assets, and any other entity in which
these persons (or the grantee) own more than 50 percent of the voting interests.

(d) Designation of Beneficiary. Each grantee to whom an Award has been made
under the Plan may designate a beneficiary or beneficiaries to exercise any
Award or receive any payment under any Award payable on or after the grantee’s
death. Any such designation shall be on a form provided for that purpose by the
Committee and shall not be effective until received by the Committee. If no
beneficiary has been designated by a deceased grantee, or if the designated
beneficiaries have predeceased the grantee, the beneficiary shall be the
grantee’s estate.

SECTION 15. TAX WITHHOLDING

(a) Each participant shall, no later than the date as of which the value of an
Award or of any Stock or other amounts received thereunder first becomes
includable in the gross income of the participant for Federal income tax
purposes, pay to the Company, or make arrangements satisfactory to the Committee
regarding payment of, any federal, state, or local taxes of any kind required by
law to be withheld with respect to such income. The Company and its Subsidiaries
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the participant. The Company’s
obligation to deliver evidence of book entry (or stock certificates) to any
grantee is subject to and conditioned on tax withholding obligations being
satisfied by the grantee.

 

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(b) Payment in Stock. Subject to approval by the Committee, a grantee may elect
to have the Company’s minimum required tax withholding obligation satisfied, in
whole or in part, by authorizing the Company to withhold from shares of Stock to
be issued pursuant to any Award a number of shares with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
withholding amount due.

SECTION 16. SECTION 409A AWARDS

To the extent that any Award is determined to constitute “nonqualified deferred
compensation” within the meaning of Section 409A (a “409A Award”), the Award
shall be subject to such additional rules and requirements as specified by the
Committee from time to time in order to comply with Section 409A. In this
regard, if any amount under a 409A Award is payable upon a “separation from
service” (within the meaning of Section 409A) to a grantee who is then
considered a “specified employee” (within the meaning of Section 409A), then no
such payment shall be made prior to the date that is the earlier of (i) six
months and one day after the grantee’s separation from service, or (ii) the
grantee’s death, but only to the extent such delay is necessary to prevent such
payment from being subject to interest, penalties and/or additional tax imposed
pursuant to Section 409A. Further, the settlement of any such Award may not be
accelerated except to the extent permitted by Section 409A.

SECTION 17. TRANSFER, LEAVE OF ABSENCE, ETC.

For purposes of the Plan, the following events shall not be deemed a termination
of employment:

(a) a transfer to the employment of the Company from a Subsidiary or from the
Company to a Subsidiary, or from one Subsidiary to another; or

(b) 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 re-employment
is guaranteed either by a statute or by contract or under the policy pursuant to
which the leave of absence was granted or if the Committee otherwise so provides
in writing.

SECTION 18. AMENDMENTS AND TERMINATION

The Board may, at any time, amend or discontinue the Plan and the Committee may,
at any time, amend or cancel any outstanding Award (or provide substitute Awards
at the same exercise or purchase price in a manner not inconsistent with the
terms of the Plan), but such price, if any, must satisfy the requirements which
would apply to the substitute or amended Award if it were then initially granted
under this Plan for the purpose of satisfying changes in law or for any other
lawful purpose, but no such action shall adversely affect rights under any
outstanding Award without the holder’s consent. Notwithstanding any other
provision of this Plan to the contrary, no outstanding Option or Stock
Appreciation Right under the Plan may be re-priced, either by amendment to the
Option or Stock Appreciation Right or by cancellation of the Option or Stock
Appreciation Right in exchange for the grant of a new Option or Stock
Appreciation Right with a lower exercise price, without the prior approval by
the Company’s stockholders who are eligible to vote at a meeting of
stockholders. If and to the extent determined by the Committee to be required by
the Act to ensure that Awards granted under the Plan are exempt under Rule 16b-3
promulgated under the Act, or that Incentive Stock Options granted under the
Plan are qualified under Section 422 of the Code, or as required by other
applicable laws, rules or requirements, Plan amendments shall be subject to
approval by the Company’s stockholders who are eligible to vote at a meeting of
stockholders. Any material Plan amendments shall be subject to shareholder
approval to the extent required by Rule 4350(i) of the Nasdaq Stock Market,
Inc., as such rule may be amended and interpreted from time to time.

SECTION 19. STATUS OF PLAN

With respect to the portion of any Award which has not been exercised and any
payments in cash, Stock or other consideration not received by a participant, a
participant shall have no rights greater than those of a general creditor of the
Company unless the Committee shall otherwise expressly determine in connection
with any Award or Awards. In its sole discretion, the Committee may authorize
the creation of trusts or other arrangements to meet the Company’s obligations
to deliver Stock or make payments with respect to Awards hereunder, provided
that the existence of such trusts or other arrangements is consistent with the
foregoing sentence.

 

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SECTION 20. GENERAL PROVISIONS

(a) No Distribution; Compliance with Legal Requirements. The Committee may
require each person acquiring Stock pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.

No shares of Stock shall be issued pursuant to an Award until all applicable
securities law and other legal and stock exchange or similar requirements have
been satisfied. The Committee may require the placing of such stop-orders and
restrictive legends on certificates for Stock and Awards as it deems
appropriate.

(b) Other Compensation Arrangements; No Employment Rights. Nothing contained in
this Plan shall prevent the Board from adopting other or additional compensation
arrangements, including trusts, and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of this Plan and
the grant of Awards do not confer upon any employee any right to continued
employment with the Company or any Subsidiary.

(c) Trading Policy Restrictions. Option exercises and other Awards under the
Plan shall be subject to the Company’s insider trading policies and procedures,
as in effect from time to time.

SECTION 21. EFFECTIVE DATE OF PLAN

This Plan shall become effective upon approval by the holders of a majority of
the shares of Stock of the Company present or represented and entitled to vote
at a meeting of stockholders. Subject to such approval by the stockholders and
to the requirement that no Stock may be issued hereunder prior to such approval,
Stock Options and other Awards may be granted hereunder on and after adoption of
this Plan by the Board. No grants of Stock Options and other Awards may be made
hereunder after May 11, 2021 and no grants of Incentive Stock Options may be
made hereunder after February 17, 2021.

SECTION 22. GOVERNING LAW

This Plan shall be governed by Delaware law except to the extent such law is
preempted by federal law.

 

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