Exhibit 10.1

AMENDED AND RESTATED

U.S. SILICA HOLDINGS, INC.

 

 

2011 INCENTIVE COMPENSATION PLAN

 

 

ARTICLE I

PURPOSE

The purpose of this Amended and Restated U.S. Silica Holdings, Inc. 2011
Incentive Compensation Plan is to enhance the profitability and value of the
Company for the benefit of its stockholders by enabling the Company to offer
Eligible Individuals cash and stock-based incentives in order to attract, retain
and reward such individuals and strengthen the mutuality of interests between
such individuals and the Company’s stockholders. The Plan is effective as of the
date set forth in Article XV.

ARTICLE II

DEFINITIONS

For purposes of this Plan, the following terms shall have the following
meanings:

2.1 “Acquisition Event” has the meaning set forth in Section 4.2(d).

2.2 “Affiliate” means each of the following: (a) any Subsidiary; (b) any Parent;
(c) any corporation, trade or business (including, without limitation, a
partnership or limited liability company) which is directly or indirectly
controlled 50% or more (whether by ownership of stock, assets or an equivalent
ownership interest or voting interest) by the Company or one of its Affiliates;
(d) any trade or business (including, without limitation, a partnership or
limited liability company) which directly or indirectly controls 50% or more
(whether by ownership of stock, assets or an equivalent ownership interest or
voting interest) of the Company; and (e) any other entity in which the Company
or any of its Affiliates has a material equity interest and which is designated
as an “Affiliate” by resolution of the Committee; provided that, unless
otherwise determined by the Committee, the Common Stock subject to any Award
constitutes “service recipient stock” for purposes of Section 409A of the Code
or otherwise does not subject the Award to Section 409A of the Code.

2.3 “Award” means any award under the Plan of any Stock Option, Stock
Appreciation Right, Restricted Stock, Performance Award or Other Stock-Based
Award or Other Cash-Based Award. All Awards shall be granted by, confirmed by,
and subject to the terms of, a written agreement executed by the Company and the
Participant.

2.4 “Award Agreement” means the written or electronic agreement setting forth
the terms and conditions applicable to an Award.

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

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2.6 “Cause” means, unless otherwise determined by the Committee in the
applicable Award Agreement, with respect to a Participant’s Termination of
Employment or Termination of Consultancy, the following: (a) in the case where
there is no employment agreement, consulting agreement, change in control
agreement or similar agreement in effect between the Company or an Affiliate and
the Participant at the time of the grant of the Award (or where there is such an
agreement but it does not define “cause” (or words of like import)), termination
due to a Participant’s, dishonesty, fraud, moral turpitude, willful misconduct
or refusal to perform his or her duties or responsibilities for any reason other
than illness or incapacity, as determined by the Committee in its sole
discretion; or (b) in the case where there is an employment agreement,
consulting agreement, change in control agreement or similar agreement in effect
between the Company or an Affiliate and the Participant at the time of the grant
of the Award that defines “cause” (or words of like import), “cause” as defined
under such agreement; provided, however, that with regard to any agreement under
which the definition of “cause” only applies on occurrence of a change in
control, such definition of “cause” shall not apply until a change in control
actually takes place and then only with regard to a termination thereafter. With
respect to a Participant’s Termination of Directorship, “cause” means an act or
failure to act that constitutes cause for removal of a director under applicable
Delaware law.

2.7 “Change in Control” has the meaning set forth in Section 11.2.

2.8 “Change in Control Price” has the meaning set forth in Section 11.1(b).

2.9 “Code” means the Internal Revenue Code of 1986, as amended. Any reference to
any section of the Code shall also be a reference to any successor provision and
any Treasury Regulation promulgated thereunder.

2.10 “Committee” means any committee of the Board duly authorized by the Board
to administer the Plan. If no committee is duly authorized by the Board to
administer the Plan, the term “Committee” shall be deemed to refer to the Board
for all purposes under the Plan.

2.11 “Common Stock” means the common stock, $0.01 par value per share, of the
Company.

2.12 “Company” means U.S. Silica Holdings, Inc., a Delaware corporation, and its
successors by operation of law.

2.13 “Consultant” means any natural person who is an advisor or consultant to
the Company or its Affiliates.

2.14 “Detrimental Activity” means, unless otherwise determined by the Committee,
in the applicable Award Agreement: (a) the disclosure to anyone outside the
Company or its Affiliates, or the use in any manner other than in the
furtherance of the Company’s or its Affiliate’s business, without written
authorization from the Company, of any confidential information, trade secrets
or proprietary information, relating to the business of the Company or its
Affiliates that is acquired by a Participant prior to the Participant’s
Termination; (b) activity while employed or performing services that results, or
if known could result, in the Participant’s

 

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Termination that is classified by the Company as a termination for Cause;
(c) any attempt, directly or indirectly, to solicit, induce or hire (or the
identification for solicitation, inducement or hiring of) any employee of the
Company or its Affiliates to be employed by, or to perform services for, the
Participant or any person or entity with which the Participant is associated
(including, but not limited to, due to the Participant’s employment by,
consultancy for, equity interest in, or creditor relationship with such person
or entity) or any person or entity from which the Participant receives direct or
indirect compensation or fees as a result of such solicitation, inducement or
hire (or the identification for solicitation, inducement or hire) without, in
all cases, written authorization from the Company; (d) any attempt, directly or
indirectly, to solicit in a competitive manner any customer or prospective
customer of the Company or its Affiliates at the time of a Participant’s
Termination, without, in all cases, written authorization from the Company;
(e) the Participant’s Disparagement, or inducement of others to do so, of the
Company or its Affiliates or their past and present officers, directors,
employees or products; (f) without written authorization from the Company, the
rendering of services for any organization, or engaging, directly or indirectly,
in any business, which is competitive with the Company or its Affiliates, or the
rendering of services to such organization or business if such organization or
business is otherwise prejudicial to or in conflict with the interests of the
Company or its Affiliates provided, however, that competitive activities shall
only be those competitive with any business unit or Affiliate of the Company
with regard to which the Participant performed services at any time within the
two years prior to the Participant’s Termination; or (g) breach of any agreement
between the Participant and the Company or an Affiliate (including, without
limitation, any employment agreement or noncompetition or nonsolicitation
agreement). For purposes of sub-sections (a), (c), (d) and (f) above, the
General Counsel or the Chief Executive Officer of the Company shall have
authority to provide the Participant, except for himself or herself, with
written authorization to engage in the activities contemplated thereby and no
other person shall have authority to provide the Participant with such
authorization.

2.15 “Disability” means, unless otherwise determined by the Committee in the
applicable Award Agreement, with respect to a Participant’s Termination, a
permanent and total disability as defined in Section 22(e)(3) of the Code. A
Disability shall only be deemed to occur at the time of the determination by the
Committee of the Disability. Notwithstanding the foregoing, for Awards that are
subject to Section 409A of the Code, Disability shall mean that a Participant is
disabled under Section 409A(a)(2)(C)(i) or (ii) of the Code.

2.16 “Disparagement” means making comments or statements to the press, the
Company’s or its Affiliates’ employees, consultants or any individual or entity
with whom the Company or its Affiliates has a business relationship which could
reasonably be expected to adversely affect in any manner: (a) the conduct of the
business of the Company or its Affiliates (including, without limitation, any
products or business plans or prospects); or (b) the business reputation of the
Company or its Affiliates, or any of their products, or their past or present
officers, directors or employees.

2.17 “Effective Date” means the effective date of the Plan as defined in Article
XV.

2.18 “Eligible Employee” means each employee of the Company or an Affiliate.

 

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2.19 “Eligible Individual” means an Eligible Employee, Non-Employee Director or
Consultant who is designated by the Committee in its discretion as eligible to
receive Awards subject to the conditions set forth herein.

2.20 “Exchange Act” means the Securities Exchange Act of 1934, as amended.
Reference to a specific section of the Exchange Act or regulation thereunder
shall include such section or regulation, any valid regulation or interpretation
promulgated under such section, and any comparable provision of any future
legislation or regulation amending, supplementing or superseding such section or
regulation.

2.21 “Fair Market Value” means, for purposes of the Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, as of any date and except as provided below, the last sales price
reported for the Common Stock on the applicable date: (a) as reported on the
principal national securities exchange in the United States on which it is then
traded or (b) if the Common Stock is not traded, listed or otherwise reported or
quoted, the Committee shall determine in good faith the Fair Market Value in
whatever manner it considers appropriate taking into account the requirements of
Section 409A of the Code. For purposes of the grant of any Award, the applicable
date shall be the trading day immediately prior to the date on which the Award
is granted. For purposes of the exercise of any Award, the applicable date shall
be the date a notice of exercise is received by the Committee or, if not a day
on which the applicable market is open, the next day that it is open.

2.22 “Family Member” means “family member” as defined in Section A.1.(5) of the
general instructions of Form S-8.

2.23 “Full Value Award” means any Award other than a Stock Option or Stock
Appreciation Right, which is settled through the issuance of shares of Common
Stock.

2.24 “Incentive Stock Option” means any Stock Option awarded to an Eligible
Employee of the Company, its Subsidiaries and its Parents (if any) under this
Plan intended to be and designated as an “Incentive Stock Option” within the
meaning of Section 422 of the Code.

2.25 “Lead Underwriter” has the meaning set forth in Section 14.20.

2.26 “Lock-Up Period” has the meaning set forth in Section 14.20.

2.27 “Merger Event” has the meaning set forth in Section 4.2(b).

2.28 “Non-Employee Director” means a director or a member of the Board of the
Company or any Affiliate who is not an active employee of the Company or any
Affiliate.

2.29 “Non-Qualified Stock Option” means any Stock Option awarded under the Plan
that is not an Incentive Stock Option.

2.30 “Non-Tandem Stock Appreciation Right” shall mean the right to receive an
amount in cash and/or stock equal to the difference between (x) the Fair Market
Value of a share of Common Stock on the date such right is exercised, and
(y) the aggregate exercise price of such right, otherwise than on surrender of a
Stock Option.

 

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2.31 “Other Cash-Based Award” means an Award granted pursuant to Section 10.3 of
the Plan and payable in cash at such time or times and subject to such terms and
conditions as determined by the Committee in its sole discretion.

2.32 “Other Extraordinary Event” has the meaning set forth in Section 4.2(b).

2.33 “Other Stock-Based Award” means an Award under Article X of the Plan that
is valued in whole or in part by reference to, or is payable in or otherwise
based on, Common Stock, including, without limitation, an Award valued by
reference to an Affiliate.

2.34 “Parent” means any parent corporation of the Company within the meaning of
Section 424(e) of the Code.

2.35 “Participant” means an Eligible Individual to whom an Award has been
granted pursuant to the Plan.

2.36 “Performance Award” means an Award granted to a Participant pursuant to
Article IX hereof contingent upon achieving certain Performance Goals.

2.37 “Performance Goals” means goals established by the Committee as
contingencies for Awards to vest and/or become exercisable or distributable
based on one or more of the performance goals set forth in Exhibit A hereto.

2.38 “Performance Period” means the designated period during which the
Performance Goals must be satisfied with respect to the Award to which the
Performance Goals relate.

2.39 “Plan” means this Amended and Restated U.S. Silica Holdings, Inc. 2011
Incentive Compensation Plan, as amended from time to time.

2.40 “Reference Stock Option” has the meaning set forth in Section 7.1.

2.41 “Restricted Stock” means an Award of shares of Common Stock under the Plan
that is subject to restrictions under Article VIII.

2.42 “Restriction Period” has the meaning set forth in Section 8.3(a) with
respect to Restricted Stock.

2.43 “Rule 16b-3” means Rule 16b-3 under Section 16(b) of the Exchange Act as
then in effect or any successor provision.

2.44 “Section 162(m) of the Code” means the exception for performance-based
compensation under Section 162(m) of the Code and any applicable treasury
regulations thereunder.

2.45 “Section 4.2 Event” has the meaning set forth in Section 4.2(b).

 

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2.46 “Section 409A of the Code” means the nonqualified deferred compensation
rules under Section 409A of the Code and any applicable treasury regulations and
other official guidance thereunder.

2.47 “Securities Act” means the Securities Act of 1933, as amended and all rules
and regulations promulgated thereunder. Reference to a specific section of the
Securities Act or regulation thereunder shall include such section or
regulation, any valid regulation or interpretation promulgated under such
section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation.

2.48 “Share Authorization” has the meaning set forth in Section 4.1(a).

2.49 “Stock Appreciation Right” shall mean the right pursuant to an Award
granted under Article VII.

2.50 “Stock Option” or “Option” means any option to purchase shares of Common
Stock granted to Eligible Individuals granted pursuant to Article VI.

2.51 “Subsidiary” means any subsidiary corporation of the Company within the
meaning of Section 424(f) of the Code.

2.52 “Tandem Stock Appreciation Right” shall mean the right to surrender to the
Company all (or a portion) of a Stock Option in exchange for an amount in cash
and/or stock equal to the difference between (i) the Fair Market Value on the
date such Stock Option (or such portion thereof) is surrendered, of the Common
Stock covered by such Stock Option (or such portion thereof), and (ii) the
aggregate exercise price of such Stock Option (or such portion thereof).

2.53 “Ten Percent Stockholder” means a person owning stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company, its Subsidiaries or its Parent.

2.54 “Termination” means a Termination of Consultancy, Termination of
Directorship or Termination of Employment, as applicable.

2.55 “Termination of Consultancy” means: (a) that the Consultant is no longer
acting as a consultant to the Company or an Affiliate; or (b) when an entity
which is retaining a Participant as a Consultant ceases to be an Affiliate
unless the Participant otherwise is, or thereupon becomes, a Consultant to the
Company or another Affiliate at the time the entity ceases to be an Affiliate.
In the event that a Consultant becomes an Eligible Employee or a Non-Employee
Director upon the termination of his or her consultancy, unless otherwise
determined by the Committee, in its sole discretion, no Termination of
Consultancy shall be deemed to occur until such time as such Consultant is no
longer a Consultant, an Eligible Employee or a Non-Employee Director.
Notwithstanding the foregoing, the Committee may otherwise define Termination of
Consultancy in the Award Agreement or, if no rights of a Participant are
reduced, may otherwise define Termination of Consultancy thereafter, provided
that any such change to the definition of the term “Termination of Consultancy”
does not subject the applicable Award to Section 409A of the Code.

 

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2.56 “Termination of Directorship” means that the Non-Employee Director has
ceased to be a director of the Company; except that if a Non-Employee Director
becomes an Eligible Employee or a Consultant upon the termination of his or her
directorship, his or her ceasing to be a director of the Company shall not be
treated as a Termination of Directorship unless and until the Participant has a
Termination of Employment or Termination of Consultancy, as the case may be.

2.57 “Termination of Employment” means: (a) a termination of employment (for
reasons other than a military or personal leave of absence granted by the
Company) of a Participant from the Company and its Affiliates; or (b) when an
entity which is employing a Participant ceases to be an Affiliate, unless the
Participant otherwise is, or thereupon becomes, employed by the Company or
another Affiliate at the time the entity ceases to be an Affiliate. In the event
that an Eligible Employee becomes a Consultant or a Non-Employee Director upon
the termination of his or her employment, unless otherwise determined by the
Committee, in its sole discretion, no Termination of Employment shall be deemed
to occur until such time as such Eligible Employee is no longer an Eligible
Employee, a Consultant or a Non-Employee Director. Notwithstanding the
foregoing, the Committee may otherwise define Termination of Employment in the
Award Agreement or, if no rights of a Participant are reduced, may otherwise
define Termination of Employment thereafter, provided that any such change to
the definition of the term “Termination of Employment” does not subject the
applicable Award to Section 409A of the Code.

2.58 “Transfer” means: (a) when used as a noun, any direct or indirect transfer,
sale, assignment, pledge, hypothecation, encumbrance or other disposition
(including the issuance of equity in any entity), whether for value or no value
and whether voluntary or involuntary (including by operation of law), and
(b) when used as a verb, to directly or indirectly transfer, sell, assign,
pledge, encumber, charge, hypothecate or otherwise dispose of (including the
issuance of equity in any entity) whether for value or for no value and whether
voluntarily or involuntarily (including by operation of law). “Transferred” and
“Transferable” shall have a correlative meaning.

ARTICLE III

ADMINISTRATION

3.1 The Committee. The Plan shall be administered and interpreted by the
Committee. To the extent required by applicable law, rule or regulation, it is
intended that each member of the Committee shall qualify as (a) a “non-employee
director” under Rule 16b-3, (b) an “outside director” under Code Section 162(m)
and (c) an “independent director” under the rules of any national securities
exchange or national securities association, as applicable. If it is later
determined that one or more members of the Committee do not so qualify, actions
taken by the Committee prior to such determination shall be valid despite such
failure to qualify. In the event that any member of the Committee does not
qualify as a “non-employee director” for purposes of Section 16 of the Exchange
Act, then all compensation that is intended to be exempt from Section 16 will
also be approved by the Board or a subcommittee made up of members of the Board
who qualify as non-employee directors. In the event that any member of the
Committee does not qualify as an “outside director” for purposes of
Section 162(m) of the Code, then all compensation that is intended to be exempt
from Section 162(m) of the Code will also be approved by a subcommittee made up
of members of the Board who qualify as outside directors.

 

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3.2 Grants of Awards. The Committee shall have full authority to grant, pursuant
to the terms of this Plan, to Eligible Individuals: (i) Stock Options,
(ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv) Performance Awards;
(v) Other Stock-Based Awards; and (vi) Other Cash-Based Awards. In particular,
the Committee shall have the authority:

(a) to select the Eligible Individuals to whom Awards may from time to time be
granted hereunder;

(b) to determine whether and to what extent Awards, or any combination thereof,
are to be granted hereunder to one or more Eligible Individuals;

(c) to determine the number of shares of Common Stock to be covered by each
Award granted hereunder;

(d) to determine the terms and conditions, not inconsistent with the terms of
the Plan, of any Award granted hereunder (including, but not limited to, the
exercise or purchase price (if any), any restriction or limitation, any vesting
schedule or acceleration thereof, or any forfeiture restrictions or waiver
thereof, regarding any Award and the shares of Common Stock relating thereto,
based on such factors, if any, as the Committee shall determine, in its sole
discretion);

(e) to determine whether, to what extent and under what circumstances grants of
Options and other Awards under the Plan are to operate on a tandem basis and/or
in conjunction with or apart from other awards made by the Company outside of
this Plan;

(f) to determine whether and under what circumstances a Stock Option may be
settled in cash, Common Stock and/or Restricted Stock under Section 6.4(d);

(g) to determine whether a Stock Option is an Incentive Stock Option or
Non-Qualified Stock Option;

(h) to determine whether to require a Participant, as a condition of the
granting of any Award, to not sell or otherwise dispose of shares acquired
pursuant to the exercise of an Award for a period of time as determined by the
Committee, in its sole discretion, following the date of the acquisition of such
Award;

(i) to modify, extend or renew an Award, subject to Article XII and
Section 6.4(l), provided, however, that such action does not subject the Award
to Section 409A of the Code without the consent of the Participant; and

(j) solely to the extent permitted by applicable law, to determine whether, to
what extent and under what circumstances to provide loans (which may be on a
recourse basis and shall bear interest at the rate the Committee shall provide)
to Participants in order to exercise Options under the Plan.

 

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3.3 Guidelines. Subject to Article XII hereof, the Committee shall have the
authority to adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan and perform all acts, including the delegation of
its responsibilities (to the extent permitted by applicable law and applicable
stock exchange rules), as it shall, from time to time, deem advisable; to
construe and interpret the terms and provisions of the Plan and any Award issued
under the Plan (and any agreements relating thereto); and to otherwise supervise
the administration of the Plan. The Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or in any agreement relating
thereto in the manner and to the extent it shall deem necessary to effectuate
the purpose and intent of the Plan. The Committee may adopt special guidelines
and provisions for persons who are residing in or employed in, or subject to,
the taxes of, any domestic or foreign jurisdictions to comply with applicable
tax and securities laws of such domestic or foreign jurisdictions.
Notwithstanding the foregoing, no action of the Committee under this Section 3.3
shall impair the rights of any Participant without the Participant’s consent. To
the extent applicable, this Plan is intended to comply with the applicable
requirements of Rule 16b-3, and with respect to Awards intended to be
“performance-based,” the applicable provisions of Section 162(m) of the Code,
and the Plan shall be limited, construed and interpreted in a manner so as to
comply therewith.

3.4 Decisions Final. Any decision, interpretation or other action made or taken
in good faith by or at the direction of the Company, the Board or the Committee
(or any of its members) arising out of or in connection with the Plan shall be
within the absolute discretion of all and each of them, as the case may be, and
shall be final, binding and conclusive on the Company and all employees and
Participants and their respective heirs, executors, administrators, successors
and assigns.

3.5 Procedures. If the Committee is appointed, the Board shall designate one of
the members of the Committee as chairman and the Committee shall hold meetings,
subject to the By-Laws of the Company, at such times and places as it shall deem
advisable, including, without limitation, by telephone conference or by written
consent to the extent permitted by applicable law. A majority of the Committee
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. Any decision or determination reduced to
writing and signed by all of the Committee members in accordance with the
By-Laws of the Company, shall be fully effective as if it had been made by a
vote at a meeting duly called and held. The Committee shall keep minutes of its
meetings and shall make such rules and regulations for the conduct of its
business as it shall deem advisable.

3.6 Designation of Consultants/Liability.

(a) The Committee may designate employees of the Company and professional
advisors to assist the Committee in the administration of the Plan and (to the
extent permitted by applicable law and applicable exchange rules) may grant
authority to officers to grant Awards and/or execute agreements or other
documents on behalf of the Committee.

(b) The Committee may employ such legal counsel, consultants and agents as it
may deem desirable for the administration of the Plan and may rely upon any
opinion received from any such counsel or consultant and any computation
received from any such consultant or agent. Expenses incurred by the Committee
or the Board in the engagement of any such counsel,

 

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consultant or agent shall be paid by the Company. The Committee, its members and
any person designated pursuant to sub-section (a) above shall not be liable for
any action or determination made in good faith with respect to the Plan. To the
maximum extent permitted by applicable law, no officer of the Company or member
or former member of the Committee or of the Board shall be liable for any action
or determination made in good faith with respect to the Plan or any Award
granted under it.

ARTICLE IV

SHARE LIMITATION

4.1 Shares. (a) Subject to any increase or decrease pursuant to Section 4.2, the
aggregate number of shares of Common Stock that may be issued or used for
reference purposes or with respect to which Awards may be granted under the Plan
shall not exceed 6,300,000 shares (the “Share Authorization”). The shares may be
either authorized and unissued Common Stock or Common Stock held in or acquired
for the treasury of the Company or both. The full number of Stock Appreciation
Rights granted that are to be settled in Common Stock shall be counted against
the number of shares of Common Stock available for award under the Plan,
regardless of the number of shares of Common Stock actually issued upon
settlement of such Stock Appreciation Rights. If any Option, Stock Appreciation
Right or Other Stock-Based Award granted under the Plan expires, terminates or
is canceled for any reason without having been exercised in full, the number of
shares of Common Stock underlying any unexercised Award shall again be available
for the purpose of Awards under the Plan. If any shares of Restricted Stock,
Performance Awards or Other Stock-Based Awards denominated in shares of Common
Stock awarded under the Plan to a Participant are forfeited for any reason, the
number of forfeited shares of Restricted Stock, Performance Awards or Other
Stock-Based Awards denominated in shares of Common Stock shall again be
available for purposes of Awards under the Plan. If a Tandem Stock Appreciation
Right or a Limited Stock Appreciation Right is granted in tandem with an Option,
such grant shall only apply once against the maximum number of shares of Common
Stock which may be issued under the Plan. Any Award under the Plan settled in
cash shall not be counted against the foregoing maximum share limitations. Any
shares of Common Stock tendered or withheld to satisfy tax withholding
obligations on an Award issued under the Plan, shares of Common Stock tendered
or withheld to pay the exercise price of an Award under the Plan, and shares of
Common Stock repurchased on the open market with the proceeds of an Option
exercise will no longer be eligible to be again available for grant under this
Plan.

(b) Limit on Full Value Awards. To the extent that a share of Common Stock is
issued pursuant to the grant or exercise of a Full Value Award, it shall reduce
the Share Authorization by 1.35 shares of Common Stock; and, to the extent that
a share of Common Stock is issued pursuant to the grant or exercise of an Award
other than a Full Value Award, it shall reduce the Share Authorization by one
(1) share of Common Stock.

(c) Individual Participant Limitations. To the extent required by Section 162(m)
of the Code for Awards under the Plan to qualify as “performance-based
compensation,” the following individual Participant limitations shall apply:

(i) The maximum number of shares of Common Stock subject to any Award of Stock
Options, or Stock Appreciation Rights, or shares of Restricted Stock, or Other

 

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Stock-Based Awards for which the grant of such Award or the lapse of the
relevant Restriction Period is subject to the attainment of Performance Goals in
accordance with Section 8.3(a)(ii) which may be granted under the Plan during
any fiscal year of the Company to any Participant shall be one million five
hundred thousand (1,500,000) shares per type of Award (which shall be subject to
any further increase or decrease pursuant to Section 4.2), provided that the
maximum number of shares of Common Stock for all types of Awards does not exceed
one million five hundred thousand (1,500,000) shares (which shall be subject to
any further increase or decrease pursuant to Section 4.2) during any fiscal year
of the Company. If a Tandem Stock Appreciation Right is granted or a Limited
Stock Appreciation Right is granted in tandem with a Stock Option, it shall
apply against the Participant’s individual share limitations for both Stock
Appreciation Rights and Stock Options.

(ii) There are no annual individual share limitations applicable to Participants
on Restricted Stock or Other Stock-Based Awards for which the grant, vesting or
payment (as applicable) of any such Award is not subject to the attainment of
Performance Goals.

(iii) The maximum number of shares of Common Stock subject to any Performance
Award which may be granted under the Plan during any fiscal year of the Company
to any Participant shall be one million five hundred thousand (1,500,000) shares
(which shall be subject to any further increase or decrease pursuant to
Section 4.2) with respect to any fiscal year of the Company.

(iv) The maximum value of a cash payment made under a Performance Award which
may be granted under the Plan with respect to any fiscal year of the Company to
any Participant shall be seven million five hundred thousand dollars
($7,500,000).

(v) The individual Participant limitations set forth in this Section 4.1(c)
(other than Section 4.1(c)(iii)) shall be cumulative; that is, to the extent
that shares of Common Stock for which Awards are permitted to be granted to a
Participant during a fiscal year are not covered by an Award to such Participant
in a fiscal year, the number of shares of Common Stock available for Awards to
such Participant shall automatically increase in the subsequent fiscal years
during the term of the Plan until used.

(d) Annual Non-Employee Director Award Limitation. The aggregate grant date fair
value (computed as of the date of grant in accordance with applicable financial
accounting rules) of all Awards granted under the Plan to any individual
Non-Employee Director in any fiscal year of the Company (excluding Awards made
pursuant to deferred compensation arrangements in lieu of all or a portion of
cash retainers and any stock dividends payable in respect of outstanding Awards)
shall not exceed $500,000.

4.2 Changes.

(a) The existence of the Plan and the Awards granted hereunder shall not affect
in any way the right or power of the Board or the stockholders of the Company to
make or authorize (i) any adjustment, recapitalization, reorganization or other
change in the Company’s capital structure or its business, (ii) any merger or
consolidation of the Company or any Affiliate, (iii) any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the Common
Stock, (iv) the dissolution or liquidation of the Company or any Affiliate,
(v) any sale or transfer of all or part of the assets or business of the Company
or any Affiliate or (vi) any other corporate act or proceeding.

 

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(b) Subject to the provisions of Section 4.2(d), in the event of a dividend or
other distribution (whether in the form of cash, Common Stock, other securities,
or other property) other than regular cash dividends, recapitalization, stock
split, reverse stock split, reorganization, merger, consolidation, split-up,
spin-off, combination, Change in Control or exchange of Common Stock or other
securities of the Company, or other corporate transaction or event affects the
Common Stock such that an adjustment is necessary or appropriate in order to
prevent dilution or enlargement of benefits or potential benefits intended to be
made available under the Plan (a “Section 4.2 Event”), the Committee shall
equitably adjust (i) the number of shares of Common Stock or other securities of
the Company (or number and kind of other securities or property) with respect to
which Awards may be granted under the Plan, (ii) the maximum share limitation
applicable to each type of Award that may be granted to any individual
participant in any calendar year, (iii) the number of shares of Common Stock or
other securities of the Company (or number and kind of other securities or
property) subject to outstanding Awards, and (iv) the exercise price with
respect to any Stock Option or any Stock Appreciation Right. Any such adjustment
determined by the Committee shall be final, binding and conclusive on the
Company and all Participants and their respective heirs, executors,
administrators, successors and permitted assigns. If the Company enters into or
is involved in any merger, reorganization, Change in Control or other business
combination with any person or entity (a “Merger Event”), the Committee may,
prior to such Merger Event and effective upon such Merger Event, take such
action as it deems appropriate, including, but not limited to, replacing Awards
with substitute Awards in respect of the shares, other securities or other
property of the surviving corporation or any affiliate of the surviving
corporation on such terms and conditions, as to the number of shares, pricing
and otherwise, which shall substantially preserve the value, rights and benefits
of any affected Awards granted hereunder as of the date of the consummation of
the Merger Event. Upon receipt by any affected Participant of any such
substitute Award (or payment) as a result of any such Merger Event, such
Participant’s affected Awards for which such substitute Awards (or payment) were
received shall be thereupon cancelled without the need for obtaining the consent
of any such affected Participant. In addition, subject to Section 4.2(d), if
there shall occur any change in the capital structure or the business of the
Company that is not a Section 4.2 Event or Merger Event (an “Other Extraordinary
Event”), then the Committee, in its sole discretion, may adjust any Award and
make such other adjustments to the Plan. Except as expressly provided in this
Section 4.2 or in the applicable Award Agreement, a Participant shall have no
rights by reason of any Section 4.2 Event, Merger Event, or any Other
Extraordinary Event.

(c) Fractional shares of Common Stock resulting from any adjustment in Awards
pursuant to Section 4.2(a) or 4.2(b) shall be aggregated until, and eliminated
at, the time of exercise by rounding-down for fractions less than one-half and
rounding-up for fractions equal to or greater than one-half. No cash settlements
shall be made with respect to fractional shares eliminated by rounding. Notice
of any adjustment shall be given by the Committee to each Participant whose
Award has been adjusted and such adjustment (whether or not such notice is
given) shall be effective and binding for all purposes of the Plan.

 

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(d) In the event of a Merger Event in which the Company is not the surviving
entity or in the event of any transaction that results in the acquisition of
substantially all of the Company’s outstanding Common Stock by a single person
or entity or by a group of persons and/or entities acting in concert, or in the
event of the sale or transfer of all or substantially all of the Company’s
assets (all of the foregoing being referred to as an “Acquisition Event”), then
the Committee may, in its sole discretion, terminate all outstanding and
unexercised Stock Options, Stock Appreciation Rights, or any Other Stock-Based
Awards that provide for a Participant elected exercise, effective as of the date
of the Acquisition Event, by delivering notice of termination to each
Participant at least 10 days prior to the date of consummation of the
Acquisition Event, in which case during the period from the date on which such
notice of termination is delivered to the consummation of the Acquisition Event,
each such Participant shall have the right to exercise in full all of his or her
Awards that are then outstanding and vested as of such exercised date, but any
such exercise may be indicated as contingent on the occurrence of the
Acquisition Event, and, provided that, if the Acquisition Event does not take
place within a specified period after giving such notice for any reason
whatsoever, any such notice and contingent exercise pursuant thereto shall be
null and void.

If an Acquisition Event occurs but the Committee does not terminate the
outstanding Awards pursuant to this Section 4.2(d), then the provisions of
Section 4.2(b) and Article XI shall apply.

4.3 Minimum Purchase Price. Notwithstanding any provision of the Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued under the Plan, such shares shall not be issued for a consideration that
is less than as permitted under applicable law.

ARTICLE V

ELIGIBILITY

5.1 General Eligibility. All current and prospective Eligible Individuals are
eligible to be granted Awards. Eligibility for the grant of Awards and actual
participation in the Plan shall be determined by the Committee in its sole
discretion.

5.2 Incentive Stock Options. Notwithstanding the foregoing, only Eligible
Employees of the Company, its Subsidiaries and its Parent (if any) are eligible
to be granted Incentive Stock Options under the Plan. Eligibility for the grant
of an Incentive Stock Option and actual participation in the Plan shall be
determined by the Committee in its sole discretion.

5.3 General Requirement. The vesting and exercise of Awards granted to a
prospective Eligible Individual are conditioned upon such individual actually
becoming an Eligible Employee, Consultant or Non-Employee Director,
respectively.

5.4 Minimum Vesting Requirements. The minimum vesting period for any Award shall
be one (1) year from the date of grant.

 

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ARTICLE VI

STOCK OPTIONS

6.1 Options. Stock Options may be granted alone or in addition to other Awards
granted under the Plan. Each Stock Option granted under the Plan shall be of one
of two types: (a) an Incentive Stock Option or (b) a Non-Qualified Stock Option.

6.2 Grants. The Committee shall have the authority to grant to any Eligible
Employee one or more Incentive Stock Options, Non-Qualified Stock Options, or
both types of Stock Options. The Committee shall have the authority to grant any
Consultant or Non-Employee Director one or more Non-Qualified Stock Options. To
the extent that any Stock Option does not qualify as an Incentive Stock Option
(whether because of its provisions or the time or manner of its exercise or
otherwise), such Stock Option or the portion thereof which does not so qualify
shall constitute a separate Non-Qualified Stock Option.

6.3 Incentive Stock Options. Notwithstanding anything in the Plan to the
contrary, no term of the Plan relating to Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority granted
under the Plan be so exercised, so as to disqualify the Plan under Section 422
of the Code, or, without the consent of the Participants affected, to disqualify
any Incentive Stock Option under such Section 422.

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

(a) Exercise Price. The exercise price per share of Common Stock subject to a
Stock Option shall be determined by the Committee at the time of grant, provided
that the per share exercise price of an Incentive Stock Option shall be at least
equal to 100% (or, in the case of a Ten Percent Stockholder, 110%) of the Fair
Market Value of the Common Stock at the time of grant. To the extent that a
Stock Option is granted with an exercise price that is less than 100% of the
Fair Market Value of the Common Stock at the time of grant, such Stock Option
will be intended to comply with the requirements of Section 409A of the Code,
and the Committee shall take such requirements into account when approving any
such grant.

(b) Stock Option Term. The term of each Stock Option shall be fixed by the
Committee, provided that no Stock Option shall be exercisable more than 10 years
after the date the Option is granted; and provided further that the term of an
Incentive Stock Option granted to a Ten Percent Stockholder shall not exceed
five years.

(c) Exercisability. Unless otherwise provided by the Committee in accordance
with the provisions of this Section 6.4, and subject to Section 5.4, Stock
Options granted under the Plan shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the Committee at
the time of grant. If the Committee provides, in its discretion, that any Stock
Option is exercisable subject to certain limitations (including, without
limitation, that such Stock Option is exercisable only in installments or within
certain time periods), the Committee may waive such limitations on the
exercisability at any time at or after the time of grant in whole or in part
(including, without limitation, waiver of the installment exercise provisions or
acceleration of the time at which such Stock Option may be exercised). Unless
otherwise determined by the Committee at the time of grant, the Option agreement
shall provide that (i) in the event that the Participant engages in Detrimental
Activity prior to any exercise of the

 

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Stock Option (whether vested or unvested), all Stock Options held by the
Participant shall thereupon terminate and expire, (ii) as a condition of the
exercise of a Stock Option, the Participant shall be required to certify (or
shall be deemed to have certified) at the time of exercise in a manner
acceptable to the Company that the Participant is in compliance with the terms
and conditions of the Plan and that the Participant has not engaged in, and does
not intend to engage in, any Detrimental Activity, and (iii) in the event that
the Participant engages in Detrimental Activity during the one-year period
commencing on the date that the Stock Option is exercised or becomes vested, the
Company shall be entitled to recover from the Participant at any time within one
year after such exercise or vesting, and the Participant shall pay over to the
Company, an amount equal to any gain realized as a result of the exercise
(whether at the time of exercise or thereafter).

(d) Method of Exercise. Subject to whatever installment exercise and waiting
period provisions apply under Section 6.4(c), to the extent vested, Stock
Options may be exercised in whole or in part at any time during the Option term,
by giving written notice of exercise to the Company specifying the number of
shares of Common Stock to be purchased. Such notice shall be accompanied by
payment in full of the purchase price as follows: (i) in cash or by check, bank
draft or money order payable to the order of the Company; (ii) solely to the
extent permitted by applicable law, if the Common Stock is traded on a national
securities exchange, and the Committee authorizes, through a procedure whereby
the Participant delivers irrevocable instructions to a broker reasonably
acceptable to the Committee to deliver promptly to the Company an amount equal
to the purchase price; or (iii) on such other terms and conditions as may be
acceptable to the Committee (including, without limitation, having the Company
withhold shares of Common Stock issuable upon exercise of the Stock Options or
by payment in full or in part in the form of Common Stock owned by the
Participant based on the Fair Market Value of the Common Stock on the payment
date as determined by the Committee). No shares of Common Stock shall be issued
until payment therefore, as provided herein, has been made or provided for.

(e) Non-Transferability of Options. No Stock Option shall be Transferable by the
Participant otherwise than by will or by the laws of descent and distribution,
and all Stock Options shall be exercisable, during the Participant’s lifetime,
only by the Participant. Notwithstanding the foregoing, the Committee may
determine, in its sole discretion, at the time of grant or thereafter that a
Non-Qualified Stock Option that is otherwise not Transferable pursuant to this
Section is Transferable to a Family Member in whole or in part and in such
circumstances, and under such conditions, as specified by the Committee. A
Non-Qualified Stock Option that is Transferred to a Family Member pursuant to
the preceding sentence (i) may not be subsequently Transferred otherwise than by
will or by the laws of descent and distribution and (ii) remains subject to the
terms of this Plan and the applicable Award Agreement. Any shares of Common
Stock acquired upon the exercise of a Non-Qualified Stock Option by a
permissible transferee of a Non-Qualified Stock Option or a permissible
transferee pursuant to a Transfer after the exercise of the Non-Qualified Stock
Option shall be subject to the terms of this Plan and the applicable Award
Agreement.

(f) Termination by Death or Disability. Unless otherwise determined by the
Committee at the time of grant, or if no rights of the Participant are reduced,
thereafter, if a Participant’s Termination is by reason of death or Disability,
all Stock Options that are held by such Participant that are vested and
exercisable at the time of the Participant’s Termination may

 

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be exercised by the Participant at any time within a period of one year from the
date of such Termination (or in the case of death, by the legal representative
of the Participant’s estate), but in no event beyond the expiration of the
stated term of such Stock Options; provided, however, that, in the case of a
Termination due to Disability, if the Participant dies within such exercise
period, all unexercised Stock Options held by such Participant shall thereafter
be exercisable, to the extent to which they were exercisable at the time of
death, for a period of one year from the date of such death, but in no event
beyond the expiration of the stated term of such Stock Options.

(g) Involuntary Termination Without Cause. Unless otherwise determined by the
Committee at the time of grant, or if no rights of the Participant are reduced,
thereafter, if a Participant’s Termination is by involuntary termination without
Cause, all Stock Options that are held by such Participant that are vested and
exercisable at the time of the Participant’s Termination may be exercised by the
Participant at any time within a period of 90 days from the date of such
Termination, but in no event beyond the expiration of the stated term of such
Stock Options.

(h) Voluntary Termination. Unless otherwise determined by the Committee at the
time of grant, or if no rights of the Participant are reduced, thereafter, if a
Participant’s Termination is voluntary (other than a voluntary termination
described in Section 6.4(i)(y) hereof), all Stock Options that are held by such
Participant that are vested and exercisable at the time of the Participant’s
Termination may be exercised by the Participant at any time within a period of
90 days from the date of such Termination, but in no event beyond the expiration
of the stated term of such Stock Options.

(i) Termination for Cause. Unless otherwise determined by the Committee at the
time of grant, or if no rights of the Participant are reduced, thereafter, if a
Participant’s Termination (x) is for Cause or (y) is a voluntary Termination (as
provided in Section 6.4(h)) after the occurrence of an event that would be
grounds for a Termination for Cause, all Stock Options, whether vested or not
vested, that are held by such Participant shall thereupon terminate and expire
as of the date of such Termination.

(j) Unvested Stock Options. Unless otherwise determined by the Committee at the
time of grant, or if no rights of the Participant are reduced, thereafter, Stock
Options that are not vested as of the date of a Participant’s Termination for
any reason shall terminate and expire as of the date of such Termination.

(k) Incentive Stock Option Limitations. To the extent that the aggregate Fair
Market Value (determined as of the time of grant) of the Common Stock with
respect to which Incentive Stock Options are exercisable for the first time by
an Eligible Employee during any calendar year under this Plan and/or any other
stock option plan of the Company, any Subsidiary or any Parent exceeds $100,000,
such Options shall be treated as Non-Qualified Stock Options. In addition, if an
Eligible Employee does not remain employed by the Company, any Subsidiary or any
Parent at all times from the time an Incentive Stock Option is granted until
three months prior to the date of exercise thereof (or such other period as
required by applicable law), such Stock Option shall be treated as a
Non-Qualified Stock Option. Should any provision of this Plan not be necessary
in order for the Stock Options to qualify as Incentive Stock Options, or should
any additional provisions be required, the Committee may amend this Plan
accordingly, without the necessity of obtaining the approval of the stockholders
of the Company.

 

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(l) Form, Modification, Extension and Renewal of Stock Options. Subject to the
terms and conditions and within the limitations of the Plan, Stock Options shall
be evidenced by such form of agreement or grant as is approved by the Committee,
and the Committee may (i) modify, extend or renew outstanding Stock Options
granted under the Plan (provided that the rights of a Participant are not
reduced without his or her consent and provided further that such action does
not subject the Stock Options to Section 409A of the Code without the consent of
the Participant), and (ii) accept the surrender of outstanding Stock Options (up
to the extent not theretofore exercised) and authorize the granting of new Stock
Options in substitution therefor (to the extent not theretofore exercised).
Notwithstanding the foregoing, an outstanding Option may not be modified to
reduce the exercise price thereof nor may a new Option at a lower price be
substituted for a surrendered Option (other than adjustments or substitutions in
accordance with Section 4.2) nor may any cash payment be made for a surrendered
Option, unless such action is approved by the stockholders of the Company.

(m) Deferred Delivery of Common Stock. The Committee may in its discretion
permit Participants to defer delivery of Common Stock acquired pursuant to a
Participant’s exercise of an Option in accordance with the terms and conditions
established by the Committee in the applicable Award Agreement, which shall be
intended to comply with the requirements of Section 409A of the Code.

(n) Other Terms and Conditions. The Committee may include a provision in an
Award Agreement providing for the automatic exercise of a Non-Qualified Stock
Option on a cashless basis on the last day of the term of such Option if the
Participant has failed to exercise the Non-Qualified Stock Option as of such
date, with respect to which the Fair Market Value of the shares of Common Stock
underlying the Non-Qualified Stock Option exceeds the exercise price of such
Non-Qualified Stock Option on the date of expiration of such Option, subject to
Section 14.4. Stock Options may contain such other provisions, which shall not
be inconsistent with any of the terms of the Plan, as the Committee shall deem
appropriate.

ARTICLE VII

STOCK APPRECIATION RIGHTS

7.1 Tandem Stock Appreciation Rights. Stock Appreciation Rights may be granted
in conjunction with all or part of any Stock Option (a “Reference Stock Option”)
granted under the Plan (“Tandem Stock Appreciation Rights”). In the case of a
Non-Qualified Stock Option, such rights may be granted either at or after the
time of the grant of such Reference Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of the grant of such
Reference Stock Option.

 

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7.2 Terms and Conditions of Tandem Stock Appreciation Rights. Tandem Stock
Appreciation Rights granted hereunder shall be subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as shall be
determined from time to time by the Committee, and the following:

(a) Exercise Price. The exercise price per share of Common Stock subject to a
Tandem Stock Appreciation Right shall be determined by the Committee at the time
of grant. To the extent that a Stock Appreciation Right is granted with an
exercise price that is less than 100% of the Fair Market Value of the Common
Stock at the time of grant, such Stock Appreciation Right will be intended to
comply with the requirements of Section 409A of the Code, and the Committee
shall take such requirements into account when approving any such grant.

(b) Term. A Tandem Stock Appreciation Right or applicable portion thereof
granted with respect to a Reference Stock Option shall terminate and no longer
be exercisable upon the termination or exercise of the Reference Stock Option,
except that, unless otherwise determined by the Committee, in its sole
discretion, at the time of grant, a Tandem Stock Appreciation Right granted with
respect to less than the full number of shares covered by the Reference Stock
Option shall not be reduced until and then only to the extent that the exercise
or termination of the Reference Stock Option causes the number of shares covered
by the Tandem Stock Appreciation Right to exceed the number of shares remaining
available and unexercised under the Reference Stock Option.

(c) Exercisability. Tandem Stock Appreciation Rights shall be exercisable only
at such time or times and to the extent that the Reference Stock Options to
which they relate shall be exercisable in accordance with the provisions of
Article VI, and shall be subject to the provisions of Section 6.4(c).

(d) Method of Exercise. A Tandem Stock Appreciation Right may be exercised by
the Participant by surrendering the applicable portion of the Reference Stock
Option. Upon such exercise and surrender, the Participant shall be entitled to
receive an amount determined in the manner prescribed in this Section 7.2. Stock
Options which have been so surrendered, in whole or in part, shall no longer be
exercisable to the extent that the related Tandem Stock Appreciation Rights have
been exercised.

(e) Payment. Upon the exercise of a Tandem Stock Appreciation Right, a
Participant shall be entitled to receive up to, but no more than, an amount in
cash and/or Common Stock (as chosen by the Committee in its sole discretion)
equal in value to the excess of the Fair Market Value of one share of Common
Stock over the Option exercise price per share specified in the Reference Stock
Option agreement multiplied by the number of shares of Common Stock in respect
of which the Tandem Stock Appreciation Right shall have been exercised, with the
Committee having the right to determine the form of payment.

(f) Deemed Exercise of Reference Stock Option. Upon the exercise of a Tandem
Stock Appreciation Right, the Reference Stock Option or part thereof to which
such Stock Appreciation Right is related shall be deemed to have been exercised
for the purpose of the limitation set forth in Article IV of the Plan on the
number of shares of Common Stock to be issued under the Plan.

(g) Non-Transferability. Tandem Stock Appreciation Rights shall be Transferable
only when and to the extent that the underlying Stock Option would be
Transferable under Section 6.4(e) of the Plan.

 

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7.3 Non-Tandem Stock Appreciation Rights. Non-Tandem Stock Appreciation Rights
may also be granted without reference to any Stock Options granted under the
Plan.

7.4 Terms and Conditions of Non-Tandem Stock Appreciation Rights. Non-Tandem
Stock Appreciation Rights granted hereunder shall be subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as shall be
determined from time to time by the Committee, and the following:

(a) Exercise Price. The exercise price per share of Common Stock subject to a
Non-Tandem Stock Appreciation Right shall be determined by the Committee at the
time of grant, provided that the per share exercise price of a Non-Tandem Stock
Appreciation Right shall not be less than 100% of the Fair Market Value of the
Common Stock at the time of grant.

(b) Term. The term of each Non-Tandem Stock Appreciation Right shall be fixed by
the Committee, but shall not be greater than 10 years after the date the right
is granted.

(c) Exercisability. Unless otherwise provided by the Committee in accordance
with the provisions of this Section 7.4, and subject to Section 5.4, Non-Tandem
Stock Appreciation Rights granted under the Plan shall be exercisable at such
time or times and subject to such terms and conditions as shall be determined by
the Committee at the time of grant. If the Committee provides, in its
discretion, that any such right is exercisable subject to certain limitations
(including, without limitation, that it is exercisable only in installments or
within certain time periods), the Committee may waive such limitations on the
exercisability at any time at or after grant in whole or in part (including,
without limitation, waiver of the installment exercise provisions or
acceleration of the time at which such right may be exercised).

Unless otherwise determined by the Committee at grant, the Award Agreement shall
provide that (i) in the event that the Participant engages in Detrimental
Activity prior to any exercise of the Non-Tandem Stock Appreciation Right, all
Non-Tandem Stock Appreciation Rights held by the Participant shall thereupon
terminate and expire, (ii) as a condition of the exercise of a Non-Tandem Stock
Appreciation Right, the Participant shall be required to certify (or shall be
deemed to have certified) at the time of exercise in a manner acceptable to the
Company that the Participant is in compliance with the terms and conditions of
the Plan and that the Participant has not engaged in, and does not intend to
engage in, any Detrimental Activity, and (iii) in the event that the Participant
engages in Detrimental Activity during the one-year period commencing on the
date the Non-Tandem Stock Appreciation Right is exercised or becomes vested, the
Company shall be entitled to recover from the Participant at any time within one
year after such exercise or vesting, and the Participant shall pay over to the
Company, an amount equal to any gain realized as a result of the exercise
(whether at the time of exercise or thereafter).

(d) Method of Exercise. Subject to whatever installment exercise and waiting
period provisions apply under Section 7.4(c), Non-Tandem Stock Appreciation
Rights may be exercised in whole or in part at any time in accordance with the
applicable Award Agreement, by giving written notice of exercise to the Company
specifying the number of Non-Tandem Stock Appreciation Rights to be exercised.

 

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(e) Payment. Upon the exercise of a Non-Tandem Stock Appreciation Right a
Participant shall be entitled to receive, for each right exercised, up to, but
no more than, an amount in cash and/or Common Stock (as chosen by the Committee
in its sole discretion) equal in value to the excess of the Fair Market Value of
one share of Common Stock on the date that the right is exercised over the Fair
Market Value of one share of Common Stock on the date that the right was awarded
to the Participant.

(f) Termination. Unless otherwise determined by the Committee at grant or, if no
rights of the Participant are reduced, thereafter, subject to the provisions of
the applicable Award Agreement and the Plan, upon a Participant’s Termination
for any reason, Non-Tandem Stock Appreciation Rights will remain exercisable
following a Participant’s Termination on the same basis as Stock Options would
be exercisable following a Participant’s Termination in accordance with the
provisions of Sections 6.4(f) through 6.4(j).

(g) Non-Transferability. No Non-Tandem Stock Appreciation Rights shall be
Transferable by the Participant otherwise than by will or by the laws of descent
and distribution, and all such rights shall be exercisable, during the
Participant’s lifetime, only by the Participant.

7.5 Limited Stock Appreciation Rights. The Committee may, in its sole
discretion, grant Tandem and Non-Tandem Stock Appreciation Rights either as a
general Stock Appreciation Right or as a Limited Stock Appreciation Right.
Limited Stock Appreciation Rights may be exercised only upon the occurrence of a
Change in Control or such other event as the Committee may, in its sole
discretion, designate at the time of grant or thereafter. Upon the exercise of
Limited Stock Appreciation Rights, except as otherwise provided in an Award
Agreement, the Participant shall receive in cash and/or Common Stock, as
determined by the Committee, an amount equal to the amount (i) set forth in
Section 7.2(e) with respect to Tandem Stock Appreciation Rights, or (ii) set
forth in Section 7.4(e) with respect to Non-Tandem Stock Appreciation Rights.

7.6 No Repricings or Cash Buyouts of Stock Appreciation Rights. Notwithstanding
the foregoing, an outstanding Stock Appreciation Right may not be modified to
reduce the exercise price thereof nor may a new Stock Appreciation Right at a
lower price be substituted for a surrendered Stock Appreciation Right (other
than adjustments or substitutions in accordance with Section 4.2) nor may any
cash payment be made for a surrendered Stock Appreciation Right, unless such
action is approved by the stockholders of the Company.

ARTICLE VIII

RESTRICTED STOCK

8.1 Awards of Restricted Stock. Shares of Restricted Stock may be issued either
alone or in addition to other Awards granted under the Plan. The Committee shall
determine the Eligible Individuals, to whom, and the time or times at which,
grants of Restricted Stock shall be made, the number of shares to be awarded,
the price (if any) to be paid by the Participant (subject to Section 8.2), the
time or times within which such Awards may be subject to forfeiture, the vesting
schedule (subject to Section 5.4) and rights to acceleration thereof, and all
other terms and conditions of the Awards.

 

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Unless otherwise determined by the Committee at grant, each Award of Restricted
Stock shall provide that in the event that the Participant engages in
Detrimental Activity prior to, or during the one-year period after, any vesting
of Restricted Stock, the Committee may direct that all unvested Restricted Stock
shall be immediately forfeited to the Company and that the Participant shall pay
over to the Company an amount equal to the Fair Market Value at the time of
vesting of any Restricted Stock which had vested in the period referred to
above.

The Committee may condition the grant or vesting of Restricted Stock upon the
attainment of specified performance targets (including, the Performance Goals)
or such other factor as the Committee may determine in its sole discretion,
including to comply with the requirements of Section 162(m) of the Code.

8.2 Awards and Certificates. Eligible Individuals selected to receive Restricted
Stock shall not have any right with respect to such Award, unless and until such
Participant has delivered a fully executed copy of the agreement evidencing the
Award to the Company and has otherwise complied with the applicable terms and
conditions of such Award. Further, such Award shall be subject to the following
conditions:

(a) Purchase Price. The purchase price of Restricted Stock shall be fixed by the
Committee. Subject to Section 4.3, the purchase price for shares of Restricted
Stock may be zero to the extent permitted by applicable law, and, to the extent
not so permitted, such purchase price may not be less than par value.

(b) Acceptance. Awards of Restricted Stock must be accepted within a period of
60 days (or such shorter period as the Committee may specify at grant) after the
grant date, by executing a Restricted Stock agreement and by paying whatever
price (if any) the Committee has designated thereunder.

(c) Legend. Each Participant receiving Restricted Stock shall be issued a stock
certificate in respect of such shares of Restricted Stock, unless the Committee
elects to use another system, such as book entries by the transfer agent, as
evidencing ownership of shares of Restricted Stock. Such certificate shall be
registered in the name of such Participant, and shall, in addition to such
legends required by applicable securities laws, bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Award,
substantially in the following form:

“The anticipation, alienation, attachment, sale, transfer, assignment, pledge,
encumbrance or charge of the shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of the Amended and Restated U.S.
Silica Holdings, Inc. (the “Company”) 2011 Incentive Compensation Plan (the
“Plan”) and an Agreement entered into between the registered owner and the
Company dated                     . Copies of such Plan and Agreement are on
file at the principal office of the Company.”

(d) Custody. If stock certificates are issued in respect of shares of Restricted
Stock, the Committee may require that any stock certificates evidencing such
shares be held in custody by the Company until the restrictions thereon shall
have lapsed, and that, as a condition of

 

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any grant of Restricted Stock, the Participant shall have delivered a duly
signed stock power or other instruments of assignment (including a power of
attorney), each endorsed in blank with a guarantee of signature if deemed
necessary or appropriate by the Company, which would permit transfer to the
Company of all or a portion of the shares subject to the Restricted Stock Award
in the event that such Award is forfeited in whole or part.

8.3 Restrictions and Conditions. The shares of Restricted Stock awarded pursuant
to the Plan shall be subject to the following restrictions and conditions:

(a) Restriction Period. (i) The Participant shall not be permitted to Transfer
shares of Restricted Stock awarded under the Plan during the period or periods
set by the Committee (the “Restriction Period”) commencing on the date of such
Award, as set forth in the Restricted Stock Award Agreement and such agreement
shall set forth a vesting schedule and any event that would accelerate vesting
of the shares of Restricted Stock. Within these limits, based on service,
attainment of Performance Goals pursuant to Section 8.3(a)(ii) and/or such other
factors or criteria as the Committee may determine in its sole discretion, the
Committee may condition the grant or provide for the lapse of such restrictions
in installments in whole or in part, or may accelerate the vesting of all or any
part of any Restricted Stock Award and/or waive the deferral limitations for all
or any part of any Restricted Stock Award.

(ii) If the grant of shares of Restricted Stock or the lapse of restrictions is
based on the attainment of Performance Goals, the Committee shall establish the
objective Performance Goals and the applicable vesting percentage of the
Restricted Stock applicable to each Participant or class of Participants in
writing prior to the beginning of the applicable fiscal year or at such later
date as otherwise determined by the Committee and while the outcome of the
Performance Goals are substantially uncertain. Such Performance Goals may
incorporate provisions for disregarding (or adjusting for) changes in accounting
methods, corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar type events or circumstances. With regard to a
Restricted Stock Award that is intended to comply with Section 162(m) of the
Code, to the extent that any such provision would create impermissible
discretion under Section 162(m) of the Code or otherwise violate Section 162(m)
of the Code, such provision shall be of no force or effect.

(b) Rights as a Stockholder. Except as provided in Section 8.3(a) and this
Section 8.3(b) and as otherwise determined by the Committee, the Participant
shall have, with respect to the shares of Restricted Stock, all of the rights of
a holder of shares of Common Stock of the Company including, without limitation,
the right to vote such shares, subject to and conditioned upon the full vesting
of shares of Restricted Stock, the right to tender such shares, and the right to
receive all dividends and other distributions paid with respect to the
Restricted Stock, provided that such dividends or other distributions will be
subject to the same vesting requirements as the underlying Restricted Stock and
shall be paid at the time the Restricted Stock becomes vested. If dividends or
distributions are paid in shares of Common Stock, such shares shall be deposited
with the Company and shall be subject to the same restrictions on
transferability and forfeitability as the Restricted Stock with respect to which
they were paid. The Committee may, in its sole discretion, determine at the time
of grant that the payment of dividends shall be deferred until, and conditioned
upon, the expiration of the applicable Restriction Period.

 

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(c) Termination. Unless otherwise determined by the Committee at grant or, if no
rights of the Participant are reduced, thereafter, subject to the applicable
provisions of the Award Agreement and the Plan, upon a Participant’s Termination
for any reason during the relevant Restriction Period, all Restricted Stock
still subject to restriction will be forfeited in accordance with the terms and
conditions established by the Committee at grant or thereafter.

(d) Lapse of Restrictions. If and when the Restriction Period expires without a
prior forfeiture of the Restricted Stock, the certificates for such shares, if
any, shall be delivered to the Participant, unless the Committee elects to use
another system, such as book entries by the transfer agent. All legends shall be
removed from said certificates at the time of delivery to the Participant,
except as otherwise required by applicable law or other limitations imposed by
the Committee.

ARTICLE IX

PERFORMANCE AWARDS

9.1 Performance Awards. The Committee may grant a Performance Award to a
Participant payable upon the attainment of specific Performance Goals. The
Committee may grant Performance Awards that are intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, as well as
Performance Awards that are not intended to qualify as “performance-based
compensation” under Section 162(m) of the Code. If the Performance Award is
payable in shares of Restricted Stock, such shares shall be transferable to the
Participant only upon attainment of the relevant Performance Goal in accordance
with Article VIII. If the Performance Award is payable in cash, it may be paid
upon the attainment of the relevant Performance Goals either in cash or in
shares of Restricted Stock (based on the then current Fair Market Value of such
shares), as determined by the Committee, in its sole and absolute discretion.
Each Performance Award shall be evidenced by an Award Agreement in such form
that is not inconsistent with the Plan and that the Committee may from time to
time approve.

Unless otherwise determined by the Committee at grant, each Performance Award
shall provide that in the event the Participant engages in Detrimental Activity
prior to, or during the one-year period after, any vesting of the Performance
Award, the Committee may direct (at any time within one year thereafter) that
all of the unvested portion of the Performance Award shall be immediately
forfeited to the Company and that the Participant shall pay over to the Company
an amount equal to any gain that the Participant realized from any Performance
Award that had vested in the period referred to above.

With respect to Performance Awards that are intended to qualify as
“performance-based compensation” under Section 162(m) of the Code, the Committee
shall condition the right to payment of any Performance Award upon the
attainment of objective Performance Goals established pursuant to
Section 9.2(c).

9.2 Terms and Conditions. Performance Awards awarded pursuant to this Article IX
shall be subject to the following terms and conditions:

(a) Earning of Performance Award. At the expiration of the applicable
Performance Period, the Committee shall determine the extent to which the
Performance Goals established pursuant to Section 9.2(c) are achieved and the
percentage of each Performance Award that has been earned.

 

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(b) Non-Transferability. Subject to the applicable provisions of the Award
Agreement and the Plan, Performance Awards may not be Transferred during the
Performance Period.

(c) Objective Performance Goals, Formulae or Standards. With respect to
Performance Awards that are intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, the Committee shall establish
the objective Performance Goals for the earning of Performance Awards based on a
Performance Period applicable to each Participant or class of Participants in
writing prior to the beginning of the applicable Performance Period or at such
later date as permitted under Section 162(m) of the Code and while the outcome
of the Performance Goals are substantially uncertain. Such Performance Goals may
incorporate, if and only to the extent permitted under Section 162(m) of the
Code, provisions for disregarding (or adjusting for) changes in accounting
methods, corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar type events or circumstances. To the extent that
any such provision would create impermissible discretion under Section 162(m) of
the Code or otherwise violate Section 162(m) of the Code, such provision shall
be of no force or effect, with respect to Performance Awards that are intended
to qualify as “performance-based compensation” under Section 162(m) of the Code.

(d) Dividends. Unless otherwise determined by the Committee at the time of
grant, amounts equal to dividends declared during the Performance Period with
respect to the number of shares of Common Stock covered by a Performance Award
will not be paid to the Participant.

(e) Payment. Following the Committee’s determination in accordance with
Section 9.2(a), the Company shall settle Performance Awards, in such form
(including, without limitation, in shares of Common Stock or in cash) as
determined by the Committee, in an amount equal to such Participant’s earned
Performance Awards. Notwithstanding the foregoing, the Committee may, in its
sole discretion, award an amount less than the earned Performance Awards and/or
subject the payment of all or part of any Performance Award to additional
vesting, forfeiture and deferral conditions as it deems appropriate.

(f) Termination. Subject to the applicable provisions of the Award Agreement and
the Plan, upon a Participant’s Termination for any reason during the Performance
Period for a given Performance Award, the Performance Award in question will
vest or be forfeited in accordance with the terms and conditions established by
the Committee at grant.

(g) Accelerated Vesting. Based on service, performance and/or such other factors
or criteria, if any, as the Committee may determine, the Committee may, at or
after grant, accelerate the vesting of all or any part of any Performance Award.

ARTICLE X

OTHER STOCK-BASED AND CASH-BASED AWARDS

10.1 Other Stock-Based Awards. The Committee is authorized to grant to Eligible
Individuals Other Stock-Based Awards that are payable in, valued in whole or in
part by reference

 

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to, or otherwise based on or related to shares of Common Stock, including but
not limited to, shares of Common Stock awarded purely as a bonus and not subject
to restrictions or conditions, shares of Common Stock in payment of the amounts
due under an incentive or performance plan sponsored or maintained by the
Company or an Affiliate, stock equivalent units, restricted stock units, and
Awards valued by reference to book value of shares of Common Stock. Other
Stock-Based Awards may be granted either alone or in addition to or in tandem
with other Awards granted under the Plan.

Subject to the provisions of the Plan, the Committee shall have authority to
determine the Eligible Individuals, to whom, and the time or times at which,
such Awards shall be made, the number of shares of Common Stock to be awarded
pursuant to such Awards, and all other conditions of the Awards. The Committee
may also provide for the grant of Common Stock under such Awards upon the
completion of a specified Performance Period.

The Committee may condition the grant or vesting of Other Stock-Based Awards
upon the attainment of specified Performance Goals as the Committee may
determine, in its sole discretion; provided that to the extent that such Other
Stock-Based Awards are intended to comply with Section 162(m) of the Code, the
Committee shall establish the objective Performance Goals for the grant or
vesting of such Other Stock-Based Awards based on a Performance Period
applicable to each Participant or class of Participants in writing prior to the
beginning of the applicable Performance Period or at such later date as
permitted under Section 162(m) of the Code and while the outcome of the
Performance Goals are substantially uncertain. Such Performance Goals may
incorporate, if and only to the extent permitted under Section 162(m) of the
Code, provisions for disregarding (or adjusting for) changes in accounting
methods, corporate transactions (including, without limitation, dispositions and
acquisitions) and other similar type events or circumstances. To the extent that
any such provision would create impermissible discretion under Section 162(m) of
the Code or otherwise violate Section 162(m) of the Code, such provision shall
be of no force or effect, with respect to Performance Awards that are intended
to qualify as “performance-based compensation” under Section 162(m) of the Code.

10.2 Terms and Conditions. Other Stock-Based Awards made pursuant to this
Article X shall be subject to the following terms and conditions:

(a) Non-Transferability. Subject to the applicable provisions of the Award
Agreement and the Plan, shares of Common Stock subject to Awards made under this
Article X may not be Transferred prior to the date on which the shares are
issued, or, if later, the date on which any applicable restriction, performance
or deferral period lapses.

(b) Dividends. Unless otherwise determined by the Committee at the time of
Award, subject to the provisions of the Award Agreement and the Plan, the
recipient of an Award under this Article X shall not be entitled to receive,
currently or on a deferred basis, dividends or dividend equivalents with respect
to the number of shares of Common Stock covered by the Award, as determined at
the time of the Award by the Committee, in its sole discretion.

(c) Vesting. Subject to Section 5.4, any Award under this Article X and any
Common Stock covered by any such Award shall vest or be forfeited to the extent
so provided in the Award Agreement, as determined by the Committee, in its sole
discretion.

 

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(d) Price. Common Stock issued on a bonus basis under this Article X may be
issued for no cash consideration. Common Stock purchased pursuant to a purchase
right awarded under this Article X shall be priced, as determined by the
Committee in its sole discretion.

10.3 Other Cash-Based Awards. The Committee may from time to time grant Other
Cash-Based Awards to Eligible Individuals in such amounts, on such terms and
conditions, and for such consideration, including no consideration or such
minimum consideration as may be required by applicable law, as it shall
determine in its sole discretion. Other Cash-Based Awards may be granted subject
to the satisfaction of vesting conditions or may be awarded purely as a bonus
and not subject to restrictions or conditions, and if subject to vesting
conditions, the Committee may accelerate the vesting of such Awards at any time.
The grant of an Other Cash-Based Award shall not require a segregation of any of
the Company’s assets for satisfaction of the Company’s payment obligation
thereunder.

10.4 Detrimental Activity. Unless otherwise determined by the Committee at
grant, the Award Agreement shall provide that (i) in the event that the
Participant engages in Detrimental Activity prior to any exercise, distribution
or settlement of any Other Stock-Based Award and/or Other Cash-Based Award, such
Other Stock-Based Awards and/or Other Cash-Based Awards held by the Participant
shall thereupon terminate and expire, (ii) as a condition of the exercise,
distribution or settlement of an Other Stock-Based Award and/or Other Cash-Based
Award, the Participant shall be required to certify (or shall be deemed to have
certified) at the time of exercise in a manner acceptable to the Company that
the Participant is in compliance with the terms and conditions of the Plan and
that the Participant has not engaged in, and does not intend to engage in, any
Detrimental Activity, and (iii) in the event that the Participant engages in
Detrimental Activity during the one-year period commencing on the date of
exercise, distribution, or settlement of an Other Stock-Based Award and/or Other
Cash-Based Award, the Company shall be entitled to recover from the Participant
at any time within one year after such exercise, settlement, or distribution,
and the Participant shall pay over to the Company, an amount equal to any gain
realized as a result of the exercise, distribution or settlement (whether at the
time of exercise, distribution or settlement or thereafter).

ARTICLE XI

CHANGE IN CONTROL PROVISIONS

11.1 Benefits. In the event of a Change in Control of the Company (as defined
below), and except as otherwise provided by the Committee in an Award Agreement,
a Participant’s unvested Awards shall not vest and a Participant’s Awards shall
be treated in accordance with one of the following methods as determined by the
Committee:

(a) Awards, whether or not then vested, shall be continued, assumed, have new
rights substituted therefor or be treated in accordance with Section 4.2(d)
hereof in a manner consistent with the requirements of Section 409A of the Code,
as determined by the Committee, and restrictions to which shares of Restricted
Stock or any other Award granted prior to the Change in Control are subject
shall not lapse upon a Change in Control and the Restricted Stock or other Award
shall, where appropriate in the sole discretion of the Committee, receive the
same distribution as other Common Stock on such terms as determined by the
Committee; provided that the Committee may decide to award additional Restricted
Stock or other Awards in lieu of any

 

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cash distribution. Notwithstanding anything to the contrary herein, for purposes
of Incentive Stock Options, any assumed or substituted Stock Option shall comply
with the requirements of Treasury Regulation Section 1.424-1 (and any amendment
thereto).

(b) The Committee, in its sole discretion, may provide for the purchase of any
Awards by the Company or an Affiliate for an amount of cash equal to the excess
(if any) of the Change in Control Price (as defined below) of the shares of
Common Stock covered by such Awards, over the aggregate exercise price of such
Awards. For purposes of this Section 11.1, “Change in Control Price” shall mean
the highest price per share of Common Stock paid in any transaction related to a
Change in Control of the Company.

(c) Notwithstanding any other provision herein to the contrary, the Committee
may, in its sole discretion, provide for accelerated vesting or lapse of
restrictions, of an Award in connection with a Change of Control of the Company.

11.2 Change in Control. Unless otherwise determined by the Committee in the
applicable Award Agreement or other written agreement approved by the Committee,
a “Change in Control” shall be deemed to occur if:

(a) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Exchange Act (other than the Company, any trustee or other fiduciary holding
securities under any employee benefit plan of the Company, or any company owned,
directly or indirectly, by the stockholders of the Company in substantially the
same proportions as their ownership of Common Stock of the Company), becoming
the beneficial owner (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company’s then outstanding securities;

(b) during any period of two consecutive years, individuals who at the beginning
of such period constitute the Board, and any new director (other than a director
designated by a person who has entered into an agreement with the Company to
effect a transaction described in paragraph (a), (c), or (d) of this
Section 11.2 or a director whose initial assumption of office occurs as a result
of either an actual or threatened election contest (as such term is used in Rule
14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board) whose election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority of the Board;

(c) a merger or consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; provided, however, that a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no person (other than those covered by the exceptions in
Section 11.2(a)) acquires more than 50% of the combined voting power of the
Company’s then outstanding securities shall not constitute a Change in Control
of the Company; or

 

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(d) a complete liquidation or dissolution of the Company or the consummation of
a sale or disposition by the Company of all or substantially all of the
Company’s assets other than the sale or disposition of all or substantially all
of the assets of the Company to a person or persons who beneficially own,
directly or indirectly, 50% or more of the combined voting power of the
outstanding voting securities of the Company at the time of the sale.

Notwithstanding the foregoing, with respect to any Award that is characterized
as “nonqualified deferred compensation” within the meaning of Section 409A of
the Code, an event shall not be considered to be a Change in Control under the
Plan for purposes of payment of any such Award unless such event is also a
“change in ownership,” a “change in effective control” or a “change in the
ownership of a substantial portion of the assets” of the Company within the
meaning of Section 409A of the Code.

ARTICLE XII

TERMINATION OR AMENDMENT OF PLAN

12.1 Termination or Amendment. Notwithstanding any other provision of the Plan,
the Board may at any time, and from time to time, amend, in whole or in part,
any or all of the provisions of the Plan (including any amendment deemed
necessary to ensure that the Company may comply with any regulatory requirement
referred to in Article XIV or Section 409A of the Code), or suspend or terminate
it entirely, retroactively or otherwise; provided, however, that, unless
otherwise required by law or specifically provided herein, the rights of a
Participant with respect to Awards granted prior to such amendment, suspension
or termination, may not be impaired without the consent of such Participant and,
provided further, that without the approval of the holders of the Company’s
Common Stock entitled to vote in accordance with applicable law, no amendment
may be made that would (i) increase the aggregate number of shares of Common
Stock that may be issued under the Plan (except by operation of Section 4.2);
(ii) increase the maximum individual Participant limitations for a fiscal year
under Section 4.1(c) (except by operation of Section 4.2); (iii) change the
classification of individuals eligible to receive Awards under the Plan;
(iv) decrease the minimum option price of any Stock Option or Stock Appreciation
Right; (v) extend the maximum option period under Section 6.4; (vi) alter the
Performance Goals for Restricted Stock, Performance Awards or Other Stock-Based
Awards as set forth in Exhibit A hereto; (vii) award any Stock Option or Stock
Appreciation Right in replacement of a canceled Stock Option or Stock
Appreciation Right with a higher exercise price than the replacement award,
except in accordance with Section 6.4(l); or (viii) require stockholder approval
in order for the Plan to continue to comply with the applicable provisions of
Section 162(m) of the Code or, to the extent applicable to Incentive Stock
Options, Section 422 of the Code. In no event may the Plan be amended without
the approval of the stockholders of the Company in accordance with the
applicable laws of the State of Delaware to increase the aggregate number of
shares of Common Stock that may be issued under the Plan, decrease the minimum
exercise price of any Award, or to make any other amendment that would require
stockholder approval under Financial Industry Regulatory Authority (FINRA) rules
and regulations or the rules of any exchange or system on which the Company’s
securities are listed or traded at the request of the Company. Notwithstanding
anything herein to the contrary, the Board may amend the Plan or any Award
Agreement at any time without a Participant’s consent to comply with applicable
law including Section 409A of the Code.

 

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The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, subject to Article IV or as otherwise
specifically provided herein, no such amendment or other action by the Committee
shall impair the rights of any holder without the holder’s consent.

ARTICLE XIII

UNFUNDED STATUS OF PLAN

The Plan is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payment as to which a Participant has a fixed
and vested interest but which are not yet made to a Participant by the Company,
nothing contained herein shall give any such Participant any right that is
greater than those of a general unsecured creditor of the Company.

ARTICLE XIV

GENERAL PROVISIONS

14.1 Legend. The Committee may require each person receiving shares of Common
Stock pursuant to a Stock Option or other Award under the Plan to represent to
and agree with the Company in writing that the Participant is acquiring the
shares without a view to distribution thereof. In addition to any legend
required by the Plan, the certificates for such shares may include any legend
that the Committee deems appropriate to reflect any restrictions on Transfer.
All certificates for shares of Common Stock delivered under the Plan shall be
subject to such stop transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed or any national securities exchange system upon whose
system the Common Stock is then quoted, any applicable federal or state
securities law, and any applicable corporate law, and the Committee may cause a
legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

14.2 Other Plans. Nothing contained in the Plan shall prevent the Board from
adopting other or additional compensation arrangements, subject to stockholder
approval if such approval is required, and such arrangements may be either
generally applicable or applicable only in specific cases.

14.3 No Right to Employment/Directorship/Consultancy. Neither the Plan nor the
grant of any Option or other Award hereunder shall give any Participant or other
employee, Consultant or Non-Employee Director any right with respect to
continuance of employment, consultancy or directorship by the Company or any
Affiliate, nor shall there be a limitation in any way on the right of the
Company or any Affiliate by which an employee is employed or a Consultant or
Non-Employee Director is retained to terminate his or her employment,
consultancy or directorship at any time.

14.4 Withholding of Taxes. The Company shall have the right to deduct from any
payment to be made pursuant to the Plan, or to otherwise require, prior to the
issuance or delivery

 

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of shares of Common Stock or the payment of any cash hereunder, payment by the
Participant of, any federal, state or local taxes required by law to be
withheld. Upon the vesting of Restricted Stock (or other Award that is taxable
upon vesting), or upon making an election under Section 83(b) of the Code, a
Participant shall pay all required withholding to the Company. Any minimum
statutorily required withholding obligation with regard to any Participant may
be satisfied, subject to the consent of the Committee, by reducing the number of
shares of Common Stock otherwise deliverable or by delivering shares of Common
Stock already owned. Any fraction of a share of Common Stock required to satisfy
such tax obligations shall be disregarded and the amount due shall be paid
instead in cash by the Participant.

14.5 No Assignment of Benefits. No Award or other benefit payable under the Plan
shall, except as otherwise specifically provided by law or permitted by the
Committee, be Transferable in any manner, and any attempt to Transfer any such
benefit shall be void, and any such benefit shall not in any manner be liable
for or subject to the debts, contracts, liabilities, engagements or torts of any
person who shall be entitled to such benefit, nor shall it be subject to
attachment or legal process for or against such person.

14.6 Listing and Other Conditions.

(a) Unless otherwise determined by the Committee, as long as the Common Stock is
listed on a national securities exchange or system sponsored by a national
securities association, the issuance of shares of Common Stock pursuant to an
Award shall be conditioned upon such shares being listed on such exchange or
system. The Company shall have no obligation to issue such shares unless and
until such shares are so listed, and the right to exercise any Option or other
Award with respect to such shares shall be suspended until such listing has been
effected.

(b) If at any time counsel to the Company shall be of the opinion that any sale
or delivery of shares of Common Stock pursuant to an Option or other Award is or
may in the circumstances be unlawful or result in the imposition of excise taxes
on the Company under the statutes, rules or regulations of any applicable
jurisdiction, the Company shall have no obligation to make such sale or
delivery, or to make any application or to effect or to maintain any
qualification or registration under the Securities Act or otherwise, with
respect to shares of Common Stock or Awards, and the right to exercise any
Option or other Award shall be suspended until, in the opinion of said counsel,
such sale or delivery shall be lawful or will not result in the imposition of
excise taxes on the Company.

(c) Upon termination of any period of suspension under this Section 14.6, any
Award affected by such suspension which shall not then have expired or
terminated shall be reinstated as to all shares available before such suspension
and as to shares which would otherwise have become available during the period
of such suspension, but no such suspension shall extend the term of any Award.

(d) A Participant shall be required to supply the Company with certificates,
representations and information that the Company requests and otherwise
cooperate with the Company in obtaining any listing, registration,
qualification, exemption, consent or approval the Company deems necessary or
appropriate.

 

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14.7 Stockholders Agreement and Other Requirements. Notwithstanding anything
herein to the contrary, as a condition to the receipt of shares of Common Stock
pursuant to an Award under the Plan, to the extent required by the Committee,
the Participant shall execute and deliver a stockholder’s agreement or such
other documentation that shall set forth certain restrictions on transferability
of the shares of Common Stock acquired upon exercise or purchase, and such other
terms as the Board or Committee shall from time to time establish. Such
stockholder’s agreement or other documentation shall apply to the Common Stock
acquired under the Plan and covered by such stockholder’s agreement or other
documentation. The Company may require, as a condition of exercise, the
Participant to become a party to any other existing stockholder agreement (or
other agreement).

14.8 Governing Law. The Plan and actions taken in connection herewith shall be
governed and construed in accordance with the laws of the State of Delaware
(regardless of the law that might otherwise govern under applicable Delaware
principles of conflict of laws).

14.9 Jurisdiction; Waiver of Jury Trial. Any suit, action or proceeding with
respect to the Plan or any Award Agreement, or any judgment entered by any court
of competent jurisdiction in respect of any thereof, shall be resolved only in
the courts of the State of Delaware or the United States District Court for the
District of Delaware and the appellate courts having jurisdiction of appeals in
such courts. In that context, and without limiting the generality of the
foregoing, the Company and each Participant shall irrevocably and
unconditionally (a) submit in any proceeding relating to the Plan or any Award
Agreement, or for the recognition and enforcement of any judgment in respect
thereof (a “Proceeding”), to the exclusive jurisdiction of the courts of the
State of Delaware, the court of the United States of America for the District of
Delaware, and appellate courts having jurisdiction of appeals from any of the
foregoing, and agree that all claims in respect of any such Proceeding shall be
heard and determined in such Delaware State court or, to the extent permitted by
law, in such federal court, (b) consent that any such Proceeding may and shall
be brought in such courts and waives any objection that the Company and each
Participant may now or thereafter have to the venue or jurisdiction of any such
Proceeding in any such court or that such Proceeding was brought in an
inconvenient court and agree not to plead or claim the same, (c) waive all right
to trial by jury in any Proceeding (whether based on contract, tort or
otherwise) arising out of or relating to the Plan or any Award Agreement,
(d) agree that service of process in any such Proceeding may be effected by
mailing a copy of such process by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such party, in the case
of a Participant, at the Participant’s address shown in the books and records of
the Company or, in the case of the Company, at the Company’s principal offices,
attention General Counsel, and (e) agree that nothing in the Plan shall affect
the right to effect service of process in any other manner permitted by the laws
of the State of Delaware.

14.10 Construction. Wherever any words are used in the Plan in the masculine
gender they shall be construed as though they were also used in the feminine
gender in all cases where they would so apply, and wherever words are used
herein in the singular form they shall be construed as though they were also
used in the plural form in all cases where they would so apply.

14.11 Other Benefits. No Award granted or paid out under the Plan shall be
deemed compensation for purposes of computing benefits under any retirement plan
of the Company or its Affiliates nor affect any benefit under any other benefit
plan now or subsequently in effect under which the availability or amount of
benefits is related to the level of compensation.

 

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14.12 Costs. The Company shall bear all expenses associated with administering
this Plan, including expenses of issuing Common Stock pursuant to Awards
hereunder.

14.13 No Right to Same Benefits. The provisions of Awards need not be the same
with respect to each Participant, and such Awards to individual Participants
need not be the same in subsequent years.

14.14 Death/Disability. The Committee may in its discretion require the
transferee of a Participant to supply it with written notice of the
Participant’s death or Disability and to supply it with a copy of the will (in
the case of the Participant’s death) or such other evidence as the Committee
deems necessary to establish the validity of the transfer of an Award. The
Committee may also require that the agreement of the transferee to be bound by
all of the terms and conditions of the Plan.

14.15 Section 16(b) of the Exchange Act. All elections and transactions under
the Plan by persons subject to Section 16 of the Exchange Act involving shares
of Common Stock are intended to comply with any applicable exemptive condition
under Rule 16b-3. The Committee may establish and adopt written administrative
guidelines, designed to facilitate compliance with Section 16(b) of the Exchange
Act, as it may deem necessary or proper for the administration and operation of
the Plan and the transaction of business thereunder.

14.16 Section 409A of the Code. The Plan is intended to comply with the
applicable requirements of Section 409A of the Code and shall be limited,
construed and interpreted in accordance with such intent. To the extent that any
Award is subject to Section 409A of the Code, it shall be paid in a manner that
will comply with Section 409A of the Code, including proposed, temporary or
final regulations or any other guidance issued by the Secretary of the Treasury
and the Internal Revenue Service with respect thereto. Notwithstanding anything
herein to the contrary, any provision in the Plan that is inconsistent with
Section 409A of the Code shall be deemed to be amended to comply with
Section 409A of the Code and to the extent such provision cannot be amended to
comply therewith, such provision shall be null and void. The Company shall have
no liability to a Participant, or any other party, if an Award that is intended
to be exempt from, or compliant with, Section 409A of the Code is not so exempt
or compliant or for any action taken by the Committee or the Company and, in the
event that any amount or benefit under the Plan becomes subject to penalties
under Section 409A of the Code, responsibility for payment of such penalties
shall rest solely with the affected Participants and not with the Company.
Notwithstanding any contrary provision in the Plan or Award Agreement, any
payment(s) of “nonqualified deferred compensation” (within the meaning of
Section 409A of the Code) that are otherwise required to be made under the Plan
to a “specified employee” (as defined under Section 409A of the Code) as a
result of his or her separation from service (other than a payment that is not
subject to Section 409A of the Code) shall be delayed for the first six
(6) months following such separation from service (or, if earlier, the date of
death of the specified employee) and shall instead be paid (in a manner set
forth in the Award Agreement) on the payment date that immediately follows the
end of such six-month period or as soon as administratively practicable
thereafter to the extent permitted under Section 409A of the Code.

 

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14.17 Successor and Assigns. The Plan shall be binding on all successors and
permitted assigns of a Participant, including, without limitation, the estate of
such Participant and the executor, administrator or trustee of such estate.

14.18 Severability of Provisions. If any provision of the Plan shall be held
invalid or unenforceable, such invalidity or unenforceability shall not affect
any other provisions hereof, and the Plan shall be construed and enforced as if
such provisions had not been included.

14.19 Payments to Minors, Etc. Any benefit payable to or for the benefit of a
minor, an incompetent person or other person incapable of receipt thereof shall
be deemed paid when paid to such person’s guardian or to the party providing or
reasonably appearing to provide for the care of such person, and such payment
shall fully discharge the Committee, the Board, the Company, its Affiliates and
their employees, agents and representatives with respect thereto.

14.20 Lock-Up Agreements. As a condition to the grant of an Award, if requested
by the Company and the lead underwriter of any public offering of the Common
Stock (the “Lead Underwriter”), a Participant shall irrevocably agree not to
sell, contract to sell, grant any option to purchase, transfer the economic risk
of ownership in, make any short sale of, pledge or otherwise transfer or dispose
of, any interest in any Common Stock or any securities convertible into,
derivative of, or exchangeable or exercisable for, or any other rights to
purchase or acquire Common Stock (except Common Stock included in such public
offering or acquired on the public market after such offering) during such
period of time following the effective date of a registration statement of the
Company filed under the Securities Act that the Lead Underwriter shall specify
(the “Lock-Up Period”). The Participant shall further agree to sign such
documents as may be requested by the Lead Underwriter to effect the foregoing
and agree that the Company may impose stop-transfer instructions with respect to
Common Stock acquired pursuant to an Award until the end of such Lock-Up Period.

14.21 Headings and Captions. The headings and captions herein are provided for
reference and convenience only, shall not be considered part of the Plan, and
shall not be employed in the construction of the Plan.

14.22 Section 162(m) of the Code. Notwithstanding any other provision of the
Plan to the contrary, the provisions of the Plan requiring compliance with
Section 162(m) of the Code shall not apply to Awards granted under the Plan that
are not intended to qualify as “performance-based compensation” under
Section 162(m) of the Code.

14.23 Company Recoupment of Awards. A Participant’s rights with respect to any
Award hereunder shall in all events be subject to (i) any right that the Company
may have under any Company recoupment policy or other agreement or arrangement
with a Participant, or (ii) any right or obligation that the Company may have
regarding the clawback of “incentive-based compensation” under Section 10D of
the Exchange Act and any applicable rules and regulations promulgated thereunder
from time to time by the U.S. Securities and Exchange Commission.

 

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ARTICLE XV

EFFECTIVE DATE OF PLAN

The Plan shall become effective at 12:01 a.m. Eastern Time on May 7, 2015,
subject to the approval of the Plan by the stockholders of the Company in
accordance with the requirements of the laws of the State of Delaware.

ARTICLE XVI

TERM OF PLAN

No Award shall be granted pursuant to the Plan on or after the tenth anniversary
of the earlier of the date that the Plan is adopted or the date of stockholder
approval, but Awards granted prior to such tenth anniversary may extend beyond
that date; provided that no Award (other than a Stock Option or Stock
Appreciation Right) that is intended to be “performance-based compensation”
under Section 162(m) of the Code shall be granted on or after the fifth
anniversary of the stockholder approval of the Plan unless the Performance Goals
are re-approved (or other designated Performance Goals are approved) by the
stockholders no later than the first stockholder meeting that occurs in the
fifth year following the year in which stockholders approve the Performance
Goals.

ARTICLE XVII

NAME OF PLAN

This Plan shall be known as the “Amended and Restated U.S. Silica Holdings, Inc.
2011 Incentive Compensation Plan.”

 

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EXHIBIT A

PERFORMANCE GOALS

To the extent permitted under Section 162(m) of the Code, performance goals
established for purposes of Awards intended to be “performance-based
compensation” under Section 162(m) of the Code, shall be based on the attainment
of certain target levels of, or a specified increase or decrease (as applicable)
in one or more of the following performance goals:

 

  •   earnings per share;

 

  •   operating income;

 

  •   gross income;

 

  •   net income (before or after taxes);

 

  •   cash flow;

 

  •   gross profit;

 

  •   gross profit return on investment;

 

  •   gross margin return on investment;

 

  •   gross margin;

 

  •   operating margin;

 

  •   working capital;

 

  •   earnings before interest and taxes;

 

  •   earnings before interest, tax, depreciation and amortization;

 

  •   return on equity;

 

  •   return on assets;

 

  •   return on capital;

 

  •   return on invested capital;

 

  •   net revenues;

 

  •   gross revenues;

 

  •   revenue growth;

 

  •   net revenues by segment;

 

  •   revenue growth by segment;

 

  •   overall contribution margin;

 

  •   contribution margin growth;

 

  •   contribution margin by segment;

 

  •   sales or market share;

 

  •   total shareholder return;

 

  •   economic value added;

 

  •   specified objectives with regard to limiting the level of increase in all
or a portion of the Company’s bank debt or other long-term or short-term public
or private debt or other similar financial obligations of the Company, which may
be calculated net of cash balances and/or other offsets and adjustments as may
be established by the Committee in its sole discretion;

 

  •   the fair market value of a share of Common Stock;

 

  •   the growth in the value of an investment in the Common Stock assuming the
reinvestment of dividends;

 

A-1

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  •   reduction in operating expenses;

 

  •   volume growth by segment;

 

  •   overall volume growth;

 

  •   price growth by segment;

 

  •   overall price growth;

 

  •   reduction in variable costs;

 

  •   reduction in fixed costs;

 

  •   asset productivity;

 

  •   cost per ton;

 

  •   output per employee;

 

  •   logistics efficiency; or

 

  •   customer acquisitions.

With respect to Awards that are intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, to the extent permitted under
Section 162(m) of the Code, the Committee may, in its sole discretion, also
exclude, or adjust to reflect, the impact of an event or occurrence that the
Committee determines should be appropriately excluded or adjusted, including:

(a) restructurings, discontinued operations, extraordinary items or events, and
other unusual or non-recurring charges as described in Accounting Standards
Codification 225-20, “Extraordinary and Unusual Items,” and/or management’s
discussion and analysis of financial condition and results of operations
appearing or incorporated by reference in the Company’s Form 10-K for the
applicable year;

(b) an event either not directly related to the operations of the Company or not
within the reasonable control of the Company’s management; or

(c) a change in tax law or accounting standards required by generally accepted
accounting principles.

Performance goals may also be based upon individual participant performance
goals, as determined by the Committee, in its sole discretion. In addition,
Awards that are not intended to qualify as “performance-based compensation”
under Section 162(m) of the Code may be based on the performance goals set forth
herein or on such other performance goals as determined by the Committee in its
sole discretion.

In addition, such performance goals may be based upon the attainment of
specified levels of Company (or subsidiary, division, other operational unit or
administrative department of the Company) performance under one or more of the
measures described above relative to the performance of other corporations. With
respect to Awards that are intended to qualify as “performance-based
compensation” under Section 162(m) of the Code, to the extent permitted under
Section 162(m) of the Code, but only to the extent permitted under
Section 162(m) of the Code (including, without limitation, compliance with any
requirements for stockholder approval), the Committee may also:

(a) designate additional business criteria on which the performance goals may be
based; or

(b) adjust, modify or amend the aforementioned business criteria.

 

A-2

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AMENDED AND RESTATED

U.S. SILICA HOLDINGS, INC.

 

 

2011 INCENTIVE COMPENSATION PLAN

 

 

TABLE OF CONTENTS

 

ARTICLE I PURPOSE   1    ARTICLE II DEFINITIONS   1    ARTICLE III
ADMINISTRATION   7    ARTICLE IV SHARE LIMITATION   10    ARTICLE V ELIGIBILITY
  13    ARTICLE VI STOCK OPTIONS   14    ARTICLE VII STOCK APPRECIATION RIGHTS  
17    ARTICLE VIII RESTRICTED STOCK   20    ARTICLE IX PERFORMANCE AWARDS   23
   ARTICLE X OTHER STOCK-BASED AND CASH-BASED AWARDS   24    ARTICLE XI CHANGE
IN CONTROL PROVISIONS   26    ARTICLE XII TERMINATION OR AMENDMENT OF PLAN   28
   ARTICLE XIII UNFUNDED STATUS OF PLAN   29    ARTICLE XIV GENERAL PROVISIONS  
29    ARTICLE XV EFFECTIVE DATE OF PLAN   34    ARTICLE XVI TERM OF PLAN   34   
ARTICLE XVII NAME OF PLAN   34    EXHIBIT A PERFORMANCE GOALS   A-1   

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AMENDED AND RESTATED

U.S. SILICA HOLDINGS, INC.

 

 

2011 INCENTIVE COMPENSATION PLAN