Exhibit 10.1

LIGHTING SCIENCE GROUP CORPORATION

2012 AMENDED AND RESTATED EQUITY-BASED COMPENSATION PLAN

(Effective as of July 5, 2012)

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TABLE OF CONTENTS

 

Section 1. Purpose      1    Section 2. Definitions      1    Section 3.
Administration      5   

(a)

   Authority of the Committee      5   

(b)

   Manner of Exercise of Committee Authority      5   

(c)

   Limitation of Liability      6    Section 4. Stock Subject to Plan      6   

(a)

   Overall Number of Shares Available for Delivery      6   

(b)

   Application of Limitation to Grants of Awards      6   

(c)

   Availability of Shares Not Delivered under Awards      6   

(d)

   Stock Offered      7    Section 5. Eligibility; Per Person Award Limitations
     7    Section 6. Specific Terms of Awards      7   

(a)

   Grant of Awards; Performance-Based Compensation; Section 409A      7   

(b)

   Options      7   

(c)

   Exercise Price      7   

(d)

   Time and Method of Exercise      8   

(e)

   ISOs      8   

(f)

   Stock Appreciation Rights      8   

(g)

   Right to Payment      8   

(h)

   Rights Related to Options      8   

(i)

   Right Without Option      9   

(j)

   Terms      9   

(k)

   Restricted Stock      10   

(l)

   Phantom Stock      11   

(m)

   Bonus Stock and Awards in Lieu of Obligations      11   

(n)

   Dividend Equivalents      11   

(o)

   Other Stock-Based Awards      11    Section 7. Certain Provisions Applicable
to Awards      12   

(a)

   Stand-Alone, Additional, Tandem, and Substitute Awards      12   

(b)

   Term of Awards      12   

(c)

   Form and Timing of Payment under Awards      12   

(d)

   Exemptions from Section 16(b) Liability      12   

(e)

   Non-Competition Agreement      13    Section 8. Performance and Annual
Incentive Awards      13   

(a)

   Performance Conditions      13   

(b)

   Performance Awards Granted to Designated Covered Employees      13   

(c)

   Annual Incentive Awards Granted to Designated Covered Employees      14   

(d)

   Written Determinations      15   

(e)

   Status of Section 8(b) and Section 8(c) Awards under Section 162(m) of the
Code      16   

 

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Section 9. Recapitalization or Reorganization      16   

(a)

   Existence of Plans and Awards      16   

(b)

   Subdivision or Consolidation of Shares      16   

(c)

   Corporate Restructuring      17   

(d)

   Change in Control Price      17   

(e)

   Non-Option Awards      18   

(f)

   Additional Issuances      18   

(g)

   Restricted Stock Awards      18    Section 10. General Provisions      18   

(a)

   Transferability      18   

(b)

   Taxes      19   

(c)

   Changes to this Plan and Awards      19   

(d)

   Limitation on Rights Conferred under Plan      20   

(e)

   Unfunded Status of Awards      20   

(f)

   Nonexclusivity of this Plan      20   

(g)

   Payments in the Event of Forfeitures; Fractional Shares      20   

(h)

   Severability      20   

(i)

   Compliance with Legal and Exchange Requirements      21   

(j)

   Governing Law      21   

(k)

   Conditions to Delivery of Stock      21   

(l)

   Headings and Captions      21   

(m)

   Plan Effective Date      22   

 

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LIGHTING SCIENCE GROUP CORPORATION

2012 AMENDED AND RESTATED EQUITY-BASED COMPENSATION PLAN

Section 1. Purpose.

The purpose of the Lighting Science Group Corporation 2012 Amended and Restated
Equity-Based Compensation Plan (the “Plan”) is to provide a means through which
Lighting Science Group Corporation, a Delaware corporation, and any successor
thereto (the “Company”), and its Subsidiaries may attract and retain able
persons as employees, directors and consultants of the Company and to provide a
means whereby those persons upon whom the responsibilities of the successful
administration and management of the Company rest, and whose present and
potential contributions to the welfare of the Company are of importance, can
acquire and maintain stock ownership, or awards the value of which is tied to
the performance of the Company’s stock, thereby strengthening their concern for
the welfare of the Company and their desire to remain in its employ. A further
purpose of this Plan is to provide such employees and directors with additional
incentive and reward opportunities designed to enhance the profitable growth of
the Company. Accordingly, this Plan primarily provides for granting Incentive
Stock Options, Options which do not constitute Incentive Stock Options,
Restricted Stock Awards, Stock Appreciation Rights, Phantom Stock Awards or any
combination of the foregoing, as is best suited to the circumstances of the
particular individual as provided herein. Effective as of July 5, 2012, this
Plan amends and restates in its entirety the Lighting Science Group Corporation
Amended and Restated Equity-Based Compensation Plan, which was approved by the
Company’s stockholders effective as of September 11, 2008.

Section 2. Definitions.

For purposes of this Plan, the following terms shall be defined as set forth
below, in addition to such terms defined in Section 1 hereof:

(a) “Annual Incentive Award” means a conditional right granted to a Participant
under Section 8(c) hereof to receive a cash payment, Stock or other Award,
unless otherwise determined by the Committee, after the end of a specified
fiscal year.

(b) “Award” means any Option, SAR (including Limited SAR), Restricted Stock
Award, Phantom Stock Award, Stock granted as a bonus or in lieu of another
award, Dividend Equivalent, Other Stock-Based Award, Performance Award or Annual
Incentive Award, together with any other right or interest granted to a
Participant under this Plan.

(c) “Beneficiary” means one or more persons, trusts or other entities which have
been designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under
this Plan upon such Participant’s death or to which Awards or other rights are
transferred if and to the extent permitted under Section 10(a) hereof. If, upon
a Participant’s death, there is no designated Beneficiary or surviving
designated Beneficiary, then the term Beneficiary means the persons, trusts or
other entities entitled by will or the laws of descent and distribution to
receive such benefits.

(d) “Beneficial Owner” shall have the meaning ascribed to such term in Rule
13d-3 under the Exchange Act and any successor to such Rule.

(e) “Board” means the Company’s Board of Directors.

(f) “Business Day” means any day other than a Saturday, a Sunday, or a day on
which banking institutions in the state of Texas are authorized or obligated by
law or executive order to close.

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(g) “Change in Control” means the first to occur after the date this Plan is
adopted by the Board of any of the following events:

(i) The acquisition or the completion of a tender offer for beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) by any
individual, entity or group (within the meaning of section 13(d)3 or 14(d)(2) of
the Exchange Act) (each, a “Person”), of 35% or more of either (x) the then
outstanding shares of Stock (the “Outstanding Stock”) or (y) the combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding Company Voting
Securities”); provided, however, that for purposes of this subsection (i), the
following acquisitions shall not constitute a Change in Control: (A) any
acquisition by the Company, (B) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (C) any acquisition by any Person pursuant to a
transaction which complies with clauses (A), (B) and (C) of paragraph
(iii) below; or

(ii) A majority of the members of the Board is replaced during any 12-month
period by directors whose appointment or election is not endorsed by a majority
of the members constituting the Board prior to the date of the appointment or
election; or

(iii) Consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company or an
acquisition of assets of another corporation (a “Business Combination”), in each
case, unless, following such Business Combination, (A) all or substantially all
of the individuals and entities who were the beneficial owners, respectively, of
the Outstanding Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without
limitation, a corporation which as a result of such transaction owns the
Company, or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities, as the case may
be, (B) no Person (excluding any employee benefit plan (or related trust) of the
Company or the corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership of the
Company existed prior to the Business Combination and (C) at least a majority of
the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board, providing for
such Business Combination; or

(iv) Approval by the stockholders of the Company of a complete liquidation or
dissolution of the Company.

Notwithstanding the foregoing provisions of this Section 2(g), in the event an
Award issued under the Plan is subject to section 409A of the Code, then, in
lieu of the foregoing definition and to the extent necessary to comply with the
requirements of section 409A of the Code, the definition of “Change in Control”
for purposes of such Award shall be the definition provided for under section
409A of the Code and the regulations or other guidance issued thereunder.

(h) “Change in Control Price” means the amount calculated in accordance with
Section 9 of this Plan.

(i) “Code” means the Internal Revenue Code of 1986, as amended from time to
time, including regulations thereunder and successor provisions and regulations
thereto.

 

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(j) “Committee” means the Compensation Committee of the Board or a committee of
two or more directors designated by the Board to administer this Plan or
portions hereof; provided, however, that, unless otherwise determined by the
Board, the Committee shall consist solely of two or more directors, each of whom
shall be (i) a “nonemployee director” within the meaning of Rule 16b-3 under the
Exchange Act, (ii) an “outside director” as defined under section 162(m) of the
Code, unless administration of this Plan by “outside directors” is not then
required in order to qualify for tax deductibility under section 162(m) of the
Code, and (iii) “independent” under any applicable listing requirements.
Notwithstanding anything to the contrary herein, the Board shall have the
authority to designate a separate committee of two or more directors to
administer and grant awards under this Plan to members of the Board, and in the
event such separate committee has been designated, any references to “Committee”
contained herein shall be deemed to include such separate committee.

(k) “Covered Employee” means an Eligible Person who is a Covered Employee as
specified in Section 8(e) of this Plan.

(l) “Disability” means, as determined by the Board in its sole discretion
exercised in good faith, a physical or mental impairment of sufficient severity
that either the Participant is unable to continue performing the duties he
performed before such impairment or the Participant’s condition entitles him to
disability benefits under any insurance or employee benefit plan of the Company
or its Subsidiaries and that impairment or condition is cited by the Company as
the reason for termination of the Participant’s employment or participation as a
member of the Board. Notwithstanding the foregoing provisions of this
Section 2(l), in the event an Award issued under the Plan is subject to section
409A of the Code, then, in lieu of the foregoing definition and to the extent
necessary to comply with the requirements of section 409A of the Code, the
definition of “Disability” for purposes of such Award shall be the definition of
“disability” provided for under section 409A of the Code and the regulations or
other guidance issued thereunder.

(m) “Dividend Equivalent” means a right, granted to a Participant under
Section 6(g), to receive cash or Stock equal in value to dividends paid with
respect to a specified number of shares of Stock.

(n) “Eligible Person” means all officers and employees of the Company or of any
Subsidiary, and other persons who provide services to the Company or any of its
Subsidiaries, including directors of the Company. An employee on leave of
absence may be considered as still in the employ of the Company or a Subsidiary
for purposes of eligibility for participation in this Plan (however, in the case
of ISOs, only to the extent permitted under applicable law).

(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended from
time to time, including rules thereunder and successor provisions and rules
thereto.

(p) “Fair Market Value” means, as of a particular date:

(i) if the shares of Stock are listed on any established national securities
exchange, the closing sales price per share of Stock on the consolidated
transaction reporting system for the principal securities exchange for the Stock
on such date, or, if there shall have been no such sale so reported on that
date, on the last preceding date on which such a sale was so reported,

(ii) if the shares of Stock are not so listed on an established national
securities exchange but are quoted on the Nasdaq National Market System (or any
successor thereof), the closing sales price per share of Stock on the Nasdaq
National Market System (or any successor thereof) on such date, or, if there
shall have been no such sale so reported on that date, on the last preceding
date on which such a sale was so reported,

(iii) if the Stock is not so listed on an established national securities
exchange or quoted on the Nasdaq National Market System (or any successor
thereof), the mean between the

 

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closing bid and asked price on such date, or, if there are no quotations
available for such date, on the last preceding date on which such quotations
shall be available, as reported by the Nasdaq Stock Market, or, if not reported
by the Nasdaq Stock Market, by Pink OTC Markets, Inc. (or any successor
thereof), or

(iv) if none of (i) through (iii) above is applicable, such amount as may be
determined by the Committee (acting on the advice of an Independent Third Party,
should the Committee elect in its sole discretion to utilize an Independent
Third Party for this purpose), in good faith, to be the fair market value per
share of Stock.

Notwithstanding anything to the contrary contained in this Plan or in any
applicable Award agreement, as of any particular day, Fair Market Value shall be
determined, for purposes of Incentive Stock Option grants, in accordance with
the requirements of section 422 of the Code (and the regulations issued
thereunder), and for purposes of grants of any Awards intended to be in
compliance with section 409A of the Code, in accordance with section 409A of the
Code and Section 1.409A-1(b)(5)(iv) of the regulations issued thereunder or any
successor provisions thereto.

(q) “Incentive Stock Option” or “ISO” means any Option intended to be and
designated as an incentive stock option within the meaning of section 422 of the
Code or any successor provision thereto.

(r) “Independent Third Party” means an individual or entity independent of the
Company having experience in providing investment banking or similar appraisal
or valuation services and with expertise generally in the valuation of
securities or other property for purposes of this Plan. The Committee may
utilize one or more Independent Third Parties.

(s) “Limited SAR” means a right granted to a Participant under Section 6(g)
hereof.

(t) “Option” means a right, granted to a Participant under Section 6(b) hereof,
to purchase Stock at a specified price during specified time periods.

(u) “Other Stock-Based Awards” means Awards granted to a Participant under
Section 6(o) hereof.

(v) “Participant” means a person who has been granted an Award under this Plan
which remains outstanding, including a person who is no longer an Eligible
Person.

(w) “Performance Award” means a right, granted to a Participant under Section 8
hereof, to receive a cash payment or Stock based upon performance criteria
specified by the Committee.

(x) “Phantom Stock” means a right, granted to a Participant under Section 6(l)
hereof, to receive Stock, cash or a combination thereof at the end of a
specified vesting period.

(y) “Qualified Member” means a member of the Committee who is a “Non-Employee
Director” within the meaning of Rule 16b-3(b)(3), an “outside director” within
the meaning of regulation 1.162-27 under section 162(m) of the Code, and
“independent” within the meaning of any applicable listing requirements.

(z) “Restricted Stock” means Stock granted to a Participant under Section 6(k)
hereof, that is subject to certain restrictions and to a risk of forfeiture.

(aa) “Rule 16b-3” means Rule 16b-3, promulgated by the Securities and Exchange
Commission under section 16 of the Exchange Act, as from time to time in effect
and applicable to this Plan and Participants.

 

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(bb) “Rule 701” means Rule 701, promulgated by the Securities and Exchange
Commission under the Securities Act, as from time to time in effect and
applicable to the Plan and Participants.

(cc) “Securities Act” means the Securities Act of 1933 and the rules and
regulations promulgated thereunder, or any successor law, as it may be amended
from time to time.

(dd) “Stock” means the Company’s Common Stock, par value $.001 per share, and
such other securities as may be substituted (or resubstituted) for Stock
pursuant to Section 9.

(ee) “Stock Appreciation Right” or “SAR” means a right granted to a Participant
under Section 6(f) hereof.

(ff) “Subsidiary” means (i) any corporation in which the Company owns, directly
or indirectly, stock possessing more than 50% of the total combined voting power
of all classes of stock entitled to vote of such corporation or more than 50% of
the total value of shares of all classes of stock of such corporation, and
(ii) any other business organization, regardless of form, in which the Company
possesses, directly or indirectly, more than 50% of the total combined equity
interests of such organization.

Section 3. Administration.

(a) Authority of the Committee

This Plan shall be administered by the Committee except to the extent the Board
elects to administer this Plan, in which case references herein to the
“Committee” shall be deemed to include references to the “Board.” Subject to the
express provisions of the Plan and Rule 16b-3, the Committee shall have the
authority, in its sole and absolute discretion, to (i) adopt, amend, and rescind
administrative and interpretive rules and regulations relating to the Plan;
(ii) determine the Eligible Persons to whom, and the time or times at which,
Awards shall be granted; (iii) determine the amount of cash and the number of
shares of Stock or any combination thereof that shall be the subject of each
Award; (iv) determine the terms and provisions of each Award agreement (which
need not be identical), including provisions defining or otherwise relating to
(A) the term and the period or periods and extent of exercisability of the
Options, (B) the extent to which the transferability of shares of Stock issued
or transferred pursuant to any Award is restricted, (C) the effect of
termination of employment of a Participant on the Award, and (D) the effect of
approved leaves of absence (consistent with any applicable regulations of the
Internal Revenue Service); (v) accelerate the time of exercisability of any
Option that has been granted; (vi) construe the respective Award agreements and
the Plan; (vii) make determinations of the Fair Market Value of the Stock
pursuant to the Plan; (viii) delegate its duties under the Plan to such agents
as it may appoint from time to time, provided that the Committee may not
delegate its duties with respect to making Awards to, or otherwise with respect
to Awards granted to, Eligible Persons who are subject to section 16(b) of the
Exchange Act or section 162(m) of the Code; (ix) subject to ratification by the
Board, terminate, modify, or amend the Plan; and (x) make all other
determinations, perform all other acts, and exercise all other powers and
authority necessary or advisable for administering the Plan, including the
delegation of those ministerial acts and responsibilities as the Committee deems
appropriate. Subject to Rule 16b-3 and section 162(m) of the Code, the Committee
may correct any defect, supply any omission, or reconcile any inconsistency in
the Plan, in any Award, or in any Award agreement in the manner and to the
extent it deems necessary or desirable to carry the Plan into effect, and the
Committee shall be the sole and final judge of that necessity or desirability.
The determinations of the Committee on the matters referred to in this
Section 3(a) shall be final, binding and conclusive on all persons.

(b) Manner of Exercise of Committee Authority

At any time that a member of the Committee is not a Qualified Member, any action
of the Committee relating to an Award granted or to be granted to a Participant
who is then subject to section 16 of the Exchange Act in respect of the Company,
or relating to an Award intended by the Committee to qualify as
“performance-based compensation” within the meaning of section 162(m) of the
Code and regulations thereunder, may be taken either (i) by a subcommittee,
designated by the Committee, composed solely of two or more Qualified Members,
or (ii) by the Committee but with each such member who is not a Qualified Member
abstaining or recusing himself or herself

 

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from such action; provided, however, that, upon such abstention or recusal, the
Committee remains composed solely of two or more Qualified Members. Such action,
authorized by such a subcommittee or by the Committee upon the abstention or
recusal of such non-Qualified Member(s), shall be the action of the Committee
for purposes of this Plan. Any action of the Committee shall be final,
conclusive and binding on all persons, including the Company, its Subsidiaries,
stockholders, Participants, Beneficiaries, and transferees under Section 10(a)
hereof or other persons claiming rights from or through a Participant. The
express grant of any specific power to the Committee, and the taking of any
action by the Committee, shall not be construed as limiting any power or
authority of the Committee. The Committee may delegate to officers or managers
of the Company or any Subsidiary, or committees thereof, the authority, subject
to such terms as the Committee shall determine, to perform such functions,
including administrative functions, as the Committee may determine, to the
extent that such delegation will not result in the loss of an exemption under
Rule 16b-3(d)(1) for Awards granted to Participants subject to section 16 of the
Exchange Act in respect of the Company and will not cause Awards intended to
qualify as “performance-based compensation” under section 162(m) of the Code to
fail to so qualify. The Committee may appoint agents to assist it in
administering this Plan.

(c) Limitation of Liability

The Committee and each member thereof shall be entitled to, in good faith, rely
or act upon any report or other information furnished to him or her by any
officer or employee of the Company or a Subsidiary, the Company’s legal counsel,
independent auditors, consultants or any other agents assisting in the
administration of this Plan. Members of the Committee and any officer or
employee of the Company or a Subsidiary acting at the direction or on behalf of
the Committee shall not be personally liable for any action or determination
taken or made in good faith with respect to this Plan, and shall, to the fullest
extent permitted by law, be indemnified and held harmless by the Company with
respect to any such action or determination.

Section 4. Stock Subject to Plan.

(a) Overall Number of Shares Available for Delivery

Subject to adjustment in a manner consistent with any adjustment made pursuant
to Section 9, the total number of shares of Stock reserved and available for
delivery in connection with Awards under this Plan, from inception, is
55,000,000, 100% of which may be granted as Incentive Stock Options.

(b) Application of Limitation to Grants of Awards

No Award may be granted if (i)(A) the number of shares of Stock to be delivered
in connection with such Award or, (B) in the case of an Award relating to shares
of Stock but settleable only in cash (such as cash-only SARs), the number of
shares to which such Award relates exceeds (ii) the number of shares of Stock
remaining available under this Plan minus the number of shares of Stock issuable
in settlement of or relating to then-outstanding Awards. The Committee may adopt
reasonable counting procedures to ensure appropriate counting, avoid double
counting (as, for example, in the case of tandem or substitute awards) and make
adjustments if the number of shares of Stock actually delivered differs from the
number of shares previously counted in connection with an Award.

(c) Availability of Shares Not Delivered under Awards

Shares of Stock subject to an Award under this Plan that expire or are canceled,
forfeited, settled in cash or otherwise terminated without a delivery of shares
to the Participant, including (i) the number of shares withheld in payment of
any exercise or purchase price of an Award or taxes relating to Awards, and
(ii) the number of shares surrendered in payment of any exercise or purchase
price of an Award or taxes relating to any Award, will again be available for
Awards under this Plan, except that if any such shares could not again be
available for Awards to a particular Participant under any applicable law or
regulation, such shares shall be available exclusively for Awards to
Participants who are not subject to such limitation.

 

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(d) Stock Offered

The shares to be delivered under the Plan shall be made available from
(i) authorized but unissued shares of Stock, (ii) Stock held in the treasury of
the Company, or (iii) previously issued shares of Stock reacquired by the
Company, including shares purchased on the open market, in each situation as the
Board or the Committee may determine from time to time at its sole option.

Section 5. Eligibility; Per Person Award Limitations.

Awards may be granted under this Plan only to Eligible Persons. In each fiscal
year during any part of which this Plan is in effect, a Covered Employee may not
be granted Options or SARs relating to more than 7,000,000 shares of Stock,
subject to adjustment in a manner consistent with any adjustment made pursuant
to Section 9, and in the case of Performance Awards intended to comply with the
requirements of section 162(m) of the Code which have an aggregate value of more
than $1,500,000 (provided that if such Performance Awards involve the issuance
of shares of Stock, said aggregate value shall be based on the Fair Market Value
of such shares at the time of the grant of such Performance Award).

Section 6. Specific Terms of Awards.

(a) Grant of Awards; Performance-Based Compensation; Section 409A

Awards may be granted on the terms and conditions set forth in this Section 6.
In addition, the Committee may impose on any Award or the exercise thereof, at
the date of grant or thereafter (subject to Section 10(c)), such additional
terms and conditions, not inconsistent with the provisions of this Plan, as the
Committee shall determine, including terms requiring forfeiture of Awards in the
event of termination of employment by the Participant and terms permitting a
Participant to make elections relating to his or her Award. Except in cases in
which the Committee is authorized to require other forms of consideration under
this Plan, or to the extent other forms of consideration must be paid to satisfy
the requirements of the Delaware General Corporation Law, no consideration other
than services may be required for the grant (but not the exercise) of any Award.
The Committee shall retain full power and discretion to accelerate, waive, amend
or modify, at any time, any term or condition of an Award or an Award agreement
that is not mandatory under this Plan; provided, that, notwithstanding anything
to the contrary contained in the Plan:

(i) To the extent that the Committee determines on the grant date that an Award
shall qualify as “other performance-based compensation” for purposes of section
162(m) of the Code, the Board and the Committee shall not exercise any
discretion to accelerate, waive, amend or modify any term or condition of such
Award or Award agreement that would cause such Award to fail to qualify as
“other performance-based compensation”; and

(ii) It is intended that all Awards be exempt from the application of section
409A of the Code. Accordingly, the Board and the Committee shall not exercise
any discretion to accelerate, waive, amend or modify any term or condition of
such Award or Award agreement that would cause such Award to become subject to
section 409A of the Code.

(b) Options

The Committee is authorized to grant Options to Participants on the terms and
conditions set forth in Sections 6(c), (d) and (e) hereof.

(c) Exercise Price

Each Option agreement shall state the exercise price per share of Stock (the
“Exercise Price”); provided, however, that the Exercise Price per share of Stock
subject to an Option shall not be less than the greater of (A) the par value per
share of the Stock or (B) 100% of the Fair Market Value per share of the Stock
on the date of grant of the Option or in the case of an Incentive Stock Option
granted to an individual who owns stock possessing more than 10 percent of the
total combined voting power of all classes of stock of the Corporation or its
parent or any Subsidiary 110% of the Fair Market Value per share of the Stock on
the date of grant.

 

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(d) Time and Method of Exercise

The Committee shall determine the time or times at which or the circumstances
under which an Option may be exercised in whole or in part (including based on
achievement of performance goals and/or future service requirements), the
methods by which such exercise price may be paid or deemed to be paid, the form
of such payment, including without limitation cash, Stock, other Awards or
awards granted under other plans of the Company or any Subsidiary, or other
property (including notes or other contractual obligations of Participants to
make payment on a deferred basis), and the methods by or forms in which Stock
will be delivered or deemed to be delivered to Participants, including, but not
limited to, the delivery of Restricted Stock subject to Section 6(k). In the
case of an exercise whereby the Exercise Price is paid with Stock, such Stock
shall be valued as of the date of such of exercise in accordance with the
applicable law.

(e) ISOs

The terms of any ISO granted under this Plan shall comply in all respects with
the provisions of section 422 of the Code. Anything in this Plan to the contrary
notwithstanding, no term of this Plan relating to ISOs (including any SAR in
tandem therewith) shall be interpreted, amended or altered, nor shall any
discretion or authority granted under this Plan be exercised, so as to
disqualify either this Plan or any ISO under section 422 of the Code, unless the
Participant has first requested the change that will result in such
disqualification. ISOs shall not be granted more than ten years after the
earlier of the adoption of this Plan or the approval of this Plan by the
Company’s stockholders. Notwithstanding the foregoing, the Fair Market Value of
shares of Stock subject to an ISO and the aggregate Fair Market Value of shares
of stock of any parent or Subsidiary corporation (within the meaning of sections
424(e) and (f) of the Code) subject to any other incentive stock option (within
the meaning of section 422 of the Code)) of the Company or a parent or
Subsidiary corporation (within the meaning of sections 424(e) and (f) of the
Code) that first becomes purchasable by a Participant in any calendar year may
not (with respect to that Participant) exceed $100,000, or such other amount as
may be prescribed under section 422 of the Code or applicable regulations or
rulings from time to time. As used in the previous sentence, Fair Market Value
shall be determined as of the date the incentive stock options are granted.
Failure to comply with this provision shall not impair the enforceability or
exercisability of any Option, but shall cause the excess amount of shares to be
reclassified in accordance with the Code. Any Option granted prior to
stockholder approval of this Plan shall only be treated as an ISO if the
Company’s stockholder approve this Plan on or before July 5, 2013.

(f) Stock Appreciation Rights

The Committee is authorized to grant SARs to Participants on the terms and
conditions set forth in Sections 6(g), (h), (i) and (j) hereof.

(g) Right to Payment

An SAR shall confer on the Participant to whom it is granted a right to receive,
upon exercise thereof, the excess of (i) the Fair Market Value of one share of
Stock on the date of exercise (or, in the case of a “Limited SAR,” the Fair
Market Value determined by reference to the Change in Control Price, as defined
under Section 2(h) hereof) over (ii) the Fair Market Value of one share of Stock
on the date of grant.

(h) Rights Related to Options

A Stock Appreciation Right granted pursuant to an Option shall entitle a
Participant, upon exercise, to surrender that Option or any portion thereof, to
the extent unexercised, and to receive payment of an amount computed pursuant to
Subsection 6(h)(ii). That Option shall then cease to be exercisable to the
extent surrendered. Stock Appreciation Rights granted in connection with an
Option shall be subject to the terms of the Award agreement governing the
Option, which shall comply with the following provisions in addition to those
applicable to Options:

(i) A Stock Appreciation Right granted in connection with an Option shall be
exercisable only at such time or times and only to the extent that the related
Option is exercisable and shall not be transferable except to the extent that
the related Option is transferable.

 

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(ii) Upon the exercise of a Stock Appreciation Right related to an Option, a
Participant shall be entitled to receive payment from the Company of an amount
determined by multiplying:

 

  1. the difference obtained by subtracting the exercise price of a share of
Stock specified in the related Option from the Fair Market Value of a share of
Stock on the date of exercise of the Stock Appreciation Right, by

 

  2. the number of shares as to which that Stock Appreciation Right has been
exercised.

(i) Right Without Option

A Stock Appreciation Right granted independent of an Option shall be exercisable
as determined by the Committee and set forth in the Award agreement governing
the Stock Appreciation Right, which Award agreement shall comply with the
following provisions:

(i) Each Award agreement shall state the total number of shares of Stock to
which the Stock Appreciation Right relates.

(ii) Each Award agreement shall state the time or periods in which the right to
exercise the Stock Appreciation Right or a portion thereof shall vest and the
number of shares of Stock for which the right to exercise the Stock Appreciation
Right shall vest at each such time or period.

(iii) Each Award agreement shall state the date at which the Stock Appreciation
Rights shall expire if not previously exercised.

(iv) Each Stock Appreciation Right shall entitle a Participant, upon exercise
thereof, to receive payment of an amount determined by multiplying:

(a) the difference obtained by subtracting the Fair Market Value of a share of
Stock on the date of grant of the Stock Appreciation Right from the Fair Market
Value of a share of Stock on the date of exercise of that Stock Appreciation
Right, by

(b) the number of shares as to which the Stock Appreciation Right has been
exercised.

(j) Terms

The Committee shall determine at the date of grant or thereafter, the time or
times at which and the circumstances under which an SAR may be exercised in
whole or in part (including based on achievement of performance goals and/or
future service requirements), the method of exercise, method of settlement, form
of consideration payable in settlement, method by or forms in which Stock will
be delivered or deemed to be delivered to Participants, whether or not an SAR
shall be in tandem or in combination with any other Award, and any other terms
and conditions of any SAR. Limited SARs, which may only be exercised in
connection with a Change in Control or other event as specified by the
Committee, may be granted on such terms, not inconsistent with this
Section 6(j), as the Committee may determine. SARs and Limited SARs may be
either freestanding or in tandem with other Awards.

 

9

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(k) Restricted Stock

The Committee is authorized to grant Restricted Stock to Participants on the
following terms and conditions:

(i) Grant and Restrictions

Restricted Stock shall be subject to such restrictions on transferability, risk
of forfeiture and other restrictions, if any, as the Committee may impose, which
restrictions may lapse separately or in combination at such times, under such
circumstances (including based on achievement of performance goals and/or future
service requirements), in such installments or otherwise, as the Committee may
determine at the date of grant or thereafter. Except to the extent restricted
under the terms of this Plan and any Award agreement relating to the Restricted
Stock, a Participant granted Restricted Stock shall have all of the rights of a
stockholder, including the right to vote the Restricted Stock and the right to
receive dividends thereon (subject to any mandatory reinvestment or other
requirement imposed by the Committee). During the restricted period applicable
to the Restricted Stock, the Restricted Stock may not be sold, transferred,
pledged, hypothecated, margined or otherwise encumbered by the Participant.

(ii) Forfeiture

Except as otherwise determined by the Committee, upon termination of employment
during the applicable restriction period, Restricted Stock that is at that time
subject to restrictions shall be forfeited and reacquired by the Company;
provided that the Committee may provide, by rule or regulation or in any Award
agreement, or may determine in any individual case, that restrictions or
forfeiture conditions relating to Restricted Stock shall be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of
Restricted Stock.

(iii) Certificates for Stock

Restricted Stock granted under this Plan may be evidenced in such manner as the
Committee shall determine. If certificates representing Restricted Stock are
registered in the name of the Participant, the Committee may require that such
certificates bear an appropriate legend referring to the terms, conditions and
restrictions applicable to such Restricted Stock, that the Company retain
physical possession of the certificates, and that the Participant deliver a
stock power to the Company, endorsed in blank, relating to the Restricted Stock.

(iv) Dividends and Splits

As a condition to the grant of an Award of Restricted Stock, the Committee may
require or permit a Participant to elect that any cash dividends paid on a share
of Restricted Stock be automatically reinvested in additional shares of
Restricted Stock or applied to the purchase of additional Awards under this
Plan. Unless otherwise determined by the Committee, Stock distributed in
connection with a Stock split or Stock dividend, and other property distributed
as a dividend, shall be subject to restrictions and a risk of forfeiture to the
same extent as the Restricted Stock with respect to which such Stock or other
property has been distributed.

 

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(l) Phantom Stock

The Committee is authorized to grant Phantom Stock to Participants, which are
rights to receive Stock, cash, or a combination thereof at the end of a
specified vesting period, subject to the following terms and conditions:

(i) Vesting and Settlement

A Participant shall vest in an Award of Phantom Stock upon expiration of the
vesting period specified by the Committee, which vesting conditions may be based
on the achievement of performance goals and/or future service requirements. As
soon as reasonably practicable after the lapse of the vesting period and before
the later of (x) the end of the calendar year which includes the date on which
the vesting period lapsed and (y) the 15th day of the third calendar month
following the date on which the vesting period lapsed, the Company shall deliver
Stock or cash equal to the Fair Market Value of the specified number of shares
of Stock covered by the Phantom Stock, or a combination thereof, as determined
by the Committee at the date of grant or thereafter.

(ii) Forfeiture

Upon termination of employment during the applicable vesting period (as provided
in the Award agreement evidencing the Phantom Stock), all Phantom Stock that is
at that time subject to vesting shall be forfeited; provided that, subject to
Sections 6(a)(ii) and 6(a)(iii), the Committee may provide, by rule or
regulation or in any Award agreement, or may determine in any individual case,
that forfeiture conditions relating to Phantom Stock shall be waived in whole or
in part in the event of terminations resulting from specified causes, and the
Committee may in other cases waive in whole or in part the forfeiture of Phantom
Stock.

(iii) Dividend Equivalents

At the date of grant, the Committee shall specify that Dividend Equivalents, if
any, on the specified number of shares of Stock covered by an Award of Phantom
Stock be either (A) paid with respect to such Phantom Stock on the dividend
payment date in cash or in shares of unrestricted Stock having a Fair Market
Value equal to the amount of such dividends, or (B) automatically deemed
reinvested in additional Phantom Stock covered by the Award.

(m) Bonus Stock and Awards in Lieu of Obligations

The Committee is authorized to grant Stock as a bonus, or to grant Stock or
other Awards in lieu of obligations to pay cash or deliver other property under
this Plan or under other plans or compensatory arrangements; provided that, in
the case of Participants subject to section 16 of the Exchange Act, the amount
of such grants remains within the discretion of the Committee to the extent
necessary to ensure that acquisitions of Stock or other Awards are exempt from
liability under section 16(b) of the Exchange Act and from coverage under
section 409A of the Code. Stock or Awards granted hereunder shall be subject to
such other terms as shall be determined by the Committee. In the case of any
grant of Stock to an officer of the Company or a Subsidiary in lieu of salary or
other cash compensation, the number of shares granted in place of such
compensation shall be reasonable, as determined by the Committee.

(n) Dividend Equivalents

The Committee is authorized to grant Dividend Equivalents to a Participant,
entitling the Participant to receive cash or Stock equal in value to dividends
paid with respect to a specified number of shares of Stock. Dividend Equivalents
may be awarded on a free-standing basis or in connection with another Award.
Except Dividend Equivalents deemed reinvested in Phantom Stock pursuant to
Section 6(l)(iii), Dividend Equivalents shall be paid or distributed no later
than the 15th day of the third month following the fiscal year in which the
Board declares the dividend.

(o) Other Stock-Based Awards

The Committee is authorized, subject to limitations under applicable law, to
grant to Participants such other Awards that may be denominated or payable in,
valued in whole or in part by reference to, or otherwise based on, or related
to, Stock, as deemed by the Committee to be consistent with the purposes of this
Plan, including without

 

11

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limitation convertible or exchangeable debt securities, other rights convertible
or exchangeable into Stock, purchase rights for Stock and Awards with value and
payment contingent upon performance of the Company or any other factors
designated by the Committee. The Committee shall determine the terms and
conditions of such Awards; provided, that any Award granted under this
Section 6(o) shall satisfy the requirements for exemption from the application
of section 409A of the Code, and the Board and the Committee shall not exercise
any discretion to accelerate, waive, amend or modify any term or condition of
such Award or Award agreement that would cause such Award to become subject to
section 409A of the Code. Stock delivered pursuant to an Award in the nature of
a purchase right granted under this Section 6(o) shall be purchased for such
consideration (which shall not be less than Fair Market Value), paid for at such
times, by such methods, and in such forms, including, without limitation, cash,
Stock, other Awards, or other property, as the Committee shall determine. Cash
awards, as an element of or supplement to any other Award under this Plan, may
also be granted pursuant to this Section 6(o).

Section 7. Certain Provisions Applicable to Awards.

(a) Stand-Alone, Additional, Tandem, and Substitute Awards

Awards granted under this Plan may, in the discretion of the Committee, be
granted either alone or in addition to, in tandem with, or in substitution or
exchange for, any other Award or any award granted under another plan of the
Company, any Subsidiary, or any business entity to be acquired by the Company or
a Subsidiary, or any other right of a Participant to receive payment from the
Company or any Subsidiary. Such additional, tandem and substitute or exchange
Awards may be granted at any time. If an Award is granted in substitution or
exchange for another Award, the Committee shall require the surrender of such
other Award in consideration for the grant of the new Award. In addition, Awards
may be granted in lieu of cash compensation, including in lieu of cash amounts
payable under other plans of the Company or any Subsidiary, in which the value
of Stock subject to the Award is equivalent in value to the cash compensation
(for example, Phantom Stock or Restricted Stock), or in which the exercise
price, grant price or purchase price of the Award in the nature of a right that
may be exercised is equal to the Fair Market Value of the underlying Stock minus
the value of the cash compensation surrendered.

(b) Term of Awards

The term of each Award shall be for such period as may be determined by the
Committee; provided that in no event shall the term of any Option or SAR exceed
a period of ten years (or such shorter term as may be required in respect of an
ISO under section 422 of the Code).

(c) Form and Timing of Payment under Awards

Subject to the terms of this Plan and any applicable Award agreement, payments
to be made by the Company or a Subsidiary upon the exercise of an Option or
other Award or settlement of an Award may be made in such forms as the Committee
shall determine, including without limitation cash, Stock, other Awards or other
property, and shall be made in a single payment or transfer. The settlement of
any Award may be accelerated, and cash paid in lieu of Stock in connection with
such settlement, in the discretion of the Committee or upon occurrence of one or
more specified events (in addition to a Change in Control), provided such
acceleration would not cause such Award to violate the requirements of section
409A of the Code. This Plan shall not constitute an “employee benefit plan” for
purposes of section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended.

(d) Exemptions from Section 16(b) Liability

It is the intent of the Company that the grant of any Awards to or other
transaction by a Participant who is subject to section 16 of the Exchange Act
shall be exempt from section 16 pursuant to an applicable exemption (except for
transactions acknowledged in writing to be non-exempt by such Participant).
Accordingly, if any provision of this Plan or any Award agreement does not
comply with the requirements of Rule 16b-3 as then applicable to any such
transaction, such provision shall be construed or deemed amended to the extent
necessary to conform to the applicable requirements of Rule 16b-3 so that such
Participant shall avoid liability under section 16(b).

 

12

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(e) Non-Competition Agreement

Each Participant to whom an Award is granted under this Plan may be required to
agree in writing as a condition to the granting of such Award not to engage in
conduct in competition with the Company or any of its Subsidiaries for a period
after the termination of such Participant’s employment with the Company and its
Subsidiaries as determined by the Committee.

Section 8. Performance and Annual Incentive Awards.

(a) Performance Conditions

The right of a Participant to exercise or receive a grant or settlement of any
Award, and the timing thereof, may be subject to such performance conditions as
may be specified by the Committee. The Committee may use such business criteria
and other measures of performance as it may deem appropriate in establishing any
performance conditions, and may exercise its discretion to reduce or increase
the amounts payable under any Award subject to performance conditions, except as
limited under Sections 8(b) and 8(c) hereof in the case of a Performance Award
or Annual Incentive Award intended to qualify under section 162(m) of the Code.

(b) Performance Awards Granted to Designated Covered Employees

If the Committee determines that a Performance Award to be granted to an
Eligible Person who is designated by the Committee as likely to be a Covered
Employee should qualify as “performance-based compensation” for purposes of
section 162(m) of the Code, the grant, exercise and/or settlement of such
Performance Award may be contingent upon achievement of preestablished
performance goals and other terms set forth in this Section 8(b).

(i) Performance Goals Generally

The performance goals for such Performance Awards shall consist of one or more
business criteria or individual performance criteria and a targeted level or
levels of performance with respect to each of such criteria, as specified by the
Committee consistent with this Section 8(b). Performance goals shall be
objective and shall otherwise meet the requirements of section 162(m) of the
Code and regulations thereunder (including Treasury Regulation §1.162-27 and
successor regulations thereto), including the requirement that the level or
levels of performance targeted by the Committee result in the achievement of
performance goals being “substantially uncertain.” The Committee may determine
that such Performance Awards shall be granted, exercised, and/or settled upon
achievement of any one performance goal or that two or more of the performance
goals must be achieved as a condition to grant, exercise and/or settlement of
such Performance Awards. Performance goals may differ for Performance Awards
granted to any one Participant or to different Participants.

(ii) Business Criteria

One or more of the following business criteria for the Company, on a
consolidated basis, and/or for specified Subsidiaries or business or
geographical units of the Company (except with respect to the total stockholder
return and earnings per share criteria), shall be used by the Committee in
establishing performance goals for such Performance Awards: (1) earnings per
share; (2) increase in revenues; (3) increase in cash flow; (4) increase in cash
flow return; (5) return on net assets, return on assets, return on investment,
return on capital, or return on equity; (6) economic value added; (7) operating
margin or contribution margin; (8) net income; pretax earnings; pretax earnings
before interest, depreciation and amortization; pretax operating earnings after
interest expense and before incentives, service fees, and extraordinary or
special items; or operating income; (9) total stockholder return; (10) debt
reduction; and (11) any of the above goals determined on an absolute or relative
basis or as compared to the performance of a published or special index deemed
applicable by the Committee including, but not limited to, the Standard & Poor’s
500 Stock Index or a group of comparable companies. One or more of the foregoing
business criteria shall also be exclusively used in establishing performance
goals for Annual Incentive Awards granted to a Covered Employee under
Section 8(c) hereof.

 

13

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(iii) Individual Performance Criteria

The grant, exercise and/or settlement of Performance Awards may also be
contingent upon individual performance goals established by the Committee. If
required for compliance with section 162(m) of the Code, such criteria shall be
approved by the stockholders of the Company.

(iv) Performance Period; Timing for Establishing Performance Goals

Achievement of performance goals in respect of such Performance Awards shall be
measured over a performance period (the Performance Period”) of at least 12
months and up to ten years, as specified by the Committee. Performance goals
shall be established not later than 90 days after the beginning of any
Performance Period applicable to such Performance Awards, or at such other date
as may be required or permitted for “performance-based compensation” under
section 162(m) of the Code.

(v) Performance Award Pool

The Committee may establish a Performance Award pool, which shall be an unfunded
pool, for purposes of measuring performance of the Company in connection with
Performance Awards. The amount of such Performance Award pool shall be based
upon the achievement of a performance goal or goals based on one or more of the
criteria set forth in Section 8(b)(ii) and (iii) hereof during the Performance
Period, as specified by the Committee in accordance with Section 8(b)(iv)
hereof. The Committee may specify the amount of the Performance Award pool as a
percentage of any of such criteria, a percentage thereof in excess of a
threshold amount, or as another amount which need not bear a strictly
mathematical relationship to such criteria.

(vi) Settlement of Performance Awards; Other Terms

After the end of each Performance Period, the Committee shall determine the
amount, if any, of (A) the Performance Award pool, and the maximum amount of
potential Performance Award payable to each Participant in the Performance Award
pool, or (B) the amount of potential Performance Award otherwise payable to each
Participant. Unless the Committee determines otherwise at or after the grant
date, as soon as reasonably practicable after the date on which the Performance
Period has lapsed and the Committee has made a determination under clause (A) or
(B) above, and before the later of (x) the end of the calendar year which
includes the date on which the Performance Period has lapsed and the Committee
has made such determination and (y) the 15th day of the third calendar month
following the date on which the Performance Period has lapsed and the Committee
has made such determination, the Company shall deliver to each Participant Stock
or cash equal to the Participant’s Performance Award, if any. The Committee may,
in its discretion, reduce the amount of a settlement otherwise to be made in
connection with such Performance Awards, but may not exercise discretion to
increase any such amount payable to a Covered Employee in respect of a
Performance Award subject to this Section 8(b). The Committee shall specify the
circumstances in which such Performance Awards shall be paid or forfeited in the
event of termination of employment by the Participant prior to the end of a
Performance Period or settlement of Performance Awards.

(c) Annual Incentive Awards Granted to Designated Covered Employees

If the Committee determines that an Annual Incentive Award to be granted to an
Eligible Person who is designated by the Committee as likely to be a Covered
Employee should qualify as “performance-based compensation” for purposes of
section 162(m) of the Code, the grant, exercise and/or settlement of such Annual
Incentive Award shall be contingent upon achievement of preestablished
performance goals and other terms set forth in this Section 8(c).

 

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(i) Annual Incentive Award Pool

The Committee may establish an Annual Incentive Award pool, which shall be an
unfunded pool, for purposes of measuring performance of the Company in
connection with Annual Incentive Awards. The amount of such Annual Incentive
Award pool shall be based upon the achievement of a performance goal or goals
based on one or more of the business criteria set forth in Section 8(b)(ii)
hereof during the given Performance Period, as specified by the Committee in
accordance with Section 8(b)(iv) hereof. The Committee may specify the amount of
the Annual Incentive Award pool as a percentage of any of such business
criteria, a percentage thereof in excess of a threshold amount, or as another
amount which need not bear a strictly mathematical relationship to such business
criteria.

(ii) Potential Annual Incentive Awards

Not later than the end of the 90th day of each fiscal year, or at such other
date as may be required or permitted in the case of Awards intended to be
“performance-based compensation” under section 162(m) of the Code, the Committee
shall determine the Eligible Persons who will potentially receive Annual
Incentive Awards, and the amounts potentially payable thereunder, for that
fiscal year, either out of an Annual Incentive Award pool established by such
date under Section 8(c)(i) hereof or as individual Annual Incentive Awards. In
the case of individual Annual Incentive Awards intended to qualify under section
162(m) of the Code, the amount potentially payable shall be based upon the
achievement of a performance goal or goals based on one or more of the business
criteria set forth in Section 8(b)(ii) hereof in the given performance year, as
specified by the Committee; in other cases, such amount shall be based on such
criteria as shall be established by the Committee. In all cases, the maximum
Annual Incentive Award of any Participant shall be subject to the limitation set
forth in Section 5 hereof.

(iii) Payout of Annual Incentive Awards

After the end of each fiscal year, the Committee shall determine the amount, if
any, of (A) the Annual Incentive Award pool, and the maximum amount of potential
Annual Incentive Award payable to each Participant in the Annual Incentive Award
pool, or (B) the amount of potential Annual Incentive Award otherwise payable to
each Participant. The Committee may, in its discretion, determine that the
amount payable to any Participant as a final Annual Incentive Award shall be
increased or reduced from the amount of his or her potential Annual Incentive
Award, including a determination to make no final Award whatsoever, but may not
exercise discretion to increase any such amount in the case of an Annual
Incentive Award intended to qualify under section 162(m) of the Code. As soon as
reasonably practicable after the date on which the fiscal year has ended and the
Committee has made a determination under Clause (A) or (B) above, and before the
later of (x) the end of the calendar year which includes the date on which the
fiscal year has ended and the Committee has made such determination and (y) the
15th day of the third calendar month following the date on which the fiscal year
has ended and the Committee has made such determination, the Company shall
deliver to each Participant Stock or cash equal to the Participant’s Annual
Incentive Award, if any. The Committee shall specify the circumstances in which
an Annual Incentive Award shall be paid or forfeited in the event of termination
of employment by the Participant prior to the end of a fiscal year or settlement
of such Annual Incentive Award.

(d) Written Determinations

All determinations by the Committee as to the establishment of performance
goals, the amount of any Performance Award pool or potential individual
Performance Awards and as to the achievement of performance

 

15

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goals relating to Performance Awards under Section 8(b), and the amount of any
Annual Incentive Award pool or potential individual Annual Incentive Awards and
the amount of final Annual Incentive Awards under Section 8(c), shall be made in
writing in the case of any Award intended to qualify under section 162(m) of the
Code. The Committee may not delegate any responsibility relating to such
Performance Awards or Annual Incentive Awards.

(e) Status of Section 8(b) and Section 8(c) Awards under Section 162(m) of the
Code

It is the intent of the Company that Performance Awards and Annual Incentive
Awards under Sections 8(b) and 8(c) hereof granted to persons who are designated
by the Committee as likely to be Covered Employees within the meaning of section
162(m) of the Code and regulations thereunder (including Treasury Regulation
§1.162-27 and successor regulations thereto) shall, if so designated by the
Committee, constitute “performance-based compensation” within the meaning of
section 162(m) of the Code and regulations thereunder. Accordingly, the terms of
Sections 8(b), (c), (d) and (e), including the definitions of Covered Employee
and other terms used therein, shall be interpreted in a manner consistent with
section 162(m) of the Code and regulations thereunder. The foregoing
notwithstanding, because the Committee cannot determine with certainty whether a
given Participant will be a Covered Employee with respect to a fiscal year that
has not yet been completed, the term Covered Employee as used herein shall mean
only a person designated by the Committee, at the time of grant of Performance
Awards or an Annual Incentive Award, who is likely to be a Covered Employee with
respect to that fiscal year. If any provision of this Plan as in effect on the
date of adoption or any agreements relating to Performance Awards or Annual
Incentive Awards that are designated as intended to comply with section 162(m)
of the Code does not comply or is inconsistent with the requirements of section
162(m) of the Code or regulations thereunder, such provision shall be construed
or deemed amended to the extent necessary to conform to such requirements.

Section 9. Recapitalization or Reorganization.

(a) Existence of Plans and Awards

The existence of this 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 any adjustment, recapitalization, reorganization or other
change in the Company’s capital structure or its business, any merger or
consolidation of the Company, any issue of debt or equity securities ahead of or
affecting Stock or the rights thereof, the dissolution or liquidation of the
Company or any sale, lease, exchange or other disposition of all or any part of
its assets or business or any other corporate act or proceeding.

(b) Subdivision or Consolidation of Shares

The terms of an Award and the number of shares of Stock authorized pursuant to
Section 4 for issuance under the Plan shall be subject to adjustment from time
to time, in accordance with the following provisions:

(i) If at any time, or from time to time, the Company shall subdivide as a whole
(by reclassification, by a Stock split, by the issuance of a distribution on
Stock payable in Stock, or otherwise) the number of shares of Stock then
outstanding into a greater number of shares of Stock, then (A) the maximum
number of shares of Stock available for the Plan as provided in Section 4 shall
be increased proportionately, and the kind of shares or other securities
available for the Plan shall be appropriately adjusted, (B) the number of shares
of Stock (or other kind of shares or securities) that may be acquired under any
Award shall be increased proportionately, and (C) the price (including the
exercise price) for each share of Stock (or other kind of shares or securities)
subject to then outstanding Awards shall be reduced proportionately, without
changing the aggregate purchase price or value as to which outstanding Awards
remain exercisable or subject to restrictions.

(ii) If at any time, or from time to time, the Company shall consolidate as a
whole (by reclassification, reverse Stock split, or otherwise) the number of
shares of Stock then outstanding into a lesser number of shares of Stock,
(A) the maximum number of shares of Stock available for the Plan as provided in
Section 4 shall be decreased proportionately, and the kind of shares or other
securities available for the Plan shall be appropriately adjusted, (B) the
number of

 

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shares of Stock (or other kind of shares or securities) that may be acquired
under any Award shall be decreased proportionately, and (C) the price (including
the exercise price) for each share of Stock (or other kind of shares or
securities) subject to then outstanding Awards shall be increased
proportionately, without changing the aggregate purchase price or value as to
which outstanding Awards remain exercisable or subject to restrictions.

(iii) Whenever the number of shares of Stock subject to outstanding Awards and
the price for each share of Stock subject to outstanding Awards are required to
be adjusted as provided in this Section 9(b), the Committee shall promptly
prepare a notice setting forth, in reasonable detail, the event requiring
adjustment, the amount of the adjustment, the method by which such adjustment
was calculated, and the change in price and the number of shares of Stock, other
securities, cash, or property purchasable subject to each Award after giving
effect to the adjustments. The Committee shall promptly give each Participant
such a notice.

(iv) Adjustments under Subsections 9(b)(i) and (ii) shall be made by the
Committee, and its determination as to what adjustments shall be made and the
extent thereof shall be final, binding, and conclusive. No fractional interest
shall be issued under the Plan on account of any such adjustments.

(c) Corporate Restructuring

If the Company recapitalizes, reclassifies its capital stock, or otherwise
changes its capital structure (a “recapitalization”), the number and class of
shares of Stock covered by an Option theretofore granted shall be adjusted so
that such Option shall thereafter cover the number and class of shares of stock
and securities to which the holder would have been entitled pursuant to the
terms of the recapitalization if, immediately prior to the recapitalization, the
holder had been the holder of record of the number of shares of Stock then
covered by such Option and the share limitations provided in Sections 4 and 5
shall be adjusted in a manner consistent with the recapitalization. Upon a
Change in Control the Committee, shall fully accelerate the forfeiture
provisions associated with all outstanding Awards and, acting in its sole
discretion without the consent or approval of any holder, effect one of the
following alternatives with respect to Options: (1) accelerate the time at which
all Options then outstanding may be exercised so that such Options may be
exercised in full for a limited period of time on or before a specified date
(before or after such Change in Control) fixed by the Committee, after which
specified date all unexercised Options and all rights of holders thereunder
shall terminate, (2) require the mandatory surrender to the Company of all of
the outstanding Options held by such holders (irrespective of whether such
Options are then exercisable under the provisions of this Plan) as of a date,
before such Change in Control, specified by the Committee, in which event the
Committee shall thereupon cancel such Options and pay to each holder an amount
of cash per share equal to the excess, if any, of the amount calculated in
Section 9(d) (the “Change in Control Price”) of the shares subject to such
Option over the exercise price(s) under such Options for such shares, or
(3) allow for the conversion of Options into options to purchase a security of a
successor to the Company.

(d) Change in Control Price

The “Change in Control Price” shall equal the amount determined in clause (i),
(ii), (iii), (iv) or (v), whichever is applicable, as follows: (i) the per share
price offered to holders of the same class of Stock of the Company in any such
merger or consolidation, (ii) the per share value of the Stock immediately
before the Change in Control without regard to assets sold in the Change in
Control and assuming the Company has received the consideration paid for the
assets in the case of a sale of the assets, (iii) the amount distributed per
share of Stock in a dissolution transaction, (iv) the price per share offered to
holders of the same class of Stock of the Company in any tender offer or
exchange offer whereby a Change in Control takes place, or (v) if such Change in
Control occurs other than pursuant to a tender or exchange offer, the fair
market value per share of the shares into which such Options being surrendered
are exercisable, as determined by the Committee as of the date determined by the
Committee to be the date of cancellation and surrender of such Options. In the
event that the consideration offered to stockholders of the Company in any
transaction described in this Section 9(d) or Section 9(c) above consists of
anything other than cash, the Committee shall determine the fair cash equivalent
of the portion of the consideration offered which is other than cash.

 

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(e) Non-Option Awards

In the event of changes in the outstanding Stock by reason of recapitalization,
reorganizations, mergers, consolidations, combinations, exchanges or other
relevant changes in capitalization occurring after the date of the grant of any
Award and not otherwise provided for by this Section 9, any outstanding Awards
and any agreements evidencing such Awards shall be subject to adjustment by the
Committee at its discretion as to the number and price of shares of Stock or
other consideration subject to such Awards. In the event of any such change in
the outstanding Stock, the aggregate number of shares available under this Plan
may be appropriately adjusted by the Committee, whose determination shall be
conclusive.

(f) Additional Issuances

Except as hereinbefore expressly provided, the issuance by the Company of shares
of stock of any class or securities convertible into shares of stock of any
class, for cash, property, labor or services, upon direct sale, upon the
exercise of rights or warrants to subscribe therefore, or upon conversion of
shares or obligations of the Company convertible into such shares or other
securities, and in any case whether or not for fair value, shall not affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Stock subject to Awards theretofore granted or the purchase price per
share, if applicable.

(g) Restricted Stock Awards

Plan provisions to the contrary notwithstanding, with respect to any Restricted
Stock Awards outstanding at the time a Change in Control as described in
Section 2(g) occurs, all Stock awarded to the holder pursuant to a Restricted
Stock Award shall fully vest and, upon such vesting, all restrictions applicable
to such Restricted Stock Award shall terminate as of such date.

Section 10. General Provisions.

(a) Transferability

(i) Permitted Transferees

The Committee may, in its discretion, permit a Participant to transfer all or
any portion of an Award or authorize all or a portion of such Awards to be
granted to an Eligible Person to be on terms which permit transfer by such
Participant; provided that, in either case the transferee or transferees must be
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive
relationships, in each case with respect to the Participant, any person sharing
the Participant’s household (other than a tenant or employee of the Company), a
trust in which these persons have more than fifty percent of the beneficial
interest, a foundation in which these persons (or the Participant) control the
management of assets, and any other entity in which these persons (or the
Participant) own more than fifty percent of the voting interests (collectively,
“Permitted Transferees”); provided further that, (X) there may be no
consideration for any such transfer and (Y) subsequent transfers of Awards
transferred as provided above shall be prohibited except subsequent transfers
back to the original holder of the Award and transfers to other Permitted
Transferees of the original holder. Agreements evidencing Awards with respect to
which such transferability is authorized at the time of grant must be approved
by the Committee, and must expressly provide for transferability in a manner
consistent with this Subsection 10(a)(i).

(ii) Domestic Relations Orders

An Award may be transferred, to a Permitted Transferee, pursuant to a domestic
relations order entered or approved by a court of competent jurisdiction upon
delivery to the Company of written notice of such transfer and a certified copy
of such order.

 

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(iii) Other Transfers

Except as expressly permitted by Subsections 10(a)(i) and 10(a)(ii), Awards
shall not be transferable other than by will or the laws of descent and
distribution. Notwithstanding anything to the contrary in this Section 10, an
Incentive Stock Option shall not be transferable other than by will or the laws
of descent and distribution.

(iv) Effect of Transfer

Following the transfer of any Award as contemplated by Subsections 10(a)(i),
10(a)(ii) and 10(a)(iii), (A) such Award shall continue to be subject to the
same terms and conditions as were applicable immediately prior to transfer,
provided that the term “Participant” shall be deemed to refer to the Permitted
Transferee, the recipient under a qualified domestic relations order, the estate
or heirs of a deceased Participant, or other transferee, as applicable, to the
extent appropriate to enable the Participant to exercise the transferred Award
in accordance with the terms of this Plan and applicable law and (B) the
provisions of the Award relating to exercisability hereof shall continue to be
applied with respect to the original Participant and, following the occurrence
of any such events described therein the Awards shall be exercisable by the
Permitted Transferee, the recipient under a qualified domestic relations order,
the estate or heirs of a deceased Participant, or other transferee, as
applicable, only to the extent and for the periods that would have been
applicable in the absence of the transfer.

(v) Procedures and Restrictions

Any Participant desiring to transfer an Award as permitted under Subsections
10(a)(i), 10(a)(ii) or 10(a)(iii) shall make application therefore in the manner
and time specified by the Committee and shall comply with such other
requirements as the Committee may require to assure compliance with all
applicable securities laws. The Committee shall not give permission for such a
transfer if (A) it would give rise to short-swing liability under section 16(b)
of the Exchange Act or (B) it may not be made in compliance with all applicable
federal, state and foreign securities laws.

(vi) Registration

To the extent the issuance to any Permitted Transferee of any shares of Stock
issuable pursuant to Awards transferred as permitted in this Section 10(a) is
not registered pursuant to the effective registration statement of the Company
generally covering the shares to be issued pursuant to this Plan to initial
holders of Awards, the Company shall not have any obligation to register the
issuance of any such shares of Stock to any such transferee.

(b) Taxes

The Company and any Subsidiary is authorized to withhold from any Award granted,
or any payment relating to an Award under this Plan, including from a
distribution of Stock, amounts of withholding and other taxes due or potentially
payable in connection with any transaction involving an Award, and to take such
other action as the Committee may deem advisable to enable the Company and
Participants to satisfy obligations for the payment of withholding taxes and
other tax obligations relating to any Award. This authority shall include
authority to withhold or receive Stock or other property and to make cash
payments in respect thereof in satisfaction of a Participant’s tax obligations,
either on a mandatory or elective basis in the discretion of the Committee.

(c) Changes to this Plan and Awards

The Board may amend, alter, suspend, discontinue or terminate this Plan or the
Committee’s authority to grant Awards under this Plan without the consent of
stockholders or Participants, except that any amendment or alteration to this
Plan, including any increase in any share limitation, shall be subject to the
approval of the

 

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Company’s stockholders not later than the annual meeting next following such
Board action if such stockholder approval is required by any federal or state
law or regulation or the rules of any stock exchange or automated quotation
system on which the Stock may then be listed or quoted, and the Board may
otherwise, in its discretion, determine to submit other such changes to this
Plan to stockholders for approval; provided that, without the consent of an
affected Participant, no such Board action may materially and adversely affect
the rights of such Participant under any previously granted and outstanding
Award. The Committee may waive any conditions or rights under, or amend, alter,
suspend, discontinue or terminate any Award theretofore granted and any Award
agreement relating thereto, except as otherwise provided in this Plan; provided
that, without the consent of an affected Participant, no such Committee action
may materially and adversely affect the rights of such Participant under such
Award.

(d) Limitation on Rights Conferred under Plan

Neither this Plan nor any action taken hereunder shall be construed as
(i) giving any Eligible Person or Participant the right to continue as an
Eligible Person or Participant or in the employ or service of the Company or a
Subsidiary, (ii) interfering in any way with the right of the Company or a
Subsidiary to terminate any Eligible Person’s or Participant’s employment or
service at any time, (iii) giving an Eligible Person or Participant any claim to
be granted any Award under this Plan or to be treated uniformly with other
Participants and employees, or (iv) conferring on a Participant any of the
rights of a stockholder of the Company unless and until the Participant is duly
issued or transferred shares of Stock in accordance with the terms of an Award.

(e) Unfunded Status of Awards

This Plan is intended to constitute an “unfunded” plan for certain incentive
awards.

(f) Nonexclusivity of this Plan

Neither the adoption of this Plan by the Board nor its submission to the
stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board or a committee thereof to adopt such other
incentive arrangements as it may deem desirable, including incentive
arrangements and awards which do not qualify under section 162(m) of the Code.
Nothing contained in this Plan shall be construed to prevent the Company or any
Subsidiary from taking any corporate action which is deemed by the Company or
such Subsidiary to be appropriate or in its best interest, whether or not such
action would have an adverse effect on this Plan or any Award made under this
Plan. No employee, beneficiary or other person shall have any claim against the
Company or any Subsidiary as a result of any such action.

(g) Payments in the Event of Forfeitures; Fractional Shares

Unless otherwise determined by the Committee, in the event of a forfeiture of an
Award with respect to which a Participant paid cash or other consideration to
the Company in exchange for such Award, the Participant shall be repaid the
amount of such cash or other consideration. No fractional shares of Stock shall
be issued or delivered pursuant to this Plan or any Award. The Committee shall
determine whether cash, other Awards or other property shall be issued or paid
in lieu of such fractional shares or whether such fractional shares or any
rights thereto shall be forfeited or otherwise eliminated.

(h) Severability

If any provision of this Plan is held to be illegal or invalid for any reason,
the illegality or invalidity shall not affect the remaining provisions hereof,
but such provision shall be fully severable and the Plan shall be construed and
enforced as if the illegal or invalid provision had never been included herein.
If any of the terms or provisions of this Plan or any Award agreement conflict
with the requirements of Rule 16b-3 (as those terms or provisions are applied to
Eligible Persons who are subject to section 16(b) of the Exchange Act) or
section 422 of the Code (with respect to Incentive Stock Options), then those
conflicting terms or provisions shall be deemed inoperative to the extent they
so conflict with the requirements of Rule 16b-3 (unless the Board or the
Committee, as appropriate, has expressly determined that the Plan or such Award
should not comply with Rule 16b-3) or section 422 of the Code. With respect to
Incentive Stock Options, if this Plan does not contain any provision required to
be

 

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included herein under section 422 of the Code, that provision shall be deemed to
be incorporated herein with the same force and effect as if that provision had
been set out at length herein; provided, further, that, to the extent any Option
that is intended to qualify as an Incentive Stock Option cannot so qualify, that
Option (to that extent) shall be deemed an Option not subject to section 422 of
the Code for all purposes of the Plan.

(i) Compliance with Legal and Exchange Requirements.

The Plan, the granting and exercising of Awards thereunder, and any obligations
of the Company under the Plan, shall be subject to all applicable federal and
state laws, rules, and regulations, and to such approvals by any regulatory or
governmental agency as may be required, and to any rules or regulations of any
exchange on which the Stock is listed. The Company, in its discretion, may
postpone the granting and exercising of Awards, the issuance or delivery of
shares of Stock under any Award or any other action permitted under the Plan to
permit the Company, with reasonable diligence, to complete such stock exchange
listing or registration or qualification of such shares or other required action
under any federal or state law, rule, or regulation and may require any
Participant to make such representations and furnish such information as it may
consider appropriate in connection with the issuance or delivery of shares of
Stock in compliance with applicable laws, rules, and regulations. The Company
shall not be obligated by virtue of any provision of the Plan to recognize the
exercise of any Award or to otherwise sell or issue shares of Stock in violation
of any such laws, rules, or regulations, and any postponement of the exercise or
settlement of any Award under this provision shall not extend the term of such
Awards. Neither the Company nor its directors or officers shall have any
obligation or liability to a Participant with respect to any Award (or shares of
Stock issuable thereunder) (i) that shall lapse because of such postponement or
(ii) for any failure to comply with the requirements of any applicable law,
rules or regulations, including, but not limited to, any failure to comply with
the requirements of section 409A of the Code.

(j) Governing Law

All questions arising with respect to the provisions of the Plan and Awards
shall be determined by application of the laws of the State of Delaware, without
giving effect to any choice of law provisions thereof, except to the extent
Delaware law is preempted by federal law. The obligation of the Company to sell
and deliver Stock hereunder is subject to applicable federal and state laws and
to the approval of any governmental authority required in connection with the
authorization, issuance, sale, or delivery of such Stock.

(k) Conditions to Delivery of Stock

Nothing herein or in any Award granted hereunder or any Award agreement shall
require the Company to issue any shares with respect to any Award if that
issuance would, in the opinion of counsel for the Company, constitute a
violation of the Securities Act or any similar or superseding statute or
statutes, any other applicable statute or regulation, or the rules of any
applicable securities exchange or securities association, as then in effect. At
the time of any exercise of an Option or Stock Appreciation Right, or at the
time of any grant of a Restricted Stock Award or Phantom Stock Award payable in
Stock, the Company may, as a condition precedent to the exercise of such Option
or Stock Appreciation Right or settlement of any Restricted Stock Award or
Phantom Stock Award payable in Stock, require from the Participant (or in the
event of his death, his legal representatives, heirs, legatees, or distributees)
such written representations, if any, concerning the holder’s intentions with
regard to the retention or disposition of the shares of Stock being acquired
pursuant to the Award and such written covenants and agreements, if any, as to
the manner of disposal of such shares as, in the opinion of counsel to the
Company, may be necessary to ensure that any disposition by that holder (or in
the event of the holder’s death, his legal representatives, heirs, legatees, or
distributees) will not involve a violation of the Securities Act or any similar
or superseding statute or statutes, any other applicable state or federal
statute or regulation, or any rule of any applicable securities exchange or
securities association, as then in effect.

(l) Headings and Captions

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

 

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(m) Plan Effective Date

This Plan has been adopted by the Board effective as of July 5, 2012.

 

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