EXHIBIT 10.1

PACIFIC SUNWEAR OF CALIFORNIA, INC.
2015 LONG-TERM INCENTIVE PLAN

1. PURPOSE OF PLAN
The purpose of this Pacific Sunwear of California, Inc. 2015 Long-Term Incentive
Plan (this “Plan”) of Pacific Sunwear of California, Inc., a California
corporation (the “Corporation”), is to promote the success of the Corporation
and to increase shareholder value by providing an additional means through the
grant of awards to attract, motivate, retain and reward selected employees and
other eligible persons.
2. ELIGIBILITY
The Administrator (as such term is defined in Section 3.1) may grant awards
under this Plan only to those persons that the Administrator determines to be
Eligible Persons. An “Eligible Person” is any person who is either: (a) an
officer (whether or not a director) or employee of the Corporation or one of its
Subsidiaries; (b) a director of the Corporation or one of its Subsidiaries; or
(c) an individual consultant or advisor who renders or has rendered bona fide
services (other than services in connection with the offering or sale of
securities of the Corporation or one of its Subsidiaries in a capital-raising
transaction or as a market maker or promoter of securities of the Corporation or
one of its Subsidiaries) to the Corporation or one of its Subsidiaries and who
is selected to participate in this Plan by the Administrator; provided, however,
that a person who is otherwise an Eligible Person under clause (c) above may
participate in this Plan only if such participation would not adversely affect
either the Corporation’s eligibility to use Form S-8 to register under the
Securities Act of 1933, as amended (the “Securities Act”), the offering and sale
of shares issuable under this Plan by the Corporation or the Corporation’s
compliance with any other applicable laws. An Eligible Person who has been
granted an award (a “participant”) may, if otherwise eligible, be granted
additional awards if the Administrator shall so determine. As used herein,
“Subsidiary” means any corporation or other entity a majority of whose
outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Corporation; and “Board” means the Board of Directors of the
Corporation.
3.    PLAN ADMINISTRATION
3.1
The Administrator. This Plan shall be administered by and all awards under this
Plan shall be authorized by the Administrator. The “Administrator” means the
Board or one or more committees appointed by the Board or another committee
(within its delegated authority) to administer all or certain aspects of this
Plan. Any such committee shall be comprised solely of one or more directors or
such number of directors as may be required under applicable law. A committee
may delegate some or all of its authority to another committee so constituted.
The Board or a committee comprised solely of directors may also delegate, to the
extent permitted by applicable law, to one or more officers of the Corporation,
its powers under this Plan (a) to designate the officers and employees of the
Corporation and its Subsidiaries who will receive grants of awards under this
Plan, and (b) to determine the number of shares subject to, and the other terms
and conditions of, such awards. The Board may delegate different levels of
authority to different committees with administrative and grant authority under
this Plan. Unless otherwise provided in the Bylaws of the Corporation or the
applicable charter of any Administrator: (a) a majority of the members of the
acting Administrator shall constitute a quorum, and (b) the vote of a majority
of the members present assuming the presence of a

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quorum or the unanimous written consent of the members of the Administrator
shall constitute action by the acting Administrator.
With respect to awards intended to satisfy the requirements for
performance-based compensation under Section 162(m) of the Internal Revenue Code
of 1986, as amended (the “Code”), this Plan shall be administered by a committee
consisting solely of two or more outside directors (as this requirement is
applied under Section 162(m) of the Code); provided, however, that the failure
to satisfy such requirement shall not affect the validity of the action of any
committee otherwise duly authorized and acting in the matter. Award grants, and
transactions in or involving awards, intended to be exempt under Rule 16b-3
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), must
be duly and timely authorized by the Board or a committee consisting solely of
two or more non-employee directors (as this requirement is applied under Rule
16b-3 promulgated under the Exchange Act). To the extent required by any
applicable listing agency, this Plan shall be administered by a committee
composed entirely of independent directors (within the meaning of the applicable
listing agency).
3.2
Powers of the Administrator. Subject to the express provisions of this Plan
(including, but not limited to, Section 8.8.3(c)), the Administrator is
authorized and empowered to do all things necessary or desirable in connection
with the authorization of awards and the administration of this Plan (in the
case of a committee or delegation to one or more officers, within the authority
delegated to that committee or person(s)), including, without limitation, the
authority to:

(a)
determine eligibility and, from among those persons determined to be eligible,
the particular Eligible Persons who will receive an award under this Plan;

(b)
grant awards to Eligible Persons, determine the price at which securities will
be offered or awarded and the number of securities to be offered or awarded to
any of such persons, determine the other specific terms and conditions of such
awards consistent with the express limits of this Plan, establish the
installments (if any) in which such awards shall become exercisable or shall
vest (which may include, without limitation, performance and/or time-based
schedules), or determine that no delayed exercisability or vesting is required,
establish any applicable performance targets, and establish the events of
termination or reversion of such awards;

(c)
approve the forms of award agreements (which need not be identical either as to
type of award or among participants);

(d)
construe and interpret this Plan and any agreements defining the rights and
obligations of the Corporation, its Subsidiaries, and participants under this
Plan, further define the terms used in this Plan, and prescribe, amend and
rescind rules and regulations relating to the administration of this Plan or the
awards granted under this Plan;

(e)
cancel, modify, or waive the Corporation’s rights with respect to, or modify,
discontinue, suspend, or terminate any or all outstanding awards, subject to any
required consent under Section 8.6.5;

(f)
accelerate or extend the vesting or exercisability or extend the term of any or
all such outstanding awards (in the case of options or stock appreciation
rights, within the

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maximum ten-year term of such awards) in such circumstances as the Administrator
may deem appropriate (including, without limitation, in connection with a
termination of employment or services or other events of a personal nature)
subject to any required consent under Section 8.6.5;
(g)
adjust the number of shares of Common Stock subject to any award, adjust the
price of any or all outstanding awards or otherwise change previously imposed
terms and conditions, in such circumstances as the Administrator may deem
appropriate, in each case subject to Sections 4 and 8.6, and provided that in no
case (except due to an adjustment contemplated by Section 7 or any repricing
that may be approved by shareholders) shall such an adjustment constitute a
repricing (by amendment, cancellation and regrant, exchange or other means) of
the per share exercise or base price of any option or stock appreciation right;

(h)
determine the date of grant of an award, which may be a designated date after
but not before the date of the Administrator’s action (unless otherwise
designated by the Administrator, the date of grant of an award shall be the date
upon which the Administrator took the action granting an award);

(i)
determine whether, and the extent to which, adjustments are required pursuant to
Section 7 hereof and authorize the termination, conversion, substitution or
succession of awards upon the occurrence of an event of the type described in
Section 7;

(j)
acquire or settle (subject to Sections 7 and 8.6) rights under awards in cash,
stock of equivalent value, or other consideration; and

(k)
determine the fair market value of the Common Stock or awards under this Plan
from time to time and/or the manner in which such value will be determined.

3.3
Binding Determinations. Any action taken by, or inaction of, the Corporation,
any Subsidiary, or the Administrator relating or pursuant to this Plan and
within its authority hereunder or under applicable law shall be within the
absolute discretion of that entity or body and shall be conclusive and binding
upon all persons. Neither the Board nor any Board committee, nor any member
thereof or person acting at the direction thereof, shall be liable for any act,
omission, interpretation, construction or determination made in good faith in
connection with this Plan (or any award made under this Plan), and all such
persons shall be entitled to indemnification and reimbursement by the
Corporation in respect of any claim, loss, damage or expense (including, without
limitation, attorneys’ fees) arising or resulting therefrom to the fullest
extent permitted by law and/or under any directors and officers liability
insurance coverage that may be in effect from time to time.

3.4
Reliance on Experts. In making any determination or in taking or not taking any
action under this Plan, the Board or a committee, as the case may be, may obtain
and may rely upon the advice of experts, including employees and professional
advisors to the Corporation. No director, officer or agent of the Corporation or
any of its Subsidiaries shall be liable for any such action or determination
taken or made or omitted in good faith.

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3.5
    Delegation. The Administrator may delegate ministerial, non-discretionary
functions to individuals who are officers or employees of the Corporation or any
of its Subsidiaries or to third parties.

4.    SHARES OF COMMON STOCK SUBJECT TO THE PLAN; SHARE LIMITS
4.1
    Shares Available. Subject to the provisions of Section 7.1, the capital
stock that may be delivered under this Plan shall be shares of the Corporation’s
authorized but unissued Common Stock. For purposes of this Plan, “Common Stock”
shall mean the common stock of the Corporation and such other securities or
property as may become the subject of awards under this Plan, or may become
subject to such awards, pursuant to an adjustment made under Section 7.1.

4.2
    Share Limits. The maximum number of shares of Common Stock that may be
delivered pursuant to awards granted to Eligible Persons under this Plan (the
“Share Limit”) is equal to the sum of the following:

(1)
7,000,000 shares of Common Stock, consisting of never before authorized shares
of Common Stock, plus

(2)
the number of any shares subject to stock options granted under the
Corporation’s 2005 Performance Incentive Plan (the “2005 Plan”) and outstanding
as of the date of shareholder approval of this Plan (the “Shareholder Approval
Date”) which expire, or for any reason are cancelled or terminated, after the
Shareholder Approval Date without being exercised, plus

(3)
the number of any shares of restricted stock granted under the 2005 Plan that
are outstanding and unvested on the Shareholder Approval Date that are
forfeited, terminated, cancelled or otherwise reacquired by the Corporation
without having become vested.

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 Limit by one and
thirty-eight one hundredths (1.38) 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 Limit by one (1)
share of Common Stock. As used herein, “Full Value Award” means an award other
than a stock option or stock appreciation right (or “SAR”) that is settled
through the issuance of shares of Common Stock.
The following limits also apply with respect to awards granted under this Plan:
(a)
The maximum number of shares of Common Stock that may be delivered pursuant to
options qualified as incentive stock options granted under this Plan is
7,000,000 shares.

(b)
The maximum number of shares of Common Stock subject to those options and SARs
that are granted during any calendar year to any individual under this Plan is
2,000,000 shares.

(c)
Additional limits with respect to Performance-Based Awards are set forth in
Section 5.2.3.

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Each of the foregoing numerical limits is subject to adjustment as contemplated
by Section 4.3, Section 7.1, and Section 8.10.
4.3
Awards Settled in Cash, Reissue of Awards and Shares. To the extent that an
award is settled in cash or a form other than shares of Common Stock, the shares
that would have been delivered had there been no such cash or other settlement
shall not be counted against the Share Limit. Notwithstanding the foregoing, the
full number of SARs granted that are to be settled by the issuance of shares of
Common Stock shall be counted against the Share Limit, regardless of the number
of shares of Common Stock actually issued upon settlement of such SARs.
Furthermore, 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 to pay the exercise price of an award under the Plan, and shares
of Common Stock repurchased on the open market with the proceeds from the
exercise of a Stock Option will no longer be eligible to be again available for
grant under this Plan. Shares that are subject to or underlie awards which
expire or for any reason are cancelled or terminated, are forfeited, fail to
vest, or for any other reason are not paid or delivered under this Plan shall
again be available for subsequent awards under this Plan.

4.4
Refer to Section 8.10 for application of the foregoing share limits with respect
to assumed awards. The foregoing adjustments to the share limits of this Plan
are subject to any applicable limitations under Section 162(m) of the Code with
respect to awards intended as performance-based compensation thereunder.

4.5
Reservation of Shares; No Fractional Shares; Minimum Issue. The Corporation
shall at all times reserve a number of shares of Common Stock sufficient to
cover the Corporation’s obligations and contingent obligations to deliver shares
with respect to awards then outstanding under this Plan (exclusive of any
dividend equivalent obligations to the extent the Corporation has the right to
settle such rights in cash). No fractional shares shall be delivered under this
Plan. The Administrator may pay cash in lieu of any fractional shares in
settlements of awards under this Plan. No fewer than 100 shares may be purchased
on exercise of any award (or, in the case of stock appreciation or purchase
rights, no fewer than 100 rights may be exercised at any one time) unless the
total number purchased or exercised is the total number at the time available
for purchase or exercise under the award.

5.    AWARDS
5.1
Type and Form of Awards. The Administrator shall determine the type or types of
award(s) to be made to each selected Eligible Person. Awards may be granted
singly, in combination or in tandem. Awards also may be made in combination or
in tandem with, in replacement of, as alternatives to, or as the payment form
for grants or rights under any other employee or compensation plan of the
Corporation or one of its Subsidiaries. The types of awards that may be granted
under this Plan are:

5.1.1    Stock Options. A stock option is the grant of a right to purchase a
specified number of shares of Common Stock during a specified period as
determined by the Administrator. An option may be intended as an incentive stock
option within the meaning of Section 422 of the Code (an “ISO”) or a
nonqualified stock option (an option not intended to be an ISO). The award
agreement for an option will indicate if the option is intended as an ISO;
otherwise it will be deemed to be a nonqualified stock option. The maximum term
of each option (ISO or nonqualified) shall be ten (10) years. The per share
exercise price for each option shall be

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not less than 100% of the fair market value of a share of Common Stock on the
date of grant of the option, except in the case of a stock option granted
retroactively in tandem with or as a substitution for another award, in which
case the per share exercise price may be no lower than the fair market value of
a share of Common Stock on the date such other award was granted (to the extent
consistent with Sections 422 and 424 of the Code in the case of options intended
as incentive stock options). When an option is exercised, the exercise price for
the shares to be purchased shall be paid in full in cash or such other method
permitted by the Administrator consistent with Section 5.5.
5.1.2    Additional Rules Applicable to ISOs. To the extent that the aggregate
fair market value (determined at the time of grant of the applicable option) of
stock with respect to which ISOs first become exercisable by a participant in
any calendar year exceeds $100,000, taking into account both Common Stock
subject to ISOs under this Plan and stock subject to ISOs under all other plans
of the Corporation or one of its Subsidiaries (or any parent or predecessor
corporation to the extent required by and within the meaning of Section 422 of
the Code and the regulations promulgated thereunder), such options shall be
treated as nonqualified stock options. In reducing the number of options treated
as ISOs to meet the $100,000 limit, the most recently granted options shall be
reduced first. To the extent a reduction of simultaneously granted options is
necessary to meet the $100,000 limit, the Administrator may, in the manner and
to the extent permitted by law, designate which shares of Common Stock are to be
treated as shares acquired pursuant to the exercise of an ISO. ISOs may only be
granted to employees of the Corporation or one of its subsidiaries (for this
purpose, the term “subsidiary” is used as defined in Section 424(f) of the Code,
which generally requires an unbroken chain of ownership of at least 50% of the
total combined voting power of all classes of stock of each subsidiary in the
chain beginning with the Corporation and ending with the subsidiary in
question). There shall be imposed in any award agreement relating to ISOs such
other terms and conditions as from time to time are required in order that the
option be an “incentive stock option” as that term is defined in Section 422 of
the Code. No ISO may be granted to any person who, at the time the option is
granted, owns (or is deemed to own under Section 424(d) of the Code) shares of
outstanding Common Stock possessing more than 10% of the total combined voting
power of all classes of stock of the Corporation, unless the exercise price of
such option is at least 110% of the fair market value of the stock subject to
the option and such option by its terms is not exercisable after the expiration
of five years from the date such option is granted.
5.1.3    Stock Appreciation Rights. An SAR is a right to receive a payment, in
cash and/or shares of Common Stock, equal to the excess of the fair market value
of a specified number of shares of Common Stock on the date the SAR is exercised
over the fair market value of a share of Common Stock on the date the SAR was
granted (the “base price”) as set forth in the applicable award agreement. In
the case of a SAR granted retroactively in tandem with or as a substitution for
another award, however, the base price may be no lower than the fair market
value of a share of Common Stock on the date such other award was granted. The
maximum term of an SAR shall be ten (10) years.
5.1.4    Other Awards. The other types of awards that may be granted under this
Plan include: (a) stock bonuses, restricted stock, performance stock, stock
units, phantom stock, dividend equivalents, or similar rights to purchase or
acquire shares, whether at a fixed or variable price or ratio related to the
Common Stock, upon the passage of time, the occurrence of one or more events, or
the satisfaction of performance criteria or other conditions, or any combination

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thereof; (b) any similar securities with a value derived from the value of or
related to the Common Stock and/or returns thereon; or (c) cash awards granted
consistent with Section 5.2 below.
5.1.5     Dividends and Dividend Equivalent Rights. Any participant selected by
the Administrator may be granted dividend equivalents based on the dividends
declared on shares of Common Stock that are subject to any award other than
stock options or SARs, to be credited as of any dividend payment date(s) that
occur during the period between the date the award is granted and the date the
award is exercised, vests or expires, as determined by the Administrator. Such
dividend equivalents shall be converted to cash or additional shares of Common
Stock by such formula and at such time and subject to such limitations as may be
determined by the Administrator. Notwithstanding the foregoing, if any award for
which dividend equivalents have been granted has its vesting or grant dependent
upon the achievement of one or more Business Criteria, then the dividend
equivalents shall accrue and only be paid to the extent such award becomes
vested. Under no circumstances may dividend equivalents be granted with respect
to any stock option or SAR.
5.2
Section 162(m) Performance-Based Awards. Without limiting the generality of the
foregoing, any of the types of awards listed in Section 5.1.4 above may be, and
options and SARs granted with an exercise or base price not less than the fair
market value of a share of Common Stock at the date of grant (“Qualifying
Options” and “Qualifying SARS,” respectively) typically will be, granted as
awards intended to satisfy the requirements for “performance-based compensation”
within the meaning of Section 162(m) of the Code (“Performance-Based Awards”).
The grant, vesting, exercisability or payment of Performance-Based Awards may
depend (or, in the case of Qualifying Options or Qualifying SARs, may also
depend) on the degree of achievement of one or more performance goals relative
to a pre-established targeted level or level using one or more of the Business
Criteria set forth below (on an absolute or relative basis) for the Corporation
on a consolidated basis or for one or more of the Corporation’s subsidiaries,
segments, divisions or business units, or any combination of the foregoing. Any
Qualifying Option or Qualifying SAR shall be subject only to the requirements of
Section 5.2.1 and 5.2.3 in order for such award to satisfy the requirements for
“performance-based compensation” under Section 162(m) of the Award. Any other
Performance-Based Award shall be subject to all of the following provisions of
this Section 5.2.

5.2.1    Class; Administrator. The eligible class of persons for
Performance-Based Awards under this Section 5.2 shall be officers and employees
of the Corporation or one of its Subsidiaries. The Administrator approving
Performance-Based Awards or making any certification required pursuant to
Section 5.2.4 must be constituted as provided in Section 3.1 for awards that are
intended as performance-based compensation under Section 162(m) of the Code.
5.2.2    Performance Goals. Performance-Based Awards (other than Qualifying
Options and Qualifying SARs) shall be determined based on the attainment of
specific performance goals established based on one or more of the business
criteria set forth on Appendix A hereto (“Business Criteria”) as selected by the
Administrator in its sole discretion. To qualify awards as performance-based
under Section 162(m), the applicable Business Criterion (or Business Criteria,
as the case may be) and specific performance goal or goals (“targets”) must be
established in writing and approved by the Administrator during the first 90
days of the performance period (and, in the case of performance periods of less
than one year, in no event

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after 25% or more of the performance period has elapsed) and while performance
relating to such target(s) remains substantially uncertain within the meaning of
Section 162(m) of the Code. At the same time as the performance goal(s) are
established, the Administrator will prescribe a formula to determine the amount
of the Performance-Based Award that may be payable based upon the level of
attainment of the performance goal(s) during the performance period.
The Administrator may provide for objectively determinable adjustments,
modifications or amendments, as the Administrator may determine appropriate
(including, but not limited to, the unbudgeted impact of material, unusual or
nonrecurring gains and losses, accounting changes or other extraordinary events
not foreseen at the time the targets were set). The applicable performance
measurement period may not be less than three months nor more than 10 years.
5.2.3    Form of Payment; Maximum Performance-Based Award. Grants or awards
under this Section 5.2 may be paid in cash or shares of Common Stock or any
combination thereof. Grants of Qualifying Options and Qualifying SARs to any one
participant in any one calendar year shall be subject to the limit set forth in
Section 4.2(b). The maximum number of shares of Common Stock which may be
delivered pursuant to Performance-Based Awards (other than Qualifying Options
and Qualifying SARs, and other than cash awards covered by the following
sentence) that are granted to any one participant in any one calendar year shall
not exceed 2,000,000 shares, either individually or in the aggregate, subject to
adjustment as provided in Section 7.1. In addition, the aggregate amount of
compensation to be paid to any one participant in respect of all
Performance-Based Awards payable only in cash and not related to shares of
Common Stock and granted to that participant in any one calendar year shall not
exceed $5,000,000. Awards that are cancelled during the year shall be counted
against these limits to the extent permitted by Section 162(m) of the Code.
5.2.4    Certification of Payment. Before any Performance-Based Award under this
Section 5.2 (other than Qualifying Options and Qualifying SARs) is paid and to
the extent required to qualify the award as performance-based compensation
within the meaning of Section 162(m) of the Code, the Administrator must certify
in writing that the performance target(s) and any other material terms of the
Performance-Based Award were in fact timely satisfied and ascertain the amount
of such Performance-Based Award.
5.2.5    Reservation of Discretion. The Administrator will have the discretion
to determine the restrictions or other limitations of the individual awards
granted under this Section 5.2 including the authority to reduce (but not to
increase) awards, payouts or vesting or to pay no awards, in its sole
discretion, if the Administrator preserves such authority at the time of grant
by language to this effect in its authorizing resolutions or otherwise.

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5.2.6    Expiration of Grant Authority. As required pursuant to Section 162(m)
of the Code and the regulations promulgated thereunder, the Administrator’s
authority to grant new awards that are intended to qualify as performance-based
compensation within the meaning of Section 162(m) of the Code (other than
Qualifying Options and Qualifying SARs) shall terminate upon the first meeting
of the Corporation’s shareholders that occurs in the fifth year following the
year in which the Corporation’s shareholders first approve this Plan.
5.3
Award Agreements. Each award shall be evidenced by a written award agreement in
the form approved by the Administrator and executed on behalf of the Corporation
and, if required by the Administrator, executed by the recipient of the award.
The Administrator may authorize any officer of the Corporation (other than the
particular award recipient) to execute any or all award agreements on behalf of
the Corporation. The award agreement shall set forth the material terms and
conditions of the award as established by the Administrator consistent with the
express limitations of this Plan.

5.4
Deferrals and Settlements. Payment of awards may be in the form of cash, Common
Stock, other awards or combinations thereof as the Administrator shall
determine, and with such restrictions as it may impose. The Administrator may
also require or permit participants to elect to defer the issuance of shares or
the settlement of awards in cash under such rules and procedures as it may
establish under this Plan, subject to Section 8.8.3(c). The Administrator may
also provide that deferred settlements include the payment or crediting of
interest or other earnings on the deferral amounts, or the payment or crediting
of dividend equivalents where the deferred amounts are denominated in shares,
subject to Section 8.8.3(c).

5.5
Consideration for Common Stock or Awards. The purchase price for any award
granted under this Plan or the Common Stock to be delivered pursuant to an
award, as applicable, may be paid by means of any lawful consideration as
determined by the Administrator, including, without limitation, one or a
combination of the following methods:

•
services rendered by the recipient of such award;

•
cash, check payable to the order of the Corporation, or electronic funds
transfer;

•
notice and third party payment in such manner as may be authorized by the
Administrator;

•
the delivery of previously owned shares of Common Stock;

•
by a reduction in the number of shares otherwise deliverable pursuant to the
award; or

•
subject to such procedures as the Administrator may adopt, pursuant to a
“cashless exercise” with a third party who provides financing for the purposes
of (or who otherwise facilitates) the purchase or exercise of awards.

In no event shall any shares newly-issued by the Corporation be issued for less
than the minimum lawful consideration for such shares or for consideration other
than consideration permitted by applicable state law. In the event that the
Administrator allows a participant to exercise an award by delivering shares of
Common Stock previously owned by such participant and unless otherwise expressly
provided by the Administrator, any shares delivered which were initially
acquired by the participant from the Corporation (upon exercise of a stock
option or otherwise) must have been owned by the participant at least six months
as of the date of delivery. Shares of Common Stock used to satisfy the exercise
price of an option

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shall be valued at their fair market value on the date of exercise. The
Corporation will not be obligated to deliver any shares unless and until it
receives full payment of the exercise or purchase price therefor and any related
withholding obligations under Section 8.5 and any other conditions to exercise
or purchase have been satisfied. Unless otherwise expressly provided in the
applicable award agreement, the Administrator may at any time eliminate or limit
a participant’s ability to pay the purchase or exercise price of any award or
shares by any method other than cash payment to the Corporation.
5.6
Definition of Fair Market Value. For purposes of this Plan, “fair market value”
shall mean, unless otherwise determined or provided by the Administrator in the
circumstances, the last price for a share of Common Stock as furnished by the
National Association of Securities Dealers, Inc. (the “NASD”) through the NASDAQ
National Market Reporting System (the “National Market”) for the date in
question or, if no sales of Common Stock were reported by the NASD on the
National Market on that date, the last price for a share of Common Stock as
furnished by the NASD through the National Market for the next preceding day on
which sales of Common Stock were reported by the NASD. The Administrator may,
however, provide with respect to one or more awards that the fair market value
shall equal the last price for a share of Common Stock as furnished by the NASD
through the National Market available on the date in question or the average of
the high and low trading prices of a share of Common Stock as furnished by the
NASD through the National Market for the date in question or the most recent
trading day. If the Common Stock is no longer listed or is no longer actively
traded on the National Market as of the applicable date, the fair market value
of the Common Stock shall be the value as reasonably determined by the
Administrator for purposes of the award in the circumstances. The Administrator
also may adopt a different methodology for determining fair market value with
respect to one or more awards if a different methodology is necessary or
advisable to secure any intended favorable tax, legal or other treatment for the
particular award(s) (for example, and without limitation, the Administrator may
provide that fair market value for purposes of one or more awards will be based
on an average of closing prices (or the average of high and low daily trading
prices) for a specified period preceding the relevant date).

5.7    Transfer Restrictions.
5.7.1    Limitations on Exercise and Transfer. Unless otherwise expressly
provided in (or pursuant to) this Section 5.7, by applicable law and by the
award agreement, as the same may be amended, (a) all awards are non-transferable
and shall not be subject in any manner to sale, transfer, anticipation,
alienation, assignment, pledge, encumbrance or charge; (b) awards shall be
exercised only by the participant; and (c) amounts payable or shares issuable
pursuant to any award shall be delivered only to (or for the account of) the
participant.
5.7.2    Exceptions. The Administrator may permit awards to be exercised by and
paid to, or otherwise transferred to, other persons or entities pursuant to such
conditions and procedures, including limitations on subsequent transfers, as the
Administrator may, in its sole discretion, establish in writing. Any permitted
transfer shall be subject to compliance with applicable federal and state
securities laws.
5.7.3    Further Exceptions to Limits on Transfer. The exercise and transfer
restrictions in Section 5.7.1 shall not apply to:
(a)
transfers to the Corporation,

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(b)
transfers to the participant’s immediate family (i.e., spouse, children,
grandchildren and their spouses) or to one or more trusts for the benefit of
such immediate family members, provided that (1) the award agreement, if any,
with respect to such awards expressly so permits or is amended to so permit, (2)
the participant does not receive any consideration for such transfer, and (3)
the participant provides such documentation or information concerning any such
transfer or transferee as the Corporation or the Administrator may request from
time to time. Any awards held by any such transferees shall be subject to the
same terms and conditions that applied immediately prior to their transfer,

(c)
the designation of a beneficiary to receive benefits in the event of the
participant’s death or, if the participant has died, transfers to or exercise by
the participant’s beneficiary, or, in the absence of a validly designated
beneficiary, transfers by will or the laws of descent and distribution,    

(d)
subject to any applicable limitations on ISOs, transfers to a family member (or
former family member) pursuant to a domestic relations order if approved or
ratified by the Administrator,

(e)
if the participant has suffered a disability, permitted transfers or exercises
on behalf of the participant by his or her legal representative, or

(f)
the authorization by the Administrator of “cashless exercise” procedures with
third parties who provide financing for the purpose of (or who otherwise
facilitate) the exercise of awards consistent with applicable laws and the
express authorization of the Administrator.

5.8
International Awards. One or more awards may be granted to Eligible Persons who
provide services to the Corporation or one of its Subsidiaries outside of the
United States. Any awards granted to such persons may be granted pursuant to the
terms and conditions of any applicable sub-plans, if any, appended to this Plan
and approved by the Administrator.

6.    EFFECT OF TERMINATION OF SERVICE ON AWARDS
6.1
General. The Administrator shall establish the effect of a termination of
employment or service on the rights and benefits under each award under this
Plan and in so doing may make distinctions based upon, inter alia, the cause of
termination and type of award. If the participant is not an employee of the
Corporation or one of its Subsidiaries and provides other services to the
Corporation or one of its Subsidiaries, the Administrator shall be the sole
judge for purposes of this Plan (unless a contract or the award otherwise
provides) of whether the participant continues to render services to the
Corporation or one of its Subsidiaries and the date, if any, upon which such
services shall be deemed to have terminated.

6.2
Events Not Deemed Terminations of Service. Unless the express policy of the
Corporation or one of its Subsidiaries, or the Administrator, otherwise
provides, the employment relationship shall not be considered terminated in the
case of (a) sick leave, (b) military leave, or (c) any other leave of absence
authorized by the Corporation or one of its Subsidiaries, or the Administrator;
provided that unless reemployment upon the expiration of such leave is

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guaranteed by contract or law, such leave is for a period of not more than 90
days. In the case of any employee of the Corporation or one of its Subsidiaries
on an approved leave of absence, continued vesting of the award while on leave
from the employ of the Corporation or one of its Subsidiaries may be suspended
until the employee returns to service, unless the Administrator otherwise
provides or applicable law otherwise requires. In no event shall an award be
exercised after the expiration of the term set forth in the award agreement.
6.3
Effect of Change of Subsidiary Status. For purposes of this Plan and any award,
if an entity ceases to be a Subsidiary of the Corporation a termination of
employment or service shall be deemed to have occurred with respect to each
Eligible Person in respect of such Subsidiary who does not continue as an
Eligible Person in respect of another entity within the Corporation or another
Subsidiary that continues as such after giving effect to the transaction or
other event giving rise to the change in status.

7.    ADJUSTMENTS; ACCELERATION
7.1
    Adjustments. Upon or in contemplation of: any reclassification,
recapitalization, stock split (including a stock split in the form of a stock
dividend) or reverse stock split (“stock split”); any merger, combination,
consolidation, or other reorganization; any spin-off, split-up, or similar
extraordinary dividend distribution in respect of the Common Stock (whether in
the form of securities or property); any exchange of Common Stock or other
securities of the Corporation, or any similar, unusual or extraordinary
corporate transaction in respect of the Common Stock; or a sale of all or
substantially all the business or assets of the Corporation as an entirety; then
the Administrator shall, in such manner, to such extent (if any) and at such
time as it deems appropriate and equitable in the circumstances:

(a)
proportionately adjust any or all of (1) the number and type of shares of Common
Stock (or other securities) that thereafter may be made the subject of awards
(including the specific share limits, maximums and numbers of shares set forth
elsewhere in this Plan), (2) the number, amount and type of shares of Common
Stock (or other securities or property) subject to any or all outstanding
awards, (3) the grant, purchase, or exercise price (which term includes the base
price of any SAR or similar right) of any or all outstanding awards, (4) the
securities, cash or other property deliverable upon exercise or payment of any
outstanding awards, or (5) (subject to Section 8.8.3(a)) the performance
standards applicable to any outstanding awards, or

(b)
make provision for a cash payment or for the assumption, substitution or
exchange of any or all outstanding share-based awards or the cash, securities or
property deliverable to the holder of any or all outstanding share-based awards,
based upon the distribution or consideration payable to holders of the Common
Stock upon or in respect of such event.

The Administrator may adopt such valuation methodologies for outstanding awards
as it deems reasonable in the event of a cash or property settlement and, in the
case of options, SARs or similar rights, but without limitation on other
methodologies, may base such settlement solely upon the excess if any of the per
share amount payable upon or in respect of such event over the exercise or base
price of the award. With respect to any award of an ISO, the Administrator may
make such an adjustment that causes the option to cease to qualify as an ISO
without the consent of the affected participant.

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In any of such events, the Administrator may take such action prior to such
event to the extent that the Administrator deems the action necessary to permit
the participant to realize the benefits intended to be conveyed with respect to
the underlying shares in the same manner as is or will be available to
shareholders generally. In the case of any stock split or reverse stock split,
if no action is taken by the Administrator, the proportionate adjustments
contemplated by clause (a) above shall nevertheless be made.
7.2
    Automatic Acceleration of Awards. Upon a dissolution of the Corporation or
other event described in Section 7.1 that the Corporation does not survive (or
does not survive as a public company in respect of its Common Stock), then each
then-outstanding option and SAR shall become fully vested,     all shares of
restricted stock then outstanding shall fully vest free of restrictions, and
each other award granted under this Plan that is then outstanding shall become
payable to the holder of such award; provided that such acceleration provision
shall not apply, unless otherwise expressly provided by the Administrator
(either at the time of grant or at the time of the event), with respect to any
award to the extent that the Administrator has made a provision for the
substitution, assumption, exchange or other continuation or settlement of the
award, or the award would otherwise continue in accordance with its terms, in
the circumstances.

7.3
Possible Acceleration of Awards. Without limiting Section 7.2 and unless
otherwise provided by the Board in advance of a Change in Control Event (as
defined below), upon such a Change in Control Event each then-outstanding option
and SAR shall become fully vested,     all shares of restricted stock then
outstanding shall fully vest free of restrictions, and each other award granted
under this Plan that is then outstanding shall become payable to the holder of
such award. For purposes of this Plan, “Change in Control Event” means any of
the following:

(a)
    The acquisition by any individual, entity or group (within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (a “Person”)) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act)
of more than 30% of either (1) the then-outstanding shares of common stock of
the Corporation (the “Outstanding Company Common Stock”) or (2) the combined
voting power of the then-outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the “Outstanding
Company Voting Securities”); provided, however, that, for purposes of this
clause (a), the following acquisitions shall not constitute a Change in Control
Event; (A) any acquisition directly from the Corporation, (B) any acquisition by
the Corporation, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any affiliate of the
Corporation or a successor, or (D) any acquisition by any entity pursuant to a
transaction that complies with Sections (c)(1), (2) and (3) below;

(b)
    Over a period of not longer than two consecutive years commencing not
earlier than the Effective Date, Individuals who, as of the first day of such
period, constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the first day of such period whose
election, or nomination for election by the Corporation’s shareholders, was
approved by a vote of at least a majority of the directors then comprising the
remaining Incumbent Board (including for these purposes, the new members whose
election or nomination was so approved) shall be considered as though such
individual were a member of the Incumbent Board, but

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excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;
(c)
    Consummation of a reorganization, merger, statutory share exchange or
consolidation or similar corporate transaction involving the Corporation or any
of its Subsidiaries, a sale or other disposition of all or substantially all of
the assets of the Corporation, or the acquisition of assets or stock of another
entity by the Corporation or any of its Subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (1) all
or substantially all of the individuals and entities that were the beneficial
owners of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of 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 entity resulting from such Business Combination (including,
without limitation, an entity that, as a result of such transaction, owns the
Corporation or all or substantially all of the Corporation's assets directly or
through one or more subsidiaries (a “Parent”)) in substantially the same
proportions as their ownership immediately prior to such Business Combination of
the Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (2) no Person (excluding any entity resulting
from such Business Combination or a Parent or any employee benefit plan (or
related trust) of the Corporation or such entity resulting from such Business
Combination or Parent) beneficially owns, directly or indirectly, more than 30%
of, respectively, the then-outstanding shares of common stock of the entity
resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such entity, except to the extent that the
ownership in excess of 30% existed prior to the Business Combination, and (3) at
least a majority of the members of the board of directors or trustees of the
entity resulting from such Business Combination or a Parent 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

(d)
    Approval by the shareholders of the Corporation of a complete liquidation or
dissolution of the Corporation other than in the context of a transaction that
does not constitute a Change in Control Event under clause (c) above.

7.4
Excise Tax Limit. In the event that the vesting of awards together with all
other payments and the value of any benefits received or to be received by a
participant (the “Total Payments”) would result in all or a portion of such
Total Payments being subject to the excise tax under Section 4999 of the Code
(the “Excise Tax”), then the participant’s Total Payments shall be either (i)
the full amount of such payments and benefits or (ii) such lesser amount that
would result in no portion of the Total Payments being subject to the Excise
Tax, whichever of the foregoing amounts, taking into account the applicable
federal, state, and local employment taxes, income taxes and the Excise Tax,
results in the receipt by the participant, on an after-tax basis, of the
greatest amount of payments and benefits notwithstanding that all or some
portion of such payments and benefits may be taxable under Section 4999 of the
Code. Solely to the extent that the participant is better off on an after-tax
basis as a result of the reduction

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of Total Payments, such payments and benefits shall be reduced or eliminated, as
determined by the Corporation, in the following order: (i) any cash payments,
(ii) any taxable benefits, (iii) any nontaxable benefits, and (iv) any vesting
or accelerated delivery of equity awards in each case in reverse order beginning
with the payments or benefits that are to be paid the farthest in time from the
date that triggers the applicable Excise Tax.
7.5
Early Termination of Awards. Any award that has been accelerated as required or
contemplated by Section 7.2 or 7.3 (or would have been so accelerated but for
Section 7.6 or Section 7.7) shall terminate upon the related event referred to
in Section 7.2 or 7.3, as applicable, subject to any provision that has been
expressly made by the Administrator, through a plan of reorganization or
otherwise, for the survival, substitution, assumption, exchange or other
continuation or settlement of such award and provided that, in the case of
options and SARs that will not survive, be substituted for, assumed, exchanged,
or otherwise continued or settled in the transaction, the holder of such award
shall be given reasonable advance notice of the impending termination and a
reasonable opportunity to exercise his or her outstanding options and SARs in
accordance with their terms before the termination of such awards (except that
in no case shall more than ten days’ notice of accelerated vesting and the
impending termination be required and any acceleration may be made contingent
upon the actual occurrence of the event).

7.6
Other Acceleration Rules. Any acceleration of awards pursuant to this Section 7
shall comply with applicable legal requirements and, if necessary to accomplish
the purposes of the acceleration or if the circumstances require, may be deemed
by the Administrator to occur a limited period of time not greater than 30 days
before the event. Without limiting the generality of the foregoing, the
Administrator may deem an acceleration to occur immediately prior to the
applicable event and/or reinstate the original terms of an award if an event
giving rise to an acceleration does not occur. The Administrator may override
the provisions of Section 7.2, 7.3, 7.5 and/or 7.7 by express provision in the
award agreement and may accord any Eligible Person a right to refuse any
acceleration, whether pursuant to the award agreement or otherwise, in such
circumstances as the Administrator may approve. The portion of any ISO
accelerated in connection with a Change in Control Event or any other action
permitted hereunder shall remain exercisable as an ISO only to the extent the
applicable $100,000 limitation on ISOs is not exceeded. To the extent exceeded,
the accelerated portion of the option shall be exercisable as a nonqualified
stock option under the Code. Notwithstanding anything to the contrary, no
adjustment pursuant to this Section 7 may be made if or to the extent that it
would cause an outstanding award to cease to be exempt from, or to fail to
comply with, Section 409A of the Code including any amendments or successor
provisions to that section, and any regulations and other administrative
guidance thereunder, in each case as they may be from time to time amended or
interpreted through further administrative guidance (“Code Section 409A”).

7.7
Possible Rescission of Acceleration. If the vesting of an award has been
accelerated expressly in anticipation of an event or upon shareholder approval
of an event and the Administrator later determines that the event will not
occur, the Administrator may rescind the effect of the acceleration as to any
then outstanding and unexercised or otherwise unvested awards.

8.    OTHER PROVISIONS

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8.1
Compliance with Laws. This Plan, the granting and vesting of awards under this
Plan, the offer, issuance and delivery of shares of Common Stock, the acceptance
of promissory notes and/or the payment of money under this Plan or under awards
are subject to compliance with all applicable federal and state laws, rules and
regulations (including but not limited to state and federal securities law,
federal margin requirements) and to such approvals by any listing, regulatory or
governmental authority as may, in the opinion of counsel for the Corporation, be
necessary or advisable in connection therewith. The person acquiring any
securities under this Plan will, if requested by the Corporation or one of its
Subsidiaries, provide such assurances and representations to the Corporation or
one of its Subsidiaries as the Administrator may deem necessary or desirable to
assure compliance with all applicable legal and accounting requirements.

8.2
Employment Status. No person shall have any claim or rights to be granted an
award (or additional awards, as the case may be) under this Plan, subject to any
express contractual rights (set forth in a document other than this Plan) to the
contrary.

8.3
No Employment/Service Contract. Nothing contained in this Plan (or in any other
documents under this Plan or in any award) shall confer upon any Eligible Person
or other participant any right to continue in the employ or other service of the
Corporation or one of its Subsidiaries, constitute any contract or agreement of
employment or other service or affect an employee’s status as an employee at
will, nor shall interfere in any way with the right of the Corporation or one of
its Subsidiaries to change a person’s compensation or other benefits, or to
terminate his or her employment or other service, with or without cause. Nothing
in this Section 8.3, however, is intended to adversely affect any express
independent right of such person under a separate employment or service contract
other than an award agreement.

8.4
Plan Not Funded. Awards payable under this Plan shall be payable in shares or
from the general assets of the Corporation, and no special or separate reserve,
fund or deposit shall be made to assure payment of such awards. No participant,
beneficiary or other person shall have any right, title or interest in any fund
or in any specific asset (including shares of Common Stock, except as expressly
otherwise provided) of the Corporation or one of its Subsidiaries by reason of
any award hereunder. Neither the provisions of this Plan (or of any related
documents), nor the creation or adoption of this Plan, nor any action taken
pursuant to the provisions of this Plan shall create, or be construed to create,
a trust of any kind or a fiduciary relationship between the Corporation or one
of its Subsidiaries and any participant, beneficiary or other person. To the
extent that a participant, beneficiary or other person acquires a right to
receive payment pursuant to any award hereunder, such right shall be no greater
than the right of any unsecured general creditor of the Corporation.

8.5
Tax Withholding. Upon any exercise, vesting, or payment of any award or upon the
disposition of shares of Common Stock acquired pursuant to the exercise of an
ISO prior to satisfaction of the holding period requirements of Section 422 of
the Code, the Corporation or one of its Subsidiaries shall have the right at its
option to:

(a)
require the participant (or the participant’s personal representative or
beneficiary, as the case may be) to pay or provide for payment of at least the
minimum amount of any taxes which the Corporation or one of its Subsidiaries may
be required to withhold with respect to such award event or payment; or

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(b)
deduct from any amount otherwise payable in cash to the participant (or the
participant’s personal representative or beneficiary, as the case may be) the
minimum amount of any taxes which the Corporation or one of its Subsidiaries may
be required to withhold with respect to such cash payment.

In any case where a tax is required to be withheld in connection with the
delivery of shares of Common Stock under this Plan, the Administrator may in its
sole discretion (subject to Section 8.1) grant (either at the time of the award
or thereafter) to the participant the right to elect, pursuant to such rules and
subject to such conditions as the Administrator may establish, to have the
Corporation reduce the number of shares to be delivered by (or otherwise
reacquire) the appropriate number of shares, valued in a consistent manner at
their fair market value or at the sales price in accordance with authorized
procedures for cashless exercises, necessary to satisfy the applicable
withholding obligation on exercise, vesting or payment. In no event shall the
shares withheld exceed the whole number of shares required for tax withholding
under applicable law; provided, however, that to the extent a withholding rate
is elected by a participant that results in an amount higher than the amount
determined necessary by the Corporation, and the Corporation determines that
withholding at the higher amount would not result in adverse accounting
consequences to the Corporation, the Corporation may allow withholding of the
higher amount. The Corporation may, with the Administrator’s approval, accept
one or more promissory notes from any Eligible Person in connection with taxes
required to be withheld upon the exercise, vesting or payment of any award under
this Plan; provided that any such note shall be subject to terms and conditions
established by the Administrator and the requirements of applicable law.
8.6    Effective Date, Termination and Suspension, Amendments.
8.6.1    Effective Date. This Plan is effective as of March 19, 2015, the date
of its approval by the Board (the “Effective Date”). This Plan shall be
submitted for and subject to shareholder approval no later than twelve months
after the Effective Date. Unless earlier terminated by the Board, this Plan
shall terminate at the close of business on the day before the tenth anniversary
of the Effective Date. After the termination of this Plan either upon such
stated expiration date or its earlier termination by the Board, no additional
awards may be granted under this Plan, but previously granted awards (and the
authority of the Administrator with respect thereto, including the authority to
amend such awards) shall remain outstanding in accordance with their applicable
terms and conditions and the terms and conditions of this Plan.
8.6.2    Board Authorization. The Board may, at any time, terminate or, from
time to time, amend, modify or suspend this Plan, in whole or in part. No awards
may be granted during any period that the Board suspends this Plan.
8.6.3    Shareholder Approval. To the extent then required by applicable law or
any applicable listing agency or required under Sections 162, 422 or 424 of the
Code to preserve the intended tax consequences of this Plan, or deemed necessary
or advisable by the Board, any amendment to this Plan shall be subject to
shareholder approval.
8.6.4    Amendments to Awards. Without limiting any other express authority of
the Administrator under (but subject to) the express limits of this Plan, the
Administrator by agreement or resolution may waive conditions of or limitations
on awards to participants that the Administrator in the prior exercise of its
discretion has imposed, without the consent of

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a participant, and (subject to the requirements of Sections 3.2, 8.6.5 and
8.8.3(c)) may make other changes to the terms and conditions of awards. Any
amendment or other action that would constitute a repricing of an award is
subject to the limitations set forth in Sections 3.2(g) and 8.6.6.
8.6.5    Limitations on Amendments to Plan and Awards. No amendment, suspension
or termination of this Plan or amendment of any outstanding award agreement
shall, without written consent of the participant, affect in any manner
materially adverse to the participant any rights or benefits of the participant
or obligations of the Corporation under any award granted under this Plan prior
to the effective date of such change. Changes, settlements and other actions
contemplated by Section 7 shall not be deemed to constitute changes or
amendments for purposes of this Section 8.6.
8.6.6    No Repricing or Cash Outs or Reloads of Underwater Stock Options or
Stock Appreciation Rights. Except to the extent (i) approved in advance by
holders of a majority of the shares of Common Stock entitled to vote generally
in the election of Directors or (ii) provided in Section 7, the Administrator
shall not have the power or authority to (a) reduce, whether through amendment
or otherwise, the exercise price or the base price of any outstanding stock
option or SAR, (b) to grant any new Award, or make any cash payment, in
substitution for or upon the cancellation of stock options or SARs previously
granted or (c) grant any new Award or amend any existing Award to include
provisions that “reload” the option or SAR upon exercise.
8.7
Privileges of Stock Ownership. Except as otherwise expressly authorized by the
Administrator or this Plan, a participant shall not be entitled to any privilege
of stock ownership as to any shares of Common Stock not actually delivered to
and held of record by the participant. No adjustment will be made for dividends
or other rights as a shareholder for which a record date is prior to such date
of delivery.

8.8    Governing Law; Construction; Severability.
8.8.1    Choice of Law. This Plan, the awards, all documents evidencing awards
and all other related documents shall be governed by, and construed in
accordance with the laws of the State of California.
8.8.2    Severability. If a court of competent jurisdiction holds any provision
invalid and unenforceable, the remaining provisions of this Plan shall continue
in effect.
8.8.3    Plan Construction.
(a)
Rule 16b-3. It is the intent of the Corporation that the awards and transactions
permitted by awards be interpreted in a manner that, in the case of participants
who are or may be subject to Section 16 of the Exchange Act, qualify, to the
maximum extent compatible with the express terms of the award, for exemption
from matching liability under Rule 16b-3 promulgated under the Exchange Act.
Notwithstanding the foregoing, the Corporation shall have no liability to any
participant for Section 16 consequences of awards or events under awards if an
award or event does not so qualify.

(b)
Section 162(m). Awards under Section 5.1.4 to persons described in Section 5.2
that are either granted or become vested, exercisable or payable based on
attainment of one or more performance goals related to the Business Criteria, as
well as Qualifying

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Options and Qualifying SARs granted to persons described in Section 5.2, that
are approved by a committee composed solely of two or more outside directors (as
this requirement is applied under Section 162(m) of the Code) shall be deemed to
be intended as performance-based compensation within the meaning of Section
162(m) of the Code unless such committee provides otherwise at the time of grant
of the award. It is the further intent of the Corporation that (to the extent
the Corporation or one of its Subsidiaries or awards under this Plan may be or
become subject to limitations on deductibility under Section 162(m) of the Code)
any such awards and any other Performance-Based Awards under Section 5.2 that
are granted to or held by a person subject to Section 162(m) will qualify as
performance-based compensation or otherwise be exempt from deductibility
limitations under Section 162(m).
(c)
Section 409A. The Plan is intended to be administered in a manner consistent
with the requirements, where applicable, of Code Section 409A. All awards
granted under this Plan that are intended to be “deferred compensation” subject
to Section 409A will be interpreted, administered and construed to comply with
Section 409A, and all awards granted under this Plan that are intended to be
exempt from Section 409A will be interpreted, administered and construed to
comply with and preserve such exemption. The Administrator will have full
authority to give effect to the intent of the foregoing sentence. Where
reasonably possible and practicable, the Plan shall be administered in a manner
to avoid the imposition on participants of immediate tax recognition and
additional taxes pursuant to such Section 409A. Notwithstanding the foregoing,
neither the Corporation nor the Administrator shall have any liability to any
person in the event such Section 409A applies to any such award in a manner that
results in adverse tax consequences for the participant or any of the
participant’s beneficiaries or transferees.

To the extent necessary to give effect to the intent of this Section 8.8.3(c),
in the case of any conflict or potential inconsistency between this Plan and a
provision of any award or award agreement, this Plan will govern. To the extent
any of the awards granted under this Plan are deemed “deferred compensation” and
hence subject to Code Section 409A, without limiting the generality of the
foregoing, the following rules shall apply to such awards:
i.
Timing of Payments. Payment(s) of compensation that is subject to Code Section
409A shall only be made upon an event or at a time set forth in Treas. Reg.
1.409A-3, i.e., the participant’s separation from service, the participant’s
becoming disabled, the participant’s death, at a time or a fixed schedule
specified in the Plan or an award agreement, a change in the ownership or
effective control of the corporation, or in the ownership of a substantial
portion of the assets of the corporation, or the occurrence of an unforeseeable
emergency. Any payment due upon a participant’s termination of employment or
service will be paid only upon such participant’s separation from service from
the Corporation within the meaning of Code Section 409A. For purposes of
determining whether the participant has experienced a separation from service
from the Corporation within the meaning of Code Section 409A, “subsidiary” will
mean a corporation or other entity in a chain of corporations or other entities
in which each corporation or other entity, starting with the Corporation, has a
controlling interest in another corporation or other entity

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in the chain, ending with such corporation or other entity. For purposes of the
preceding sentence, the term “controlling interest” has the same meaning as
provided in Treas. Reg. 1.414(c)-2(b)(2)(i), provided that the language “at
least 20 percent” is used instead of “at least 80 percent” each place it appears
in Treas. Reg. 1.414(c)-2(b)(2)(i).
ii.
Six-Month Delay. Any payment to be made with respect to such award in connection
with the participant’s separation from service from the Corporation within the
meaning of Section 409A (and any other payment that would be subject to the
limitations in Section 409A(a)(2)(B) of the Code) will be delayed until six
months after the participant’s separation from service (or earlier death) in
accordance with the requirements of Section 409A;

iii.
Certain Delayed Payments. If any payment to be made with respect to such award
would occur at a time when the tax deduction with respect to such payment would
be limited or eliminated by Section 162(m) of the Code, such payment may be
deferred by the Corporation under the circumstances described in Code Section
409A until the earliest date that the Corporation reasonably anticipates that
the deduction or payment will not be limited or eliminated. To the extent
necessary to comply with Code Section 409A, any other securities, other awards
or other property that the Corporation may deliver in lieu of shares of Common
Stock in respect of an award will not have the effect of deferring delivery or
payment beyond the date on which such delivery or payment would occur with
respect to the shares of Common Stock that would otherwise have been deliverable
(unless the Administrator elects a later date for this purpose in accordance
with the requirements of Code Section 409A). Notwithstanding anything to the
contrary, to the extent an amount was intended to be paid such that it would
have qualified as a short-term deferral under Code Section 409A and the
applicable regulations, then such payment is or could be delayed if the
requirements of Treas. Reg. 1.409A-1(b)(4)(ii) are met.

iv.
Acceleration of Payment. Any payment made under this Plan to which Code Section
409A applies may not be accelerated, except in accordance with Treas. Reg.
1.409A-3(j)(4), i.e., upon a participant’s separation from service, the
participant becomes disabled, the participant’s death, a change of ownership or
effective control, or in the ownership of a substantial portion of the assets,
or upon an unforeseeable emergency (all as detailed in Treas. Reg. 1.409A-3(a)).

v.
Series of Payments. If such award includes a “series of installment payments”
(within the meaning of Treas. Reg. 1.409A-2(b)(2)(iii)), any payments made
pursuant to any award shall be considered a series of separate payments and not
one a single payment.

vi.
Dividend Equivalents. If the award includes “dividend equivalents” (within the
meaning of Treas. Reg. 1.409A-3(e)), the participant’s right to the dividend
equivalents will be treated separately from the right to other amounts under the
award.

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8.9
Captions. Captions and headings are given to the sections and subsections of
this Plan solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Plan or any provision thereof.

8.10
Stock-Based Awards in Substitution for Stock Options or Awards Granted by Other
Corporation. Awards may be granted to Eligible Persons in substitution for or in
connection with an assumption of employee stock options, SARs, restricted stock
or other stock-based awards granted by other entities to persons who are or who
will become Eligible Persons in respect of the Corporation or one of its
Subsidiaries, in connection with a distribution, merger or other reorganization
by or with the granting entity or an affiliated entity, or the acquisition by
the Corporation or one of its Subsidiaries, directly or indirectly, of all or a
substantial part of the stock or assets of the employing entity. The awards so
granted need not comply with other specific terms of this Plan, provided the
awards reflect only adjustments giving effect to the assumption or substitution
consistent with the conversion applicable to the Common Stock in the transaction
and any change in the issuer of the security. Any shares that are delivered and
any awards that are granted by, or become obligations of, the Corporation, as a
result of the assumption by the Corporation of, or in substitution for,
outstanding awards previously granted by an acquired company (or previously
granted by a predecessor employer (or direct or indirect parent thereof) in the
case of persons that become employed by the Corporation or one of its
Subsidiaries in connection with a business or asset acquisition or similar
transaction) shall not be counted against the Share Limit or other limits on the
number of shares available for issuance under this Plan.

Available shares under a stockholder approved plan of an acquired company (as
appropriately adjusted to reflect the transaction) may be used for awards under
this Plan and do not reduce the Share Limit, subject to applicable stock
exchange requirements.
8.11
Non-Exclusivity of Plan. Nothing in this Plan shall limit or be deemed to limit
the authority of the Board or the Administrator to grant awards or authorize any
other compensation, with or without reference to the Common Stock, under any
other plan or authority.

8.12
No Corporate Action Restriction. The existence of this Plan, the award
agreements and the awards granted hereunder shall not limit, affect or restrict
in any way the right or power of the Board or the shareholders of the
Corporation to make or authorize: (a) any adjustment, recapitalization,
reorganization or other change in the capital structure or business of the
Corporation or any Subsidiary, (b) any merger, amalgamation, consolidation or
change in the ownership of the Corporation or any Subsidiary, (c) any issue of
bonds, debentures, capital, preferred or prior preference stock ahead of or
affecting the capital stock (or the rights thereof) of the Corporation or any
Subsidiary, (d) any dissolution or liquidation of the Corporation or any
Subsidiary, (e) any sale or transfer of all or any part of the assets or
business of the Corporation or any Subsidiary, or (f) any other corporate act or
proceeding by the Corporation or any Subsidiary. No participant, beneficiary or
any other person shall have any claim under any award or award agreement against
any member of the Board or the Administrator, or the Corporation or any
employees, officers or agents of the Corporation or any Subsidiary, as a result
of any such action.

8.13
Other Company Benefit and Compensation Programs. Payments and other benefits
received by a participant under an award made pursuant to this Plan shall not be
deemed a part of a participant’s compensation for purposes of the determination
of benefits under any other employee welfare or benefit plans or arrangements,
if any, provided by the Corporation or

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any Subsidiary, except where the Administrator expressly otherwise provides or
authorizes in writing. Awards under this Plan may be made in addition to, in
combination with, as alternatives to or in payment of grants, awards or
commitments under any other plans or arrangements of the Corporation or its
Subsidiaries.
8.14
Delivery and Execution of Electronic Documents. To the extent permitted by
applicable law, the Corporation may (i) deliver by email or other electronic
means (including posting on a web site maintained by the Corporation or by a
third party under contract with the Corporation ) all documents relating to the
Plan or any Award thereunder (including without limitation, prospectuses
required by the U.S. Securities and Exchange Commission) and all other documents
that the Corporation is required to deliver to its security holders (including
without limitation, annual reports and proxy statements) and (ii) permit
Participants to electronically execute applicable Plan documents (including, but
not limited to, award agreements) in a manner prescribed by the Administrator.

8.15
No Representations or Warranties Regarding Tax Effect. Notwithstanding any
provision of the Plan to the contrary, the Corporation, its affiliates and
Subsidiaries, the Board and the Administrator neither represent nor warrant the
tax treatment under any federal, state, local or foreign laws and regulations
thereunder (individually and collectively referred to as the “Tax Laws”) of any
award granted or any amounts paid to any participant under the Plan including,
but not limited to, when and to what extent such awards or amounts may be
subject to tax, penalties and interest under the Tax Laws.

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APPENDIX A
BUSINESS CRITERIA
The Business Criteria referred to in Section 5.2.2 of the Plan shall mean any
one or a combination of the following terms. These terms are used as applied
under generally accepted accounting principles, in the Corporation’s financial
reporting or such other objective principles, as may be designated by the
Administrator. The Business Criteria applicable to an award may be established
with respect to the Corporation or any applicable Subsidiary, division, segment,
or unit or any combination thereof, as the Administrator may deem appropriate,
may be determined on a pre- or post-tax basis or on a per share basis (either
basic or fully diluted) and may be determined in absolute terms, or (1) relative
to the performance of one or more comparable companies or a published or special
index covering multiple companies that the Administrator, in its sole
discretion, deems appropriate, or (2) based on changes in the Business Criteria
over a specified period of time, which changes may be measured based on an
arithmetic change over a specified period (e.g., cumulative percentage change,
average percentage change or compounded percentage change).
EBIT. “EBIT” means Net Income before interest expense and taxes.
EBITDA. “EBITDA” means Net Income before interest expense, taxes, depreciation
and amortization.
EPS. “EPS” means Net Income divided by the weighted average number of common
shares outstanding. Unless otherwise provided by the Administrator in the
related award agreement, outstanding shares of Common Stock shall be adjusted to
include the dilutive effect of stock options, restricted stock and other
dilutive financial instruments.
Expense Reduction. “Expense Reduction” means reduction in actual expense or an
improvement in the expense to Net Sales ratio compared to a target or prior year
actual expense to Sales ratio.
Debt to EBITDA. “Debt to EBITDA” means the ratio of debt to EBITDA.
Interest Coverage. “Interest Coverage” means the ratio of EBITDA to interest
expense.
Inventory Turns. “Inventory Turns” means the ratio of total cost of goods sold
on a historical basis to average net inventory.
Net Income. “Net Income” means the difference between total Net Sales and total
costs and expenses, including income taxes.
Net Sales. “Net Sales” means net sales.
Operating Cash Flow. “Operating Cash Flow” means the net cash provided by
operating activities less net cash used by operations and investing activities
as shown on the statement of cash flows.
Cash Flow Return on Equity or “CFROE” means the Corporation’s operating cash
flow divided by the Corporation’s average total equity.
Cash Flow Return on Investment or “CFROI” means the Corporation’s gross cash
flow divided by the Corporation’s gross investment.
Pre-Tax Margin. “Pre-Tax Margin” means the ratio of earnings before income taxes
to Net Sales.

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Return on Assets. “Return on Assets” means the ratio of Net Income to total
average assets including goodwill.
Return on Capital. “Return on Capital” means the ratio of Net Income to average
total capital. Total capital includes working capital, and other long term
assets such as PP&E, goodwill and intangibles, and leased assets. Unless
otherwise provided by the Administrator in the related award agreement, cash,
deferred tax assets and debt shall not be included in capital for calculation
purposes.
Return on Equity. “Return on Equity” means Net Income divided by average total
equity.
Stock Price means the price of a share of Common Stock as of a particular date
or an average price over a stated period of time.
Stock Price Appreciation. “Stock Price Appreciation” means an increase, or an
average annualized increase, in the stock price or market value of the Common
Stock of the Corporation after the date of grant of an Award or above a
specified price.
Total Shareholder Return means the total return on a share of common stock over
a stated period assuming the reinvestment of all dividends paid during such
period.
Acquisition or Divestiture Activities means any activities related to
acquisition or divestiture of an area impacting the Corporation’s business,
including, but not limited to, Subsidiaries, business units, products, services,
and real estate.
Management Succession Planning means any action or result related to the
development and maintenance of an executive succession plan for the Corporation.
Economic Value Added or EVA® means net operating profit after tax minus the sum
of capital multiplied by the cost of capital.
Working Capital Improvement. “Working Capital Improvement” means the net change
in current assets less current liabilities over the applicable period or the
reduction in the current ratio (current assets divided by current liabilities),
excluding changes in cash and cash equivalents, and current and deferred income
taxes.

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