Exhibit 10.1

RAND WORLDWIDE, INC.

OMNIBUS EQUITY COMPENSATION PLAN

AUGUST 22, 2012

1. Purpose. The purpose of the Plan is to provide designated (a) Employees of
the Company and its Affiliates and (b) Non-Employee Directors of the Company
with the opportunity to receive grants of Options, Stock Units, Performance
Units, Stock Awards and Other Stock-Based Awards. The Company believes that the
Plan will encourage the Participants to contribute materially to the growth of
the Company, thereby benefiting the Company’s stockholders, and will align the
economic interests of the Participants with those of the stockholders.

All capitalized terms shall be as defined in Section 2 hereof.

2. Definitions. Whenever used in this Plan, the following terms will have the
respective meanings set forth below:

(a) “Affiliate” means any “parent corporation” and any “subsidiary corporation”
of the Company, as such terms are defined in Section 424 of the Code.

(b) “Board of Directors” or “Board” means the Company’s board of directors.

(c) “Cause” means, for purposes of a termination of a Participant’s employment
or service with the Company or a Subsidiary for Cause, one or more of: (i) the
Participant’s misappropriation of corporate funds; (ii) Participant’s conviction
of a felony; (iii) the Participant’s conviction of any crime involving theft,
dishonesty, or more turpitude; (iv) if the Participant is an employee, the
Participant’s willful violation of directions of the board of directors of the
Company or a Subsidiary which are consistent with Participant’s employment
duties; (v) falsification of any material representation made by the Participant
to the Company or a Subsidiary; (vi) verifiable evidence that the Participant
has engaged in sexual harassment of a nature that could give rise to liability
on the part of the Company or a Subsidiary; and/or (vii) if the Participant is a
party to an employment agreement with the Company or a Subsidiary, any event
that constitutes “cause” as defined in that employment agreement or, if no such
definition is contained in that employment agreement, the Participant’s material
breach of any of the terms of such employment agreement; provided, however, that
any condition or occurrence specified in items (i), (iv), (v), (vi) or (vii) of
this subsection (c) shall be deemed to exist only upon a finding by a majority
vote of the entire board of directors of the Company or a Subsidiary, as
applicable, after at least 10 days’ written notice to the Participant specifying
the condition or occurrence proposed to be claimed and after an opportunity for
the Participant to be heard at a meeting of such board of directors.

(d) “Change in Control” means the occurrence of any of the following events:

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the
Exchange Act) becomes, within the 12-month period ending on the date of such
person’s most recent acquisition, a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act),

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directly or indirectly, of securities of the Company representing more than 50%
of the voting power of the then outstanding securities of the Company; provided
that a Change in Control shall not be deemed to occur as a result of a
transaction in which the Company becomes a subsidiary of another corporation and
in which the stockholders of the Company, immediately prior to the transaction,
will beneficially own, immediately after the transaction, securities entitling
such stockholders to more than 50% of all votes to which all stockholders of the
parent corporation would be entitled in the election of directors (without
consideration of the rights of any class of stock to elect directors by a
separate class vote); and provided further that ownership or control of the
Company’s voting securities, individually or collectively, by any Affiliate that
is a benefit plan sponsored by the Company or any Affiliate shall not constitute
a Change in Control.

(ii) The consummation of (A) a merger, consolidation, or similar extraordinary
event involving the Company and another entity where the stockholders of the
Company, immediately prior to the merger, consolidation or similar extraordinary
event, will not beneficially own, immediately after the merger, consolidation or
similar extraordinary event, securities entitling such holders to more than 50%
of all votes to which all stockholders of the surviving corporation would be
entitled in the election of directors (without consideration of the rights of
any class of stock to elect directors by a separate class vote), or (B) a sale
or other disposition of all or substantially all of the assets of the Company;
or

(iii) During any 12-month period after the Effective Date, individuals who at
the beginning of such period constituted the Board of Directors cease for any
reason to constitute a majority thereof, unless the election, or the nomination
for election by the Company’s stockholders, of at least a majority of the
directors who were not directors at the beginning of such period, was approved
by a vote of at least two-thirds of the directors then in office at the time of
such election or nomination who either (i) were directors at the beginning of
such period or (ii) whose appointment, election or nomination for election was
previously so approved.

Notwithstanding the foregoing, the Committee may modify the definition of a
Change in Control for a particular Grant as the Committee deems appropriate to
comply with Section 409A of the Code and any related regulations or other
guidance promulgated with respect to such Section by the U.S. Department of the
Treasury or the Internal Revenue Service.

(e) “Code” means the Internal Revenue Code of 1986, as amended.

(f) “Committee” means a committee of the Board of Directors comprised solely of
two or more independent directors as the Board of Directors may appoint to
administer the Plan, or, if such committee has not been appointed, the full
Board of Directors. Notwithstanding the foregoing, with respect to Grants to
Employees that are intended as “qualified performance-based compensation” (as
defined under Section 162(m) of the Code), as well as to Employees who are
officers of the Company, the Committee shall consist of two or more persons
appointed by the Board, all of whom shall be “outside directors” (as defined
under Section 162(m) of the Code and related U.S. Department of the Treasury
regulations) and “non-employee directors” as defined under Rule 16b-3
promulgated under the Exchange Act.

 

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(g) “Company” means Rand Worldwide, Inc., a Delaware corporation, and any
successor thereto.

(h) “Date of Grant” means the date a Grant is effective.

(i) “Director” means a member of the Board of Directors.

(j) “Effective Date” means August 22, 2012, subject to approval by the
stockholders of the Company.

(k) “Eligible Person” has the meaning given such term in Section 6(a) of this
Plan.

(l) “Employee” means an employee of the Company or of a Subsidiary (including an
officer or director who is also an employee).

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

(n) “Fair Market Value” of a Share on any given date under this Plan shall be
determined as follows:

(iv) If Shares are at the time listed or admitted to trading on any national
securities exchange or national market system, then the Fair Market Value shall
be the average of the closing sales prices per Share for the five (5) trading
days immediately preceding the date of determination as reported on such
exchange or system.

(v) If Shares are not at the time listed or admitted to trading on any national
securities exchange or national market system but are traded in the
over-the-counter market, then the Fair Market Value shall be the average of the
high bid price and the low ask price per Share for the five (5) trading days
immediately preceding the date of determination as reported through the
over-the-counter market.

(vi) If Shares are not listed or admitted to trading on any national securities
exchange or national market system or traded in the over-the-counter market,
then the Fair Market Value shall be determined by the Committee pursuant to a
reasonable method adopted by the Committee in good faith for such purpose in
accordance with applicable law.

(o) “Grant” means an Option, Stock Unit, Performance Unit, Stock Award, or Other
Stock-Based Award granted under the Plan.

(p) “Grant Agreement” means the written agreement that sets forth the terms and
conditions of a Grant, including all amendments thereto.

(q) “Incentive Option” means an Option which by its terms is intended to be
treated as an “incentive stock option” within the meaning of Section 422 of the
Code, as described in Section 7.

 

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(r) “Non-Employee Director” means a Director who is not an officer or employee
of the Company and who is (i) a “nonemployee director” within the meaning of
Exchange Act Rule 16b-3, or any successor regulation, and (ii) an “outside
director” within the meaning of Section 162(m) of the Code; provided, however,
that item (ii) shall apply only with respect to grants of Options intended by
the Committee to qualify as “performance-based compensation” under
Section 162(m) of the Code.

(s) “Nonstatutory Option” means any Option that is not an Incentive Option, as
described in Section 7.

(t) “Option” means an option to purchase Shares at an Option Price for a
specified period of time under this Plan.

(u) “Option Period” shall have the meaning given such term in Section 7(d) of
this Plan.

(v) “Option Price” means the price paid or to be paid by a Participant for a
Share upon exercise of an Option.

(w) “Other Stock-Based Award” means any Grant based on, measured by or payable
in Shares (other than Grants described in Sections 7, 8, 9, 10, 11 and 12), as
described in Section 13.

(x) “Participant” means an Eligible Person designated by the Committee to
receive a Grant under the Plan.

(y) “Performance Units” means an award of phantom units, representing one or
more Shares, as described in Section 9 hereof.

(z) “Person” means as such term is defined in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its affiliates (as defined
under Rule 12b-2 of the Exchange Act), (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of its
affiliates, (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, or (iv) a corporation owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of the Stock.

(aa) “Plan” means this 2012 Omnibus Equity Compensation Plan of the Company, as
in effect from time to time.

(bb) “Share” means a share of Stock.

(cc) “Stock” means the common stock, par value $.01 per Share, of the Company or
such other securities of the Company as may be substituted for Stock pursuant to
Sections 5(d) or 16 hereof.

 

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(dd) “Stock Award” means an award of Shares, as described in Section 10 hereof.

(ee) “Stock Unit” means an award of a phantom unit, representing one or more
Shares, as described in Section 8 hereof.

(ff) “Subsidiary” means any subsidiary of the Company as defined in
Section 424(f) of the Code.

(gg) “Successor Participant” means the personal representative or other person
entitled to succeed to the rights of the Participant in accordance with
Section 15 hereof.

(hh) “Ten Percent Owner” means a Person who owns, or is deemed within the
meaning of Section 422(b)(6) of the Code to own, securities possessing more than
10% of the total combined voting power of all classes of securities of the
Company (or its parent or subsidiary corporations). Whether a person is a Ten
Percent Owner shall be determined with respect to each Grant based on the facts
existing on the Date of Grant of such Grant.

3. Administration.

(a) Committee. The Plan shall be administered and interpreted by the Committee.
Day to day administrative functions may be performed by employees of the
Company, as approved by the Committee.

(b) Committee Authority. The Committee shall have the sole authority to
(i) determine the Employees and Non-Employee Directors to whom Grants shall be
made under the Plan, (ii) determine the type, size and terms of the Grants to be
made to each Participant, (iii) determine the time when the Grants will be made
and the duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, (iv) amend
the terms of any previously issued Grant, subject to the provisions of
Section 19 hereof, (v) adopt guidelines separate from the Plan that set forth
the specific terms and conditions for Grants under the Plan, and (vi) deal with
any other matters arising under the Plan.

(c) Committee Determinations. The Committee shall have full power and express
discretionary authority to administer and interpret the Plan, to make factual
determinations and to adopt or amend such rules, regulations, agreements and
instruments for implementing the Plan and for the conduct of its business as it
deems necessary or advisable, in its sole discretion. The Committee’s
interpretations of the Plan and all determinations made by the Committee
pursuant to the powers vested in it hereunder shall be conclusive and binding on
all persons having any interest in the Plan or in any Grants awarded hereunder.
All powers of the Committee shall be executed in its sole discretion, in the
best interest of the Company, not as a fiduciary, and in keeping with the
objectives of the Plan and need not be uniform as to similarly situated
individuals. The majority of the members of the Committee shall constitute a
quorum. The acts of a majority of the members present at any meeting at which a
quorum is present or acts approved in writing by a majority of the Committee
shall be deemed the acts of the Committee.

 

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4. Grants. Grants under the Plan may consist of Options, Stock Units,
Performance Units, Stock Awards, and Other Stock-Based Awards. All Grants shall
be subject to the terms and conditions set forth herein and to such other terms
and conditions consistent with the Plan as the Committee deems appropriate and
as are specified in writing by the Committee in separate guidelines or to the
individual in the Grant Agreement or an amendment to the guidelines or Grant
Agreement. The Committee shall approve the form and provisions of each Grant
Agreement. Grants under a particular Section of the Plan need not be uniform as
among the Participants. All Grants shall be made conditional upon the
Participant’s acknowledgement, in writing or by acceptance of the Grant, that
all decisions and determinations of the Committee shall be final and binding on
the Participant, his or her beneficiaries, and any other person having or
claiming an interest under such Grant. Notwithstanding any provision of the Plan
to the contrary, the Committee may make Grants that are contingent on, and
subject to, shareholder approval of the Plan or an amendment to the Plan.

5. Shares of Stock Subject to the Plan.

(a) Shares Authorized. Subject to adjustment as described below, the aggregate
number of Shares that may be issued or transferred under the Plan is 2,000,000.
The Shares may be authorized but unissued Shares or reacquired Shares, including
Shares purchased by the Company on the open market for purposes of the Plan.
Grants paid in cash shall not count against the foregoing Share limits.

(b) Share Counting. For administrative purposes, when the Committee makes a
Grant payable in Shares, the Committee shall reserve Shares equal to the maximum
number of Shares that may be payable under the Grant. If and to the extent
Options granted under the Plan terminate, expire, or are canceled, forfeited,
exchanged or surrendered after the Effective Date without having been exercised
or if any Stock Awards, Stock Units, Performance Units, or Other Stock-Based
Awards (or granted under the Prior Plans prior to the Effective Date) are
forfeited or terminated, or otherwise not paid in full after the Effective Date,
the Shares subject to such Grants shall again be available for purposes of the
Plan. To the extent Grants are paid in cash, and not in Shares, any Shares
previously reserved for issuance or transfer pursuant to such Grants shall again
be available for issuance or transfer under the Plan.

(c) Individual Limits. All Grants under the Plan shall be expressed in Shares.
The individual limits described in this subsection (c) shall apply without
regard to whether the Grants are to be paid in Shares or in cash. All cash
payments shall equal the Fair Market Value of the Shares to which the cash
payment relates.

(d) Adjustments. If there is any change in the number or kind of Shares
outstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock
split, or combination or exchange of shares, (ii) by reason of a merger,
reorganization or consolidation, (iii) by reason of a reclassification or change
in par value, or (iv) by reason of any other extraordinary or unusual event
affecting the outstanding Stock as a class without the Company’s receipt of
consideration, or if the value of outstanding Shares is substantially reduced as
a result of a spinoff or the Company’s payment of an extraordinary dividend or
distribution, the maximum number of Shares available for issuance under the
Plan, the maximum number of

 

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Shares for which any individual may receive pursuant to Grants in any year, the
number of Shares covered by outstanding Grants, the kind of Shares to be issued
or transferred under the Plan, and the price per Share or the applicable market
value of such Grants shall be appropriately adjusted by the Committee to reflect
any increase or decrease in the number of, or change in the kind or value of,
issued Shares to preclude, to the extent practicable, the enlargement or
dilution of rights and benefits under such Grants; provided, however, that any
fractional Shares resulting from such adjustment shall be eliminated by
adjusting the number of Shares to the nearest smaller whole number of Shares.
Any adjustment in Incentive Options under this Section 5(d) shall be made only
to the extent not constituting a “modification” within the meaning of
Section 424(h)(3) of the Code, and any adjustments under this Section 5(d) shall
be made in a manner which does not adversely affect the exemption provided
pursuant to Exchange Act Rule 16b-3. Further, with respect to Options intended
to qualify as “performance-based compensation” under Section 162(m) of the Code,
such adjustments or substitutions shall be made only to the extent that the
Committee determines that such adjustments or substitutions may be made without
a loss of deductibility for Options under Section 162(m) of the Code. The
Company shall give each Participant notice of an adjustment hereunder and, upon
notice, such adjustment shall be conclusive and binding for all purposes.

6. Eligibility for Participation.

(a) Eligible Persons. All Employees, including Employees who are officers or
members of the Board, all Non-Employee Directors and consultants of the Company
or of a Subsidiary (each an, “Eligible Person”) shall be eligible to participate
in the Plan.

(b) Selection of Participants. The Committee shall select the Eligible Persons
to receive Grants and shall determine the terms and conditions of the Grant and
the number of Shares subject to each Grant.

7. Options.

(a) General Requirements. The Committee may grant Options to an Eligible Person
upon such terms and conditions as the Committee deems appropriate under this
Section 7 hereof.

(b) Number of Shares. The Committee shall determine the number of Shares that
will be subject to each Grant of Options to Eligible Persons.

(c) Type of Option and Price.

(i) The Committee may grant Incentive Options or Nonstatutory Options or any
combination of Incentive Options and Nonstatutory Options. Incentive Options may
be granted only to Employees. Non-Employee Directors may be granted Nonstatutory
Options only.

 

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(ii) The Option Price shall be set by the Committee at the time of grant but
shall not be less than 100% of the Fair Market Value of the Shares subject to
the Grant on the Date of Grant. In addition, an Incentive Stock Option granted
to an Eligible Person who, at the time of grant, is a Ten Percent Owner shall
have an Option Price per Share which is at least equal to 110% of the Fair
Market Value of a Share on the Date of Grant.

(d) Vesting; Option Period. An Option shall vest and become exercisable in such
manner and on such date or dates as are determined by the Committee, which need
not be the same for all Participants. The term of each Option (the “Option
Period”) shall expire at such time as the Committee shall determine; provided,
however, that no Option shall be exercisable after the expiration of ten
(10) years from its Date of Grant. In addition, an Incentive Option granted to
an Eligible Person who, at the time of grant, is a Ten Percent Owner shall not
have an Option Period that is longer than the date that is five (5) years after
its Grant Date. Notwithstanding any vesting date or dates set by the Committee
in a Grant Agreement, the Committee may, in its sole discretion, accelerate the
exercisability of any Option, which acceleration shall not affect the terms and
conditions of the Option other than with respect to exercisability. If an Option
is exercisable in installments, then such installments or portions thereof which
become exercisable shall remain exercisable until the expiration of the Option
Period.

(e) Termination of Employment or Service. If a Participant’s employment or
service with the Company or a Subsidiary terminates for any reason other than
because the Participant becomes disabled (as defined in Section 22(e)(3) of the
Code) or dies or is terminated by the Company or a Subsidiary for Cause, then
any Option held by the Participant may be exercised by the Participant at any
time within the shorter of the Option Period or 45 days after the date of such
termination, but only to the extent that the Option was exercisable at the time
of such termination. If a Participant’s employment or service with the Company
or a Subsidiary terminates because the Participant becomes disabled (as defined
in Section 22(e)(3) of the Code) or dies, then any Option held by that
Participant may be exercised by the Participant or the Participant’s trustee,
executor or administrator, as applicable, at any time within the shorter of the
Option Period or twelve (12) months after the date of such termination, but only
to the extent the Option was exercisable at the time of such termination. If a
Participant’s employment or service with the Company or a Subsidiary is
terminated by the Company or a Subsidiary for Cause, then any Option held by
that Participant, whether vested or unvested, shall immediately lapse and be
forfeited as of the date of termination. In all cases, any Option (or portion
thereof) that is not exercisable at the time of a Participant’s termination of
employment or service or which is exercisable but is not exercised within the
time periods described above shall terminate. Military or sick leave shall not
be deemed a termination under this Section 7(e), provided that such leave does
not exceed the longer of three (3) months or the period during which the
reemployment rights of the absent employee are guaranteed by statute or by
contract. Notwithstanding anything to the contrary, a Participant whose
employment or service terminates because of retirement may exercise the
Participant’s Nonstatutory Options within twelve (12) months after the date of
retirement but only to the extent such Nonstatutory Options were exercisable on
the date of retirement and in no event after the Option Period.

(f) Exercise of Options. The Options shall be exercised by delivering written
notice to the Company stating the number of Shares to be purchased, the person
or persons in whose name the Shares are to be registered and each such person’s
address and social security number. Such notice shall not be effective unless
accompanied by the aggregate Option Price for

 

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all Shares to be purchased, and any applicable withholding taxes (as described
in Section 14 hereof). Such aggregate Option Price and applicable withholding
taxes shall be payable in cash or by certified, cashier’s or personal check;
provided, however, that if payment is made by personal check, then the written
notice of exercise shall not be effective, and the Shares payable upon exercise
shall not be issued to the Participant, until the date on which the Company
receives confirmation from its financial institution that the personal check has
been paid in full.

(g) Annual Limit on Incentive Options. To the extent that the aggregate Fair
Market Value (determined at the time the Option is granted) of Shares with
respect to which any Participant may first exercise Incentive Options (granted
under this Plan and all other equity compensation plans of the Company) during
any calendar year exceeds $100,000 or such other amount as shall be specified in
Section 422 of the Code and rules and regulations thereunder, such excess
Incentive Options shall be treated as Nonstatutory Options.

8. Stock Units.

(a) General Requirements. The Committee may grant Stock Units to any Eligible
Person, upon such terms and conditions as the Committee deems appropriate under
this Section 8. Each Stock Unit shall represent the right of the Participant to
receive a Share or an amount based on the value of a Share. All Stock Units
shall be credited to accounts on the Company’s records for purposes of the Plan.

(b) Terms of Stock Units. The Committee may grant Stock Units that are payable
if specified performance goals or other conditions are met, or under other
circumstances. Stock Units may be paid at the end of a specified period, or
payment may be deferred to a date authorized by the Committee. The Committee
shall determine the number of Stock Units to be granted and the requirements
applicable to such Stock Units.

(c) Payment with Respect to Stock Units. Payment with respect to Stock Units
shall be made in cash, in Shares, or in a combination of the two, as determined
by the Committee. The Grant Agreement shall specify the maximum number of Shares
that shall be paid under the Stock Units.

(d) Requirement of Employment or Service. The Committee shall determine in the
Grant Agreement under what circumstances a Participant may retain Stock Units
after termination of the Participant’s employment or service, and the
circumstances under which Stock Units may be forfeited.

9. Performance Units.

(a) General Requirements. The Committee may grant Performance Units to an
Eligible Person, upon such terms and conditions as the Committee deems
appropriate under this Section 9. Each Performance Unit shall represent the
right of the Participant to receive a Share or an amount based on the value of a
Share, if specified performance goals are met. All Performance Units shall be
credited to accounts on the Company’s records for purposes of the Plan.

 

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(b) Terms of Performance Units. The Committee shall establish the performance
goals and other conditions for payment of Performance Units. Performance Units
may be paid at the end of a specified performance or other period, or payment
may be deferred to a date authorized by the Committee. The Committee shall
determine the number of Performance Units to be granted and the requirements
applicable to such Performance Units.

(c) Payment with Respect to Performance Units. Payment with respect to
Performance Units shall be made in cash, in Shares, or in a combination of the
two, as determined by the Committee. The Committee shall establish in the Grant
Agreement a target amount to be paid under a Performance Unit based on
achievement of the performance goals.

(d) Requirement of Employment or Service. The Committee shall determine in the
Grant Agreement under what circumstances a Participant may retain Performance
Units after termination of the Participant’s employment or service, and the
circumstances under which Performance Units may be forfeited.

10. Stock Awards

(a) General Requirements. The Committee may issue or transfer Shares to an
Eligible Person under a Stock Award, upon such terms and conditions as the
Committee deems appropriate under this Section 10. Shares issued or transferred
pursuant to Stock Awards may be issued or transferred for cash consideration or
for no cash consideration, and subject to restrictions or no restrictions, as
determined by the Committee. The Committee may establish conditions under which
restrictions on Stock Awards shall lapse over a period of time or according to
such other criteria as the Committee deems appropriate, including restrictions
based upon the achievement of specific performance goals.

(b) Number of Shares. The Committee shall determine the number of Shares to be
issued or transferred pursuant to a Stock Award and any restrictions applicable
to such shares.

(c) Requirement of Employment or Service. The Committee shall determine in the
Grant Agreement under what circumstances a Participant may retain Stock Awards
after termination of the Participant’s employment or service, and the
circumstances under which Stock Awards may be forfeited.

(d) Restrictions on Transfer. For so long as Stock Awards are subject to
restrictions, a Participant may not sell, assign, transfer, pledge or otherwise
dispose of the Shares granted thereby except upon death as described in
Section 15 hereof. Each certificate, or electronic book entry equivalent, for a
Share granted pursuant to a Stock Award shall contain a legend giving
appropriate notice of the restrictions in the Grant. The Participant shall be
entitled to have the legend removed when all restrictions on such Shares have
lapsed. The Committee may retain possession of any stock certificates for Stock
Awards until all restrictions on such Shares have lapsed.

 

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(e) Right to Vote and to Receive Dividends. The Committee shall determine to
what extent, and under what conditions, the Participant shall have the right to
vote Shares awarded pursuant to a Stock Award and to receive any dividends or
other distributions paid on such Shares during the restriction period. The
Committee may determine that a Participant’s entitlement to dividends or other
distributions with respect to a Stock Award shall be subject to achievement of
performance goals or other conditions.

11. Other Stock-Based Awards. The Committee may grant other awards that are
cash-based or based on, measured by or payable in Shares to Eligible Persons, on
such terms and conditions as the Committee deems appropriate under this
Section 11. Other Stock-Based Awards may be granted subject to achievement of
performance goals or other conditions and may be payable in Shares or cash, or
in a combination of the two, as determined by the Committee in the Grant
Agreement.

12. Qualified Performance-Based Compensation

(a) Designation as Qualified Performance-Based Compensation. The Committee may
determine that Stock Units, Performance Units, Stock Awards, or Other
Stock-Based Awards granted to an Employee shall be considered “qualified
performance-based compensation” under Section 162(m) of the Code. The provisions
of this Section 12 shall apply to any such Grants that are to be considered
“qualified performance-based compensation” under Section 162(m) of the Code. To
the extent that Grants of Stock Units, Performance Units, Stock Awards, or Other
Stock-Based Awards designated as “qualified performance-based compensation”
under Section 162(m) of the Code are made, no such Grant may be made as an
alternative to another Grant that is not designated as “qualified performance
based compensation” but instead must be separate and apart from all other Grants
made.

(b) Performance Goals. When Stock Units, Performance Units, Stock Awards, or
Other Stock-Based Awards that are to be considered “qualified performance-based
compensation” are granted, the Committee shall establish in writing (i) the
objective performance goals that must be met, (ii) the period during which
performance will be measured, (iii) the maximum amounts that may be paid if the
performance goals are met, and (iv) any other conditions that the Committee
deems appropriate and consistent with the Plan and the requirements of
Section 162(m) of the Code for “qualified performance-based compensation.” The
performance goals shall satisfy the requirements for “qualified
performance-based compensation,” including the requirement that the achievement
of the goals be substantially uncertain at the time they are established and
that the performance goals be established in such a way that a third party with
knowledge of the relevant facts could determine whether and to what extent the
performance goals have been met. The Committee shall not have discretion to
increase the amount of compensation that is payable upon achievement of the
designated performance goals, but the Committee may reduce the amount of
compensation that is payable upon achievement of the designated performance
goals.

(c) Criteria Used for Objective Performance Goals. The Committee shall use
objectively determinable performance goals based on one or more of the following
criteria: Stock price, earnings per Share, net earnings or profits, operating
earnings, return on assets,

 

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shareholder return, return on equity, growth in assets, unit volume, sales,
market share, or strategic business criteria consisting of one or more
objectives based on meeting specific revenue goals, market penetration goals,
geographic business expansion goals, cost targets, cash position or goals
relating to acquisitions or divestitures. The performance goals may relate to
the Participant’s business unit or the performance of the Company, an Affiliate,
a Subsidiary or the Company and its Affiliates and Subsidiaries as a whole, or
any combination of the foregoing. Performance goals need not be uniform as among
Participants.

(d) Timing of Establishment of Goals. The Committee shall establish the
performance goals in writing either before the beginning of the performance
period or during a period ending no later than the earlier of (i) ninety
(90) days after the beginning of the performance period or (ii) the date on
which 25% of the performance period has been completed, or such other date as
may be required or permitted under applicable regulations under Section 162(m)
of the Code.

(e) Certification of Results. The Committee shall certify and announce the
results for the performance period to all Participants after the Company
announces the Company’s financial results for the performance period. The
Committee shall determine the amount, if any, to be paid pursuant to each Grant
based on the achievement of the performance goals and the terms of each Grant
Agreement.

(f) Death, Disability or Other Circumstances. The Committee may provide in the
Grant Agreement that Grants shall be payable, in whole or in part, in the event
of the Participant’s death of disability, a Change in Control or under other
circumstances consistent with the U.S. Department of the Treasury regulations
and rulings under Section 162(m) and Section 409A of the Code.

13. Deferrals. To the extent permitted by applicable law, including Section 409A
of the Code and the corresponding U.S. Department of the Treasury regulations
and rulings, the Committee may permit or require a Participant to defer receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
the Participant in connection with any Grant.

14. Withholding of Taxes.

(a) Required Withholding. All Grants under the Plan shall be subject to
applicable federal (including FICA), state and local tax withholding
requirements. The Company may (i) require that the Participant or other person
receiving or exercising Grants pay to the Company the amount of any federal,
state or local taxes that the Company is required to withhold with respect to
such Grants, or (ii) to the extent permitted by law, deduct from other wages
paid by the Company or a Subsidiary the amount of any withholding taxes due with
respect to such Grants.

(b) Election to Withhold Shares. Unless the Committee determines otherwise, a
Participant may elect to satisfy the Company’s tax withholding obligation with
respect to Grants paid in Shares by having Shares withheld, at the time such
Grants become taxable, up to an amount that does not exceed the minimum
applicable withholding tax rate for federal

 

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(including FICA), state and local tax liabilities. Such election must be in a
form and manner prescribed by the Committee and may be subject to the prior
approval of the Committee. The value of the Shares to be withheld shall be based
on the Fair Market Value of such Shares on the date that the amount of tax to be
withheld is to be determined. All elections by a Participant shall be
irrevocable and be made in writing and in such manner as determined by the
Committee in advance of the day that the transaction becomes taxable.

15. Transferability of Grants.

(a) In General. Except as provided in this Section, only the Participant or his
or her legal guardian or representative may exercise rights under a Grant during
the Participant’s lifetime. Unless specifically allowed by the Committee and set
forth in a Grant Agreement, a Participant may not sell, transfer, pledge, assign
or otherwise alienate or hypothecate those rights except by will or by the laws
of descent and distribution, or, with respect to Grants. When a Participant
dies, the Successor Participant may exercise such rights in accordance with the
terms of the Plan. A Successor Participant must furnish proof satisfactory to
the Company of his or her right to receive the Grant under the Participant’s
will or under the applicable laws of descent and distribution.

(b) Transfer of Nonstatutory Options. Notwithstanding the foregoing or any other
provision of this Plan to the contrary, but subject to the consent of the
Committee, to the extent permissible under Exchange Act Rule 16b-3, a
Participant who is granted Nonstatutory Options pursuant to this Plan may
transfer such Nonstatutory Options to his or her spouse, lineal ascendants,
lineal descendants, or to trusts for their benefit, provided that the
Nonstatutory Options so transferred may not again be transferred other than to
the Participant originally receiving the grant of Nonstatutory Options or to an
individual or trust to whom such Participant could have transferred Nonstatutory
Options pursuant to this Section 15(b). Nonstatutory Options that are
transferred pursuant to this Section 15(b) shall be exercisable by the
transferee subject to the same terms and conditions as would have applied to
such Nonstatutory Options in the hands of the Participant originally receiving
the grant of such Nonstatutory Options.

16. Consequences of a Change in Control.

(a) Notice and Acceleration. Upon a Change in Control, (i) the Company shall
provide each Participant with outstanding Grants written notice of such Change
in Control, (ii) all outstanding Options shall automatically accelerate and
become fully exercisable, (iii) the restrictions and conditions on all
outstanding Stock Awards shall immediately lapse, (iv) Participants holding
outstanding Performance Units shall receive payment in settlement of such
Performance Units, in an amount determined by the Committee, based on the
Participant’s target payment for the performance period and the portion of the
performance period that precedes the Change in Control, (v) all outstanding
Stock Units shall become payable in cash or Shares in an amount not less than
their target amounts, as determined by the Committee, and (vi) Other Stock-Based
Awards shall become fully payable in cash or Shares, in amounts determined by
the Committee.

 

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(b) Assumption of Grants. Upon a Change in Control where the Company is not the
surviving corporation (or survives only as a subsidiary of another corporation),
all outstanding Options that are not exercised shall be assumed by, or replaced
with comparable options and rights by, the surviving corporation (or a parent or
subsidiary of the surviving corporation), and other Grants that remain
outstanding shall be converted to similar grants of the surviving corporation
(or a parent or subsidiary of the surviving corporation).

(c) Other Alternatives. Notwithstanding the foregoing, subject to subsection
(d) below, in the event of a Change in Control, the Committee may take any of
the following actions with respect to any or all outstanding Options, without
the consent of any Participant: (i) the Committee may require that Participants
surrender their outstanding Options in exchange for a payment by the Company, in
cash or Stock as determined by the Committee, in an amount equal to the amount
by which the then Fair Market Value subject to the Participant’s unexercised
Options exceeds the Option Price of the Options, or (ii) after giving
Participants an opportunity to exercise their outstanding Options, the Committee
may terminate any or all unexercised Options at such time as the Committee deems
appropriate. Such surrender, termination or settlement shall take place as of
the date of the Change in Control or such other date as the Committee may
specify.

(d) Committee. The Committee making the determinations under this Section 16
following a Change in Control must be comprised of the same members as those of
the Committee immediately before the Change in Control. If the Committee members
do not meet this requirement, the automatic provisions of subsections (a) and
(b) of this Section shall apply, and the Committee shall not have discretion to
vary them.

(e) Modifications. The terms of this Section 16 may be varied by the Committee
in any particular Grant Agreement.

17. Requirements for Issuance of Shares. No Shares shall be issued or
transferred in connection with any Grant hereunder unless and until all legal
requirements applicable to the issuance of such Shares have been complied with
to the satisfaction of the Committee. The Committee shall have the right to
condition any Grant made to any Participant hereunder on such Participant’s
undertaking in writing to comply with such restrictions on his or her subsequent
disposition of such Shares as the Committee shall deem necessary or advisable,
and certificates representing such Shares may be legended to reflect any such
restrictions. The Committee may require each person acquiring Shares pursuant to
a Grant to represent to and agree with the Company in writing that such person
is acquiring the Shares for investment purposes and without a view to the
distribution thereof. Certificates representing Shares issued or transferred
under the Plan will be subject to such stop-transfer orders and other
restrictions as may be required by applicable laws, regulations and
interpretations, including any requirement that a restrictive or other legend be
placed thereon.

18. Voluntary Surrender. The Committee may permit the voluntary surrender of all
or any portion of any Nonstatutory Option granted under the Plan to be
conditioned upon the granting to the Participant of a new Option for the same or
a different number of Shares as the Option surrendered, subject to the aggregate
maximum number of Shares available under the

 

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Plan as set forth in Section 5(a) of this Plan, or require such voluntary
surrender as a condition precedent to a grant of a new Option to such
Participant. Such new Option shall be exercisable at an Option Price, during an
Option Period, and in accordance with any other terms or conditions specified by
the Committee at the time the new Option is granted, all determined in
accordance with the provisions of the Plan without regard to the Option Price,
Option Period, or any other terms and conditions of the Nonstatutory Option
surrendered.

19. Amendment and Termination of the Plan.

(a) Amendment. The Board may amend or terminate the Plan at any time; provided,
however, that the Board shall not amend the Plan without approval of the
stockholders of the Company if such approval is required to comply with the Code
or applicable laws, or to comply with applicable stock exchange requirements. In
addition, the Committee may at any time, in its sole discretion, alter or amend
any or all of the outstanding Grant Agreements to the extent not prohibited by
law. Notwithstanding the foregoing, however, no amendment, alteration, or
termination of this Plan or of any Grant Agreement shall, without the consent of
the Participant, impair any rights or obligations under any Grant previously
made to the Participant, unless such right has been reserved in the Plan or the
Grant Agreement, or except as provided in Section 20(b) hereof.

(b) No Repricing Without Shareholder Approval. Notwithstanding anything in the
Plan to the contrary, without the prior approval of the Company’s stockholders,
no Grant under the Plan may be repriced, replaced, regranted through
cancellation or modified if the effect would be to reduce the exercise price for
the shares underlying such Grant; provided, however, that the foregoing shall
not apply to any adjustment made to a Grant pursuant to Section 5(d) hereof. In
addition, without the prior approval of the Company’s stockholders, the
Committee may not cancel an outstanding Grant that is underwater for the purpose
of granting a replacement Grant of a different type.

(c) Shareholder Approval for “Qualified Performance-Based Compensation”. If
Stock Units, Performance Units, Stock Awards, or Other Stock-Based Awards are
granted as “qualified performance-based compensation” under Section 12 hereof,
the Plan must be reapproved by the Company’s stockholders no later than the
first stockholders meeting that occurs in the fifth year following the year in
which the stockholders previously approved the provisions of Section 12 hereof,
if additional Grants are to be made under Section 12 hereof and if required by
Section 162(m) of the Code or the regulations thereunder.

(d) Termination of Plan. The Plan shall terminate on the day immediately
preceding the 10th anniversary of its Effective Date, unless the Plan is
terminated earlier by the Board or is extended by the Board with the approval of
the stockholders. The termination of the Plan shall not impair the power and
authority of the Committee with respect to an outstanding Grant.

 

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20. Miscellaneous.

(a) Grants in Connection with Corporate Transactions and Otherwise. Nothing
contained in this Plan shall be construed to (i) limit the right of the
Committee to make Grants under this Plan in connection with the acquisition, by
purchase, lease, merger, consolidation or otherwise, of the business or assets
of any corporation, firm or association, including Grants to employees thereof
who become Employees, or for other proper corporate purposes, or (ii) limit the
right of the Company to grant stock options or make other awards outside of this
Plan. Without limiting the foregoing, the Committee may make a Grant to an
employee of another corporation who becomes an Employee by reason of a corporate
merger, consolidation, acquisition of stock or property, reorganization or
liquidation involving the Company in substitution for a grant made by such
corporation. The terms and conditions of the substitute Grants may vary from the
terms and conditions required by the Plan and from those of the substituted
stock incentives. The Committee shall prescribe the provisions of the substitute
Grants.

(b) Compliance with Law. The Plan, the exercise of Options and the obligations
of the Company to issue or transfer Shares under Grants shall be subject to all
applicable laws and to approvals by any governmental or regulatory agency as may
be required. With respect to persons subject to Section 16 of the Exchange Act,
it is the intent of the Company that the Plan and all transactions under the
Plan comply with all applicable provisions of Rule 16b-3 or its successors under
the Exchange Act. In addition, it is the intent of the Company that the Plan and
applicable Grants comply with the applicable provisions of Sections 162(m), 409A
and 422 of the Code, and this Plan and all Grants shall be administered in a
manner which complies with, and all interpretations, decisions and
determinations by the Committee shall be construed as though intended to comply
with, such sections. To the extent that any legal requirement of Section 16 of
the Exchange Act or Sections 162(m), 409A or 422 of the Code as set forth in the
Plan ceases to be required under Section 16 of the Exchange Act or Sections
162(m), 409A or 422 of the Code, that Plan provision shall cease to apply.
Notwithstanding anything to the contrary contained in this Plan, or in any Grant
Agreement, but subject to any stockholder approval requirements imposed by
applicable law, the Board may amend the Plan and the Committee may amend or
cancel any Grant, to take effect retroactively or otherwise, without the consent
of the holders of outstanding Grants as deemed necessary or advisable for the
purpose of conforming the Plan and/or a Grant to, or exempting the Plan and /or
any Grant from, Sections 162(m), 409A and/or 422 of the Code and/or any other
present or future law relating to plans of this or similar nature and to the
administrative regulations and rulings promulgated thereunder. The Committee may
also adopt rules regarding the withholding of taxes on payments to Participants.
The Committee may, in its sole discretion, agree to limit its authority under
this Section.

(c) Enforceability. The Plan shall be binding upon and enforceable against the
Company and its successors and assigns.

(d) Funding of the Plan; Limitation on Rights. This Plan shall be unfunded.
Neither the Company nor any other company shall be required to establish any
special or separate fund or to make any other segregation of assets to assure
the payment of any Grants under this Plan. Nothing contained in the Plan and no
action taken pursuant hereto shall create or be construed to create a fiduciary
relationship between the Company or any other company

 

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and any Participant or any other person. No Participant or any other person
shall under any circumstances acquire any property interest in any specific
assets of the Company or any other company. To the extent that any person
acquires a right to receive payment from the Company hereunder, such right shall
be no greater than the right of any unsecured general creditor of the Company.

(e) Other Compensation Arrangements; Claim to Options; Employment Rights.
Nothing contained in this Plan shall prevent the Board from adopting other or
additional compensation arrangements, including trusts, and such arrangements
may be either generally applicable or applicable only in specific cases. Nothing
in this Plan shall entitle any Eligible Person or other person to any claim or
right to receive a Grant under this Plan. Neither this Plan nor any action taken
hereunder shall be construed as giving any individual any rights to be retained
by or in the employment or service of the Company.

(f) No Liability of Committee Members. No member of the Committee shall be
personally liable by reason of any contract or other instrument executed by such
member or on his behalf in his capacity as a member of the Committee nor for any
mistake of judgment made in good faith, and the Company shall indemnify and hold
harmless each member of the Committee and each other employee, officer or
Director of the Company to whom any duty or power relating to the administration
or interpretation of the Plan may be allocated or delegated, against any cost or
expense (including counsel fees) or liability (including any sum paid in
settlement of a claim) arising out of any act or omission to act in connection
with the Plan unless arising out of such person’s own fraud or willful bad
faith; provided, however, that approval of the Board shall be required for the
payment of any amount in settlement of a claim against any such person. The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Articles of Incorporation or By-Laws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.

(g) No Fractional Shares. No fractional Shares shall be issued or delivered
pursuant to the Plan or any Grant. 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) Employees Subject to Taxation Outside the United States. With respect to
Participants who are subject to taxation in countries other than the United
States, the Committee may make Grants on such terms and conditions as the
Committee deems appropriate to comply with the laws of the applicable countries,
and the Committee may create such procedures, addenda and subplans and make such
modifications as may be necessary or advisable to comply with such laws.

(i) Governing Law. The validity, construction, interpretation and effect of the
Plan and Grant Agreements issued under the Plan shall be governed and construed
by and determined in accordance with the laws of the State of Delaware, without
giving effect to the conflict of laws provisions thereof that would apply the
law of a another state.

 

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(j) Relationship to Other Benefits. No payment under the Plan shall be taken
into account in determining any benefits under any pension, retirement, profit
sharing, group insurance or other benefit plan of the Company or any Subsidiary
except as otherwise specifically provided in such other plan.

(k) Expenses. The expenses of administering the Plan shall be borne by the
Company and its Affiliates and Subsidiaries.

(l) Pronouns. Masculine pronouns and other words of masculine gender shall refer
to both men and women.

(m) Titles and Headings. The titles and headings of the sections in the Plan are
for convenience of reference only, and in the event of any conflict, the text of
the Plan, rather than such titles or headings shall control.

 

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