EXHIBIT 10.1

NUTRACEUTICAL INTERNATIONAL CORPORATION
2013 LONG-TERM EQUITY INCENTIVE PLAN

PERFORMANCE STOCK UNIT GRANT NOTICE

Nutraceutical International Corporation, a Delaware corporation (the “Company”),
pursuant to the Nutraceutical International Corporation 2013 Long-Term Equity
Incentive Plan (the “Plan”), hereby grants to the individual listed below (the
“Participant”) the following award of Performance Stock Units (“PSUs”). This
award of PSUs is subject to all of the terms and conditions set forth in this
Grant Notice, in the Performance Stock Unit Terms and Conditions (the “Terms and
Conditions”) attached hereto as Appendix A and in the Process for Determining
Earned PSUs attached hereto as Appendix B (this Grant Notice and Appendix A and
Appendix B being collectively referred to as the “Award Agreement”) and in the
Plan, the terms of which are incorporated herein by reference. All capitalized
terms used and not otherwise defined in this Award Agreement shall have the
meanings ascribed to such terms in the Plan (as it may be amended from time to
time) unless the context clearly indicates otherwise.
Participant:
[Name]

Grant Date:
[Date]    

Target Number of PSUs:
[Number]    

Performance Period:
October 1, 2016 to September 30, 2019

Performance Measures:
Revenue Growth and Adjusted EBITDA Margin (see tables and description below)

Payout Range (earned PSUs):
0% to 210% of Target Number

Vesting Date:
The earned PSUs will vest as of September 30, 2019

Payment of PSUs:
The Company shall pay to the Participant in the form of one share of Stock for
each vested PSU as set forth in Section 4 of the attached Performance Stock Unit
Terms and Conditions.

Termination of PSUs:
Unvested PSUs are forfeited and terminated to the extent set forth in Section 3
of the attached Terms and Conditions if the Participant ceases to be an
Employee, Consultant or Independent Director (a “Termination of Service”).

By his or her signature and the Company’s signature below, the Participant
agrees to be bound by the terms and conditions of the Plan and this Award
Agreement. The Participant has reviewed the Award Agreement, including
Appendices A and B, and the Plan in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Grant Notice and fully
understands all provisions of this Award Agreement and the Plan. In the event
that there are any inconsistencies between the terms of the Plan and the terms
of this Award Agreement, the terms of the Plan shall control. The Participant
hereby agrees to accept as binding, conclusive and final all decisions or
interpretations of the Committee upon any questions arising under the Plan, this
Grant Notice or the Performance Stock Unit Agreement.

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Signed:
NUTRACEUTICAL INTERNATIONAL CORPORATION:
 
PARTICIPANT:
HOLDER:
 
 
 
 
By:
 
 
 
 
Name:
 
 
Print Name:
 
Title:
 
 
Address:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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APPENDIX A
PERFORMANCE STOCK UNIT GRANT NOTICE
PERFORMANCE STOCK UNIT TERMS AND CONDITIONS
1.Grant. Pursuant to the Performance Stock Unit Grant Notice (the “Grant
Notice”) and these Performance Stock Unit Terms and Conditions (the “Terms and
Conditions”) attached to the Grant Notice, and which together constitute the
“Award Agreement,” Nutraceutical International Corporation, a Delaware
corporation (the “Company”), has granted to the Participant an award of PSUs
under the Nutraceutical International Corporation 2013 Long-Term Equity
Incentive Plan (the “Plan”), subject to all of the terms and conditions
contained in this Award Agreement and the Plan. All capitalized terms used but
not defined in the Award Agreement shall have the meanings ascribed to such
terms in the Plan unless the context clearly indicates otherwise.

2.PSUs. Each PSU that vests represents the right to receive payment, in
accordance with Section 4 below, in the form of one share of Stock. Unless and
until a PSU vests, the Participant has no right to payment in respect of any
such PSU. Prior to actual payment in respect of any vested PSU, such PSU
represents an unsecured obligation of the Company, payable (if at all) only from
the general assets of the Company.

3.Vesting and Termination. Except as otherwise provided in this Section 3, the
number of PSUs that are earned and eligible to vest is determined as set forth
in Appendix B.

3.1    Unearned PSUs. Any PSUs that have not yet been earned in the manner
provided in Appendix B as of the end of the Performance Period immediately
terminate and are forfeited and cancelled without payment of consideration
therefore.

3.2    Voluntary Termination (other than Retirement) by the Participant or
Termination by the Company for Cause. All PSUs that have not yet vested as of
the Participant’s Termination of Service due to voluntary termination by the
Participant (other than due to Retirement, as defined in Section 3.3) or to
termination by the Company for Cause (defined as contemplated by the Plan)
thereupon terminate and are forfeited and cancelled without payment of
consideration therefore.

3.3    Termination by the Company without Cause. If during the Performance
Period the Participant's Termination of Service occurs due to an involuntary
Termination of Service without Cause, the Compensation Committee in its sole
discretion may provide that the Participant, or the Participant's estate or
designated beneficiary in the event of the Participant’s death, may become
entitled to vesting and payout of a number of PSUs not in excess of the Target
Number of PSUs as set forth in the Grant Notice multiplied by a Performance
Factor determined in the manner provided in Section 3.4(b) (but replacing
references to the Change in Control with references to the Participant’s
Termination of Service). Any PSUs that are not vested by reason of the
Compensation Committee’s determination as contemplated in the preceding sentence
are forfeited and cancelled without payment of consideration therefor.
3.4     Termination by Reason of Death, Disability or Retirement. If during the
Performance Period the Participant's Termination of Service occurs by reason of
death, Disability or Retirement (defined below), the Participant, or the
Participant's estate or designated beneficiary in the event of the Participant’s
death, is entitled to vesting and payout of PSUs as follows (and any PSUs that
do not vest under the circumstances described below are forfeited and cancelled
without payout of consideration therefor):
(a)    If such termination occurs in the first fiscal year of the Performance
Period, then the Participant is entitled to an immediate vesting of a number of
PSUs equal to one-third of the Target Number of PSUs as set forth in the Grant
Notice multiplied by a Performance Factor determined in the manner specified in
Appendix B, except that the Performance Period for purposes of applying Appendix
B is deemed to be the first fiscal year rather than the full three fiscal years.

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(b)    If such termination occurs in the second fiscal year of the Performance
Period, then the Participant is entitled to an immediate vesting of a number of
PSUs equal to two-thirds of the Target Number of PSUs as set forth in the Grant
Notice multiplied by a Performance Factor determined in the manner specified in
Appendix B, except that the Performance Period for purposes of applying Appendix
B is deemed to be the first two fiscal years rather than the full three fiscal
years.
(c)    If such termination occurs in the third fiscal year of the Performance
Period, or after the end of the Performance Period, then 100% of PSUs earned
based on actual performance over the Performance Period vest as provided in the
Grant Notice.
For purposes of this Agreement, “Retirement” means a Termination of Service due
to the voluntary resignation of the Participant after attaining the age of 65
with a minimum of twenty years of service (from the most recent hire date, not
including service with predecessor acquired entities) with the Company and its
Affiliates, provided that such Participant does not accept or commence
employment or service, prior to six (6) months after the date of such
Termination of Service, in a full-time position as an employee, consultant or
independent contractor (other than solely in a capacity as a non-employee member
of a board of directors) with any company or other entity or business that
competes with the Company and its Affiliates (the “Special Retirement
Restriction”). Notwithstanding anything herein to the contrary, with respect to
the PSUs for which vesting is accelerated as a result of Retirement, the
settlement of such PSUs shall be subject to a condition subsequent that the
Participant: (i) has not breached the Special Retirement Restriction, and (ii)
has provided, if requested by the Compensation Committee, a written
certification of compliance with the Special Retirement Restriction.
3.5    Change in Control.
(a)     If a Change in Control occurs during the Performance Period and prior to
the Participant’s Termination of Service, the Participant is entitled to
immediate vesting and payout of a number of PSUs equal to the Target Number of
PSUs as set forth in the Grant Notice multiplied by a Performance Factor
determined as provided in Section 3.4(b). Any PSUs that do not vest under the
circumstances described in the preceding sentence are forfeited and cancelled
without payment of consideration therefor.
(b)    For purposes of Sections 3.4(a), the Performance Factor shall be
determined in the manner specified in Appendix B, except that (i) the
Performance Period for purposes of applying Appendix B shall be deemed to have
ended on (A) the date of the Change in Control, if the Change in Control occurs
on the last date of a fiscal quarter, or (B) the last day of the fiscal quarter
preceding the Change in Control if the Change in Control does not occur on the
last day of a fiscal quarter, and (ii) if the date the Performance Period is
deemed to have ended under clause (i) is not also the last day of a fiscal year,
then the period between the last day of the Company’s immediately preceding
fiscal year and the deemed last day of the Performance Period (the “Stub
Period”) shall be deemed a fiscal year for purposes of Appendix B and the
Company’s Revenue and Adjusted EBITDA Before Incentive Comp for such deemed
fiscal year shall be annualized amounts based on the Company’s actual Revenue
and Adjusted EBITDA Before Incentive Comp for the Stub Period.
4.Payment after Vesting; No Dividend Equivalents; Code Section 409A. The Company
shall issue one share of Stock (in book-entry form or otherwise) in respect of
each PSU that vests in accordance herewith to the Participant (or in the event
of the Participant’s death, to the Participant’s estate or designated
beneficiary) according to the following schedule: (i) if vesting occurs at a
fiscal year end (currently September 30th), then on the last day of the second
month following the fiscal year end (i.e., November 30th if the fiscal year end
is September 30th); or (ii) except with respect to accelerated vesting as a
result of Retirement, if vesting occurs on any other date, then within 60 days
following the end of the fiscal year (or other applicable measurement period, in
the case of a Change in Control) that includes the date on which such PSU vests;
or (iii) in the case of PSUs that receive accelerated vesting as a result of
Retirement, then on the later of (a) the expiration of the six-month period
immediately following Retirement, subject to the satisfaction of the conditions
set forth in Section 3.3, or (b) on the last day of the second month following
the fiscal year end of the fiscal year during which Retirement occurred (i.e.,
November 30th if the fiscal year end is September 30th), but in no event later
than March 15th of the calendar

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year following the calendar year in which retirement occurs. The Participant
shall not be entitled to receive any amounts (so-called “dividend equivalents”)
in respect of the PSUs with respect to dividends or other distributions paid by
the Company on shares of Stock underlying the PSUs prior to the date of vesting.
Notwithstanding anything herein to the contrary, no payments hereunder shall be
made to the Participant during the six-month period following the Participant’s
“separation from service” (within the meaning of Section 409A of the Code) if
the Participant is a “specified employee” (within the meaning of Section 409A of
the Code) on the date of such separation from service (as determined by the
Company in accordance with Section 409A of the Code) and the Company determines
that paying such amounts at the time set forth in this Section 4 would be a
prohibited distribution under Section 409A(a)(2)(B)(i) of the Code. If the
payment of any such amounts is delayed as a result of the previous sentence,
then on the first day following the end of such six-month period, the Company
shall pay the Participant the cumulative amounts that would have otherwise been
payable to the Participant during such six-month period.

5.Tax Withholding. The Company may deduct or withhold, or require the
Participant to remit to the Company, an amount sufficient to satisfy all
applicable federal, state and local taxes (including the Participant’s
employment tax obligations, if any) required by law to be withheld with respect
to any taxable event arising in connection with the PSUs. Without limiting the
generality of Section 15.3 of the Plan, the Participant may, in satisfaction of
the foregoing requirement, elect to have the Company withhold or cause to be
withheld shares of Stock otherwise issuable in respect of such PSUs having a
Fair Market Value equal to the sums required to be withheld. Notwithstanding any
other provision of the Plan or this Agreement, the number of shares of Stock
which may be so withheld shall be limited to the number of shares of Stock which
have a Fair Market Value on the date of withholding equal to the aggregate
amount of such liabilities based on the minimum statutory withholding rates for
income and payroll tax purposes that are applicable to such supplemental taxable
income.

6.Rights as Shareholder. Neither the Participant nor any person claiming under
or through the Participant has any of the rights or privileges of a shareholder
of the Company in respect of any shares of Stock that may become deliverable
hereunder unless and until certificates representing such shares of Stock have
been issued, recorded on the records of the Company or its transfer agents or
registrars, and delivered in certificate or book entry form to the Participant
or any person claiming under or through the Participant.

7.Non-Transferability. Neither the PSUs nor any interest or right therein is
liable for the debts, contracts or engagements of the Participant or his or her
successors in interest or subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means, whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 7 shall not prevent
transfers by will or by the applicable laws of descent and distribution or
pursuant to a domestic relations order as defined by the Code or Title I of the
Employee Retirement Income Security Act of 1974, as amended, or the rules
thereunder. Upon any attempt by the Participant to transfer, assign, pledge,
hypothecate or otherwise dispose of this grant, or any right or privilege
conferred hereby, or upon any attempted sale by the Participant under any
execution, attachment or similar process, this grant and the rights and
privileges conferred hereby shall immediately become null and void.

8.Distribution of Stock. Notwithstanding anything herein to the contrary, the
Company is not required to issue or deliver any certificates evidencing shares
of Stock pursuant to this Agreement unless and until the Committee has
determined, with advice of counsel, that the issuance and delivery of such
certificates is in compliance with all applicable laws, regulations of
governmental authorities and, if applicable, the requirements of any exchange on
which the shares of Stock are listed or traded. All Stock certificates delivered
pursuant to this Agreement are subject to any stop-transfer orders and other
restrictions as the Committee deems necessary or advisable to comply with
federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. In the event
that any such issuance or delivery is delayed because the Company reasonably
determines that such issuance or delivery will violate Federal securities laws
or other applicable law, such issuance or delivery shall be made at the earliest
date at which the Company reasonably determines that such issuance or delivery
will

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not cause such violation, as required by Treasury Regulation Section
1.409A-2(b)(7)(ii). The Company shall not delay any such recording or delivery
if such delay will result in a violation of Section 409A of the Code. The
Committee may place legends on any Stock certificate to reference restrictions
applicable to the Stock. In addition to the terms and conditions provided
herein, the Committee may require that the Participant make such reasonable
covenants, agreements, and representations as the Committee, in its discretion,
deems advisable in order to comply with any such laws, regulations, or
requirements. The Committee may require the Participant to comply with any
timing or other restrictions with respect to the settlement of any PSUs,
including a window-period limitation, as may be imposed in the discretion of the
Committee. Notwithstanding any other provision of this Agreement, unless
otherwise determined by the Committee or required by any applicable law, rule or
regulation, the Company shall not deliver to the Participant any certificates
evidencing shares of Stock issued upon settlement of any PSUs under this
Agreement and instead such shares of Stock shall be recorded in the books of the
Company (or, as applicable, its transfer agent or stock plan administrator) and
all references herein to certificates shall be deemed to apply instead to
recordation in such books.

9.Clawback/Forfeiture. The Committee may in its sole discretion cancel this
award if the Participant, without the consent of the Company, while employed by
or providing services to the Company or any Affiliate or after a Termination of
Service, violates a non-competition, non-solicitation, non-disparagement or
non-disclosure covenant or agreement. .In addition, participation in the Plan
and receipt of remuneration as a result of the PSUs is subject in all respects
to any Company compensation clawback policies that may be in effect from time to
time.

10.No Effect on Service Relationship. Nothing in this Agreement or in the Plan
confers upon the Participant any right to serve or continue to serve as an
Employee, Consultant, or other service provider of the Company or any Affiliate,
or shall interfere with or restrict in any way the right of the Company or its
Affiliates, which are hereby expressly reserved, to remove, terminate or
discharge the Participant at any time for any reason whatsoever.

11.Severability. In the event that any provision in this Agreement is held
invalid or unenforceable, such provision will be severable from, and such
invalidity or unenforceability will not be construed to have any effect on, the
remaining provisions of this Agreement, which shall remain in full force and
effect to the extent permitted by law.

12.Tax Consultation. The Participant understands that the Participant may suffer
adverse tax consequences in connection with the PSUs granted pursuant to this
Agreement. The Participant represents that the Participant has consulted with
any tax consultants that the Participant deems advisable in connection with the
PSUs and that the Participant is not relying on the Company for tax advice.

13.Amendments, Suspension and Termination. To the extent permitted by the Plan,
this Agreement may be wholly or partially amended or otherwise modified,
suspended or terminated at any time or from time to time by the Committee or the
Board.

14.Conformity to Securities Laws. The Participant acknowledges that the Plan and
this Agreement are intended to conform to the extent necessary with all
provisions of the Securities Act of 1933, as amended, and the Exchange Act and
any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, and all applicable state securities laws and regulations.
Notwithstanding anything herein to the contrary, the Plan shall be administered,
and the PSUs are granted, only in such a manner as to conform to such laws,
rules and regulations. To the extent permitted by applicable law, the Plan and
this Agreement shall be deemed amended to the extent necessary to conform to
such laws, rules and regulations.

15.Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or this Agreement, if the Participant becomes subject to
Section 16 of the Exchange Act, the Plan, the PSUs and this Agreement will be
subject to any additional limitations set forth in any applicable exemptive rule
under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of
the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, this Agreement is deemed
amended

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to the extent necessary to conform to such applicable exemptive rule.

16.Code Section 409A. Neither the PSUs nor this Agreement is intended to provide
for any deferral of compensation subject to Section 409A of the Code, and,
accordingly, notwithstanding anything to the contrary, the shares of Stock
issuable (or cash deliverable) hereunder shall be distributed no later than the
later of: (i) the 15th day of the third month following the last day of the
Participant’s first taxable year in which the PSUs are no longer subject to a
substantial risk of forfeiture, and (ii) the 15th day of the third month
following the last day of the first taxable year of the Company in which the
PSUs are no longer subject to substantial risk of forfeiture, as determined in
accordance with Code Section 409A and any Treasury Regulations and other
guidance issued thereunder. Nevertheless, to the extent that the Committee
determines that any PSUs may not be exempt from (or compliant with) Section 409A
of the Code, the Committee may (but shall not be required to) amend this
Agreement in a manner intended to comply with the requirements of Section 409A
of the Code or an exemption therefrom (including amendments with retroactive
effect), or take any other actions as it deems necessary or appropriate to (a)
exempt the PSUs from Section 409A of the Code and/or preserve the intended tax
treatment of the benefits provided with respect to the PSUs, or (b) comply with
the requirements of Section 409A of the Code. To the extent applicable, this
Agreement shall be interpreted in accordance with the provisions of Section 409A
of the Code.

17.Adjustments. The Participant acknowledges that the PSUs are subject to
modification and termination in certain events as provided in this Agreement and
Sections 12 and 13 of the Plan.

18.Notices. Notices required or permitted hereunder must be given in writing and
are deemed effectively given upon personal delivery or upon deposit in the
United States mail by certified mail, with postage and fees prepaid, addressed
to the Participant to his or her address shown in the Company records, and to
the Company at its principal executive office.

19.Beneficiary.  The Participant may file with the Committee a written
designation of a beneficiary on such form as may be prescribed by the Committee
and may, from time to time, amend or revoke such designation.  If no designated
beneficiary survives the Participant, the executor or administrator of the
Participant’s estate shall be deemed to be the Participant’s beneficiary.

20.Successors and Assigns. The Company may assign any of its rights under this
Agreement to single or multiple assignees, and this Agreement inures to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer contained herein, this Agreement shall be binding upon
the Participant and his or her heirs, executors, administrators, successors and
assigns.

21.Entire Agreement.  This Agreement and the Plan contain the entire agreement
and understanding of the parties hereto with respect to the subject matter
contained herein and supersede all prior communications, representations and
negotiations in respect thereto.  No change, modification or waiver of any
provision of this Agreement shall be valid unless the same be in writing and
signed by the parties hereto.

22.Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Utah without regard to principles of
conflicts of law thereof, or principles of conflicts of laws of any other
jurisdiction which could cause the application of the laws of any jurisdiction
other than the State of Utah.

23.Captions. Captions provided herein are for convenience only and are not
intended to serve as a basis for interpretation or construction of this
Agreement.

24.Signature in Counterparts.  This Agreement may be signed (including
electronically as specified by the Committee), in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.    

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APPENDIX B
TO PERFORMANCE STOCK UNIT GRANT NOTICE
PROCESS FOR DETERMINING EARNED PSUS

Participant:    

Grant Date:    

Target Number of PSUs:    

Performance Period:    October 1, 2016 to September 30, 2019

Determination of Earned PSUs: Subject to the terms of the Grant Notice and the
Terms and Conditions to which this Appendix B is attached, the number of the
PSUs that the Participant earns as of the end of the Performance Period pursuant
to this Award Agreement is determined as follows:

1.Performance Factor. The number of earned PSUs is determined by multiplying the
Target Number of PSUs by the Performance Factor, which is itself calculated by
multiplying the “Revenue Growth Factor” determined in accordance with paragraph
2 by the “Adjusted EBITDA Average Margin Factor” determined in accordance with
paragraph 3 below.

2.Revenue Growth Factor. The Revenue Growth Factor is equal to the “Payout as a
% of Target” percentage specified in the following table that corresponds to the
three-fiscal-year moving average growth in Revenue achieved by the Company
during the Performance Period as specified in the “2017-2019 Performance Goal”
column in the following table:
Revenue Growth
Performance Level
Payout as a % of Target (1)
2017-2019 Performance Goal
3-fiscal-year moving average growth in Revenue
Below Threshold
0%
<0.0%
Threshold
50%
2.0%
Target
100%
4.0%
Stretch
125%
5.0%
 
Maximum
150%
≥6.0%

(1)
If performance is between Below Threshold and Stretch levels set forth above,
then the Payout as a % of Target percentage is determined by linear
interpolation. There is no interpolation for performance above Stretch level but
below Maximum level.

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3.Adjusted EBITDA Average Margin Factor. The Adjusted EBITDA Average Margin
Factor is equal to the “Adjusted EBITDA Average Margin Multiplier” percentage
specified in the following table that corresponds to the “Adjusted EBITDA
Average Margin Performance” achieved by the Company during the three fiscal
years of the Performance Period (i.e., ending September 30, 2019):
Adjusted EBITDA Average Margin Performance (1)
Adjusted EBITDA Average Margin Multiplier (2)
≥24.0%
140%
22.0%
120%
20.0%
110%
18.0%
100%
16.0%
90%
14.0%
80%
≤10.0%
0%

(1)
Adjusted EBITDA Average Margin Performance goals as specified may be adjusted in
connection with acquisitions as provided below in paragraph 4(f) of this section
of the Grant Notice.

(2)
If Adjusted EBITDA Average Margin Performance is between any of the amounts
specified in the table, then the Adjusted EBITDA Average Margin Multiplier
percentage is determined by linear interpolation.

4.Applicable Definitions and Computation Rules. The following definitions and
computation rules apply for purposes of determining the number of PSUs earned as
of the end of the Performance Period:

(a)
“Revenue” for any fiscal year is the net sales reported in the Company’s
consolidated statements of operations for the applicable fiscal year, as
determined under Generally Accepted Accounting Principles (“GAAP”).

(b)
Moving average revenue growth is calculated by comparing Revenue for the
Performance Period to Revenue for the fiscal 2016 base year.

(c)
“Adjusted EBITDA Average Margin” is measured as a three fiscal year average of
the Adjusted EBITDA Before Incentive Comp margin for the three fiscal years of
the Performance Period (i.e., ending September 30, 2019) and is calculated by
dividing Adjusted EBITDA Before Incentive Comp for those three fiscal years by
Revenue for those three fiscal years.

(d)
“Adjusted EBITDA Before Incentive Comp” for a fiscal year is the net income
(loss) reported in the Company’s consolidated statements of operations for the
applicable fiscal year, as determined under GAAP, less all incentive
compensation and less net interest income and plus income tax expense,
depreciation, amortization and contingent consideration for that fiscal year,
and may be adjusted, at the discretion of the Committee, to exclude the impact
of Special Items.

(e)
“Special Items” consist of the following items, as determined by the
Compensation Committee, associated with events that occur during the Performance
Period: (i) gains or losses attributable to accounting rule changes not in place
as of the beginning of Performance Period; (ii) gains and losses from litigation
not connected to the Company’s core business; (iii) gains or losses from an “act
of God” such as fire, flood, etc.; (iv) financial, consulting and legal advisory
fees associated with an acquisition or disposition to the extent they exceed
budgeted amounts; (v) in-process R&D expenses associated with acquisitions; and
(vi) severance, retention, integration and asset write-down charges associated
with an acquired company or product line.

(f)
Certain adjustments may be made at the discretion of the Committee to the
Adjusted EBITDA Average Margin Performance goals in the event of the Company’s
acquisition of another entity, business, or product line:

•
If an acquisition occurs during the Performance Period, and the business case on

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which the acquisition was predicated specifies that the acquisition will
positively impact both Revenue and Adjusted EBITDA Before Incentive Comp during
the Performance Period, then the existing Revenue and Adjusted EBITDA Average
Margin Performance goals will be unchanged.

•
If an acquisition occurs during the Performance Period, and the business case on
which the acquisition was predicated specifies that the acquisition will erode
Adjusted EBITDA Before Incentive Comp during the Performance Period, then the
Adjusted EBITDA Average Margin Performance goals may be adjusted downward,
consistent with the estimates in the business case.

(g)
In calculating the Performance Factor, Revenue Growth Factor and Adjusted EBITDA
Average Margin Factor, all percentages will be rounded to the nearest one-tenth
of one percent. In calculating the number of earned PSUs, the number of earned
PSUs shall be rounded to the nearest whole PSU.

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