Exhibit 10.1

EIGHTH AMENDED AND RESTATED

KENSEY NASH CORPORATION

EMPLOYEE INCENTIVE COMPENSATION PLAN,

AS AMENDED BY THE FIRST AMENDMENT THERETO

ARTICLE I

ESTABLISHMENT

1.1 Purpose. The Eighth Amended and Restated Kensey Nash Corporation Employee
Incentive Compensation Plan (the “Plan”), which amends and restates the Seventh
Amended and Restated Kensey Nash Corporation Employee Incentive Compensation
Plan (the (“Prior Plan”), is hereby established by Kensey Nash Corporation
(“Company”). The purpose of the Plan is to promote the overall financial
objectives of the Company and its stockholders by motivating those persons
selected to participate in the Plan to achieve long-term growth in stockholder
equity in the Company and by retaining the association of those individuals who
are instrumental in achieving this growth. The Plan is intended to qualify
certain compensation awarded under the Plan for tax deductibility under
Section 162(m) of the Code (as defined herein) to the extent deemed appropriate
by the Committee (as defined herein). The Plan and the grant of awards hereunder
are expressly conditioned upon the Plan’s approval by the stockholders of the
Company. If such approval is not obtained, then this Plan and all Awards (as
defined herein) hereunder shall be null and void ab initio with respect to all
Awards granted on or after the Effective Date (as defined below). The Plan is
adopted (and accordingly, the Prior Plan is amended and restated), subject to
stockholder approval, effective as of December 1, 2010 (the “Effective Date”),
and the Plan’s terms shall govern Awards granted hereunder (including all prior
versions hereof) before, on or after the Effective Date.

ARTICLE II

DEFINITIONS

As used in the Plan, in addition to terms defined elsewhere in the Plan, the
following terms shall have the meanings set forth below:

2.1 “Affiliate” means a corporation or other entity (i) controlled by or under
common control with the Company (as defined in Section 414(b) or (c) of the
Code) and which, in the case of grants of Stock Options and Stock Appreciation
Rights would, together with the Company, be classified as the “service
recipient” (as defined under Section 409A of the Code) with respect to a
Participant.

2.2 “Agreement” or “Award Agreement” means, individually or collectively, any
agreement entered into pursuant to the Plan pursuant to which an Award is
granted to a Participant.

2.3 “Award” means any Option, SAR, Restricted Stock, Stock, Other Stock-Based
Award, Performance Award or Cash Incentive Award, together with any other right
or interest granted to a Participant under the Plan.

2.4 “Beneficiary” means the person, persons, trust or trusts which have been
designated by a Participant in his or her most recent written beneficiary
designation filed with the Committee to receive the benefits specified under the
Plan upon such Participant’s death or to which Awards or other rights are
transferred if and to the extent permitted hereunder. If, upon a Participant’s
death, there is no designated Beneficiary or surviving designated Beneficiary,
then the term Beneficiary means the Participant’s Representative.

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

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2.6 “Cash Incentive Award” means a conditional right granted to a Participant
under Section 9.3(c) hereof to receive a cash payment, unless otherwise
determined by the Committee, after the end of a specified period.

2.7 “Cause” shall mean, for purposes of whether and when a Participant has
incurred a Termination of Service for Cause, any act or omission which permits
the Company to terminate the written agreement or arrangement between the
Participant and the Company or an Affiliate for “cause” as defined in such
agreement or arrangement, or in the event there is no such agreement or
arrangement or the agreement or arrangement does not define the term “cause” or
a substantially equivalent term, then Cause shall mean (a) any act or failure to
act deemed to constitute cause under the Company’s established practices,
policies or guidelines applicable to the Participant or (b) the Participant’s
act or omission which constitutes gross misconduct with respect to the Company
or an Affiliate in any material respect, including, without limitation, an act
or omission of a criminal nature, the result of which is detrimental to the
interests of the Company or an Affiliate, or conduct, or the omission of
conduct, which constitutes a material breach of a duty the Participant owes to
the Company or an Affiliate.

2.8 “Change in Control” and “Change in Control Price” have the meanings set
forth in Sections 11.2 and 11.3, respectively.

2.9 “Code” or “Internal Revenue Code” means the Internal Revenue Code of 1986,
as amended, Treasury regulations (including proposed regulations) thereunder and
any other effective guidance thereunder, and includes any subsequent Internal
Revenue Code.

2.10 “Commission” means the Securities and Exchange Commission or any successor
agency.

2.11 “Committee” means the Compensation Committee of the Board or such other
Board committee as may be designated by the Board to administer the Plan;
provided, however, that the Committee shall consist solely of two or more
directors, each of whom is a “disinterested person” within the meaning of Rule
16b-3 under the Exchange Act and each of whom is also an “outside director”
under Section 162(m) of the Code.

2.12 “Common Stock” means the shares of the $0.01 par value common stock of the
Company, whether presently or hereafter issued, and any other stock or security
resulting from adjustment thereof as described hereinafter or the common stock
of any successor to the Company which is designated for the purpose of the Plan.

2.13 “Company” means Kensey Nash Corporation, a Delaware corporation, and
includes any successor or assignee corporation or corporations into which the
Company may be merged, changed or consolidated; any corporation for whose
securities the securities of the Company shall be exchanged; and any assignee of
or successor to substantially all of the assets of the Company.

2.14 “Covered Employee” means a Participant who is a “covered employee” within
the meaning of Section 162(m) of the Code.

2.15 “Disability” means a mental or physical illness that entitles the
Participant to receive benefits under the long-term disability plan of the
Company or an Affiliate, or if the Participant is not covered by such a plan or
the Participant is not an employee of the Company or an Affiliate, a mental or
physical illness that renders a Participant totally and permanently incapable of
performing the Participant’s duties for the Company or an Affiliate.
Notwithstanding the foregoing, a Disability shall not qualify under this Plan if
it is the result of (i) a willfully self-inflicted injury or willfully
self-induced sickness; or (ii) an injury or disease contracted, suffered, or
incurred while participating in a criminal offense. The determination of
Disability shall be made by the Committee. The determination of Disability for
purposes of this Plan shall not be construed to be an admission of disability
for any other purpose.

2.16 “Effective Date” means December 1, 2010.

 

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2.17 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

2.18 “Fair Market Value” means the value determined on the basis of the good
faith determination of the Committee, without regard to whether the Common Stock
is restricted or represents a minority interest, pursuant to the applicable
method described below:

 

  (a) if the Common Stock is listed on a national securities exchange or quoted
on NASDAQ, the closing price of the Common Stock on the relevant date (or, if
such date is not a business day or a day on which quotations are reported, then
on the immediately preceding date on which quotations were reported), as
reported by the principal national exchange on which such shares are traded (in
the case of an exchange) or by NASDAQ, as the case may be;

 

  (b) if the Common Stock is not listed on a national securities exchange or
quoted on NASDAQ, but is actively traded in the over-the-counter market, the
average of the closing bid and asked prices for the Common Stock on the relevant
date (or, if such date is not a business day or a day on which quotations are
reported, then on the immediately preceding date on which quotations were
reported), or the most recent preceding date for which such quotations are
reported; and

 

  (c) if, on the relevant date, the Common Stock is not publicly traded or
reported as described in (a) or (b) above, the value determined in good faith by
the Committee in accordance with Section 409A of the Code.

2.19 “Grant Date” means the date as of which an Award is granted pursuant to the
Plan.

2.20 “Incentive Stock Option” means any Stock Option intended to be and
designated as an “incentive stock option” within the meaning of Section 422 of
the Code.

2.21 “NASDAQ” means The Nasdaq Stock Market, including the Nasdaq Global Select
Market (or any successor thereto).

2.22 “Nonqualified Stock Option” means an Option to purchase Common Stock in the
Company granted under the Plan, the taxation of which is pursuant to Section 83
of the Code.

2.23 “Option Period” means the period during which an Option shall be
exercisable in accordance with the related Agreement and Article VI.

2.24 “Option Price” means the price at which the Common Stock may be purchased
under an Option as provided in Section 6.3(b).

2.25 “Other Stock-Based Awards” means Awards granted to a Participant under
Section 9.2 hereof.

2.26 “Participant” means a person who satisfies the eligibility conditions of
Article V and to whom an Award has been granted by the Committee under the Plan,
and in the event a Representative is appointed for a Participant or another
person becomes a Representative, then the term “Participant” shall mean such
Representative. The term shall also include a trust for the benefit of the
Participant, a partnership the interest of which was held by or for the benefit
of the Participant, the Participant’s parents, spouse or descendants, or a
custodian under a uniform gifts to minors act or similar statute for the benefit
of the Participant’s descendants, to which an Award has been assigned or
transferred and to the extent permitted by the Committee and the Plan.
Notwithstanding the foregoing, the term “Termination of Service” shall mean the
Termination of Service of the person to whom the Award was originally granted.

 

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2.27 “Performance Award” means a right, granted to a Participant under
Section 9.3 hereof, to receive Awards based upon performance criteria specified
by the Committee.

2.28 “Plan” means the Eighth Amended and Restated Kensey Nash Corporation
Employee Incentive Compensation Plan, as herein set forth and as may be amended
from time to time.

2.29 “Prior Plan” means the Seventh Amended and Restated Kensey Nash Corporation
Employee Incentive Compensation Plan.

2.30 “Representative” means (a) the person or entity acting as the executor or
administrator of a Participant’s estate pursuant to the last will and testament
of a Participant or pursuant to the laws of the jurisdiction in which the
Participant had the Participant’s primary residence at the date of the
Participant’s death; (b) the person or entity acting as the guardian or
temporary guardian of a Participant; (c) the person or entity which is the
Beneficiary of the Participant upon or following the Participant’s death; or
(d) any person to whom an Option has been permissibly transferred; provided that
only one of the foregoing shall be the Representative at any point in time as
determined under applicable law and recognized by the Committee.

2.31 “Restricted Stock” means Common Stock granted to a Participant under
Section 8.1 hereof that is subject to certain restrictions and to a risk of
forfeiture.

2.32 “Retirement” means the Participant’s Termination of Service after attaining
either the normal retirement age or the early retirement age as defined in the
principal (as determined by the Committee) tax-qualified plan of the Company or
an Affiliate, if the Participant is covered by such a plan, or if the
Participant is not covered by such a plan or such a plan does not have an
applicable definition of retirement age, then age 65, or age 55 with the accrual
of 10 years of service, as determined by the Committee.

2.33 “Rule 16b-3” and “Rule 16a-1(c)(3)” mean Rule 16b-3 and Rule 16a-1(c)(3),
as from time to time in effect and applicable to the Plan and Participants,
promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act.

2.34 “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

2.35 “Stock Appreciation Right” or “SAR” means a right granted under Article
VII.

2.36 “Stock Option” or “Option” means a right granted to a Participant under
Section 6.1 hereof to purchase Common Stock or other Awards at a specified price
during specified time periods.

2.37 “Strike Price” shall have the meaning set forth in Section 7.3(b).

2.38 “Termination of Service” means the occurrence of any act or event, whether
pursuant to an employment agreement or otherwise, that actually or effectively
causes or results in the person’s ceasing, for whatever reason, to be an
officer, independent contractor, director or employee of the Company or of any
Affiliate, or to be an officer, independent contractor, director or employee of
any entity that provides services to the Company or an Affiliate, including,
without limitation, death, Disability, dismissal, severance at the election of
the Participant, Retirement, or severance as a result of the discontinuance,
liquidation, sale or transfer by the Company or its Affiliates of all businesses
owned or operated by the Company or its Affiliates. With respect to any person
who is not an employee with respect to the Company or an Affiliate of the
Company, the Agreement shall establish what act or event shall constitute a
Termination of Service for purposes of the Plan. A transfer of employment from
the Company to an Affiliate, or from an Affiliate to the Company, shall not be a
Termination of Service, unless expressly determined by the Committee. A
Termination of Service shall occur for an employee who is employed by an
Affiliate of the company if the Affiliate shall cease to be an Affiliate and the
Participant shall not immediately thereafter become an employee of the Company
or an Affiliate of the

 

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Company. The Committee shall have the discretion to determine when a
Participant, who terminates service as an employee, but continues to provide
services in the capacity of a consultant or non-employee director, has incurred
a Termination of Service.

ARTICLE III

ADMINISTRATION

3.1 Committee Structure and Authority. The Plan shall be administered by the
Committee. A majority of the Committee shall constitute a quorum at any meeting
thereof (including by telephone conference) and the acts of a majority of the
members present, or acts approved in writing by the entire Committee without a
meeting, shall be the acts of the Committee for purposes of this Plan. The
Committee may authorize any one or more of its members or an officer of the
Company to execute and deliver documents on behalf of the Committee. A member of
the Committee shall not exercise any discretion respecting himself or herself
under the Plan. The Board shall have the authority to remove, replace or fill
any vacancy of any member of the Committee upon notice to the Committee and the
affected member. Any member of the Committee may resign upon notice to the
Board. The Committee may allocate among one or more of its members, or may
delegate to one or more of its agents, such duties and responsibilities as it
determines.

Subject to and consistent with the provisions of the Plan, the Committee shall
have full power and authority and sole discretion as follows:

 

  (a) to select those persons to whom Awards may be granted from time to time;

 

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

 

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

 

  (d) to determine the terms and conditions of any Award granted hereunder
(including, but not limited to, the Option Price, the Option Period, any
exercise restriction or limitation and any exercise acceleration, forfeiture or
waiver regarding any Award, any shares of Common Stock relating thereto, any
applicable performance criteria and the satisfaction of any such criteria);

 

  (e) to adjust the terms and conditions, at any time or from time to time, of
any Award, subject to the limitations of Section 12.1;

 

  (f) to determine under what circumstances an Award may be settled in cash or
Common Stock;

 

  (g) to provide for the forms of Agreements to be utilized in connection with
the Plan;

 

  (h) to determine whether a Participant has a Disability or a Retirement;

 

  (i) to determine what securities law requirements are applicable to the Plan,
Awards and the issuance of shares of Common Stock under the Plan and to require
of a Participant that appropriate action be taken with respect to such
requirements;

 

  (j) to cancel, with the consent of the Participant or as otherwise provided in
the Plan or an Agreement, outstanding Awards;

 

  (k) to interpret and make final determinations with respect to the remaining
number of shares of Common Stock available under this Plan;

 

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  (l) to require, as a condition of the exercise of an Award or the issuance or
transfer of a certificate of Common Stock, the withholding from a Participant of
the amount of any Federal, state or local taxes as may be necessary in order for
the Company or an Affiliate to obtain a deduction or as may be otherwise
required by law;

 

  (m) to determine whether and with what effect a Participant has incurred a
Termination of Service (e.g., whether Termination of Service was for Cause);

 

  (n) to determine whether the Company or any other person has a right or
obligation to purchase Common Stock from a Participant and, if so, the terms and
conditions on which such Common Stock is to be purchased;

 

  (o) to determine the restrictions or limitations on the transfer of any Award
and any Common Stock underlying an Award;

 

  (p) to determine whether an Award is to be adjusted, modified or purchased, or
is to become fully exercisable, under the Plan or the terms of an Agreement;

 

  (q) to determine the permissible methods of Award exercise and payment,
including cashless exercise arrangements;

 

  (r) to adopt, amend and rescind such rules and regulations as, in its opinion,
may be advisable in the administration of the Plan; and

 

  (s) to appoint and compensate agents, counsel, auditors or other specialists
to aid it in the discharge of its duties.

The Committee shall have the authority to adopt, alter and repeal such
administrative rules, guidelines and practices governing the Plan (including,
without limitation, rules and procedures applicable to any Awards constituting
deferred compensation under Code Section 409A and any applicable terms and
definitions as the Committee determines appropriate) as it shall, from time to
time, deem advisable, to interpret the terms and provisions of the Plan and any
Award issued under the Plan (and any Agreement) and to otherwise supervise the
administration of the Plan. The Committee’s policies and procedures may differ
with respect to Awards granted at different times or to different Participants.

Any determination made by the Committee pursuant to the provisions of the Plan
shall be made in its sole discretion and, in the case of any determination
relating to an Award, may be made at the time of the grant of the Award or,
unless in contravention of any express term of the Plan or an Agreement, at any
time thereafter. All decisions made by the Committee pursuant to the provisions
of the Plan shall be final and binding on all persons, including the Company and
Participants. No determination shall be subject to de novo review if challenged
in court.

ARTICLE IV

STOCK SUBJECT TO PLAN

4.1 Number of Shares. Subject to the adjustment as provided under Section 4.6,
the aggregate number of shares of Common Stock which may be delivered under the
Plan shall not exceed the sum of (a) three hundred thousand (300,000), plus
(b) the number of remaining shares of Common Stock available for Awards under
the Prior Plan as of the Effective Date (i.e., shares not subject to outstanding
Awards under the Prior Plan and not delivered out of the shares reserved
thereunder). Of the 300,000 shares of Common Stock available under subsection
(a) above, only 40,000 of such shares may be used for share-based Awards other
than Options and Stock Appreciation Rights (“Full Value Awards”) and the other
260,000 such shares must be used exclusively

 

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for share-based Awards consisting of Options and Stock Appreciation Rights. Of
the shares of Common Stock available under subsection (b) above, no such shares
shall be allowed to be used for Full Value Awards under the Plan. Shares of
Common Stock available for distribution pursuant to Awards under the Plan may
consist, in whole or in part, of authorized and unissued shares or treasury
shares.

4.2 Release of Shares. Subject to the terms of this Section 4.2, if any shares
of Common Stock that are subject to any Award (including Awards made under the
Prior Plan or its predecessor amended and restated plans) cease to be subject to
an Award or are forfeited, or if any Award is settled in cash or otherwise
terminates without issuance of shares of Common Stock being made to the
Participant, such shares, in the discretion of the Committee, may again be
available for distribution in connection with Awards under the Plan; provided,
however, that any such shares of Common Stock resulting from the forfeiture of a
Full Value Award (as described in Section 4.1) shall be reallocated for future
grants of Full Value Awards under the Plan. A number of shares equal to the
greater of each share of Common Stock delivered upon exercise of a SAR and the
number of shares of Common Stock underlying such SAR (whether the distribution
is made in cash, shares of Common Stock or a combination of cash and shares of
Common Stock) shall reduce the number of available shares of Common Stock under
the Plan by one (1) share, other than a SAR that, by its terms, from and after
the Grant Date thereof is payable only in cash, in which case the number of such
available shares shall not be reduced. Any shares (whether or not restricted) of
Common Stock that the Company receives in connection with the exercise or
payment of an Award, including the satisfaction of any tax withholding
obligation, shall not again be available for Awards under the Plan.

4.3 Restrictions on Shares. Shares of Common Stock issued as or in conjunction
with an Award shall be subject to the terms and conditions specified herein and
to such other terms, conditions and restrictions as the Committee in its
discretion may determine or provide in an Award Agreement. The Company shall not
be required to issue or deliver any certificates for shares of Common Stock,
cash or other property prior to (i) the listing of such shares on any stock
exchange or NASDAQ (or other public market) on which the Common Stock may then
be listed (or regularly traded), (ii) the completion of any registration or
qualification of such shares under Federal or state law, or any ruling or
regulation of any government body which the Committee determines to be necessary
or advisable, and (iii) the satisfaction of any applicable withholding
obligation . The Company may cause any certificate for any share of Common Stock
to be delivered to be properly marked with a legend or other notation reflecting
the limitations on transfer of such Common Stock as provided in this Plan or as
the Committee may otherwise require. The Committee may require any person
exercising an Award to make such representations and furnish such information as
it may consider appropriate in connection with the issuance or delivery of the
shares of Common Stock in compliance with applicable law or otherwise.
Fractional shares shall not be delivered, but shall be rounded to the next lower
whole number of shares.

4.4 Stockholder Rights. No person shall have any rights of a stockholder as to
shares of Common Stock subject to an Award until, after proper exercise of the
Award or other action required, such shares shall have been recorded on the
Company’s official stockholder records as having been issued or transferred.
Upon exercise or payment of the Award or any portion thereof, subject to other
applicable provisions of the Plan, the Company will have thirty (30) days in
which to issue the shares, and the Participant will not be treated as a
stockholder for any purpose whatsoever prior to such issuance. No adjustment
shall be made for cash dividends or other rights for which the record date is
prior to the date such shares are recorded as issued or transferred in the
Company’s official stockholder records, except as provided herein or in an
Agreement.

4.5 Best Efforts To Register. The Company will use its reasonable best efforts
to register under the Securities Act the Common Stock delivered or deliverable
pursuant to Awards on Commission Form S-8 if available to the Company for this
purpose (or any successor or alternate form that is substantially similar to
that form to the extent available to effect such registration), in accordance
with the rules and regulations governing such forms, as soon after stockholder
approval of the Plan as the Committee, in its sole discretion, shall deem such
registration appropriate. The Company will use its reasonable best efforts to
cause the registration statement to become effective and will file such
supplements and amendments to the registration statement as may be necessary to
keep the registration statement in effect until the earliest of (a) one year
following the

 

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expiration of the Option Period of the last Option outstanding, (b) the date the
Company is no longer a reporting company under the Exchange Act and (c) the date
all Participants have disposed of all shares delivered pursuant to any Award.
The Company may delay the foregoing obligation if the Committee reasonably
determines that any such registration would materially and adversely affect the
Company’s interests or if there is no material benefit to Participants.

4.6 Adjustments. In the event of any Company stock dividend, stock split,
combination or exchange of shares, recapitalization or other change in the
capital structure of the Company, corporate separation or division of the
Company (including, but not limited to, a split-up, spin-off, split-off or
distribution to Company stockholders other than a normal cash dividend), sale by
the Company of all or a substantial portion of its assets (measured on either a
stand-alone or consolidated basis), reorganization, rights offering, a partial
or complete liquidation, or any other corporate transaction, Company stock
offering or event involving the Company and having an effect similar to any of
the foregoing, then the Committee shall adjust or substitute, as the case may
be, the number of shares of Common Stock available for Awards under the Plan,
the number of shares of Common Stock covered by outstanding Awards, the exercise
price per share of outstanding Awards, the limitations set forth in Section 5.2
and performance conditions and any other characteristics or terms of the Awards
as the Committee shall deem necessary or appropriate to reflect equitably the
effects of such changes to the Participants; provided, however, that the
Committee may limit any such adjustment so as to maintain the deductibility of
the Awards under Code Section 162(m) or to continue to maintain an exemption for
an Award under Code Section 409 or to prevent a violation of Code Section 409A
with respect to any Award. Any fractional shares resulting from such adjustment
shall be eliminated by rounding to the next lower whole number of shares with
appropriate payment for such fractional shares as shall reasonably be determined
by the Committee.

ARTICLE V

ELIGIBILITY

5.1 Eligibility. Except as herein provided, the persons who shall be eligible to
participate in the Plan and be granted Awards shall be those persons who are
directors, officers, employees and consultants of the Company or any Affiliate
of the Company, who shall be in a position, in the opinion of the Committee, to
make contributions to the growth, management, protection and success of the
Company and its Affiliates. Of those persons described in the preceding
sentence, the Committee may, from time to time, select persons to be granted
Awards and shall determine the terms and conditions with respect thereto. In
making any such selection and in determining the form of the Award, the
Committee may give consideration to the person’s functions and responsibilities,
the person’s contributions to the Company and its Affiliates, the value of the
individual’s service to the Company and its Affiliates and such other factors
deemed relevant by the Committee.

5.2 Per-Person Award Limitations. Subject to adjustment under Section 4.6, the
maximum number of shares of Common Stock that may be covered by Stock Options,
Stock Appreciation Rights, Restricted Stock, Other Stock Based Awards and other
Awards that are payable in Shares, in the aggregate, granted to any one
Participant during any three consecutive fiscal years of the Company shall be
1,000,000 shares of Common Stock. In addition, the maximum aggregate amount that
may be paid out as Cash Incentive Awards to a Participant or other cash Awards
in any fiscal year of the Company shall be $1,000,000.

ARTICLE VI

STOCK OPTIONS

6.1 General. The Committee shall have authority to grant Stock Options under the
Plan at any time or from time to time. Stock Options may be granted alone or in
addition to other Awards and may be either Incentive Stock Options or
Nonqualified Stock Options. A Stock Option shall entitle the Participant to
receive shares of Common Stock upon exercise of such Option, subject to the
Participant’s satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement (the terms and
provisions of which may differ from other Agreements), including, without
limitation, payment of the Option Price.

 

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6.2 Grant and Exercise. The grant of a Stock Option shall occur as of the date
the Committee determines. Each Option granted under this Plan shall be evidenced
by an Agreement, in a form approved by the Committee, which shall embody the
terms and conditions of such Option and which shall be subject to the express
terms and conditions set forth in the Plan. Such Agreement shall become
effective upon execution by the Participant to the extent that such execution is
required, or otherwise on the Grant Date of the Stock Option; provided, however,
any such execution shall not in any way impact the Grant Date or Option Price of
the Stock Option. Only a person who is a common-law employee of the Company, any
“parent corporation” of the Company or a “subsidiary” of the Company (as such
terms are defined in Section 424 of the Code) on the Grant Date shall be
eligible to be granted an Option which is intended to be and is an Incentive
Stock Option. To the extent that any Stock Option is not designated as an
Incentive Stock Option or even if so designated does not qualify as an Incentive
Stock Option, it shall constitute a Nonqualified Stock Option. Anything in the
Plan to the contrary notwithstanding, no term of the Plan relating to Incentive
Stock Options shall be interpreted, amended or altered, nor shall any discretion
or authority granted under the Plan be exercised, so as to disqualify the Plan
under Section 422 of the Code or, without the consent of the Participant
affected, to disqualify any Incentive Stock Option under such Section 422.

6.3 Terms and Conditions. Stock Options shall be subject to such terms and
conditions as shall be determined by the Committee, including the following:

 

  (a) Option Period. The Option Period of each Stock Option shall be fixed by
the Committee; provided that no Stock Option shall be exercisable more than ten
(10) years after the Grant Date of the Stock Option. In the case of an Incentive
Stock Option granted to an individual who owns more than ten percent (10%) of
the combined voting power of all classes of stock of the Company, a corporation
which is a “parent corporation” of the Company or any “subsidiary” of the
Company (each as defined in Section 424 of the Code), the Option Period shall
not exceed five (5) years from the Grant Date. No Option which is intended to be
an Incentive Stock Option shall be granted more than ten (10) years from the
date the Plan is adopted by the Company or the date the Plan is approved by the
stockholders of the Company, whichever is earlier.

 

  (b) Option Price. The Option Price per share of the Common Stock purchasable
under a Stock Option shall be determined by the Committee; provided, however,
that the Option Price per share shall be not less than the Fair Market Value per
share on the Grant Date of the Option. If such Option is intended to qualify as
an Incentive Stock Option and is granted to an individual who owns or who is
deemed to own stock possessing more than ten percent (10%) of the combined
voting power of all classes of stock of the Company, a corporation which is a
“parent corporation” of the Company or any “subsidiary” of the Company (each as
defined in Section 424 of the Code), the Option Price per share shall not be
less than one hundred ten percent (110%) of such Fair Market Value per share on
the Grant Date of the Option.

 

  (c) Exercisability. Subject to Section 11.1, Stock Options shall be
exercisable at such time or times and subject to such terms and conditions as
shall be determined by the Committee. If the Committee provides that any Stock
Option is exercisable only in installments, the Committee may at any time waive
such installment exercise provisions, in whole or in part. In addition, the
Committee may at any time accelerate the exercisability of any Stock Option. If
the Committee intends that an Option be an Incentive Stock Option, the Committee
may, in its discretion, provide that the aggregate Fair Market Value (determined
at the Grant Date) of the Common Stock as to which such Incentive Stock Option
which is exercisable for the first time during any calendar year shall not
exceed $100,000.

 

  (d)

Method of Exercise. Subject to the provisions of this Article VI, a Participant
may exercise Stock Options, in whole or in part, at any time during the Option
Period by the Participant’s giving written notice of exercise on a form provided
by the Committee (if available) to the Company specifying the number of shares
of Common Stock subject to the Stock Option to be purchased. Such notice shall
be

 

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accompanied by payment in full of the purchase price by cash or check or such
other form of payment as the Committee may accept. If approved by the Committee,
payment in full or in part may also be made (i) by delivering Common Stock
already owned by the Participant having a total Fair Market Value on the date of
such delivery equal to the Option Price; (ii) by authorizing the Company to
retain shares of Common Stock which would otherwise be issuable upon exercise of
the Option having a total Fair Market Value on the date of delivery equal to the
Option Price; (iii) by the delivery of cash or the extension of credit by a
broker-dealer to whom the Participant has submitted a notice of exercise or
otherwise indicated an intent to exercise an Option (in accordance with Part
220, Chapter II, Title 12 of the Code of Federal Regulations, so-called
“cashless” exercise); or (iv) by any combination of the foregoing. If payment of
the Option Price of a Nonqualified Stock Option is made in whole or in part in
the form of Restricted Stock, the number of shares of Common Stock to be
received upon such exercise that is equal to the number of shares of Restricted
Stock used for payment of the Option Price shall be subject to the same
forfeiture provisions to which such Restricted Stock was subject, unless
otherwise determined by the Committee. In the case of an Incentive Stock Option,
the right to make a payment in the form of already owned shares of Common Stock
of the same class as the Common Stock subject to the Stock Option may be
authorized only at the time the Stock Option is granted. No shares of Common
Stock shall be issued until full payment therefor, as determined by the
Committee, has been made. Subject to any forfeiture provisions that may apply if
a Stock Option is exercised using Restricted Stock, a Participant shall have all
of the rights of a stockholder of the Company holding the class of Common Stock
that is subject to such Stock Option (including, if applicable, the right to
vote the shares and the right to receive dividends) when the Participant has
given written notice of exercise, has paid in full the Option Price for such
shares and such shares have been recorded on the Company’s official stockholder
records as having been issued or transferred.

 

  (e) Non-transferability of Options. Except as provided herein or in an
Agreement, no Stock Option or interest therein shall be transferable by the
Participant other than by will or by the laws of descent and distribution, and
all Stock Options shall be exercisable during the Participant’s lifetime only by
the Participant. Notwithstanding the foregoing, unless otherwise not permitted
by the Plan or an Agreement, Nonqualified Stock Options may be transferred,
without consideration, to a Permitted Transferee. For this purpose, a “Permitted
Transferee” in respect of any Participant means any member of the Immediate
Family of such Participant, any trust of which all of the primary beneficiaries
are such Participant or members of his or her Immediate Family, or any
partnership, limited liability company, corporation or and similar entity of
which all of the partners, members or stockholders are such Participant or
members of his or her Immediate Family; and the “Immediate Family” of a
Participant means the Participant’s spouse, former spouse, children,
stepchildren, grandchildren, parents, stepparents, siblings, grandparents,
nieces and nephews, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships. Such
transferred Award may be exercised by such Permitted Transferee in accordance
with the terms of such Award.

6.4 Termination by Reason of Death. Unless otherwise provided in an Agreement or
determined by the Committee, if a Participant incurs a Termination of Service
due to death, any unexpired and unexercised Stock Option held by such
Participant shall thereafter be fully exercisable for a period of one (1) year
(or such other period or no period as the Committee may specify) or until the
expiration of the Option Period, whichever period is the shorter. To the extent
that such Stock Options are not exercised at the end of such one (1) year
period, the Options shall be immediately cancelled and forfeited to the Company.

6.5 Termination by Reason of Disability. Unless otherwise provided in an
Agreement or determined by the Committee, if a Participant incurs a Termination
of Service due to a Disability, any unexpired and unexercised Stock Option held
by such Participant shall thereafter be fully exercisable by the Participant for
the one (1) year period (or such other period or no period as the Committee may
specify) immediately following the date of such Termination of Service or until
the expiration of the Option Period, whichever period is shorter, and the
Participant’s death at any time following such Termination of Service due to
Disability shall not affect the foregoing. In the event of Termination of
Service by reason of Disability, if an Incentive Stock Option is

 

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exercised after the expiration of the exercise periods that apply for purposes
of Section 422 of the Code, such Stock Option will thereafter be treated as a
Nonqualified Stock Option.

6.6 Other Termination. Unless otherwise provided in an Agreement or determined
by the Committee, if a Participant incurs a Termination of Service which is a
Retirement, or the Termination of Service is involuntary on the part of the
Participant (but is not due to death or Disability or with Cause), (a) any
unvested Stock Option (or portion thereof) held by such Participant shall
thereupon terminate, and (b) any Stock Option (or portion thereof) that is
vested as of the date of such Termination of Service shall be exercisable for
the lesser of the ninety (90) day period commencing with the date of such
Termination of Service or until the expiration of the applicable Option Period.
Unless otherwise provided in an Agreement or determined by the Committee, if a
Participant incurs a Termination of Service which is either (a) voluntary on the
part of the Participant (and is not a Retirement) or (b) with Cause, the Option
shall terminate immediately. The death or Disability of a Participant after a
Termination of Service otherwise provided herein shall not extend the time
permitted to exercise an Option.

ARTICLE VII

STOCK APPRECIATION RIGHTS

7.1 General. The Committee shall have authority to grant Stock Appreciation
Rights under the Plan at any time or from time to time. Subject to the
Participant’s satisfaction in full of any conditions, restrictions or
limitations imposed in accordance with the Plan or an Agreement, a Stock
Appreciation Right shall entitle the Participant to surrender to the Company the
Stock Appreciation Right and to be paid therefor in shares of the Common Stock,
cash or a combination thereof as herein provided, the amount described in
Section 7.3(b).

7.2 Grant. Stock Appreciation Rights may be granted in conjunction with all or
part of any Stock Option granted under the Plan, in which case the exercise of
the Stock Appreciation Right shall require the cancellation of a corresponding
portion of the Stock Option, and the exercise of a Stock Option shall result in
the cancellation of a corresponding portion of the Stock Appreciation Right.
Such rights may be granted only at the time of grant of such Stock Option. A
Stock Appreciation Right may also be granted on a stand-alone basis. The grant
of a Stock Appreciation Right shall occur as of the date the Committee
determines. Each Stock Appreciation Right granted under this Plan shall be
evidenced by an Agreement, which shall embody the terms and conditions of such
Stock Appreciation Right and which shall be subject to the terms and conditions
set forth in this Plan.

7.3 Terms and Conditions. Stock Appreciation Rights shall be subject to such
terms and conditions as shall be determined by the Committee, including the
following:

 

  (a) Period and Exercise. The term of a Stock Appreciation Right shall be
established by the Committee in accordance with this Section 7.3(a). If granted
in conjunction with a Stock Option, the Stock Appreciation Right shall have a
term which is the same as the Option Period and shall be exercisable only at
such time or times and to the extent the related Stock Option would be
exercisable in accordance with the provisions of Article VI; provided, however,
that the term of the Stock Appreciation Right shall not exceed five years from
the Grant Date of such Stock Appreciation Right. A Stock Appreciation Right
which is granted on a stand-alone basis shall be for such period and shall be
exercisable at such times and to the extent provided in an Agreement; provided,
however, that the term of the Stock Appreciation Right shall not exceed five
years from the Grant Date of such Stock Appreciation Right. Stock Appreciation
Rights shall be exercised by the Participant’s giving written notice of exercise
on a form provided by the Committee (if available) to the Company specifying the
portion of the Stock Appreciation Right to be exercised.

 

  (b)

Amount. Upon the exercise of a Stock Appreciation Right granted in conjunction
with a Stock Option, a Participant shall be entitled to receive an amount in
cash, shares of Common Stock or both as determined by the Committee or as
otherwise permitted in an Agreement equal to the product of the

 

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excess of the Fair Market Value per share of Common Stock on the date of
exercise over the Option Price per share of Common Stock specified in the
related Agreement multiplied by the number of shares in respect of which the
Stock Appreciation Right is exercised; provided, however, that the Option Price
may not be less than the Fair Market Value per share of Common Stock on the
Grant Date of the Stock Appreciation Right. In the case of a Stock Appreciation
Right granted on a stand-alone basis, the Agreement shall specify the per share
price of Common Stock to be used as the baseline measure for the value of a
Stock Appreciation Right (the “Strike Price”); provided, however, that the
Strike Price may not be less than the Fair Market Value per share of Common
Stock on the Grant Date of the Stock Appreciation Right. The amount payable, if
any, upon exercise of a Stock Appreciation Right shall be equal to the product
of the excess of the per share Fair Market Value of the Common Stock on the date
of exercise over the per share Strike Price multiplied by the number of shares
subject to the Stock Appreciation Right being exercised.

 

  (c) Non-transferability of Stock Appreciation Rights. Except as provided
herein or in an Agreement, no Stock Appreciation Rights or interest therein
shall be transferable by the Participant other than by will or by the laws of
descent and distribution, and all Stock Appreciation Rights shall be exercisable
during the Participant’s lifetime only by the Participant.

 

  (d) Termination. A Stock Appreciation Right shall terminate at such time as a
Stock Option would terminate under the Plan, unless otherwise provided in an
Agreement or determined by the Committee.

 

  (e) Incentive Stock Option. A Stock Appreciation Right granted in tandem with
an Incentive Stock Option shall not be exercisable unless the Fair Market Value
of the Common Stock on the date of exercise exceeds the Option Price. In no
event shall any amount paid with respect to shares of Common Stock pursuant to
the Stock Appreciation Right exceed the difference between the aggregate Fair
Market Value of such shares on the date of exercise and the Option Price with
respect thereto.

ARTICLE VIII

RESTRICTED STOCK

8.1 General. The Committee shall have authority to grant Restricted Stock under
the Plan at any time or from time to time. Shares of Restricted Stock may be
awarded either alone or in addition to other Awards granted under the Plan. The
Committee shall determine the persons to whom and the time or times at which
grants of Restricted Stock will be awarded, the number of shares of Restricted
Stock to be awarded to any Participant, the time or times within which such
Awards may be subject to forfeiture and any other terms and conditions of the
Awards. Each Award shall be confirmed by, and be subject to the terms of, an
Agreement. The Committee may condition the grant of Restricted Stock upon the
attainment of specified performance goals by the Participant or by the Company
or an Affiliate (including a division or department of the Company or an
Affiliate) for or within which the Participant is primarily employed or upon
such other factors or criteria (such as length of tenure) as the Committee shall
determine. The provisions of Restricted Stock Awards need not be the same with
respect to any Participant.

8.2 Awards and Certificates. Notwithstanding the limitations on issuance of
shares of Common Stock otherwise provided in the Plan, each Participant
receiving an Award of Restricted Stock shall be issued a certificate in respect
of such shares of Restricted Stock. Such certificate shall be registered in the
name of such Participant and shall bear an appropriate legend referring to the
terms, conditions, and restrictions applicable to such Award as determined by
the Committee. The Committee may require that the certificates evidencing such
shares be held in custody by the Company until the restrictions thereon shall
have lapsed and that, as a condition of any Award of Restricted Stock, the
Participant shall have delivered a stock power, endorsed in blank, relating to
the Common Stock covered by such Award.

8.3 Terms and Conditions. Shares of Restricted Stock shall be subject to the
following terms and conditions:

 

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  (a) Limitations on Transferability. Subject to the provisions of the Plan and
the Agreement, during a period set by the Committee commencing with the date of
such Award (the “Restriction Period”), the Participant shall not be permitted to
sell, assign, transfer, pledge or otherwise encumber any interest in shares of
Restricted Stock.

 

  (b) Rights. Except as otherwise provided in an Award Agreement, the
Participant shall not have any voting rights or rights to receive any dividends
with respect to shares subject to a Restricted Stock Award during the
Restriction Period.

 

  (c) Acceleration. Based on service, performance by the Participant or by the
Company or an Affiliate, including any division or department for which the
Participant is employed, or such other factors or criteria as the Committee may
determine, the Committee may provide for the lapse of restrictions in
installments and may accelerate the vesting of all or any part of any Award and
waive the restrictions for all or any part of such Award.

 

  (d) Forfeiture. Unless otherwise provided in an Agreement or determined by the
Committee, if the Participant incurs a Termination of Service during the
Restriction Period due to death or Disability, the restrictions shall lapse and
the Participant shall be fully vested in shares subject to the Restricted Stock
Award. Unless otherwise provided in an Agreement or as determined by the
Committee, upon a Participant’s Termination of Service for any reason during the
Restriction Period other than death or Disability, all shares of Restricted
Stock still subject to restriction shall be forfeited by the Participant, except
the Committee shall have the discretion to waive in whole or in part any or all
remaining restrictions with respect to any or all of such Participant’s shares
of Restricted Stock.

 

  (e) Delivery. If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock subject to such Restriction Period,
unlegended certificates for such shares shall be delivered to the Participant.

ARTICLE IX

OTHER AWARDS

9.1 Bonus Stock and Awards In Lieu of Obligations. The Committee is authorized
to grant Common Stock as a bonus, or to grant Common Stock or other Awards in
lieu of Company obligations to pay cash or deliver other property under other
plans or compensatory arrangements, provided that, (a) in the case of
Participants subject to Section 16 of the Exchange Act, the amount of such
grants remains within the discretion of the Committee to the extent necessary to
ensure that acquisition of Common Stock or other Awards are exempt from
liability under Section 16(b) of the Exchange Act and (b) if and to the extent
any such Awards constitute deferred compensation within the meaning of Code
Section 409A, the Committee shall apply such terms to the Award so as to either
permit the Award to comply with, or be exempt from, Code Section 409A. Common
Stock or Awards granted hereunder shall be subject to such other terms as shall
be determined by the Committee.

9.2 Other Stock-Based Awards. The Committee is authorized, subject to
limitations under applicable law to grant to Participants such other Awards that
may be denominated or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, Common Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including, without limitation,
convertible or exchangeable debt securities, other rights convertible or
exchangeable into Common Stock, purchase rights for Common Stock, Awards with
value and payment contingent upon performance of the Company or any other
factors designated by the Committee, and Awards valued by reference to the book
value of Common Stock or the value of securities of, or the performance of,
specified subsidiaries. Notwithstanding anything in this Section 9.2 to the
contrary, if and to the extent any such Awards constitute deferred compensation
within the meaning of Code Section 409A, the

 

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Committee shall apply such terms to the Award so as to either permit the Award
to comply with, or be exempt from, Code Section 409A The Committee shall also
have the authority to determine any other terms and conditions of such Awards as
it deems appropriate. Common Stock delivered pursuant to an Award in the nature
of a purchase right granted under this Section 9.2 shall be purchased for such
consideration, and paid for at such times, by such methods, and in such forms,
including, without limitation, cash, Common Stock, other Awards, or other
property, as the Committee shall determine. Cash awards, as an element of or
supplement to any other Award under the Plan, may also be granted pursuant to
this Section 9.2.

9.3 Performance Awards.

 

  (a) Performance Conditions. The right of a Participant to exercise or receive
a grant or settlement of any Award, and its timing, may be subject to
performance conditions specified by the Committee. The Committee may use
business criteria and other measures of performance it deems appropriate in
establishing any performance conditions, and may exercise its discretion to
reduce or increase the amounts payable under any Award subject to performance
conditions, except as limited under Sections 9.4(b) and 9.4(c) hereof in the
case of a Performance Award intended to qualify under Code Section 162(m).

 

  (b) Performance Awards Granted to Designated Covered Employees. If the
Committee determines that a Performance Award to be granted to a person the
Committee regards as likely to be a Covered Employee should qualify as
“performance-based compensation” for purposes of Code Section 162(m), the grant
and/or settlement of such Performance Award shall be contingent upon achievement
of preestablished performance goals and other terms set forth in this
Section 9.3(b).

 

  (i) Performance Goals Generally. The performance goals for such Performance
Awards shall consist of one or more business criteria and a targeted level or
levels of performance with respect to such criteria, as specified by the
Committee consistent with this Section 9.3(b). Performance goals shall be
objective and shall otherwise meet the requirements of Code Section 162(m),
including the requirement that the level or levels of performance targeted by
the Committee result in the performance goals being “substantially uncertain.”
The Committee may determine that more than one performance goal must be achieved
as a condition to settlement of such Performance Awards. Performance goals may
differ for Performance Awards granted to any one Participant or to different
Participants.

 

  (ii)

Business Criteria. One or more of the following business criteria for the
Company, on a consolidated basis, and/or for specified subsidiaries or business
units of the Company (except with respect to the total stockholder return and
earnings per share criteria), shall be used exclusively by the Committee in
establishing performance goals for such Performance Awards to the extent that
such Awards are intended to satisfy the exception for “qualified
performance-based compensation” under Code Section 162(m): (1) total stockholder
return; (2) such total stockholder return as compared to total return (on a
comparable basis) of a publicly available index such as, but not limited to, the
Standard & Poor’s 500 or the Nasdaq-U.S. Index; (3) net income or loss (either
in the aggregate or on a per-share basis); (4) pre-tax earnings (either in the
aggregate or on a per-share basis); (5) EBITDA or earnings before interest
expense, taxes, depreciation and amortization (actual and adjusted and either in
the aggregate or on a per-share basis); or (6) pre-tax operating earnings after
interest expense and before bonuses, service fees, and extraordinary or special
items (either in the aggregate or on a per-share basis); (7) operating margin;
(8) operating profit; (9) earnings per share; (10) return on equity; (11) return
on capital; (12) return on investment; (13) operating income before payment of
executive bonuses; (14) working capital; (15) pro forma net income, excluding
equity compensation expense; (16) pro forma earnings per share, excluding equity
compensation expense; (17) cash flow (either in the aggregate or on a per-share
basis); (18) free cash flow (either in the aggregate or on a per-share basis);
(19) gross revenues; (20) reductions in expense levels; (21)

 

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operating and maintenance cost management and employee productivity; (22) net
economic value; (23) economic value added; (24) aggregate product unit and
pricing targets; (25) strategic business criteria, consisting of one or more
objectives based on meeting specified revenue, market share, market penetration,
geographic business expansion goals, objectively identified project milestones,
production volume levels, cost targets and goals related to acquisitions or
divestitures; (26) achievement of objectives relating to diversity and/or
employee turnover; (27) results of customer satisfaction surveys; and/or
(28) debt ratings, debt leverage and debt service . The foregoing business
criteria shall also be exclusively used in establishing performance goals for
Cash Incentive Awards granted under Section 9.3(c) hereof to the extent that
such Awards are intended to satisfy the exception for “qualified
performance-based compensation” under Code Section 162(m).

 

  (iii) Performance Period: Timing For Establishing Performance Goals.
Achievement of performance goals in respect of Performance Awards shall be
measured over such periods as may be specified by the Committee. Performance
goals shall be established on or before the dates that are required or permitted
for “performance-based compensation” under Code Section 162(m).

 

  (iv) Settlement of Performance Awards; Other Terms. Settlement of Performance
Awards may be in cash or Common Stock, or other Awards, or other property, in
the discretion of the Committee. The Committee may, in its discretion, reduce
the amount of a settlement otherwise to be made in connection with such
Performance Awards, but may not exercise discretion to increase any such amount
payable in respect of a Performance Award subject to this Section 9.3(b) that is
intended to satisfy the exception under Code Section 162(m) for
performance-based compensation. The Committee shall specify the circumstances in
the Award Agreement under which such Performance Awards shall be forfeited or
paid in the event of a Termination of Service or a Change in Control prior to
the end of a performance period or settlement of Performance Awards, and other
terms relating to such Performance Awards.

 

  (c) Cash Incentive Awards Granted to Designated Covered Employees. The
Committee may grant Cash Incentive Awards to Participants, including those
designated by the Committee as likely to be Covered Employees, which Awards
shall represent a conditional right to receive a payment in cash, unless
otherwise determined by the Committee, after the end of a specified calendar
year or calendar quarter or other period specified by the Committee, in
accordance with this Section 9.3(c).

 

  (i) Cash Incentive Award. The Cash Incentive Award for Participants that the
Committee regards as likely to be regarded as Covered Employees shall be based
on achievement of a performance goal or goals based on one or more of the
business criteria set forth in Section 9.3(b) and, for any other Participant,
may be based on such criteria or any other criteria as specified by the
Committee. The Committee may specify the amount of the individual Cash Incentive
Award as a percentage of any such business criteria, a percentage thereof in
excess of a threshold amount, or another amount which need not bear a strictly
mathematical relationship to such relationship criteria. The Committee may
establish a Cash Incentive Award pool that includes Participants the Committee
regards likely to be regarded as Covered Employees, which shall be an unfunded
pool, for purposes of measuring Company performance in connection with Cash
Incentive Awards. The amount of the Cash Incentive Award pool shall be based
upon the achievement of a performance goal or goals based on one or more of the
business criteria set forth in Section 9.3(b) hereof in the given performance
period, as specified by the Committee. The Committee may specify the amount of
the Cash Incentive Award pool as a percentage of any of such business criteria,
a percentage thereof in excess of a threshold amount, or as another amount which
need not bear a strictly mathematical relationship to such business criteria.

 

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  (ii) Potential Cash Incentive Awards. Not later than the date required or
permitted for “qualified performance-based compensation” under Code
Section 162(m), the Committee shall determine the Participants who will
potentially receive Cash Incentive Awards for the specified year, quarter or
other period, either as individual Cash Incentive Awards or out of an Cash
Incentive Award pool established by such date, the applicable performance goal
or goals, and the amount or method for determining the amount of the individual
Cash Incentive Award or the amount of such Participant’s portion of the Cash
Incentive Award pool or the individual Cash Incentive Award.

 

  (iii) Payout of Cash Incentive Awards. After the end of the specified year,
quarter or other period, as the case may be, the Committee shall determine the
amount, if any, of potential individual Cash Incentive Award otherwise payable
to a Participant, the Cash Incentive Award pool and the maximum amount of
potential Cash Incentive Award payable to each Participant in the Cash Incentive
Award pool. The Committee may, in its discretion, determine that the amount
payable to any Participant as a final Cash Incentive Award shall be increased or
reduced from the amount of his or her potential Cash Incentive Award, including
a determination to make no final Award whatsoever, but may not exercise
discretion to increase any such amount in the case of a Cash Incentive Award
intended to qualify for the exception for “performance-based compensation” under
Code Section 162(m). The Committee shall specify the circumstances in which a
Cash Incentive Award shall be paid or forfeited in the event of Termination of
Service by the Participant or a Change in Control prior to the end of the period
for measuring performance or the payout of such Cash Incentive Award, and other
terms relating to such Cash Incentive Award in accordance with the Plan. Upon
the completion of the measuring period and the determination of the right to
payment and the amount, the Committee shall direct the Committee to make
payment, which shall occur no later than the later of (A) the fifteenth day of
the third month following the end of the Participant’s taxable year in which the
Participant earned the Cash Incentive Award or (B) the fifteenth day of the
third month following the end of the Company’s taxable year in which the
Participant earned the Cash Incentive Award.

 

  (d) Written Determinations. All determinations by the Committee as to the
establishment of performance goals and the potential Performance Awards or Cash
Incentive Awards related to such performance goals and as to the achievement of
performance goals relating to such Awards, the amount of any Cash Incentive
Award pool and the amount of final Cash Incentive Awards, shall be made in
writing in the case of any Award intended to qualify under Code Section 162(m).
The Committee may not delegate any responsibility relating to such Performance
Awards or Cash Incentive Awards.

ARTICLE X

PROVISIONS APPLICABLE TO STOCK ACQUIRED UNDER THE PLAN

10.1 Transfer of Shares. Except as otherwise provided in the Plan or an
Agreement, Participant may at any time make a transfer of shares of Common Stock
received pursuant to the exercise of an Award to his parents, spouse or
descendants, to any trust for the benefit of the foregoing or to a partnership
the interests of which are principally for the foregoing or to a custodian under
a uniform gifts to minors act or similar statute for the benefit of any of the
Participant’s descendants. Any transfer of shares received pursuant to the
exercise of an Award shall not be permitted or valid unless and until the
transferee agrees to be bound by the provisions of this Plan, and any provision
respecting Common Stock under the applicable Agreement, provided that
“Termination of Service” shall continue to refer to the Termination of Service
of the Participant.

10.2 Limited Transfer During Offering. In the event there is an effective
registration statement under the Securities Act pursuant to which shares of
Common Stock shall be offered for sale in an underwritten offering, a
Participant identified for “lock-up” by the underwriters managing the registered
public offering shall not, during

 

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the period requested by the underwriters managing the registered public
offering, effect any public sale or distribution of shares received directly or
indirectly pursuant to an exercise of an Award.

10.3 Committee Discretion. The Committee may in its sole discretion include in
any Agreement an obligation that the Company purchase a Participant’s shares of
Common Stock received upon the exercise of an Award (including the purchase of
any unexercised Awards which have not expired), or may obligate a Participant to
sell shares of Common Stock to the Company, upon such terms and conditions as
the Committee may determine and set forth in an Agreement. The provisions of
this Article X shall be construed by the Committee in its sole discretion, and
shall be subject to such other terms and conditions as the Committee may from
time to time determine. Notwithstanding any provision herein to the contrary,
the Company may upon determination by the Committee assign its right to purchase
shares of Common Stock under this Article X, whereupon the assignee of such
right shall have all the rights, duties and obligations of the Company with
respect to purchase of the shares of Common Stock.

10.4 No Company Obligation. None of the Company, an Affiliate or the Committee
shall have any duty or obligation to disclose affirmatively to a record or
beneficial holder of Common Stock or an Award, and such holder shall have no
right to be advised of, any material information regarding the Company or any
Affiliate at any time prior to, upon or in connection with receipt or the
exercise of an Award or the Company’s purchase of Common Stock or an Award from
such holder in accordance with the terms hereof.

ARTICLE XI

CHANGE IN CONTROL PROVISIONS

11.1 Impact of Event. Notwithstanding any other provision of the Plan to the
contrary, unless otherwise provided in an Agreement, in the event of a Change in
Control (as defined in Section 11.2):

 

  (a) Any Stock Appreciation Rights and Stock Options outstanding as of the date
of such Change in Control and not then exercisable shall become fully
exercisable to the full extent of the original grant;

 

  (b) The restrictions applicable to any Restricted Stock or other Award shall
lapse, and such Restricted Stock or other Award shall become free of all
restrictions and become fully vested and transferable to the full extent of the
original grant.

 

  (c) The performance goals and other conditions with respect to any outstanding
Performance Award or Cash Incentive Award shall be deemed to have been satisfied
in full, and such Award shall be fully distributable, if and to the extent
provided by the Committee in the Agreement relating to such Award or otherwise,
notwithstanding that the Award may not be fully deductible to the Company under
Section 162(m) of the Code.

11.2 Definition of Change in Control. For purposes of the Plan, a “Change in
Control” shall mean the happening of any of the following events:

 

  (a) An acquisition of at least fifty percent (50%) 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 the beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of the then outstanding shares of common
stock of the Company (the “Outstanding Company Common Stock”) or the combined
voting power of the then outstanding voting securities of the Company entitled
to vote generally in the election of directors (the “Outstanding Company Voting
Securities”); or

 

  (b)

The approval by the stockholders of the Company of a reorganization, merger,
consolidation, complete liquidation or dissolution of the Company, the sale or
disposition of all or substantially all

 

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of the assets of the Company or similar corporate transaction (in each case
referred to in this Section 11.2 as a “Corporate Transaction”) or, if
consummation of such Corporate Transaction is subject, at the time of such
approval by stockholders, to the consent of any government or governmental
agency, the obtaining of such consent (either explicitly or implicitly);
provided, however, that, with respect to (i) any Awards granted on or after the
Effective Date and (ii) Awards covering any of the additional 300,000 shares of
Common Stock issuable under the Plan on and after the Effective Date, a Change
in Control shall not be deemed to occur pursuant to this Section 11.2(b) unless
and until such Corporate Transaction is consummated; or

 

  (c) A change in the composition of the Board such that the individuals who, as
of the Effective Date, constitute the Board (such Board shall be hereinafter
referred to as the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, for purposes of this
Section 11.2(c), that any individual who becomes a member of the Board whose
election, or nomination for election by the Company’s stockholders, was approved
by a vote of at least a majority of those individuals who are members of the
Board and who were also members of the Incumbent Board (or deemed to be such
pursuant to this proviso) shall be considered as though such individual were a
member of the Incumbent Board; but, provided, further, that any such individual
whose initial assumption of office occurs as a result of either an actual or
threatened election contest (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board shall not be so considered as a member of the Incumbent Board.

Notwithstanding the foregoing provisions of this Section, the following shall be
excluded from the events described in (a) and (b) above: (i) any acquisition by
or consummation of a Corporate Transaction with the Company, an Affiliate or an
employee benefit plan (or related trust) sponsored or maintained by the Company
or an Affiliate, (ii) the acquisition by or consummation of a Corporate
Transaction with any Person who beneficially owned, immediately prior to such
acquisition or Corporate Transaction, directly or indirectly, fifty percent
(50%) or more of the Outstanding Company Common Stock or Outstanding Company
Voting Securities, or (iii) any acquisition or Corporate Transaction, if more
than a majority of the beneficial ownership of the entity resulting from the
acquisition or Corporate Transaction is held by Persons who held the beneficial
ownership of the Outstanding Company Voting Securities before the acquisition or
Corporate Transaction.

11.3 Special Treatment In the Event of a Change in Control. In order to maintain
the Participant’s rights upon the occurrence of any event satisfying the
definition of “Change in Control” with respect to an Award, the Committee, as
constituted before such event, may, in its sole discretion, as to any such
Award, either at the time the Award is made hereunder or any time thereafter,
take any one or more of the following actions: (i) make such adjustment to any
such Award then outstanding as the Committee deems appropriate to reflect such
Change in Control; or (ii) cause any such Award then outstanding to be assumed,
or new rights substituted therefore, by the acquiring or surviving entity after
such Change in Control. Additionally, in the event of any Change in Control with
respect to Options and SARs, the Committee, as constituted before such Change in
Control, may, in its sole discretion (except as may be otherwise provided in the
Award Agreement): (a) cancel any outstanding unexercised Options or SARs
(whether or not vested) that have a per share Option Price or Strike Price (as
applicable) which is greater than the Change in Control Price (as defined
below); or (b) cancel any outstanding unexercised Options or SARs (whether or
not vested) that have a per share Option Price or Strike Price (as applicable)
which is less than or equal to the Change in Control Price in exchange for a
cash payment of an amount equal to (x) the difference between the Change in
Control Price and the Option Price or Strike Price, multiplied by (y) the total
number of shares of Common Stock underlying such Option or SAR that are vested
and exercisable at the time of the Change in Control. The Committee may, in its
discretion, include such further provisions and limitations in any Award
Agreement as it may deem desirable. The “Change in Control Price” means the
lower of (i) the per share Fair Market Value of the Common Stock as of the date
of the Change in Control, or (ii) the price paid per share of Common Stock as
part of the transaction which constitutes the Change in Control

 

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ARTICLE XII

MISCELLANEOUS

12.1 Amendments and Termination. The Board may amend, alter or discontinue the
Plan at any time, but no amendment, alteration or discontinuation shall be made
which would impair the rights of a Participant under a Stock Option, Stock
Appreciation Right or Restricted Stock Award theretofore granted without the
Participant’s consent, except such an amendment made to cause the Plan to
qualify for the exemption provided by Rule 16b-3 or made to comply with an
exemption from, or prevent a violation of, Section 409A of the Code. In
addition, no such amendment shall be made without the approval of the Company’s
stockholders to the extent such approval is required by law, agreement or the
rule of any stock exchange or NASDAQ (or other public market) on which the
Common Stock is listed (or regularly traded).

The Committee may amend the Plan at any time provided that (a) no amendment
shall impair the rights of any Participant under any Award theretofore granted
without the Participant’s consent, and (b) any amendment shall be subject to the
approval or rejection of the Board.

The Committee may amend the terms of any Award or other Award theretofore
granted, prospectively or retroactively, but no such amendment shall impair the
rights of any Participant without the Participant’s consent. With the exception
of an adjustment to an Award pursuant to Section 4.6,, (i) the terms of any
outstanding Option or SAR may not be amended to reduce its Option Price or
Strike Price (as applicable), and (ii) no Option or SAR may be canceled in
exchange for cash or other Awards, or Options or SARs with an Option Price or
Strike Price (as applicable) less than the Option Price or Strike Price (as
applicable) of the cancelled Option or SAR, unless approved by the Company’s
stockholders.

Subject to the above provisions, the Board shall have authority to amend the
Plan to take into account changes in law and tax and accounting rules, as well
as other developments, and to grant Awards which qualify for beneficial
treatment under such rules without stockholder approval.

12.2 Stand-Alone, Additional, Tandem, and Substitute Awards. Awards granted
under the Plan may, in the discretion of the Committee, be granted either alone
or in addition to, in tandem with, or in substitution or exchange for, any other
Award or any award granted under another plan of the Company, any subsidiary, or
any business entity to be acquired by the Company or a subsidiary, or any other
right of a Participant to receive payment from the Company or any subsidiary.
Such additional, tandem, and substitute or exchange Awards may be granted at any
time. If an Award is granted in substitution or exchange for another Award or
award, the Committee shall require the surrender of such other Award or award in
consideration for the grant of the new Award. In addition, Awards may be granted
in lieu of cash compensation, including in lieu of cash amounts payable under
other plans of the Company or any subsidiary, in which the Fair Market Value of
Common Stock subject to the Award is equivalent in value to the cash
compensation, or in which the exercise price, grant price or purchase price of
the Award in the nature of a right that may be exercised is equal to the Fair
Market Value of the underlying Common Stock minus the value of the cash
compensation surrendered. Notwithstanding the foregoing, no grant or
substitution made pursuant to this Section 12.2 shall be made to the extent that
such grant or substitution would violate Section 409A of the Code or prevent the
Plan or an Award from qualifying for exemption under Section 409A of the Code.

12.3 Form and Timing of Payment Under Awards. Subject to the terms of the Plan
and any applicable Agreement, payments to be made by the Company or an Affiliate
upon the exercise of an Award or settlement of an Award may be made in such
form(s) as the Committee shall determine, including, without limitation, cash,
Common Stock, other Awards or other property, and may be made in a single
payment or transfer or in installments, as specified in the applicable Award
Agreement. The settlement of any Award may be accelerated, and cash paid in lieu
of Common Stock in connection with such settlement, in the discretion of the
Committee or upon occurrence of one or more specified events (in addition to a
Change in Control). An Award may provide, without limitation, for the payment or
crediting of reasonable interest on installment payments. Notwithstanding the
foregoing, no form or timing of payment made pursuant to this Section 12.3 shall
be made

 

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to the extent that such form or timing of payment would violate Section 409A of
the Code or prevent the Plan or an Award from qualifying for exemption under
Section 409A of the Code.

12.4 Status of Awards Under Code Section 162(m). The Committee has the
discretion to determine whether Awards granted to persons who are Covered
Employees within the meaning of Code Section 162(m) shall constitute “qualified
performance-based compensation” satisfying the requirements of Code
Section 162(m). Accordingly, to the extent that the Committee intends for an
Award to constitute qualified performance-based compensation under Code
Section 162(m), the provisions of the Plan shall be interpreted in a manner
consistent with Code Section 162(m). If any provision of the Plan or any
agreement relating to such an Award does not comply or is inconsistent with the
requirements of Code Section 162(m), such provision shall be construed or deemed
amended to the extent necessary to conform to such requirements.

12.5 Unfunded Status of Plan; Limits on Transferability. It is intended that the
Plan be an “unfunded” plan for incentive compensation. The Committee may
authorize the creation of domestic trusts or other arrangements to meet the
obligations created under the Plan to deliver Common Stock or make payments;
provided, that, unless the Committee otherwise determines, the existence of such
trusts or other arrangements is consistent with the “unfunded” status of the
Plan. Unless otherwise provided in this Plan or in an Agreement, no Award shall
be subject to the claims of Participants’ creditors and no Award may be
transferred, assigned, alienated or encumbered in any way other than by will or
the laws of descent and distribution or to a Representative upon the death of
the Participant.

12.6 Section 409A of the Code.

(a) To the extent applicable and notwithstanding any other provision of this
Plan, this Plan and Awards hereunder shall be administered, operated and
interpreted in accordance with Section 409A of the Code; provided, however, in
the event that the Committee determines that any amounts payable hereunder may
be taxable to a Participant under Section 409A of the Code prior to the payment
and/or delivery to such Participant of such amount, the Company may (a) adopt
such amendments to the Plan and related Award, and appropriate policies and
procedures, including amendments and policies with retroactive effect, that the
Committee determines necessary or appropriate to preserve the intended tax
treatment of the benefits provided by the Plan and Awards hereunder and/or
(b) take such other actions as the Committee determines necessary or appropriate
to comply with or exempt the Plan and/or Awards from the requirements of
Section 409A of the Code. The Company and its Affiliates make no guarantees to
any person or entity regarding the tax treatment of Awards or payments made
under the Plan, and, notwithstanding the above provisions and any agreement or
understanding to the contrary, if any Award, payments or other amounts due to a
Participant (or his or her Beneficiaries, as applicable) results in, or causes
in any manner, the application of an accelerated or additional tax, fine or
penalty under Section 409A of the Code or otherwise to be imposed, then the
Participant (or his or her Beneficiaries, as applicable) shall be solely liable
for the payment of, and the Company and its Affiliates shall have no obligation
or liability to pay or reimburse (either directly or otherwise) the Participant
(or his or her Beneficiaries, as applicable) for, any such additional taxes,
fines or penalties.

(b) Notwithstanding anything to the contrary in the Plan, if a Participant is
considered a “specified employee” (as defined in Treasury Regulation
Section 1.409A-1(i)) as of the date such Participant incurs a “separation from
service” (as defined in as defined in Treasury Regulation Section 1.409A-1(h)),
no Award, if and to the extent it constitutes deferred compensation, shall be
paid or provided before the date that is six (6) months after such Participant’s
separation from service (or upon his or her death, if earlier) (the “Restricted
Period”). Any deferred compensation owed to the Participant during the
Restricted Period, and for which payment is not otherwise provided, may be
accumulated by the Company and paid to such Participant on the first business
day after the end of the Restricted Period as specified in the Award Agreement.
The foregoing restriction on the payment of deferred compensation amounts to the
Participant during the Restricted Period shall not apply to the payment of
employment taxes.

12.7 General Provisions.

 

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  (a) Representation. The Committee may require each person purchasing or
receiving shares pursuant to an Award, as a condition to such purchase or
receipt, to represent to and agree with the Company in writing that such person
is acquiring the shares without a view to the distribution thereof and as to
other matters deemed necessary by the Committee to qualify the issuance of such
shares for exemption from Federal and state securities law registration
requirements. The certificates for such shares may include any legend which the
Committee deems appropriate to reflect any restrictions on transfer.

 

  (b) No Additional Obligation. Nothing contained in the Plan shall prevent the
Company or an Affiliate from adopting other or additional compensation
arrangements for its employees.

 

  (c) Withholding. No later than the date as of which an amount first becomes
includible in the gross income of the Participant for Federal income tax
purposes with respect to any Award, the Participant shall pay to the Company (or
other entity identified by the Committee), or make arrangements satisfactory to
the Company or other entity identified by the Committee regarding the payment
of, any Federal, state, local or foreign taxes of any kind required by law to be
withheld with respect to such amount required in order for the Company or an
Affiliate to obtain a current deduction. If the Participant disposes of shares
of Common Stock acquired pursuant to an Incentive Stock Option in any
transaction considered to be a disqualifying transaction under the Code, the
Participant must give the Committee written notice of such disposition and the
Company shall have the right to deduct any taxes required by law to be withheld
from any amounts otherwise payable to the Participant. Unless otherwise
determined by the Committee or provided in an Agreement or otherwise,
withholding obligations may be settled with Common Stock, including Common Stock
that is part of the Award that gives rise to the withholding requirement. The
obligations of the Company under the Plan shall be conditional on such payment
or arrangements, and the Company and its Affiliates shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment
otherwise due to the Participant.

 

  (d) Reinvestment. The reinvestment of dividends in additional Restricted Stock
at the time of any dividend payment shall be permissible only if sufficient
shares of Common Stock are available under the Plan for such reinvestment
(taking into account then outstanding Options and other Awards).

 

  (e) Representation. The Committee shall establish such procedures as it deems
appropriate for a Participant to designate a Representative to whom any amounts
payable in the event of the Participant’s death are to be paid.

 

  (f) Controlling Law. The Plan and all Awards made and actions taken thereunder
shall be governed by and construed in accordance with the laws of the State of
Delaware (other than its law respecting choice of law). The Plan shall be
construed to comply with all applicable law and, to the extent possible, to
avoid liability to the Company, an Affiliate or a Participant, including,
without limitation, liability under Section 16(b) of the Exchange Act.

 

  (g) Offset. If and to the extent that the additional tax under Code
Section 409A would not be imposed, any amounts owed to the Company or an
Affiliate by the Participant of whatever nature may be offset by the Company
from the value of any shares of Common Stock, cash or other thing of value under
this Plan or an Agreement to be transferred to the Participant, and no shares of
Common Stock, cash or other thing of value under this Plan or an Agreement shall
be transferred unless and until all disputes between the Company and the
Participant have been fully and finally resolved and the Participant has waived
all claims to such against the Company or an Affiliate.

 

  (h) Fail Safe. With respect to persons subject to Section 16 of the Exchange
Act, transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3. To the extent any action by the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.

 

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12.8 Mitigation of Excise Tax. If any payment or right accruing to a Participant
under this Plan (without the application of this Section 12.8), either alone or
together with other payments or rights accruing to the Participant from the
Company or an Affiliate (“Total Payments”), would constitute a “parachute
payment” (as defined in Section 280G of the Code and regulations thereunder),
such payment or right shall be reduced to the largest amount or greatest right
that will result in no portion of the amount payable or right accruing under the
Plan being subject to an excise tax under Section 4999 of the Code or being
disallowed as a deduction under Section 280G of the Code. The determination of
whether any reduction in the rights or payments under this Plan is to apply
shall be made by the Committee in good faith after consultation with the
Participant, and such determination shall be conclusive and binding on the
Participant. The Participant shall cooperate in good faith with the Committee in
making such determination and providing the necessary information for this
purpose. Notwithstanding the foregoing, in the event a Participant is a party to
a written agreement with the Company or an Affiliate that provides for more
favorable treatment for the Participant regarding Section 280G of the Code,
including, but not limited to, the right to receive a gross-up payment for the
excise tax under Section 4999 of the Code, such agreement shall be controlling.

12.9 No Rights with Respect to Continuance of Employment. Nothing contained
herein or in an Agreement shall be deemed to alter the relationship between the
Company or an Affiliate and a Participant, or the contractual relationship
between a Participant and the Company or an Affiliate if there is a written
contract regarding such relationship. Nothing contained herein or in an
Agreement shall be construed to constitute a contract of employment between the
Company or an Affiliate and a Participant. The Company or an Affiliate and each
of the Participants continue to have the right to terminate the employment or
service relationship at any time for any reason, except as provided in a written
contract. The Company or an Affiliate shall have no obligation to retain the
Participant in its employ or service as a result of this Plan. There shall be no
inference as to the length of employment or service hereby, and the Company or
an Affiliate reserves the same rights to terminate the Participant’s employment
or service as existed prior to the individual’s becoming a Participant in, or
receiving an Award under, this Plan.

12.10 Awards in Substitution for Awards Granted by Other Corporations. Awards
(including cash in respect of fractional shares) may be granted under the Plan
from time to time in substitution for awards held by employees, directors or
service providers of other corporations who are about to become officers,
directors or employees of the Company or an Affiliate as the result of a merger
or consolidation of the employing corporation with the Company or an Affiliate,
or the acquisition by the Company or an Affiliate of the assets of the employing
corporation, or the acquisition by the Company or Affiliate of the stock of the
employing corporation, as the result of which it becomes a designated employer
under the Plan. The terms and conditions of the Awards so granted may vary from
the terms and conditions set forth in this Plan at the time of such grant as the
majority of the members of the Committee may deem appropriate to conform, in
whole or in part, to the provisions of the awards in substitution for which they
are granted. Notwithstanding the foregoing, no grant or substitution made
pursuant to this Section 12.10 shall be made to the extent that such grant or
substitution would violate Section 409A of the Code or prevent the Plan or an
Award from qualifying for an exemption under Section 409A of the Code.

12.11 Procedure for Adoption. Any Affiliate of the Company may, by resolution of
such Affiliate’s board of directors, with the consent of the Board of Directors
and subject to such conditions as may be imposed by the Board of Directors,
adopt the Plan for the benefit of its employees as of the date specified in the
board resolution.

12.12 Procedure for Withdrawal. Any Affiliate which has adopted the Plan may, by
resolution of the board of directors of such Affiliate, with the consent of the
Board of Directors and subject to such conditions as may be imposed by the Board
of Directors, terminate its adoption of the Plan.

12.13 Delay. If at the time a Participant incurs a Termination of Service (other
than due to Cause) or if at the time of a Change in Control, the Participant is
subject to “short-swing” liability under Section 16 of the

 

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Exchange Act, any exercise period provided for under the Plan or an Agreement
shall, to the extent necessary to avoid the imposition of liability, be
suspended and delayed during the period the Participant would be subject to such
liability, but not more than six (6) months and one (1) day and not to exceed
the Option Period, or the period for exercise of a Stock Appreciation Right as
provided in the Agreement, whichever is shorter. The Company shall have the
right to suspend or delay any time period described in the Plan or an Agreement
if the Committee shall determine that the action may constitute a violation of
any law or result in liability under any law to the Company, an Affiliate or a
stockholder of the Company until such time as the action required or permitted
shall not constitute a violation of law or result in liability to the Company,
an Affiliate or a stockholder of the Company.

12.14 Headings. The headings contained in the Plan are for reference purposes
only and shall not affect the meaning or interpretation of this Plan.

12.15 Severability. If any provision of the Plan shall for any reason be held to
be invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provision hereby, and this Plan shall be construed as if such
invalid or unenforceable provision were omitted.

12.16 Successors and Assigns. The Plan shall inure to the benefit of and be
binding upon each successor and assign of the Company. All obligations imposed
upon a Participant, and all rights granted to the Company hereunder, shall be
binding upon the Participant’s heirs, legal representatives, successors and
permitted assigns.

12.17 Entire Agreement. The Plan and each Agreement constitute the entire
agreement with respect to the subject matter hereof and thereof, provided that
in the event of any inconsistency between the Plan and the Agreement, the terms
and conditions of the Plan shall control.

Executed on this 1st day of December, 2010.

 

KENSEY NASH CORPORATION By:   /S/ JOSEPH W. KAUFMANN         Title:   President
and CEO

 

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