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**3.****EOIP Payouts**3.1 Incentive Pool. EOIP payouts are based on the Company’s performance for threefinancial metrics — Adjusted EBITDA, Revenues and APC Bookings. An “Incentive Pool” may or maynot be created dependent on the Company’s financial performance pertaining to all or some of thosemetrics during the fiscal year. If the Incentive Pool is created, each Participant is then awardedthat Participant’s designated portion of the Incentive Pool on or before March 31, 2012. Themethodology for calculating EOIP payouts to Participants is more fully described below.3.2 Minimum Adjusted EBITDA Threshold. No amounts shall be payable under this EOIP for anyfiscal year unless the Company has achieved the established minimum threshold of Adjusted EBITDAfor such fiscal year. Accordingly, if the Company’s financial performance for the fiscal yearfalls below the established minimum threshold of Adjusted EBITDA, there is no payout under the EOIPof any kind, regardless of the annual Revenue or annual APC Bookings amounts achieved.3.3 Funding and Payout.     3.3.1 A percentage of Adjusted EBITDA is set aside in an Incentive Pool with respect to eachfiscal year to provide for bonus payments under this EOIP based on performance in the followingthree categories: (i) Adjusted EBITDA, (ii) Revenue and (iii) APC Bookings. The percentage ofAdjusted EBITDA that is set aside based on the Company’s actual level attained in each of thesethree categories shall be determined by the Committee after consideration of the recommendations ofthe Company’s Chief Executive Officer.     3.3.2 Once the Company’s minimum threshold of Adjusted EBITDA is met, the percentage ofAdjusted EBITDA set aside in the Incentive Pool rises pro rata incrementally based on actualCompany performance in each of the Adjusted EBITDA, Revenues, and APC Bookings financial metricssubject to an overall Incentive Pool funding percentage upper limit cap, all as shown in the chartbelow. The payout formula for a Participant is shown in the chart below.**Executive Officer Incentive Plan Mechanics**                               Increment    Minimums Funding % Value Incremental % % CapAdjusted EBITDA, as defined $10,500   0.75% $500   0.1250%  2.25%Revenue $85,000   0.50% $2,500   0.0625%  1.00%APC Bookings $50,000   0.50% $2,500   0.0625%  1.00%                            1.75%          4.25%**Executive Officer Plan Incentive Summary**                        Title Percentage of PoolChief Executive Officer  40.0%Chief Financial Officer  20.0%EVP, Marketing & Sales  20.0%EVP, Worldwide Operations  20.0%        100.0%
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**4. DEFINITIONS**     “*Adjusted EBITDA”*— means generally earnings before interest expense, taxes, depreciation andamortization, profit sharing plan contributions, legal expenses out of the ordinary course of theCompany’s business and incentive pay (excluding sales commissions), but shall be as determined bythe Company, in its sole discretion, with the assistance of its accountants.     *“APC Bookings”*— means generally to revenue (a) to which the Company has a legally binding,contractual right pursuant to a Sales Contract signed after December 31, 2010, and (b) whichinvolves the sale of equipment or services associated the Company’s APC product line, all asdetermined by the Company, in its sole discretion. For purposes of clarity, it is understood thatAPC Bookings shall not include revenue (i) for equipment or services included in the scope of workof contracts executed and entered into prior to January 1, 2011 and restated in newly executedcontracts; (ii) revenues relating to work for which authorization to proceed from the customer isrequired but has not been obtained in writing; or (iii) revenues relating to any equipment orservices the delivery of which has been cancelled by the customer.     *“Committee”*— means the Compensation & Nominating Committee of the Company’s Boardof Directors or such other committee as may from time to time succeed or perform the functions ofthat Committee.     *“Disability”*— means that a Participant, after exhausting any applicable leave availableunder the Company’s policies, is unable because of physical or mental condition to perform theessential functions of such Participant’s position, with or without a reasonable accommodation.     *“Revenue*” — means the Company’s net sales, as determined by the Company in its solediscretion.     *“Sales Contract”*— means a comprehensive set of executed, legally binding documents betweenthe Company and a customer, in form and substance acceptable to the Company.**5. OTHER CONDITIONS**5.1 No Alienation of Awards. Payouts under this EOIP may not be assigned or alienated,except that payouts earned and payable may be assigned under the laws of descent and distributionof the Participant’s domicile.5.2 No Right of Employment. Neither the EOIP nor any action taken under the EOIP shall beconstrued, expressly or by implication, as either giving to any Participant the right to beretained in the employ of the Company or any affiliate, or altering or limiting theemployment-at-will relationship between the Company and any Participant.5.3 Taxes, Withholding. The Company or any affiliate shall have the right to deduct fromany payout under the EOIP any applicable federal, state or local taxes or other amounts required byapplicable law, rule, or regulation to be withheld with respect to such payment.5.4 Code Section 409A. The EOIP is intended to be exempt from or comply with Section 409Aof the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder.5.5 Plan Administration; Effectiveness for any Fiscal Year. The EOIP shall be administeredby or under the authority of the Committee which shall have the full discretionary power toadminister and interpret this EOIP and to establish rules for its administration. The EOIP willnot be deemed effective for any fiscal year until such time, if any, as the determination of theEOIP Adjusted EBITDA, Revenues, and APC Bookings minimum targets and Incentive Pool fundingpercentage amounts contemplated by Paragraph 3 above have been released for communication to EOIPparticipants, which date shall be no later than March 31st of each fiscal year.
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5.6 Reservation of Rights; Governing Law; Contract Disclaimer. The Company reserves theright to amend or cancel the EOIP in whole or in part at any time without notice. There can be noguaranty that the EOIP will be in effect in any subsequent fiscal year. The Company also reservesthe right to decide all questions and issues arising under the EOIP and its decisions are final.The EOIP shall be construed in accordance with and governed by the laws of the State of Illinois.The EOIP is a statement of the Company’s intentions and does not constitute a guarantee that anyparticular EOIP payment amount will be paid. It does not create a contractual relationship or anycontractually enforceable rights between the Company or its wholly owned subsidiaries and theParticipant.
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