EX-10.4






EXHIBIT 10.4




SAFEGUARD SCIENTIFICS, INC.

1999 EQUITY COMPENSATION PLAN




As Amended and Restated Effective October 21, 2008




          The purpose of the Safeguard Scientifics, Inc. 1999 Equity Compensation Plan (the “Plan”) is
to provide (i) designated employees of Safeguard Scientifics, Inc. (the “Company” or “Employer”)
and its subsidiaries, (ii) individuals to whom an offer of employment has been extended, (iii)
certain advisors who perform services for the Company or its subsidiaries, and (iv) non-employee
members of the Board of Directors of the Company (the “Board”) with the opportunity to receive
grants of incentive stock options, nonqualified stock options, stock appreciation rights,
restricted stock, performance units and other stock-based awards. The Company believes that the
Plan will encourage the participants to contribute materially to the growth of the Company, thereby
benefiting the Company’s stockholders, and will align the economic interests of the participants
with those of the stockholders. The Plan was originally established by the Company’s Board of
Directors effective February 11, 1999 and approved by the stockholders on May 20, 1999. The Plan
is hereby amended and restated to reflect the applicable requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (“Code”, which shall also include all applicable
regulations promulgated thereunder) and to make certain other clarifying changes and is effective
October 21, 2008.




          1. Administration




               (a) Committee. The Plan shall be administered and interpreted by a committee appointed
by the Board (the “Committee”). The Committee shall consist of two or more persons appointed by
the Board, all of whom may be “outside directors” as defined under Code Section 162(m) and related
Treasury regulations and may be “non-employee directors” as defined under Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”). Except to the extent prohibited
by applicable law or the applicable rules of a stock exchange, the Committee may allocate all or
any portion of its responsibilities and powers to any one or more of its members or may delegate
all or any part of its responsibilities and powers to any person or persons selected by it. Any
such allocation or delegation may be revoked by the Committee at any time. If the Committee does
not exist, or for any other reason determined by the Board, the Board may take any action under the
Plan that would otherwise be the responsibility of the Committee.



               (b) Committee Authority. The Committee shall have the sole authority to (i) determine
the individuals to whom grants shall be made under the Plan, (ii) determine the type, size and
terms of the grants to be made to each such individual, (iii) determine the time when the grants
will be made and the duration of any applicable exercise or restriction period, including the
criteria for exercisability and the acceleration of exercisability, and (iv) deal with any other
matters arising under the Plan.



               (c) Committee Determinations. The Committee shall have full power and authority to
administer and interpret the Plan, to make factual determinations and to adopt or



 









 




amend such rules, regulations, agreements and instruments for implementing the Plan and for
the conduct of its business as it deems necessary or advisable, in its sole discretion. The
Committee’s interpretations of the Plan and all determinations made by the Committee pursuant to
the powers vested in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the Committee shall be
executed in its sole discretion, in the best interest of the Company, not as a fiduciary, and in
keeping with the objectives of the Plan and need not be uniform as to similarly situated
individuals.




          2. Grants




               (a) Generally. Awards under the Plan may consist of grants of incentive stock options
as described in Section 5 (“Incentive Stock Options”), nonqualified stock options as described in
Section 5 (“Nonqualified Stock Options”) (Incentive Stock Options and Nonqualified Stock Options
are collectively referred to as “Options”), restricted stock as described in Section 6 (“Restricted
Stock”), stock appreciation rights as described in Section 7 (“SARs”), performance units as
described in Section 8 (“Performance Units”), and other stock-based awards as described in Section
9 (“Other Stock-Based Grants”) (hereinafter collectively referred to as “Grants”). All Grants shall
be subject to the terms and conditions set forth herein and to such other terms and conditions
consistent with this Plan as the Committee deems appropriate and as are specified in writing by the
Committee to the individual in a grant instrument (the “Grant Instrument”) or an amendment to the
Grant Instrument. The Committee shall approve the basic form and provisions of each Grant
Instrument. Grants under a particular Section of the Plan need not be uniform as among the
Grantees.



               (b) Stand-Alone, Additional, Tandem, and Substitute Grants. Grants made under the
Plan may, in the discretion of the Committee, be made either alone or in addition to, in tandem
with, or in substitution or exchange for, any other Grants or any grant made under another plan of
the Company, any subsidiary or affiliate, or any business entity to be acquired by the Company or a
subsidiary or affiliate, or any other right of a Grantee to receive payment from the Company or any
subsidiary or affiliate (“Non-Plan Grants”). Grants made in addition to or in tandem with other
Grants or Non-Plan Grants may be granted either as of the same time as or a different time from the
grant of such other Grants or Non-Plan Grants.



               (c) Form and Timing of Payment under Grants; Deferrals. Subject to the terms of the
Plan and any applicable Grant document, payments to be made by the Company or a subsidiary or
affiliate upon the exercise of an Option or other Grant or settlement of a Grant may be made in
such forms as the Committee shall determine and set forth in the Grant Instrument on the date such
Grant is made (“Date of Grant”), including, without limitation, cash, Company Stock (hereinafter
defined), other Grants or other property, and may be made in a single payment or transfer, in
installments, or on a deferred basis. The settlement of any Grant may be accelerated, and cash
paid in lieu of Company Stock in connection with such settlement, in the discretion of the
Committee or upon occurrence of one or more specified events and in accordance with all applicable
legal requirements, including, without limitation, the requirements of Code Section 409A.
Installment or deferred payments may be required by the Committee or permitted at the election of
the Grantee on terms and conditions established by the Committee. Payments may include, without limitation, provisions for the payment or crediting



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of
reasonable interest on installment or deferred payments or the grant or crediting of dividend
equivalents, other rights or other amounts in respect of installment or deferred payments
denominated in Company Stock.




          3. Shares Subject to the Plan




               (a) Shares Authorized. Subject to the adjustment specified below, the aggregate number
of shares of common stock of the Company (“Company Stock”) that may be issued or transferred under
the Plan is 9,000,000 shares. The maximum aggregate number of shares of Company Stock that shall be
subject to Grants made under the Plan to any individual during any calendar year shall be 1,500,000
shares. The shares may be authorized but unissued shares of Company Stock or reacquired shares of
Company Stock, including shares purchased by the Company on the open market for purposes of the
Plan. If, and to the extent Options or SARs granted under the Plan terminate, expire, or are
canceled, forfeited, exchanged, or surrendered without having been exercised, or if any shares of
Restricted Stock, Performance Units or Other Stock-Based Grants are forfeited, the shares subject
to such Grants shall again be available for purposes of the Plan.



               (b) Adjustments. If there is any change in the number or kind of shares of Company
Stock outstanding (i) by reason of a stock dividend, spinoff, recapitalization, stock split or
combination or exchange of shares, (ii) by reason of a merger, reorganization or consolidation in
which the Company is the surviving corporation, (iii) by reason of a reclassification or change in
par value, or (iv) by reason of any other extraordinary or unusual event affecting the outstanding
Company Stock as a class without the Company’s receipt of consideration, or if the value of
outstanding shares of Company Stock is substantially reduced as a result of a spinoff or the
Company’s payment of an extraordinary dividend or distribution (as may be determined from time to
time by the Committee), the maximum number of shares of Company Stock available for Grants, the
maximum number of shares of Company Stock with respect to which any individual participating in the
Plan may be granted in any year, the kind and number of shares of Company Stock covered by
outstanding Grants, the kind and number of shares issued and to be issued under the Plan, all
outstanding Grants, and the price per share or the applicable market value of any outstanding
Grants shall be equitably adjusted by the Committee, as the Committee deems appropriate, to reflect
any increase or decrease in the number of, or change in the kind or value of, issued shares of
Company Stock to preclude, to the extent practicable, the enlargement or dilution of rights and
benefits under such Grants; provided, however, that any fractional shares resulting from such
adjustment shall be eliminated by rounding any portion of a share equal to .5 or greater up, and
any portion of a share equal to less than .5 down, in each case to the nearest whole number. In
addition, the Committee shall have discretion to make the foregoing equitable adjustments in any
circumstances in which an adjustment is not mandated by this subsection (b) or applicable law,
including in the event of a Change of Control. Any adjustments to outstanding Grants shall be
consistent with Code Sections 409A or 422, to the extent applicable. Any adjustments determined by
the Committee shall be conclusive and binding on all persons having any interest in the Plan or in
any awards granted hereunder.



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          4. Eligibility for Participation




               (a) Eligible Persons. All employees of the Company and its subsidiaries (“Employees”),
including Employees who are officers or members of the Board, individuals to whom an offer of
employment has been extended (“New Hire”), and members of the Board who are not Employees
(“Non-Employee Directors”) shall be eligible to participate in the Plan. Advisors who perform
services at the Company’s request (“Key Advisors”) shall be eligible to participate in the Plan.



               (b) Selection of Grantees. The Committee shall select the Employees, New Hires,
Non-Employee Directors and Key Advisors to receive Grants and shall determine the number of shares
of Company Stock subject to such Grant. Employees, New Hires, Key Advisors, and Non-Employee
Directors who receive Grants under this Plan shall herein be referred to as “Grantees.”



          5. Granting of Options




               (a) Number of Shares. The Committee shall determine the number of shares of Company
Stock that will be subject to each Grant of Options to Employees, New Hires, Non-Employee
Directors, and Key Advisors.



               (b) Type of Option and Price.



                    (i) The Committee may grant Incentive Stock Options that are intended to qualify as “incentive
stock options” within the meaning of Code Section 422, Nonqualified Stock Options that are not
intended so to qualify, or any combination of Incentive Stock Options and Nonqualified Stock
Options. Incentive Stock Options may be granted only to Employees who have actually commenced
employment with the Company. Nonqualified Stock Options may be granted to Employees, New Hires,
Non-Employee Directors, and Key Advisors. If an Option is not specifically designated as an
Incentive Stock Option, then the Option shall be a Nonqualified Stock Option.



                    (ii) The purchase price (the “Exercise Price”) of Company Stock subject to an Option shall be
determined by the Committee and may be equal to, or greater than, the Fair Market Value (as defined
below) on the date the Option is granted, provided, however, that (x) the Exercise Price of an
Incentive Stock Option shall be equal to, or greater than, the Fair Market Value of a share of
Company Stock on the date the Incentive Stock Option is granted and (y) an Incentive Stock Option
may not be granted to an Employee who, at the time of grant, owns stock possessing more than 10
percent of the total combined voting power of all classes of stock of the Company or any parent or
subsidiary of the Company, unless the Exercise Price per share is not less than 110% of the Fair
Market Value of Company Stock on the Date of Grant.



                    (iii) If the Company Stock is publicly traded, then, except as otherwise determined by the
Committee, the following rules regarding the determination of Fair Market Value per share apply:



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     (x) if the principal trading market for the Company Stock is a national securities exchange,
the mean between the highest and lowest quoted selling prices on the relevant date or (if there
were no trades on that date) the latest preceding date on which there were Company Stock
transactions on such exchange, or



     (y) if the Company Stock is not principally traded on such exchange, the mean between the last
reported “bid” and “asked” prices of Company Stock on the relevant date, as reported on the OTC
Bulletin Board. If the Company Stock is not publicly traded or, if publicly traded, is not subject
to reported transactions or “bid” or “asked” quotations as set forth above, the Fair Market Value
per share shall be determined by the Committee based upon the reasonable application of a
reasonable valuation method as outlined under Code Section 409A.



               (c) Option Term. The Committee shall determine the term of each Option. The term of
any Option shall not exceed ten years from the Date of Grant. However, an Incentive Stock Option
that is granted to an Employee who, at the time of grant, owns stock possessing more than 10
percent of the total combined voting power of all classes of stock of the Company, or any parent or
subsidiary of the Company, may not have a term that exceeds five years from the Date of Grant.



               (d) Exercisability of Options.



                    (i) Options shall become exercisable in accordance with such terms and conditions as may be
determined by the Committee and specified in the Grant Instrument or an amendment to the Grant
Instrument. The Committee may accelerate the exercisability of any or all outstanding Options at
any time for any reason.



                    (ii) Notwithstanding the foregoing, the Option may, but need not, include a provision whereby
the Grantee may elect at any time while an Employee, Non-Employee Director, or Key Advisor to
exercise the Option as to any part or all of the shares subject to the Option prior to the full
vesting of the Option. Any unvested shares so purchased shall be subject to a repurchase right in
favor of the Company (which the Company shall have the right, but not the obligation, to exercise),
with the repurchase price to be equal to the original purchase price, and any other restrictions
the Committee determines to be appropriate.



               (e) Termination of Employment, Disability or Death.



                    (i) Except as provided below, an Option may only be exercised while the Grantee is employed
by, or providing service to, the Company as an Employee, Key Advisor or member of the Board. In the
event that a Grantee ceases to be employed by, or providing service to the Company for any reason
other than Disability, death or termination for Cause, any Option which is otherwise exercisable by
the Grantee shall terminate unless exercised
within 90 days after the date on which the Grantee ceases to be employed by, or providing
service to, the Company (or within such other period of time as may be specified by the Committee),
but in any event no later than the date of expiration of the Option term. Except as otherwise
provided by the Committee, any of the Grantee’s Options that are not otherwise



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exercisable as of
the date on which the Grantee ceases to be employed by, or providing service to, the Company shall
terminate as of such date.




                    (ii) In the event the Grantee ceases to be employed by, or providing service to, the Company
on account of a termination for Cause by the Company, any Option held by the Grantee shall
terminate as of the date the Grantee ceases to be employed by, or providing service to, the
Company. In addition, notwithstanding any other provisions of this Section 5, if the Committee
determines that the Grantee has engaged in conduct that constitutes Cause at any time while the
Grantee is employed by, or providing service to, the Company or after the Grantee’s termination of
employment or service, any Option held by the Grantee shall immediately terminate, and the Grantee
shall automatically forfeit all shares underlying any exercised portion of an Option for which the
Company has not yet delivered the share certificates, upon refund by the Company of the Exercise
Price paid by the Grantee for such shares. Upon any exercise of an Option, the Company may
withhold delivery of share certificates pending resolution of an inquiry that could lead to a
finding resulting in a forfeiture.



                    (iii) In the event the Grantee ceases to be employed by, or providing service to, the Company
because the Grantee incurs a Disability, any Option which is otherwise exercisable by the Grantee
shall terminate unless exercised within one year after the date on which the Grantee ceases to be
employed by, or provide service to, the Company (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee’s Options which are not
otherwise exercisable as of the date on which the Grantee ceases to be employed by, or providing
service to, the Company shall terminate as of such date.



                    (iv) If the Grantee dies while employed by, or providing service to, the Company or within 90
days after the date on which the Grantee ceases to be employed or providing service on account of a
termination specified in Section 5(e)(i) above (or within such other period of time as may be
specified by the Committee), any Option that is otherwise exercisable by the Grantee shall
terminate unless exercised within one year after the date on which the Grantee ceases to be
employed by, or providing service to, the Company (or within such other period of time as may be
specified by the Committee), but in any event no later than the date of expiration of the Option
term. Except as otherwise provided by the Committee, any of the Grantee’s Options that are not
otherwise exercisable as of the date on which the Grantee ceases to be employed by, or providing
service to, the Company shall terminate as of such date.



                    (v) For purposes of Sections 5(e), 6, 7, 8 and 9:



     (A) “Company, ” when used in the phrase “employed by the Company, ” shall mean the Company,
any successor corporation, each corporation which is a member of a controlled
group of corporations (within the meaning of Code Section 414(b)) of which the Company is a
component member, any subsidiary at least 50% directly or indirectly owned by the Company (or any
successor thereto)and any affiliate entity which, with the approval of the Committee, is deemed to
constitute an entity controlled by the Company.



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     (B) “Employed by, or providing service to, the Company” shall mean employment or service as an
Employee of the Company, Key Advisor, or member of the Board (so that, for purposes of exercising
Options and SARs and satisfying conditions with respect to Restricted Stock, Performance Units and
Other Stock-Based Grants, a Grantee shall not be considered to have terminated employment or
service until the Grantee ceases to be an Employee of the Company, Key Advisor, and member of the
Board), unless the Committee determines otherwise. The Committee’s determination as to a
participant’s employment or other provision of services, termination of employment or cessation of
the provision of services, leave of absence, or reemployment shall be conclusive on all persons
unless determined to be incorrect.



     (C) “Disability” shall mean a Grantee’s becoming disabled within the meaning of Code Section
22(e)(3).



     (D) “Cause” shall mean the determination of the Committee that any one or more of the
following events has occurred:



          (1) the Grantee’s conviction of any act which constitutes a felony under applicable federal or
state law, either in connection with the performance of the Grantee’s obligations on behalf of the
Company or which affects the Grantee’s ability to perform his or her obligations as an employee,
board member or advisor of the Company or under any employment agreement, non-competition
agreement, confidentiality agreement or like agreement or covenant between the Grantee and the
Company (any such agreement or covenant being herein referred to as an “Employment Agreement”);




          (2) the Grantee’s willful misconduct in connection with the performance of his or her duties
and responsibilities as an employee, board member or advisor of the Company or under any Employment
Agreement, which willful misconduct is not cured by the Grantee within 10 days of his or her
receipt of written notice thereof from the Committee;




          (3) the Grantee’s commission of an act of embezzlement, fraud or dishonesty which results in a
loss, damage or injury to the Company;




          (4) the Grantee’s substantial and continuing neglect, gross negligence or inattention in the
performance of his or her duties as an employee, board member or advisor of the Company or under
any Employment Agreement which is not cured by the Grantee within 10 days of his or her receipt of
written notice thereof from the Committee;




          (5) the Grantee’s unauthorized use or disclosure or any trade secret or confidential
information of the Company which adversely affects the business of the Company, provided that any
disclosure of any trade secret or confidential information of the Company to a
third party in the ordinary course of business who signs a confidentiality agreement shall not
be deemed a breach of this subparagraph;




          (6) the Grantee’s material breach of any of the provisions of any Employment Agreement, which
material breach is not cured by the Grantee within 10 days of his or her receipt of a written
notice from the Company specifying such material breach; or




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          (7) the Grantee has voluntarily terminated his or her employment or service with the Company
and breaches his or her non-competition agreement with the Company.




               (f) Exercise of Options. A Grantee may exercise an Option that has become
exercisable, in whole or in part, by delivering a notice of exercise to the Company with payment of
the Exercise Price. The Grantee shall pay the Exercise Price for an Option as specified by the
Committee:



                    (i) in cash,



                    (ii) by delivering shares of Company Stock owned by the Grantee for the period necessary to
avoid a charge to the Company’s earnings for financial reporting purposes (including Company Stock
acquired in connection with the exercise of an Option, subject to such restrictions as the
Committee deems appropriate) and having a Fair Market Value on the date of exercise equal to the
Exercise Price,



                    (iii) by payment through a broker in accordance with procedures permitted by Regulation T of
the Federal Reserve Board, or



                    (iv) by such other method of payment as the Committee may approve.



                    Shares of Company Stock used to exercise an Option shall have been held by the Grantee for the
requisite period of time to avoid adverse accounting consequences to the Company with respect to
the Option. The Grantee shall pay the Exercise Price and the amount of any withholding tax due
(pursuant to Section 11) at the time of exercise.



               (g) Limits on Incentive Stock Options. Each Incentive Stock Option shall provide that
if the aggregate Fair Market Value of the stock on the date of the grant with respect to which
Incentive Stock Options are exercisable for the first time by a Grantee during any calendar year,
under the Plan or any other stock option plan of the Company or a parent or subsidiary, exceeds
$100,000, then the option, as to the excess, shall be treated as a Nonqualified Stock Option. An
Incentive Stock Option shall not be granted to any person who is not an Employee of the Company or
a parent or subsidiary (within the meaning of Code Section 424(f)).



               (h) Reload Options. In the event that shares of Company Stock are used to exercise an
Option, the terms of such Option may provide for a Grant of additional Options, or the Committee
may grant additional Options, to purchase a number of shares of
Company Stock equal to the number of whole shares used to exercise the Option and the number
of whole shares, if any, withheld in payment of any taxes. Such Options shall be granted with an
Exercise Price equal to the Fair Market Value of the Company Stock at the Date of Grant of such
additional Options, or at such other Exercise Price as the
Committee may establish, for a term not
longer than the unexpired term of the exercised option and on such other terms as the


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Committee
shall determine. In no event shall the Exercise Price be less than the Fair Market Value of the
Company Stock at the Date of Grant of such additional Options.




          6. Restricted Stock Grants




          The Committee may issue or transfer shares of Company Stock to a Grantee under a Grant of
Restricted Stock upon such terms as the Committee deems appropriate. The following provisions are
applicable to Restricted Stock:




               (a) General Requirements. Shares of Company Stock issued or transferred pursuant to
Restricted Stock Grants may be issued or transferred for consideration or for no consideration, as
determined by the Committee. The Committee may establish conditions under which restrictions on
shares of Restricted Stock shall lapse over a period of time or according to such other criteria as
the Committee deems appropriate. The period of time during which the Restricted Stock will remain
subject to restrictions will be designated in the Grant Instrument as the “Restriction Period. ”



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



               (c) Requirement of Employment or Service. If the Grantee ceases to be employed by, or
providing services to, the Company (as defined in Section 5(e)) during a period designated in the
Grant Instrument as the Restriction Period, or if other specified conditions are not met, the
Restricted Stock Grant shall terminate as to all shares covered by the Grant as to which the
restrictions have not lapsed, and those shares of Company Stock must be immediately returned to the
Company. The Committee may, however, provide for complete or partial exceptions to this requirement
as it deems appropriate.



               (d) Restrictions on Transfer and Legend on Stock Certificate. During the Restriction
Period, a Grantee may not sell, assign, transfer, pledge or otherwise dispose of the shares of
Restricted Stock except to a Successor Grantee under Section 13(a). Each certificate for a share of
Restricted Stock shall contain a legend giving appropriate notice of the restrictions in the Grant.
The Grantee shall be entitled to have the legend removed from the stock certificate covering the
shares subject to restrictions when all restrictions on such shares have lapsed. The Committee may
determine that the Company will not issue certificates for shares of Restricted Stock until all
restrictions on such shares have lapsed, or that the Company will retain possession of certificates
for shares of Restricted Stock until all restrictions on such shares have lapsed.



               (e) Right to Vote and to Receive Dividends. Unless the Committee determines otherwise,
during the Restriction Period, the Grantee shall have the right to vote shares of Restricted Stock
and to receive any dividends or other distributions paid on such shares, subject to any
restrictions deemed appropriate by the Committee, including, without limitation, the achievement of
specific performance goals.



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               (f) Lapse of Restrictions. All restrictions imposed on Restricted Stock shall lapse
upon the expiration of the applicable Restriction Period and the satisfaction of all conditions
imposed by the Committee. The Committee may determine, as to any or all Restricted Stock Grants,
that the restrictions shall lapse without regard to any Restriction Period.



          7. Stock Appreciation Rights




               (a) General Requirements. The Committee may grant stock appreciation rights (“SARs”)
to a Grantee separately or in tandem with any Option (for all or a portion of the applicable
Option). Tandem SARs may be granted either at the time the Option is granted or at any time
thereafter while the Option remains outstanding; provided, however, that, in the case of an
Incentive Stock Option, SARs may be granted only at the time of the Grant of the Incentive Stock
Option. The Committee shall establish the base amount of the SAR at the time the SAR is granted.
Unless the Committee determines otherwise, the base amount of each SAR shall be equal to the per
share Exercise Price of the related Option or, if there is no related Option, the Fair Market Value
of a share of Company Stock as of the Date of Grant of the SAR. In no event shall the base amount
of the SAR be less than the Fair Market Value of a share of Stock as of the Date of Grant of the
SAR.



               (b) Tandem SARs. In the case of tandem SARs, the number of SARs granted to a Grantee
that shall be exercisable during a specified period shall not exceed the number of shares of
Company Stock that the Grantee may purchase upon the exercise of the related Option during such
period. Upon the exercise of an Option, the SARs relating to the Company Stock purchased pursuant
to such Option shall terminate. Upon the exercise of SARs, the related Option shall terminate to
the extent of an equal number of shares of Company Stock.



               (c) Exercisability. A SAR shall be exercisable during the period specified by the
Committee in the Grant Instrument and shall be subject to such vesting and other restrictions as
may be specified in the Grant Instrument. The Committee may accelerate the exercisability of any or
all outstanding SARs at any time for any reason. SARs may only be exercised while the Grantee is
employed by, or providing service to, the Company or during the applicable period after termination
of employment as described in Section 5(e). A tandem SAR shall be exercisable only during the
period when the Option to which it is related is also exercisable. No SAR may be exercised for cash
by an officer or director of the Company or any of its subsidiaries who is subject to Section 16 of
the Exchange Act, except in accordance with Rule 16b-3 under the Exchange Act.



               (d) Value of SARs. When a Grantee exercises SARs, the Grantee shall receive in
settlement of such SARs an amount equal to the value of the stock appreciation
for the number of SARs exercised, payable in cash, Company Stock or a combination thereof, as
determined by the Committee. The stock appreciation for a SAR is the amount by which the Fair
Market Value of the underlying Company Stock on the date of exercise of the SAR exceeds the base
amount of the SAR as described in Subsection (a).



               (e) Form of Payment. The Committee shall determine whether the appreciation in a SAR
shall be paid in the form of cash, shares of Company Stock, or a



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combination of the two, in such
proportion as the Committee deems appropriate. For purposes of calculating the number of shares of
Company Stock to be received, shares of Company Stock shall be valued at their Fair Market Value on
the date of exercise of the SAR. If shares of Company Stock are to be received upon exercise of a
SAR, cash shall be delivered in lieu of any fractional share.




          8. Performance Units




               (a) General Requirements. The Committee may grant performance units (“Performance
Units”) to a Grantee. Each Performance Unit shall represent the right of the Grantee to receive an
amount based on the value of the Performance Unit, if performance goals established by the
Committee are met. A Performance Unit shall be based on the Fair Market Value of a share of Company
Stock or on such other measurement base as the Committee deems appropriate. The Committee shall
determine the number of Performance Units to be granted and the requirements applicable to such
Units.



               (b) Performance Period and Performance Goals. When Performance Units are granted, the
Committee shall establish the number of Performance Units to be granted, the performance period
during which performance shall be measured (the “Performance Period”), the performance goals
applicable to the Units (“Performance Goals”), to the extent required by Code Section 409A, the
specified payment events on which the Performance Units will be paid, and such other conditions of
the Grant as the Committee deems appropriate. Performance Goals may relate to the financial
performance of the Company or its operating units, the performance of Company Stock, individual
performance, or such other criteria as the Committee deems appropriate.



               (c) Payment with respect to Performance Units. At the end of each Performance Period,
the Committee shall determine to what extent the Performance Goals and other conditions of the
Performance Units have been met and the amount, if any, to be paid with respect to the Performance
Units. Payments with respect to Performance Units shall be made in cash, in Company Stock, or in a
combination of the two, as determined by the Committee. Payment of Performance Units shall be made
as set forth in the Grant Instrument, and, if applicable, shall be structured to comply with Code
Section 409A.



               (d) Requirement of Employment or Service. If the Grantee ceases to be employed by, or
providing service to, the Company (as defined in Section 5(e)) during a Performance Period, or if
other conditions established by the Committee are not met, the
Grantee’s Performance Units shall be forfeited. The Committee may, however, provide for
complete or partial exceptions to this requirement as it deems appropriate.



          9. Other Stock-Based Grants




               (a) General Requirements. The Committee may, subject to limitations under applicable
law, grant to a Grantee such other Grants that may be denominated or payable in, valued in whole or
in part by reference to, or otherwise based on or related to, Company Stock or factors that may
influence the value of Company Stock, including, without limitation,



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convertible or exchangeable
debt securities, other rights convertible or exchangeable into Company Stock, purchase rights for
Company Stock, Grants with value and payment contingent upon performance of the Company or business
units thereof or any other factors designated by the Committee, and Grants valued by reference to
the book value of Company Stock or the value of securities of or the performance of specified
subsidiaries or affiliates or other business units. The Committee shall determine the terms and
conditions of such Grants, including, to the extent required by Code Section 409A, the specified
payment events on which the Grants will be paid. Company Stock delivered pursuant to a Grant in
the nature of a purchase right granted under this Section 9 shall be purchased for such
consideration and paid for at such times, by such methods and in such forms, including, without
limitation, cash, Company Stock, other Grants, notes, or other property, as the Committee shall
determine. Cash grants, as an element of or supplement to any other Grant under the Plan, may also
be made pursuant to this Section 9.




               (b) Requirement of Employment. If with respect to any Other Stock-Based Grant, the
Grantee ceases to be employed by the Company (as defined in Section 5(e)) before all conditions of
vesting or exercise have been met, or if other conditions established by the Committee are not met,
the Grantee’s Other Stock-Based Grant shall be forfeited. The Committee may, however, provide for
complete or partial exceptions to this requirement as it deems appropriate.



          10. Qualified Performance-Based Compensation.




               (a) Designation as Qualified Performance-Based Compensation. The Committee may
determine that Performance Units, Restricted Stock or Other Stock-Based Grants granted to an
Employee shall be considered “qualified performance-based compensation” under Code Section 162(m).
The provisions of this Section 10 shall apply to Grants of Performance Units, Restricted Stock and
Other Stock-Based Grants that are to be considered “qualified performance-based compensation” under
Code Section 162(m).



               (b) Performance Goals. When Performance Units, Restricted Stock or Other Stock-Based
Grants that are to be considered “qualified performance-based compensation” are granted, the
Committee shall establish in writing (i) the objective performance goals that must be met in order
for restrictions on the Restricted Stock to lapse or amounts to be paid under the Performance
Units, (ii) the Performance Period during which the performance goals must be met, (iii) the
threshold, target and maximum amounts that may be paid if the performance goals are met, and (iv)
any other conditions, including without limitation provisions relating to death,
disability, other termination of employment or Reorganization or Change of Control, that the
Committee deems appropriate and consistent with the Plan and Code Section 162(m). The performance
goals may relate to the Employee’s business unit or the performance of the Company and its
subsidiaries as a whole, or any combination of the foregoing. The Committee shall use objectively
determinable performance goals based on one or more of the following criteria: stock price,
earnings per share, net earnings, operating earnings, return on assets, stockholder return, return
on equity, growth in assets, unit volume, sales, market share, or strategic business criteria
consisting of one or more objectives based on meeting specific revenue goals, market penetration
goals, geographic business expansion goals, cost targets or goals relating to acquisitions or
divestitures or capital raising activities (including without limitation



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rights offerings and share
subscription programs) for the Company (as defined in Section 5(e)(v)(A) hereof).




               (c) Establishment of Goals. The Committee shall establish the performance goals in
writing either before the beginning of the Performance Period or during a period ending no later
than the earlier of (i) 90 days after the beginning of the Performance Period or (ii) the date on
which 25% of the Performance Period has been completed, or such other date as may be required or
permitted under applicable regulations under Code Section 162(m). The performance goals shall
satisfy the requirements for “qualified performance-based compensation, ” including the requirement
that the achievement of the goals be substantially uncertain at the time they are established and
that the goals be established in such a way that a third party with knowledge of the relevant facts
could determine whether and to what extent the performance goals have been met. The Committee shall
not have discretion to increase the amount of compensation that is payable upon achievement of the
designated performance goals; however, subject to any restrictions in Code Section 162(m), the
Committee may reduce the amount of compensation that is payable upon achievement of the designated
performance goals.



               (d) Maximum Payment. If Restricted Stock, or Performance Units or Other Stock-Based
Grants measured with respect to the fair market value of the Company Stock, are granted, not more
than 1,500,000 shares may be granted to any Grantee for any Performance Period. If Performance
Units are measured with respect to other criteria, the maximum amount that may be paid to a Grantee
with respect to a Performance Period is $1,000,000.



               (e) Announcement of Grants. The Committee shall certify and announce the results for
each Performance Period to all Grantees immediately following the announcement of the Company’s
financial results for the Performance Period. If and to the extent that the Committee does not
certify that the performance goals have been met, the grants of Restricted Stock, Performance Units
or Other Stock-Based Grants for the Performance Period shall be forfeited.



          11. Withholding of Taxes




               (a) Required Withholding. All Grants under the Plan shall be subject to applicable
federal (including FICA), state and local tax withholding requirements. The Company shall have the
right to deduct from all Grants paid in cash, or from other wages paid to
the Grantee, any federal, state or local taxes required by law to be withheld with respect to
such Grants. In the case of Options and other Grants paid in Company Stock, the Company may require
the Grantee or other person receiving such shares to pay to the Company the amount of any such
taxes that the Company is required to withhold with respect to such Grants, or the Company may
deduct from other wages paid by the Company the amount of any withholding taxes due with respect to
such Grants.



               (b) Election to Withhold Shares. If the Committee so permits, a Grantee may elect to
satisfy the Company’s income tax withholding obligation with respect to an Option, SAR, Restricted
Stock, Performance Units or Other Stock-Based Grant paid in Company Stock by having shares withheld
up to an amount that does not exceed the Grantee’s minimum



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applicable withholding tax rate for
federal (including FICA), state and local tax liabilities. The election must be in a form and
manner prescribed by the Committee and shall be subject to the prior approval of the Committee.




          12. Transferability of Grants




               (a) Nontransferability of Grants. Except as provided below or as provided by the
terms of an Other Stock-Based Grant, only the Grantee may exercise rights under a Grant during the
Grantee’s lifetime. A Grantee may not transfer those rights except by will or by the laws of
descent and distribution or, with respect to Grants other than Incentive Stock Options, if
permitted in any specific case by the Committee, pursuant to a domestic relations order (as defined
under the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended, or
the regulations thereunder). When a Grantee dies, the personal representative or other person
entitled to succeed to the rights of the Grantee (“Successor Grantee”) may exercise such rights. A
Successor Grantee must furnish proof satisfactory to the Company of his or her right to receive the
Grant under the Grantee’s will or under the applicable laws of descent and distribution.



               (b) Transfer of Nonqualified Stock Options. Notwithstanding the foregoing, the
Committee may provide, in a Grant Instrument or other written agreement, that a Grantee may
transfer Grants other than Incentive Stock Options to family members or other persons or entities,
consistent with applicable securities laws, according to such terms as the Committee may determine;
provided that the Grantee receives no consideration for the transfer of such Grants and the
transferred Grant shall continue to be subject to the same terms and conditions as were applicable
to the Grant immediately before the transfer.



          13. Reorganization or Change of Control of the Company.




               (a) Reorganization. As used herein, a “Reorganization” shall be deemed to have
occurred if the stockholders of the Company approve (or, if stockholder approval is not required,
the Board approves) an agreement providing for (i) the merger or consolidation of the Company with
another corporation where the stockholders of the Company, immediately prior to the merger or
consolidation, will not beneficially own, immediately after the merger or consolidation, shares
entitling such stockholders to more than 50% of all votes to which all
stockholders of the surviving corporation would be entitled in the election of directors
(without consideration of the rights of any class of stock to elect directors by a separate class
vote), (ii) the sale or other disposition of all or substantially all of the assets of the Company,
or (iii) a liquidation or dissolution of the Company.



               (b) As used herein, a “Change of Control” shall be deemed to have occurred if



                    (i) Any “person” (as such term is used in sections 13(d) and 14(d) of the Exchange Act)
becomes a “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing a majority of the



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voting power of the then
outstanding securities of the Company except where the acquisition is approved by the Board; or




                    (ii) Any person has commenced a tender offer or exchange offer for a majority of the voting
power of the then outstanding shares of the Company.



                    (iii) Notwithstanding the foregoing, the Committee may modify the definition of Change of
Control for a particular Grant as the Committee deems appropriate to comply with Code Section 409A.



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



               (d) Other Alternatives. Notwithstanding the foregoing, in the event of a
Reorganization or Change of Control, the Committee may take one or both of the following actions:
the Committee may (i) require that Grantees surrender their outstanding Options and SARs in
exchange for a payment by the Company, in cash or Company Stock as determined by the Committee, in
an amount equal to the amount by which the then Fair Market Value of the shares of Company Stock
subject to the Grantee’s unexercised Options and SARs exceeds the Exercise Price of the Options or
the base amount of the SARs, as applicable, or (ii) after giving Grantees an opportunity to
exercise their outstanding Options and SARs or otherwise realize the value of all of their other
Grants, terminate any or all unexercised Options, SARs and Grants at such time as the Committee
deems appropriate. Such surrender or termination shall take place as of the date of the
Reorganization or Change of Control or such other date as the Committee may specify. The Committee
shall have no obligation to take any of the foregoing actions and, in the absence of any such
actions, outstanding Grants shall continue in effect according to their terms (subject to any
assumption pursuant to Subsection (b)).



               (e) Limitations. Notwithstanding anything in the Plan to the contrary, in the event
of a Reorganization or Change of Control, the Committee shall not have the right to take any
actions described in the Plan (including without limitation actions described in Subsection (d)
above) that would make the Reorganization or Change of Control ineligible for pooling of interests
accounting treatment or that would make the Reorganization or Change of Control ineligible for
desired tax treatment if, in the absence of such right, the Reorganization or Change of Control
would qualify for such treatment and the Company intends to use such treatment with respect to the
Reorganization or Change of Control. The Committee shall have the right, however, to provide in
any Grant Instrument or other written agreement with the Grantee that the terms of the Grant,
including without limitation, any vesting provision, may change upon the occurrence of a Change of
Control or Reorganization.



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          14. Requirements for Issuance or Transfer of Shares




               (a) Stockholder’s Agreement. The Committee may require that a Grantee execute a
stockholder’s agreement, with such terms as the Committee deems appropriate, with respect to any
Company Stock distributed pursuant to this Plan.



               (b) Limitations on Issuance or Transfer of Shares. No Company Stock shall be issued
or transferred in connection with any Grant hereunder unless and until all legal requirements
applicable to the issuance or transfer of such Company Stock have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition any Grant made to
any Grantee hereunder on such Grantee’s undertaking in writing to comply with such restrictions on
his or her subsequent disposition of such shares of Company Stock as the Committee shall deem
necessary or advisable as a result of any applicable law, regulation or official interpretation
thereof, and certificates representing such shares may be legended to reflect any such
restrictions. Certificates representing shares of Company Stock issued or transferred under the
Plan will be subject to such stop-transfer orders and other restrictions as may be required by
applicable laws, regulations and interpretations, including any requirement that a legend be placed
thereon.



          15. Amendment and Termination of the Plan




               (a) Amendment. The Board or the Committee may amend or terminate the Plan at any
time.



               (b) Termination of Plan. The Plan shall terminate on the day immediately preceding the
tenth anniversary of its effective date, unless the Plan is terminated earlier by the Board or is
extended by the Board with the approval of the stockholders.



               (c) Termination and Amendment of Outstanding Grants. A termination or amendment of the
Plan that occurs after a Grant is made shall not materially impair the rights of a Grantee unless
the Grantee consents. The termination of the Plan shall not impair the power and authority of the
Committee with respect to an outstanding Grant. Whether or not the Plan has terminated, an
outstanding Grant may be terminated or amended in
accordance with the Plan or may be amended by agreement of the Company and the Grantee
consistent with the Plan. Notwithstanding the preceding, the Board may amend the Plan at any time,
without the consent of the Grantee, to comply with applicable legal requirements or to ensure the
various Grants awarded under this Plan maintain the designations given to them in the Plan,
including, but not limited to, changes necessary to ensure an option continues to be an incentive
stock option or to ensure qualified performance-based compensation continues to “qualified
performance-based compensation” under Code Section 162(m).



               (d) Governing Document. The Plan shall be the controlling document. No other
statements, representations, explanatory materials or examples, oral or written, may amend the Plan
in any manner. The Plan shall be binding upon and enforceable against the Company and its
successors and assigns.



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          16. Funding of the Plan




          This Plan shall be unfunded. The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to assure the payment of any Grants under
this Plan. In no event shall interest be paid or accrued on any Grant, including unpaid
installments of Grants. Notwithstanding the foregoing, the Committee may authorize the creation of
trusts and deposit therein cash, Company Stock, other Grants or other property, or make other
arrangements to meet the Company’s obligations under the Plan. Such trusts or other arrangements
shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise
determines with the consent of each affected Grantee.




          17. Rights of Grantees




          Nothing in this Plan shall entitle any Grantee or other person to any claim or right to be
granted a Grant under this Plan. Neither this Plan nor any action taken hereunder shall be
construed as giving any individual any rights to be retained by or in the employ of the Company or
any other employment rights.




          18. No Fractional Shares




          No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan or any
Grant. The Committee shall determine whether cash, other awards or other property shall be issued
or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto
shall be forfeited or otherwise eliminated.




          19. Headings




          Section headings are for reference only. In the event of a conflict between a title and the
content of a Section, the content of the Section shall control.




          20. Effective Date of the Plan




          This Plan is effective on October 21, 2008.




          21. Miscellaneous




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



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made by such corporation. The terms
and conditions of the substitute grants may vary from the terms and conditions required by the Plan
and from those of the substituted stock incentives. The Committee shall prescribe the provisions of
the substitute grants.




               (b) Compliance with Law. The Plan, the exercise of Options and SARs and the
obligations of the Company to issue or transfer shares of Company Stock under Grants shall be
subject to all applicable laws and to approvals by any governmental or regulatory agency as may be
required. In addition, it is the intent of the Company that Incentive Stock Options comply with the
applicable provisions of Code Section 422 and that, to the extent applicable, Grants comply with
the requirements of Code Section 409A. To the extent that any legal requirement of Code Sections
422 or 409A as set forth in the Plan ceases to be required under Code Sections 422 or 409A, that
Plan provision shall cease to apply. With respect to persons subject to section 16 of the Exchange
Act, it is the intent of the Company that the Plan and all transactions under the Plan comply with
all applicable provisions of Rule 16b-3 or its successors under the Exchange Act. The Committee may
revoke any Grant if it is contrary to law or modify a Grant to bring it into compliance with any
valid and mandatory government regulation. The Committee may also adopt rules regarding the
withholding of taxes on payments to Grantees. The Committee may, in its sole discretion, agree to
limit its authority under this Section.



               (c) Code Section 409A. The Plan is intended to comply with the applicable
requirements of Code Section 409A and the regulations promulgated thereunder, to the extent
applicable, and shall be administered in accordance with Code Section 409A to the extent Code
Section 409A is applicable to the Plan or any Grant hereunder. Each Grant shall be subject to such
terms as the Committee determines and shall be construed and administered such that the Grant
either (i) qualifies for an exemption from the requirements of Code Section 409A or (ii) satisfies
such requirements. Grants of Performance Units and other similar stock-based awards shall be
structured in a manner consistent with the requirements of Code Section 409A and distributions
shall only be made in a manner and upon an event permitted under Code Section 409A and, to the
extent required under Code Section 409A, payments to a Grantee who is a “specified employee”
(within the meaning of such term under Code Section 409A) upon his
or her separation from service shall be subject to a six-month delay and shall be paid within
15 days after the end of the six-month period following separation from service. All payments to
be made upon a termination of employment or service shall only be made upon a “separation from
service” under Code Section 409A. Except as permitted by Code Section 409A, in no event shall a
Grantee, directly or indirectly, designate the calendar year in which the distribution is made.



               (d) Governing Law. The validity, construction, interpretation and effect of the Plan
and Grant Instruments issued under the Plan shall exclusively be governed by and determined in
accordance with the law of the Commonwealth of Pennsylvania.




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