Document:

Third Amended and Restated Security Agreement

 Exhibit 10.3 
 THIRD AMENDED AND RESTATED 
 SECURITY AGREEMENT 
 THIS THIRD AMENDED AND RESTATED SECURITY AGREEMENT (this “Security Agreement”), is entered into as of May 15, 2007, among
THE PANTRY, INC., a Delaware corporation (the “Borrower”), the Domestic Subsidiaries of the Borrower from time to time a party hereto (individually a “Guarantor” and collectively the
“Guarantors”; the Guarantors, together with the Borrower, individually an “Obligor” and collectively the “Obligors”) and WACHOVIA BANK, NATIONAL ASSOCIATION, in its capacity as Administrative
Agent under the Credit Agreement referred to below (in such capacity, the “Administrative Agent”) for the several banks and other financial institutions as may from time to time become parties to such Credit Agreement (individually
a “Secured Party” and collectively the “Secured Parties”). 
 RECITALS 
 WHEREAS, pursuant to that certain Second Amended and Restated Credit Agreement dated as of December 29, 2005 (as amended, modified, extended,
renewed or replaced, the “Existing Credit Agreement”), among the Borrower, the guarantors party thereto, the lenders party thereto, and the Administrative Agent, the lenders agreed to make loans and issue letters of credit upon the
terms and subject to the conditions set forth therein; 
 WHEREAS, pursuant to that certain Third Amended and Restated Credit
Agreement dated as of the date hereof (as amended, modified, extended, renewed or replaced from time to time, the “Credit Agreement”), among the Borrower, the Guarantors, the Secured Parties party thereto, and the Administrative
Agent, the Secured Parties have agreed to refinance the Existing Credit Agreement and make Loans and issue Letters of Credit upon the terms and subject to the conditions set forth therein; 
 WHEREAS, in connection with the Existing Credit Agreement, the Borrower and the Guarantors entered into that certain Second Amended and Restated
Security Agreement dated as of December 29, 2005 (as amended, modified, extended, renewed or replaced, the “Existing Security Agreement”); and 
 WHEREAS, it is a condition precedent to the effectiveness of the Credit Agreement and the obligations of the Secured Parties to make their respective Loans and to issue Letters of Credit under the Credit
Agreement that the Obligors shall have executed and delivered this Security Agreement (which amends and restates the Existing Security Agreement) to the Administrative Agent for the ratable benefit of the Secured Parties. 
 NOW, THEREFORE, in consideration of these premises and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows: 

 1. Definitions. 
 (a) Unless otherwise defined herein, capitalized terms used herein shall have the meanings ascribed to such terms in the Credit Agreement,
and the following terms which are defined in the Uniform Commercial Code from time to time in effect in the State of New York (the “UCC”) are used herein as so defined: Accessions, Accounts, As-Extracted Collateral, Chattel Paper,
Commercial Tort Claims, Consumer Goods, Control, Deposit Accounts, Documents, Electronic Chattel Paper, Equipment, Farm Products, Fixtures, General Intangibles, Goods, Instruments, Inventory, Investment Property, Letter-of-Credit Rights,
Manufactured Homes, Proceeds, Securities Account, Securities Intermediary, Security, Security Entitlement, Software, Supporting Obligations and Tangible Chattel Paper. For purposes of this Security Agreement, the term “Secured Party” shall
include any Hedging Agreement Provider. 
 (b) In addition, the following term shall have the following meaning: 

“Secured Obligations”: means (a) all of the Credit Party Obligations, howsoever evidenced, created, incurred or
acquired, whether primary, secondary, direct, contingent, or joint and several and (b) all expenses and charges, legal and otherwise, incurred by the Administrative Agent and/or the Secured Parties in collecting or enforcing any of the Credit
Party Obligations or in realizing on or protecting any security therefor, including without limitation the security granted hereunder. 
 2.
Grant of Security Interest in the Collateral. 
 (a) To secure the prompt payment and performance in full when due,
whether by lapse of time, acceleration, mandatory prepayment or otherwise, of the Secured Obligations, each Obligor hereby grants to the Administrative Agent, for the ratable benefit of the Secured Parties, a continuing security interest in, and
right to set off against, any and all right, title and interest of such Obligor in and to the following, whether now owned or existing or owned, acquired, or arising hereafter (collectively, the “Collateral”): 
  

	 	(i)	all Accounts; 

  

	 	(ii)	all cash and Cash Equivalents; 

  

	 	(iii)	all Chattel Paper; 

  

	 	(iv)	those certain Commercial Tort Claims set forth on Schedule 2(a) attached hereto (as such Schedule may be updated from time to time by the Obligors); 

 

	 	(v)	all Copyright Licenses; 

  

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	 	(vi)	all Copyrights; 

  

	 	(vii)	all Deposit Accounts; 

  

	 	(viii)	all Documents; 

  

	 	(ix)	all Equipment; 

  

	 	(x)	all Fixtures; 

  

	 	(xi)	all General Intangibles; 

  

	 	(xii)	all Goods; 

  

	 	(xiii)	all Instruments; 

  

	 	(xiv)	all Inventory; 

  

	 	(xv)	all Investment Property; 

  

	 	(xvi)	all Letter-of-Credit Rights; 

  

	 	(xvii)	all Material Contracts and all such other agreements, contracts, leases, licenses, tax sharing agreements or hedging arrangements now or hereafter entered into by an Obligor, as
such agreements may be amended or otherwise modified from time to time (collectively, the “Assigned Agreements”), including without limitation, (A) all rights of an Obligor to receive moneys due and to become due under or
pursuant to the Assigned Agreements, (B) all rights of an Obligor to receive proceeds of any insurance, indemnity, warranty or guaranty with respect to the Assigned Agreements, (C) claims of an Obligor for damages arising out of or for
breach of or default under the Assigned Agreements and (D) the right of an Obligor to terminate the Assigned Agreements, to perform thereunder and to compel performance and otherwise exercise all remedies thereunder; 

 

	 	(xviii)	all Patent Licenses; 

  

	 	(xix)	all Patents; 

  

	 	(xx)	all Payment Intangibles; 

  

	 	(xxi)	all Trademark Licenses; 

  

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	 	(xxii)	all Trademarks; 

  

	 	(xxiii)	all Software; 

  

	 	(xxiv)	all Supporting Obligations; 

  

	 	(xxv)	all books, records, ledger cards, files, correspondence, computer programs, tapes, disks, and related data processing software (owned by such Obligor or in which it has an interest)
that at any time evidence or contain information relating to any Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon; 

  

	 	(xxvi)	all other personal property of any kind or type whatsoever owned by such Obligor; and 

  

	 	(xxvii)	to the extent not otherwise included, all Accessions, Proceeds and products of any and all of the foregoing. 

 Notwithstanding the foregoing, nothing in this Section 2 or otherwise in this Security Agreement shall constitute a grant by any
Obligor of a security interest in any contract, document, instrument, general intangible, lease, license or other right of any kind to the extent such agreement was entered into prior to the date of this Security Agreement and to the extent such a
grant of a security interest would, after giving effect to the provisions of subsections 9-406, 9-407 and 9-408 of the UCC, constitute a breach or violation of any term thereof. 
 (b) The Obligors and the Administrative Agent, on behalf of the Secured Parties, hereby acknowledge and agree that the security interest
created hereby in the Collateral (i) constitutes continuing collateral security for all of the Secured Obligations, whether now existing or hereafter arising and (ii) is not to be construed as an assignment of any Intellectual Property.

 (c) The term “Collateral” shall include any Secured Hedging Agreement and any rights of the Obligors thereunder
only for purposes of this Section 2. 
 3. Provisions Relating to Accounts, Contracts and Agreements. 
 (a) Anything herein to the contrary notwithstanding, each of the Obligors shall remain liable under each of its Accounts, contracts and
agreements to observe and perform all the conditions and obligations to be observed and performed by it thereunder, all in accordance with the terms of any agreement giving rise to each such Account or the terms of such contract or agreement.
Neither the Administrative Agent nor any Secured Party shall have any obligation or liability under any Account (or any agreement giving 

  

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rise thereto), contract or agreement by reason of or arising out of this Security Agreement or the receipt by the Administrative Agent or any Secured Party
of any payment relating to such Account, contract or agreement pursuant hereto, nor shall the Administrative Agent or any Secured Party be obligated in any manner to perform any of the obligations of an Obligor under or pursuant to any Account (or
any agreement giving rise thereto), contract or agreement, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto), contract or agreement, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time
or times. 
 (b) The Administrative Agent hereby authorizes the Obligors to collect the Accounts; provided, that, upon
written notice to the Obligors, the Administrative Agent may curtail or terminate such authority at any time after the occurrence and during the continuation of an Event of Default. If required by the Administrative Agent at any time after the
occurrence and during the continuation of an Event of Default, any payments of Accounts, when collected by the Obligors (i) shall be forthwith (and in any event within two (2) Business Days) deposited by the Obligors in a collateral
account maintained under the sole dominion and control of the Administrative Agent, subject to withdrawal by the Administrative Agent for the account of the Lenders only as provided in Section 12 hereof, and (ii) until so turned over,
shall be held by the Obligors in trust for the Administrative Agent and the Lenders, segregated from other funds of the Obligors. Upon any waiver of such Event of Default, the Administrative Agent shall promptly transfer any deposits held in the
collateral account under this clause (b) to an account designated by the Obligors. 
 (c) From time to time and upon
reasonable notice, the Administrative Agent shall have the right, but not the obligation, to make test verifications of the Accounts in any manner and through any medium that it reasonably considers advisable, and the Obligors shall furnish all such
assistance and information as the Administrative Agent may reasonably require in connection with such test verifications. Upon the occurrence and during the continuation of an Event of Default, the Administrative Agent’s request and at the
expense of the Obligors, the Obligors shall cause independent public accountants or others satisfactory to the Administrative Agent to furnish to the Administrative Agent reports showing reconciliations, aging and test verifications of, and trial
balances for, the Accounts. Subject to Section 2(a), the Administrative Agent in its own name or in the name of others may communicate with account debtors on the Accounts to verify with them to the Administrative Agent’s satisfaction the
existence, amount and terms of any Accounts. 
 4. Representations and Warranties. Each Obligor hereby represents and warrants to the
Administrative Agent, for the benefit of the Secured Parties, that so long as any of the Secured Obligations remain outstanding (other than contingent indemnity or reimbursement obligations) or any Credit Document or Secured Hedging Agreement is in
effect, and until all of the Commitments shall have been terminated: 
 (a) Chief Executive Office; Books &
Records; Legal Name; State of Formation. As of the Closing Date, each Obligor’s chief executive office and chief place of business are (and for the prior four months has been) located at the locations set forth on Schedule 3.5(c) to
the Credit Agreement and as of the Closing Date each Obligor keeps its books and records at such locations. As of the Closing Date, each Obligor’s exact legal name is as shown in this Security Agreement and its state of incorporation or
organization is (and for the prior four months has been) the location set forth on Schedule 3.1-1 to the Credit Agreement. No Obligor has in the four months preceding the Closing Date changed its name, been party to a merger, consolidation or
other change in structure or used any tradename not disclosed on Schedule 4(a) attached hereto. 
  

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 (b) Location of Tangible Collateral. As of the Closing Date, the location of all
tangible Collateral owned by each Obligor is as shown on Schedule 3.5(c) to the Credit Agreement. 
 (c)
Ownership. Each Obligor is the legal and beneficial owner of its Collateral and has the right to pledge, sell, assign or transfer the same. 
 (d) Security Interest/Priority. This Security Agreement creates a valid security interest in favor of the Administrative Agent, for the ratable benefit of the Secured Parties, in the Collateral of such Obligor
and, when properly perfected by filing, obtaining possession, the granting of Control to the Administrative Agent or otherwise, shall constitute a valid first priority, perfected security interest in such Collateral, to the extent such security
interest can be perfected by filing, obtaining possession, the granting of Control or otherwise under the UCC or by filing an appropriate notice with the United States Patent and Trademark Office or the United States Copyright Office, free and clear
of all Liens except for Permitted Liens. 
 (e) Consents. Except for (i) the filing or recording of UCC financing
statements, (ii) the filing of appropriate notices with the United States Patent and Trademark Office and the United States Copyright Office or (iii) obtaining Control to perfect the Liens created by this Security Agreement, no consent or
authorization of, filing with, or other act by or in respect of, any arbitrator or Governmental Authority and no consent of any other Person (including, without limitation, any stockholder, member or creditor of such Obligor), is required
(A) for the grant by such Obligor of the security interest in the Collateral granted hereby or for the execution, delivery or performance of this Security Agreement by such Obligor or (B) for the perfection of such security interest or the
exercise by the Administrative Agent of the rights and remedies provided for in this Security Agreement. 
  

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 (f) Types of Collateral. None of the Collateral consists of, or is the Proceeds
of, As-Extracted Collateral, Consumer Goods, Farm Products, Manufactured Homes or standing timber (as used in the UCC). 
 (g)
Accounts. With respect to the Accounts of the Obligors: (i) to the extent an Account arises out of goods sold and/or services furnished, (A) the goods sold and/or services furnished giving rise to each Account, are not subject to
any security interest or Lien except the first priority, perfected security interest granted to the Administrative Agent herein and Permitted Liens and (B) such Account arises out of a bona fide transaction for goods sold and delivered (or in
the process of being delivered) by an Obligor or for services actually rendered by an Obligor, which transaction was conducted in the ordinary course of the Obligor’s business or otherwise permitted by the Credit Agreement; (ii) no Account
of an Obligor is evidenced by any Instrument or Chattel Paper unless (x) such Instrument or Chattel Paper represents an obligation of less than $50,000, or (y) as to any Instrument or Chattel Paper which represents an obligation of $50,000
or more, notice has been given to the Administrative Agent, and at the request of the Administrative Agent, the same has been endorsed over and delivered to, or submitted to the Control of, the Administrative Agent; (iii) each Account and the
papers and documents of the applicable Obligor relating thereto are genuine and in all material respects what they purport to be; (iv) the amount of each Account as shown on the applicable Obligor’s books and records, and on all invoices
and statements which may be delivered to the Administrative Agent with respect thereto, is due and payable to the applicable Obligor and is not in any way contingent; (v) no Account is evidenced by a judgment, there are no set-offs,
counterclaims or disputes existing or asserted with respect to any Account that in the aggregate could reasonably be expected to have a Material Adverse Effect, and no Obligor has made any agreement with any account debtor for any deduction from any
Account except for deductions made in the ordinary course of its business; (vi) there has been no development or event which individually or in the aggregate has had or could be reasonably expected to have an adverse effect on the validity or
enforcement of any Account or tend to reduce the amount payable thereunder as shown on the applicable Obligor’s books and records and all invoices and statements delivered to the Administrative Agent with respect thereto, which development or
event could reasonably be expected to have a Material Adverse Effect; and (vii) the right to receive payment under each Account is assignable except where the account debtor with respect to such Account is the United States government or any
State government or any agency, department or instrumentality thereof, or any other Governmental Authority, to the extent the assignment of any such right to payment is prohibited or limited by applicable law, regulations, administrative guidelines
or contract. 
 (h) Inventory. Except as set forth on Schedule 4(a) attached hereto, no Inventory of an Obligor
is held by a third party pursuant to consignment, sale or return, sale on approval or similar arrangement. 
  

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 (i) Intellectual Property. 
 (i) Schedule 3.21 to the Credit Agreement includes all Intellectual Property owned by the Obligors as of the date hereof.

 (ii) All Intellectual Property owned by each Obligor is valid, subsisting, unexpired, and enforceable and has not been
abandoned, and each Obligor is legally entitled to use each of its tradenames. 
 (iii) Except as set forth in Schedule
3.21 to the Credit Agreement, none of the Intellectual Property owned by the Obligors is the subject of any licensing or franchise agreement. 
 (iv) No holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of any Intellectual Property of the Obligors. 
 (v) To the knowledge by each Obligor no action or proceeding is pending seeking to limit, cancel or question the validity of any
Intellectual Property of the Obligors, or which, if adversely determined, would have a material adverse effect on the value of any such Intellectual Property. 
 (vi) All filed applications pertaining to the Intellectual Property of each Obligor have been duly and properly filed, and all
registrations or letters pertaining to such Intellectual Property have been duly and properly filed and issued, and all of such Intellectual Property is valid and enforceable. 
 (vii) No Obligor has made any assignment or agreement in conflict with the security interest of the Administrative Agent in the
Intellectual Property of each Obligor hereunder. 
 (j) Documents, Instruments and Chattel Paper. Set forth on
Schedule 4(j) is a description of all Documents, Instruments, and Tangible Chattel Paper of the Obligors as of the Closing Date with a value of $50,000 or more. All Documents, Instruments and Chattel Paper describing, evidencing or
constituting Collateral are, to the Obligors’ knowledge, complete, valid, and genuine. 
 (k) Equipment. With
respect to each Obligor’s Equipment: (i) such Obligor has good and marketable title thereto; and (ii) all such Equipment is in normal operating condition and repair, ordinary wear and tear alone excepted, and is suitable for the uses
to which it is customarily put in the conduct of such Obligor’s business. 
 (l) Collateral Requiring Control to
Perfect. Set forth on Schedule 4(l) is a description of all Deposit Accounts, Electronic Chattel Paper, Letter-of-Credit Rights, 

  

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Securities Accounts and uncertificated Investment Property of the Obligors as of the Closing Date with a value of $50,000 or more, including the name and
address of (i) in the case of a Deposit Account, the depository institution, (ii) in the case of Electronic Chattel Paper, the account debtor, (iii) in the case of Letter-of-Credit Rights, the issuer or nominated person, as
applicable, and (iv) in the case of a Securities Account or other uncertificated Investment Property, the Securities Intermediary or issuer, as applicable. 
 5. Covenants. Each Obligor covenants that, so long as any of the Secured Obligations remain outstanding (other than contingent indemnity or reimbursement obligations) or any Credit Document or Secured Hedging
Agreement is in effect, and until all of the Commitments shall have been terminated, such Obligor shall: 
 (a) Other
Liens. Defend the Collateral against the claims and demands of all other parties claiming an interest therein and keep the Collateral free from all Liens, except for Permitted Liens. If an Obligor proposes to obtain financing permitted under
Section 6.1(c) of the Credit Agreement with respect to any asset acquired after the Closing Date (a “Purchase Money Financing”), the Administrative Agent will either (i) with respect to such asset, subordinate the Lien and
security interest created hereunder to the Lien securing the Purchase Money Financing by a subordination agreement reasonably acceptable to the Administrative Agent and the provider thereof or (ii) if the Obligor has not been able, after
reasonable effort, to get the provider of such Purchase Money Financing to agree to subordination, the Administrative Agent will release the Lien and security interest granted hereunder in such asset. 
 (b) Sales and Sale and Lease-Backs of Collateral. Neither the Administrative Agent nor any Secured Party authorizes any Obligor to,
and no Obligor shall, sell, exchange, transfer, assign, lease or otherwise dispose of the Collateral or any interest therein, except as permitted under the Credit Agreement; provided that in the event the Obligor makes an asset sale or sale
and lease-back transaction permitted by the Credit Agreement and the assets subject to such asset sale or sale and lease-back transaction constitute Collateral, the Administrative Agent shall release the Collateral that is the subject of such asset
sale to the Obligor free and clear of any Lien and security interest under this Security Agreement or any other Credit Document concurrently with the consummation of such asset sale or sale and lease-back transaction. 
 (c) Preservation of Collateral. Keep the Collateral in good order, condition and repair in all material respects, ordinary wear and
tear excepted; not use the Collateral in violation of the provisions of this Security Agreement or any other agreement relating to the Collateral or any policy insuring the Collateral or any applicable Requirement of Law; not permit any Collateral
to be or become a fixture to real property or an accession to other personal property unless the Administrative Agent has a valid, perfected and first priority security interest for the benefit of the Secured Parties in such real or personal
property; and not, without the prior written consent of the Administrative Agent, alter or remove any identifying symbol or number on its Equipment. 
  

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 (d) Possession or Control of Certain Collateral. If (i) any amount payable
under or in connection with any of the Collateral shall be or become evidenced by any Instrument, Tangible Chattel Paper or Supporting Obligation or (ii) if any Collateral shall be stored or shipped subject to a Document or (iii) if any
Collateral shall consist of Investment Property in the form of certificated securities, in the case of either clause (i) or (ii), in an amount of $50,000 or more individually or $250,000 or more in the aggregate, promptly notify the
Administrative Agent of the existence of such Collateral and, upon the request of the Administrative Agent, deliver such Instrument, Chattel Paper, Supporting Obligation, Document or Investment Property to the Administrative Agent, duly endorsed in
a manner satisfactory to the Administrative Agent, to be held as Collateral pursuant to this Security Agreement. If any Collateral shall consist of Deposit Accounts, Electronic Chattel Paper, Letter-of-Credit Rights, Securities Accounts or
uncertificated Investment Property, execute and deliver (and, with respect to any Collateral consisting of a Securities Account or uncertificated Investment Property with a value of $50,000 or more individually or $250,000 or more in the aggregate,
cause the Securities Intermediary or the issuer, as applicable, with respect to such Investment Property to execute and deliver) to the Administrative Agent all control agreements, assignments, instruments or other documents as reasonably requested
by the Administrative Agent or the Required Lenders for the purposes of obtaining and maintaining Control of such Collateral; provided that it is acknowledged and agreed that, as of the Closing Date, neither the Administrative Agent nor the
Required Lenders have requested the Obligors to execute and deliver any control agreement with respect to Deposit Accounts, Securities Accounts and uncertificated Investment Property. 
 (e) Changes in Corporate Structure or Location. Within five (5) days of (i) altering its legal existence or, in one
transaction or a series of transactions, merging into or consolidating with any other entity, (ii) changing its state of incorporation or (iii) changing its registered corporate name, provide written notice to the Administrative Agent and
file (or confirm that the Administrative Agent will file) such financing statements and amendments to any previously filed financing statements as the Administrative Agent may require. 
 (f) Inspection. Allow the Administrative Agent or its representatives to visit and inspect the Collateral as set forth in
Section 5.5 of the Credit Agreement. 
 (g) Perfection of Security Interest. Execute and deliver to the
Administrative Agent and/or file such agreements, assignments or instruments (including affidavits, notices, reaffirmations, amendments and restatements of existing documents, and any document as may be necessary if the law of any jurisdiction other
than New York becomes or is applicable to the Collateral or any portion thereof, in each case, as the Administrative Agent may reasonably request) and do all such other things as the Administrative Agent may reasonably deem necessary or appropriate
(i) to assure to the Administrative Agent its security interests hereunder are perfected, including (A) such financing statements (including continuation statements) or amendments thereof or supplements thereto or other instruments as the
Administrative Agent may from time to 

  

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time reasonably request in order to perfect and maintain the security interests granted hereunder in accordance with the UCC and any other personal property
security legislation in the appropriate state(s) or province(s), (B) with regard to Copyrights and Copyright Licenses, a Notice of Grant of Security Interest in Copyrights for filing with the United States Copyright Office in the form of
Exhibit A attached hereto, (C) with regard to Patents and Patent Licenses, a Notice of Grant of Security Interest in Patents for filing with the United States Patent and Trademark Office in the form of Exhibit B attached hereto
and (D) with regard to Trademarks and Trademark Licenses, a Notice of Grant of Security Interest in Trademarks for filing with the United States Patent and Trademark Office in the form of Exhibit C attached hereto, (ii) to
consummate the transactions contemplated hereby and (iii) to otherwise protect and assure the Administrative Agent of its rights and interests hereunder (and, if an Obligor shall fail to do any of the foregoing promptly upon the request of the
Administrative Agent, then the Administrative Agent may execute and/or file any and all such requested documents on behalf of such Obligor pursuant to the power of attorney granted herein). Each Obligor hereby authorizes the Administrative Agent to
prepare and file such financing statements (including continuation statements) or amendments thereof or supplements thereto or other instruments as the Administrative Agent may from time to time deem necessary or appropriate in order to perfect and
maintain the security interests granted hereunder in accordance with the UCC, including, without limitation, any financing statement that describes the Collateral as “all personal property” or “all assets” of such Obligor or that
describes the Collateral in some other manner as the Administrative Agent deems necessary or advisable. 
 (h) Collateral
Held by Warehouseman, Bailee, etc. If any Collateral with a book value of $1,000,000 or more is at any time in the possession or control of a warehouseman, bailee or any agent or processor of such Obligor, (i) notify the Administrative
Agent of such possession, (ii) notify such Person of the Administrative Agent’s security interest for the benefit of the Secured Parties in such Collateral, (iii) instruct such Person to hold all such Collateral for the Administrative
Agent’s account subject to the Administrative Agent’s instructions and (iv) obtain an acknowledgment from such Person that it is holding such Collateral for the benefit of the Administrative Agent. 
 (i) Treatment of Accounts. (i) Not grant or extend the time for payment of any Account, or compromise or settle any Account
for less than the full amount thereof, or release any person or property, in whole or in part, from payment thereof, or allow any credit or discount thereon, other than as normal and customary in the ordinary course of an Obligor’s business and
(ii) maintain at its principal place of business a record of Accounts consistent with customary business practices. 
 (j) Covenants Relating to Inventory. 
 (i) Maintain, keep and preserve its Inventory in good salable
condition at its own cost and expense, subject to policies and procedures relating to obsolete, defective, damaged, or slow-moving items and items held for return that are normal and customary in the ordinary course of any Obligor’s business.

  

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 (ii) Comply with all reporting requirements set forth in the Credit Agreement with
respect to Inventory. 
 (iii) If any of the Inventory with a book value in excess of $100,000 is at any time evidenced by a
document of title, immediately upon request by the Administrative Agent, deliver such document of title to the Administrative Agent. 
 (k) Covenants Relating to Copyrights. 
 (i) Employ the Copyright for each material Work with such notice of
copyright as may be required by law to secure copyright protection. 
 (ii) Not do any act or knowingly omit to do any act
whereby any Copyright may become invalidated and (A) not do any act, or knowingly omit to do any act, whereby any Copyright material to the conduct of its business may become injected into the public domain; (B) notify the Administrative
Agent immediately if it knows, or has reason to know, that any Copyright material to the conduct of its business may become injected into the public domain or of any adverse determination or development (including, without limitation, the
institution of, or any such determination or development in, any proceeding in any court or tribunal in the United States or any other country) regarding an Obligor’s ownership of any such Copyright or its validity; (C) take all necessary
steps as it shall deem appropriate under the circumstances, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of each Copyright owned by an Obligor, which any Obligor reasonably
determines are material to the conduct of its business, including, without limitation, filing of applications for renewal where necessary; and (D) promptly notify the Administrative Agent of any material infringement of any Copyright of an
Obligor of which it becomes aware (with respect to Copyrights that an Obligor reasonably determines is material to the conduct of its business) and take such actions as it shall reasonably deem appropriate under the circumstances to protect such
Copyright, including, where appropriate, the bringing of suit for infringement, seeking injunctive relief and seeking to recover any and all damages for such infringement. 
 (iii) Not make any assignment or agreement in conflict with the security interest in the Copyrights of each Obligor hereunder. 

(l) Covenants Relating to Patents and Trademarks. 
 (i)(A) Continue to use each Trademark, which any Obligor reasonably determines is material to the conduct of its business, in order to

  

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maintain such Trademark in full force free from any claim of abandonment for non-use, (B) maintain as in the past the quality of products and services
offered under such Trademark, (C) employ such Trademark with the appropriate notice of registration, (D) not adopt or use any mark which is confusingly similar or a colorable imitation of such Trademark unless the Administrative Agent, for
the ratable benefit of the Secured Parties, shall obtain a perfected security interest in such mark pursuant to this Security Agreement, and (E) not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any
act whereby any such Trademark may become invalidated. 
 (ii) Not do any act, or omit to do any act, whereby any Patent,
which any Obligor reasonably determines is material to the conduct of its business, may become abandoned or dedicated. 
 (iii) Promptly notify the Administrative Agent if it knows, or has reason to know, that any application or registration relating to any Patent or Trademark material to the conduct of its business may become abandoned or dedicated, or of any
adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office or any court or tribunal in any country) regarding
an Obligor’s ownership of any such Patent or Trademark or its right to register the same or to keep, maintain and use the same. 
 (iv) Whenever an Obligor, either by itself or through an agent, employee, licensee or designee, shall file an application for the registration of any Patent or Trademark with the United States Patent and Trademark Office or any similar
office or agency in any other country or any political subdivision thereof, such Obligor shall report such filing to the Administrative Agent within five Business Days after the last day of the fiscal quarter in which such filing occurs. Upon
request of the Administrative Agent, an Obligor shall execute and deliver any and all agreements, instruments, documents and papers as the Administrative Agent may request to evidence the Administrative Agent’s and the Secured Parties’
security interest in any Patent or Trademark and the goodwill and General Intangibles of such Obligor relating thereto or represented thereby. 
 (v) Take all reasonable and necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, or any similar office or agency in any other country or any political
subdivision thereof, to maintain and pursue each material application, to obtain the relevant registration and to maintain each registration of the Patents and Trademarks, which any Obligor reasonably determines is material to the conduct of its
business, including, without limitation, filing of applications for renewal, affidavits of use and affidavits of incontestability. 
  

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 (vi) Promptly notify the Administrative Agent and the Secured Parties after it learns
that any Patent or Trademark included in the Collateral, which any Obligor reasonably determines is material to the conduct of its business, is infringed, misappropriated or diluted by a third party and, if such Patent or Trademark is necessary or
desirable for the conduct of any Obligor’s business and if consistent with good business judgment, then promptly sue for infringement, misappropriation or dilution, to seek injunctive relief where appropriate and to recover any and all damages
for such infringement, misappropriation or dilution, or take such other actions as it shall reasonably deem appropriate under the circumstances to protect such Patent or Trademark. 
 (vii) Not make any assignment or agreement in conflict with the security interest in the Patents or Trademarks of any Obligor hereunder.

 (m) New Patents, Copyrights and Trademarks. Promptly provide the Administrative Agent with (i) a listing of all
applications, if any, for new Copyrights, Patents or Trademarks (together with a listing of the issuance of registrations or letters on present applications) which new applications and issued registrations of letters shall be subject to the terms
and conditions hereunder, and (ii) (A) with respect to Copyrights and Copyright Licenses, a duly executed Notice of Grant of Security Interest in Copyrights, (B) with respect to Patents and Patent Licenses, a duly executed Notice of
Grant of Security Interest in Patents, (C) with respect to Trademarks and Trademark Licenses, a duly executed Notice of Grant of Security Interest in Trademarks or (D) such other duly executed documents as the Administrative Agent may
request in a form acceptable to counsel for the Administrative Agent and suitable for recording to evidence the security interest in the Copyright, Patent or Trademark which is the subject of such new application. 
 (n) Commercial Tort Claims; Notice of Litigation. (i) Promptly forward to the Administrative Agent written notification of any
and all Commercial Tort Claims of any Obligor, including, but not limited to, any and all actions, suits, and proceedings before any court or Governmental Authority by or affecting such Obligor or any of its Subsidiaries and (ii) execute and
deliver such statements, documents and notices and do and cause to be done all such things as may be required by the Administrative Agent, or required by law, including all things which may from time to time be necessary under the UCC to fully
create, preserve, perfect and protect the priority of the Administrative Agent’s security interest in any Commercial Tort Claims. 
 (o) Fixtures. At all times maintain the Collateral as personal property and not affix any of the Collateral to any real property (except real property in which the Administrative Agent has a valid, perfected
and first priority security interest) in a manner which would change its nature from personal property to real property or a Fixture. 
 (p) Insurance. Insure, repair and replace the Collateral of such Obligor as set forth in the Credit Agreement. Subject to the provisions of the Credit Agreement, all insurance proceeds shall be subject to the
security interest of the Administrative Agent hereunder. 
  

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 (q) New Licenses and Leases. Use its commercially reasonable best efforts to
ensure that any material license or any material lease obtained or entered into by such Obligor after the Closing Date does not contain legally enforceable restrictions on the granting of a security interest therein. 
 6. License of Intellectual Property. The Obligors hereby assign, transfer and convey to the Administrative Agent, effective upon the occurrence of
any Event of Default, the nonexclusive right and license to use all Intellectual Property owned by or used by any Obligor that relate to the Collateral and any other collateral granted by the Obligors as security for the Secured Obligations (to the
extent this license can be granted without violation of the Obligor’s license thereof), together with any goodwill associated therewith, all to the extent necessary to enable the Administrative Agent to use, possess and realize on the
Collateral and to enable any successor or assign to enjoy the benefits of the Collateral. This right and license shall inure to the benefit of all successors, assigns and transferees of the Administrative Agent and its successors, assigns and
transferees, whether by voluntary conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and license is granted free of charge, without requirement that any monetary payment whatsoever
be made to the Obligors. 
 7. Special Provisions Regarding Inventory. Notwithstanding anything to the contrary contained in this
Security Agreement, each Obligor may, unless and until an Event of Default occurs and is continuing and the Administrative Agent instructs such Obligor otherwise, without further consent or approval of the Administrative Agent, use, consume, sell,
lease and exchange its Inventory in the ordinary course of its business as presently conducted, whereupon, in the case of such a sale or exchange, the security interest created hereby in the Inventory so sold or exchanged (but not in any Proceeds
arising from such sale or exchange) shall cease immediately without any further action on the part of the Administrative Agent. 
 8.
Performance of Obligations; Advances by Administrative Agent. The Administrative Agent may, at its sole option and sole discretion, perform or cause to be performed any of the following actions on failure of any Obligor to perform the same
and in so doing may expend such sums as the Administrative Agent may reasonably deem advisable in the performance thereof: the payment of any insurance premiums, the payment of any taxes, a payment to obtain a release of a Lien or potential Lien,
expenditures made in defending against any adverse claim and all other expenditures which the Administrative Agent may make for the protection of the security interest hereof or may be compelled to make by operation of law. All such reasonable sums
and amounts so expended shall be repayable by the Obligors on a joint and several basis promptly upon timely notice thereof and demand therefor, shall constitute additional Secured Obligations and shall bear interest from the date said amounts are
expended at the default rate for Alternate Base Rate Loans set forth in Section 2.11 of the Credit Agreement. No such performance of any action by the Administrative Agent on behalf of any Obligor, and no such advance or expenditure therefor,
shall relieve the Obligors of any default under the terms of 

  

 15 

 
this Security Agreement, the other Credit Documents or any Secured Hedging Agreement. The Administrative Agent may make any payment hereby authorized in
accordance with any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment,
sale, forfeiture, tax lien, title or claim except to the extent such payment is being contested in good faith by an Obligor in appropriate proceedings and against which adequate reserves are being maintained in accordance with GAAP. 
 9. Events of Default. 
 The occurrence
of an event which under the Credit Agreement would constitute an Event of Default shall be an event of default hereunder (an “Event of Default”). 
 10. Remedies. 
 (a) General Remedies. Upon the occurrence of an Event of
Default and during continuation thereof, the Administrative Agent and the Secured Parties shall have, in addition to the rights and remedies provided herein, in the Credit Documents, in any Secured Hedging Agreement or by law (including, but not
limited to, levy of attachment, garnishment and the rights and remedies set forth in the Uniform Commercial Code of the jurisdiction applicable to the affected Collateral), the rights and remedies of a secured party under the UCC (regardless of
whether the UCC is the law of the jurisdiction where the rights and remedies are asserted and regardless of whether the UCC applies to the affected Collateral), and further, the Administrative Agent may, with or without judicial process or the aid
and assistance of others, (i) to the extent permitted by applicable law, enter on any premises on which any of the Collateral may be located and, without resistance or interference by the Obligors, take possession of the Collateral,
(ii) subject to Section 10(c) with respect to leased properties, dispose of any Collateral on any such premises, (iii) require the Obligors to assemble and make available to the Administrative Agent at the expense of the Obligors any
Collateral at any place and time designated by the Administrative Agent which is reasonably convenient to both parties, (iv) remove any Collateral from any such premises for the purpose of effecting sale or other disposition thereof, and/or
(v) without demand and without advertisement, notice, hearing or process of law, all of which each of the Obligors hereby waives to the fullest extent permitted by applicable law, at any place and time or times, sell and deliver any or all
Collateral held by or for it at public or private sale, by one or more contracts, in one or more parcels, for cash, upon credit or otherwise, at such prices and upon such terms as the Administrative Agent deems advisable, in its sole discretion
(subject to any and all mandatory legal requirements). Neither the Administrative Agent’s compliance with any applicable state or federal law in the conduct of such sale, nor its disclaimer of any warranties relating to the Collateral, shall be
considered to adversely affect the commercial reasonableness of such sale. In addition to all other sums due the Administrative Agent and the Secured Parties with respect to the Secured Obligations, the Obligors shall pay the Administrative Agent
and each of the Secured Parties all reasonable documented costs and expenses incurred by the Administrative Agent or any such Secured Party, including, but not limited to, 

  

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reasonable attorneys’ fees and court costs, in obtaining or liquidating the Collateral, in enforcing payment of the Secured Obligations, or in the
prosecution or defense of any action or proceeding by or against the Administrative Agent or the Secured Parties or the Obligors concerning any matter arising out of or connected with this Security Agreement, any Collateral or the Secured
Obligations, including, without limitation, any of the foregoing arising in, arising under or related to a case under the Bankruptcy Code. To the extent the rights of notice cannot be legally waived hereunder, each Obligor agrees that any
requirement of reasonable notice shall be met if such notice is personally served on or mailed, postage prepaid, to the Borrower in accordance with the notice provisions of Section 9.2 of the Credit Agreement at least ten (10) days
before the time of sale or other event giving rise to the requirement of such notice. The Administrative Agent and the Secured Parties shall not be obligated to make any sale or other disposition of the Collateral regardless of notice having been
given. To the extent permitted by applicable law, any Secured Party may be a purchaser at any such sale. To the extent permitted by applicable law, each of the Obligors hereby waives all of its rights of redemption with respect to any such sale.
Subject to the provisions of applicable law, the Administrative Agent and the Secured Parties may postpone or cause the postponement of the sale of all or any portion of the Collateral by announcement at the time and place of such sale, and such
sale may, without further notice, to the extent permitted by law, be made at the time and place to which the sale was postponed, or the Administrative Agent and the Secured Parties may further postpone such sale by announcement made at such time and
place. 
 (b) Remedies Relating to Accounts. Upon the occurrence of an Event of Default and during the continuation
thereof, whether or not the Administrative Agent has exercised any or all of its rights and remedies hereunder, the Administrative Agent shall have the right, subject to applicable law, to enforce any Obligor’s rights against any account
debtors and obligors on such Obligor’s Accounts. Each Obligor acknowledges and agrees that the Proceeds of its Accounts remitted to or on behalf of the Administrative Agent in accordance with the provisions of this Section shall be solely for
the Administrative Agent’s own convenience in administering the provisions of this Security Agreement and that such Obligor shall not have any right, title or interest in such Proceeds or in any such other amounts except as expressly provided
herein. To the extent required by the Administrative Agent, each Obligor agrees to execute any document or instrument, and to take any action, necessary under applicable law (including the Federal Assignment of Claims Act) in order for the
Administrative Agent to exercise its rights and remedies (or be able to exercise its rights and remedies at some future date) with respect to any Accounts of such Obligor where the account debtor is a Governmental Authority. The Administrative Agent
and the Secured Parties shall have no liability or responsibility to any Obligor for acceptance of a check, draft or other order for payment of money bearing the legend “payment in full” or words of similar import or any other restrictive
legend or endorsement or be responsible for determining the correctness of any remittance. Each Obligor hereby agrees to indemnify the Administrative Agent and the Secured Parties and their respective officers, directors, employees, partners,
members, counsel, agents, representatives, advisors and affiliates (each, an “Indemnified Party”) from and against all liabilities, damages, losses, actions, claims, judgments, costs, 

  

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expenses, charges and reasonable attorneys’ fees suffered or incurred by any such Indemnified Party because of the maintenance of the foregoing
arrangements except as relating to or arising out of the gross negligence or willful misconduct of such Indemnified Party or its officers, directors, employees, partners, members, counsel, agents, representatives, advisors or affiliates. In the case
of any investigation, litigation or other proceeding, the foregoing indemnity shall be effective whether or not such investigation, litigation or proceeding is brought by an Obligor, its directors, shareholders or creditors or by an Indemnified
Party or any other Person, and whether or not any other Indemnified Party is a party thereto. 
 (c) Access. In
addition to the rights and remedies hereunder, upon the occurrence of an Event of Default and during the continuation thereof, the Obligors shall provide the Administrative Agent with access to the Collateral, without cost or charge to the
Administrative Agent, and the reasonable use of the same, together with materials, supplies, books and records of the Obligors for the purpose of collecting and liquidating the Collateral, or for preparing for sale and conducting the sale of the
Collateral, whether by foreclosure, auction or otherwise (except to the extent such activities are specifically restricted by the terms of any lease; provided, if the foregoing activities are specifically restricted by the terms of any lease,
the Obligors shall promptly take all reasonable steps to move the Collateral at such lease location to a new location satisfactory to the Administrative Agent). In addition, the Administrative Agent may remove Collateral, or any part thereof, from
such premises and/or any records with respect thereto, in order to effectively collect or liquidate such Collateral. If the Administrative Agent exercises its right to take possession of the Collateral, each Obligor shall also at its expense perform
any and all other steps reasonably requested by the Administrative Agent to preserve and protect the security interest hereby granted in the Collateral, such as placing and maintaining signs indicating the security interest of the Administrative
Agent, appointing overseers for the Collateral and maintaining inventory records. 
 (d) Nonexclusive Nature of
Remedies. Failure by the Administrative Agent or the Secured Parties to exercise any right, remedy or option under this Security Agreement, any other Credit Document, any Secured Hedging Agreement or as provided by law, or any delay by the
Administrative Agent or the Secured Parties in exercising the same, shall not operate as a waiver of any such right, remedy or option. No waiver hereunder shall be effective unless it is in writing, signed by the party against whom such waiver is
sought to be enforced and then only to the extent specifically stated, which in the case of the Administrative Agent or the Secured Parties shall only be granted as provided herein. To the extent permitted by law, neither the Administrative Agent,
the Secured Parties, nor any party acting as attorney for the Administrative Agent or the Secured Parties, shall be liable hereunder for any acts or omissions or for any error of judgment or mistake of fact or law other than their gross negligence
or willful misconduct hereunder. The rights and remedies of the Administrative Agent and the Secured Parties under this Security Agreement shall be cumulative and not exclusive of any other right or remedy which the Administrative Agent or the
Secured Parties may have. 
  

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 (e) Retention of Collateral. In addition to the rights and remedies hereunder,
upon the occurrence and continuance of an Event of Default, the Administrative Agent may, after providing the notices required by Sections 9-620 and 9-621 (or similar provision) of the UCC (or any successor sections of the UCC) or otherwise
complying with the notice requirements of applicable law of the relevant jurisdiction, accept or retain the Collateral in satisfaction of the Secured Obligations. Unless and until the Administrative Agent shall have provided such notices, however,
the Administrative Agent shall not be deemed to have retained any Collateral in satisfaction of any Secured Obligations for any reason. 
 (f) Deficiency. In the event that the proceeds of any sale, collection or realization are insufficient to pay all amounts to which the Administrative Agent or the Secured Parties are legally entitled, the
Obligors shall be jointly and severally liable for the deficiency, together with interest thereon at the default rate for Alternate Base Rate Loans set forth in Section 2.10 of the Credit Agreement, together with the reasonable costs of
collection and the reasonable fees of any attorneys employed by the Administrative Agent to collect such deficiency. Any surplus remaining after the full payment and satisfaction of the Secured Obligations shall be returned to the Obligors or to
whomsoever a court of competent jurisdiction shall determine to be entitled thereto. 
 (g) Other Security. To the
extent that any of the Secured Obligations are now or hereafter secured by property other than the Collateral (including, without limitation, real property and securities owned by an Obligor), or by a guarantee, endorsement or property of any other
Person, then the Administrative Agent shall have the right to proceed against such other property, guarantee or endorsement upon the occurrence of any Event of Default, and the Administrative Agent shall have the right, in its sole discretion, to
determine which rights, security, Liens, security interests or remedies the Administrative Agent shall at any time pursue, relinquish, subordinate, modify or take with respect thereto, without in any way modifying or affecting any of them or any of
the Administrative Agent’s and the Secured Parties’ rights or the Secured Obligations under this Security Agreement, under any other of the Credit Documents or under any Secured Hedging Agreement. 
 11. Rights of the Administrative Agent. 
 (a) Power of Attorney. In addition to other powers of attorney contained herein, each Obligor hereby designates and appoints the Administrative Agent, on behalf of the Secured Parties, and each of its designees
or agents, as attorney-in-fact of such Obligor, irrevocably and with power of substitution, with authority to take any or all of the following actions only upon the occurrence and during the continuation of an Event of Default: 
 (i) to demand, collect, settle, compromise, adjust, give discharges and releases, all as the Administrative Agent may reasonably determine
with respect to the Collateral; 
  

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 (ii) to commence and prosecute any actions at any court for the purposes of collecting
any Collateral and enforcing any other right in respect thereof; 
 (iii) to defend, settle, adjust or compromise any action,
suit or proceeding brought and, in connection therewith, give such discharge or release as the Administrative Agent may deem reasonably appropriate with respect to the Collateral; 
 (iv) to receive, open and dispose of mail addressed to an Obligor and endorse checks, notes, drafts, acceptances, money orders, bills of
lading, warehouse receipts or other instruments or documents evidencing payment, shipment or storage of the goods giving rise to the Collateral of such Obligor, or securing or relating to such Collateral, on behalf of and in the name of such
Obligor; 
 (v) to sell, assign, transfer, make any agreement in respect of, or otherwise deal with or exercise rights in
respect of, any Collateral or the goods or services which have given rise thereto, as fully and completely as though the Administrative Agent were the absolute owner thereof for all purposes; 
 (vi) to adjust and settle claims under any insurance policy relating to the Collateral; 
 (vii) to execute and deliver and/or file all assignments, conveyances, statements, financing statements, continuation statements, security
agreements, affidavits, notices and other agreements, instruments and documents that the Administrative Agent may determine necessary in order to perfect and maintain the security interests and Liens granted in this Security Agreement and in order
to fully consummate all of the transactions contemplated herein; 
 (viii) to institute any foreclosure proceedings that the
Administrative Agent may deem appropriate; 
 (ix) to do and perform all such other acts and things as the Administrative
Agent may reasonably deem to be necessary, proper or convenient in connection with the Collateral; and 
 (x) to execute any
document or instrument, and to take any action, necessary under applicable law (including the Federal Assignment of Claims Act) in order for the Administrative Agent to exercise its rights and remedies (or to be able to exercise its rights and
remedies at some future date) with respect to any Account of an Obligor where the account debtor is a Governmental Authority. 
  

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 This power of attorney is a power coupled with an interest and shall be irrevocable for so long as any of
the Secured Obligations remain outstanding (other than contingent indemnity or reimbursement obligations) or any Credit Document or Secured Hedging Agreement is in effect, and until all of the Commitments shall have been terminated. The
Administrative Agent shall be under no duty to exercise or withhold the exercise of any of the rights, powers, privileges and options expressly or implicitly granted to the Administrative Agent in this Security Agreement, and shall not be liable for
any failure to do so or any delay in doing so. The Administrative Agent shall not be liable for any act or omission or for any error of judgment or any mistake of fact or law in its individual capacity or its capacity as attorney-in-fact except acts
or omissions resulting from its gross negligence or willful misconduct. This power of attorney is conferred on the Administrative Agent solely to protect, preserve and realize upon its security interest in the Collateral. 
 (b) Assignment by the Administrative Agent. The Administrative Agent may from time to time assign the Secured Obligations and any
portion thereof and/or the Collateral and any portion thereof to a successor Administrative Agent, and the assignee shall be entitled to all of the rights and remedies of the Administrative Agent under this Security Agreement in relation thereto.

 (c) The Administrative Agent’s Duty of Care. Other than the exercise of reasonable care to assure the safe
custody of the Collateral while being held by the Administrative Agent hereunder, the Administrative Agent shall have no duty or liability to preserve rights pertaining thereto, it being understood and agreed that the Obligors shall be responsible
for preservation of all rights in the Collateral, and the Administrative Agent shall be relieved of all responsibility for the Collateral upon surrendering it or tendering the surrender of it to the Obligors. The Administrative Agent shall be deemed
to have exercised reasonable care in the custody and preservation of the Collateral in its possession if the Collateral is accorded treatment substantially equal to that which the Administrative Agent accords its own property, which shall be no less
than the treatment employed by a reasonable and prudent agent in the industry, it being understood that the Administrative Agent shall not have responsibility for taking any necessary steps to preserve rights against any parties with respect to any
of the Collateral. In the event of a public or private sale of Collateral pursuant to Section 10 hereof, the Administrative Agent shall have no obligation to clean-up, repair or otherwise prepare the Collateral for sale. 
 12. Application of Proceeds. After the exercise of remedies (other than the invocation of default interest pursuant to Section 2.10 of the
Credit Agreement) by the Administrative Agent or the Lenders pursuant to Section 7.2 of the Credit Agreement (or after the Commitments shall automatically terminate and the Loans (with accrued interest thereon) and all other amounts under the
Credit Documents (including without limitation the maximum amount of all contingent liabilities under Letters of Credit) shall automatically become due and payable in accordance with the terms of such Section 7.2), all amounts collected or
received by the Administrative Agent or any Secured Party on account of the Secured Obligations and any proceeds of any Collateral will be applied in reduction of the Secured Obligations in the order set forth in Section 

  

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2.13(b) of the Credit Agreement, and each Obligor irrevocably waives the right to direct the application of such payments and proceeds and acknowledges and
agrees that the Administrative Agent shall have the continuing and exclusive right to apply and reapply any and all such payments and proceeds in the Administrative Agent’s sole discretion (but subject in all events to Section 2.13(b) of
the Credit Agreement), notwithstanding any entry to the contrary upon any of its books and records. 
 13. Costs of Counsel. If at any
time hereafter, whether upon the occurrence of an Event of Default or not, the Administrative Agent employs counsel to prepare or consider amendments, waivers or consents with respect to this Security Agreement, or to take action or make a response
in or with respect to any legal or arbitral proceeding relating to this Security Agreement or relating to the Collateral, or to protect the Collateral or exercise any rights or remedies under this Security Agreement or with respect to the
Collateral, then the Obligors agree to promptly pay upon demand any and all such reasonable documented costs and expenses of the Administrative Agent, all of which costs and expenses shall constitute Secured Obligations hereunder; provided,
that, except to the extent a conflict of interest exists that requires separate legal counsel, the Obligors shall be obligated, collectively, to pay reasonable fees and expenses of only one law firm to act as counsel for the Secured Parties (other
than counsel to the Administrative Agent) in each applicable jurisdiction. 
 14. Continuing Agreement. 
 (a) Upon this Security Agreement becoming effective in accordance with the terms hereof and of the other Credit Documents, the Existing
Security Agreement shall be deemed amended and restated by this Security Agreement. This Security Agreement shall be a continuing agreement in every respect and shall remain in full force and effect so long as any of the Secured Obligations remain
outstanding (other than contingent indemnity or reimbursement obligations) or any Credit Document or Secured Hedging Agreement is in effect, and until all of the Loans shall have been paid and the Commitments shall have been terminated. Upon such
payment and termination, this Security Agreement shall be automatically terminated and the Administrative Agent and the Secured Parties shall, upon the request and at the expense of the Obligors, forthwith release all of their Liens and security
interests hereunder and shall execute and deliver all UCC termination statements and/or other documents reasonably requested by the Obligors evidencing such termination. Upon any sale or other transfer by any Obligor of any Collateral that is
permitted under the Credit Documents, or upon the effectiveness of any written consent to the release of the security interest granted hereby in any Collateral pursuant to Section 9.1 of the Credit Agreement, that security interest in such
Collateral shall be automatically released and the Administrative Agent and the Secured Parties shall, upon the request and at the expense of the Obligors, forthwith release all of their Liens and security interests in such Collateral hereunder and
shall promptly execute and deliver all UCC termination statements and/or other documents reasonably requested by the Obligors evidencing such release. Notwithstanding the foregoing all releases and indemnities provided hereunder shall survive
termination of this Security Agreement. 
  

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 (b) This Security Agreement shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole or in part, of any of the Secured Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any Secured Party as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar law, all as though such payment had not been made; provided that in the event payment of all or any part of the Secured Obligations is rescinded or must be restored or
returned, all reasonable costs and expenses (including without limitation any reasonable legal fees and disbursements) incurred by the Administrative Agent or any Secured Party in defending and enforcing such reinstatement shall be deemed to be
included as a part of the Secured Obligations. 
 15. Amendments; Waivers; Modifications. This Security Agreement and the provisions
hereof may not be amended, waived, modified, changed, discharged or terminated except as set forth in Section 9.1 of the Credit Agreement. 
 16. Successors in Interest; Release. This Security Agreement shall create a continuing security interest in the Collateral and shall be binding upon each Obligor, its successors and assigns and shall inure,
together with the rights and remedies of the Administrative Agent and the Secured Parties hereunder, to the benefit of the Administrative Agent and the Secured Parties and their successors and permitted assigns; provided, however, that
none of the Obligors may assign its rights or delegate its duties hereunder without the prior written consent of each Secured Party or the Required Secured Parties, as required by the Credit Agreement. To the fullest extent permitted by law, each
Obligor hereby releases each Indemnified Party and its successors and assigns from any liability for any act or omission relating to this Security Agreement or the Collateral, except for any liability arising from the gross negligence or willful
misconduct of such Indemnified Party or its officers, directors, employees, partners, members, counsel, agents, representatives, advisors, affiliates, successors and assigns, in each case as determined by a court of competent jurisdiction pursuant
to a final non-appealable judgment. 
 17. Notices. All notices required or permitted to be given under this Security Agreement shall
be in conformance with Section 9.2 of the Credit Agreement. 
 18. Counterparts. This Security Agreement may be executed
in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart. Delivery of executed counterparts of the Security Agreement by telecopy or other electronic means shall be effective as an original and shall constitute a representation that an original shall be
delivered. 
 19. Headings. The headings of the sections and subsections hereof are provided for convenience only and shall not in any
way affect the meaning, construction or interpretation of any provision of this Security Agreement. 
 20. Governing Law; Submission to
Jurisdiction and Service of Process; Waivers. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE 

  

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PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (without giving effect to any
conflict of laws rules). Each Obligor agrees not to assert any claim against the Administrative Agent, any Secured Party (including the Issuing Secured Party), any of their Affiliates, or any of their respective directors, officers, employees,
attorneys or agents, on any theory of liability, for special, indirect, consequential or punitive damages arising out of or otherwise relating to any of the transactions contemplated herein or in any other Credit Document. The terms of Sections 9.14
and 9.17 of the Credit Agreement are incorporated herein by reference, mutatis mutandis, and the parties hereto agree to such terms. 
 21. Severability. If any provision of this Security Agreement is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall
be construed without giving effect to the illegal, invalid or unenforceable provisions. 
 22. Entirety. This Security Agreement, the
other Credit Documents and the Secured Hedging Agreements represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or
correspondence relating to the Credit Documents, the Secured Hedging Agreements or the transactions contemplated herein and therein. 
 23.
Survival. All representations and warranties of the Obligors hereunder shall survive the execution and delivery of this Security Agreement, the other Credit Documents and the Secured Hedging Agreements, the delivery of the Notes and the
making of the Loans and the issuance of the Letters of Credit under the Credit Agreement. 
 24. Joint and Several Obligations of
Obligors. 
 (a) Each of the Guarantors is entering into this Security Agreement in consideration of the financial
accommodation to be provided by the Secured Parties under the Credit Agreement and under the Secured Hedging Agreements, for the mutual benefit, directly and indirectly, of each of the Obligors and in consideration of the joint and several
undertakings of each of the Guarantors under the Guaranty provided pursuant to Article X of the Credit Agreement, and each Guarantor is granting the security interests in the Collateral of such Guarantor pursuant to this Security Agreement in
support of its obligations under the Guaranty. 
 (b) Notwithstanding any provision to the contrary contained herein, in any
other of the Credit Documents or in any Secured Hedging Agreement, to the extent the obligations of an Obligor shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or
federal law relating to fraudulent conveyances or transfers), then the obligations of such Obligor hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation,
the Bankruptcy Code). 
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 Each of the parties hereto has caused a counterpart of this Security Agreement to be duly executed and
delivered as of the date first above written. 
  

									
	OBLIGORS:	 		 	THE PANTRY, INC.,	 	
		 		 	a Delaware corporation	 	
					
		 		 	By:	 	 /s/ Daniel J. Kelly
	 	
		 		 	Name:	 	Daniel J. Kelly	 	
		 		 	Title:	 	Chief Financial Officer, Vice-President Finance and Secretary	 	
				
		 		 	R. & H. MAXXON, INC.,	 	
		 		 	a South Carolina corporation	 	
					
		 		 	By:	 	 /s/ Daniel J. Kelly
	 	
		 		 	Name:	 	Daniel J. Kelly	 	
		 		 	Title:	 	Executive Vice-President and Assistant Secretary	 	
				
		 		 	KANGAROO, INC.,	 	
		 		 	a Georgia corporation	 	
					
		 		 	By:	 	 /s/ Daniel J. Kelly
	 	
		 		 	Name:	 	Daniel J. Kelly	 	
		 		 	Title:	 	Executive Vice-President and Assistant Secretary	 	

  

 25 

 Accepted and agreed to as of the date first above written. 
  

			
	WACHOVIA BANK, NATIONAL ASSOCIATION
	as Administrative Agent
		
	By:	 	 /s/ Jorge A. Gonzalez

	Name:	 	Jorge A. Gonzalez
	Title:	 	Managing Director

  

 26Zhone Technologies, Inc. Amended and Restated 2001 Stock Incentive Plan

 Exhibit 10.1 
 ZHONE TECHNOLOGIES, INC. 
 AMENDED AND RESTATED 
 2001 STOCK INCENTIVE PLAN 
 1.
Purpose. 
 The purpose of the Zhone Technologies, Inc. Amended and Restated 2001 Stock Incentive Plan (the “Plan”), formerly
known as the Tellium, Inc. 2001 Stock Incentive Plan) is to strengthen Zhone Technologies, Inc., a Delaware corporation (the “Company”), by providing an incentive to its employees, officers, directors and consultants and thereby
encouraging them to devote their abilities and industry to the success of the Company’s business enterprise. It is intended that this purpose be achieved by extending to employees (including future employees who have received a formal written
offer of employment), officers, directors, and consultants of the Company and its Subsidiaries an added long-term incentive for high levels of performance and unusual efforts through the grant of Incentive Stock Options, Nonqualified Stock Options,
Stock Appreciation Rights, Dividend Equivalent Rights, Performance Units and Performance Shares, Share Awards, Phantom Stock and Restricted Stock (as each term is herein defined). After the Original Effective Date of this Plan, no further awards
shall be made under the Amended and Restated 1997 Employee Stock Incentive Plan of Tellium, Inc. (as amended and currently in effect, the “Former Plan”). Each award outstanding under the Former Plan as of the Original Effective Date of
this Plan shall remain outstanding and continue to be subject to the terms of the Former Plan and the award agreement under which such award was granted. Each Share that is available for the granting of new awards under the Former Plan as of the
Original Effective Date of this Plan and each Share that is the subject of an award under the Former Plan but is not issued prior to the time that such award expires or otherwise terminates (collectively, the “Former Plan Shares”) shall,
after the Original Effective Date of this Plan, not be available for the granting of awards under the Former Plan, but shall instead be available for the granting of Options or Awards under this Plan. 
 2. Definitions. 
 For purposes of the
Plan: 
 2.1 “Adjusted Fair Market Value” means, in the event of a Change in Control, the greater of
(a) the highest price per Share paid to holders of the Shares in any transaction (or series of related transactions) constituting or resulting in a Change in Control other than pursuant to Section 2.10(b) or (b) the highest Fair
Market Value of a Share during the ninety (90) day period ending on the date of the Change in Control. 
 2.2
“Affiliate” means, with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls, or is controlled by, or under common control with, such Person. Any Relative (for this
purpose, “Relative” means a spouse, child, stepchild, parent, parent of spouse, sibling or grandchild) of an individual shall be deemed to be an Affiliate of such individual for purposes hereof. Neither the Company nor any Person
controlled by the Company shall be deemed to be an Affiliate of any holder of Company stock. 
 2.3
“Agreement” means the written agreement between the Company and an Optionee or Grantee evidencing the grant of an Option or Award and setting forth the terms and conditions thereof. 
 2.4 “Award” means a grant of Restricted Stock, Phantom Stock, a Stock Appreciation Right, a Performance Award, a Dividend
Equivalent Right, a Share Award, or any or all of them. 
 2.5 “Beneficial Ownership” means ownership within
the meaning of Rule 13d-3 promulgated under the Exchange Act. 
 2.6 “Beneficiary” means an individual, trust
or estate who or which, by a written designation of the Optionee or Grantee filed with the Company or by operation of law succeeds to the rights and obligations of the Optionee or Grantee under the Plan and an Agreement upon the Optionee’s or
Grantee’s death. 
 2.7 “Board” means the Board of Directors of the Company. 
  

 1 

 2.8 “Cause” means: 
 (a) with respect to directors, the commission of an act of fraud or intentional misrepresentation or an act of embezzlement,
misappropriation or conversion of assets or opportunities of the Company or any of its Subsidiaries, and 
 (b) in the case of
an Optionee or Grantee whose employment with the Company or a Subsidiary is, as the date of the applicable Agreement, subject to the terms of an employment agreement between such Optionee or Grantee and the Company or a Subsidiary, which employment
agreement includes a definition of “Cause,” the term “Cause” as used in this Plan or any Agreement shall have the meaning set forth in such employment agreement during the period that such employment agreement remains in effect;
or 
 (c) in all other cases, the term “Cause” as used in this Plan or any Agreement shall mean (i) willfully
failing to perform reasonably assigned duties within thirty (30) days after having received written notice from the Company to do so, (ii) dishonesty or willful misconduct in the performance of duties, (iii) involvement in a
transaction in connection with the performance of duties to the Company or any of its Subsidiaries which transaction is adverse to the interests of the Company or any of its Subsidiaries and which is engaged in for personal profit or
(iv) willful violation of any law, rule or regulation (other than traffic violations or similar offenses) in connection with the performance of duties. 
 2.9 “Change in Capitalization” means any increase or reduction in the number of Shares, or any change (including, without
limitation, in the case of a spin-off, dividend or other distribution in respect of Shares, a change in value) in the Shares or exchange of Shares for a different number or kind of shares or other securities of the Company or another corporation, by
reason of a reclassification, recapitalization, merger, consolidation, reorganization, spin-off, split-up, issuance of warrants or rights or debentures, stock dividend, stock split or reverse stock split, cash dividend, property dividend,
combination or exchange of shares, repurchase of shares, change in corporate structure or a substantially similar transaction. 
 2.10 A “Change in Control” shall mean the occurrence of any of the following: 
 (a) An acquisition
(other than directly from the Company) of any Voting Securities of the Company by any Person, immediately after which such Person has Beneficial Ownership of fifty percent (50%) or more of the then outstanding Shares or the combined voting
power of the Company’s then outstanding Voting Securities, provided, however, in determining whether a Change in Control has occurred pursuant to this Section 2.10(a), Shares or Voting Securities which are acquired in a
“Non-Control Acquisition” (as hereinafter defined) shall not constitute an acquisition which would cause a Change in Control. A “Non-Control Acquisition” shall mean an acquisition by (i) an employee benefit plan (or a trust
forming a part thereof) maintained by (A) the Company or (B) any corporation or other Person of which a majority of its voting power or its voting equity securities or equity interest is owned, directly or indirectly, by the Company (for
purposes of this definition, a “Related Entity”), (ii) the Company or any Related Entity, or (iii) any Person in connection with a “Non-Control Transaction” (as hereinafter defined); 
 (b) The individuals who, as of the date hereof, are members of the Board (the “Incumbent Board”), cease for any reason to
constitute at least a majority of the members of the Board, or following a Merger (as defined in paragraph (c)(i) below) which results in a Parent corporation, the board of directors of the ultimate Parent Corporation (as defined in paragraph
(c)(i)(A) below); provided, however, that if the election, or nomination for election by the Company’s common stockholders, of any new director was approved by a vote of at least two-thirds of the Incumbent Board, such new director
shall, for purposes of this Plan, be considered as a member of the Incumbent Board; provided further, however, that no individual shall be considered a member of the Incumbent Board if such individual initially assumed office as a result of
either an actual or threatened “Election Contest” (as described in Rule 14a-11 promulgated under the Exchange Act) or other actual or 

  

 2 

 
threatened solicitation of proxies or consents by or on behalf of a Person other than the Board (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest; or 
 (c) The consummation of: 
 (i) A merger, consolidation or reorganization with or into the Company or in which securities of the Company are issued (a
“Merger”), unless such Merger is a “Non-Control Transaction.” A “Non-Control Transaction” shall mean a Merger where: 
 (A) the stockholders of the Company, immediately before such Merger own directly or indirectly immediately following such Merger at least fifty percent (50%) of the combined voting power of the outstanding voting
securities of (x) the corporation resulting from such Merger (the “Surviving Corporation”) if fifty percent (50%) or more of the combined voting power of the then outstanding voting securities of the Surviving Corporation is not
Beneficially Owned, directly or indirectly by another Person (a “Parent Corporation”), or (y) if there are one or more Parent Corporations, the ultimate Parent Corporation; and 
 (B) the individuals who were members of the Incumbent Board immediately prior to the execution of the agreement providing for such Merger
constitute at least a majority of the members of the board of directors of (x) the Surviving Corporation, if there is no Parent Corporation, or (y) if there are one or more Parent Corporations, the ultimate Parent Corporation; and

 (C) no Person other than (1) the Company, (2) any Related Entity, (3) any employee benefit plan (or any
trust forming a part thereof) that, immediately prior to such Merger was maintained by the Company or any Related Entity, or (4) any Person who, together with its Affiliates, immediately prior to such Merger, had Beneficial Ownership of fifty
percent (50%) or more of the then outstanding Voting Securities or Shares, owns, together with its Affiliates, Beneficial Ownership of (i) fifty percent (50%) or more of the combined voting power of the outstanding voting securities
or common stock of (x) the Surviving Corporation if there is no Parent Corporation, or (y) if there are one or more Parent Corporations, the ultimate Parent Corporation. 
 (ii) A complete liquidation or dissolution of the Company; or 
 (iii) The sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a
Related Entity or under conditions that would constitute a Non-Control Transaction with the disposition of the assets being regarded as a Merger for this purpose or the distribution to the Company’s stockholders of the stock of a Related Entity
or any other assets). 
 Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any Person (the
“Subject Person”) acquired Beneficial Ownership of more than the permitted amount of the then outstanding Shares or Voting Securities as a result of the acquisition of Shares or Voting Securities by the Company which, by reducing the
number of Shares or Voting Securities then outstanding, increases the proportional number of shares Beneficially Owned by the Subject Persons, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of
the acquisition of Shares or Voting Securities by the Company, and (1) before such share acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Shares or Voting Securities in contemplation of such
share acquisition by the Company or (2) after such share acquisition by the Company the Subject Person becomes the Beneficial Owner of any new or additional Shares or Voting Securities which in either case increases the percentage of the then
outstanding Shares or Voting Securities Beneficially Owned by the Subject Person, then a Change in Control shall occur. 
 2.11 “Code” means the Internal Revenue Code of 1986, as amended. 
 2.12
“Committee” means a committee, as described in Section 3.1, appointed by the Board from time to time to administer the Plan and to perform the functions set forth herein. 
  

 3 

 2.13 “Company” means Zhone Technologies, Inc., a Delaware corporation.

 2.14 “Director” means a director of the Company. 
 2.15 “Disability” means: 
 (a) in the case of an Optionee or Grantee whose employment with the Company or a Subsidiary is, as of the date of the applicable Agreement, subject to the terms of an employment agreement between such Optionee or
Grantee and the Company or a Subsidiary, which employment agreement includes a definition of “Disability,” the term “Disability” as used in this Plan or any Agreement shall have the meaning set forth in such employment agreement
during the period that such employment agreement remains in effect; or 
 (b) in all other cases, the term
“Disability” as used in this Plan or any Agreement shall mean a physical or mental infirmity which impairs the Optionee’s or Grantee’s ability to perform substantially his or her duties for a period of one hundred eighty
(180) consecutive days. 
 2.16 “Disability Date” means the date which is one hundred eighty
(180) consecutive days after the date on which an Optionee or Grantee is first absent from active employment with the Company or ceases to perform his or her duties as a director, by reason of a Disability. 
 2.17 “Dividend Equivalent Right” means a right to receive all or some portion of the cash dividends that are or would be
payable with respect to Shares. 
 2.18 “Division” means any of the operating units or divisions of the
Company designated as a Division by the Committee. 
 2.19 “Eligible Individual” means any of the following
individuals who is designated by the Committee as eligible to receive Options or Awards subject to the conditions set forth herein: (a) any director, officer or employee of the Company or a Subsidiary, (b) any individual to whom the
Company or a Subsidiary has extended a formal, written offer of employment, or (c) any consultant or advisor of the Company or a Subsidiary. 
 2.20 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 2.21 “Fair Market Value” on any date means the closing sales prices of the Shares on such date on the principal national securities exchange on which such Shares are listed or admitted to trading, or, if such Shares are not
so listed or admitted to trading, the average of the per Share closing bid price and per Share closing asked price on such date as quoted on the National Association of Securities Dealers Automated Quotation System or such other market in which such
prices are regularly quoted, or, if there have been no published bid or asked quotations with respect to Shares on such date, the Fair Market Value shall be the value established by the Board in good faith and, in the case of an Incentive Stock
Option, in accordance with Section 422 of the Code. 
 2.22 “Former Plan” means the Amended and Restated
1997 Employee Stock Incentive Plan of Tellium, Inc. 
 2.23 [Reserved] 
 2.24 “Grantee” means a person to whom an Award has been granted under the Plan. 
 2.25 “Incentive Stock Option” means an Option satisfying the requirements of Section 422 of the Code and designated
by the Committee as an Incentive Stock Option. 
 2.26 “Initial Public Offering” means the consummation of
the first public offering of Shares pursuant to a registration statement (other than a Form S-8 or successor forms) filed with, and declared effective by, the Securities and Exchange Commission. 
 2.27 “Nonemployee Director” means a director of the Company who is a “nonemployee director” within the meaning
of Rule 16b-3 promulgated under the Exchange Act. 
  

 4 

 2.28 “Nonqualified Stock Option” means an Option which is not an
Incentive Stock Option. 
 2.29 “Normal Retirement Date” means the date on which an Optionee or Grantee
terminates active employment with the Company or ceases to perform his or her duties as a director on or after attainment of age 65, but does not include termination by the Company for Cause. 
 2.30 “Option” means a Nonqualified Stock Option, an Incentive Stock Option, or any or all of them. 
 2.31 “Optionee” means a person to whom an Option has been granted under the Plan. 
 2.32 “Outside Director” means a director of the Company who is an “outside director” within the meaning of
Section 162(m) of the Code and the regulations promulgated thereunder. 
 2.33 “Parent” means any
corporation which is a parent corporation (within the meaning of Section 424(e) of the Code) with respect to the Company. 
 2.34 “Performance Awards” means Performance Units, Performance Shares or either or both of them. 
 2.35 “Performance-Based Compensation” means any Option or Award that is intended to constitute “performance based compensation” within the meaning of Section 162(m)(4)(C) of the Code and the regulations
promulgated thereunder. 
 2.36 “Performance Cycle” means the time period specified by the Committee at the
time Performance Awards are granted during which the performance of the Company, a Subsidiary or a Division will be measured. 
 2.37 “Performance Objectives” has the meaning set forth in Section 11. 
 2.38
“Performance Shares” means Shares issued or transferred to an Eligible Individual under Section 11. 
 2.39 “Performance Units” means Performance Units granted to an Eligible Individual under Section 11. 
 2.40 “Person” means ‘person’ as such term is used for purposes of Section 13(d) or 14(d) of the Exchange Act, including without limitation, any individual, corporation, limited liability company, partnership,
trust, unincorporated organization, government or any agency or political subdivision thereof, or any other entity or any group of Persons. 
 2.41 “Phantom Stock” means a right granted to an Eligible Individual under Section 12 representing a number of hypothetical Shares. 
 2.42 “Plan” means the Zhone Technologies, Inc. Amended and Restated 2001 Stock Incentive Plan, as amended and restated
from time to time. 
 2.43 [Reserved] 
 2.44 “Restricted Stock” means Shares issued or transferred to an Eligible Individual pursuant to Section 10.

 2.45 “Share Award” means a grant of Shares pursuant to Section 12. 
 2.46 “Shares” means the common stock, par value $0.001 per share, of the Company and any other securities into which such
shares are changed or for which such shares are exchanged. 
 2.47 “Stock Appreciation Right” means a right
to receive all or some portion of the increase in the value of the Shares as provided in Section 8 hereof. 
 2.48
“Subsidiary” means (i) except as provided in subsection (ii) below, any corporation which is or becomes a subsidiary corporation (within the meaning of Section 424(f) of the Code) with respect to the Company, and
(ii) with respect to provisions relating to the eligibility to receive Options or Awards other than Incentive Stock Options and to continued employment for purposes of Options and Awards (unless the Committee determines otherwise), any entity,
whether or not incorporated, in which the Company directly or indirectly owns fifty percent (50%) or more of the outstanding equity or other ownership interests. 
  

 5 

 2.49 “Successor Corporation” means a corporation, or a parent or
subsidiary thereof, which issues or assumes an Option or Award in a transaction described in Section 424(a) of the Code without regard to Sections 424(a)(1) and (2) thereof. 
 2.50 “Tax Benefit” means an actual decrease in the Company’s liability for taxes in any period. 
 2.51 “Ten-Percent Stockholder” means an Eligible Individual, who, at the time an Incentive Stock Option is to be granted
to him or her, owns (within the meaning of Section 422(b)(6) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, or of a Parent or a Subsidiary. 

2.52 “Termination of Employment” means the later of (i) severance of the employer-employee relationship with the
Company, a Parent or a Subsidiary or (ii) the resignation, removal or termination of an officer or Director of the Company, a Parent or a Subsidiary. 
 2.53 [Reserved] 
 2.54 “Voting Securities” means all outstanding voting
securities of the Company entitled to vote generally in the election of the Board of Directors. 
 3. Administration. 
 3.1 The Plan shall be administered by the Committee, which shall hold meetings at such times as may be necessary for the proper
administration of the Plan. The Committee shall keep minutes of its meetings. If the Committee consists of more than one (1) member, a quorum shall consist of not fewer than two (2) members of the Committee and a majority of a quorum may
authorize any action. Any decision or determination reduced to writing and signed by all of the members of the Committee shall be as fully effective as if made by a majority vote at a meeting duly called and held. The Committee shall consist of at
least one (1) Director and may consist of the entire Board; provided, however, that from and after the date of an Initial Public Offering, (A) if the Committee consists of less than the entire Board, then with respect to any
Option or Award to an Eligible Individual who is subject to Section 16 of the Exchange Act, the Committee shall consist of at least two (2) Directors each of whom shall be a Nonemployee Director and (B) to the extent necessary for any
Option or Award intended to qualify as Performance-Based Compensation to so qualify, the Committee shall consist of at least two (2) Directors each of whom shall be an Outside Director. For purposes of the preceding sentence, if one or more
members of the Committee is not a Nonemployee Director and, if necessary for any Option or Award intended to qualify as Performance-Based Compensation to so qualify, an Outside Director, but recuses himself or herself or abstains from voting with
respect to a particular action taken by the Committee, then the Committee, with respect to that action, shall be deemed to consist only of the members of the Committee who have not recused themselves or abstained from voting. Subject to applicable
law, the Committee may delegate its authority under the Plan to any other person or persons. Notwithstanding the foregoing, with respect to any Option or Award granted to an Eligible Individual who is a Nonemployee Director, the Committee
should consist of the entire Board. 
 3.2 No member of the Committee shall be liable for any action, failure to act,
determination or interpretation made in good faith with respect to this Plan or any transaction hereunder. The Company hereby agrees to indemnify each member of the Committee for all costs and expenses and, to the extent permitted by applicable law,
any liability incurred in connection with defending against, responding to, negotiating for the settlement of or otherwise dealing with any claim, cause of action or dispute of any kind arising in connection with any actions in administering this
Plan or in authorizing or denying authorization to any transaction hereunder. 
 3.3 Subject to the express terms and
conditions set forth herein, the Committee shall have the power from time to time to: 
 (a) determine those Eligible
Individuals to whom Options shall be granted under the Plan and the number of such Options to be granted and to prescribe the terms and conditions (which need not be 

  

 6 

 
identical) of each such Option, including the purchase price per Share, the vesting schedule and the duration of each Option, and make any amendment or
modification to any Option Agreement consistent with the terms of the Plan; 
 (b) select those Eligible Individuals to whom
Awards shall be granted under the Plan and to determine the number of Shares in respect of which each Award is granted, the terms and conditions (which need not be identical) of each such Award, including the restrictions or Performance Objectives
relating to Awards and the maximum value of any Award, and make any amendment or modification to any Award Agreement consistent with the terms of the Plan; 
 (c) construe and interpret the Plan and the Options and Awards granted hereunder and to establish, amend and revoke rules and regulations for the administration of the Plan, including, without limitation, correcting
any defect or supplying any omission, or reconciling any inconsistency in the Plan or in any Agreement, in the manner and to the extent it shall deem necessary or advisable, including so that the Plan and the operation of the Plan complies
with Rule 16b-3 under the Exchange Act, the Code to the extent applicable and other applicable law, and otherwise to make the Plan fully effective. All decisions and determinations by the Committee in the exercise of this power shall be final,
binding and conclusive upon the Company, its Subsidiaries, the Optionees and Grantees, and all other persons having any interest therein; 
 (d) determine the duration and purposes for leaves of absence which may be granted to an Optionee or Grantee on an individual basis without constituting a Termination of Employment or service for purposes of the Plan;

 (e) exercise its sole discretion with respect to the powers and rights granted to it as set forth in the Plan; and

 (f) exercise, generally, such powers and to perform such acts as are deemed necessary or advisable to promote the best
interests of the Company with respect to the Plan. 
 4. Stock Subject to the Plan; Grant Limitations. 
 4.1 The maximum number of Shares that may be made the subject of Options and Awards granted under this Plan shall not exceed
(a) 5,493,021, which is the number of Shares remaining available for issuance under the Plan plus the number of Shares subject to outstanding options or awards, each as of the Restatement Effective Date, plus (b) the Shares that are
subject to outstanding options or awards granted under the Former Plan which Shares are not issued prior to the expiration or termination of such options or awards (including Shares subject to options or awards that expire or terminate after the
expiration of the term of the Former Plan), plus, (c) if on January 1 of any year in which this Plan is in effect, commencing on January 1, 2008 and ending on January 1, 2017, the aggregate number of Shares with respect to which
Options or Awards may be granted under the Plan (not including Shares that are subject to outstanding Options or Awards granted under the Plan) is less than five percent (5%) of the total number of outstanding Shares on such date, an annual
increase (determined as of January 1 of each year) in an amount such that the aggregate number of Shares with respect to which Options or Awards may be granted under the Plan (not including Shares that are subject to outstanding Options or
Awards granted under the Plan) is equal to the lesser of (i) five percent (5%) of the total number of outstanding Shares on such date, (ii) 5,000,000 shares, or (iii) such other number of Shares as determined by the Board;
provided, however, that in the aggregate, not more than one-quarter of the number of allotted Shares may be made the subject of Restricted Stock Awards under Section 10 of the Plan (other than shares of Restricted Stock made in
settlement of Performance Units pursuant to Section 11.2(b)). The Company shall reserve for the purposes of the Plan, out of its authorized but unissued Shares or out of Shares held in the Company’s treasury, or partly out of each, such
number of Shares as shall be determined by the Board. 
 4.2 Upon the granting of an Option or an Award, the number of Shares
available under Section 4.1 for the granting of further Options and Awards shall be reduced as follows: 
 (a) In
connection with the granting of an Option or an Award (other than the granting of a Performance Unit denominated in dollars), the number of Shares shall be reduced by the number of 

  

 7 

 
Shares in respect of which the Option or Award is granted or denominated; provided, however, that if any Option is exercised by tendering
Shares, either actually or by attestation, to the Company as full or partial payment of the purchase price, the maximum number of Shares available under Section 4.1 shall be increased by the number of Shares so tendered. 
 (b) In connection with the granting of a Performance Unit denominated in dollars, the number of Shares shall be reduced by an amount equal
to the quotient of (i) the dollar amount in which the Performance Unit is denominated, divided by (ii) the Fair Market Value of a Share on the date the Performance Unit is granted. 
 4.3 Whenever any outstanding Option or Award or portion thereof under this Plan or the Former Plan expires, is canceled, is settled in
cash (including the settlement of tax withholding obligations using Shares), or is otherwise terminated for any reason without having been exercised or payment having been made in respect of the entire Option or Award, the Shares allocable to the
expired, canceled, settled or otherwise terminated portion of the Option or Award may again be the subject of Options or Awards granted hereunder. 
 5. Option Grants for Eligible Individuals. 
 5.1 Authority of Committee. Subject to the
provisions of the Plan, the Committee shall have full and final authority to select those Eligible Individuals who will receive Options, the terms and conditions of which shall be set forth in an Agreement. Without limiting the generality of the
preceding sentence, unless the Committee determines otherwise in its sole discretion, in consideration of granting an Option, the Optionee shall agree, in the Agreement, to remain in the employ of the Company or any Subsidiary for a period of at
least one (1) year (or such shorter period as may be fixed in the Agreement or by action of the Committee following grant of the Option) after the Option is granted. Incentive Stock Options may be granted only to Eligible Individuals who are
employees of the Company or any Subsidiary. 
 5.2 Purchase Price. The purchase price (which may be greater than,
less than or equal to the Fair Market Value on the date of grant) or the manner in which the purchase price is to be determined for Shares under each Option shall be determined by the Committee and set forth in the Agreement pursuant to which each
Option is granted; provided, however, that the purchase price per Share under each Option intended to qualify as Performance-Based Compensation shall not be less than 100% of the Fair Market Value of a Share on the Date the Option is granted
and provided, further, however, that the purchase price per Share under each Incentive Stock Option shall not be less than 100% of the Fair Market Value of a Share on the date the Option is granted (110% in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder). 
 5.3 Maximum Duration. Options granted hereunder shall
be for such term as the Committee shall determine; provided, however, that an Option shall not be exercisable after the expiration of ten (10) years from the date it is granted (five (5) years in the case of an Incentive
Stock Option granted to a Ten-Percent Stockholder); and provided, further, however, that the Committee may provide that an Option (other than an Incentive Stock Option) may, upon the death of the Optionee prior to the expiration
of the Option, be exercised for up to one (1) year following the date of the Optionee’s death even if such period extends beyond ten (10) years from the date the Option is granted. The Committee may, subsequent to the granting of any
Option, extend the term thereof, but in no event shall the term as so extended exceed the maximum term provided for in the preceding sentence. 
 5.4 Vesting and Exercisability. Subject to Sections 5.5 and 7.5, each Option shall become vested and exercisable in such installments (which need not be equal) and at such times as may be designated by the
Committee and set forth in the Agreement. To the extent not exercised, installments shall accumulate and be exercisable, in whole or in part, at any time after becoming exercisable, but not later than the date the Option expires. The Committee may
accelerate the exercisability of any Option or portion thereof at any time. 
  

 8 

 5.5 Termination. Subject to Sections 5.3, 7.5 and 13 and unless otherwise provided
by the Committee, in its sole discretion, at the time of grant (and set forth in the applicable Agreement) or at a later date, the following provisions shall apply to Options upon a Termination of Employment: 
 (a) Except in the case of termination for Cause, Disability, retirement on or after the Optionee’s Normal Retirement Date, or death
as provided in Sections 5.5(b), (c) and (d) below, upon an Optionee’s Termination of Employment with the Company, a Parent or a Subsidiary for any reason, any unexercised Option (or portion thereof) held by such Optionee shall expire
three (3) months after the Optionee has a Termination of Employment and such Option (or portion thereof) may only be exercised by the Optionee or his or her Beneficiary to the extent that the Option (or a portion thereof) was exercisable on the
date of Termination of Employment. 
 (b) If the Optionee’s Termination of Employment arises as a result of a termination
for Cause, then, unless the Committee determines otherwise at the time of the Termination of Employment, any unexercised Options (whether or not vested and exercisable) held by such Optionee shall terminate and expire concurrently with the
Optionee’s Termination of Employment and no rights thereunder may be exercised. 
 (c) If an Optionee suffers a
Disability or retires on or after the Optionee’s Normal Retirement Date, any unexercised Option (or portion thereof) held by such disabled or retired Optionee shall expire one (1) year after the Disability Date or date of Termination of
Employment by reason of retirement, as the case may be, and such Option (or portion thereof) may only be exercised by the Optionee or his or her guardian or legal representative to the extent that the Option (or a portion thereof) was exercisable on
the Disability Date or the date of Termination of Employment by reason of retirement, as the case may be. 
 (d) If an
Optionee dies while still employed by the Company, each Option (or portion thereof) held by such Optionee shall immediately become vested and exercisable with respect to those Shares that otherwise would have vested during the one-year period
following the Optionee’s death and will be deemed to have become vested and exercisable on the day preceding the date of the Optionee’s death. The Options (or portions thereof) which the Optionee was entitled to exercise on the date of the
Optionee’s death (which shall include those Options (or portions thereof) that become vested and exercisable pursuant to the preceding sentence by reason of the Optionee’s death) may be exercised at any time after the Optionee’s death
by the Optionee’s Beneficiary; provided, however, that no Option (or portion thereof) may be exercised after the earlier of: (i) one (1) year after the Optionee’s death or (ii) the expiration date specified for the
particular Option in the Agreement. If an Optionee dies after his or her Termination of Employment, then the Option (or portions thereof) which the Optionee was entitled to exercise on the date of the Optionee’s death may be exercised by his or
her Beneficiary within the remaining portion of the period specified in Sections 5.5(a) or 5.5(c), as the case may be. 
 (e)
The Option (or portion thereof), to the extent not yet vested and exercisable as of the date of the Optionee’s Termination of Employment, shall terminate immediately upon such date. 
 5.6 Deferred Delivery of Option Shares. The Committee may, in its sole discretion, permit Optionees to elect to defer the issuance
of Shares upon the exercise of one or more Nonqualified Stock Options granted pursuant to the Plan. The terms and conditions of such deferral shall be determined at the time of the grant of the Option or thereafter and shall be set forth in the
Agreement evidencing the Option. 
 5.7 Modification. No modification of an Option shall adversely alter or impair any
rights or obligations under the Option without the Optionee’s consent. 
 5.8 Limitations on Incentive Stock Options.
To the extent that the aggregate Fair Market Value (determined as of the date of the grant) of Shares with respect to which Incentive Stock Options granted under the Plan and “incentive stock options” (within the meaning of
Section 422 of the Code) granted under all other plans of the Company or its Subsidiaries (in either case determined without regard to this Section 5.8) are exercisable by an Optionee for the first time during any calendar year exceeds
$100,000, 

  

 9 

 
such Incentive Stock Options shall be treated as Nonqualified Stock Options. In applying the limitation in the preceding sentence in the case of multiple
Option grants, Options which were intended to be Incentive Stock Options shall be treated as Nonqualified Stock Options according to the order in which they were granted such that the most recently granted Options are first treated as Nonqualified
Stock Options. 
 6. [Reserved. All options granted under this Article prior to May 12, 2005, the effective date of the amendment and
restatement of this plan pursuant to which this Article was removed, shall be governed by the terms of the Plan as in effect prior to such date.] 
 7. Terms and Conditions Applicable to All Options. 
 7.1 Additional Terms. The provisions of this
Section 7 shall apply to all Options, unless otherwise provided by the Committee, in its sole discretion, in the applicable Agreement. 
 7.2 Non-Transferability. No Option granted hereunder shall be transferable by the Optionee to whom it is granted otherwise than by will or by the laws of descent and distribution or, in the case of an Option
other than an Incentive Stock Option, in the Committee’s sole discretion, pursuant to a domestic relations order (within the meaning of Rule 16a-12 promulgated under the Exchange Act) (a “Domestic Relations Transfer”), and, except
with respect to an Option transferred pursuant to a Domestic Relations Transfer, an Option shall be exercisable during the lifetime of such Optionee only by the Optionee or his or her guardian or legal representative. Notwithstanding the foregoing,
the Committee may set forth in the Agreement evidencing an Option (other than an Incentive Stock Option) at the time of grant or thereafter, that the Option may be transferred to members of the Optionee’s immediate family, to trusts solely for
the benefit of such immediate family members and to partnerships in which such family members and/or trusts are the only partners. Following transfer, for purposes of this Plan, a transferee of an Option shall be deemed to be the Optionee; provided
that the Option shall be exercisable by the transferee only to the extent and for such periods that the Option would have been exercisable if held by the original Optionee. For this purpose, immediate family means the Optionee’s spouse,
parents, children, stepchildren and grandchildren and the spouses of such parents, children, stepchildren and grandchildren. The terms of an Option shall be final, binding and conclusive upon the beneficiaries, executors, administrators, heirs and
successors of the Optionee. 
 7.3 Method of Exercise. 
 (a) The exercise of an Option shall be made only by a written notice delivered in person or by mail to the Secretary of the Company at the
Company’s principal executive office, specifying the number of Shares to be purchased and, to the extent applicable, accompanied by payment therefor and otherwise in accordance with such procedures which may be approved by the Committee from
time to time, and in accordance with the Agreement pursuant to which the Option was granted; provided, however, that Options may not be exercised by an Optionee for twelve months following a hardship distribution to the Optionee, to the
extent such exercise is prohibited under Treasury Regulation § 1.401(k)-1(d)(2)(iv)(B)(4). The purchase price for any Shares purchased pursuant to the exercise of an Option shall be paid, in any of the following forms: (a) cash or
(b) the transfer, either actually or by attestation, to the Company of Shares that have been held by the Optionee for at least six (6) months (or such lesser period as may be permitted by the Committee) prior to the exercise of the Option
and that have a Fair Market Value equal in amount to the purchase price, such transfer to be upon such terms and conditions as determined by the Committee or (c) a combination of cash and the transfer of Shares, provided, however,
that the Committee, in its sole discretion, may determine in the case of Options that the purchase price shall be paid only in cash. In addition, Options may be exercised through a registered broker-dealer pursuant to such cashless exercise
procedures which are, from time to time, deemed acceptable by the Committee. Any Shares transferred to the Company as payment of the purchase price under an Option shall be valued at their Fair Market Value on the day preceding the date of exercise
of such Option. If requested by the Committee, the Optionee shall deliver the Agreement evidencing the Option to the Secretary of the Company who shall endorse thereon a notation of such 

  

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exercise and return such Agreement to the Optionee. No fractional Shares (or cash in lieu thereof) shall be issued upon exercise of an Option and the number
of Shares that may be purchased upon exercise shall be rounded to the nearest number of whole Shares. 
 (b) If the Fair
Market Value of the Shares with respect to which the Option is being exercised exceeds the purchase price of such Option, an Optionee may, instead of exercising an Option as provided in Section 7.3(a), request that the Committee authorize
payment to the Optionee of the difference between the Fair Market Value of part or all of the Shares which are the subject of the Option and the purchase price of the Option, such difference to be determined as of the date the Committee receives the
request from the Optionee. The Committee, in its sole discretion, may grant or deny such a request from an Optionee with respect to part or all of the Shares as to which the Option is then exercisable and, to the extent granted, shall direct the
Company to make the payment to the Optionee either in cash or in Shares or in any combination thereof; provided, however, that the payment in Shares shall be based upon the Fair Market Value of Shares as of the date the Committee
received the request from the Optionee. An Option shall be deemed to have been exercised and shall be canceled to the extent that the Committee grants a request pursuant to this Section 7.3(b). 
 7.4 Rights of Optionees. No Optionee shall be deemed for any purpose to be the owner of any Shares subject to any Option unless and
until (a) the Option shall have been exercised pursuant to the terms thereof, (b) the Company shall have issued and delivered Shares to the Optionee, and (c) the Optionee’s name shall have been entered as a stockholder of record
on the books of the Company. Thereupon, the Optionee shall have full voting, dividend and other ownership rights with respect to such Shares, subject to such terms and conditions as may be set forth in the applicable Agreement. 
 7.5 Effect of Change in Control. 
 (a) Notwithstanding anything to the contrary in Section 5, in the event of a Change in Control, the Plan and the Options shall continue; provided, however, that the Committee, in its sole discretion
and on such terms and conditions as it deems appropriate, may provide, either by the terms of the applicable Agreement or by action taken prior to the occurrence of any such Change in Control, for any or all of the following alternatives (separately
or in any combination): 
 (i) for the payment in cash upon the surrender to the Company for cancellation of any Option or
portion of an Option to the extent vested and not yet exercised in an amount equal to the excess, if any, of (a) (i) in the case of a Nonqualified Stock Option, the greater of (A) the Fair Market Value, on the date preceding the date
of surrender, of the Shares subject to the Option or portion thereof surrendered or (B) the Adjusted Fair Market Value of the Shares subject to the Option or portion thereof surrendered or (ii) in the case of an Incentive Stock Option, the
Fair Market Value, on the date preceding the date of surrender, of the Shares subject to the Option or portion thereof surrendered, over (b) the aggregate purchase price for such Shares under the Option or portion thereof surrendered.

 (ii) for the replacement of the Options with other rights or property selected by the Committee in its sole discretion;

 (iii) for the accelerated vesting of all or a portion of the Options; 
 (iv) for the assumption of the Options by the successor or survivor corporation, or a parent or subsidiary thereof, or the substitution
by such corporation for such Options of new options covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices; or 
 (v) for adjustments in the terms and conditions of outstanding Options and/or the number and type of Shares or other securities or
property subject to such outstanding Options. 
 Any action pursuant to this Section 7.5(a) shall be conditioned upon the consummation of the Change in
Control and shall be effective only immediately before the consummation of the Change in Control. 
  

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 (b) Subject to Section 7.5(d) and to the extent set forth in the applicable
Agreement or provided by the Committee, in its sole discretion, subsequent to the granting of an Option, if, as a result of a Change in Control transaction, an Option intended to qualify as an Incentive Stock Option fails to so qualify solely
because of the failure to meet the holding requirements of Code Section 422(a)(1) (a “Disqualifying Disposition”), the Company shall make a cash payment to the Optionee equal to the amount which will, after taking into account
all taxes imposed on the Disqualifying Disposition and the receipt of such payment, leave the Optionee in the same after-tax position the Optionee would have been in had the Code Section 422(a)(1) holding requirements been met at the time of
the Disqualifying Disposition (which after-tax position will reflect the total taxes, if any, that would have been incurred by the Optionee had the Disqualifying Disposition been subject to federal income tax at capital gains rates) provided,
however, that no payment described in this Section shall exceed the Tax Benefit to the Company resulting from deductions relating to ordinary income recognized by the Optionee as a result of the Disqualifying Disposition. The payment
described in this Section shall be made by the Company within thirty (30) days of the filing by the Company of the federal tax return which includes the tax items associated with the income recognized by the Optionee as a result of the
Disqualifying Disposition (or, if the Tax Benefit described in the preceding sentence is not realized until a later year, within thirty (30) days of the filing by the Company of the federal tax return with respect to which such Tax Benefit is
realized). 
 (c) Subject to Section 7.5(d) and to the extent set forth in the applicable Agreement or provided by the
Committee, in its sole discretion, subsequent to the granting of an Option, and provided that an Optionee is not entitled to payment under Section 7.5(b) hereof, if, as a result of a Change in Control transaction, an Option intended to qualify
as an Incentive Stock Option fails to so qualify solely because the vesting of the Option is accelerated pursuant to Section 7.5(a) and such acceleration causes the aggregate fair market value (determined at the time the Option is
granted) of the Shares with respect to which Options are exercisable for the first time by an Optionee during the calendar year in which such vesting occurs to exceed $100,000, within the meaning of Code Section 422(d) (a “Disqualified
Option”), then, upon exercise of such Disqualified Option, the Company shall make a cash payment to the Optionee equal to the amount which will, after taking into account all taxes imposed on the exercise of such Disqualified Option and the
receipt of such payment, leave the Optionee in the same after-tax position the Optionee would have been in had the Disqualified Option continued to qualify as an Incentive Stock Option on the date of exercise and the Optionee sold the Shares
received upon exercise of the Option at their Fair Market Value on the date of exercise, provided, however, that no payment described in this Section shall exceed the Tax Benefit to the Company resulting from deductions relating to
ordinary income recognized by the Optionee as a result of exercising the Disqualified Option and the receipt of such payment. The payment described in this Section shall be made by the Company within thirty (30) days of the filing by the
Company of the federal tax return which includes the tax items associated with the income recognized by the Optionee as a result of exercising the Disqualified Option (or, if the Tax Benefit described in the preceding sentence is not realized until
a later year, within thirty (30) days of the filing by the Company of the federal tax return with respect to which such Tax Benefit is realized). 
 (d) If more than one Optionee is entitled to a cash payment pursuant to Section 7.5(b) or Section 7.5(c) in any single tax year and the Tax Benefit realized by the Company in such year with respect to all
such Optionees is less than the aggregate amount of the payments due to such Optionees hereunder, then (i) each such Optionee shall receive a portion of such cash payment equal to an amount determined by multiplying the amount of the Tax
Benefit realized by the Company in such year by a fraction the numerator of which is equal to the amount of payment due to such Optionee and the denominator of which is equal to the aggregate amount due to all such Optionees entitled to a payment
hereunder, and (ii) subject to further application of this Section 7.5(d), shall be entitled to receive the remaining portion within thirty (30) days of the filing by the Company of the federal tax return with respect to which such
Tax Benefit is realized. 
  

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 8. Stock Appreciation Rights. 
 The Committee may in its sole discretion, either alone or in connection with the grant of an Option, grant Stock Appreciation Rights in accordance with
the Plan, the terms and conditions of which shall be set forth in an Agreement. If granted in connection with an Option, a Stock Appreciation Right shall cover the same Shares covered by the Option (or such lesser number of Shares as the Committee
may determine) and shall, except as provided in this Section 8, be subject to the same terms and conditions as the related Option. 
 8.1 Time of Grant. A Stock Appreciation Right may be granted (a) at any time if unrelated to an Option, or (b) if related to an Option, either at the time of grant, or (except in the case of an
Incentive Stock Option) at any time thereafter during the term of the Option. 
 8.2 Stock Appreciation Right Related to an
Option. 
 (a) Exercise. Subject to Section 8.9, a Stock Appreciation Right granted in connection with an
Option shall be exercisable at such time or times and only to the extent that the related Options are exercisable (including, without limitation, exercisability upon Termination of Employment or a Change in Control), and will not be transferable
except to the extent the related Option may be transferable. A Stock Appreciation Right granted in connection with an Incentive Stock Option shall expire no later than the expiration of the related Incentive Stock Option and shall be exercisable
only if the Fair Market Value of a Share on the date of exercise exceeds the purchase price of the Option specified in the related Incentive Stock Option Agreement. 
 (b) Treatment of Related Options and Stock Appreciation Rights Upon Exercise. Upon the exercise of a Stock Appreciation Right
granted in connection with an Option, the Option shall be canceled to the extent of the number of Shares as to which the Stock Appreciation Right is exercised, and upon the exercise of an Option granted in connection with a Stock Appreciation Right,
the Stock Appreciation Right shall be canceled to the extent of the number of Shares as to which the Option is exercised or surrendered. 
 8.3 Stock Appreciation Right Unrelated to an Option. 
 (a) Terms. Subject to
Section 8.9, stock Appreciation Rights unrelated to Options shall contain such terms and conditions as to exercisability, vesting and duration as the Committee shall determine, but in no event shall they have a term of greater than ten
(10) years; provided, however, that the Committee may provide that Stock Appreciation Rights may, upon the death of the Grantee, be exercised for up to one (1) year following the date of the Grantee’s death even if such
period extends beyond ten (10) years from the date the Stock Appreciation Right was granted. 
 (b) Termination.
Subject to Section 13 and except as provided in Section 8.9, and unless otherwise provided by the Committee, in its sole discretion, in the applicable Agreement, upon a Grantee’s Termination of Employment, a Stock Appreciation Right
shall be exercisable by the Grantee to the same extent that an Option would be exercisable by an Optionee upon the Optionee’s Termination of Employment under the provisions of Section 5.5; provided, however, no Stock
Appreciation Right may be exercised after the expiration date specified for the particular Stock Appreciation Right in the applicable Agreement. 
 8.4 Amount Payable. Subject to Section 8.7, upon the exercise of a Stock Appreciation Right, the Grantee shall be entitled to receive an amount determined by multiplying (x) the excess of the Fair
Market Value of a Share on the date preceding the date of exercise of such Stock Appreciation Right over (A) in the case of a Stock Appreciation Right granted in connection with an Option, the per Share purchase price under the related Option,
or (B) in the case of a Stock Appreciation Right unrelated to an Option, the Fair Market Value of a Share on the date the Stock Appreciation Right was granted, by (y) the number of Shares as to which such Stock Appreciation Right is being
exercised. Notwithstanding the foregoing, the Committee may limit in any manner the amount payable with respect to any Stock Appreciation Right by including such a limit in the Agreement evidencing the Stock Appreciation Right at the time it is
granted. 
  

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 8.5 Non-Transferability. No Stock Appreciation Right shall be transferable by the
Grantee to whom it was granted otherwise than by will or by the laws of descent and distribution or, in the Committee’s sole discretion, (except in the case of a Stock Appreciation Right granted in connection with an Incentive Stock Option),
pursuant to domestic relations order (within the meaning of Rule 16a-12 promulgated under the Exchange Act (a “Domestic Relations Transfer”) and, except with respect to a Stock Appreciation Right transferred pursuant to a Domestic
Relations Transfer, such Stock Appreciation Right shall be exercisable during the lifetime of such Grantee only by the Grantee or his or her guardian or legal representative. The terms of such Stock Appreciation Right shall be final, binding and
conclusive upon the beneficiaries, executors, administrators, heirs and successors of the Grantee. 
 8.6 Method of
Exercise. Stock Appreciation Rights shall be exercised by a Grantee only by a written notice delivered in person or by mail to the Secretary of the Company at the Company’s principal executive office, specifying the number of Shares with
respect to which the Stock Appreciation Right is being exercised. If requested by the Committee, the Grantee shall deliver the Agreement evidencing the Stock Appreciation Right being exercised and the Agreement evidencing any related Option to the
Secretary of the Company who shall endorse thereon a notation of such exercise and return such Agreement to the Grantee. 
 8.7 Form of Payment. Payment of the amount determined under Section 8.4 may be made in the sole discretion of the Committee solely in whole Shares in a number determined at their Fair Market Value on the date preceding the date
of exercise of the Stock Appreciation Right, or solely in cash, or in a combination of cash and Shares. If the Committee decides to make full payment in Shares and the amount payable results in a fractional Share, no fractional Shares (or cash in
lieu thereof) shall be issued upon the exercise of the Stock Appreciation Right and the number of Shares that will be delivered shall be rounded to the nearest number of whole Shares. 
 8.8 Modification. No modification of an Award shall adversely alter or impair any rights or obligations under the Agreement without
the Grantee’s consent. 
 8.9 Effect of Change in Control. Notwithstanding anything contained in this
Section 8 to the contrary, in the event of a Change in Control, the Plan and the Stock Appreciation Rights shall continue; provided, however, that the Committee, in its sole discretion and on such terms and conditions as it deems
appropriate, may provide, either by the terms of the applicable Agreement or by action taken prior to the occurrence of any such Change in Control, for any or all of the following alternatives (separately or in any combination): 
 (i) with respect to a Stock Appreciation Right unrelated to an Option, for the payment in cash upon the surrender to the Company for
cancellation of any such Stock Appreciation Right or portion of a Stock Appreciation Right to the extent vested and not yet exercised in an amount equal to the excess, if any, of (A) the greater of (i) the Fair Market Value, on the date
preceding the date of surrender, of the Shares subject to the Stock Appreciation Right or portion thereof surrendered or (ii) the Adjusted Fair Market Value, on the date preceding the date of surrender, of the Shares over (B) the aggregate
Fair Market Value, on the date the Stock Appreciation Right was granted, of the Shares subject to the Stock Appreciation Right or portion thereof surrendered. 
 (ii) for the replacement of the Stock Appreciation Rights with other rights or property selected by the Committee in its sole discretion;

 (iii) for the accelerated vesting of all or a portion of the Stock Appreciation Rights; 
 (iv) for the assumption of the Stock Appreciation Rights by the successor or survivor corporation, or a parent or subsidiary thereof, or
the substitution by such corporation for such Stock Appreciation Rights of new stock appreciation rights covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices; or 
 (v) for adjustments in the terms and conditions of outstanding Stock Appreciation Rights
and/or the number and type of Shares or other securities or property subject to such outstanding Stock Appreciation Rights. 
  

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 Any action pursuant to this Section 8.9 shall be conditioned upon the consummation of the Change in Control and
shall be effective only immediately before the consummation of the Change in Control. 
 9. Dividend Equivalent Rights. 
 The Committee may in its sole discretion grant Dividend Equivalent Rights to Eligible Individuals in tandem with an Option or Award or as a separate
Award. The terms and conditions (including, without limitation, terms and conditions relating to a Change in Control) applicable to each Dividend Equivalent Right shall be specified in the Agreement under which the Dividend Equivalent Right is
granted. In the sole discretion of the Committee, amounts payable in respect of Dividend Equivalent Rights may be payable currently or deferred until the lapsing of restrictions on such Dividend Equivalent Rights or until the vesting, exercise,
payment, settlement or other lapse of restrictions on the Option or Award to which the Dividend Equivalent Rights relate. In the event that the amount payable in respect of Dividend Equivalent Rights are to be deferred, the Committee shall determine
whether such amounts are to be held in cash or reinvested in Shares or deemed (notionally) to be reinvested in Shares. If amounts payable in respect of Dividend Equivalent Rights are to be held in cash, there may be credited at the end of each year
(or portion thereof) interest on the amount of the account at the beginning of the year at a rate per annum as the Committee, in its sole discretion, may determine. In the sole discretion of the Committee, Dividend Equivalent Rights may be settled
in cash or Shares or a combination thereof, in a single installment or multiple installments. To the extent necessary for any Dividend Equivalent Right intended to qualify as Performance-Based Compensation to so qualify, the terms and conditions of
the Dividend Equivalent Right shall be such that payment of the Dividend Equivalent Right is contingent upon attainment of specified Performance Objectives within the Performance Cycle, as provided for in Section 11, and such Dividend
Equivalent Right shall be treated as a Performance Award for purposes of Sections 11 and 16. 
 10. Restricted Stock. 
 10.1 Grant. The Committee may in its sole discretion grant Awards to Eligible Individuals of Restricted Stock, which shall be
evidenced by an Agreement between the Company and the Grantee. Each Agreement shall contain such restrictions, terms and conditions as the Committee may, in its sole discretion, determine and (without limiting the generality of the foregoing) such
Agreements may require that an appropriate legend be placed on Share certificates. Awards of Restricted Stock shall be subject to the terms and provisions set forth below in this Section 10. 
 10.2 Rights of Grantee. Shares of Restricted Stock granted pursuant to an Award hereunder shall be issued in the name of the
Grantee as soon as reasonably practicable after the Award is granted provided that the Grantee has executed an Agreement evidencing the Award, the appropriate blank stock powers and, in the sole discretion of the Committee, an escrow agreement and
any other documents which the Committee may require as a condition to the issuance of such Shares. If a Grantee shall fail to execute the Agreement evidencing a Restricted Stock Award, the appropriate blank stock powers, an escrow agreement or any
other documents which the Committee may require within the time period prescribed by the Committee at the time the Award is granted, the Award shall be null and void. At the sole discretion of the Committee, Shares issued in connection with a
Restricted Stock Award shall be deposited together with the stock powers with an escrow agent (which may be the Company) designated by the Committee. Unless the Committee determines otherwise and as set forth in the Agreement, upon delivery of the
Shares to the escrow agent, the Grantee shall have all of the rights of a stockholder with respect to such Shares, including the right to vote the Shares and to receive all dividends or other distributions paid or made with respect to the Shares.

 10.3 Non-transferability. Until all restrictions upon the Shares of Restricted Stock awarded to a Grantee shall have
lapsed in the manner set forth in Section 10.4, such Shares shall not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated, nor shall they be delivered to the Grantee. 
 10.4 Lapse of Restrictions. 
 (a) Generally. Subject to Section 10.4(b), restrictions upon Shares of Restricted Stock awarded hereunder shall lapse at such time or times and on such terms and conditions as the Committee may 

  

 15 

 
determine; provided, however, that except in the case of Shares of Restricted Stock issued in full or partial settlement of another Award or
other earned compensation, such restrictions shall not fully lapse prior to the third anniversary of the date on which such Shares of Restricted Stock were granted. The Agreement evidencing the Award shall set forth any such restrictions.

 (b) Effect of Change in Control. Notwithstanding anything contained in this Section 10 to the contrary, in the
event of a Change in Control, the Plan and the Awards of Restricted Stock shall continue; provided, however, that the Committee, in its sole discretion and on such terms and conditions as it deems appropriate, may provide, either by
the terms of the applicable Agreement or by action taken prior to the occurrence of any such Change in Control, for any or all of the following alternatives (separately or in any combination): (i) for the assumption of the shares of Restricted
Stock by the successor or survivor corporation, or a parent or subsidiary thereof, or the substitution by such corporation for such shares of Restricted Stock of new shares of restricted stock of the successor or survivor corporation, or a parent or
subsidiary thereof, with appropriate adjustments as to the number and kind of shares, (ii) for the lapse of all restrictions upon all or a portion of the shares of Restricted Stock, or (iii) for adjustments in the terms and conditions of
outstanding Awards of Restricted Stock. Any action pursuant to this Section 10.5(b) shall be conditioned upon the consummation of the Change in Control and shall be effective only immediately before the consummation of the Change in Control.

 10.5 Terms of Restricted Stock. 
 (a) Forfeiture of Restricted Stock. Subject to Sections 10.4(b), 10.5(b) and 13, all Restricted Stock shall be forfeited and
returned to the Company and all rights of the Grantee with respect to such Restricted Stock shall terminate unless the Grantee continues in the service of the Company as an employee or director until the expiration of the forfeiture period for such
Restricted Stock and satisfies any and all other conditions set forth in the Agreement. The Committee, in its sole discretion, shall determine the forfeiture period (which may, but need not, lapse in installments) and any other terms and conditions
applicable with respect to any Restricted Stock Award. 
 (b) Waiver of Forfeiture Period. Notwithstanding anything
contained in this Section 10 to the contrary, the Committee may, in its sole discretion, waive the forfeiture period and any other conditions set forth in any Agreement under appropriate circumstances (including, without limitation, the death,
Disability or retirement of the Grantee or a material change in circumstances arising after the date of grant) and subject to such terms and conditions (including, without limitation, forfeiture of a proportionate number of the Restricted Stock) as
the Committee shall deem appropriate, provided that the Grantee shall at that time have completed at least one (1) year of employment or service after the date of grant. 
 10.6 Modification or Substitution. Subject to the terms of the Plan, including, without limitation, Section 16, the Committee
may modify outstanding Awards of Restricted Stock or accept the surrender of outstanding shares of Restricted Stock (to the extent the restrictions on such Shares have not yet lapsed) and grant new Awards in substitution for them. Notwithstanding
the foregoing, no modification of an Award shall adversely alter or impair any rights or obligations under the Agreement without the Grantee’s consent. 
 10.7 Treatment of Dividends. At the time an Award of Shares of Restricted Stock is granted, the Committee may, in its sole
discretion, determine that the payment to the Grantee of dividends, or a specified portion thereof, declared or paid on such Shares by the Company shall be (a) deferred until the lapsing of the restrictions imposed upon such Shares and
(b) held by the Company for the account of the Grantee until such time. In the event that dividends are to be deferred, the Committee shall determine whether such dividends are to be reinvested in Shares (which shall be held as additional
Shares of Restricted Stock) or held in cash. If deferred dividends are to be held in cash, there may be credited at the end of each year (or portion thereof) interest on the amount of the account at the beginning of the year at a rate per annum as
the Committee, in its sole discretion, may determine. Payment of deferred dividends in respect of Shares of Restricted Stock (whether held in cash or as additional Shares of Restricted Stock), together with interest accrued thereon, if any, shall be
made upon the lapsing of restrictions imposed on the Shares in respect of 

  

 16 

 
which the deferred dividends were paid, and any dividends deferred (together with any interest accrued thereon) in respect of any Shares of Restricted Stock
shall be forfeited upon the forfeiture of such Shares. 
 10.8 Delivery of Shares. Upon the lapse of the restrictions
on Shares of Restricted Stock, the Committee shall cause a stock certificate to be delivered to the Grantee with respect to such Shares, free of all restrictions hereunder. 
 11. Performance Awards. 
 11.1 Performance Objectives 
 (a) Establishment. Performance Objectives for Performance Awards may be
expressed in terms of (i) earnings per Share, (ii) Share price, (iii) pre-tax profits, (iv) after-tax profits, (v) operating profits, (vi) sales or expenses, (vii) net earnings, (viii) return on equity or
assets, (ix) revenues, (x) EBITDA (earnings before interest, taxes, depreciation and amortization), (xi) market share, or market penetration, (xii) any combination of the foregoing, or (xiii) confidential business
objectives. Performance Objectives may be in respect of the performance of the Company, any of its Subsidiaries, any of its Divisions or any combination thereof. Performance Objectives may be absolute or relative (to prior performance of the Company
or to the performance of one or more other entities or external indices) and may be expressed in terms of a progression within a specified range. The Performance Objectives with respect to a Performance Cycle shall be established in writing by the
Committee by the earlier of (x) the date on which a quarter of the Performance Cycle has elapsed or (y) the date which is ninety (90) days after the commencement of the Performance Cycle, and in any event while the performance
relating to the Performance Objectives remains substantially uncertain. 
 (b) Effect of Certain Events. At the time of
the granting of a Performance Award, or at any time thereafter, in either case to the extent permitted under Section 162(m) of the Code and the regulations thereunder without adversely affecting the treatment of the Performance Award as
Performance-Based Compensation, the Committee may provide for the manner in which performance will be measured against the Performance Objectives (or may adjust the Performance Objectives) to reflect the impact of specified corporate transactions,
accounting or tax law changes and other extraordinary or nonrecurring events. 
 (c) Determination of Performance.
Prior to the vesting, payment, settlement or lapsing of any restrictions with respect to any Performance Award that is intended to constitute Performance-Based Compensation made to a Grantee who is subject to Section 162(m) of the Code, the
Committee shall certify in writing that the applicable Performance Objectives have been satisfied to the extent necessary for such Award to qualify as Performance-Based Compensation. 
 11.2 Performance Units. The Committee, in its sole discretion, may grant Awards of Performance Units to Eligible Individuals, the
terms and conditions of which shall be set forth in an Agreement between the Company and the Grantee. Performance Units may be denominated in Shares or a specified dollar amount and, contingent upon the attainment of specified Performance Objectives
within the Performance Cycle, represent the right to receive payment as provided in Section 11.2(b) of (i) in the case of Share-denominated Performance Units, the Fair Market Value of a Share on the date the Performance Unit was granted,
the date the Performance Unit became vested or any other date specified by the Committee, (ii) in the case of dollar-denominated Performance Units, the specified dollar amount or (iii) a percentage (which may be more than 100%) of the
amount described in clause (i) or (ii) depending on the level of Performance Objective attainment; provided, however, that, the Committee may at the time a Performance Unit is granted specify a maximum amount payable in respect of a
vested Performance Unit. Each Agreement shall specify the number of Performance Units to which it relates, the Performance Objectives which must be satisfied in order for the Performance Units to vest and the Performance Cycle within which such
Performance Objectives must be satisfied. 
 (a) Vesting and Forfeiture. Subject to Sections 11.1(c) and 11.4,
Performance Units shall become vested in such installments (which need not be equal) and at such time or times and on such terms, conditions and satisfaction of Performance Objectives as the Committee may, in its sole discretion, determine at the
time an Award is granted. 
  

 17 

 (b) Payment of Awards. Subject to Sections 11.1(c) and 11.4, payment to Grantees
in respect of vested Performance Units shall be made as soon as practicable after the last day of the Performance Cycle to which such Award relates unless the Agreement evidencing the Award provides for the deferral of payment, in which event the
terms and conditions of the deferral shall be set forth in the Agreement. Subject to Section 11.4, such payments may be made entirely in Shares valued at their Fair Market Value as of the day preceding the date of payment or such other date
specified by the Committee, entirely in cash, or in such combination of Shares and cash as the Committee in its sole discretion shall determine at any time prior to such payment; provided, however, that if the Committee in its sole discretion
determines to make such payment entirely or partially in Shares of Restricted Stock, the Committee must determine the extent to which such payment will be in Shares of Restricted Stock and the terms of such Restricted Stock at the time the Award is
granted. 
 (c) Non-transferability. Until the vesting of Performance Units, such Performance Units shall not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated. 
 11.3 Performance Shares.
The Committee, in its sole discretion, may grant Awards of Performance Shares to Eligible Individuals, the terms and conditions of which shall be set forth in an Agreement between the Company and the Grantee. Each Agreement may require that an
appropriate legend be placed on Share certificates. Awards of Performance Shares shall be subject to the following terms and provisions: 
 (a) Rights of Grantee. The Committee shall provide at the time an Award of Performance Shares is made the time or times at which the actual Shares represented by such Award shall be issued in the name of the
Grantee; provided, however, that no Performance Shares shall be issued until the Grantee has executed an Agreement evidencing the Award, the appropriate blank stock powers and, in the sole discretion of the Committee, an escrow agreement and
any other documents which the Committee may require as a condition to the issuance of such Performance Shares. If a Grantee shall fail to execute the Agreement evidencing an Award of Performance Shares, the appropriate blank stock powers, an escrow
agreement and any other documents which the Committee may require within the time period prescribed by the Committee at the time the Award is granted, the Award shall be null and void. At the sole discretion of the Committee, Shares issued in
connection with an Award of Performance Shares shall be deposited together with the stock powers with an escrow agent (which may be the Company) designated by the Committee. Except as restricted by the terms of the Agreement, upon delivery of the
Shares to the escrow agent, the Grantee shall have, in the sole discretion of the Committee, all of the rights of a stockholder with respect to such Shares, including the right to vote the Shares and to receive all dividends or other distributions
paid or made with respect to the Shares. 
 (b) Non-transferability. Until any restrictions upon the Performance Shares
awarded to a Grantee shall have lapsed in the manner set forth in Sections 11.3(c) or 11.4, such Performance Shares shall not be sold, transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated, nor shall they be
delivered to the Grantee. The Committee also may impose such other restrictions and conditions on the Performance Shares, if any, as it deems appropriate. 
 (c) Lapse of Restrictions. Subject to Sections 11.1(c) and 11.4, restrictions upon Performance Shares awarded hereunder shall lapse and such Performance Shares shall become vested at such time or times and on
such terms, conditions and satisfaction of Performance Objectives as the Committee may, in its sole discretion, determine at the time an Award is granted. 
 (d) Treatment of Dividends. At the time the Award of Performance Shares is granted, the Committee may, in its sole discretion, determine that the payment to the Grantee of dividends, or a specified
portion thereof, declared or paid on Shares represented by such Award which have been issued by the Company to the Grantee shall be (i) deferred until the lapsing of the restrictions imposed upon such Performance Shares and (ii) held by
the Company for the account of the Grantee until such time. In the event that dividends are to be deferred, the Committee shall determine whether such dividends are to be reinvested in Shares (which shall be held as additional Performance Shares) or
held in cash. If deferred dividends are to be held in cash, there may be credited at the end of each year (or 

  

 18 

 
portion thereof) interest on the amount of the account at the beginning of the year at a rate per annum as the Committee, in its sole discretion, may
determine. Payment of deferred dividends in respect of Performance Shares (whether held in cash or in additional Performance Shares), together with interest accrued thereon, if any, shall be made upon the lapsing of restrictions imposed on the
Performance Shares in respect of which the deferred dividends were paid, and any dividends deferred (together with any interest accrued thereon) in respect of any Performance Shares shall be forfeited upon the forfeiture of such Performance Shares.

 (e) Delivery of Shares. Upon the lapse of the restrictions on Performance Shares awarded hereunder, the
Committee shall cause a stock certificate to be delivered to the Grantee with respect to such Shares, free of all restrictions hereunder. 
 11.4 Effect of Change in Control. Notwithstanding anything in this Section 11 to the contrary, in the event of a Change in Control, the Plan and the Performance Awards shall continue;
provided, however, that the Committee, in its sole discretion and on such terms and conditions as it deems appropriate, may provide, either by the terms of the applicable Agreement or by action taken prior to the occurrence of any such
Change in Control, for any or all of the following alternatives (separately or in any combination): (i) for the assumption of the Performance Awards by the successor or survivor corporation, or a parent or subsidiary thereof, or the
substitution by such corporation for such Performance Awards of new performance awards of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the applicable performance objectives and, if
necessary, the number and kind of shares, (ii) for the vesting of all or a portion of the Performance Awards as if all Performance Objectives had been satisfied at the level specified by the Committee in its sole discretion and, in the case of
Performance Units which become vested as a result of a Change in Control, for a payment which may be made entirely in cash, entirely in Shares valued at their Fair Market Value as of the day preceding the payment, or in such combination of cash and
Shares as the Committee shall determine in its sole discretion at any time prior to such payment; provided that such payment shall be made within ten (10) business days after such Change in Control, or (iii) for adjustments in the terms
and conditions of outstanding Performance Awards. Any action pursuant to this Section 11.4 shall be conditioned upon the consummation of the Change in Control and shall be effective only immediately before the consummation of the Change in
Control. 
 11.5 Termination. Subject to Sections 11.4 and 13, and unless otherwise provided by the Committee, in its
sole discretion, in the applicable Agreement, the following provisions shall apply to Performance Awards upon a Termination of Employment: 
 (a) Termination of Employment Prior to End of Performance Cycle. Except as provided in Sections 11.5(b) and (d), in the case of a Grantee’s Termination of Employment, prior to the end of a Performance
Cycle, the Grantee will not be entitled to any Performance Awards, and any Performance Shares shall be forfeited. 
 (b)
Disability, Retirement or Death Prior to End of Performance Cycle. Unless otherwise provided by the Committee, in its sole discretion, in the Agreement, if a Grantee’s Disability Date or Termination of Employment by reason of retirement
on or after the Grantee’s Normal Retirement Date or death occurs following participation in at least one-half (1/2) of the Performance Cycle, but prior to the end of a Performance Cycle, the Grantee or such Grantee’s Beneficiary, as
the case may be, shall be entitled to receive a pro-rata share of his or her Performance Award as determined under Subsection (c). 
 (c) Pro-Rata Payment. 
 (i) Performance Units. With respect to
Performance Units, the amount of any payment made to a Grantee (or Beneficiary) under circumstances described in Section 11.5(b) shall be the amount determined by multiplying the amount of the Performance Units payable in Shares or dollars
which would have been earned, determined at the end of the Performance Cycle, had such employment not been terminated, by a fraction, the numerator of which is the number of whole months such Grantee was employed during the Performance Cycle, and
the denominator of which 

  

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is the total number of months of the Performance Cycle. Any such payment shall be made as soon as practicable after the end of the respective Performance
Cycle, and shall relate to attainment of Performance Objectives over the entire Performance Cycle. 
 (ii)
Performance Shares. With respect to Performance Shares, the amount of Performance Shares held by a Grantee (or Beneficiary) with respect to which restrictions shall lapse under circumstances described in Section 11.5(b) shall be the
amount determined by multiplying the amount of the Performance Shares with respect to which restrictions would have lapsed, determined at the end of the Performance Cycle, had such employment not been terminated, by a fraction, the numerator of
which is the number of whole months such Grantee was employed during the Performance Cycle, and the denominator of which is the total number of months of the Performance Cycle. The Committee shall determine the amount of Performance Shares with
respect to which restrictions shall lapse under this Section 11.5(c)(ii) as soon as practicable after the end of the respective Performance Cycle, and such determination shall relate to attainment of Performance Objectives over the
entire Performance Cycle. At that time, all Performance Shares relating to that Performance Cycle with respect to which restrictions shall not lapse shall be forfeited. 
 (d) Other Events. Except to the extent a Performance Award is intended to qualify as Performance-Based Compensation, the Committee
may, in its sole discretion, determine to pay all or any portion of a Performance Award to a Grantee who has a Termination of Employment prior to the end of a Performance Cycle under certain circumstances (including, without limitation, a material
change in circumstances arising after the date of grant) and subject to such terms and conditions as the Committee shall deem appropriate, provided that the Grantee shall have completed at his or her date of Termination of Employment at least one
(1) year of employment after the date of grant. 
 (e) Termination of Employment After End of Performance Cycle.
Subject to Sections 11.4 and 11.5(f), in the case of a Grantee’s Termination of Employment after the end of a Performance Cycle in which the applicable Performance Objectives have been satisfied, the Grantee shall not be entitled to any
Performance Awards that have not yet vested as of the date of the Grantee’s Termination of Employment. 
 (f) Waiver
of Forfeiture. Notwithstanding anything to the contrary in Section 11(e), in the case of a Grantee’s Termination of Employment after the end of a Performance Cycle in which the applicable Performance Objectives have been satisfied, the
Committee may, in its sole discretion, waive the forfeiture of Performance Awards and any other conditions set forth in any Agreement under appropriate circumstances (including, without limitation, the death, Disability, or retirement of the Grantee
or a material change in circumstances arising after the date of grant) and subject to such terms and conditions as the Committee shall deem appropriate. 
 11.6 Modification or Substitution. Subject to the terms of the Plan, including, without limitation, Section 16, the Committee may modify outstanding Performance Awards or accept the surrender of
outstanding Performance Awards and grant new Performance Awards in substitution for them. Notwithstanding the foregoing, no modification of a Performance Award shall adversely alter or impair any rights or obligations under the Agreement without the
Grantee’s consent. 
 12. Other Share Based Awards. 
 12.1 Share Awards. The Committee, in its sole discretion, may grant a Share Award to any Eligible Individual on such terms and
conditions as the Committee may determine. Share Awards may be made as additional compensation for services rendered by the Eligible Individual or may be in lieu of cash or other compensation to which the Eligible Individual is entitled from the
Company. 
 12.2 Phantom Stock Awards. 
 (a) Grant. The Committee, in its sole discretion, may grant shares of Phantom Stock to any Eligible Individual. Such Phantom Stock
shall be subject to the terms and conditions established by the Committee and set forth in the applicable Agreement. 
  

 20 

 (b) Payment of Awards. Upon the vesting of a Phantom Stock Award, the Grantee
shall be entitled to receive a cash payment in respect of each share of Phantom Stock which shall be equal to the Fair Market Value of a Share as of the date the Phantom Stock Award was granted, or such other date as determined by the Committee at
the time the Phantom Stock Award was granted. The Committee may, at the time a Phantom Stock Award is granted, provide a limitation on the amount payable in respect of each share of Phantom Stock. In lieu of a cash payment, the Committee, in its
sole discretion, may settle Phantom Stock Awards with Shares having a Fair Market Value on the date of vesting equal to the cash payment to which the Grantee has become entitled. 
 13. Employment Agreement Governs Termination of Employment. 
 An employment agreement, if applicable, between an Optionee or Grantee and the Company shall govern with respect to the terms and conditions applicable to such Option or Award upon a termination or change in the
status of the employment of the Optionee or Grantee, to the extent that such employment agreement provides for terms and conditions that differ from the terms and conditions provided for in the applicable Agreement or the Plan; provided,
however, that to the extent necessary for an Option or Award intended to qualify as Performance-Based Compensation to so qualify, the terms of the applicable Agreement or the Plan shall govern the Option or Award; and, provided
further, that the Committee shall have reviewed and, in its sole discretion, approved the employment agreement. 
 14. Adjustment Upon
Changes in Capitalization. 
 (a) In the event of a Change in Capitalization, the Committee shall conclusively determine
the appropriate adjustments, if any, to (i) the maximum number and class of Shares or other stock or securities with respect to which Options or Awards may be granted under the Plan, (ii) the maximum number and class of Shares or other
stock or securities that may be issued upon exercise of Incentive Stock Options; (iii) the number and class of Shares or other stock or securities which are subject to outstanding Options or Awards granted under the Plan and the purchase price
therefor, if applicable, (iv) the Performance Objectives. 
 (b) Any such adjustment in the Shares or other stock or
securities (i) subject to outstanding Incentive Stock Options (including any adjustments in the purchase price) shall be made in such manner as not to constitute a modification as defined by Section 424(h)(3) of the Code and only to the
extent otherwise permitted by Sections 422 and 424 of the Code or (ii) subject to outstanding Options or Awards that are intended to qualify as Performance-Based Compensation shall be made in such a manner as not to adversely affect the
treatment of the Options or Awards as Performance-Based Compensation. 
 (c) If, by reason of a Change in Capitalization, a
Grantee of an Award shall be entitled to, or an Optionee shall be entitled to exercise an Option with respect to, new, additional or different shares of stock or securities of the Company or any other corporation, such new, additional or different
shares shall thereupon be subject to all of the conditions, restrictions and performance criteria which were applicable to the Shares subject to the Award or Option, as the case may be, prior to such Change in Capitalization. 
 15. Effect of Certain Transactions. 
 Subject to Sections 7.5, 8.9, 10.4(b) and 11.4 or as otherwise provided in an Agreement, in the event of (a) the liquidation or dissolution of the Company or (b) a merger or consolidation of the Company (a
“Transaction”), the Plan and the Options and Awards issued hereunder shall continue in effect in accordance with their respective terms, except that following a Transaction either (i) each outstanding Option or Award shall be treated
as provided for in the agreement entered into in connection with the Transaction or (ii) if not so provided in such agreement, each Optionee and Grantee shall be entitled to receive in respect of each Share subject to any outstanding Options or
Awards, as the case may be, upon exercise of any Option or payment or transfer in respect of any Award, the same number and kind of stock, securities, cash, property or other consideration that each holder of a Share was entitled to receive in the
Transaction in respect of a Share; provided, however, that such stock, securities, cash, property, or other consideration shall remain subject to all of the conditions, 

  

 21 

 
restrictions and performance criteria which were applicable to the Options and Awards prior to such Transaction. The treatment of any Option or Award as
provided in this Section 15 shall be conclusively presumed to be appropriate for purposes of Section 11. 
 16.
Interpretation. 
 Following the required registration of any equity security of the Company pursuant to Section 12 of the
Exchange Act: 
 (a) The Plan is intended to comply with Rule 16b-3 promulgated under the Exchange Act and the Committee shall
interpret and administer the provisions of the Plan or any Agreement in a manner consistent therewith. Any provisions inconsistent with such Rule shall be inoperative and shall not affect the validity of the Plan. 
 (b) Unless otherwise expressly stated in the relevant Agreement, each Option, Stock Appreciation Right and Performance Award granted under
the Plan is intended to be Performance-Based Compensation. The Committee shall not be entitled to exercise any discretion otherwise authorized hereunder with respect to such Options or Awards if the ability to exercise such discretion or the
exercise of such discretion itself would cause the compensation attributable to such Options or Awards to fail to qualify as Performance-Based Compensation. Notwithstanding anything to the contrary in the Plan, the provisions of the Plan may at any
time be bifurcated by the Board or the Committee in any manner so that certain provisions of the Plan or any Performance Award intended (or required in order) to satisfy the applicable requirements of Section 162(m) of the Code are only
applicable to persons whose compensation is subject to Section 162(m). 
 17. [Reserved] 
 18. Effective Date, Termination and Amendment of the Plan. 
 18.1 Effective Date. The original effective date of this Plan was March 12, 2001 (the “Original Effective Date”).
The effective date of this amended and restated Plan shall be March 28, 2007 (the “Restatement Effective Date”), subject only to the approval of the stockholders of the Company. 
 18.2 Plan Amendment or Termination. The Plan shall terminate on the day prior to the tenth anniversary of the Restatement Effective
Date, and no Option or Award may be granted thereafter. The Board may sooner terminate the Plan and the Board may at any time and from time to time amend, modify or suspend the Plan; provided, however, that: 
 (a) no such amendment, modification, suspension or termination shall impair or adversely alter any Options or Awards theretofore granted
under the Plan, except with the consent of the Optionee or Grantee, nor shall any amendment, modification, suspension or termination deprive any Optionee or Grantee of any Shares which he or she may have acquired through or as a result of the Plan;
and 
 (b) to the extent necessary under any applicable law, regulation or exchange requirement, no amendment shall be
effective unless approved by the stockholders of the Company in accordance with applicable law, regulation or exchange requirement. 
 19.
Non-Exclusivity of the Plan. 
 The adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any
previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including, without limitation, the granting of stock options otherwise than under
the Plan, and such arrangements may be either applicable generally or only in specific cases. 
  

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 20. Limitation of Liability. 
 As illustrative of the limitations of liability of the Company, but not intended to be exhaustive thereof, nothing in the Plan shall be construed to:

 (a) give any person any right to be granted an Option or Award other than at the sole discretion of the Committee;

 (b) give any person any rights whatsoever with respect to Shares except as specifically provided in the Plan; 

(c) interfere with or limit in any way the right of the Company or any Subsidiary to terminate the employment of any person at any time
for any reason whatsoever, with or without good cause; or 
 (d) be evidence of any agreement or understanding, expressed or
implied, that the Company will employ any person at any particular rate of compensation or for any particular period of time. 
 21.
Regulations and Other Approvals; Governing Law. 
 21.1 Except as to matters of federal law, the Plan and the rights of
all persons claiming hereunder shall be construed and determined in accordance with the laws of the State of Delaware without giving effect to conflicts of laws principles thereof. 
 21.2 The obligation of the Company to sell or deliver Shares with respect to Options and Awards granted under the Plan shall be subject to
all applicable laws, rules and regulations, including all applicable federal and state securities laws, and the obtaining of all such approvals by governmental agencies as may be deemed necessary or appropriate by the Committee. 
 21.3 The Board may make such changes as may be necessary or appropriate to comply with the rules and regulations of any government
authority, or to obtain for Eligible Individuals granted Incentive Stock Options the tax benefits under the applicable provisions of the Code and regulations promulgated thereunder. 
 21.4 Each Option and Award is subject to the requirement that, if at any time the Committee determines, in its sole discretion, that the
listing, registration or qualification of Shares issuable pursuant to the Plan is required by any securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body is necessary or desirable as a
condition of, or in connection with, the grant of an Option or Award or the issuance of Shares, no Options or Awards shall be granted or payment made or Shares issued, in whole or in part, unless listing, registration, qualification, consent or
approval has been effected or obtained free of any conditions as acceptable to the Committee. 
 21.5 Notwithstanding anything
contained in the Plan or any Agreement to the contrary, in the event that the disposition of Shares acquired pursuant to the Plan is not covered by a then current registration statement under the Securities Act of 1933, as amended (the
“Securities Act”), and is not otherwise exempt from such registration, such Shares shall be restricted against transfer to the extent required by the Securities Act and Rule 144 or other regulations thereunder. The Company may place
on any certificate representing any such Shares any legend deemed desirable by the Company’s counsel to comply with federal or state securities laws and the Committee may require any individual receiving Shares pursuant to an Option or Award
granted under the Plan, as a condition precedent to receipt of such Shares, to represent and warrant to the Company in writing that the Shares acquired by such individual are acquired without a view to any distribution thereof and will not be sold
or transferred other than pursuant to an effective registration thereof under said Act or pursuant to an exemption applicable under the Securities Act or the rules and regulations promulgated thereunder. 
 22. Miscellaneous. 
 22.1 Multiple Agreements. The terms of each Option or Award may differ from other Options or Awards granted under the Plan at the same time, or at some other time. The Committee may also grant more 

  

 23 

 
than one Option or Award to a given Eligible Individual during the term of the Plan, either in addition to, or in substitution for, one or more Options or
Awards previously granted to that Eligible Individual. 
 22.2 Captions. The use of captions in this Plan or any
Agreement is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or such Agreement. 
 22.3 Severability. Whenever possible, each provision of the Plan or an Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Plan or an Agreement shall be held by
a court of competent jurisdiction to be prohibited by or invalid or unenforceable under applicable law, then (a) such provision shall be deemed to be amended to accomplish the objectives of the provision as originally written to the fullest
extent permitted by law and (b) all other provisions of the Plan or an Agreement shall remain in full force and effect. 
 22.4 Withholding of Taxes. 
 (a) At such times as an Optionee or Grantee recognizes taxable income in
connection with the receipt of Shares or cash hereunder (a “Taxable Event”), the Optionee or Grantee shall pay to the Company an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be
withheld by the Company in connection with the Taxable Event (the “Withholding Taxes”) prior to the issuance, or release from escrow, of such Shares or the payment of such cash. The Company shall have the right to deduct from any payment
of cash to an Optionee or Grantee an amount equal to the Withholding Taxes in satisfaction of the obligation to pay Withholding Taxes. In satisfaction of the obligation to pay Withholding Taxes to the Company, the Optionee or Grantee may make a
written election (the “Tax Election”), which may be accepted or rejected in the sole discretion of the Committee, to have withheld a portion of the Shares then issuable to him or her having an aggregate Fair Market Value equal to the
Withholding Taxes. 
 (b) If an Optionee makes a disposition, within the meaning of Section 424(c) of the Code and
regulations promulgated thereunder, of any Share or Shares issued to such Optionee pursuant to the exercise of an Incentive Stock Option within the two-year period commencing on the day after the date of the grant or within the one-year period
commencing on the day after the date of transfer of such Share or Shares to the Optionee pursuant to such exercise, the Optionee shall, within ten (10) days of such disposition, notify the Company thereof, by delivery of written notice to the
Company at its principal executive office. 
 22.5 [Reserved] 
  

 24

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