Document:

Exhibit
10.1

 

Generac Holdings Inc.

 

2010 Equity Incentive Plan

 

Article 1.                                            Establishment &
Purpose

 

1.1                               Establishment.  Generac Holdings Inc., a Delaware corporation (the “Company”), hereby
establishes the 2010 Equity Incentive Plan (the “Plan”) as set forth herein.

 

1.2                               Purpose
of Plan.  The purpose of this Plan is to
attract, retain and motivate officers, employees, non-employee directors, and consultants
of the Company and its Subsidiaries and Affiliates and to promote the success
of the Company’s business by providing the Participants with appropriate
incentives.

 

Article 2.                                            Definitions

 

Whenever capitalized in this Plan, the following
terms shall have the meanings set forth below.

 

2.1                               “Affiliate” means any
entity that the Company, either directly or indirectly, is in common control
with, is controlled by or controls, or any other entity designated by the Board
in which the Company or an Affiliate has a substantial direct or indirect
equity interest.

 

2.2                               “Annual
Award Limit” shall have the meaning set forth in Section 5.1(b) hereof.

 

2.3                               “Award” means any
Option, Stock Appreciation Right, Restricted Stock, Other Stock-Based Award, or
Performance-Based Compensation that is granted under this Plan.

 

2.4                               “Award
Agreement” means either (a) a written agreement entered
into by the Company and a Participant setting forth the terms and provisions
applicable to an Award granted under this Plan, or (b) a written statement
issued by the Company, a Subsidiary, or Affiliate to a Participant describing
the terms and conditions of the actual grant of such Award.

 

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

 

2.6                               “CCMP” means CCMP
Capital Investors II, L.P.

 

2.7                               “CCMP
Affiliate” means any Person who, directly or indirectly,
controls any CCMP Person or is controlled by any CCMP Person or is under common
control with any CCMP Person, where “control” means the power and ability to
direct, directly or indirectly, or share equally in or cause the direction of,
the management and/or policies of a CCMP Person, whether through ownership of
voting shares or other equivalent interests of the controlled CCMP Person, by
contract (including proxy) or otherwise.

 

2.8                               “CCMP
Cayman” means CCMP Capital Investors (Cayman), L.P.

 

2.9                               “CCMP
Co-Invest” means CCMP Generac Co-Invest, L.P.

 

2.10                        “CCMP
Entity” means, collectively, CCMP, CCMP Cayman, CCMP
Co-Invest and any CCMP Affiliate.

 

2.11                        “CCMP
Person” means any of CCMP, CCMP Cayman and CCMP Co-Invest.

 

 

2.12                        “Change of Control” unless otherwise
specified in the Award Agreement, means an event or series of events that
results in any of the following:

 

(a)                                  Change in Ownership of the
Company.  A change in the ownership of
the Company occurs on the date that any one Person or more than one Person
acting as a group (as determined under Treas. Reg. Section 1.409A-3(i)(5)(v)(B)),
other than a Subsidiary or one or more CCMP Entities or a “group” (as such term
is used in Section 13(d) of the Exchange Act) in which a CCMP Entity
is a member, acquires ownership of stock of the Company that, together with
stock held by such Person or group, constitutes more than 50% of the total fair
market value or total voting power of stock of the Company;

 

(b)                                 Change in Board of Directors of
the Company.  A change in
the effective control of the Company occurs on the date individuals who, as of
the Effective Date, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board during any twelve
month period, provided, however, that if the election, or nomination for
election by the Company’s stockholders, of any new director was approved by a
vote of at least a majority of the Incumbent Board, such new director shall be
considered a member of the Incumbent Board, and provided further that any
reductions in the size of the Board that are instituted voluntarily by the
Incumbent Board shall not constitute a “Change of Control”, and after any such
reduction the “Incumbent Board” shall mean the Board as so reduced; or

 

(c)                                  Change in Ownership of a
Substantial Portion of the Company’s Assets.  A change in the ownership of a substantial
portion of the Company’s assets occurs on the date that any one Person, or more
than one Person acting as a group (as determined under Treas. Reg. Section 1.409A-3(i)(5)(v)(B)),
other than a Subsidiary or one or more CCMP Entities or a “group” (as such term
is used in Section 13(d) of the Exchange Act) in which a CCMP Entity
is a member, acquires (or has acquired during the 12-month period ending on the
date of the most recent acquisition by such Person or Persons) assets from the
Company that have a total gross fair market value of more than 50% of the total
gross fair market value of all of the assets of the Company immediately prior
to such acquisition or acquisitions.  For
this purpose, gross fair market value means the value of the assets of the
Company, or the value of the assets being disposed of, determined in good faith
by the Board without regard to any liabilities associated with such assets.

 

2.13                        “Code” means the U.S.
Internal Revenue Code of 1986, as amended from time to time.

 

2.14                        “Committee” means the Compensation
Committee of the Board or any other committee designated by the Board to
administer this Plan.  To the extent
applicable, the Committee shall have at least two members, each of whom shall
be (a) a Non-Employee Director, (b) an Outside Director, and (c) an
“independent director” within the meaning of the listing requirements of any
exchange on which the Company is listed.

 

2.15                        “Consultant” means any
person who provides bona fide services to the Company or any Subsidiary or
Affiliate as a consultant or advisor, excluding any Employee or Director.

 

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2.16                        “Covered
Employee” means for any Plan Year, a Participant designated
by the Company as a potential “covered employee” as such term is defined in Section 162(m) of
the Code.

 

2.17                        “Director” means a member
of the Board who is not an Employee.

 

2.18                        “Effective
Date” means the date set forth in Section 14.14
hereof.

 

2.19                        “Employee” means an
officer or other employee of the Company, a Subsidiary or Affiliate, including
a member of the Board who is an employee of the Company, a Subsidiary or
Affiliate.

 

2.20                        “Exchange
Act” means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations promulgated thereunder.

 

2.21                        “Fair
Market Value” means, as of any date, the per Share value
determined as follows, in accordance with applicable provisions of Section 409A
of the Code:

 

(a)                                  The
average of the high and low trading price on a recognized stock exchange or any
established over-the-counter trading system on which dealings take place, or if
no trades were made on any such day, the immediately preceding day on which
trades were made; or

 

(b)                                 In the absence of an
established market for the Shares of the type described in (a) above, the
per Share Fair Market Value thereof shall be determined by the Committee in
good faith and in accordance with the applicable provisions of Section 409A
of the Code.

 

2.22                        “Incentive
Stock Option” means an Option intended to meet the requirements of
an incentive stock option as defined in Section 422 of the Code and
designated as an Incentive Stock Option.

 

2.23                        “Non-Employee
Director” means a person defined in Rule 16b-3(b)(3) promulgated
by the Securities and Exchange Commission under the Exchange Act, or any
successor definition adopted by the Securities and Exchange Commission.

 

2.24                        “Nonqualified
Stock Option” means an Option that is not an Incentive Stock
Option.

 

2.25                        “Other
Stock-Based Award” means any right granted under Article 9
hereof.

 

2.26                        “Option” means any
stock option granted from time to time under Article 6 hereof.

 

2.27                        “Option
Price” means the purchase price per Share subject to an
Option, as determined pursuant to Section 6.2 hereof.

 

2.28                        “Outside
Director” means a member of the Board who is an “outside
director” within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder.

 

2.29                        “Participant” means any
eligible person as set forth in Section 4.1 hereof to whom an Award
is granted.

 

2.30                        “Performance-Based
Compensation” means compensation under an Award that is intended
to constitute “qualified performance-based compensation” within the meaning of
the regulations promulgated under Section 162(m) of Code or any
successor provision.

 

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2.31                        “Performance Measures” means
measures as described in Section 10.2 on which the performance
goals are based in order to qualify Awards as Performance-Based Compensation.

 

2.32                        “Performance
Period” means the period of time during which the
performance goals must be met in order to determine the degree of payout and/or
vesting with respect to an Award.

 

2.33                        “Person” means any
natural person, sole proprietorship, general partnership, limited partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, governmental authority, or any other organization,
irrespective of whether it is a legal entity and includes any successor (by
merger or otherwise) of such entity.

 

2.34                        “Plan
Year” means the applicable fiscal year of the Company.

 

2.35                        “Restricted
Stock” means any Award granted under Article 8
hereof.

 

2.36                        “Restriction
Period” means the period during which Restricted Stock
awarded under Article 8 of this Plan is subject to forfeiture.

 

2.37                        “Share” means a share
of common stock of the Company, par value $0.01 per share, or such other class
or kind of shares or other securities resulting from the application of Article 12
hereof.

 

2.38                        “Stock
Appreciation Right” means any right granted under Article 7
hereof.

 

2.39                        “Subsidiary” means any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company (or any parent of the Company) if each of the
corporations, other than the last corporation in each unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in such chain.

 

2.40                        “Ten
Percent Shareholder” means a person who on any given date owns,
either directly or indirectly (taking into account the attribution rules contained
in Section 424(d) of the Code), stock possessing more than ten
percent of the total combined voting power of all classes of stock of the
Company or a Subsidiary or Affiliate.

 

Article 3.                                            Administration

 

3.1                               Authority
of the Committee.  This Plan
shall be administered by the Committee, which shall have full power to
interpret and administer this Plan and Award Agreements and full authority to
select the Participants to whom Awards will be granted, to determine the type
and amount of Awards to be granted to each such Participant and the terms and
conditions of Awards and Award Agreements, and to make such Award grants to
such Participants and enter into the related Award Agreements.  Without
limiting the generality of the foregoing, the Committee may, in its sole
discretion, but subject to the limitations in Article 11, Section 6.6,
and Section 10.6 hereof, clarify, construe or resolve any ambiguity
in any provision of this Plan or any Award Agreement, extend the term or period
of exercisability of any Awards, or waive any terms or conditions applicable to
any Award.  Awards may, in the discretion
of the Committee, be made under this Plan in assumption of, or in substitution
for, outstanding awards previously granted by the Company or any of its
Subsidiaries or Affiliates or a company acquired by the Company or with which
the Company combines.  The
Committee shall have full and exclusive discretionary power to adopt rules,
forms, instruments, and guidelines for administering this Plan as the Committee
deems necessary or proper. 
Notwithstanding anything in this Section 3.1 to the
contrary, the Board, or any other committee or sub-committee established by the
Board, is hereby authorized (in addition to any necessary action by the
Committee) to grant or approve Awards as necessary to satisfy the 

 

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requirements of Section 16
of the Exchange Act and the rules and regulations thereunder and to act in
lieu of the Committee with respect to Awards made to Non-Employee Directors
under this Plan.  All actions taken and
all interpretations and determinations made by the Committee or by the Board
(or any other committee or sub-committee thereof), as applicable, shall be
final and binding upon the Participants, the Company, and all other interested
individuals.

 

3.2                               Delegation.  The Committee may delegate to one or more of
its members, one or more officers of the Company or any of its Subsidiaries or
Affiliates, and one or more agents or advisors such administrative duties or
powers as it may deem advisable; provided, that, the Committee
shall not delegate to officers of the Company or any of its Subsidiaries or
Affiliates the power to make grants of Awards to officers of the Company or any
of its Subsidiaries or Affiliates; provided, further, that,
no delegation shall be permitted under this Plan that is prohibited by
applicable law.

 

Article 4.                                            Eligibility
and Participation

 

4.1                               Eligibility.  Participants will consist of such Employees, Directors
and Consultants as the Committee in its sole discretion determines and whom the
Committee may designate from time to time to receive Awards.  Designation of a Participant in any year
shall not require the Committee to designate such person to receive an Award in
any other year or, once designated, to receive the same type or amount of Award
as granted to the Participant in any other year.

 

4.2                               Type of
Awards.  Awards under this Plan may be
granted in any one or a combination of:  (a) Options,
(b) Stock Appreciation Rights, (c) Restricted Stock, (d) Other
Stock-Based Awards, and (e) Performance-Based Compensation Awards.  This Plan sets forth the performance goals and
procedural requirements to permit the Company to design Awards that qualify as
Performance-Based Compensation, as described in Article 10
hereof.  Awards granted under this Plan
shall be evidenced by Award Agreements (which need not be identical) that
provide additional terms and conditions associated with such Awards, as
determined by the Committee in its sole discretion; provided, however,
that in the event of any conflict between the provisions of this Plan and any
such Award Agreement, the provisions of this Plan shall prevail.

 

Article 5.                                            Shares
Subject to Plan and Maximum Awards

 

5.1                               Number
of Shares Available for Awards.

 

(a)                                  General.  Subject to
adjustment as provided in Article 12 hereof, the maximum number of
Shares available for issuance to Participants pursuant to Awards under this Plan
shall be [            ](1) Shares.  The number of Shares available for granting Incentive
Stock Options under this Plan shall not exceed 1,500,000
Shares, subject to Article 12 hereof and the provisions of
Sections 422 and 424 of the Code and any successor provisions.  The Shares available for issuance under this Plan
may consist of either authorized and unissued Shares or treasury Shares.

 

(b)                                 Annual
Award Limits.  The maximum number of Shares
with respect to Awards denominated in Shares that may be granted to any
Participant in any Plan 

 

(1) 9.25% of the fully
diluted Shares to be issued and outstanding immediately upon the consummation
of the proposed initial public offering of Shares as contemplated by the
Corporation’s Registration Statement on Form S-1 (Reg. No. 333-162590).

 

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Year shall be 3,000,000 Shares, subject to adjustments made in
accordance with Article 12 hereof (the “Annual Award Limit”).

 

(c)                                  Additional Shares.  In the event that any outstanding Award
expires, is forfeited, cancelled or otherwise terminated, the Shares subject to
such Award, to the extent of any such forfeiture, cancellation, expiration, or
termination, shall again be available for Awards.  Any Shares delivered to the Company as part or
full payment for the purchase price of an Award, or to satisfy the Company’s
withholding obligation with respect to an Award, shall again be available for
Awards to the extent the Committee determines that the availability of
Incentive Stock Options will not be compromised; provided, however,
that such Shares shall continue to be counted as outstanding for purposes of
determining whether an Annual Award Limit has been attained.  If the Committee authorizes the assumption
under this Plan, in connection with any merger, consolidation, acquisition of
property or stock, or reorganization, of awards granted under another plan,
such assumption shall not (i) reduce the maximum number of Shares
available for issuance under this Plan or (ii) be subject to or counted
against a Participant’s Annual Award Limit.

 

Article 6.                                            Stock
Options

 

6.1                               Grant
of Options.  The
Committee is hereby authorized to grant Options to Participants.  Each Option shall permit a Participant to
purchase from the Company a stated number of Shares at an Option Price
established by the Committee, subject to the terms and conditions described in
this Article 6 and to such additional terms and conditions, as
established by the Committee, in its sole discretion, that are consistent with
the provisions of this Plan.  Options
shall be designated as either Incentive Stock Options or Nonqualified Stock
Options, provided that Options granted to Directors shall be Nonqualified Stock
Options.  An Option granted as an
Incentive Stock Option shall, to the extent it fails to qualify as an Incentive
Stock Option, be treated as a Nonqualified Stock Option.  Neither the Committee nor the Company or any
of its Subsidiaries or Affiliates shall be liable to any Participant or to any
other Person if it is determined that an Option intended to be an Incentive
Stock Option does not qualify as an Incentive Stock Option.  Options shall be evidenced by Award
Agreements which shall state the number of Shares covered by such Option.  Such Award Agreements shall conform to the
requirements of this Plan, and may contain such other provisions, as the
Committee shall deem advisable.

 

6.2                               Terms
of Option Grant.  The Option Price shall be
determined by the Committee at the time of grant, but shall not be less than 100%
of the Fair Market Value of a Share on the date of grant.  In the case of any Incentive Stock Option,
the Option Price shall be (a) if granted to a person other than a Ten
Percent Shareholder, not less than 100% of the Fair Market Value of a Share on
the date of grant or (b) if granted to a Ten Percent Shareholder, not less
than 110% of the Fair Market Value of a Share on the date of grant.

 

6.3                               Option
Term.  The
term of each Option shall be determined by the Committee at the time of grant
and shall be stated in the Award Agreement, but in no event shall such term be
greater than ten years (or, in the case on an Incentive Stock Option granted to
a Ten Percent Shareholder, five years).

 

6.4                               Time of
Exercise.  Options
granted under this Article 6 shall be exercisable at such times and
be subject to such restrictions and conditions as the Committee shall in each
instance approve, which terms and restrictions need not be the same for each
grant or for each Participant.

 

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6.5                               Method
of Exercise.  Except as
otherwise provided in this Plan or in an Award Agreement, an Option may be
exercised for all, or from time to time any part, of the Shares for which it is
then exercisable.  For purposes of this Article 6,
the exercise date of an Option shall be the later of the date a notice of
exercise is received by the Company and, if applicable, the date full payment
is received by the Company pursuant to clauses:  (a), (b), (c) (d), or (e) in the
following sentence (including the applicable tax withholding pursuant to Section 14.3
hereof).  The aggregate Option Price for
the Shares as to which an Option is exercised shall be paid to the Company at
the election of the Participant (a) in cash or its equivalent (e.g., by
cashier’s check), (b) to the extent permitted by the Committee, in Shares
(whether or not previously owned by the Participant) having a Fair Market Value
equal to the aggregate Option Price for the Shares being purchased and
satisfying such other requirements as may be imposed by the Committee, (c) partly
in cash and, to the extent permitted by the Committee, partly in such Shares (as
described in (b) above), (d) to the extent permitted by the Committee,
by reducing the number of Shares otherwise deliverable upon the exercise of the
Option by the number of Shares having a Fair Market Value equal to the Option
Price, or (e) if there is a public market for the Shares at such time,
subject to such requirements as may be imposed by the Committee, through the
delivery of irrevocable instructions to a broker to sell Shares obtained upon
the exercise of the Option and to deliver promptly to the Company an amount out
of the proceeds of such sale equal to the aggregate Option Price for the Shares
being purchased.  The Committee may
prescribe any other method of payment that it determines to be consistent with
applicable law and the purpose of this Plan.

 

6.6                               Limitations
on Incentive Stock Options.  Incentive Stock Options may be granted only
to employees of the Company or of a “parent corporation” or “subsidiary
corporation” (as such terms are defined in Section 424 of the Code) at the
date of grant.  To the extent the
aggregate Fair Market Value (generally determined as of the time the Option is
granted) of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by a Participant during any calendar year under
all plans of the Company and of any “parent corporation” or “subsidiary
corporation” exceeds $100,000, the amount in excess of $100,000 (and the
portion of any Option relating thereto) shall be treated as a Nonqualified
Stock Option.  For purposes of the
preceding sentence, Incentive Stock Options will be taken into account
generally in the order in which they are granted.  Each provision of this Plan and each Award Agreement
relating to an Incentive Stock Option shall be construed so that each Incentive
Stock Option shall be an incentive stock option as defined in Section 422
of the Code, and any provisions of the Award Agreement thereof that cannot be
so construed shall be disregarded.

 

Article 7.                                            Stock
Appreciation Rights

 

7.1                               Grant
of Stock Appreciation Rights.  The Committee is hereby authorized to grant
Stock Appreciation Rights to Participants. 
Stock Appreciation Rights shall be evidenced by Award Agreements that
shall conform to the requirements of this Plan and may contain such other
provisions, as the Committee shall deem advisable.  Subject to the terms of this Plan and any
applicable Award Agreement, a Stock Appreciation Right granted under this Plan
shall confer on the holder thereof a right to receive, upon exercise thereof,
the excess of (a) the Fair Market Value of a specified number of Shares on
the date of exercise over (b) the grant price of the right as specified by
the Committee on the date of the grant.  Such payment may be in the form of cash,
Shares, other property or any combination thereof, as the Committee shall
determine in its sole discretion.

 

7.2                               Terms
of Stock Appreciation Right.  Subject to the terms of this Plan and any
applicable Award Agreement, the grant price (which shall not be less than 100%
of the Fair Market Value of a
Share on the date of grant), term, methods of exercise, methods of settlement,
and any other terms and conditions of any Stock Appreciation Right shall be as
determined by the Committee.  The
Committee may impose such other conditions or restrictions on the exercise of
any Stock Appreciation 

 

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Right as it may deem
appropriate.  No Stock Appreciation Right
shall have a term of more than ten years from the date of grant.

 

Article 8.                                            Restricted
Stock

 

8.1                               Grant of Restricted Stock.  The Committee is hereby authorized to grant
and otherwise issue Restricted Stock to Participants.  An Award of Restricted Stock
is a grant by the Committee of a specified number of Shares to the Participant,
which Shares are subject to forfeiture upon the occurrence of specified
events.  Participants shall be awarded
Restricted Stock in exchange for consideration not less than the minimum
consideration required by applicable law.  Restricted Stock shall be evidenced by
an Award Agreement, which shall conform to the requirements of this Plan and may
contain such other provisions, as the Committee shall deem advisable.

 

8.2                               Terms
of Restricted Stock Awards.  Each Award Agreement evidencing a Restricted
Stock grant shall specify Restriction Period(s), the number of Shares of
Restricted Stock subject to the Award, the performance, employment or other
conditions (including the termination of a Participant’s service whether due to
death, disability or other reason) under which the Restricted Stock may be
forfeited to the Company and such other provisions as the Committee shall
determine.  Any Restricted Stock granted
under this Plan shall be evidenced in such manner as the Committee may deem
appropriate, including book-entry registration or issuance of a stock
certificate or certificates (in which case, the certificate(s) representing
such Shares shall be legended as to sale, transfer, assignment, pledge or other
encumbrances during the Restriction Period and deposited by the Participant,
together with a stock power endorsed in blank, with the Company, to be held in
escrow during the Restriction Period).  At
the end of the Restriction Period, the restrictions imposed hereunder and under
the Award Agreement shall lapse with respect to the number of Shares of
Restricted Stock as determined by the Committee, and the legend shall be
removed and such number of Shares delivered to the Participant (or, where
appropriate, the Participant’s legal representative).

 

8.3                               Voting
and Dividend Rights.  The Committee shall determine and
set forth in a Participant’s Award Agreement whether or not a Participant
holding Restricted Stock granted hereunder shall have the right to exercise
voting rights with respect to the Restricted Stock during the Restriction
Period (the Committee may require a Participant to grant an irrevocable proxy
and power of substitution) and/or have the right to receive dividends on the
Restricted Stock during the Restriction Period (and, if so, on what terms).

 

8.4                               Performance
Goals.  The Committee may condition
the grant of Restricted Stock or the expiration of the Restriction Period upon
the Participant’s achievement of one or more performance goal(s) specified
in the Award Agreement.  If the
Participant fails to achieve the specified performance goal(s), the Committee
shall not grant the Restricted Stock to such Participant or the Participant
shall forfeit the Award of Restricted Stock to the Company, as applicable.

 

8.5                               Section 83(b) Election.  If a Participant
makes an election pursuant to Section 83(b) of the Code concerning
Restricted Stock, the Participant shall be required to file promptly a copy of
such election with the Company.

 

Article 9.                                            Other
Stock-Based Awards

 

The Committee, in its sole discretion, may grant
Awards of Shares and Awards that are valued, in whole or in part, by reference
to, or are otherwise based on the Fair Market Value of Shares (the “Other
Stock-Based Awards”), including
without limitation, restricted stock units, dividend equivalent rights, and
other phantom awards.  Such Other
Stock-Based Awards shall be in such form, and dependent on 

 

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such conditions, as the
Committee shall determine, including, without limitation, the right to receive
one or more Shares (or the equivalent cash value of such Shares) upon the
completion of a specified period of service, the occurrence of an event and/or
the attainment of performance objectives. 
Each Other Stock-Based Award shall be evidenced by an Award Agreement
which shall conform to the requirements of this Plan.  Subject to the provisions of this Plan, the
Committee shall determine to whom and when Other Stock-Based Awards will be
made, the number of Shares to be awarded under (or otherwise related to) such
Other Stock-Based Awards, whether such Other Stock-Based Awards shall be settled
in cash, Shares or a combination of cash and Shares, and all other terms and
conditions of such Awards (including, without limitation, the vesting
provisions thereof and provisions ensuring that all Shares so awarded and
issued shall be fully paid and non-assessable).

 

Article 10.                                     Performance-Based
Compensation

 

10.1                        Grant
of Performance-Based Compensation Awards.  To the extent permitted by Section 162(m) of
the Code, the Committee is authorized to design any Award so that the amounts
or Shares payable or distributed pursuant to such Award are treated as “qualified
performance-based compensation” within the meaning of Section 162(m) of
the Code and related regulations.

 

10.2                        Performance
Measures.  The
vesting, crediting and/or payment of Performance-Based Compensation shall be
based on the achievement of objective performance goals based on one or more of
the following Performance Measures: (a) sales or revenue; (b) earnings
per share; (c) measurable achievement in quality, operation and compliance
initiatives; (d) objectively determinable measure of non-financial
operating and management performance objectives; (e) net earnings (either
before or after interest, taxes, depreciation and amortization); (f) economic
value-added (as determined by the Committee); (g) net income (either
before or after taxes); (h) operating earnings; (i) cash flow
(including, but not limited to, operating cash flow and free cash flow); (j) cash
flow return on capital; (k) return on net assets; (l) return on
stockholders’ equity; (m) return on assets; (n) return on capital; (o) stockholder
returns, dividends and/or other distributions; (p) return on sales; (q) gross
or net profit margin; (r) productivity; (s) expenses; (t) margins;
(u) operating efficiency; (v) customer satisfaction; (w) measurable
achievement in quality and compliance initiatives; (x) working capital; (y) debt;
(z) debt reduction; (aa) price per share of stock; (bb) market share; (cc)
completion of acquisitions; (dd) business expansion; (ee) product diversification;
and (ff) new or expanded market penetration. 
The foregoing criteria shall have any reasonable definitions that the
Committee may specify, which may include or exclude any or all of the following
items, as the Committee may specify: (pp) extraordinary, unusual or
non-recurring items; (qq) effects of changes in tax law, accounting principles
or other such laws or provisions affecting reported results; (rr) effects of
currency fluctuations; (ss) effects of financing activities (e.g., effect on
earnings per share of issuing convertible debt securities); (tt) expenses for
restructuring, productivity initiatives or new business initiatives; (uu)  impairment of tangible or intangible assets;
(vv) litigation or claim judgments or settlements; (ww) non-operating items;
(xx) acquisition expenses; (yy) discontinued operations; and (zz) effects
of assets sales or divestitures.  Any
Performance Measure may be used to measure the performance of the Company
and/or any of the Subsidiaries or Affiliates as a whole, any business unit
thereof or any combination thereof against any goal including past performance
or compared to the performance of a group of comparable companies, or a
published or special index, in each case that the Committee, in its sole
discretion, deems appropriate.

 

10.3                        Establishment
of Performance Goals for Covered Employees.  No later than 90 days after the commencement
of a Performance Period (but in no event after 25% of such Performance Period
has elapsed), the Committee shall establish in writing:  (a) the performance goals applicable to
the Performance Period; (b) the targets to be used to measure the
performance goals in terms of an objective formula or standard; (c) the formula for
computing the amount of compensation payable to the Participant if such
performance goals are obtained; and (d) the Participants or class of
Participants to which such 

 

9

 

performance goals apply.  The outcome of such performance goals must be
substantially uncertain when the Committee establishes the goals.

 

10.4                        Adjustment
of Performance-Based Compensation.  Awards that are designed to qualify as
Performance-Based Compensation may not be adjusted upward.  The Committee shall retain the discretion to
adjust such Awards downward, either on a formula or discretionary basis or any
combination, as the Committee determines.

 

10.5                        Approval
of Performance-Based Compensation.  The vesting and settlement of
Performance-Based Compensation Awards shall be contingent upon the approval of
this Plan by a majority of the stockholders of the Company, including the
applicable Performance Measures relating thereto.  To the extent necessary for purposes of Section 162(m) of
the Code, this Plan shall be resubmitted to stockholders for their reapproval
with respect to bonuses payable for the taxable years of the Company commencing
on and after the fifth (5th) anniversary of the initial stockholder approval, or at such earlier
time required by Section 162(m) of the Code.

 

10.6                        Certification
of Performance.  Except for
Awards that pay compensation attributable solely to an increase in the value of
Shares, no Award designed to qualify as Performance-Based Compensation shall be
vested, credited or paid, as applicable, with respect to any Participant until
the Committee certifies in writing that the performance goals and any other
material terms applicable to such Performance Period have been satisfied.

 

10.7                        Terms
of Performance-Based Compensation Awards.  Each provision of this Plan and each Award Agreement
relating to Performance-Based Compensation shall be construed so that each such
Award shall be “qualified performance-based compensation” within the meaning of
Section 162(m) of the Code and related regulations, and any
provisions of the Award Agreement thereof that cannot be so construed shall be
disregarded.

 

Article 11.                                     Compliance
with Section 409A of the Code

 

11.1                        General.  The Company intends that all Awards be
structured in compliance with, or to satisfy an exemption from, Section 409A
of the Code and all regulations, guidance, compliance programs and other
interpretative authority thereunder (“Section 409A”),
such that there are no adverse tax consequences, interest, or penalties under Section 409A
as a result of the payments.  Notwithstanding
the Company’s intention, in the event any Award is subject to Section 409A,
the Committee may, in its sole discretion and without a Participant’s prior
consent, amend this Plan and/or Awards, adopt policies and procedures, or take
any other actions (including amendments, policies, procedures and actions with
retroactive effect) as are necessary or appropriate to (a) exempt this Plan
and/or any Award from the application of Section 409A, (b) preserve
the intended tax treatment of any such Award, or (c) comply with the
requirements of Section 409A, including without limitation any such
regulations guidance, compliance programs and other interpretative authority
that may be issued after the date of the grant.

 

11.2                        Payments
to Specified Employees. 
Notwithstanding any contrary provision in this Plan or Award Agreement,
any payment(s) of nonqualified deferred compensation (within the meaning
of Section 409A) that are otherwise required to be made under this Plan to
a “specified employee” (as defined under Section 409A) as a result of his
or her separation from service (other than a payment that is not subject to Section 409A)
shall be delayed for the first six months following such separation from
service (or, if earlier, until the date of death of the specified employee) and
shall instead be paid (in a manner set forth in the Award Agreement) on the day
that immediately follows the end of such six-month period or as soon as
administratively practicable thereafter. 
Any remaining payments of nonqualified 

 

10

 

deferred compensation shall be paid without delay
and at the time or times such payments are scheduled to be made.

 

11.3                        Separation
from Service.  A
termination of service shall not be deemed to have occurred for purposes of any
provision of this Plan or any Award Agreement providing for the payment of any
amounts or benefits that are considered nonqualified deferred compensation
under Section 409A upon or following a termination of service, unless such
termination is also a “separation from service” within the meaning of Section 409A
and the payment thereof prior to a “separation from service” would violate Section 409A.  For purposes of any such provision of this
Plan or any Award Agreement relating to any such payments or benefits,
references to a “termination,” “termination of employment,” “termination of
service,” or like terms shall mean “separation from service.”

 

Article 12.                                     Adjustments

 

12.1                        Adjustments
in Authorized Shares.  In the
event of any corporate event or transaction involving the Company, a Subsidiary
and/or an Affiliate (including, but not limited to, a change in the Shares of
the Company or the capitalization of the Company) such as a merger,
consolidation, reorganization, recapitalization, separation, stock dividend,
stock split, reverse stock split, split up, spin-off, combination of Shares,
exchange of Shares, dividend in kind, amalgamation, or other like change in
capital structure (other than normal cash dividends to stockholders of the Company),
or any similar corporate event or transaction, the Committee, to prevent
dilution or enlargement of Participants’ rights under this Plan, shall
substitute or adjust, in its sole discretion, the number and kind of Shares or
other property that may be issued under this Plan or under particular forms of
Awards, the number and kind of Shares or other property subject to outstanding
Awards, the Option Price, grant price or purchase price applicable to
outstanding Awards, the Annual Award Limits, and/or other value determinations
applicable to this Plan or outstanding Awards.

 

12.2                        Change
of Control.  Upon the
occurrence of a Change of Control after the Effective Date, unless otherwise
specifically prohibited under applicable laws or by the rules and regulations
of any governing governmental agencies or national securities exchanges, or
unless the Committee shall determine otherwise in the Award Agreement, the
Committee is authorized (but not obligated) to make adjustments in the terms
and conditions of outstanding Awards, including without limitation the
following (or any combination thereof):  (a) continuation
or assumption of such outstanding Awards under this Plan by the Company (if it
is the surviving company or corporation) or by the surviving company or
corporation or its parent; (b) substitution by the surviving company or
corporation or its parent of awards with substantially the same terms for such
outstanding Awards (excluding the consideration payable upon settlement of the
Awards); (c) accelerated exercisability, vesting and/or lapse of
restrictions under outstanding Awards immediately prior to the occurrence of
such event; (d) upon written notice, provide that any outstanding Awards
must be exercised, to the extent then exercisable, during a reasonable period
of time immediately prior to the scheduled consummation of the event, or such
other period as determined by the Committee (contingent upon the consummation
of the event), and at the end of such period, such Awards shall terminate to
the extent not so exercised within the relevant period; and (e) cancellation
of all or any portion of outstanding Awards for fair value (as determined in
the sole discretion of the Committee and which may be zero) which, in the case
of Options and Stock Appreciation Rights or similar Awards, may equal the
excess, if any, of the value of the consideration to be paid in the Change of
Control transaction to holders of the same number of Shares subject to such
Awards (or, if no such consideration is paid, Fair Market Value of the Shares
subject to such outstanding Awards or portion thereof being canceled) over the
aggregate Option Price or grant price, as applicable, with respect to such
Awards or portion thereof being canceled.

 

11

 

Article 13.                                     Duration,
Amendment, Modification, Suspension, and Termination

 

13.1                        Duration
of Plan.  Unless sooner terminated as
provided in Section 13.2 hereof, this Plan shall terminate on the
tenth anniversary of the Effective Date.

 

13.2                        Amendment,
Modification, Suspension, and Termination of Plan.  Subject to the terms of this Plan, the Committee
may amend, alter, suspend, discontinue or terminate this Plan or any portion
thereof or any Award (or Award Agreement) hereunder at any time, in its sole
discretion.  Without limiting the generality of the
foregoing, the Committee may in its sole discretion amend the terms of
outstanding Awards to reduce the Option Price of outstanding Options or Stock
Appreciation Rights or cancel outstanding Options or Stock Appreciation Rights
in exchange for cash, other Awards or Options or Stock Appreciation Rights with
an Option Price that is less than the Option Price of the original Options or
Stock Appreciation Rights, and may take such any such action without stockholder
approval.

 

Article 14.                                     General
Provisions

 

14.1                        No
Right to Service or Award.  The
granting of an Award under this Plan shall impose no obligation on the Company,
any Subsidiary or any Affiliate to continue the service of a Participant and
shall not lessen or affect any right that the Company, any Subsidiary or any
Affiliate may have to terminate the service of such Participant.  No Participant or other Person shall have any
claim to be granted any Award, and there is no obligation for uniformity of
treatment of Participants, or holders or beneficiaries of Awards.  The terms and conditions of Awards and the
Committee’s determinations and interpretations with respect thereto need not be
the same with respect to each Participant (whether or not such Participants are
similarly situated).

 

14.2                        Settlement
of Awards; Fractional Shares.  Each Award Agreement shall establish the form
in which the Award shall be settled.  The
Committee shall determine whether cash, Awards, other securities or other
property shall be issued or paid in lieu of fractional Shares or whether such
fractional Shares or any rights thereto shall be issued, rounded, forfeited, or
otherwise eliminated.

 

14.3                        Tax
Withholding.  The Company
shall have the power and the right to deduct or withhold automatically from any
amount deliverable under the Award or otherwise, or require a Participant to
remit to the Company, the minimum statutory amount to satisfy federal, state,
and local taxes, domestic or foreign, required by law or regulation to be
withheld with respect to any taxable event arising as a result of this Plan.  With respect to required withholding,
Participants may elect (subject to the Company’s automatic withholding right
set out above), subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares having a Fair Market Value on the date the tax is to be determined equal
to the minimum statutory total tax that could be imposed on the transaction.

 

14.4                        No Guarantees Regarding Tax Treatment.  Participants (or their beneficiaries) shall
be responsible for all taxes with respect to any Awards under this Plan.  The Committee and the Company make no
guarantees to any Person regarding the tax treatment of Awards or payments made
under this Plan.  Neither the Committee
nor the Company has any obligation to take any action to prevent the assessment
of any tax on any Person with respect to any Award under Section 409A of
the Code or Section 457A of the Code or otherwise and none of the Company,
any of its Subsidiaries or Affiliates, or any of their employees or
representatives shall have any liability to a Participant with respect thereto.

 

14.5                        Non-Transferability
of Awards.  Unless
otherwise determined by the Committee, an Award shall not be transferable or
assignable by the Participant except in the event of his death (subject to the
applicable laws of descent and distribution) and any such purported assignment,
alienation, pledge, 

 

12

 

attachment, sale, transfer
or encumbrance shall be void and unenforceable against the Company or any
Affiliate.  No transfer shall be
permitted for value or consideration.  An
award exercisable after the death of a Participant may be exercised by the
legatees, personal representatives or distributees of the Participant.  Any permitted transfer of the Awards to heirs
or legatees of the Participant shall not be effective to bind the Company
unless the Committee shall have been furnished with written notice thereof and
a copy of such evidence as the Committee may deem necessary to establish the
validity of the transfer and the acceptance by the transferee or transferees of
the terms and conditions hereof.

 

14.6                        Conditions
and Restrictions on Shares.  The Committee may impose such other
conditions or restrictions on any Shares received in connection with an Award
as it may deem advisable or desirable. 
These restrictions may include, but shall not be limited to, a
requirement that the Participant hold the Shares received for a specified
period of time or a requirement that a Participant represent and warrant in
writing that the Participant is acquiring the Shares for investment and without
any present intention to sell or distribute such Shares.  The certificates for Shares may include any
legend which the Committee deems appropriate to reflect any conditions and
restrictions applicable to such Shares.

 

14.7                        Awards
to Non-U.S. Employees or Directors.  To comply with the laws in countries other
than the United States in which the Company or any Subsidiary or Affiliate
operates or has Employees, Directors or Consultants, the Committee, in its sole
discretion, shall have the power and authority to:  (a) determine which Subsidiaries or
Affiliates shall be covered by this Plan; (b) determine which Employees,
Directors or Consultants outside the United States are eligible to participate
in this Plan; (c) modify the terms and conditions of any Award granted to
Employees, Directors or Consultants outside the United States to comply with
applicable foreign laws; (d) take any action, before or after an Award is
made, that it deems advisable to obtain approval or comply with any necessary
local government regulatory exemptions or approvals; and (e) establish
subplans and modify exercise procedures and other terms and procedures, to the
extent such actions may be necessary or advisable.

 

14.8                        Rights
as a Stockholder.  Except as
otherwise provided herein or in the applicable Award Agreement, a Participant
shall have none of the rights of a stockholder with respect to Shares covered
by any Award until the Participant becomes the record holder of such Shares.

 

14.9                        Severability.  If any provision of this Plan or any Award is
or becomes or is deemed to be invalid, illegal, or unenforceable in any
jurisdiction, or as to any Person or Award, or would disqualify this Plan or
any Award under any law deemed applicable by the Committee, such provision
shall be construed or deemed amended to conform to applicable laws, or if it
cannot be so construed or deemed amended without, in the determination of the
Committee, materially altering the intent of this Plan or the Award, such
provision shall be stricken as to such jurisdiction, Person, or Award, and the
remainder of this Plan and any such Award shall remain in full force and
effect.

 

14.10                 Unfunded
Plan.  Participants shall have no
right, title, or interest whatsoever in or to any investments that the Company
or any of its Subsidiaries or Affiliates may make to aid it in meeting its
obligations under this Plan.  Nothing
contained in this Plan, and no action taken pursuant to its provisions, shall
create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and any Participant, beneficiary, legal
representative, or any other Person.  To
the extent that any Person acquires a right to receive payments from the
Company under this Plan, such right shall be no greater than the right of an
unsecured general creditor of the Company. 
All payments to be made hereunder shall be paid from the general funds
of the Company and no special or separate fund shall be established and no
segregation of assets shall be made to assure payment of such amounts.  This Plan is not subject to the U.S. Employee
Retirement Income Security Act of 1974, as amended from time to time.

 

13

 

14.11                 No
Constraint on Corporate Action.  Nothing in this Plan shall be construed to (a) limit,
impair, or otherwise affect the Company’s right or power to make adjustments,
reclassifications, reorganizations, or changes of its capital or business
structure, or to merge or consolidate, or dissolve, liquidate, sell, or
transfer all or any part of its business or assets, or (b) limit the right
or power of the Company to take any action which such entity deems to be
necessary or appropriate.

 

14.12                 Successors.  All obligations of the Company under this Plan
with respect to Awards granted hereunder shall be binding on any successor to
the Company, whether the existence of such successor is the result of a direct
or indirect purchase, merger, consolidation, or otherwise, of all or
substantially all of the business or assets of the Company.

 

14.13                 Governing
Law.  This Plan and each Award Agreement
shall be governed by the laws of the State of Delaware, excluding any conflicts
or choice of law rule or principle that might otherwise refer construction
or interpretation of this Plan to the substantive law of another jurisdiction.

 

14.14                 Effective
Date. This Plan shall be effective as of the date of adoption by the Board,
which date is set forth below (the “Effective Date”).

 

14.15                 Stockholder
Approval.  This Plan will
be submitted for approval by the stockholders of the Company at an annual
meeting or any special meeting of stockholders of the Company within 12 months
of the Effective Date.  Any Awards
granted under this Plan prior to such approval of stockholders shall be
effective as of the date of grant, but no such Award may be exercised or settled
and no restrictions relating to any Award may lapse prior to such stockholder
approval, and if stockholders fail to approve this Plan as specified hereunder,
this Plan and any Award shall be terminated and cancelled without consideration.

 

*                                         *                                         *

 

This Plan was duly adopted and approved by the Board
of Directors of the Company by resolution at a meeting held on the 14th day of January,
2010.

 

14Exhibit 10.44

 

Generac Holdings Inc.

2010 Equity Incentive Plan

 

RESTRICTED STOCK AWARD AGREEMENT

 

THIS RESTRICTED STOCK
AWARD AGREEMENT (this “Award  Agreement”) is
made effective as of the          day
of                   ,
2010 (the “Date of Grant”), between
Generac Holdings Inc., a Delaware corporation (the “Company”), and              
(the “Participant”):

 

R E C I T A L S:

 

WHEREAS, the Company has adopted the Generac
Holdings Inc. 2010 Equity Incentive Plan (the “Plan”), which Plan is incorporated herein by reference and
made a part of this Award Agreement. 
Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan; and

 

WHEREAS, the Committee has determined that it would
be in the best interests of the Company and its stockholders to grant the
restricted stock provided for herein to the Participant pursuant to the Plan
and the terms set forth herein.

 

NOW THEREFORE, in consideration of the mutual
covenants hereinafter set forth, the parties agree as follows:

 

1.                                       Restricted
Stock Award.  Subject to
the terms and conditions of the Plan and this Agreement, the Company hereby
grants to the Participant                   Shares (the “Restricted Shares”), which shall vest and become
nonforfeitable in accordance with Section 3 hereof.

 

2.                                       Certificates.  A certificate or certificates representing
the Restricted Shares shall be issued by the Company and shall be registered in
the name of the Participant on the stock transfer books of the Company promptly
following execution of this Award Agreement by the Participant, but shall
remain in the physical custody of the Company or its designee at all times
prior to the vesting of such Restricted Shares pursuant to Section 3
hereof.  As a condition to the receipt of
this Award Agreement, the Participant shall deliver to the Company a Stock
Power in the form attached hereto as Exhibit A, duly endorsed in
blank, relating to the Restricted Shares. 
Each certificate representing the Restricted Shares shall bear the
following legend:

 

“The ownership and transferability of this
certificate and these shares are subject to the terms and conditions (including
forfeiture) of the Generac Holdings Inc. 2010 Equity Incentive Plan and a
Restricted Stock Award Agreement entered into between the registered owner and Generac
Holdings Inc.  Copies of such Plan and
Agreement are on file in the executive offices of Generac Holdings Inc.”

 

As soon as administratively
practicable, but not later than sixty (60) days, following the vesting of the
Restricted Shares (as described in Section 3 hereof), and upon the
satisfaction of all other applicable conditions, including, but not limited to,
the payment by the Participant of all applicable withholding taxes, the Company
shall deliver or cause to be delivered to the Participant, or in the case of
Participant’s death, Participant’s beneficiary, a certificate or certificates
for the applicable Shares of Restricted Stock which shall not bear the legend
described 

 

 

above, but may bear such
other legends as the Company deems advisable pursuant to Section 7
below.

 

3.                                       Vesting of
Restricted Stock.

 

(a)                                  Vesting
Schedule.  Subject to
the Participant’s continued service through the vesting date, the Restricted
Shares shall all vest on the third (3rd) anniversary of the Date of Grant.

 

(b)                                 Acceleration of
Vesting.  Notwithstanding Section 3(a) hereof,
if within the one (1) year period following a Change of Control, the
Participant’s service is terminated by the Company or any Affiliate without
Cause, the Restricted Shares shall immediately vest as of the date of such
termination of service, subject to the Participant’s execution of an effective
general release and waiver of all claims against the Company, its Affiliates
and their respective officers and directors, substantially in the form attached
hereto as Exhibit B.

 

(c)                                  Termination of
Service.  If the Participant’s Service
is terminated for any reason, other than as described in Section 3(b) above,
the Restricted Shares, to the extent not then-vested, shall be forfeited by the
Participant without any consideration.

 

(d)                                 Definition of Cause.  “Cause” shall
mean, (i) a material breach by the Participant of any of the Participant’s
obligations under any written agreement with the Company or any of its
Affiliates, (ii) a material violation by the Participant of any of the
Company’s policies, procedures, rules and regulations applicable to
employees generally or to similarly situated employees, in each case, as they
may be amended from time to time in the Company’s sole discretion; (iii) the
failure by the Participant to reasonably and substantially perform his or her
duties to the Company or its Affiliates (other than as a result of physical or
mental illness or injury); (iv) the Participant’s willful misconduct or
gross negligence that has caused or is reasonably expected to result in
material injury to the business, reputation or prospects of the Company or any
of its Affiliates; (v) the Participant’s fraud or misappropriation of
funds; or (vi) the commission by the Participant of a felony or other
serious crime involving moral turpitude; provided, that, in the case of the
failures described in (i), (ii) and (iii) above, such failures shall
only constitute “Cause” after a written notice of such failure is delivered to
the Participant that specifically identifies the specific failure that could
lead to the Participant’s termination, and the Participant does not remedy such
failure within fifteen (15) business days after receipt of such written notice,
as prescribed within the notice.  Notwithstanding
the foregoing, if the Participant is a party to an employment agreement with
the Company or any Affiliate at the time of his or her termination of
employment and such employment agreement contains a different definition of “cause”
(or any derivation thereof), the definition in such employment agreement will
control for purposes of this Agreement.

 

4.                                       Rights as a
Stockholder.  The
Participant shall have none of the rights of a stockholder of the Company until
the Restricted Shares vest, provided, that, the Participant shall
have the right to receive dividends on the Restricted Shares (the “Dividends”) subject to the remainder of this Section 4.  The Dividends, if any, shall be held by the
Company and shall be subject to forfeiture until such time that the Restricted
Shares on which the Dividends were distributed vest in accordance with Section 3
above.  The Dividends shall be released
to the Participant as soon as administratively practicable, but not later than
the time of delivery to the 

 

2

 

Participant, in accordance
with Section 2 above, of certificates representing the Restricted
Shares on which the Dividends were distributed.

 

5.                                       Restrictive Covenant Agreement.  The Participant and the Company have
previously entered into a restrictive covenant agreement.  Participant hereby reaffirms his obligations
under such restrictive covenant agreement and nothing contained in this Award
Agreement shall cancel, change or modify Participant’s obligations thereunder.

 

6.                                       Non-Disparagement.  The Participant, while providing services to
the Company and thereafter, shall not make any oral or written communication to
any Person that disparages, or has the effect of damaging the reputation of,
the Company, the Affiliates or their respective directors, officers, agents,
employees, former employees, representatives or stockholders; provided, that,
nothing in the foregoing shall preclude the Participant from disclosing any
information to Participant’s attorney or in response to a lawful subpoena or
court order requiring disclosure of information.

 

7.                                       Adjustment of
Shares.  In the event of any corporate
event or transaction (as described in Section 12.1 of the Plan),
the terms of this Award Agreement (including, without limitation, the number
and kind of Shares subject to this Agreement) may be adjusted as set forth in Section 12.1
of the Plan.

 

8.                                       No Right to
Continued Service.  The
granting of the Restricted Stock evidenced hereby and this Award Agreement
shall impose no obligation on the Company or any Affiliate to continue the
Service of the Participant and shall not lessen or affect any right that the
Company or any Affiliate may have to terminate the service of such Participant.

 

9.                                       Securities
Laws/Legend on Certificates.  The issuance and delivery of Shares shall
comply (or be exempt from) all applicable requirements of law, including
(without limitation) the Securities Act of 1933, as amended, the rules and
regulations promulgated thereunder, state securities laws and regulations, and
the regulations of any stock exchange or other securities market on which the
Company’s securities may then be traded. 
The Company shall not be obligated to file any registration statement
under any applicable securities laws to permit the purchase or issuance of any
Shares under the Plan or Awards, and accordingly any certificates for Shares or
documents granting Awards may have an appropriate legend or statement of
applicable restrictions endorsed thereon. 
If the Company deems it necessary to ensure that the issuance of Shares
under the Plan is not required to be registered under any applicable securities
laws, each Participant to whom such Shares would be issued shall deliver to the
Company an agreement or certificate containing such representations, warranties
and covenants as the Company may reasonably request which satisfies such
requirements.

 

10.                                 Transferability.  Unless otherwise provided by the Committee, the
Restricted Shares may not be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by the Participant other than by will or by
the laws of descent and distribution, and any such purported assignment,
alienation, pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company or any Affiliate; provided, that,
the designation of a beneficiary shall not constitute an assignment,
alienation, pledge, attachment, sale, transfer or encumbrance.  No such permitted transfer of the Restricted
Shares to heirs or legatees of the Participant shall be effective to bind the
Company unless the Committee shall have been furnished with written notice
thereof and a copy of such evidence as the Committee 

 

3

 

may
deem necessary to establish the validity of the transfer and the acceptance by
the transferee or transferees of the terms and conditions hereof.

 

11.                                 Withholding.  The Participant may be required to pay to the
Company or any Affiliate and the Company shall have the right and is hereby
authorized to withhold, any applicable withholding taxes in respect of the Restricted
Shares, their vesting or transfer and to take such other action as may be
necessary in the opinion of the Committee to satisfy all obligations for the payment
of such withholding taxes.

 

12.                                 Notices. Any
notification required by the terms of this Award Agreement shall be given in
writing and shall be deemed effective upon personal delivery or within three (3) days
of deposit with the United States Postal Service, by registered or certified
mail, with postage and fees prepaid.  A
notice shall be addressed to the Company, Attention: General Counsel, at its
principal executive office and to the Participant at the address that he or she
most recently provided to the Company.

 

13.                                 Entire
Agreement.  This Award
Agreement and the Plan constitute the entire contract between the parties
hereto with regard to the subject matter hereof.  They supersede any other agreements, representations
or understandings (whether oral or written and whether express or implied)
which relate to the subject matter hereof.

 

14.                                 Waiver.  No waiver of any breach or condition of this
Award Agreement shall be deemed to be a waiver of any other or subsequent
breach or condition whether of like or different nature.

 

15.                                 Successors and
Assigns.  The provisions of this Award
Agreement shall inure to the benefit of, and be binding upon, the Company and
its successors and assigns and upon the Participant, the Participant’s assigns
and the legal representatives, heirs and legatees of the Participant’s estate,
whether or not any such person shall have become a party to this Award
Agreement and have agreed in writing to be joined herein and be bound by the
terms hereof.

 

16.                                 Choice of Law.  This Award Agreement shall be governed by the
law of the State of Delaware (regardless of the laws that might otherwise
govern under applicable Delaware principles of conflicts of law) as to all
matters, including but not limited to matters of validity, construction,
effect, performance and remedies.

 

17.                                 Restricted
Shares Subject to Plan.  By
entering into this Award Agreement the Participant agrees and acknowledges that
the Participant has received and read a copy of the Plan.  The Restricted Shares are subject to the
Plan.  The terms and provisions of the
Plan as it may be amended from time to time are hereby incorporated herein by
reference.  In the event of a conflict
between any term or provision contained herein and a term or provision of the
Plan, the applicable terms and provisions of the Plan will govern and prevail.

 

18.                                 No Guarantees
Regarding Tax Treatment. 
Participants (or their beneficiaries) shall be responsible for all taxes
with respect to the Restricted Shares. 
The Committee and the Company make no guarantees regarding the tax
treatment of the Restricted Shares. 
Neither the Committee nor the Company has any obligation to take any
action to prevent the assessment of any tax under Section 409A of the Code
or Section 457A of the Code or otherwise and none of the Company, any
Subsidiary or Affiliate, or any of their employees or representatives shall
have any liability to a Participant with respect thereto.

 

4

 

19.                                 Amendment.  The Committee may amend or alter this Award
Agreement and the Restricted Shares granted hereunder at any time, subject to
the terms of the Plan.

 

20.                                 Section 83(b) Election.  In the event the Participant determines to
make an election with the Internal Revenue Service (the “IRS”)
under Section 83(b) of the Code and the regulations promulgated
thereunder (the “83(b) Election”), the
Participant shall provide a copy of such form to the Company promptly following
its filing, which is required under current law to be filed with the IRS no later
than thirty (30) days after the Date of Grant of the Restricted Shares.  The form for making an 83(b) Election is
attached hereto as Exhibit C. 
The Participant is advised to consult with his or her own tax advisors
regarding the purchase and holding of the Restricted Shares, and the Company
shall bear no liability for any consequence of the Participant making an 83(b) Election
or failing to make an 83(b) Election.

 

21.                                 Severability. The provisions of this
Award Agreement are severable and if any one or more provisions are determined
to be illegal or otherwise unenforceable, in whole or in part, the remaining
provisions shall nevertheless be binding and enforceable.

 

22.                                 Signature in
Counterparts.  This Award
Agreement may be signed in counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument.

 

*                                         *                                         *

 

5

 

IN WITNESS WHEREOF, the parties hereto have executed
this Award Agreement.

 

	
   

  	
  GENERAC
  HOLDINGS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
  Agreed
  and acknowledged as

  of the date first above written:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  PARTICIPANT

  	
   

  

 

SIGNATURE
PAGE TO

AWARD
AGREEMENT

 

 

EXHIBIT A

 

STOCK POWER(1)

 

FOR VALUE RECEIVED the undersigned hereby sells,
assigns and transfers unto Generac Holdings Inc. (the “Company”),                           
(           ) shares of
common stock, par value $0.01 per share, of the Company standing in
his/her/their/its name on the books of the Company represented by Certificate No.                           
herewith and does hereby irrevocably constitute and appoint                                  
his/her/their/its attorney-in-fact, with full power of substitution, to
transfer such shares on the books of the Company.

 

	
  Dated:

  	
   

  	
   

  	
  Signature:

  	
   

  

 

 

Print Name and Mailing
Address

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

Instructions:                         Please
do not fill in any blanks other than the signature line and printed name and
mailing address.  Please print your name
exactly as you would like your name to appear on the issued stock certificate(s).  The purpose of this assignment is to enable
the forfeiture of the shares without requiring additional signatures on your
part.

 

(1) This
stock power is not effective if executed in New York State.

 

 

EXHIBIT B

 

FORM OF RELEASE

 

A release is required as a condition for receiving
the benefits provided pursuant to the Restricted Stock Award Agreement between
GENERAC HOLDINGS INC. (the “Company”) and [                  ]
(“Participant”)
dated [                   ],
2010, (the “Agreement”);
thus, by executing this release (“Release”), you have advised us that you hold
no claims against the Company, its predecessors, successors or assigns,
affiliates, shareholders or members and each of their respective officers,
directors, agents and employees (collectively, the “Releasees”), and by
execution of this Release you agree to waive and release any such claims,
except relating to any compensation, severance pay and benefits described in
any written agreement between you and the Company.

 

You understand and agree that this Release will
extend to all claims, demands, liabilities and causes of action of every kind,
nature and description whatsoever, whether known, unknown or suspected to
exist, which you ever had or may now have against the Releasees in your
capacity as an employee of the Company, including, without limitation, any
claims, demands, liabilities and causes of action arising from your employment
with the Releasees and the termination of that employment, including any claims
for severance or vacation pay, business expenses, and/or pursuant to any
federal, state, county, or local employment laws, regulations, executive
orders, or other requirements, including, but not limited to, Title VII of the
1964 Civil Rights Act, the 1866 Civil Rights Act, the Age Discrimination in
Employment Act as amended by the Older Workers Benefit Protection Act, the
Americans with Disabilities Act, the Civil Rights Act of 1991, the Workers
Adjustment and Retraining Notification Act and any other local, state or
federal fair employment laws, and any contract or tort claims.

 

You understand and agree that this Release is
intended to include all claims by you or on your behalf alleging discrimination
on the basis of race, sex, religion, national origin, age, disability, marital
status, or any other protected status or involving any contract or tort claims
based on your termination from the Company. 
It is also acknowledged that your termination is not in any way related
to any work-related injury.

 

It also is understood and agreed that the remedy at
law for breach of the Award Agreement, any restrictive covenant agreements
between you and the Company, and/or this Release shall be inadequate, and the
Company shall be entitled to injunctive relief in respect thereof.

 

Your ability to receive payments and benefits under
the terms of the Award Agreement will remain open for a 21-day period after
your Termination Date to give you an opportunity to consider the effect of this
Release.  At your option, you may elect
to execute this Release on an earlier date. 
Additionally, you have seven days after the date you execute this
Release to revoke it.  As a result, this
Release will not be effective until eight days after you execute it.  We also want to advise you of your right to
consult with legal counsel prior to executing a copy of this Release.

 

Finally, this is to expressly acknowledge:

 

·                                          You understand that you are
not waiving any claims or rights that may arise after the date you execute this
Release.

 

 

·                                          You understand and agree
that the compensation and benefits described in the Award Agreement offer you
consideration greater than that to which you would otherwise be entitled.

 

I hereby state that I have carefully read this
Release and that I am signing this Release knowingly and voluntarily with the
full intent of releasing the Releases from any and all claims, except as set
forth herein.  Further, if signed prior
to the completion of the 21 day review period, this is to acknowledge that I
knowingly and voluntarily signed this Release on an earlier date.

 

 

	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  [                        ]

  

 

2

 

EXHIBIT C

 

SECTION 83(b) ELECTION

 

This statement is being made
under Section 83(b) of the Internal Revenue Code, pursuant to Treas.
Reg. Section 1.83-2.

 

(1)                                  The taxpayer
who performed the services is:

 

Name:
                                                                             

 

Address:                                                                          

 

Social
Security Number:
                                                

 

(2)                                  The property with respect to
which the election is being made is                     
shares of the common stock, par value $0.01 per share, of Generac Holdings Inc.

 

(3)                                  The transferor
of the property is Generac Holdings Inc.

 

(4)                                  The property
was transferred on                                 .

 

(5)                                  The taxable
year in which the election is being made is the calendar year 2010.

 

(6)                                  The property will vest upon
the third anniversary of the date of transfer, subject to the taxpayer’s
continued service to Generac Holdings Inc or its affiliates.

 

(7)                                  The fair market value at the
time of transfer (determined without regard to any restriction other than a
restriction which by its terms will never lapse) is $                      
per share.

 

(8)                                  The amount paid
for such property is $                      
per share.

 

(9)                                  A copy of this statement was
furnished to Generac Holdings Inc. for whom taxpayer rendered the services underlying
the transfer of property.

 

(10)                            This statement is executed
on                              .

 

	
   

  	
  Signature:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [Taxpayer’s
  name]

  

 

This
election must be filed with the Internal Revenue Service Center with which
taxpayer files his Federal income tax returns and must be made within thirty
days after the Date of Grant.  This
filing should be made by registered or certified mail, return receipt
requested.  The taxpayer shall also
provide a copy of such form to the Company promptly following its filing.  The taxpayer should retain two (2) additional
copies of the completed form for filing with Federal and state tax returns for
the taxpayer’s current tax year and an additional copy for the taxpayer’s
records.

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