Document:

Exhibit

Exhibit 10.1

SENIOR EXECUTIVE INCENTIVE COMPENSATION PLAN
PLAN DESCRIPTION
INTRODUCTION
The purpose of the Senior Executive Incentive Compensation Plan is to advance the interests of the Company's stockholders by enhancing the Company's ability to attract, retain and motivate persons who make (or who are expected to make) important contributions to the Company.  Participants do not have any special right to continued employment by the Company because of their participation in the programs described below.  
The plan consists of an annual incentive program, which is referred to as the Short-Term Incentive, or STI, and a three-year incentive program, which is referred to as the Long-Term Incentive, or LTI.  
The STI and the LTI are designed to encourage participants to exert an extra effort to raise the Company's performance to the next level, both in the near term and over the course of several years, and reflect the pay-for-performance philosophy of the Company by linking the opportunity to earn additional compensation to the achievement of Company financial and strategic goals.  
Both the STI and the LTI were adopted by the Compensation & Talent Development Committee of the Board of Directors of the Company (the “Committee”) to begin on January 1, 2019.  The LTI, which involves the issuance of shares of Common Stock, has been adopted under the Sterling Construction Company, Inc. Stock Incentive Plan, which, among other things, provides for stock-based awards.  

    

    
    

Exhibit 10.1

THE SHORT-TERM INCENTIVE
The STI.
The STI is a program that has one or more annual goals, the achievement of which by the end of the year, is rewarded with a cash payment.  
Each participant in the STI is assigned an STI Target Amount, which is expressed as a percentage of his or her annual base salary in effect.  The STI Target Amount of each participant is set forth in a separate document that is provided to the participant at or before the beginning of the year.  Participants do not necessarily have the same STI Target Amounts.  
The STI goal or goals have three performance or achievement levels expressed as percentages of goal achievement and accordingly the amount of a participant's Target Amount that he or she can earn, namely Threshold performance, Target performance, and Maximum performance.  Achievement below the Threshold results in no payment and performance exceeding the Target is limited to the Maximum.  Target performance is established each year as the level that the Committee believes is reasonably achievable. Pay-outs for performance falling between two levels will be determined by linear interpolation.  
The STI performance goals and the Threshold, Target, and Maximum levels for a given year will be established by the Committee.  
Calculation of STI Payouts.  
At the end of the year, the level of performance of each goal (expressed as a percentage) will be determined from the Company's audited financial statements, or for non-financial goals, by some other objective means determined by the Committee.  
Once the level of performance of each goal has been determined, the payout, if any, to each participant for each goal is determined by multiplying the participant's STI Target Amount —
		
	•
	By his or her annual base salary in effect; then

		
	•
	By the percentage allocated to the particular goal (if there is more than one goal for the year); and then

		
	•
	By the performance level of the goal.

THE LONG-TERM INCENTIVE
The LTI.  
The LTI is a stock award that vests over a three-year period.  Each three-year period, which begins on January 1 of a given year and ends on December 31 of the third year thereafter, is referred to as a Program Cycle.  The LTI consists of two awards made as of the start of the Program Cycle:  
		
	•
	An award to the participant of Time-Based Restricted Stock Units (“RSUs”) that vest ratably over the Program Cycle provided the participant is an employee of the Company on the vesting date; and 

		
	•
	An award to the participant of Performance Share Units (“PSUs”) that vest ratably over the Program Cycle based on the Company achieving a pre-determined performance goal for each year in the Program Cycle and provided the participant is an employee of the Company on the vesting date, or as otherwise provided below (see Termination of Employment). 

Exhibit 10.1

Each participant in the LTI is assigned an LTI Target Amount, which is expressed as a percentage of his or her annual base salary in effect.  The LTI Target Amount of each participant is set forth in a separate document that is provided to the participant at or before the beginning of a Program Cycle.  Participants do not necessarily have the same LTI Target Amounts.  
The Time-Based Restricted Share Units.  
A RSU is an unfunded and unsecured, non-transferable promise by the Company to issue under certain conditions one share of unrestricted Common Stock. RSUs will vest in three substantially equal annual installments on the first, second and third anniversary of the January 1 start date of the Program Cycle, provided that on the vesting date, the participant is still an employee of the Company.
The number of RSUs granted to a participant is computed by multiplying the participant's LTI Target Amount by 50% of his or her annual base salary and then by dividing the result by the closing price per share of the Common Stock on the trading day prior to the grant date (the “Closing Price”). 
The Performance-Based Restricted Share Units.  
A PSU is an unfunded and unsecured, non-transferable promise by the Company to issue under certain conditions one share of unrestricted Common Stock.  PSUs will vest in three substantially equal annual installments on the first, second and third anniversary of the January 1 start date of the Program Cycle, based on the extent to which, if at all, the EPS goal is achieved and the participant is still an employee of the Company on the vesting date, or as otherwise provided below (see Termination of Employment).  
The number of PSUs awarded to a participant is computed by multiplying the participant's LTI Target Amount by 50% of his or her annual base salary and then by dividing the result by the Closing Price.  
The pre-determined performance goal and the Threshold, Target, and Maximum performance levels that determine payouts will be provided to participants at each grant.
All awards under the LTI are contingent on the participant signing the Company's form of LTI Award Agreement.  
No un-vested RSUs and no PSUs may be sold, assigned, transferred, pledged or otherwise disposed of or encumbered.  
Continuing Restrictions.  Vested RSUs and shares of Common Stock issued for vested PSUs remain subject to all the restrictions imposed on them by federal and state securities laws, rules and regulations, and by the Company's policies and rules relating to Common Stock.  
Forfeiture.  RSUs and PSUs that fail to vest are automatically forfeited, canceled, and cease to be subject to vesting.  No compensation is paid to a participant for any of his or her RSUs or PSUs that are forfeited.  

Example.  Attached as Appendix A is an example of the documentation that will be provided to a participant in the STI and LTI.

Exhibit 10.1

Termination of Employment.  In the event that a participant's employment with the Company terminates before the end of an STI Program Year and an LTI Program Cycle, his or her participation in the STI and LTI will be treated as follows:
	
		
	Reason for Termination
	Effect on Participation

	Death or Permanent Disability (as defined in the award agreement)
	STI:  A prorated payout under the STI for the Program Year in which termination occurs will be made on the assumption that the Target performance for that year was met.
RSUs:  All unvested RSUs will vest in full.
PSUs:   PSUs for years in which the participant was an employee will vest based on actual performance.  PSUs for the remaining years will vest on the assumption that the Target performance level was met.  

	Change of Control (COC) (as defined in the Sterling Construction Company, Inc. Stock Incentive Plan)
	STI:  A prorated payout under the STI for the Program Year in which the COC occurs will be made on the assumption that the Target performance level was met.
RSUs:  All unvested RSUs will vest in full.
PSUs:  PSUs for years in which the participant was an employee will vest based on actual performance.  PSUs for the remaining years will vest on the assumption that the Target performance level was met.  

	Retirement (age 60 with a minimum of 10 years of service; or age 65 with a minimum of 5 years of service, both requiring 6 months written notice.)
	STI:  A prorated payout under the STI for the Program Year in which termination occurs will be made based on the actual level of performance for that year.  
RSUs:  If the participant has been an employee for at least six months since the start of a Program Cycle and executes a one-year non-compete and non-solicitation agreement with the Company, all unvested RSUs will vest in full.    
PSUs:  Provided that the participant executes a one-year non-compete and non-solicitation agreement with the Company, all his or her PSUs will vest in full based on actual performance achieved.   

	Without Cause or “Good Reason” (as said term is defined in a participant’s employment agreement.)
	STI:  A payout under the STI for the Program Year in which termination occurred will be made based on the actual level of performance for that year, but pro-rated for the number of days during the Program Year that the participant was an employee.
RSUs:  All unvested RSUs will vest in full.
PSUs:   PSUs for years in which the participant was an employee will vest based on actual performance.  PSUs for the remaining years will vest on the assumption that the Target performance level was achieved.

	For Cause (as defined in the award agreement)
	STI:  No payout will be made under the STI.
RSUs:  All unvested RSUs will be forfeited.  
PSUs.  All PSUs will be forfeited.

Exhibit 10.1

	
		
	Resignation by the Participant
	STI:  No payout will be made under the STI.
RSUs: All unvested RSUs will be forfeited.  
PSUs: All unvested PSUs will be forfeited.

	In a termination of employment, payouts based on the actual performance level achieved will be made at the same time as payouts are made to participants whose employment did not terminate.  Payouts based on the assumption that Target performance was achieved will be made irrespective of whether at the end of the Program Cycle, a greater or lesser performance level was actually achieved.

PART III:  TERMS AFFECTING BOTH PROGRAMS
Administration of the Programs.  The STI and LTI are both administered by the Committee.  Among other things, the Committee determines those employees who are eligible to participate in the programs; the participants' STI and LTI Target Amounts; the goals and other performance measures; and in the case of more than one goal for a Program Year or Program Cycle, the weighting of those goals.  
The Committee will correct any defects, supply any omissions, and reconcile any inconsistencies in the programs or in any award made under the programs in the manner and to the extent it believes necessary or advisable to implement the programs.  The decisions by the Committee on matters that are not expressly determined by award agreements will be made in the Committee's good faith discretion, including among other things, unusual transactions, acquisitions, and divestitures.  In the event of a conflict between the terms of this summary description and an award agreement, the terms of the award agreement will govern.  In the event of a conflict between this summary description and the Sterling Construction Company, Inc. Stock Incentive Plan, the terms of the Stock Incentive Plan will govern.  
STI — Taxes & Tax Consequences.  
		
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	Any payout under the STI will be made in the first quarter of the year following the end of an STI Program Year, but no later than March 15 of the following year.  

		
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	Payouts under the STI are treated as supplemental income for federal income tax withholding purposes.  The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the participant.  

		
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	Payouts may also be subject to state income tax withholding, and to any garnishment, levy or other wage withholding order affecting the participant.  

		
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	Payouts are not eligible for deferral into a participant's Company 401(k) account.  

LTI — Taxes & Tax Consequences.  
		
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	Generally, a participant will not recognize taxable income at the time RSUs and PSUs are received, but will recognize taxable income when they vest — that is, when the restrictions on RSUs and PSUs are converted into shares of Common Stock.  

		
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	The taxable income recognized by a participant is equal to the fair market value of the converted shares on the vesting date.  The Company may, to the extent permitted by law, deduct any such tax obligations from any payment of any kind otherwise due to the participant.  

		
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	The Committee permits participants to satisfy the Company's LTI withholding requirements (but not the STI withholding requirements) by transferring to the Company shares of Common Stock that have vested under the LTI and that have a market value on the last trading day of the Program Cycle equal to the taxes that the Company is required to withhold.  

		
	•
	More information about the tax consequences of participating in the LTI is contained in the Plan Description of the Sterling Construction Company, Inc. Stock Incentive Plan.  

Exhibit 10.1

The Company's Claw-Back Policy.  The Company's Incentive Compensation and Claw-Back Policy applies to all payments made under the STI, and all RSUs and PSUs issued under the LTI.  A copy of the Claw-Back Policy is attached as Appendix B to this summary description.  It affects any incentive compensation (cash or stock) that was paid to a participant if the Company subsequently, for whatever reason, restates the financial statements on which all or a portion of that incentive compensation was based.
Change of Control.  A "Change of Control" of the Company is defined in the Sterling Construction Company, Inc. Stock Incentive Plan and generally refers to an acquisition of the Company or of a large portion of the Company through acquisition of shares of Common Stock, acquisition of assets of the Company, a merger, or the like.  
Governing Law.  The provisions of the STI and the LTI are governed by, and interpreted in accordance with, the laws of the State of Delaware, without regard to any of its conflicts of law provisions.  
Compliance with Section 409A of the Code.  The Company intends that the STI, the LTI and each award agreement either (a) complies with Section 409A of the Internal Revenue Code of 1986, as amended, and the guidance thereunder; or (b) is excepted from the provisions of Section 409A.  As a result, the Company has the right to amend the programs or any award agreement, or both, in order to cause them to be in compliance with Section 409A or to qualify for being excepted from the provisions of Section 409A, and to take any other actions under the programs and any award agreement to achieve that compliance or exception.  

Exhibit 10.1

Appendix A
Example of Participant Documentation
2019
	
			
	STI

	[Name] (2019) Base Salary
	$100,000
	 

	[Name] STI Target Amount
	80% — $80,000
	 

	Goal I — 2019 EBITDA Goal:
Goal Weighting:  75%

	Threshold
TBD
	Target
TBD
	Maximum
TBD

	Payout:         50%
	100%
	200%

	Goal II — Strategic
Income from expanding Tealstone Residential into new markets
Goal Weighting:  25%

	Threshold
TBD
	Target
TBD
	Maximum
TBD

	Payout:         50%
	100%
	200%

	 
	 
	 

	LTI

	LTI Target Amount
	120% — $120,000
	 

	EPS Goal / Weighting:
	 
	 

	 
	2019 EPS Goal:
	 

	Threshold
	Target
	Maximum

	TBD
	TBD
	TBD

	Payout:           50%
	100%
	200%

	 
	2020 EPS Goal:
	 

	Threshold
	Target
	Maximum

	TBD
	TBD
	TBD

	Payout:           50%
	100%
	200%

	 
	2021 EPS Goal:
	 

	Threshold
	Target
	Maximum

	TBD
	TBD
	TBD

	Payout:           50%
	100%
	200%

	

	 
	 

Exhibit 10.1

Appendix B
Sterling Construction Company, Inc.
Incentive Compensation and Claw-Back Policy
		
	1.
	It is the policy of Sterling Construction Company, Inc., including its subsidiaries, (the “Company”) that the amount of any bonus or other incentive compensation (together, "Incentive Compensation") that has already been paid to an employee of the Company (either in cash or in common stock of the Company, or both) that was based on financial statements that are subsequently restated (other than the retroactive changes in accounting as required by GAAP), may, at the sole discretion of the Board of Directors through its Compensation Committee be adjusted either by repayment by the employee to the Company or by making an additional payment to the employee so that the employee will have received no more and no less than the amount that he or she would have received had the financial statements been restated before the amount of the Incentive Compensation was determined.

		
	2.
	If an adjustment is made as a result of the restatement and the Incentive Compensation is shown to have been —

		
	(a)
	Overpaid, the employee shall return the amount of the overpayment within sixty (60) days of a written demand therefor by the Company. 

		
	(b)
	Underpaid, the Company shall pay the amount of the underpayment to the employee within thirty (30) days of the completion of the restatement.  

In the event that any repayment by an employee under this policy involves the re-conveyance to the Company of shares of common stock that have been sold by the employee, the proceeds realized from the sale shall be repaid to the Company.  If the shares shall have been otherwise transferred, or shall have been pledged or encumbered, the employee shall convey to the Company either —   
		
	(i)
	The market value of such shares at the date of such transfer, pledge or encumbrance or at the date the demand for repayment is made, whichever is higher; or 

		
	(ii)
	An equivalent number of shares of common stock of the Company having such market value.  

		
	3.
	Any payment and/or conveyance of shares to the Company under this policy shall be made whether or not the employee required to make the payment or conveyance was culpable with respect to the error, event, act or omission that caused the restatement to be made, but nothing in this policy shall be construed to prevent the Company from pursuing other remedies against the employee if the Company determines that he or she was in fact culpable in any respect.

		
	4.
	In the event of a restatement of the financial statements of the Company due to the action(s) or inaction(s) of an employee subject to paragraph 1 herein, the Board of Directors, through its Compensation Committee, may in its sole discretion seek to recover from any said current or former employee of the Company who received incentive-based compensation (including cash or common stock awarded as compensation) during the 3-year period prior to the date on which the Company is required to prepare a restatement, the excess of what was paid to said employee, including the cancellation and/or recovery of shares of common stock of the Company that were awarded, due to the accounting restatement. 

________________
Adopted by the Board of Directors on January 18, 2011
Amended January 17, 2018Exhibit

WILLIAM LYON HOMES 
AMENDED AND RESTATED 2012 EQUITY INCENTIVE PLAN 
PERFORMANCE STOCK UNIT AWARD GRANT NOTICE 
William Lyon Homes, a Delaware corporation, (the “Company”), pursuant to its Amended and Restated 2012 Equity Incentive Plan, as amended from time to time (the “Plan”), hereby grants to the individual listed below (the “Participant”), in consideration of the mutual agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the number of Performance Stock Units set forth below (the “Performance Stock Units” or “PSUs”).  If and when it vests, each PSU that becomes an Earned PSU (as defined in, and determined in accordance with, Exhibit B) entitles the Participant to receive a number of shares of the Company’s Class A Common Stock (each, a “Share”) as determined below.  This PSU award is subject to all of the terms and conditions as set forth herein and in the Performance Stock Unit Award Agreement attached hereto as Exhibit A (the “Agreement”), the Performance Conditions attached hereto as Exhibit Band the Plan, each of which is incorporated herein by reference.  Unless otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in this Performance Stock Unit Award Grant Notice (the “Grant Notice”) and the Agreement.

	
		
	Participant:
	[___]

	Grant Date:
	[___]

	Total Number of PSUs:
	[___]

	Vesting:
	Subject to the terms and conditions of the Plan, this Grant Notice and the Agreement, and subject to the Participant’s continued service to the Company through each applicable vesting date, the Earned PSUs (as determined in accordance with Exhibit B) shall vest as to one-third of the Earned PSUs on each of __________, 20__, 20__ and 20__.  The maximum number of Shares that may be issued in respect of the PSUs is [___].

By the Participant’s signature and the Company’s signature below, the Participant agrees to be bound by the terms and conditions of the Plan, the Agreement and this Grant Notice.  The Participant has reviewed the Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and fully understands all provisions of this Grant Notice, the Agreement and the Plan. The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any questions arising under the Plan, this Grant Notice or the Agreement.  In addition, by signing below, the Participant also agrees that the Company, in its sole discretion, may satisfy any withholding obligations in accordance with Section 2.6(b) of the Agreement by (i) withholding Shares otherwise issuable to the Participant following the vesting of the PSUs, (ii) instructing a broker on the Participant’s behalf to sell Shares otherwise issuable to the Participant following the vesting of the PSUs and submit the proceeds of such sale to the Company, or (iii) using any other method permitted by Section 2.6(b) of the Agreement or the Plan.  

1

	
				
	WILLIAM LYON HOMES:
	PARTICIPANT:

	By:
	            
	By:
	            

	Print Name:
	      
	Print Name:
	      

	Title:
	 
	 
	 

	Address:
	            
	Address:
	            

	 
	            
	 
	            

2

EXHIBIT A 
TO PERFORMANCE STOCK UNIT AWARD GRANT NOTICE
PERFORMANCE STOCK UNIT AWARD AGREEMENT
William Lyon Homes, a Delaware corporation (the “Company”), pursuant to the Company’s Amended and Restated 2012 Equity Incentive Plan, as amended from time to time (the “Plan”) and in accordance with the Performance Stock Unit Award Grant Notice to which this Performance Stock Unit Award Agreement is attached  (the “Grant Notice”), has granted to the Participant an award of performance stock units (“Performance Stock Units” or “PSUs”). The PSUs are subject to all of the terms and conditions set forth in this Performance Stock Unit Award Agreement (collectively with the Grant Notice and Exhibit B thereto, the “Agreement”) and the Plan.
ARTICLE I.

GENERAL
1.1    Incorporation of Terms of Plan.  The PSUs are subject to the terms and conditions of the  Plan, which are incorporated herein by reference.  In the event of any inconsistency between the  Plan and this Agreement, the terms of the Plan shall control.
1.2    Defined Terms. Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice.
(a)    “Change in Control” shall have the meaning set forth in any employment, consulting or similar agreement with the Company or any of its Affiliates to which the Participant is a party on the date of grant, and in the absence of such agreement or definition, “Change in Control” shall have the meaning set forth in the Plan.
(b)    “Termination of Consultancy” shall mean the time when the engagement of the Participant as a Consultant to the Company or an Affiliate is terminated for any reason, with or without cause, including, but not by way of limitation, by resignation, discharge, death, Disability or retirement, but excluding: (a) terminations where there is a simultaneous employment or continuing employment of the Participant by the Company or any Affiliate, and (b) terminations where there is a simultaneous re-establishment of a consulting relationship or continuing consulting relationship between the Participant and the Company or any Affiliate. The Administrator, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Consultancy, including, but not by way of limitation, the question of whether a particular leave of absence constitutes a Termination of Consultancy. Notwithstanding any other provision of the Plan, the Company or any Affiliate has an absolute and unrestricted right to terminate a Consultant’s service at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in writing.

A-1

(c)    “Termination of Directorship” shall mean the time when the Participant, if he or she is or becomes a Non-Employee Director, ceases to be a Non-Employee Director for any reason, including, but not by way of limitation, a termination by resignation, failure to be elected, death or retirement. The Board, in its sole and absolute discretion, shall determine the effect of all matters and questions relating to Termination of Directorship with respect to Non-Employee Director.
(d)    “Termination of Employment” shall mean the time when the employee-employer relationship between the Participant and the Company or any Affiliate is terminated for any reason, with or without cause, including, but not by way of limitation, a termination by resignation, discharge, death, Disability or retirement, but excluding: (a) terminations where there is a simultaneous reemployment or continuing employment of the Participant by the Company or any Affiliate, and (b) terminations where there is a simultaneous establishment of a consulting relationship or continuing consulting relationship between the Participant and the Company or any Affiliate. The Administrator, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Employment, including, but not by way of limitation, the question of whether a particular leave of absence constitutes a Termination of Employment.
(e)    “Termination of Services” shall mean the Participant’s Termination of Consultancy, Termination of Directorship or Termination of Employment, as applicable.
1.3    General.  Each PSU represents the right to receive a number of Shares determined in accordance with Exhibit B if and when it vests.  The PSUs shall not be treated as property or as a trust fund of any kind.
ARTICLE II.    
GRANT OF PERFORMANCE STOCK UNITS
2.1    Grant of PSUs.  In consideration of the Participant’s continued employment with or service to the Company or an Affiliate and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant Date”), the Company granted the Participant the number of PSUs set forth in the Grant Notice.
2.2    Company’s Obligation to Pay.  Subject to and until the PSUs shall have vested in the manner set forth in Article II hereof, the Participant will have no right to payment of any such PSUs.  Prior to actual payment of any vested PSUs, such PSUs will represent an unsecured obligation of the Company, payable (if at all) only from the general assets of the Company.  
2.3    Vesting Schedule.  Subject to Section 2.4, the PSUs will vest and become nonforfeitable according to the vesting schedule set forth in the Grant Notice.  Except as set forth in Section 2.4 and unless otherwise determined by the Administrator, employment or service for a portion, even a substantial portion, of the vesting period will not entitle the Participant to any proportionate vesting or avoid or mitigate a termination of rights and benefits upon or following a Termination of Services as provided in Section 2.5 below.

A-2

2.4    Change in Control Treatment; Acceleration.  Notwithstanding any other provision of this Agreement to the contrary, in the event of a Change in Control or Termination of Services, the vesting of the Earned PSUs (if any) shall not accelerate except to the extent provided in an employment or other agreement between the Participant and the Company in effect as of the date of such Change in Control or Termination of Services.  For purposes of this Section 2.4, in the event of a Change in Control or Termination of Services, “Earned PSUs” shall be the number of PSUs equal to (x) the “Target PSUs” (as defined in Exhibit B) before the “Determination Date” (as defined in Exhibit B), or (y) the “Earned PSUs” (as determined in accordance with Exhibit B) on or after the Determination Date.  
2.5    Forfeiture; Termination.  Subject to Section 2.4, upon the Participant’s Termination of Services for any reason prior to a vesting date, any then-unvested PSUs will be automatically forfeited, terminated and cancelled as of the applicable termination date without payment of any consideration by the Company, and the Participant, or the Participant’s beneficiary or personal representative, as the case may be, shall have no further rights hereunder.  In addition, any PSUs that do not become Earned PSUs on the Determination Date in accordance with Exhibit B will be automatically forfeited, terminated and cancelled as of the Determination Date without payment of any consideration by the Company, and the Participant, or the Participant’s beneficiary or personal representative, as the case may be, shall have no further rights hereunder.
2.6    Payment after Vesting.  
(a)    As soon as administratively practicable following the vesting of any Earned PSUs pursuant to Section 2.3, but in no event later than the 30th day following the applicable vesting date, the Company shall deliver to the Participant that number of Shares equal to the number of Earned PSUs that vested on the applicable vesting date.  Notwithstanding the foregoing, to the extent permitted by Section 409A (as defined below), in the event Shares cannot be issued because of the failure to meet one or more of the conditions set forth in Sections 2.9(a), (b) or (c) hereof, then the Shares shall be issued pursuant to the preceding sentence as soon as administratively practicable after the Administrator determines that Shares can again be issued in accordance with Sections 2.9(a), (b) and (c) hereof.  In no event will the PSUs be settled in cash.  
(b)    The Company or its Affiliates shall be entitled to require a cash payment (or to elect, or permit the Participant to elect, such other form of payment determined in accordance with Section 10.1 of the Plan) by or on behalf of the Participant and/or to deduct from other compensation payable to the Participant any sums required by federal, state or local tax law to be withheld with respect to the PSUs or the issuance of Shares.  In satisfaction of the foregoing requirement with respect to the PSUs or the issuance of Shares, unless otherwise determined by the Company, the Company or its Affiliates shall withhold Shares otherwise issuable in respect of the PSUs having a fair market value equal to the sums required to be withheld by federal, state and/or local tax law.  Notwithstanding any other provision of this Agreement, the Company shall not be obligated to deliver any new certificate representing Shares to the Participant or the Participant’s legal representative or enter any such Shares in book entry form unless and until the Participant or the Participant’s legal representative, as applicable, 

A-3

shall have paid or otherwise satisfied in full the amount of all federal, state and local taxes applicable to the taxable income of the Participant resulting from the PSUs or the issuance of Shares.
2.7    Rights as Stockholder.  As a holder of PSUs the Participant is not, and does not have any of the rights or privileges of, a stockholder of the Company, including, without limitation, any dividend rights or voting rights, in respect of the PSUs and any Shares issuable upon vesting or settlement thereof unless and until such Shares shall have been issued by the Company to the Participant.  
2.8    Dividends.  The Participant shall be entitled to receive payments equal to any cash dividends and other distributions paid prior to the settlement of the PSUs with respect to that number of Shares issued following the vesting of the PSUs, such cash payment to be made at the same time that Shares are delivered to the Participant in respect of the PSUs.  If any dividends or distributions are paid in Shares prior to the settlement of the PSUs, the number of PSUs shall be proportionately increased to reflect such Share dividend.  
2.9    Conditions to Delivery of Shares.  Subject to Section 13.1 of the Plan, the Shares deliverable hereunder, or any portion thereof, may be either previously authorized but unissued Shares or issued Shares which have then been reacquired by the Company.  Such Shares shall be fully paid and nonassessable.  Unless an applicable exemption otherwise applies to the Company or the Participant, as applicable, the Company shall not be required to issue or deliver any Shares deliverable hereunder prior to fulfillment of all of the following conditions:
(a)    The admission of such Shares to listing on all stock exchanges on which the Shares are then listed; 
(b)    The completion of any registration or other qualification of such Shares under any state, federal or foreign law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; 
(c)    The obtaining of any approval or other clearance from any state, federal or foreign governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; 
(d)    The receipt by the Company of full payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 2.6 hereof; and
(e)    The lapse of such reasonable period of time following a vesting date as the Administrator may from time to time establish for reasons of administrative convenience.
ARTICLE III.    
OTHER PROVISIONS

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3.1    Grant is Not Transferable.  The PSUs may not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and will not be subject to sale under execution, attachment or similar process.  Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the PSUs, or any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, the PSUs will terminate immediately and will become null and void. 
3.2    Notices.  Any notice to be given under the terms of this Agreement shall be addressed to the Company in care of the Secretary of the Company at the Company’s principal office, and any notice to be given to the Participant shall be addressed to the Participant at the Participant’s last address reflected on the Company’s records.  Any notice shall be deemed duly given when sent via email or when sent by reputable overnight courier or by certified mail (return receipt requested) through the United States Postal Service.
3.3    Not a Contract of Service Relationship.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue to serve as an Employee or other service provider of the Company or any of its Affiliates or shall interfere with or restrict in any way the rights of the Company and its Affiliates, which rights are hereby expressly reserved, to discharge or terminate the services of the Participant at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in a written agreement between the Company or an Affiliate and the Participant.
3.4    Governing Law.  The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws.
3.5    Conformity to Securities Laws.  The Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and any and all regulations and rules promulgated by the Securities and Exchange Commission thereunder, and state and foreign securities laws and regulations.  Notwithstanding anything herein to the contrary, the Plan shall be administered, and the PSUs are granted, only in such a manner as to conform to such laws, rules and regulations.  To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.    
3.6    Amendments, Suspension and Termination.  To the extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Administrator or the Board, provided, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the PSUs in any material way without the Participant’s prior written consent.    
3.7    Successors and Assigns.  The Company or any Affiliate may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company and its Affiliates.  Subject to the restrictions on transfer herein set 

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forth in Section 3.3 hereof, this Agreement shall be binding upon the Participant and his heirs, executors, administrators, successors and assigns.
3.8    Limitations Applicable to Section 16 Persons.  Notwithstanding any other provision of the Plan or this Agreement, the Plan, the PSUs and this Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule.  To the extent permitted by applicable law, this Agreement shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.
3.9    Not a Contract of Employment.  Nothing in this Agreement or in the Plan shall confer upon the Participant any right to continue to serve as an employee or other service provider of the Company or any of its Affiliates.
3.10    Entire Agreement.  The Plan, the Grant Notice and this Agreement (including all Exhibits thereto, if any) constitute the entire agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and its Affiliates and the Participant with respect to the subject matter hereof.
3.11    Section 409A.  The PSUs are not intended to constitute “nonqualified deferred compensation” within the meaning of Section 409A of the Code (together with any Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”).  However, notwithstanding any other provision of the Plan or this Agreement, if at any time the Administrator determines that the PSUs (or any portion thereof) may be subject to Section 409A, the Administrator shall adopt such amendments to the Plan or this Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Administrator determines are necessary or appropriate either for the PSUs to be exempt from the application of Section 409A or to comply with the requirements of Section 409A, provided that no such amendments, policies, procedures or other alterations to this Agreement or the PSUs shall reduce the Participant’s originally-intended economic benefits.
3.12    Limitation on the Participant’s Rights.  Participation in the Plan confers no rights or interests other than as herein provided.    Neither the Plan nor any underlying program, in and of itself, has any assets.  The Participant shall have only the rights of a general unsecured creditor of the Company with respect to amounts credited and benefits payable, if any, with respect to the PSUs, and rights no greater than the right to receive the Shares as a general unsecured creditor with respect to PSUs, as and when payable hereunder.
  

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