Document:

Exhibit 10.4

 

EXCHANGE
AGREEMENT

 

EXCHANGE AGREEMENT (this “Agreement”), dated
as of                  ,
2010, among DynaVox Inc., a Delaware corporation, and the holders of Holdings
Units (as defined herein) from time to time party hereto.

 

WHEREAS, the parties hereto desire to provide for
the exchange of Holdings Units for shares of Class A Common Stock (as
defined herein), on the terms and subject to the conditions set forth herein;

 

NOW, THEREFORE, in consideration of the mutual
covenants and undertakings contained herein and for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto hereby agree as follows:

 

ARTICLE I

 

SECTION 1.1.  
Definitions

 

The following definitions
shall be for all purposes, unless otherwise clearly indicated to the contrary,
applied to the terms used in this Agreement.

 

A “Change in Control” shall be deemed to have
occurred if or upon:

 

(i) the stockholders of the Corporation approve
the sale, lease or transfer, in one or a series of related transactions, of all
or substantially all of the Corporation’s assets (determined on a consolidated
basis) to any person or group (as such term is used in Section 13(d)(3) of
the Exchange Act other than to any subsidiary of the Corporation;

 

(ii) the stockholders of the Corporation
approve a merger or consolidation of the Corporation with any other person,
other than a merger or consolidation which would result in the Voting
Securities of the Corporation outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into Voting
Securities of the surviving entity) at least 50.1% of the total voting power
represented by the Voting Securities of the Corporation or such surviving
entity outstanding immediately after such merger or consolidation;

 

(iii) the stockholders of the Corporation
approve the adoption of a plan the consummation of which would result in the
liquidation or dissolution of the Corporation;

 

(iv) the acquisition, directly or indirectly,
by any person or group (as such term is used in Section 13(d)(3) of
the Exchange Act) (other than (a) a trustee or other fiduciary holding
securities under an employee benefit plan of the Corporation; (b) a
corporation or other entity owned, directly or indirectly, by the stockholders
of the Corporation in substantially the same proportions as their ownership of
stock of the Corporation; (c) Vestar Capital Partners IV, L.P., VCD
Investors LLC and their affiliates; or (d) any party from time to time to
the Securityholders Agreement, dated as of or about the date hereof, by and
among the Corporation, Holdings and the Securityholders from time to time
parties thereto, as such agreement may be amended from time to time,  unless such party together with its
affiliates is the holder of securities representing 

 

 

at least 50.01% of the
outstanding voting securities of the Corporation or is deemed to beneficially
own at least 50.01% of the outstanding voting securities of the Corporation for
purposes of Rule 16a-1(a)(2) under the Exchange Act, or any group (as
such term is used in Section 13(d)(3) of the Exchange Act) to the
extent that such group may be deemed to exist solely as a result of the
Securityholders Agreement ((a) through (d) collectively are referred
to herein as “Exempt Persons”)) of beneficial ownership (as defined in Rule 13d-3
under the Exchange Act) of more than 50.01% of the aggregate voting power of
the Voting Securities of the Corporation;

 

(v) during any 12 month period, individuals who
at the beginning of such period composed the Board of Directors of the
Corporation (together with any new directors whose election by such Board of
Directors or whose nomination for election by the stockholders of the
Corporation was approved by a vote of 66 2/3% of the directors of the
Corporation then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors of the Corporation then in office; or

 

(vi)  the Corporation (or a directly or
indirectly wholly-owned subsidiary thereof) ceasing to be the sole Managing
Member of Holdings.

 

“Change in Control  Event” means any of the following (i) the
commencement of, or the first public announcement of the intent to commence,
any transaction, including, without limitation, a tender or exchange offer by
any person or entity (other than any Exempt Person), the consummation of which
would result in a Change in Control; (ii) the commencement of, or the
first public announcement of the intent to commence, any proxy solicitation by
any person or entity subject to Rule 14a-12(c) under the Exchange
Act, the consummation of which would result in a Change in Control; (iii) the
Corporation, Holdings or any affiliate thereof entering into an agreement with
any person or entity which, if consummated, would result in a Change in
Control; or (iv) the adoption by the Board of Directors of the Corporation
of resolutions authorizing any transaction or event which, if consummated,
would result in a Change in Control.

 

“Class A Common Stock” means the Class A
common stock, par value $0.01 per share, of the Corporation.

 

“Code” means the Internal Revenue Code of
1986, as amended.

 

“Corporation” means DynaVox Inc., a Delaware
corporation, and any successor thereto.

 

“Exchange” has the meaning set forth in Section 2.1(a) of
this Agreement.

 

“Exchange Act” means the Securities Exchange
Act of 1934, as amended.

 

“Exchange Rate” means the number of shares of
Class A Common Stock for which a Holdings Unit is entitled to be
Exchanged.  On the date of this
Agreement, the Exchange Rate shall be 1 for 1, subject to adjustment pursuant
to Section 2.2 of this Agreement.

 

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“Holdings” means DynaVox Systems Holdings
LLC, a Delaware limited liability company, and any successor thereto.

 

“Holdings LLC Agreement” means the Third
Amended and Restated Limited Liability Company Agreement of Holdings, dated on
or about the date hereof, as such agreement may be amended from time to time.

 

“Holdings Unit” means (i) each Class A
Unit (as such term is defined in the Holdings LLC Agreement) issued as of the
date hereof and (ii) each Class A Unit or other interest in Holdings
that may be issued by Holdings in the future that is designated by the
Corporation as a “Holdings Unit”.

 

“Holdings Unitholder” means each holder of
one or more Holdings Units that may from time to time be a party to this
Agreement.

 

“IPO” has the meaning set forth in Section 2.1(a)(i) of
this Agreement.

 

“Permitted Transferee” has the meaning given
to such term in Section 3.1 of this Agreement.

 

“Unvested Units” has the meaning given to
such term in the Holdings LLC Agreement.

 

“Voting Securities” shall mean any securities
of the Corporation which are entitled to vote generally in matters submitted
for a vote of the Corporation’s stockholders or generally in the election of
the Corporation’s board of directors.

 

ARTICLE II

 

SECTION 2.1.       
 Exchange of Holdings Units for Class A
Common Stock.

 

(a)           (i)  Subject to Section 2.1(a)(ii) hereof,
from and after the first anniversary of the date of the closing of the initial
public offering and sale of Class A Common Stock (as contemplated by the
Corporation’s Registration Statement on Form S-1 (File No. 333-164217))
(the “IPO”), each Holdings Unitholder shall be entitled at any
time and from time to time, upon the terms and subject to the conditions
hereof, to surrender Holdings Units (other than Unvested Units) to the
Corporation in exchange for the delivery by the Corporation of a number of
shares of Class A Common Stock that is equal to the product of the number
of Holdings Units surrendered multiplied by the Exchange Rate (such
exchange, an “Exchange”); provided that any such Exchange is for a
minimum of the lesser of 1,000 Holdings Units or all of the Holdings Units
(other than Unvested Units) held by such Holdings Unitholder.

 

(ii)  Notwithstanding
anything to the contrary herein, upon the occurrence of any Change in Control
Event, each Holdings Unitholder shall be entitled, upon the terms and subject
to the conditions hereof, to elect to Exchange Holdings Units for shares of Class A
Common Stock; provided, that any such Exchange pursuant to this sentence shall
be effective immediately prior to the consummation of the Change in Control
(and, for the avoidance of doubt, shall not be effective if such Change of
Control is not consummated); and provided further, that any such election pursuant
to this Section 2.1(a)(ii) may be withdrawn by the 

 

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Holdings Unitholder who
submitted such election by providing written notice to the Corporation not less
than four business days prior to the consummation of the Change in Control.

 

(b)           A Holdings Unitholder shall exercise its right to Exchange
Holdings Units as set forth in Section 2.1(a) above by delivering to
the Corporation a written election of exchange in respect of the Holdings Units
to be Exchanged substantially in the form of Exhibit A hereto, duly
executed by such holder or such holder’s duly authorized attorney, in each case
delivered during normal business hours at the principal executive offices of
the Corporation.  Subject to Section 2.1(a)(ii),
as promptly as practicable following the delivery of such a written election of
exchange, and in any event within three business days, the Corporation shall
deliver or cause to be delivered at the offices of the then-acting registrar
and transfer agent of the Class A Common Stock or, if there is no
then-acting registrar and transfer agent of the Class A Common Stock, at
the principal executive offices of the Corporation, the number of shares of Class A
Common Stock deliverable upon such Exchange, registered in the name of the
relevant Exchanging Holdings Unitholder.  To the extent the Class A Common Stock
is settled through the facilities of The Depository Trust Company, the Company
will, subject to Section 2.1(c) below, upon the written instruction of
an Exchanging Unitholder, use its reasonable best efforts to deliver the shares
of Class A Common Stock deliverable to such Exchanging Unitholder, through
the facilities of The Depository Trust Company, to the account of the
participant of The Depository Trust Company designated by such Exchanging
Holder.

 

(c)           The Corporation and each Exchanging Holdings Unitholder
shall bear their own expenses in connection with the consummation of any
Exchange, whether or not any such Exchange is ultimately consummated, except
that the Corporation shall bear any transfer taxes, stamp taxes or duties, or
other similar taxes in connection with, or arising by reason of, any Exchange;
provided, however, that if any shares of Class A Common Stock are to be
delivered in a name other than that of the Holdings Unitholder that requested
the Exchange, then such Holdings Unitholder and/or the person in whose name
such shares are to be delivered shall pay to the Corporation the amount of any
transfer taxes, stamp taxes or duties, or other similar taxes in connection
with, or arising by reason of, such Exchange or shall establish to the
reasonable satisfaction of the Corporation that such tax has been paid or is
not payable.

 

(d)           The Corporation covenants and agrees that, prior to
taking or causing to be taken any action that would cause interests in Holdings
to not meet the requirements of Treasury Regulation section 1.7704-1(h),
including, without limitation, issuing any Holdings Units in a transaction
required to be registered with the Securities and Exchange Commission pursuant
to the Securities Act of 1933, as amended, it will provide at least 15 business
days advance written notice describing the proposed action in reasonable detail
to the Holdings Unitholders and provide each Holdings Unitholders with the
opportunity to effect an Exchange of all such Holdings Unitholder’s Holdings
Units in accordance with the terms of this Agreement; provided, however, that
in no event will the Corporation take or cause to be taken any action that
would cause interests in Holdings to not meet the requirements of Treasury
Regulation section 1.7704-1(h) prior to the first anniversary of the
closing of the IPO.  Provided that the
notice and opportunity to Exchange contemplated by the previous sentence has
been provided the Holdings Unitholders, then, notwithstanding anything to the
contrary herein, if the Board of Directors of the Corporation, after
consultation with its outside legal counsel and tax advisor, shall determine in
good faith that interests in Holdings do not meet the requirements of Treasury
Regulation 

 

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section 1.7704-1(h), the Corporation may impose such restrictions on
Exchange as the Corporation may reasonably determine to be necessary or
advisable so that Holdings is not treated as a “publicly traded partnership”
under Section 7704 of the Code.

 

(e)           For the avoidance of doubt, and notwithstanding anything
to the contrary herein, a Holdings Unitholder shall not be entitled to Exchange
Holdings Units to the extent the Corporation reasonably determines in good
faith that such Exchange (i) would be prohibited by law or regulation or (ii) would
not be permitted under any other agreement with the Corporation or its
subsidiaries to which such Holdings Unitholder is then subject (including,
without limitation, the Holdings LLC Agreement) or any written policies of the
Corporation relating to insider trading then applicable to such Holdings
Unitholder.  For avoidance of doubt, no
Exchange shall be deemed to be prohibited by any law or regulation pertaining
to the registration of securities if such securities have been so registered or
if any exemption from such registration requirements is reasonably available.

 

SECTION 2.2.  
Adjustment.

 

(a)           The Exchange Rate shall be adjusted accordingly if there
is: (a) any subdivision (by any unit split, unit distribution,
reclassification, reorganization, recapitalization or otherwise) or combination
(by reverse unit split, reclassification, reorganization, recapitalization or
otherwise) of the Holdings Units that is not accompanied by an identical
subdivision or combination of the Class A Common Stock; or (b) any
subdivision (by any stock split, stock dividend or distribution,
reclassification, reorganization, recapitalization or otherwise) or combination
(by reverse stock split, reclassification, reorganization, recapitalization or
otherwise) of the Class A Common Stock that is not accompanied by an
identical subdivision or combination of the Holdings Units. If there is any
reclassification, reorganization, recapitalization or other similar transaction
in which the Class A Common Stock are converted or changed into another
security, securities or other property, then upon any subsequent Exchange, an
exchanging Holdings Unitholder shall be entitled to receive the amount of such
security, securities or other property that such exchanging Holdings Unitholder
would have received if such Exchange had occurred immediately prior to the
effective date of such reclassification, reorganization, recapitalization or
other similar transaction, taking into account any adjustment as a result of
any subdivision (by any split, distribution or dividend, reclassification,
reorganization, recapitalization or otherwise) or combination (by reverse
split, reclassification, recapitalization or otherwise) of such security,
securities or other property that occurs after the effective time of such
reclassification, reorganization, recapitalization or other similar
transaction. For the avoidance of doubt, if there is any reclassification,
reorganization, recapitalization or other similar transaction in which the Class A
Common Stock are converted or changed into another security, securities or
other property, this Section 2.2 shall continue to be applicable, mutatis mutandis, with respect to such security or other
property.  This Agreement shall apply to
the Holdings Units held by the Holdings Unitholders and their Permitted
Transferees as of the date hereof, as well as any Holdings Units hereafter
acquired by a Holdings Unitholder and his or her or its Permitted Transferees.
This Agreement shall apply to, mutatis mutandis,
and all references to “Holdings Units” shall be deemed to include, any
security, securities or other property of Holdings which may be issued in
respect of, in exchange for or in substitution of Holdings Units by reason of
any distribution or dividend, split, reverse split, 

 

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combination, reclassification, reorganization, recapitalization,
merger, exchange (other than an Exchange) or other transaction.

 

SECTION 2.3.  
Class A Common Stock to be Issued.

 

(a)           The Corporation covenants and agrees to deliver shares of Class A
Common Stock that have been registered under the Securities Act with respect to
any Exchange to the extent that a registration statement is effective and
available for such shares.  In the event
that any Exchange in accordance with this Agreement is to be effected at a time
when any required registration has not become effective or otherwise is
unavailable, upon the request and with the reasonable cooperation of the
Holdings Unitholder requesting such Exchange, the Corporation shall use its
reasonable best efforts to promptly facilitate such Exchange pursuant to any
reasonably available exemption from such registration requirements.  The Corporation shall use its reasonable best
efforts to list the Class A Common Stock required to be delivered upon
exchange prior to such delivery upon each national securities exchange or
inter-dealer quotation system upon which the outstanding Class A Common
Stock may be listed or traded at the time of such delivery. Nothing contained
herein shall be construed to preclude the Corporation or Holdings from
satisfying their obligations in respect of the exchange of the Holdings Units
by delivery of Class A Common Stock which are held in the treasury of the
Corporation or Holdings or any of their subsidiaries.

 

(b)           The Corporation shall at all times reserve and keep
available out of its authorized but unissued Class A Common Stock, solely
for the purpose of issuance upon an Exchange, such number of shares of Class A
Common Stock as shall be deliverable upon any such Exchange; provided that
nothing contained herein shall be construed to preclude the Corporation from
satisfying its obligations in respect of any such Exchange by delivery of
purchased shares of Class A Common Stock (which may or may not be held in
the treasury of the Corporation or any subsidiary thereof).

 

(c)           Prior to the date of this Agreement, the Corporation has
taken all such steps as may be required to cause to qualify for exemption under
Rule 16b-3(d) or (e), as applicable, under the Exchange Act, and be
exempt for purposes of Section 16(b) under the Exchange Act, any
acquisitions or dispositions of equity securities of the Corporation (including
derivative securities with respect thereto) and any securities which may be
deemed to be equity securities or derivative securities of the Corporation for
such purposes that result from the transactions contemplated by this Agreement,
by each director or officer of the Corporation who may reasonably be expected
to be subject to the reporting requirements of Section 16(a) of the
Exchange Act with respect to the Corporation upon the registration of any class
of equity security of the Corporation pursuant to Section 12 of the
Exchange Act (with the authorizing resolutions specifying the name of each such
officer or director whose acquisition or disposition of securities is to be exempted
and the number of securities that may be acquired and disposed of by each such
person pursuant to this Agreement).

 

(d)           If any Takeover Law or other similar law or regulation
becomes or is deemed to become applicable to the this Agreement or any of the
transactions contemplated hereby, the Corporation shall use its reasonable best
efforts to render such law or regulation inapplicable to all of the foregoing.

 

6

 

(e)           The Corporation covenants that all Class A Common
Stock issued upon an Exchange will, upon issuance, be validly issued, fully
paid and non-assessable and not subject to any preemptive right of stockholders
of the Corporation or to any right of first refusal or other right in favor of
any person or entity.

 

ARTICLE III

 

SECTION 3.1.  
Representations and Warranties of the Corporation.  The Corporation represents and warrants that (i) it
is a corporation duly incorporated and is existing in good standing under the
laws of the State of Delaware, (ii) it has all requisite corporate power
and authority to enter into and perform this Agreement and to consummate the
transactions contemplated hereby and to issue the Class A Common Stock in
accordance with the terms hereof, (iii) the execution and delivery of this
Agreement by the Corporation and the consummation by it of the transactions
contemplated hereby (including without limitation, the issuance of the Class A
Common Stock) have been duly authorized by all necessary corporate action on
the part of the Corporation, including but not limited to all actions necessary
to ensure that the acquisition of shares Class A Common Stock pursuant to
the transactions contemplated hereby, to the fullest extent of the Corporation’s
Board of Directors’ power and authority and to the extent permitted by law,
shall not be subject to any “moratorium,” “control share acquisition,” “business
combination,” “fair price” or other form of anti-takeover laws and regulations”
of any jurisdiction that may purport to be applicable to this Agreement or the
transactions contemplated hereby (collectively, “Takeover Laws”), (iv) this
Agreement constitutes a legal, valid and binding obligation of the Corporation
enforceable against the Corporation in accordance with its terms, except as
enforcement may be limited by equitable principles or by bankruptcy,
insolvency, reorganization, moratorium, or similar laws relating to or limiting
creditors’ rights generally, and (v) the execution, delivery and
performance of this Agreement by the Corporation and the consummation by the
Corporation of the transactions contemplated hereby will not (A) result in
a violation of the Certificate of Incorporation of the Corporation or the
Bylaws of the Corporation or (B) conflict with, or constitute a default
(or an event which with notice or lapse of time or both would become a default)
under, or give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Corporation is a party, or (C) result in a violation of any law, rule,
regulation, order, judgment or decree applicable to the Corporation or by which
any property or asset of the Corporation is bound or affected, except with
respect to clauses (B) or (C) for any conflicts, defaults,
accelerations, terminations, cancellations or violations, that would not
reasonably be expected to have a material adverse effect on the Corporation or
its business, financial condition or results of operations.

 

SECTION 3.2.  
Representations and Warranties of the Holdings Unitholders.  Each Holdings Unitholder, severally and not
jointly, represents and warrants that (i) if it is not a natural person,
that it is duly incorporated or formed and, the extent such concept exists in
its jurisdiction of organization, is in good standing under the laws of such
jurisdiction, (ii) it has all requisite legal capacity and authority to
enter into and perform this Agreement and to consummate the transactions
contemplated hereby, (iii) if it is not a natural person, the execution
and delivery of this Agreement by it of the transactions contemplated
hereby  have been duly authorized by all
necessary corporate or other entity action on the part of such Holdings 

 

7

 

Unitholder, (iv) this Agreement constitutes a legal, valid and
binding obligation of such Holdings Unitholder enforceable against it in
accordance with its terms, except as enforcement may be limited by equitable
principles or by bankruptcy, insolvency, reorganization, moratorium, or similar
laws relating to or limiting creditors’ rights generally, and (v) the
execution, delivery and performance of this Agreement by such Holdings
Unitholder and the consummation by such Holdings Unitholder of the transactions
contemplated hereby will not (A) if it is not a natural person, result in
a violation of the Certificate of Incorporation and Bylaws or other
organizational documents of such Holdings Unitholder or (B) conflict with,
or constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which such Holdings Unitholder is a party, or (C) result in
a violation of any law, rule, regulation, order, judgment or decree applicable
such Holdings Unitholder, except with respect to clauses (B) or (C) for
any conflicts, defaults, accelerations, terminations, cancellations or
violations, that would not in any material respect result in the
unenforceability against such Holdings Unitholder of this Agreement.

 

ARTICLE IV

 

SECTION 4.1.  
Additional Holdings Unitholders.  To the extent
a Holdings Unitholder validly transfers any or all of such holder’s Holdings
Units to another person in a transaction in accordance with, and not in
contravention of, the Holdings LLC Agreement, then such transferee (each, a “Permitted
Transferee”) shall have the right to execute and deliver a joinder to
this Agreement, substantially in the form of Exhibit B hereto, whereupon
such Permitted Transferee shall become a Holdings Unitholder hereunder.  To the extent Holdings issues Holdings Units
in the future, then the holder of such Holdings Units shall have the right to execute and deliver a
joinder to this Agreement, substantially in the form of Exhibit B hereto,
whereupon such holder shall become a Holdings Unitholder hereunder.

 

SECTION 4.2.  
Addresses and Notices.  All
notices, requests, claims, demands and other communications hereunder shall be
in writing and shall be given (and shall be deemed to have been duly given upon
receipt) by delivery in person, by courier service, by fax, by electronic mail
(delivery receipt requested) or by registered or certified mail (postage prepaid,
return receipt requested) to the respective parties at the following addresses
(or at such other address for a party as shall be as specified in a notice
given in accordance with this Section 3.2):

 

(a) 
If to the Corporation, to:

 

2100 Wharton Street

Suite 400

Pittsburgh, PA 15203

Attention: Chief Financial
Officer

Fax: (412) 381-5241

Electronic Mail:
Ken.Misch@dynavoxtech.com

 

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(b) 
If to any Holdings Unitholder, to the address and other contact information set
forth in the records of Holdings from time to time.

 

SECTION 4.3.  
Further Action. The parties shall execute and deliver all documents,
provide all information and take or refrain from taking action as may be
necessary or appropriate to achieve the purposes of this Agreement.

 

SECTION 4.4.  
Binding Effect. This Agreement shall be binding upon and inure to the
benefit of all of the parties and, to the extent permitted by this Agreement,
their successors, executors, administrators, heirs, legal representatives and
assigns.

 

SECTION 4.5.  
Severability.  If any term or
other provision of this Agreement is held to be invalid, illegal or incapable
of being enforced by any rule of law, or public policy, all other
conditions and provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
is not affected in any manner materially adverse to any party. Upon a
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the transactions
contemplated hereby be consummated as originally contemplated to the fullest
extent possible.

 

SECTION 4.6.  
Amendment.  The provisions of this
Agreement may be amended only by the affirmative vote or written consent of
each of (i) the Corporation and (ii) Holdings Unitholders holding at
least two thirds of the then outstanding Holdings Units (excluding Holdings
Units held by the Corporation). 
Notwithstanding the foregoing, in addition to any other consent that may
be required, the prior written consent of each of Vestar Capital Partners IV,
L.P. and Edward L. Donnelly, Jr. shall also be required for any amendment
of this Agreement that adversely affects such Holdings Unitholder and/or its
affiliates for so long as such Holdings Unitholder continues, together with its
affiliates, to hold a number of Holdings Units that is equal to or greater than
3% of the number of Holdings Units outstanding immediately following the
closing of the IPO and the related repurchase of Holdings Units with the
proceeds therefrom (such number to be adjusted for any subdivision or
combination of the Holdings Units effected after the closing of the IPO);
provided that except as otherwise provided herein (including, without
limitation, in Section 2.1(d)), no amendment may materially and adversely
affect the rights of a Holdings Unitholder, as such, other than on a pro rata
basis with other Holdings Unitholders without the consent of such Holdings
Unitholder (or, if there is more than one such Holdings Unitholder that is so
affected, without the consent of a 
majority of such affected Holdings Unitholder in accordance with their
holdings of Holdings Units).

 

SECTION 4.7.  
Waiver. No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach of any other covenant, duty, agreement or condition.

 

SECTION 4.8.  
Submission to Jurisdiction; Waiver of Jury Trial.

 

(a)           Any and all disputes which cannot be settled amicably,
including any ancillary claims of any party, arising out of, relating to or in
connection with the validity, negotiation, execution, interpretation,
performance or non-performance of this Agreement (including the validity, scope
and enforceability of this arbitration provision) shall be finally settled by
arbitration conducted by a single arbitrator in New York in accordance with the
then-existing Rules of Arbitration of the International Chamber of
Commerce. If the parties to 

 

9

 

the dispute fail to agree on the selection of
an arbitrator within thirty (30) days of the receipt of the request for
arbitration, the International Chamber of Commerce shall make the
appointment.  The arbitrator shall be a
lawyer and shall conduct the proceedings in the English language.  Performance under this Agreement shall
continue if reasonably possible during any arbitration proceedings.

 

(b)           Notwithstanding the provisions of paragraph (a), the
parties hereto may bring an action or special proceeding in any court of
competent jurisdiction for the purpose of compelling a party to arbitrate,
seeking temporary or preliminary relief in aid of an arbitration hereunder,
and/or enforcing an arbitration award and, for the purposes of this paragraph
(b), each party hereto (i) expressly consents to the application of
paragraph (c) of this Section 4.8 to any such action or proceeding
and (ii) agrees that proof shall not be required that monetary damages for
breach of the provisions of this Agreement would be difficult to calculate and
that remedies at law would be inadequate.

 

(c)           (i)            EACH
PARTY HERETO IRREVOCABLY SUBMITS TO THE JURISDICTION OF COURTS LOCATED IN NEW
YORK, NEW YORK FOR THE PURPOSE OF ANY JUDICIAL PROCEEDING BROUGHT IN ACCORDANCE
WITH THE PROVISIONS OF THIS SECTION 4.8, OR ANY JUDICIAL PROCEEDING
ANCILLARY TO AN ARBITRATION OR CONTEMPLATED ARBITRATION ARISING OUT OF OR
RELATING TO OR CONCERNING THIS AGREEMENT. Such ancillary judicial proceedings
include any suit, action or proceeding to compel arbitration, to obtain
temporary or preliminary judicial relief in aid of arbitration, or to confirm
an arbitration award. The parties acknowledge that the fora designated by this
paragraph (c) have a reasonable relation to this Agreement, and to the
parties’ relationship with one another.

 

(ii)           The parties hereby waive, to the fullest extent permitted
by applicable law, any objection which they now or hereafter may have to
personal jurisdiction or to the laying of venue of any such ancillary suit,
action or proceeding brought in any court referred to in the preceding
paragraph of this Section 4.8 and such parties agree not to plead or claim
the same.

 

(d)           Notwithstanding any provision of this Agreement to the
contrary, this Section 3.8 shall be construed to the maximum extent
possible to comply with the laws of the State of Delaware, including the
Delaware Uniform Arbitration Act (10 Del. C. § 5701 et  seq.) (the “Delaware Arbitration Act”).  If, nevertheless, it shall be determined by a
court of competent jurisdiction that any provision or wording of this Section 4.8,
including any rules of the International Chamber of Commerce, shall be
invalid or unenforceable under the Delaware Arbitration Act, or other
applicable law, such invalidity shall not invalidate all of this Section 4.8.  In that case, this Section 4.8 shall be
construed so as to limit any term or provision so as to make it valid or
enforceable within the requirements of the Delaware Arbitration Act or other
applicable law, and, in the event such term or provision cannot be so limited,
this Section 3.8 shall be construed to omit such invalid or unenforceable
provision.

 

SECTION 4.9.  
Counterparts. This Agreement may be executed and delivered (including by
facsimile transmission or by e-mail delivery of a “.pdf” format data file) in
one or more counterparts, and by the different parties hereto in separate
counterparts, each of which 

 

10

 

when executed and delivered shall be deemed
to be an original but all of which taken together shall constitute one and the
same agreement. Copies of executed counterparts transmitted by telecopy, by
e-mail delivery of a “.pdf” format data file or other electronic transmission
service shall be considered original executed counterparts for purposes of this
Section 4.9.

 

SECTION 4.10.  
Tax Treatment. This Agreement shall be treated as part of the
partnership agreement of Holdings as described in Section 761(c) of
the Code and Sections 1.704-1(b)(2)(ii)(h) and 1.761-1(c) of the
Treasury Regulations promulgated thereunder. 

 

SECTION 4.11.  
Specific Performance.  The parties
hereto agree that irreparable damage would occur in the event that any of the
provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached. 
It is accordingly agreed that the parties shall be entitled to specific
performance of the terms and provisions hereof, in addition to any other remedy
to which they are entitled at law or in equity.

 

SECTION 4.12.  
Independent Nature of Holdings Unitholders’ Rights and Obligations.  The obligations of each Holdings Unitholder
hereunder are several and not joint with the obligations of any other Holdings
Unitholder, and no Holdings Unitholder shall be responsible in any way for the
performance of the obligations of any other Holdings Unitholder under
hereunder.  The decision of each Holdings
Unitholder to enter into to this Agreement has been made by such Holdings
Unitholder independently of any other Holdings Unitholder. Nothing contained
herein, and no action taken by any Holdings Unitholder pursuant hereto, shall
be deemed to constitute the Holdings Unitholders as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Holdings Unitholders are in any way acting in concert or
as a group with respect to such obligations or the transactions contemplated
hereby and the Corporation acknowledges that the Holdings Unitholders are not
acting in concert or as a group, and the Corporation will not assert any such
claim, with respect to such obligations or the transactions contemplated hereby.

 

SECTION 4.13.  
Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the law of the State of Delaware.

 

11

 

IN WITNESS WHEREOF, the
parties have caused this Agreement to be duly executed and delivered, all as of
the date first set forth above.

 

	
   

  	
  DYNAVOX INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HOLDINGS UNITHOLDERS

  
	
   

  	
   

  	
   

  
	
   

  	
  Each Holdings Unitholder
  set forth on Annex A hereto

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title: Attorney-in-fact

  

 

[Exchange Agreement]

 

 

EXHIBIT
A

 

[FORM OF]

ELECTION OF EXCHANGE

 

DynaVox Inc.

2100
Wharton Street

Suite 400

Pittsburgh,
PA 15203

Attention:
Chief Financial Officer

 

Reference is hereby made to the Exchange Agreement, dated as of  [               ],
2010 (the “Exchange Agreement”), among DynaVox Inc., a Delaware
corporation, and the holders of Holdings Units (as defined herein) from time to
time party thereto.  Capitalized terms
used but not defined herein shall have the meanings given to them in the
Exchange Agreement.

 

The undersigned Holdings Unitholder hereby transfers to the Corporation
the number of Holdings Units set forth below in Exchange for shares of Class A
Common Stock to be issued in its name as set forth below, as set forth in the
Exchange Agreement.

 

	
  Legal
  Name of Holdings Unitholder:

  	
   

  
	
   

  	
   

  
	
  Address:

  	
   

  
	
   

  	
   

  
	
  Number of Holdings Units
  to be Exchanged:

  	
   

  
					

 

The undersigned hereby
represents and warrants that (i) the undersigned has full legal capacity
to execute and deliver this Election of Exchange and to perform the undersigned’s
obligations hereunder; (ii) this Election of Exchange has been duly
executed and delivered by the undersigned and is the legal, valid and binding
obligation of the undersigned enforceable against it in accordance with the
terms thereof or hereof, as the case may be, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors’ rights generally and the
availability of equitable remedies; (iii) the Holdings Units subject to
this Election of Exchange are being transferred to the Corporation free and
clear of any pledge, lien, security interest, encumbrance, equities or claim;
and (iv) no consent, approval, authorization, order, registration or
qualification of any third party or with any court or governmental agency or
body having jurisdiction over the undersigned or the Holdings Units subject to
this Election of Exchange is required to be obtained by the undersigned for the
transfer of such Holdings Units to the Corporation.

 

The undersigned hereby irrevocably
constitutes and appoints any officer of the Corporation as the attorney of the
undersigned, with full power of substitution and resubstitution in the
premises, to do any and all things and to take any and all actions that may be
necessary to transfer to the Corporation the Holdings Units subject to this
Election of Exchange and to deliver to the undersigned the shares of Class A
Common Stock to be delivered in Exchange therefor. 

 

 

IN WITNESS WHEREOF the
undersigned, by authority duly given, has caused this Election of Exchange to
be executed and delivered by the undersigned or by its duly authorized
attorney.

 

 

	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Dated:

  	
   

  
				

 

 

EXHIBIT
B

 

[FORM OF]

JOINDER AGREEMENT

 

This
Joinder Agreement (“Joinder Agreement”) is a joinder to the Exchange
Agreement, dated as of                ,
2010 (the “Agreement”), among DynaVox Inc., a Delaware corporation (the “Corporation”),
and each of the Holdings Unitholders from time to time party thereto.  Capitalized terms used but not defined in
this Joinder Agreement shall have their meanings given to them in the
Agreement.  This Joinder Agreement shall
be governed by, and construed in accordance with, the law of the State of
Delaware.  In the event of any conflict
between this Joinder Agreement and the Agreement, the terms of this Joinder
Agreement shall control.

 

The undersigned hereby joins
and enters into the Agreement having acquired Holdings Units in Holdings.  By signing and returning this Joinder
Agreement to the Corporation, the undersigned (i) accepts and agrees to be
bound by and subject to all of the terms and conditions of and agreements of a
Holdings Unitholder contained in the Agreement, with all attendant rights,
duties and obligations of a Holdings Unitholder thereunder and (ii) makes
each of the representations and warranties of a Holdings Unitholder set forth
in Section 3.2 of the Agreement as fully as if such representations and
warranties were set forth herein.  The
parties to the Agreement shall treat the execution and delivery hereof by the undersigned
as the execution and delivery of the Agreement by the undersigned and, upon
receipt of this Joinder Agreement by the Corporation, the signature of the
undersigned set forth below shall constitute a counterpart signature to the
signature page of the Agreement.

 

	
  Name:

  	
   

  	
   

  

 

	
  Address for Notices:

  	
   

  	
  With copies to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attention:Exhibit 10.6

 

DYNAVOX INC.

 

2010 LONG-TERM INCENTIVE
PLAN

 

1.                                       Purpose of the Plan

 

The purpose of the Plan is
to aid the Company and its Subsidiaries in recruiting and retaining key
employees, directors or other service providers and to motivate such employees,
directors or other service providers to exert their best efforts on behalf of
the Company and its Subsidiaries by providing incentives through the granting
of Awards.  The Company expects that it
will benefit from the added interest which such key employees, directors or
other service providers will have in the welfare of the Company as a result of
their proprietary interest in the Company’s success.

 

2.                                       Definitions

 

The following capitalized
terms used in the Plan have the respective meanings set forth in this Section:

 

(a)                                 Act:  The Securities Exchange Act of 1934, as
amended, or any successor thereto.

 

(b)                                Affiliate: 
With respect to any entity, any
entity directly or indirectly controlling, controlled by, or under common
control with, such entity.

 

(c)                                 Award:  An Option, Stock Appreciation Right, Other
Stock-Based Award or Performance-Based Award granted pursuant to the Plan.

 

(d)                                Board:  The Board of Directors of the Company.

 

(e)                                 Change in Control:  The occurrence of any of the following
events: (i) the sale or disposition, in one or a series of related
transactions, of all or substantially all of the assets of the Company to any “person”
or “group” (as such terms are defined in Sections 13(d)(3) and 14(d)(2) of
the Act) other than any member of the Vestar/Company Group; provided
that, for the avoidance of doubt, a sale of the Mayer-Johnson business shall
not constitute a Change in Control hereunder, (ii) any “person” or “group”,
other than any member of the Vestar/Company Group, is or becomes the “beneficial
owner” (as defined in Rules 13d-3 and 13d-5 under the Act), directly or
indirectly, of more than 50% of the total voting power of the voting stock of
the Company, including by way of purchase, merger, consolidation or otherwise,
or (iii) during any period of two (2) consecutive
years, individuals who at the beginning of such period constituted the Board
(together with any new directors whose election by such Board or whose
nomination for election by the shareholders of the Company was approved by a
vote of a majority of the directors of the Company, then still in office, who
were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) (the “Incumbent Board”)
cease for any reason to constitute a majority of the Board then in office; provided that, any director appointed or elected to the
Board to avoid or settle a threatened or actual proxy contest shall in no event
be deemed to be an individual on the Incumbent Board.

 

(f)                                   Code:  The Internal Revenue Code of 1986, as
amended, or any successor thereto, and the regulations and guidance promulgated
thereunder.

 

 

(g)                                Committee:  The
Compensation Committee of the Board (or a subcommittee thereof), or such other
committee of the Board (including, without limitation, the full Board) to which
the Board has delegated power to act under or pursuant to the provisions of the
Plan.

 

(h)                                Company:  DynaVox Inc., a Delaware corporation.

 

(i)                                    Disability:  Unless otherwise agreed by the Company (or any
of its Subsidiaries) in a written employment agreement or employment letter
with such Participant, the inability of the Participant to perform in all
material respects his or her duties and responsibilities to the Company or any
of its Subsidiaries by reason of a physical or mental disability or infirmity
which inability is reasonably expected to be permanent and has continued for a
period of six consecutive months or for an aggregate of nine months in any
twenty-four consecutive month period. 
The Disability determination shall be in the sole discretion of the
Committee.

 

(j)                                    Effective
Date:  The date the
Board approves the Plan, or such later date as is designated by the Board.

 

(k)                                 Employment:  The term “Employment” as used herein shall be
deemed to refer to (i) a Participant’s employment if the Participant is an
employee of the Company or any of its Subsidiaries, (ii) a Participant’s
services as a consultant, if the Participant is a consultant to the Company or
any of its Subsidiaries, and (iii) a Participant’s services as a
non-employee director, if the Participant is a non-employee member of the
Board.

 

(l)                                    Fair Market Value:  On a given date, (i) if there should be
a public market for the Shares on such date, the closing price of the Shares as
reported on such date on the Composite Tape of the principal national
securities exchange on which such Shares are listed or admitted to trading, or,
if the Shares are not listed or admitted on any national securities exchange,
the closing bid price on such date as quoted on the National Association of
Securities Dealers Automated Quotation System (or such market in which such
prices are regularly quoted (the “NASDAQ”), or, if no sale of Shares
shall have been reported on the Composite Tape of any national securities
exchange or quoted on the NASDAQ on such date, then the immediately preceding
date on which sales of the Shares have been so reported or quoted shall be
used, and (ii) if there should not be a public market for the Shares on
such date, the Fair Market Value shall be the fair market value of the Shares
as determined by the Committee in good faith.

 

(m)                              ISO: An
Option that is also an incentive stock option granted pursuant to Section 6(d) of
the Plan.

 

(n)                                Option:  A stock option granted pursuant to Section 6
of the Plan.

 

(o)                                Option Price:  The purchase price per Share of an Option, as
determined pursuant to Section 6(a) of the Plan.

 

(p)                                Other Stock-Based Awards:  Awards granted pursuant to Section 8 of
the Plan.

 

(q)                                Participant:  An employee, director or other service
provider of the Company or any of its Subsidiaries who is selected by the
Committee to participate in the Plan.

 

(r)                                   Performance-Based Awards:  Awards granted pursuant to Section 9 of
the Plan.

 

2

 

(s)                                 Plan:  The DynaVox Inc. 2010 Long-Term Incentive Plan, as it may be amended from
time to time.

 

(t)                                   Service Recipient:  The Company, any
Subsidiary of the Company, or any Affiliate of the Company that satisfies the
definition of “service recipient” within the meaning of Treasury Regulation Section 1.409A-1
(or any successor regulation), with respect to which the person is a “service
provider” (within the meaning of Treasury Regulation Section 1.409A-1(or
any successor regulation).

 

(u)                                Shares:  Shares of Class A common stock of the
Company.

 

(v)                                Stock Appreciation Right:  A stock appreciation right granted pursuant
to Section 7 of the Plan.

 

(w)                               Subsidiary:  A subsidiary corporation, as defined in Section 424(f) of
the Code (or any successor section thereto).

 

(x)                                   Vestar/Company Group:
(i) Vestar Capital Partners IV, L.P. or any of its Affiliates, (ii) any
party from time to time to the Securityholders Agreement, dated as of or about
the date of the initial public offering of the Shares, by and among the
Company, DynaVox Systems Holdings LLC and the Securityholders from time to time
parties thereto, as such agreement may be amended from time to time (the “Securityholders
Agreement”) unless such party together with its Affiliates is the holder of securities
representing at least 50.01% of the outstanding voting securities of the
Company or is deemed to beneficially own at least 50.01% of the outstanding
voting securities of the Company for purposes of Rule 16a-1(a)(2) under
the Act or any group (as such term is used in Section 13(d)(3) of the
Act) to the extent that such group may be deemed to exist solely as a result of
the Securityholders Agreement, (iii) any employee benefit plan (or trust
forming a part thereof) maintained by the Company or any of its Affiliates, or (iv) any
corporation or other “person” of which a majority of the voting power of its
voting equity securities and equity interest is owned, directly or indirectly,
by the Company.

 

3.                                       Shares Subject to the Plan

 

Subject
to Section 10, the total number of Shares which may be issued under the
Plan is 3,550,000 and the maximum number of Shares for which ISOs may be
granted is 3,550,000.  The Shares may
consist, in whole or in part, of unissued Shares or treasury Shares.  The issuance of Shares shall reduce the total
number of Shares available under the Plan. 
Shares related to Awards or portions of Awards that are (a) forfeited,
terminated, canceled, expire unexercised, (b) withheld or tendered to
satisfy tax withholding obligations, the aggregate Option Price on the exercise
of Options or the purchase price for any other Award, or (c) repurchased
by the Company, in each case, shall immediately become available for new
Awards.  If an Award is settled for cash
(in whole or in part) or otherwise does not result in the issuance of all or a
portion of the Shares subject to such Award (including in connection with
payment in Shares on exercise of a Stock Appreciation Right) such Shares shall,
to the extent of such cash settlement, immediately become available for new
Awards.

 

Awards
may, in the discretion of the Committee, be made under the Plan in assumption
of, or in substitution for, outstanding awards previously granted by the
Company or any of its 

 

3

 

Subsidiaries
or a company acquired by the Company or with which the Company combines.  The number of Shares underlying awards made
in assumption of, or in substitution for, outstanding awards previously granted
by a company acquired by the Company or any of its Subsidiaries or with which
the Company or any of its Subsidiaries combines shall not be counted against
the aggregate number of Shares available for Awards under the Plan, nor shall
the Shares subject to such substitute awards become available for new Awards
under the circumstances described in the prior paragraph of this Section 3.  In addition, in the event that a company
acquired by the Company or any of its Subsidiaries or with which the Company or
any of its Subsidiaries combines has shares available under a pre-existing plan
approved by shareholders and not adopted in contemplation of such acquisition
or combination, the shares available for grant pursuant to the terms of such
pre-existing plan (as adjusted, to the extent appropriate, using the exchange
ratio or other adjustment or valuation ratio or formula used in such
acquisition or combination to determine the consideration payable to the
holders of common stock of the entities party to such acquisition or
combination) may be used for Awards under the Plan and shall not reduce the
Shares authorized for issuance; provided that Awards using such available
shares shall not be made after the date awards or grants could have been made
under the terms of the pre-existing plan, absent the acquisition or
combination, and shall only be made to individuals who were not employees or
directors of the Company or any of its Subsidiaries prior to such acquisition
or combination.

 

4.                                       Administration

 

(a)                                 The Plan shall be administered by the Committee, which may
delegate its duties and powers in whole or in part to any subcommittee thereof
consisting solely of at least two individuals who are intended to qualify as “Non-Employee
Directors” within the meaning of Rule 16b-3 under the Act (or any
successor rule thereto), “independent directors” within the meaning of the
NASDAQ listed company rules and “outside directors” within the meaning of Section 162(m) of
the Code (or any successor section thereto), to the extent Rule 16b-3
under the Act and Section 162(m) of the Code, respectively, are
applicable to the Company and the Plan; provided, however, that
the Board may, in its sole discretion, take any action designated to the
Committee under this Plan as it may deem necessary.

 

(b)                                Subject to Section 17 of the Plan, the Committee is
authorized to (i) interpret the Plan, (ii) establish, amend and
rescind any rules and regulations relating to the Plan, and (iii) make
any other determinations that it deems necessary or desirable for the
administration of the Plan.  The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent the Committee deems
necessary or desirable.  Any decision of
the Committee in the interpretation and administration of the Plan, as
described herein, shall lie within its sole and absolute discretion and shall
be final, conclusive and binding on all parties concerned (including, but not
limited to, Participants and their beneficiaries or successors).  The Committee shall have the full power and
authority to establish the terms and conditions of any Award consistent with
the provisions of the Plan and to waive any such terms and conditions at any
time (including, without limitation, accelerating or waiving any vesting conditions).

 

(c)                                 The Committee shall require payment of any amount it may
determine to be necessary to withhold for federal, state, local or other taxes
as a result of the exercise, grant or 

 

4

 

vesting of an Award and the Company or
any of its Subsidiaries shall have the right and is authorized to withhold any
applicable withholding taxes in respect to the Award, its exercise or any
payment or transfer under or with respect to the Award 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. 
Unless the Committee specifies otherwise, the Participant may elect to
pay a portion or all of such withholding taxes by (i) delivery of Shares,
provided that such Shares have been held by the Participant for more than six (6) months
(or such other period as established by the Committee from time to time in
order to avoid adverse accounting treatment applying generally accepted accounting
principles) or (ii) with respect to minimum withholding amounts only,
having Shares with a Fair Market Value equal to the amount withheld by the
Company from any Shares that would have otherwise been received by the
Participant.

 

5.                                       Limitations

 

No Award may be granted
under the Plan after the tenth anniversary of the Effective Date, but Awards
theretofore granted may extend beyond that date.

 

6.                                       Terms and Conditions of Options

 

Options granted under the
Plan shall be non-qualified or incentive stock options for federal income tax
purposes, as determined by the Committee and evidenced by the related Award
agreements, and shall be subject to such other terms and conditions not
inconsistent therewith.  In addition to
the foregoing, except as otherwise determined by the Committee and evidenced by
the related Award agreements, the Options shall also be subject to the
following terms and conditions:

 

(a)                                  Option Price.  The Option Price per Share shall be
determined by the Committee, but shall not be less than 100% of the Fair Market
Value of a Share on the date an Option is granted (other than in the case of
Options granted in substitution of previously granted awards, as described in Section 3).

 

(b)                                Exercisability.  Options granted under the Plan shall be
exercisable at such time and upon such terms and conditions as may be
determined by the Committee, but in no event shall an Option be exercisable
more than ten years after the date it is granted.

 

(c)                                  Exercise of Options.  Except as otherwise provided in the 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 Section 6 of the Plan,
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 payment is
received by the Company pursuant to clauses (i), (ii), (iii), (iv) or (v) in
the following sentence.  The purchase
price for the Shares as to which an Option is exercised shall be paid to the
Company in full at the time of exercise at the election of the Participant (i) in
cash or its equivalent (e.g., by
check), (ii) to the extent permitted by the Committee, in Shares 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; provided, that such Shares have been held by the Participant for
more than six months (or such other period as established from time to time by
the Committee in order to avoid adverse accounting treatment applying generally
accepted accounting principles), (iii) partly in cash and, to the
extent 

 

5

 

permitted by the Committee, partly in
such Shares, (iv) if there is a public market for the Shares at such time,
to the extent permitted by, and subject to such rules as may be
established 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, or (v) through net settlement in Shares as
described in Section 4(c)(ii) above.  No Participant shall have any rights to
dividends or other rights of a shareholder with respect to Shares subject to an
Option until the Participant has given written notice of exercise of the
Option, paid in full for such Shares and, if applicable, has satisfied any
other conditions imposed by the Committee pursuant to the Plan.

 

(d)                                ISOs.  The Committee may grant Options under the
Plan that are intended to be ISOs.  Such
ISOs shall comply with the requirements of Section 422 of the Code (or any
successor section thereto).  No ISO may
be granted to any Participant who at the time of such grant, owns more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or of any of its Subsidiaries, unless (i) the Option Price for such
ISO is at least 110% of the Fair Market Value of a Share on the date the ISO is
granted and (ii) the date on which such ISO terminates is a date not later
than the day preceding the fifth anniversary of the date on which the ISO is
granted.  Any Participant who disposes of
Shares acquired upon the exercise of an ISO either (x) within two years
after the date of grant of such ISO or (y) within one year after the
transfer of such Shares to the Participant, shall notify the Company of such
disposition and of the amount realized upon such disposition.  All Options granted under the Plan are
intended to be nonqualified stock options, unless the applicable Award
agreement expressly states that the Option is intended to be an ISO.  If an Option is intended to be an ISO, and,
if for any reason such Option (or portion thereof) shall not qualify as an ISO,
then, to the extent of such nonqualification, such Option (or portion thereof)
shall be regarded as a nonqualified stock option granted under the Plan; provided
that such Option (or portion thereof) otherwise complies with the Plan’s
requirements relating to nonqualified stock options.  In no event shall any member of the
Committee, the Company or any of its Subsidiaries (or their respective
employees, officers or directors) have any liability to any Participant (or any
other Person) due to the failure of an Option to qualify for any reason as an
ISO.

 

(e)                                 Attestation.  Wherever in this Plan or any agreement
evidencing an Award a Participant is permitted to pay the Option Price of an
Option or taxes relating to the exercise of an Option by delivering Shares, the
Participant may, subject to procedures satisfactory to the Committee, satisfy
such delivery requirement by presenting proof of beneficial ownership of such Shares,
in which case the Company shall treat the Option as exercised without further
payment and shall withhold such number of Shares from the Shares acquired by
the exercise of the Option.

 

(f)                                    Repricing of Options.  Notwithstanding
any provision herein to the contrary, the repricing of an Option, once granted
hereunder, is prohibited without prior approval of the Company’s shareholders.
For this purpose, a “repricing” means any of the following (or any other action
that has the same effect as any of the following): (i) changing the terms
of an Option to lower the Option Price; (ii) any other action that is
treated as a “repricing” under generally accepted accounting principles; and (iii) repurchasing
for cash or canceling an Option at a time when the Option Price is greater than
the Fair Market Value of the underlying Shares in 

 

6

 

exchange for another Award, unless the
cancellation and exchange occurs in connection with a change in capitalization
or similar change permitted under Section 10(a) below.  Such cancellation and exchange would be
considered a “repricing” regardless of whether it is treated as a “repricing”
under generally accepted accounting principles and regardless of whether it is
voluntary on the part of the Participant.

 

7.                                       Terms and Conditions of Stock Appreciation Rights

 

(a)                                 Grants.  The Committee also may grant (i) a Stock
Appreciation Right independent of an Option or (ii) a Stock Appreciation
Right in connection with an Option, or a portion thereof.  A Stock Appreciation Right granted pursuant
to clause (ii) of the preceding sentence (A) may be granted at
the time the related Option is granted or at any time prior to the exercise or
cancellation of the related Option, (B) shall cover the same number of
Shares covered by an Option (or such lesser number of Shares as the Committee
may determine) and (C) shall be subject to the same terms and conditions
as such Option except for such additional limitations as are contemplated by
this Section 7 (or such additional limitations as may be included in an
Award agreement).

 

(b)                                Terms.  The exercise price per Share of a Stock
Appreciation Right shall be an amount determined by the Committee but in no
event shall such amount be less than 100% of the Fair Market Value of a Share
on the date the Stock Appreciation Right is granted (other than in the case of
Stock Appreciation Rights granted in substitution of previously granted awards,
as described in Section 3); provided, however, that in the
case of a Stock Appreciation Right granted in conjunction with an Option, or a
portion thereof, the exercise price may not be less than the Option Price of
the related Option.  Each Stock
Appreciation Right granted independent of an Option shall entitle a Participant
upon exercise to an amount equal to (i) the excess of (A) the Fair
Market Value on the exercise date of one Share over (B) the exercise price
per Share, times (ii) the number of Shares covered by the Stock
Appreciation Right.  Each Stock
Appreciation Right granted in conjunction with an Option, or a portion thereof,
shall entitle a Participant to surrender to the Company the unexercised Option,
or any portion thereof, and to receive from the Company in exchange therefor an
amount equal to (i) the excess of (A) the Fair Market Value on the
exercise date of one Share over (B) the Option Price per Share, times (ii) the
number of Shares covered by the Option, or portion thereof, which is
surrendered.  The date a notice of
exercise is received by the Company shall be the exercise date.  Payment to the Participant shall be made in
Shares or in cash, or partly in Shares and partly in cash (any such Shares
valued at such Fair Market Value), all as shall be determined by the Committee.  Stock Appreciation Rights may be exercised
from time to time upon actual receipt by the Company of written notice of
exercise stating the number of Shares with respect to which the Stock
Appreciation Right is being exercised. 
No fractional Shares will be issued in payment for Stock Appreciation
Rights, but instead cash will be paid for a fraction or, if the Committee
should so determine, the number of Shares will be rounded downward to the next
whole Share.

 

(c)                                 Limitations.  The Committee may impose, in its discretion,
such conditions upon the exercisability or transferability of Stock
Appreciation Rights as it may deem fit, but in no event shall a Stock
Appreciation Right be exercisable more than ten years after the date it is
granted.

 

7

 

(d)                                 Repricing of Stock Appreciation Rights.  Notwithstanding any provision herein to the contrary, the
repricing of a Stock Appreciation Right, once granted hereunder, is prohibited
without prior approval of the Company’s shareholders. For this purpose, a “repricing”
means any of the following (or any other action that has the same effect as any
of the following): (i) changing the terms of a Stock Appreciation Right to
lower its exercise price; (ii) any other action that is treated as a “repricing”
under generally accepted accounting principles; and (iii) repurchasing for
cash or canceling a Stock Appreciation Right at a time when its exercise price
is greater than the Fair Market Value of the underlying Shares in exchange for
another Award, unless the cancellation and exchange occurs in connection with a
change in capitalization or similar change permitted under Section 10(a) below.  Such cancellation and exchange would be
considered a “repricing” regardless of whether it is treated as a “repricing”
under generally accepted accounting principles and regardless of whether it is
voluntary on the part of the Participant.

 

8.                                       Other Stock-Based Awards

 

The Committee, in its sole discretion,
may grant or sell Awards of Shares, Awards of restricted 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 (such Awards, “Other Stock-Based Awards”).  Such Other Stock-Based Awards shall be in
such form, and dependent on such conditions, as the Committee shall determine,
including, without limitation, the right to receive, or vest with respect to,
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. 
Other Stock-Based Awards may be granted alone or in addition to any
other Awards granted under the Plan. 
Subject to the provisions of the 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).

 

9.                                       Performance-Based Awards

 

During
any period when Section 162(m) of the Code is applicable to the
Company and the Plan, the Committee, in its sole discretion, may grant Awards
which are denominated in Shares or cash (such Awards, “Performance-Based
Awards”), which Awards may, but for the avoidance of doubt are not required
to, be granted in a manner which is intended to be deductible by the Company
under Section 162(m) of the Code (or any successor section
thereto).  Such Performance-Based Awards
shall be in such form, and dependent on such conditions, as the Committee shall
determine, including, without limitation, the right to receive, or vest with
respect to, one or more Shares or the cash value of the Award upon the
completion of a specified period of service, the occurrence of an event and/or
the attainment of performance objectives. 
Performance-Based Awards may be granted alone or in addition to any
other Awards granted under the Plan. 
Subject to the provisions of the Plan, the Committee shall determine to
whom and when Performance-Based Awards will be made, the number of Shares or
aggregate amount of cash to be awarded under (or otherwise related to) such
Performance-Based Awards, whether such Performance-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 

 

8

 

vesting
provisions thereof and provisions ensuring that all Shares so awarded and
issued, to the extent applicable, shall be fully paid and non-assessable).

 

A
Participant’s Performance-Based Award shall be determined based on the
attainment of written performance goals approved by the Committee for a
performance period established by the Committee (i) while the outcome for
that performance period is substantially uncertain and (ii) no more than
90 days after the commencement of the performance period to which the
performance goal relates or, if less, the number of days which is equal to 25
percent of the relevant performance period. 
The performance goals, which must be objective, shall be based upon one
or more of the following criteria: (i) consolidated income before or after
taxes (including income before interest, taxes, depreciation and amortization);
(ii) EBITDA; (iii) adjusted EBITDA; (iv) operating income; (v) net
income; (vi) net income per Share; (vii) book value per Share; (viii) return
on members’ or shareholders’ equity; (ix) expense management; (x) return
on investment; (xi) improvements in capital structure; (xii) profitability of
an identifiable business unit or product; (xiii) maintenance or improvement of
profit margins; (xiv) stock price; (xv) market share; (xvi) revenue or sales;
(xvii) costs; (xviii) cash flow; (xix) working capital; (xx) multiple of
invested capital; (xxi) total return; and (xxii) such other objective
performance criteria as determined by the Committee in its sole
discretion.  The foregoing criteria may
relate to the Company, one or more of its Subsidiaries or one or more of its or
their divisions or units, or any combination of the foregoing, and may be
applied on an absolute basis and/or be relative to one or more peer group
companies or indices, or any combination thereof, all as the Committee shall
determine.  In addition, to the degree
consistent with Section 162(m) of the Code (or any successor section
thereto), the performance goals may be calculated without regard to
extraordinary items.  The maximum amount
of a Performance-Based Award during a fiscal year to any Participant shall be: (x) with
respect to Performance-Based Awards that are denominated in Shares, 300,000 Shares and (y) with
respect to Performance-Based Awards that are denominated in cash, $4
million.  The Committee shall determine
whether, with respect to a performance period, the applicable performance goals
have been met with respect to a given Participant and, if they have, during any
period when Section 162(m) of the Code is applicable to the Company
and the Plan and such Performance-Based Award is intended to be deductible by
the Company under Section 162(m) of the Code, shall so certify and
ascertain the amount of the applicable Performance-Based Award.  No Performance-Based Awards will be paid for
such performance period until such certification, to the extent applicable, is
made by the Committee.  The amount of the
Performance-Based Award actually paid to a given Participant may be less than
the amount determined by the applicable performance goal formula, at the
discretion of the Committee.  The amount
of the Performance-Based Award determined by the Committee for a performance
period shall be paid to the Participant at such time as determined by the
Committee in its sole discretion after the end of such performance period;
provided, however, that a Participant may, if and to the extent permitted by
the Committee and consistent with the provisions of Sections 162(m) and
409A of the Code, to the extent applicable, elect to defer payment of a
Performance-Based Award.

 

10.                                 Adjustments Upon Certain Events

 

Notwithstanding any other
provisions in the Plan to the contrary, the following provisions shall apply to
all Awards granted under the Plan:

 

9

 

(a)                                 Generally.  In the event of any change in the outstanding
Shares after the Effective Date by reason of any Share dividend or split,
reorganization, recapitalization, merger, consolidation, spin-off, combination,
combination or transaction or exchange of Shares or other corporate exchange,
or any distribution to shareholders other than regular cash dividends or any
transaction similar to the foregoing, the Committee in its sole discretion and
without liability to any Person shall make such substitution or adjustment, if
any, as it deems to be equitable (subject to Section 21), as to (i) the
number or kind of Shares or other securities issued or reserved for issuance
pursuant to the Plan or pursuant to outstanding Awards, (ii) the maximum
number of Shares for which Options or Stock Appreciation Rights may be granted
during a fiscal year to any Participant, (iii) the maximum amount of a
Performance Based Award that may be granted during a fiscal year to any
Participant, (iv) the Option Price or exercise price of any Award and/or (v) any
other affected terms of such Awards.

 

(b)                                Change in Control.
In the event of a Change in Control after the Effective Date, (i) if
determined by the Committee in the applicable Award agreement or otherwise, any
outstanding Awards then held by Participants which are unexercisable or
otherwise unvested or subject to lapse restrictions shall  automatically be deemed exercisable or
otherwise vested or no longer subject to lapse restrictions, as the case may
be, as of immediately prior to such Change in Control and (ii) the
Committee may (subject to Section 21), but shall not be obligated to,
provide for the issuance of substitute Awards that will substantially preserve
the otherwise applicable terms of any affected Awards previously granted
hereunder, including without limitation, any applicable vesting conditions
(such Awards, “Substitute Awards”), as determined by the Committee in
its sole discretion; provided, however, that if the Committee does not provide
for the issuance of  Substitute Awards,
it may (subject to Section 21), but shall not be obligated to, (A) cancel
Awards for fair value (as determined in the sole discretion of the Committee),
to the extent permitted under Section 409A of the Code, which, in the case
of Options and Stock Appreciation Rights, may equal the excess, if any, of
value of the consideration to be paid in the Change in Control transaction to
holders of the same number of Shares subject to such Options or Stock
Appreciation Rights (or, if no consideration is paid in any such transaction,
the Fair Market Value of the Shares subject to such Options or Stock Appreciation
Rights) over the aggregate Option Price or exercise price of such Options or
Stock Appreciation Rights, or (B) provide that for a period of at least 15
days prior to the Change in Control, such Awards shall be exercisable, to the
extent applicable, as to all Shares subject thereto and the Committee may
further provide that upon the occurrence of the Change in Control, such Awards
shall terminate and be of no further force and effect.  For the avoidance of doubt, pursuant to (A) above,
the Committee may cancel Options and Stock Appreciation Rights for no
consideration if the aggregate Fair Market Value of the Shares subject to such
Options or Stock Appreciation Rights is less than or equal to the aggregate
Option Price of such Options or exercise price
of such Stock Appreciation Rights.

 

11.                                 Forfeiture/Clawback

 

The Committee may,
in its sole discretion, specify in an Award that the Participant’s rights,
payments, and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture or recoupment upon the occurrence of certain specified
events, in addition to any otherwise applicable vesting or performance
conditions of an Award. Such events may include, but shall not be limited to,
termination of Employment for cause, termination of the Participant’s 

 

10

 

provision of
services to the Company or any of its Subsidiaries, breach of noncompetition,
confidentiality, or other restrictive covenants that may apply to the
Participant, or restatement of the Company’s financial statements to reflect
adverse results from those previously released financial statements, as a
consequence of errors, omissions, fraud, or misconduct.

 

12.                                 No Right to Employment or Awards

 

The granting of an Award under
the Plan shall impose no obligation on the Company or any of its Subsidiaries
to continue the Employment of a Participant and shall not lessen or affect the
Company’s or any Subsidiary’s right to terminate the Employment 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).

 

13.                                 Certificates

 

All
certificates, if any, evidencing Shares or other securities of the Company
delivered under the Plan pursuant to any Award or the exercise thereof shall be
subject to such stop transfer orders and other restrictions as the Committee
may deem advisable under the Plan or the rules, regulations, and other
requirements of the Securities and Exchange Commission or other applicable
governmental authority, any stock exchange or market upon which such securities
are then listed, admitted or quoted, as applicable, and any applicable Federal,
state or any other applicable laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to
such restrictions.

 

14.                                 Other Laws

 

The
Committee may refuse to issue or transfer any Shares or other consideration
under an Award if, acting in its sole discretion, it determines that the
issuance or transfer of such Shares or such other consideration might violate
any applicable law or regulation and any payment tendered to the Company  by a Participant, other holder or
beneficiary in connection with the exercise of such Award shall be promptly
refunded to the relevant Participant, holder or beneficiary.  Without limiting the generality of the
foregoing, no Award granted hereunder shall be construed as an offer to sell
securities of the Company, and no such offer shall be outstanding, unless and
until the Committee in its sole discretion has determined that any such offer,
if made, would be in compliance with all applicable requirements of applicable
securities laws, including, without limitation, laws of the United States (and
any state thereof), and England.

 

15.                                 Successors and Assigns

 

The Plan shall be binding on
all successors and assigns of the Company and a Participant, including without
limitation, the estate of such Participant and the executor, administrator or
trustee of such estate, or any receiver or trustee in bankruptcy or
representative of the Participant’s creditors.

 

11

 

16.                                 Nontransferability of Awards

 

Unless otherwise determined
by the Committee, an Award shall not be transferable or assignable by the
Participant otherwise than by will or by the laws of descent and
distribution.  An Award exercisable after
the death of a Participant may be exercised by the legatees, personal
representatives or distributees of the Participant.

 

17.                                 Amendments or Termination

 

The Board may amend, alter
or discontinue the Plan, but no amendment, alteration or discontinuation shall
be made, (a) without the approval of the shareholders of the Company to
the extent such approval is (x) required by or (y) desirable to
satisfy the requirements of, in each case, any applicable law, regulation or
other rule, including, the listing standards of the securities exchange, which
is, at the applicable time, the principal market for the Shares or (b) without
the consent of a Participant, if such action would materially adversely affect
any of the rights of the Participant under any Award theretofore granted to
such Participant under the Plan; provided, however, that the Committee may amend
the Plan in such manner as it deems necessary to permit the granting of Awards
meeting the requirements of the Code or other applicable laws (including,
without limitation, to avoid adverse tax or accounting consequences to the
Company or to Participants).

 

18.                                 International Participants

 

With respect to Participants
who reside or work outside the United States of America and who are not (and
who are not expected to be) “covered employees” within the meaning of Section 162(m) of
the Code, the Committee may, in its sole discretion, amend the terms of the
Plan or Awards with respect to such Participants in order to conform such terms
with the requirements of local law or to obtain more favorable tax or other
treatment for a Participant, the Company or a Subsidiary.

 

19.                                 Choice of Law

 

The Plan shall be governed
by and construed in accordance with the laws of the State of Delaware without
regard to conflicts of laws.

 

20.                                 Effectiveness of the Plan

 

The Plan shall be effective as of the Effective Date,
subject to the approval of the shareholders of the Company.

 

21.                                 Section 409A

 

To the extent applicable,
this Plan and all Awards granted hereunder are intended to comply with Section 409A
of the Code and will be interpreted in a manner intended to comply with Section 409A
of the Code.  References under the Plan or an Award to the
Participant’s termination of Employment shall be deemed to refer to the date
upon which the Participant has experienced a “separation from service” within
the meaning of Section 409A of the Code. 
Notwithstanding anything herein to the contrary, (i) if at the
time of the Participant’s separation from service with any Service Recipient
the Participant is a “specified employee” as defined in Section 409A of
the 

 

12

 

Code, and the deferral of
the commencement of any payments or benefits otherwise payable hereunder as a
result of such separation from service is necessary in order to prevent the
imposition of any accelerated or additional tax under Section 409A of the
Code, then the Company will defer the commencement of the payment of any such
payments or benefits hereunder (without any reduction in such payments or
benefits ultimately paid or provided to the Participant) to the minimum extent
necessary to satisfy Section 409A of the Code until the date that is six
months and one day following the Participant’s separation from service with all Service Recipients
(or the earliest date as is permitted under Section 409A of the Code), if
such payment or benefit is payable upon a termination of Employment and (ii) if
any other payments of money or other benefits due to the Participant hereunder
would cause the application of an accelerated or additional tax under Section 409A
of the Code, such payments or other benefits shall be deferred, if deferral
will make such payment or other benefits compliant under Section 409A of
the Code, or otherwise such payment or other benefits shall be restructured, to
the minimum extent necessary, in a manner, reasonably determined by the Board,
that does not cause such an accelerated or additional tax or result in an
additional cost to the Company (without any reduction in such payments or
benefits ultimately paid or provided to the Participant).

 

13

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