Document:

EX-10.1

 Exhibit 10.1 
 UNITED SECURITY BANCSHARES, INC. 
 2013 INCENTIVE PLAN 

Effective March 22, 2013 

 UNITED SECURITY BANCSHARES, INC. 

2013 INCENTIVE PLAN 
  

	1.	Purpose; Eligibility. 

 1.1 General Purpose. The name of the Plan is the United Security Bancshares, Inc. 2013 Incentive Plan. The purposes of the Plan are to (a) enable the Company and any Affiliate to attract and
retain the types of Employees, Consultants and Directors who will contribute to the Company’s long range success; (b) provide incentives that align the interests of Employees, Consultants and Directors with those of the shareholders of the
Company; and (c) promote the success of the Company’s business. 
 1.2 Eligible Award
Recipients. The persons eligible to receive Awards are the Employees, Consultants and Directors of the Company and its Affiliates and such other individuals designated by the Committee who are reasonably expected to become Employees, Consultants
and Directors after the receipt of Awards. 
 1.3 Available Awards. Awards that may be granted under the
Plan include: (a) Incentive Stock Options, (b) Nonqualified Stock Options, (c) Stock Appreciation Rights, (d) Restricted Awards and (e) Performance Compensation Awards. 

 

	2.	Definitions. 

“Affiliate” means a corporation or other entity that, directly or through one or more intermediaries, controls, is
controlled by or is under common control with, the Company; provided, that the entity is one with respect to which Common Stock will qualify as “service recipient stock” under Section 409A of the Code. 

“Applicable Laws” means the requirements related to or implicated by the administration of the Plan under
applicable state corporate law, United States federal and state banking and securities laws, the Code, the rules of any stock exchange or quotation system on which the shares of Common Stock are listed or quoted, and the applicable laws of any other
jurisdiction where Awards are granted under the Plan. 
 “Award” means any right granted under the Plan,
including an Incentive Stock Option, a Nonqualified Stock Option, a Stock Appreciation Right, a Restricted Award or a Performance Compensation Award. 
 “Award Agreement” means a written agreement, contract, certificate or other instrument or document evidencing the terms and conditions of an individual Award granted under the Plan
which may, in the discretion of the Company, be transmitted electronically to any Participant. Each Award Agreement shall be subject to the terms and conditions of the Plan. 
 “Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular
“person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” shall be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is exercisable only after the passage of time. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning. 

“Board” means the Board of Directors of the Company, as constituted from time to time. 

“Cause” means: 
 With respect to any Employee or Consultant: (a) if the employee is a party to an employment or service agreement with the Company or its Affiliates and such agreement provides for a definition of
Cause, the definition contained therein; or (b) if no such agreement exists, or if such agreement does not define Cause: (i) the commission of, or plea of guilty or no contest to, a felony or a crime involving moral turpitude or the
commission of any other act involving willful malfeasance or material fiduciary breach with respect to the Company or an Affiliate; (ii) conduct that results in or is reasonably likely to result in harm to the reputation or business of the
Company or any of its Affiliates; (iii) gross negligence or willful misconduct with respect to the 

 
Company or an Affiliate; (iv) material violation of state or federal banking or securities laws; or (v) conduct that results in the suspension or removal of the employee from his
position as an officer, director or employee of the Company or any Affiliate pursuant to an order or requirement by any regulatory agency with authority or jurisdiction over the Company or any such Affiliate. 

With respect to any Director, a determination by a majority of the disinterested Board members that the Director has engaged in any of
the following: (a) malfeasance in office; (b) gross conduct or neglect; (c) false or fraudulent misrepresentation inducing the director’s appointment; (d) wilful conversion of corporate funds; or (e) repeated failure to
participate in Board meetings on a regular basis despite having received proper notice of the meetings in advance. 
 The
Committee, in its absolute discretion, shall determine the effect of all matters and questions relating to whether a Participant has been discharged for Cause. 
 “Change in Control” means: (a) one person (or more than one person acting as a group) acquires ownership of stock of the Company that, together with the stock held by such
person or group, constitutes more than fifty percent (50%) of the total fair market value or total voting power of the stock of the Company; provided, however, that a Change in Control shall not occur if any person (or more than
one person acting as a group) owns more than fifty percent (50%) of the total fair market value or total voting power of the Company’s stock and acquires additional stock; (b) one person (or more than one person acting as a group)
acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) ownership of the Company’s stock possessing thirty percent (30%) or more of the total voting power of the stock of such
corporation; (c) a majority of the members of the Board are replaced during any twelve-month period by directors whose appointment or election is not endorsed by a majority of the Board before the date of appointment or election; or
(d) one person (or more than one person acting as a group), acquires (or has acquired during the twelve-month period ending on the date of the most recent acquisition) assets from the Company that have a total gross fair market value equal to
or more than forty percent (40%) of the total gross fair market value of all of the assets of the Company before such acquisition. 
 “Code” means the Internal Revenue Code of 1986, as it may be amended from time to time. Any reference to a section of the Code shall be deemed to include a reference to any
regulations promulgated thereunder. 
 “Committee” means a committee of one or more members of the Board
appointed by the Board to administer the Plan in accordance with Section 3. 
 “Common
Stock” means the common stock, $0.01 par value per share, of the Company, or such other securities of the Company as may be designated by the Committee from time to time in substitution thereof. 

“Company” means United Security Bancshares, Inc., a Delaware corporation, and any successor thereto. 

“Consultant” means any individual who is engaged by the Company or any Affiliate to render consulting or advisory
services. 
 “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Consultant or Director, is not interrupted or terminated. The Participant’s Continuous Service shall not be deemed to have terminated merely because of a change in the capacity in which the Participant renders
service to the Company or an Affiliate as an Employee, Consultant or Director or a change in the entity for which the Participant renders such service; provided, however, that there is no interruption or termination of the
Participant’s Continuous Service; provided further, that, if any Award is subject to Section 409A of the Code, this sentence shall only be given effect to the extent consistent with a “separation from service,” as
defined under Section 409A of the Code. The Committee or its delegate, in its sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence approved by that party, including sick
leave, military leave or any other personal or family leave of absence. 

 “Covered Employee” has the same meaning as set forth in
Section 162(m)(3) of the Code, as interpreted by Internal Revenue Service Notice 2007-49. 

“Director” means a member of the Board or the board of directors of any Affiliate. 

“Disability” means that the Participant is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment; provided, however, that for purposes of determining the term of an Incentive Stock Option pursuant to Section 6.10 hereof, the term Disability shall have the meaning
ascribed to it under Section 22(e)(3) of the Code. The determination of whether an individual has a Disability shall be determined under procedures established by the Committee. Except in situations where the Committee is determining Disability
for purposes of the term of an Incentive Stock Option pursuant to Section 6.10 hereof within the meaning of Section 22(e)(3) of the Code, the Committee may rely on any determination that a Participant is disabled for purposes of
benefits under any long-term disability plan maintained by the Company or any Affiliate in which a Participant participates; provided, however, that, if any Award is subject to Section 409A of the Code, Disability shall only be
given effect to the extent consistent with a “disability,” as defined under Section 409A of the Code. 

“Disqualifying Disposition” has the meaning set forth in Section 14.11. 

“Dividend Equivalents” has the meaning set forth in Section 7.2(b)(ii). 

“Effective Date” shall mean the date as of which the Plan is adopted by the Board, subject to approval by the
Company’s shareholders at the 2013 Annual Meeting of Shareholders. 
 “Employee” means any person,
including an Officer or Director, employed by the Company or an Affiliate; provided, however, that, for purposes of determining eligibility to receive Incentive Stock Options, an Employee shall mean an employee of the Company or a
parent or subsidiary corporation within the meaning of Section 424 of the Code. Mere service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “employment” by the
Company or an Affiliate. 
 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

 “Fair Market Value” means, as of any date, the value of the Common Stock as determined below. If the
Common Stock is listed on any established stock exchange or a national market system, including, without limitation, the NASDAQ Stock Market, the Fair Market Value shall be the closing price of a share of Common Stock (or if no sales were reported
the closing price on the date immediately preceding such date) as quoted on such exchange or system on the day of determination, as reported in the Wall Street Journal or such other source as the Committee deems reliable. In the absence of an
established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Committee in accordance with Section 409A of the Code, and such determination shall be conclusive and binding on all persons. 

“Free Standing Rights” has the meaning set forth in Section 7.1(a). 

“Grant Date” means the date on which the Committee adopts a resolution, or takes other appropriate action,
expressly granting an Award to a Participant that specifies the key terms and conditions of the Award or, if a later date is set forth in such resolution, then such date as is set forth in such resolution. 

“Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code. 
 “Negative Discretion” means the discretion authorized by the Plan to be
applied by the Committee to eliminate or reduce the size of a Performance Compensation Award in accordance with Section 7.3(d)(iv) of the Plan; provided, that the exercise of such discretion would not cause the Performance
Compensation Award to fail to qualify as “performance-based compensation” under Section 162(m) of the Code. 

 “Non-Employee Director” means a Director who is a “non-employee
director” within the meaning of Rule 16b-3. 
 “Nonqualified Stock Option” means an Option that by
its terms does not qualify or is not intended to qualify as an Incentive Stock Option. 
 “Officer” means
a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
 “Option” means an Incentive Stock Option or a Nonqualified Stock Option granted pursuant to the Plan. 
 “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option. 

“Option Exercise Price” means the price at which a share of Common Stock may be purchased upon the exercise of an
Option. 
 “Outside Director” means a Director who is an “outside director” within the meaning
of Section 162(m) of the Code and Treasury Regulations Section 1.162-27(e)(3) or any successor to such statute and regulation. 
 “Participant” means an eligible person to whom an Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Award. 

“Performance Compensation Award” means any Award designated by the Committee as a Performance Compensation Award
pursuant to Section 7.3 of the Plan. 
 “Performance Criteria” means the criterion or criteria
that the Committee shall select for purposes of establishing the Performance Goal(s) for a Performance Period with respect to any Performance Compensation Award under the Plan. The Performance Criteria that will be used to establish the Performance
Goal(s) shall be based on the attainment of specific levels of performance of the Company (or Affiliate, division, business unit or operational unit of the Company). With respect to the establishment of the Performance Goal(s) for Covered Employees,
the Performance Criteria shall be limited to the following: (a) net earnings or net income (before or after taxes); (b) basic or diluted earnings per share (before or after taxes); (c) net revenue or net revenue growth; (d) gross
revenue; (e) gross profit or gross profit growth; (f) net operating profit (before or after taxes); (g) return on assets, capital, invested capital, equity, or sales; (h) cash flow (including, but not limited to, operating cash
flow, free cash flow, and cash flow return on capital); (i) earnings before or after taxes, interest, depreciation and/or amortization; (j) gross or operating margins; (k) improvements in capital structure; (l) budget and expense
management; (m) productivity ratios; (n) economic value added or other value added measurements; (o) share price (including, but not limited to, growth measures and total shareholder return); (p) expense targets;
(q) margins; (r) operating efficiency; (s) working capital targets; (t) enterprise value; and (u) completion of acquisitions or business expansion. For all other Participants, the Performance Criteria shall include such
other or different criteria as the Committee may deem appropriate. 
 Any one or more of the Performance Criteria may be used on
an absolute or relative basis to measure the performance of the Company and/or an Affiliate as a whole or any division, business unit or operational unit of the Company and/or an Affiliate or any combination thereof, as the Committee may deem
appropriate, or as compared to the performance of a group of comparable companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Committee may select Performance Criterion (o) above as
compared to various stock market indices. The Committee also has the authority to provide for accelerated vesting of any Award based on the achievement of Performance Goals pursuant to the Performance Criteria specified in this paragraph. To the
extent required under Section 162(m) of the Code, the Committee shall, within the first ninety (90) days of a Performance Period (or, if longer or shorter, within the maximum 

 
period allowed under Section 162(m) of the Code), define in an objective fashion the manner of calculating the Performance Criteria that it selects to use for such Performance Period. In the
event that applicable tax and/or securities laws change to permit the Committee discretion to alter the governing Performance Criteria without obtaining shareholder approval of such changes, the Committee shall have sole discretion to make such
changes without obtaining shareholder approval. 
 “Performance Formula” means, for a Performance Period,
the one or more objective formulas applied against the relevant Performance Goal to determine, with regard to the Performance Compensation Award of a particular Participant, whether all, some portion but less than all, or none of the Performance
Compensation Award has been earned for the Performance Period. 
 “Performance Goals” means, for a
Performance Period, the one or more goals established by the Committee for the Performance Period based upon the Performance Criteria. The Committee is authorized at any time during the first ninety (90) days of a Performance Period (or, if
longer or shorter, within the maximum period allowed under Section 162(m) of the Code), or at any time thereafter (but only to the extent the exercise of such authority after such period would not cause the Performance Compensation Awards
granted to any Participant for the Performance Period to fail to qualify as “performance-based compensation” under Section 162(m) of the Code), in its sole and absolute discretion, to adjust or modify the calculation of a Performance
Goal for such Performance Period to the extent permitted under Section 162(m) of the Code in order to prevent the dilution or enlargement of the rights of Participants based on the following events: (a) asset write-downs;
(b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles or other laws or regulatory rules affecting reported results; (d) any reorganization and restructuring programs;
(e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 (or any successor or pronouncement thereto) and/or in management’s discussion and analysis of financial condition and results of
operations appearing in the Company’s annual report to shareholders for the applicable year; (f) acquisitions or divestitures; (g) any other specific unusual or nonrecurring events, or objectively determinable category thereof; and
(h) a change in the Company’s fiscal year. 
 “Performance Period” means the one or more periods
of time, not less than one fiscal quarter, in duration, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to and the payment of a
Performance Compensation Award. 
 “Permitted Transferee” means, unless otherwise authorized by the
Committee (or the Board, as the case may be) in an Award Agreement, a member of the Optionholder’s immediate family (child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law, including adoptive relationships), any person sharing the Optionholder’s household (other than a tenant or employee), a trust in which these persons have more than
fifty percent (50%) of the beneficial interest, a foundation in which these persons (or the Optionholder) control the management of assets, and any other entity in which these persons (or the Optionholder) own more than fifty percent
(50%) of the voting interests. 
 “Plan” means this United Security Bancshares, Inc. 2013 Incentive
Plan, as amended and/or amended and restated from time to time. 
 “Related Rights” has the meaning set
forth in Section 7.1(a). 
 “Restricted Award” means any Award granted pursuant to
Section 7.2. 
 “Restricted Period” has the meaning set forth in Section 7.2(a).

 “Restricted Stock” has the meaning set forth in Section 7.2(a). 

 “Restricted Stock Unit” has the meaning set forth in Section 7.2(a).

 “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor to Rule 16b-3, as in
effect from time to time. 
 “Securities Act” means the Securities Act of 1933, as amended. 

“Stock Appreciation Right” means the right pursuant to an Award granted under Section 7.1 to receive,
upon exercise, an amount payable in cash or shares equal to the number of shares subject to the Stock Appreciation Right that is being exercised multiplied by the excess of (a) the Fair Market Value of a share of Common Stock on the date the
Award is exercised over (b) the exercise price specified in the Stock Appreciation Right Award Agreement. 
 “Stock
for Stock Exchange” has the meaning set forth in Section 6.4. 
 “Ten Percent
Shareholder” means a person who owns (or is deemed to own pursuant to Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or of
any of its Affiliates. 
 “Vested Unit” has the meaning set forth in Section 7.2(e). 

 

	3.	Administration. 

 3.1 Authority of the Committee. The Plan shall be administered by the Committee or, in the Board’s sole discretion, by the Board. Subject to the terms of the Plan, the Committee’s charter
and Applicable Laws, and in addition to other express powers and authorization conferred by the Plan, the Committee (or the Board, as the case may be) shall have the authority: 

(a) to construe and interpret the Plan and apply its provisions; 

(b) to promulgate, amend and rescind rules and regulations relating to the administration of the Plan; 

(c) to authorize any person to execute, on behalf of the Company, any instrument required to carry out the purposes of the
Plan; 
 (d) to delegate its authority to one or more Officers of the Company with respect to Awards that do not
involve Covered Employees or “insiders” within the meaning of Section 16 of the Exchange Act; 

(e) to determine when Awards are to be granted under the Plan and the applicable Grant Date; 

(f) to select, subject to the limitations set forth in the Plan, those Participants to whom Awards shall be granted;

 (g) to determine the number of shares of Common Stock, if any, to be made subject to each Award; 

(h) to determine whether each Option is to be an Incentive Stock Option or a Nonqualified Stock Option; 

(i) to prescribe the terms and conditions of each Award, including, without limitation, the exercise price and medium of
payment and vesting provisions, and to specify the provisions of the Award Agreement relating to such grant; 

(j) to designate an Award (including a cash bonus) as a Performance Compensation Award and to select the Performance
Criteria that will be used to establish the Performance Goals; 
 (k) to amend any outstanding Awards, including
for the purpose of modifying the time or manner of vesting, or the term of any outstanding Award; provided, however, that, if any such amendment impairs a Participant’s rights or increases a Participant’s obligations under
his or her Award or creates or increases a Participant’s federal income tax liability with respect to an Award, such amendment shall also be subject to the Participant’s consent; 

 (l) to determine the duration and purpose of leaves of absences that may be
granted to a Participant without constituting termination of their employment for purposes of the Plan, which periods shall be no shorter than the periods generally applicable to Employees under the Company’s employment policies; 

(m) to make decisions with respect to outstanding Awards that may become necessary upon a change in corporate control or
an event that triggers anti-dilution adjustments; 
 (n) to interpret, administer, reconcile any inconsistency
in, correct any defect in and/or supply any omission in the Plan and any instrument or agreement relating to, or Award granted under, the Plan; and 
 (o) to exercise discretion to make any and all other determinations that it determines to be necessary or advisable for the administration of the Plan. 

The Committee also may modify the purchase price or the exercise price of any outstanding Award, including cash buyouts,
cancellations, substitutions and exchanges; provided, however, that, if the modification effects a repricing, shareholder approval shall be required before the repricing is effective. 

3.2 Committee Decisions Final. All decisions made by the Committee (or the Board, as the case may be) pursuant to
the provisions of the Plan shall be final and binding on the Company and the Participants, unless such decisions are determined by a court having jurisdiction to be arbitrary and capricious. 

3.3 Delegation. The Committee, or if no committee has been appointed, the Board, may delegate administration of the
Plan to a committee or committees of one or more members of the Board, and the term “Committee” shall apply to any person or persons to whom such authority has been delegated. The Committee shall have the power to delegate to a
subcommittee any of the administrative powers that the Committee is authorized to exercise (and references in the Plan to the Board or the Committee shall thereafter be to the committee or subcommittee), subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee at any time and revest in the Board the administration of the Plan. The members of the Committee shall be appointed
by and serve at the pleasure of the Board. From time to time, the Board may increase or decrease the size of the Committee, add additional members to, remove members (with or without cause) from, appoint new members in substitution therefor and fill
vacancies, however caused, in the Committee. The Committee shall act pursuant to a vote of the majority of its members or, in the case of a Committee comprised of only two members, the unanimous consent of its members, whether present or not, or by
the written consent of the majority of its members, and minutes shall be kept of all of its meetings and copies thereof shall be provided to the Board. Subject to the limitations prescribed by the Plan and the Board, the Committee may establish and
follow such rules and regulations for the conduct of its business as it may determine to be advisable. 
 3.4
Committee Composition. Except as otherwise determined by the Board, the Committee shall consist solely of two or more Non-Employee Directors who are also Outside Directors. The Board shall have discretion to determine whether or not it
intends to comply with the exemption requirements of Rule 16b-3 and/or Section 162(m) of the Code. However, (i) if the Board intends to satisfy the exemption requirements of Rule 16b-3 with respect to Awards to any insider subject to
Section 16 of the Exchange Act that are to be approved by the Committee rather than the Board, then the Committee shall be composed solely of a compensation committee of the Board that consists solely of two or more Non-Employee Directors, and
(ii) if the Board intends to satisfy the exemption requirements of Section 162(m) of the Code with respect to Awards to any Covered Employee, then the Committee shall be a compensation committee of the Board that consists solely of two or
more Outside Directors. Within the scope of such authority, the Board or the Committee may (a) delegate to a committee of one or more members of the Board who are not Outside Directors the authority to grant Awards to eligible persons who are
either (i) not then Covered Employees and are not expected to be Covered Employees at the time of recognition of income resulting from such Award or (ii) not persons with respect to whom the Company wishes to comply with
Section 162(m) of the Code; or (b) delegate to a committee of one or more members of the Board who are not Non-Employee Directors the authority to grant Awards to eligible persons who are not then subject to

 
Section 16 of the Exchange Act. Nothing herein shall create an inference that an Award is not validly granted under the Plan in the event Awards are granted under the Plan by a compensation
committee of the Board that does not at all times consist solely of two or more Non-Employee Directors who are also Outside Directors. 
 3.5 Indemnification. In addition to such other rights of indemnification as they may have as Directors or members of the Committee, and to the extent allowed by Applicable Laws, the Committee shall
be indemnified by the Company against the reasonable expenses, including attorney’s fees, actually incurred in connection with any action, suit or proceeding or in connection with any appeal therein, to which the Committee may be party by
reason of any action taken or failure to act under or in connection with the Plan or any Award granted under the Plan, and against all amounts paid by the Committee in settlement thereof (provided, however, that the settlement has been
approved by the Company, which approval shall not be unreasonably withheld) or paid by the Committee in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action,
suit or proceeding that such Committee did not act in good faith and in a manner which such person reasonably believed to be in the best interests of the Company, or in the case of a criminal proceeding, had no reason to believe that the conduct
complained of was unlawful; provided, however, that, within sixty (60) days after institution of any such action, suit or proceeding, such Committee shall, in writing, offer the Company the opportunity at its own expense to handle
and defend such action, suit or proceeding. 
  

	4.	Shares Subject to the Plan. 

 4.1 Subject to adjustment in accordance with Section 11, a total of 600,000 shares of Common Stock shall be available for the grant of Awards under the Plan, all of which may, in the
Committee’s discretion, be granted as Incentive Stock Options. Any shares of Common Stock granted in connection with Options and Stock Appreciation Rights shall be counted against this limit as one share for every one Option or Stock
Appreciation Right awarded. Any shares of Common Stock granted in connection with Awards other than Options and Stock Appreciation Rights shall be counted against this limit as two (2) shares of Common Stock for every one share of Common Stock
granted in connection with such Award. During the terms of the Awards, the Company shall keep available at all times the number of shares of Common Stock required to satisfy such Awards. 

4.2 Shares of Common Stock available for distribution under the Plan may consist, in whole or in part, of authorized and
unissued shares, treasury shares or shares reacquired by the Company in any manner. 
 4.3 Subject to adjustment
in accordance with Section 11, no Participant shall be granted, during any one (1) year period, Options to purchase Common Stock and Stock Appreciation Rights with respect to more than 30,000 shares of Common Stock in the aggregate
or any other Awards with respect to more than 30,000 shares of Common Stock in the aggregate. If an Award is to be settled in cash, the number of shares of Common Stock on which the Award is based shall not count toward the individual share limit
set forth in this Section 4.3. 
 4.4 Any shares of Common Stock subject to an Award that is
cancelled, forfeited or expires prior to exercise or realization, either in full or in part, shall again become available for issuance under the Plan. Any shares of Common Stock that again become available for future grants pursuant to this
Section 4.4 shall be added back as one share if such shares were subject to Options or Stock Appreciation Rights and as two (2) shares if such shares were subject to other Awards. Notwithstanding anything to the contrary contained
herein, shares subject to an Award under the Plan shall not again be made available for issuance or delivery under the Plan if such shares are (a) shares tendered in payment of an Option; (b) shares delivered or withheld by the Company to
satisfy any tax withholding obligation; or (c) shares covered by a stock-settled Stock Appreciation Right or other Awards that were not issued upon the settlement of the Award. 

4.5 If required by the Sarbanes-Oxley Act of 2002 and/or by the Dodd-Frank Wall Street Reform and Consumer Protection Act
of 2010, each Participant’s Award shall be conditioned on repayment or forfeiture 

 
in accordance with law. In addition, the Committee may establish such conditions for repayment or forfeiture of Awards as the Committee or the Board may adopt by policy for the Company or any
Affiliate and in accordance with any requirements of state or federal banking and securities laws and regulatory agencies. 
  

	5.	Eligibility. 

 5.1 Eligibility for Specific Awards. Incentive Stock Options may be granted only to Employees. Awards other than Incentive Stock Options may be granted to Employees, Consultants and Directors of
the Company and its Affiliates and such other individuals designated by the Committee who are reasonably expected to become Employees, Consultants and Directors following the Grant Date. 

5.2 Ten Percent Shareholders. A Ten Percent Shareholder shall not be granted an Incentive Stock Option unless the
Option Exercise Price is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the Grant Date and the Option is not exercisable after the expiration of five (5) years from the Grant Date. 

6. Option Provisions. Each Option granted under the Plan shall be evidenced by an Award Agreement. Each Option so granted shall be subject to the
conditions set forth in this Section 6, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. All Options shall be separately designated Incentive Stock Options or Nonqualified
Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. Notwithstanding the foregoing, the Company shall have
no liability to any Participant or any other person if an Option designated as an Incentive Stock Option fails to qualify as such at any time, or if an Option is determined to constitute “nonqualified deferred compensation” within the
meaning of Section 409A of the Code and the terms of such Option do not satisfy the requirements of Section 409A of the Code. The provisions of separate Options need not be identical, but each Option shall include (through incorporation of
provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions: 

6.1 Term. Subject to the provisions of Section 5.2 regarding Ten Percent Shareholders, no Incentive
Stock Option shall be exercisable after the expiration of ten (10) years from the Grant Date. The term of a Nonqualified Stock Option granted under the Plan shall be determined by the Committee; provided, however, that no
Nonqualified Stock Option shall be exercisable after the expiration of ten (10) years from the Grant Date. 

6.2 Exercise Price of an Incentive Stock Option. Subject to the provisions of Section 5.2 regarding Ten
Percent Shareholders, the Option Exercise Price of each Incentive Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the
foregoing, an Incentive Stock Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the
provisions of Section 424(a) of the Code. 
 6.3 Exercise Price of a Nonqualified Stock Option. The
Option Exercise Price of each Nonqualified Stock Option shall be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the Grant Date. Notwithstanding the foregoing, a Nonqualified Stock
Option may be granted with an Option Exercise Price lower than that set forth in the preceding sentence if such Option is granted pursuant to an assumption or substitution for another option in a manner satisfying the provisions of Section 409A
of the Code. 
 6.4 Consideration. The Option Exercise Price of Common Stock acquired pursuant to an
Option shall be paid, to the extent permitted by applicable statutes and regulations, either (a) in cash or by certified or bank check at the time the Option is exercised or (b) in the discretion of the Committee, upon such terms as the
Committee shall approve, the Option Exercise Price may be paid: (i) by delivery to the Company of 

 
other Common Stock, duly endorsed for transfer to the Company, with a Fair Market Value on the date of delivery equal to the Option Exercise Price (or portion thereof) due for the number of
shares being acquired, or by means of attestation whereby the Participant identifies for delivery specific shares of Common Stock that have an aggregate Fair Market Value on the date of attestation equal to the Option Exercise Price (or portion
thereof) and receives a number of shares of Common Stock equal to the difference between the number of shares thereby purchased and the number of identified attestation shares of Common Stock (a “Stock for Stock Exchange”);
(ii) through a “cashless” exercise program established with a broker; (iii) by a reduction in the number of shares of Common Stock otherwise deliverable upon exercise of such Option with a Fair Market Value equal to the aggregate
Option Exercise Price at the time of exercise; (iv) by any combination of the foregoing methods; or (v) in any other form of legal consideration that may be acceptable to the Committee. Unless otherwise specifically provided in the Award
Agreement, the exercise price of Common Stock acquired pursuant to an Option that is paid by delivery (or attestation) to the Company of other Common Stock acquired, directly or indirectly from the Company, shall be paid only by shares of the Common
Stock of the Company that have been held for more than six (6) months (or such longer or shorter period of time required to avoid a charge to earnings for financial accounting purposes). Notwithstanding the foregoing, during any period for
which the Common Stock is publicly traded (i.e., the Common Stock is listed on any established stock exchange or a national market system), an exercise by an Officer that involves or may involve a direct or indirect extension of credit or
arrangement of an extension of credit by the Company, directly or indirectly, in violation of Section 402(a) of the Sarbanes-Oxley Act of 2002 shall be prohibited with respect to any Award under the Plan. 

6.5 Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be transferable except by
will or by the laws of descent and distribution and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form
satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 
 6.6 Transferability of a Nonqualified Stock Option. A Nonqualified Stock Option may, in the sole discretion of the Committee, be transferable to a Permitted Transferee, upon written approval by the
Committee, to the extent provided in the Award Agreement. If the Nonqualified Stock Option does not provide for transferability, then the Nonqualified Stock Option shall not be transferable except by will or by the laws of descent and distribution
and shall be exercisable during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the Company, designate a third
party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 

6.7 Vesting of Options. Each Option may, but need not, vest and, therefore, become exercisable in periodic
installments that may, but need not, be equal. The Option may be subject to such other terms and conditions at the time or times when it may be exercised (which may be based on performance or other criteria) as the Committee may deem appropriate.
The vesting provisions of individual Options may vary. No Option may be exercised for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting and exercisability in the terms of
any Award Agreement upon the occurrence of a specified event. 
 6.8 Termination of Continuous Service.
Unless otherwise provided in an Award Agreement or in an employment agreement, the terms of which have been approved by the Committee, in the event that an Optionholder’s Continuous Service terminates (other than upon the Optionholder’s
death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination) but only within such period of time ending on the earlier of (a) the
date three (3) months following the termination of the Optionholder’s Continuous Service or (b) the expiration of the term of the Option as set forth in the Award Agreement; provided, however, that, if the termination of
Continuous Service is for Cause, all outstanding Options (whether or not vested) shall immediately terminate and cease to be exercisable. If, after termination, the Optionholder does not exercise his or her Option within the time specified in the
Award Agreement, the Option shall terminate. 

 6.9 Extension of Termination Date. An Optionholder’s Award
Agreement may also provide that if the exercise of the Option following the termination of the Optionholder’s Continuous Service for any reason would be prohibited at any time because the issuance of shares of Common Stock would violate the
registration requirements under the Securities Act or any other state or federal securities law or the rules of any securities exchange or interdealer quotation system, then the Option shall terminate on the earlier of (a) the expiration of the
term of the Option in accordance with Section 6.1 or (b) the expiration of a period after termination of the Participant’s Continuous Service that is three (3) months after the end of the period during which the exercise
of the Option would be in violation of such registration or other securities law requirements. 
 6.10
Disability of Optionholder. Unless otherwise provided in an Award Agreement, in the event that an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination), but only within such period of time ending on the earlier of (a) the date twelve (12) months following such termination or
(b) the expiration of the term of the Option as set forth in the Award Agreement. If, after termination, the Optionholder does not exercise his or her Option within the time specified herein or in the Award Agreement, the Option shall
terminate. 
 6.11 Death of Optionholder. Unless otherwise provided in an Award Agreement, in the event an
Optionholder’s Continuous Service terminates as a result of the Optionholder’s death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s
estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder’s death, but only within the period ending on the earlier of (a) the date
twelve (12) months following the date of death or (b) the expiration of the term of such Option as set forth in the Award Agreement. If, after the Optionholder’s death, the Option is not exercised within the time specified herein or
in the Award Agreement, the Option shall terminate. 
 6.12 Incentive Stock Option $100,000 Limitation. To
the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the
Company and its Affiliates) exceeds $100,000, the Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonqualified Stock Options. 

6.13 Forfeiture by Order of Regulatory Agency. If the Company’s or any of its financial institution
subsidiaries’ capital falls below the minimum requirements contained in 12 C.F.R. 3 (Minimum Capital Ratios; Issuances of Directives) or below a higher requirement as determined by the Company’s or such subsidiary’s primary bank
regulatory agency, such agency may direct the Company to require Participants to exercise or forfeit some or all of their Options. All Options granted under the Plan are subject to the terms of any such directive. 

 

	7.	Provisions of Awards Other Than Options. 

 7.1 Stock Appreciation Rights. 
 (a) General. Each
Stock Appreciation Right granted under the Plan shall be evidenced by an Award Agreement. Each Stock Appreciation Right so granted shall be subject to the conditions set forth in this Section 7.1, and to such other conditions not
inconsistent with the Plan as may be reflected in the applicable Award Agreement. Stock Appreciation Rights may be granted alone (“Free Standing Rights”) or in tandem with an Option granted under the Plan (“Related Rights”).

 (b) Grant Requirements. Any Related Right that relates to a Nonqualified Stock Option may be granted at
the same time the Option is granted or at any time thereafter but before the exercise or expiration of the Option. Any Related Right that relates to an Incentive Stock Option must be granted at the same time the Incentive Stock Option is granted.

 (c) Term of Stock Appreciation Rights. The term
of a Stock Appreciation Right granted under the Plan shall be determined by the Committee; provided, however, that no Stock Appreciation Right shall be exercisable later than the tenth (10th) anniversary of the Grant Date. 

(d) Vesting of Stock Appreciation Rights. Each Stock Appreciation Right may, but need not, vest and, therefore,
become exercisable in periodic installments that may, but need not, be equal. The Stock Appreciation Right may be subject to such other terms and conditions at the time or times when it may be exercised as the Committee may deem appropriate. The
vesting provisions of individual Stock Appreciation Rights may vary. No Stock Appreciation Right may be exercised for a fraction of a share of Common Stock. The Committee may, but shall not be required to, provide for an acceleration of vesting and
exercisability in the terms of any Award Agreement upon the occurrence of a specified event. 
 (e) Exercise
and Payment. Upon exercise of a Stock Appreciation Right, the holder shall be entitled to receive from the Company an amount equal to the number of shares of Common Stock subject to the Stock Appreciation Right that is being exercised multiplied
by the excess of (i) the Fair Market Value of a share of Common Stock on the date the Award is exercised, over (ii) the exercise price specified in the Stock Appreciation Right or related Option. Payment with respect to the exercise of a
Stock Appreciation Right shall be made on the date of exercise. Payment shall be made in the form of shares of Common Stock (with or without restrictions as to substantial risk of forfeiture and transferability, as determined by the Committee in its
sole discretion), cash or a combination thereof, as determined by the Committee. 
 (f) Exercise Price.
The exercise price of a Free Standing Right shall be determined by the Committee, but shall not be less than one hundred percent (100%) of the Fair Market Value of one share of Common Stock on the Grant Date of such Stock Appreciation Right. A
Related Right granted simultaneously with or subsequent to the grant of an Option and in conjunction therewith or in the alternative thereto shall have the same exercise price as the related Option, shall be transferable only upon the same terms and
conditions as the related Option, and shall be exercisable only to the same extent as the related Option; provided, however, that a Stock Appreciation Right, by its terms, shall be exercisable only when the Fair Market Value per share
of Common Stock subject to the Stock Appreciation Right and related Option exceeds the exercise price per share thereof, and no Stock Appreciation Rights may be granted in tandem with an Option unless the Committee determines that the requirements
of Section 7.1(b) are satisfied. 
 (g) Reduction in the Underlying Option Shares. Upon any
exercise of a Related Right, the number of shares of Common Stock for which any related Option shall be exercisable shall be reduced by the number of shares for which the Stock Appreciation Right has been exercised. The number of shares of Common
Stock for which a Related Right shall be exercisable shall be reduced upon any exercise of any related Option by the number of shares of Common Stock for which such Option has been exercised. 

7.2 Restricted Awards. 
 (a) General. A Restricted Award is an Award of actual shares of Common Stock (“Restricted Stock”) or hypothetical Common Stock units (“Restricted Stock Units”) having a value
equal to the Fair Market Value of an identical number of shares of Common Stock, which may, but need not, provide that such Restricted Award may not be sold, assigned, transferred or otherwise disposed of, pledged or hypothecated as collateral for a
loan or as security for the performance of any obligation or for any other purpose for such period (the “Restricted Period”) as the Committee shall determine. Each Restricted Award granted under the Plan shall be evidenced by an Award
Agreement. Each Restricted Award so granted shall be subject to the conditions set forth in this Section 7.2, and to such other conditions not inconsistent with the Plan as may be reflected in the applicable Award Agreement. 

(b) Restricted Stock and Restricted Stock Units. 

(i) Each Participant granted Restricted Stock shall execute and deliver to the Company an Award Agreement with respect to
the Restricted Stock setting forth the restrictions and other terms and conditions applicable to such Restricted Stock. If the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than delivered to the
Participant pending the release 

 
of the applicable restrictions, the Committee may require the Participant to additionally execute and deliver to the Company (A) an escrow agreement satisfactory to the Committee, if
applicable, and (B) the appropriate blank stock power with respect to the Restricted Stock covered by such agreement. If a Participant fails to execute an agreement evidencing an Award of Restricted Stock and, if applicable, an escrow agreement
and stock power, the Award shall be null and void. Subject to the restrictions set forth in the Award, the Participant generally shall have the rights and privileges of a shareholder as to such Restricted Stock, including the right to vote such
Restricted Stock and the right to receive dividends. 
 (ii) The terms and conditions of a grant of Restricted
Stock Units shall be reflected in an Award Agreement. No shares of Common Stock shall be issued at the time a Restricted Stock Unit is granted, and the Company will not be required to set aside a fund for the payment of any such Award. A Participant
shall have no voting rights with respect to any Restricted Stock Units granted hereunder. At the discretion of the Committee, each Restricted Stock Unit (representing one share of Common Stock) may be credited with cash and stock dividends paid by
the Company in respect of one share of Common Stock (“Dividend Equivalents”). Dividend Equivalents shall be withheld by the Company for the Participant’s account, and interest may be credited on the amount of cash Dividend Equivalents
withheld at a rate and subject to such terms as determined by the Committee. Dividend Equivalents credited to a Participant’s account and attributable to any particular Restricted Stock Unit (and earnings thereon, if applicable) shall be
distributed in cash or, at the discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to the amount of such Dividend Equivalents and earnings, if applicable, to the Participant upon settlement of such Restricted
Stock Unit (in any event, no later than sixty (60) days following the date on which such settlement occurs) and, if such Restricted Stock Unit is forfeited, the Participant shall have no right to such Dividend Equivalents. 

(c) Restrictions. 
 (i) Restricted Stock awarded to a Participant shall be subject to the following restrictions until the expiration of the Restricted Period, and to such other terms and conditions as may be set forth in
the applicable Award Agreement: (A) if an escrow arrangement is used, the Participant shall not be entitled to delivery of the stock certificate; (B) the shares shall be subject to the restrictions on transferability set forth in the Award
Agreement; (C) the shares shall be subject to forfeiture to the extent provided in the applicable Award Agreement; and (D) to the extent such shares are forfeited, the stock certificates shall be returned to the Company, and all rights of
the Participant to such shares and as a shareholder with respect to such shares shall terminate without further obligation on the part of the Company. 
 (ii) Restricted Stock Units awarded to any Participant shall be subject to (A) forfeiture until the expiration of the Restricted Period, and satisfaction of any applicable Performance Goals during
such period, to the extent provided in the applicable Award Agreement, and to the extent such Restricted Stock Units are forfeited, all rights of the Participant to such Restricted Stock Units shall terminate without further obligation on the part
of the Company and (B) such other terms and conditions as may be set forth in the applicable Award Agreement. 
 (iii) The Committee shall have the authority to remove any or all of the restrictions on the Restricted Stock and Restricted Stock Units whenever it may determine that, by reason of changes in Applicable
Laws or other changes in circumstances arising after the date the Restricted Stock or Restricted Stock Units are granted, such action is appropriate. 
 (d) Restricted Period. With respect to Restricted Awards, the Restricted Period shall commence on the Grant Date and end at the time or times set forth on a schedule established by the Committee in
the applicable Award Agreement. 
 (e) Delivery of Restricted Stock and Settlement of Restricted Stock
Units. Upon the expiration of the Restricted Period with respect to any shares of Restricted Stock, the restrictions set forth in Section 7.2(c) and the applicable Award Agreement shall be of no further force or effect with respect
to such shares, 

 
except as set forth in the applicable Award Agreement. If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Participant, or his or her beneficiary, without
charge, the stock certificate evidencing the shares of Restricted Stock that have not then been forfeited and with respect to which the Restricted Period has expired (to the nearest full share). Upon the expiration of the Restricted Period (in any
event, no later than sixty (60) days following the expiration of the Restricted Period) with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Participant, or his or her beneficiary, without charge, one share
of Common Stock for each such outstanding Restricted Stock Unit (“Vested Unit”) and cash equal to any Dividend Equivalents credited with respect to each such Vested Unit in accordance with Section 7.2(b)(ii) hereof and the
interest thereon or, at the discretion of the Committee, in shares of Common Stock having a Fair Market Value equal to such Dividend Equivalents and the interest thereon, if any; provided, however, that, if explicitly provided in the
applicable Award Agreement, the Committee may, in its sole discretion, elect to pay cash or part cash and part Common Stock in lieu of delivering only shares of Common Stock for Vested Units. If a cash payment is made in lieu of delivering shares of
Common Stock, the amount of such payment shall be equal to the Fair Market Value of the Common Stock as of the date on which the Restricted Period lapsed with respect to each Vested Unit. 

(f) Stock Restrictions. Each certificate representing Restricted Stock awarded under the Plan shall bear a legend
in such form as the Company deems appropriate. 
 7.3 Performance Compensation Awards. 

(a) General. 
 (i) The Committee shall have the authority, at the time of grant of any Award described in the Plan (other than Options and Stock Appreciation Rights granted with an exercise price equal to or greater
than the Fair Market Value per share of Common Stock on the Grant Date), to designate such Award as a Performance Compensation Award in order to qualify such Award as “performance-based compensation” under Section 162(m) of the Code.

 (ii) In addition, the Committee shall have the authority to make an Award of a cash bonus to any Participant
and designate such Award as a Performance Compensation Award in order to qualify such Award as “performance-based compensation” under Section 162(m) of the Code. 

(b) Eligibility. The Committee will, in its sole discretion, designate within the first ninety (90) days of a
Performance Period (or, if longer or shorter, within the maximum period allowed under Section 162(m) of the Code) which Participants will be eligible to receive Performance Compensation Awards in respect of such Performance Period. However,
designation of a Participant eligible to receive an Award hereunder for a Performance Period shall not in any manner entitle the Participant to receive payment in respect of any Performance Compensation Award for such Performance Period. The
determination as to whether or not such Participant becomes entitled to payment in respect of any Performance Compensation Award shall be decided solely in accordance with the provisions of this Section 7.3. Moreover, designation of a
Participant eligible to receive an Award hereunder for a particular Performance Period shall not require designation of such Participant eligible to receive an Award hereunder in any subsequent Performance Period, and designation of one person as a
Participant eligible to receive an Award hereunder shall not require designation of any other person as a Participant eligible to receive an Award hereunder in such period or in any other period. 

(c) Discretion of Committee with Respect to Performance Compensation Awards. With regard to a particular
Performance Period, the Committee shall have full discretion to select the length of such Performance Period (provided any such Performance Period shall be not less than one fiscal quarter in duration), the type(s) of Performance Compensation Awards
to be issued, the Performance Criteria that will be used to establish the Performance Goal(s), the kind(s) and/or level(s) of the Performance Goal(s) that is (are) to apply to the Company and the Performance Formula. Within the first ninety
(90) days of a Performance Period (or, if longer or shorter, within the maximum period allowed under Section 162(m) of the Code), the Committee shall, with regard to the Performance Compensation Awards to be issued for such

 
Performance Period, exercise its discretion with respect to each of the matters enumerated in the immediately preceding sentence of this Section 7.3(c) and record the same in writing.

 (d) Payment of Performance Compensation Awards. 

(i) Condition to Receipt of Payment. Unless otherwise provided in the applicable Award Agreement, a Participant
must be employed by the Company on the last day of a Performance Period to be eligible for payment in respect of a Performance Compensation Award for such Performance Period. 

(ii) Limitation. A Participant shall be eligible to receive payment in respect of a Performance Compensation Award
only to the extent that: (A) the Performance Goals for such period are achieved; and (B) the Performance Formula as applied against such Performance Goals determines that all or some portion of such Participant’s Performance
Compensation Award has been earned for the Performance Period. A Participant shall not be entitled to receive dividends on any unearned Performance Compensation Award. 

(iii) Certification. Following the completion of a Performance Period, the Committee shall review and certify in
writing whether, and to what extent, the Performance Goals for the Performance Period have been achieved and, if so, calculate and certify in writing the amount of the Performance Compensation Awards earned for the period based upon the Performance
Formula. The Committee shall then determine the actual size of each Participant’s Performance Compensation Award for the Performance Period and, in so doing, may apply Negative Discretion in accordance with Section 7.3(d)(iv)
hereof, if and when it deems appropriate. 
 (iv) Use of Discretion. In determining the actual size of an
individual Performance Compensation Award for a Performance Period, the Committee may reduce or eliminate the amount of the Performance Compensation Award earned under the Performance Formula in the Performance Period through the use of Negative
Discretion if, in its sole judgment, such reduction or elimination is appropriate. The Committee shall not have the discretion to (A) grant or provide payment in respect of Performance Compensation Awards for a Performance Period if the
Performance Goals for such Performance Period have not been attained or (B) increase a Performance Compensation Award above the maximum amount payable under Section 7.3(d)(vi) of the Plan. 

(v) Timing of Award Payments. Performance Compensation Awards granted for a Performance Period shall be paid to
Participants within sixty (60) days following the end of the Performance Period unless otherwise provided in an Award Agreement. 
 (vi) Maximum Award Payable. Notwithstanding any provision contained in the Plan to the contrary, the maximum Performance Compensation Award payable to any one Participant under the Plan for a
Performance Period (excluding any Options and Stock Appreciation Rights) is 30,000 shares of Common Stock or, in the event such Performance Compensation Award is paid in cash, the equivalent cash value thereof on the first or last day of the
Performance Period to which such Award relates, as determined by the Committee. The maximum amount that can be paid in any calendar year to any Participant pursuant to a cash bonus Award described in the last sentence of Section 7.3(a)
shall be $500,000. 
 8. Compliance With Applicable Laws. Each Award Agreement shall provide that no shares of Common Stock shall be
purchased or sold thereunder unless and until (a) any then applicable requirements of state or federal banking and securities laws and regulatory agencies have been fully complied with to the satisfaction of the Company and its counsel and
(b) if required to do so by the Company, the Participant has executed and delivered to the Company a letter of investment intent in such form and containing such provisions as the Committee may require. The Company shall use reasonable efforts
to seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Awards and to issue and sell shares of Common Stock upon exercise of the Awards; provided,
however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Award or any Common Stock issued or issuable 

 
pursuant to any such Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority which counsel for the Company deems necessary
for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Awards unless and until such authority is obtained. 

9. Use of Proceeds from Common Stock. Proceeds from the sale of Common Stock pursuant to Awards, or upon exercise thereof, shall constitute
general funds of the Company. 
 10. Miscellaneous. 

10.1 Acceleration of Exercisability and Vesting. The Committee shall have the power to accelerate the time at which
an Award may first be exercised or the time during which an Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Award stating the time at which it may first be exercised or the time during which it
will vest. 
 10.2 Shareholder Rights. Except as provided in the Plan or an Award Agreement, no
Participant shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Award unless and until such Participant has satisfied all requirements for exercise of the Award
pursuant to its terms, and no adjustment shall be made for dividends (ordinary or extraordinary, whether in cash, securities or other property) or distributions of other rights for which the record date is prior to the date such Common Stock
certificate is issued, except as provided in Section 11 hereof. 
 10.3 No Employment or Other
Service Rights. Nothing in the Plan or any instrument executed or Award granted pursuant thereto shall confer upon any Participant any right to continue to serve the Company or an Affiliate in the capacity in effect at the time the Award was
granted or shall affect the right of the Company or an Affiliate to terminate the employment of an Employee with or without notice and with or without Cause pursuant to the bylaws of the Company or an Affiliate, and any applicable provisions of the
corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be. 
 10.4
Transfer; Approved Leave of Absence. For purposes of the Plan, no termination of employment by an Employee shall be deemed to result from either (a) a transfer to the employment of the Company from an Affiliate or from the Company to an
Affiliate, or from one Affiliate to another; or (b) an approved leave of absence for military service or sickness, or for any other purpose approved by the Company, if the Employee’s right to reemployment is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of absence was granted, or if the Committee otherwise so provides in writing, in either case, except to the extent inconsistent with Section 409A of the Code if the applicable Award
is subject thereto. 
 10.5 Withholding Obligations. To the extent provided by the terms of an Award
Agreement and subject to the discretion of the Committee, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Award by any of the following means (in
addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (a) tendering a cash payment; (b) authorizing the Company to withhold shares of Common Stock
from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Award (provided, however, that no shares of Common Stock are withheld with a value exceeding the
minimum amount of tax required to be withheld by law); or (c) delivering to the Company previously owned and unencumbered shares of Common Stock of the Company. 
 11. Adjustments Upon Changes in Stock. In the event of changes in the outstanding Common Stock or in the capital structure of the Company by reason of any stock or extraordinary cash dividend,
stock split, reverse stock split, an extraordinary corporate transaction (such as any recapitalization, reorganization, merger, consolidation, combination or exchange) or other relevant change in capitalization occurring after the Grant Date of any
Award, 

 
Awards granted under the Plan and any Award Agreements, the exercise price of Options and Stock Appreciation Rights, the maximum number of shares of Common Stock subject to all Awards stated in
Section 4 and the maximum number of shares of Common Stock with respect to which any one person may be granted Awards during any period stated in Section 4 and Section 7.3(d)(vi) will be equitably adjusted or
substituted, as to the number, price or kind of a share of Common Stock or other consideration subject to such Awards, to the extent necessary to preserve the economic intent of such Award. In the case of adjustments made pursuant to this
Section 11, unless the Committee specifically determines that such adjustment is in the best interests of the Company or its Affiliates, the Committee shall, in the case of Incentive Stock Options, ensure that any adjustments under this
Section 11 will not constitute a modification, extension or renewal of the Incentive Stock Options within the meaning of Section 424(h)(3) of the Code, and, in the case of Nonqualified Stock Options, ensure that any adjustments
under this Section 11 will not constitute a modification of such Nonqualified Stock Options within the meaning of Section 409A of the Code. Any adjustments made under this Section 11 shall be made in a manner which does
not adversely affect the exemption provided pursuant to Rule 16b-3. Further, with respect to Awards intended to qualify as “performance-based compensation” under Section 162(m) of the Code, any adjustments or substitutions will not
cause the Company to be denied a tax deduction on account of Section 162(m) of the Code. The Company shall give each Participant notice of an adjustment hereunder, and, upon notice, such adjustment shall be conclusive and binding for all
purposes. 
 12. Effect of Change in Control. 
 12.1 Unless otherwise provided in an Award Agreement, notwithstanding any provision of the Plan to the contrary: 
 (a) In the event of a Change in Control, all Options and Stock Appreciation Rights shall become immediately exercisable with respect to one hundred percent (100%) of the shares subject to such
Options or Stock Appreciation Rights, and/or the Restricted Period shall expire immediately with respect to one hundred percent (100%) of the shares of Restricted Stock or Restricted Stock Units. 

(b) With respect to Performance Compensation Awards, in the event of a Change in Control, all incomplete Performance
Periods in respect of such Award in effect on the date on which the Change in Control occurs shall end on the date of such change, and the Committee shall (i) determine the extent to which Performance Goals with respect to each such Performance
Period have been met based upon such audited or unaudited financial information then available as it deems relevant and (ii) cause to be paid to the applicable Participant partial or full Awards with respect to Performance Goals for each such
Performance Period based upon the Committee’s determination of the degree of attainment of Performance Goals or, if not determinable, assuming that the applicable “target” levels of performance have been attained, or on such other
basis determined by the Committee. The payment of such partial or full Award shall take place no later than sixty (60) days following the date on which such Change in Control occurs. 

To the extent practicable, any actions taken by the Committee under the immediately preceding clauses (a) and
(b) shall occur in a manner and at a time which allows affected Participants the ability to participate in the Change in Control with respect to the shares of Common Stock subject to their Awards. 

12.2 In addition, in the event of a Change in Control, the Committee may in its discretion and upon at least ten
(10) days’ advance notice to the affected persons, cancel any outstanding Awards and pay to the holders thereof, in cash or stock, or any combination thereof, the value of such Awards based upon the price per share of Common Stock received
or to be received by other shareholders of the Company in the event. In the case of any Option or Stock Appreciation Right with an exercise price that equals or exceeds the price paid for a share of Common Stock in connection with the Change in
Control, the Committee may cancel the Option or Stock Appreciation Right without the payment of consideration therefor. 
 12.3 The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon
any successor corporation or organization succeeding to all or substantially all of the assets and business of the Company and its Affiliates, taken as a whole. 

	13.	Amendment of the Plan and Awards. 

 13.1 Amendment of the Plan. The Board at any time, and from time to time, may amend or terminate the Plan. However, except as provided in Section 11 relating to adjustments upon changes
in Common Stock and Section 13.3, no amendment shall be effective unless approved by the shareholders of the Company to the extent that shareholder approval is necessary to satisfy any Applicable Laws. At the time of such amendment, the
Board shall determine, upon advice from counsel, whether such amendment will be contingent on shareholder approval. 
 13.2 Shareholder Approval. The Board may, in its sole discretion, submit any other amendment to the Plan for shareholder approval, including, but not limited to, amendments to the Plan intended to
satisfy the requirements of Section 162(m) of the Code and the regulations thereunder regarding the exclusion of performance-based compensation from the limit on corporate deductibility of compensation paid to certain executive officers.

 13.3 Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in any
respect the Board deems necessary or advisable to provide eligible Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated thereunder relating to Incentive Stock Options or to
the nonqualified deferred compensation provisions of Section 409A of the Code and/or to bring the Plan and/or Awards granted under it into compliance therewith. 

13.4 No Impairment of Rights. Rights under any Award granted before amendment of the Plan shall not be impaired by
any amendment of the Plan unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing. 
 13.5 Amendment of Awards. The Committee at any time, and from time to time, may amend the terms of any one or more Awards; provided, however, that the Committee may not affect any
amendment which would otherwise constitute an impairment of the rights under any Award unless (a) the Company requests the consent of the Participant and (b) the Participant consents in writing. 

 

	14.	General Provisions. 

 14.1 Forfeiture Events. The Committee may specify in an Award Agreement 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 events, in addition to applicable vesting conditions of an Award. Such events may include, without limitation, breach of non-competition, non-solicitation, confidentiality or
other restrictive covenants that are contained in the Award Agreement or otherwise applicable to the Participant, a termination of the Participant’s Continuous Service for Cause or other conduct by the Participant that is detrimental to the
business or reputation of the Company and/or its Affiliates. 
 14.2 Clawback. Notwithstanding any other
provisions in the Plan, any Award that is subject to recovery under any law, government regulation or stock exchange listing requirement will be subject to such deductions and clawback as may be required to be made pursuant to such law, government
regulation or stock exchange listing requirement (or any policy adopted by the Company pursuant to any such law, government regulation or stock exchange listing requirement). 

14.3 Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Board from adopting other or
additional compensation arrangements, subject to shareholder approval if such approval is required, and such arrangements may be either generally applicable or applicable only in specific cases. 

14.4 Unfunded Plan. The Plan shall be unfunded. Neither the Company, the Board nor the Committee shall be required
to establish any special or separate fund or to segregate any assets to assure the performance of its obligations under the Plan. 
 14.5 Deferral of Awards. Subject to the requirements of Section 409A of the Code, the Committee may establish one or more programs to permit selected Participants the opportunity to elect to
defer receipt 

 
of consideration upon exercise of an Award, satisfaction of performance criteria or other event that, absent the election, would entitle he Participant to payment or receipt of shares of Common
Stock or other consideration under an Award. The Committee may establish the election procedures, the timing of such elections, the mechanisms for payments of and accrual of interest or other earnings, if any, on amounts, shares or other
consideration so deferred, and such other terms, conditions, rules and procedures that the Committee deems advisable for the administration of any such deferral program. 

14.6 Recapitalizations. Each Award Agreement shall contain provisions required to reflect the provisions of
Section 11. 
 14.7 Delivery. Upon exercise of a right granted under the Plan, the Company
shall issue Common Stock or pay any amounts due within a reasonable period of time thereafter. Subject to any statutory or regulatory obligations the Company may otherwise have, for purposes of the Plan, thirty (30) days shall be considered a
reasonable period of time. 
 14.8 No Fractional Shares. No fractional shares of Common Stock shall be
issued or delivered pursuant to the Plan. The Committee shall determine whether cash, additional Awards or other securities or property shall be issued or paid in lieu of fractional shares of Common Stock or whether any fractional shares should be
rounded, forfeited or otherwise eliminated. 
 14.9 Other Provisions. The Award Agreements authorized
under the Plan may contain such other provisions not inconsistent with the Plan, including, without limitation, restrictions upon the exercise of the Awards, as the Committee may deem advisable. 

14.10 Section 409A of the Code. The Plan is intended for Awards to be exempt from or comply with
Section 409A of the Code to the extent subject thereto, and, accordingly, to the maximum extent permitted, the Plan shall be interpreted and administered to be in compliance therewith. Any payments described in the Plan that are due within the
“short-term deferral period,” as defined in Section 409A of the Code, shall not be treated as deferred compensation unless Applicable Laws require otherwise. Notwithstanding anything to the contrary in the Plan, to the extent required
to avoid accelerated taxation and tax penalties under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to the Plan during the six (6) month period immediately
following the Participant’s termination of Continuous Service shall instead be paid on the first payroll date after the six-month anniversary of the Participant’s separation from service (or the Participant’s death, if earlier).
Notwithstanding the foregoing, neither the Company nor the Committee shall have any obligation to take any action to prevent the assessment of any excise tax or penalty on any Participant under Section 409A of the Code, and neither the Company
nor the Committee shall have any liability to any Participant for such excise tax or penalty. 
 14.11
Disqualifying Dispositions. Any Participant who shall make a “disposition” (as defined in Section 424 of the Code) of all or any portion of shares of Common Stock acquired upon exercise of an Incentive Stock Option within two
(2) years from the Grant Date of such Incentive Stock Option or within one (1) year after the issuance of the shares of Common Stock acquired upon exercise of such Incentive Stock Option (a “Disqualifying Disposition”)
shall be required to immediately advise the Company in writing as to the occurrence of the sale and the price realized upon the sale of such shares of Common Stock. 

14.12 Section 16 of the Exchange Act. It is the intent of the Company that the Plan satisfy, and be
interpreted in a manner that satisfies, the applicable requirements of Rule 16b-3 so that Participants will be entitled to the benefit of Rule 16b-3, or any other rule promulgated under Section 16 of the Exchange Act, and will not be subject to
short-swing liability under Section 16 of the Exchange Act. Accordingly, if the operation of any provision of the Plan would conflict with the intent expressed in this Section 14.12, such provision, to the extent possible, shall be
interpreted and/or deemed amended so as to avoid such conflict. 
 14.13 Section 162(m) of the Code.
To the extent the Committee issues any Award that is intended to be exempt from the deduction limitation of Section 162(m) of the Code, the Committee may, without 

 
shareholder or grantee approval, amend the Plan or the relevant Award Agreement retroactively or prospectively to the extent that it determines necessary in order to comply with any subsequent
clarification of Section 162(m) of the Code required to preserve the Company’s federal income tax deduction for compensation paid pursuant to any such Award. 

14.14 Beneficiary Designation. Each Participant under the Plan may from time to time name any beneficiary or
beneficiaries by whom any right under the Plan is to be exercised in case of such Participant’s death. Each designation will revoke all prior designations by the same Participant, shall be in a form reasonably prescribed by the Committee and
shall be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. If no valid beneficiary designation form is on file with the Company at the time of a Participant’s death, the default
beneficiary of such Participant shall be the Participant’s spouse, if any, then to any children equally, per stirpes. 
 14.15 Expenses. The costs of administering the Plan shall be paid by the Company. 
 14.16 Severability. If any of the provisions of the Plan or any Award Agreement is held to be invalid, illegal or unenforceable, whether in whole or in part, such provision shall be deemed modified
to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining provisions shall not be affected thereby. 
 14.17 Plan Headings. The headings in the Plan are for purposes of convenience only and are not intended to define or limit the construction of the provisions hereof. 

14.18 Non-Uniform Treatment. The Committee’s determinations under the Plan need not be uniform and may be made
by it selectively among persons who are eligible to receive, or actually receive, Awards. Without limiting the generality of the foregoing, the Committee shall be entitled to make non-uniform and selective determinations, amendments and adjustments,
and to enter into non-uniform and selective Award Agreements. 
 14.19 Effective Date of the Plan. The
Plan shall become effective as of the Effective Date, but no Award shall be exercised (or, in the case of a stock Award, shall be granted) unless and until the Plan has been approved by the shareholders of the Company, which approval shall be within
twelve (12) months before or after the date the Plan is adopted by the Board. 
 14.20
Termination or Suspension of the Plan. The Plan shall terminate automatically on March 22, 2023. No Award shall be granted pursuant to the Plan after such date, but Awards theretofore granted may extend beyond that date. The Board may
suspend or terminate the Plan at any earlier date pursuant to Section 13.1 hereof. No Awards may be granted under the Plan while the Plan is suspended or after it is terminated. Unless the Company determines to submit
Section 7.3 of the Plan and the definition of “Performance Goal” and “Performance Criteria” to the Company’s shareholders at the first shareholder meeting that occurs in the fifth (5th) year following the year in which the Plan was last approved by
shareholders (or any earlier meeting designated by the Board), in accordance with the requirements of Section 162(m) of the Code, and such shareholder approval is obtained, then no further Performance Compensation Awards shall be made to
Covered Employees under Section 7.3 after the date of such annual meeting, but the Plan may continue in effect for Awards to Participants not in accordance with Section 162(m) of the Code. 

14.21 Choice of Law. The law of the State of Delaware shall govern all questions concerning the construction,
validity and interpretation of the Plan, without regard to such state’s conflict of law rules. 
 * * * * *

 As adopted by the Board of Directors of United Security Bancshares, Inc. on March 22, 2013. 

As approved by the shareholders of United Security Bancshares, Inc. on May 16, 2013.VISHAY
PRECISION GROUP, INC. 2010 STOCK INCENTIVE PROGRAM 

(AS AMENDED AND RESTATED EFFECTIVE MAY 21, 2013)

     1. Purpose. The Vishay Precision Group Inc. 2010 Stock Incentive Program (the
“Program”) provides for the grant of stock options, restricted stock and stock
units to executive officers, key employees and directors of Vishay Precision
Group Inc. (the “Company”) and its subsidiaries. The purpose of the Program is
to enhance the long-term performance of the Company and to provide the selected
individuals with an incentive to improve the growth and profitability of the
Company by acquiring a proprietary interest in the success of the Company.

     2. Definitions. Whenever
used in the Program, the masculine pronoun shall be deemed to include the
feminine, the singular to include the plural, unless the context clearly
indicates otherwise, and the following capitalized words and phrases shall have
the meaning set forth below unless the context plainly requires a different
meaning: 

         
(a) “Agreement” means the written agreement between
the Company and a Participant, or other documentation, evidencing an Award.

         
(b) “Award” means a Stock Option, Restricted Stock,
Unrestricted Stock or Stock Unit. 

         
(c) “Board” means the Board of Directors of the
Company. 

         
(d) “Cause” means conduct by a Participant amounting
to (1) fraud or dishonesty against the Company, (2) willful misconduct, repeated
refusal to follow the reasonable directions of the Board of Directors of the
Company, or knowing violation of law in the course of performance of the duties
of Participant’s employment with the Company, (3) repeated absences from work
without a reasonable excuse, (4) intoxication with alcohol or drugs while on the
Company’s premises during regular business hours, (5) a conviction or plea of
guilty or no contest to a felony or a crime involving dishonesty, or (6) a
breach or violation of any Company policies regarding employee conduct, or a
breach or violation of the terms of any employment or other agreement between
Participant and the Company. 

         
(e) “Class B Common Stock” means the Class B common
stock, $0.10 par value per share, of the Company. 

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

         
(g) “Committee” means the Compensation Committee of
the Board of Directors of the Company. 

         
(h) “Common Stock” means the common stock, par value
$0.10 per share of the Company, other than Class B Common Stock. 

         
(i) “Company” means Vishay Precision Group Inc. a
Delaware corporation, or any successor organization. 

         
(j) “Consent” has the meaning prescribed in Section 13
below. 

         
(k) “Disability” means a physical or mental condition
which, in the judgment of the Committee, permanently prevents a Participant from
performing his usual duties for the Company or such other position or job which
the Company makes available to him and for which the Participant is qualified by
reason of his education, training and experience. In making its determination,
the Committee may, but is not required to, rely on advice of a physician
competent in the area to which such Disability relates. The Committee may make
the determination in its sole discretion and any decision of the Committee shall
be binding on all parties. 

A-1 

          (l)
“Employee” means a full-time,
nonunion, salaried employee, as that term is understood under the common law, of
the Company. 

         
(m) “Exercise Price” means the price per share at
which Common Stock may be purchased upon exercise of a Stock Option. 

         
(n) “Expiration Date” means the last date upon which a
Stock Option can be exercised, as described in Section 6(b). 

         
(o) “Fair Market Value” means, for any particular
date, the last sale price of the Common Stock on the New York Stock Exchange or,
if no reported sales take place on the applicable date, the average of the high
bid and low asked price of the Common Stock as reported for such date or, if no
such quotation is made on such date, on the next preceding day on which there
were quotations, provided that such quotations shall have been made within the
ten (10) business days preceding the applicable date. In the event that the Fair
Market Value cannot be thus determined, it shall be determined in good faith by
the Committee. 

         
(p) “Involuntary Termination” means a Termination of
Employment but does not include a Termination of Employment for Cause or a
Voluntary Resignation. 

         
(q) “Participant” means an individual to whom an Award
is granted pursuant to the Program.

         
(r) “Program” means the 2010 Vishay Precision Group
Inc. Stock Incentive Program.

         
(s) “Program Action” has the meaning prescribed in
Section 13 below. 

         
(t) “Restricted Stock” means restricted shares of
Common Stock that, until vested, may not be transferred and are forfeitable.

         
(u) “Retirement” means a Termination of Employment
from the Company or a Subsidiary, with the consent of the Company, on or after
the earliest “normal retirement age” defined under any tax qualified retirement
plan maintained by the Company. 

         
(v) “Stock Option” or “Option” means a right to
purchase shares of Common Stock granted pursuant to Section 6 of this Program,
which shall not be treated as an incentive stock option under section 422 of the
Code. 

         
(w) “Stock Unit” means the right to receive a share of
Common Stock on a date determined by the Committee and set forth in the
applicable Agreement. 

         
(x) “Subsidiary” means any corporation (other than the
Company) in an unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Award, each of the corporations other than the
last corporation in the unbroken chain owns stock equal to 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in the chain. 

         
(y) “Termination of Employment” means the termination
of the employee-employer relationship between an Employee and the Company or a
Subsidiary, or the termination of service as a member of the Board, regardless
of the fact that severance or similar payments are made to the Participant, for
any reason, including, but not limited to, a Voluntary Resignation, Involuntary
Termination, termination for Cause, death, Disability or Retirement. The
Committee shall, in its absolute discretion, determine the effect of all matters
and questions relating to a Termination of Employment, including, but not by way
of limitation, the question of whether a leave of absence constitutes a
Termination of Employment, or whether a Termination of Employment is for Cause.
If a Participant is both an Employee and a member of the Board or if a
Participant ceases to be an Employee or Board member and immediately commences
service in the other capacity, then a Termination of Employment shall occur when
the Participant` is neither an Employee nor a member of the Board. 

          (z)
“Unrestricted Stock” means
unrestricted shares of Common Stock.

         
(aa) “Voluntary Resignation” means a Termination of
Employment as a result of the Participant’s resignation. 

A-2 

     3. Administration.

         
(a) The Program shall be administered by the
Committee, which shall consist of at least two directors who are not Employees
of the Company or a Subsidiary. The members of the Committee shall be appointed
by, and serve at the pleasure of, the Board. To the extent required for
transactions under the Program to qualify for the exemptions available under
Rule 16b-3 promulgated under the Securities Exchange Act of 1934, the members of
the Committee shall be “non-employee directors” within the meaning of Rule
16b-3. To the extent required for compensation realized from Awards to be
deductible by the Company pursuant to section 162(m) of the Code, the members of
the Committee shall be “outside directors” within the meaning of section 162(m).
Notwithstanding the foregoing, no
grant of an Award shall be invalidated if the Committee is not so constituted.
If the Committee does not exist, or for any other reason determined by the
Board, the Board may take any action under the Program that would otherwise be
the responsibility of the Committee.

         
(b) The Committee shall have full authority, in its
discretion, (a) to determine the Employees of the Company or any Subsidiary to
whom Awards shall be granted and the terms and provisions of each Award, subject
to the provisions of this Program, (b) to exercise all of the powers granted to
it under this Program, (c) to construe, interpret and implement the Program and
any Agreement, (d) to prescribe, amend and rescind rules and regulations
relating to this Program, including rules governing its own operations, (e) to
determine the terms and provisions of the respective Agreement with each
Participant, (f) to make all determinations necessary or advisable in
administering the Program, and (g) to correct any defect, supply any omission
and reconcile any inconsistency in the Program. The Committee’s determinations
under the Program need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Awards under the Program
(whether or not such persons are similarly situated). The Committee’s decisions
shall be final and binding on all Participants.

         
(c) Action of the Committee shall be taken by the vote
of a majority of its members. The determination of the Committee on all matters
relating to the Program or any Agreement (including, without limitation, the
determination as to whether an event has occurred resulting in a forfeiture or a
termination or reduction of the Company’s obligations in accordance with the
terms of this Program) shall be final, binding and conclusive. No member of the
Committee shall be liable for any action or determination made in good faith
with respect to the Program or any award thereunder. 

         
(d) Notwithstanding any other provision of the
Program, the Committee (or the Board acting instead of the Committee), may
delegate to one or more officers of the Company the authority to designate the
individuals (other than such officer(s) or any member of the Board), among those
eligible to receive awards pursuant to the terms of the Program, who will
receive Awards and the size of each such grant, to the fullest extent permitted
by Section 157 of the Delaware General Corporation Law (or any successor
provision thereto). 

         
(e) With respect to Awards granted to members of the
Board who are not employees of the Company, the Program shall be administered
(as otherwise set forth in this Section 3), including determining which
individuals shall receive Awards and the terms of any such Awards, solely by the
Board. 

     4. Shares Available.

         
(a) Subject to adjustment in accordance with Section
4(b), the number of shares of Common Stock for which Awards may be granted under
this Program is 1,000,000, which may consist of treasury shares or authorized
but unissued shares. The maximum number of shares of Common Stock subject to
Awards granted under this Program to any participating Employee for any year
shall not exceed 250,000 shares, subject to adjustment in accordance with
Section 4(b), below. To the extent permitted by law, any shares of Common Stock
attributable to the unexercised or otherwise unsettled portion of any Award that
is forfeited, canceled, expires or terminates for any reason without being
exercised or otherwise settled in full shall again be available for the grant of
Awards under this Program, provided that no more than 1,000,000 shares of Common
Stock cumulatively shall be available under this Program at any time.

A-3 

         
If (i) the Company withholds shares of
Common Stock to satisfy its minimum tax withholding requirements as provided in
Section 16 of the Program, (ii) an Option covering shares of Common Stock is
exercised pursuant to an arrangement under which the Participant receives shares
of Common Stock having an aggregate Fair Market Value equal to the excess of the
Fair Market Value of the Common Stock subject to the Option exercised over the
aggregate Option Exercise Price for such Options (“Immaculate Cashless
Exercise”) or (iii) shares of Common Stock are tendered to the Company in
payment of the Exercise Price of a Stock Option, other Options may not be
granted covering (x) the shares of Common Stock so withheld to satisfy the
Company’s tax withholding requirements, (y) the shares of Common Stock that were
subject to such Option but not delivered because of the Immaculate Cashless
Exercise or (z) the shares of Common Stock so tendered to pay the Exercise
Price, as applicable. Options may not be granted covering shares of Common Stock
repurchased by the Company on the open market with proceeds, if any, received by
the Company on account of the payment of the Exercise Price for an Option by
Participants. 

         
(b) If there is any change in the outstanding shares
of Common Stock by reason of a stock dividend or distribution, or stock
split-up, or by reason of any merger, consolidation, spinoff or other corporate
reorganization in which the Company is the surviving corporation, the number of
shares that may be delivered under the Program and the number of shares subject
to each outstanding Award, and, if appropriate, the Exercise Price under each
such Option, shall be equitably adjusted by the Committee, whose determination
shall be final, binding and conclusive. After any adjustment made pursuant to
this Section 4(b), the number of shares subject to each outstanding Award shall
be rounded down to the nearest whole number. 

     5.
Eligibility. Officers, other Employees of the Company or a
Subsidiary, and members of the Board, who are responsible for or contribute to
the management, growth, and profitability of the business of the Company or a
Subsidiary are eligible for participation in this Program. The selection of
individuals for participation in the Program shall be made by the Committee,
based on a subjective evaluation of each individual’s performance and expected
future contribution to the Company and its Subsidiaries, and may take into
account the recommendations of the Chief Executive Officer of the Company.

     6. Granting
of Stock Options.

          (a)
Grant of Stock Options. The Committee, in its discretion, may grant Stock
Options during any year that this Program is in effect to any eligible Employee.
The terms of each Stock Option shall be contained in an Agreement, which shall
contain the number of shares of Common Stock covered by the Option, the period
during which the Option may be exercised, the Exercise Price, and any additional
terms and conditions not inconsistent with this Program that the Committee deems
to be appropriate. The Committee shall have complete discretion in determining
the number of shares of Common Stock subject to each Option grant (subject to
the share limitations set forth in Section 4(a)) and, consistent with the
provisions of this Program, the terms, conditions and limitations pertaining to
each Option. The terms of Options need not be uniform among Participants. By
accepting a Stock Option, a Participant thereby agrees that the Option shall be
subject to all of the terms and conditions of this Program and the applicable
Agreement. 

          (b)
Option Term. The duration of each Option shall be specified in the
Agreement and shall not exceed ten (10) years. 

          (c)
Option Price. The Exercise Price of the Common Stock purchasable under
any Stock Option shall be determined by the Committee and set forth in each
Agreement, subject to adjustment in accordance with Section 4(b). The Exercise
Price shall not be less than the Fair Market Value of a share of Common Stock on
the date the Option is granted. 

          (d)
Exercise of Stock Options. Each Agreement shall contain a vesting
schedule, which shall specify when the Stock Option shall become vested and thus
exercisable; provided, however, that subsequent to the grant of an Option, the
Committee, at any time before complete termination of such Option, may
accelerate the time or times at which such Option may be exercised in whole or
in part, and may permit the Participant or any other designated person acting
for the benefit of the Participant to exercise all or any part of the Option
during all or part of the remaining Option term specified in Section 6(a),
notwithstanding any provision of the Agreement to the contrary. 

A-4 

          (e) Termination of Employment. 

              
(i) Death or Disability. If a Participant has a Termination of
Employment as a result of death or Disability, the time at which the unexercised
portion of any Option becomes exercisable may be accelerated, including to make
the Option immediately exercisable in full. Except as otherwise provided in an
applicable Agreement, the Option, to the extent that it is not exercisable on
the date of termination, shall expire and terminate on such date of termination
and the Option, to the extent that it is exercisable (including after any
acceleration of vesting) on such date of termination, shall expire and terminate
on the earlier of the Expiration Date or first anniversary of the Participant’s
death or disability. Any exercise of an Option following a Participant’s death
shall be made only by the Participant’s executor or administrator, unless the
Participant’s will specifically disposes of such award, in which case such
exercise shall be made only by the recipient of such specific disposition. If a
Participant’s personal representative or the recipient of a specific disposition
shall be entitled to exercise an Option pursuant to the preceding sentence, such
representative or recipient shall be bound by all the terms and conditions of
the Program and the applicable Agreement which would have applied to the
Participant. 

              
(ii) Retirement. If a Participant has a Termination of Employment
due to Retirement, the time at which the unexercised portion of an Option
becomes exercisable may be accelerated, including to make the Option immediately
exercisable in full. Except as otherwise provided in an applicable Agreement,
the Option, to the extent that it is not exercisable on the date of Retirement,
shall expire and terminate on such date of Retirement and the Option, to the
extent that it is exercisable (including after any acceleration of vesting) on
such date of retirement, shall expire and terminate on the earlier of the
Expiration Date of the Option term or the first anniversary of the Participant’s
Retirement. 

              
(iii) Other Termination. Except as otherwise provided in an
applicable Agreement, if a Participant has a Termination of Employment for
reasons other than as provided in subsections (i) and (ii) above, the Option, to
the extent that it is not exercisable on the date of termination, shall expire
and terminate on such date of termination and the Option, to the extent that it
is exercisable (including after any acceleration of vesting) on such date of
termination, shall expire and terminate on the earlier of the Expiration Date of
the Option or on the 60th day after the Participant’s termination; provided,
however, that the unexercised portion of any Option (including any vested
portion) shall expire and terminate immediately upon a Termination of Employment
for Cause. 

              
(iv) In the event that the Company in its sole
discretion determines that the Participant has, at any time during the 12-month period following
Termination of Employment violated the terms of any agreement with the Company
or a Subsidiary regarding (i) engaging in a business that competes with the
business of the Company or any Subsidiary, (ii) interfering in any material
respect with any contractual or business relationship of the Company or any
Subsidiary, or (iii) soliciting the employment of any person who was during such
12-month period, a director, officer, partner, Employee, agent or consultant of
the Company or a Subsidiary, then (x) all outstanding unexercised Stock Options
issued to the holder pursuant to the Program shall be forfeited and (y) upon
written request from the Company, the Participant shall pay to the Company any
gain realized upon the exercise of an Option within the 12-month period
preceding the violation or such other period as may be set forth in the
applicable Agreement. 

          (f)
Transfer of Option. Unless the Committee determines otherwise at the time
an Option is granted, no Option granted under the Program shall be assignable or
transferable other than by will or by the laws of descent and distribution, and
all Options shall be exercisable during the life of the Participant only by the
Participant or his legal representative. 

          (g)
Substituted Options. Notwithstanding anything to the contrary in this
Section 6, any Option issued in substitution for an Option previously issued by
another entity, which substitution occurs in connection with a transaction to
which Code section 424(a) is applicable, may provide for an Exercise Price
computed in accordance with such Code section and the regulations thereunder and
may contain such other terms and conditions as the Committee may prescribe to
cause such substitute Option to contain as nearly as possible the same terms and
conditions (including the applicable vesting and termination provisions) as
those contained in the previously issued Option being replaced thereby.

A-5 

     7.
Exercise of Stock Options. A Stock Option shall be exercised by
the delivery of a written notice of exercise to the Vice President and Secretary
of the Company, or such other person specified by the Committee, setting forth
the number of shares of Common Stock with respect to which the Option is to be
exercised, accompanied by full payment of the Exercise Price and, pursuant to
Section 16 any required withholding taxes. Payment of the Exercise Price for the
shares of Common Stock being purchased shall be made: (a) by certified or
official bank check (or the equivalent thereof acceptable to the Company), or
(b) at the discretion of the Committee and to the extent permitted by law, by
such other provision as the Committee may from time to time prescribe. The
Committee may allow exercises to be made by means of a “brokered cashless
exercise,” with the delivery of payment as permitted under Federal Reserve Board
Regulation T, subject to applicable securities law restrictions, or by any other
means which the Committee determines to be consistent with the Program’s purpose
and applicable law. Payment shall be made on the date that the Option or any
part thereof is exercised, and no shares shall be issued or delivered upon
exercise of an Option until full payment has been made by the Participant.
Promptly after receiving payment of the full Exercise Price, the Company shall,
subject to the provisions of Section 13, deliver to the Participant, or to such
other person as may then have the right to exercise the Option, a certificate
for the shares of Common Stock for which the Option has been exercised.

     8. Employees
Based Outside of the United States. Notwithstanding any provision of
this Program to the contrary, in order to foster and promote the achievement of
the purposes of the Program, or to comply with these provisions in other
countries in which the Company or any Subsidiary operates or has Employees, the
Committee, in its sole discretion, shall have the power and authority to (i)
determine which Employees employed outside the United States are eligible to
participate in the Program, (ii) modify the terms and conditions of any Options
granted to Employees who are employed outside the United States (including the
grant of stock appreciation rights, as described in the following paragraph, in
lieu of Stock Options), and (iii) establish subprograms, modified Option
exercise procedures and other terms and procedures to the extent such actions
may be necessary or advisable. 

          The
Committee in its discretion may grant stock appreciation rights in lieu of Stock
Options to Employees employed outside the United States. A stock appreciation
right shall provide an Employee the right to receive in cash the difference
between the Fair Market Value of a share of Common Stock on the grant date and
the exercise date, and otherwise shall have the same terms and conditions as a
Stock Option granted hereunder. Stock appreciation rights granted under this
Section 8 shall be considered as Stock Options for the application of the
limitations in Section 4(a) of the Program. 

     9. No Rights
as a Stockholder. No Participant (or other person having the right to
exercise an Option) shall have any of the rights of a stockholder of the Company
with respect to shares subject to an Option until the issuance of a stock
certificate to such person for such shares or the establishment of an account
evidencing ownership of such shares in uncertificated form, except as otherwise
provided in Section 4(b). 

     10.
Restricted Stock. 

          (a)
Restricted Stock Grants. The Committee may grant Restricted Stock to such
key persons, in such amounts, and subject to such vesting and forfeiture
provisions and other terms and conditions as the Committee shall determine in
its sole discretion, subject to the provisions of the Program. The terms of a
grant of Restricted Stock shall be contained in an Agreement, which shall
contain the number of shares of Restricted Stock granted, when the Restricted
Stock vests and any additional terms and conditions not inconsistent with this
Program that the Committee deems to be appropriate If the Restricted Stock is
newly issued by the Company, the Participant must make payment to the Company or
its exchange agent in an amount at least equal to the par value of the shares as
required by the Committee and in accordance with the Delaware General
Corporation Law. 

          (b)
Issuance of Stock Certificate(s). Promptly after the Committee grants
Restricted Stock to a Participant, the Company or its exchange agent shall issue
to the Participant a stock certificate or stock certificates for the shares of
Common Stock covered by the Award or shall establish an account evidencing
ownership of the stock in uncertificated form. Upon the issuance of such stock
certificate(s) or establishment of such account, the Participant shall have the
rights of a stockholder with respect to the restricted stock, subject to: (i)
the nontransferability restrictions and forfeiture provision described in
Sections 10(d) and 10(e); (ii) in the Committee’s discretion, a requirement that
any dividends paid on such shares shall be held in escrow until all restrictions
on such shares have lapsed; and (iii) any other restrictions and conditions
contained in the applicable Agreement. 

A-6 

          (c) Custody of Stock Certificate(s). Unless
the Committee shall otherwise determine, any stock certificates issued
evidencing shares of restricted stock shall remain in the possession of the
Company until such shares are free of any restrictions specified in the
applicable Agreement. The Committee may direct that such stock certificate(s)
bear a legend setting forth the applicable restrictions on transferability or,
if the Restricted Stock is in book entry form, that such book entry or account
be subject to electronic coding or stop order indicating that such shares of
Restricted Stock are restricted by the terms of the Program. Such legend,
electronic coding or stop order shall not be removed until such shares of
Restricted Stock vest. 

          (d)
Nontransferability. Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as otherwise
specifically provided in this Program or the applicable Agreement. The Committee
at the time of grant shall specify the date or dates (which may depend upon or
be related to a period of continued employment with the Company, the attainment
of performance goals or other conditions or a combination of such conditions) on
which the nontransferability of the restricted stock shall lapse. 

          (e)
Termination of Employment. Except as may otherwise be provided by the
Committee at any time prior to a Participant’s Termination of Employment, a
Participant’s Termination of Employment for any reason (including death) shall
cause the immediate forfeiture of all Restricted Stock that has not yet vested
as of the date of such Termination of Employment. Unless the Board or the
Committee determines otherwise, all dividends paid on such shares also shall be
forfeited, whether by termination of any escrow arrangement under which such
dividends are held, by the Participant’s repayment of dividends received
directly, or otherwise. 

     11.
Unrestricted Stock. The Committee may grant (or sell at a
purchase price at least equal to par value) shares of Common Stock free of
restrictions under the Program, to such key persons and in such amounts as the
Committee shall determine in its sole discretion. Shares may be thus granted or
sold in respect of past services or other valid consideration. 

     12. Stock
Units.

          (a)
Stock Unit Grants. The Committee may grant Stock Units to such key
persons, in such amounts, and subject to such terms and conditions as the
Committee shall determine in its discretion, subject to the provisions of the
Program. The terms of a grant of Stock Units shall be contained in an Agreement,
which shall contain the number of Stock Units granted, whether the Stock Unit is
subject to vesting and, to the extent applicable, when the Stock Units vest,
when the shares of Common Stock will be issued and any additional terms and
conditions not inconsistent with this Program that the Committee deems to be
appropriate. Unless the applicable Agreement provides otherwise, a share of
Common Stock will be issued immediately upon vesting of a Stock Unit. Stock
Units may be awarded independently of or in connection with any other Award
under the Program. 

          (b)
Nontransferability. Stock Units may not be sold, assigned, transferred,
pledged or otherwise encumbered or disposed of except as otherwise specifically
provided in this Program or the applicable Agreement. 

          (c)
Vesting. Stock Units may be granted fully vested or subject to vesting.
If a Stock Units is subject to vesting, the Committee at the time of grant shall
specify the date or dates (which may depend upon or be related to a period of
continued employment with the Company, the attainment of performance goals or
other conditions or a combination of such conditions) on which the Stock Units
shall vest. 

          (d)
Termination of Employment. Except as may otherwise be provided by the
Committee at any time prior to a Participant’s Termination of Employment, a
Participant’s termination of employment for any reason (including death) shall
cause the immediate forfeiture of all Stock Units that have not yet vested as of
the date of such Termination of Employment. 

A-7 

     13. Consents and Approvals. If the Committee shall
at any time determine that any Consent (as hereinafter defined) is necessary or
desirable as a condition of, or in connection with, the issuance of shares under
the Program or the taking of any other action thereunder (each such action being
hereinafter referred to as a “Program Action”), then such Program Action shall
not be taken, in whole or in part, unless and until such Consent shall have been
effected or obtained to the full satisfaction of the Committee. The term
“Consent” as used herein with respect to any Program Action means (a) any and
all listings, registrations or qualifications in respect thereof upon any
securities exchange or under any federal, state or local law, rule or
regulation, (b) any and all written agreements and representations by the
Participant with respect to the disposition of shares, or with respect to any
other matter, which the Committee shall deem necessary or desirable to comply
with the terms of any such listing, registration or qualification or to obtain
an exemption from the requirement that any such listing, qualification or
registration be made and (c) any and all consents, clearances and approvals in
respect of a Program Action by any governmental or other regulatory bodies.

     14. Change
in Control. 

          (a)
Change in Control Defined. A “Change in Control” shall be deemed to have
occurred at such time as: 

              
(i) a “person” or “group” within the meaning of
Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) (other
than the Company or any of its Subsidiaries or any employee benefit plans of the
Company or any of its Subsidiaries or any Permitted Holders) becomes the direct
or indirect “beneficial owner”, as defined in Rule 13d-3 under the Exchange Act,
of 50% or more, in the aggregate, of the voting power of the (x) Common Stock
and Class B Common Stock then outstanding or (y) other capital stock into which
the Common Stock or Class B Common Stock is reclassified or changed; 

              
(ii) the consummation of any share exchange,
consolidation or merger of the Company pursuant to which the Common Stock will
be converted into cash, securities or other property or any sale, lease or other
transfer in one transaction or a series of transactions of all or substantially
all of the consolidated assets of the Company and its Subsidiaries, taken as a
whole, to any person other than to a Subsidiary of the Company; provided,
however, that a transaction where the holders of the Common Stock and the Class
B Common Stock immediately prior to such transaction own, directly or
indirectly, more than 50% of aggregate voting power of all classes of common
equity of the continuing or surviving corporation or transferee entitled to vote
generally in the election of directors immediately after such event shall not be
a Change in Control; 

              
(iii) the Continuing Directors cease to constitute at
least a majority of the Company’s board of directors; or 

              
(iv) the stockholders of the Company approve any plan
or proposal for the liquidation or dissolution of the Company.

          “Permitted Holder” means each of Dr. Felix Zandman
or his wife, children or lineal descendants (including the estate of any such
person), the Estate of Mrs. Luella B. Slaner or her children or lineal
descendants, any trust established for the benefit of such persons, or any
“person” (as such term is used in Section 13(d) or 14(d) of the Exchange Act),
directly or indirectly, controlling, controlled by or under common control with
any such person mentioned in this paragraph or any trust established for the
benefit of such persons or any charitable trust or non-profit entry established
by a Permitted Holder, or any group in which such Permitted Holders hold more
than a majority of the voting power of the Common Stock and Class B Common Stock
deemed to be beneficially owned by such group. 

          “Continuing
Director” means a director who either was a member of the Board of Directors on
April 1, 2008 or who becomes a member of the Board of Directors subsequent to
that date and whose election, appointment or nomination for election by the
stockholders of the Company is duly approved by a majority of the Continuing
Directors on the Board of Directors at the time of such approval, either by a
specific vote or by approval of the proxy statement issued by the Company on
behalf of the Board of Directors in which such individual is named as nominee
for director. 

A-8 

          (b)
Effect of a Change in
Control. 

              
(i) Upon the occurrence of a Change in Control, the
Committee may cause all or some of the Awards outstanding under the Program to
be fully vested as of the effective date of the Change in Control. 

              
(ii) Upon the occurrence of a Change in Control that
results in (i) a dissolution or liquidation of the Company, (ii) a sale of all
or substantially all of the Company’s assets, (iii) a merger or consolidation
involving the Company in which the Company is not the surviving corporation or
(iv) a merger or consolidation involving the Company in which the Company is the
surviving corporation but the holders of shares of Common Stock receive
securities of another corporation and/or other property, including cash, the
Committee shall, in its absolute discretion (which may include not treating all
Options uniformly), elect to either: 

                   
(1) amend each Stock Option so that it becomes
exercisable in full at least two weeks before the occurrence of such event and
expires upon the occurrence of such event; 

                   
(2) cancel, effective immediately prior to the
occurrence of such event, each Stock Option outstanding immediately prior to
such event (whether or not then exercisable), and, in full consideration of such
cancellation, pay to the Participant an amount in cash, for each share of Common
Stock subject to such Stock Option equal to the excess of (x) the value, as
determined by the Committee in its absolute discretion, of the property
(including cash) received by the holder of a share of Common Stock as a result
of such event over (y) the Exercise Price of such Stock Option; or 

                   
(3) provide for the exchange of each Stock Option
outstanding immediately prior to such event (whether or not then exercisable)
for an option on some or all of the property which a holder of the number of
shares of Common Stock subject to such Stock Option would have received and,
incident thereto, make an equitable adjustment as determined by the Committee in
its absolute discretion in the Exercise Price of the Stock Option, or the number
of shares or amount of property subject to the Stock Option or, if appropriate,
provide for a cash payment to the Participant in partial consideration for the
exchange of the Stock Option. 

     15. Limitations Imposed by Section 162(m) 

         
(a) Qualified Performance-Based
Compensation. The Committee may
make the granting and/or vesting of an Award subject to the attainment of one or
more pre-established objective performance goals during a performance period, as
set forth below. It is intended that the compensation realized by the
Participant from such Awards would qualify as “qualified performance-based
compensation” within the meaning of Code section 162(m). 

              
(i) Performance Goals. Prior to the ninety-first (91st) day of the
applicable performance period or during such other period as may be permitted
under section 162(m) of the Code, the Committee shall establish one or more
objective performance goals with respect to such performance period. Such
performance goals shall be expressed in terms of one or more of the following
criteria: (a) earnings (either in the aggregate or on a per-share basis,
reflecting dilution of shares as the Committee deems appropriate and, if the
Committee so determines, net of or including dividends); (b) adjusted net income
(meaning net income, excluding specified items of income, expense, gain or loss,
including, without limitation, any or all of restructuring and related severance
costs, fixed asset or inventory write-downs and related purchase commitment
charges, impairment charges for goodwill or indefinite-lived intangible assets,
and individually material one-time gains or charges); (c) adjusted operating
income (meaning operating income, excluding specified items of income, expense,
gain or loss, including, without limitation, any or all of restructuring and
related severance costs, fixed asset or inventory write-downs and related
purchase commitment charges, impairment charges for goodwill or indefinite-lived
intangible assets, and individually material one-time gains or charges), (d)
gross or net sales; (e) cash flow(s) (including either operating or net cash
flows); (f) financial return ratios; (g) total shareholder return, shareholder
return based on growth measures or the attainment by the shares of a specified
value for a specified period of time, share price or share price appreciation;
(h) value of assets, return or net return on assets, net assets or capital
(including invested capital); (i) adjusted pre-tax margin; (j) margins, profits
and expense levels; (k) dividends; (l) market share, market penetration or other
performance measures with respect to specific designated products or product
groups and/or specific geographic areas; (m) reduction of losses, loss ratios or
expense ratios; (n) reduction in fixed costs; (o) operating cost management; (p)
cost of capital; (q) debt reduction; (r) productivity improvements; (s)
inventory turnover measurements; or (t) customer satisfaction based on specified
objective goals or a Company-sponsored customer survey. Each such performance
goal (A) may be expressed (1) with respect to the Company as a whole or with
respect to one or more divisions or business units, (2) on a pre-tax or
after-tax basis, (3) on an absolute and/or relative basis, and (B) may employ
comparisons with past performance of the Company (including one or more
divisions) and/or the current or past performance of other companies, and in the
case of earnings-based, net income-based or operating income-based measures, may
employ comparisons to net revenues, capital, stockholders’ equity and shares
outstanding. 

A-9 

          To the extent applicable, the measures used in
performance goals set under the Program shall be determined in accordance with
generally accepted accounting principles (“GAAP”) and in a manner consistent
with the methods used in the Company’s regular reports on Forms 10-K and 10-Q,
without regard to any of the following, unless otherwise determined by the
Committee consistent with the requirements of section 162(m)(4)(C) and the
regulations thereunder: 

                    (1) all
items of gain, loss or expense for a fiscal year that are related to special,
unusual or non-recurring items, events or circumstances affecting the Company or
the financial statements of the Company; 

                    (2) all
items of gain, loss or expense for a fiscal year that are related to (i) the
disposal of a business or discontinued operations or (ii) the operations of any
business acquired by Company during the fiscal year; and 

                    (3) all
items of gain, loss or expense for a fiscal year that are related to changes in
accounting principles or to changes in applicable law or regulations.

                    (4) To the
extent any objective performance goals are expressed using any earnings or
sales-based measures that require deviations from GAAP, such deviations shall be
at the discretion of the Committee and established at the time the applicable
performance goals are established. 

               (ii) Performance Period. The Committee in its sole discretion shall determine
the length of each performance period. 

          (b) Nonqualified Deferred Compensation. Notwithstanding any other provision hereunder, if and to the extent
that the Committee determines the Company’s federal tax deduction in respect of
an Award may be limited as a result of section 162(m) of the Code, with respect
to Restricted Stock or Stock Units, the Committee may require the Participant to
surrender to the Committee any certificates with respect to Restricted Stock and
agreements with respect to Stock Units, in order to cancel the awards of such
Restricted Stock or Stock Units. In exchange for such cancellation, the
Committee shall credit to a book account a cash amount equal to the Fair Market
Value of the shares of Common Stock subject to such Awards. The amount credited
to the book account shall be paid to the Participant within 30 days after the
date that compensation paid to the grantee no longer is subject to the deduction
limitation under section 162(m) of the Code. The Participant shall have no
rights in respect of such book account and the amount credited thereto shall not
be transferable by the Participant other than by will or laws of descent and
distribution. The Committee may credit additional amounts to such book account
as it may determine in its sole discretion. Any book account created hereunder
shall represent only an unfunded, unsecured promise by the Company to pay the
amount credited thereto to the Participant in the future. 

     16. Tax
Withholding. The Company shall withhold any taxes required to be
withheld by federal, state or local government in connection with an Award. The
Company shall have the right to require a Participant to remit to the Company an
amount sufficient to satisfy any federal, state and local withholding tax
requirements prior to the delivery of any certificate or certificates for
shares. A Participant may pay the withholding tax in cash, or, if the Agreement
provides, a Participant may also elect to have the number of shares of Common
Stock he is to receive reduced by the smallest number of whole shares of Common
Stock which, when multiplied by the Fair Market Value of the shares determined
as of the date on which the amount of tax to be withheld is determined, is
sufficient to satisfy federal, state and local, if any, withholding taxes
arising from the Award. Any such election must be made on or before the date on
which the amount of tax required to be withheld is determined. 

A-10 

     17. Right of Discharge Reserved. Nothing in the Program or in any Agreement shall confer upon any
Participant the right to continue as an Employee or executive officer of the
Company or any Subsidiary, or affect any right which the Company may have to
terminate such Employee or executive officer. 

     18. Amendment. 

         
(a) In General. The Board may amend the Program, and the Committee may amend any
outstanding Agreement, in any respect whatsoever, except that, other than
pursuant to Section 14(b), no amendment to an outstanding Agreement shall
materially impair any rights or materially increase any obligations of any
Participant under any Award without the consent of the Participant (or, after
the Participant’s death, the person succeeding to the Participant’s interests
with respect to the Award). An amendment shall be subject to stockholder
approval to the extent necessary for compliance with Code section 162(m) and
other applicable law or regulation. 

         
(b) Repricing of Options and Cash
Buyouts. Notwithstanding any
provision in the Program to the contrary, neither the Board nor the Committee
may, without obtaining prior approval by the Company’s shareholders: 

              
(i) Reduce the Exercise Price of any issued and
outstanding Option granted under the Program at any time during the term of such
Option (other than by adjustment pursuant to Section 4(b) of the Program
relating to changes in capitalization); or 

              
(ii) Authorize the Company to purchase Options or
exchange Options for cash or other property, except to the extent specifically
authorized under circumstances described in Section 7, Section 14(b) or Section
16 of the Program relating to Immaculate Cashless Exercise, change in control
and tax withholding, respectively. 

     19. Term of the Program. This Program initially
became effective on July 6, 2010, the date approved by the stockholder of the
Company. The Program, as amended and restated, is effective on June 2, 2011, the
date the amendment and restatement was adopted by the Board. The Program shall
terminate upon the earlier of (i) the date on which all Common Stock available
under this Program have been issued, (ii) May 21, 2023, or (iii) the termination
of this Program by the Committee subject to approval of the Board of Directors
of the Company. No Award may be granted after the termination of the Program.
Any outstanding Awards as of the date the Program terminates shall remain in
full force and effect, subject to the terms of the Program and the relevant
Agreement relating to such Award. 

     20. Indemnification.
Each person who is or shall have
been a member of the Committee, or of the Board of Directors, shall be
indemnified and held harmless by the Company from and against any loss, cost,
liability or expense that may be imposed upon or reasonably incurred by such
person in connection with or resulting from any claim, action, suit or
proceeding to which such person may be a party or in which such person may be
involved by reason of any action taken or failure to act under the Program and
against and from any and all amounts paid by such person in settlement thereof
with the Company’s approval, or paid by such person in satisfaction of any
judgment in any such action, suit or proceeding against such person, provided
such person shall give the Company an opportunity, at its own expense, to handle
and defend the same before such person undertakes to handle and defend it on
such person’s own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled from the Company, as a matter of law, or otherwise. 

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

     22. Severability. In the event any provision of the Program shall be held illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining parts of the Program, and the Program shall be construed and enforced
as if the illegal or invalid provision had not been included. 

     23. Governing Law.
This Program and any grant of
Awards made and any action taken hereunder shall be subject to and construed and
interpreted in accordance with the laws of the State of Delaware, without giving
effect to principles of conflict of laws.

A-11 

VISHAY PRECISION GROUP,
INC.

2010 Stock Incentive
Program

2010 ISRAELI
ADDENDUM 

     This 2010 Israeli Addendum is implemented for appropriate administration
of the 2010 Stock Incentive Program in Israel. It shall form a part of the 2010
Stock Incentive Program of Vishay Precision Group Inc., and it shall apply only
to Employees who are (i) deemed residents of the State of Israel for the purpose
of Israeli tax laws; and (ii) employed by Vishay Precision Group, Inc. or any of
its Israeli Subsidiaries.

 

 

 

 

 

 

 

A-12 

Vishay Precision Group
Inc.

2010 Stock Incentive
Program

2010 ISRAELI
ADDENDUM 

	1.
	Purpose of the
Addendum: This 2010 Israeli Addendum shall form an integral part of the 2010
Stock Incentive Program (the “Program”) of Vishay Precision Group Inc.
(the "Company"), and it shall apply only to Employees who are (i) deemed
residents of the State of Israel for the purpose of Israeli tax laws; and (ii)
employed by the Company or any of its Israeli Subsidiaries. 

	 	 
	 	This Addendum modifies the Program so that it
shall comply with the requirements set by the Israeli Tax Ordinance and the
Rules (as defined below).

The Program and this 2010 Israeli Addendum are
complimentary to each other and shall be read and deemed as one. Any
requirements provided in this Addendum shall be in addition to the requirements
provided in the Program and in the Agreement. In the event of a conflict,
whether explicit or implied, between the provisions of the Program and this
Addendum, the latter shall govern and prevail. 

	 	 
	2.	Definitions:
	          	 
		(a)	Unless otherwise defined herein, the terms defined in the Program
      shall have the same defined meaning in this Addendum.
		          	
		(b)	For the purposes of this Addendum, the following terms shall have
      the meaning ascribed thereto as set forth below:
	 
			(i)	"Addendum" means this
      2010 Israeli Addendum, as amended from time to time.
	 		              	
			(ii)	"Rights" means stock options, stock and stock units granted by the Company granted in accordance with the terms of the Program.
	 
			(iii)	"Additional
      Rights" means any
      distribution of rights granted in accordance with the terms of the
      Program, in connection with 102 Trustee Rights (as defined below) and/or
      with the Common Shares issued pursuant to such Rights.
	 
			(iv)	"Controlling
      Shareholder" shall have the
      same meaning ascribed to it in Section 32(9) of the Tax Ordinance (as
      defined below).
	 
			(v)	"Employee" shall have
      the same meaning ascribed to it Section 102.
	 
			(vi)	"Lock-up
      Period" means the period
      during which the Trustee shall hold on behalf of the Employee Section 102
      Trustee Rights granted to an Employee or, the underlying Common Shares as
      well as any Additional Rights distributed in connection therewith, in
      accordance with the terms and conditions set forth in Section 102,
      pursuant to the Company's Section 102(b) Route Election, as applicable, and the Rules.
	 
			(vii)	"Section
      102" means Section 102 of
      the Israeli Income Tax Ordinance [New Version], 1961 and the Rules, as
      applicable, and any regulations, rules, orders or procedures promulgated
      thereunder, all as amended from time to time.
	 
	 		(viii)	“Non-Employee” means
      a consultant, adviser, service provider or any other person who is not an
      Employee.
	 
			(ix)	"Rules" means Income
      Tax Rules (Tax Relief upon the Allotment of Shares to Employees),
      2003.

A-13 

			(x)	"Section
      3(i)" means Section 3(i) of
      the Tax Ordinance and the applicable rules or regulations thereto, all as
      amended from time to time.
			              	 
			(xi)	"Section 3(i)
      Right" means a Right
      granted pursuant to Section 3(i).
			 
			(xii)	“Section 102 Trustee
      Right" means a Right
      intended to qualify, under the provisions of Section 102(b) of the Tax
      Ordinance (including the Section 102(b) Route Election), as
    either:
			 
				i.	“Ordinary Income Right Through a
      Trustee” for the special
      tax treatment under Section 102(b)(1) and the “Ordinary Income Route”,
      or
			 	          	
				ii.	“Capital Gain Right Through a
      Trustee"” for the special
      tax treatment under Section 102(b)(2) and the “Capital
Route”.
			 
			(xiii)	“Section 102(b) Route
      Election” means the right
      of the Company to choose either the “Capital Route” (as set under Section
      102(b)(2)), or the “Ordinary Income Route” (as set under Section
      102(b)(1)), but subject to the provisions of Section 102(g) of the Tax
      Ordinance, as further specified in Section 5 below.
			 
			(xiv)	“Section 102
      Non-Trustee Right” means a
      Right granted not through a trustee under the terms of Section 102(c) of
      the Tax Ordinance.
			 
			(xv)	“Tax
      Ordinance” means the
      Israeli Income Tax Ordinance, 1961.
			 
			(xvi)	"Trustee" means a
      person or an entity, appointed by the Company and approved in accordance with
      the provisions of Section 102, to hold in trust on behalf of the Employees
      the granted Rights, or the underlying Common Shares, as well as all Additional
      Rights granted in connection therewith, in accordance with the provisions
      of Section 102.
			 
			(xvii)	"Trust
      Agreement" means a written
      agreement between the Company and the Trustee, which sets forth the terms
      and conditions of the trust and is in accordance with the provisions of
      Section 102.
	          	          	 	
	
      3.
	
      Administration:
      Further to the authorities of the Committee, as detailed in Section 3 of
      the Program, with regard to this Addendum, the Committee shall have full
      power and authority, at all times, to: (i) designate Rights as an: Section
      102 Trustee Right, Section 102 Non-Trustee Right or Section 3(i) Right;
      (ii) make a Section 102(b) Route Election (subject to the limitations set
      under Section 102(g)); and (iii) determine any other matter and execute
      any document which are necessary or desirable for, or incidental to, the
      administration of the Addendum and the grant of Rights
      hereunder.

	 	 
	
      4.
	
      Eligibility: Subject
      to the terms and conditions of the Program, Section 102 Trustee Rights and
      Section 102 Non-Trustee Rights may be granted only to Employees of the
      Company or its Subsidiary provided that such Subsidiary is "employing
      company" within the meaning of Section 102(a) of the Tax Ordinance.
      Section 3(i) Rights may be granted only to Non-Employees and/or Employees
      who are Controlling Shareholders prior to and/or after the issuance of the
      Rights.

	 	 
	
      5.
	
      Section 102(b)
      Route Election: No Section
      102 Trustee Rights may be granted under this Addendum to any eligible
      Employee, unless and until, the Company's election of the type of Section
      102 Trustee Rights, either as "Ordinary Income Right Through a Trustee" or
      as "Capital Gain Right Through a Trustee", is appropriately filed with the
      Income Tax Authorities before the first date of grant of Section 102
      Trustee Right. Such Section 102(b) Route Election shall become effective
      beginning the first date of grant of a Section 102 Trustee Right under
      this Addendum and shall remain in effect until the end of the year
      following the year during which the Company first granted Section 102
      Trustee Rights. The Section 102(b) Route Election shall obligate the
      Company to grant only the type of
      Section 102 Trustee Right it has elected, and shall apply to all Employees
      who were granted Section 102 Trustee Rights during the period indicated
      herein, all in accordance with the provisions of Section 102(g) of the Tax
      Ordinance. For avoidance of doubt, it is clarified that the Company does
      not obligate itself to file a Section 102(b) Route Election, and in any
      case, such Section 102(b) Route Election shall be at the sole discretion
      of the Company. It is further clarified that such Section 102(b) Route
      Election shall not prevent the Company from granting Section 102
      Non-Trustee Rights simultaneously.

A-14 

	
      6.
    
	
      Trustee:

		 
		(a)	Section
      102 Trustee Rights, which shall be granted under the Addendum and any
      Common Shares issued pursuant to such Rights shall be issued to the
      Trustee who shall hold the same in trust for the benefit of the Employees
      at least for the applicable Lock-up Period. Upon the expiration of the
      Lock-up Period and subject to any further period included in the Program
      and/or in the Agreement, the Trustee may release Section 102 Trustee
      Rights or Common Shares issued pursuant to such Rights to Employee only
      after the Employee's full payment of his or her tax liability in
      connection therewith due pursuant to the Tax Ordinance and the
      Rules.
		 
		(b)	Notwithstanding the above, in the event that an Employee shall
      elect to release Section 102 Trustee Rights or the Common Shares issued
      pursuant to such Rights prior to the expiration of the Lock-up Period, the
      sanctions under Section 102 shall apply to and shall be borne solely by
      the Employee.
		 
		(c)	Any
      Additional Rights distributed to Employees shall be deposited with and/or
      issued to the Trustee for the benefit of the Employees, and shall be held
      by the Trustee for the applicable Lock-up Period in accordance with the
      provisions of Section 102 and the Rules.
		 
		(d)	Upon
      receipt of Section 102 Trustee Rights, an Employee will sign the
      Agreement, which shall be deemed as the Employee’s undertaking to exempt
      the Trustee from any liability in respect of any action or decision duly
      taken and bona fide
      executed in relation with
      the Plan, the Addendum and any Right, Common Share or other rights
      received by the Employee in connection therewith.
		 
		(e)	The
      Trustee and the Employees shall comply with the Tax Ordinance, the Rules
      and the provisions of the Trust Agreement.
		          	
	
      7.
	
      Issuance Section
      102 Trustee Rights: The
      Company may grant Section 102 Trustee Rights after the passage of thirty
      (30) days' following the delivery, to the appropriate Israeli Income Tax
      Authorities, of a request for approval of the Program and the Addendum as
      well as the Trustee according to Section 102. Notwithstanding the above,
      if within ninety (90) days' following the delivery of such request, the
      tax officer notifies the Company of its decision not to approve the
      Program and/or the Addendum, the Rights, which were intended to be granted
      as Section 102 Trustee Rights, shall be deemed to be Section 102
      Non-Trustee Rights, unless otherwise was approved by the tax officer.
      

		 
	
      8.
	
      Fair Market
      Value: Without derogating
      from the definition of Fair Market Value in the Program and solely for the
      purpose of determining the tax liability with respect to the grant of
      Capital Gain Right Through a Trustee pursuant to Section 102(b)(3), (i) if
      at the Date of Grant the Company’s stock is listed on any established
      stock exchange or a national market system or if the Company’s stock will
      be registered for trading within ninety (90) days following the Date of
      Grant, the Fair Market Value of a share of Common Stock at the Date of
      Grant shall be determined in accordance with the average value of the
      Company’s Common Stock on the thirty (30) trading days preceding the Date
      of Grant or on the thirty (30) trading days following the date of
      registration for trading, as the case may be; (ii) if the stock is
      regularly quoted by a recognized securities dealer but selling prices are
      not reported, the Fair Market Value shall be the mean between the high bid
      and low asked prices for the Common Stock on the last market trading day
      prior to the day of determination; or (iii) in the absence of an
      established market, the Fair Market Value thereof shall be determined in
      good faith by the Company. 

		 
	
      9.
	
      Tax
      Consequences:

		 
	          	
      (a)
	
      Any tax consequences
      arising from the grant or exercise of any Right, from the payment for
      Common Shares covered thereby or from any other event or act (of the
      Employee, the Company, its Subsidiaries or the Trustee) hereunder, shall
      be borne solely by the Employee. The Company and/or its Subsidiaries
      and/or the Trustee shall withhold taxes according to the requirements
      under the Tax Ordinance, the Rules and any other applicable laws, rules,
      and regulations, including withholding taxes at source. The Company and/or
      the Trustee shall not be required to release any Share certificate to the
      Employee until all required payments have been fully made.

      Furthermore, the
      Employee shall agree to indemnify the Company, the Subsidiary that employs
      the Employee and the Trustee and hold them harmless against and from any
      and all liability for any such tax or interest or penalty thereon,
      including without limitation, liabilities relating to the necessity to
      withhold, or to have withheld, any such tax from any payment made to the
      Employee. 

A-15 

		(b)	In the
      event that Employee shall cease to be employed by the Company or its
      Subsidiary for any reason, the Employee shall be obligated upon the
      Company's, the Subsidiary's or the Trustee's first demand to provide the
      Company, its Subsidiary and the Trustee with a security or guarantee, in
      the degree and manner satisfactory to them, to cover any future tax
      obligation resulting from the disposition of the Rights and/or the Common
      Shares acquired thereunder.
		          	 
		(c)	With
      regard to Section 102 Trustee Rights, to the extent Section 102 and/or the
      Assessing Officer's approval require the Addendum to contain specified
      provisions in order to qualify the Rights for preferential tax treatment,
      such provisions shall be deemed to be stated in this Addendum and to be an
      integral part hereof.
	 
	10.	Non-Transferability:
      Notwithstanding anything in the Program to the contrary, with regard to
      Section 102 Trustee Rights and the shares of Common Stock issued pursuant
      to such Rights, as long as such Rights and/or Shares are held by the
      Trustee on behalf of the Employee, all rights of the Employee with respect
      thereto are personal and cannot be transferred, assigned, pledged or
      mortgaged, other than by will or by the laws of descent and
      distribution.
	          	 
	11.	Governing Tax Law:
      This Addendum and all instruments issued thereunder or in connection
      therewith shall be governed by and construed and enforced in accordance
      with the tax laws of the state of Israel, without giving effect to the
      principles of conflict of laws.
	 
	12.	Effectiveness: This
      Addendum shall be effective with respect to Rights granted prior to or
      after its adoption by the Company.

*         
*          * 

A-16

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