Document:

EX-4.4

 

Exhibit 4.4

REGISTRATION RIGHTS AGREEMENT

     This Registration Rights Agreement (this “Agreement”) is made and entered into as of
April 12, 2007, by and among Horsehead Holding Corp., a Delaware corporation (the
“Company”) and Friedman, Billings, Ramsey & Co., Inc., a Delaware corporation
(“FBR”), for the benefit of FBR, the purchasers of the Company’s common stock, par value
$0.01 per share (the “Common Stock”), as participants (“Participants”) in the
private placement by the Company of shares of Common Stock consummated on the date hereof (the
“Private Placement”), and the direct and indirect transferees of FBR, and each of the
Participants.

     This Agreement is made pursuant to the Purchase/Placement Agreement (the
“Purchase/Placement Agreement”), dated as of April 4, 2007, by and between the Company and
FBR in connection with the purchase and sale or placement of an aggregate of 12,151,184 shares of
the Company’s Common Stock (plus an additional 1,822,678 shares to cover additional allotments, if
any) (the “Offering”). In order to induce FBR to enter into the Purchase/Placement
Agreement, the Company has agreed to provide the registration rights provided for in this Agreement
to FBR, the Participants, and their respective direct and indirect transferees. The execution of
this Agreement is a condition to the closing of the transactions contemplated by the
Purchase/Placement Agreement.

     The parties hereby agree as follows:

1. DEFINITIONS

     As used in this Agreement, the following terms shall have the following meanings:

     144A/Regulation S Shares: Shares initially sold to FBR in the Private Placement and resold by
FBR to “qualified institutional buyers” (as such term is defined in Rule 144A) or to “non-U.S.
persons” (in accordance with Regulation S) in an “offshore transaction” (in accordance with
Regulation S).

     Affiliate: As to any specified Person, (i) any Person directly or indirectly owning,
controlling or holding, with power to vote, ten percent or more of the outstanding voting
securities of such other Person, (ii) any Person ten percent or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held, with power to vote, by such other
Person, (iii) any Person directly or indirectly controlling, controlled by or under common control
with such other Person, (iv) any executive officer, director, trustee or general partner of such
Person and (v) any legal entity for which such Person acts as an executive officer, director,
trustee or general partner. An indirect relationship shall include circumstances in which a
Person’s spouse, children, parents, siblings or mother, father, sister or brother-in-law is or has
been associated with a Person.

     Agreement: As defined in the preamble.

     Business Day: With respect to any act to be performed hereunder, each Monday, Tuesday,
Wednesday, Thursday and Friday that is not a day on which banking institutions in New York, New
York or other applicable places where such act is to occur are authorized or obligated by
applicable law, regulation or executive order to close.

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     Closing Date: The date of this Agreement or such other time or such other date as FBR and the
Company may agree.

     Commission: The Securities and Exchange Commission.

     Common Stock: As defined in the preamble.

     Company: As defined in the preamble.

     Controlling Person: As defined in Section 6(a) hereof.

     End of Suspension Notice: As defined in Section 5(b) hereof.

     Exchange Act: The Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated by the Commission pursuant thereto.

     FBR: As defined in the preamble.

     Form 8-K: Current report required to be filed with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act, as such form may be amended from time to time, or any similar
form, rule or regulation hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such form.

     Form 10-K: Annual report required to be filed with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act, as such form may be amended from time to time, or any similar
form, rule or regulation hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such form.

     Form 10-Q: Quarterly report required to be filed with the Commission pursuant to Section 13
or Section 15(d) of the Exchange Act, as such form may be amended from time to time, or any similar
form, rule or regulation hereafter adopted by the Commission as a replacement thereto having
substantially the same effect as such form.

     Holder: Each record owner of any Registrable Shares from time to time, including FBR and its
Affiliates.

     Indemnified Party: As defined in Section 6(c) hereof.

     Indemnifying Party: As defined in Section 6(c) hereof.

     IPO Registration Statement: As defined in Section 2(b) hereof.

     Liabilities: As defined in Section 6(a) hereof.

     NASD: The National Association of Securities Dealers, Inc.

     No Objections Letter: As defined in Section 4(a)(xx) hereof.

     November Agreement: The Registration Rights Agreement, dated as of November 30, 2006, by and
among the Company and FBR.

     November Holder: Each record owner of November Registrable Shares from time to time,
including FBR and its Affiliates, pursuant to the November Agreement.

     November Registrable Shares: “Registrable Shares” as defined in the November Agreement.

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     Offering Memorandum: The Offering Memorandum of the Company dated April 4, 2007 pursuant to
which the 144A/Regulation S Shares and the Private Placement Shares are offered and sold.

     Participant: As defined in the preamble.

     Person: An individual, partnership, corporation, trust, unincorporated organization,
government or agency or political subdivision thereof, or any other legal entity.

     Private Placement: As defined in the preamble.

     Private Placement Shares: Shares initially sold by the Company on the date hereof directly to
“accredited investors” (within the meaning of Rule 501(a) promulgated under the Securities Act) as
Participants, with FBR acting as placement agent.

     Proceeding: An action, claim, suit or proceeding (including without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or, to the knowledge
of the Person subject thereto, threatened.

     Prospectus: The prospectus included in any Registration Statement, including any preliminary
prospectus, and all other amendments and supplements to any such prospectus, including
post-effective amendments, and all material incorporated by reference or deemed to be incorporated
by reference, if any, in such prospectus.

     Purchase/Placement Agreement: As defined in the preamble.

     Purchaser Indemnitee: As defined in Section 6(a) hereof.

     Questionnaire: As defined in Section 4(b) hereof.

     Questionnaire Deadline: As defined in Section 4(b) hereof.

     Registrable Shares: The 144A/Regulation S Shares and the Private Placement Shares, upon
original issuance thereof, and at all times subsequent thereto, including upon the transfer thereof
by the original holder or any subsequent holder and any shares or other securities issued in
respect of such Registrable Shares by reason of or in connection with any stock dividend, stock
distribution, stock split, purchase in any rights offering or in connection with any exchange for
or replacement of such Registrable Shares or any combination of shares, recapitalization, merger or
consolidation, or any other equity securities issued pursuant to any other pro rata distribution
with respect to such Registrable Shares until the earliest to occur of (i) the date on which such
share has been first registered effectively pursuant to the Securities Act and disposed of in
accordance with the Registration Statement relating to it, (ii) the date on which such share is
either distributed to the public pursuant to Rule 144 (or any similar provision then in effect) or
is eligible for sale without registration, pursuant to Rule 144(k) promulgated by the Commission
pursuant to the Securities Act or (iii) the date on which it is sold to the Company or any
subsidiary of the Company.

     Registration Expenses: Any and all expenses incident to the performance of or compliance with
this Agreement, including, without limitation: (i) all Commission, securities exchange, NASD
registration, listing, inclusion and filing fees, including, if applicable, the fees and expenses
of a “qualified independent underwriter” and its counsel that is required to be retained by any
Holder of Registrable Shares in connection with an underwritten offering in accordance with the
rules and regulations of the NASD, (ii) all fees and expenses incurred in

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connection with compliance with international, federal or state securities or blue sky laws
(including, without limitation, any registration, listing and filing fees and reasonable fees and
disbursements of counsel in connection with blue sky qualification of any of the Registrable Shares
and the preparation of a blue sky memorandum and compliance with the rules of the NASD), (iii) all
expenses in preparing or assisting in preparing, word processing, duplicating, printing, delivering
and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto,
any underwriting agreements, securities sales agreements, certificates and any other documents
relating to the performance under and compliance with this Agreement, (iv) all fees and expenses
incurred in connection with the listing or inclusion of any of the Registrable Shares on any
securities exchange pursuant to Section 4(a)(xiv) of this Agreement, (v) the fees and disbursements
of counsel for the Company and of the independent public accountants of the Company (including,
without limitation, the expenses of any special audit and “cold comfort” letters required by or
incident to such performance), (vi) reasonable fees and disbursements of one counsel, reasonably
acceptable to the Company, for the Holders, which shall be Akin Gump Strauss Hauer & Feld LLP,
unless other counsel is selected by holders of a majority of the aggregate amount of the November
Registrable Shares and the Registrable Shares included in the registration statement (such counsel,
“Selling Holders’ Counsel”) and (vii) any fees and disbursements customarily paid by
issuers in issues and sales of securities (including the fees and expenses of any experts retained
by the Company in connection with any Registration Statement); provided, however, that Registration
Expenses shall exclude transfer taxes, brokers’ or underwriters’ discounts and commissions, if any,
relating to the sale or disposition of Registrable Shares by a Holder and the fees and
disbursements of any counsel to or accounting firm of the Holders other than as provided for in
subparagraphs (v) and (vi) above.

     Registration Statement: Any registration statement of the Company that covers the resale of
Registrable Shares pursuant to the provisions of this Agreement, including the Prospectus,
amendments and supplements to such registration statement or Prospectus, including pre- and
post-effective amendments, all exhibits thereto and all material incorporated by reference or
deemed to be incorporated by reference, if any, in such registration statement.

     Regulation S: Regulation S (Rules 901-904) promulgated by the Commission under the Securities
Act, as such rules may be amended from time to time, or any similar rule or regulation hereafter
adopted by the Commission as a replacement thereto having substantially the same effect as such
regulation.

     Rule 144: Rule 144, and any of its referenced paragraphs, promulgated by the Commission
pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission as a replacement thereto having substantially the
same effect as such rule.

     Rule 144A: Rule 144A promulgated by the Commission pursuant to the Securities Act, as such
rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.

     Rule 158: Rule 158 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.

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     Rule 415: Rule 415 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.

     Rule 424: Rule 424 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.

     Rule 457: Rule 457 promulgated by the Commission pursuant to the Securities Act, as such rule
may be amended from time to time, or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same effect as such rule.

     Securities Act: The Securities Act of 1933, as amended, and the rules and regulations
promulgated by the Commission thereunder.

     Selling Holders’ Counsel: As defined under “Registration Expenses” in Section 1 hereof.

     Shares: The shares of Common Stock being offered and sold pursuant to the terms and
conditions of the Purchase/Placement Agreement.

     Shelf Registration Statement: As defined in Section 2(a) hereof.

     Suspension Event: As defined in Section 5(b) hereof.

     Suspension Notice: As defined in Section 5(b) hereof.

     Underwritten Offering: A sale of securities of the Company to an underwriter or underwriters
for reoffering to the public.

2. REGISTRATION RIGHTS

     (a) Mandatory Shelf Registration. As set forth in Section 4 hereof, the Company
agrees to file with the Commission or amend no earlier than the later of (i) May 29, 2007 and (ii)
10 days after the Company receives authorization from the U.S. Federal Regulatory Commission for
the proposed application of the net proceeds of the Private Placement, a shelf Registration
Statement on Form S-1 or such other form under the Securities Act then available to the Company
providing for the resale of any Registrable Shares pursuant to Rule 415 from time to time by the
Holders (a “Shelf Registration Statement”). The Company shall use its commercially
reasonable efforts to cause such Shelf Registration Statement to be declared effective by the
Commission as soon as practicable after the filing. Any Shelf Registration Statement shall provide
for the resale from time to time, and pursuant to any method or combination of methods legally
available (including, without limitation, an Underwritten Offering, a direct sale to purchasers or
a sale through brokers or agents, which may include sales over the internet) by the Holders of any
and all Registrable Shares. Notwithstanding anything set forth in this Agreement, in the event that
the Shelf Registration Statement is also being used to provide for the resale of November
Registrable Shares and the Commission requires that the Shelf Registration Statement be amended in
order to reduce the number of shares registered thereunder, any shares included in the Shelf
Registration Statement shall be allocated first, to the November Registrable Shares, and
second, to the Registrable Shares. In the case of any Registrable Shares not registered
with the November Registrable Shares, the Company will, in a manner consistent with the November
Agreement, use commercially reasonable efforts to file

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another Shelf Registration Statement or take such other steps as necessary to provide for the
resale of the Registrable Shares and use its commercially reasonable efforts to cause such
Registration Statement to be declared effective by the Commission as soon as possible after the
filing.

     (b) IPO Registration.

          (i) If the Company proposes to file a registration statement on Form S-1 or such other form
under the Securities Act providing for the initial public offering of shares of Common Stock (the
“IPO Registration Statement”), the Company will notify each Holder of the proposed filing,
and of the managing underwriter(s) for such offering, and afford each Holder an opportunity to
include in the IPO Registration Statement all or any part of the Registrable Shares then held by
such Holder. Each Holder desiring to include in the IPO Registration Statement all or part of the
Registrable Shares held by such Holder shall, within twenty (20) days after receipt of the
above-described notice from the Company, so notify the Company in writing, and in such notice shall
inform the Company of the number of Registrable Shares such Holder wishes to include in the IPO
Registration Statement. Any election by any Holder to include any Registrable Shares in the IPO
Registration Statement will not affect the inclusion of such Registrable Shares in the Shelf
Registration Statement until such Registrable Shares have been sold under the IPO Registration
Statement; provided, however, that at such time of sale, the Company shall have the right to remove
from any Shelf Registration Statement any Registrable Shares sold pursuant to an IPO Registration
Statement.

          (ii) Right to Terminate IPO Registration. The Company, in its sole discretion, shall
have the right to terminate or withdraw the IPO Registration Statement initiated by it referred to
in this Section 2(b) prior to the effectiveness of such registration whether or not any Holder has
elected to include Registrable Shares in such registration.

          (iii) Selection of Underwriter. The Company shall have the sole right to select the
managing underwriter(s) for its initial public offering, regardless of whether any Registrable
Shares are included in the IPO Registration Statement or otherwise.

          (iv) Shelf Registration not Impacted by IPO Registration Statement. The Company’s
obligation to file the Shelf Registration Statement pursuant to Section 2(a) hereof shall not be
affected by the filing or effectiveness of the IPO Registration Statement, except that the Company
shall have the right to remove from any Shelf Registration Statement any Registrable Shares sold
pursuant to an IPO Registration Statement.

     (c) Underwriting.

          (i) The right of any such Holder’s Registrable Shares to be included in the IPO Registration
Statement pursuant to Section 2(b) shall be conditioned upon such Holder’s participation in such
underwriting and the inclusion of such Holder’s Registrable Shares in the underwriting to the
extent provided herein. All Holders proposing to distribute their Registrable Shares through such
underwriting shall enter into an underwriting agreement in customary form with the managing
underwriter(s) selected for such underwriting and complete and execute any questionnaires, powers
of attorney, indemnities, securities escrow agreements, lock-up

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agreements and other documents reasonably required under the terms of such underwriting, and
furnish to the Company such information as the Company may reasonably request in writing for
inclusion in the Registration Statement; provided, however, that no Holder shall be required to
make any representations or warranties to or agreements with the Company or the underwriters other
than representations, warranties or agreements regarding such Holder, its holdings and such
Holder’s intended method of distribution, and the disclosure in the applicable prospectus related
thereto and any other representation required by law, regulation or reasonably requested by the
underwriters. Notwithstanding any other provision of this Agreement, if the managing
underwriter(s) determine(s) in good faith that marketing factors require a limitation on the number
of shares to be included, then the managing underwriter(s) may exclude shares (including
Registrable Shares) from the IPO Registration Statement and Underwritten Offering, and any shares
included in such IPO Registration Statement and Underwritten Offering shall be allocated
first, to the Company, second, to each of the November Holders requesting inclusion
of their November Registrable Shares in such IPO Registration Statement pursuant to the November
Agreement (on a pro rata basis based on the total number of shares of Common Stock then held by
each such holder who is requesting inclusion), and third, to each of the Holders requesting
inclusion of their Registrable Shares in such IPO Registration Statement (on a pro rata basis based
on the total number of shares of Common Stock then held by each such holder who is requesting
inclusion); provided, however, that the number of Registrable Shares to be included in the IPO
Registration Statement shall not be reduced unless all other securities of the Company held by (i)
officers, directors, other employees of the Company and consultants; and (ii) other holders of the
Company’s capital stock with registration rights that are subordinate (with respect to such
reduction) to the registration rights of the Holders set forth herein, are first entirely excluded
from the underwriting and registration.

          (ii) Regardless of whether a Holder elects to include Registrable Shares in the IPO
Registration Statement, the Holder of such Registrable Shares shall be deemed to have agreed not to
effect any public sale or distribution of securities of the Company of the same or similar class or
classes of the securities included in the IPO Registration Statement or any securities convertible
into or exchangeable or exercisable for such securities, including a sale pursuant to Rule 144 or
Rule 144A, during such periods as reasonably requested (but in no event for a period longer than
thirty (30) days prior to and sixty (60) days following the effective date of the IPO Registration
Statement) by the representatives of the underwriters, if an Underwritten Offering, or by the
Company in any other registration.

          (iii) If any Holder disapproves of the terms of any such underwriting, such Holder may elect
to withdraw therefrom by written notice to the Company and the underwriter, delivered at least ten
(10) Business Days prior to the effective date of the Registration Statement covering the
Underwritten Offering, provided that the Holder may agree to waive this right to withdraw with the
Company, the underwriters or any custodial agent in any custody agreement and/or power of attorney
executed by such Holder in connection with the underwriting. Any Registrable Shares excluded or
withdrawn from such underwriting shall be excluded and withdrawn from the registration.

     (d) Company Registrations.

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          (i) Subject to the terms of this Agreement, in the event the Company decides to register any
of its securities, other than as contemplated by Sections 2(a) and 2(b) (either for its own account
or the account of a security holder) and other than a registration on Form S-4 or S-8 (or any
successor or similar forms), on a form that would be suitable for a registration involving
Registrable Shares, the Company will (i) promptly give the Holders written notice thereof and (ii)
subject to Section 2(d)(ii)(b) below, include in such registration (and any related qualification
under blue sky laws or other compliance), and in any underwriting involved therein, all the
Registrable Shares specified in a written request delivered to the Company by the Holders within
ten (10) business days after delivery of such written notice from the Company.

          (ii) Underwriting in Piggyback Registration.

	 	a.	 	Notice of Underwriting in Piggyback
Registration. If the registration of which the Company gives
notice is for a registered public offering involving an underwriting,
the Company shall so advise the Holders as a part of the written notice
given pursuant to Section 2(d)(i). In such event, the right of the
Holders to registration shall be conditioned upon such underwriting and
the inclusion of their Registrable Shares in such underwriting to the
extent provided in this Section 2(d)(ii). To the extent that the
Holders wish to distribute their securities through such underwriting
they shall (together with the Company and any Holders distributing
their securities through such underwriting) enter into an underwriting
agreement with the managing underwriter on behalf of all underwriters
for such offering. The Holders shall have no right to participate in
the selection of the underwriters for an offering pursuant to this
Section 2(d)(ii).
	 
	 	b.	 	Marketing Limitation in Piggyback
Registration. In the event the managing underwriter on behalf of
all underwriters advises the Holders seeking registration of
Registrable Shares pursuant to this Section 2(d) in writing that market
factors (including, without limitation, the aggregate number of shares
of Common Stock requested to be registered, the general condition of
the market, and the status of the persons proposing to sell securities
pursuant to the registration) require a limitation of the number of
shares to be underwritten, the managing underwriter on behalf of all
underwriters (subject to the allocation set forth in this Section
2(d)(ii)(b)) may exclude some or all Registrable Shares from such
registration and underwriting. In the event that the managing
underwriter on behalf of all underwriters limits the number of shares
to be included in a registration pursuant to this Section 2(d)(ii)(b),
or shall otherwise require a limitation of the number of shares to be
included in the registration, then the Company will include in such
registration first, securities proposed by the Company to be
sold for its own account, second, November Registrable Shares
requested to be included in the registration by

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	 	 	 	the November Holders pursuant to the November Agreement, on a pro
rata basis based on the total number of shares of Common Stock
eligible for inclusion then held by each such person requesting
inclusion, and third, Registrable Shares requested to be
included in the registration by any Holder hereunder, on a pro rata
basis based on the total number of shares of Common Stock eligible
for inclusion then held by each such person requesting inclusion.
	 
	 	c.	 	Right of Withdrawal in Piggyback
Registration. If any Holder disapproves of the terms of any such
underwriting, such Holder may elect to withdraw therefrom by written
notice to the Company and the underwriter, delivered at least ten (10)
Business Days prior to the effective date of the Registration Statement
covering the Underwritten Offering, provided that the Holder may agree
to waive this right to withdraw with the Company, the underwriters or
any custodial agent in any custody agreement and/or power of attorney
executed by such Holder in connection with the underwriting. Any
Registrable Shares excluded or withdrawn from such underwriting shall
be excluded and withdrawn from such registration.

     (e) Expenses. The Company shall pay all Registration Expenses in connection with the
registration of the Registrable Shares pursuant to this Agreement. Each Holder participating in a
registration pursuant to this Section 2 shall bear such Holder’s proportionate share (based on the
total number of Registrable Shares sold in such registration) of all discounts and commissions
payable to underwriters or brokers in connection with a registration of Registrable Shares pursuant
to this Agreement.

3. RULES 144 AND 144A REPORTING

     With a view to making available the benefits of certain rules and regulations of the
Commission that may at any time permit the sale of the Registrable Shares to the public without
registration, the Company agrees to:

     (a) use commercially reasonable efforts to make and keep available adequate current public
information, as those terms are understood and defined in Rule 144, at all times after the
effective date of the first registration under the Securities Act filed by the Company for an
offering of its securities to the general public;

     (b) use commercially reasonable efforts to file with the Commission in a timely manner all
reports and other documents required to be filed by the Company under the Securities Act and the
Exchange Act (at any time after it has become subject to such reporting requirements);

     (c) so long as a Holder owns any Registrable Shares, notwithstanding that the Company may not
be required to file reports and other documents under the Securities Act and

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the Exchange Act, or otherwise report on an annual and quarterly basis on forms provided for
such annual and quarterly reporting pursuant to rules and regulations promulgated by the
Commission, the Company shall use commercially reasonable efforts to furnish to the Holders, within
fifteen (15) days after it is or would have been required to file such with the Commission as a
non-accelerated filer: (i) all quarterly and annual financial information that would be required to
be contained in a filing with the Commission on Forms 10-K and 10-Q if the Company was required to
file such forms, including a “Management’s Discussion and Analysis of Financial Condition and
Results of Operations” and, with respect to the annual information only, reports thereon by the
certified independent accountants of the Company and (ii) all current reports that would be
required to be filed with the Commission on Form 8-K if the Company was required to file such
reports;

     (d) so long as a Holder owns any Registrable Shares the Company shall hold, a reasonable time
after the financial statements are made available pursuant to Section 3(c)(i) and upon reasonable
notice to the Holders and FBR (either by mail or by press release), a quarterly investor conference
call for the Holders to discuss such financial statements, which call will also include an
opportunity for the Holders to ask questions of management with regard to such financial
statements;

     (e) so long as a Holder owns any Registrable Shares, if the Company is not required to file
reports and other documents under the Securities Act and the Exchange Act, it will make available
other information as required by, and so long as necessary to permit sales of Registrable Shares
pursuant to, Rule 144 or Rule 144A; and

     (f) so long as a Holder owns any Registrable Shares, to furnish to the Holder promptly upon
request (i) a written statement by the Company as to its compliance with the reporting requirements
of Rule 144 (at any time after ninety (90) days after the effective date of the first registration
statement filed by the Company for an offering of its securities to the general public), and of the
Securities Act and the Exchange Act (at any time after it has become subject to the reporting
requirements of the Exchange Act), and (ii) such other reports and documents of the Company, and
take such further actions, as a Holder may reasonably request in availing itself of any rule or
regulation of the Commission allowing a Holder to sell any such Registrable Shares without
registration.

4. REGISTRATION PROCEDURES

     (a) In connection with the obligations of the Company with respect to any registration
pursuant to this Agreement, (x) the Company shall use its commercially reasonable efforts to effect
or cause to be effected the registration of the Registrable Shares under the Securities Act to
permit the sale of such Registrable Shares by the Holder or Holders in accordance with the Holder’s
or Holders’ intended method or methods of distribution, and (y) the Company shall:

     (i) notify FBR and Selling Holders’ Counsel, in writing, at least ten (10) Business Days prior
to the initial filing or amendment of a Registration Statement pursuant to this Agreement, of its
intention to file or amend a Registration Statement with the Commission and, at least five (5)
Business Days prior to such initial filing or amendment, provide a copy of the Registration
Statement, or the amendment thereof, to FBR, its counsel, and Selling Holders’

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Counsel for review and comment; prepare and file with the Commission or amend, as specified in
this Agreement, a Registration Statement(s), which Registration Statement(s) (x) shall comply as to
form in all material respects with the requirements of the applicable form and include all
financial statements required by the Commission to be filed therewith and (y) shall be reasonably
acceptable to FBR, its counsel and Selling Holders’ Counsel; notify FBR and Selling Holders’
Counsel in writing, at least five (5) Business Days prior to the filing of any amendment or
supplement to such Registration Statement and, at least three (3) Business Days prior to filing,
provide a copy of such amendment or supplement to FBR, its counsel and Selling Holders’ Counsel for
review and comment; promptly following receipt from the Commission, provide to FBR, its counsel and
Selling Holders’ Counsel copies of any comments made by the staff of the Commission relating to
such Registration Statement and of the Company’s responses thereto for review and comment; and use
its commercially reasonable efforts to cause such Registration Statement to become effective as
soon as reasonably practicable after filing or amendment and to remain effective, subject to
Section 5 hereof, until the earlier of (1) such time as all Registrable Shares covered thereby have
been sold pursuant to a Registration Statement or pursuant to Rule 144, (2) there are no
Registrable Shares outstanding (including as a result of such Shares having become eligible to be
sold pursuant to Rule 144(k)), (3) the Registrable Shares have been sold to the Company or any of
its subsidiaries, or (4) the second anniversary of the effective date of such Registration
Statement (subject to extension as provided in Section 5(c) hereof); provided, that if the Company
has an effective Shelf Registration Statement on Form S-1 under the Securities Act and becomes
eligible to use Form S-3 or such other short-form registration statement form under the Securities
Act, the Company may, upon thirty (30) Business Days prior written notice to all Holders, either
(i) amend the Shelf Registration Statement on Form S-1 to convert it into a Form S-3 Shelf
Registration Statement or (ii) register any Registrable Shares registered but not yet distributed
under the effective Shelf Registration Statement on such a short-form Shelf Registration Statement
and, once the short-form Shelf Registration Statement is declared effective, de-register such
shares under the previous Registration Statement or transfer the filing fees from the previous
Registration Statement (such transfer pursuant to Rule 457, if applicable) unless any Holder
registered under the initial Shelf Registration Statement notifies the Company within twenty (20)
Business Days of receipt of the Company notice that such a registration under a new Registration
Statement and de-registration of the initial Shelf Registration Statement would interfere with its
distribution of Registrable Shares already in progress;

          (ii) subject to Section 4(a)(ix) hereof, (1) prepare and file with the Commission such
pre-effective amendments and post-effective amendments to any Registration Statement as may be
necessary to keep such Registration Statement effective for the period described in Section 4(a)(i)
hereof; (2) cause each Prospectus contained therein to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 or any similar rule that may be
adopted under the Securities Act; (3) amend or supplement each such Registration Statement to
include the Company’s quarterly and annual financial information and other material developments
(until the Company is eligible to incorporate such information by reference into the Registration
Statement), during which time sales of the Registrable Securities under the Shelf Registration
Statement will be suspended until such amendment is filed and effective, and (4) comply with the
provisions of the Securities Act with respect to the disposition of all securities covered by each
Registration Statement during the applicable period in accordance with the intended method or
methods of distribution by the selling Holders thereof;

11

 

          (iii) furnish to the Holders, without charge, as many copies of each Prospectus, including
each preliminary Prospectus, if any, and any amendment or supplement thereto and such other
documents as such Holder may reasonably request, in order to facilitate the public sale or other
disposition of the Registrable Shares; the Company consents to the lawful use of such Prospectus,
including each preliminary Prospectus, by the Holders, if any, in connection with the offering and
sale of the Registrable Shares covered by any such Prospectus;

          (iv) use its commercially reasonable efforts to register or qualify, or obtain exemption from
registration or qualification for, all Registrable Shares by the time the applicable Registration
Statement is declared effective by the Commission under all applicable state securities or “blue
sky” laws of such jurisdictions as FBR or any Holder of Registrable Shares covered by a
Registration Statement shall reasonably request in writing, keep each such registration or
qualification or exemption effective during the period such Registration Statement is required to
be kept effective pursuant to Section 4(a)(i) and do any and all other acts and things that may be
reasonably necessary or advisable to enable such Holder to consummate the disposition in each such
jurisdiction of such Registrable Shares owned by such Holder; provided, however, that the Company
shall not be required to (1) qualify generally to do business in any jurisdiction or to register as
a broker or dealer in such jurisdiction where it would not otherwise be required to qualify but for
this Section 4(a)(iv) and except as may be required by the Securities Act, (2) subject itself to
taxation in any such jurisdiction, or (3) submit to the general service of process in any such
jurisdiction;

          (v) use its commercially reasonable efforts to cause all Registrable Shares covered by such
Registration Statement to be registered and approved by such other U.S. federal and state
governmental agencies or authorities as may be necessary to enable the Holders thereof to
consummate the disposition of such Registrable Shares;

          (vi) notify FBR and each Holder promptly and, if requested by FBR or any such Holder, confirm
such advice in writing (1) when a Registration Statement has become effective and when any
post-effective amendments and supplements thereto become effective, (2) of the issuance by the
Commission or any state securities authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose, (3) of any request by
the Commission or any other federal, state or foreign governmental authority for amendments or
supplements to a Registration Statement or related Prospectus or for additional information, (4) of
the happening of any event during the period a Registration Statement is effective as a result of
which such Registration Statement or the related Prospectus or any document incorporated by
reference therein contains any untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements therein not misleading
(which notice may be in the form of a Suspension Notice under Section 5(b) hereof) and (5) at the
request of any such Holder, promptly to furnish to such Holder a reasonable number of copies of a
supplement to or an amendment of such Prospectus prepared in accordance with Section 4(a)(ix);

          (vii) except as provided in Section 5, use its commercially reasonable efforts to avoid the
issuance of, or if issued, to obtain the withdrawal of, any order enjoining or suspending the use
or effectiveness of a Registration Statement covering Registrable Shares or suspending of

12

 

the qualification (or exemption from qualification) of any of the Registrable Shares for sale
in any jurisdiction, as promptly as practicable;

          (viii) upon request, furnish to each requesting Holder of Registrable Shares, without charge,
at least one conformed copy of each Registration Statement and any post-effective amendment or
supplement thereto (without documents incorporated therein by reference or exhibits thereto, unless
requested);

          (ix) except as provided in Section 5, upon the occurrence of any event contemplated by Section
4(a)(vi)(4) hereof, use its commercially reasonable efforts to promptly prepare a supplement or
post-effective amendment to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Shares, such Prospectus will not contain any untrue
statement of a material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading;

          (x) if requested by the representative of the underwriters, if any, or any Holders of
Registrable Shares being sold in connection with such offering, (1) promptly incorporate in a
Prospectus supplement or post-effective amendment such information as the representative of the
underwriters, if any, or such Holders indicate relates to them or that they reasonably request be
included therein and (2) make all required filings of such Prospectus supplement or such
post-effective amendment as soon as reasonably practicable after the Company has received written
notification of the matters to be incorporated in such Prospectus supplement or post-effective
amendment;

          (xi) in the case of an Underwritten Offering, use its commercially reasonable efforts to
furnish to each Holder of Registrable Shares covered by such Registration Statement and the
underwriters a signed counterpart, addressed to each such Holder and the underwriters, of: (1) an
opinion of counsel for the Company, dated the date of each closing under the underwriting
agreement, reasonably satisfactory to such Holder and the underwriters; and (2) a “comfort” letter,
dated the effective date of such Registration Statement and the date of each closing under the
underwriting agreement, signed by the independent public accountants who have certified the
Company’s financial statements included in such Registration Statement, covering substantially the
same matters with respect to such Registration Statement (and the Prospectus included therein) and
with respect to events subsequent to the date of such financial statements, as are customarily
covered in accountants’ letters delivered to underwriters in underwritten public offerings of
securities and such other financial matters as such Holder and the underwriters may reasonably
request;

          (xii) enter into customary agreements (including in the case of an Underwritten Offering, an
underwriting agreement in customary form) and take all other reasonable action in connection
therewith in order to expedite or facilitate the distribution of the Registrable Shares included in
such Registration Statement and, in the case of an Underwritten Offering, make representations and
warranties to the underwriters in such form and scope as are customarily made by issuers to
underwriters in such underwritten offerings and confirm the same to the extent customary if and
when requested;

13

 

          (xiii) subject to appropriate confidentiality agreements being entered into, make available
for inspection by representatives of the Holders and the representatives of any underwriters
participating in any disposition pursuant to a Registration Statement and any special counsel or
accountants retained by such Holders or underwriters during normal business hours and upon
reasonable notice, all financial and other records, pertinent corporate documents and properties of
the Company and cause the respective officers, directors and employees of the Company to supply all
information reasonably requested by such parties in connection with a Registration Statement;
provided, however, that such records, documents or information that the Company determines, in good
faith, to be confidential and notifies such parties are confidential shall not be disclosed by the
representatives, representative of the underwriters, counsel thereto or accountants unless (1) the
disclosure of such records, documents or information is necessary to avoid or correct a
misstatement or omission in a Registration Statement or Prospectus, (2) the release of such
records, documents or information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or otherwise required by law, or (3) such records, documents or information
have been generally made available to the public; and provided, further, that to the extent
reasonably practicable, the foregoing inspection and information gathering shall be coordinated on
behalf of the Holders by Selling Holders’ Counsel;

          (xiv) use its commercially reasonable efforts (including, without limitation, seeking to cure
any deficiencies cited by the exchange or market in the Company’s listing or inclusion application)
to list or include all Registrable Shares on the New York Stock Exchange, the American Stock
Exchange or The Nasdaq Global Market and thereafter maintain the listing on such exchange or
market;

          (xv) prepare and file in a timely manner all documents and reports required by the Exchange
Act and, to the extent the Company’s obligation to file such reports pursuant to Section 15(d) of
the Exchange Act expires prior to the expiration of the effectiveness period of the Registration
Statement as required by Section 4(a)(i) hereof, the Company shall register the Registrable Shares
under the Exchange Act and maintain such registration through the effectiveness period required by
Section 4(a)(i) hereof;

          (xvi) provide a CUSIP number for all Registrable Shares, not later than the effective date of
the Registration Statement;

          (xvii) (1) otherwise use its commercially reasonable efforts to comply with all applicable
rules and regulations of the Commission, (2) make generally available to its stockholders, as soon
as reasonably practicable, earnings statements covering at least 12 months that satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 (or any similar rule promulgated
under the Securities Act ) thereunder, but in no event later than the earlier of any filing date
required for the filing of an annual report on Form 10-K as would be applicable to the Company or
forty-five (45) days after the end of each fiscal year of the Company and (3) not file any
Registration Statement or Prospectus or amendment or supplement to such Registration Statement or
Prospectus to which any Holder of Registrable Shares covered by any Registration Statement shall
have reasonably objected in writing on the grounds that such Registration Statement or Prospectus
or amendment or supplement does not comply in all material respects with the requirements of the
Securities Act, such Holder having been furnished with a copy thereof at least two (2) Business
Days prior to the filing thereof;

14

 

          (xviii) provide and cause to be maintained a registrar and transfer agent for all Registrable
Shares covered by any Registration Statement from and after a date not later than the effective
date of such Registration Statement;

          (xix) in connection with any sale or transfer of the Registrable Shares (whether or not
pursuant to a Registration Statement) that will result in the security being delivered no longer
being Registrable Shares, cooperate with the Holders and the representative of the underwriters, if
any, to the extent reasonably necessary to facilitate the timely preparation and delivery of any
certificates representing the Registrable Shares to be sold, which certificates shall not bear any
transfer restrictive legends (other than as required by the Company’s certificate of incorporation
or bylaws) and to enable such Registrable Shares to be in such denominations and registered in such
names as the representative of the underwriters, if any, or the Holders may request at least two
(2) Business Days prior to any sale of the Registrable Shares;

          (xx) in connection with the initial filing of a Shelf Registration Statement and each
amendment thereto with the Commission pursuant to Section 2(a) hereof, prepare or cause to be
prepared and, within one (1) Business Day of such filing with the Commission, file with the NASD
all forms and information required or requested by the NASD in order to obtain written confirmation
from the NASD that the NASD does not object to the fairness and reasonableness of the underwriting
terms and arrangements (or any deemed underwriting terms and arrangements) (each such written
confirmation, a “No Objections Letter”) relating to the resale of Registrable Shares
pursuant to the Shelf Registration Statement, including, without limitation, information provided
to the NASD through its COBRADesk system, and pay all costs, fees and expenses incident to the
NASD’s review of the Shelf Registration Statement and the related underwriting terms and
arrangements, including, without limitation, all filing fees associated with any filings or
submissions to the NASD and the legal expenses, filing fees and other disbursements of FBR and any
other NASD member that is the holder of, or is affiliated or associated with an owner of,
Registrable Shares included in the Shelf Registration Statement (including in connection with any
initial or subsequent member filing); and

          (xxi) upon effectiveness of the first Registration Statement filed under this Agreement, the
Company will take such actions and make such filings as are necessary to effect the registration of
the Common Stock under the Exchange Act simultaneously with or immediately following the
effectiveness of the Registration Statement.

     (b) Notwithstanding anything to the contrary, if the Company files a mandatory Shelf
Registration Statement in accordance with Section 2(a) of this Agreement, each Holder desiring to
include all or any part of its Registrable Shares in the Shelf Registration Statement pursuant to
this Agreement shall, within twenty (20) Business Days after the date of the notice including a
request therefor (the “Questionnaire Deadline”), provide to the Company such information as
the Company may reasonably request for use in connection with the Shelf Registration Statement or
any Prospectus included therein and in any application to be filed with or under state securities
laws as set forth in Annex VI to the Offering Memorandum (the “Questionnaire”), and which
shall cause the Holder to be bound by the terms of this Agreement. Notwithstanding anything to the
contrary, from and after the date that the Shelf Registration Statement is declared effective by
the Commission, the Company shall as promptly as is reasonably practicable take all actions as
contemplated by Sections 4(a)(i), (ii), (iii), (vi), (viii), (ix) and (x) so that such Holder
delivering

15

 

the Questionnaire in a timely fashion is named as a selling security holder in the initial
Shelf Registration Statement and the related Prospectus in such a manner so as to permit the Holder
to deliver such Prospectus to purchasers of the Registrable Securities in accordance with the
Securities Act and applicable state securities laws. Notwithstanding anything to the contrary, to
the extent any Holder desiring to be added to the mandatory Shelf Registration Statement after the
effective date of such registration statement shall be required to deliver the Questionnaire to the
Company and upon receipt of such Questionnaire, the Company will, as soon as is practicable, amend
such registration statement or supplement the prospectus contained therein in accordance with
Commission rules and guidance.

     (c) The Company may require the Holders to furnish to the Company such information regarding
the proposed distribution by such Holder of such Registrable Shares as the Company may from time to
time reasonably request in writing or as shall be required to effect the registration of the
Registrable Shares, and no Holder shall be entitled to be named as a selling stockholder in any
Registration Statement and no Holder shall be entitled to use the Prospectus forming a part thereof
if such Holder does not provide such information to the Company. Each Holder further agrees to
furnish promptly to the Company in writing all information required from time to time to make the
information previously furnished by such Holder (in light of the circumstances under which they
were made) not misleading.

     (d) Each Holder agrees that, upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 4(a)(vi)(3) or 4(a)(vi)(4) hereof, such Holder will
immediately discontinue disposition of Registrable Shares pursuant to a Registration Statement
until such Holder’s receipt of the copies of the supplemented or amended Prospectus. If so
directed by the Company, such Holder will deliver to the Company (at the expense of the Company)
all copies in its possession, other than permanent file copies then in such Holder’s possession, of
the Prospectus covering such Registrable Shares current at the time of receipt of such notice.

5. BLACK-OUT PERIOD

     (a) Subject to the provisions of this Section 5, following the effectiveness of a Registration
Statement (and the filings with any international, federal or state securities commissions), the
Company, by written notice to FBR and the Holders, may direct the Holders to suspend sales of the
Registrable Shares pursuant to a Registration Statement for such times as the Company reasonably
may determine is necessary and advisable (but in no event for more than an aggregate of ninety (90)
days in any consecutive twelve (12)-month period commencing on the Closing Date or more than sixty
(60) days in any consecutive ninety (90)-day period, except as a result of a review of any
post-effective amendment by the Commission prior to declaring any post effective amendment to the
Registration Statement effective, provided the Company has used all commercially reasonable efforts
to cause such post effective amendment to be declared effective, if any of the following events
shall occur: (i) the representative of the underwriters of an Underwritten Offering of primary
shares by the Company has advised the Company that the sale of Registrable Shares pursuant to the
Registration Statement would have a material adverse effect on the Company’s initial public
offering; (ii) the majority of the members of the Board of Directors of the Company shall have
determined in good faith that (1) the offer or sale of any Registrable Shares would materially
impede, delay or interfere with any proposed

16

 

financing, offer or sale of securities, acquisition, merger, tender offer, business
combination, corporate reorganization, consolidation or other significant transaction involving the
Company, (2) after the advice of counsel, the sale of Registrable Shares pursuant to the
Registration Statement would require disclosure of non-public material information not otherwise
required to be disclosed under applicable law, or (3) either (x) the Company has a bona fide
business purpose for preserving the confidentiality of such transaction, (y) disclosure would have
a material adverse effect on the Company or the Company’s ability to consummate such transaction,
or (z) the proposed transaction renders the Company unable to comply with Commission requirements,
in each case under circumstances that would make it impractical or inadvisable to cause the
Registration Statement (or such filings) to become effective or to promptly amend or supplement the
Registration Statement on a post-effective basis, as applicable; or (iii) the majority of the
members of the Board of Directors of the Company shall have determined in good faith, after the
advice of counsel, that it is required by law, rule or regulation to supplement the Registration
Statement or file a post-effective amendment to the Registration Statement in order to incorporate
information into the Registration Statement for the purpose of (1) including in the Registration
Statement any prospectus required under Section 10(a)(3) of the Securities Act; (2) reflecting in
the prospectus included in the Registration Statement any facts or events arising after the
effective date of the Registration Statement (or of the most-recent post-effective amendment) that,
individually or in the aggregate, represents a fundamental change in the information set forth
therein; or (3) including in the prospectus included in the Registration Statement any material
information with respect to the plan of distribution or any information required under Item 507 of
Regulation S-K not disclosed in the Registration Statement or any material change to such
information. Upon the occurrence of any such suspension, the Company shall use its commercially
reasonable efforts to cause the Registration Statement to become effective or to promptly amend or
supplement the Registration Statement on a post-effective basis or to take such action as is
necessary to make resumed use of the Registration Statement compatible with the Company’s best
interests, as applicable, so as to permit the Holders to resume sales of the Registrable Shares as
soon as possible.

     (b) In the case of an event that causes the Company to suspend the use of a Registration
Statement (a “Suspension Event”), the Company shall give written notice (a “Suspension
Notice”) to FBR and the Holders to suspend sales of the Registrable Shares and such notice
shall state generally the basis for the notice and that such suspension shall continue only for so
long as the Suspension Event or its effect is continuing and the Company is using its best efforts
and taking all reasonable steps to terminate suspension of the use of the Registration Statement as
promptly as possible. The Holders agree to hold any Suspension Notice in confidence. The Holders
shall not effect any sales of the Registrable Shares pursuant to such Registration Statement (or
such filings) at any time after it has received a Suspension Notice from the Company and prior to
receipt of an End of Suspension Notice (as defined below). If so directed by the Company, each
Holder will deliver to the Company (at the expense of the Company) all copies other than permanent
file copies then in such Holder’s possession of the Prospectus covering the Registrable Shares at
the time of receipt of the Suspension Notice. The Holders may recommence effecting sales of the
Registrable Shares pursuant to the Registration Statement (or such filings) following further
notice to such effect (an “End of Suspension Notice”) from the Company, which End of
Suspension Notice shall be given by the Company to the Holders and FBR in the manner described
above promptly following the conclusion of any Suspension Event and its effect.

17

 

     (c) Notwithstanding any provision herein to the contrary, if the Company shall give a
Suspension Notice pursuant to this Section 5, the Company agrees that it shall extend the period of
time during which the applicable Registration Statement shall be maintained effective pursuant to
this Agreement by the number of days during the period from the date of receipt by the Holders of
the Suspension Notice to and including the date of receipt by the Holders of the End of Suspension
Notice and copies of the supplemented or amended Prospectus necessary to resume sales.

6. INDEMNIFICATION AND CONTRIBUTION

     (a) The Company agrees to indemnify and hold harmless (i) each Holder of Registrable Shares
and any underwriter (as determined in the Securities Act) for such Holder (including, if
applicable, FBR), (ii) each Person, if any, who controls (within the meaning of Section 15 of the
Securities Act or Section 20(a) of the Exchange Act), any such Person described in clause (i) (any
of the Persons referred to in this clause (ii) being hereinafter referred to as a “Controlling
Person”), and (iii) the respective officers, directors, partners, members, employees,
representatives and agents of any such Person or any Controlling Person (any Person referred to in
clause (i), (ii) or (iii) may hereinafter be referred to as a “Purchaser Indemnitee”), to
the fullest extent lawful, from and against any and all losses, claims, damages, judgments,
actions, out-of-pocket expenses, and other liabilities (the “Liabilities”), including
without limitation and as incurred, reimbursement of all reasonable costs of investigating,
preparing, pursuing or defending any claim or action, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, including the reasonable fees and expenses of
counsel to any Purchaser Indemnitee, joint or several, directly or indirectly related to, based
upon, arising out of or in connection with any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement or Prospectus (as amended or supplemented if
the Company shall have furnished to such Purchaser Indemnitee any amendments or supplements
thereto), or any preliminary Prospectus or any other document used by the Company to sell the
Shares, or any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the circumstances under which they
were made, not misleading, except insofar as such Liabilities arise out of or are based upon (i)
any untrue statement or omission or alleged untrue statement or omission made in reliance upon and
in conformity with information relating to any Purchaser Indemnitee furnished to the Company or any
underwriter in writing by such Purchaser Indemnitee expressly for use therein, or (ii) any untrue
statement contained in or omission from a preliminary Prospectus if a copy of the Prospectus (as
then amended or supplemented, if the Company shall have furnished to or on behalf of the Holder
participating in the distribution relating to the relevant Registration Statement any amendments or
supplements thereto) was not sent or given by or on behalf of such Holder to the Person asserting
any such Liabilities who purchased Shares, if such Prospectus (or Prospectus as amended or
supplemented) is required by law to be sent or given at or prior to the written confirmation of the
sale of such Shares to such Person and the untrue statement contained in or omission from such
preliminary Prospectus was corrected in the Prospectus (or the Prospectus as amended or
supplemented). The Company shall notify the Holders promptly of the institution, threat or
assertion of any claim, proceeding (including any governmental investigation), or litigation of
which it shall have become aware in connection with the matters addressed by this Agreement which
involves the Company or a

18

 

Purchaser Indemnitee. The indemnity provided for herein shall remain in full force and effect
regardless of any investigation made by or on behalf of any Purchaser Indemnitee.

     (b) In connection with any Registration Statement in which a Holder of Registrable Shares is
participating, such Holder agrees, severally and not jointly, to indemnify and hold harmless the
Company, each Person who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20(a) of the Exchange Act and the respective partners, directors, officers, members,
representatives, employees and agents of such Person or Controlling Person to the same extent as
the foregoing indemnity from the Company to each Purchaser Indemnitee, but only with reference to
untrue statements or omissions or alleged untrue statements or omissions made in reliance upon and
in strict conformity with information relating to such Purchaser Indemnitee furnished to the
Company in writing by such Purchaser Indemnitee expressly for use in any Registration Statement or
Prospectus, any amendment or supplement thereto or any preliminary Prospectus. The liability of
any Purchaser Indemnitee pursuant to this paragraph shall in no event exceed the net proceeds
received by such Purchaser Indemnitee from sales of Registrable Shares giving rise to such
obligations.

     (c) If any suit, action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against any Person in respect of which indemnity may
be sought pursuant to paragraph (a) or (b) above, such Person (the “Indemnified Party”)
shall promptly notify the Person against whom such indemnity may be sought (the “Indemnifying
Party”), in writing of the commencement thereof (but the failure to so notify an Indemnifying
Party shall not relieve it from any liability which it may have under this Section 6, except to the
extent the Indemnifying Party is prejudiced by the failure to give notice), and the Indemnifying
Party, upon request of the Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and any others the Indemnifying Party may
reasonably designate in such proceeding and shall pay the reasonable fees and expenses actually
incurred by such counsel related to such proceeding. Notwithstanding the foregoing, in any such
proceeding, any Indemnified Party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party, unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed in writing to the contrary,
(ii) the Indemnifying Party failed within a reasonable time after notice of commencement of the
action to assume the defense and employ counsel reasonably satisfactory to the Indemnified Party,
(iii) the Indemnifying Party and its counsel do not actively and vigorously pursue the defense of
such action or (iv) the named parties to any such action (including any impleaded parties), include
both such Indemnified Party and the Indemnifying Party, or any Affiliate of the Indemnifying Party,
and such Indemnified Party shall have been reasonably advised by counsel that, either (x) there may
be one or more legal defenses available to it which are different from or additional to those
available to the Indemnifying Party or such Affiliate of the Indemnifying Party or (y) a conflict
may exist between such Indemnified Party and the Indemnifying Party or such Affiliate of the
Indemnifying Party (in which case the Indemnifying Party shall not have the right to assume nor
direct the defense of such action on behalf of such Indemnified Party, it being understood,
however, that the Indemnifying Party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising out of the same
general allegations or circumstances, be liable for the fees and expenses of more than one separate
firm of attorneys (in addition to any local counsel), for all such Indemnified Parties,

19

 

which firm shall be designated in writing by those Indemnified Parties who sold a majority of
the Registrable Shares sold by all such Indemnified Parties and any such separate firm for the
Company, the directors, the officers and such control Persons of the Company as shall be designated
in writing by the Company). The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, which consent shall not be unreasonably withheld,
but if settled with such consent or if there is a final judgment for the plaintiff, the
Indemnifying Party agrees to indemnify any Indemnified Party from and against any loss or liability
by reason of such settlement or judgment. No Indemnifying Party shall, without the prior written
consent of the Indemnified Party, effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Party is or could have been a party and indemnity could have been
sought hereunder by such Indemnified Party, unless such settlement includes an unconditional
release of such Indemnified Party from all liability on claims that are the subject matter of such
proceeding.

     (d) If the indemnification provided for in paragraphs (a) and (b) of this Section 6 is for any
reason held to be unavailable to an Indemnified Party in respect of any Liabilities referred to
therein (other than by reason of the exceptions provided therein) or is insufficient to hold
harmless a party indemnified thereunder, then each Indemnifying Party under such paragraphs, in
lieu of indemnifying such Indemnified Party thereunder, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Liabilities (i) in such proportion as is
appropriate to reflect the relative benefits of the Indemnified Party on the one hand and the
Indemnifying Party(ies) on the other in connection with the statements or omissions that resulted
in such Liabilities, or (ii) if the allocation provided by clause (i) above is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Indemnifying Party(ies) and the
Indemnified Party, as well as any other relevant equitable considerations. The relative fault of
the Company on the one hand and any Purchaser Indemnitees on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to information supplied by the
Company or by such Purchaser Indemnitees and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

     (e) The parties agree that it would not be just and equitable if contribution pursuant to this
Section 6 were determined by pro rata allocation (even if such Indemnified Parties were treated as
one entity for such purpose), or by any other method of allocation that does not take account of
the equitable considerations referred to in paragraph 6(d) above. The amount paid or payable by an
Indemnified Party as a result of any Liabilities referred to paragraph 6(d) shall be deemed to
include, subject to the limitations set forth above, any reasonable legal or other expenses
actually incurred by such Indemnified Party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 6, in no event shall a Purchaser
Indemnitee be required to contribute any amount in excess of the amount by which proceeds received
by such Purchaser Indemnitee from sales of Registrable Shares exceeds the amount of any damages
that such Purchaser Indemnitee has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission. For purposes of this Section 6, each
Person, if any, who controls (within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act) FBR or a Holder of Registrable Shares shall

20

 

have the same rights to contribution as FBR or such Holder, as the case may be, and each
Person, if any, who controls (within the meaning of Section 15 of the Act or Section 20(a) of the
Exchange Act) the Company, and each officer, director, member, partner, employee, representative
and agent of the Company shall have the same rights to contribution as the Company. Any party
entitled to contribution will, promptly after receipt of notice of commencement of any action, suit
or proceeding against such party in respect of which a claim for contribution may be made against
another party or parties, notify each party or parties from whom contribution may be sought, but
the omission to so notify such party or parties shall not relieve the party or parties from whom
contribution may be sought from any obligation it or they may have under this Section 6 or
otherwise, except to the extent that any party is materially prejudiced by the failure to give
notice. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act), shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.

     (f) The indemnity and contribution agreements contained in this Section 6 will be in addition
to any liability which the Indemnifying Parties may otherwise have to the Indemnified Parties
referred to above. The Purchaser Indemnitees’ obligations to contribute pursuant to this Section 6
are several in proportion to the respective number of Shares sold by each of the Purchaser
Indemnitees hereunder and not joint.

7. MARKET STAND-OFF AGREEMENT

     (a) Each Holder hereby agrees that it shall not, to the extent requested by the Company or an
underwriter of securities of the Company, directly or indirectly sell, offer to sell (including
without limitation any short sale), contract to sell, pledge, grant any option, otherwise transfer
or dispose of, enter into any transaction which is designed to, or might reasonably be expected to,
result in the disposition of any Registrable Shares or other shares of Common Stock of the Company
or any securities convertible into or exchangeable or exercisable for shares of Common Stock of the
Company then owned by such Holder (other than to donees or partners of the Holder who agree to be
similarly bound) for a period of sixty (60) days following the effective date of an IPO
Registration Statement of the Company filed under the Securities Act; provided, however, that:

          (i) the restrictions above shall not apply to Registrable Shares sold pursuant to the IPO
Registration Statement;

          (ii) all executive officers and directors of the Company then holding shares of Common Stock
of the Company or securities convertible into or exchangeable or exercisable for shares of Common
Stock of the Company enter into similar agreements;

          (iii) the Holders shall be allowed any concession or proportionate release allowed to any
officer or director that entered into similar agreements (with such proportion being determined by
dividing the number of shares being released with respect to such officer or director by the total
number of issued and outstanding shares held by such officer or director); provided, that nothing
in this Section 7(a)(iii) shall be construed as a right to proportionate release for the executive
officers and directors of the Company upon the expiration of the 60-day

21

 

          period applicable to all Holders other than the executive officers and directors of the
Company; and

          (iv) this Section 7 shall not be applicable if a Shelf Registration Statement of the Company
filed under the Securities Act has been declared effective prior to the filing of an IPO
Registration Statement.

     (b) In order to enforce the foregoing covenant, the Company shall have the right to place
restrictive legends on the certificates representing the securities subject to this Section 7 and
to impose stop transfer instructions with respect to the Registrable Shares and such other
securities of each Holder (and the securities of every other Person subject to the foregoing
restriction) until the end of such period.

8. TERMINATION OF THE COMPANY’S OBLIGATION

     (a) In the event of the consummation of a Redemption (as defined in the Purchase/Placement
Agreement), this Agreement shall terminate automatically.

     (b) The Company shall have no obligation pursuant to this Agreement with respect to any
Registrable Shares proposed to be sold by a Holder in a registration pursuant to this Agreement if,
in the opinion of counsel to the Company, all such Registrable Shares proposed to be sold by a
Holder may be sold in a three-month period without registration under the Securities Act pursuant
to Rule 144 under the Securities Act.

9. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS

     From and after the date of this Agreement, the Company shall not, without the prior written
consent of the Holders beneficially owning not less than a majority of the then outstanding
Registrable Shares (provided, however, that for purposes of this Section 9, Registrable Shares that
are owned, directly or indirectly, by an Affiliate or employee of the Company shall not be deemed
to be outstanding), enter into any agreement with any holder or prospective holder of any Common
Stock of the Company that would allow such holder or prospective holder (a) to include such Common
Stock in any Registration Statement filed pursuant to the terms hereof, unless under the terms of
such agreement, such holder or prospective holder may include such securities in any such
registration only to the extent that the inclusion of his securities will not reduce the amount of
Registrable Shares of the Holders that is included, or (b) to have its Common Stock registered on a
registration statement that could be declared effective prior to, or within one hundred eighty
(180) days of, the effective date of any Registration Statement filed or amended pursuant to this
Agreement.

10. MISCELLANEOUS

     (a) Remedies. In the event of a breach by the Company of any of its obligations under
this Agreement, each Holder, in addition to being entitled to exercise all rights provided herein
or, in the case of FBR, in the Purchase/Placement Agreement, or granted by law, including recovery
of damages, will be entitled to specific performance of its rights under this Agreement. Subject
to Section 6, the Company agrees that monetary damages would not be adequate compensation for any
loss incurred by reason of a breach by it of any of the provisions

22

 

of this Agreement and hereby further agree that, in the event of any action for specific
performance in respect of such breach, it shall waive the defense that a remedy at law would be
adequate.

     (b) Amendments and Waivers. The provisions of this Agreement, including the provisions
of this sentence, may not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions hereof may not be given, without the written consent of the Company
and Holders beneficially owning not less than a majority of the then outstanding Registrable
Shares; provided, however, that for purposes of this Section 10(b), Registrable Shares that are
owned, directly or indirectly, by an Affiliate or employee of the Company shall not be deemed to be
outstanding. No amendment shall be deemed effective unless it applies uniformly to all Holders.
Notwithstanding the foregoing, a waiver or consent to or departure from the provisions hereof with
respect to a matter that relates exclusively to the rights of a Holder whose securities are being
sold pursuant to a Registration Statement and that does not directly or indirectly affect, impair,
limit or compromise the rights of other Holders may be given by such Holder; provided that the
provisions of this sentence may not be amended, modified or supplemented except in accordance with
the provisions of the immediately preceding sentence.

     (c) Notices. All notices and other communications provided for or permitted hereunder
shall be made in writing or delivered by facsimile (with receipt confirmed), overnight courier or
registered or certified mail, return receipt requested, or by telegram:

          (i) if to a Holder, at the most current address given by the transfer agent and registrar of
the Shares to the Company, with a copy to FBR at:

Friedman Billings Ramsey & Co., Inc.

10011 19th Street North

Arlington, VA 22209

Facsimile: (703) 312-9698

          (ii) if to the Company at the offices of the Company at:

Horsehead Holding Corp.

300 Frankfort Road

Monaca, PA 15061-2295

Facsimile: (724) 774-4348

with a copy to:

Kirkland & Ellis LLP

200 East Randolph Drive, 54th Floor

Chicago, IL 60601

Attention: James S. Rowe

Facsimile: (312) 861-2200

23

 

     (d) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties hereto, including, without
limitation and without the need for an express assignment or assumption, subsequent Holders. The
Company agrees that the Holders shall be third party beneficiaries to the agreements made hereunder
by FBR and the Company, and each Holder shall have the right to enforce such agreements directly to
the extent it deems such enforcement necessary or advisable to protect its rights hereunder;
provided, however, that such Holder fulfills all of its obligations hereunder.

     (e) Counterparts. This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same agreement.

     (f) Headings. The headings in this Agreement are for convenience of reference only and
shall not limit or otherwise affect the meaning hereof.

     (g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE
OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY STATE COURT IN THE STATE OF NEW YORK OR ANY FEDERAL
COURT SITTING IN NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS AGREEMENT, AND IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.

     (h) Severability. If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in
full force and effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties
hereto that they would have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

     (i) Entire Agreement. This Agreement, together with the Purchase/Placement Agreement,
is intended by the parties hereto as a final expression of their agreement, and is

24

 

intended to be a complete and exclusive statement of the agreement and understanding of the
parties hereto in respect of the subject matter contained herein and therein.

     (j) Registrable Shares Held by the Company or its Affiliates. Whenever the consent or
approval of Holders of a specified percentage of Registrable Shares is required hereunder,
Registrable Shares held by the Company or its Affiliates shall not be counted in determining
whether such consent or approval was given by the Holders of such required percentage.

     (k) Adjustment for Stock Splits, etc. Wherever in this Agreement there is a reference
to a specific number of shares with respect to any Registrable Shares, then upon the occurrence of
any subdivision, combination, or stock dividend of such shares, the specific number of shares with
respect to any Registrable Shares so referenced in this Agreement shall automatically be
proportionally adjusted to reflect the effect on the outstanding shares of such class or series of
stock by such subdivision, combination, or stock dividend.

     (l) Survival. This Agreement is intended to survive the consummation of the
transactions contemplated by the Purchase/Placement Agreement. The indemnification and
contribution obligations under Section 6 of this Agreement shall survive the termination of the
Company’s obligations under Section 2 of this Agreement.

     (m) Attorneys’ Fees. In any action or proceeding brought to enforce any provision of
this Agreement, or where any provision hereof is validly asserted as a defense, the prevailing
party, as determined by the court, shall be entitled to recover its reasonable attorneys’ fees in
addition to any other available remedy.

     (n) WAIVER OF TRIAL BY JURY. EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY AND
UNCONDITIONALLY WAIVES THE RIGHT TO A TRIAL BY JURY IN ANY ACTION, SUIT OR PROCEEDING ARISING OUT
OF, CONNECTION WITH OR RELATING TO THIS AGREEMENT, THE MATTERS CONTEMPLATED HEREBY, OR THE ACTIONS
OF THE PARTIES IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT.

25

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above
written.

	 	 	 	 	 	 
	 	 	HORSEHEAD HOLDING CORP.
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James M. Hensler
	 

	 	 	 	 
	 

	 	Name:
	 	James M. Hensler
	 

	 	Title:
	 	President and CEO
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
	 
	 	 	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ James R. Kleeblatt
	 

	 	 	 	 
	 

	 	Name:
	 	James R. Kleeblatt
	 

	 	Title:
	 	Senior Managing Director

26EX-10.1

 

Exhibit 10.1

HORSEHEAD HOLDING CORP.

2006 LONG-TERM EQUITY INCENTIVE PLAN

1. Purpose.

          This plan shall be known as the Horsehead Holding Corp. 2006 Long-Term Equity Incentive Plan
(the “Plan”). The purpose of the Plan shall be to promote the long-term growth and profitability
of Horsehead Holding Corp. (the “Company”) and its Subsidiaries by (i) providing certain
directors, officers and employees of, and certain other individuals who perform services for, the
Company and its Subsidiaries with incentives to maximize stockholder value and otherwise contribute
to the success of the Company and (ii) enabling the Company to attract, retain and reward the best
available persons for positions of responsibility. Grants of incentive or non-qualified stock
options, stock appreciation rights (“SARs”), restricted stock, restricted stock units, deferred
stock units, performance awards, or any combination of the foregoing may be made under the Plan.

2. Definitions

          (a) “Board of Directors” and “Board” mean the board of directors of the Company.

          (b) “Cause” means the occurrence of one or more of the following events:

               (i) Conviction of a felony or any crime or offense lesser than a felony involving the property
of the Company or a Subsidiary; or

               (ii) Conduct that has caused demonstrable and serious injury to the Company or a Subsidiary,
monetary or otherwise; or

               (iii) Willful refusal to perform or substantial disregard of duties properly assigned, as
determined by the Company or a Subsidiary, as the case may be; or

               (iv) Breach of duty of loyalty to the Company or a Subsidiary or any act of fraud or
dishonesty with respect to the Company or a Subsidiary.

          (c) “Change in Control” means the occurrence of one of the following events:

               (i) if any “person” or “group” as those terms are used in Sections 13(d) and 14(d) of the
Exchange Act or any successors thereto, other than an Exempt Person, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act or any successor thereto), directly or
indirectly, of securities of the Company representing 50% or more of the combined voting power of
the Company’s then outstanding securities; or

               (ii) during any period of two consecutive years, individuals who at the beginning of such
period constitute the Board and any new directors whose election by the Board or nomination for
election by the Company’s stockholders was approved by at least two-thirds of the directors then
still in office who either were directors at the beginning of the period

 

 

or whose election was
previously so approved, cease for any reason to constitute a majority thereof; or

               (iii) consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation (A) which would result in all or a portion of the voting
securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity) more
than 50% of the combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or (B) by which the corporate
existence of the Company is not affected and following which the Company’s chief executive officer
and directors retain their positions with the Company (and constitute at least a majority of the
Board); or

               (iv) consummation of a plan of complete liquidation of the Company or a sale or disposition by
the Company of all or substantially all the Company’s assets, other than a sale to an Exempt
Person.

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

          (e) “Committee” means the Compensation Committee of the Board, if any, which shall consist
solely of two or more members of the Board, and each member of the Committee shall be (i) a
“non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, unless
administration of the Plan by “non-employee directors” is not then required in order for exemptions
under Rule 16b-3 to apply to transactions under the Plan, (ii) an “outside director” within the
meaning of Section 162(m) of the Code, unless administration of the Plan by “outside directors” is
not then required in order to qualify for tax deductibility under Section 162(m) of the Code, and
(iii) independent, as defined by the rules of the Nasdaq Stock Market or any national securities
exchange on which any securities of the Company are listed for trading, and if not listed for
trading, by the rules of the Nasdaq Stock Market.

          (f) “Common Stock” means the Common Stock, par value $0.01 per share, of the Company, and any
other shares into which such stock may be changed by reason of a recapitalization, reorganization,
merger, consolidation or any other change in the corporate structure or capital stock of the
Company.

          (g) “Competition” is deemed to occur if a person whose employment with the Company or its
Subsidiaries has terminated obtains a position as a full-time or part-time employee of, as a member
of the board of directors of, or as a consultant or advisor with or to, or acquires an ownership
interest in excess of 5% of, a corporation, partnership, firm or other entity that engages in any
of the businesses of the Company or any Subsidiary with which the person was involved in a
management role at any time during his or her last five years of employment with or other service
for the Company or any Subsidiaries.

          (h) “Disability” means a disability that would entitle an eligible participant to payment of
monthly disability payments under any Company disability plan or as otherwise determined by the
Committee.

2

 

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

          (j) “Exempt Person” means any employee benefit plan of the Company or any Subsidiary or a
trustee or other administrator or fiduciary holding securities under an employee benefit plan of
the Company or any Subsidiary.

          (k) “Family Member” has the meaning given to such term in General Instructions A.1(a)(5) to
Form S-8 under the Securities Act of 1933, as amended, and any successor thereto.

          (l) “Fair Market Value” of a share of Common Stock of the Company means, as of the date in
question, the officially-quoted closing selling price of the stock (or if no selling price is
quoted, the bid price) on the principal securities exchange on which the Common Stock is then
listed for trading (including for this purpose the Nasdaq Global Select Market) (the “Market”) for
the applicable trading day or, if the Common Stock is not then listed or quoted in the Market, the
Fair Market Value shall be the fair value of the Common Stock determined in good faith by the
Board; provided, however, that when shares received upon exercise of an option are immediately sold
in the open market, the net sale price received may be used to determine the Fair Market Value of
any shares used to pay the exercise price or applicable withholding taxes and to compute the
withholding taxes.

          (m) “Incentive Stock Option” means an option conforming to the requirements of Section 422 of
the Code and any successor thereto.

          (n) “Non-Employee Director” has the meaning given to such term in Rule 16b-3 under the
Exchange Act and any successor thereto.

          (o) “Non-qualified Stock Option” means any stock option other than an Incentive Stock Option.

          (p) “Other Company Securities” mean securities of the Company other than Common Stock, which
may include, without limitation, unbundled stock units or components thereof, debentures, preferred
stock, warrants and securities convertible into or exchangeable for Common Stock or other property.

          (q) “Retirement” means retirement as defined under any Company pension plan or retirement
program or termination of one’s employment on retirement with the approval of the Committee.

          (r) “Subsidiary” means a corporation or other entity of which outstanding shares or ownership
interests representing 50% or more of the combined voting power of such
corporation or other entity entitled to elect the management thereof, or such lesser
percentage as may be approved by the Committee, are owned directly or indirectly by the Company.

3

 

3. Administration.

          The Plan shall be administered by the Committee, if any; provided that the Board may, in its
discretion, at any time and from time to time, resolve to administer the Plan, in which case the
term “Committee” shall be deemed to mean the Board for all purposes herein. Subject to the
provisions of the Plan, the Committee shall be authorized to (i) select persons to participate in
the Plan, (ii) determine the form and substance of grants made under the Plan to each participant,
and the conditions and restrictions, if any, subject to which such grants will be made, (iii)
certify that the conditions and restrictions applicable to any grant have been met, (iv) modify the
terms of grants made under the Plan, (v) interpret the Plan and grants made thereunder, (vi) make
any adjustments necessary or desirable in connection with grants made under the Plan to eligible
participants located outside the United States and (vii) adopt, amend, or rescind such rules and
regulations, and make such other determinations, for carrying out the Plan as it may deem
appropriate. Decisions of the Committee on all matters relating to the Plan shall be in the
Committee’s sole discretion and shall be conclusive and binding on all parties. The validity,
construction, and effect of the Plan and any rules and regulations relating to the Plan shall be
determined in accordance with applicable federal and state laws and rules and regulations
promulgated pursuant thereto and the rules and regulations of the principal securities exchange on
which the Common Stock is then listed for trading. No member of the Committee and no officer of
the Company shall be liable for any action taken or omitted to be taken by such member, by any
other member of the Committee or by any officer of the Company in connection with the performance
of duties under the Plan, except for such person’s own willful misconduct or as expressly provided
by statute.

          The expenses of the Plan shall be borne by the Company. The Plan shall not be required to
establish any special or separate fund or make any other segregation of assets to assume the
payment of any award under the Plan, and rights to the payment of such awards shall be no greater
than the rights of the Company’s general creditors.

4. Shares Available for the Plan.

          Subject to adjustments as provided in Section 16 hereof, an aggregate of one million one
hundred thousand one two hundred seventy-nine (1,101,279) shares of Common Stock may be issued
pursuant to the Plan (collectively, the “Shares”). Notwithstanding the foregoing, the maximum
aggregate number of Shares that may be issued pursuant to Incentive Stock Options under the Plan
shall not exceed one million one hundred thousand one two hundred seventy-nine (1,101,279) (subject
to adjustments as provided in Section 16 hereof).

          Such Shares may be in whole or in part authorized and unissued or held by the Company as
treasury shares. If any grant under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited as to any Shares, or is tendered or withheld as to any shares in
payment of the exercise price of the grant or the taxes payable with respect to the exercise, then
such unpurchased, forfeited, tendered or withheld Shares shall thereafter be available for further
grants under the Plan.

          Without limiting the generality of the foregoing provisions of this Section 4 or the
generality of the provisions of Sections 3, 6 or 18 or any other section of this Plan, the

4

 

Committee may, at any time or from time to time, and on such terms and conditions (that are
consistent with and not in contravention of the other provisions of this Plan) as the Committee
may, in its sole discretion, determine, enter into agreements (or take other actions with respect
to the options) for new options containing terms (including exercise prices) more (or less)
favorable than the outstanding options.

5. Participation.

          Participation in the Plan shall be limited to those directors (including Non-Employee
Directors), officers (including non-employee officers) and employees of, and other individuals
performing services for, the Company and its Subsidiaries selected by the Committee (including
participants located outside the United States). Nothing in the Plan or in any grant thereunder
shall confer any right on a participant to continue in the service or employ as a director or
officer of or in the performance of services for the Company or a Subsidiary or shall interfere in
any way with the right of the Company or a Subsidiary to terminate the employment or performance of
services or to reduce the compensation or responsibilities of a participant at any time. By
accepting any award under the Plan, each participant and each person claiming under or through him
or her shall be conclusively deemed to have indicated his or her acceptance and ratification of,
and consent to, any action taken under the Plan by the Company, the Board or the Committee.

          Incentive Stock Options or Non-qualified Stock Options, SARs, restricted stock awards,
restricted stock unit or deferred stock unit awards, performance awards, or any combination
thereof, may be granted to such persons and for such number of Shares as the Committee shall
determine (such individuals to whom grants are made being sometimes herein called “optionees” or
“grantees,” as the case may be). Determinations made by the Committee under the Plan need not be
uniform and may be made selectively among eligible individuals under the Plan, whether or not such
individuals are similarly situated. A grant of any type made hereunder in any one year to an
eligible participant shall neither guarantee nor preclude a further grant of that or any other type
to such participant in that year or subsequent years.

6. Incentive and Non-qualified Options.

          The Committee may from time to time grant to eligible participants Incentive Stock Options,
Non-qualified Stock Options, or any combination thereof; provided that the Committee may grant
Incentive Stock Options only to eligible employees of the Company or its subsidiaries (as defined
for this purpose in Section 422(a)(2) of the Code or any successor thereto). In any one calendar
year, the Committee shall not grant to any one participant options to purchase a number of shares
of Common Stock in excess of eight hundred thousand (800,000) (as adjusted pursuant to Section 16
hereof). The options granted shall take such form as the Committee shall determine, subject to the
following terms and conditions.

          It is the Company’s intent that Non-qualified Stock Options granted under the Plan not be
classified as Incentive Stock Options, that Non-qualified Stock Options not give rise to plan
failure income inclusion under Section 409A(a)(1) of the Code, that Incentive Stock Options be
consistent with and contain or be deemed to contain all provisions required under Section 422 of
the Code and any successor thereto, and that any ambiguities in construction be

5

 

interpreted in
order to effectuate such intent. If an Incentive Stock Option granted under the Plan does not
qualify as such for any reason, then to the extent of such non-qualification, the stock option
represented thereby shall be regarded as a Non-qualified Stock Option duly granted under the Plan,
provided that such stock option otherwise meets the Plan’s requirements for Non-qualified Stock
Options.

          (a) Price. The price per Share deliverable upon the exercise of each option (“exercise
price”) may not be less than 100% of the Fair Market Value of a share of Common Stock as of the
date of grant of the option, and in the case of the grant of any Incentive Stock Option to an
employee who, at the time of the grant, owns more than 10% of the total combined voting power of
all classes of stock of the Company or any of its Subsidiaries, the exercise price may not be less
than 110% of the Fair Market Value of a share of Common Stock as of the date of grant of the
option, in each case unless otherwise permitted by Section 422 of the Code or any successor
thereto.

          (b) Payment. Options may be exercised, in whole or in part, upon payment of the exercise
price of the Shares to be acquired. Unless otherwise determined by the Committee, payment shall be
made (i) in cash (including check, bank draft, money order or wire transfer of immediately
available funds), (ii) by delivery of outstanding shares of Common Stock with a Fair Market Value
on the date of exercise equal to the aggregate exercise price payable with respect to the options’
exercise, (iii) by simultaneous sale through a broker reasonably acceptable to the Committee of
Shares acquired on exercise, as permitted under Regulation T of the Federal Reserve Board or (iv)
by any combination of the foregoing.

          In the event a grantee elects to pay the exercise price payable with respect to an option
pursuant to clause (ii) above, (A) only a whole number of share(s) of Common Stock (and not
fractional shares of Common Stock) may be tendered in payment, (B) such grantee must
present evidence acceptable to the Company that he or she has owned any such shares of Common
Stock tendered in payment of the exercise price (and that such tendered shares of Common Stock have
not been subject to any substantial risk of forfeiture) for at least six months prior to the date
of exercise, and (C) Common Stock must be delivered to the Company. Delivery for this purpose may,
at the election of the grantee, be made either by (1) physical delivery of the certificate(s) for
all such shares of Common Stock tendered in payment of the price, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, or (2) direction to the grantee’s
broker to transfer, by book entry, such shares of Common Stock from a brokerage account of the
grantee to a brokerage account specified by the Company. When payment of the exercise price is
made by delivery of Common Stock, the difference, if any, between the aggregate exercise price
payable with respect to the option being exercised and the Fair Market Value of the shares of
Common Stock tendered in payment (plus any applicable taxes) shall be paid in cash. No grantee may
tender shares of Common Stock having a Fair Market Value exceeding the aggregate exercise price
payable with respect to the option being exercised (plus any applicable taxes).

          (c) Terms of Options. The term during which each option may be exercised shall be
determined by the Committee, but if required by the Code and except as otherwise provided herein,
no option shall be exercisable in whole or in part more than ten years from the

6

 

date it is granted,
and no Incentive Stock Option granted to an employee who at the time of the grant owns more than
10% of the total combined voting power of all classes of stock of the Company or any of its
Subsidiaries shall be exercisable more than five years from the date it is granted. All rights to
purchase Shares pursuant to an option shall, unless sooner terminated, expire at the date
designated by the Committee. The Committee shall determine the date on which each option shall
become exercisable and may provide that an option shall become exercisable in installments. The
Shares constituting each installment may be purchased in whole or in part at any time after such
installment becomes exercisable, subject to such minimum exercise requirements as may be designated
by the Committee. Prior to the exercise of an option and delivery of the Shares represented
thereby, the optionee shall have no rights as a stockholder with respect to any Shares covered by
such outstanding option (including any dividend or voting rights).

          (d) Limitations on Grants. If required by the Code, the aggregate Fair Market Value
(determined as of the grant date) of Shares for which an Incentive Stock Option is exercisable for
the first time by any individual during any calendar year under all equity incentive plans of the
Company and its Subsidiaries (as defined in Section 422 of the Code or any successor thereto) may
not exceed $100,000.

          (e) Termination.

               (i) Death or Disability

               (i) . If a participant ceases to be a director, officer or employee of, or to perform other
services for, the Company or any Subsidiary due to death or Disability, all of the participant’s
options and SARs shall become fully vested and exercisable and shall remain so for a period of 180
days from the date of such death or Disability, but in no event after the expiration date of the
options and SARs; provided that the participant does not engage in Competition during such 180-day
period unless he or she received written consent to do so from the Board or the Committee; provided
further that the Board or Committee may extend such exercise period (and related non-competition
period) in its discretion, but in no event may such extended exercise period extend beyond the
expiration date of the options. Notwithstanding the foregoing, if the Disability giving rise to
the termination of employment is not within the meaning of Section 22(e)(3) of the Code or any
successor thereto, Incentive Stock Options not exercised by such participant within 90 days after
the date of termination of employment will cease to qualify as Incentive Stock Options and will be
treated as Non-qualified Stock Options under the Plan if required to be so treated under the Code.

               (ii) Retirement. If a participant ceases to be a director, officer or employee of, or to
perform other services for, the Company or any Subsidiary upon the occurrence of his or her
Retirement, (A) all of the participant’s options and SARs that were exercisable on the date of
Retirement shall remain exercisable for, and shall otherwise terminate at the end of, a period of
90 days after the date of Retirement, but in no event after the expiration date of the options or SARs; provided that the participant does not engage in Competition during such 90 day period unless
he or she receives written consent to do so from the Board or the Committee; provided further that
the Board or Committee may extend such exercise period (and related non-competition period) in its
discretion, but in no event may such extended exercise period extend beyond the expiration date of
the options, and (B) all of the participant’s options

7

 

and SARs that were not exercisable on the
date of Retirement shall be forfeited immediately upon such Retirement; provided, however, that
such options and SARs may become fully vested and exercisable in whole or in part in the discretion
of the Committee. Notwithstanding the foregoing, Incentive Stock Options not exercised by such
participant within 90 days after Retirement will cease to qualify as Incentive Stock Options and
will be treated as Non-qualified Stock Options under the Plan if required to be so treated under
the Code.

               (iii) Discharge for Cause. If a participant ceases to be a director, officer or employee
of, or to perform other services for, the Company or a Subsidiary due to Cause, all of the
participant’s options and SARs shall expire and be forfeited immediately upon such cessation,
whether or not then exercisable.

               (iv) Other Termination. Unless otherwise determined by the Committee, if a participant
ceases to be a director, officer or employee of, or to otherwise perform services for, the Company
or a
Subsidiary for any reason other than death, Disability, Retirement or Cause, (A) all of the
participant’s options and SARs that were exercisable on the date of such cessation shall remain
exercisable for, and shall otherwise terminate at the end of, a period of 30 days after the date of
such cessation, but in no event after the expiration date of the options or SARs; provided that the
participant does not engage in Competition during such 30-day period unless he or she receives
written consent to do so from the Board or the Committee; provided further that the Board or
Committee may extend such exercise period (and related non-competition period) in its discretion,
but in no event may such extended exercise period extend beyond the expiration date of the options,
and (B) all of the participant’s options and SARs that were not exercisable on the date of such
cessation shall be forfeited immediately upon such cessation. Notwithstanding the foregoing,
Incentive Stock Options not exercised within 90 days after termination will cease to qualify as an
Incentive Stock Option and will be treated as a Non-qualified Stock Option under the Plan if
required to be so treated under the Code.

               (v) Change in Control. If there is a Change in Control of the Company and a participant
is terminated other than for Cause from being a director, officer or employee of, or from
performing other services for, the Company or a Subsidiary within one year after such Change in
Control, all of the participant’s options and SARs shall become fully vested and exercisable upon
such termination and shall remain so for up to one year after the date of termination, but in no
event after the expiration date of the options or SARs. In addition, the Committee shall have the
authority to grant options and SARs that become fully vested and exercisable automatically upon a
Change in Control, whether or not the grantee is subsequently terminated. Notwithstanding the
foregoing, Incentive Stock Options not exercised within 90 days after a participant’s termination
will cease to qualify as an Incentive Stock Option and will be treated as a Non-qualified Stock
Option under the Plan if required to be so treated under the Code.

          (f) Forfeiture. If a participant exercises any of his or her options and SARs and, within
one year thereafter, either (i) is terminated from the Company or a Subsidiary for any of the
reasons specified in the definition of “Cause” set forth in Section 2(b), or (ii) engages in
Competition without having received written consent to do so from the Board or the Committee, then
the participant may, in the discretion of the Committee, be required to pay the Company the

8

 

gain
represented by the difference between the aggregate selling price of the Shares acquired upon the
exercise of options or SARs (or, if the Shares were not then sold, their aggregate Fair Market
Value on the date of exercise) and the aggregate exercise price of the options or SARs exercised
(the “Option Gain”), without regard to any subsequent increase or decrease in the Fair Market Value
of the Common Stock. In addition, the Company may, in its discretion, deduct from any payment of
any kind (including salary or bonus) otherwise due to any such participant an amount equal to the
Option Gain.

          (g) Grant of Reload Options The Committee may provide (either at the time of grant or exercise of an option), in its
discretion, for the grant to a grantee who exercises all or any portion of an option (“Exercised
Options”) and who pays all or part of such exercise price with shares of Common Stock, of an
additional option (a “Reload Option”) for a number of shares of Common Stock equal to the sum (the
“Reload Number”) of the number of shares of Common Stock tendered for the Exercised Options plus,
if so provided by the Committee, the number of shares of Common Stock, if any, tendered by the
grantee in connection with the exercise of the Exercised Options to satisfy any federal, state or
local tax withholding requirements. The terms of each Reload Option, including the date of its
expiration and the terms and conditions of its exercisability and transferability, shall be the
same as the terms of the Exercised Option to which it relates, except that (i) the grant date for
each Reload Option shall be the date of exercise of the Exercised Option to which it relates and
(ii) the exercise price for each Reload Option shall be the Fair Market Value of the Common Stock
on the grant date of the Reload Option.

7. Stock Appreciation Rights. The Committee shall have the authority to grant SARs under
this Plan. SARs shall be subject to such terms and conditions as the Committee may specify;
provided that (1) the exercise price of an SAR may never be less than the Fair Market Value of the
Shares subject to the SAR on the date the SAR is granted, (2) the Shares are traded on an
established securities market, and (3) no SAR may include any feature for the deferral of
compensation other than the deferral of recognition of income until the exercise of the SAR.

     Prior to the exercise of the SAR, the participant shall have no rights as a stockholder with
respect to Shares covered by such outstanding SAR (including any dividend or voting rights).

     Upon the exercise of an SAR, the participant shall be entitled to a distribution in an amount
equal to (A) the difference between the Fair Market Value of a share of Common Stock on the date of
exercise and the exercise price of the SAR multiplied by (B) the number of Shares as to which the
SAR is exercised.

     All SARs will be exercised automatically on the last day prior to the expiration date of the
SAR so long as the Fair Market Value of a share of Common Stock on that date exceeds the exercise
price of the SAR.

8. Restricted Stock.

          The Committee may at any time and from time to time grant Shares of restricted stock under the
Plan to such participants and in such amounts as it determines. Each grant of Shares of restricted
stock shall specify the applicable restrictions on such Shares, the duration of

9

 

such restrictions
(which shall be at least six months except as otherwise determined by the Committee or provided in
the third paragraph of this Section 8), and the time or times at which such restrictions shall
lapse with respect to all or a specified number of Shares that are part of the grant.

          The participant will be required to pay the Company the aggregate par value of any Shares of
restricted stock (or such larger amount as the Board may determine to constitute capital under
Section 154 of the Delaware General Corporation Law, as amended, or any successor thereto) within
ten days of the date of grant, unless such Shares of restricted stock are treasury shares. Unless
otherwise determined by the Committee, certificates representing Shares of restricted stock granted
under the Plan will be held in escrow by the Company on the participant’s behalf during any period
of restriction thereon and will bear an appropriate legend specifying the applicable restrictions
thereon, and the participant will be required to execute a blank stock power therefor. Except as
otherwise provided by the Committee, during such period of restriction the participant shall have
all of the rights of a holder of Common Stock, including but not limited to the rights to receive
dividends (so long as such dividends are paid by March 15 of the year following the year in which
the participant’s right to receive the dividend vests) and to vote, and any stock or other
securities received as a distribution with respect to such participant’s restricted stock shall be
subject to the same restrictions as then in effect for the restricted stock.

          Except as otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company and its Subsidiaries due
to death, Disability or Retirement during any period of restriction, all restrictions on Shares of
restricted stock granted to such participant shall lapse. At such time as a participant ceases to
be a director, officer or employee of, or otherwise performing services for, the Company or its
Subsidiaries for any other reason, all Shares of restricted stock granted to such participant on
which the restrictions have not lapsed shall be immediately forfeited to the Company.

          If there is a Change in Control of the Company and a participant is terminated other than for
Cause from being a director, officer or employee of, or from performing other services for, the
Company or a subsidiary within one year after such Change in Control, all restrictions on Shares of
restricted stock granted to such participant shall lapse. In addition, the Committee shall have
the authority to grant shares of restricted stock with respect to which all restrictions shall
lapse automatically upon a Change in Control, whether or not the grantee is subsequently
terminated.

9. Restricted Stock Units; Deferred Stock Units.

          The Committee may at any time and from time to time grant restricted stock units under the
Plan to such participants and in such amounts as it determines. Each grant of restricted stock
units shall specify the applicable restrictions on such units, the duration of such restrictions
(which shall be at least six months except as otherwise determined by the Committee or provided in
the third paragraph of this Section 9), and the time or times at which such restrictions shall
lapse with respect to all or a specified number of units that are part of the grant.

10

 

          Each restricted stock unit shall be equivalent in value to one share of Common Stock and shall
entitle the participant to receive from the Company at the end of the vesting period (the “Vesting
Period”) applicable to such unit one Share, unless the participant elects in a timely
fashion to defer the receipt of such Shares, as provided below. Restricted stock units may be
granted without payment of cash or consideration to the Company; provided that participants shall
be required to pay to the Company the aggregate par value of the Shares received from the Company
within ten days of the issuance of such Shares unless such Shares are treasury shares.

          Except as otherwise provided by the Committee, during the Vesting Period the participant shall
not have any rights as a shareholder of the Company; provided that the participant shall have the
right to receive accumulated dividends (so long as such dividends are paid by March 15 of the year
following the year in which the participant’s right to receive the dividend vests) or distributions
with respect to the corresponding number of shares of Common Stock underlying each restricted stock
unit at the end of the Vesting Period, unless such restricted stock units are converted into
deferred stock units, in which case such accumulated dividends or distributions shall be paid by
the Company to the participant at such time as the deferred stock units are converted into Shares.

          Except as otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any Subsidiary due to
death, Disability or Retirement during any Vesting Period, all restrictions on restricted stock
units granted to such participant shall lapse and the participant shall then be entitled to receive
payment in Shares with respect to the applicable restricted stock units. At such time as a
participant ceases to be a director, officer or employee of, or otherwise performing services for,
the Company or any Subsidiary for any other reason, all restricted stock units granted to such
participant on which the restrictions have not lapsed shall be immediately forfeited to the
Company.

          If there is a Change in Control of the Company and a participant is terminated other than for
Cause from being a director, officer or employee of, or from performing other services for, the
Company or any Subsidiary within one year after such Change in Control, all restrictions on
restricted stock units granted to such participant shall lapse. In addition, the Committee shall
have the authority to grant restricted stock units with respect to which all restrictions shall
lapse automatically upon a Change in Control, whether or not the grantee is subsequently
terminated.

          A participant may elect by written notice to the Company, which notice must be made before the
later of (i) the close of the tax year preceding the year in which the restricted stock units are
granted or (ii) 30 days of first becoming eligible to participate in the Plan (or, if earlier, the
last day of the tax year in which the participant first becomes eligible to participate in the
plan) and on or prior to the date the restricted stock units are granted, to defer the receipt of
all or a portion of the Shares due with respect to the vesting of such restricted stock units;
provided that the Committee may impose such additional restrictions with respect to the time at
which a participant may elect to defer receipt of Shares subject to the deferral election, and any
other terms with respect to a grant of restricted stock units to the extent the Committee deems
necessary to enable the participant to defer recognition of income with respect to such units until

11

 

the Shares underlying such units are issued or distributed to the participant. Upon such deferral,
the restricted stock units so deferred shall be converted into deferred stock units. Except as
provided
below, delivery of Shares with respect to deferred stock units shall be made at the end of the
deferral period set forth in the participant’s deferral election notice (the “Deferral Period”).
Deferral Periods shall be no less than one year after the vesting date of the applicable restricted
stock units.

          Except as otherwise provided by the Committee, during such Deferral Period the participant
shall not have any rights as a shareholder of the Company; provided that, the participant shall
have the right to receive accumulated dividends or distributions with respect to the corresponding
number of shares of Common Stock underlying each deferred stock unit at the end of the Deferral
Period when such deferred stock units are converted into Shares.

          Except as otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any Subsidiary upon
his or her death prior to the end of the Deferral Period, the participant shall receive payment in
Shares in respect of such participant’s deferred stock units which would have matured or been
earned at the end of such Deferral Period as if the applicable Deferral Period had ended as of the
date of such participant’s death.

          Except as otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any Subsidiary upon
becoming disabled (as defined under Section 409A(a)(2)(C) of the Code) or Retirement or for any
other reason except termination for Cause prior to the end of the Deferral Period, the participant
shall receive payment in Shares in respect of such participant’s deferred stock units at the end of
the applicable Deferral Period or on such accelerated basis as the Committee may determine, to the
extent permitted by regulations issued under Section 409A(a)(3) of the Code.

          Except as otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any Subsidiary due to
termination for Cause such participant shall immediately forfeit any deferred stock units which
would have matured or been earned at the end of the applicable Deferral Period.

          Except as otherwise provided by the Committee, in the event of a Change in Control that also
constitutes a “change in the ownership or effective control of” the Company, or a change in the
ownership of a substantial portion of the Company’s assets (in each case as determined under
regulations issued pursuant to Section 409A(a)(2)(A)(v) of the Code), a participant shall receive
payment in Shares in respect of such participant’s deferred stock units which would have matured or
been earned at the end of the applicable Deferral Period as if such Deferral Period had ended
immediately prior to the Change in Control; provided, however, that if an event that constitutes a
Change in Control hereunder does not constitute a “change in control” under Section 409A of the
Code (or the regulations promulgated thereunder), no payments with respect to the deferred stock
units shall be made under this paragraph to the extent such payments would constitute an
impermissible acceleration under Section 409A of the Code.

12

 

10. Performance Awards.

          Performance awards may be granted to participants at any time and from time to time as
determined by the Committee. The Committee shall have complete discretion in determining the size
and composition of performance awards granted to a participant. The period over which performance
is to be measured (a “performance cycle”) shall commence on the date specified by the Committee and
shall end on the last day of a fiscal year specified by the Committee. A performance award shall
be paid no later than the 15th day of the third month following the completion of a
performance cycle. Performance awards may include (i) specific dollar-value target awards, (ii)
performance units, the value of each such unit being determined by the Committee at the time of
issuance, and/or (iii) performance Shares, the value of each such Share being equal to the Fair
Market Value of a share of Common Stock.

          The value of each performance award may be fixed or it may be permitted to fluctuate based on
a performance factor (e.g., return on equity) selected by the Committee.

          The Committee shall establish performance goals and objectives for each performance cycle on
the basis of such criteria and objectives as the Committee may select from time to time, including,
without limitation, the performance of the participant, the Company, one or more of its
Subsidiaries or divisions or any combination of the foregoing. During any performance cycle, the
Committee shall have the authority to adjust the performance goals and objectives for such cycle
for such reasons as it deems equitable.

          The Committee shall determine the portion of each performance award that is earned by a
participant on the basis of the Company’s performance over the performance cycle in relation to the
performance goals for such cycle. The earned portion of a performance award may be paid out in
Shares, cash, Other Company Securities, or any combination thereof, as the Committee may determine.

          A participant must be a director, officer or employee of, or otherwise perform services for,
the Company or its Subsidiaries at the end of the performance cycle in order to be entitled to
payment of a performance award issued in respect of such cycle; provided, however, that except as
otherwise determined by the Committee, if a participant ceases to be a director, officer or
employee of, or to otherwise perform services for, the Company and its Subsidiaries upon his or her
death, Retirement, or Disability prior to the end of the performance cycle, the participant shall
earn a proportionate portion of the performance award based upon the elapsed portion of the
performance cycle and the Company’s performance over that portion of such cycle.

          In the event of a Change in Control, a participant shall earn no less than the portion of the
performance award that the participant would have earned if the applicable performance cycle(s) had
terminated as of the date of the Change in Control.

11. Withholding Taxes.

          (a)Participant Election. Unless otherwise determined by the Committee, a participant may elect
to deliver shares of Common Stock (or have the Company withhold shares

13

 

acquired upon exercise of an
option or SAR or deliverable upon grant or vesting of restricted stock, as the case may be) to
satisfy, in whole or in part, the amount the Company is required to withhold for taxes in
connection with the exercise of an option or SAR or the delivery of restricted stock upon grant or
vesting, as the case may be. Such election must be made on or before the date the amount of tax to
be withheld is determined. Once made, the election shall be irrevocable. The fair market value of
the shares to be withheld or delivered will be the Fair Market Value as of the date the amount of
tax to be withheld is determined. In the event a participant elects to deliver or have the Company
withhold shares of Common Stock pursuant to this Section 11(a), such delivery or withholding must
be made subject to the conditions and pursuant to the procedures set forth in Section 6(b) with
respect to the delivery or withholding of Common Stock in payment of the exercise price of options.

          (b) Company Requirement. The Company may require, as a condition to any grant or exercise under
the Plan or to the delivery of certificates for Shares issued hereunder, that the grantee make
provision for the payment to the Company, either pursuant to Section 11(a) or this Section 11(b),
of federal, state or local taxes of any kind required by law to be withheld with respect to any
grant or delivery of Shares. The Company, to the extent permitted or required by law, shall have
the right to deduct from any payment of any kind (including salary or bonus) otherwise due to a
grantee, an amount equal to any federal, state or local taxes of any kind required by law to be
withheld with respect to any grant or delivery of Shares under the Plan.

12. Written Agreement; Vesting.

          Unless the Committee determines otherwise, each participant to whom a grant is made under the
Plan shall enter into a written agreement with the Company that shall contain such provisions,
including without limitation vesting requirements, consistent with the provisions of the Plan, as
may be approved by the Committee. Unless the Committee determines otherwise and except as
otherwise provided in Sections 6, 7, 8, 9 and 10 in connection with a Change in Control or certain
occurrences of termination, no grant under this Plan may be exercised, and no restrictions relating
thereto may lapse, within six months of the date such grant is made.

13. Transferability.

          Unless the Committee determines otherwise, no award granted under the Plan shall be
transferable by a participant other than by will or the laws of descent and distribution or to a
participant’s Family Member by gift or a qualified domestic relations order as defined by the Code.
Unless the Committee determines otherwise, an option or SAR may be exercised only by the optionee
or grantee thereof; by his or her Family Member if such person has acquired the option or SAR by
gift or qualified domestic relations order; by the executor or administrator of the estate of any
of the foregoing or any person to whom the option or SAR is transferred by will or the laws of
descent and distribution; or by the guardian or legal representative of any of the foregoing;
provided that Incentive Stock Options may be exercised by any Family Member, guardian or legal
representative only if permitted by the Code and any regulations thereunder. All provisions of
this Plan shall in any event continue to apply to any award granted under the Plan and transferred
as permitted by this Section 13, and any transferee of any such award shall

14

 

be bound by all
provisions of this Plan as and to the same extent as the applicable original grantee.

14. Listing, Registration and Qualification.

          If the Committee determines that the listing, registration or qualification upon any
securities exchange or under any law of Shares subject to any option, SAR, performance award,
restricted stock unit, deferred stock unit or restricted stock grant is necessary or desirable as a
condition of, or in connection with, the granting of same or the issue or purchase of Shares
thereunder, no such option or SAR may be exercised in whole or in part, no such performance award
may be paid out, and no Shares may be issued, unless such listing, registration or qualification is
effected free of any conditions not acceptable to the Committee.

15. Transfer of Employee.

          The transfer of an employee from the Company to a Subsidiary, from a Subsidiary to the
Company, or from one Subsidiary to another shall not be considered a termination of employment; nor
shall it be considered a termination of employment if an employee is placed on military or sick
leave or such other leave of absence which is considered by the Committee as continuing intact the
employment relationship.

16. Adjustments.

          In the event of a reorganization, recapitalization, stock split, stock dividend, combination
of Shares, merger, consolidation, distribution of assets, or any other change in the corporate
structure or shares of the Company, the Committee shall make such adjustment as it deems
appropriate in the number and kind of Shares or other property available for issuance under the
Plan (including, without limitation, the total number of Shares available for issuance under the
Plan pursuant to Section 4), in the number and kind of options, SARs, Shares, restricted stock
units, deferred stock units or other property covered by grants previously made under the Plan, and
in the exercise price of outstanding options or SARS; provided, however, that the Committee
shall not be required to make any adjustment that would (i) require the inclusion of any
compensation deferred pursuant to provisions of the Plan (or an award thereunder) in a
participant’s gross income pursuant to Section 409A of the Code and the regulations issued
thereunder from time to time and/or (ii) cause any award made pursuant to the Plan to be treated as
providing for the deferral of compensation pursuant to such Code section and regulations. Any such
adjustment shall be final, conclusive and binding for all purposes of the Plan. In the event of
any merger, consolidation or other reorganization in which the Company is not the surviving or
continuing corporation or in which a Change in Control is to occur, all of the Company’s
obligations regarding awards that were granted hereunder and that are outstanding on the date of
such event shall, on such terms as may be approved by the Committee prior to such event, be (a)
canceled in exchange for cash or other property (but, with respect to vested deferred stock units,
only if such merger, consolidation, other reorganization, or Change in Control constitutes a
“change in ownership or control” of the Company or a “change in the ownership of a substantial
portion” of the Company’s assets, as determined pursuant to regulations issued under Section
409A(a)(2)(A)(v) of the Code) or (b) assumed by the surviving or continuing corporation.

15

 

          Without limitation of the foregoing, in connection with any transaction of the type specified
by clause (iii) of the definition of a Change in Control in Section 2(c) that also constitutes a
“change in ownership or control” of the Company or a “change in the ownership of a substantial
portion” of the Company’s assets, as determined pursuant to regulations issued under Section
409A(a)(2)(A)(v) of the Code, the Committee may, in its discretion, (i) cancel any or all
outstanding options under the Plan in consideration for payment to the holders thereof of an amount
equal to the portion of the consideration that would have been payable to such holders pursuant to
such transaction if their options had been fully exercised immediately prior to such transaction,
less the aggregate exercise price that would have been payable therefor, or (ii) if the amount that
would have been payable to the option holders pursuant to such transaction if their options had
been fully exercised immediately prior thereto would be equal to or less than the aggregate
exercise price that would have been payable therefor, cancel any or all such options for no
consideration or payment of any kind. Payment of any amount payable pursuant to the preceding
sentence may be made in cash or, in the event that the consideration to be received in such
transaction includes securities or other property, in cash and/or securities or other property in
the Committee’s discretion.

17. Amendment and Termination of the Plan.

          The Board of Directors or the Committee, without approval of the stockholders, may amend or
terminate the Plan, except that no amendment shall become effective without prior approval of the
stockholders of the Company if stockholder approval would be required by applicable law or
regulations or by any listing requirement of the principal stock exchange on which the Common Stock
is then listed.

          Notwithstanding any other provisions of the Plan, and in addition to the powers of amendment
set forth in this Section 17 and Section 18 hereof or otherwise, the provisions hereof
and the provisions of any award made hereunder may be amended unilaterally by the Committee
from time to time to the extent necessary (and only to the extent necessary) to prevent the
implementation, application or existence (as the case may be) of any such provision from (i)
requiring the inclusion of any compensation deferred pursuant to the provisions of the Plan (or an
award thereunder) in a participant’s gross income pursuant to Section 409A of the Code, and the
regulations issued thereunder from time to time and/or (ii) inadvertently causing any award
hereunder to be treated as providing for the deferral of compensation pursuant to such Code section
and regulations.

18. Amendment or Substitution of Awards under the Plan. 

     The terms of any outstanding award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate, including, but not limited to,
acceleration of the date of exercise of any award and/or payments thereunder or of the date of
lapse of restrictions on Shares (but only to the extent permitted by regulations issued under
Section 409A(a)(3) of the Code); provided that, except as otherwise provided in Section 16, no such
amendment shall adversely affect in a material manner any right of a participant under the award
without his or her written consent, and provided further that the Committee shall not reduce the
exercise price of any options or SARs awarded under the Plan without approval of the stockholders
of the Company. The Committee may, in its discretion, permit holders of awards under the Plan to
surrender outstanding awards in order to exercise or realize rights under other awards, or in
exchange for the grant of new awards, or require holders of

16

 

awards to surrender outstanding awards
as a condition precedent to the grant of new awards under the Plan, but only if such surrender,
exercise, realization, exchange, or grant (a) would not constitute a distribution of deferred
compensation for purposes of Section 409A(a)(3) of the Code or (b) constitutes a distribution of
deferred compensation that is permitted under regulations issued pursuant to Section 409A(a)(3) of
the Code.

19. Commencement Date; Termination Date.

          The plan shall commence on the date of and immediately prior to execution and delivery by the
Company of that certain Purchase/Placement Agreement (the “Purchase/Placement Agreement”) by and
between the Company and Friedman, Billings, Ramsey & Co., Inc. (“FBR”) pursuant to which the
Company will sell shares of its common stock to FBR and certain other purchasers. If required by
the Code, the Plan will also be subject to reapproval by the shareholders of the Company prior to
the time required under the Code.

          Unless previously terminated upon the adoption of a resolution of the Board terminating the
Plan, the Plan shall terminate at the close of business on the ten year anniversary of the date of
the Purchase/Placement Agreement. No termination of the Plan shall materially and adversely affect
any of the rights or obligations of any person, without his or her written consent, under any grant
of options or other incentives theretofore granted under the Plan.

20. Severability. Whenever possible, each provision of the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of the Plan is held
to be prohibited by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder of the Plan.

21. Governing Law. The Plan shall be governed by the corporate laws of the State of Delaware,
without giving effect to any choice of law provisions that might otherwise refer construction or
interpretation of the Plan to the substantive law of another jurisdiction.

17

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