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Unassociated Document

    EXHIBIT
10.1

     

    THE
SECURITIES REPRESENTED HEREBY MAY NOT BE TRANSFERRED UNLESS (I) SUCH SECURITIES
HAVE BEEN REGISTERED FOR SALE PURSUANT TO THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”),
(II) SUCH SECURITIES MAY BE SOLD PURSUANT TO RULE 144 OF THE SECURITIES ACT, OR
(III) THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY THAT SUCH TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER
THE SECURITIES ACT OR QUALIFICATION UNDER APPLICABLE STATE SECURITIES
LAWS.

     

    SUBJECT
TO THE PROVISIONS OF SECTION 13 HEREOF,
THIS WARRANT SHALL BE VOID AFTER 5:00 P.M. (EASTERN TIME) ON THE TENTH
ANNIVERSARY (THE “EXPIRATION DATE”) OF
AUGUST 3, 2009 (THE “ORIGINAL ISSUANCE
DATE”).

     

    WABASH
NATIONAL CORPORATION

     

    WARRANT
TO PURCHASE SHARES OF COMMON STOCK

     

    FOR VALUE
RECEIVED, Trailer Investments, LLC (the “Warrantholder”), is
entitled to purchase, subject to the provisions of this Warrant, from Wabash
National Corporation, a Delaware corporation (the “Company”), at any
time not later than 5:00 p.m. (Eastern Time) on the Expiration Date, at an
exercise price per share equal to $0.01 (such exercise price, as adjusted from
time to time in accordance with the terms of this Warrant, the “Warrant Price”),
9,355,865 shares (the
“Warrant
Shares”) of the Company’s Common Stock, par value $0.01 per
share (“Common
Stock”).  The number of Warrant
Shares purchasable upon exercise of this Warrant shall be subject to
adjustment from time to
time as described herein.  Capitalized terms used but not otherwise
defined in this Warrant shall have the meanings ascribed to such terms in the
Securities Purchase Agreement, dated as of the July 17, 2009, by and between the
Company and the Warrantholder (the “Purchase
Agreement”).  This Warrant, dated as of
May 28, 2010 (the “Issuance
Date”), is being issued as a replacement of
that certain Warrant dated as of the Original Issuance Date issued to the
Warrantholder (the “Original
Warrant”) to give effect to the partial exercise
of the Original Warrant and the terms of the Consent dated as of May 24, 2010
between the Warrantholder and the Company (the “Consent”)

     

    Section 1. Registration.  The Company shall maintain
books for the transfer and registration of this Warrant.  Upon the
initial issuance of this Warrant, the Company shall issue and register this
Warrant in the name of the Warrantholder.

     

    Section 2. Transfers.  As provided herein, this
Warrant may be transferred to any person or entity but only pursuant
to a registration statement
filed under the Securities Act or pursuant to an exemption from such
registration.  Subject to such restrictions, the Company shall
transfer this Warrant from time to time upon the books to be maintained by the
Company for that purpose, within five calendar days
following the surrender hereof for transfer, properly endorsed or accompanied by
appropriate instructions for transfer and a new Warrant shall be issued to the
transferee and the surrendered Warrant shall be canceled by the Company within such five calendar day
period.

     

    
      
        
        

      

      
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    Section 3. Exercise of
Warrant.  Subject
to the provisions hereof, the Warrantholder may exercise this Warrant, in whole
or in part, at any time prior to the Expiration Date upon surrender of this
Warrant, together with
delivery of a duly executed Warrant exercise form, in the form attached hereto
as Appendix
A (the “Exercise
Agreement”) and payment by wire transfer of funds
(or, in certain circumstances, by cashless exercise as provided in Section
4) of the aggregate
Warrant Price for that
number of Warrant Shares then being purchased, to the Company during normal
business hours on any business day at the Company’s principal executive offices (or such
other office or agency of the Company as it may designate by notice
to the Warrantholder).  The
Warrant Shares so purchased shall be deemed to be issued to the Warrantholder or
the Warrantholder’s designee, as the record owner of such
shares, as of the close of business on the date on which this Warrant shall have
been surrendered (or the date evidence of loss,
theft or destruction thereof and security or indemnity reasonably satisfactory
to the Company has been provided to the Company), the Warrant Price shall have
been paid and the completed Exercise Agreement shall have been delivered.  The Warrant
Shares shall be credited to the book entry account of the Warrantholder within a
reasonable time, not exceeding three business days, after this Warrant shall
have been exercised (such crediting, a “Book Entry
Delivery”) or, if requested in writing by the Warrantholder,
the Certificates for the Warrant Shares so purchased shall be delivered to the
Warrantholder within a reasonable time, not exceeding three business days, after
this Warrant shall have been exercised (such delivery of certificates, a “Certificated
Delivery”). If a Certificated Delivery is
requested by the Warrantholder, the certificates so delivered shall be in such
denominations as may be requested by the Warrantholder and shall be registered
in the name of the Warrantholder or such other name as shall be
designated by the Warrantholder, as specified in the Exercise
Agreement.  If this Warrant shall have been exercised only in part,
then, unless this Warrant has expired, the Company shall, at its expense, at the
time of a Book Entry Delivery or a
Certificated Delivery, as applicable, deliver to the Warrantholder a new Warrant
representing the right to purchase the number of shares with respect to which
this Warrant shall not then have been exercised.  As used herein,
“business day” means a day, other than a Saturday or
Sunday, on which banks in New York, New York are open for the general
transaction of business.

     

    Section 4. Cashless
Exercise.  Notwithstanding any other
provision contained herein to the contrary, the Warrantholder may elect to receive,
without payment by the Warrantholder of the aggregate Warrant Price in respect
of the shares of Common Stock to be acquired, shares of Common Stock having a
Fair Market Value equal to the Market Price of all shares of Common Stock that may then be purchased upon
full exercise of this Warrant, less the aggregate Warrant Price for all such
shares, or any specified portion thereof, by the surrender to the Company of
this Warrant (or such portion of this Warrant being so exercised) together with a Net Issue Election
Notice, in the form annexed hereto as Appendix
B, duly executed, to the
Company. Thereupon, the Company shall issue to the Warrantholder such number of
fully paid, validly issued and nonassessable shares of Common Stock as is computed using the following
formula:

     

    X = Y (A -
B)

         A

     

    where

     

    
      	
               
      

            	
              X =

            	
              the number of shares of Common
      Stock to which the Warrantholder is entitled upon such cashless
      exercise;

            

    

     

    
      	
               
      

            	
              Y =

            	
              the total number of shares of
      Common Stock covered by this Warrant for which the
      Warrantholder has surrendered purchase rights at such time for cashless
      exercise (including both shares to be issued to the Warrantholder and
      shares as to which the purchase rights are to be canceled as payment
      therefor);

            

    

     

    
      	
               
      

            	
              A =

            	
              the Market Price of one share of
      Common Stock as of the date the net issue election is made;
      and

            

    

     

    
      	
               
      

            	
              B =

            	
              the Warrant
      Price;

            

    

     

    provided that if X is equal to zero or a
negative number, then the Warrantholder shall not be entitled to receive any
Warrant Shares pursuant to
a cashless exercise in accordance with this Section
4.

     

    
      
        
        

      

      
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    Section 5. Compliance
with Securities Act.  Except as provided in the
Purchase Agreement, the Company may cause the legend set forth on the first page
of this Warrant to be set forth on each Warrant, and a similar legend on any security issued or
issuable upon exercise of this Warrant, unless counsel for the Company is of the
opinion as to any such security that such legend is unnecessary.  The
Warrantholder hereby represents and warrants to the Company that the Warrantholder is acquiring the
Warrant and the Warrant Shares purchasable upon exercise of this Warrant
(collectively, the “Securities”) for investment for its own account and
not with a view to, or for resale in connection with, any distribution
thereof.  The
Warrantholder acknowledges and understands that the Securities have not been
registered under the Securities Act or applicable state securities laws and may
not be offered, sold, assigned, pledged, transferred or otherwise disposed of
unless (a) such Securities have been registered for
sale pursuant to the Securities Act, (b) such Securities may be sold pursuant to
Rule 144 of the Securities Act, or (c) the Company has received an opinion of
counsel reasonably satisfactory to the Company that such transfer may lawfully be made without
registration under the Securities Act or qualification under applicable state
securities laws.

     

    Section 6. Payment of
Taxes.  The
Company will pay any documentary stamp taxes attributable to the initial
issuance of Warrant Shares issuable upon the exercise of this
Warrant; provided, however, that the Company shall not be required
to pay any tax or taxes which may be payable in respect of any transfer involved
in the issuance or delivery of any certificates for Warrant Shares in a
name other than that of the
Warrantholder in respect of which such shares are issued, and in such case, the
Company shall not be required to issue or deliver any certificate for Warrant
Shares or any Warrant until the person requesting the same has paid
to the Company the amount of such tax or
has established to the Company’s reasonable satisfaction that such tax
has been paid.  The Warrantholder shall be responsible for income
taxes due under federal, state or other law to the extent any such tax is
due.

     

    Section 7. Replacement.  Upon receipt of evidence
reasonably satisfactory to the Company (an affidavit of the Warrantholder shall
be satisfactory) of the ownership and the loss, theft, destruction or mutilation
of this Warrant, and in the case of any such loss, theft or destruction, upon receipt of indemnity
reasonably satisfactory to the Company (provided that if the Warrantholder is a
financial institution or other institutional investor, then the
Warrantholder’s own agreement shall be satisfactory;
it being understood and
agreed that each of Trailer Investments, LLC and its affiliates shall constitute
an institutional investor for such purpose), or, in the case of any such
mutilation upon surrender of this Warrant, the Company shall (at its expense)
execute and deliver in lieu of this Warrant a new Warrant
of like kind representing the number of Warrant Shares represented by such lost,
stolen, destroyed or mutilated Warrant and dated the date of such lost, stolen,
destroyed or mutilated Warrant.

     

    
      
        
        

      

      
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    Section 8. Reservation
of Common Stock; Outstanding Options.  The Company hereby
represents and warrants that there have been reserved, and the Company shall at
all applicable times keep reserved until issued (if necessary), out of the
authorized and unissued
shares of Common Stock, the maximum number of shares issuable upon the exercise
of the rights of purchase represented by this Warrant.  The Company
represents, warrants and covenants that all Warrant Shares issued upon due
exercise of this Warrant shall be, at the time of delivery of the
certificates for such Warrant Shares, duly authorized, validly issued, fully
paid and non-assessable shares of Common Stock.  The Company represents and
warrants that, as of the Original Issuance Date, (a) 31,248,755 shares of Common Stock have
been issued and remain outstanding, (b) 2,181,541 Options (as defined below)
have been issued or granted, and (c) no Convertible Securities (as defined
below) have been issued or remain outstanding.

     

    Section 9. Adjustment
of Number of Warrant Shares.  In order to prevent
dilution of the rights granted under this Warrant (including on account of the
Out of the Money Options) the number of Warrant Shares obtainable upon exercise
of this Warrant shall be subject to adjustment from time to time
as provided in this Section
9; provided that if more than one subsection of
this Section
9 is applicable to a single
event, then the subsection shall be applied that produces the largest adjustment
and no single event shall
cause an adjustment under more than one subsection of this Section
9 so as to result in
duplication; provided, further, that, with respect to any
Warrantholder that is not a Trailer Investor (as defined in the Investor Rights
Agreement), no adjustment
shall be made pursuant to Section
9(a) or Section
9(b) if, immediately prior
to the time at which such adjustment would otherwise be made, the number of
shares of Common Stock exercisable under this Warrant and any other Warrant held
by the Warrantholder or any
of its affiliates is for fewer than 2,800,570 shares of Common Stock
(provided, however, that such number shall be adjusted
from time to time in the same manner as the number of Warrant Shares subject to
this Warrant is adjusted in accordance with Section
9(c) and Section
9(d)).  For the
avoidance of doubt, the Warrant Price shall not be subject to adjustment
hereunder.  For the purposes of this Warrant, the following terms have
the meanings set forth below:

     

    “Common Stock
Deemed Outstanding” means, at any given time, the number of
shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock deemed to be outstanding pursuant to Section
9(b)(i) and Section
9(b)(ii) hereof regardless
of whether the Options or Convertible Securities are actually exercisable at
such time, but excluding any shares of Common Stock issuable upon exercise of
this Warrant.

     

    “Convertible
Securities” means any stock or securities (directly
or indirectly) convertible
into or exchangeable for Common Stock.

     

    “Fair Market
Value” means, with respect to any security or
other property, the fair market value of such security or other property, as
jointly determined in good faith by the Board of Directors of the Company and the Warrantholder,
assuming a willing buyer and willing seller; provided that no minority or
illiquidity discount shall be taken into account and no consideration shall be
given to any restrictions on transfer, or to the existence or absence of, or any limitations on,
voting rights.

     

    
      
        
        

      

      
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    “Liquidity
Event” means, (i) with respect to any Option
(other than awards of Common Stock), the last day of the fiscal quarter during
which such Option is exercised or in respect of which any liquidity
event has occurred,
including the cashing out of such Option or the underlying share of Common
Stock, the payment of any consideration or the exchange or rollover of such
Option (or the underlying share of Common Stock), provided, however, that if any of the foregoing occur in connection with any
transaction or a series of related transactions in which the liquidity for the
Warrant or the Warrant Share occurs substantially contemporaneously, then
“Liquidity
Event” shall mean the date
on which such transaction or the last portion of such series of
related transactions is consummated, and (ii) with respect to any Option that is
an award of Common Stock, the date of grant of such Option.

     

    “Market
Price” means, as of a particular date (the
“Valuation
Date”), the following: (i) if the Common Stock is then
quoted on the New York Stock Exchange, Inc. (“NYSE”), The Nasdaq Stock Market, Inc.
(“Nasdaq”), the National Association of
Securities Dealers, Inc. OTC Bulletin Board (the “Bulletin
Board”) or such similar quotation system or association (together with
the NYSE, Nasdaq and Bulletin Board, “Trading
Markets” and each, a “Trading
Market”), the average of the daily volume
weighted average prices, as reported by Bloomberg Financial L.P., of one share
of Common Stock on a Trading Market for a period of five
trading days consisting of the trading day immediately prior to the Valuation
Date and the four trading days prior to such date; or (ii) if the Common Stock
is not then quoted on a Trading Market, the Fair Market Value of one share of Common Stock as of the
Valuation Date, as jointly determined in good faith by the Board of Directors of
the Company and the Warrantholder.  If the Common Stock is not then
listed on a Trading Market, then the Board of Directors of the Company shall respond promptly, in writing, to
an inquiry by the Warrantholder prior to the exercise hereunder as to the Fair
Market Value of a share of Common Stock as determined in good faith by the Board
of Directors of the Company.  In the event that the Board of Directors of the Company and the
Warrantholder are unable to agree upon the Fair Market Value in respect of
clause (ii) above, the Company and the Warrantholder shall jointly select an
appraiser who is experienced in such matters.  The decision of
such appraiser shall be final and
conclusive, and the cost of such appraiser shall be borne equally by the Company
and the Warrantholder.

     

    “Options” means any rights or options to
subscribe for or purchase Common Stock or Convertible Securities and any
awards of Common Stock or
Convertible Securities.

     

    “Out of the Money
Options” means any Options existing as of the Signing Date with an
exercise in excess of $0.54, which have the right on such date to convert
to 2,195,442 shares of Common Stock.  For the avoidance of doubt, an
Out of the Money Option shall continue to remain an Out of the Money Option
after a repricing, exchange or similar action with respect to such Out of the
Money Option.

     

    “Signing Date” means
July 17, 2009.

     

    
      
        
        

      

      
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    (a) Adjustment
of Number of Warrant
Shares Issuable upon Exercise of Warrant.

     

    (i) If and whenever on or after the Original
Issuance Date of this Warrant the Company issues or sells, or in accordance with
Section
9(b) is deemed to have
issued or sold, any shares of Common Stock for a consideration per share less
than (x) $0.54 (as
such amount is proportionately adjusted for stock splits, stock combinations,
stock dividends and recapitalizations affecting the Common Stock after the
Original Issuance Date, the “Base
Price”) or (y) the Market Price of the Common Stock
determined as of the date of such issue or sale, then immediately upon such
issue or sale the number of Warrant Shares issuable upon exercise of this
Warrant shall be increased to whichever of the following number of Warrant Shares is
greater:

     

    (A) the number of Warrant Shares acquirable
upon exercise of this Warrant determined by multiplying number of Warrant Shares
acquirable upon exercise of this Warrant immediately prior to such issue or sale
by a fraction, the numerator of which shall be the product
derived by multiplying the Base Price of the Common Stock by the number of
shares of Common Stock Deemed Outstanding immediately after such issue or sale,
and the denominator of which shall be the sum of (1) the number of shares of Common Stock Deemed
Outstanding immediately prior to such issue or sale multiplied by the Base Price
of the Common Stock determined as of the date of such issue or sale, plus (2)
the consideration, if any, received by the Company upon such issue or sale; or

     

    (B) the number of Warrant Shares acquirable
upon exercise of this Warrant determined by multiplying the number of Warrant
Shares acquirable upon exercise of this Warrant immediately prior to such issue
or sale by a fraction, the numerator of which shall be the product derived by
multiplying the Market Price of the Common Stock by the number of shares of
Common Stock Deemed Outstanding immediately after such issue or sale, and the
denominator of which shall be the sum of (1) the number of shares of
Common Stock Deemed Outstanding
immediately prior to such issue or sale multiplied by the Market Price of the
Common Stock determined as of the date of such issuance of sale, plus (2) the
consideration, if any, received by the Company upon such issue or sale.

     

    (ii) Anything herein to the contrary
notwithstanding, the Company shall not be required to make any adjustment of the
number of Warrant Shares acquirable upon exercise of this Warrant in the case of
the issuance of (A) securities issued pursuant to the Purchase Agreement and securities issued upon
the exercise or conversion of those securities, and (B) shares of Common Stock
issued or issuable by reason of a dividend, stock split or other distribution on
shares of Common Stock (but only to the extent that such a dividend, split or distribution
results in an adjustment in the number of Warrant Shares acquirable upon
exercise of this Warrant pursuant to the other provisions of this
Warrant).

     

    (b) Effect of
Certain Events on Number of Warrant Shares.  For purposes of determining the adjusted
number of Warrant Shares acquirable upon exercise of this Warrant under
Section
9(a), the following shall
be applicable:

     

    (i) Issuance of
Options.  If the
Company in any manner grants or sells any Options, then upon the occurrence of a
Liquidity Event with respect to such Options the number of Warrant Shares
acquirable upon exercise of this Warrant shall be increased such that the
Warrantholder shall be entitled to acquire upon exercise of this Warrant the same percentage of the fully
diluted Common Stock (i.e., determined by calculating all convertible
instruments as fully converted) immediately following or contemporaneous with
the occurrence of such Liquidity Event that the Warrantholder
otherwise would have been entitled to acquire
upon exercise of this Warrant immediately prior to the occurrence of such
Liquidity Event (excluding, for purposes of such calculation, the number of Out
of the Money Options outstanding as of the Signing Date).  The
Company shall promptly provide the
Warrantholder with written notice of the occurrence of any Liquidity
Event.  The adjustments set forth in this paragraph shall also be
given effect with respect to any transaction where the relevant Liquidity Event
and liquidity for the Warrant or the Warrant
Shares occurs contemporaneously, in the same transaction or as part of a series
of related transactions.

     

    
      
        
        

      

      
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    (ii) Issuance of
Convertible Securities.  If the Company in any
manner issues or sells any Convertible Securities, and the price
per share for which Common Stock is issuable upon conversion or exchange thereof
is less than (a) the Base Price in effect immediately prior to the time of such
issue or sale or (b) the Market Price determined as of such time, then the maximum number of
shares of Common Stock issuable upon conversion or exchange of such Convertible
Securities shall be deemed to be outstanding and to have been issued and sold by
the Company for such price per share.  For the purposes of this paragraph, the “price per share for which Common Stock
is issuable upon conversion or exchange thereof” is determined by dividing (A) the total
amount received or receivable by the Company as consideration for the issue or
sale of such Convertible Securities, plus the minimum aggregate
amount of additional consideration, if any, payable to the Company upon the
conversion or exchange thereof, by (B) the total maximum number of shares of
Common Stock issuable upon the conversion or exchange of all such Convertible Securities.  No
further adjustment of the number of Warrant Shares acquirable upon exercise of
this Warrant shall be made upon the actual issue of such Common Stock upon
conversion or exchange of such Convertible Securities, and if any such
issue or sale of such Convertible Securities
is made upon exercise of any Options for which adjustments of the number of
Warrant Shares acquirable upon exercise of this Warrant had been or are to be
made pursuant to other provisions of this Section
9(b), no further adjustment of the number of
Warrant Shares acquirable upon exercise of this Warrant shall be made by reason
of such issue or sale.

     

    (iii) Change in
Conversion Rate.  If the additional
consideration, if any, payable upon the issue, conversion or exchange of any Convertible Securities,
or the rate at which any Convertible Securities are convertible into or
exchangeable for Common Stock changes at any time, the number of Warrant Shares
acquirable upon exercise of this Warrant at the time of such change shall be adjusted immediately to
the number of Warrant Shares which would have been acquirable upon exercise of
this Warrant at such time had such Convertible Securities still outstanding
provided for such changed additional consideration or changed conversion rate, as the case may be, at
the time initially granted, issued or sold.  For purposes of this
Section
9(b), if the terms of any
Convertible Security which was outstanding as of the Original Issuance Date of
this Warrant are changed in the manner described in the immediately preceding
sentence, then such Convertible Security and the Common Stock deemed issuable
upon exercise, conversion or exchange thereof shall be deemed to have been
issued as of the date of such change; provided that no such change shall at any time
cause the number of Warrant Shares acquirable upon exercise of this Warrant
hereunder to be decreased.

     

    
      
        
        

      

      
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    (iv) Treatment of
Expired Options and Terminated Convertible Securities.  Upon the expiration of any
Option issued or granted on
or following the Original Issuance Date or the termination of any right to
convert or exchange any Convertible Securities without the exercise of such
Option or right, the number of Warrant Shares acquirable upon exercise of this
Warrant shall be adjusted immediately to the number of
Warrant Shares which would have been acquirable upon exercise of this Warrant at
the time of such expiration or termination had such Option or Convertible
Securities, to the extent outstanding immediately prior to such expiration or termination, never been
issued.

     

    (v) Treatment of
Out of the Money Options Outstanding as of the Original Issuance
Date.  Upon the
occurrence of a Liquidity Event with respect to any Out of the Money Option at
any time after the Signing Date, (A) if this Warrant shall not have been
exercised in full, then the number of Warrant Shares acquirable upon exercise of
this Warrant shall be increased such that the Warrantholder shall be entitled to
acquire upon exercise of this Warrant the same percentage of the Common Stock outstanding
immediately following the occurrence of the Liquidity Event with respect to such
Option that the Warrantholder otherwise would have been entitled to acquire upon
exercise of this Warrant immediately prior to the occurrence of the Liquidity Event with respect
to such Option, or (B) if this Warrant shall have been exercised in full, then
the Company shall promptly, and in any event within three business days, issue
and deliver to the Warrantholder the requisite number of shares of Common Stock such that the
Warrantholder shall own the same percentage of the Common Stock outstanding
immediately following the occurrence of the Liquidity Event with respect to such
Option that the Warrantholder owned immediately prior to the occurrence of the Liquidity Event with
respect to such Option.  The Company shall promptly provide the
Warrantholder with written notice of the occurrence of any Liquidity
Event.  The adjustments set forth in this paragraph shall also be
given effect with respect to any transaction where the
relevant Liquidity Event and liquidity for the Warrant or the Warrant Shares
occurs contemporaneously in the same transaction or as part of a series of
related transactions.

     

    (vi) Calculation
of Consideration Received.  If any Common Stock or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, then the
consideration received therefor shall be deemed to be the net amount received by
the Company therefor.  In case any Common Stock or
Convertible Securities are issued or sold for a
consideration other than cash, the amount of the consideration other than cash
received by the Company shall be the Fair Market Value of such consideration,
except where such consideration consists of securities, in which case the amount of consideration
received by the Company shall be the Market Price thereof as of the date of
receipt.  In case any Common Stock or Convertible Securities are
issued to the owners of the non-surviving entity in connection with any
merger in which the Company is the surviving
entity the amount of consideration therefor shall be deemed to be the Fair
Market Value of such portion of the net assets and business of the non-surviving
entity as is attributable to such Common Stock or Convertible Securities, as the case may
be.  In the event that the Board of Directors of the Company and the
Warrantholder are unable to agree upon the Fair Market Value, the Company and
the Warrantholder shall jointly select an appraiser who is experienced in such
matters.  The decision of such
appraiser shall be final and conclusive, and the cost of such appraiser shall be
borne equally by the Company and the Warrantholder.

     

    
      
        
        

      

      
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    (vii) Treasury
Shares.  The
number of shares of Common Stock outstanding at any given time does
not include shares owned or
held by or for the account of the Company or any Subsidiary of the Company, and
the disposition of any shares so owned or held shall be considered an issue or
sale of Common Stock.

     

    (viii) Record
Date.  If the
Company takes a record of the holders of Common Stock for the purpose
of entitling them (A) to receive a dividend or other distribution payable in
Common Stock, Options or in Convertible Securities or (B) to subscribe for or
purchase Common Stock, Options or Convertible Securities, then such record date shall be deemed to
be the date of the issue or sale of the shares of Common Stock deemed to have
been issued or sold upon the declaration of such dividend or the making of such
other distribution or the date of the granting of such right of subscription or purchase, as the
case may be.

     

    (c) Subdivision
or Combination of Common Stock.  If the Company at any time
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater
number of shares, then the number of Warrant Shares acquirable upon exercise of
this Warrant immediately prior to such subdivision shall be proportionately
increased.  If the Company at any time combines (by reverse
stock split or otherwise) one or more
classes of its outstanding shares of Common Stock into a smaller number of
shares, then the number of Warrant Shares acquirable upon exercise of this
Warrant shall be proportionately decreased.

     

    (d) Reorganization,
Reclassification, Consolidation, Merger or Sale.  Any recapitalization,
reorganization, reclassification, consolidation, merger, sale of all or
substantially all of the Company’s assets or other transaction, which in
each case is effected in
such a way that the holders of Common Stock are entitled to receive (either
directly or upon subsequent liquidation) stock, securities or assets with
respect to or in exchange for Common Stock is referred to herein as
“Organic
Change.”  Prior to the
consummation of any Organic
Change, the Company shall make appropriate provision (in form and substance
reasonably satisfactory to the Warrantholder) to insure that the Warrantholder
shall thereafter have the right to acquire and receive, in lieu of or
addition to (as the case may be) the Warrant
Shares immediately theretofore acquirable and receivable upon the exercise of
this Warrant, such shares of stock, securities or assets as would have been
issued or payable in such Organic Change (if the Warrantholder had exercised this Warrant immediately
prior to such Organic Change) with respect to or in exchange for the number of
Warrant Shares immediately theretofore acquirable and receivable upon exercise
of this Warrant had such Organic Change not taken
place.  In any such case, the Company shall make
appropriate provision (in form and substance satisfactory to the Warrantholder)
with respect to the Warrantholder’s rights and interests to insure that
the provisions of this Section
9 and Sections
10 and 11 hereof shall thereafter be applicable to the
Warrant.  The Company shall not effect any such consolidation, merger
or sale, unless prior to the consummation thereof, the successor entity (if
other than the Company) resulting from consolidation or merger or the
entity purchasing such assets assumes by
written instrument (in form and substance reasonably satisfactory to the
Warrantholder), the obligation to deliver to the Warrantholder such shares of
stock, securities or assets as, in accordance with the foregoing provisions, the Warrantholder may be
entitled to acquire.  Notwithstanding any other provision in this
Warrant to the contrary, the Warrantholder shall have the right, at its
election, to sell or exchange this Warrant (rather sell or exchange the Warrant
Shares) in connection with any Organic
Change that is structured as a sale or exchange of securities of the Company,
and the Company shall use its reasonable best efforts to take all actions
necessary or reasonably requested by the Warrantholder to give effect to such election.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    (e) Certain
Events.  If any
event occurs of the type contemplated by the provisions of this Section
9 but not expressly
provided for by such provisions (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights with
equity features), then the Company’s Board of Directors shall make an
appropriate adjustment in the number of Warrant Shares obtainable upon exercise
of this Warrant so as to protect the rights of the Warrantholder; provided that no such adjustment shall decrease
the number of Warrant Shares obtainable as otherwise determined pursuant to this
Section
9.

     

    Section 10. Dividends.  If the Company declares or
pays any dividend upon the Common Stock except for a stock dividend payable in shares of Common Stock
(a “Dividend”), then the Company shall pay to the
Warrantholder at the time of payment thereof the Dividend which would have been
paid to such Warrantholder had this Warrant been fully exercised immediately
prior to the date on which
a record is taken for such Dividend, or, if no record is taken, the date as of
which the record holders of Common Stock entitled to such dividends are to be
determined.

     

    Section 11. Purchase
Rights.  If at
any time the Company
grants, issues or sells any Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any
class of Common Stock (the “Purchase
Rights”), then the Warrantholder shall be
entitled to acquire, upon
the terms applicable to such Purchase Rights, the aggregate Purchase Rights
which such holder could have acquired if such holder had held the number of
Warrant Shares acquirable upon complete exercise of this Warrant immediately
before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights, or, if no such record is taken, the
date as of which the record holders of Common Stock are to be determined for the
grant, issue or sale of such Purchase Rights.

     

    Section 12. Fractional
Interest.  The
Company shall not be required to issue fractions of Warrant Shares upon the
exercise of this Warrant.  If any fractional share of Common Stock
would, except for the provisions of the first sentence of this Section
12, be deliverable upon such exercise, then
the Company, in lieu of delivering such fractional share, shall pay to the
exercising Warrantholder an amount in cash equal to the Market Price of such
fractional share of Common Stock on the date of exercise.

     

    Section 13. Extension of
Expiration Date.  If (a)(i) the Company fails
to cause any Registration Statement covering Registrable Securities (as such
term is defined in that certain Investor Rights Agreement, dated as of the date
hereof, by and between the
Company and Trailer Investments, LLC, as amended, supplemented or otherwise
modified from time to time (the “Investor
Rights Agreement”)) to be declared effective prior to the
applicable dates set forth therein, or (ii) if any of the events
specified in Section 7.1 of
the Investor Rights Agreement occurs, and the Blackout Period (as such term is
defined in the Investor Rights Agreement) (whether alone, or in combination with
any other Blackout Period) continues for more than sixty days in any
twelve-month period, or for more than a total
of ninety days, or (b) the Company fails to provide the notice required by
Section
15(b) within the time
periods set forth therein, then the Expiration Date of this Warrant shall be
extended one day for (1) in the case of clause (a), each day beyond the
sixty day or ninety day limits, as the case may be, that the Blackout Period
continues, or (2) in the case of clause (b), each day after the ninetieth day
prior to the Expiration Date that the required notice has not yet been provided to the
Warrantholder.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    Section 14. Benefits.  Nothing in this Warrant
shall be construed to give any person, firm or corporation (other than the
Company and the Warrantholder) any legal or equitable right, remedy or claim, it
being agreed that this
Warrant shall be for the sole and exclusive benefit of the Company and the
Warrantholder.

     

    Section 15. Notices to
Warrantholder.

     

    (a) Upon the happening of any event
requiring an adjustment of the number of Warrant Shares acquirable upon exercise
of this Warrant, the
Company shall promptly give written notice thereof to the Warrantholder at the
address appearing in the records of the Company, stating the adjusted number of
Warrant Shares acquirable upon exercise of this Warrant resulting from such
event and setting forth in reasonable detail the method
of calculation and the facts upon which such calculation is
based.  Failure to give such notice to the Warrantholder or any defect
therein shall not affect the legality or validity of the subject
adjustment.

     

    (b) At least ninety but no more than one hundred
twenty days prior to the Expiration Date, the Company shall provide written
notice to the Warrantholder at the address appearing in the records of the
Company, stating the calendar date upon which the Expiration Date will occur.

     

    Section 16. Identity of
Transfer Agent.  The transfer agent for the
Common Stock is The Bank of New York Mellon Trust Company, N.A.  Upon
the appointment of any subsequent transfer agent for the Common Stock or other
shares of the Company’s capital stock issuable upon the exercise of the rights
of purchase represented by this Warrant, the Company will mail to the
Warrantholder a statement setting forth the name and address of such transfer
agent; provided, however, that such notice shall be provided for
convenience only and shall
not be required for effectiveness of any such subsequent
appointment.

     

    Section 17. Further
Assurances.  Except and to the extent as
waived or consented to by the Warrantholder, the Company shall not by any
action, including, without limitation, amending its certificate of incorporation
or through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of  the
terms of this Warrant, but will at all
times in good faith assist in the carrying out of all such terms and in the
taking of all such actions as may be necessary or reasonably required to protect
the rights of Warrantholder as set forth in this Warrant against impairment. Without limiting the
generality of the foregoing, the Company will (a) not increase the par value of
any Warrant Shares above the amount payable therefor upon such exercise
immediately before such increase in par value, (b) take all such action as may be necessary or reasonably
required in order that the Company may validly and legally issue fully paid and
nonassessable Warrant Shares upon the exercise of this Warrant, (c) in the event
that any adjustment to the number of Warrant Shares (as defined in the Original Warrant) that
was required to be made under the terms of the Original
Warrant  (other than adjustments expressly waived pursuant to the
terms of the Consent) was not made prior to its cancellation, take all such
action as may be necessary or reasonably required to fully
reflect such adjustment in the number of Warrant Shares (as defined herein)
issuable hereunder, and (d) use all reasonable best efforts to obtain all such
authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as
may be necessary to enable the Company to perform its obligations under this
Warrant.  Before taking any action which would result in an adjustment
in the number of Warrant Shares for which this Warrant is exercisable, the Company shall use all
reasonable  best efforts to obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary or reasonably
required from any public regulatory body or bodies having jurisdiction
thereof.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

     

    Section 18. Notices.  Unless otherwise provided, any notice
required or permitted under this Warrant shall be given in writing and shall be
deemed effectively given as hereinafter described (a) if given by personal
delivery, then such notice shall be deemed given upon such delivery, (b) if given by telex or
facsimile, then such notice shall be deemed given upon receipt of confirmation
of complete transmittal, (c) if given by mail, then such notice shall be deemed
given upon the earlier of (i) receipt of such notice by the recipient or (ii) three days after such notice
is deposited in first class mail, postage prepaid, and (d) if given by an
internationally recognized overnight air courier, then such notice shall be
deemed given one business day after delivery to such
carrier.  All notices shall be addressed as set
forth below, or at such other address as the Warrantholder or the Company may
designate by ten days’ advance written notice to the other
party:

     

    If to the Company, then
to:

     

    Wabash National
Corporation

    1000 Sagamore Parkway South

    Lafayette, Indiana
47905

    Attention:        Chief Financial
Officer

    Facsimile:         (765) 771-5579

     

    with a copy to (which shall not
constitute notice):

     

    Hogan Lovells LLP

    100 International
Drive

    Suite 2000

    Baltimore, MD 21202

    Attention:        Michael J. Silver

    Facsimile:         (410) 639-2741

     

    If to the Warrantholder, then
to:

     

    Trailer Investments,
Inc.

    c/o Lincolnshire Management,
Inc.

    780 Third Avenue

    New York,
NY  10017

    Attention:        Michael J. Lyons

                               Allan D. L.
Weinstein

    Facsimile:         (212) 755-5457

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    with a copy to (which shall not constitute
notice):

     

    Kirkland & Ellis
LLP

    601 Lexington Avenue

    New York,
NY  10022

    Attention:       
Frederick Tanne,
P.C.

                 
    Srinivas S.
Kaushik

    Facsimile:        
(212) 446-6460

     

    Section 19. Registration
Rights.  The
initial Warrantholder is entitled to the benefit of certain registration rights
with respect to the shares of Common Stock issuable upon the exercise of this
Warrant as provided in the Investor Rights Agreement, and any subsequent
Warrantholder may be entitled to such rights in accordance
with the terms of the Investor Rights Agreement.

     

    Section 20. Successors.  All the covenants and
provisions hereof by or for the benefit of the Warrantholder shall bind and
inure to the benefit of its respective successors and assigns hereunder.

     

    Section 21. Governing
Law; Consent to Jurisdiction; Waiver of Jury Trial.  This Warrant shall be
governed by, and construed in accordance with, the internal laws of the State of
New York, without reference to the choice of law provisions
thereof.  The
Company and, by accepting this Warrant, the Warrantholder, each irrevocably
submits to the exclusive jurisdiction of the courts of the State of New York
located in New York County and the United States District Court for the Southern
District of New York for the purpose of any suit, action,
proceeding or judgment relating to or arising out of this Warrant and the
transactions contemplated hereby.  Service of process in connection
with any such suit, action or proceeding may be served on each party
hereto anywhere in the world by the same
methods as are specified for the giving of notices under this
Warrant.  The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably consents to the jurisdiction of any such court
in any such suit, action or proceeding and to the laying of
venue in such court.  The Company and, by accepting this Warrant, the
Warrantholder, each irrevocably waives any objection to the laying of venue of
any such suit, action or proceeding brought in such courts and
irrevocably waives any claim that any such
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.  EACH OF THE COMPANY
AND, BY ITS ACCEPTANCE HEREOF, THE WARRANTHOLDER HEREBY WAIVES ANY RIGHT TO
REQUEST A TRIAL BY JURY IN ANY LITIGATION WITH
RESPECT TO THIS WARRANT AND REPRESENTS AND WARRANTS THAT COUNSEL HAS BEEN
CONSULTED SPECIFICALLY AS TO THIS WAIVER.

     

    Section 22. No Rights as
Stockholder.  Prior to the exercise of
this Warrant, the Warrantholder shall not have or exercise any rights as a stockholder of the Company by
virtue of its ownership of this Warrant.

     

    Section 23. Amendment;
Waiver.  This
Warrant was issued in connection with the consummation of the transactions
contemplated by the Purchase Agreement.  Any term of this Warrant may
be amended or waived
(including the adjustment provisions included in Section
9 of this Warrant) upon the
written consent of the Company and the Warrantholder.

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    Section 24. No Strict
Construction.  The language used in this
Warrant shall be deemed to be the language chosen by the parties hereto to express their
mutual intent, and no rule of strict construction shall be applied against any
Person.

     

    Section 25. Section
Headings.  The
section headings in this Warrant are for the convenience of the Company and the
Warrantholder and in no way alter, modify, amend, limit or restrict
the provisions hereof.

     

    [END OF PAGE]

    [SIGNATURE PAGES
FOLLOW]

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    SIGNATURE PAGE TO
WARRANT

     

    IN WITNESS WHEREOF, the Company has
caused this Warrant to be duly executed as of the Issuance
Date.

     

    
      
        	 	WABASH
      NATIONAL
      CORPORATION	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Richard
      J. Giromini	 
	 	 	Name:
      Richard J. Giromini	 
	 	 	Title:  
      President and Chief Executive Officer	 
	 	 	 	 

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    SIGNATURE PAGE TO
WARRANT

     

    ACCEPTED AND AGREED TO AS OF THE
ISSUANCE DATE BY:

     

    
      
        	 	TRAILER
      INVESTMENTS, LLC	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Michael
      Lyons	 
	 	 	Name: Michael
      Lyons	 
	 	 	Title:  
      President	 
	 	 	 	 

      

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    APPENDIX A

    WABASH NATIONAL
CORPORATION

    WARRANT EXERCISE
FORM

     

    To: Wabash National
Corporation

     

    The undersigned hereby irrevocably
elects to exercise the right of purchase represented by the within Warrant (“Warrant”) for, and to purchase thereunder by the
payment of the Warrant Price and surrender of the Warrant, _______________
shares of Common Stock (“Warrant
Shares”) provided for therein, and requests
that:

     

    [Warrantholder to insert book entry
instructions]

     

    or

     

    [certificates for the Warrant Shares be
issued as follows:

     

    _______________________________

    Name

     

    _______________________________

    Address

     

    _______________________________

    _______________________________

    Federal Tax ID No.

     

    
      	
              and delivered
      by

            	
              (certified mail to the above
      address, or

            

    

    
      	
               
      

            	
              (other (specify):
      _______________________________________).]

            

    

     

    and, if the number of Warrant Shares
shall not be all the Warrant Shares purchasable upon exercise of the Warrant,
then that a new Warrant for the balance of the Warrant Shares purchasable upon
exercise of this Warrant be registered in the name of the undersigned
Warrantholder or the undersigned’s assignee as below indicated and
delivered to the address stated below.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Dated: ___________________,
____

     

    Signature:______________________

     

    ______________________________

    Name (please print)

     

    ______________________________

    ______________________________

    Address

    ______________________________

    Federal Tax ID No.

     

    Assignee:

    _______________________________

    _______________________________

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    APPENDIX B

    WABASH NATIONAL
CORPORATION

    NET ISSUE ELECTION
NOTICE

     

    To: Wabash National
Corporation

     

    Date:
[_________________________]

     

    The undersigned hereby elects under
Section
4 of this Warrant to
surrender the right to purchase [____________] shares of Common Stock
pursuant to this Warrant and hereby requests the issuance of [_____________]
shares of Common Stock.  The shares issuable upon such net issue
election shall be issued in the name of the undersigned or as otherwise
indicated below.

     

    _________________________________________

     

    Signature

     

    _________________________________________

     

    Name for
Registration

     

    _________________________________________

     

    Mailing Address2010
Executive Incentive Plan

    

    Background
and Objectives

    

    The
overall executive compensation strategy of Sanders Morris Harris Group Inc.
(“SMH” or the
“Company”) is
to provide key executives with targeted total cash pay opportunities that
generally are competitive with median total cash pay opportunities in wealth and
asset management companies of similar size.  The two primary elements
of the SMH cash compensation program are base salary and the 2010 Executive
Incentive Plan (the “Plan” or “EIP”).  SMH
base salaries are designed to be broadly competitive with industry standards and
are used to reward an executive’s job performance over time.  All
awards under the Plan are determined and awarded at the sole discretion of the
Compensation Committee of the SMH Board of Directors (the “Committee”).

    

    The Plan
provides annual incentive compensation opportunity for key executives for
achieving critical financial and other goals of and for SMH.  The
following document defines Plan eligibility, the size of potential award
opportunities, performance measurement, form and timing of award payments,
administrative guidelines, and definitions for ongoing Plan
management.

    

    The Plan
does not include potential equity-based awards, which are covered by the
Company’s separate Restricted Stock Unit Plan a sub-plan under the SMHG
Long-Term Incentive Plan..

    

    Capitalized
terms that are used but not defined in the Plan shall have the meaning ascribed
to them in the SMHG Long-Term Incentive Plan.

    

    Eligibility

    

    Employees
who are eligible to participate in the Plan (“Participants”) will
be proposed by the Chairman of the Board, Chief Executive Officer, President,
and Chief Financial Officer of the Company (the “Plan Committee”) and
approved by the Compensation Committee at the beginning of each
performance/award period.  Generally, Participants will be selected
from key executives who primarily are responsible for the annual growth and
profitability of SMH, i.e., generally senior managers and
officers.  For 2010, 22 senior officers and executives are proposed as
Participants.

    

    Targeted
Award Opportunities

    

    At the
beginning of each fiscal year, each Participant will be assigned a targeted
award opportunity proposed by the Plan Committee and approved by the Committee
that can increase or decrease in value, based on actual performance
achievement.  Targeted award opportunities for Participants for 2010
are shown in Exhibit
1.  Plan targeted award opportunities may be re-defined from
time to time by the Plan Committee, as modifications are made in SMH’s executive
compensation strategy.

    

    Within 90
days after the end of each fiscal year, each Participant’s salary rate at the
end of the prior fiscal year (just ended) will be multiplied by his or her
actual EIP award percentage earned (determined by applying the performance
measures set forth below) to determine the dollar value of the award for the
prior performance cycle.

    

    Performance
Measures

    

    Four Plan
financial performance measures, totaling 80% by weight of all performance
measures, are proposed for the 2010 performance period, as follows:

    

    
      	
              ·

            	
              Adjusted cash flow from
      operations1 (“ACF”) — weighted 30%
      (target — 110% of 2009 ACF).

            

    

     

    
      
        

      

      
        	
                1

              	
                Cash
      flow from operations will be adjusted by excluding from the calculation
      any cash flow items related to (a) discontinued operations of the Company,
      (b) marketable securities owned, (c) securities sold, not yet purchased,
      and (d) other non-recurring and extraordinary
  items.

              

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              Sanders
      Morris Harris Group

            	
              Page
      2 of 7

            
	
              2010
      Executive Incentive Plan

            	 
      

    

    

    
      	
              ·

            	
              Client investment
      results — weighted 20% (target — change in 60/402
      in 2010).

            

    

    
      	
              ·

            	
              Net new client money —
      weighted 20% (target— 4% increase over 2009 year-end client
      assets).

            

    

    
      	
              ·

            	
              Expenses adjusted for
      non-recurring and extraordinary items as a percentage of revenue —
      weighted 10% (target — no greater than
2009).

            

    

    

    The Plan
performance targets will be proposed by the Plan Committee and approved by the
Committee as soon as possible after the beginning of each fiscal
year.

    

    The final
20% portion of the performance measures will be determined on a discretionary
basis by the Committee for the Chief Executive Officer and by the Plan Committee
for the other Participants and will be based on the degree to which the
executive has mastered the primary duties and responsibilities of his or her
present job.

    

    SMH
performance calculations for the Plan shall exclude nonrecurring and
extraordinary items, which are defined at the sole discretion of the
Committee.  Performance goals for EIP awards may be adjusted during
the year if a major change occurs in the Company’s operations or capital
structure, e.g., an acquisition or merger.  In addition to the EIP
targets, the Committee and the Plan Committee jointly will establish minimum
acceptable and outstanding Plan goals, which are currently as
follows:

    

    
      	
              ·

            	
              Minimum Acceptable — The
      SMH performance level at or below which no
      incentive will be paid is 75% of the EIP
      performance measure target;

            

    

    
      	
              ·

            	
              Target — The SMH
      performance level where the Plan adjustment factor is 1X, with “X” equal
      to the target incentive, is 100% of the EIP
      performance measure target; and

            

    

    
      	
              ·

            	
              Outstanding — The SMH
      performance level at or above which the Plan adjustment factor is 2X, with
      “X” equal to the target incentive is 125% of the EIP
      performance measure target.

            

    

    

    EIP
awards will be interpolated for actual performance falling closest to the
nearest 5% increment between any of the foregoing goals.

    

    Exhibit 2 presents
the performance matrix for calculating EIP awards.  This performance
matrix may be revised by the Plan Committee with approval of the Committee if
the Company’s business strategy and performance focus changes.

    

    Form
and Timing of Awards

    

    EIP award
calculations will be finalized within 90 days after fiscal year
end.  All EIP awards will be paid in cash in quarterly installments in
the year immediately following a performance cycle, as follows:

    

    
      	
              ·

            	
              25%
      of the final award on February 15,
2011.

            

    

    
      	
              ·

            	
              25%
      of the final award on April 15,
2011.

            

    

    
      	
              ·

            	
              25%
      of the final award on August 15,
2011.

            

    

    
      	
              ·

            	
              25%
      of the final award on November 30,
2011.

            

    

    

    Each
installment will be deemed to be a separate payment for purposes of
Section 409A of the Internal Revenue Code of 1986, as amended and the
regulations thereunder (“Section 409A”).
 In no event will any payment of an award be made subsequent to December
31, 2011.

    

    Administrative
Guidelines and Definitions

     

    The Plan
operates at the discretion of the Committee.  The Committee may
exercise considerable discretion and judgment in interpreting the Plan, and
adopting, from time to time, rules and regulations that govern the
administration of the Plan. Once the Compensation Committee approves Plan
participants, award targets, and performance goals, the Plan Committee is
delegated authority to administer the Plan. All decisions of the Committee and
the Plan Committee are final, conclusive, and binding on all parties, including
the Company, its stockholders, and employees.

     

    
      
        

      

    

    
      
        
          	
                  2

                	
                  Investment
      performance of portfolio invested 60% in Standard & Poors 500 Index
      and 40% in Barclay’s Capital U.S. Aggregate Bond Index from January 1,
      2010 to December 31,
2010.

                

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              Sanders
      Morris Harris Group

            	
              Page
      3 of 7

            
	
              2010
      Executive Incentive Plan

            	 
      

    

    

    
      	
              ·

            	
              Employee Termination
      —

            

    

    

    Termination during 2010.
Except as expressly set forth below, in the event a Participant’s
employment with SMH terminates for any reason prior to the end of the workday on
December 31, 2010, such Participant will be ineligible for any award under
the Plan. In other words, if a Participant is employed according to Company
records through the end of the workday on December 31, 2010, the
Participant will, subject to the following provisions, be eligible for any award
earned under the Plan for 2010.

        

    Any
Participant (or his or her estate) who ceases to be employed by the Company
prior to January 1, 2011, due to the Participant’s death, Disability, or
Retirement (as such terms are defined in the SMHG Long-Term Incentive Plan),
subject to the Participant’s execution of a waiver and release of claims in a
form and manner satisfactory to the Company, will be eligible to receive a EIP
award based on an adjusted annual base salary amount, but otherwise in the same
manner, to the same extent, and at the same time as the Participant would have
received such EIP award if such Participant’s employment had continued through
December 31, 2010 (i.e., based on achievement of
applicable performance measures).  The Participant’s annual base
salary will be the result of the following formula: X × Y/12,
where:

    

    X = the
Participant’s annual base salary as in effect as of the date of termination of
employment; and

    
      Y = the
number of calendar months the Participant was actively employed by the Company
during 2010, rounded up for any partial month.

    

    

    Termination on or after
January 1, 2011. Except as expressly set forth below, a Participant
who ceases to be employed by SMH for any reason on or after January 1, 2011,
will forfeit any unpaid EIP award.  Any Participant (or his or her
estate) who ceases to be employed by the Company subsequent to December 31,
2010, but prior to November 30, 2011, due to the Participant’s death,
Disability, or Retirement, subject to the Participant’s execution of a waiver
and release of claims in a form and manner satisfactory to the Company, will be
eligible to be paid all unpaid EIP awards in the same manner, to the same
extent, and at the same time as the Participant would have been paid such EIP
awards if such Participant’s employment had continued through November 30,
2011.

    

    
      	
              ·

            	
              New Hires — Employees
      must have a minimum of six months of service to be eligible for an award,
      unless waived by the Plan Committee.  EIP awards for new hires
      are earned on a pro-rata basis, based on their date of
      employment.

            

    

    
      	
              ·

            	
              Base Salary Rate — Base
      salary for EIP award calculations shall be the annualized base rate in
      effect on December 31, 2010.

            

    

    
      	
              ·

            	
              Support Documentation —
      The Chief Financial Officer of the Company shall be responsible for
      maintaining all necessary support documentation regarding performance and
      bonus calculations under the Plan.

            

    

    

    Amendment

    

    The
Committee may at any time suspend, terminate, modify, waive, or amend any
or all of the provisions of this Plan. In addition, the terms applicable to any
Participant will be subject in their entirety to the terms of any offer letter
or other document to which the Participant has agreed. The terms of such offer
letter or other document, if contrary to the terms of the Plan, shall govern the
rights of the corresponding Participant.

     

    Governing
Law

    

    The Plan
is governed by the laws of the State of Texas.

    

    Withholding
Taxes

    

    The
Company has the right to make such provisions as it deems necessary or
appropriate to satisfy any obligations it may have under law to withhold
federal, state or local income or other taxes incurred by reason of payments
pursuant to the Plan.

    

    Section
409A

    

    The Plan
is intended to comply with the applicable requirements of
Section 409A and will be limited, construed, and interpreted in
accordance with such intent. Notwithstanding anything to the contrary in the
Plan, to the extent that any amount paid hereunder in connection with a
termination of employment constitutes deferred compensation under
Section 409A and is paid to a “specified employee” as defined in
Section 409A, the payment of such amount will be delayed for six
months.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              Sanders
      Morris Harris Group

            	
              Page
      4 of 7

            
	
              2010
      Executive Incentive Plan

            	 
      

    

    

    Non-transferability
of Awards

    

    No award
under this Plan, and no rights or interests therein, will be assignable or
transferable by a Participant (or legal representative).

    

    Effective
Date

    

    This Plan
is effective as of January 1, 2010, and continues until terminated,
suspended, modified, or amended by the Committee.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              Sanders
      Morris Harris Group

            	
              Page 5
      of 7

            
	
              2010
      Executive Incentive Plan

            	 
      

 

    Exhibit
1

    

    Proposed
2010 Participants and Award Targets

    

    
      
        
          	
                  Title

                	 
      	
                  Targeted
      Award

                
	
                  SMH
      Chairman/Chief Executive Officer

                	 
      	
                  50%
      of SMH salary

                
	
                  SMH
      President (w/Sales responsibility)

                	 
      	
                  50%
      of SMH salary

                
	
                  SMH
      EVP High Net Worth

                	 
      	
                  80%
      of SMH salary

                
	
                  SMH
      Chief Compliance Officer

                	 
      	
                  50%
      of SMH salary

                
	
                  SMH
      Corporate Chief Financial Officer

                	 
      	
                  40%
      of SMH salary

                
	
                  SMH
      Legal Counsel

                	 
      	
                  40%
      of SMH salary

                
	
                  SMH
      EVP Corporate

                	 
      	
                  40%
      of SMH salary

                
	
                  SMH
      Controller

                	 
      	
                  40%
      of SMH salary

                
	
                  SMH
      IT Director

                	 
      	
                  35%
      of SMH salary

                
	
                  SMH
      SVP Operations

                	 
      	
                  20%
      of SMH salary

                
	
                  SMH
      Administrative Manager

                	 
      	
                  20%
      of SMH salary

                
	
                  SMH
      VP Human Resources

                	 
      	
                  20%
      of SMH salary

                
	
                  EFS
      Chairman/Chief Executive Officer

                	 
      	
                  100%
      of EFS salary

                
	
                  EFS
      Chief Compliance Officer

                	 
      	
                  50%
      of EFS salary

                
	
                  EFS
      VP Technology

                	 
      	
                  35%
      of EFS salary

                
	
                  EFS
      Chief Financial Officer (w/Division responsibility)

                	 
      	
                  30%
      of EFS salary

                
	
                  EFS  Chief
      of Staff (w/Operations responsibility)

                	 
      	
                  25%
      of EFS salary

                
	
                  EFS
      VP Broker Operations

                	 
      	
                  20%
      of EFS salary

                
	
                  EFS
      Chief Marketing Officer

                	 
      	
                  20%
      of EFS salary

                
	
                  EFS
      VP Communications

                	 
      	
                  20%
      of EFS salary

                
	
                  EFS
      Executive Assistant

                	 
      	
                  20%
      of EFS salary

                
	
                  EFS
      Director Human Resources/Training

                	
                    

                	
                  15%
      of EFS salary

                

        

      

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              Sanders
      Morris Harris Group

            	
              Page 6
      of 7

            
	
              2010
      Executive Incentive Plan

            	 
      

    

     

    Exhibit
2

    

    Proposed
2010 Performance Goals and Weights

    Versus
Award Opportunity Earned

    

    
      
        
          	
                  Level of

                  Performance

                  Achievement

                	
                  Adjusted

                  Cash Flow

                  from

                  Operations

                	
                  Client

                  Investment

                  Results

                	
                  Net New

                  Client

                  Money

                	
                  Expenses

                  as

                  Percentage

                  of Revenue

                	
                  %  of Target

                  Award Earned

                	
                  Discretionary

                
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                  (Weight)

                	
                  (30%)

                	
                  (20%)

                	
                  (20%)

                	
                  (10%)

                	 
      	
                  (20%)

                
	 
      	 
      	 
      	 
      	 
      	 
      	 
      
	
                  Outstanding

                	
                  125%

                	
                  125%

                	
                  125%

                	
                  75%

                	
                  200%

                	
                  100%

                
	 
      	
                  120%

                	
                  120%

                	
                  120%

                	
                  80%

                	
                  180%

                	
                  

                
	 
      	
                  115%

                	
                  115%

                	
                  115%

                	
                  85%

                	
                  160%

                
	 
      	
                  110%

                	
                  110%

                	
                  110%

                	
                  90%

                	
                  140%

                
	 
      	
                  105%

                	
                  105%

                	
                  105%

                	
                  95%

                	
                  120%

                
	
                  Target

                	
                  100%

                	
                  100%

                	
                  100%

                	
                  100%

                	
                  100%

                
	 
      	
                  95%

                	
                  95%

                	
                  95%

                	
                  105%

                	
                  80%

                
	 
      	
                  90%

                	
                  90%

                	
                  90%

                	
                  110%

                	
                  60%

                
	 
      	
                  85%

                	
                  85%

                	
                  85%

                	
                  115%

                	
                  40%

                
	 
      	
                  80%

                	
                  80%

                	
                  80%

                	
                  120%

                	
                  30%

                
	
                  Min
      Acceptable

                	
                  75%

                	
                  75%

                	
                  75%

                	
                  125%

                	
                  20%

                
	 
      	
                  >75%

                	
                  >75%

                	
                  >75%

                	
                  <125%

                	
                  0%

                	
                  0%

                

        

      

    
 

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	
              Sanders
      Morris Harris Group

            	
              Page 7
      of 7

            
	
              2010
      Executive Incentive Plan

            	 
      

    

     

    Exhibit
3

    

    Sample
Award Calculation

    

    Assumptions:

    Executive’s
current salary is $200,000.

    Targeted
Plan award is 40% of salary or $80,000.

    Targeted
SMH performance goals achieved:

    
      	
              ·

            	
              110%
      of Cash Flow target, providing 140% of targeted award
    segment;

            

    

    
      	
              ·

            	
              100%
      of Client Investment Results target, providing 100% of targeted award
      segment;

            

    

    
      	
              ·

            	
              90%
      of Net New Client Money target, providing 60% of targeted award
      segment;

            

    

    
      	
              ·

            	
              90%
      of Expenses as Percentage of Revenue target, providing 140% of targeted
      award segment; and

            

    

    
      	
              ·

            	
              Plan
      Committee awards 100% of targeted amount based on personal goal
      achievement.

            

    

    

    
      
        
          
            
              	
                      Calculations:

                    	 
	
                      Current
      Salary:

                    	 	$	200,000	 
	
                      Incentive
      Target Percent:

                    	 	 	x
      .40	 
	
                      Incentive
      Target Amount:

                    	 	$	80,000	 

            

          

        

      

    

    

    
      
        
          
            	
                    A.

                  	
                    Component for SMH Cash
      Flow:

                  	 	 	 	 	 	 	 	 	 
	 
      	
                    Incentive
      Target:

                  	 	$	80,000	 	 	 	 	 	 	 
	 
      	
                    Cash
      Flow Performance Adjustment:

                  	 	 	x
      1.40	 	 	 	 	 	 	 
	 
      	
                    Non-weighted
      Cash Flow Allocation:

                  	 	 	 	 	 	$	112,000	 	 	 	 
	 
      	
                    Cash
      Flow Weighting:

                  	 	 	 	 	 	 	x
      .30	 	 	 	 
	 
      	
                    Weighted
      SMH Cash Flow Component:

                  	 	 	 	 	 	 	 	 	 	$	33,600	 
	 
      	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                    B.

                  	
                    Component for Client Investment
      Results (CIR):

                  	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	
                    Incentive
      Target:

                  	 	$	80,000	 	 	 	 	 	 	 	 	 
	 
      	
                    CIR
      Performance Adjustment:

                  	 	 	x
      1.00	 	 	 	 	 	 	 	 	 
	 
      	
                    Non-weighted
      CIR Allocation:

                  	 	 	 	 	 	$	80,000	 	 	 	 	 
	 
      	
                    CIR
      Weighting:

                  	 	 	 	 	 	 	x
      .20	 	 	 	 	 
	 
      	
                    Weighted
      CIR Component:

                  	 	 	 	 	 	 	 	 	 	$	16,000	 
	 
      	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                    C.

                  	
                    Component for Net New Client
      Money:

                  	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	
                    Incentive
      Target:

                  	 	$	80,000	 	 	 	 	 	 	 	 	 
	 
      	
                    New
      Client Money Performance Adjustment:

                  	 	 	x
      .60	 	 	 	 	 	 	 	 	 
	 
      	
                    Non-weighted
      New Client Money Allocation:

                  	 	 	 	 	 	$	48,000	 	 	 	 	 
	 
      	
                    New
      Client Money Weighting:

                  	 	 	 	 	 	 	x
      .20	 	 	 	 	 
	 
      	
                    Weighted
      Net New Client Money Component:

                  	 	 	 	 	 	 	 	 	 	$	9,600	 
	 
      	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                    D.

                  	
                    Component for Non-Recurring
      & Extraordinary Item (NREI) Expense Ratio:

                  	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	
                    Incentive
      Target:

                  	 	$	80,000	 	 	 	 	 	 	 	 	 
	 
      	
                    NREI
      Performance Adjustment:

                  	 	 	x
      1.40	 	 	 	 	 	 	 	 	 
	 
      	
                    Non-weighted
      NREI Allocation:

                  	 	 	 	 	 	$	112,000	 	 	 	 	 
	 
      	
                    NREI
      Weighting:

                  	 	 	 	 	 	 	x
      .10	 	 	 	 	 
	 
      	
                    Weighted
      NREI Expense Ratio Component:

                  	 	 	 	 	 	 	 	 	 	$	11,200	 
	 
      	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                    E.

                  	
                    Component for Personal Goal
      (PG) Achievement:

                  	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	
                    Incentive
      Target:

                  	 	$	80,000	 	 	 	 	 	 	 	 	 
	 
      	
                    PG
      Performance Adjustment:

                  	 	 	x
      1.00	 	 	 	 	 	 	 	 	 
	 
      	
                    Non-weighted
      PG Allocation:

                  	 	 	 	 	 	$	80,000	 	 	 	 	 
	 
      	
                    PG
      Weighting:

                  	 	 	 	 	 	 	x
      .20	 	 	 	 	 
	 
      	
                    Weighted
      Personal Goal Component:

                  	 	 	 	 	 	 	 	 	 	$	16,000	 
	 
      	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                    F.

                  	
                    Total Plan
      Award:

                  	 	 	 	 	 	 	 	 	 	$	86,400	 
	 
      	 
      	 	 	 	 	 	 	 	 	 	 	 	 
	
                    G.

                  	
                    Payout
      Schedule:

                  	 	 	 	 	 	 	 	 	 	 	 	 
	 
      	
                    First
      Installment on February 15, 2011

                  	 	 	 	 	 	$	21,600	 	 	 	 	 
	 
      	
                    Second
      Installment on April 15, 2011:

                  	 	 	 	 	 	$	21,600	 	 	 	 	 
	 
      	
                    Third
      Installment on August 15, 2011:

                  	 	 	 	 	 	$	21,600	 	 	 	 	 
	 
      	
                    Fourth
      Installment on November 30, 2011:

                  	 	 	 	 	 	$	21,600	 	 	 	 	 
	 
      	 
      	 	 	 	 	 	 	 	 	 	$	86,400

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