Document:

usac-Ex10-7

		

			 

		

		
			Exhibit 10.7
		

		
			EMPLOYMENT AGREEMENT
		

		
			This Employment Agreement (“Agreement”) is made and entered into as of July 15, 2013 (the “Effective Date”) by and between USA Compression Management Services, LLC, a Delaware limited liability company (hereafter the “Company”), and William G. Manias (“Employee”).
		

		
			WHEREAS, Employee and the Company desire to enter into this Agreement as set forth herein.
		

		
			NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, Employee and the Company, intending to be legally bound, do hereby agree as follows:
		

			
	
			
				 1.
			Employment.  During the Employment Period (as defined in Section 4 below), the Company shall employ Employee, and Employee shall serve, as Vice President and Chief Operating Officer of the Company.

			
	
			
				 2.
			Duties and Responsibilities of Employee.

			
	
			
				 (a)
			

			
	
			
			During the Employment Period, Employee shall: (i) devote all of Employee’s business time and attention to the business of the Company and its Affiliates (as defined below) (collectively, the “Company Group”, which term shall include, for the avoidance of doubt, any subsidiaries or other entities that become Affiliates of the Company from and after the date hereof), as applicable, (ii) will act in the best interests of the Company Group and (iii) will perform with due care Employee’s duties and responsibilities. Employee’s duties will include those normally incidental to the position of Chief Operating Officer, as well as whatever additional duties may be assigned to Employee by the Chief Executive Officer or the board of directors of USA Compression GP, LLC (the “Board”), which duties may include, without limitation, providing services to members of the Company Group in addition to the Company. Employee agrees to cooperate fully with the Board and not to engage in any activity that interferes with the performance of Employee’s duties hereunder. During the Employment Period, Employee will not hold any type of outside employment, engage in any type of consulting or otherwise render services to or for any other person or business concern without the advance written consent of the Board; provided, that the foregoing shall not preclude Employee from managing private investments, participating in industry and/or trade groups, engaging in volunteer civic, charitable or religious activities, serving on boards of directors of charitable not‐for‐profit entities or, with the consent of the Board, which consent is not to be unreasonably withheld, serving on the board of directors of other entities, in each case as long as such activities, individually or in the 

		 

		

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	aggregate, do not materially interfere or conflict with Employee’s responsibilities to the Company.

			
	
			
				 (b)
			

			
	
			
			Employee represents and covenants that Employee is not the subject of or a party to any employment agreement, non‐competition covenant, nondisclosure agreement, or any other agreement, covenant, understanding, or restriction that would prohibit Employee from executing this Agreement or the Amended and Restated Limited Liability Company Agreement of USA Compression Holdings, LLC, dated as of December 23, 2010 (as amended, the “Operating Agreement”) and fully performing Employee’s duties and responsibilities hereunder or thereunder, or would in any manner, directly or indirectly, limit or affect the duties and responsibilities that may now or in the future be assigned to Employee hereunder.

			
	
			
				 (c)
			

			
	
			
			Employee acknowledges and agrees that Employee owes the Company Group a duty of loyalty as a fiduciary of the Company Group, and that the obligations described in this Agreement are in addition to, and not in lieu of, the obligations Employee owes the Company Group under the common law.

			
	
			
				 3.
			Compensation.

			
	
			
				 (a)
			

			
	
			
			During the Employment Period, the Company shall pay to Employee an annualized base salary of $275,000 (the “Base Salary”) in consideration for Employee’s services under this Agreement, payable on a bi‐weekly basis, in conformity with the Company’s customer payroll practices for similarly situated employees. The Board will annually review the Base Salary, which may be increased but not decreased during the Employment Period based on Employee’s performance and market conditions.

			
	
			
				 (b)
			

			
	
			
			During the Employment Period, Employee shall be entitled to participate in the bonus programs established for employees of the Company, as may be amended from time to time. The performance targets that must be achieved in order to be eligible for certain bonus levels shall be established by the Board each year within 90 days following the start of the applicable fiscal year, in its sole discretion, and communicated to Employee. If the Board determines that Employee meets the performance targets established for a particular fiscal year, then his bonus for that year (the “Annual Bonus”) will be in an amount up to $137,500 (the “Target Annual Bonus”), in accordance with the terms of the bonus program in effect for the applicable year, which amount shall be prorated for less than a full year of service for the fiscal year ending December 31, 2013. In addition, in the event Employee outperforms and exceeds the performance targets established for a particular fiscal year, Employee may receive an additional outperformance bonus for the applicable year, in an amount determined in the sole discretion of the Board (an “Outperformance 

		 

		

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	Bonus”). The Annual Bonus and any Outperformance Bonus shall be paid no later than March 15 of the year following the year in which the Annual Bonus or Outperformance Bonus is earned, and shall not be payable unless Employee remains employed by the Company on the date that such bonus is paid, except in the case of a termination of Employee due to the death or Disability of Employee, by the Company for convenience, or a resignation by Employee for Good Reason, in which case Employee will be entitled to (i) the entire amount of any earned Annual Bonus for the year preceding the year in which Employee dies, becomes Disabled, is terminated by the Company for convenience or resigns for Good Reason and (ii) a pro rata portion (based on the number of days employed during the year) of any earned Annual Bonus for the year in which Employee dies, becomes Disabled, is terminated by the Company for convenience or resigns for Good Reason in each case in the year following the year to which the applicable bonus relates.

			
	
			
				 4.
			Term of Employment. The initial term of this Agreement shall be for the period beginning on the Effective Date and ending on the second anniversary of the Effective Date (the “Initial Term”).  On the second anniversary of the Effective Date and on each subsequent anniversary thereafter, this Agreement shall automatically renew and extend for a period of 12 months (each such 12‐month period being a “Renewal Term”) unless written notice of non‐renewal is delivered from either party to the other not less than 90 days prior to the expiration of the then‐existing Initial Term or Renewal Term.    Notwithstanding any other provision of this Agreement, Employee’s employment pursuant to this Agreement may be terminated at any time in accordance with Section 6.  The period from the Effective Date through the expiration of this Agreement or, if sooner, the termination of Employee’s employment pursuant to this Agreement, regardless of the time or reason for such termination, shall be referred to herein as the “Employment Period.”

			
	
			
				 5.
			Benefits.  Subject to the terms and conditions of this Agreement, Employee shall be entitled to the following benefits during the Employment Period:

			
	
			
				 (a)
			

			
	
			
			Reimbursement of Business Expenses.    Subject to Section 24 hereof (regarding section 409A compliance), the Company agrees to reimburse Employee for Employee’s reasonable business‐related expenses incurred in the performance of Employee’s duties under this Agreement; provided, that Employee timely submits all documentation for such reimbursement, as required by Company policy in effect from time‐to‐time.    Employee is not permitted to receive a payment in lieu of reimbursement under this Section 5(a).

			
	
			
				 (b)
			

			
	
			
			Benefits.    During the Employment Period, Employee and where applicable Employee’s spouse and dependents shall be eligible to participate in the same benefit plans or fringe benefit policies, other  than severance programs, such as health, dental, life insurance, vision, and 401(k), as are offered to members of the Company’s executive management and in each case on no less favorable than the terms of benefits generally available to 

		 

		

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	the employees of the Company (based on seniority and salary level), subject to applicable eligibility requirements and the terms and conditions of all plans and policies.

			
	
			
				 (c)
			

			
	
			
			Paid Time Off.    During the Employment Period, Employee shall accrue paid time off (“Paid Time Off”) at a rate of 20 days per calendar year during the Employment Period; provided,  however, that Employee shall cease accruing Paid Time Off once Employee has accrued 20 unused days’ worth of Paid Time Off, and such accrual will begin again only after Employee has used accrued Paid Time Off such that Employee’s accrued entitlement to Paid Time Off is once again less than 20 days.    Employee shall take Paid Time Off in accordance with all Company policies and with due regard for the needs of the Company Group.

			
	
			
				 6.
			Termination of Employment.

			
	
			
				 (a)
			

			
	
			
			Company’s Right to Terminate Employee’s Employment for Cause.    The Company shall have the right to terminate Employee’s employment hereunder at any time for “Cause.”  For purposes of this Agreement, “Cause” shall mean:

			
	
			
				 (i)
			

			
	
			
			any material breach of this Agreement or the Operating Agreement by Employee, including, without limitation, the material breach of any representation, warranty or covenant made under this Agreement or the Operating Agreement by Employee;

			
	
			
				 (ii)
			

			
	
			
			Employee’s breach of any applicable duties of loyalty to the Company or any of its Affiliates, gross negligence or material misconduct, or a significant act or acts of personal dishonesty or deceit, taken by Employee, in the performance of duties and services required of Employee that is demonstrably and significantly injurious to the Company or any of its Affiliates;

			
	
			
				 (iii)
			

			
	
			
			conviction of Employee of a felony or crime involving moral turpitude;

			
	
			
				 (iv)
			

			
	
			
			Employee’s willful and continued failure or refusal to perform substantially Employee’s material obligations pursuant to this Agreement or the Operating Agreement or follow any lawful and reasonable directive from the Chief Executive Officer or the Board, other than as a result of Employee’s incapacity; or

			
	
			
				 (v)
			

			
	
			
			a violation of a federal, state or local law or regulation applicable to the business of the Company that is demonstrably and significantly injurious to the Company.

		
			

		 

		

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Prior to Employee’s termination for Cause, the Company must give written notice to Employee describing the act or omission of Employee giving rise to the determination of Cause and, in respect of circumstances capable of cure, such circumstances must remain uncured for 15 days following receipt by Employee of such written notice, provided, that Employee shall not be entitled to cure any such acts or omissions if Employee has previously cured any acts or omissions in the immediately preceding six months.
		

			
	
			
				 (b)
			

			
	
			
			Company’s Right to Terminate for Convenience.    The Company shall have the right to terminate Employee’s employment for convenience at any time and for any reason, or no reason at all, with written notice to Employee, subject to the provisions of Section 6(g) regarding the severance benefits.  For purposes of this Agreement, the Company’s failure to renew the Agreement at the end of Initial Term or a Renewal Term shall be deemed a termination of Employee’s employment for convenience.

			
	
			
				 (c)
			

			
	
			
			Employee’s Right to Terminate for Good Reason.  Employee shall have the right to terminate Employee’s employment with the Company at any time for “Good Reason.”  For purposes of this Agreement, “Good Reason” shall mean:

			
	
			
				 (i)
			

			
	
			
			a material breach by the Company of any of its covenants or obligations under this Agreement, the Operating Agreement or any other material agreement with Employee;

			
	
			
				 (ii)
			

			
	
			
			any material reduction in Employee’s Base Salary, other than a reduction that is generally applicable to all similarly situated employees of the Company;

			
	
			
				 (iii)
			

			
	
			
			a material reduction by the Company in Employee’s duties, authority, responsibilities, job title or reporting relationships as in effect immediately prior to such reduction, or the assignment to Employee of such reduced duties, authority, responsibilities, job title or reporting relationships;

			
	
			
				 (iv)
			

			
	
			
			a material reduction of the facilities and perquisites available to Employee immediately prior to such reduction, other than a reduction that is generally applicable to all similarly situated employees of the Company; or

			
	
			
				 (v)
			

			
	
			
			the relocation of the geographic location of Employee’s principal place of employment by more than 50 miles from 

		 

		

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	the location of Employee’s principal place of employment as of the Effective Date.

		
			Notwithstanding the foregoing provisions of this Section 6(c) or any other provision of this Agreement to the contrary, any assertion of Employee of a termination for Good Reason shall not be effective unless all of the following conditions are satisfied:  (A) the condition giving rise to Employee’s termination of employment must have arisen without Employee’s written consent; (B) Employee must provide written notice to the Board of such condition within 30 days of the initial existence of the condition; (C) the condition specified in such notice must remain uncorrected for 30 days after receipt of such notice by the Board; and (D) the date of Employee’s termination of employment must occur within the 90‐day period after the initial existence of the condition specified in such notice, in which case, if Good Reason is found to exist and Employee otherwise complies with Section 6(g), Employee will be entitled to receive the severance benefits provided in Section 6(g).
		

			
	
			
				 (d)
			

			
	
			
			Death or Disability.  Upon the death or Disability (as defined below) of Employee, Employee’s employment with Company shall terminate and the Company shall have no further obligation to Employee, or Employee’s successor(s) in interest; provided, that the Company shall pay to Employee or the estate of Employee the amounts set forth in Section 6(h), plus any Annual Bonus or Outperformance Bonus provided for in Section 3(b).  For purposes of this Agreement, “Disability” shall mean that Employee is unable to perform the essential functions of Employee’s position, with reasonable accommodation, due to an illness or physical or mental impairment or other incapacity which continues for a period in excess of 20 consecutive weeks.  The determination of Disability will be made by a physician selected by Employee and acceptable to the Company or its insurers, with such agreement to the acceptability not to be unreasonably withheld.

			
	
			
				 (e)
			

			
	
			
			Employee’s Right to Terminate for Convenience.  Employee shall have the right to terminate Employee’s employment with the Company for convenience at any time and for any reason, or no reason at all, upon 30 days’ advance written notice to the Company.

			
	
			
				 (f)
			

			
	
			
			Termination upon Non‐Renewal of the Agreement.  Except as otherwise mutually agreed between the Company and Employee, if the Company or Employee provides the other party with a written notice of non‐renewal of this Agreement in accordance with Section 4, Employee’s employment with Company shall automatically terminate upon the expiration of the then-applicable Initial Term or Renewal Term, as applicable.

		 

		

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				 (g)
			

			
	
			
			Effect of Termination for Convenience or Good Reason Resignation.  If Employee incurs a Separation from Service (as defined below) due to Employee’s employment terminating pursuant to Sections 6(b) or 6(c) (regarding termination for convenience and resignation for Good Reason) above and Employee:  (x) executes within 45 days following the date of Employee’s Separation from Service, and does not revoke, a release of all claims in a form satisfactory to the Company, which such form will be promptly provided by Company to Employee on or before his Separation from Service substantially in the form of release contained at Exhibit A (the “Release”); and (y) abides by Employee’s continuing obligations hereunder, including, without limitation, the provisions of Sections 8 and 9 hereof (regarding confidentiality and non‐competition), then Employee shall be entitled to the following, in addition to the amounts described in Section 6(h), and any Annual Bonus or Outperformance Bonus provided for in Section 3(b):

			
	
			
				 (i)
			

			
	
			
			Severance Pay.  The Company shall make severance payments to Employee in an aggregate amount equal to one times Employee’s Base Salary as in effect as of the date of Employee’s termination of employment (or Base Salary for any preceding year in the Employment Period, if greater) (the “Severance Payment”).  If payable, the Severance Payment will be made, as applicable, in equal semi‐monthly installments over the one‐year period following the date of Employee’s Separation from Service (the “Severance Period’), in accordance with the Company’s regular payroll practices, provided, that any such installment payments that would otherwise be paid prior to the Company’s first regular payroll date that occurs on or after the 60th day following the date of Employee’s Separation from Service (the “First Pay Date”) shall be paid on the First Pay Date.  Notwithstanding the foregoing, in the event of Employee’s death during the Severance Period, all remaining Severance Payments due him shall be paid in a lump sum within 30 days of Employee’s death.  Likewise, notwithstanding the other provisions of this Section 6(g)(i), in the event of a termination for convenience by the Company or termination by Employee for Good Reason within two years following the occurrence of a “change in control event” within the meaning of Treasury Regulation Section 1.409A‐3(i)(5), the Severance Payment shall be paid in a lump sum on the Company’s first regular payroll date that occurs on or after 30 days of the date of Employee’s Separation from Service.

			
	
			
				 (ii)
			

			
	
			
			Continued Health Insurance Benefits.  For a period of 24 months following Employee’s Separation from Service 

		 

		

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	(which period of 24 months shall include and run concurrently with any so‐called COBRA continuation period applicable to Employee and/or his eligible dependents under Section 4980B of the Code, and may be subject to Employee and/or his eligible dependents electing  such continuation coverage), provided,  however, that (A) during the first 12 months of such coverage, the Company shall continue to provide health insurance benefits to Employee and any eligible dependents at the Company’s expense (other than Employee’s monthly cost‐sharing contribution under the Company’s group health plan, as in effect on the date of Employee’s Separation from Service), and (B) during the remaining 12 months of such coverage, the Company shall continue to provide health insurance benefits to Employee and any eligible dependents at Employee’s expense.  Notwithstanding the previous sentence, if the Company determines in its sole discretion that it cannot provide the foregoing benefit without potentially violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act and any applicable non‐discrimination requirement thereunder or otherwise), the Company shall in lieu thereof provide to Employee a taxable monthly payment in an amount equal to the monthly COBRA premium that Employee would be required to pay to continue his and his covered dependents’ group health coverage in effect on the Date of Termination for the 12 month period following the date of Employee’s Separation from Service (which amount shall be based on the premium for the first month of COBRA coverage), less the amount of Employee’s monthly cost‐sharing contribution under the Company’s group health plan, as in effect on the date of Employee’s Separation from Service at employee rates in effect thereunder as of the Separation from Service.

			
	
			
				 (h)
			

			
	
			
			Effect of Termination.  Subject to Section 24 hereof (regarding section 409A compliance), upon the termination of Employee’s employment for any reason, all earned, unpaid Base Salary and all accrued, unused Paid Time Off shall be paid to Employee within 30 days of the date of Employee’s termination of employment, or earlier if required by law.  With the exception of any payments to which Employee may be entitled pursuant to Section 5(a) (regarding business expenses) and Section 6(g) (regarding severance benefits), the Company shall have no further obligation under this Agreement to make any payments to Employee.

		 

		

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				 7.
			Conflicts of Interest.  Employee agrees that Employee shall promptly disclose to the Board any conflict of interest involving Employee upon Employee becoming aware of such conflict.

			
	
			
				 8.
			Confidentiality.  Employee acknowledges and agrees that, in the course of Employee’s employment with the Company and the performance of Employee’s duties on behalf of the Company Group hereunder, Employee will be provided with, and have access to, valuable Confidential Information (as defined below) of the Company Group and exchange for other valuable consideration provided hereunder, Employee agrees to comply with this Section 8 and Section 9.

			
	
			
				 (a)
			

			
	
			
			Employee covenants and agrees, both during the term of the Employment Period and thereafter that, except as expressly permitted by this Agreement or by directive of the Board, Employee shall not disclose any Confidential Information to any person or entity and shall not use any Confidential, Information except for the benefit of the Company Group.  Employee shall take all reasonable precautions to protect the physical security of all documents and other material containing Confidential Information (regardless of the medium on which the Confidential Information is stored).  This covenant shall apply to all Confidential Information, whether now known or later to become known to Employee during the Employment Period.

			
	
			
				 (b)
			

			
	
			
			Notwithstanding Section 5(a), Employee may make the following disclosures and uses of Confidential Information:

			
	
			
				 (i)
			

			
	
			
			disclosures to other employees of the Company Group in connection with the  faithful performance of duties for the Company Group;

			
	
			
				 (ii)
			

			
	
			
			disclosures to customers and suppliers when, in the reasonable and good faith belief of Employee, such disclosure is in connection with Employee’s performance of services under this Agreement and is in the best interests of the Company Group;

			
	
			
				 (iii)
			

			
	
			
			disclosures and uses that are approved by the Board;

			
	
			
				 (iv)
			

			
	
			
			disclosures to a person or entity that has been retained by the Company Group to provide services to the Company Group, and has agreed in writing to abide by the terms of a confidentiality agreement;

			
	
			
				 (v)
			

			
	
			
			disclosures for the purpose of complying with any applicable laws or regulatory requirements;

			
	
			
				 (vi)
			

			
	
			
			disclosures to Employee’s legal, tax or financial advisors for the purpose of  assisting such advisors in providing 

		 

		

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	advice to Employee, provided, however, that such advisors agree to maintain the confidentiality of such disclosures; or

			
	
			
				 (vii)
			

			
	
			
			disclosures that Employee is legally compelled to make by deposition, interrogatory, request for documents, subpoena, civil investigative demand, order of a court of competent jurisdiction, or similar process, or otherwise by law; provided,  however, that, prior to any such disclosure, Employee shall, to the extent legally permissible:

			
	
			
				 (A)
			

			
	
			
			provide the Board with prompt notice of such requirements so that the Board may seek a protective order or other appropriate remedy or waive compliance with the terms of this Section;

			
	
			
				 (B)
			

			
	
			
			consult with the Board on the advisability of taking steps to resist or narrow such disclosure; and

			
	
			
				 (C)
			

			
	
			
			cooperate with the Board (at the Company’s cost and expense) in any attempt the Board may make to obtain a protective order or other appropriate remedy or assurance that confidential treatment will be afforded the Confidential Information; and in the event such protective order or other remedy is not obtained, Employee agrees (y) to furnish only that portion of the Confidential Information that is legally required to be furnished, as advised by counsel to Employee, and (z) to exercise (at the Company’s reasonable cost and expense) all reasonable efforts to obtain assurance that confidential treatment will be accorded such Confidential Information.

			
	
			
				 (c)
			

			
	
			
			Upon the expiration of the Employment Period and at any other time upon request of the Company, Employee shall surrender and deliver to the Company all documents (including, without limitation, electronically stored information) and other material of any nature containing or pertaining to all Confidential Information in Employee’s possession and shall not retain any such document or other material.  Within 10 days of any such request, Employee shall certify to the Company in writing that all such materials have been returned to the Company.

			
	
			
				 (d)
			

			
	
			
			All non‐public information, designs, ideas, concepts, improvements, product developments, discoveries and inventions, whether patentable or not, that are conceived, made, developed or acquired by Employee, individually or in conjunction with others, during the Employment Period (whether during business hours  or otherwise and whether on  the 

		 

		

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	Company’s premises or otherwise) that relate to the Company Group’s businesses or properties, products or services (including, without limitation, all such information relating to corporate opportunities, business plans, strategies for developing business and market share, research, financial and sales data, pricing terms, evaluations, opinions, interpretations, acquisition prospects, the identity of customers or their requirements, the identity of key contacts within customers’ organizations or within the organization of acquisition prospects, or marketing and merchandising techniques, prospective names and marks) is defined as “Confidential Information.”    Moreover, all documents, videotapes, written presentations, brochures, drawings, memoranda, notes, records, files, correspondence, manuals, models, specifications, computer programs, e‐mail, voice mail, electronic databases, maps, drawings, architectural renditions, models and all other writings or materials of any type including or embodying any of such information, ideas, concepts, improvements, discoveries, inventions and other  similar forms of expression are and shall be the sole and exclusive property of the Company Group and be subject to the same restrictions on disclosure applicable to all Confidential Information pursuant to this Agreement.

			
	
			
				 9.
			Non‐Competition.

			
	
			
				 (a)
			

			
	
			
			The Company shall provide Employee access to the Confidential Information for use only during the Employment Period, and Employee acknowledges and agrees that the Company Group will be entrusting Employee, in Employee’s unique and special capacity, with developing the goodwill of the Company Group, and in consideration thereof and in consideration of the access to Confidential Information, has voluntarily agreed to the covenants set forth in this Section.  Employee further agrees and acknowledges that the limitations and restrictions set forth herein, including, but not limited to, geographical and temporal restrictions on certain competitive activities, are reasonable and not oppressive and are material and substantial parts of this Agreement intended and necessary to prevent unfair competition and to protect the Company Group’s Confidential Information and substantial and legitimate business interests and goodwill.

			
	
			
				 (b)
			

			
	
			
			During the Employment Period and for a period of two years (the “Restricted Period”) following the termination of the Employment Period for any reason, Employee shall not, for whatever reason and with or without cause, either individually or in partnership or jointly or in conjunction with any other Person or Persons as principal, agent, employee, shareholder (other than holding equity interests listed on a United States stock exchange or automated quotation system that do not exceed 5% of the outstanding shares so listed), owner, investor, partner or in any other manner whatsoever, directly or indirectly, engage in or compete with the Business anywhere in the world.

		 

		

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				 (c)
			

			
	
			
			During the Restricted Period, Employee shall not (i) knowingly induce or attempt to induce any other Person known to Employee to be a customer of the Company or its affiliates (each, a “Customer”) to cease doing any business with the Company or its affiliates anywhere in the world or (ii) solicit business involving the Business from, or provide services related to the Business to, any Customer.

			
	
			
				 (d)
			

			
	
			
			During the Restricted Period, Employee shall not solicit the employment of any individual who is an employee of the Company or its affiliates, except that Employee shall not be precluded from soliciting the employment of, or hiring, any such individual (i) whose employment with the Company or one of its affiliates has been terminated before entering into employment discussions with such Seller, (ii) who initiates discussions with Employee regarding employment opportunities with Employee or (iii) responds to a general advertisement or other similarly broad form of solicitation for employees.

			
	
			
				 (e)
			

			
	
			
			For purposes of this Section 9, the following terms shall have the following meanings:

			
	
			
				 (i)
			

			
	
			
			“Business” shall mean the business of providing natural gas compression services through the deployment and maintenance of on‐site compressor packages and any other line of business in which the Company Group is engaged at the time of termination or has taken substantial steps to enter during the Employment Period and is actively pursuing at the time of termination.

			
	
			
				 (ii)
			

			
	
			
			“Person” means any individual, corporation, partnership, limited liability company, association, trust, incorporated organization, other entity or group (as defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended).

			
	
			
				 (f)
			

			
	
			
			Because of the difficulty of measuring economic losses to the Company Group as a result of a breach of the foregoing covenants, and because of the immediate and irreparable damage that could be caused to the Company Group for which it would have no other adequate remedy, Employee agrees that the foregoing covenant may be enforced by the Company, in the event of breach by Employee, by injunctions and restraining orders and that such enforcement shall not be the Company’s exclusive remedy for a breach but instead shall be in addition to all other rights and remedies available to the Company.

			
	
			
				 (g)
			

			
	
			
			The covenants in this Section 9 are severable and separate, and the unenforceability of any specific covenant shall not affect the provisions of any other covenant.  Moreover, in the event any arbitrator or court of 

		 

		

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	competent jurisdiction shall determine that the scope, time or territorial . restrictions set forth are unreasonable, then it is the intention of the parties that such restrictions be enforced to the fullest extent which the panel or court deems reasonable, and this Agreement shall thereby be reformed.

			
	
			
				 (h)
			

			
	
			
			All of the covenants in this Section 9 shall be construed as an agreement independent of any other provision in this Agreement; and the existence of any claim or cause of action of Employee against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of such covenants.

			
	
			
				 10.
			Ownership of Intellectual Property.  Employee agrees that the Company shall own, and Employee agrees to assign and does hereby assign, all right, title and interest (including, but not limited, to patent rights, copyrights, trade secret rights, mask work rights, trademark rights, and all other intellectual and industrial property rights of any sort throughout the world) relating to any and all inventions (whether or not patentable), works of authorship, mask works, designs, ideas and information authored, created, contributed to, made or conceived or reduced to practice, in whole or in part, by Employee during the Employment Period which either (a) relate, at the time of conception, reduction to practice, creation, derivation or development, to the Company Group’s businesses or actual or anticipated research or development, or (b) were developed on any amount of the Company’s time or with the use of any of the Company Group’s equipment, supplies, facilities or trade secret information (all of the foregoing collectively referred to herein as “Company Intellectual Property”); and Employee will promptly disclose all Company Intellectual Property to the Company.  All of Employee’s works of authorship and associated copyrights created during the Employment Period and in the scope of Employee’s employment shall be deemed to be “works made for hire” within the meaning of the Copyright Act.  Employee agrees to perform, during and after the Employment Period, all reasonable acts deemed necessary by the Company Group to assist the Company, at the Company’s expense, in obtaining and enforcing its rights throughout the world in the Company Intellectual Property.  Such acts may include, but are not limited to, execution of documents and assistance or cooperation (a) in the filing, prosecution, registration, and memorialization of assignment of any applicable patents, copyrights, mask work, or other applications, (b) in the enforcement of any applicable patents, copyrights, mask work, moral rights, trade secrets, or other proprietary rights, and (c) in other legal proceedings related to the Company Intellectual Property.

			
	
			
				 11.
			Arbitration.

			
	
			
				 (a)
			

			
	
			
			Subject to Section 11(b), any dispute, controversy or claim between Employee and the Company arising out of or relating to this Agreement or Employee’s employment with the Company will be finally settled by arbitration in Austin, Texas before, and in accordance with the rules for the resolution of employment disputes then in effect of, the American Arbitration Association (“AAA”).  The arbitration award shall be final and binding on both parties.

		 

		

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				 (b)
			

			
	
			
			Any arbitration conducted under this Section 11 shall be heard by a single arbitrator (the “Arbitrator”) selected in accordance with the then applicable rules of the AAA.  The Arbitrator shall expeditiously (and, if possible, within 90 days after the selection of the Arbitrator) hear and decide all matters concerning the dispute.  Except as expressly provided to the contrary in this Agreement, the Arbitrator shall have the power to (i) gather such materials, information, testimony and evidence as he or she deems relevant to the dispute before him or her (and each party will provide such materials, information, testimony and evidence requested by the Arbitrator, except to the extent any information so requested is subject to an attorney‐client or other privilege and, if the information so requested is proprietary or subject to a third party confidentiality restriction, the arbitrator shall enter an order providing that such material will be subject to a confidentiality agreement), and (ii) grant injunctive relief and enforce specific performance.  The decision of the Arbitrator shall be rendered in writing, be final, non‐appealable and binding upon the disputing parties and the parties agree that judgment upon the award may be entered by any court of competent jurisdiction; provided, that the parties agree that the Arbitrator and any court enforcing the award of the Arbitrator shall not have the right or authority to award punitive or exemplary damages to any disputing party.

			
	
			
				 (c)
			

			
	
			
			Each side shall share equally the cost of the arbitration and bear its own costs and attorneys’ fees incurred in connection with any arbitration, unless the Arbitrator determines that compelling reasons exist for allocating all or a portion of such costs and fees to the other side.

			
	
			
				 (d)
			

			
	
			
			Notwithstanding Section 11(a), an application for emergency or temporary injunctive relief by either party shall not be subject to arbitration under this Section; provided,  however, that the remainder of any such dispute (beyond the application for emergency or temporary injunctive relief) shall be subject to arbitration under this Section.

			
	
			
				 (e)
			

			
	
			
			By entering into this Agreement and entering into the arbitration provisions of this Section 11, THE PARTIES EXPRESSLY ACKNOWLEDGE AND AGREE THAT THEY ARE KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVING THEIR RIGHTS TO A JURY TRIAL.

			
	
			
				 (f)
			

			
	
			
			Nothing in this Section 11 shall prohibit a party to this Agreement from (i) instituting litigation to enforce any arbitration award, or (ii) joining another party to this Agreement in a litigation initiated by a person or entity which is not a party to this Agreement.

			
	
			
				 12.
			Defense of Claims.  Employee agrees that, during the Employment Period and thereafter, upon request from the Company, Employee will reasonably cooperate with the Company Group in the defense of any claims or actions that may be made by or against the 

		 

		

			14

		

		

			 

		

 

		

			 

		

	Company Group that relate to Employee’s actual or prior areas of responsibility, except if Employee’s reasonable interests are adverse to the Company or its Affiliate(s), as applicable, in such claim or action.  The Company agrees to pay or reimburse Employee for all of Employee’s reasonable travel and other direct expenses incurred, or to be reasonably incurred, to comply with Employee’s obligations under this Section, provided, Employee provides reasonable documentation of same and obtains the Company’s prior approval for incurring such expenses.  After the expiration of one year following the date of Employee’s Separation from Service, the Company will compensate Employee for the time Employee spends on reasonable cooperation and assistance at the Company’s request at a rate per hour calculated, by dividing his annualized Base Salary at the end of the Employment Period by 2,080.

			
	
			
				 13.
			Withholdings; Deductions.  The Company may withhold and deduct from any payments made or to be made pursuant to this Agreement (a) all federal, state, local and other taxes or other amounts as may be required pursuant to any law or governmental regulation or ruling and (b) any deductions consented to in writing by Employee.

			
	
			
				 14.
			Title and Headings; Construction.  Titles and headings to Sections hereof are for the purpose of reference only and shall in no way limit, define or otherwise affect the provisions hereof.    Any and all Exhibits or Attachments referred to in this Agreement are, by such reference, incorporated herein and made a part hereof for all purposes.  The words “herein”, “hereof, “hereunder” and other compounds of the word “here” shall refer to the entire Agreement and not to any particular provision hereof.

			
	
			
				 15.
			Applicable Law; Submission to Jurisdiction.    This Agreement shall in all respects be construed according to the laws of the State of Texas.  With respect to any claim or dispute related to or arising under this Agreement, the parties hereby consent to the arbitration provisions of Section 11 above and recognize and agree that should any resort to a court be necessary and permitted under this Agreement, then they consent to the exclusive jurisdiction, forum and venue of the state and federal courts located in Austin, Texas.

			
	
			
				 16.
			Entire Agreement and Amendment.  This Agreement,-including the Operating Agreement, the terms of which are incorporated herein by reference, contains the entire agreement of the parties with respect to the matters covered herein; moreover, this Agreement supersedes all prior and contemporaneous agreements and understandings, oral or written, between the parties hereto concerning the subject matter hereof; provided,  however, that, notwithstanding anything to the contrary in the Operating Agreement, the definitions of “Cause” and “Good Reason” in this Agreement shall apply in lieu of those same defined terms in the Operating Agreement when and to the extent those defined terms are applicable to Employee under the Operating Agreement.  This Agreement may be amended only by a written instrument executed by both parties hereto.

			
	
			
				 17.
			Waiver of Breach.  Any waiver of this Agreement must be executed by the party to be bound by such waiver.  No waiver by either party hereto of a breach of any provision of this Agreement by the other party, or of compliance with any condition or provision of this Agreement to be performed by such other party, will operate or be construed as a waiver of any subsequent breach by such other party or any similar or dissimilar provision or condition at the same or any subsequent time.  The failure of either party hereto to take any action by reason of 

		 

		

			15

		

		

			 

		

 

		

			 

		

	any breach will not deprive such party of the right to take action at any time while such breach continues.

			
	
			
				 18.
			Assignment.    This Agreement is personal to Employee, and neither this Agreement nor any rights or obligations hereunder shall be assignable or otherwise transferred by Employee.  The Company may assign this Agreement to any member of the Company Group and to any successor (whether by merger, purchase or otherwise) to all or substantially all of the equity, assets or businesses of the Company, if such successor expressly agrees to assume the obligations of the Company hereunder.

			
	
			
				 19.
			Affiliates.    For purposes of this Agreement, the term “Affiliates” means any person or entity Controlling, Controlled by or Under Common Control with such person or entity, but with respect to the Company, specifically does not mean Riverstone, the entities Controlling it, and its investment funds, partners of its investment funds, and its portfolio companies other than the Company and its subsidiaries.    The term “Control,” including the correlative terms “Controlling,” “Controlled by,” and “Under Common Control with” means possession, directly or indirectly, of the power to direct or cause the direction of management or policies (whether through ownership of securities or any Company or other ownership interest, by contract or otherwise) of a person or entity.    For the purposes of the preceding sentence, Control shall be deemed to exist when a person or entity possesses, directly or indirectly, through one or more intermediaries (a) in the case of a corporation more than 50% of the outstanding voting securities thereof; (b) in the case of a limited liability company, partnership or joint venture, the right to more than 50% of the distributions therefrom (including liquidating distributions); or (c) in the case of any other person or entity, more than 50% of the economic or beneficial interest therein.

			
	
			
				 20.
			Notices.  Notices provided for in this Agreement shall be in writing and shall be deemed to have been duly received (a) when delivered in person or sent by facsimile transmission, (b) on the first business day after such notice is sent by air express overnight courier service, or (c) on the third business day following deposit in the United States mail, registered or certified mail, return receipt requested, postage prepaid and addressed, to the following address, as applicable:

		
			If to the Company, addressed to:
		

		
			 
		

		
			USA Compression Management Services, LLC
		

		
			100 Congress Avenue, Suite 1550
		

		
			Austin, TX  78701
		

		
			Attn:  J. Gregory Holloway
		

		
			Facsimile:  (512) 473‐2616
		

		
			 
		

		
			

		 

		

			16

		

		

			 

		

 

		

			 

		

and a copy to:
		

		
			 
		

		
			R/C IV USACP Holdings, L.P.
		

		
			c/o Riverstone Holdings, LLC
		

		
			712 Fifth Avenue, 51st Floor
		

		
			New York, NY  10019
		

		
			Attn:  Andrew W. Ward
		

		
			Facsimile:   (212) 993‐0077
		

		
			 
		

		
			and a copy to:
		

		
			 
		

		
			Vinson & Elkins
		

		
			1001 Fannin Street
		

		
			Suite 2500
		

		
			Houston, Texas 77002-6760
		

		
			Attn:  E. Ramey Layne
		

		
			Facsimile:  (713) 751‐5396
		

		
			 
		

		
			If to Employee, addressed to:
		

		
			 
		

		
			William G. Manias
		

		
			Facsimile:  (___) ___‐____
		

		
			 
		

			
	
			
				 21.
			Counterparts.  This Agreement may be executed in any number of counterparts, including by electronic mail or facsimile, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a copy hereof containing multiple signature pages, each signed by one party, but together signed by both parties hereto.

			
	
			
				 22.
			Deemed Resignations.  Unless otherwise agreed to in writing by the Company and Employee prior to the termination of Employee’s employment, any termination of Employee’s employment shall constitute:  (a) an automatic resignation of Employee as an officer of the Company and each member of the Company Group, as applicable, and (b) an automatic resignation of Employee from the Board (if applicable), from the board of directors or managers of any member of the Company Group (if applicable) and from the board of directors or managers or any similar governing body of any corporation, limited liability entity or other entity in which the Company or any Affiliate holds an equity interest and with respect to which board or similar governing body Employee serves as the Company’s or such Affiliate’s designee or other representative (if applicable).

			
	
			
				 23.
			Key Person Insurance.    At any time during the Employment Period, the Company shall have the right to insure the life of Employee for the Company’s sole benefit.  The Company shall have the right to determine the amount of insurance and the type of policy.    Employee shall cooperate with the Company in obtaining such insurance by submitting to physical examinations, by supplying all information reasonably required by any insurance carrier and by executing all necessary documents reasonably required by any insurance carrier. 

		 

		

			17

		

		

			 

		

 

		

			 

		

	Employee shall incur no financial obligation by executing any required document, and shall have no interest in any such policy.

			
	
			
				 24.
			Compliance with Section 409A.

			
	
			
				 (a)
			

			
	
			
			The severance pay and benefits provided under this Agreement are intended to be exempt from or comply with Section 409A of the Internal Revenue Code (the “Code”), and any ambiguous provision shall be construed in a manner consistent with such intent.  For purposes of this Agreement, a “Separation from Service” shall mean Employee’s “separation from service” as such term is defined in Treasury Regulation Section 1.409A‐1(h) or any successor regulation.  Each separate severance payment and each severance installment payment shall be treated as a separate payment under this Agreement for all purposes.  To the extent that Employee is a “specified employee” within the meaning of Section 1.409A‐l(i)(l) of the Department of Treasury Regulations, any amounts that would otherwise be payable by reason of such separation from service and are not otherwise exempt from the provisions of Section 409A of the Code will delayed for a period of six months from the date of such Separation from Service, in which case the payments that would otherwise have been paid during such six month period shall be paid in a lump sum on the first day of the seventh month after the date of the Separation from Service and the remainder of such payments, if any, will be made pursuant to their terms.

			
	
			
				 (b)
			

			
	
			
			Notwithstanding anything to the contrary in this Agreement, in‐kind benefits and reimbursements provided under this Agreement during any calendar year shall not affect in‐kind benefits or reimbursements to be provided in any other calendar year, other than an arrangement providing for the reimbursement of medical expenses referred to in Section 105(b) of the Code, and are not subject to liquidation or exchange for another benefit.  Notwithstanding anything to the contrary in this Agreement, reimbursement requests must be timely submitted by Employee and, if timely submitted, reimbursement payments shall be promptly made to Employee following such submission, but in no event later than December 31st of the calendar year following the calendar year in which the expense was incurred.  In no event shall Employee be entitled to any reimbursement payments after December 31st of the calendar year following the calendar year in which the expense was incurred.  This paragraph shall only apply to in‐kind benefits and reimbursements that would result in taxable compensation income to Employee.

			
	
			
				 (c)
			

			
	
			
			If any amount payable hereunder would be subject to additional taxes and interest under Section 409A of the Code because the timing of such payment is not delayed as provided in Section 409A(a)(2)(B) of the Code, then the payment of such amount shall be delayed and paid, without interest, in a lump sum on the earliest of:  (i) Employee’s death, (ii) the 

		 

		

			18

		

		

			 

		

 

		

			 

		

	date that is six months after the date of Employee’s Separation from Service with the Company (or if such payment date does not fall on a business day of Company, the next following business day of the Company), or (iii) such earlier date upon which such payment can be paid under Section 409A of the Code without being subject to such additional taxes and interest.

		
			[Signature Page Follows]
		

		
			 
		

		
			

		 

		

			19

		

		

			 

		

 

		

			 

		

IN WITNESS WHEREOF, Employee and the Company each have caused this Agreement to be executed in its name and on its behalf, as of the Effective Date.
		

		
			EMPLOYEE:
		

		
			 
		

		
			 
		

		
			/s/ William G. Manias
		

		
			William G. Manias
		

		
			 
		

		
			 
		

		
			COMPANY:
		

		
			 
		

		
			USA COMPRESSION MANAGEMENT SERVICES, LLC
		

		
			 
		

		
			 
		

		
			 
		

		
			By:/s/Joseph C. Tusa, Jr.
		

		
			Joseph C. Tusa, Jr.
		

		
			President
		

		
			 
		

		
			 
		

		
			 
		

		
			

		 

		

			Signature Page to
Employment Agreement

		

 

		

			 

		

EXHIBIT A
		

		
			FORM OF RELEASE AGREEMENT
		

		
			This Release Agreement (this “Agreement”) constitutes the release referred to in that certain Employment Agreement (the “Employment Agreement”) dated as of July __, 2013 by and among William G. Manias (“Employee”) and USA Compression Management Services, LLC (the “Company”).
		

			
	
			
				 (a)
			For good and valuable consideration, including the Company’s provision of a severance payment to Employee in accordance with Section 6(f) of the Employment Agreement, Employee hereby releases, discharges and forever acquits each member of the Company Group and their respective Affiliates (each as defined in the Employment Agreement, provided,  however, that for purposes of this Agreement, “Affiliates” shall expressly include Riverstone, the entities Controlling it, and its investment funds, partners of its investment funds, and its and their portfolio companies other than the Company) and subsidiaries and the past, present and future stockholders, members, partners, directors, managers, employees, agents, attorneys, heirs, representatives, successors and assigns of the foregoing, in their personal and representative capacities (collectively, the “Company Parties”), from liability for, and hereby waives, any and all claims, damages, or causes of action of any kind related to Employee’s employment with any Company Party, the termination of such employment, and any other acts or omissions related to any matter on or prior to the date of the execution of this Agreement including, without limitation, any alleged violation through the date of this Agreement of:  (i) the Age Discrimination in Employment Act of 1967, as amended; (ii) Title VII of the Civil Rights Act of 1964, as amended; (iii) the Civil Rights Act of 1991; (iv) Section 1981 through 1988 of Title 42 of the United States Code, as amended; (v) Employee Retirement Income Security Act of 1974, as amended; (vi) the Immigration Reform Control Act, as amended; (vii) the Americans with Disabilities Act of 1990, as amended; (viii) the National Labor Relations Act, as amended; (ix) the Occupational Safety and Health Act, as amended; (x) the Family and Medical Leave Act of 1993; (xi) any state anti‐discrimination law; (xii) any state wage and hour law; (xiii) any other local, state or federal law, regulation or ordinance; (xiv) any public policy, contract, tort, or common law claim; (xv) any allegation for costs, fees, or other expenses including attorneys’ fees incurred in these matters; (xvi) any and all rights, benefits or claims Employee may have under any employment contract, incentive compensation plan or stock option plan with any Company Party or to any ownership interest in any Company Party except as expressly provided in the Employment Agreement and any stock option or other equity compensation agreement between Employee and the Company and (xvii) any claim for compensation or benefits of any kind not expressly set forth in the Employment Agreement or any such stock option or other equity compensation agreement (collectively, the “Released Claims”).  In no event shall the Released Claims include (i) any claim which arises after the date of this Agreement, (ii) any claim to vested benefits under an employee benefit plan, (iii) any claims for contractual payments under the Employment Agreement, or (iv) any claims under the Operating Agreement of the Company.  This Agreement is not intended to indicate that any such claims exist or 

		 

		

			Exhibit A‐1

		

		

			 

		

 

		

			 

		

	that, if they do exist, they are meritorious.  Rather, Employee is simply agreeing that, in exchange for the consideration recited in the first sentence of this paragraph, any and all potential claims of this nature that Employee may have against the Company Parties, regardless of whether they actually exist, are expressly settled, compromised and waived.  By signing this Agreement, Employee is bound by it.  Anyone who succeeds to Employee’s rights and responsibilities, such as heirs or the executor of Employee’s estate, is also bound by this Agreement.  This release also applies to any claims brought by any person or agency or class action under which Employee may have a right or benefit.  Notwithstanding the release of liability contained herein, nothing in this Agreement prevents Employee from filing any non‐legally waivable claim (including a challenge to the validity of this Agreement) with the Equal Employment Opportunity Commission (“EEOC”) or comparable state or local agency or participating in any investigation or proceeding conducted by the .EEOC or comparable state or local agency; however, Employee understands and agrees that Employee is waiving any and all rights to recover any monetary or personal relief or recovery as a result of such EEOC or comparable state or local agency proceeding or subsequent legal actions.  THIS RELEASE INCLUDES MATTERS ATTRIBUTABLE TO THE SOLE OR PARTIAL NEGLIGENCE (WHETHER GROSS OR SIMPLE) OR OTHER FAULT, INCLUDING STRICT LIABILITY, OF ANY OF THE COMPANY PARTIES.

			
	
			
				 (b)
			Employee agrees not to bring or join any lawsuit against any of the Company Parties in any court relating to any of the Released Claims.  Employee represents that Employee has not brought or joined any lawsuit or filed any charge or claim against any of the Company Parties in any court or before any government agency and has made no assignment of any rights Employee has asserted or may have against any of the Company Parties to any person or entity, in each case, with respect to any Released Claims.

			
	
			
				 (c)
			By executing and delivering this Agreement, Employee acknowledges that:

			
	
			
				 (i)
			

			
	
			
			He has carefully read this Agreement;

			
	
			
				 (ii)
			

			
	
			
			He has had at least [21] [45] days to consider this Agreement before the execution and delivery hereof to the Company.   [Add if 45 days applies:  , and he acknowledges that attached to this Agreement are (A) a list of the positions and ages of those employees selected for termination (or participation in the exit incentive or other employment termination program); (B) a list of the ages of those employees not selected for termination (or participation in such program); and (C) information about the unit affected by the employment termination program of which his termination was a part, including any eligibility factors for such program and any time limits applicable to such program];

		 

		

			Exhibit A‐2

		

		

			 

		

 

		

			 

		

			
	
			
				 (iii)
			

			
	
			
			He has been and hereby is advised in writing that he may, at his option, discuss this Agreement with an attorney of his choice and that he has had adequate opportunity to do so;

			
	
			
				 (iv)
			

			
	
			
			He fully understands the final and binding effect of this Agreement; the only promises made to him to sign this Agreement are those stated in the Employment Agreement and herein; and he is signing this Agreement voluntarily and of his own free will, and that he understands and agrees to each of the terms of this Agreement; and

			
	
			
				 (v)
			

			
	
			
			With the exception of any sums that he may be owed pursuant to Section 6(f) of the Employment Agreement, he has been paid all wages and other compensation to which he is entitled under the Agreement and received all leaves (paid and unpaid) to which he was entitled during the Employment Period (as defined in the Employment Agreement).

		
			Notwithstanding the initial effectiveness of this Agreement, Employee may revoke the delivery (and therefore the effectiveness) of this Agreement within the seven‐day period beginning on the date Employee delivers this Agreement to the Company (such seven day period being referenced to herein as the “Release Revocation Period”).  To be effective, such revocation must be in writing signed by Employee and must be delivered to [name, address] before 11:59 p.m., Austin, Texas time, on the last day of the Release Revocation Period.  If an effective revocation is delivered in the foregoing manner and timeframe, this Agreement shall be of no force or effect and shall be null and void ab initio.  No consideration shall be paid if this Agreement is revoked by Employee in the foregoing manner.
		

		
			Executed on this _____ day of _________________________, 201__.
		

		
			
		

		
			William G. Manias
		

		
			 
		

		
			 
		

		 

		

			Exhibit A‐3EX-4.3

 Exhibit 4.3 

SANDERSON FARMS, INC. AND AFFILIATES 

STOCK INCENTIVE PLAN 

(Amended and Restated as of February 11, 2016) 

  
 A-1 

 Table of Contents 
  

					
	 ARTICLE 1 — GENERAL PROVISIONS
	  	 	A-4	  
		
	 1.1 Establishment and Purposes of Plan
	  	 	A-4	  
	 1.2 Types of Awards
	  	 	A-4	  
	 1.3 Effective Date
	  	 	A-4	  
		
	 ARTICLE 2 — DEFINITIONS
	  	 	A-4	  
		
	 ARTICLE 3 — ADMINISTRATION
	  	 	A-6	  
		
	 3.1 General
	  	 	A-6	  
	 3.2 Authority of the Board
	  	 	A-7	  
	 3.3 Delegation of Authority
	  	 	A-7	  
	 3.4 Award Agreements
	  	 	A-7	  
	 3.5 Indemnification
	  	 	A-7	  
		
	 ARTICLE 4 — SHARES SUBJECT TO THE PLAN
	  	 	A-7	  
		
	 4.1 Number of Shares
	  	 	A-7	  
	 4.2 Individual Limits
	  	 	A-8	  
	 4.3 Adjustment of Shares
	  	 	A-8	  
		
	 ARTICLE 5 — STOCK OPTIONS
	  	 	A-9	  
		
	 5.1 Grant of Options
	  	 	A-9	  
	 5.2 Agreement
	  	 	A-9	  
	 5.3 Option Price
	  	 	A-9	  
	 5.4 Duration of Options
	  	 	A-9	  
	 5.5 Exercise of Options
	  	 	A-9	  
	 5.6 Payment
	  	 	A-9	  
	 5.7 Nontransferability of Options
	  	 	A-9	  
	 5.8 Special Rules for ISOs
	  	 	A-9	  
		
	 ARTICLE 6 — STOCK APPRECIATION RIGHTS
	  	 	A-10	  
		
	 6.1 Grant of SARs
	  	 	A-10	  
	 6.2 Tandem SARs
	  	 	A-10	  
	 6.3 Payment
	  	 	A-10	  
	 6.4 Exercise of SARs
	  	 	A-10	  
		
	 ARTICLE 7 — RESTRICTED STOCK
	  	 	A-10	  
		
	 7.1 Grant of Restricted Stock
	  	 	A-10	  
	 7.2 Restricted Stock Agreement
	  	 	A-10	  
	 7.3 Nontransferability
	  	 	A-10	  
	 7.4 Certificates
	  	 	A-10	  
	 7.5 Dividends and Other Distributions
	  	 	A-10	  
	 7.6 Restricted Stock Units (or RSUs)
	  	 	A-11	  
		
	 ARTICLE 8 — PERFORMANCE SHARES
	  	 	A-11	  
		
	 8.1 Grant of Performance Shares
	  	 	A-11	  
	 8.2 Performance Share Agreement
	  	 	A-11	  
	 8.3 Earning of Performance Shares
	  	 	A-11	  
	 8.4 Form and Timing of Payment of Performance Shares
	  	 	A-11	  
	 8.5 Nontransferability
	  	 	A-11	  
		
	 ARTICLE 9 — PHANTOM STOCK UNITS
	  	 	A-12	  
		
	 9.1 Grant of Phantom Stock Units
	  	 	A-12	  
	 9.2 Phantom Stock Agreement
	  	 	A-12	  
	 9.3 Amount, Form and Timing of Payment
	  	 	A-12	  
	 9.4 Nontransferability of Award
	  	 	A-12	  

  
 A-2 

					
		
	 ARTICLE 10 — OTHER STOCK-BASED AWARDS
	  	 	A-12	  
		
	 10.1 Terms of Other Stock-Based Awards
	  	 	A-12	  
	 10.2 Dividend Equivalents
	  	 	A-12	  
	 10.3 Nontransferability of Award
	  	 	A-12	  
		
	 ARTICLE 11 — MANAGEMENT SHARE PURCHASE PLAN
	  	 	A-12	  
		
	 11.1 Share Purchase Rights
	  	 	A-12	  
	 11.2 Share Purchase Agreement
	  	 	A-12	  
	 11.3 Repurchase Option
	  	 	A-13	  
	 11.4 Transferability
	  	 	A-13	  
		
	 ARTICLE 12 — PERFORMANCE MEASURES
	  	 	A-14	  
		
	 ARTICLE 13 — BENEFICIARY DESIGNATION
	  	 	A-14	  
		
	 ARTICLE 14 — DEFERRALS
	  	 	A-14	  
		
	 ARTICLE 15 — WITHHOLDING
	  	 	A-14	  
		
	 15.1 Tax Withholding
	  	 	A-14	  
	 15.2 Share Withholding
	  	 	A-15	  
		
	 ARTICLE 16 — FOREIGN EMPLOYEES
	  	 	A-15	  
		
	 ARTICLE 17 — AMENDMENT AND TERMINATION
	  	 	A-15	  
		
	 17.1 Amendment of Plan
	  	 	A-15	  
	 17.2 Amendment of Award Agreement
	  	 	A-15	  
	 17.3 Termination of Plan
	  	 	A-15	  
	 17.4 Cancellation of Awards
	  	 	A-15	  
	 17.5 Adjustments Upon Change in Control and Other Events
	  	 	A-16	  
		
	 ARTICLE 18 — MISCELLANEOUS PROVISIONS
	  	 	A-16	  
		
	 18.1 Restrictions on Shares
	  	 	A-16	  
	 18.2 Rights of a Stockholder
	  	 	A-16	  
	 18.3 No Implied Rights
	  	 	A-16	  
	 18.4 Non-Uniform Determinations
	  	 	A-16	  
	 18.5 Compliance with Laws
	  	 	A-16	  
	 18.6 Successors
	  	 	A-16	  
	 18.7 Tax Elections
	  	 	A-17	  
	 18.8 Legal Construction
	  	 	A-17	  
	 18.9 Plan Year
	  	 	A-17	  

  
 A-3 

 SANDERSON FARMS, INC. AND AFFILIATES 

STOCK INCENTIVE PLAN 

(Amended and Restated as of February 11, 2016) 

ARTICLE 1 — GENERAL PROVISIONS 

1.1 Establishment and Purposes of Plan. Sanderson Farms, Inc., a Mississippi corporation (together with its affiliates and
subsidiaries, the “Company”), hereby amends and restates its stock incentive plan known as the Sanderson Farms, Inc. and Affiliates Stock Incentive Plan (the “Plan”), which was approved by the Company’s shareholders on
February 17, 2011, and thereafter adopted by the Board on the same date, as set forth in this document. The objectives of the Plan are: (a) to align closely the long-term financial interests of the management of the Company with the
stockholders by reinforcing the relationship between Eligible Participants’ rewards and stockholder gains; (b) to provide management with an equity ownership in the Company commensurate with Company performance, as reflected in increased
stockholder value; (c) to attract, motivate and retain key employees and non-employee directors by maintaining competitive compensation levels; and (d) to provide an incentive to management for continuous employment with or service to the
Company. 
 1.2 Types of Awards. Awards under the Plan may be made to Eligible Participants who are employees (including Directors who
are also employees) in the form of (a) Incentive Stock Options, (b) Nonqualified Stock Options, (c) Stock Appreciation Rights, (d) Restricted Stock, (e) Restricted Stock Units, (f) Performance Shares, (g) Phantom
Stock Units, (h) Share Purchase Rights, (i) Other Stock-Based Awards, or any combination of the foregoing. Awards under the Plan may be made to Eligible Participants who are Directors in the form of (i) Nonqualified Stock Options,
(ii) Stock Appreciation Rights, (iii) Restricted Stock, (iv) Restricted Stock Units, (v) Phantom Stock Units, (vi) Share Purchase Rights, (vii) Other Stock-Based Awards, or any combination of the foregoing. 

1.3 Effective Date. The Plan, as amended and restated hereby, shall be effective on the date that it is approved by the holders of a
majority of the Company’s Shares present in person or by proxy and voting at a duly called meeting of the stockholders and adopted by a majority of the Board at a duly called meeting of the Board following such stockholders’ meeting (the
“Effective Date”). 
 ARTICLE 2 — DEFINITIONS 

Except where the context otherwise indicates, the following definitions apply: 

2.1 “Agreement” means the written agreement evidencing an Award granted to the Participant under the Plan. 

2.2 “Applicable Law” means the laws, rules and regulations relating to the administration of stock option plans and other stock
incentive plans under Mississippi law relating to corporations, applicable federal and state securities laws, the Code, any stock exchange or quotation system on which the Shares are listed or quoted, and the applicable laws, rules and regulations
of any country or jurisdiction where Awards are granted under the Plan. 
 2.3 “Award” means an award granted to a Participant
under the Plan that is an Option, Stock Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Share, Phantom Stock Unit, Share Purchase Right, Other Stock-Based Award, or a combination of these. 

2.4 “Board” means the Board of Directors of the Company, or, to the extent of any authority delegated to a Committee pursuant to
Article 3, the Committee. 
 2.5 “Cause” means, unless provided otherwise in the Agreement, the “Causes for
Discharge” set forth in the Company’s employee handbook, as it may be amended from time to time. The existence of “Cause” shall be determined by the Board. 

2.6 “Change in Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of
the following events: 
 (a) The acquisition (other than an acquisition from or by the Company or by a Company-sponsored
employee benefit plan or by a person that directly or indirectly controls, is controlled by, or is under common control with the Company) by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act
) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50 percent of the then outstanding shares of common stock of the Company; or 

(b) The consummation of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of
the assets of the Company or the consummation of the acquisition by the Company of assets of another corporation (each of the foregoing, a “Business Combination”), in each case, unless, following such Business Combination, the individuals
and entities who were the beneficial owners, respectively, of the outstanding common stock of the Company immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the
combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation surviving or resulting from such Business Combination (or of a corporation which as a result of such
transaction controls the Company or owns all or substantially all of the Company’s assets either directly or through one or more subsidiaries), in substantially the same proportions as their ownership, immediately prior to such Business
Combination, of the common stock of the Company; or 

  
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 (c) individuals who, as of the close of business on February 11, 2016,
constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to such date whose election, or nomination
for election by the Company’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or 
 (d) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company. 
 2.7 “Code” means the Internal Revenue Code of 1986, as now in effect or as
hereafter amended. All citations to sections of the Code are to such sections as they may from time to time be amended or renumbered. 
 2.8
“Committee” means the Compensation Committee of the Board or such other committee as may be appointed by the Board to administer this Plan pursuant to Article 3. 

2.9 “Company” means Sanderson Farms, Inc., a Mississippi corporation, and its affiliates and subsidiaries, and their respective
successors and assigns. 
 2.10 “Director” means any individual who is a member of the Board of Directors of the Company; provided,
however, that any Director who is employed by the Company or any other Employer shall also be considered an employee for purposes of the Plan. 

2.11 “Disability” (a) in the case of Incentive Stock Options, means permanent and total disability as defined under
Section 22(e)(3) of the Code, and (b) in all other cases, has such meaning as determined by the Board from time to time. 
 2.12
“Effective Date” shall have the meaning ascribed to such term in Section 1.3 hereof. 
 2.13 “Eligible Participant”
means Directors and the executive officers and other key employees (including employees who are also Directors) of the Company who occupy responsible managerial and professional positions and who have the capability of making substantial
contributions to the success of the Company. 
 2.14 “Employer” means the Company and any entity during any period that it is a
“parent corporation” or a “subsidiary corporation” with respect to the Company within the meaning of Code Sections 424(e) and 424(f). With respect to all purposes of the Plan, including but not limited to, the establishment,
amendment, termination, operation and administration of the Plan, Sanderson Farms, Inc. shall be authorized to act on behalf of all other entities included within the definition of “Employer.” 

2.15 “Exchange Act” means the Securities Exchange Act of 1934, as now in effect or as hereafter amended. All citations to sections of
the Exchange Act or rules thereunder are to such sections or rules as they may from time to time be amended or renumbered. 
 2.16 “Fair
Market Value” means, as of any date, the value of a Share, as determined in good faith by the Board, as follows: 
 (a)
if the Share shall then be listed on a national securities exchange (including the Nasdaq Global Select Market), the last sale price reported for the Share on the principal national exchange on which such Share is sold on such date; or, if no sale
was reported on such date, the average of the closing bid and asked prices on the principal national securities exchange (including the Nasdaq Global Select Market) on which the Share is listed or admitted to trading; or, if such exchange is closed
on such date, the last sales price reported for the Company’s Shares on the last preceding day on which the principal national exchange on which the such Share is sold was open, and if no sale of the Company’s Shares was reported on such
preceding day, then the average of the closing bid and asked prices of the Share on such preceding day; 
 (b) if the Share
is not listed on the Nasdaq Global Select Market nor listed or admitted to trading on another national securities exchange, then the average of the closing bid and asked prices, as reported by The Wall Street Journal for the over-the-counter market,
on such date; 
 (c) If (a) and (b) do not apply, on the basis of the good faith determination of the Board in its
discretion. 
 2.17 “Incentive Stock Option” or “ISO” means an Option granted to an Eligible Participant under
Article 5 of the Plan which is intended to meet the requirements of Section 422 of the Code. 
 2.18 “Insider” shall mean
an individual who is, on the relevant date, subject to the reporting requirements of Section 16(a) of the Exchange Act. 

  
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 2.19 “Named Executive Officer” means an Eligible Participant who is a member of the
group of “covered employees” as defined in the regulations promulgated or other guidance issued under Code Section 162(m), as determined by the Board. 

2.20 “Nonqualified Stock Option” or “NQSO” means an Option granted to an Eligible Participant under Article 5 of the
Plan which is not intended to meet, or does not meet, the requirements of Section 422 of the Code. 
 2.21 “Option” means an
Incentive Stock Option or a Nonqualified Stock Option. An Option shall be designated as either an Incentive Stock Option or a Nonqualified Stock Option, and in the absence of such designation, shall be treated as a Nonqualified Stock Option. 

2.22 “Option Price” means the price at which a Share may be purchased by a Participant pursuant to an Option. 

2.23 “Other Stock-Based Award” means an Award granted pursuant to Article 10 of the Plan that is paid with, valued in whole or
in part by reference to, or is otherwise based on Shares. 
 2.24 “Participant” means an Eligible Participant to whom an Award has
been granted. 
 2.25 “Permitted Transferee” means any member of the immediate family of the Participant (i.e., spouse, children,
and grandchildren), any trust for the benefit of such family members or any partnership whose only partners are such family members. 
 2.26
“Performance Share” means an Award under Article 8 of the Plan that is valued by reference to a Share, which value may be paid to the Participant by delivery of such property as the Board shall determine, including without limitation,
cash or Shares, or any combination thereof, upon achievement of such performance objectives during the relevant performance period as the Board shall establish at the time of such Award or thereafter, but not later than the time permitted by Code
Section 162(m) in the case of a Named Executive Officer, unless the Board determines not to comply with Code Section 162(m). 

2.27 “Phantom Stock Unit” means an Award granted pursuant to Article 9 of the Plan. 

2.28 “Plan” means the Sanderson Farms, Inc. and Affiliates Stock Incentive Plan, as originally adopted and as amended hereby and as
it may be further amended from time to time. 
 2.29 “Prior Plan” shall have the meaning ascribed to such term in Section 4.1
hereof. 
 2.30 “Restricted Stock” means an Award of Shares under Article 7 of the Plan, which Shares are issued with such
restriction(s) as the Board, in its sole discretion, may impose, including without limitation, any restriction on the right to retain such Shares, to sell, transfer, pledge or assign such Shares, to vote such Shares, and/or to receive any cash
dividends with respect to such Shares, which restrictions may lapse separately or in combination at such time or times, in installments or otherwise, as the Board may deem appropriate. 

2.31 “Restricted Stock Unit” or “RSU” means a right granted under Article 7 of the Plan to receive a number of Shares
or a cash payment for each such Share equal to the Fair Market Value of a Share on a specified date. 
 2.32 “Restriction Period”
means the period commencing on the date an Award of Restricted Stock or Restricted Stock Units is granted and ending on such date as the Board shall determine. 

2.33 “Secretary” means the Secretary of the United States Department of the Treasury. 

2.34 “Share” means one share of common stock, par value $1.00 per share, of the Company, and as such Share may be adjusted pursuant
to the provisions of Section 4.3 of the Plan. 
 2.35 “Share Purchase Right” means an Award granted pursuant to
Article 11 of the Plan. 
 2.36 “Stock Appreciation Right” or “SAR” means an Award granted under Article 6
which provides for an amount payable in Shares and/or cash, as determined by the Board, equal to the excess of the Fair Market Value of a Share on the day the Stock Appreciation Right is exercised over the specified exercise price. 

2.37 “Tandem SAR” means an SAR granted in connection with an Option. 

ARTICLE 3 — ADMINISTRATION 

3.1 General. This Plan shall be administered by the Board. The Board may by resolution delegate some or all of its authority under the
Plan to a committee of the Board consisting of two or more Directors, each of whom qualifies as (a) a “Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act, and (b) an “outside director”
within the meaning of Code Section 162(m). 

  
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 3.2 Authority of the Board. 

(a) The Board shall have the right to interpret, construe and administer the Plan and Awards granted pursuant to the Plan, to
select the Eligible Participants who are to receive an Award from time to time, and to act in all matters pertaining to the granting of an Award and the contents of the Agreement evidencing the Award, including without limitation, the determination
of the number of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares, Phantom Stock Units, Share Purchase Rights or Other Stock-Based Awards subject to an Award and the form, terms, conditions and
duration of each Award, and any amendment thereof consistent with the provisions of the Plan. The Board may adopt, amend and rescind such rules, regulations and procedures for the administration of this Plan as it deems appropriate. 

(b) Subject to Article 17 of the Plan, the Board may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Agreement in the manner and to the extent it shall deem desirable to carry it into effect. 

(c) If the Company shall assume outstanding employee benefit awards or the right or obligation to make future such awards in
connection with the acquisition of another corporation or business entity, the Board may, in its discretion, make such adjustments in the terms of Awards under the Plan as it shall deem appropriate. 

(d) The Board shall be entitled to make such rules, regulations and determinations as it deems appropriate under the Plan in
respect of any leave of absence taken by a Participant. Without limiting the generality of the foregoing, the Board shall be entitled to determine (i) whether or not any such leave of absence shall constitute a termination of employment within
the meaning of the Plan or a “separation from service” within the meaning of Section 409A(a)(2) of the Code, and (ii) the impact, if any, of any such leave of absence on Awards under the Plan theretofore made to any Participant
who takes a leave of absence. 
 (e) All acts, determinations and decisions of the Board made or taken pursuant to grants of
authority under the Plan or with respect to any questions arising in connection with the administration and interpretation of the Plan, including the severability of any and all of the provisions thereof, shall be in the Board’s sole discretion
and shall be conclusive, final and binding upon all parties, including the Company, its stockholders, Participants, Eligible Participants and their estates, beneficiaries and successors. 

3.3 Delegation of Authority. The Board may, at any time and from time to time, delegate to one or more persons or committees any or all
of its authority under Section 3.2, to the full extent permitted by Applicable Law. 
 3.4 Award Agreements. Each Award granted
under the Plan shall be evidenced by a written Agreement. Each Agreement shall be subject to and incorporate, by reference or otherwise, the applicable terms and conditions of the Plan and any other terms and conditions, not inconsistent with the
Plan, as may be imposed by the Board, including without limitation provisions related to the consequences of termination of employment. A copy of such document shall be provided to the Participant and the Board may, but need not, require that the
Participant sign a copy of the Agreement. 
 3.5 Indemnification. In addition to such other rights of indemnification as they may have
as Directors or as members of the Committee, the members of the Board or Committee shall be indemnified by the Company against reasonable expenses, including attorney’s fees, actually and necessarily incurred in connection with the defense of
any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any Award granted thereunder, and against
all amounts paid by them in settlement thereof, provided such settlement is approved by legal counsel selected by the Company, or paid by them in satisfaction of a judgment or settlement in any such action, suit or proceeding, except as to matters
as to which the Board or Committee member has been grossly negligent or engaged in willful misconduct in the performance of his duties; provided, that within sixty (60) days after institution of any such action, suit or proceeding, the member
shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same. 
 ARTICLE 4 — SHARES SUBJECT
TO THE PLAN 
 4.1 Number of Shares. 

(a) No further grants may be made under the Sanderson Farms, Inc. and Affiliates Stock Option Plan (as amended and
restated as of February 28, 2002) (the “Prior Plan”), but awards made under the Prior Plan shall remain outstanding in accordance with their terms and the terms of the Prior Plan and Shares issued or reserved for issuance pursuant to
outstanding awards under the Prior Plan shall count against the number of Shares otherwise available for issuance under the Plan. Subject to adjustment as provided in (b) below and in Section 4.3, the aggregate number of Shares which are
available for issuance pursuant to all Awards under the Plan and awards under the Prior Plan (including Shares that are already issued or reserved for issuance) is 4,200,000 Shares (2,250,000 of which were approved by stockholders in 2005, 1,250,000
of which were approved by stockholders in 2011, and 700,000 of which will be added subject to approval by stockholders in 2016). Not more than 2,112,500 of the Shares issued under the Plan may be granted in the form of Restricted Stock (unless based
on the achievement of Performance Measures). The aggregate number of Incentive Stock Options that may be issued under the Plan and the Prior Plan is 2,250,000. Such Shares shall be made available from Shares currently authorized but unissued or to
the extent permitted by Applicable Law, from Shares acquired by the Company for the purposes set forth herein. 

  
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 (b) The following rules shall apply for purposes of the determination of the
number of Shares available for grant under the Plan: 
 (i) All the Shares issued upon exercise of an Option (including the
Shares, if any, withheld for tax withholding requirements) shall be counted as used when cash is used as full payment for such Shares. 

(ii) Only the Shares issued (including the Shares, if any, withheld for tax withholding requirements) as a result of exercise
of a Stock Appreciation Right shall be counted as used. 
 (iii) Only the net Shares issued (including the Shares, if any,
withheld for tax withholding requirements) shall be counted as used when Shares are used as full or partial payment for Shares issued upon exercise of an Option. 

(iv) Shares tendered (either by actual delivery or attestation) by a Participant as payment for Shares issued upon exercise of
an Option shall be available for subsequent issuance under the Plan if the Shares tendered were acquired by earlier exercise of an Option. 

(v) Shares issued and withheld by the Company to satisfy the Participant’s tax withholding obligation with respect to any
Award shall be counted as used. 
 (vi) Shares subject to an Award shall not be counted as used unless and until they are
actually issued and delivered to a Participant. Therefore, Shares reserved for issuance with respect to Awards that expire or are forfeited or canceled prior to issuance or are settled without the delivery of Shares, or with respect to which the
performance terms are not met, shall again be available for issuance pursuant to another Award under the Plan. Also, if for any reason any Shares subject to an Award under the Plan or the Prior Plan are issued but are reacquired by the Company, for
reasons including, but not limited to, a forfeiture or repurchase of Restricted Stock or other Award (“Returned Shares”), such Returned Shares shall again be available for issuance pursuant to another Award under the Plan. 

(vii) The Board shall reserve one Share for each Restricted Stock Unit, Phantom Stock Unit or Other Stock-Based Award awarded
that may be settled in Shares. The Board shall reserve Shares to allow for issuance of the maximum number of Shares that may be awarded under an Agreement with respect to Performance Shares. Any such Awards that may not be settled in Shares shall
not require a reserve. 
 (viii) The Board shall reserve one Share for each Share subject to an Option or a Stock
Appreciation Right that may be settled in Shares. Stock Appreciation Rights that may not be settled in Shares shall not require a reserve. In addition, if a Stock Appreciation Right is granted in connection with an Option and the exercise of the
Stock Appreciation Right results in the termination of the Option, the reserved Shares that otherwise would have been issued upon the exercise of such related Option will again be available for issuance pursuant to another Award under the Plan. 

4.2 Individual Limits. Except to the extent the Board determines that an Award to a Named Executive Officer shall not comply with the
performance-based compensation provisions of Code Section 162(m), the following rules shall apply to Awards under the Plan: 

(a) Options and SARs. The maximum number of Options and Stock Appreciation Rights that, in the aggregate, may be granted
in any one calendar year to any one Participant shall be 500,000. 
 (b) Other Awards. The maximum number of Shares of
Restricted Stock, Performance Shares or Shares subject to Restricted Stock Units, Phantom Stock Units, Share Purchase Rights or Other Stock-Based Awards (or their equivalent value in cash, Shares or other property) that may be granted pursuant to
Awards in any one calendar year to any one Participant shall be the higher of (i) 200,000 and (ii) the number of Shares obtained by dividing 5,000,000 by the fair market value of a Share on the respective dates of grant. 

4.3 Adjustment of Shares. If any change in corporate capitalization, such as a stock split, reverse stock split, stock dividend, or any
corporate transaction such as a reorganization, reclassification, merger or consolidation or separation, including a spin-off, of the Company or sale or other disposition by the Company of all or a portion of its assets, any other change in the
Company’s corporate structure, or any distribution to stockholders (other than a cash dividend) results in the outstanding Shares, or any securities exchanged therefor or received in their place, being exchanged for a different number or class
of shares or other securities of the Company, or for shares of stock or other securities of any other corporation; or new, different or additional shares or other securities of the Company or of any other corporation being received by the holders of
outstanding Shares; then appropriate adjustments shall be made by the Board to the following in order to preserve, but not to increase, the benefits intended to be provided to the Participants: 

(a) the limitations on the aggregate number of Shares that may be awarded as set forth in Section 4.1, including, without
limitation, with respect to Incentive Stock Options; 
 (b) the limitations on the aggregate number of Shares that may be
awarded to any one single Participant as set forth in Section 4.2; 
 (c) the number and class of Shares that may be
subject to an Award, and which have not been issued or transferred under an outstanding Award; 

  
 A-8 

 (d) the Option Price under outstanding Options and the number of Shares to be
transferred in settlement of outstanding Stock Appreciation Rights; and 
 (e) the terms, conditions or restrictions of any
Award and Agreement, including the price payable for the acquisition of Shares; provided, however, that all such adjustments made in respect of each Incentive Stock Option shall be accomplished so that such Option shall continue to be an incentive
stock option within the meaning of Code Section 422. 
 ARTICLE 5 — STOCK OPTIONS 

5.1 Grant of Options. Options may be granted to Eligible Participants in such amounts and upon such terms as are consistent with this
Plan, and at any time and from time to time, as shall be determined by the Board. The Board shall have sole discretion in determining the number of Shares subject to Options granted to each Participant. The Board may grant a Participant ISOs, NQSOs
or a combination thereof, and may vary such Awards among Participants; provided that only an Employee may be granted ISOs. 
 5.2
Agreement. Each Option shall be evidenced by an Agreement that shall specify the Option Price, the duration of the Option, the number of Shares to which the Option pertains and such other provisions as the Board shall determine in its sole
discretion. The Option Agreement shall further specify whether the Award is intended to be an ISO or an NQSO. Any portion of an Option that is not designated as an ISO or that fails to meet the requirements of Section 422 of the Code (even if
designated as an ISO) shall be an NQSO. 
 5.3 Option Price. The Option Price for each grant of an Option shall not be less than
100 percent of the Fair Market Value of a Share on the date the Option is granted. 
 5.4 Duration of Options. Each Option shall
expire at such time as the Board shall determine at the time of grant; provided, however, that no Option shall be exercisable later than the tenth anniversary of its grant date. 

5.5 Exercise of Options. Options granted under the Plan shall be exercisable at such times and be subject to such restrictions and
conditions as the Board shall in each instance approve, including conditions related to the employment of or provision of services by the Participant with the Company or any Employer, which need not be the same for each grant or for each
Participant. The exercise of any Option shall cancel a Tandem SAR, if any, proportionate in amount to the number of Shares purchased pursuant to the exercise of the Option. 

5.6 Payment. Except as otherwise provided in the applicable Agreement, Options shall be exercised by the delivery of a written notice of
exercise to the Company, setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. The Option Price upon exercise of any Option shall be payable to the Company in full,
either: (a) in cash, (b) cash equivalent approved by the Board, (c) if approved by the Board, by tendering previously acquired Shares (or delivering a certification or attestation of ownership of such Shares) having an aggregate Fair
Market Value at the time of exercise equal to the total Option Price (provided that the tendered Shares must have been held by the Participant for any period required by the Board), or (d) by a combination of (a), (b) and (c). The Board
also may allow cashless exercises as permitted under Federal Reserve Board’s Regulation T, subject to applicable securities law restrictions, or by any other means which the Board determines to be consistent with the Plan’s purpose
and Applicable Law. 
 5.7 Nontransferability of Options. 

(a) Incentive Stock Options. No ISO granted under the Plan may be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated by a Participant, other than by will or by the laws of descent and distribution of the state in which the Participant resided on the date of his death. Further, all ISOs granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant or by his guardian or legal representative. 
 (b)
Nonqualified Stock Options. Except as otherwise provided in a Participant’s Award Agreement with respect to transfers to Permitted Transferees (any such transfers being subject to Applicable Law), no NQSO granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated by a Participant, other than by will or by the laws of descent and distribution of the state in which the Participant resided on the date of his death. Appropriate evidence
of any transfer to Permitted Transferees shall be delivered to the Company at its principal executive office. If all or part of an Option is transferred to a Permitted Transferee, the Permitted Transferee’s rights thereunder shall be subject to
the same restrictions and limitations with respect to the Option as those of the Participant. Further, except as otherwise provided in a Participant’s Award Agreement, all NQSOs granted to a Participant under the Plan shall be exercisable
during his or her lifetime only by such Participant or by his guardian or legal representative. 
 5.8 Special Rules for ISOs.
Notwithstanding the above, in no event shall any Participant who owns (within the meaning of Section 424(d) of the Code) stock of the Company possessing more than ten percent (10%) of the total combined voting power of all classes of stock
of the Company be eligible to receive an ISO at an Option Price less than 110 percent of the Fair Market Value of a Share on the date the ISO is granted or be eligible to receive an ISO that is exercisable later than the fifth anniversary date
of its grant. To the extent that a Participant is granted ISOs (under the Plan and all other incentive stock option plans of the Employer) which are first exercisable in any calendar year for Shares having an aggregate Fair Market Value (determined
as of the date an Option is granted) that exceeds One Hundred Thousand Dollars, such Options shall be treated as NQSOs. For purposes of this Section 5.8, ISOs shall be taken into account in the order in which they were granted. 

  
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 ARTICLE 6 — STOCK APPRECIATION RIGHTS 

6.1 Grant of SARs. A Stock Appreciation Right may be granted to an Eligible Participant in connection with an Option granted under
Article 5 of this Plan or may be granted independently of any Option. A Stock Appreciation Right shall entitle the holder, within the specified period, to exercise the SAR and receive in exchange therefor a payment having an aggregate value
equal to the amount by which the Fair Market Value of a Share on the date of exercise exceeds the exercise price, times the number of Shares with respect to which the SAR is exercised. A SAR granted in connection with an Option (a “Tandem
SAR”) shall entitle the holder of the related Option, within the period specified for the exercise of the Option, to surrender the unexercised Option, or a portion thereof, and to receive in exchange therefor a payment having an aggregate value
equal to the amount by which the Fair Market Value of a Share on the date of exercise exceeds the Option Price per Share, times the number of Shares under the Option, or portion thereof, which is surrendered. 

6.2 Tandem SARs. Each Tandem SAR shall be subject to the same terms and conditions as the related Option, including limitations on
transferability, and shall be exercisable only to the extent such Option is exercisable and shall terminate or lapse and cease to be exercisable when the related Option terminates or lapses. The grant of Stock Appreciation Rights related to ISOs
must be concurrent with the grant of the ISOs. With respect to NQSOs, the grant either may be concurrent with the grant of the NQSOs, or in connection with NQSOs previously granted under Article 5, which are unexercised and have not terminated
or lapsed. 
 6.3 Payment. The Board shall have sole discretion to determine in each Agreement whether the payment with respect to the
exercise of an SAR will be in the form of all cash, all Shares, or any combination thereof. If payment is to be made in Shares, the number of Shares shall be determined based on the Fair Market Value of a Share on the date of exercise. If the Board
elects to make full payment in Shares, no fractional Shares shall be issued and cash payments shall be made in lieu of fractional shares. The Board shall set forth in each Agreement in its sole discretion the timing of any payment due to the
Participant by virtue of the exercise of SARs. Payment may be made in a lump sum, in annual installments or may be otherwise deferred as set forth in the Agreement; and the Board shall have sole discretion to determine whether any deferred payments
may bear amounts equivalent to interest or cash dividends. 
 6.4 Exercise of SARs. Upon exercise of a Tandem SAR, the number of
Shares subject to exercise under any related Option shall automatically be reduced by the number of Shares represented by the Option or portion thereof which is surrendered. 

ARTICLE 7 — RESTRICTED STOCK 

7.1 Grant of Restricted Stock. Restricted Stock Awards may be made to Eligible Participants as a reward for past service or as an
incentive for the performance of future services that will contribute materially to the successful operation of the Employer. Awards of Restricted Stock may be made either alone or in addition to or in tandem with other Awards granted under the Plan
and may be current grants of Restricted Stock or deferred grants of Restricted Stock. 
 7.2 Restricted Stock Agreement. The
Restricted Stock Agreement shall set forth the terms of the Award, as determined by the Board, including, without limitation, the purchase price, if any, to be paid for such Restricted Stock, which may be more than, equal to, or less than Fair
Market Value and may be zero, subject to such minimum consideration as may be required by Applicable Law; the restrictions applicable to the grant or vesting of the Restricted Stock such as continued service or achievement of Performance Measures,
the length of the Restriction Period and whether any circumstances, such as death, retirement, Disability, or a Change in Control, will shorten or terminate the Restriction Period; and rights of the Participant to vote or receive dividends with
respect to the Shares during the Restriction Period. 
 Notwithstanding Section 3.4 of the Plan, a Restricted Stock Award must be
accepted within a period of sixty (60) days, or such other period as the Board may specify, by executing a Restricted Stock Agreement and paying whatever price, if any, is required. The prospective recipient of a Restricted Stock Award shall
not have any rights with respect to such Award, unless and until such recipient has executed a Restricted Stock Agreement and has delivered a fully executed copy thereof to the Board, and has otherwise complied with the applicable terms and
conditions of such Award. 
 7.3 Nontransferability. Except as otherwise provided in this Article 7, no shares of Restricted
Stock received by a Participant shall be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of during the Restriction Period. 

7.4 Certificates. Upon an Award of Restricted Stock to a Participant, Shares of Restricted Stock shall be registered in the
Participant’s name (or an appropriate book entry shall be made). Certificates, if issued, may either be held in custody by the Company until the Restriction Period expires or until restrictions thereon otherwise lapse and/or be issued to the
Participant and registered in the name of the Participant, bearing an appropriate restrictive legend and remaining subject to appropriate stop-transfer orders. If required by the Board, the Participant shall deliver to the Company one or more stock
powers endorsed in blank relating to the Restricted Stock. If and when the Restriction Period expires without a prior forfeiture of the Restricted Stock subject to such Restriction Period, unrestricted certificates for such shares shall be delivered
to the Participant; provided, however, that the Board may cause such legend or legends to be placed on any such certificates as it may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission and
any applicable federal or state law. 
 7.5 Dividends and Other Distributions. Except as provided in this Article 7 or in the
Award Agreement, a Participant receiving a Restricted Stock Award shall have, with respect to such Restricted Stock Award, all of the rights of a stockholder of the Company, including the right to vote the Shares to the extent, if any, such Shares
possess voting rights and the right to receive any dividends; provided, however, 

  
 A-10 

 
the Board may require that any dividends on such Shares of Restricted Stock shall be automatically deferred and reinvested in additional Restricted Stock subject to the same restrictions as the
underlying Award, or may require that dividends and other distributions on Restricted Stock shall be paid to the Company for the account of the Participant. The Board shall determine whether interest shall be paid on such amounts, the rate of any
such interest, and the other terms applicable to such amounts. In addition, with respect to Named Executive Officers, the Board may apply any restrictions it deems appropriate to the payment of dividends declared with respect to Restricted Stock
such that the dividends and/or Restricted Stock maintain eligibility for the performance-based compensation exception under Code Section 162(m). 

7.6 Restricted Stock Units (or RSUs). Awards of Restricted Stock Units may be made to Eligible Participants in accordance with the
following terms and conditions: 
 (a) The Board, in its discretion, shall determine the number of RSUs to grant to a
Participant, the Restriction Period and other terms and conditions of the Award, including whether the Award will be paid in cash, Shares or a combination of the two and the time when the Award will be payable (i.e., at vesting, termination of
employment, Change in Control or another date). 
 (b) Unless the Agreement provides otherwise, RSUs shall not be sold,
transferred or otherwise disposed of and shall not be pledged or otherwise hypothecated. 
 (c) Restrictions upon RSUs
awarded hereunder shall lapse at such time or times and on such terms and conditions as the Board may provide in the Agreement. Unless the Agreement provides otherwise, in the event of a Change in Control, all restrictions upon any RSUs shall lapse
immediately and all such RSUs shall become fully vested in the Participant. 
 (d) The Agreement shall set forth the terms
and conditions that shall apply upon the termination of the Participant’s employment with the Employer (including a forfeiture of RSUs for which the restrictions have not lapsed upon Participant’s ceasing to be employed) as the Board may,
in its discretion, determine at the time the Award is granted. An Award of Restricted Stock Units may provide the holder thereof with dividends or dividend equivalents, payable in cash or in additional Restricted Stock Units (or a combination
thereof), as determined by the Board, on a current or deferred basis. Such dividends or dividend equivalents may be subject to the same accrual, forfeiture, and payout restrictions as apply to dividends earned with respect to Restricted Stock, as
set forth in Section 7.5 herein. 
 ARTICLE 8 — PERFORMANCE SHARES 

8.1 Grant of Performance Shares. Performance Shares may be granted to Eligible Participants in such amounts and upon such terms as are
consistent with this Plan, and at any time and from time to time, as shall be determined by the Board. 
 8.2 Performance Share
Agreement. In the Performance Share Agreement, the Board shall set the Performance Measures in its discretion which, depending on the extent to which they are met, will determine the number of Performance Shares that will be paid out to the
Participant. For purposes of this Article 8, the time period during which the Performance Measures must be met shall be called a “Performance Period.” 

8.3 Earning of Performance Shares. Subject to the terms of this Plan and the applicable Agreement, after the applicable Performance
Period has ended, the holder of Performance Shares shall be entitled to receive a payout of the number of Performance Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the
corresponding Performance Measures have been achieved. 
 8.4 Form and Timing of Payment of Performance Shares. Subject to the terms
of this Plan and the applicable Agreement, the Board, in its sole discretion, may pay earned Performance Shares in the form of cash or in Shares (or in a combination thereof) which has an aggregate Fair Market Value equal to the value of the earned
Performance Shares at the close of the applicable Performance Period. Such Shares may be granted subject to any restrictions deemed appropriate by the Board. The Board shall have sole discretion as to the timing of any payment made in cash or
Shares, or a combination thereof. The determination of the Board with respect to the form and timing of payout of such Awards shall be set forth in the Award Agreement pertaining to the grant of the Award. 

Except as otherwise provided in the Participant’s Award Agreement, a Participant shall be entitled to receive any dividends declared
subsequent to the end of the Performance Period with respect to earned grants of Performance Shares that have not yet been distributed to the Participant (such dividends shall be subject to the same accrual, forfeiture, and payout restrictions as
apply to dividends earned with respect to Restricted Stock, as set forth in Section 7.5 herein). In addition, unless otherwise provided in the Participant’s Award Agreement, a Participant shall be entitled to exercise full voting rights
with respect to earned Performance Shares. 
 8.5 Nontransferability. Except as otherwise provided in a Participant’s Award
Agreement, Performance Shares may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated by a Participant, other than by will or by the laws of descent and distribution of the state in which the Participant resided on
the date of his death. Further, except as otherwise provided in a Participant’s Award Agreement, a Participant’s rights under the Award shall be exercisable during the Participant’s lifetime only by the Participant or the
Participant’s guardian or legal representative. 

  
 A-11 

 ARTICLE 9 — PHANTOM STOCK UNITS 

9.1 Grant of Phantom Stock Units. Phantom Stock Units may be granted to Eligible Participants in such amounts and upon such terms as
are consistent with this Plan, and at any time and from time to time, as shall be determined by the Board. 
 9.2 Phantom Stock
Agreement. The Phantom Stock Agreement shall set forth the terms of the Phantom Stock Units, as determined by the Board, including, without limitation, the vesting schedule, the period during which the Phantom Stock Units must be converted, if
at all, and the “Award Value” of each Phantom Stock Unit (which shall be the Fair Market Value of a Share as of the date of grant of the related Phantom Stock Unit). 

9.3 Amount, Form and Timing of Payment. Subject to the terms of this Plan and the applicable Agreement, a Phantom Stock Unit shall
entitle the holder, within the specified conversion period, to convert vested Phantom Stock Units into property with a value equal to the difference between the Award Value and the Fair Market Value of a Share on the conversion date times the number
of Phantom Stock Units converted. The Board, in its sole discretion, may pay the amount to which the holder is entitled in the form of cash or in Shares (or in a combination thereof). Shares issued in payment may contain such restrictions deemed
appropriate by the Board. If payment is to be made in Shares, the number of Shares shall be determined based on the Fair Market Value of a Share on the date of conversion. If the Board elects to make full payment in Shares, no fractional Shares
shall be issued and cash payments shall be made in lieu of fractional shares. The determination of the Board with respect to the form and timing of payout of Phantom Stock Units shall be set forth in the Award Agreement pertaining to the grant of
the Award. 
 9.4 Nontransferability of Award. Except as otherwise provided in a Participant’s Award Agreement, Phantom Stock
Units may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated by a Participant, other than by will or by the laws of descent and distribution of the state in which the Participant resided on the date of his death.
Further, except as otherwise provided in a Participant’s Award Agreement, a Participant’s rights under the Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or
legal representative. 
 ARTICLE 10 — OTHER STOCK-BASED AWARDS 

10.1 Terms of Other Stock-Based Awards. Other Stock-Based Awards may be granted to Eligible Participants, in such amounts and upon such
terms as are consistent with this Plan, and at any time and from time to time, as shall be determined by the Board. An Other Stock-Based Award is an award, the value of which is based in whole or in part on the value of Shares, that is not an Award
specified in Article 5, 6, 7, 8 or 9 of the Plan. Other Stock-Based Awards may be awards of Shares or may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without
limitation, securities convertible or exchangeable into or exercisable for Shares), as determined by the Board, consistent with the purposes of the Plan. The Board may provide that such Awards are payable in cash or Shares (or a combination
thereof). Shares issued in payment may contain such restrictions deemed appropriate by the Board. If payment is to be made in Shares, the number of Shares shall be determined based on the Fair Market Value of a Share on the date that payment is due
pursuant to the applicable Agreement. If the Board elects to make full payment in Shares, no fractional Shares shall be issued and cash payments shall be made in lieu of fractional shares. The determination of the Board with respect to the form and
timing of payout of Other Stock-Based Awards shall be set forth in the Award Agreement pertaining to the grant of the Award. 
 10.2
Dividend Equivalents. An Other Stock-Based Award may provide the holder thereof with dividends or dividend equivalents, payable in cash or in Shares (or a combination thereof), as determined by the Board, on a current or deferred basis. Such
dividends or dividend equivalents may be subject to the same accrual, forfeiture, and payout restrictions as apply to dividends earned with respect to Restricted Stock, as set forth in Section 7.5 herein. 

10.3 Nontransferability of Award. Except as otherwise provided in a Participant’s Award Agreement, Other Stock-Based Awards may not
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated by a Participant, other than by will or by the laws of descent and distribution of the state in which the Participant resided on the date of his death. Further, except
as otherwise provided in a Participant’s Award Agreement, a Participant’s rights under an Award shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s guardian or legal representative.

 ARTICLE 11 — MANAGEMENT SHARE PURCHASE PLAN 

11.1 Share Purchase Rights. Share Purchase Rights may be granted to Participants upon such terms as are consistent with this Plan, and
at any time and from time to time, as shall be determined by the Board. Share Purchase Rights allow Eligible Participants to forego the receipt of all or a portion of cash compensation (including bonuses and, in the case of non-employee Directors,
annual retainers and meeting fees) and to receive such compensation in the form of Shares or Restricted Stock Units. Such Shares or RSUs available for purchase will be subject to any restrictions deemed appropriate by the Board, as set forth in the
Share Purchase Agreement. 
 11.2 Share Purchase Agreement. When the Board determines to award Share Purchase Rights to an Eligible
Participant, it shall deliver a Share Purchase Agreement to the Eligible Participant setting forth all of the terms, conditions and restrictions related to the Award, including the amount of compensation that the Eligible Participant may defer for
the Share or RSU purchase, the price per Share or RSU to be paid, the vesting schedule, and the time within which the Eligible Participant must accept the Award. The Agreement shall also set forth the terms of any Company matching contribution to be
paid in the form of additional Shares or RSUs. The Award shall be accepted by execution and delivery of the Share Purchase Agreement in the form and by the time determined by the Board. 

  
 A-12 

 11.3 Repurchase Option. The Share Purchase Agreement may grant the Company an option to
repurchase Shares or RSUs that have not vested, exercisable upon the voluntary or involuntary termination of the purchaser’s service with the Company for any reason (including death or disability). The purchase price for Shares or RSUs so
repurchased shall be the original price paid by the Participant and may be paid by cancellation of any indebtedness owed by the Participant to the Company. 

11.4 Transferability. Rights to purchase Shares or RSUs under a Share Purchase Agreement shall be transferable by the Participant only
upon such terms and conditions as are set forth in the Share Purchase Agreement; provided, however, that the transferability of Shares or RSUs purchased pursuant to the Agreement shall remain subject to any restrictions applicable to those Shares or
RSUs as set forth in the Share Purchase Agreement. 

  
 A-13 

 ARTICLE 12 — PERFORMANCE MEASURES 

Until the Board proposes for stockholder vote and stockholders approve a change in the general Performance Measures set forth in this
Article 12, the attainment of which may determine the degree of payout and/or vesting with respect to Named Executive Officers’ Awards that are intended to qualify under the performance-based compensation provisions of Code
Section 162(m), the Performance Measure(s) to be used for purposes of such Awards shall be chosen from among the following: earnings, earnings per share, consolidated pre-tax earnings, net earnings, operating income, EBIT (earnings before
interest and taxes), EBITDA (earnings before interest, taxes, depreciation and amortization), gross margin, revenues, revenue growth, market value added, economic value added, return on equity, return on investment, return on assets, return on net
assets, return on capital employed, return on sales, total stockholder return, profit, economic profit, capitalized economic profit, after-tax profit, pre-tax profit, cash flow measures, cash flow return, sales, sales volume, inventory turnover
ratio, stock price, cost, and/or unit cost, or any function of any of the foregoing factors. The Board can establish other Performance Measures for performance Awards granted to Eligible Participants that are not Named Executive Officers. For any
Performance Period, the targeted level or levels of performance with respect to chosen Performance Measures may be established on an absolute basis or relative to a group of peer companies selected by the Board, relative to internal goals or
relative to levels attained in prior years. 
 The Board shall be authorized to make adjustments in performance based criteria or in the
terms and conditions of other Awards in recognition of unusual or nonrecurring events affecting the Company or its financial statements or changes in Applicable Law or accounting principles. The Board shall also have the discretion to adjust the
determinations of the degree of attainment of the pre-established Performance Measures. Notwithstanding the foregoing, with respect to Awards which are intended to qualify for the performance-based compensation exception from the deductibility
limitations of Code Section 162(m), and which are held by Named Executive Officers, (a) the amount of compensation payable under any such Award may not be adjusted upward, but the Board shall retain the discretion to adjust such Awards
downward, and (b) the Board may not adjust any such Award’s targeted level of attainment of Performance Measures after the first 90 days of the Award’s Performance Period, except, in either case, as a result of adjustments
permitted by this paragraph and Code Section 162(m) and the regulations promulgated thereunder. 
 If applicable tax and/or securities
laws change to permit Board discretion to alter the governing Performance Measures without obtaining stockholder approval of such changes, the Board shall have sole discretion to make such changes without obtaining stockholder approval. In addition,
if the Board determines that it is advisable to grant Awards which shall not qualify for the performance-based compensation exception from the deductibility limitations of Code Section 162(m), the Board may make such grants without satisfying
the requirements of Code Section 162(m). 
 ARTICLE 13 — BENEFICIARY DESIGNATION 

Each Participant under the Plan may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively)
to whom any benefit under the Plan is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the same Participant, shall be in a form prescribed by
the Board, and will be effective only when filed by the Participant in writing with the Board during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to
the Participant’s estate. 
 ARTICLE 14 — DEFERRALS 

To the extent set forth in the Agreement evidencing an Award, the Board may permit or require a Participant to defer under this Plan or to a
separate deferred compensation arrangement of the Company such Participant’s receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant by virtue of the exercise of an Option, SAR, or Share Purchase
Right, the lapse or waiver of restrictions with respect to Restricted Stock, the conversion or vesting of Restricted Stock Units or Phantom Stock Units or the satisfaction of any requirements or goals with respect to Performance Shares or Other
Stock-Based Awards. If any such deferral election is required or permitted, the Board shall, in its sole discretion, establish rules and procedures for such payment deferrals. 

Notwithstanding anything in this Plan or any Agreement to the contrary, however, with respect to all compensation deferred under this Plan or
any Agreement within the meaning of Section 409A(a)(1)(A) of the Code (other than Options lacking any deferral feature other than the feature that the Option holder has the right to exercise the Option in the future), whether by action of the
Board or by the election of the Participant, this Plan incorporates and makes applicable to such deferred compensation the requirements of paragraphs (2), (3) and (4) of Section 409A(a) of the Code. If changes are made to
Section 409A of the Code or regulations are promulgated thereunder, in either case to permit greater flexibility with respect to any Awards under the Plan that constitute deferred compensation, the Board may, subject to the requirements of
Article 17, make any adjustments it deems appropriate. 
 ARTICLE 15 — WITHHOLDING 

15.1 Tax Withholding. The Company shall have the power and the right to deduct or withhold from any cash or property payable to a
Participant under the Plan, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes, domestic or foreign, required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Plan. 

  
 A-14 

 15.2 Share Withholding. With the consent of the Board, with respect to withholding
required upon the exercise of Options, SARS or Share Purchase Rights, upon the lapse of restrictions on Restricted Stock, or upon any other taxable event arising from the Company’s obligation to issue or transfer Shares to a Participant under
the Plan, the Participant may satisfy the withholding requirement by having the Company withhold Shares having a Fair Market Value on the date the withholding obligation is incurred equal to the amount of tax required to be withheld with respect to
the transaction. All such elections shall be subject to any restrictions or limitations that the Board, in its sole discretion, deems appropriate. 

ARTICLE 16 — FOREIGN EMPLOYEES 

In order to facilitate the making of any grant of Awards under this Plan, the Board may provide for such special terms for Awards to
Participants who are foreign nationals or who are employed by the Company or any Employer outside of the United States of America as the Board may consider necessary or appropriate to accommodate differences in local law, tax policy or custom, which
special terms may be contained in an Appendix attached hereto. Moreover, the Board may approve such supplements to or amendments, restatements or alternative versions of this Plan as it may consider necessary or appropriate for such purposes,
without thereby affecting the terms of this Plan as in effect for any other purpose, and the Secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No
such special terms, supplements, amendments or restatements, however, shall include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without
further approval by the shareholders of the Company. 
 ARTICLE 17 — AMENDMENT AND TERMINATION 

17.1 Amendment of Plan. The Board may at any time terminate or from time to time amend the Plan in whole or in part, but no such action
shall adversely affect any rights or obligations with respect to any Awards previously granted under the Plan, unless the affected Participants consent in writing. To the extent required by Applicable Law, no amendment shall be effective unless
approved by the stockholders of the Company at an annual or special meeting. To the extent the Board deems it desirable to maintain the Plan’s eligibility for the benefits of Code Section 162(m) or 422, the Board shall obtain stockholder
approval of any Plan amendment to the extent necessary to comply with those provisions. 
 17.2 Amendment of Award Agreement. The
Board may, at any time, without further action by the stockholders and without consent of or receiving further consideration from the affected Participants, amend outstanding Awards and Award Agreements in response to, or to comply with changes in,
Applicable Law. To the extent not inconsistent with the terms of the Plan, the Board may, at any time, amend an outstanding Agreement in a manner that is not unfavorable to the Participant without the consent of such Participant. The Board may amend
Awards and Award Agreements otherwise with the written consent of the Participant. Notwithstanding the above provision, the Board shall not have the authority to decrease the Option Price of any outstanding Option or the exercise price of any
outstanding SAR, or to permit the exchange of any Option or SAR for an Option or SAR with a lower Option Price or exercise price, except in accordance with Section 4.3, without the prior approval of the holders of a majority of the
Company’s Shares present in person or by proxy and voting at a duly called meeting of the stockholders of the Company. 
 17.3
Termination of Plan. No Awards shall be granted under the Plan later than ten (10) years after the Effective Date; provided, however, that the Plan and all Awards made under the Plan prior to such date shall remain in effect until such
Awards have been satisfied or terminated in accordance with the Plan and the terms of such Awards. 
 17.4 Cancellation of Awards. The
Board may provide in the Award Agreement that if a Participant engages in any “Detrimental Activity” (as defined below) during the period that a Participant is employed by the Company or during the two (2) year period following the
Participant’s voluntary termination of employment or his termination by the Company for Cause (as defined in Section 2.5 above), the Board may, notwithstanding any other provision in this Plan to the contrary, (a) cancel, rescind,
suspend, withhold or otherwise restrict or limit any unexpired, unexercised, unpaid or deferred Award as of the first date the Participant engages in the Detrimental Activity, unless sooner terminated by operation of another term of this Plan or any
other Agreement, and (b) with respect to any exercised or paid Award, require the Participant, upon thirty (30) days’ written notice from the Company, to return to the Company, in immediately available funds, the excess of the fair
market value of the Shares subject to the Award as of the date of exercise or receipt over the total price paid by the Participant for such Shares. 

For purposes of this Section, engaging in “Detrimental Activity” means that the Participant, without the prior written consent of
the Board, directly or indirectly, as employee, agent, consultant, stockholder, director, co-partner or in any other individual or representative capacity, owns, operates, manages, controls, engages in, invests in or participates in any manner in,
acts as a consultant or advisor to, renders services for, or otherwise assists any person or entity that directly or indirectly engages in, the business of producing, marketing, distributing or selling poultry or processed food products anywhere
that the Company is then doing business. “Detrimental Activity” shall not include the passive investment by the Participant in publicly traded common equity of any entity that is engaged in the business of producing, marketing,
distributing or selling poultry or processed food products so long as such investment does not exceed two percent (2%) of the outstanding common equity of such entity. The determination of whether a Participant has engaged in Detrimental
Activity shall be determined by the Board in good faith and in its sole discretion, and any such determination by the Board shall be final and binding on the Participant. The Board may in any Agreement change the definition of “Detrimental
Activity” to the extent necessary to comply with Applicable Law. 

  
 A-15 

 17.5 Adjustments Upon Change in Control and Other Events. Subject to compliance with the
applicable requirements of paragraphs (2), (3) and (4) of Section 409A(a) of the Code in the case of any Award that constitutes compensation deferred under the Plan within the meaning of Section 409A(a)(1) of the Code, the Board
may provide in the Agreement for any Award for automatic accelerated vesting, lapse of any restrictions and any other rights upon the occurrence of a Change in Control of the Company or upon the occurrence of other events as specified in the
Agreement, which rights may or may not be conditioned on a successor corporation’s failure to assume the Award or issue an equivalent award. 

ARTICLE 18 — MISCELLANEOUS PROVISIONS 

18.1 Restrictions on Shares. All certificates for Shares delivered under the Plan shall be subject to such stop-transfer orders and
other restrictions as the Board may deem advisable under Applicable Law, and the Board may cause a legend or legends to be placed on any such certificates to make appropriate reference to such restrictions. In making such determination, the Board
may rely upon an opinion of counsel for the Company. 
 18.2 Rights of a Stockholder. Except as otherwise provided in Article 7
of the Plan and in the Restricted Stock Agreement, each Participant who receives an Award of Restricted Stock shall have all of the rights of a stockholder with respect to such Shares, including the right to vote the Shares to the extent, if any,
such Shares possess voting rights and receive dividends and other distributions. Except as provided otherwise in the Plan or in an Agreement, no Participant awarded an Option, Stock Appreciation Right, Restricted Stock Unit, Phantom Stock Unit,
Performance Share, Other Stock-Based Award or Share Purchase Right shall have any right as a stockholder with respect to any Shares covered by such Award prior to the date of issuance to him or her of a certificate or certificates for such Shares.

 18.3 No Implied Rights. Nothing in the Plan or any Award granted under the Plan shall confer upon any Participant any right to
continue in the service of the Employer, or to serve as a Director thereof, or interfere in any way with the right of the Employer (except as it may otherwise be limited by a written agreement between the Company and the Participant) to terminate
the Participant’s employment or other service relationship for any reason at any time. Unless agreed by the Board, no Award granted under the Plan shall be deemed salary or compensation for the purpose of computing benefits under any employee
benefit plan, severance program, or other arrangement of the Employer for the benefit of its employees. No Participant shall have any claim to an Award until it is actually granted under the Plan. To the extent that any person acquires a right to
receive payments from the Company under the Plan, such right shall, except as otherwise provided by the Board, be no greater than the right of an unsecured general creditor of the Company. 

18.4 Non-Uniform Determinations. The Board’s determinations under the Plan (including without limitation determinations of the
Eligible Participants to receive Awards, the form, amount and timing of such Awards, the terms and provisions of such Awards and the Agreements evidencing Awards) need not be uniform and may be made by it selectively among Participants and Eligible
Participants, whether or not such persons are similarly situated. 
 18.5 Compliance with Laws. 

(a) To the extent that the Board intends an Award to qualify as performance-based compensation for purposes of
Section 162(m)(4)(C) of the Code, it must be granted subject to the achievement of Performance Measures as described in Article 12 of the Plan and all other requirements of said Code Section 162(m)(4)(C) must be satisfied. In
addition, if changes are made to Code Section 162(m) to permit greater flexibility with respect to any Awards under the Plan, the Board may, subject to the requirements of Article 17, make any adjustments it deems appropriate. 

(b) The Plan and the grant of Awards shall be subject to all Applicable Law and to such approvals by any United States
government or regulatory agency as may be required. Any provision herein relating to compliance with Rule 16b-3 under the Exchange Act shall not be applicable with respect to participation in the Plan by Participants who are not Insiders. 

(c) Notwithstanding any other provision of the Plan, the Company shall have no liability to deliver any Shares under the Plan
or make any other distribution of the benefits under the Plan unless such delivery or distribution would comply with all Applicable Laws (including, without limitation, the requirements of the Securities Act of 1933). 

(d) Each Award under the Plan shall be subject to the requirement that, if at any time the Board shall determine that
(i) the listing, registration or qualification of the Shares subject or related thereto upon any securities exchange or under any Applicable Law, or (ii) the consent or approval of any government regulatory body, or (iii) an agreement
by the grantee of an Award with respect to the disposition of Shares, is necessary or desirable as a condition of, or in connection with, the granting of such Award or the issue or purchase of Shares thereunder, such Award may not be consummated in
whole or in part unless such listing, registration, qualification, consent, approval or agreement shall have been effected or obtained free of any conditions not acceptable to the Board. 

(e) As a condition to the issuance or transfer of any Shares pursuant to any Award, the Board may require the Participant to
represent and warrant at the time of such issuance or transfer that the Shares are being acquired only for investment and without any current intention to sell or distribute such Shares, if, in the opinion of counsel for the Company, such a
representation is advisable. 
 18.6 Successors. The terms of the Plan shall be binding upon the Company, and its successors and
assigns. 

  
 A-16 

 18.7 Tax Elections. Each Participant agrees to give the Board prompt written notice of any
election made by such Participant under Code Section 83(b) or any similar provision thereof. 
 18.8 Legal Construction. 

(a) Severability. If any provision of this Plan or an Agreement is or becomes or is deemed invalid, illegal or
unenforceable in any jurisdiction, or would disqualify the Plan or any Agreement under any law with respect to which the Plan is intended to qualify, such provision shall be construed or deemed amended to conform to Applicable Law or, if it cannot
be construed or deemed amended without, in the determination of the Board, materially altering the intent of the Plan or the Agreement, it shall be stricken and the remainder of the Plan or the Agreement shall remain in full force and effect. 

(b) Compliance with Section 409A of the Code. All Awards granted under the Plan are intended to be either exempt
from the requirements of Section 409A of the Code or, if not exempt, to satisfy the requirements of Section 409A (including the Treasury Department guidance and regulations issued thereunder), and the Plan shall be administered, construed
and interpreted in accordance with such intent. If the Board determines that an Award, Agreement, payment, transaction or any other action or arrangement contemplated by the provision of this Plan would, if undertaken, cause a Participant to become
subject to any additional taxes or other penalties under Section 409A, then unless the Board specifically provides otherwise, such Award, Agreement, payment, transaction or other action or arrangement shall not be given effect to the extent
that it causes such result and the related provision of the Plan or Agreement will be deemed modified or, if necessary, suspended in order to comply with the requirements of Section 409A of the Code to the extent determined appropriate by the
Board, in each case without the consent of or notice to the Participant. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant in connection with Awards
(including any taxes and penalties under Section 409A) and the Company will have no obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties. 

In addition, notwithstanding any other provision of the Plan or an Agreement to the contrary, the Company will not pay or accelerate the
payment of any amount that constitutes “deferred compensation” within the meaning of Section 409A in violation of Section 409A. To the extent any amount of “deferred compensation” would otherwise vest and become payable
upon a Change in Control or upon a Disability, as set forth herein or in an Agreement, any such Award may vest but payment shall not be accelerated unless the Change in Control also satisfies the definition of “change in the ownership”
“change in the effective control” and/or “change in the ownership of a substantial portion of the assets” of the Company as those terms are defined in Treasury Regulations Section 1.409A-3(i)(5) (or such other regulation or
guidance issued under Section 409A) or the Disability also satisfies the definition of “disability” as that term is defined in Treasury Regulations Section 1.409A-3(i)(4) (or such other regulation or guidance issued under
Section 409A). 
 Any amount that constitutes “deferred compensation” within the meaning of Section 409A and is payable
under the Plan or an Agreement solely by reason of a Participant’s termination of employment shall be payable only if the Participant has experienced a “separation from service” within the meaning of Section 409A (or the
regulations or guidance issued under Section 409A), provided that if the Participant is a “specified employee” within the meaning of Section 409A at the time of such separation from service, as determined by the Board in
accordance with Section 409A, no payments shall be made before the six (6) month anniversary of the Participant’s separation from service, at which time all payments that would otherwise have been made during such six (6) month
period shall be paid to the Participant in a lump sum. 
 (c) Gender and Number. Where the context admits, words in
any gender shall include the other gender, words in the singular shall include the plural and words in the plural shall include the singular. 

(d) Governing Law. To the extent not preempted by federal law, the Plan and all Agreements hereunder shall be construed
in accordance with and governed by the laws of the State of Mississippi. 
 18.9 Plan Year. The Plan Year shall be a calendar year.

 IN WITNESS WHEREOF, this Plan is executed as of this the 11th day of February, 2016. 

 

			
	By:	 	 /s/ Mike Cockrell

	Authorized Officer

  

	
	ATTEST:
	
	 /s/ Tim Rigney
 Secretary

  
 A-17

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