Document:

Amended and Restated Security Agreement

 Exhibit 10.2 
 AMENDED AND RESTATED SECURITY AGREEMENT 
 This Amended and Restated Security Agreement (the “Agreement”) is dated as of June 6, 2008, by and among Nobel Learning Communities, Inc., a Delaware corporation (the
“Borrower”), and the other parties executing this Agreement under the heading “Debtors” (the Borrower and such other parties, along with any parties who execute and deliver to the Agent an agreement substantially in
the form attached hereto as Schedule G, being hereinafter referred to collectively as the “Debtors” and individually as a “Debtor”), each with its mailing address as set forth in Section 14(b) below, and
Bank of Montreal, a chartered bank of Canada acting through its Chicago branch (“BMO”), with its mailing address as set forth in Section 14(b) below, acting as administrative agent hereunder for the Secured Creditors
hereinafter identified and defined (BMO acting as such administrative agent and any successor or successors to BMO acting in such capacity being hereinafter referred to as the “Agent”). 
 PRELIMINARY STATEMENTS 
 A. The Borrower and the other Debtors heretofore executed and delivered to Harris N.A., a national banking association (“Harris”), that certain Amended and Restated Security Agreement dated as of
October 30, 2006 (the “Prior Security Agreement”) pursuant to which the Borrower and the other Debtors granted Harris a lien on and continuing security interest in certain personal property and fixtures of the Debtors described
therein as collateral security for, among other things, all indebtedness, obligations and liabilities of the Borrower under that certain Amended and Restated Credit Agreement dated as of October 30, 2006, as amended (the “Prior Credit
Agreement”), among the Borrower, the other Debtors, Harris, as Administrative Agent, and the lenders party thereto. 
 B. The
Borrower, the other Debtors, and BMO, as Agent, have entered into an Amended and Restated Credit Agreement dated as of the date hereof (such Amended and Restated Credit Agreement, as the same may be amended or modified from time to time, including
amendments and restatements thereof in its entirety, being hereinafter referred to as the “Credit Agreement”), which (i) amends and restates the Prior Credit Agreement in its entirety, (ii) pursuant to which Harris has
resigned as Administrative Agent and the Lenders have approved BMO as successor Administrative Agent, and (iii) pursuant to which the banks and financial institutions and letter of credit issuers from time to time party to the Credit Agreement
(such banks and financial institutions being hereinafter referred to collectively as the “Lenders” and individually as a “Lender” and such letter of credit issuers being hereinafter referred to collectively as the
“L/C Issuers” and individually as a “L/C Issuer”) have agreed, subject to certain terms and conditions, to extend credit and make certain other financial accommodations available to the Borrower (the Agent, the L/C
Issuers, and the Lenders, together with affiliates of the Lenders with respect to Hedging Liability and Funds Transfer and Deposit Account Liability referred to below, being hereinafter referred to collectively as the “Secured
Creditors” and individually as a “Secured Creditor”). 

 C. In addition, one or more of the Debtors may from time to time be liable to the Lenders and/or their
affiliates with respect to Hedging Liability and/or Funds Transfer and Deposit Account Liability (as such terms are defined in the Credit Agreement). 
 D. As a condition to extending credit or otherwise making financial accommodations available to or for the account of the Borrower under the Credit Agreement, the Secured Creditors require, among other things, that
each Debtor grant to the Agent for the benefit of the Secured Creditors a lien on and security interest in the personal property and fixtures of such Debtor described herein subject to the terms and conditions hereof. 
 E. The Borrower owns, directly or indirectly, equity interests in each other Debtor and the Borrower provides each of the other Debtors with financial,
management, administrative, and technical support which enables such Debtors to conduct their businesses in an orderly and efficient manner in the ordinary course. 
 F. Each Debtor will benefit, directly or indirectly, from credit and other financial accommodations extended by the Secured Creditors to the Borrower. 
 NOW, THEREFORE, for good and valuable consideration, receipt whereof is hereby acknowledged, the parties hereto agree as
follows: 
 Section 1. Terms defined in Credit Agreement. Except as otherwise provided in Section 2 below, all capitalized
terms used herein without definition shall have the same meanings herein as such terms have in the Credit Agreement. The term “Debtor” and “Debtors” as used herein shall mean and include the Debtors collectively and also each
individually, with all grants, representations, warranties, and covenants of and by the Debtors, or any of them, herein contained to constitute joint and several grants, representations, warranties, and covenants of and by the Debtors; provided,
however, that unless the context in which the same is used shall otherwise require, any grant, representation, warranty or covenant contained herein related to the Collateral shall be made by each Debtor only with respect to the Collateral owned
by it or represented by such Debtor as owned by it. 
 Section 2. Grant of Security Interest in the Collateral. As collateral
security for the Secured Obligations defined below, each Debtor hereby grants to the Agent for the benefit of the Secured Creditors a lien on and security interest in, and right of set-off against, and acknowledges and agrees that the Agent
has and shall continue to have for the benefit of the Secured Creditors a continuing lien on and security interest in, and right of set-off against, all right, title, and interest of each Debtor, whether now owned or existing or hereafter created,
acquired or arising, in and to all of the following: 
 (a) Accounts (including Health-Care-Insurance Receivables, if any);

 (b) Chattel Paper; 
 (c) Instruments (including Promissory Notes); 
  

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 (d) Documents; 
 (e) General Intangibles (including Payment Intangibles and Software, patents, trademarks, tradestyles, copyrights, and all other
intellectual property rights, including all applications, registration, and licenses therefor, and all goodwill of the business connected therewith or represented thereby); 
 (f) Letter-of-Credit Rights; 
 (g) Supporting Obligations; 
 (h) Deposit Accounts; 
 (i) Investment Property (including certificated and uncertificated Securities, Securities Accounts, Security Entitlements, Commodity
Accounts, and Commodity Contracts); 
 (j) Inventory; 
 (k) Equipment (including all software, whether or not the same constitutes embedded software, used in the operation thereof); 

(l) Fixtures; 
 (m) Commercial Tort Claims (as described on Schedule F hereto or on one or more supplements to this Agreement); 
 (n) Rights to merchandise and other Goods (including rights to returned or repossessed Goods and rights of stoppage in transit) which is represented by, arises from, or relates to any of the foregoing; 
 (o) Monies, personal property, and interests in personal property of such Debtor of any kind or description now held by any Secured
Creditor or at any time hereafter transferred or delivered to, or coming into the possession, custody or control of, any Secured Creditor, or any agent or affiliate of any Secured Creditor, whether expressly as collateral security or for any other
purpose (whether for safekeeping, custody, collection or otherwise), and all dividends and distributions on or other rights in connection with any such property; 
 (p) Supporting evidence and documents relating to any of the above-described property, including, without limitation, computer programs,
disks, tapes and related electronic data processing media, and all rights of such Debtor to retrieve the same from third parties, written applications, credit information, account cards, payment records, correspondence, delivery and installation
certificates, invoice copies, delivery receipts, notes and other evidences of indebtedness, insurance certificates and the like, together with all books of account, ledgers, and cabinets in which the same are reflected or maintained; 
  

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 (q) Accessions and additions to, and substitutions and replacements of, any and all of
the foregoing; and 
 (r) Proceeds and products of the foregoing, and all insurance of the foregoing and proceeds thereof;

 all of the foregoing being herein sometimes referred to as the “Collateral”. All terms which are used in this Agreement which are defined
in the Uniform Commercial Code of the State of Illinois as in effect from time to time (“UCC”) shall have the same meanings herein as such terms are defined in the UCC, unless this Agreement shall otherwise specifically provide. For
purposes of this Agreement, the term “Receivables” means all rights to the payment of a monetary obligation, whether or not earned by performance, and whether evidenced by an Account, Chattel Paper, Instrument, General Intangible,
or otherwise, and the term “Subsidiary Interests” means all equity interests held by a Debtor in its Subsidiaries (as that term is defined in the Credit Agreement), whether such equity interests constitute Investment Property or
General Intangibles under the UCC; provided that with respect to the security interests granted in Investment Property or General Intangibles constituting or evidencing equity interests in Foreign Subsidiaries, such security interest shall not
include more than 65% of the issued and outstanding equity interests of any such Foreign Subsidiary. 
 Section 3. Secured
Obligations. This Agreement is made and given to secure, and shall secure, the prompt payment and performance of (a) any and all indebtedness, obligations, and liabilities of the Debtors, and of any of them individually, to the Secured
Creditors, and to any of them individually, under or in connection with or evidenced by the Credit Agreement or any other Loan Documents, including, without limitation, all obligations evidenced by the Notes of the Borrower heretofore or hereafter
issued under the Credit Agreement, all obligations of the Borrower to reimburse the Secured Creditors for the amount of all drawings on all Letters of Credit issued pursuant to the Credit Agreement and all other obligations of the Borrower under all
Applications for Letters of Credit, all obligations of the Debtors, and of any of them individually, with respect to any Hedging Liability, all obligations of the Debtors, and of any of them individually, with respect to any Funds Transfer and
Deposit Account Liability, and all obligations of the Debtors, and of any of them individually, arising under any guaranty issued by it relating to the foregoing or any part thereof, in each case whether now existing or hereafter arising (and
whether arising before or after the filing of a petition in bankruptcy and including all interest accrued after the petition date), due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired and
(b) any and all expenses and charges, legal or otherwise, suffered or incurred by the Secured Creditors, and any of them individually, in collecting or enforcing any of such indebtedness, obligations, and liabilities or in realizing on or
protecting or preserving any security therefor, including, without limitation, the lien and security interest granted hereby (all of the indebtedness, obligations, liabilities, expenses, and charges described above being hereinafter referred to as
the “Secured Obligations”). Notwithstanding anything in this Agreement to the contrary, the right of recovery against any Debtor under this Agreement (other than the Borrower to which this limitation shall not apply) 

  

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shall not exceed $1.00 less than the lowest amount that would render such Debtor’s obligations under this Agreement void or voidable under applicable
law, including fraudulent conveyance law. 
 Section 4. Covenants, Agreements, Representations and Warranties. Each Debtor hereby
covenants and agrees with, and represents and warrants to, the Secured Creditors that: 
 (a) Each Debtor is duly organized
and validly existing in good standing under the laws of the jurisdiction of its organization. Each Debtor is the sole and lawful owner of its Collateral, and has full right, power, and authority to enter into this Agreement and to perform each and
all of the matters and things herein provided for. The execution and delivery of this Agreement, and the observance and performance of each of the matters and things herein set forth, will not (i) contravene or constitute a default under any
provision of law or any judgment, injunction, order or decree binding upon any Debtor or any provision of any Debtor’s organizational documents (e.g., charter, articles or certificate of incorporation and bylaws, articles or certificate
of formation or organization and limited liability company operating agreement, partnership agreement or similar organizational documents) or any covenant, indenture or agreement of or affecting any Debtor or any of its property or (ii) result
in the creation or imposition of any lien or encumbrance on any property of any Debtor except for the lien and security interest granted to the Agent hereunder. 
 (b) Each Debtor’s respective chief executive office is at the location listed under Column 2 on Schedule A attached hereto
opposite such Debtor’s name; and as of the date hereof such Debtor has no other executive offices or places of business other than those listed under Column 3 on Schedule A attached hereto opposite such Debtor’s name. The Collateral
is and shall remain in such Debtor’s possession or control at the locations listed under Columns 2 and 3 on Schedule A attached hereto opposite such Debtor’s name and in the case of Collateral consisting of Deposit Accounts, in
the accounts set forth in Part C of Exhibit E attached hereto (collectively for each Debtor, the “Permitted Collateral Locations”), except for (i) Collateral which in the ordinary course of the Debtor’s business is in
transit between Permitted Collateral Locations and (ii) Collateral aggregating less than $100,000 in fair market value outstanding at any one time. If for any reason any Collateral is at any time kept or located at a location other than a
Permitted Collateral Location, the Agent shall nevertheless have and retain a lien on and security interest therein. The Debtors own and shall continue to own the Permitted Collateral Locations except to the extent otherwise disclosed under Columns
2 and 3 on Schedule A. The Debtor shall promptly notify the Agent in writing of any additional collateral locations acquired or arising after the date hereof, and shall submit to the Agent a supplement to Schedule A to reflect such additional
Permitted Collateral Locations. No Debtor shall move its chief executive office or maintain a place of business at a location other than those specified under Columns 2 or 3 on Schedule A or permit any Collateral to be located at a location
other than a Permitted Collateral Location, in each case without first providing the Agent at least 30 days (or such shorter period of time as agreed to by the Agent) prior written notice of the Debtor’s intent to do so; provided that,
except in the case of foreign subsidiary organized in Canada or unless 

  

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the Agent and the Required Lenders otherwise consent, each Debtor shall at all times maintain its chief executive office, places of business, and Permitted
Collateral Locations in the United States of America. Furthermore, such Debtor shall have taken all action reasonably requested by the Agent to maintain the lien and security interest of the Agent in the Collateral at all times fully perfected and
in full force and effect. 
 (c) Each Debtor’s legal name, jurisdiction of organization and organizational number (if
any) are correctly set forth under Column 1 on Schedule A of this Agreement. No Debtor has transacted business at any time during the immediately preceding five-year period, and does not currently transact business, under any other legal
names or trade names other than the prior legal names and trade names (if any) set forth on Schedule B attached hereto. No Debtor shall change its jurisdiction of organization without the Agent’s prior written consent. No Debtor shall
change its legal name or transact business under any other trade name without first giving 30 days’ prior written notice of its intent to do so to the Agent. 
 (d) The Collateral and every part thereof is and shall be free and clear of all security interests, liens (including, without limitation,
mechanics’, laborers’ and statutory liens), attachments, levies, and encumbrances of every kind, nature, and description and whether voluntary or involuntary, except for the lien and security interest of the Agent therein and other Liens
permitted by Section 8.8 of the Credit Agreement (herein, the “Permitted Liens”). Each Debtor shall warrant and defend the Collateral against any claims and demands of all persons at any time claiming the same or any interest
in the Collateral adverse to any of the Secured Creditors. 
 (e) Each Debtor will promptly pay when due all taxes,
assessments, and governmental charges and levies upon or against it or its Collateral, in each case before the same become delinquent and before penalties accrue thereon, unless and to the extent that the same are being contested in good faith by
appropriate proceedings which prevent attachment of any lien resulting therefrom to, foreclosure on or other realization upon any Collateral and preclude interference with the operation of its business in the ordinary course and such Debtor shall
have established adequate reserves therefor. 
 (f) Each Debtor agrees it will not waste or destroy the Collateral or any part
thereof and will not be negligent in the care or use of any Collateral. Each Debtor agrees it will not use, manufacture, sell or distribute any Collateral in violation of any statute, ordinance or other governmental requirement. Each Debtor will
perform in all respects its obligations under any contract or other agreement constituting part of the Collateral except where the failure to so perform could not reasonably be expected to have a Material Adverse Effect, it being understood and
agreed that the Secured Creditors have no responsibility to perform such obligations. 
 (g) Subject to Sections 5(c),
6(a), 7(b), 7(c), and 8(c) hereof and the terms of the Credit Agreement (including, without limitation, Section 8.10 thereof), each Debtor agrees it will not, without the Agent’s prior written consent, sell, assign, mortgage, lease, or
otherwise dispose of the Collateral or any interest therein. 
  

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 (h) Each Debtor will insure its Collateral consisting of tangible personal property
against such risks and hazards as other companies similarly situated insure against, and including in any event loss or damage by fire, theft, burglary, pilferage, and loss in transit (other than as a result of common carriage), in amounts and under
policies containing lender’s loss payable clauses to the Agent as its interest may appear (and, if the Agent requests, naming the Agent as additional insureds therein) by insurers reasonably acceptable to the Agent. All premiums on such
insurance shall be paid by the Debtors and the policies of such insurance (or certificates therefor) delivered to the Agent. All insurance required hereby shall provide that any loss shall be payable notwithstanding any act or negligence of the
relevant Debtor, shall provide that no cancellation thereof shall be effective until at least 30 days after receipt by the relevant Debtor and the Agent of written notice thereof, and shall be reasonably satisfactory to the Agent in all other
respects. In case of any material loss, damage to or destruction of the Collateral or any part thereof, the relevant Debtor shall promptly give written notice thereof to the Agent generally describing the nature and extent of such damage or
destruction. In case of any loss, damage to or destruction of the Collateral or any part thereof, the relevant Debtor, whether or not the insurance proceeds, if any, received on account of such damage or destruction shall be sufficient for that
purpose, at such Debtor’s cost and expense, will promptly repair or replace the Collateral so lost, damaged or destroyed, except to the extent such Collateral is not necessary to the conduct of such Debtor’s business in the ordinary
course. In the event any Debtor shall receive any proceeds of such insurance in an amount exceeding $500,000 in the aggregate for all Debtors with respect to any event or occurrence, such Debtor shall notify the Agent and, subject to the terms of
the Credit Agreement, immediately pay over such proceeds of insurance to the Agent which will thereafter be applied to the reduction of the Secured Obligations (whether or not then due) or held as collateral security therefor, as provided for in the
Credit Agreement; provided, however, that the Agent agrees to release such insurance proceeds to the relevant Debtor for replacement or restoration of the portion of the Collateral lost, damaged or destroyed if, but only if, (i) at the
time of release no Default or Event of Default exists, (ii) the relevant Debtor has requested that the Agent so release such insurance proceeds, and (iii) the Agent has received evidence reasonably satisfactory to it that the collateral
lost, damaged or destroyed has been or will be replaced or restored to substantially its condition immediately prior to the loss, destruction or other event giving rise to the payment of such insurance proceeds. Each Debtor hereby authorizes the
Agent, at the Agent’s option, to adjust, compromise, and settle any losses under any insurance afforded at any time after the occurrence and during the continuation of any Default or Event of Default, and such Debtor does hereby irrevocably
constitute the Agent, its officers, agents, and attorneys, as such Debtor’s attorneys-in-fact, with full power and authority after the occurrence and during the continuation of any Default or Event of Default to effect such adjustment,
compromise, and/or settlement and to endorse any drafts drawn by an insurer of the Collateral or any part thereof and to do everything necessary to carry out such purposes and to receive and receipt for any unearned premiums due under policies of
such insurance. Unless the Agent elects to adjust, compromise or settle losses as aforesaid, any adjustment, compromise, and/or settlement of any losses under any insurance shall be made by the relevant Debtor subject to final approval of the Agent
(regardless of whether or not an 

  

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Event of Default shall have occurred) in the case of losses exceeding $500,000. All insurance proceeds shall be subject to the lien and security interest of
the Agent hereunder. 
 UNLESS THE DEBTORS PROVIDE
THE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS
AGREEMENT, THE AGENT MAY PURCHASE INSURANCE AT THE DEBTORS’ EXPENSE TO
PROTECT THE AGENT’S INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY,
BUT NEED NOT, PROTECT ANY DEBTOR’S INTERESTS IN THE COLLATERAL.
THE COVERAGE PURCHASED BY THE AGENT MAY NOT PAY ANY CLAIMS THAT
ANY DEBTOR MAKES OR ANY CLAIM THAT IS MADE AGAINST SUCH DEBTOR
IN CONNECTION WITH THE COLLATERAL. THE DEBTORS MAY LATER CANCEL ANY
SUCH INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER PROVIDING THE
AGENT WITH EVIDENCE THAT THE DEBTORS HAVE OBTAINED INSURANCE AS REQUIRED
BY THIS AGREEMENT. IF THE AGENT PURCHASES INSURANCE FOR THE COLLATERAL,
THE DEBTORS WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE,
INCLUDING INTEREST AND ANY OTHER CHARGES THAT THE AGENT MAY IMPOSE IN
CONNECTION WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE
OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE
INSURANCE MAY BE ADDED TO THE SECURED OBLIGATIONS SECURED HEREBY. THE
COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF INSURANCE
THE DEBTORS MAY BE ABLE TO OBTAIN ON THEIR OWN. 
 (i) Subject to the terms of the Credit Agreement, each Debtor will at all times allow the Secured Creditors and their respective
representatives free access to and right of inspection of the Collateral at such reasonable times and intervals as the Agent or any other Secured Creditor may designate and, in the absence of any existing Default or Event of Default, with reasonable
prior written notice to the relevant Debtor. 
 (j) If any Collateral is in the possession or control of any agents or
processors of a Debtor and the Agent so requests, such Debtor agrees to notify such agents or processors in writing of the Agent’s lien and security interest therein and instruct them to hold all such Collateral for the Agent’s account and
subject to the Agent’s instructions. Each Debtor will, upon the reasonable request of the Agent, authorize and instruct all bailees and any other parties, if any, at any time processing, labeling, packaging, holding, storing, shipping or
transferring all or any part of the Collateral to permit the Secured Creditors and their respective representatives to examine and inspect any of the Collateral then in such party’s possession and to verify from such party’s own books and
records any information concerning the Collateral or any part thereof which the Secured Creditors or their respective representatives may seek to verify. As to any premises not owned by a Debtor wherein any of the Collateral is located, if any, such
Debtor shall, upon the Agent’s reasonable request, use good faith efforts to cause each party having any right, title or interest in, or lien on, any of such premises to enter into an agreement (any such agreement to contain a legal description
of such premises) whereby such party disclaims any right, title, and interest in and lien on the Collateral, allows the removal of such Collateral by the Agent or its agents or representatives, and otherwise is in form and substance reasonably
acceptable to the Agent. 
  

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 (k) Upon the Agent’s reasonable request, each Debtor agrees from time to time to
deliver to the Agent such evidence of the existence, identity, and location of its Collateral and of its availability as collateral security pursuant hereto (including, without limitation, schedules describing all Receivables created or acquired by
such Debtor, copies of customer invoices or the equivalent and original shipping or delivery receipts for all merchandise and other goods sold or leased or services rendered by it, together with such Debtor’s warranty of the genuineness
thereof, and reports stating the book value of its Inventory and Equipment by major category and location), in each case as the Agent may reasonably request. The Agent shall have the right to verify all or any part of the Collateral in any manner,
and through any medium, which the Agent considers appropriate and reasonable, and each Debtor agrees to furnish all assistance and information, and perform any acts, which the Agent may reasonably require in connection therewith. 
 (l) Each Debtor will comply in all material respects with the terms and conditions of any and all leases, easements, right-of-way
agreements, and other agreements binding upon such Debtor or affecting the Collateral, in each case which cover the premises wherein the Collateral is located, and any orders, ordinances, laws or statutes of any city, state or other governmental
entity, department or agency having jurisdiction with respect to such premises or the conduct of business thereon, in each case where the failure to so comply could reasonably be expected to cause an Event of Default or result in the creation of a
Lien on a material portion of the Collateral. 
 (m) Schedule C attached hereto contains a true, complete, and current
listing of all patents, trademarks, tradestyles, copyrights, and other intellectual property rights (including all registrations and applications therefor) owned by each of the Debtors as of the date hereof that are registered with any governmental
authority. The Debtors shall promptly notify the Agent in writing of any additional intellectual property rights acquired or arising after the date hereof, and shall submit to the Agent a supplement to Schedule C to reflect such additional
rights (provided any Debtor’s failure to do so shall not impair the Agent’s security interest therein). Each Debtor owns or possesses rights to use all franchises, licenses, patents, trademarks, trade names, tradestyles, copyrights, and
rights with respect to the foregoing which are required to conduct its business. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and the Debtors are not
liable to any person for infringement under applicable law with respect to any such rights as a result of its business operations. 
 (n) Schedule F attached hereto contains a true, complete and current listing of all Commercial Tort Claims held by the Debtors as of the date hereof, each described by referring to a specific incident giving rise to the claim. Each
Debtor agrees to execute and deliver to the Agent an agreement in the form attached hereto as Schedule H, or in such other form reasonably acceptable to the Agent, promptly upon becoming aware of any Commercial Tort Claim of such Debtor arising
after the date hereof (provided any Debtor’s failure to do so shall not impair the Agent’s security interest therein). 
  

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 (o) Each Debtor agrees to execute and deliver to the Agent such further agreements,
assignments, instruments, and documents, and to do all such other things, as the Agent may reasonably deem necessary or appropriate to assure the Agent its lien and security interest hereunder, including, without limitation, (i) such financing
statements or other instruments and documents as the Agent may from time to time reasonably require to comply with the UCC and any other applicable law, (ii) such agreements with respect to patents, trademarks, copyrights, and similar
intellectual property rights as the Agent may from time to time reasonably require to comply with the filing requirements of the United States Patent and Trademark Office and the United States Copyright Office, and (iii) such control agreements
with respect to Deposit Accounts, Investment Property, Letter-of-Credit Rights, and electronic Chattel Paper (except as otherwise provided in the Credit Agreement), and to cause the relevant depository institutions, financial intermediaries, and
issuers to execute and deliver such control agreements, as the Agent may from time to time reasonably require (except as otherwise provided in the Credit Agreement). Each Debtor hereby agrees that a carbon, photographic or other reproduction of this
Agreement or any such financing statement is sufficient for filing as a financing statement by the Agent without notice thereof to such Debtor wherever the Agent in its sole discretion desires to file the same. Each Debtor hereby authorizes the
Agent to file any and all financing statements covering the Collateral or any part thereof as the Agent may require, including financing statements describing the Collateral as “all assets” or “all personal property” or words of
like meaning. The Agent may order lien searches from time to time against any Debtor and the Collateral, and the Debtors shall promptly reimburse the Agent for all reasonable costs and expenses incurred in connection with such lien searches. In the
event for any reason the law of any jurisdiction other than Illinois becomes or is applicable to the Collateral or any part thereof, or to any of the Secured Obligations, each Debtor agrees to execute and deliver all such agreements, assignments,
instruments, and documents and to do all such other things as the Agent deems necessary or appropriate to preserve, protect, and enforce the security interest of the Agent under the law of such other jurisdiction. Each Debtor agrees to mark its
books and records to reflect the lien and security interest of the Agent in the Collateral. 
 (p) On failure of any Debtor to
perform any of the covenants and agreements herein contained, the Agent may, at its option and with prior written notice to the Borrower (unless the giving of such notice is prohibited by law or the giving of such notice or any delay in performance
occasioned by the requirement to give such notice would, in the reasonable opinion of the Agent, be reasonably likely to cause damage to the Collateral or a reduction in the value thereof), perform the same and in so doing may expend such sums as
the Agent deems advisable in the performance thereof, including, without limitation, the payment of any insurance premiums, the payment of any taxes, liens, and encumbrances, expenditures made in defending against any adverse claims, and all other
expenditures which the Agent may be compelled to make by operation of law or which the Agent may make by agreement or otherwise for the protection of the security hereof. All such sums and amounts so expended shall be repayable by the Debtors upon
demand, shall constitute additional Secured Obligations secured hereunder, and shall bear interest from the date said amounts are expended at the rate per annum (computed on the 

  

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basis of a year of 365-366 days for the actual number of days elapsed) determined by adding 2.0% per annum to the Base Rate from time to time in effect
plus the Applicable Margin from time to time in effect for Base Rate Loans under the Revolving Credit, with any change in such rate per annum as so determined by reason of a change in such Base Rate to be effective on the date of such change in said
Base Rate (such rate per annum as so determined being hereinafter referred to as the “Default Rate”). No such performance of any covenant or agreement by the Agent on behalf of a Debtor, and no such advancement or expenditure
therefor, shall relieve any Debtor of any default under the terms of this Agreement or in any way obligate any Secured Creditor to take any further or future action with respect thereto. The Agent, in making any payment hereby authorized, may do so
according to any bill, statement or estimate procured from the appropriate public office or holder of the claim to be discharged without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax assessment, sale,
forfeiture, tax lien or title or claim. The Agent, in performing any act hereunder, shall be the sole judge of whether the relevant Debtor is required to perform the same under the terms of this Agreement. The Agent is hereby authorized to charge
any account of any Debtor maintained with any Secured Creditor for the amount of such sums and amounts so expended. 
 Section 5.
Special Provisions Re: Receivables. (a) As of the time any Receivable owned by a Debtor becomes subject to the security interest provided for hereby, and at all times thereafter, such Debtor shall be deemed to have warranted as to each such
Receivable that all warranties of such Debtor set forth in this Agreement are true and correct in all material respects with respect to such Receivable; that such Receivable and all papers and documents relating thereto are genuine and in all
material respects what they purport to be; that such Receivable is valid and subsisting; except as set forth below, that the amount of such Receivable represented as owing is the correct amount actually and unconditionally owing, except for normal
cash discounts on normal trade terms in the ordinary course of business; that the amount of such Receivable represented as owing is not disputed and is not subject to any set-offs, credits, deductions or countercharges other than those arising in
the ordinary course of such Debtor’s business which, to the extent that the aggregate amount of such set-offs, credits, deductions or countercharges exceeds $250,000 at any one time, are disclosed to the Agent in writing promptly upon such
Debtor or the Borrower becoming aware that such threshold amount has been exceeded and promptly upon such Debtor or the Borrower becoming aware of any additional set-offs, credits, deductions or countercharges at all times when such threshold amount
has been exceeded; and, except as disclosed to the Agent in writing at or prior to the time such Receivable is created, that no surety bond was required or given in connection with such Receivable or the contracts or purchase orders out of which the
same arose. 
 (b) If any Receivable arises out of a contract with the United States of America, or any state or political subdivision
thereof, or any department, agency or instrumentality of any of the foregoing, each Debtor agrees to promptly so notify the Agent and, at the request of the Agent or the Secured Creditors, execute whatever instruments and documents are required by
the Agent in order that such Receivable shall be assigned to the Agent and that proper notice of such assignment shall be given under the federal Assignment of Claims Act (or any successor statute) or any similar state or local statute, as the case
may be. 
  

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 (c) Unless and until an Event of Default has occurred and is continuing any merchandise or other goods
which are returned by a customer or account debtor or otherwise recovered may be resold by a Debtor in the ordinary course of its business as presently conducted in accordance with Section 7(b) hereof; and, during the existence of any Event of
Default, such merchandise and other goods shall be set aside at the request of the Agent and held by the relevant Debtor as trustee for the Secured Creditors and shall remain part of the Secured Creditors’ Collateral. Unless and until an Event
of Default has occurred and is continuing, the Debtors may settle and adjust disputes and claims with its customers and account debtors, handle returns and recoveries, and grant discounts, credits, and allowances in the ordinary course of its
business as presently conducted for amounts and on terms which the relevant Debtor in its reasonable business judgment faith considers advisable; and, during the existence of any Event of Default, at the Agent’s request, the Debtors shall
notify the Agent promptly of all returns and recoveries and, on the Agent’s request, deliver any such merchandise or other goods to the Agent. During the existence of any Event of Default, at the Agent’s request, the Debtors shall also
notify the Agent promptly of all disputes and claims and settle or adjust them at no expense to the Agent, but no discount, credit or allowance other than on normal trade terms in the ordinary course of business as presently conducted shall be
granted to any customer or account debtor and no returns of merchandise or other goods shall be accepted by any Debtor without the Agent’s consent. The Agent may, at all times during the existence of any Event of Default, settle or adjust
disputes and claims directly with customers or account debtors for amounts and upon terms which the Agent considers advisable. 
 (d) To the
extent any Receivable or other item of Collateral is evidenced by an Instrument or tangible Chattel Paper, each Debtor shall cause such Instrument or tangible Chattel Paper to be pledged and delivered to the Agent; provided, however, that,
prior to the existence of a Default or Event of Default and thereafter until otherwise required by the Agent, a debtor shall not be required to deliver any such Instrument or tangible Chattel Paper if and only so long as the aggregate unpaid
principal balance of all such Instruments and tangible Chattel Paper held by the Debtors and not delivered to the Agent hereunder is less than $250,000 (excluding those notes set forth in Section 8.9(m) of the Credit Agreement) at any one time
outstanding. 
 Section 6. Collection of Receivables. (a) Except as otherwise provided in this Agreement, each Debtor shall
make collection of its Receivables and may use the same to carry on its business in accordance with sound business practice and otherwise subject to the terms hereof. 
 (b) Upon the occurrence and during the continuation of any Event of Default, whether or not the Agent has exercised any of its other rights under other provisions of this Section 6, in the event the Agent
requests any Debtor to do so: 
 (i) all Instruments and tangible Chattel Paper at any time constituting part of the
Receivables (including any postdated checks) shall, upon receipt by such Debtor, be immediately endorsed to and deposited with Agent; and/or 
 (ii) such Debtor shall instruct all customers and account debtors to remit all payments in respect of Receivables or any other Collateral to a lockbox or lockboxes under the sole custody and control of the Agent and
which are maintained at one or more post offices selected by the Agent. 
  

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 (c) Upon the occurrence and during the continuation of any Event of Default, whether or not the Agent has
exercised any of its other rights under the other provisions of this Section 6, the Agent or its designee may notify the relevant Debtor’s customers and account debtors at any time that Receivables have been assigned to the Agent or of the
Agent’s security interest therein, and either in its own name, or such Debtor’s name, or both, demand, collect (including, without limitation, through a lockbox analogous to that described in Section 6(b)(ii) hereof), receive, receipt
for, sue for, compound and give acquittance for any or all amounts due or to become due on Receivables, and in the Agent’s discretion file any claim or take any other action or proceeding which the Agent may deem necessary or appropriate to
protect and realize upon the security interest of the Agent in the Receivables or any other Collateral. 
 (d) Any proceeds of Receivables or
other Collateral transmitted to or otherwise received by the Agent pursuant to any of the provisions of Sections 6(b) or 6(c) hereof may be handled and administered by the Agent in and through a remittance account or accounts maintained at the
Agent or by the Agent at a commercial bank or banks selected by the Agent (collectively the “Depositary Banks” and individually a “Depositary Bank”), and each Debtor acknowledges that the maintenance of such
remittance accounts by the Agent is solely for the Agent’s convenience and that the Debtors do not have any right, title or interest in such remittance accounts or any amounts at any time standing to the credit thereof. The Agent may, after the
occurrence and during the continuation of any Event of Default, apply all or any part of any proceeds of Receivables or other Collateral received by it from any source to the payment of the Secured Obligations (whether or not then due and payable),
such applications to be made in such amounts, in such manner and order, and at such intervals as the Agent may from time to time in its discretion determine, but not less often than once each week. The Agent need not apply or give credit for any
item included in proceeds of Receivables or other Collateral until the Depositary Bank has received final payment therefor at its office in cash or final solvent credits current at the site of deposit acceptable to the Agent and the Depositary Bank
as such. However, if the Agent does permit credit to be given for any item prior to a Depositary Bank receiving final payment therefor and such Depositary Bank fails to receive such final payment or an item is charged back to the Agent or any
Depositary Bank for any reason, the Agent may at its election in either instance charge the amount of such item back against any such remittance accounts or any Deposit Account of any Debtor subject to the lien and security interest of this
Agreement, together with interest thereon at the Default Rate. Concurrently with each transmission of any proceeds of Receivables or other Collateral to any such remittance account, upon the Agent’s request, the relevant Debtor shall furnish
the Agent with a report in such form as Agent shall reasonably require identifying the particular Receivable or such other Collateral from which the same arises or relates. Unless and until an Event of Default has occurred and is continuing, the
Agent will release proceeds of Collateral which the Agent has not applied to the Secured Obligations as provided above from the remittance account from time to time after receipt thereof. Each Debtor hereby indemnifies the Secured Creditors from and
against all liabilities, damages, losses, actions, claims, judgments, and all reasonable costs, expenses, charges, and attorneys’ fees suffered or incurred by any Secured Creditor because of the maintenance of the foregoing arrangements;
provided, however, that no Debtor shall be required to indemnify any 

  

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Secured Creditor for any of the foregoing to the extent they arise solely from the gross negligence or willful misconduct of the person seeking to be
indemnified. The Secured Creditors shall have no liability or responsibility to any Debtor for the Agent or any Depositary Bank accepting any check, draft or other order for payment of money bearing the legend “payment in full” or words of
similar import or any other restrictive legend or endorsement whatsoever or be responsible for determining the correctness of any remittance. 
 Section 7. Special Provisions Re: Inventory and Equipment. (a) Except as otherwise provided in the Credit Agreement, each Debtor shall at its own cost and expense maintain, keep, and preserve its Inventory in good and
merchantable condition and keep and preserve its Equipment in good repair, working order, and condition, ordinary wear and tear excepted. 
 (b) Each Debtor may, until an Event of Default has occurred and is continuing and thereafter until otherwise notified by the Agent, use, consume, sell, and lease the Inventory in the ordinary course of its business, but a sale in the
ordinary course of business shall not under any circumstance include any transfer or sale in satisfaction, partial or complete, of a debt owing by such Debtor. 
 (c) Each Debtor may, until an Event of Default has occurred and is continuing and thereafter until otherwise notified by the Agent, sell Equipment to the extent permitted by Section 8.10 of the Credit Agreement.

 (d) As of the time any Inventory or Equipment of a Debtor becomes subject to the security interest provided for hereby and at all times
thereafter, such Debtor shall be deemed to have warranted as to any and all of such Inventory and Equipment that all warranties of such Debtor set forth in this Agreement are true and correct with respect to such Inventory and Equipment; and that
all of such Inventory and Equipment is located at a location set forth pursuant to Section 4(b) hereof. Each Debtor warrants and agrees that none of its Inventory is or will be consigned to any other person without the Agent’s prior
written consent. 
 (e) Except as otherwise provided in the Credit Agreement, upon the Agent’s request, each Debtor shall at its own
cost and expense cause the lien of the Agent in and to any portion of the Collateral subject to a certificate of title law to be duly noted on such certificate of title or to be otherwise filed in such manner as is prescribed by law in order to
perfect such lien and will cause all such certificates of title and evidences of lien to be deposited with the Agent. 
 (f) Except for
Equipment from time to time located on the real estate described on Schedule D attached hereto or as otherwise hereafter disclosed to the Agent in writing, none of the Equipment is or will be attached to real estate in such a manner that the
same may become a fixture. 
 (g) If any of the Inventory is at any time evidenced by a document of title, such document shall be promptly
delivered by the relevant Debtor to the Agent. 
  

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 Section 8. Special Provisions Re: Investment Property, Subsidiary Interests, and Deposits.
(a) Unless and until an Event of Default has occurred and is continuing and thereafter until notified to the contrary by the Agent pursuant to Section 10(d) hereof: 
 (i) each Debtor shall be entitled to exercise all voting and/or consensual powers pertaining to its Investment Property and Subsidiary
Interests, or any part thereof, for all purposes not inconsistent with the terms of this Agreement, the Credit Agreement or any other document evidencing or otherwise relating to any Secured Obligations; and 
 (ii) each Debtor shall be entitled to receive and retain all cash dividends paid upon or in respect of its Investment Property and
Subsidiary Interests subject to the lien and security interest of this Agreement. 
 (b) All Investment Property (including all securities,
certificated or uncertificated, securities accounts, and commodity accounts) or Subsidiary Interests of the Debtors on the date hereof is listed and identified on Schedule E attached hereto and made a part hereof. Each Debtor shall promptly
notify the Agent of any other Investment Property or Subsidiary Interests acquired or maintained by such Debtor after the date hereof, and shall submit to the Agent a supplement to Schedule E to reflect such additional rights (provided any
Debtor’s failure to do so shall not impair the Agent’s security interest therein). Certificates for all certificated securities now or at any time constituting Investment Property or Subsidiary Interests and part of the Collateral
hereunder shall be promptly delivered by the relevant Debtor to the Agent duly endorsed in blank for transfer or accompanied by an appropriate assignment or assignments or an appropriate undated stock power or powers, in every case sufficient to
transfer title thereto, including, without limitation, all stock received in respect of a stock dividend or resulting from a split-up, revision or reclassification of the Investment Property or Subsidiary Interests or any part thereof or received in
addition to, in substitution of or in exchange for the Investment Property or Subsidiary Interests or any part thereof as a result of a merger, consolidation or otherwise. With respect to any uncertificated securities or any Investment Property or
Subsidiary Interests held by a securities intermediary, commodity intermediary, or other financial intermediary of any kind, at the Agent’s request, the relevant Debtor shall execute and deliver, and shall cause any such issuer or intermediary
to execute and deliver, an agreement among such Debtor, the Agent, and such issuer or intermediary in form and substance satisfactory to the Agent which provides, among other things, for the issuer’s or intermediary’s agreement that it
will comply with such entitlement orders, and apply any value distributed on account of any Investment Property or Subsidiary Interests, as directed by the Agent without further consent by such Debtor. The Agent may, at any time after the occurrence
and during the continuation of any Default or Event of Default, cause to be transferred into its name or the name of its nominee or nominees any and all of the Investment Property or Subsidiary Interests hereunder. 
 (c) Unless and until an Event of Default has occurred and is continuing, each Debtor may sell or otherwise dispose of any of its Investment Property to
the extent permitted by the Credit Agreement, provided that, except to the extent permitted by the Credit Agreement, no Debtor shall sell or otherwise dispose of any Subsidiary Interests without the prior written consent of the Agent. After
the occurrence and during the continuation of any Event of Default, no Debtor shall sell all or any part of its Investment Property or Subsidiary Interests without the prior written consent of the Agent (except to the extent permitted by
Section 8.10(a) or (b) of the Credit Agreement). 
  

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 (d) Each Debtor represents that on the date of this Agreement, none of its Investment Property or
Subsidiary Interests consists of margin stock (as such term is defined in Regulation U of the Board of Governors of the Federal Reserve System) except to the extent such Debtor has delivered to the Agent a duly executed and completed
Form U-1 with respect to such stock. If at any time the Investment Property or Subsidiary Interests or any part thereof consists of margin stock, the relevant Debtor shall promptly so notify the Agent and deliver to the Agent a duly executed
and completed Form U-1 and such other instruments and documents reasonably requested by the Agent in form and substance satisfactory to the Agent. 
 (e) Notwithstanding anything to the contrary contained herein, in the event any Investment Property or Subsidiary Interests is subject to the terms of a separate security agreement in favor of the Agent, the terms of
such separate security agreement shall govern and control unless otherwise agreed to in writing by the Agent. 
 (f) Each Debtor represents
and warrants to, and agrees with, the Secured Creditors as follows: (i) as of the date hereof, each Subsidiary is a valid and existing entity of the type listed on Schedule E and is duly organized and existing under applicable law;
(ii) as of the date hereof, the Subsidiary Interests listed and described on Schedule E hereto constitute the percentage of the equity interest in each Subsidiary set forth thereon owned by the relevant Debtor; (iii) as of the date
hereof, copies of the certificate or articles of incorporation and by-laws, certificate or articles of association and operating agreement, and partnership agreement of each Subsidiary (each such agreement being hereinafter referred to as an
“Organizational Agreement”) heretofore delivered to the Agent are true and correct copies thereof and have not been amended or modified in any respect, and (iv) without the prior written consent of the Agent, no Debtor will
agree to any amendment or modification to any Organizational Agreement which would in any manner adversely affect or impair the Subsidiary Interests or reduce or dilute the rights of such Debtor with respect to any Subsidiary Interests. Each Debtor
shall perform when due all of its material obligations under each Organizational Agreement. 
 (g) All Deposit Accounts of the Debtors on the
date hereof are listed and identified (by account number and depository institution) on Schedule E attached hereto and made a part hereof. Each Debtor shall promptly notify the Agent of any other Deposit Account opened or maintained by such
Debtor after the date hereof, and shall submit to the Agent a supplement to Schedule E to reflect such additional accounts (provided any Debtor’s failure to do so shall not impair the Agent’s security interest therein). With respect
to any Deposit Account maintained by a depository institution other than the Agent, except as otherwise permitted by the Credit Agreement, such Debtor, the depository institution, and the Agent shall execute and deliver an account control agreement
in form and substance satisfactory to the Agent which provides, among other things, for the depository institution’s agreement that it will comply with instructions originated by the Agent directing the disposition of the funds in the Deposit
Account without further consent by such Debtor. 
  

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 Section 9. Power of Attorney. In addition to any other powers of attorney contained herein,
each Debtor hereby appoints the Agent, its nominee, or any other person whom the Agent may designate as such Debtor’s attorney-in-fact, with full power and authority upon the occurrence and during the continuation of any Event of Default to
sign such Debtor’s name on verifications of Receivables and other Collateral; to send requests for verification of Collateral to such Debtor’s customers, account debtors, and other obligors; to endorse such Debtor’s name on any
checks, notes, acceptances, money orders, drafts, and any other forms of payment or security that may come into the Agent’s possession; to endorse the Collateral in blank or to the order of the Agent or its nominee; to sign such Debtor’s
name on any invoice or bill of lading relating to any Collateral, on claims to enforce collection of any Collateral, on notices to and drafts against customers and account debtors and other obligors, on schedules and assignments of Collateral, on
notices of assignment and on public records; to notify the post office authorities to change the address for delivery of such Debtor’s mail to an address designated by the Agent; to receive, open, and dispose of all mail addressed to such
Debtor; and to do all things necessary to carry out this Agreement. Each Debtor hereby ratifies and approves all acts of any such attorney and agrees that neither the Agent nor any such attorney will be liable for any acts or omissions or for any
error of judgment or mistake of fact or law other than such person’s gross negligence or willful misconduct. The Agent may file one or more financing statements disclosing its security interest in all or any part of the Collateral. The
foregoing powers of attorney, being coupled with an interest, are irrevocable until the Secured Obligations have been fully paid and satisfied and the commitments of the Lenders to extend credit to or for the account of the Borrower under the Credit
Agreement have expired or otherwise terminated. 
 Section 10. Defaults and Remedies. (a) The occurrence of any event or the
existence of any condition specified as an “Event of Default” under the Credit Agreement shall constitute an “Event of Default” hereunder. 
 (b) Upon the occurrence and during the continuation of any Event of Default, the Agent shall have, in addition to all other rights provided herein or by law, the rights and remedies of a secured party under the UCC
(regardless of whether the UCC is the law of the jurisdiction where the rights or remedies are asserted and regardless of whether the UCC applies to the affected Collateral), and further the Agent may, without demand and, to the extent permitted by
applicable law, without advertisement, notice, hearing or process of law, all of which each Debtor hereby waives to the extent permitted by applicable law, at any time or times, sell and deliver any or all Collateral held by or for it at public or
private sale, at any securities exchange or broker’s board or at the Agent’s office or elsewhere, for cash, upon credit or otherwise, at such prices and upon such terms as the Agent deems advisable, in its discretion. In the exercise of
any such remedies, the Agent may sell the Collateral as a unit even though the sales price thereof may be in excess of the amount remaining unpaid on the Secured Obligations. Also, if less than all the Collateral is sold, the Agent shall have no
duty to marshal or apportion the part of the Collateral so sold as between the Debtors, or any of them, but may sell and deliver any or all of the Collateral without regard to which of the Debtors are the owners thereof. In addition to all other
sums due any Secured Creditor hereunder, each Debtor shall pay the Secured Creditors all costs and expenses incurred by the Secured Creditors, including reasonable attorneys’ fees and court costs, in obtaining, liquidating or enforcing payment
of Collateral or the Secured Obligations or in the prosecution or defense of any action or proceeding by or against any 

  

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Secured Creditor or any Debtor concerning any matter arising out of or connected with this Agreement or the Collateral or the Secured Obligations, including,
without limitation, any of the foregoing arising in, arising under or related to a case under the United States Bankruptcy Code (or any successor statute). Any requirement of reasonable notice shall be met if such notice is personally served on or
mailed, postage prepaid, to the Debtors in accordance with Section 14(b) hereof at least 10 days before the time of sale or other event giving rise to the requirement of such notice; provided, however, no notification need be given to a
Debtor if such Debtor has signed, after an Event of Default hereunder has occurred, a statement renouncing any right to notification of sale or other intended disposition. The Agent shall not be obligated to make any sale or other disposition of the
Collateral regardless of notice having been given. Any Secured Creditor may be the purchaser at any such sale to the extent permitted by applicable law. Each Debtor hereby waives all of its rights of redemption from any such sale. The Agent may
postpone or cause the postponement of the sale of all or any portion of the Collateral by announcement at the time and place of such sale, and such sale may, without further notice, be made at the time and place to which the sale was postponed or
the Agent may further postpone such sale by announcement made at such time and place. The Agent has no obligation to prepare the Collateral for sale. The Agent may sell or otherwise dispose of the Collateral without giving any warranties as to the
Collateral or any part thereof, including disclaimers of any warranties of title or the like, and each Debtor acknowledges and agrees that the absence of such warranties shall not render the disposition commercially unreasonable. 
 (c) Without in any way limiting the foregoing, upon the occurrence and during the continuation of any Event of Default hereunder, in addition to all
other rights provided herein or by law, (i) the Agent shall have the right to take physical possession of any and all of the Collateral and anything found therein, the right for that purpose to enter without legal process any premises where the
Collateral may be found (provided such entry be done lawfully), and the right to maintain such possession on the relevant Debtor’s premises (each Debtor hereby agreeing, to the extent it may lawfully do so, and subject to the rights of any
third-party tenant or subtenant, to lease such premises without cost or expense to the Agent or its designee if the Agent so requests) or to remove the Collateral or any part thereof to such other places as the Agent may desire, (ii) the Agent
shall have the right to direct any intermediary at any time holding any Investment Property or other Collateral, or any issuer thereof, to deliver such Collateral or any part thereof to the Agent and/or to liquidate such Collateral or any part
thereof and deliver the proceeds thereof to the Agent (including, without limitation, the right to deliver a notice of control with respect to any Collateral held in a securities account or commodities account and deliver all entitlement orders with
respect thereto), (iii) the Agent shall have the right to exercise any and all rights with respect to all Deposit Accounts of each Debtor, including, without limitation, the right to direct the disposition of the funds in each Deposit Account
and to collect, withdraw, and receive all amounts due or to become due or payable thereunder, and (iv) each Debtor shall, upon the Agent’s demand, promptly assemble the Collateral and make it available to the Agent at a place reasonably
designated by the Agent. If the Agent exercises its right to take possession of the Collateral, each Debtor shall also at its expense perform any and all other steps requested by the Agent to preserve and protect the security interest hereby granted
in the Collateral, such as placing and maintaining signs indicating the security interest of the Agent, appointing overseers for the Collateral and maintaining Collateral records. 
  

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 (d) Without in any way limiting the foregoing, upon the occurrence and during the continuation of any
Event of Default, all rights of the Debtors to exercise the voting and/or consensual powers which they are entitled to exercise pursuant to Section 8(a)(i) hereof and/or to receive and retain the distributions which they are entitled to receive
and retain pursuant to Section 8(a)(ii) hereof, shall, at the option of, and upon notice from, the Agent (except to the extent that the Agent is legally prohibited from giving any such notice), cease and thereupon become vested in the Agent,
which, in addition to all other rights provided herein or by law, shall then be entitled solely and exclusively to exercise all voting and other consensual powers pertaining to the Investment Property and Subsidiary Interests and/or to receive and
retain the distributions which such Debtor would otherwise have been authorized to retain pursuant to Section 8(a)(ii) hereof and shall then be entitled solely and exclusively to exercise any and all rights of conversion, exchange or
subscription or any other rights, privileges or options pertaining to any Investment Property or Subsidiary Interests as if the Agent were the absolute owner thereof including, without limitation, the rights to exchange, at its discretion, all
Investment Property or Subsidiary Interests or any part thereof upon the merger, consolidation, reorganization, recapitalization or other readjustment of the respective issuer thereof or upon the exercise by or on behalf of any such issuer or the
Agent of any right, privilege or option pertaining to any Investment Property or Subsidiary Interests and, in connection therewith, to deposit and deliver the Investment Property or Subsidiary Interests or any part thereof with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms and conditions as the Agent may determine. In the event the Agent in good faith believes any of the Collateral constitutes restricted securities within the meaning of
any applicable securities laws, any disposition thereof in compliance with such laws shall not render the disposition commercially unreasonable. 
 (e) Without in any way limiting the foregoing, each Debtor hereby grants to the Secured Creditors a royalty-free irrevocable non-exclusive license and right to use all of such Debtor’s patents, patent applications, patent licenses,
trademarks, trademark registrations, trademark licenses, trade names, trade styles, and similar intangibles in connection with any foreclosure or other realization by the Agent or the Secured Creditors on all or any part of the Collateral to the
extent permitted by law. The license and right granted the Secured Creditors hereby shall be without any royalty or fee or charge whatsoever. 
 (f) The powers conferred upon the Agent and the Secured Creditors hereunder are solely to protect their interest in the Collateral and shall not impose on them any duty to exercise such powers. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its possession or control if such Collateral is accorded treatment substantially equivalent to that which the Agent accords its own property, consisting of similar type assets, it
being understood, however, that the Agent shall have no responsibility for (i) ascertaining or taking any action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Collateral, whether or not the
Agent has or is deemed to have knowledge of such matters, (ii) taking any necessary steps to preserve rights against any parties with respect to any Collateral, or (iii) initiating any action to protect the Collateral or any part thereof
against the possibility of a decline in market value. This Agreement constitutes an assignment of rights only and not an assignment of any duties or obligations of the Debtors in any way related to the Collateral, and neither the Agent nor any
Secured Creditor shall have any 

  

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duty or obligation to discharge any such duty or obligation. Neither the Agent nor any Secured Creditor nor any party acting as attorney for the Agent or any
Secured Creditor shall be liable for any acts or omissions or for any error of judgment or mistake of fact or law other than such person’s gross negligence or willful misconduct. 
 (g) Failure by the Agent to exercise any right, remedy or option under this Agreement or any other agreement between any Debtor and the Agent or provided
by law, or delay by the Agent in exercising the same, shall not operate as a waiver; and no waiver shall be effective unless it is in writing, signed by the party against whom such waiver is sought to be enforced and then only to the extent
specifically stated. The rights and remedies of the Agent and the Secured Creditors under this Agreement shall be cumulative and not exclusive of any other right or remedy which the Agent or any Secured Creditor may have. For purposes of this
Agreement, an Event of Default shall be construed as continuing after its occurrence until the same is waived in writing by the Agent. 
 Section 11. Application of Proceeds. The proceeds and avails of the Collateral at any time received by the Agent upon the occurrence and during the continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as collateral security for, the Secured Obligations in accordance with the terms of the Credit Agreement. The Debtors shall remain liable to the Secured Creditors for any
deficiency. Any surplus remaining after the full payment and satisfaction of the Secured Obligations shall be returned to the Borrower, as agent for the Debtors, or to whomsoever the Agent reasonably determines is lawfully entitled thereto.

 Section 12. Continuing Agreement. This Agreement shall be a continuing agreement in every respect and shall remain in full
force and effect until all of the Secured Obligations, both for principal and interest, have been fully paid and satisfied and the commitments of the Lenders to extend credit to or for the account of the Borrower under the Credit Agreement have
expired or otherwise terminated. Upon such termination of this Agreement, the Agent shall, upon the request and at the expense of the Debtors, forthwith release its liens and security interests hereunder. 
 Section 13. The Agent. In acting under or by virtue of this Agreement, the Agent shall be entitled to all the rights, authority, privileges,
and immunities provided in the Credit Agreement, all of which provisions of said Credit Agreement (including, without limitation, Section 11 thereof) are incorporated by reference herein with the same force and effect as if set forth herein in
their entirety. The Agent hereby disclaims any representation or warranty to the Secured Creditors or any other holders of the Secured Obligations concerning the perfection of the liens and security interests granted hereunder or in the value of any
of the Collateral. 
 Section 14. Miscellaneous. (a) This Agreement cannot be changed or terminated orally. This Agreement
shall create a continuing lien on and security interest in the Collateral and shall be binding upon each Debtor, its successors and assigns and shall inure, together with the rights and remedies of the Secured Creditors hereunder, to the benefit of
the Secured Creditors and their successors and permitted assigns; provided, however, that no Debtor may assign its rights or delegate its duties hereunder without the Agent’s prior written consent. Without limiting the 

  

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generality of the foregoing, and subject to the provisions of the Credit Agreement, any Lender may assign or otherwise transfer any indebtedness held by it
secured by this Agreement to any other person, and such other person shall thereupon become vested with all the benefits in respect thereof granted to such Lender herein or otherwise. 
 (b) Except as otherwise specified herein, all notices hereunder shall be in writing (including, without limitation, notice by telecopy) and shall be
given to the relevant party at its address or telecopier number set forth below (or, if no such address is set forth below, at the address of the relevant Debtor as shown on the records of the Agent), or such other address or telecopier number as
such party may hereafter specify by notice to the other given by courier, by United States certified or registered mail, by telecopy or by other telecommunication device capable of creating a written record of such notice and its receipt. Notices
hereunder shall be addressed: 
  

							
	to the Debtors at:	 	to the Agent at:
		
	Nobel Learning Communities, Inc.	 	Bank of Montreal
	1615 West Chester Pike	 	115 South LaSalle Street
	West Chester, Pennsylvania 19382	 	Chicago, Illinois 60603
	Attention:	 	Chief Financial Officer	 	Attention:	 	Pauline Christopher
	Telecopy:	 	(484) 947-2003	 	Telecopy:	 	(312) 293-5041

 with a required copy of notices to the Debtors (not constituting notice) to: 
 Nobel Learning Communities, Inc. 
 1615 West
Chester Pike 
 West Chester, Pennsylvania 19382 

			
	Attention:	 	General Counsel
	Telecopy:	 	(484) 947-2003

 Each such notice, request or other communication shall be effective (i) if given by telecopier, when such
telecopy is transmitted to the telecopier number specified in this Section and a confirmation of such telecopy has been received by the sender, (ii) if given by mail, five (5) days after such communication is deposited in the mail,
certified or registered with return receipt requested, addressed as aforesaid or (iii) if given by any other means, when delivered at the addresses specified in this Section. 
 (c) In the event and to the extent that any provision hereof shall be deemed to be invalid or unenforceable by reason of the operation of any law or by
reason of the interpretation placed thereon by any court, this Agreement shall to such extent be construed as not containing such provision, but only as to such jurisdictions where such law or interpretation is operative, and the invalidity or
unenforceability of such provision shall not affect the validity of any remaining provisions hereof, and any and all other provisions hereof which are otherwise lawful and valid shall remain in full force and effect. Without limiting the generality
of the foregoing, in the event that this Agreement shall be deemed to be invalid or otherwise unenforceable with respect to any Debtor, such invalidity or unenforceability shall not affect the validity of this Agreement with respect to the other
Debtors. 
  

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 (d) The lien and security interest herein created and provided for stand as direct and primary security
for the Secured Obligations of the Borrower arising under or otherwise relating to the Credit Agreement as well as for the other Secured Obligations secured hereby. No application of any sums received by the Secured Creditors in respect of the
Collateral or any disposition thereof to the reduction of the Secured Obligations or any part thereof shall in any manner entitle any Debtor to any right, title or interest in or to the Secured Obligations or any collateral or security therefor,
whether by subrogation or otherwise, unless and until all Secured Obligations have been fully paid and satisfied and all commitments to extend credit to or for the account of the Borrower under the Credit Agreement have expired or otherwise
terminated. Each Debtor acknowledges and agrees that the lien and security interest hereby created and provided are absolute and unconditional and shall not in any manner be affected or impaired by any acts of omissions whatsoever of any Secured
Creditor or any other holder of any Secured Obligations, and without limiting the generality of the foregoing, the lien and security interest hereof shall not be impaired by any acceptance by any Secured Creditor or any other holder of any Secured
Obligations of any other security for or guarantors upon any of the Secured Obligations or by any failure, neglect or omission on the part of any Secured Creditor or any other holder of any of the Secured Obligations to realize upon or protect any
of the Secured Obligations or any collateral or security therefor. The lien and security interest hereof shall not in any manner be impaired or affected by (and the Secured Creditors, without notice to anyone, are hereby authorized to make from time
to time) any sale, pledge, surrender, compromise, settlement, release, renewal, extension, indulgence, alteration, substitution, exchange, change in, modification or disposition of any of the Secured Obligations or of any collateral or security
therefor, or of any guaranty thereof, or of any instrument or agreement setting forth the terms and conditions pertaining to any of the foregoing. The Secured Creditors may at their discretion at any time grant credit to the Borrower without notice
to the other Debtors in such amounts and on such terms as the Secured Creditors may elect without in any manner impairing the lien and security interest created and provided for. In order to realize hereon and to exercise the rights granted the
Secured Creditors hereunder and under applicable law, there shall be no obligation on the part of any Secured Creditor or any other holder of any Secured Obligations at any time to first resort for payment to the Borrower or any other Debtor or to
any guaranty of the Secured Obligations or any portion thereof or to resort to any other collateral, security, property, liens or any other rights or remedies whatsoever, and the Secured Creditors shall have the right to enforce this Agreement
against any Debtor or its Collateral irrespective of whether or not other proceedings or steps seeking resort to or realization upon or from any of the foregoing are pending. 
 (e) In the event the Secured Creditors shall at any time in their discretion permit a substitution of Debtors hereunder or a party shall wish to become a
Debtor hereunder, such substituted or additional Debtor shall, upon executing an agreement in the form attached hereto as Schedule G, become a party hereto and be bound by all the terms and conditions hereof to the same extent as though such
Debtor had originally executed this Agreement and, in the case of a substitution, in lieu of the Debtor being replaced. Any such agreement shall contain information as to such Debtor necessary to update Schedules A, B, C, D, E, and F hereto
with respect to it. No such substitution shall be effective absent the written consent of the Agent nor shall it in any manner affect the obligations of the other Debtors hereunder. 
  

 -22- 

 (f) This Agreement may be executed in any number of counterparts and by different parties hereto on
separate counterpart signature pages, each constituting an original, but all together one and the same instrument. Each Debtor acknowledges that this Agreement is and shall be effective upon its execution and delivery by such Debtor to the Agent,
and it shall not be necessary for the Agent to execute this Agreement or any other acceptance hereof or otherwise to signify or express its acceptance hereof. 
 (g) This Agreement shall be deemed to have been made in the State of Illinois and shall be governed by, and construed in accordance with, the laws of the State of Illinois. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the meaning of any provision hereof. 
 (h) Each Debtor hereby submits
to the non-exclusive jurisdiction of the United States District Court for the Northern District of Illinois and of any Illinois state court sitting in the City of Chicago, Illinois, for purposes of all legal proceedings arising out of or relating to
this Agreement or the transactions contemplated hereby. Each Debtor irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such a court has been brought in an inconvenient form. EACH DEBTOR AND, BY ACCEPTING THE
BENEFITS OF THIS AGREEMENT, EACH SECURED CREDITOR HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY. 
 (i) Upon the execution and delivery of this Agreement by the Debtors hereunder, this Agreement shall supercede all
provisions of the Prior Security Agreement as of such date. The Debtors hereby agree, that, notwithstanding the execution and delivery of this Agreement, the lien and security interest created and provided for under the Prior Security Agreement
shall continue in effect under and pursuant to the terms of this Agreement for the benefit of all of the Obligations secured hereby. Nothing herein contained shall in any manner effect or impair the priority of the liens and security interests
created and provided for by the Prior Security Agreement as to the indebtedness and obligations which would otherwise be secured thereby prior to giving effect to this Agreement. 
 Section 15. Resignation of Harris N.A. As set forth in the Credit Agreement, Harris N.A. has resigned as Agent for the purposes of this
Security Agreement and the Lenders have appointed BMO as successor Agent hereunder. By its execution hereof, Harris N.A. agrees to execute and deliver, at the Borrower’s expense, all assignments and other documents reasonably requested by the
Agent in connection with such resignation. 
 [SIGNATURE PAGES TO FOLLOW]

  

 -23- 

 IN WITNESS WHEREOF, each Debtor has caused this Amended and
Restated Security Agreement to be duly executed and delivered as of the date first above written. 
  

			
	“DEBTORS”
	
	NOBEL LEARNING COMMUNITIES, INC.
		
	By:	 	 /s/ Thomas Frank

	Name:	 	Thomas Frank
	Title:	 	Chief Financial Officer
	
	MERRYHILL SCHOOLS NEVADA, INC.
		
	By:	 	 /s/ Thomas Frank

	Name:	 	Thomas Frank
	Title:	 	President
	
	NEDI, INC.
		
	By:	 	 /s/ Thomas Frank

	Name:	 	Thomas Frank
	Title:	 	Assistant Treasurer
	
	ENCHANTED CARE LEARNING CENTER INC.
		
	By:	 	 /s/ Thomas Frank

	Name:	 	Thomas Frank
	Title:	 	Vice President

 Accepted and agreed to in Chicago, Illinois, as of the date first above written. 

 

			
	 BANK OF MONTREAL, as Agent

		
	By:	 	 /s/ Kathleen J. Collins

	Name:	 	Kathleen J. Collins
	Title:	 	Director

  

 S-1 

 The undersigned executes and delivers this Agreement solely for the purposes of Section 15 hereof.

  

			
	HARRIS N.A.
		
	By:	 	 /s/ Kathleen J. Collins

	Name:	 	Kathleen J. Collins
	Title:	 	Director

  

 S-1Deferred Compensation Plan 2008 Restatement

 Exhibit 10.14 
 CONFORMED COPY 
 ELECTRO SCIENTIFIC INDUSTRIES, INC. 
 DEFERRED COMPENSATION PLAN 
 2008
Restatement 
 January 1, 2008 
  

			
	 Electro Scientific Industries, Inc.
 an Oregon
corporation
 13900 NW Science Park Drive
 Portland,
Oregon 97229
	  	Company

 TABLE OF CONTENTS 
  

					
	1.	  	 Effective Date; Company; Committee; Plan Year
	  	1
			
	2.	  	 Eligibility
	  	2
			
	3.	  	 Deferral Election
	  	2
			
	4.	  	 Deferred Compensation Account
	  	5
			
	5.	  	 Irrevocable Trust
	  	7
			
	6.	  	 Payment to the Participant
	  	8
			
	7.	  	 Payment to a Beneficiary or a Former Spouse
	  	11
			
	8.	  	 Unscheduled Payments
	  	12
			
	9.	  	 Amendment; Termination
	  	13
			
	10.	  	 Claims Procedure
	  	14
			
	11.	  	 General Provisions
	  	14
		
	Appendix A	  	16

  

 i 

 INDEX OF TERMS 
  

					
	 Bonus
	  	3.2(b)	  	1, 2
	 CEO
	  	2.1	  	2
	 Cash Deferral Election
	  	3.1	  	2
	 Code
	  	Preamble	  	1
	 Committee
	  	1.3	  	1
	 Company
	  	Preamble	  	1
	 Compensation
	  	3.2	  	2
	 Controlled Group of Corporations
	  	6.1(a)	  	8
	 Disability
	  	6.1(a)	  	8
	 Employer
	  	1.2	  	1
	 Officer
	  	2.1	  	2
	 PRSU
	  	3.7	  	4
	 Participant
	  	2.2	  	2
	 Plan
	  	Preamble	  	1
	 Plan Year
	  	1.4	  	1
	 RSU
	  	3.7	  	4
	 Restricted Stock Unit
	  	3.7	  	4
	 Retirement
	  	6.1(b)	  	9
	 Salary
	  	3.2(a)	  	2
	 Stock
	  	3.7	  	4
	 Stock Deferral Election
	  	3.6	  	3
	 Unforeseeable Emergency
	  	8.2(b)	  	13

  

 ii 

 ELECTRO SCIENTIFIC INDUSTRIES, INC. 
 DEFERRED COMPENSATION PLAN 
 2008 Restatement 
 January 1, 2008 
  

			
	 Electro Scientific Industries
 an Oregon
corporation
 13900 NW Science Park Drive
 Portland,
Oregon 97229
	  	“Company”

 The Company adopted this Deferred Compensation Plan (the “Plan“) effective May 11,
2001, as a nonqualified plan of deferred compensation for Company Officers. The most recent amendment was signed March 12, 2004. The purpose of the Plan is to provide an additional benefit to Company Officers and other select employees as a
means to attract and retain highly effective individuals. 
 Generally effective January 1, 2005, new section 409A of the Internal
Revenue Code (the “Code”) imposed new requirements on nonqualified deferred compensation plans and provided for substantial penalties for noncompliance. Amounts that are deferred under the Plan after December 31, 2004 are subject to
section 409A of the Code and the Plan is intended to comply with section 409A. In order to update the Plan to accommodate new developments and to maintain the intended deferral of compensation and related deferral of income taxation, the Company
amends and restates the Plan, in its entirety, as follows. 
  

	 	1.	Effective Date; Company; Committee; Plan Year. 

 1.1 This Restatement is generally effective January 1, 2008. Cash Deferral Elections for Bonuses otherwise payable in 2008 must be submitted by September 30, 2007. 
 1.2 The Plan shall apply to the Company and affiliates of the Company for whom an employee performs services. The term
“Employer“ refers to the Company or such affiliate for which such services are performed. Except as provided in 9.1 and 9.2, Company functions or responsibilities shall be exercised by the chief executive officer of the Company, who may
delegate all or any part of those functions. 
 1.3 The Plan shall be administered by the Compensation Committee of the
Board of Directors of the Company (the “Committee“). The Committee shall interpret the Plan, determine eligibility and the amount of benefits, maintain records, determine interest rates and generally be responsible for seeing that the
purposes of the Plan are accomplished. The Committee may delegate all or part of its administrative duties to others. 
 1.4 The “Plan Year” of the Plan is a calendar year. 
  

 1 

 1.5 The Plan is intended to be unfunded for purposes of deferring the time of
taxation under the Code and for purposes of constituting an unfunded plan maintained by an employer primarily for the purpose of providing deferred compensation to a select group of management or highly compensated employees under Title I of
ERISA. 
  

	 	2.	Eligibility. 

 2.1 Officers
and other employees designated by the chief executive officer of the Company (“CEO”), in the CEO’s discretion, shall be eligible to participate in the Plan. The CEO may delegate authority to designate eligible employees.
“Officer” means an appointed officer of the Company whose functions are not merely formal. An employee other than an Officer shall not be initially eligible unless the CEO reasonably expects that the employee will have Salary for the year
of not less than $125,000, without regard for any salary reduction election. 
 2.2 “Participant” means an
Officer or other eligible employee who has an Account under the Plan or who has elected to defer compensation pursuant to Section 3 for any Plan Year. 
 2.3 Participation shall continue until the individual has been paid all amounts in accordance with the Plan. An individual who ceases to be an Officer or who the CEO or delegate determines is no longer eligible
shall continue to be a Participant, but shall not elect to defer additional amounts. Any election in effect while the individual is eligible shall remain in effect with respect to the entire Plan Year or with respect to a Bonus, as applicable.

  

	 	3.	Deferral Election. 

 3.1 An
eligible employee may elect to participate for each Plan Year by completing a form prescribed by the Committee (a “Cash Deferral Election“), signing it and returning it to the Committee. The Cash Deferral Election provides for a deferral
of Compensation under 3.2. 
 3.2 “Compensation“ means the following, without regard for any deferral of
compensation under the Plan: 
 (a) Base salary (“Salary”) earned and payable within the Plan Year (except for usual
payroll administrative delay). 
 (b) Annual performance bonus (“Bonus”) payable within the Plan Year. Bonus is
intended to be “performance based compensation” within the meaning of section 409A of the Code and related regulations. Amounts described as “bonus” within the payroll system that are not determined with respect to
performance criteria established for the Company’s fiscal year are not Bonus and are not Salary. 
 3.3 A Cash
Deferral Election shall specify the percentage of Salary or Bonus to be deferred, subject to the following restrictions: 
 (a) A deferral of Salary shall be for a minimum of 10 percent and a maximum of 50 percent, unless the employee defers none of the Salary. 
  

 2 

 (b) A deferral of Bonus shall be a minimum of 10 percent and a maximum of
100 percent, unless the employee defers none of the Bonus. 
 3.4 To be effective for a Plan Year, the Cash
Deferral Election must be returned before a date established by the Committee and the following apply: 
 (a) The date for
submitting a Cash Deferral Election for Salary shall be not later than the December 31 before the first day of the Plan Year, except as provided in (c). 
 (b) The date for submitting a Cash Deferral Election for Bonus shall be not later than the date that is six months before the end of the
performance period. The election shall apply to Bonus amounts otherwise payable in the Plan Year. An individual who has not performed services continuously from the date on which the Bonus performance criteria for the performance period are
established may not defer Bonus for the Plan Year in which the performance period ends. 
 (c) An individual under 2.1 who
first becomes an employee of an Employer during a Plan Year may elect to participate for the remainder of the Plan Year by completing, signing, and returning to the Committee a Cash Deferral Election within 30 days after becoming an employee.
The Cash Deferral Election shall apply to the Participant’s elected percentage of Salary for the Plan Year earned after the end of the pay period in which the Cash Deferral Election is received by the Committee. 
 (d) An individual who first becomes an employee during a performance period may not elect to participate with respect to Bonus for the
performance period. 
 (e) The Committee may determine that an employee is ineligible to elect a deferral of Bonus if the
Committee determines that the timing of the election does not comply with requirements of section 409A of the Code. If the Committee determines that the employee is not eligible, any attempted deferral of Bonus shall be void. 
 3.5 Subject to stopping elective deferrals for the remainder of a year under 8.2, or in connection with a hardship withdrawal under
a 401(k) plan of Employer to the extent of suspension required by the terms of the 401(k) plan, Cash Deferral Elections shall be irrevocable as of the date established by the Committee or otherwise applicable under 3.4 for delivery of the Cash
Deferral Election. 
 3.6 An eligible employee may elect to participate with respect to restricted stock units granted
in a Plan Year by completing a form prescribed by the Committee (a “Stock Deferral Election”), signing it and returning it to the Committee. The Stock Deferral Election provides for the deferral of compensation under a restricted stock
unit to a time later than the time the restricted stock unit vests or is otherwise payable. 
  

 3 

 3.7 A “restricted stock unit” means a restricted stock unit granted
under the Company’s 2004 Stock Option Incentive Plan, subject to the following: 
 (a) A restricted stock unit
(“RSU”) is payable in a share of Company common stock (“Stock”), subject to vesting. 
 (b) A performance
based restricted stock unit (“PRSU”) is payable in a number of shares of Stock that is a multiple of the units granted. The multiplier is determined after the end of a performance measurement period applicable to the unit. The multiplier
may be less than one and may be zero. 
 3.8 The Stock Deferral Election shall specify the restricted stock units that
are subject to the Stock Deferral Election and the number of shares of Stock represented by the restricted stock units that are subject to the Stock Deferral Election in accordance with procedures adopted by the Committee. Fractional shares shall be
disregarded. An election must cover a minimum of 10 percent of the shares represented by the restricted stock units granted to the Participant as of a certain date, without regard for the multiplier applicable to PSRUs. 
 3.9 To be effective for a Plan Year, the Stock Deferral Election must be returned before a date established by the Committee and
the following shall apply: 
 (a) The Stock Deferral Election shall be irrevocable, and the date for submitting a Stock
Deferral Election, shall not be later than the December 31 before the first day of the Plan Year, except as provided in (b). 
 (b) An individual under 2.1 who first becomes an employee of an Employer during a Plan Year may elect to defer restricted stock units granted in the Plan Year by completing, signing and returning to the Committee a Stock Deferral Election
within 30 days after becoming an employee. A Stock Deferral Election may not be returned on or after the date that restricted stock units are granted to the participant in the Plan Year. 
 3.10 Employer shall reduce the Participant’s Salary and Bonus by the amounts deferred under a Cash Deferral Election and shall
credit such amounts to the Participant’s Account under Section 4. Taxes under Chapter 21 of the Code (“FICA taxes”) due on a Participant’s deferred Salary and Bonus shall be withheld from the Participant’s
remaining nondeferred compensation. If the Participant has insufficient remaining nondeferred compensation for timely payment of FICA taxes, the Participant shall pay cash to the Employer in an amount sufficient to cover the FICA tax due.

 3.11 Employer shall credit the number of shares of Stock specified under the Stock Deferral Election to the
Participant’s Account under section 4. Employer shall adjust the number of phantom shares that are subject to a multiplier by application of the multiplier as provided in the related PSRU, except fractional shares remaining after aggregating
the adjusted phantom shares shall be disregarded. The Participant shall not receive compensation with 

  

 4 

 
respect to RSUs or PRSUs covered by Stock Deferral Elections for income tax purposes upon the vesting of an RSU or the determination or application of a
multiplier for a PRSU. The value of the shares of Stock reflected as phantom shares shall be treated as wages for purposes of FICA taxes as follows: 
 (a) Phantom shares shall be treated as wages at the time the shares are no longer subject to a substantial risk of forfeiture. Shares relating to a PRSU are considered to be subject to a substantial risk of forfeiture
until the multiplier is determined. If the number of shares is subject to a multiplier, the number of shares treated as wages shall be the product of the number of shares granted times the multiplier. 
 (b) Related earnings, if any, shall be treated as wages when they are no longer subject to a substantial risk of forfeiture. Earnings
credit on amounts that have been treated as wages before the effective date of the earnings credit shall not be treated as wages. 
  

	 	4.	Deferred Compensation Account. 

 4.1 An Account shall be maintained for each Participant on the books of the Company until full payment has been made to the Participant or Beneficiaries under Sections 5 and 6 and the following shall apply, subject to
Section 5: 
 (a) The Committee shall maintain such subaccounts under each Account as may be necessary to give effect to
the Participant’s elections concerning time and form of payment, to proper earnings credit, to multipliers for PRSUs, and to any other terms of the Plan that may affect the balance of the Account. 
 (b) The Company shall not be obligated to set aside or earmark any funds or Stock for the Account, which shall be purely a bookkeeping
device. 
 (c) All amounts of deferred compensation under this Plan shall remain at all times the unrestricted assets of the
Company, and the promise to pay the deferred amounts shall at all times remain unfunded as to the Participants and Beneficiaries. 
 (d) All payments to Participants and Beneficiaries under the Plan shall be charged against Account and subaccount balances and guideline investments and phantom shares of Stock ratably, except amounts described in 8.1(b) shall be charged
last for any distribution other than a distribution under 8.1(b). Forfeiture of phantom shares of Stock shall be charged against only the phantom shares. 
 4.2 The Account of each Participant shall be adjusted by adding credit for deferrals under Section 3 and credit for additional phantom shares of Stock after application of a multiplier as provided in 3.11.
Deferred shares of Stock under Section 3 shall be credited as whole phantom shares. Cash amounts shall be credited as soon as practicable after the date the amount would have been paid if not deferred. Shares of deferred Stock shall be credited
as soon 

  

 5 

 
as practicable after receipt of a Stock Deferral Election whether or not the number of shares is subject to later adjustment because of determination of a
multiplier. If application of a multiplier would cause credit of fractional phantom shares, the fractional phantom shares shall be recorded, maintained and aggregated with other fractional phantom shares, but fractional phantom shares remaining
after aggregation shall be disregarded for payment and no other payment shall be made with respect to fractional phantom shares. 
 4.3 Subject to 4.4, the Company shall credit earnings to each Participant’s Account, based on guideline investment earnings, until the entire Account has been paid out, as follows: 
 (a) The Committee shall establish guideline investment funds for amounts other than Stock with investment objectives fixed by the
Committee, and may change the funds in its discretion. The guideline funds may parallel funds or other investments available under any insurance policy or policies purchased by the Company in connection with the Plan, funds available under any
irrevocable trust established under Section 5 or other investment indexes established from time to time by the Committee, but neither the Company nor a trustee shall have any obligation to invest any amounts in any guideline fund. A guideline
fund shall not be composed substantially of Stock. 
 (b) Each Participant shall, under procedures established by the
Committee, elect among available guideline funds for credit of earnings for the Participant’s Account under this Plan. In the absence of a proper election, a guideline fund designated by the Committee will be used. Participant elections may be
changed at such times and subject to such limits as may be fixed by the Committee. 
 (c) The Committee shall credit Accounts
in accordance with earnings (which may be negative) of the elected guideline funds in accordance with procedures established by the Committee. 
 4.4 Amounts recorded as phantom shares of Stock shall not be subject to 4.3 and the following shall apply: 
 (a) A phantom share of Stock shall be subject to the same forfeiture and vesting provisions that applied to the related restricted stock unit. A phantom share relating to a PRSU shall have the same performance
multiplier as applied to the related PRSU, based on the same performance criteria as the related PRSU. 
 (b) Generally,
phantom shares of Stock will continue to be recorded in shares of Stock. Phantom shares of Stock shall be adjusted to reflect any reorganization, Stock split or combination, dividend or distribution on the Stock, or other event affecting the Stock,
as the Committee shall determine. Generally, if the adjustment or dividend would have been paid or recorded in Stock outside of the Plan, the credit to the Account shall be the same number of phantom shares as the number of shares of Stock outside
of the Plan. Subject to (c), if the 

  

 6 

 
adjustment or dividend would have been paid or recorded in cash outside of the Plan, the amount shall be credited in dollars to the Participant’s
Account that is subject to 4.3 and treated as invested in guideline funds in accordance with the Participant’s most recent investment election. If the Participant has not elected guideline investments, the guideline fund designated by the
Committee under 4.3 shall apply. 
 (c) Phantom shares of Stock shall be credited with additional phantom shares of Stock in
place of dollars under (a) for cash dividends, distributions or other payments of cash applicable to actual shares of Stock if the record date is before the following: 
 (1) For phantom shares related to RSUs, the date phantom shares have vested. 
 (2) For phantom shares related to PRSUs, the date the number of shares has been determined by application of the performance multiplier
under the related PRSUs. 
 The additional phantom shares representing earnings or payments shall be subject to forfeiture under the same
terms as the phantom shares that were credited with the earnings or payments. 
 (d) The Committee shall determine the
adjustments and credits under (b) and (c) with reference to the terms of the restricted stock units deferred under the Plan and in a manner that does not provide for duplicative credits of amounts representing earnings on the restricted
stock units or phantom shares of Stock or for acceleration of vesting of earnings amounts relative to the principal amounts deferred. 
 (e) Fractional phantom shares shall be recorded, maintained, and aggregated with respect to adjustments and earnings credits, but fractional shares remaining after aggregation shall be disregarded for payment and no
other payment shall be made with respect to fractional shares. 
  

	 	5.	Irrevocable Trust. 

 5.1 The
Company may, but shall not be required to, establish an irrevocable trust to cover certain liabilities to Participants, and may transfer cash or other property to such a trust. For example, the Company may choose not to cover liabilities related to
certain Participants or not to transfer cash or other property to the trust with respect to all liabilities. 
 5.2 The
Company may issue or transfer Stock to a trust under 5.1. 
  

 7 

 5.3 If the Company creates a trust under 5.1, assets transferred to the trust
shall be invested as follows: 
 (a) Investment of such assets shall be at the absolute discretion of the Committee, the
trustee, or both on a shared basis, as provided in the trust. Neither the Company nor the trustee shall be required to invest in such funds in accordance with Participants’ elections under 4.3 (c). The Company and the trustee may, however,
choose, in their discretion, to invest in the elected guideline funds in accordance with the elections. 
 (b) The guideline
investment funds under 4.3 shall be solely for measuring the amount of earnings credits to Accounts. 
 5.4 The trust
under 5.1 shall be a grantor trust and all assets held in trust shall be assets of the Company subject to the trust terms. All assets of the trust shall at all times be subject to the claims of creditors of the Company in circumstances described in
the trust. Participants will not receive a priority interest in the trust assets ahead of such creditors and Participants shall have no interest in any particular trust asset. Participants’ interests in the trust will be governed by the trust
terms at all times. 
 5.5 The trust terms may provide that the assets of the trust may be used to pay amounts with
respect to certain Accounts or subaccounts and not others, subject to claims of creditors. 
  

	 	6.	Payment to the Participant. 

 6.1 Deferred Salary and Bonus and related earnings credit based on the Participant’s Account shall be payable in cash, and phantom shares of Stock shall be payable in whole shares of Stock, upon a Termination of the Participant
and as provided in 6.5 and the following shall apply: 
 (a) “Termination” means a separation from service from the
controlled group of corporations, as defined in Section 1563(a) of the Code, of which the Company is a member. In applying Code sections 1563(a), (b) and (c) for purposes of determining the controlled group of corporations to which
the Company belongs, the language “at least 50 percent” is substituted for “at least 80 percent” in those sections. In applying Treasury Regulation section 1.414(c)-2 for purposes of determining trades or businesses that are
under common control with the Company, the language “at least 50 percent” is substituted for “at least 80 percent” in that section. Disability shall be a Termination. A Participant is disabled if the Committee determines that any
of the following apply: 
 (1) The Participant is unable to engage in any substantial gainful activity by reason of any
medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months. 
 (2) The Participant is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or
can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Employer. 
  

 8 

 (3) The Social Security Administration has determined the Participant to be totally
disabled. 
 (b) If the Termination is a Retirement, the benefit shall be paid to the Participant in the form determined under
6.2. “Retirement” means a Termination after the Participant has attained age 55. 
 (c) If (b) does not apply,
the benefit shall be equal to the balance of the Participant’s Account and shall be paid to the Participant in a lump sum within 60 days following the date of Termination, subject to 6.6 and 6.7. 
 (d) Employer may delay any payment to the extent that Employer anticipates that Employer’s deduction with respect to the payment
would be limited or eliminated by application of section 162(m) of the Code. A delayed payment will be made at the earliest date the Employer reasonably anticipates that the deduction of the payment will not be limited or eliminated by application
of section 162(m) of the Code. 
 6.2 The deferred compensation payable upon Retirement shall be an amount equal to the
Participant’s Account, payable as follows, as elected by the Participant in writing on a form provided by the Committee, subject to 6.6 and 6.7: 
 (a) A lump sum payable in the January following the Participant’s Retirement. 
 (b) Five
substantially equal annual installments commencing in the January following the Participant’s Retirement. 
 (c) Ten
substantially equal annual installments commencing in the January following the Participant’s Retirement. 
 6.3 A
Participant’s election under 6.2 shall be submitted at the same time as the Participant’s first deferral election under Section 3. The election shall apply to the entire Account of the Participant, including subsequent deferrals and
earnings credit, subject to 6.5. 
 6.4 A Participant may change an election under 6.2 once as follows: 
 (a) The election must be submitted to the Committee at least 12 months before the applicable payment date under 6.2 and may not take
effect until 12 months after the election is made. 
 (b) An election under 6.2 for payment under 6.2(a) may be changed to
provide for either of the following: 
 (1) Payment in a lump sum payable in a February that is at least 5 years, but
not more than 10 years, after the date in 6.2(a). 
  

 9 

 (2) Payment in five substantially equal annual installments commencing in the February
that is five years after the January described in 6.2(a), with subsequent installments in Januaries. 
 (c) An election for
payment under 6.2(b) may be changed to provide for either of the following: 
 (1) Payment in a lump sum in the February that
is five years after the January described in 6.2(b). 
 (2) Payment in five substantially equal annual installments
commencing in the February that is five years after the January described in 6.2(b), with subsequent installments in Januaries. 
 6.5 A Participant may elect with respect to deferrals of Compensation for any Plan Year to have all amounts deferred for the Plan Year, plus related earnings credit, paid in a Plan Year specified by the Participant. A Participant may
make a separate election with respect to a deferral of Stock. The following shall apply: 
 (a) The Participant shall specify
in the Deferral Election under 3.1 or 3.6 for the Plan Year a date for payment subject to the following: 
 (1) The date for
payment may not be earlier than the third anniversary of the beginning of the Plan Year to which the election applies. 
 (2)
If the deferral relates to restricted stock units, the date may not be earlier than the last date that the phantom shares of Stock will vest or be determined according to performance criteria, without taking into account any provisions of the
restricted stock unit for acceleration of vesting upon specified events. 
 (3) The date may not be later than the January of
the year in which the Participant would attain age 65. 
 (b) Payment shall be made in a lump sum as soon as practicable
either within 30 days after the specified payment date or after the specified payment date but in the same calendar year as the specified payment date. 
 (c) If the Participant has a Termination before the payment date, whether or not the Termination constitutes a Retirement, the amount shall be paid at the time provided in 6.1(c). 
  

 10 

 6.6 Payment on account of Termination, including Retirement, may not start or be
made to a Participant who is a “key employee” as defined in Section 416(i) of the Code, without regard to Section 416(i)(5) of the Code, before the date which is six months after the date of Termination. Disability shall not be a
Termination for purposes of this 6.6. The Committee may determine that a Participant is a key employee in the event of doubt or to avoid impractical efforts or expense to make an exact determination of key employees. A Participant shall have no
claim, rights or remedy if the determination is not correct. 
 (a) If the Participant terminates service because of death or
if the Participant dies before or within the six months, benefits shall be paid as soon as practicable after death, except as provided in 7.1(a). If an installment payment is delayed because of this provision, the installment shall be paid as soon
as practicable after six months; later installments shall be made in accordance with the original schedule and shall not be affected. 
 (b) If the Participant has specified a payment date under 6.5 and the specified payment date is within the six months, payment shall be made in accordance with 6.5. 
 6.7 If shares of Stock are payable in connection with phantom shares that are subject to a multiplier and the number of shares
actually payable has not been determined at the date scheduled for payment the following shall apply: 
 (a) If benefits are
payable in a lump sum, the shares shall be paid within 90 days after the applicable multiplier has been determined. 
 (b) If
benefits are payable in installments, the shares subject to a multiplier shall be disregarded for purposes of calculating the amount of the installment, but shall be included for purposes of calculating the amount of installments payable on or after
the date the multiplier is applied. 
 6.8 The Employer shall withhold from benefit payments to the Participant any
amount required by law. 
  

	 	7.	Payment to a Beneficiary or a Former Spouse. 

 7.1 On the Participant’s death, a benefit equal to the Participant’s Account shall be paid in cash and shares of Stock, as applicable, to the Participant’s Beneficiary in the same form applicable
to the Participant because of Termination. If the Participant had started payments in installments, payments shall continue in accordance with the Participant’s election. 
 7.2 “Beneficiary” means the person or persons named by the Participant in the most recent designation filed by the
Participant with the Committee. If the Participant was married at the time a designation of a spouse Beneficiary was made and is no longer married to that spouse at the time of death, the benefit shall be paid as though the former spouse predeceased
the Participant unless the Participant files a new beneficiary designation after divorce that names the former spouse as beneficiary. If no Beneficiary has been designated or all designated Beneficiaries have died prior to the Participant’s
death, the Beneficiary shall be determined in the following order of priority: 
 (a) The Participant’s surviving spouse.

  

 11 

 (b) The Participant’s surviving children in equal shares. 
 (c) The Participant’s surviving parents in equal shares. 
 (d) The Participant’s estate. 
 7.3 If a Beneficiary dies after the Participant and before the entire benefit of the Beneficiary has been paid, it shall be paid in a lump sum as soon as practicable to the estate of the deceased Beneficiary.

 7.4 Payments may be made to a spouse or former spouse in connection with a divorce in accordance with a qualified
domestic relations order as defined in section 206(d)(3) of ERISA and procedures adopted by the Committee. Reference to section 206(d)(3) is for purposes of specifying administrative requirements and procedures and shall not be interpreted to mean
that any ERISA requirements apply or are incorporated into the Plan. The reference shall not give any person any rights under ERISA. 
  

	 	8.	Unscheduled Payments. 

 8.1 A
Participant may elect to be paid the entire Account balance in a lump sum in cash at any time before the Account would otherwise be payable, subject to the following: 
 (a) Ten percent of the payment shall be forfeited as a penalty for early withdrawal. 
 (b) The provisions of 8.1 are applicable only to amounts that were credited to a Participant’s account as of December 31, 2004
(and subsequent related earnings credits) with respect to services performed before January 1, 2005, pursuant to the terms of the Plan in effect on October 3, 2004, and such amount shall constitute the “entire Account balance”
eligible for payment. 
 (c) The provisions of 8.1 are not applicable to Participants who were eligible to change elections
before December 31, 2007 pursuant to any special transition rule under section 409A of the Code or related proposed or final regulations or Internal Revenue Service Notices, whether or not the Participant actually changed an election.

 8.2 A Participant may be paid amounts up to 100 percent of the vested Account balance because of Unforeseeable
Emergency, as determined by the Committee, before those amounts otherwise would have been paid, subject to the following: 
 (a) The payment shall be a lump sum in cash and shall be limited to the amount reasonably necessary to satisfy the emergency need, including amounts necessary to pay federal, state and local income taxes or penalties as reasonably
anticipated to result from the payment. 
  

 12 

 (b) “Unforeseeable Emergency” means a severe financial hardship to the extent
the hardship cannot be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the recipients’ assets (to the extent liquidation would not cause severe financial hardship), by cessation of deferrals under
the Plan for the remainder of the Plan Year, or from other reasonably available resources and is caused by one or more of the following: 
 (1) Illness or accident of the Participant or Beneficiary, or the spouse or dependent (as defined in section 152 of the Code without regard to sections 152(b)(1), (b)(2) and (d)(1)(B)) of the Participant.

 (2) Loss of or damage to a Participant’s or Beneficiary’s possessions or property due to casualty, including the
need to rebuild a home following damage to the home that is not covered by insurance. 
 (3) Other similar extraordinary and
unforeseeable circumstances arising from events beyond the Participant’s or Beneficiary’s control. 
 (c) Deferrals
of Salary shall cease for the remainder of the Plan Year. 
 (d) Deferrals may be ceased if cessation would meet the need,
either separately or together with payment of cash. If deferrals cease, they shall cease for the remainder of the Plan Year. 
 8.3 The Committee shall establish guidelines and procedures for implementing unscheduled payments. An application shall be written, be signed by the Participant or Beneficiary, and include a statement of facts concerning the
financial hardship, if applicable, and any other facts required by the Committee. 
 8.4 If the Company or the Internal
Revenue Service determines that any amount deferred under the Plan will be included in income because of section 409A of the Code prior to the time the amount is otherwise payable, the amount shall be paid to the Participant as soon as
practicable. 
  

	 	9.	Amendment; Termination. 

 9.1
The Board of Directors of the Company may amend this Plan effective the first day of any month by notice to the Participants. The CEO or delegate may amend the Plan to make technical, administrative or editorial changes on advice of legal counsel to
comply with applicable law or to clarify the Plan. No amendment may reduce the value of guideline investment funds or phantom shares of Stock credited to any Account as of the valuation date immediately preceding the effective date of the amendment.
No Participant shall have any rights to particular guideline investment funds or to have Accounts recorded in phantom shares. If the amendment ceases the deferral of compensation, but is not a termination under 9.2, the following shall apply:

 (a) Deferral credit shall continue in accordance with elections until the end of the Plan Year. 
  

 13 

 (b) Earnings credit shall continue in accordance with the provisions of the Plan, as
amended. 
 9.2 The Board of Directors of the Company may terminate the Plan and provide for payment of amounts under
all Accounts as follows: 
 (a) No payments other than payments that would be payable if the termination had not occurred will
be made within 12 months of the termination of the Plan. 
 (b) All payments shall be made within 24 months of the termination
of the Plan. 
 (c) Any amendments to the Plan in connection with termination shall not reduce amounts credited to Accounts,
and earnings credit shall continue pending full payment. 
  

	 	10.	Claims Procedure. 

 Any person
claiming a benefit or requesting an interpretation, ruling or information under the Plan shall present the request in writing to the Committee, and the procedures provided in Appendix A shall apply. The Committee may amend the procedures.

  

	 	11.	General Provisions. 

 11.1 If
suit or action is instituted to enforce any rights under this Plan, the prevailing party may recover from the other party reasonable attorneys’ fees at trial and on any appeal. 
 11.2 Any notice under this Plan shall be in writing and shall be effective when actually delivered or, if mailed, when deposited as
first class mail postage prepaid. Mail shall be directed to the Company at the address stated in this Plan, to the Participant’s last known home address shown in the Company’s records, or to such other address as a party may specify by
notice to the other parties. Notices to an Employer or the Committee shall be sent to the Company’s address. 
 11.3 The rights of a Participant under this Plan are personal. Except for the limited provisions of Section 7, no interest of a Participant or one claiming through a Participant may be directly or indirectly assigned,
transferred or encumbered and no such interest shall be subject to seizure by legal process or in any other way subjected to the claims of any creditor. A Participant’s rights to benefits payable under this Plan are not subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge or encumbrance, except as provided in 7.4. Such rights shall not be subject to the debts, contracts, liabilities, engagements or torts of the Participant or a Beneficiary. 
  

 14 

 11.4 Amounts payable under this Plan shall be a general obligation of the Company
and paid out of its general assets. If an Employer merges, consolidates, or otherwise reorganizes or if its business or assets are acquired by another company, this Plan shall continue with respect to those eligible individuals who continue in the
employ of the successor company. The transition of Employers shall not be considered a termination of employment for purposes of this Plan. In such an event, however, a successor corporation may terminate this Plan as to its Participants on the
effective date of the succession by notice to Participants within 30 days after the succession. 
 11.5 The Committee
may decide that because of the mental or physical condition of a person entitled to payments, or because of other relevant factors, it is in the person’s best interest to make payments to others for the benefit of the person entitled to
payment. In that event, the Committee may in its discretion direct that payments be made as follows: 
 (a) To a parent or
spouse or a child of legal age; 
 (b) To a legal guardian; or 
 (c) To one furnishing maintenance, support, or hospitalization. 
  

									
	Company	 		 	ELECTRO SCIENTIFIC INDUSTRIES, INC.
					
		 		 		 	By: 	 	NICK KONIDARIS
		 		 		 		 	Nick Konidaris
				
		 		 		 	Date signed:  2/26/08

  

 15 

 Appendix A 
 to 
 Electro Scientific Industries, Inc. 
 Deferred Compensation Plan 
 Claims Procedure 
  

	1.	Filing a Claim. 

 If you claim a benefit or have a
question about the Plan, you should contact the head of Human Resources, as representative of the Committee. Most claims and questions will be resolved informally. If you wish to present a formal claim, put it in writing and give it to the
representative to forward to the Committee Chair, who will respond as soon as practicable, but not later than 90 days after receipt of your claim unless the Plan gives written notice before the end of the 90-day period that additional time is
required. The notice will explain the special circumstances that require additional time and the expected date of the response. The extension will not be more than an additional 90 days. 
 If an extension is necessary to obtain information from you, the extension period may be further extended by the amount of time you take to provide the
specified information. 
 You may have a representative to assist you or to conduct the claim, and review of any denial, for you. The
Committee Chair may require that you notify the Committee Chair in writing about your authorization of a representative. 
 Determinations
about your claim will be based on and in accordance with plan documents and will be applied consistently with respect to similarly situated Participants and beneficiaries. 
  

	2.	Claim Denial. 

 If your claim is denied, the
Committee Chair will notify you in writing. The notice will state the following: 
  

	 	(a)	The specific reasons for the denial. 

  

	 	(b)	Reference to the relevant Plan provisions. 

  

	 	(c)	A description of additional material or information that is needed and an explanation of why the material or information is needed. 

  

	 	(d)	A description of the Plan’s review procedures and your right to bring a civil action under section 502(a) of the Employee Retirement Income Security Act of 1974 (ERISA) if
your claim is also denied after review. 

 If your claim involves benefits upon disability, you will be notified if any
internal rule, guideline, protocol or other similar criterion was relied upon in the decision to deny your claim, and that you may have a copy of any such rule, guideline, protocol or other criterion free of charge upon request. 
  

 16 

	3.	Review of Claim Denial. 

 If you make a claim and it
is denied, you may ask for review by written notice to the Committee. If your claim is denied, you must request review in writing within 60 days. If you fail to request review of a denied claim within the applicable deadline, you will lose
your right to bring an action in court. The full Committee will review the matter and may grant you a hearing, but is not required to. The following apply in connection with the review: 
  

	 	(a)	You may submit written comments, documents, records and other information. 

  

	 	(b)	Upon your request, you will be provided, without charge, reasonable access to, and copies of, all documents, records and other information relevant to your claim.

  

	 	(c)	If your claim involves a determination of disability, upon your request, you will be provided with the identity of medical or vocational experts who advised the Plan, whether or not
the advice was relied upon in deciding to deny your claim. 

  

	 	(d)	The review will consider all aspects of your claim and all comments, documents, records and other information that you submit, whether or not you raised the issues or submitted such
information when your claim was originally considered. 

  

	4.	Decision Upon Review. 

 The decision on review will
be made within 60 days after receipt of your request for review in most cases. If there is a hearing or other special reason for delay, you will be so notified in writing or by electronic notice within the initial 60-day period and the time
limit will be 120 days. The notice of any extension will explain the special circumstances that require additional time and the expected date of the decision upon review. If an extension is necessary to obtain information from you, the
extension period may be further extended by the amount of time you take to provide the information. 
 The Committee’s decision will be
provided in writing and will be final and bind all parties. An adverse determination will state the following: 
  

	 	(a)	The specific reasons for the determination. 

  

	 	(b)	Reference to relevant Plan provisions. 

  

	 	(c)	A reminder that you are entitled to access to and copies of all documents, records and information relevant to your claim upon request and without charge. 

 

	 	(d)	A reminder that you may bring a civil action under section 502(a) of ERISA. 

  

 17

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