Document:

a6705370ex4-1.htm

Exhibit 4.1

 

PAPA JOHN’S INTERNATIONAL, INC.

2011 OMNIBUS INCENTIVE PLAN

 

 

 

 

  

  

  

TABLE OF CONTENTS

 

	  	  	  	

Page

	
1.

	
PURPOSE

	
1

	
2.

	
DEFINITIONS

	
1

	
3.

	
ADMINISTRATION OF THE PLAN

	
4

	  	
3.1.

	
Committee

	
4

	  	
3.2.

	
Board

	
5

	  	
3.3.

	
Terms of Awards

	
5

	  	
3.4.

	
No Repricing

	
6

	  	
3.5.

	
Deferral Arrangement

	
6

	  	
3.6.

	
No Liability

	
6

	  	
3.7.

	
Stock Issuance; Book-Entry

	
6

	
4.

	
STOCK SUBJECT TO THE PLAN

	
7

	  	
4.1.

	
Number of Shares of Stock Available for Awards

	
7

	  	
4.2.

	
Adjustments in Authorized Shares of Stock

	
7

	  	
4.3.

	
Share Usage

	
7

	
5.

	
EFFECTIVE DATE, DURATION AND AMENDMENTS

	
8

	  	
5.1.

	
Effective Date

	
8

	  	
5.2.

	
Term

	
8

	  	
5.3.

	
Amendment and Termination

	
8

	
6.

	
AWARD ELIGIBILITY AND LIMITATIONS

	
8

	  	
6.1.

	
Service Providers and Other Persons

	
8

	  	
6.2.

	
Limitation on Shares of Stock Subject to Awards and Cash Awards

	
8

	  	
6.3.

	
Stand-Alone, Additional, Tandem and Substitute Awards

	
9

	
7.

	
AWARD AGREEMENT

	
9

	
8.

	
TERMS AND CONDITIONS OF OPTIONS

	
9

	  	
8.1.

	
Option Price

	
9

	  	
8.2.

	
Vesting

	
9

	  	
8.3.

	
Term

	
9

	  	
8.4.

	
Termination of Service

	
10

	  	
8.5.

	
Limitations on Exercise of Option

	
10

	  	
8.6.

	
Method of Exercise

	
10

	  	
8.7.

	
Rights of Holders of Options

	
10

	  	
8.8.

	
Delivery of Stock

	
10

	  	
8.9.

	
Transferability of Options

	
10

	  	
8.10.

	
Family Transfers

	
10

	  	
8.11.

	
Limitations on Incentive Stock Options

	
11

	  	
8.12.

	
Notice of Disqualifying Disposition

	
11

	
9.

	
TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

	
11

	  	
9.1.

	
Right to Payment and Grant Price

	
11

	  	
9.2.

	
Other Terms

	
11

	  	
9.3.

	
Term

	
11

	  	
9.4.

	
Transferability of SARS

	
11

	  	
9.5.

	
Family Transfers

	
12

	
10.

	
TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS

	
12

	  	
10.1.

	
Grant of Restricted Stock or Stock Units

	
12

	  	
10.2.

	
Restrictions

	
12

	  	
10.3.

	
Restricted Stock Certificates; Book-Entry Registration

	
12

	  	
10.4.

	
Rights of Holders of Restricted Stock

	
12

	  	
10.5.

	
Rights of Holders of Stock Units

	
13

	  	  	
10.5.1.

	
Voting and Dividend Rights

	
13

	  	  	
10.5.2.

	
Creditor’s Rights

	
13

	  	
10.6.

	
Termination of Service

	
13

	  	
10.7.

	
Purchase of Restricted Stock and Shares of Stock Subject to Stock Units

	
13

	  	
10.8.

	
Delivery of Shares of Stock

	
13

 

  

  

  

 

	  	  	  	

Page

	
11.

	
TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS AND OTHER EQUITY-BASED AWARDS

	
13

	
12.

	
FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

	
14

	  	
12.1.

	
General Rule

	
14

	  	
12.2.

	
Surrender of Shares of Stock

	
14

	  	
12.3.

	
Cashless Exercise

	
14

	  	
12.4.

	
Other Forms of Payment

	
14

	
13.

	
TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS

	
14

	  	
13.1.

	
Dividend Equivalent Rights   

	
14

	  	
13.2.

	
Termination of Service

	
15

	
14.

	
TERMS AND CONDITIONS OF PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS

	
15

	  	
14.1.

	
Grant of Performance Awards and Annual Incentive Awards

	
15

	  	
14.2.

	
Value of Performance Awards and Annual Incentive Awards

	
15

	  	
14.3.

	
Earning of Performance Awards and Annual Incentive Awards

	
15

	  	
14.4.

	
Form and Timing of Payment of Performance Awards and Annual Incentive Awards

	
15

	  	
14.5.

	
Performance Conditions

	
15

	  	
14.6.

	
Performance Awards or Annual Incentive Awards Granted to Designated Covered Employees

	
15

	  	  	
14.6.1.

	
Performance Goals Generally

	
16

	  	  	
14.6.2.

	
Timing For Establishing Performance Goals

	
16

	  	  	
14.6.3.

	
Settlement of Awards; Other Terms

	
16

	  	  	
14.6.4.

	
Performance Measures

	
16

	  	  	
14.6.5.

	
Evaluation of Performance

	
17

	  	  	
14.6.6.

	
Adjustment of Performance-Based Compensation

	
17

	  	  	
14.6.7.

	
Committee Discretion

	
18

	  	
14.7.

	
Status of Awards Under Code Section 162(m)

	
18

	
15.

	
PARACHUTE LIMITATIONS

	
18

	
16.

	
REQUIREMENTS OF LAW

	
18

	  	
16.1.

	
General

	
18

	  	
16.2.

	
Rule 16b-3

	
19

	
17.

	
EFFECT OF CHANGES IN CAPITALIZATION

	
19

	  	
17.1.

	
Changes in Stock

	
19

	  	
17.2.

	
Reorganization in Which the Company Is the Surviving Entity Which Does not Constitute a Corporate Transaction

	
20

	  	
17.3.

	
Corporate Transaction in which Awards are not Assumed

	
20

	  	
17.4.

	
Corporate Transaction in which Awards are Assumed

	
21

	  	
17.5.

	
Adjustments

	
21

	  	
17.6.

	
No Limitations on Company

	
21

	
18.

	
GENERAL PROVISIONS

	
21

	  	
18.1.

	
Disclaimer of Rights

	
21

	  	
18.2.

	
Nonexclusivity of the Plan

	
22

	  	
18.3.

	
Withholding Taxes

	
22

	  	
18.4.

	
Captions

	
22

	  	
18.5.

	
Other Provisions

	
22

	  	
18.6.

	
Number and Gender

	
22

	  	
18.7.

	
Severability

	
23

	  	
18.8.

	
Governing Law

	
23

	  	
18.9.

	
Section 409A of the Code

	
23

 

  

  

  

 

PAPA JOHN’S INTERNATIONAL, INC.

2011 OMNIBUS INCENTIVE PLAN

 

Papa John’s International, Inc., a Delaware corporation (the “Company”), sets forth herein the terms of its 2011 Omnibus Incentive Plan (the “Plan”), as follows:

 

	
1.

	
PURPOSE

 

The Plan is intended to (a) provide eligible persons with an incentive to contribute to the success of the Company and to operate and manage the Company’s business in a manner that will provide for the Company’s long-term growth and profitability, and (b) provide a means of obtaining, rewarding and retaining key personnel. To this end, the Plan provides for the grant of awards of stock options, stock appreciation rights, restricted stock, stock units (including deferred stock units), unrestricted stock, dividend equivalent rights, other equity-based awards and cash bonus awards. Any of these awards may, but need not, be made as performance incentives to reward the holders of such awards for the achievement of annual or long-term performance goals in accordance with the terms of the Plan. Stock options granted under the Plan may be non-qualified stock options or incentive stock options, as provided herein.

 

	
2.

	
DEFINITIONS

 

For purposes of interpreting the Plan and related documents (including Award Agreements), the following definitions shall apply:

 

2.1  “Affiliate” means any company or other trade or business that controls, is controlled by or is under common control with the Company within the meaning of Rule 405 of Regulation C under the Securities Act, including any Subsidiary. For purposes of grants of Options or Stock Appreciation Rights, an entity may not be considered an Affiliate unless the Company holds a “controlling interest” in such entity within the meaning of Treasury Regulation Section 1.414(c)-2(b)(2)(i), provided that (a) except as specified in clause (b) below, an interest of “at least 50 percent” shall be used instead of an interest of “at least 80 percent” in each case where “at least 80 percent” appears in Treasury Regulation Section 1.414(c)-2(b)(2)(i) and (b) where the grant of Options or Stock Appreciation Rights is based upon a legitimate business criterion, an interest of “at least 20 percent” shall be used instead of an interest of “at least 80 percent” in each case where “at least 80 percent” appears in Treasury Regulation Section 1.414(c)-2(b)(2)(i).

 

2.2  “Annual Incentive Award” means an Award, denominated in cash, made subject to the attainment of performance goals (as provided in Section 14) over a Performance Period of up to one (1) year, which shall be the Company’s fiscal year, unless otherwise specified by the Committee.

 

2.3  “Applicable Laws” means the legal requirements relating to the Plan and the Awards under (a) applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders of any jurisdiction applicable to Awards granted to residents therein and (b) the rules of any stock exchange on which the Stock is listed.

 

2.4  “Award” means a grant under the Plan of an Option, a Stock Appreciation Right, Restricted Stock, a Stock Unit, Unrestricted Stock, a Dividend Equivalent Right, a Performance Award, an Other Equity-Based Award, an Annual Incentive Award or cash.

 

2.5  “Award Agreement” means the agreement between the Company and a Grantee that evidences and sets out the terms and conditions of an Award.

 

2.6  “Benefit Arrangement” shall have the meaning set forth in Section 15.

 

2.7  “Board” means the Board of Directors of the Company.

 

2.8  “Cause” means, as determined by the Board and unless otherwise provided in an applicable agreement between the Grantee and the Company or an Affiliate, (i) gross negligence or willful misconduct in connection with the performance of duties; (ii) conviction of a criminal offense (other than minor traffic offenses); or (iii) material breach of any term of any employment, consulting or other services, confidentiality, intellectual property or non-competition agreements, if any, between the Service Provider and the Company or an Affiliate.

 

2.9  “Code” means the Internal Revenue Code of 1986, as amended, as now in effect or as hereafter amended, and any successor thereto.

 

  

  

  

 

2.10  “Committee” means a committee of, and designated from time to time by resolution of, the Board, which shall be constituted as provided in Section 3.1 (or, if no Committee has been so designated, the entire Board itself).

 

2.11  “Company” means Papa John’s International, Inc., a Delaware corporation.

 

2.12  “Corporate Transaction” means (i) the dissolution or liquidation of the Company or a merger, consolidation, or reorganization of the Company with one or more other entities in which the Company is not the surviving entity, (ii) a sale of substantially all of the assets of the Company to another person or entity, or (iii) any transaction (including without limitation a merger or reorganization in which the Company is the surviving entity) which results in any person or entity owning 50% or more of the combined voting power of all classes of stock of the Company.

 

2.13  “Covered Employee” means a Grantee who is a “covered employee” within the meaning of Code Section 162(m)(3).

 

2.14  “Disability” means, with respect to rules regarding expiration of an Incentive Stock Option following termination of the Grantee’s Service, the Grantee is unable to engage in any substantial gainful activity by reason of a medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.

 

2.15  “Dividend Equivalent Right” means a right, granted to a Grantee pursuant to Section 13, to receive cash, Stock, other Awards or other property equal in value to dividends or other periodic payments paid or made with respect to a specified number of shares of Stock.

 

2.16  “Effective Date” means April 28, 2011, the date on which the Plan was approved by the shareholders.

 

2.17  “Exchange Act” means the Securities Exchange Act of 1934, as amended, as now in effect or as hereafter amended.

 

2.18  “Fair Market Value” means the fair market value of a share of Stock for purposes of the Plan, which shall be determined as follows:

 

	
  

	
(a)

	
If on the Grant Date or other determination date the shares of Stock are listed on an established national or regional stock exchange (a “Stock Exchange”), or are publicly traded on an established securities market (a “Securities Market”), the Fair Market Value of a share of Stock shall be the closing price of the Stock as reported on such Stock Exchange or Securities Market (provided that if there is more than one such Stock Exchange or Securities Market, the Committee shall designate the appropriate Stock Exchange or Securities Market for purposes of the Fair Market Value determination) on the Grant Date or other determination date. If there is no such reported closing price on such date, the Fair Market Value of a share of Stock shall be, as determined by the Committee, the mean between (i) the highest bid price and the lowest asked price of the Stock as reported on such Stock Exchange or such Securities Market on such date or (ii) the high and low sale prices of the Stock as reported on such Stock Exchange or such Securities Market on such date, or if no sale of Stock shall have been so reported for such date, on the next preceding day on which any sale of Stock shall have been reported on such Stock Exchange or Securities Market.

 

	
  

	
(b)

	
If on such Grant Date or other determination date the shares of Stock are not listed on a Stock Exchange or publicly traded on a Securities Market, the Fair Market Value of a share of Stock shall be the value of the Stock as determined by the Committee by the reasonable application of a reasonable valuation method, in a manner consistent with Code Section 409A.

 

Notwithstanding this Section 2.18 or Section 18.3, for purposes of determining taxable income and the amount of the related tax withholding obligation pursuant to Section 18.3, for any shares of Stock subject to an Award that are sold by or on behalf of a Grantee on the same date on which such shares may first be sold pursuant to the terms of the related Award Agreement, the Fair Market Value of such shares shall be the sale price of such shares on such date (or if sales of such shares are effectuated at more than one sale price, the weighted average sale price of such shares on such date).

 

2.19  “Family Member” means, with respect to any Grantee as of any date of determination, (a) a person who is a spouse, former spouse, child, stepchild, grandchild, parent, stepparent, grandparent, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother, sister, brother-in-law, or sister-in-law, including adoptive relationships, of such Grantee, (b) any person sharing such Grantee’s household (other than a tenant or employee), (c) a trust in which any one or more of the persons specified in clauses (a) and (b) above (and such Grantee) own more than fifty percent (50%) of the beneficial interest, (d) a foundation in which any one or more of the persons specified in clauses (a) and (b) above (and such Grantee) control the management of assets, and (e) any other entity in which one or more of the persons specified in clauses (a) and (b) above (and such Grantee) own more than fifty percent (50%) of the voting interests.

 

  

2

  

 

2.20  “Grant Date” means, as determined by the Committee, the latest to occur of (a) the date as of which the Company completes the corporate action constituting the Award, or (b) such date subsequent to the date specified in clause (a) as may be specified by the Committee.

 

2.21  “Grantee” means a person who receives or holds an Award under the Plan.

 

2.22  “Incentive Stock Option” means an “incentive stock option” within the meaning of Code Section 422, or the corresponding provision of any subsequently enacted tax statute, as amended from time to time.

 

2.23  “Non-qualified Stock Option” means an Option that is not an Incentive Stock Option.

 

2.24  “Option” means an option to purchase one or more shares of Stock pursuant to the Plan.

 

2.25  “Option Price” means the exercise price for each share of Stock subject to an Option.

 

2.26  “Other Agreement” shall have the meaning set forth in Section 15.

 

2.27  “Outside Director” means a member of the Board who is not an officer or employee of the Company or any Subsidiary.

 

2.28  “Other Equity-Based Award” means an Award representing a right or other interest that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Stock, other than an Option, a Stock Appreciation Right, Restricted Stock, a Stock Unit, Unrestricted Stock, a Dividend Equivalent Right, a Performance Award or an Annual Incentive Award.

 

2.29  “Performance Award” means an Award made subject to the attainment of performance goals (as provided in Section 14) over a Performance Period of up to ten (10) years.

 

2.30  “Performance-Based Compensation” means compensation under an Award that is intended to satisfy the requirements of Code Section 162(m) for certain qualified performance-based compensation paid” to Covered Employees. Notwithstanding the foregoing, nothing in the Plan shall be construed to mean that an Award which does not satisfy the requirements for “qualified performance-based compensation” within the meaning of and pursuant to Code Section 162(m) does not constitute performance-based compensation for other purposes, including the purposes of Code Section 409A.

 

2.31  “Performance Measures” means measures as specified in Section 14 on which the performance goals under Performance Awards and Annual Incentive Awards are based and which are approved by the Company’s shareholders pursuant to the Plan in order to qualify such Performance Awards and Annual Incentive Awards as Performance-Based Compensation.

 

2.32  “Performance Period” means the period of time during which the performance goals under Performance Awards and Annual Incentive Awards must be met in order to determine the degree of payout and/or vesting with respect to any such Performance Awards or Annual Incentive Awards.

 

2.33  “Plan” means this Papa John’s International, Inc. 2011 Omnibus Incentive Plan, as amended from time to time.

 

2.34  “Prior Plan” means the Papa John’s International, Inc. 2008 Omnibus Incentive Plan.

 

2.35  “Purchase Price” means the purchase price, if any, for each share of Stock subject to an Award of Restricted Stock, Stock Units or Unrestricted Stock.

 

2.36  “Reporting Person” means a person who is required to file reports under Section 16(a) of the Exchange Act, or any successor provision.

 

2.37  “Restricted Stock” means shares of Stock awarded to a Grantee pursuant to Section 10.

 

2.38  “SAR Exercise Price” means the per share exercise price of a SAR granted to a Grantee pursuant to Section 9.

 

2.39  “Securities Act” means the Securities Act of 1933, as amended, as now in effect or as hereafter amended.

 

  

3

  

 

2.40  “Service” means service of a Grantee as a Service Provider to the Company or any Affiliate. Unless otherwise provided in the applicable Award Agreement, a Grantee’s change in position or duties with the Company or any Affiliate shall not result in interrupted or terminated Service, so long as the Grantee continues to be a Service Provider to the Company or any Affiliate. Any determination by the Committee whether a termination of Service shall have occurred for purposes of the Plan shall be final, binding and conclusive.

 

2.41  “Service Provider” means, as of any date of determination, an employee, officer, or director of the Company or an Affiliate, or a consultant (who is a natural person) or adviser (who is a natural person) of the Company or any Affiliate who provides services to the Company or any Affiliate.

 

2.42  “Stock” means the common stock, par value $0.01 per share, of the Company, or any security for which the shares of Stock may be exchanged or into which the shares of Stock may be converted.

 

2.43  “Stock Appreciation Right” or “SAR” means a right granted to a Grantee pursuant to Section 9.

 

2.44  “Stock Unit” means a bookkeeping entry representing the equivalent of one share of Stock awarded to a Grantee pursuant to Section 10.

 

2.45  “Subsidiary” means any corporation (other than the Company) or non-corporate entity with respect to which the Company and Subsidiaries collectively own, directly or indirectly, fifty percent (50%) or more of the total combined voting power of all classes of stock, membership interests or other ownership interests of any class or kind ordinarily having the power to vote for the directors, managers or other voting members of the governing body of such corporation or non-corporate entity. In addition, any other entity may be designated by the Committee as a Subsidiary, provided that (a) such entity could be considered as a subsidiary according to generally accepted accounting principles in the United States of America and (b) in the case of an Award of Options or Stock Appreciation Rights, such Award would be considered to be granted in respect of “service recipient stock” under Code Section 409A.

 

2.46  “Substitute Award” means an Award granted upon assumption of, or in substitution for, outstanding awards previously granted under a compensatory plan by a business entity acquired or to be acquired by the Company or an Affiliate or with which the Company or an Affiliate has combined or will combine.

 

2.47  “Ten Percent Shareholder” means a natural person who owns more than ten percent (10%) of the total combined voting power of all classes of outstanding voting securities of the Company, the Company’s parent (if any) or any of the Company’s Subsidiaries. In determining stock ownership, the attribution rules of Code Section 424(d) shall be applied.

 

2.48  “Unrestricted Stock” shall have the meaning set forth in Section 11.

 

Unless the context otherwise requires, all references in the Plan to “including” shall mean “including without limitation.”

 

References in the Plan to any Code Section shall be deemed to include, as applicable, regulations promulgated under such Code Section.

 

	
3.

	
ADMINISTRATION OF THE PLAN

 

	
3.1.

	
Committee.

 

The Committee shall administer the Plan and shall have such powers and authorities related to the administration of the Plan as are consistent with the Company’s articles of incorporation and bylaws and Applicable Laws. Without limiting the generality of the foregoing, the Committee shall have full power and authority to take all actions and to make all determinations required or provided for under the Plan, any Award or any Award Agreement, and shall have full power and authority to take all such other actions and make all such other determinations not inconsistent with the specific terms and provisions of the Plan which the Committee deems to be necessary or appropriate to the administration of the Plan, any Award or any Award Agreement. All such actions and determinations shall be made by (a) the affirmative vote of a majority of the members of the Committee present at a meeting, or (b) the unanimous consent of the members of the Committee executed in writing in accordance with the Company’s articles of incorporation and bylaws and Applicable Laws. Unless otherwise expressly determined by the Board, the interpretation and construction by the Committee of any provision of the Plan, any Award or any Award Agreement shall be final, binding and conclusive whether or not expressly provided for in any provision of the Plan, such Award or such Award Agreement.

 

  

4

  

 

In the event that the Plan, any Award or any Award Agreement provides for any action to be taken by or any determination to be made by the Board, such action may be taken or such determination may be made by the Committee or another committee constituted in accordance with Section 3.1 if the Board has delegated the power and authority to do so to the Committee or such other committee pursuant to this Section 3.1. Unless otherwise expressly determined by the Board, any such action or determination by the Committee or other committee shall be final, binding and conclusive whether or not expressly provided for in any provision of the Plan, such Award or such Award Agreement.

 

Except as provided in Section 3.2 and except as the Board may otherwise determine, the Committee shall consist of two or more Outside Directors of the Company who: (a) qualify as “outside directors” within the meaning of Section 162(m) of the Code and who (b) meet such other requirements as may be established from time to time by the Securities and Exchange Commission for plans intended to qualify for exemption under Rule 16b-3 (or its successor) under the Exchange Act and who (c) comply with the independence requirements of the stock exchange on which the Common Stock is listed.

 

The Board may also appoint one or more committees of the Board, each composed of one or more directors of the Company who need not be Outside Directors, who may administer the Plan with respect to employees or other Service Providers who are not “executive officers” as defined in Rule 3b-7 under the Exchange Act or directors of the Company, may grant Awards under the Plan to such employees or other Service Providers, and may determine all terms of such Awards, subject to the requirements of Code Section 162(m), Rule 16b-3 under the Exchange Act and, for so long as the Stock is listed thereon, the rules of the NASDAQ Stock Market. Any reference to “Committee” in the Plan, any Award or any Award Agreement shall be deemed, as applicable, to refer to any committee appointed by the Board pursuant to this Section 3.1.

 

	
3.2.

	
Board.

 

The Board from time to time may exercise all of the powers and authorities related to the administration and implementation of the Plan, as set forth in Section 3.1 and other applicable provisions, as the Board shall determine, consistent with the Company’s articles of incorporation and bylaws and Applicable Laws.

 

	
3.3.

	
Terms of Awards.

 

Subject to the other terms and conditions of the Plan, the Committee shall have full and final authority to:

 

	
  

	
(a)

	
designate Grantees;

 

	
  

	
(b)

	
determine the type or types of Awards to be made to a Grantee;

 

	
  

	
(c)

	
determine the number of shares of Stock to be subject to an Award;

 

	
  

	
(d)

	
establish the terms and conditions of each Award (including the Option Price of any Option), the nature and duration of any restriction or condition (or provision for lapse thereof) relating to the vesting, exercise, transfer, or forfeiture of an Award or the shares of Stock subject thereto, the treatment of an Award in the event of a Corporate Transaction (subject to applicable agreements), and any terms or conditions that may be necessary to qualify Options as Incentive Stock Options);

 

	
  

	
(e)

	
prescribe the form of each Award Agreement evidencing an Award; and

 

	
  

	
(f)

	
amend, modify, reprice (except as such practice is prohibited by Section 3.4 herein), or supplement the terms of any outstanding Award, which authority shall include the authority, in order to effectuate the purposes of the Plan but without amending the Plan, to make Awards or to modify outstanding Awards made to eligible natural persons who are foreign nationals or are natural persons who are employed outside the United States to reflect differences in local law, tax policy, or custom, provided that, notwithstanding the foregoing, no amendment, modification or supplement of the terms of any outstanding Award shall, without the consent of the Grantee thereof, impair the Grantee’s rights under such Award.

 

The Committee shall have the right, in its discretion, to make Awards in substitution or exchange for any award granted under another compensatory plan of the Company, any Affiliate, or any business entity acquired or to be acquired by the Company or an Affiliate or with which the Company or an Affiliate has combined or will combine, except as such practice is prohibited by Section 3.4 herein. The Committee may reserve the right in an Award Agreement to cause a forfeiture of the gain realized by a Grantee with respect to an Award thereunder on account of actions taken by such Grantee in violation or breach of or in conflict with any employment agreement, non-competition agreement, agreement prohibiting solicitation of employees or clients of the Company or any Affiliate, confidentiality obligation with respect to the Company or any Affiliate, or other agreement, as and to the extent specified in such Award Agreement. The Committee may annul an outstanding Award if the Grantee thereof is an employee of the Company or an Affiliate and is terminated for Cause as defined in the Plan or the applicable Award Agreement or for “cause” in any other agreement between the Company or such Affiliate and such Grantee, as applicable.

 

  

5

  

 

Any Award granted pursuant to the Plan, to the extent provided in any Award Agreement relating thereto, shall be subject to mandatory repayment by the Grantee of such Award to the Company to the extent that such Grantee is or in the future becomes subject to any Company “clawback” or recoupment policy that requires the repayment by such Grantee to the Company of compensation paid to such Grantee by the Company or an Affiliate in the event that such Grantee fails to comply with, or violates, the terms or requirements of such policy. Such policy may authorize the Company to recover from a Grantee incentive-based compensation (including Options awarded as compensation) awarded to or received by such Grantee during a period of up to three (3) years, as determined by the Committee, preceding the date on which the Company is required to prepare an accounting restatement due to material noncompliance by the Company, as a result of misconduct, with any financial reporting requirement under the federal securities laws.

 

If the Company is required to prepare an accounting restatement due to the material noncompliance by the Company, as a result of misconduct, with any financial reporting requirement under the federal securities laws, and any Award Agreement so provides, any Grantee of an Award under such Award Agreement who knowingly engaged in such misconduct, was grossly negligent in engaging in such misconduct, knowingly failed to prevent such misconduct or was grossly negligent in failing to prevent such misconduct, shall reimburse the Company the amount of any payment in settlement of such Award earned or accrued during the period of twelve (12) months following the first public issuance or filing with the United States Securities and Exchange Commission (whichever first occurred) of the financial document that contained information affected by such material noncompliance.

 

Notwithstanding any other provision of the Plan or any provision of any Award Agreement, if the Company is required to prepare an accounting restatement, then Grantees shall forfeit any cash or Stock received in connection with an Award (or an amount equal to the Fair Market Value of such Stock on the date of delivery thereof to the Grantee if the Grantee no longer holds the shares of Stock) if pursuant to the terms of the Award Agreement for such Award, the amount of the Award earned or the vesting in the Award was expressly based on the achievement of pre-established performance goals set forth in the Award Agreement (including earnings, gains, or other performance goals) that are later determined, as a result of the accounting restatement, not to have been achieved.

 

	
3.4.

	
No Repricing.

 

Notwithstanding anything in the Plan to the contrary, except in connection with a Corporate Transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding Awards may not be amended to reduce the exercise price of outstanding Options or SARs or cancel outstanding Options or SARS in exchange for cash, other Awards or Options or SARs with an exercise price that is less than the exercise price of the original Options or SARs without shareholder approval; provided, that this Section 3.4 shall not be deemed to limit the making of appropriate adjustments to outstanding Options and SARs as contemplated by Section 17.

 

	
3.5.

	
Deferral Arrangement.

 

The Committee may permit or require the deferral of any payment pursuant to any Award into a deferred compensation arrangement, subject to such rules and procedures as it may establish, which may include provisions for the payment or crediting of interest or Dividend Equivalents and, in connection therewith, provisions for converting such credits into deferred Stock equivalents and for restricting deferrals to comply with hardship distribution rules affecting tax-qualified retirement plans subject to Code Section 401(k)(2)(B)(IV), provided that no Dividend Equivalent Rights may be granted in connection with, or related to, an Award of Options or SARs. Any such deferrals shall be made in a manner that complies with Code Section 409A.

 

	
3.6.

	
No Liability.

 

No member of the Board or the Committee shall be liable for any action or determination made in good faith with respect to the Plan or any Award or Award Agreement.

 

	
3.7.

	
Stock Issuance; Book-Entry.

 

Notwithstanding any provision of the Plan to the contrary, the ownership of the shares of Stock issued under the Plan may be evidenced in such a manner as the Committee, in its discretion, deems appropriate, including by book-entry registration or by the issuance of one or more stock certificates.

 

  

6

  

 

	
4.

	
STOCK SUBJECT TO THE PLAN

 

	
4.1.

	
Number of Shares of Stock Available for Awards.

 

(a)           Subject to such additional Shares as shall be available for issuance under the Plan pursuant to Section 4.2, and subject to adjustment pursuant to Section 17, the maximum number of shares of Stock available for issuance under the Plan shall be equal to two million seven hundred fifty thousand (2,750,000) shares, plus the number of shares of Stock available for awards under the Prior Plan as of the Effective Date and the number of shares of Stock subject to awards outstanding under the Prior Plan as of the Effective Date which thereafter (i) terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such shares, (ii) are settled in cash in lieu of such shares or (iii) are exchanged for the Committee’s permission, before the issuance of such shares, for compensatory awards not involving shares.

 

(b)           Subject to adjustment as provided in Section 17, the aggregate number of shares of Stock available for issuance pursuant to Incentive Stock Options shall be two million seven hundred fifty thousand (2,750,000).

 

(c)           Shares of Stock to be issued under the Plan shall be authorized but unissued shares, or, to the extent permitted by Applicable Laws, shares of treasury stock and issued shares that have been reacquired by the Company.

 

	
4.2.

	
Adjustments in Authorized Shares of Stock.

 

In connection with mergers, reorganizations, separations, or other transactions involving the Company or a Subsidiary to which Code Section 424(a) applies, the Committee shall have the right to cause the Company to assume awards previously granted under a compensatory plan by another business entity acquired by the Company or such Subsidiary to substitute Awards under the Plan therefor. The number of shares of Stock available for issuance under the Plan pursuant to Section 4.1(a) shall be increased by the number of shares of Stock subject to any such assumed awards and substitute Awards. Shares available for issuance under a shareholder-approved plan of a business entity acquired by the Company or a Subsidiary (as appropriately adjusted to reflect the transaction pursuant to which such business entity is acquired) may be used for Awards under the Plan and shall not reduce the number of shares of Stock otherwise available for issuance under the Plan, subject to applicable rules of any stock exchange on which the Stock is listed.

 

	
4.3.

	
Share Usage.

 

(a)           Shares of Stock subject to an Award shall be counted as used as of the Grant Date.

 

(b)           Any shares of Stock that are subject to Awards of Options shall be counted against the share issuance limit set forth in Section 4.1(a) as one (1) share of Stock for every one (1) share of Stock subject to an Award. Any shares of Stock that are subject to Awards other than Options or Stock Appreciation Rights shall be counted against the limit set forth in Section 4.1(a) as 2.15 shares for every one (1) share granted. With respect to SARs, the number of shares of Stock subject to an award of SARs shall be counted against the aggregate number of shares of Stock available for issuance under the Plan regardless of the number of shares of Stock actually issued to settle such SARs upon exercise.

 

(c)           Any shares of Stock related to Awards under the Plan or awards outstanding under Prior Plan as of the Effective Date which thereafter terminate by expiration, forfeiture, cancellation, or otherwise without the issuance of such shares shall be available again for grant under the Plan, provided that any shares subject to an Award granted under the Prior Plan shall be available for making Awards under the Plan in the same amount as such shares were counted against the share limits set forth in the Prior Plan.

 

(d)           The number of shares of Stock available for issuance under the Plan shall not be increased by the number of shares of Stock (i) tendered or withheld or subject to an Award surrendered in connection with the purchase of shares of Stock upon exercise of an Option as provided in Section 12.2, (ii) deducted or delivered from payment of an Award in connection with the Company’s tax withholding obligations as provided in Section 18.3 or (iii) purchased by the Company with proceeds from Option exercises.

 

  

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5.

	
EFFECTIVE DATE, DURATION AND AMENDMENTS

 

	
5.1.

	
Effective Date.

 

The Plan shall be effective as of the Effective Date. Following the Effective Date, no awards shall be made under the Prior Plan.

 

	
5.2.

	
Term.

 

The Plan shall terminate automatically seven (7) years after the Effective Date and may be terminated on any earlier date as provided in Section 5.3.

 

	
5.3.

	
Amendment and Termination.

 

The Board may, at any time and from time to time, amend, suspend or terminate the Plan as to any shares of Stock as to which Awards have not been made. The effectiveness of any amendment to the Plan shall be contingent on approval of such amendment by the Company’s shareholders to the extent provided by the Board or required by Applicable Laws (including the rules of any stock exchange on which the Stock is then listed), provided that no amendment shall be made to the no-repricing provisions of Section 3.4 or the Option pricing provisions of Section 8.1 without the approval of the Company’s shareholders. No amendment, suspension or termination of the Plan shall impair rights or obligations under any Award theretofore awarded under the Plan without the consent of the Grantee thereof.

 

	
6.

	
AWARD ELIGIBILITY AND LIMITATIONS

 

	
6.1.

	
Service Providers and Other Persons.

 

Subject to this Section 6, Awards may be made under the Plan to any Service Provider, as the Committee shall determine and designate from time to time.

 

	
6.2.

	
Limitation on Shares of Stock Subject to Awards and Cash Awards.

 

During any time when the Company has a class of equity securities registered under Section 12 of the Exchange Act:

 

	
  

	
(a)

	
the maximum number of shares of Stock subject to Options or SARs that may be granted under the Plan to any person eligible for an Award under Section 6 is three hundred fifty thousand (350,000) shares per 12 month period; provided, however, the maximum number of shares of Stock subject to Options or SARs that can be granted under the Plan to any person eligible for an Award under Section 6 in the year that the person is first employed by the Company is five hundred thousand (500,000);

 

	
  

	
(b)

	
the maximum number of shares of Stock that may be granted under the Plan, other than pursuant to Options or SARs, to any person eligible for an Award under Section 6 is one hundred seventy five thousand (175,000) shares per 12 month period; provided, however, the maximum number of shares of Stock subject to Awards other than Options or SARs that can be granted under the Plan to any person eligible for an Award under Section 6 in the year that the person is first employed by the Company is two hundred fifty thousand (250,000); and

 

	
  

	
(c)

	
the maximum amount that may be paid as an Annual Incentive Award per 12 month period to any person eligible for an Award shall be $3 million and the maximum amount that may be paid as a cash-settled Performance Award in respect of a performance period by any person eligible for an Award shall be $9 million.

 

The preceding limitations in this Section 6.2 are subject to adjustment as provided in Section 17.

 

  

8

  

 

	
6.3.

	
Stand-Alone, Additional, Tandem and Substitute Awards.

 

Subject to Section 3.4, Awards granted under the Plan may, in the discretion of the Committee, be granted either alone or in addition to, in tandem with, or in substitution or exchange for, (a) any other Award, (b) any award granted under another plan of the Company, any Affiliate, or any business entity to be acquired by the Company or any Affiliate, or (c) any other right of a Grantee to receive payment from the Company or any Affiliate. Such additional, tandem and substitute or exchange Awards may be granted at any time. Subject to Section 3.4, if an Award is granted in substitution or exchange for another Award, or for an award granted under another plan of the Company, any Affiliate, or any business entity acquired by the Company or any Affiliate, the Committee shall require the surrender of such other Award or award under such other plan in consideration for the grant of such substitute or exchange Award. In addition, Awards may be granted in lieu of cash compensation, including in lieu of cash payments under other plans of the Company or any Affiliate. Notwithstanding Section 8.1 and Section 9.1, but subject to Section 3.4, the Option Price of an Option or the grant price of an SAR that is a Substitute Award may be less than one hundred percent (100%) of the Fair Market Value of a share of Stock on the original Grant Date; provided that, the Option Price or grant price is determined in accordance with the principles of Code Section 424 for any Incentive Stock Option and consistent with Code Section 409A for any other Option or SAR.

 

	
7.

	
AWARD AGREEMENT

 

Each Award granted pursuant to the Plan shall be evidenced by an Award Agreement, which shall be in such form or forms as the Committee shall from time to time determine. Award Agreements employed under the Plan from time to time or at the same time need not contain similar provisions but shall be consistent with the terms of the Plan. Each Award Agreement evidencing an Award of Options shall specify whether such Options are intended to be Non-qualified Stock Options or Incentive Stock Options, and in the absence of such specification, such Options shall be deemed to constitute Non-qualified Stock Options.

 

	
8.

	
TERMS AND CONDITIONS OF OPTIONS

 

	
8.1.

	
Option Price.

 

The Option Price of each Option shall be fixed by the Committee and stated in the Award Agreement evidencing such Option. Except in the case of Substitute Awards, the Option Price of each Option shall be at least the Fair Market Value of a share of Stock on the Grant Date; provided, that in the event that a Grantee is a Ten Percent Shareholder, the Option Price of an Option granted to such Grantee that is intended to be an Incentive Stock Option shall be not less than one hundred ten percent (110%) of the Fair Market Value of a share of Stock on the Grant Date. In no case shall the Option Price of any Option be less than the par value of a share of Stock.

 

	
8.2.

	
Vesting.

 

Subject to Sections 8.3 and 17.3, each Option granted under the Plan shall become exercisable at such times and under such conditions as shall be determined by the Committee and stated in the Award Agreement. For purposes of this Section 8.2, fractional numbers of shares of Stock subject to an Option shall be rounded down to the next nearest whole number.

 

	
8.3.

	
Term.

 

Each Option granted under the Plan shall terminate, and all rights to purchase shares of Stock thereunder shall cease, upon the expiration of ten (10) years from the Grant Date of such Option, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and stated in the Award Agreement relating to such Option; provided, that in the event that the Grantee is a Ten Percent Shareholder, an Option granted to such Grantee that is intended to be an Incentive Stock Option shall not be exercisable after the expiration of five (5) years from its Grant Date. If on the day preceding the date on which a Grantee’s Options would otherwise terminate, the Fair Market Value of shares of stock underlying a Grantee’s Options is greater than the Option Price of such Options, the Company shall, prior to the termination of such Options and without any action being taken on the part of the Grantee, consider such Options to have been exercised by the Grantee. The Company shall deduct from the shares of Stock deliverable to the Grantee upon such exercise the number of shares of Stock necessary to satisfy payment of the Option Price and all withholding obligations.

 

  

9

  

 

	
8.4.

	
Termination of Service.

 

Each Award Agreement with respect to the grant of an Option shall set forth the extent to which the Grantee thereof, if at all, shall have the right to exercise such Option following termination of such Grantee’s Service. Such provisions shall be determined in the sole discretion of the Committee, need not be uniform among all Options issued pursuant to the Plan, and may reflect distinctions based on the reasons for termination of Service.

 

	
8.5.

	
Limitations on Exercise of Option.

 

Notwithstanding any other provision of the Plan, in no event may any Option be exercised, in whole or in part, prior to the date on which the Plan is approved by the shareholders of the Company as provided herein or after the occurrence of an event referred to in Section 17 which results in the termination of such Option.

 

	
8.6.

	
Method of Exercise.

 

Subject to the terms of Section 12 and Section 18.3, an Option that is exercisable may be exercised by the Grantee’s delivery to the Company or its designee or agent of notice of exercise on any business day, at the Company’s principal office or the office of such designee or agent, on the form specified by the Company and in accordance with any additional procedures specified by the Committee. Such notice shall specify the number of shares of Stock with respect to which such Option is being exercised and shall be accompanied by payment in full of the Option Price of the shares of Stock for which such Option is being exercised plus the amount (if any) of federal and/or other taxes which the Company may, in its judgment, be required to withhold with respect to the exercise of such Option.

 

	
8.7.

	
Rights of Holders of Options.

 

Unless otherwise stated in the applicable Award Agreement, a Grantee or other person holding or exercising an Option shall have none of the rights of a shareholder of the Company (for example, the right to receive cash or dividend payments or distributions attributable to the shares of Stock subject to such Option, to direct the voting of the shares of Stock subject to such Option, or to receive notice of any meeting of the Company’s shareholders) until the shares of Stock subject thereto are fully paid and issued to such Grantee or other person. Except as provided in Section 17, no adjustment shall be made for dividends, distributions or other rights with respect to any shares of Stock subject to an Option for which the record date is prior to the date of issuance of such shares of Stock.

 

	
8.8.

	
Delivery of Stock.

 

Promptly after the exercise of an Option by a Grantee and the payment in full of the Option Price with respect thereto, such Grantee shall be entitled to receive such evidence of such Grantee’s ownership of the shares of Stock subject to such Option as shall be consistent with Section 3.7.

 

	
8.9.

	
Transferability of Options.

 

Except as provided in Section 8.10 or in this Section 8.9, during the lifetime of a Grantee of an Option, only such Grantee (or, in the event of such Grantee’s legal incapacity or incompetency, such Grantee’s guardian or legal representative) may exercise such Option. Except as provided in Section 8.10 and transfers pursuant to domestic relations orders, no Option shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.

 

	
8.10.

	
Family Transfers.

 

If authorized in the applicable Award Agreement and by the Committee, in its sole discretion, a Grantee may transfer, not for value, all or part of an Option which is not an Incentive Stock Option to any Family Member. For the purpose of this Section 8.10, a transfer “not for value” is a transfer which is (a) a gift, (b) a transfer under a domestic relations order in settlement of marital property rights, or (c) unless Applicable Laws do not permit such transfer, a transfer to an entity in which more than fifty percent (50%) of the voting interests are owned by Family Members (and/or the Grantee) in exchange for an interest in such entity. Following a transfer under this Section 8.10, any such Option shall continue to be subject to the same terms and conditions as were applicable immediately prior to such transfer, and the shares of Stock acquired pursuant to such Option shall be subject to the same restrictions with respect to transfers of shares as would have applied to the Grantee thereof. Subsequent transfers of transferred Options shall be prohibited except to Family Members of the original Grantee in accordance with this Section 8.10 or by will or the laws of descent and distribution. The provisions of Section 8.4 relating to termination of Service shall continue to be applied with respect to the original Grantee of the Option, following which such Option shall be exercisable by the transferee only to the extent, and for the periods specified, in Section 8.4.

 

  

10

  

 

	
8.11.

	
Limitations on Incentive Stock Options.

 

An Option shall constitute an Incentive Stock Option only (a) if the Grantee of such Option is an employee of the Company or any corporate Subsidiary, (b) to the extent specifically provided in the related Award Agreement and (c) to the extent that the aggregate Fair Market Value (determined at the time such Option is granted) of the shares of Stock with respect to which all Incentive Stock Options held by such Grantee become exercisable for the first time during any calendar year (under the Plan and all other plans of the Company and its Affiliates) does not exceed $100,000. Except to the extent provided in the regulations under Code Section 422, this limitation shall be applied by taking Options into account in the order in which they were granted.

 

	
8.12.

	
Notice of Disqualifying Disposition.

 

If any Grantee shall make any disposition of shares of Stock issued pursuant to the exercise of an Incentive Stock Option under the circumstances provided in Code Section 421(b) (relating to certain disqualifying dispositions), such Grantee shall notify the Company of such disposition within ten (10) days thereof.

 

	
9.

	
TERMS AND CONDITIONS OF STOCK APPRECIATION RIGHTS

 

	
9.1.

	
Right to Payment and Grant Price.

 

A SAR shall confer on the Grantee to whom it is granted a right to receive, upon exercise thereof, the excess of (x) the Fair Market Value of one share of Stock on the date of exercise over (y) the SAR Exercise Price as determined by the Committee. The Award Agreement for a SAR shall specify the SAR Exercise Price, which shall be no less than the Fair Market Value of a share of Stock on the Grant Date of such SAR. SARs may be granted in tandem with all or part of an Option granted under the Plan or at any subsequent time during the term of such Option, in combination with all or part of any other Award or without regard to any Option or other Award; provided that a SAR that is granted subsequent to the Grant Date of a related Option must have a SAR Exercise Price that is no less than the Fair Market Value of one share of Stock on the Grant Date of such SAR.

 

	
9.2.

	
Other Terms.

 

The Committee shall determine, on the Grant Date or thereafter, the time or times at which and the circumstances under which a SAR may be exercised in whole or in part (including based on achievement of performance goals and/or future Service requirements), the time or times at which SARs shall cease to be or become exercisable following termination of Service or upon other conditions, the method of exercise, method of settlement, form of consideration payable in settlement, method by or forms in which shares of Stock shall be delivered or deemed to be delivered to Grantees, whether or not a SAR shall be granted in tandem or in combination with any other Award, and any and all other terms and conditions of any SAR.

 

	
9.3.

	
Term.

 

Each SAR granted under the Plan shall terminate, and all rights thereunder shall cease, upon the expiration of ten (10) years from the Grant Date of such SAR, or under such circumstances and on such date prior thereto as is set forth in the Plan or as may be fixed by the Committee and stated in the Award Agreement relating to such SAR. If on the day preceding the date on which a Grantee’s SAR would otherwise terminate, the Fair Market Value of shares of stock underlying a Grantee’s SAR is greater than the SAR Exercise Price, the Company shall, prior to the termination of such SAR and without any action being taken on the part of the Grantee, consider such SAR to have been exercised by the Grantee.

 

	
9.4.

	
Transferability of SARS.

 

Except as provided in Section 9.5 or this Section 9.4, during the lifetime of a Grantee of a SAR, only the Grantee (or, in the event of such Grantee’s legal incapacity or incompetency, such Grantee’s guardian or legal representative) may exercise such SAR. Except as provided in Section 9.5 and transfers pursuant to domestic relations orders, no SAR shall be assignable or transferable by the Grantee to whom it is granted, other than by will or the laws of descent and distribution.

 

  

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9.5.

	
Family Transfers.

 

If authorized in the applicable Award Agreement and by the Committee, in its sole discretion, a Grantee may transfer, not for value, all or part of a SAR to any Family Member. For the purpose of this Section 9.5, a transfer “not for value” is a transfer which is (a) a gift, (b) a transfer under a domestic relations order in settlement of marital property rights or (c) unless Applicable Laws do not permit such transfers, a transfer to an entity in which more than fifty percent (50%) of the voting interests are owned by Family Members (and/or the Grantee) in exchange for an interest in such entity. Following a transfer under this Section 9.5, any such SAR shall continue to be subject to the same terms and conditions as were in effect immediately prior to such transfer, and shares of Stock acquired pursuant to a SAR shall be subject to the same restrictions on transfers of shares as would have applied to the Grantee or such SAR. Subsequent transfers of transferred SARs shall be prohibited except to Family Members of the original Grantee in accordance with this Section 9.5 or by will or the laws of descent and distribution.

 

	
10.

	
TERMS AND CONDITIONS OF RESTRICTED STOCK AND STOCK UNITS

 

	
10.1.

	
Grant of Restricted Stock or Stock Units.

 

Awards of Restricted Stock or Stock Units may be made for consideration or for no consideration (other than par value of the shares of Stock, which shall be deemed paid by past or future Services by the Grantee to the Company or an Affiliate).

 

	
10.2.

	
Restrictions.

 

At the time a grant of Restricted Stock or Stock Units is made, the Committee may, in its sole discretion, (a) establish a period of time (a “restricted period”) applicable to such Restricted Stock or Stock Units and (b) prescribe restrictions in addition to or other than the expiration of the restricted period, including the satisfaction of corporate or individual performance goals, which may be applicable to all or any portion of such Restricted Stock or Stock Units as provided in Section 14. Notwithstanding the foregoing, Awards of Restricted Stock and Stock Units that vest solely by the passage of time shall not vest in full in less than three (3) years from the Grant Date (but may vest pro-rata during such period on a daily, monthly, annual or other basis), and Restricted Stock and Stock Units that vest upon achievement of performance goals shall not vest in full in less than one (1) year from the Grant Date; provided, that (i) up to ten percent (10%) of the maximum number of shares of Stock available for issuance under the Plan may be granted pursuant to the Plan without being subject to the foregoing restrictions, and (ii) any dividends or Dividend Equivalents issued in connection with any Award granted at any time under the Plan shall not be subject to or counted for either such restrictions or such ten percent (10%) share issuance limit. The foregoing ten percent (10%) share issuance limit shall be subject to the adjustment consistent with the adjustment provisions of Section 17.2 and the share usage rules of Section 4.3. No awards of Restricted Stock or Stock Units may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the restricted period or prior to the satisfaction of any other restrictions prescribed by the Committee with respect to such Awards other than transfers pursuant to domestic relations orders.

 

	
10.3.

	
Restricted Stock Certificates; Book-Entry Registration.

 

Subject to Section 3.7 and the immediately following sentence, the Company may issue, in the name of each Grantee to whom Restricted Stock has been granted, stock certificates representing the total number of shares of Restricted Stock granted to the Grantee, as soon as reasonably practicable after the Grant Date of such Restricted Stock. The Committee may provide in an Award Agreement that either (a) the Secretary of the Company shall hold such certificates for such Grantee’s benefit until such time as such shares of Restricted Stock are forfeited to the Company or the restrictions applicable thereto lapse and such Grantee shall deliver a stock power to the Company with respect to each certificate, or (b) such certificates shall be delivered to such Grantee, provided, that such certificates shall bear legends that comply with applicable securities laws and regulations and make appropriate reference to the restrictions imposed on such Award of Restricted Stock under the Plan and such Award Agreement. Pursuant to Section 3.7, to the extent Restricted Stock is represented by a book-entry, such book entry shall be notated to evidence the restrictions imposed on such Award of Restricted Stock under the Plan and the applicable Award Agreement.

 

	
10.4.

	
Rights of Holders of Restricted Stock.

 

Unless the Committee otherwise provides in an Award Agreement, holders of Restricted Stock shall have the right to vote such shares of Restricted Stock and the right to receive any dividends declared or paid with respect to such shares of Restricted Stock. The Committee may provide that any dividends paid on Restricted Stock must be reinvested in shares of Stock, which may or may not be subject to the same vesting conditions and restrictions as the vesting conditions and restrictions applicable to such Restricted Stock. All stock distributions, if any, received by a Grantee with respect to Restricted Stock as a result of any stock split, stock dividend, combination of stock, or other similar transaction shall be subject to the vesting conditions and restrictions applicable to such Restricted Stock.

 

  

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10.5.

	
Rights of Holders of Stock Units.

 

	
10.5.1.

	

Voting and Dividend Rights.

 

Holders of Stock Units shall have no rights as shareholders of the Company (for example, the right to receive cash or dividend payments or distributions attributable to the shares of Stock subject to such Stock Units, to direct the voting of the shares of Stock subject to such Stock Units, or to receive notice of any meeting of the Company’s shareholders). The Committee may provide in an Award Agreement evidencing a grant of Stock Units that the holder of such Stock Units shall be entitled to receive, upon the Company’s payment of a cash dividend on its outstanding shares of Stock, a cash payment for each Stock Unit which is equal to the per-share dividend paid on such shares of Stock. Such Award Agreement also may provide that such cash payment shall be deemed reinvested in additional Stock Units at a price per unit equal to the Fair Market Value of a share of Stock on the date that such cash dividend is paid.

 

	
10.5.2.

	

Creditor’s Rights.

 

A holder of Stock Units shall have no rights other than those of a general unsecured creditor of the Company. Stock Units represent an unfunded and unsecured obligation of the Company, subject to the terms and conditions of the applicable Award Agreement.

 

	
10.6.

	
Termination of Service.

 

Unless the Committee otherwise provides in an Award Agreement or in writing after such Award Agreement is entered into, but prior to termination of Grantee’s Service, upon the termination of such Grantee’s Service, any Restricted Stock or Stock Units held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of such Restricted Stock or Stock Units, the Grantee thereof shall have no further rights with respect thereto, including any right to vote such Restricted Stock or any right to receive dividends with respect to such Restricted Stock or Stock Units. If the Committee accelerates vesting of Restricted Stock or Stock Units, except (a) in the case of a Grantee’s death or disability, (b) acceleration required by binding commitments or agreements entered into by the Company prior to the Effective Date or (c) as specified in Section 17.2, the shares subject to such Restricted Stock or Stock Units shall be deducted from the ten percent (10%) share issuance limit set forth in Section 10.2.

 

	
10.7.

	
Purchase of Restricted Stock and Shares of Stock Subject to Stock Units.

 

The Grantee shall be required, to the extent required by Applicable Laws, to purchase the Restricted Stock or shares of Stock subject to vested Stock Units from the Company at a Purchase Price equal to the greater of (x) the aggregate par value of the shares of Stock represented by such Restricted Stock or Stock Units or (y) the Purchase Price, if any, specified in the Award Agreement relating to such Restricted Stock or Stock Units. The Purchase Price shall be payable in a form provided in Section 12 or, in the sole discretion of the Committee, in consideration for past or future Services rendered to the Company or an Affiliate.

 

	
10.8.

	
Delivery of Shares of Stock.

 

Upon the expiration or termination of any restricted period and the satisfaction of any other conditions prescribed by the Committee, the restrictions applicable to Restricted Stock or Stock Units settled in shares of Stock shall lapse, and, unless otherwise provided in the applicable Award Agreement, a book-entry registration or a stock certificate evidencing ownership of such shares of Stock shall, consistent with Section 3.7, be issued, free of all such restrictions, to the Grantee thereof or such Grantee’s beneficiary or estate, as the case may be. Neither the Grantee, nor the Grantee’s beneficiary or estate, shall have any further rights with regard to a Stock Unit once the shares of Stock represented by the Stock Unit has been delivered in accordance with this Section 10.8.

 

	
11.

	
TERMS AND CONDITIONS OF UNRESTRICTED STOCK AWARDS AND OTHER EQUITY- BASED AWARDS

 

The Committee may, in its sole discretion, grant (or sell at the par value of a share of Stock or such other higher purchase price determined by the Committee) an Award to any Grantee pursuant to which such Grantee may receive shares of Stock free of any restrictions (“Unrestricted Stock”) under the Plan, subject to the ten percent (10%) share issuance limit set forth in Section 10.2. Unrestricted Stock Awards may be granted or sold to any Grantee as provided in the immediately preceding sentence in respect of past or future Service and other valid consideration, or in lieu of, or in addition to, any cash compensation due to such Grantee.

 

  

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The Committee may, in its sole discretion, grant Awards in the form of Other Equity-Based Awards, as deemed by the Committee to be consistent with the purposes of the Plan. Awards granted pursuant to this Section 10.2 may be granted with vesting, value and/or payment contingent upon the achievement of one or more performance goals. The Committee shall determine the terms and conditions of Other Equity-Based Awards at the Grant Date or thereafter. Unless the Committee otherwise provides in an Award Agreement or in writing after such Award Agreement is issued, upon the termination of a Grantee’s Service, any Other Equity-Based Awards held by such Grantee that have not vested, or with respect to which all applicable restrictions and conditions have not lapsed, shall immediately be deemed forfeited. Upon forfeiture of any Other Equity-Based Award, the Grantee thereof shall have no further rights with respect to such Other Equity-Based Award.

 

	
12.

	
FORM OF PAYMENT FOR OPTIONS AND RESTRICTED STOCK

 

	
12.1.

	
General Rule.

 

Payment of the Option Price for the shares of Stock purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock shall be made in cash or in cash equivalents acceptable to the Company.

 

	
12.2.

	
Surrender of Shares of Stock.

 

To the extent that the applicable Award Agreement so provides, payment of the Option Price for shares of Stock purchased pursuant to the exercise of an Option or the Purchase Price for Restricted Stock may be made all or in part through the tender or attestation to the Company of shares of Stock, which shall be valued, for purposes of determining the extent to which such Option Price or Purchase Price has been paid thereby, at their Fair Market Value on the date of exercise or surrender.

 

	
12.3.

	
Cashless Exercise.

 

With respect to an Option only (and not with respect to Restricted Stock), to the extent permitted by Applicable Laws and to the extent the Award Agreement so provides, payment of the Option Price for shares of Stock purchased pursuant to the exercise of an Option may be made all or in part by delivery (on a form acceptable to the Committee) of an irrevocable direction to a licensed securities broker acceptable to the Company to sell shares of Stock and to deliver all or part of the proceeds of such sale to the Company in payment of such Option Price and any withholding taxes described in Section 18.3, or, with the consent of the Company, by issuing the number of shares of Stock equal in value to the difference between such Option Price and the Fair Market Value of the shares of Stock subject to the portion of such Option being exercised.

 

	
12.4.

	
Other Forms of Payment.

 

To the extent the Award Agreement so provides and/or unless otherwise specified in an Award Agreement, payment of the Option Price for shares of Stock purchased pursuant to exercise of an Option or the Purchase Price for Restricted Stock may be made in any other form that is consistent with Applicable Laws, including (a) Service to the Company or an Affiliate and (b) net exercise.

 

	
13.

	
TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT RIGHTS

 

	
13.1.

	
Dividend Equivalent Rights.

 

A Dividend Equivalent Right is an Award entitling the recipient thereof to receive credits based on cash distributions that would have been paid on the shares of Stock specified in the Dividend Equivalent Right (or other Award to which such Dividend Equivalent Right relates) if such shares of Stock had been issued to and held by the recipient of such Dividend Equivalent Right as of the record date. A Dividend Equivalent Right may be granted hereunder to any Grantee, provided that no Dividend Equivalent Rights may be granted in connection with, or related to, an Award of Options or SARs. The terms and conditions of Dividend Equivalent Rights shall be specified in the Award Agreement therefor. Dividend equivalents credited to the holder of a Dividend Equivalent Right may be paid currently (with or without being subject to forfeiture or a repayment obligation) or may be deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional Dividend Equivalent Rights. Any such reinvestment in additional shares of Stock shall be at the Fair Market Value thereof on the date of such reinvestment. Dividend Equivalent Rights may be settled in cash or shares of Stock or a combination thereof, in a single installment or in multiple installments, all as determined in the sole discretion of the Committee. A Dividend Equivalent Right granted as a component of another Award may provide that such Dividend Equivalent Right shall be settled upon exercise, settlement, or payment of, or lapse of restrictions on, such other Award, and that such Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as such other Award. A Dividend Equivalent Right granted as a component of another Award also may contain terms and conditions which are different from the terms and conditions of such other Award; provided, that a cash amount credited pursuant to a Dividend Equivalent Right granted as a component of another Award which vests or is earned based upon the achievement of performance goals shall not vest or be paid unless such performance goals for such underlying Award are achieved.

 

  

14

  

 

	
13.2.

	
Termination of Service.

 

Unless the Committee otherwise provides in an Award Agreement or in writing after such Award Agreement is issued, a Grantee’s rights in all Dividend Equivalent Rights shall automatically terminate upon the Grantee’s termination of Service for any reason.

 

	
14.

	
TERMS AND CONDITIONS OF PERFORMANCE AWARDS AND ANNUAL INCENTIVE AWARDS

 

	
14.1.

	
Grant of Performance Awards and Annual Incentive Awards.

 

Subject to the terms and provisions of the Plan, the Committee, at any time and from time to time, may grant Performance Awards and/or Annual Incentive Awards to a Plan participant in such amounts and upon such terms as the Committee shall determine.

 

	
14.2.

	
Value of Performance Awards and Annual Incentive Awards.

 

Each Performance Award and Annual Incentive Award shall have an initial value that is established by the Committee at the time of grant. The Committee shall set performance goals in its discretion which, depending on the extent to which they are achieved, shall determine the value and/or number of Performance Awards that will be paid out to the Grantee thereof.

 

	
14.3.

	
Earning of Performance Awards and Annual Incentive Awards.

 

Subject to the terms of the Plan, after the applicable Performance Period has ended, the Grantee of Performance Awards or Annual Incentive Awards shall be entitled to receive payout on the value and number of the Performance Awards or Annual Incentive Awards earned by the Grantee over such Performance Period.

 

	
14.4.

	
Form and Timing of Payment of Performance Awards and Annual Incentive Awards.

 

Payment of earned Performance Awards and Annual Incentive Awards shall be as determined by the Committee and as evidenced in the applicable Award Agreement. Subject to the terms of the Plan, the Committee, in its sole discretion, may pay earned Performance Awards in the form of cash or in shares of Stock (or in a combination thereof) equal to the value of the earned Performance Awards at the close of the applicable Performance Period, or as soon as reasonably practicable after the Committee has determined that the performance goal or goals have been achieved; provided that, unless specifically provided in the Award Agreement for such Awards, such payment shall occur no later than the 15th day of the third month following the end of the calendar year in which such Performance Period ends. Any shares of Stock paid out under such Awards may be granted subject to any restrictions deemed appropriate by the Committee. The determination of the Committee with respect to the form of payout of such Awards shall be set forth in the Award Agreement for the Awards.

 

	
14.5.

	
Performance Conditions.

 

The right of a Grantee to exercise or receive a grant or settlement of any Performance Award or Annual Incentive Award, and the timing thereof, may be subject to such performance conditions as may be specified by the Committee. The Committee may use such business criteria and other measures of performance as it may deem appropriate in establishing any performance conditions. If and to the extent required under Code Section 162(m), any power or authority relating to an Award intended to qualify under Code Section 162(m) shall be exercised by the Committee and not by the Board.

 

	
14.6.

	
Performance Awards or Annual Incentive Awards Granted to Designated Covered Employees.

 

If and to the extent that the Committee determines that a Performance Award or an Annual Incentive Award to be granted to a Grantee who is designated by the Committee as likely to be a Covered Employee should constitute “qualified performance-based compensation” for purposes of Code Section 162(m), the grant, exercise and/or settlement of such Award shall be contingent upon achievement of pre-established performance goals and other terms set forth in this Section 14.6.

 

  

15

  

 

	
14.6.1.

	

Performance Goals Generally.

 

The performance goals for Performance Awards or Annual Incentive Awards shall consist of one or more business criteria and a targeted level or levels of performance with respect to each of such criteria, as specified by the Committee consistent with this Section 14.6. Performance goals shall be objective and shall otherwise meet the requirements of Code Section 162(m), including the requirement that the level or levels of performance targeted by the Committee result in the achievement of performance goals being “substantially uncertain.” The Committee may determine that such Awards shall be granted, exercised and/or settled upon achievement of any single performance goal or that two (2) or more of the performance goals must be achieved as a condition to grant, exercise and/or settlement of such Awards. Performance goals may differ for Awards granted to any one Grantee or to different Grantees.

 

	
14.6.2.

	

Timing For Establishing Performance Goals.

 

Performance goals for any Performance Award or Annual Incentive Award shall be established not later than the earlier of (a) 90 days after the beginning of any Performance Period applicable to such Award and (b) the date on which twenty-five percent (25%) of any Performance Period applicable to such Award has expired, or at such other date as may be required or permitted for compensation payable to a Covered Employee to constitute Performance-Based Compensation.

 

	
14.6.3.

	

Settlement of Awards; Other Terms.

 

Settlement of Performance Awards and Annual Incentive Awards shall be in cash, shares of Stock, other Awards or other property, as determined in the sole discretion of the Committee. The Committee may, in its sole discretion, reduce the amount of a settlement otherwise to be made in connection with such Awards. The Committee shall specify the circumstances in which such Performance Awards or Annual Incentive Awards shall be paid or forfeited in the event of termination of Service by the Grantee prior to the end of a Performance Period or settlement of such Awards.

 

	
14.6.4.

	

Performance Measures.

 

The performance goals upon which the payment or vesting of a Performance Award or an Annual Incentive Award to a Covered Employee that is intended to qualify as Performance-Based Compensation shall be limited to the following Performance Measures, with or without adjustment:

 

	
  

	
(a)

	
net earnings or net income;

 

	
  

	
(b)

	
operating earnings or income, including consolidated corporate operating income excluding the impact of consolidation of the franchisee-owned BIBP Commodities, Inc. cheese purchasing entity (BIBP);

 

	
  

	
(c)

	
pretax earnings;

 

	
  

	
(d)

	
earnings per share;

 

	
  

	
(e)

	
share price, including growth and capitalization measures and total stockholder return;

 

	
  

	
(f)

	
earnings before interest and taxes;

 

	
  

	
(g)

	
earnings before interest, taxes, depreciation and/or amortization;

 

	
  

	
(h)

	
sales or revenue growth, whether in general or by store, category of store or product, including system-wide comparable sales (average same-store, year-over-year sales) or method of ordering;

 

	
  

	
(i)

	
gross or operating margins (including food, labor and mileage);

 

	
  

	
(j)

	
return measures, including return on assets, capital, investment, equity, sales or revenue;

 

	
  

	
(k)

	
cash flow, including operating cash flow, free cash flow, cash flow return on equity and cash flow return on investment;

 

	
  

	
(l)

	
productivity ratios;

 

  

16

  

 

	
  

	
(m)

	
expense targets;

 

	
  

	
(n)

	
market share;

 

	
  

	
(o)

	
financial ratios as provided in credit agreements or indentures of the Company and its subsidiaries;

 

	
  

	
(p)

	
debt rating targets;

 

	
  

	
(q)

	
working capital targets;

 

	
  

	
(r)

	
completion of acquisitions or divestitures of businesses, assets, companies or stores;

 

	
  

	
(s)

	
store unit counts or similar store metrics, including franchise and/or company-store openings and/or closings;

 

	
  

	
(t)

	
system-wide, corporate, franchisee or store comparable transactions;

 

	
  

	
(u)

	
profits from restaurant operations;

 

	
  

	
(v)

	
product quality and customer service metrics, including consumer, customer, or franchisee perception targets;

 

	
  

	
(w)

	
employee retention and recruiting metrics, including turnover; and

 

	
  

	
(x)

	
any combination of any of the foregoing business criteria.

 

Performance under any of the foregoing Performance Measure(s) (a) may be used to measure the performance of (i) the Company and its Subsidiaries and other Affiliates as a whole, (ii) the Company, any Subsidiary, and/or any other Affiliate or any combination thereof, or (iii) any one or more business units of the Company, any Subsidiary, and/or any other Affiliate, as the Committee, in its sole discretion, deems appropriate and (b) may be compared to the performance of one or more other companies, or one or more published or special indices designated or approved by the Committee for such comparison, as the Committee, in its sole discretion, deems appropriate. In addition, the Committee, in its sole discretion, may select Performance Measure (e) above for comparison to performance under one or more stock market indices, designated or approved by the Committee. The Committee also shall have the authority to provide for accelerated vesting of any Performance Award or Annual Incentive Award based on the achievement of performance goals pursuant to the Performance Measures specified in this Section 14.

 

	
14.6.5.

	

Evaluation of Performance.

 

The Committee may provide in any Performance Award or Annual Incentive Award that any evaluation of performance may include or exclude any of the following events that occur during a Performance Period: (a) asset write-downs; (b) litigation or claim judgments or settlements; (c) the effect of changes in tax laws, accounting principles, or other laws or provisions affecting reported results; (d) any reorganization and restructuring programs; (e) extraordinary nonrecurring items as described in Accounting Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial condition and results of operations appearing in the Company’s annual report to shareholders for the applicable year; (f) acquisitions or divestitures; and (g) foreign exchange gains and losses. To the extent such inclusions or exclusions affect Awards to Covered Employees that are intended to qualify as Performance-Based Compensation, such inclusions or exclusions shall be prescribed in a form that meets the requirements of Code Section 162(m) for deductibility.

 

	
14.6.6.

	

Adjustment of Performance-Based Compensation.

 

Awards that are intended to qualify as Performance-Based Compensation may not be adjusted upward from the level of performance actually attained. The Committee shall have the sole discretion to adjust such Awards downward, either on a formula or discretionary basis, or on any combination thereof as the Committee determines.

 

  

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14.6.7.

	

Committee Discretion.

 

In the event that Applicable Laws change to permit Committee discretion to alter the governing Performance Measures without obtaining shareholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining shareholder approval, provided that the exercise of such discretion shall not be inconsistent with the requirements of Code Section 162(m). In addition, in the event that the Committee determines that it is advisable to grant Awards that shall not qualify as Performance-Based Compensation, the Committee may make such grants without satisfying the requirements of Code Section 162(m) and base vesting on Performance Measures other than those set forth in Section 14.6.4.

 

	
14.7.

	
Status of Awards Under Code Section 162(m).

 

It is the intent of the Company that Awards under Section 14.6 granted to persons who are designated by the Committee as likely to be Covered Employees within the meaning of Code Section 162(m) and the regulations promulgated thereunder shall, if so designated by the Committee, constitute “qualified performance-based compensation” within the meaning of Code Section 162(m). Accordingly, the terms of Section 14.6, including the definitions of Covered Employee and other terms used therein, shall be interpreted in a manner consistent with Code Section 162(m). The foregoing notwithstanding, because the Committee cannot determine with certainty whether a particular Grantee of Performance Award or Annual Incentive Award will be a Covered Employee with respect to a fiscal year that has not yet been completed, the term Covered Employee as used in the Plan shall mean only a person designated by the Committee, at the time of grant of such Award, as likely to be a Covered Employee with respect to such fiscal year. If any provision of the Plan or any agreement relating to any such Awards does not comply or is inconsistent with the requirements of Code Section 162(m), such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

 

	
15.

	
PARACHUTE LIMITATIONS

 

If any Grantee is a “disqualified individual,” as defined in Code Section 280G(c), then, notwithstanding any other provision of the Plan or of any other agreement, contract, or understanding heretofore or hereafter entered into by such Grantee with the Company or an Affiliate, except an agreement, contract, or understanding that expressly addresses Code Section 280G or Code Section 4999 (an “Other Agreement”), and notwithstanding any formal or informal plan or other arrangement for the direct or indirect provision of compensation to the Grantee (including groups or classes of Grantees or beneficiaries of which the Grantee is a member), whether or not such compensation is deferred, is in cash, or is in the form of a benefit to or for the Grantee (a “Benefit Arrangement”), any right of the Grantee to any exercise, vesting, payment or benefit under the Plan shall be reduced or eliminated:

 

	
  

	
(a)

	
to the extent that such right to exercise, vesting, payment, or benefit, taking into account all other rights, payments, or benefits to or for the Grantee under the Plan, all Other Agreements, and all Benefit Arrangements, would cause any exercise, vesting, payment, or benefit to the Grantee under the Plan to be considered a “parachute payment” within the meaning of Code Section 280G(b)(2) as then in effect (a “Parachute Payment”); and

 

	
  

	
(b)

	
if, as a result of receiving such Parachute Payment, the aggregate after-tax amounts received by the Grantee from the Company under the Plan, all Other Agreements, and all Benefit Arrangements would be less than the maximum after-tax amount that could be received by the Grantee without causing any such payment or benefit to be considered a Parachute Payment.

 

The Company shall accomplish such reduction by first reducing or eliminating any cash payments (with the payments to be made furthest in the future being reduced first), then by reducing or eliminating any accelerated vesting of Options or SARs, then by reducing or eliminating any accelerated vesting of Restricted Stock or Stock Units, then by reducing or eliminating any other remaining Parachute Payments.

 

	
16.

	
REQUIREMENTS OF LAW

 

	
16.1.

	
General.

 

The Company shall not be required to offer, sell or issue any shares of Stock under any Award, whether pursuant to the exercise of an Option or SAR or otherwise, if the offer, sale or issuance of such shares of Stock would constitute a violation by the Grantee, the Company or an Affiliate, or any other person of any provision of Applicable Laws, including any federal or state securities laws or regulations. If at any time the Company shall determine, in its discretion, that the listing, registration or qualification of any shares of Stock subject to an Award upon any securities exchange or under any governmental regulatory body is necessary or desirable as a condition of, or in connection with, the offering, issuance, sale or purchase of shares of Stock in connection with any Award, no shares of Stock may be offered, issued or sold to the Grantee or any other person under such Award, whether pursuant to the exercise of an Option or SAR or otherwise, unless such listing, registration or qualification shall have been effected or obtained free of any conditions not acceptable to the Company, and any delay caused thereby shall in no way affect the date of termination of such Award. Without limiting the generality of the foregoing, upon the exercise of any Option or any SAR that may be settled in shares of Stock or the delivery of any shares of Stock underlying an Award, unless a registration statement under the Securities Act is in effect with respect to the shares of Stock subject to such Award, the Company shall not be required to offer, sell or issue such shares of Stock unless the Committee shall have received evidence satisfactory to it that the Grantee or any other person exercising such Option or SAR or accepting delivery of such shares may acquire such shares of Stock pursuant to an exemption from registration under the Securities Act. Any determination in this connection by the Committee shall be final, binding, and conclusive. The Company may register, but shall in no event be obligated to register, any shares of Stock or other securities issuable pursuant to the Plan pursuant to the Securities Act. The Company shall not be obligated to take any affirmative action in order to cause the exercise of an Option or a SAR or the issuance of shares of Stock or other securities issuable pursuant to the Plan or any Award to comply with any Applicable Laws. As to any jurisdiction that expressly imposes the requirement that an Option or SAR that may be settled in shares of Stock shall not be exercisable until the shares of Stock subject to such Option or SAR are registered under the securities laws thereof or are exempt from such registration, the exercise of such Option or SAR under circumstances in which the laws of such jurisdiction apply shall be deemed conditioned upon the effectiveness of such registration or the availability of such an exemption.

 

  

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16.2.

	
Rule 16b-3.

 

During any time when the Company has a class of equity security registered under Section 12 of the Exchange Act, it is the intention of the Company that Awards pursuant to the Plan and the exercise of Options and SARs granted hereunder that would otherwise be subject to Section 16(b) of the Exchange Act shall qualify for the exemption provided by Rule 16b-3 under the Exchange Act. To the extent that any provision of the Plan or action by the Committee does not comply with the requirements of such Rule 16b-3, such provision or action shall be deemed inoperative with respect to such Awards to the extent permitted by Applicable Laws and deemed advisable by the Committee, and shall not affect the validity of the Plan. In the event that such Rule 16b-3 is revised or replaced, the Board may exercise its discretion to modify the Plan in any respect necessary or advisable in its judgment to satisfy the requirements of, or to permit the Company to avail itself of the benefits of, the revised exemption or its replacement.

 

	
17.

	
EFFECT OF CHANGES IN CAPITALIZATION

 

	
17.1.

	
Changes in Stock.

 

If the number of outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or exchanged for a different number of shares or kind of capital stock or other securities of the Company on account of any recapitalization, reclassification, stock split, reverse split, combination of stock, exchange of stock, stock dividend or other distribution payable in capital stock, or other increase or decrease in such Stock effected without receipt of consideration by the Company occurring after the Effective Date, the number and kinds of shares of stock for which grants of Options and other Awards may be made under the Plan, including the share limits set forth in Section 6.2, shall be adjusted proportionately and accordingly by the Committee. In addition, the number and kind of shares of stock for which Awards are outstanding shall be adjusted proportionately and accordingly by the Committee so that the proportionate interest of the Grantee therein immediately following such event shall, to the extent practicable, be the same as immediately before such event. Any such adjustment in outstanding Options or SARs shall not change the aggregate Option Price or SAR Exercise Price payable with respect to shares that are subject to the unexercised portion of such outstanding Options or SARs, as applicable, but shall include a corresponding proportionate adjustment in the per share Option Price or SAR Exercise Price, as the case may be. The conversion of any convertible securities of the Company shall not be treated as an increase in shares effected without receipt of consideration. Notwithstanding the foregoing, in the event of any distribution to the Company’s shareholders of securities of any other entity or other assets (including an extraordinary dividend, but excluding a non-extraordinary dividend, declared and paid by the Company) without receipt of consideration by the Company, the Company shall, in such manner as the Company deems appropriate, adjust (a) the number and kind of shares of stock subject to outstanding Awards and/or (b) the aggregate and per share Option Price of outstanding Options and the aggregate and per share SAR Exercise Price of outstanding Stock Appreciation Rights as required to reflect such distribution.

 

  

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17.2.

	
Reorganization in Which the Company Is the Surviving Entity Which Does not Constitute a Corporate Transaction.

 

Subject to Section 17.3, if the Company shall be the surviving entity in any reorganization, merger, or consolidation of the Company with one or more other entities which does not constitute a Corporate Transaction, any Option or SAR theretofore granted pursuant to the Plan shall pertain to and apply to the securities to which a holder of the number of shares of Stock subject to such Option or SAR would have been entitled immediately following such reorganization, merger, or consolidation, with a corresponding proportionate adjustment of the per share Option Price or SAR Exercise Price so that the aggregate Option Price or SAR Exercise Price thereafter shall be the same as the aggregate Option Price or SAR Exercise Price of the shares of Stock remaining subject to the Option or SAR as in effect immediately prior to such reorganization, merger, or consolidation. Subject to any contrary language in an Award Agreement evidencing an Award, any restrictions applicable to such Award shall apply as well to any replacement shares received by the Grantee as a result of such reorganization, merger or consolidation. In the event of any reorganization, merger, or consolidation of the Company referred to in this Section 17.2, Stock Units shall be adjusted so as to apply to the securities that a holder of the number of shares of Stock subject to the Stock Units would have been entitled to receive immediately following such reorganization, merger or consolidation.

 

	
17.3.

	
Corporate Transaction in which Awards are not Assumed.

 

Except as otherwise provided in the applicable Award Agreement, upon the occurrence of a Corporate Transaction in which outstanding Options, SARs, Restricted Stock, Stock Units, Dividend Equivalent Rights, or Other Equity-Based Awards are not being assumed or continued:

 

	
  

	
(i)

	
all Grantees of shares of Restricted Stock, Stock Units, and Dividend Equivalent Rights shall be credited with an additional 12 months of Service from the Grant Date for purposes of vesting in such shares immediately prior to the occurrence of a Corporate Transaction and any shares of Stock subject to Stock Units that become vested pursuant to the operation of this Section 17.3(i) shall be delivered, immediately prior to the occurrence of such Corporate Transaction;

 

	
  

	
(ii)

	
all Grantees of Options and SARs shall be credited with an additional 12 months of Service from the Grant Date for purposes of vesting in such Options and SARs immediately prior to the occurrence of a Corporate Transaction; and

 

	
  

	
(iii)

	
either of the following two actions shall be taken:

 

	
  

	
(A)

	
fifteen (15) days prior to the scheduled consummation of such a Corporate Transaction, notice shall be given to all Grantees of vested Options and SARs outstanding hereunder (including Options and SARs that become vested pursuant to the operation of Section 17.3(ii)) that such Options and SARs shall remain exercisable for a period of fifteen days and shall thereafter be terminated, or

 

	
  

	
(B)

	
the Committee may elect, in its sole discretion, to cancel any outstanding Awards of Options, Restricted Stock, Stock Units, and/or SARs and pay or deliver, or cause to be paid or delivered, to the holder thereof an amount in cash or securities having a value (as determined by the Committee acting in good faith), in the case of Restricted Stock or Stock Units, equal to the formula or fixed price per share paid to holders of shares of Stock pursuant to such Corporate Transaction and, in the case of Options or SARs, equal to the product of the number of shares of Stock subject such Options or SARs (the “Award Shares”) multiplied by the amount, if any, by which (I) the formula or fixed price per share paid to holders of shares of Stock pursuant to such transaction exceeds (II) the Option Price or SAR Exercise Price applicable to such Award Shares.

 

	
  

	
(iv)

	
For Performance Awards and Annual Incentive Awards denominated in Stock or Stock Units, if less than half of the Performance Period has lapsed, such Performance Awards and Annual Incentive Awards shall be converted into Restricted Stock or Stock Units assuming target performance has been achieved (or into Unrestricted Stock if no further restrictions apply). If more than half the Performance Period has lapsed, such Performance Awards and Annual Incentive Awards shall be converted into Restricted Stock or Stock Units based on actual performance to date (or into Unrestricted Stock if no further restrictions apply). If actual performance is not determinable, such Performance Awards and Annual Incentive Awards shall be converted into Restricted Stock or Stock Units assuming target performance has been achieved, based on the discretion of the Committee (or into Unrestricted Stock if no further restrictions apply).

 

  

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(v)

	
Other-Equity Based Awards shall be governed by the terms of the applicable Award Agreement.

 

With respect to the Company’s establishment of an exercise window, (i) any exercise of an Option or SAR during the fifteen (15)-day period referred to above shall be conditioned upon the consummation of the applicable Corporate Transaction and shall be effective only immediately before the consummation thereof, and (ii) upon consummation of any Corporate Transaction, the Plan and all outstanding but unexercised Options and SARs shall terminate. The Committee shall send notice of an event that shall result in such a termination to all natural persons and entities who hold Options and SARs not later than the time at which the Company gives notice thereof to its shareholders.

 

	
17.4.

	
Corporate Transaction in which Awards are Assumed.

 

The Plan and the Options, SARs, Stock Units, Restricted Stock and Other Equity- Based Awards theretofore granted under the Plan shall continue in the manner and under the terms so provided in the event of any Corporate Transaction to the extent that provision is made in writing in connection with such Corporate Transaction for the assumption or continuation of such Options, SARs, Stock Units, Restricted Stock and Other Equity-Based Awards, or for the substitution for such Options, SARs, Stock Units, Restricted Stock and Other Equity-Based Awards of new common stock options, stock appreciation rights, common stock units, restricted stock and other equity-based awards relating to the stock of a successor entity, or a parent or subsidiary thereof, with appropriate adjustments as to the number of shares (disregarding any consideration that is not common stock) and option and stock appreciation rights exercise prices. In the event a Grantee’s Award is assumed, continued or substituted upon the consummation of any Corporate Transaction and his employment is terminated without Cause within one year following the consummation of such Corporate Transaction, the Grantee shall be credited with an additional 12 months of Service from the date of such termination for purposes of vesting in the shares subject to such Award and the Grantee’s Award (to the extent vested) may be exercised, to the extent applicable, beginning on the date of such termination and for the one year period immediately following such termination or for such longer period as the Committee shall determine.

 

	
17.5.

	
Adjustments

 

Adjustments under this Section 17 related to shares of Stock or securities of the Company shall be made by the Committee, whose determination in that respect shall be final, binding and conclusive. No fractional shares or other securities shall be issued pursuant to any such adjustment, and any fractions resulting from any such adjustment shall be eliminated in each case by rounding downward to the nearest whole share. The Committee shall determine the effect of a Corporate Transaction upon Awards other than Options, SARs, Stock Units and Restricted Stock, and such effect shall be set forth in the applicable Award Agreement. The Committee may provide in the applicable Award Agreements at the time of grant, or any time thereafter with the consent of the Grantee, for different provisions to apply to an Award in place of those provided in Sections 17.1, 17.2, 17.3 and 17.4. This Section 17 shall not limit the Company’s ability to provide for alternative treatment of Awards outstanding under the Plan in the event of change in control events that are not Corporate Transactions.

 

	
17.6.

	
No Limitations on Company.

 

The making of Awards pursuant to the Plan shall not affect or limit in any way the right or power of the Company to make adjustments, reclassifications, reorganizations, or changes of its capital or business structure or to merge, consolidate, dissolve, or liquidate, or to sell or transfer all or any part of its business or assets (including all or any part of the business or assets of any Subsidiary or other Affiliate).

 

	
18.

	
GENERAL PROVISIONS

 

	
18.1.

	
Disclaimer of Rights.

 

No provision in the Plan or in any Award or Award Agreement shall be construed to confer upon any individual the right to remain in the employ or Service of the Company or an Affiliate, or to interfere in any way with any contractual or other right or authority of the Company or an Affiliate either to increase or decrease the compensation or other payments to any natural person or entity at any time, or to terminate any employment or other relationship between any natural person or entity and the Company or an Affiliate. In addition, notwithstanding anything contained in the Plan to the contrary, unless otherwise stated in the applicable Award Agreement, no Award granted under the Plan shall be affected by any change of duties or position of the Grantee thereof, so long as such Grantee continues to provide Service. The obligation of the Company to pay any benefits pursuant to the Plan shall be interpreted as a contractual obligation to pay only those amounts provided herein, in the manner and under the conditions prescribed herein. The Plan and Awards shall in no way be interpreted to require the Company to transfer any amounts to a third party trustee or otherwise hold any amounts in trust or escrow for payment to any Grantee or beneficiary under the terms of the Plan.

 

  

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18.2.

	
Nonexclusivity of the Plan.

 

Neither the adoption of the Plan nor the submission of the Plan to the shareholders of the Company for approval shall be construed as creating any limitations upon the right and authority of the Board to adopt such other incentive compensation arrangements (which arrangements may be applicable either generally to a class or classes of individuals or specifically to a particular individual or particular individuals) as the Board in its discretion determines desirable.

 

	
18.3.

	
Withholding Taxes.

 

The Company or an Affiliate, as the case may be, shall have the right to deduct from payments of any kind otherwise due to a Grantee any federal, state, or local taxes of any kind required by law to be withheld with respect to the vesting of or other lapse of restrictions applicable to an Award or upon the issuance of any shares of Stock upon the exercise of an Option or pursuant to any other Award. At the time of such vesting, lapse, or exercise, the Grantee shall pay in cash to the Company or an Affiliate, as the case may be, any amount that the Company or such Affiliate may reasonably determine to be necessary to satisfy such withholding obligation; provided, however, that if there is a same day sale of shares of Stock subject to an Award, the Grantee shall pay such withholding obligation on the day on which the same-day sale is completed. Subject to the prior approval of the Company or an Affiliate, which may be withheld by the Company or such Affiliate, as the case may be, in its sole discretion, the Grantee may elect to satisfy such withholding obligation, in whole or in part, (a) by causing the Company or such Affiliate to withhold shares of Stock otherwise issuable to the Grantee or (b) by delivering to the Company or such Affiliate shares of Stock already owned by the Grantee. The shares of Stock so withheld or delivered shall have an aggregate Fair Market Value equal to such withholding obligation. The Fair Market Value of the shares of Stock used to satisfy such withholding obligation shall be determined by the Company or such Affiliate as of the date on which the amount of tax to be withheld is to be determined. A Grantee who has made an election pursuant to this Section 18.3 may satisfy such Grantee’s withholding obligation only with shares of Stock that are not subject to any repurchase, forfeiture, unfulfilled vesting, or other similar requirements. The maximum number of shares of Stock that may be withheld from any Award to satisfy any federal, state or local tax withholding requirements upon the exercise, vesting, or lapse of restrictions applicable to such Award or payment of shares of Stock pursuant to such Award, as applicable, may not exceed such number of shares of Stock having a Fair Market Value equal to the minimum statutory amount required by the Company or the applicable Affiliate to be withheld and paid to any such federal, state or local taxing authority with respect to such exercise, vesting, lapse of restrictions or payment of shares of Stock. Notwithstanding Section 2.20 or this Section 18.3, for purposes of determining taxable income and the amount of the related tax withholding obligation pursuant to this Section 18.3, for any shares of Stock subject to an Award that are sold by or on behalf of a Grantee on the same date on which such shares may first be sold pursuant to the terms of the related Award Agreement, the Fair Market Value of such shares shall be the sale price of such shares on such date (or if sales of such shares are effectuated at more than one sale price, the weighted average sale price of such shares on such date), so long as such Grantee has provided the Company with advance written notice of such sale.

 

	
18.4.

	
Captions.

 

The use of captions in the Plan or any Award Agreement is for the convenience of reference only and shall not affect the meaning of any provision of the Plan or such Award Agreement.

 

	
18.5.

	
Other Provisions.

 

Each Award granted under the Plan may contain such other terms and conditions not inconsistent with the Plan as may be determined by the Committee, in its sole discretion.

 

	
18.6.

	
Number and Gender.

 

With respect to words used in the Plan, the singular form shall include the plural form and the masculine gender shall include the feminine gender, as the context requires.

 

  

22

  

 

	
18.7.

	
Severability.

 

If any provision of the Plan or any Award Agreement shall be determined to be illegal or unenforceable by any court of law in any jurisdiction, the remaining provisions hereof and thereof shall be severable and enforceable in accordance with their terms, and all provisions shall remain enforceable in any other jurisdiction.

 

	
18.8.

	
Governing Law

 

The validity and construction of the Plan and the instruments evidencing the Awards hereunder shall be governed by, and construed and interpreted in accordance with, the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan and the instruments evidencing the Awards granted hereunder to the substantive laws of any other jurisdiction.

 

	
18.9.

	
Section 409A of the Code.

 

The Company intends to comply with Code Section 409A, or an exemption to Code Section 409A, with regard to Awards hereunder that constitute nonqualified deferred compensation within the meaning of Code Section 409A. To the extent that the Company determines that a Grantee would be subject to the additional twenty percent (20%) tax imposed on certain nonqualified deferred compensation plans pursuant to Code Section 409A as a result of any provision of any Award granted under the Plan, such provision shall be deemed amended to the minimum extent necessary to avoid application of such additional tax. The nature of any such amendment shall be determined by the Committee.

 

* * *

 

To record adoption of the Plan by the Board as of February 17, 2011, and approval of the Plan by the shareholders on April 28, 2011, the Company has caused its authorized officer to execute the Plan.

 

	  	
PAPA JOHN’S INTERNATIONAL, INC.

	 	 
	 	 
	  	
By:

	

/s/ Clara M. Passafiume

	  	
Title:

	

Secretary

 

 

 

	23DC10577.pdf -- Converted by SEC Publisher 4.2, created by BCL Technologies Inc., for SEC Filing

	
EXHIBIT 10.4

	
[]When Recorded Return To:

     FORM OF DEED OF TRUST, LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT, FINANCING STATEMENT, FIXTURE FILING AND
ASSIGNMENT 

OF PRODUCTION (SECOND LIEN)

THIS INSTRUMENT COVERS THE INTEREST OF TRUSTOR IN MINERALS OR THE LIKE (INCLUDING GEOTHERMAL ENERGY) BEFORE EXTRACTION AND THE SECURITY INTEREST CREATED BY THIS INSTRUMENT ATTACHES TO SUCH MINERALS AS EXTRACTED AND TO THE ACCOUNTS
RESULTING FROM THE SALE THEREOF AT THE WELLHEAD.  THIS INSTRUMENT COVERS THE INTEREST OF TRUSTOR IN FIXTURES AND ALSO PRODUCTS OF THE COLLATERAL.

	
FROM

THERMO NO. 1 BE-01, LLC, a Delaware limited liability company

	
(as Trustor, Debtor and Grantor)

	
TO

	
Security Title Company for the benefit of

[
_____________
], 

(Beneficiary, Secured Party and Grantee)

	
April 15, 2011

For purposes of filing this Deed of Trust as a financing statement, the mailing address of THERMO NO. 1 BE-01, LLC is 5152 North Edgewood Drive, Provo, UT 84604, the state of its organization is Delaware, and its organizational
number is 26-2359733; the Beneficiary/Secured Party is [
_____________
] with a mailing address of [
_____________
]; the mailing address of Trustee is [
_____________
].

	
***********************************

NOTWITHSTANDING ANYTHING IN THIS DEED OF TRUST TO THE CONTRARY, THE LIEN AND SECURITY INTEREST GRANTED TO THE BENEFICIARY BY TRUSTOR PURSUANT TO THIS DEED OF TRUST AND THE OTHER LOAN DOCUMENTS AND THE EXERCISE OF ANY
RIGHT OR REMEDY BY THE BENEFICIARY HEREUNDER AND THEREUNDER WITH RESPECT THERETO ARE SUBJECT TO THE PROVISIONS OF THE LIMITED CONSENT DATED AS OF APRIL [__], 2011 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE
“CONSENT AGREEMENT”) BY AND AMONG TRUSTOR, BENEFICIARY, ZURICH AMERICAN INSURANCE COMPANY, THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, AS ADMINISTRATIVE LENDER AND LENDER, AND DEUTSCHE BANK TRUST COMPANY AMERICAS, IN ITS CAPACITY AS
ADMINISTRATIVE AGENT AND COLLATERAL AGENT. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THIS DEED OF TRUST AND THE CONSENT AGREEMENT, THE TERMS OF THE CONSENT AGREEMENT SHALL GOVERN AND CONTROL.

FORM OF DEED OF TRUST, LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF PRODUCTION, FIXTURE FILING AND

FINANCING STATEMENT (SECOND LIEN)

     This instrument (the “Deed of Trust”) dated effective as of April 15, 2011, is executed and delivered by THERMO NO. 1 BE-01, LLC, a Delaware limited liability company (“Trustor”),
to Security Title Company, as Trustee (“Trustee”), for the benefit of [
_____________
], as the lender referred to in that certain Bridge Loan Agreement dated as of [
____________
] by and among Trustor and such lender (in such
capacity, together with its permitted successors and assigns, the “Beneficiary”). The addresses of Trustor, Beneficiary and the Trustee appear in Section 8.13 of this Deed of Trust.

	
ARTICLE I

Definitions

	
1.1      		
“Bridge Loan Agreement” means that certain Bridge Loan Agreement dated as of the date hereof between Trustor, Raser and Beneficiary.	
	 
	
1.2      		
“Assignment” means that certain Assignment or Partial Assignment (Second Lien) whereby all or certain portions of Mineral Leases have been assigned to
Trustor.	
	 
	
1.3      		
“Collateral” means the Realty Collateral, Personalty Collateral and Fixture Collateral.	
	 
	
1.4      		
“Contracts” means all contracts, agreements, exploration and development agreements, operating agreements, farm-out or farm-in agreements, sharing agreements,
mineral purchase agreements, contracts for the purchase, exchange, transportation, processing or sale of Products, rights-of-way, easements, pipeline agreements, surface leases, mineral leases, equipment leases, permits, franchises, licenses,
pooling or unitization agreements, and unit or pooling designations and orders now or hereafter affecting any of the Geothermal Properties, Operating Equipment, Fixture Operating Equipment, or Products now or hereafter covered hereby, or which are
useful or appropriate in drilling for, producing, treating, handling, storing, transporting or marketing geothermal energy, gas or other minerals produced from any of the Geothermal Properties, and all as such	
	 

	 	
contracts and agreements as they may be amended, restated, modified, substituted or supplemented from time-to-time.	
	 
	
1.5      		
“Event of Default” shall have the meaning set forth in Article V hereof.	
	 
	
1.6      		
“Fixture Collateral” means all of Trustor’s interest now owned or hereafter acquired in and to all Fixture Operating Equipment and all proceeds, products,
renewals, increases, profits, substitutions, replacements, additions, amendments and accessions thereof, thereto or therefor.	
	 
	
1.7      		
“Fixture Operating Equipment” means any of the items described in the first sentence of Section 1.14 which as a result of being incorporated into realty or
structures or improvements located therein or thereon, with the intent that they remain there permanently, constitute fixtures under the laws of the state in which such equipment is located.	
	 
	
1.8      		
“Geothermal Property” or “Geothermal Properties” means (a) the Mineral Leases, the thermal
energy, gas, energy, steam, water, water rights, cooling water rights, permits, approvals, surface rights, rights of way and mineral leases and leasehold interests, fee mineral interests, term mineral interests, rights of first refusal, options,
subleases, and all rights and interests thereunder, if any; (b) all production units, and drilling and spacing units (and the Properties covered thereby) which may affect all or any portion of such interests including those units which may be
described or referred to on Exhibit A and any units created by agreement or designation or under orders, regulations, rules or other official acts of any federal, state or other
governmental body or agency having jurisdiction, (c) the surface leases, easements, rights-of-way and pipeline agreements described in Exhibit A attached hereto and made part hereof
for all purposes, and all future surface leases, easements, rights-of-way and pipeline agreements that may be issued pursuant to any of the Contracts, (d) any and all non-consent interests owned or held by, or otherwise benefiting, Trustor and
arising out of, or pursuant to, any of the Contracts, (e) any other interest in, to or relating to (i) all or any part of the land described in Exhibit A, the land relating to, or
described in, the leases set forth in Exhibit A or in the documents described in Exhibit A, or (ii) any of the
estates, property rights or other interests referred to above, (f) any instrument executed in amendment, correction, modification, confirmation, renewal or extension of the same, (g) any and all rights, titles and interests of Trustor (which are
similar in nature to any of the rights, titles and interests described in (a) through (f) above) which are located on or under or which concern any Property or Properties located in counties referenced in Exhibit A
hereto or counties in which a counterpart of this Deed of Trust is filed of record in the real property records of such county, and (h) all tenements, hereditaments and appurtenances now existing or hereafter
obtained in connection with any of the aforesaid, including any rights arising under unitization agreements, orders or other arrangements, communitization agreements, orders or other arrangements or pooling orders, agreements or other
arrangements.	
	 

3

	
1.9      		
“Lien” means any mortgage, lien, pledge, assignment, charge, deed of trust, security interest, hypothecation, preference, deposit arrangement or encumbrance (or
other type of arrangement having the practical effect of the foregoing) to secure or provide for the payment of any obligation of any Person, whether arising by contract, operation of law, or otherwise (including the interest of a vendor or lessor
under any conditional sale agreement, synthetic lease, capital lease, or other title retention agreement).	
	 
	
1.10      		
“Loan Documents” means this Deed of Trust, the Note, the Bridge Loan Agreement, the Security Agreement, and each other agreement, instrument, or document
executed by the Trustor or Raser or any of their respective officers at any time in connection with any of the forgoing agreements and instruments.	
	 
	
1.11      		
“Mineral Leases” means those certain mineral leases described on Exhibit A attached
hereto.	
	 
	
1.12      		
“Note” means that certain Promissory Note of even date herewith whereby Trustor and Raser, in consideration of value received, have promised to pay to
Beneficiary the principal sum of $[
_______
].	
	 
	
1.13      		
“Obligations” means:	
	 
	 	
1.13.1      		
All principal, interest, fees, reimbursements, indemnifications, and other amounts payable by Trustor and Raser to Beneficiary under the Loan Documents;	
	 
	 	
1.13.2      		
All other indebtedness, obligations (including performance obligations), and liabilities of Trustor and Raser arising under this Deed of Trust or the other Loan Documents;	
	 
	 	
1.13.3      		
All other indebtedness, obligations and liabilities of any kind of Trustor or Raser owing to the Beneficiary now existing or hereafter arising under or pursuant to any Loan Document, whether fixed or contingent, joint or several,
direct or indirect, primary or secondary, and regardless of how created or evidenced;	
	 
	 	
1.13.4      		
All sums advanced or costs or expenses incurred by Beneficiary (whether by it directly or on its behalf by the Trustee), other than the Loan, which are made or incurred pursuant to, or allowed by, the terms of this Deed of Trust
plus interest thereon from the date of the advance or incurrence until reimbursement of Beneficiary charged at the rate of interest applicable to the Loan pursuant to the Bridge Loan Agreement;	
	 
	 	
1.13.5      		
All future advances, of whatever class or for whatever purpose, at any time hereafter made or given by Beneficiary to Trustor or Raser under or pursuant to any Loan Document, whether or not the advances or value are given pursuant
to a commitment, whether or not the advances or value are presently contemplated by the parties hereto; and	
	 

4

	 	
1.13.6      		
All renewals, extensions, modifications, amendments, rearrangements and substitutions of all or any part of the above.	
	 
	
1.14      		
“Operating Equipment” means all surface or subsurface machinery, equipment, facilities, supplies or other Property of whatsoever kind or nature now or hereafter
located on any of the Property affected by the Geothermal Properties which are useful for the production, treatment, storage or transportation of Products, including all gas wells, water wells, injection wells, casing, tubing, rods, pumping units
and engines, christmas trees, derricks, separators, gun barrels, flow lines, pipelines, tanks, gas systems (for gathering, treating and compression), water systems (for treating, disposal and injection), supplies, derricks, wells, power plants,
poles, cables, wires, meters, processing plants, compressors, dehydration units, lines, transformers, starters and controllers, machine shops, tools, storage yards and equipment stored therein, buildings and camps, telegraph, telephone and other
communication systems, roads, loading racks, shipping facilities and all additions, substitutes and replacements for, and accessories and attachments to, any of the foregoing. Operating Equipment shall not include any items incorporated into realty
or structures or improvements located therein or thereon in such a manner that they no longer remain personalty under the laws of the state in which such equipment is located.	
	 
	
1.15      		
“Permits” means those permits, consents and approvals listed at Exhibit A or otherwise issued
in name of Trustor or otherwise related to any Collateral, the Project or the Facility.	
	 
	
1.16      		
“Person” (whether or not capitalized) means an individual, partnership, corporation (including a business trust), joint stock company, limited liability company,
limited liability partnership trust, unincorporated association, joint venture or other entity, or a government or any political subdivision or agency thereof or any trustee, receiver, custodian or similar official.	
	 
	
1.17      		
“Personalty Collateral” means all of Trustor’s interest now owned or hereafter acquired in and to (a) all Operating Equipment, (b) all Products severed and
extracted from or attributable to the Geothermal Properties, including, without limitation, all “as-extracted collateral” as such term is defined in the applicable Uniform Commercial Code, (c) all accounts (including accounts resulting
from the sale of Products at the wellhead), contract rights and general intangibles, including all accounts, contract rights and general intangibles now or hereafter arising regardless of whether any of the foregoing is in connection with the sale
or other disposition of any Products or otherwise, including all liens securing the same, (d) all accounts, contract rights and general intangibles now or hereafter arising regardless of whether any of the foregoing is in connection with or
resulting from any of the Contracts, including all liens security the same, (e) all proceeds and products of the Realty Collateral and any other contracts or agreements related or pertaining thereto, (f) all information concerning the Geothermal
Properties and all wells located thereon, including abstracts of title, title opinions, geological and geophysical information and logs (including all	
	 

5

	 	
seismic information) lease files, well files, and other books and records (including computerized records and data), (g) any deposit or time accounts with Beneficiary or any other institution, including Trustor’s operating
bank account and all funds and investments therein, (h) any options or right of first refusal to acquire any Realty Collateral, (i) any and all Permits, and (j) all proceeds, products, renewals, increases, profits, substitutions, replacements,
additions, amendments and accessions of, to or for any of the foregoing, including, without limitation, all insurance and condemnation proceeds (including rights in all settlements and judgments pertaining to such condemnation proceedings) from any
of the foregoing or from insurance payments from any damage or casualty pertaining to or occurring on the Geothermal Properties. Without limiting the foregoing, and in addition to the foregoing, Personalty Collateral shall include all of all of
Trustor’s present and future “Accounts,” “As-Extracted Collateral,” “Cash Proceeds,” “Chattel Paper,” “Collateral,” “Deposit Accounts,” “Electronic Chattel Paper,”
“Equipment,” “Fixtures,” “General Intangibles,” “Goods,” “Instruments,” “Inventory,” “Investment Property,” “Letter-of-Credit Rights,” “Noncash Proceeds,” and
“Tangible Chattel Paper” (as such terms are defined in the Utah Uniform Commercial Code, Utah Code Annotated Sec. 70A-1a-101 et seq, or such other applicable Uniform Commercial
Code). Personalty Collateral shall also include Trustor’s interest in any titled vehicles [but shall not include any PureCycle geothermal waste heat-to-electricity equipment of Trustor].	
	 
	
1.18      		
“Products” means thermal and geothermal energy in the form of hot water, steam, by-products thereof, steam condensates, geothermal resources, electrical and
other energy derived, generated or manufactured from water, steam condensates and other by-products derived or obtained from the geothermal leasehold estate, and all products, by-products, and other substances derived therefrom or the processing
thereof, and all other minerals, geothermal resources, and substances produced in conjunction with such substances, including sulfur, geothermal steam, water, carbon dioxide, helium, and any and all minerals, ores, or substances of value and the
products and proceeds therefrom.	
	 
	
1.19      		
“Property” means any property of any kind, whether real, personal, or mixed and whether tangible or intangible, that is owned by Trustor or in which Trustor has
an interest.	
	 
	
1.20      		
“Raser” means Raser Technologies, Inc., a Delaware corporation.	
	 
	
1.21      		
“Realty Collateral” means all of Trustor’s interest now owned or hereafter acquired in and to the Geothermal Properties, including any access rights, water
and Water Rights, and all unsevered and unextracted Products (even though Trustor’s interest therein may be incorrectly described in, or a description of a part or all of such interest be omitted from, Exhibit
A).	
	 
	
1.22      		
“Security Agreement” means that certain Security Agreement (Second Lien) dated of the date hereof between Trustor, Raser and the Beneficiary.	
	 

6

	
1.23      		
“Subsidiary” of a Person means any corporation or other entity of which more than 50% of the outstanding equity interests having ordinary voting power under
ordinary circumstances to elect a majority of the board of directors or similar governing body of such corporation or other entity (irrespective of whether at such time equity interests of any other class or classes of such corporation or other
entity shall or might have voting power upon the occurrence of any contingency) is at the time directly or indirectly owned or controlled by such Person, by such Person and one or more Subsidiaries of such Person, or by one or more Subsidiaries of
such Person. Unless otherwise indicated herein, each reference to the term “Subsidiary” shall mean a Subsidiary of the Trustor.	
	 
	
1.24      		
“Water Rights” means those water rights described on Exhibit A.	
	 

     All meanings to defined terms, unless otherwise indicated, are to be equally applicable to both the singular and plural forms of the terms defined. Article, Section, Schedule, and Exhibit references
are to Articles and Sections of and Schedules and Exhibits to this Deed of Trust, unless otherwise specified. All references to instruments, documents, contracts, and agreements are references to such instruments, documents, contracts, and
agreements as the same may be amended, supplemented, and otherwise modified from time to time, unless otherwise specified. The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Deed
of Trust shall refer to this Deed of Trust as a whole and not to any particular provision of this Deed of Trust. As used herein, the term “including” means “including, without limitation.”

	
ARTICLE II

Creation of Security

     2.1 Conveyance and Grant of Lien. In consideration of the foregoing, and the mutual covenants contained herein, Trustor, by this Deed
of Trust hereby irrevocably PLEDGES, BARGAINS, GRANTS, SELLS, TRANSFERS, ASSIGNS AND CONVEYS with a general warranty of title, for the uses, purposes and conditions hereinafter set forth all of its right, title and interest in and to the Mineral
Leases, Geothermal Properties, Realty Collateral, the Personalty Collateral, and the Fixture Collateral unto Trustee, and to his successor or successors or substitutes IN TRUST, WITH POWER OF SALE, to secure the payment and performance of the
Obligations for the benefit of Beneficiary.

     To have and to hold the Realty Collateral, the Personalty Collateral and Fixture Collateral unto the Trustee and its successors or substitutes in trust and to its and their successors and assigns
forever, together with all and singular the rights, hereditaments and appurtenances thereto in anywise appertaining or belonging, to secure payment of the Obligations and the performance of the covenants of Trustor contained in this Deed of Trust.
Trustor does hereby bind itself, its successors and permitted assigns, to warrant and forever defend all and singular the Realty Collateral, the Personalty Collateral and the Fixture Collateral unto the Trustee and his successors or substitutes in
trust, and their successors and assigns, against every person whomsoever lawfully claiming or to claim the same, or any part thereof.

     2.2 Security Interest.  For the same consideration and to further secure the Obligations, Trustor hereby grants to Beneficiary for its
benefit a security interest in and to the

7

Collateral. This Deed of Trust constitutes and shall be deemed to be a “security agreement” for all purposes of the applicable Uniform Commercial Code. Beneficiary shall be entitled to all the rights and remedies of a
“secured party” under such applicable Uniform Commercial Code.

	
ARTICLE III

Proceeds from Production

	
3.1      		
Assignment of Production.	
	 
	 	
(a) In order to further secure the Obligations, Trustor has assigned,	
	 

transferred, conveyed and delivered and does hereby assign, transfer, convey and deliver unto Beneficiary, effective as of the date hereof at 7:00 a.m. Mountain Time, U.S.A., all Products produced from, and which are attributable
to, Trustor’s interest, now owned or hereafter acquired, in and to the Geothermal Properties, or are allocated thereto pursuant to pooling or unitization orders, agreements or designations, and all proceeds therefrom.

     (b) Subject to the provisions of subsection (f) below, all parties producing, purchasing, taking, possessing, processing or receiving any production from the Geothermal Properties, or having in their
possession any such production, or the proceeds therefrom, for which they or others are accountable to Beneficiary by virtue of the provisions of this Section 3.1, are authorized and directed by Trustor to treat and regard Beneficiary as the
assignee and transferee of Trustor and entitled in its place and stead to receive such Products and the proceeds therefrom.

     (c) Trustor directs and instructs each of such parties to pay to Beneficiary, for its benefit, all of the proceeds of such Products until such time as such party has been furnished evidence that all
of the Obligations have been paid and that the Lien evidenced hereby has been released; provided, however, that until Beneficiary shall have exercised the rights as herein to instruct such parties to deliver such Products and all proceeds therefrom
directly to Beneficiary, such parties shall be entitled to deliver such Products and all proceeds therefrom to Trustor for Trustor’s use and enjoyment, and Trustor shall be entitled to execute division orders, transfer orders and other
instruments as may be required to direct all proceeds to Trustor without the necessity of joinder by Beneficiary in such division orders, transfer orders or other instruments. Trustor agrees to perform all such acts, and to execute all such further
assignments, transfers and division orders, and other instruments as may be required or desired by Beneficiary or any party in order to have said revenues and proceeds so paid to Beneficiary. None of such parties shall have any responsibility for
the application of any such proceeds received by Beneficiary. Subject to the provisions of subsection (f) below, Trustor authorizes Beneficiary to receive and collect all proceeds of such Products.

     (d) Subject to the provisions of subsection (f) below, Trustor will execute and deliver to Beneficiary any instruments Beneficiary may from time to time request for the purpose of effectuating this
assignment and the payment to Beneficiary of the proceeds assigned. 

     (e) Neither the foregoing assignment nor the exercise by Beneficiary of any of its rights herein shall be deemed to make Beneficiary a “mortgagee-in-possession” or otherwise responsible or
liable in any manner with respect to the Geothermal Properties or the use,

8

occupancy, enjoyment or operation of all or any portion thereof, unless and until Beneficiary, in person or by agent, assumes actual possession thereof, nor shall appointment of a receiver for the Geothermal Properties by any
court at the request of Beneficiary or by agreement with Trustor or the entering into possession of the Geothermal Properties or any part thereof by such receiver be deemed to make Beneficiary a “mortgagee -in-possession” or otherwise
responsible or liable in any manner with respect to the Geothermal Properties or the use, occupancy, enjoyment or operation of all or any portion thereof. 

     (f) Notwithstanding anything to the contrary contained herein, so long as no Event of Default shall have occurred and is continuing, Trustor shall have the right to collect all revenues and proceeds
attributable to the Products that accrue to the Geothermal Properties or the products obtained or processed therefrom, as well as any Liens and security interests securing any sales of said Products and to retain, use and enjoy same.

	
(g)      		
Intentionally omitted.	
	 
	
(h)      		
Beneficiary shall have the right at Beneficiary’s election and in the name	
	 

of Trustor, or otherwise, to prosecute and defend any and all actions or legal proceedings deemed reasonably advisable by Beneficiary in order to collect such proceeds and to protect the interests of Beneficiary or Trustor, with
all costs, expenses and attorneys fees incurred in connection therewith being paid by Trustor.

     (i) Without in any way limiting the effectiveness of the foregoing provisions, if Trustor receives any proceeds which under this Section 3.1 are payable to Beneficiary, Trustor shall hold the same in
trust and remit such proceeds, or cause them to be remitted, immediately, to Beneficiary.

     3.2 Application of Proceeds. All payments received by Beneficiary pursuant to this Article III attributable to the interest of Trustor
in and to the Products shall be applied in the order set forth in the Security Agreement.

     3.3 Trustor’s Payment Duties.  Except as provided in Section 8.18 hereof, nothing contained herein will limit Trustor’s
absolute duty to make payment of the Obligations regardless of whether the proceeds assigned by this Article III are sufficient to pay the same, and the receipt by Beneficiary of proceeds from Products under this Deed of Trust will be in addition to
all other security now or hereafter existing to secure payment of the Obligations.

     3.4 Liability of Beneficiary. Beneficiary is hereby absolved from all liability for failure to enforce collection of any of such
proceeds, and from all other responsibility in connection therewith except the responsibility to account to Trustor for proceeds actually received by Beneficiary.

	
3.5      		
Intentionally Omitted.	
	 
	
3.6      		
Power of Attorney. Without limitation upon any of the foregoing, Trustor	
	 

hereby designates and appoints Beneficiary as true and lawful agent and attorney-in-fact (with full power of substitution, either generally or for such periods or purposes as Beneficiary may from time to time prescribe), with
irrevocable full power and authority, for and on behalf of and

9

in the name of Trustor, to execute, acknowledge and deliver all such division orders, transfer orders, certificates and other documents of every nature, with such provisions as may from time to time during an Event of Default, in
the opinion of Beneficiary, be necessary or proper to effect the intent and purpose of the assignment contained in this Article III; and Trustor shall be bound thereby as fully and effectively as if Trustor had personally executed, acknowledged and
delivered any of the foregoing orders, certificates or documents.  The powers and authorities herein conferred on Beneficiary may be exercised by Beneficiary through any person who, at the time of exercise, is the president, a senior vice president
or a vice president of Beneficiary. The power of attorney conferred by this Section 3.6 is granted for valuable consideration and coupled with an interest and is irrevocable so long as the Obligations, or any portion
thereof, shall remain unpaid. All persons dealing with Beneficiary, or any substitute, shall be fully protected in treating the powers and authorities conferred by this Section 3.6 as continuing in full force and effect
until advised by Beneficiary that the Obligations are fully and finally paid.

     3.7 Indemnification.  TRUSTOR AGREES TO INDEMNIFY
BENEFICIARY, THE TRUSTEE, AND EACH OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS (COLLECTIVELY, THE “INDEMNIFIED PARTIES”) FROM, AND DISCHARGE, RELEASE AND HOLD EACH OF THEM HARMLESS AGAINST ALL LOSSES, DAMAGES, CLAIMS, ACTIONS, LIABILITIES, JUDGMENTS, COSTS, ATTORNEYS FEES OR OTHER CHARGES OF WHATSOEVER KIND OR NATURE
(HEREAFTER REFERRED TO AS “CLAIMS”) MADE AGAINST, IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ANY OF THEM IN ANY AS A
CONSEQUENCE OF THE ASSERTION EITHER BEFORE OR AFTER THE PAYMENT IN FULL OF THE OBLIGATIONS THAT ANY OF THE INDEMNIFIED PARTIES RECEIVED PRODUCTS OR PROCEEDS PURSUANT TO THIS DEED OF TRUST OR PURSUANT TO ANY RIGHT TO COLLECT PROCEEDS DIRECTLY FROM ACCOUNT DEBTORS WHICH ARE CLAIMED BY THIRD
PERSONS.  THE INDEMNIFIED
PARTIES WILL HAVE THE RIGHT TO EMPLOY ATTORNEYS AND TO DEFEND AGAINST ANY SUCH CLAIMS AND UNLESS
FURNISHED WITH REASONABLE INDEMNITY, THE INDEMNIFIED PARTIES WILL HAVE THE RIGHT TO PAY OR COMPROMISE AND ADJUST ALL SUCH CLAIMS.
TRUSTOR WILL INDEMNIFY AND PAY TO THE INDEMNIFIED PARTIES ALL
SUCH AMOUNTS AS MAY BE PAID IN RESPECT THEREOF, OR AS MAY BE SUCCESSFULLY ADJUDICATED AGAINST ANY OF THE INDEMNIFIED PARTIES. TO THE EXTENT NOT EXPRESSLY PROHIBITED BY APPLICABLE L
AWS, THE INDEMNITY UNDER THIS SECTION SHALL NOT APPLY TO CLAIMS ARISING OR INCURRED BY REASON OF THE PERSON BEING INDEMNIFIED’S OWN NEGLIGENCE OR WILLFUL
MISCONDUCT.  THE LIABILITIES OF TRUSTOR AS SET FORTH IN THIS SECTION 3.7 SHALL SURVIVE THE TERMINATION OF THIS DEED OF
TRUST.

	
ARTICLE IV

Trustor’s Warranties and Covenants

     4.1 Payment of Obligations. Trustor covenants that Trustor shall timely pay and perform the Obligations secured by this Deed of
Trust.

     4.2 Notice of Default and Beneficiary’s Right to Cure. Trustor covenants that Trustor shall, within fifteen (15) days of the
receipt thereof, provide Beneficiary written notice of any default notice Trustor receives in connection with the Collateral, and if Trustor is not diligently pursuing a cure, or Beneficiary reasonably believes that Trustor is unable to cure
such

10

default within any specified cure period, Beneficiary may cure such default on behalf of Trustor. All costs and expenses incurred by Beneficiary pursuant to this Section 4.2 shall be paid by Trustor on demand plus interest thereon
from the date of the advance by Beneficiary until reimbursement of Beneficiary at the rate of interest set forth in the Bridge Loan Agreement.

     4.3 Representations and Warranties. Except to the extent inconsistent with the Bridge Loan Agreement, Trustor represents and warrants
that the address of Trustor’s place of business, residence, chief executive office and office where Trustor keeps its records concerning accounts, contract rights and general intangibles is as set forth in Section 7.13, and there has been no
change in the location of Trustor’s place of business, residence, chief executive office and office where it keeps such records and no change of Trustor’s name during the four months immediately preceding the date of this Deed of Trust.
Trustor hereby represents and warrants that Trustor’s entity registration number is 6762105-0161, the state of its formation is Delaware and the correct spelling of Trustor’s name is as set forth in its signature block below.

	
4.4      		
Further Assurances.	
	 
	 	
(a) Trustor covenants that Trustor shall execute and deliver such other and	
	 

further instruments, and shall do such other and further acts as in the reasonable judgment of Beneficiary may be necessary or desirable to carry out more effectively the purposes of this Deed of Trust, including without limiting
the generality of the foregoing, (i) prompt correction of any defect in the execution or acknowledgment of this Deed of Trust, any written instrument comprising part or all of the Obligations, or any other document executed in connection herewith;
(ii) prompt correction of any defect which may hereafter be discovered in the title to the Collateral; (iii) prompt execution and delivery of all division or transfer orders or other instruments which in Beneficiary’s reasonable judgment are
required to transfer to Beneficiary, for its benefit, the assigned proceeds from the sale of Products from the Geothermal Properties; and (iv) prompt payment when due and owing of all taxes, assessments and governmental charges imposed on this Deed
of Trust, upon the interest of Beneficiary or the Trustee or upon the income and profits from any of the above.

     (b) Trustor covenants that Trustor shall maintain and preserve the Lien and security interest herein created so long as any of the Obligations remain unpaid.

     (c) Trustor shall immediately notify Beneficiary of any discontinuance of or change in the address of Trustor’s place of business, residence, chief executive office or office where it keeps
records concerning accounts, contract rights and general intangibles.

     4.5 Recording. Trustor shall promptly (at Trustor’s own expense) record, register, deposit and file this Deed of Trust and other
instruments in connection with or supplement hereto, including applicable financing statements, in such offices and places within the state where the Collateral is located and in the state where the Trustor is registered as an entity, as applicable,
and at such times and as often as may be necessary to preserve, protect and renew the Lien and security interest herein created as a perfected second priority security interest on real or personal property as the case may be, and otherwise shall do
and perform all matters or things necessary or expedient to be done or observed by reason of any legal requirement for the purpose

11

of effectively creating, perfecting, maintaining and preserving the Lien and security interest created hereby in and on the Collateral.

	
4.6      		
Intentionally Omitted.	
	 
	
4.7      		
Intentionally Omitted.	
	 
	
4.8      		
Security Interest in Personalty Collateral.	
	 
	 	
(a) Trustor agrees, at the request and option of Beneficiary, to take any and all	
	 

actions Beneficiary may reasonably determine to be necessary or useful for the attachment, perfection and second priority of, and the ability of Beneficiary to enforce, Beneficiary’s security interest in any and all of the
Personalty Collateral, including, without limitation, (a) causing Beneficiary’s name to be noted as Beneficiary on any certificate of title for the Personalty Collateral or any portion thereof if such notation is a condition to attachment,
perfection or priority of, or ability of Beneficiary to enforce, Beneficiary’s security interest in such Personalty Collateral, (b) complying with any provision of any statute, regulation or treaty of any State or the United States as to any
Personalty Collateral if compliance with such provision is a condition to attachment, perfection or priority of, or ability of Beneficiary to enforce, Beneficiary’s security interest in such Personalty Collateral, (c) using reasonable efforts
to obtain governmental and other third party waivers, consents and approvals in form and substance satisfactory to Beneficiary, including, without limitation, any consent of any licensor, lessor or other person obligated on Personalty Collateral,
and (d) obtaining consents, acknowledgements, agreements or waivers from third parties to any material Contracts in form and substance satisfactory to Beneficiary.

     (b) Financing Statements. Trustor hereby irrevocably authorizes Beneficiary at any time and from time to time to file or record in any filing
office in any Uniform Commercial Code jurisdiction, or in any county recorder’s office or other public office for recording of public land records, any initial financing statements and amendments thereto that (a) indicate the Personalty
Collateral: (i) as “all assets” of Trustor or words of similar effect, regardless of whether any particular asset comprised in the Personalty Collateral falls within the scope of Article 9 of such applicable the Uniform Commercial Code, or
(ii) as being of an equal or lesser scope or with greater detail, and (b) provide any other information required by Part 5 of Article 9 of such applicable Uniform Commercial Code for the sufficiency or filing office acceptance of any financing
statement or amendment, including (1) whether Trustor is an organization, the type of organization and any organization identification number issued to Trustor, and (2) in the case of a financing statement filed as a fixture filing or indicating
Personalty Collateral as as-extracted collateral or timber to be cut, a sufficient description of real property to which the Personalty Collateral relates. Trustor agrees to furnish any such information to Beneficiary promptly upon request. Trustor
also ratifies its authorization for Beneficiary to have filed in any Uniform Commercial Code jurisdiction any initial financing statements or amendments thereto if filed prior to the date hereof. Beneficiary is fully authorized to file, record, or
otherwise utilize such documents as it deems necessary to perfect and/or enforce any security interest or Lien granted hereunder.  Trustor acknowledges that it is not authorized to file any financing statement or amendment or termination statement
with respect to any financing statement without the prior written consent of Beneficiary and agrees that it will

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not do so without the prior written consent of Beneficiary, subject to Trustor’s rights under Section 9-509(4)(b) of the Utah Uniform Commercial Code (or such other applicable Uniform Commercial Code jurisdiction). Trustor
will pay the cost of recording and filing the same in all public offices wherever recording or filing is deemed by Beneficiary to be necessary or desirable.

	
(c)      		
Appointment and Powers of Beneficiary.	
	 
	 	
(i) Trustor hereby irrevocably constitutes and appoints Beneficiary	
	 

and any officer or agent thereof, with full power of substitution, as its true and lawful attorneys-in-fact with full irrevocable power and authority in the place and stead of Trustor or in Beneficiary’s own name, for the
purpose of carrying out the terms of this Deed of Trust, to take any and all appropriate action and to execute any and all documents and instruments that may be necessary or useful to accomplish the purposes of this Deed of Trust and, without
limiting the generality of the foregoing, hereby gives said attorneys the power and right, on behalf of Trustor, without notice to or assent by Trustor, to do the following:

     (A) Upon the occurrence and during the continuance of an Event of Default, generally to sell, transfer, pledge, make any agreement with respect to or otherwise dispose of or deal with any of the
Personalty Collateral in such manner as is consistent with the applicable Uniform Commercial Code and as fully and completely as though Beneficiary were the absolute owner thereof for all purposes, and to do, at Trustor’s expense, at any time,
or from time to time, all acts and things which Beneficiary deems necessary or useful to protect, preserve or realize upon the Personalty Collateral and Beneficiary’s security interest therein, in order to effect the intent of this Deed of
Trust, all at least as fully and effectively as Trustor might do, including, without limitation, the filing and prosecuting of registration and transfer applications with the appropriate federal, state, local or other agencies or authorities with
respect to trademarks, copyrights and patentable inventions and processes, upon written notice to Trustor, the exercise of voting rights with respect to voting securities, which rights may be exercised, if Beneficiary so elects, with a view to
causing the liquidation of assets of the issuer of any such securities, and the execution, delivery and recording, in connection with any sale or other disposition of any Personalty Collateral, of the endorsements, assignments or other instruments
of conveyance or transfer with respect to such Personalty Collateral; and

     (B) to the extent that Trustor’s authorization given above is not sufficient, to file such financing statements with respect hereto, with or without Trustor’s signature, or a photocopy of
this Deed of Trust in substitution for a financing statement, as Beneficiary may deem appropriate and to execute in Trustor’s name such financing statements and amendments thereto and continuation statements which may require Trustor’s
signature.

     (ii) Ratification by Trustor.  To the extent permitted by law, Trustor hereby ratifies all that said attorneys shall lawfully do or cause to
be done by virtue hereof. This power of attorney is a power coupled with an interest and is irrevocable.

     (iii) No Duty on Beneficiary. The powers conferred on Beneficiary hereunder are solely to protect its interests in the Personalty Collateral
and shall not impose any

13

duty upon it to exercise any such powers. Beneficiary shall be accountable only for the amounts that it actually receives as a result of the exercise of such powers, and neither it nor any of its officers, directors, employees or
agents shall be responsible to Trustor for any act or failure to act, except for Beneficiary’s own gross negligence or willful misconduct.

     (d) None of the Personalty Collateral constitutes, or is the proceeds of, “farm products” as defined in Section 9-102(a)(34) of the Uniform Commercial Code. Trustor holds no commercial tort
claims with respect to the Property.  Trustor has at all times operated its business in compliance with all applicable provisions of the federal Fair Labor Standards Act.

	
ARTICLE V

Default

5.1 Events of Default. Each of the following shall constitute an event of default

(“Event of Default”) hereunder.

	
(a)      		
An Event of Default under the Bridge Loan Agreement;	
	 
	
(b)      		
Any failure by Trustor to perform any obligation hereunder not involving	
	 

the payment of money, or to comply with any other term or condition applicable to Trustor hereunder and the expiration of thirty (30) days after written notice of such failure by Beneficiary to Trustor, unless cured within such
thirty (30) day period, or if not curable within such thirty (30) day period, Trustor shall have initiated such cure within such thirty (30) day period, and thereafter shall have diligently and continuously pursued such cure until complete, but in
no event shall such cure period extend more than sixty (60) days after such written notice.

	
ARTICLE VI

Beneficiary’s Rights

	
6.1      		
Rights to Realty Collateral Upon Default.	
	 
	 	
(a) Operation of Property by Beneficiary. Upon the occurrence and during	
	 

the continuation of an Event of Default or at any time thereafter, and in addition to all other rights of Beneficiary, Beneficiary shall have the following rights and powers (but no obligation):

     (i) To enter upon and take possession of any of the Realty Collateral and exclude Trustor therefrom;

     (ii) To hold, use, administer, manage and operate the Realty Collateral to the extent that Trustor could do so, and without any liability to Trustor in connection with such operations; and

     (iii) To the extent that Trustor could do so, to collect, receive and receipt for all Products produced and sold from the Realty Collateral, to make repairs, to purchase machinery and equipment, to
conduct workover operations, to drill additional wells, and to exercise every power, right and privilege of Trustor with respect to the Realty Collateral.

14

Beneficiary may designate [any] person, firm, corporation or other entity to act on its behalf in exercising the foregoing rights and powers.  When and if the expenses of such operation and development (including costs of
unsuccessful workover operations or additional wells) have been paid, and the Obligations have been paid, the Realty Collateral shall be returned to Trustor (providing there has been no foreclosure sale).

     (b) Judicial Proceedings. Upon the occurrence of an Event of Default or at any time thereafter during the continuation thereof, the Trustee
and/or Beneficiary, in lieu of or in addition to exercising the power of sale hereafter given, may proceed by a suit or suits, in equity or at law (i) for the specific performance of any covenant or agreement herein contained or in aid of the
execution of any power herein granted, (ii) for the appointment of a receiver whether there is then pending any foreclosure hereunder or the sale of the Realty Collateral, or (iii) for the enforcement of any other appropriate legal or equitable
remedy; and further, in lieu of the non-judicial power of sale hereafter given for Collateral, the Trustee may proceed by suit for a sale of the Realty Collateral as a mortgage.

     (c) After the lapse of such time as may then be required by Utah Code Annotated Sec. 57-1-24 or other applicable law following the
recordation of the notice of default, and notice of default and notice of sale having been given as then required by Utah Code Annotated Sec. 57-1-25 and Sec. 57-1-26 or other applicable
law, Trustee, without demand on Trustor, shall sell the Realty Collateral (and any Fixture Collateral) on the date and at the time and place designated in the notice of sale, in such order as Beneficiary may determine (but subject to Trustor’s
statutory right under Utah Code Annotated Sec. 57-1-27 to direct the order in which the property, if consisting of several known lots or parcels, shall be sold), at public auction to the
highest bidder, the purchase price payable in lawful money of the United States at the time of sale or on such other terms as are set forth in the notice of sale. The person conducting the sale may, for any cause deemed expedient, postpone the sale
from time to time until it shall be completed and, in every such case, notice of postponement shall be given by public declaration thereof by such person at the time and place last appointed for the sale; provided, if the sale is postponed for longer than forty-five (45) days beyond the date designated in the notice of sale, notice of the time, date, and place of sale shall be given in the same manner as the
original notice of sale as required by Utah Code Annotated Sec. 57-1-27. Trustee shall execute and deliver to the purchaser a Trustee’s Deed, in accordance with Utah Code Annotated Sec. 57-1-28, conveying the Property so sold, but without any covenant of warranty, express or implied. The recitals in the Trustee’s Deed of any matters or facts shall be
conclusive proof of the truthfulness thereof.  Any person, including Beneficiary, may bid at the sale.  Trustee shall apply the proceeds of the sale as follows:

First: To the reasonable out-of-pocket and documented costs and expenses of exercising the power of sale and of the sale, including the payment of Trustee’s and attorneys’ reasonable fees
actually incurred not to exceed the amount which may be provided for in the Deed of Trust.

Second: To payment of the obligations secured by the Deed of Trust.

Third: The balance, if any, to the person or person’s legally entitled to the proceeds, or Trustee, in the Trustee’s discretion, may deposit the balance of the proceeds with the

15

clerk of the district court of the county in which the sale took place, in accordance with

Utah Code Annotated Sec. 57-1-29.

Upon any sale made under or by virtue of this subsection (c), whether made under the power of sale herein granted or under or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, the Beneficiary
may bid for and acquire the Property, whether by payment of cash or by credit bid in accordance with Utah Code Annotated Sec. 57-1-28(1)(b). In the event of a successful credit bid,
Beneficiary shall make settlement for the purchase price by crediting upon the Obligations of Trustor secured by this Deed of Trust such credit bid amount. Beneficiary, upon so acquiring the Property or any part thereof, shall be entitled to hold,
lease, rent, operate, manage, and sell the same in any manner provided by applicable laws.

     (d) Certain Aspects of Sale.  Beneficiary will have the right to become the purchaser at any foreclosure sale and to credit the then
outstanding balance of the Obligations against the amount payable by Beneficiary as purchaser at such sale. Statements of fact or other recitals contained in any conveyance to any purchaser or purchasers at any sale made hereunder will conclusively
establish the occurrence of an Event of Default, any acceleration of the maturity of the Obligations, the advertisement and conduct of such sale in the manner provided herein, the appointment of any successor-Trustee hereunder and the truth and
accuracy of all other matters stated therein. Trustor does hereby ratify and confirm all legal acts that the Trustee may do in carrying out the Trustee’s duties and obligations under this Deed of Trust, and Trustor hereby irrevocably appoints
Beneficiary to be the attorney-in-fact of Trustor and in the name and on behalf of Trustor to execute and deliver any deeds, transfers, conveyances, assignments, assurances and notices which Trustor ought to execute and deliver and do and perform
any and all such acts and things which Trustor ought to do and perform under the covenants herein contained and generally to use the name of Trustor in the exercise of all or any of the powers hereby conferred on Trustee. Upon any sale, whether
under the power of sale hereby given or by virtue of judicial proceedings, it shall not be necessary for Trustee or any public officer acting under execution or by order of court, to have physically present or constructively in his possession any of
the Collateral, and Trustor hereby agrees to deliver to the purchaser or purchasers at such sale on the date of sale the Collateral purchased by such purchasers at such sale and if it should be impossible or impracticable to make actual delivery of
such Collateral, then the title and right of possession to such Collateral shall pass to the purchaser or purchasers at such sale as completely as if the same had been actually present and delivered.

     (e) Receipt to Purchaser. Upon any sale made under the power of sale herein granted, the receipt of the Trustee will be sufficient discharge
to the purchaser or purchasers at any sale for its purchase money, and such purchaser or purchasers, will not, after paying such purchase money and receiving such receipt of the Trustee, be obligated to see to the application of such purchase money
or be responsible for any loss, misapplication or non-application thereof.

     (f) Effect of Sale. Any sale or sales of the Realty Collateral will operate to divest all right, title, interest, claim and demand
whatsoever, either at law or in equity, of Trustor in and to the premises and the Realty Collateral (and any Fixture Collateral) sold, and will be a perpetual bar, both at law and in equity, against Trustor, Trustor’s successors or assigns, and
against any and all persons claiming or who shall thereafter claim all or any of the Realty

16

Collateral (and any Fixture Collateral) sold by, through or under Trustor, or Trustor’s successors or assigns. Nevertheless, if requested by the Trustee so to do, Trustor shall join in the execution and delivery of all proper
conveyances, assignments and transfers of the Property so sold. The purchaser or purchasers at the foreclosure sale will receive as incident to his, her, its or their own ownership, immediate possession of the Realty Collateral (and any Fixture
Collateral) purchased and Trustor agrees that if Trustor retains possession of the Realty Collateral (and any Fixture Collateral) or any part thereof subsequent to such sale, Trustor will be considered a tenant at sufferance of the purchaser or
purchasers and will be subject to eviction and removal by any lawful means, with or without judicial intervention, and all damages by reason thereof are hereby expressly waived by Trustor.

     (g) Trustor’s Waiver of Appraisement and Marshalling. Trustor agrees, to the full extent that Trustor may lawfully so agree, that
Trustor will not at any time insist upon or plead or in any manner whatever claim the benefit of any appraisement, valuation, stay, extension or redemption law, now or hereafter in force, in order to prevent or hinder the enforcement or foreclosure
of this Deed of Trust, the absolute sale of the Collateral, including the Realty Collateral (or any Fixture Collateral), or the possession thereof by any purchaser at any sale made pursuant to this Deed of Trust or pursuant to the decree of any
court of competent jurisdiction; and Trustor, for Trustor and all who may claim through or under Trustor, hereby waives the benefit of all such laws and, to the extent that Trustor may lawfully do so under any applicable law, any and all rights to
have the Collateral, including the Realty Collateral (and any Fixture Collateral), marshaled upon any foreclosure of the Lien hereof or sold in inverse order of alienation. Trustor agrees that all prerequisites to the validity of the sale shall be
conclusively presumed to have been satisfied.

     (h) Action for Deficiency. Subject to provisions of Utah Code Annotated Sec.
57-1-32, in any action for a deficiency after a foreclosure under this Deed of Trust, if any person against whom recovery is sought requests the court in which the action is pending to determine the fair market value of the Realty Collateral (and
any Fixture Collateral), as of the date of the foreclosure sale, the following shall be the basis of the court’s determination of fair market value: (i) the Realty Collateral (and any Fixture Collateral) shall be valued “as is” and in
its condition as of the date of foreclosure, and no assumption of increased value because of post-foreclosure repairs, refurbishment, restorations or improvements shall be made; (ii) any adverse effect on the marketability of title because of the
foreclosure or because of any other title condition not existing as of the date of this Deed of Trust shall be considered; (iii) the valuation of the Realty Collateral (and any Fixture Collateral) shall be based upon an assumption that the
foreclosure purchaser desires a prompt resale of the Realty Collateral (and any Fixture Collateral) for cash within a six month-period after foreclosure; (iv) although the Realty Collateral (and any Fixture Collateral) may be disposed of more
quickly by the foreclosure purchaser, the gross valuation of the Realty Collateral (and any Fixture Collateral) as of the date of foreclosure shall be discounted for a hypothetical reasonable holding period (not to exceed 6 months) at a monthly rate
equal to the average monthly interest rate on the loan as provided in the Bridge Loan Agreement for the twelve months before the date of foreclosure; (v) the gross valuation of the Realty Collateral (and any Fixture Collateral) as of the date of
foreclosure shall be further discounted and reduced by reasonable estimated costs of disposition, including brokerage commissions, title policy premiums, environmental assessment and clean-up costs, tax and assessment, prorations, costs to comply
with legal requirements and attorneys’ fees; (vi)

17

expert opinion testimony shall be considered only from a licensed appraiser certified by the State of Utah and, to the extent permitted under Utah law, a member of the Appraisal Institute, having at least five years’
experience in appraising property similar to the Realty Collateral (and any Fixture Collateral) in the county where the Realty Collateral (and any Fixture Collateral) is located, and who has conducted and prepared a complete written appraisal of the
Realty Collateral (and any Fixture Collateral) taking into considerations the factors set forth in this Deed of Trust; no expert opinion testimony shall be considered without such written appraisal; (vii) evidence of comparable sales shall be
considered only if also included in the expert opinion testimony and written appraisal referred to in the preceding paragraph; and (viii) an affidavit executed by Beneficiary to the effect that the foreclosure bid accepted by Trustee was equal to or
greater than the value of the Realty Collateral (and any Fixture Collateral) determined by Beneficiary  based upon the factors and methods set forth in subparagraphs (i) through (vii) above before the foreclosure shall constitute prima facie
evidence that the foreclosure bid was equal to or greater than the fair market value of the Realty Collateral (and any Fixture Collateral) on the foreclosure date.

     6.2 Rights to Personalty Collateral Upon Default. Upon the occurrence of an Event of Default, or at any time thereafter during the
continuation thereof, Beneficiary or the Trustee may proceed against the Personalty Collateral in accordance with the remedies provided for in Section 10 of the Security Agreement.

     6.3 Rights to Fixture Collateral Upon Default. Upon the occurrence of an Event of Default, or at any time thereafter during the
continuation thereof, Beneficiary may elect to treat the Fixture Collateral as either Realty Collateral or as Personalty Collateral (but not both) and proceed to exercise such rights as apply to the type of Collateral selected.

     6.4 Account Debtors. Beneficiary may, in its discretion, after the occurrence and during the continuation of an Event of Default,
notify any account debtor to make payments directly to Beneficiary and contact account debtors directly to verify information furnished by Trustor. Beneficiary shall not have any obligation to preserve any rights against prior parties. To the extent
required by contract or law, Trustor hereby instructs all such account debtors to abide by any instructions of the Beneficiary hereunder, and Trustor does hereby agree to indemnify, defend and hold harmless such account debtor’s for complying
with payment instructions of the Beneficiary with respect to the payment of amount by such account debtor directly to Beneficiary.

     6.5 Costs and Expenses.  All sums advanced or reasonable costs or expenses incurred by Beneficiary (either by it directly or on its
behalf by the Trustee or any receiver appointed hereunder) in protecting and enforcing its rights hereunder shall constitute a demand obligation owing by Trustor to Beneficiary as part of the Obligations. Trustor hereby agrees to repay such sums on
demand plus interest thereon from the date of the advance or incurrence until reimbursement of Beneficiary at the rate of interest as set forth in the Bridge Loan Agreement.

     6.6 Set-Off. Upon the occurrence of any Event of Default, Beneficiary shall have the right to set-off any funds of Trustor in the
possession of Beneficiary against any amounts then due by Trustor to Beneficiary pursuant to this Deed of Trust.

18

     6.7 Personal Property. It is the express understanding and intent of the parties that as to any personal property interests subject to
Article 9a of the Utah Uniform Commercial Code, Beneficiary, during the continuation of an Event of Default, may proceed under the Utah Uniform Commercial Code or may proceed as to both real and personal property interests in accordance with the
provisions of this Deed of Trust and its rights and remedies in respect of real property, and treat both real and personal property interests as one parcel or package of security as permitted by Utah Annotated Code
Sec. 70A-9a-601 or other applicable law.

ARTICLE VII

PROVISIONS REGARDING SITLA MINERAL LEASE

     7.1 The Lien of this Deed of Trust shall attach to all of Trustor’s rights and remedies at any time arising under or pursuant to Subsection 365(h) of the Bankruptcy Code, 11 U.S.C. Sec. 365(h),
including, without limitation, all of Trustor’s rights to remain in possession of the Premises.

     7.2 Notwithstanding anything to the contrary contained herein, this Deed of Trust shall not constitute an assignment of any of the Mineral Leases and Beneficiary shall have no liability or obligation
thereunder by reason of its acceptance of this Deed of Trust.

	
ARTICLE VIII

Miscellaneous

     8.1 Successor Trustees.  The Trustee may resign in writing addressed to Beneficiary or be removed at any time with or without cause by
an instrument in writing duly executed by Beneficiary. In case of the death, resignation or removal of the Trustee, a successor Trustee may be appointed by Beneficiary by instrument of substitution complying with any applicable requirements of law,
and in the absence of any requirement, without other formality other than an appointment and designation in writing. The appointment and designation will vest in the named successor Trustee all the estate and title of the Trustee in all of the
Collateral and all of the rights, powers, privileges, immunities and duties hereby conferred upon the Trustee. All references herein to the Trustee will be deemed to refer to any successor Trustee from time to time acting hereunder.

     8.2 Advances by Beneficiary or The Trustee.  Each and every covenant of Trustor herein contained shall be performed and kept by
Trustor solely at Trustor’s expense. If Trustor fails to perform or keep any of the covenants of whatsoever kind or nature contained in this Deed of Trust, Beneficiary (either by it directly or on its behalf by the Trustee or any receiver
appointed hereunder) may, following ten (10) business days’ prior written notice to Trustor, but will not be obligated to, make advances to perform the same on Trustor’s behalf, and Trustor hereby agrees to repay such sums and any
reasonable out-of-pocket attorneys’ fees incurred in connection therewith on demand plus interest thereon from the date of the advance until reimbursement of Beneficiary at the rate of interest set forth in the Bridge Loan Agreement. In
addition, Trustor hereby agrees to repay on demand any reasonable, out-of-pocket and documented costs, expenses and attorney’s fees incurred by Beneficiary or the Trustee which are to be obligations of Trustor pursuant to, or allowed by, the
terms of this Deed of Trust, including such reasonable, out-of-pocket and documented costs, expenses and attorney’s fees incurred

19

pursuant to Section 3.1(h), Section 6.5 or Section 8.3 hereof, plus interest thereon from the date of the advance by Beneficiary or the Trustee until reimbursement of Beneficiary or the Trustee, respectively, at the rate of
interest set forth in the Bridge Loan Agreement. Such amounts will be in addition to any sum of money which may, pursuant to the terms and conditions of the written instruments comprising part of the Obligations, be due and owing.  No such advance
will be deemed to relieve Trustor from any default hereunder.

     8.3 Defense of Claims. Trustor shall promptly notify Beneficiary in writing of the commencement of any legal proceedings affecting
Trustor’s title to the Collateral or Beneficiary’s Lien or security interest in the Collateral, or any part thereof, and shall take such action, employing attorneys agreeable to Beneficiary, as may be necessary to preserve Trustor’s,
the Trustee’s and Beneficiary’s rights affected thereby. If Trustor fails or refuses to adequately, in the sole judgment of Beneficiary, defend Trustor’s, the Trustee’s or Beneficiary’s rights to the Collateral, the Trustee
or Beneficiary may take such action on behalf of and in the name of Trustor and at Trustor’s expense. Moreover, Beneficiary or the Trustee on behalf of Beneficiary may take such independent action in connection therewith as they may in their
sole discretion deem proper, including the right to employ independent counsel and to intervene in any suit affecting the Collateral.  All reasonable costs, expenses and out-of-pocket attorneys’ fees incurred by Beneficiary or the Trustee
pursuant to this Section 8.3 or in connection with the defense by Beneficiary of any claims, demands or litigation relating to Trustor, the Collateral or the transactions contemplated in this Deed of Trust shall be paid by Trustor on demand plus
interest thereon from the date of the advance by Beneficiary or the Trustee until reimbursement of Beneficiary or the Trustee, respectively, at the Default Rate under the Bridge Loan Agreement.

     8.4 Termination. If all the Obligations are paid in full, and the covenants herein contained are well and fully performed then all of
the Collateral will revert to Trustor and the entire estate, right, title and interest of the Trustee and Beneficiary will thereupon cease; and Beneficiary in such case shall, upon the request of Trustor and the payment by Trustor of all
attorneys’ fees and other expenses, deliver to Trustor proper instruments acknowledging satisfaction of this Deed of Trust and releasing all Liens in connection herewith. In addition, if applicable pursuant to the Collateral release provisions
of the Security Agreement, Beneficiary shall upon request of Trustor and the payment by Trustor of all attorneys’ fees and other expenses, deliver to Trustor proper instruments releasing all Liens placed upon such Geothermal Property as
described in such Security Agreement.

     8.5 Renewals, Amendments and Other Security. Without notice or consent of Trustor, renewals and extensions of the written instruments
constituting part or all of the Obligations may be given at any time and amendments may be made to agreements relating to any part of such written instruments or the Collateral.  Beneficiary may take or hold other security for the Obligations
without notice to or consent of Trustor. The acceptance of this Deed of Trust by Beneficiary shall not waive or impair any other security Beneficiary may have or hereafter acquire to secure the payment of the Obligations nor shall the taking of any
such additional security waive or impair the Lien and security interests herein granted. The Trustee or Beneficiary may resort first to such other security or any part thereof, or first to the security herein given or any part thereof, or from time
to time to either or both, even to the partial or complete abandonment of either security, and such action will not be a waiver of any rights

20

conferred by this Deed of Trust. This Deed of Trust may not be amended, waived or modified except in a written instrument executed by both Trustor and Beneficiary.

     8.6 Security Agreement, Financing Statement and Fixture Filing; As-Extracted Collateral Filing. This Deed of Trust will be deemed to
be and may be enforced from time to time as an assignment, chattel mortgage, contract, deed of trust, financing statement, real estate mortgage, or security agreement, and from time to time as any one or more thereof if appropriate under applicable
state law. As a financing statement, this Deed of Trust is intended to cover all Personalty Collateral including Trustor’s interest in all Products as and after they are extracted and all accounts arising from the sale thereof at the wellhead.
THIS DEED OF TRUST SHALL BE EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING WITH RESPECT TO FIXTURE COLLATERAL INCLUDED WITHIN THE COLLATERAL. This Deed of Trust shall be filed
in the real estate records of any county or counties in the state in which any part of the Realty Collateral and Fixture Collateral is located, as well as the Uniform Commercial Code records of the Secretary of State or other appropriate office of
the state where the Trustor is registered as a limited liability company. At Beneficiary’s request Trustor authorizes and, if necessary, shall execute, financing statements covering the Personalty Collateral, including all Products sold at the
wellhead, and Fixture Collateral, which financing statements may be filed in the Uniform Commercial Code records of the Secretary of State or other appropriate office of the state in which any of the Collateral is located or where Trustor is
registered as a limited liability company. Furthermore, Trustor hereby irrevocably authorizes Beneficiary and any affiliate, employee or agent thereof, at any time and from time to time, to file in any Uniform Commercial Code jurisdiction any
financing statement or document and amendments thereto, without the signature of Trustor where permitted by law, in order to perfect or maintain the perfection of any security interest granted under this Deed of Trust. A photographic or other
reproduction of this Deed of Trust shall be sufficient as a financing statement. AS TO ALL OF THE COLLATERAL WHICH IS OR WHICH HEREAFTER BECOMES “AS-EXTRACTED COLLATERAL” UNDER APPLICABLE LAW, THIS DEED OF TRUST CONSTITUTES AN AS-EXTRACTED
COLLATERAL FILING UNDER THE UTAH UNIFORM COMMERCIAL CODE.

     8.7 Unenforceable or Inapplicable Provisions. If any term, covenant, condition or provision hereof is invalid, illegal or
unenforceable in any respect, the other provisions hereof will remain in full force and effect and will be liberally construed in favor of the Trustee and Beneficiary in order to carry out the provisions hereof.

     8.8 Rights Cumulative. Each and every right, power and remedy herein given to the Trustee or Beneficiary will be cumulative and not
exclusive, and each and every right, power and remedy whether specifically herein given or otherwise existing may be exercised from time to time and as often and in such order as may be deemed expedient by the Trustee, or Beneficiary, as the case
may be, and the exercise, or the beginning of the exercise, of any such right, power or remedy will not be deemed a waiver of the right to exercise, at the same time or thereafter, any other right, power or remedy.  No delay or omission by the
Trustee or by Beneficiary in the exercise of any right, power or remedy will impair any such right, power or remedy or operate as a waiver thereof or of any other right, power or remedy then or thereafter existing.

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     8.9 Waiver by Beneficiary.  Any and all covenants in this Deed of Trust may from time to time by instrument in writing by Beneficiary,
be waived to such extent and in such manner as the Trustee or Beneficiary may desire, but no such waiver will ever affect or impair either the Trustee’s or Beneficiary’s rights hereunder, except to the extent specifically stated in such
written instrument.

     8.10 Terms. The term “Trustor” as used in this Deed of Trust will be construed as singular or plural to correspond with the
number of parties executing this Deed of Trust as Trustor. Since more than one party executes this Deed of Trust as Trustor, each party’s duties and liabilities under this Deed of Trust will be joint and several.  The terms
“Beneficiary”, “Trustor”, and “Trustee” as used in this Deed of Trust include the heirs, executors or administrators, successors, representatives, receiver, trustees and assigns of those parties. Unless the context
otherwise requires, terms used in this Deed of Trust which are defined in the Uniform Commercial Code of Utah are used with the meanings therein defined.

     8.11 Counterparts.  This Deed of Trust may be executed in any number of counterparts, each of which will for all purposes be deemed to
be an original, and all of which are identical except that, to facilitate recordation, in any particular counties counterpart portions of Exhibit A hereto which describe Properties situated in counties other than the counties in which such
counterpart is to be recorded may have been omitted.

     8.12 Governing Law.  THIS DEED OF TRUST AND ALL OTHER LOAN DOCUMENTS AND THE RIGHTS, DUTIES, OBLIGATIONS AND LIABILITIES OF THE
PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF UTAH, WITHOUT GIVING EFFECT TO CONFLICT OF LAWS PRINCIPLES.  WHEREVER POSSIBLE, EACH PROVISION OF THIS DEED OF TRUST SHALL BE INTERPRETED
IN SUCH MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW. THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS DEED OF TRUST AND THE OTHER LOAN DOCUMENTS SHALL BE TRIED AND LITIGATED
ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF SALT LAKE, STATE OF UTAH, EACH PARTY HERETO WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO
VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 8.12.

     8.13 Notice. All notices required or permitted to be given by Trustor, Beneficiary or the Trustee shall be in writing and mailed by
certified mail, return receipt requested, telecopied, hand delivered, or delivered by a nationally recognized overnight courier, and shall be addressed as follows:

	
Trustor: 
		
 		
THERMO NO. 1 BE-01, LLC 
	
	
 
		
 		
5152 North Edgewood Drive 
	
	
 
		
 		
Provo, Utah 84604 
	
	
 
	
	
Beneficiary: 
		
 		
[
_____________
] 
	

22

	
 
		
 		
[Address] 
	
	
 
	
	
Trustee: 
		
 		
Any notices to be given to the 
	
	
 
		
 		
Trustee shall be delivered to Beneficiary. 
	

All such notices and communications shall, when so mailed, telecopied, or hand delivered or delivered by a nationally recognized overnight courier, be effective when received if mailed, when telecopy transmission is completed, or
when delivered by such messenger or courier, respectively.

     8.14 Duties of Trustee. It shall be no part of the duty of the Trustee to see to any recording, filing or registration of this Deed of
Trust or any other instrument in addition or supplemental hereto, or to see to the payment of or be under any duty with respect to any tax or assessment or other governmental charge which may be levied or assessed on the Collateral, any part
thereof, or against Trustor, or to see to the performance or observance by Trustor of any of the covenants and agreements contained herein.  Trustee shall not be responsible for the execution, acknowledgment or validity of this Deed of Trust or of
any instrument in addition or supplemental hereto or for the sufficiency of the security purported to be created hereby, and makes no representation in respect thereof or in respect of the rights of Beneficiary. Trustee shall have the right to seek
the advice of counsel upon any matters arising hereunder and shall be fully protected in relying as to legal matters on the advice of counsel. Trustee shall not incur any personal liability hereunder except for Trustee’s own willful misconduct;
and the Trustee shall have the right to rely on any instrument, document or signature authorizing or supporting any action taken or proposed to be taken by him hereunder, believed by him in good faith to be genuine.

     8.15 Condemnation. All awards and payments heretofore and hereafter made for the taking of or injury to the Collateral or any portion
thereof whether such taking or injury be done under the power of eminent domain or otherwise, are hereby assigned to Beneficiary and shall be applied in accordance with the terms of the Security Agreement. Beneficiary is hereby authorized to collect
and receive the proceeds of such awards and payments and to give proper receipts and acquittances therefor.  Trustor hereby agrees to make, execute and deliver, upon request, any and all assignments and other instruments sufficient for the purpose
of confirming this assignment of the awards and payments to Beneficiary free and clear of any encumbrances of any kind or nature whatsoever.

     8.16 Successors and Assigns.  This Deed of Trust is binding upon Trustor, Trustor’s successors and assigns, and shall inure to
the benefit of the Trustee and the Beneficiary, and each of their respective successors and assigns, and the provisions hereof shall likewise be covenants running with the land.

     8.17 Article and Section Headings. The article and section headings in this Deed of Trust are inserted for convenience of reference
and shall not be considered a part of this Deed of Trust or used in its interpretation.

     8.18 Usury Not Intended.  It is the intent of Trustor and Beneficiary in the execution and performance of this Deed of Trust and the
other Loan Documents to contract in

23

strict compliance with applicable usury laws governing the Obligations including such applicable usury laws of the State of Utah and the United States of America as are from time-to-time in effect. In furtherance thereof,
Beneficiary and Trustor stipulate and agree that none of the terms and provisions contained in this Deed of Trust or the other Loan Documents shall ever be construed to create a contract to pay, as consideration for the use, forbearance or detention
of money, interest at a rate in excess of the maximum non-usurious rate permitted by applicable law and that for purposes hereof “interest” shall include the aggregate of all charges which constitute interest under such laws that are
contracted for, charged or received under this Deed of Trust and the other Loan Documents; and in the event that, notwithstanding the foregoing, under any circumstances the aggregate amounts taken, reserved, charged, received or paid on the
Obligations, include amounts which by applicable law are deemed interest which would exceed the maximum non-usurious rate permitted by applicable law, then such excess shall be deemed to be a mistake and Beneficiary shall credit the same on the
principal of the Obligations (or if the Obligations shall have been paid in full, refund said excess to Trustor). In the event that the maturity of the Obligations is accelerated by reason of any election of Beneficiary resulting from any Event of
Default, or in the event of any required or permitted prepayment, then such consideration that constitutes interest may never include more than the maximum non-usurious rate permitted by applicable law and excess interest, if any, provided for in
this Deed of Trust or other Loan Documents shall be canceled automatically as of the date of such acceleration and prepayment and, if theretofore paid, shall be credited on the Obligations or, if the Obligations shall have been paid in full,
refunded to Trustor. In determining whether or not the interest paid or payable under any specific contingencies exceeds the maximum non-usurious rate permitted by applicable law, Trustor and Beneficiary shall to the maximum extent permitted under
applicable law amortize, prorate, allocate and spread in equal part during the period of the full stated term of the Obligations, all amounts considered to be interest under applicable law of any kind contracted for, charged, received or reserved in
connection with the Obligation.

     8.19 Due Authorization.  Trustor hereby represents, warrants and covenants to Beneficiary and the Trustee that the obligations of
Trustor under this Deed of Trust are the valid, binding and legally enforceable obligations of Trustor, that the execution, ensealing and delivery of this Deed of Trust by Trustor has been duly and validly authorized in all respects by Trustor, and
that the persons who are executing and delivering this Deed of Trust on behalf of Trustor have full power, authority and legal right to so do, and to observe and perform all of the terms and conditions of this Deed of Trust on Trustor’s part to
be observed or performed.

     8.20 No Offsets, Etc.  Trustor hereby represents, warrants and covenants to Beneficiary and the Trustee that there are no offsets,
counterclaims or defenses at law or in equity against this Deed of Trust.

[Remainder of this page intentionally left blank.]

24

EXECUTED AND DELIVERED effective as of the date first written above.

	 	
TRUSTOR:

	
THERMO NO. 1 BE-01, LLC, 

a Delaware limited liability company, as Trustor

	
By: 
__________________________

Name: 
________________________

Title: 
_________________________

	
THE STATE OF 
		
 		
                                                      ) 
		
 		
 
		
 		
 
	
	
 
		
 		
                                                      : ss. 
		
 		
 
		
 		
 
	
	
COUNTY OF 
		
 		
                                                      ) 
		
 		
 
		
 		
 
	
	
 
	
	
                    This instrument 
		
 		
was acknowledged before me on this 
		
 		
 
		
 		
day of April, 2011, by 
	
	
		
		
		
		

		
		
	
	
_________________
, 
___________________
of THERMO NO. 
		
 		
1 
		
 		
BE-01, LLC, a Delaware 
	
	
limited liability company, for and on behalf of said company. 
		
 		
 
		
 		
 
	

	
_______________________________________

Notary Public 

25

	
EXHIBIT A

	
TO

DEED OF TRUST, LEASEHOLD DEED OF TRUST, SECURITY AGREEMENT, ASSIGNMENT OF PRODUCTION, FIXTURE FILING AND FINANCING 

STATEMENT

	
[Insert legal description]

1

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