Document:

exv10w19

Exhibit 10.19

Lloyd Johnson

24818 NE 20th Street

Sammamish, WA 98074

Dear Lloyd:

We are pleased to offer you the position of Executive Vice President, Chief Sales Officer with
Diamond Foods, Inc. (“Diamond” or the “Company”). In this position you will report to Michael
Mendes, President and Chief Executive Officer. The terms and conditions of our offer are as
follows:

Start Date: We will mutually agree on a start date.

Compensation:

	 
	Annual Base Salary:

$390,000.00 annualized base salary (Exempt), payable in accordance with standard Company
payroll practices.

	Sign-on Bonus:

The Company will pay you a sign-on bonus of $50,000, with $25,000 payable three months after
commencement of your employment and $25,000 payable nine months after commencement of your
employment.

	Bonus Incentive Program:

You will participate in the annual bonus program, which is designed to reward outstanding
performance. Your position is eligible for a maximum bonus potential of 140% of base salary,
with a target bonus potential of 70% of base salary. The bonus amount will be based on
individual objectives and Company financial metrics, as will be established after
commencement of your employment and approved by the Compensation Committee of the Board of
Directors and/or the full Board of Directors. You will be eligible for this non-guaranteed
bonus in fiscal 2009. You must continue to be an active employee through July 31 for
eligibility in the bonus program and be an active employee on the day of the payout.

	Equity Awards: You will be granted an option to purchase 33,000 shares of common
stock and 33,000 shares of restricted stock (subject to Board approval at the next Board
meeting, scheduled for September 25, 2008). The exercise price for the options will be
Diamond’s closing price on the date the Board approves your grant, and your purchase price
for the restricted stock would be $0.001 per share.

D I A M O N D F O O D S , I N C . 

600 MONTGOMERY STREET 33RD FLOOR SAN FRANCISCO, CALIFORNIA 94111 — 2702

TEL 415 . 912 . 3180 FAX 415 . 812 . 3175 diamondfoods.com nasdaq:DMND

 

 

	 
	The options will vest and become exercisable over a four-year period, with 25% of the shares
vesting on the first anniversary of the date of grant, and the remaining shares vesting
ratably on a quarterly basis over the 36-month period following the first anniversary of the
date of grant. The restricted stock will vest over a four-year period, with 25% of the
restricted stock vesting on each anniversary of your date of grant. The option and
restricted stock will require your completion of applicable grant documents, which provide
that vesting is subject to you remaining in continuous service as an employee of Diamond
through each vest date.

Performance Evaluation/Salary Review:

An evaluation of your performance against the Company’s expectations, along with financial
consideration, will be conducted in accordance with the annual salary plan around September 2009.

Health & Welfare Benefits:

Eligibility for Diamond Foods, Inc. Health & Welfare Benefits commences on the first day of
employment. Plan description of these benefits will be provided under separate cover during
orientation.

	 
	Group Medical: Blue Cross

	Group Dental Insurance: Delta Dental

	Group Vision Insurance: Vision Service Plan (VSP)

	Group Life Insurance: The Company provides basic life insurance at one (1) times
your annual base salary. We offer the option to purchase additional voluntary life
insurance at competitive group rates.

	Long & Short Term Disability: The Company will provide both of these plans for you
at no cost.

	IRS Section 125: You will be provided the opportunity to participate in three (3)
optional plans — (a) for pre-tax employee co-share premiums; (b) Tax-free Medical Flexible
Spending Account (FSA) up to $2,600 per year; or (c) Tax-free Dependent Care Flexible
Spending Account (FSA) up to $5,000 per year.

Executive Premium Health Benefit: You will be eligible to participate in the Company’s
Exec-u-Care program, which provides for additional health and medical reimbursements that are not
otherwise covered by our Group Medical program.

D I A M O N D F O O D S , I N C . 

600 MONTGOMERY STREET 33RD FLOOR SAN FRANCISCO, CALIFORNIA 94111 — 2702

TEL 415 . 912 . 3180 FAX 415 . 812 . 3175 diamondfoods.com nasdaq:DMND

 

 

The Retirement Program:

Diamond has a Savings and Investment Plan, which is a 401k plan, with the following terms:

	 	 	 
	        a.

	 	You will be vested at 100% on your first day of eligibility after 6
months of employment and worked 1,000 hours.
	        b.

	 	Company will make a contribution equal to 3% of employee’s base salary on
a quarterly basis after six (6) months of employment.

Other Benefits:

Holidays: Ten (10) paid holidays per year.

	 
	Paid Time Off (PTO) Annual Accrual: Date of Hire — completing 14 yrs. 6.154 hrs/pay period = 4 weeks/year
15 or more years 7.692 hrs/pay period = 5 weeks/year

	Change of Control/Severance Agreement: Upon approval by the Board of Directors, the
Company will enter into its standard form of Change of Control/Severance Agreement with you.
The form of the agreement is attached to this letter.

	Severance upon Termination without Cause: In the event the Company terminates your
employment without Cause, as defined below, you will be entitled to receive the following
termination benefits:

	· Payment of 12 months of base salary, based on your base salary on the date of
termination;

	· Payment of your target bonus amount for the year in which the termination occurs;

	· Acceleration of any stock options, restricted stock or other equity grant that
would have otherwise vested in the 12 months following the date of termination; and

	· The Company will offer to you the ability to elect coverage under the
Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) under the Company’s
medical or dental plans as in effect immediately prior to the date of termination.
If you elect timely continuation of coverage under COBRA, provided that you pay the
amount required to continue coverage, the Company will maintain coverage for you and
your dependants for up to the maximum period of time allowed under COBRA.

	As used in this letter, “Cause” shall mean commission of a felony, fraud, crime of moral
terpitude, or intentional or willful misconduct.

	Health Club Membership: Diamond will provide you with a membership in a health
club. Currently, the company provides memberships for senior executives at the Bay Club in
San Francisco.

D I A M O N D F O O D S , I N C . 

600 MONTGOMERY STREET 33RD FLOOR SAN FRANCISCO, CALIFORNIA 94111 — 2702

TEL 415 . 912 . 3180 FAX 415 . 812 . 3175 diamondfoods.com nasdaq:DMND

 

 

	 
	Car Allowance: Diamond will pay you a monthly car allowance of $1,000 to cover a
car and car expenses.

	Financial Planning: Diamond provides its senior level executives with a financial
planning service for tax preparation, financial consulting and education. We partner with
Ayco, a Goldman Sachs company, to provide these services.

	Relocation: Diamond will reimburse you for real estate broker commissions you incur
in connection with the sale of your home and relocation to the San Francisco Bay Area,
provided that you relocate within 12 months of commencement of your employment. This
reimbursement will not exceed 5% of the selling price of your home. In addition, the
Company will arrange for and bear the cost of a moving company to relocate your household
goods.

	Temporary Housing: For a period of 12 months, Diamond will provide temporary
housing for you, not to exceed $3,500 per month.

Obligations of Employee During & After Employment:

	 
	Records: All records, files, documents and the like, or abstracts, summaries or
copies thereof, relating to the business of the Company or the business of any subsidiary or
affiliated companies, which the Company or you shall prepare or use or come into contract
with, shall remain the sole property of the Company or the affiliated or subsidiary company,
as the case may be, and shall not be removed from the premises without the written consent
of the Company, and shall be promptly returned upon termination of employment.

	Competitors of the Company: You acknowledge that you have acquired and will acquire
knowledge regarding confidential, proprietary and/or trade secret information in the course
of performing your responsibilities for the Company, and you further acknowledge that such
knowledge and information is the sole and exclusive property of the Company. You recognize
that disclosure of such knowledge and information, or use

of such knowledge and information, to or by a competitor could cause serious and irreparable
harm to the Company. You therefore agree that you shall not accept employment with, nor
provide any form of service for, any company that competes with the business of the Company
during and for one year after termination of your employment with the Company.

	Non-Solicitation: During your employment with the Company and for a period of one
year after termination, for any reason, you agree that you will not, directly or indirectly
(i) solicit any employee of the Company to leave the employment of the Company or (ii)

D I A M O N D F O O D S , I N C . 

600 MONTGOMERY STREET 33RD FLOOR SAN FRANCISCO, CALIFORNIA 94111 — 2702

TEL 415 . 912 . 3180 FAX 415 . 812 . 3175 diamondfoods.com nasdaq:DMND

 

 

induce or
attempt to induce, any customer or supplier of the Company to cease doing business with the Company.

Lloyd, we believe this outlines the primary components related to your employment with the Company.
Upon commencement of your employment, we will have additional employment for you to sign,
including company policies. Should you accept our offer of employment, please sign, date and
return the original copy of this letter to the Company, we have included a copy of this letter for
your files.

Sincerely,

DIAMOND FOODS, INC.

/s/ Michael J. Mendes

Michael J. Mendes

President & Chief Executive Officer

Diamond Foods, Inc. operates under an employment-at-will concept, which means either party may
terminate the employment relationship at any time, with or without cause and with or without
notice. In addition, no statements made in this offer letter are meant to imply or state a
guarantee of continued employment. If any part of the terms set forth in this letter is determined
to be unenforceable, including without limitation the section entitled “Competitors of the
Company,” the remaining terms shall not be affected and shall remain fully enforceable.

	 	 	 	 	 
	 	 	 
	Acceptance:	/s/ Lloyd Johnson	 	Date:	August 17, 2008
 	 
	 	      Lloyd Johnson 	 
	 	 	 
	 

cc: Personnel File

D I A M O N D F O O D S , I N C . 

600 MONTGOMERY STREET 33RD FLOOR SAN FRANCISCO, CALIFORNIA 94111 — 2702

TEL 415 . 912 . 3180 FAX 415 . 812 . 3175 diamondfoods.com nasdaq:DMNDexv10w17

Exihibit 10.17

HARRIS STRATEX NETWORKS

ANNUAL INCENTIVE PLAN

     1. Purpose of the Plan. The purpose of the Harris Stratex Networks Annual Incentive Plan is to
promote the growth and performance of the Company by: (i) linking a portion of the total annual
compensation for certain key employees to attainment of such business objectives as shall be
approved for each Performance Period; and (ii) assisting in the attraction, retention and
motivation of certain key employees.

     2. Definitions. Wherever the following capitalized terms are used in the Plan, they shall have
the meanings specified below:

          “Affiliate” means any corporation, partnership, limited liability company, business trust, or
other entity controlling, controlled by or under common control with the Company.

          “Award” means a right to receive a cash incentive payment pursuant to the terms and conditions
of the Plan.

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

          “Change of Control” means the occurrence of any of the following unless both (i) immediately
prior to such occurrence Harris Corporation (“Harris”) owns more than 30% of the total combined
voting power of the Company’s outstanding securities and (ii) immediately after such occurrence
(and the exercise or lapse of any rights triggered by such occurrence) Harris owns a majority of
such total combined voting power of the outstanding capital stock of the Company:

          (a) any a merger or consolidation of the Company into another person (i.e., which merger or
consolidation the Company does not survive) or the sale, transfer, or other disposition of all or
substantially all of the Company’s assets to one or more other persons in a single transaction or
series of related transactions (an “Acquisition”) or a share exchange, unless immediately following
such Acquisition or share exchange at least 50% of the total voting power (in respect of the
election of directors, or similar officials in the case of an entity other than a corporation) of
(i) the entity resulting from such Acquisition or share exchange, or the entity which has acquired
all or substantially all of the assets of the Company (in the case of an asset sale that satisfies
the Performance Criteria of an Acquisition) (in either case, the “Surviving Entity”), or (ii) if
applicable, the ultimate parent entity that directly or indirectly has beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of the total voting
power (in respect of the election of directors, or similar officials in the case of an entity other
than a corporation) of the Surviving Entity (the “Parent Entity”) is represented by Company
securities that were outstanding immediately prior to such Acquisition or share exchange (or, if
applicable, is represented by shares into which such Company securities were converted pursuant to
such Acquisition or share exchange), or

          (b) any person or group of persons (within the meaning of Section 13(d)(3) of the Exchange
Act) directly or indirectly acquires beneficial ownership (determined pursuant to Securities and
Exchange Commission Rule 13d-3 promulgated under the Exchange Act), other than through an
Acquisition or share exchange, of securities possessing more than 30% of the total combined voting
power of the Company’s outstanding securities other than (i) Harris, provided that this exclusion
of Harris shall no longer apply after such time, if any, as Harris beneficially owns less than 30%
of such total voting power, (ii) an employee benefit plan of the Company or any of its Affiliates
(other than Harris), (iii) a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or any of its Affiliates (other than Harris), or (iv) an underwriter
temporarily holding securities pursuant to an offering of such securities, or

          (c) over a period of 36 consecutive months or less, there is a change in the composition of
the Board such that a majority of the Board members (rounded up to the next whole number, if a
fraction) ceases, by reason of one or more proxy contests for the election of Board members, to be
composed of individuals each of whom meet one of the following Performance Criteria: (i) have been
a Board member continuously since the adoption of this Plan or the beginning of such 36 month
period, (ii) have been appointed by Harris Corporation, or (iii) have been elected or nominated
during such 36 month

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period by at least a majority of the Board members that (x) belong to the same class of director as
such Board member and (y) satisfied the Performance Criteria of this subsection (c) when they were
elected or nominated, or

          (d) a majority of the Board determines that a Change of Control has occurred.

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

          “Committee” means the Compensation Committee of the Board, or such other committee of the
Board to which such authority may be granted from time to time, which in general is responsible for
the administration of the Plan, as provided in Section 3 of the Plan. For any period during which
no such committee is in existence “Committee” shall mean the Board and all authority and
responsibility assigned to the Committee under the Plan shall be exercised, if at all, by the
Board.

          “Company” means Harris Stratex Networks, a Delaware corporation.

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

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

          “Participant” means any holder of an Award under the Plan.

          “Performance Criteria” means the Performance Criteria that the Committee selects for purposes
of establishing the Performance Goal or Performance Goals for a Participant for a Performance
Period. The Performance Criteria used to establish Performance Goals are limited to: (i) cash
flow (before or after dividends), (ii) earnings per share (including, without limitation, earnings
before interest, taxes, depreciation and amortization), (iii) stock price, (iv) return on equity,
(v) stockholder return or total stockholder return, (vi) return on capital (including, without
limitation, return on total capital or return on invested capital), (vii) return on investment,
(viii) return on assets or net assets, (ix) market capitalization, (x) economic value added, (xi)
debt leverage (debt to capital), (xii) revenue, (xiii) sales or net sales, (xiv) backlog, (xv)
income, pre-tax income or net income, (xvi) operating income or pre-tax profit, (xvii) operating
profit, net operating profit or economic profit, (xviii) gross margin, operating margin or profit
margin, (xix) return on operating revenue or return on operating assets, (xx) cash from operations,
(xxi) operating ratio, (xxii) operating revenue, (xxiii) market share improvement, (xxiv) general
and administrative expenses or (xxv) customer service.

          “Performance Goals” means, for a Performance Period, the written goal or goals established by
the Committee for the Performance Period based upon the Performance Criteria. The Performance
Goals may be expressed in terms of overall Company performance or the performance of a division,
business unit, subsidiary, or an individual, either individually, alternatively or in any
combination, applied to either the Company as a whole or to a business unit or Affiliate, either
individually, alternatively or in any combination, and measured either quarterly, annually or
cumulatively over a period of years, on an absolute basis or relative to a pre-established target,
to previous years’ results or to a designated comparison group, in each case as specified by the
Committee. The Committee will, in the manner and within the time prescribed by Section 162(m) of
the Code in the case of Qualified Performance-Based Awards, objectively define the manner of
calculating the Performance Goal or Goals it selects to use for such Performance Period for such
Participant. To the extent consistent with Section 162(m) of the Code, the Committee may
appropriately adjust any evaluation of performance against a Performance Goal to exclude any of the
following events that occurs during a performance period: (i) asset write-downs, (ii) litigation,
claims, judgments or settlements, (iii) the effect of changes in tax law, accounting principles or
other such laws or provisions affecting reported results, (iv) accruals for reorganization and
restructuring programs and (v) any extraordinary, unusual, non-recurring or non-comparable items
(A) as described in Accounting Principles Board Opinion No. 30, (B) as described in management’s
discussion and analysis of financial condition and results of operations appearing in the Company’s
Annual Report to stockholders for the applicable year, or (C) publicly announced by the Company in
a press release or conference call relating to the Company’s results of operations or financial
condition for a completed quarterly or annual fiscal period.

          “Performance Period” means the one or more periods of time, which may be of varying and
overlapping durations, selected by the Committee, over which the attainment of one or more
Performance Goals will be measured for purposes of determining a Participant’s right to payment in connection with an Award.

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          “Plan” means this Harris Stratex Networks Annual Incentive Plan, as amended from time to time.

          “Qualified Performance-Based Award” means any Award or portion of an Award intended to
qualify as “performance-based compensation” under Section 162(m) of the Code.

     3. Administration of Plan. The Plan shall be administered by the Committee; provided,
however, that at any time and on any one or more occasions the Board may itself exercise any of the
powers and responsibilities assigned the Committee under the Plan and when so acting shall have the
benefit of all of the provisions of the Plan pertaining to the Committee’s exercise of its
authorities hereunder and provided further, however, that the Committee may delegate to an
executive officer or officers the authority to grant Awards hereunder to employees in accordance
with such guidelines as the Committee shall set forth at any time or from time to time. Subject to
the provisions of the Plan, the Committee shall have complete authority, in its discretion, to make
or to select the manner of making all determinations with respect to each Award to be granted by
the Company under the Plan including the employee to receive the Award. In making such
determinations, the Committee may take into account the nature of the services rendered by the
respective employees, their present and potential contributions to the success of the Company and
its Affiliates, and such other factors as the Committee in its discretion shall deem relevant.
Subject to the provisions of the Plan, the Committee shall also have complete authority to
interpret the Plan, to prescribe, amend and rescind rules and regulations relating to it, to
determine the terms and provisions of the respective Award agreements (which need not be
identical), and to make all other determinations necessary or advisable for the administration of
the Plan. The Committee’s determinations made in good faith on matters referred to in the Plan
shall be final, binding and conclusive on all persons having or claiming any interest under the
Plan or an Award made pursuant hereto.

     4. Awards.

          (a) In General. All employees of the Company and its Affiliates are eligible to be designated
by the Committee to receive Awards and become Participants under the Plan. Each Participant in the
Plan shall be eligible to receive such Award, if any, as the Committee may determine in its sole
discretion.

          (b) Performance Goals. Participants shall receive payments pursuant to their Awards, if any,
as determined on the basis of the degree of achievement of the Performance Goals.

     5. Qualified Performance-Based Awards.

          (a) Purpose. The purpose of this Section 5 is to provide the Committee the ability to qualify
Awards as “performance-based compensation” under Section 162(m) of the Code. If the Committee, in
its discretion, decides to grant an Award as a Qualified Performance-Based Award, the provisions of
this Section 5 will control over any contrary provision contained in the Plan. In the course of
granting any Award, the Committee may specifically designate the Award as intended to qualify as a
Qualified Performance-Based Award. However, no Award shall be considered to have failed to qualify
as a Qualified Performance-Based Award solely because the Award is not expressly designated as a
Qualified Performance-Based Award, if the Award otherwise satisfies the provisions of this Section
5 and the requirements of Section 162(m) of the Code and the regulations promulgated thereunder
applicable to “performance-based compensation.”

          (b) Authority. All grants of Awards intended to qualify as Qualified Performance-Based Awards
and determination of terms applicable thereto shall be made by the Committee or, if not all of the
members thereof qualify as “outside directors” within the meaning of applicable IRS regulations
under Section 162 of the Code, a subcommittee of the Committee consisting of such of the members of
the Committee as do so qualify. Any action by such a subcommittee shall be considered the action
of the Committee for purposes of the Plan.

          (c) Applicability. This Section 5 will apply only to those Covered Employees, or to those
persons who the Committee determines are reasonably likely to become Covered Employees in the
period covered by an Award, selected by the Committee to receive Qualified Performance-Based
Awards. The Committee may, in its discretion, grant Awards to Covered Employees that do not
satisfy the requirements of this Section 5.

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          (d) Discretion of Committee with Respect to Qualified Performance-Based Awards. With regard
to Awards intended to qualify as Qualified Performance-Based Awards, the Committee will have full
discretion to select the length of any applicable Performance Period, the kind and/or level of the
applicable Performance Goal, and whether the Performance Goal is to apply to the Company, a
Subsidiary or any division or business unit or to the individual. Any Performance Goal or Goals
applicable to Qualified Performance-Based Awards shall be objective, shall be established not later
than three (3) months after the beginning of any applicable Performance Period (or at such other
date as may be required or permitted for “performance-based compensation” under Section 162(m) of
the Code) and shall otherwise meet the requirements of Section 162(m) of the Code, including the
requirement that the outcome of the Performance Goal or Goals be substantially uncertain (as
defined in the regulations under Section 162(m) of the Code) at the time established.

          (e) Payment of Qualified Performance-Based Awards. A Participant will be eligible to receive
payment under a Qualified Performance-Based Award which is subject to achievement of a Performance
Goal or Goals only if the applicable Performance Goal or Goals are achieved within the applicable
Performance Period, as determined by the Committee. In determining the actual size of an
individual Qualified Performance-Based Award, the Committee may reduce or eliminate the amount of
the Qualified Performance-Based Award earned for the Performance Period, if in its sole and
absolute discretion, such reduction or elimination is appropriate.

          (f) Maximum Award Payable. The maximum Qualified Performance-Based Award payment to any one
Participant under the Plan for a Performance Period is $2,500,000; provided, however, that if such
Participant is not a Participant for the entire Performance Period, the maximum amount payable
shall be pro-rated based on the number of days the individual was a Participant for the Performance
Period.

          (g) Limitation on Adjustments for Certain Events. No adjustment of any Qualified
Performance-Based Award pursuant to Section 12 shall be made except on such basis, if any, as will
not cause such Award to provide other than “performance-based compensation” within the meaning of
Section 162(m) of the Code.

     6. Payment of Annual Incentive Award on Termination of Employment.

          (a) Payments. Payment pursuant to any Award shall be made in cash at such time(s) as the
Committee may in its discretion determine. Notwithstanding the foregoing, in no event will the
payment of such amounts be made after the later of: (a) the 15th day of the third month following
the end of the Participant’s first taxable year in which the amount is no longer subject to a
substantial risk of forfeiture or (b) the 15th day of the third month following the end of the
Corporation’s first taxable year in which the amount is no longer subject to a substantial risk of
forfeiture.

          (b) Termination of Employment. Except to the extent otherwise provided by the Committee, if a
Participant’s employment with the Company, any Subsidiary or any Affiliate, is terminated for any
reason prior to the last day of a Performance Period, then, except in the case of death, disability
or normal retirement, or an involuntary termination due to a reduction in force or except as
provided in Section 12, the Participant shall forfeit the Award and shall not be entitled to a
payment of the Award. If a Participant’s employment is terminated during the Performance Period
due to death, disability, normal retirement or involuntary termination caused by a reduction in
force, the Participant shall be entitled to a pro-rated payment of the Award that would have been
payable if the Participant had been a Participant on the last day of the Performance Period, based
upon the Committee’s determination as to whether the applicable Performance Goal or Goals are
achieved within such Performance Period. If a Participant is entitled to a payment of the Award
pursuant to the preceding sentence, such amount shall be prorated based on the number of days the
individual was a Participant in the Plan for such Performance Period and shall be paid at the same
time and in the same manner as such payment would have been made if the Participant had been a
Participant on the last day of the Performance Period. A leave of absence, approved by the
Committee, shall not be deemed to be a termination of employment for purposes of this Plan.

     7. Unfunded Plan. The Plan is intended to constitute an “unfunded” plan for incentive
compensation, and the Plan is not intended to constitute a plan subject to the provisions of the
Employee Retirement Income Security Act of 1974, as amended. With respect to any payments not yet
made to a

4

 

Participant by the Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company. In its sole discretion, the
Committee may authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver payments hereunder, provided, however, that the existence of such
trusts or other arrangements is consistent with the unfunded status of the Plan.

     8. Non-Alienation of Benefits; Beneficiary Designation. All rights and benefits under the Plan
are personal to the Participant and neither the Plan nor any right or interest of a Participant or
any other person arising under the Plan is subject to voluntary or involuntary alienation, sale,
transfer, or assignment without the Company’s consent. Subject to the foregoing, the Company shall
establish such procedures as it deems necessary for a Participant to designate one or more
beneficiaries to whom any payment the Committee determines to make would be payable in the event of
the Participant’s death. In the event no beneficiary has been properly designated, the payment
shall be made to the Participant’s surviving spouse or, if none, the Participant’s estate.

     9. Withholding for Taxes. Notwithstanding any other provisions of this Plan, the Company shall
have the authority to withhold from any payment made by it under the Plan such amount or amounts as
may be required for purposes of complying with any Federal, state and local tax or withholding
requirements.

     10. No Right to Continued Employment or to Participate. Nothing contained in the Plan or in
any Award shall confer upon any recipient of an Award any right with respect to the continuation of
his or her employment with the Company (or any Affiliate), or interfere in any way with the right
of the Company, subject to the terms of any separate employment or consulting agreement or
provision of law or corporate articles or by-laws to the contrary, at any time to terminate such
employment or consulting agreement or to increase or decrease, or otherwise adjust, the other terms
and conditions of the recipient’s employment with the Company and its Affiliates.

     11. Non-Exclusivity of Plan. Neither the adoption of the Plan by the Board nor the submission
of the Plan to the stockholders of the Company shall be construed as creating any limitations on
the power of the Board to adopt such other incentive arrangements as it may deem desirable,
including without limitation, the granting of stock options and restricted stock other than under
the Plan, and such arrangements may be either applicable generally or only in specific cases

     12. Change of Control. Notwithstanding anything to the contrary provided elsewhere herein,
in the event of a “Change of Control” of the Company then the Company shall as promptly as
practicable following the effective date of the Change of Control pay any incentive Awards payable
to Participants. The payment to each Participant shall be an amount not less than the target Award
as originally approved for the Performance Period, notwithstanding actual results or any changes or
modifications occurring after any such Change of Control.

     13. Adjustment of Awards. Notwithstanding anything herein to the contrary, the Committee may
not make any such adjustment to any Qualified Performance-Based Award if such adjustment would
cause compensation pursuant to such award to cease to be performance-based compensation under
Section 162(m) of the Code. In the event the Company shall assume outstanding employee benefit
awards or the right or obligation to make future such awards in connection with the acquisition of
another corporation or business entity, the Committee may, in its discretion, make such adjustments
in the terms of Awards under the Plan as it shall deem appropriate.

     14. Impact of Restatement of Financial Statements upon Previous Awards. If any of the
Company’s financial statements are restated as a result of errors, omissions, or fraud, the
Committee may (in its sole discretion, but acting in good faith) direct that the Company recover
all or a portion of any such Award or payment made to any, all or any class of Participants with
respect to any Performance Period the financial results of which are negatively affected by such
restatement. The amount to be recovered from any Participant shall be the amount by which the
affected Award or payment exceeded the amount that would have been payable to such Participant had
the financial statements been initially filed as restated, or any greater or lesser amount
(including, but not limited to, the entire Award) that the Committee shall determine. The Committee
may determine to recover different amounts from different Participants or different classes of
Participants on such basis as it shall deem appropriate. In no event shall the amount to be
recovered by the Company from a Participant be less than the amount required to be repaid or
recovered as a matter of law.

5

 

The Committee shall determine whether the Company shall effect any such recovery (i) by seeking
repayment from the Participant, (ii) by reducing (subject to applicable law and the terms and
conditions of the applicable plan, program or arrangement) the amount that would otherwise be
payable to the Participant under any compensatory plan, program or arrangement maintained by the
Company, a Subsidiary or any of its Affiliates, (iii) by withholding payment of future increases in
compensation (including the payment of any discretionary bonus amount) or grants of compensatory
awards that would otherwise have been made in accordance with the Company’s otherwise applicable
compensation practices, or (iv) by any combination of the foregoing or otherwise.

     15. Amendment or Termination. The Board may at any time terminate the Plan or make such
modifications of the Plan as it shall deem advisable. Unless the Board otherwise expressly
provides, no amendment of the Plan shall affect the terms of any Award outstanding on the date of
such amendment. The Committee may amend the terms of any Award theretofore granted, prospectively
or retroactively, provided that the Award as amended is consistent with the terms of the Plan.

     16. Application of Code Section 409A. This Plan is intended to be administered and interpreted
in a manner such that it is exempt from the requirements of Section 409A of the Code pursuant to
the “short term deferral rule.” Notwithstanding the foregoing, no particular tax result with
respect to any income recognized by a Participant in connection with the Plan is guaranteed and
each Participant shall be responsible for any taxes imposed on him in connection with the Plan.

     17. Governing Law and Interpretation. The validity, construction, and effect of the Plan and
any rules and regulations relating to the Plan shall be determined in accordance with the laws of
the State of Delaware, without regard to the conflict of law principles thereof. Unless otherwise
indicated, all “Section” references are to sections of the Plan. References to any law, rule or
regulation shall include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing, or interpreting such law, rule or regulation.

     18. Severability. If any one or more of the provisions contained in this Plan shall be
invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality
and enforceability of the remaining provisions contained herein shall not in any way be affected or
impaired thereby.

     19. Effective Date. This Plan shall become effective immediately upon stockholder approval
and shall remain effective until five (5) years from the date of said stockholder approval, subject
to any further shareholder approvals (or reapprovals) mandated for performance-based compensation
under Section 162(m) of the Code, and subject to the right of the Board to terminate the Plan, on a
prospective basis only, at any time.

6

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