Document:

exv10w1

Exhibit 10.1

IRIS INTERNATIONAL, INC.

2011 INDUCEMENT INCENTIVE PLAN

IRIS International, Inc. (the “Company”), a Delaware corporation, hereby establishes and
adopts the following 2011 Inducement Incentive Plan (the “Plan”).

1. PURPOSE OF THE PLAN

The purpose of the Plan is to assist the Company and its Subsidiaries in attracting and
retaining selected individuals to serve as employees who are expected to contribute to the
Company’s success and to achieve long-term objectives that will benefit stockholders of the Company
through the additional incentives inherent in the Awards hereunder.

2. DEFINITIONS

2.1 “Award” shall mean any Option, Stock Appreciation Right, Restricted Stock Award,
Restricted Stock Unit Award, Other Share-Based Award, Performance Award or any other right,
interest or option relating to Shares or other property (including cash) granted pursuant to the
provisions of the Plan.

2.2 “Award Agreement” shall mean any agreement, contract or other instrument or document
evidencing any Award hereunder, whether in writing or through an electronic medium.

2.3 “Board” shall mean the board of directors of the Company.

2.4 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

2.5 “Committee” shall mean the Compensation Committee of the Board or a subcommittee thereof
formed by the Compensation Committee to act as the Committee hereunder. The Committee shall
consist of no fewer than two Directors, each of whom is (i) a “non-employee director” within the
meaning of Rule 16b-3 under the Exchange Act, and (ii) an “independent director” for purpose of the
rules of the principal U.S. national securities exchange on which the Shares are traded, to the
extent required by such rules.

2.6 “Director” shall mean a member of the Board who is not an employee.

2.7 “Dividend Equivalents” shall have the meaning set forth in Section 11.5.

2.8 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

2.9 “Fair Market Value” shall mean, with respect to Shares as of any date, (i) the closing
price of the Shares as reported on the principal U.S. national securities exchange on which the
Shares are listed and traded on such date, or, if there is no closing price on that date, then on
the last preceding date on which such a closing price was reported; (ii) if the Shares are not
listed on any U.S. national securities exchange but are quoted in an inter-dealer quotation system
on a last sale basis, the final ask price of the Shares reported on the inter-dealer quotation
system for such date, or, if there is no such sale on such date, then on the last preceding
date on which a sale was reported; or (iii) if the Shares are neither listed on a U.S. national
securities exchange nor quoted on an inter-dealer quotation system on a last sale basis, the amount
determined by the Committee to be the fair market value of the Shares as determined by the
Committee in its sole discretion. The Fair Market Value of any property other than Shares shall
mean the market value of such property determined by such methods or procedures as shall be
established from time to time by the Committee.

 

 

 

2.10 “Incentive Stock Option” shall mean an Option which when granted is intended to qualify
as an incentive stock option for purposes of Section 422 of the Code.

2.11 “New Employee” shall mean any prospective employee of the Company or any Subsidiary who
either (i) was not previously an employee or director of the Company or any Subsidiary or (ii) was
previously an employee or director of the Company or any Subsidiary but for which there has
occurred a bona fide period of non-employment.

2.12 “Option” shall mean any right granted to a Participant under the Plan allowing such
Participant to purchase Shares at such price or prices and during such period or periods as the
Committee shall determine.

2.13 “Other Share-Based Award” shall have the meaning set forth in Section 8.1.

2.14 “Participant” shall mean a New Employee who is selected by the Committee to receive an
Award under the Plan as an inducement material to the New Employee’s entering into employment with
the Company or any Subsidiary.

2.15 “Performance Award” shall mean any Award of Performance Cash, Performance Shares or
Performance Units granted pursuant to Section 9.

2.16 “Performance Cash” shall mean any cash incentives granted pursuant to Section 9
payable to the Participant upon the achievement of such performance goals as the Committee shall
establish.

2.17 “Performance Period” shall mean the period established by the Committee during which any
performance goals specified by the Committee with respect to a Performance Award are to be
measured.

2.18 “Performance Share” shall mean any grant pursuant to Section 9 of a unit valued
by reference to a designated number of Shares, which value may be paid to the Participant upon
achievement of such performance goals as the Committee shall establish.

2.19 “Performance Unit” shall mean any grant pursuant to Section 9 of a unit valued by
reference to a designated amount of cash or property other than Shares, which value may be paid to
the Participant upon achievement of such performance goals during the Performance Period as the
Committee shall establish.

2.20 “Permitted Assignee” shall have the meaning set forth in Section 11.3.

 

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2.21 “Restricted Stock” shall mean any Share issued with the restriction that the holder may
not sell, transfer, pledge or assign such Share and with such other restrictions as the Committee,
in its sole discretion, may impose, which restrictions may lapse separately or in combination at
such time or times, in installments or otherwise, as the Committee may deem appropriate.

2.22 “Restricted Stock Award” shall have the meaning set forth in Section 7.1.

2.23 “Restricted Stock Unit” means an Award that is valued by reference to a Share, which
value may be paid to the Participant in Shares or cash as determined by the Committee in its sole
discretion upon the satisfaction of vesting restrictions as the Committee may establish, which
restrictions may lapse separately or in combination at such time or times, in installments or
otherwise, as the Committee may deem appropriate.

2.24 “Restricted Stock Unit Award” shall have the meaning set forth in Section 7.1.

2.25 “SEC” means the Securities and Exchange Commission.

2.26 “Shares” shall mean the shares of common stock of the Company, par value $0.01 per share.

2.27 “Stock Appreciation Right” shall mean the right granted to a Participant pursuant to
Section 6.

2.28 “Subsidiary” shall mean any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company if, at the relevant time each of the corporations other
than the last corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations in the chain.

2.29 “Vesting Period” shall mean the period of time specified by the Committee during which
vesting restrictions for an Award are applicable.

3. SHARES SUBJECT TO THE PLAN

3.1 Number of Shares. (a) Subject to adjustment as provided in Section 11.2, a total
of 250,000 Shares shall be authorized for grant under the Plan (the “Maximum Plan Shares”). Any
Shares that are subject to Awards shall be counted against this limit as one (1) Share for every
one (1) Share granted.

(b) If any Shares subject to an Award are forfeited, an Award expires or an Award is settled
for cash (in whole or in part), then the Shares subject to such Award shall, to the extent of such
forfeiture, expiration or cash settlement, again be available for Awards under the Plan, in
accordance with Section 3.1(c) below. In the event that withholding tax liabilities
arising from an Award other an Option or Stock Appreciation Right are satisfied by the tendering of
Shares (either actually or by attestation) or by the withholding of Shares by the Company then the
Shares so tendered or withheld shall again be available for issuance under the Plan in accordance
with Section 3.1(c) below. Notwithstanding anything to the contrary contained
herein, the following Shares shall not be added to the Shares authorized for grant under
paragraph (a) of this Section: (i) Shares tendered by the Participant or withheld by the Company in
payment of the purchase price of an Option or to satisfy any tax withholding obligation with
respect to Options or Stock Appreciation Rights, (ii) Shares subject to a Stock Appreciation Right,
and (iii) Shares reacquired by the Company on the open market or otherwise using cash proceeds from
the exercise of Options.

(c) Any Shares that again become available for grant pursuant to this Section shall be added
back as one (1) Share.

 

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3.2 Character of Shares. Any Shares issued hereunder may consist, in whole or in part, of
authorized and unissued shares, treasury shares or shares purchased in the open market or
otherwise.

4. ELIGIBILITY AND ADMINISTRATION

4.1 Eligibility. Any New Employee shall be eligible to be selected as a Participant. Awards
under the Plan may only be made to a New Employee as an inducement material to the New Employee’s
entering into employment with the Company or any Subsidiary within the meaning of Listing Rule
5635(c)(4) (or any successor thereto) of The Nasdaq Stock Market.

4.2 Administration. (a) The Plan shall be administered by the Committee. The Committee shall
have full power and authority, subject to the provisions of the Plan and subject to such orders or
resolutions not inconsistent with the provisions of the Plan as may from time to time be adopted by
the Board, to: (i) select the Participants to whom Awards may be granted hereunder; (ii) determine
the type or types of Awards to be granted to Participants hereunder; (iii) determine the number of
Shares (or dollar value) to be covered by each Award granted hereunder; (iv) determine the terms
and conditions, not inconsistent with the provisions of the Plan, of any Award granted hereunder;
(v) determine whether, to what extent and under what circumstances Awards may be settled in cash,
Shares or other property; (vi) determine whether, to what extent, and under what circumstances
cash, Shares, other property and other amounts payable with respect to an Award made under the Plan
shall be deferred either automatically or at the election of the Participant; (vii) determine
whether, to what extent and under what circumstances any Award shall be canceled or suspended;
(viii) interpret and administer the Plan and any instrument or agreement entered into under or in
connection with the Plan, including any Award Agreement; (ix) correct any defect, supply any
omission or reconcile any inconsistency in the Plan or any Award in the manner and to the extent
that the Committee shall deem desirable to carry it into effect; (x) establish such rules and
regulations and appoint such agents as it shall deem appropriate for the proper administration of
the Plan; (xi) determine whether any Award, other than an Option or Stock Appreciation Right, will
have Dividend Equivalents; and (xii) make any other determination and take any other action that
the Committee deems necessary or desirable for the administration of the Plan.

(b) Decisions of the Committee shall be final, conclusive and binding on all persons or
entities, including the Company, any Participant, and any Subsidiary. A majority of the members of
the Committee may determine its actions, including fixing the time and place of its meetings.

 

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(c) To the extent not inconsistent with applicable law or the rules and regulations of the
principal U.S. national securities exchange on which the Shares are traded, the Committee may (i)
delegate to a committee of one or more directors of the Company any of the authority of the
Committee under the Plan, including the right to grant, cancel or suspend Awards and (ii) to the
extent permitted by law, authorize one or more executive officers to do one or more of the
following with respect to Participants who are not being employed as executive officers of the
Company: (A) designate Participants to be recipients of Awards, (B) determine the number of Shares
subject to such Awards to be received by such Participants and (C) cancel or suspend Awards to such
Participants; provided that any resolution of the Committee authorizing such officer(s) must
specify the total number of Shares subject to Awards that such officer(s) may so award.

5. OPTIONS

5.1 Grant of Options. Options may be granted hereunder to Participants either alone or in
addition to other Awards granted under the Plan. Any Option shall be subject to the terms and
conditions of this Section 5 and to such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall deem desirable.

5.2 Award Agreements. All Options shall be evidenced by an Award Agreement in such form and
containing such terms and conditions as the Committee shall determine which are not inconsistent
with the provisions of the Plan. The terms and conditions of Options need not be the same with
respect to each Participant. Granting an Option pursuant to the Plan shall impose no obligation on
the recipient to exercise such Option. Any individual who is granted an Option pursuant to this
Section 5 may hold more than one Option granted pursuant to the Plan at the same time.

5.3 Option Price. The option price per each Share purchasable under any Option granted
pursuant to this Section 5 shall not be less than 100% of the Fair Market Value of one
Share on the date of grant of such Option. Other than pursuant to Section 11.2, the
Committee shall not without the approval of the Company’s stockholders (a) lower the option price
per Share of an Option after it is granted, (b) cancel an Option in exchange for cash or another
Award (other than in connection with a Change in Control as defined in Section 10.3), or
(c) take any other action with respect to an Option that would be treated as a repricing under the
rules and regulations of the principal U.S. national securities exchange on which the Shares are
traded.

5.4 Option Term. The term of each Option shall be fixed by the Committee in its sole
discretion; provided that no Option shall be exercisable after the expiration of ten (10) years
from the date the Option is granted, except in the event of death or disability. Notwithstanding
the foregoing, in the event that on the last business day of the term of an Option (i) the exercise
of the Option is prohibited by applicable law or (ii) Shares may not be purchased or sold by
certain employees or directors of the Company due to the “black-out period” of a Company policy or
a “lock-up” agreement undertaken in connection with an issuance of securities by the Company, the
term shall be extended for a period of thirty (30) days following the end of the legal prohibition,
black-out period or lock-up agreement.

 

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5.5 Exercise of Options. (a) Vested Options granted under the Plan shall be exercised by the
Participant (or by a Permitted Assignee thereof or the Participant’s executors, administrators,
guardian or legal representative, as may be provided in an Award Agreement) as to all or part of
the Shares covered thereby, by giving notice of exercise to the Company or its designated agent,
specifying the number of Shares to be purchased. The notice of exercise shall be in such form,
made in such manner, and shall comply with such other requirements consistent with the provisions
of the Plan as the Committee may prescribe from time to time.

(b) Unless otherwise provided in an Award Agreement, full payment of such purchase price shall
be made at the time of exercise and shall be made (i) in cash or cash equivalents (including
certified check or bank check or wire transfer of immediately available funds), (ii) by tendering
previously acquired Shares (either actually or by attestation) valued at their then Fair Market
Value, (iii) with the consent of the Committee, by delivery of other consideration having a Fair
Market Value on the exercise date equal to the total purchase price, (iv) with the consent of the
Committee, by withholding Shares otherwise issuable in connection with the exercise of the Option,
(v) through any other method specified in an Award Agreement (including same-day sales through a
broker), or (vi) any combination of any of the foregoing; provided, however, that if the Company is
incorporated in the State of Delaware the Participant must pay in cash an amount not less than the
aggregate par value (if any) of the Shares being acquired. The notice of exercise, accompanied by
such payment, shall be delivered to the Company at its principal business office or such other
office as the Committee may from time to time direct, and shall be in such form, containing such
further provisions consistent with the provisions of the Plan, as the Committee may from time to
time prescribe. In no event may any Option granted hereunder be exercised for a fraction of a
Share.

(c) Notwithstanding the foregoing, an Award Agreement may provide that if on the last day of
the term of an Option the Fair Market Value of one Share exceeds the option price per Share, the
Participant has not exercised the Option (or a tandem Stock Appreciation Right, if applicable) and
the Option has not expired, the Option shall be deemed to have been exercised by the Participant on
such day with payment made by withholding Shares otherwise issuable in connection with the exercise
of the Option. In such event, the Company shall deliver to the Participant the number of Shares
for which the Option was deemed exercised, less the number of Shares required to be withheld for
the payment of the total purchase price and required withholding taxes; provided, however, any
fractional Share shall be settled in cash.

5.6 Form of Settlement. In its sole discretion, the Committee may provide that the Shares to
be issued upon an Option’s exercise shall be in the form of Restricted Stock or other similar
securities.

5.7 Incentive Stock Options. The Committee may not grant Incentive Stock Options under the
Plan.

6. STOCK APPRECIATION RIGHTS

6.1 Grant and Exercise. The Committee may grant Stock Appreciation Rights (a) in tandem with
all or part of any Option granted under the Plan or at any subsequent time during the term of such
Option, (b) in tandem with all or part of any Award (other than an Option) granted
under the Plan or at any subsequent time during the term of such Award, or (c) without regard
to any Option or other Award in each case upon such terms and conditions as the Committee may
establish in its sole discretion.

 

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6.2 Terms and Conditions. Stock Appreciation Rights shall be subject to such terms and
conditions, not inconsistent with the provisions of the Plan, as shall be determined from time to
time by the Committee, including the following:

(a) Upon the exercise of a Stock Appreciation Right, the holder shall have the right to
receive the excess of (i) the Fair Market Value of one Share on the date of exercise (or such
amount less than such Fair Market Value as the Committee shall so determine at any time during a
specified period before the date of exercise) over (ii) the grant price of the Stock Appreciation
Right.

(b) The Committee shall determine in its sole discretion whether payment on exercise of a
Stock Appreciation Right shall be made in cash, in whole Shares or other property, or any
combination thereof.

(c) The terms and conditions of Stock Appreciation Rights need not be the same with respect to
each recipient.

(d) The Committee may impose such other terms and conditions on the exercise of any Stock
Appreciation Right, as it shall deem appropriate. A Stock Appreciation Right shall (i) have a
grant price per Share of not less than the Fair Market Value of one Share on the date of grant or,
if applicable, on the date of grant of an Option with respect to a Stock Appreciation Right granted
in exchange for or in tandem with, but subsequent to, the Option (subject to the requirements of
Section 409A of the Code) except in connection with an adjustment provided in Section 11.2,
and (ii) have a term not greater than ten (10) years, except in the event of death or disability.
Notwithstanding clause (ii) of the preceding sentence, in the event that on the last business day
of the term of a Stock Appreciation Right (x) the exercise of the Stock Appreciation Right is
prohibited by applicable law or (y) Shares may not be purchased or sold by certain employees or
directors of the Company due to the “black-out period” of a Company policy or a “lock-up” agreement
undertaken in connection with an issuance of securities by the Company, the term shall be extended
for a period of thirty (30) days following the end of the legal prohibition, black-out period or
lock-up agreement.

(e) An Award Agreement may provide that if on the last day of the term of a Stock Appreciation
Right the Fair Market Value of one Share exceeds the grant price per Share of the Stock
Appreciation Right, the Participant has not exercised the Stock Appreciation Right or the tandem
Option (if applicable), and the Stock Appreciation Right has not expired, the Stock Appreciation
Right shall be deemed to have been exercised by the Participant on such day. In such event, the
Company shall make payment to the Participant in accordance with this Section, reduced by the
number of Shares (or cash) required for withholding taxes; any fractional Share shall be settled in
cash.

(f) Without the approval of the Company’s stockholders, other than pursuant to Section
11.2, the Committee shall not (i) reduce the grant price of any Stock Appreciation
Right after the date of grant (ii) cancel any Stock Appreciation Right in exchange for cash or
another Award (other than in connection with a Change in Control as defined in Section
10.3), or (iii) take any other action with respect to a Stock Appreciation Right that would be
treated as a repricing under the rules and regulations of the principal U.S. national securities
exchange on which the Shares are traded.

 

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7. RESTRICTED STOCK AND RESTRICTED STOCK UNITS

7.1 Grants. Awards of Restricted Stock and of Restricted Stock Units may be granted hereunder
to Participants either alone or in addition to other Awards granted under the Plan (a “Restricted
Stock Award” or “Restricted Stock Unit Award” respectively), and such Restricted Stock Awards and
Restricted Stock Unit Awards shall also be available as a form of payment of Performance Awards and
other earned cash-based incentive compensation. The Committee has absolute discretion to determine
whether any consideration (other than services) is to be received by the Company or any Subsidiary
as a condition precedent to the grant of Restricted Stock or Restricted Stock Units, subject to
such minimum consideration as may be required by applicable law.

7.2 Award Agreements. The terms of any Restricted Stock Award or Restricted Stock Unit Award
granted under the Plan shall be set forth in an Award Agreement which shall contain provisions
determined by the Committee and not inconsistent with the Plan. The terms of Restricted Stock
Awards and Restricted Stock Unit Awards need not be the same with respect to each Participant

7.3 Rights of Holders of Restricted Stock and Restricted Stock Units. Unless otherwise
provided in the Award Agreement, beginning on the date of grant of the Restricted Stock Award and
subject to execution of the Award Agreement, the Participant shall become a stockholder of the
Company with respect to all Shares subject to the Award Agreement and shall have all of the rights
of a stockholder, including the right to vote such Shares and the right to receive distributions
made with respect to such Shares. A Participant who holds a Restricted Stock Unit Award shall only
have those rights specifically provided for in the Award Agreements; provided, however, in no event
shall the Participant have voting rights with respect to such Award. Except as otherwise provided
in an Award Agreement, any Shares or any other property distributed as a dividend or otherwise with
respect to any Restricted Stock Award or Restricted Stock Unit Award as to which the restrictions
have not yet lapsed shall be subject to the same restrictions as such Restricted Stock Award or
Restricted Stock Unit Award. Notwithstanding the provisions of this Section, cash dividends, stock
and any other property (other than cash) distributed as a dividend or otherwise with respect to any
Restricted Stock Award or Restricted Stock Unit Award that vests based on achievement of
performance goals shall either (i) not be paid or credited or (ii) be accumulated, shall be subject
to restrictions and risk of forfeiture to the same extent as the Restricted Stock or Restricted
Stock Units with respect to which such cash, stock or other property has been distributed and shall
be paid at the time such restrictions and risk of forfeiture lapse.

 

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7.4 Minimum Vesting Period. Except for the death, disability or retirement of the
Participant, or special circumstances determined by the Committee, Restricted Stock Awards and
Restricted Stock Unit Awards shall have a Vesting Period of not less than (i) three (3) years from
date of grant (but permitting pro rata vesting over such time) if subject only to continued
service with the Company or a Subsidiary and (ii) one (1) year from the date of grant if subject to
the achievement of performance objectives, subject in either case to accelerated vesting in the
Committee’s discretion in the event of a Change in Control (as defined in Section 10.3) or
the termination of the Participant’s service with the Company and its Subsidiaries.
Notwithstanding the foregoing, the restrictions in the preceding sentence shall not be applicable
to (i) grants to replace forfeited awards from a prior employer or (ii) grants of Restricted Stock
or Restricted Stock Units in payment of Performance Awards and other earned cash-based incentive
compensation. The Committee may, in its sole discretion waive the vesting restrictions and any
other conditions set forth in any Award Agreement under such terms and conditions as the Committee
shall deem appropriate.

7.5 Issuance of Shares. Any Restricted Stock granted under the Plan may be evidenced in such
manner as the Board may deem appropriate, including book-entry registration or issuance of a stock
certificate or certificates, which certificate or certificates shall be held by the Company. Such
book entry registration, certificate or certificates shall be registered in the name of the
Participant and shall bear an appropriate legend referring to the restrictions applicable to such
Restricted Stock.

8. OTHER SHARE-BASED AWARDS

8.1 Grants. Other Awards of Shares and other Awards that are valued in whole or in part by
reference to, or are otherwise based on, Shares or other property (“Other Share-Based Awards”),
including deferred stock units, may be granted hereunder to Participants either alone or in
addition to other Awards granted under the Plan. Other Share-Based Awards shall also be available
as a form of payment of other Awards granted under the Plan and other earned cash-based
compensation.

8.2 Award Agreements. The terms of Other Share-Based Awards granted under the Plan shall be
set forth in an Award Agreement which shall contain provisions determined by the Committee and not
inconsistent with the Plan. The terms of such Awards need not be the same with respect to each
Participant. Notwithstanding the provisions of this Section, Dividend Equivalents with respect to
the Shares covered by an Other Share-Based Award that vests based on achievement of performance
goals shall be subject to restrictions and risk of forfeiture to the same extent as the Shares
covered by an Other Share-Based Award with respect to which such cash, stock or other property has
been distributed.

8.3 Minimum Vesting Period. Except for the death, disability or retirement of the
Participant, or special circumstances determined by the Committee, Other Share-Based Awards shall
have a Vesting Period of not less than (i) three (3) years from the date of grant (but permitting
pro rata vesting over such time) if subject only to continued service with the Company or a
Subsidiary and (ii) one (1) year from the date of grant if subject to the achievement of
performance objectives, subject in either case to accelerated vesting in the Committee’s discretion
in the event of a Change in Control (as defined in Section 10.3) or the termination of the
Participant’s service with the Company and its Subsidiaries. Notwithstanding the foregoing, the
restrictions in the preceding sentence shall not be applicable to (i) grants to replace forfeited
awards from a prior employer or (ii) grants in payment of Performance Awards
and other earned cash-based incentive compensation. The Committee may, in its sole discretion
waive the vesting restrictions and any other conditions set forth in any Award Agreement under such
terms and conditions as the Committee shall deem appropriate.

 

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8.4 Payment. Except as may be provided in an Award Agreement, Other Share-Based Awards may be
paid in cash, Shares, other property, or any combination thereof, in the sole discretion of the
Committee. Other Share-Based Awards may be paid in a lump sum or in installments or, in accordance
with procedures established by the Committee, on a deferred basis subject to the requirements of
Section 409A of the Code.

9. PERFORMANCE AWARDS

9.1 Grants. Performance Awards in the form of Performance Cash, Performance Shares or
Performance Units, as determined by the Committee in its sole discretion, may be granted hereunder
to Participants, for no consideration or for such minimum consideration as may be required by
applicable law, either alone or in addition to other Awards granted under the Plan. The performance
goals to be achieved for each Performance Period shall be conclusively determined by the Committee
and may be based upon such criteria as determined by the Committee in its discretion.

9.2 Award Agreements. The terms of any Performance Award granted under the Plan shall be set
forth in an Award Agreement (or, if applicable, in a resolution duly adopted by the Committee)
which shall contain provisions determined by the Committee and not inconsistent with the Plan,
including whether such Awards shall have Dividend Equivalents. The terms of Performance Awards need
not be the same with respect to each Participant.

9.3 Terms and Conditions. The performance criteria to be achieved during any Performance
Period and the length of the Performance Period shall be determined by the Committee upon the grant
of each Performance Award. The amount of the Award to be distributed shall be conclusively
determined by the Committee.

9.4 Payment. Except as provided in Section 10, as provided by the Committee or as may
be provided in an Award Agreement, Performance Awards will be distributed only after the end of the
relevant Performance Period. Performance Awards may be paid in cash, Shares, other property, or
any combination thereof, in the sole discretion of the Committee. Performance Awards may be paid
in a lump sum or in installments following the close of the Performance Period or, in accordance
with procedures established by the Committee, on a deferred basis subject to the requirements of
Section 409A of the Code.

10. CHANGE IN CONTROL PROVISIONS

10.1 Impact on Certain Awards. Award Agreements may provide that in the event of a Change in
Control of the Company (as defined in Section 10.3): (i) Options and Stock Appreciation
Rights outstanding as of the date of the Change in Control shall be cancelled and terminated
without payment if the Fair Market Value of one Share as of the date of the Change in Control is
less than the per Share Option exercise price or Stock Appreciation Right grant price, and (ii) all
Performance Awards shall be (x) considered to be earned and payable based on achievement of
performance goals or based on target performance (either in full or pro rata based
on the portion of Performance Period completed as of the date of the Change in Control), and
any limitations or other restrictions shall lapse and such Performance Awards shall be immediately
settled or distributed or (y) converted into Restricted Stock or Restricted Stock Unit Awards based
on achievement of performance goals or based on target performance (either in full or pro rata
based on the portion of Performance Period completed as of the date of the Change in Control) that
are subject to Section 10.2.

 

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10.2 Assumption or Substitution of Certain Awards. (a) Unless otherwise provided in an Award
Agreement, in the event of a Change in Control of the Company in which the successor company
assumes or substitutes for an Option, Stock Appreciation Right, Restricted Stock Award, Restricted
Stock Unit Award or Other Share-Based Award (or in which the Company is the ultimate parent
corporation and continues the Award), if a Participant’s employment with such successor company (or
the Company) or a subsidiary thereof terminates within 24 months following such Change in Control
(or such other period set forth in the Award Agreement, including prior thereto if applicable) and
under the circumstances specified in the Award Agreement: (i) Options and Stock Appreciation Rights
outstanding as of the date of such termination of employment will immediately vest, become fully
exercisable, and may thereafter be exercised for 24 months (or the period of time set forth in the
Award Agreement), (ii) the restrictions, limitations and other conditions applicable to Restricted
Stock and Restricted Stock Units outstanding as of the date of such termination of employment shall
lapse and the Restricted Stock and Restricted Stock Units shall become free of all restrictions,
limitations and conditions and become fully vested, and (iii) the restrictions, limitations and
other conditions applicable to any Other Share-Based Awards or any other Awards shall lapse, and
such Other Share-Based Awards or such other Awards shall become free of all restrictions,
limitations and conditions and become fully vested and transferable to the full extent of the
original grant. For the purposes of this Section 10.2, an Option, Stock Appreciation
Right, Restricted Stock Award, Restricted Stock Unit Award or Other Share-Based Award shall be
considered assumed or substituted for if following the Change in Control the Award confers the
right to purchase or receive, for each Share subject to the Option, Stock Appreciation Right,
Restricted Stock Award, Restricted Stock Unit Award or Other Share-Based Award immediately prior to
the Change in Control, the consideration (whether stock, cash or other securities or property)
received in the transaction constituting a Change in Control by holders of Shares for each Share
held on the effective date of such transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the transaction constituting a
Change in Control is not solely common stock of the successor company, the Committee may, with the
consent of the successor company, provide that the consideration to be received upon the exercise
or vesting of an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit
Award or Other Share-Based Award, for each Share subject thereto, will be solely common stock of
the successor company substantially equal in fair market value to the per Share consideration
received by holders of Shares in the transaction constituting a Change in Control. The
determination of such substantial equality of value of consideration shall be made by the Committee
in its sole discretion and its determination shall be conclusive and binding.

 

11

 

(b) Unless otherwise provided in an Award Agreement, in the event of a Change in Control of
the Company to the extent the successor company does not assume or substitute for an Option, Stock
Appreciation Right, Restricted Stock Award, Restricted Stock
Unit Award or Other Share-Based Award (or in which the Company is the ultimate parent
corporation and does not continue the Award), then immediately prior to the Change in Control: (i)
those Options and Stock Appreciation Rights outstanding as of the date of the Change in Control
that are not assumed or substituted for (or continued) shall immediately vest and become fully
exercisable, (ii) restrictions, limitations and other conditions applicable to Restricted Stock and
Restricted Stock Units that are not assumed or substituted for (or continued) shall lapse and the
Restricted Stock and Restricted Stock Units shall become free of all restrictions, limitations and
conditions and become fully vested, and (iii) the restrictions, other limitations and other
conditions applicable to any Other Share-Based Awards or any other Awards that are not assumed or
substituted for (or continued) shall lapse, and such Other Share-Based Awards or such other Awards
shall become free of all restrictions, limitations and conditions and become fully vested and
transferable to the full extent of the original grant.

(c) The Committee, in its discretion, may determine that, upon the occurrence of a Change in
Control of the Company, each Option and Stock Appreciation Right outstanding shall terminate within
a specified number of days after notice to the Participant, and/or that each Participant shall
receive, with respect to each Share subject to such Option or Stock Appreciation Right, an amount
equal to the excess of the Fair Market Value of such Share immediately prior to the occurrence of
such Change in Control over the exercise price per Share of such Option and/or Stock Appreciation
Right; such amount to be payable in cash, in one or more kinds of stock or property (including the
stock or property, if any, payable in the transaction) or in a combination thereof, as the
Committee, in its discretion, shall determine.

10.3 Change in Control. For purposes of the Plan, unless otherwise provided in an Award
Agreement, Change in Control means the occurrence of any one of the following events:

10.4 (a) During any twenty-four (24) month period, individuals who, as of the beginning of
such period, constitute the Board (the “Incumbent Directors”) cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director subsequent to the
beginning of such period whose election or nomination for election was approved by a vote of at
least a majority of the Incumbent Directors then on the Board (either by a specific vote or by
approval of the proxy statement of the Company in which such person is named as a nominee for
director, without written objection to such nomination) shall be an Incumbent Director;
provided, however, that no individual initially elected or nominated as a director
of the Company as a result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies by or on behalf of any person
other than the Board shall be deemed to be an Incumbent Director;

(b) Any “person” (as such term is defined in the Exchange Act and as used in Sections 13(d)(3)
and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined in Rule 13d-3
under the Exchange Act), directly or indirectly, of securities of the Company representing 35% or
more of the combined voting power of the Company’s then outstanding securities eligible to vote for
the election of the Board (the “Company Voting Securities”); provided, however,
that the event described in this paragraph (b) shall not be deemed to be a Change in Control by
virtue of any of the following acquisitions: (i) by the Company or any Subsidiary, (ii) by any
employee benefit plan (or related trust) sponsored or maintained by the Company or any Subsidiary,
(iii) by any underwriter temporarily holding
securities pursuant to an offering of such securities, (iv) pursuant to a Non-Qualifying
Transaction, as defined in paragraph (c), or (v) by any person of Voting Securities from the
Company, if a majority of the Incumbent Board approves in advance the acquisition of beneficial
ownership of 30% or more of Company Voting Securities by such person;

 

12

 

(c) The consummation of a merger, consolidation, statutory share exchange or similar form of
corporate transaction involving the Company or any of its Subsidiaries that requires the approval
of the Company’s stockholders, whether for such transaction or the issuance of securities in the
transaction (a “Business Combination”), unless immediately following such Business Combination:
(i) more than 50% of the total voting power of (A) the corporation resulting from such Business
Combination (the “Surviving Corporation”), or (B) if applicable, the ultimate parent corporation
that directly or indirectly has beneficial ownership of 100% of the voting securities eligible to
elect directors of the Surviving Corporation (the “Parent Corporation”), is represented by Company
Voting Securities that were outstanding immediately prior to such Business Combination (or, if
applicable, is represented by shares into which such Company Voting Securities were converted
pursuant to such Business Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting Securities among the
holders thereof immediately prior to the Business Combination, (ii) no person (other than any
employee benefit plan (or related trust) sponsored or maintained by the Surviving Corporation or
the Parent Corporation), is or becomes the beneficial owner, directly or indirectly, of 30% or more
of the total voting power of the outstanding voting securities eligible to elect directors of the
Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) and (iii) at
least a majority of the members of the board of directors of the Parent Corporation (or, if there
is no Parent Corporation, the Surviving Corporation) following the consummation of the Business
Combination were Incumbent Directors at the time of the Board’s approval of the execution of the
initial agreement providing for such Business Combination (any Business Combination which satisfies
all of the criteria specified in (i), (ii) and (iii) above shall be deemed to be a “Non-Qualifying
Transaction”); or

(d) The stockholders of the Company approve a plan of complete liquidation or dissolution of
the Company or the consummation of a sale of all or substantially all of the Company’s assets.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any
person acquires beneficial ownership of more than 30% of the Company Voting Securities as a result
of the acquisition of Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the Company such
person becomes the beneficial owner of additional Company Voting Securities that increases the
percentage of outstanding Company Voting Securities beneficially owned by such person, a Change in
Control of the Company shall then occur.

 

13

 

11. GENERALLY APPLICABLE PROVISIONS

11.1 Amendment and Termination of the Plan. The Board may, from time to time, alter, amend,
suspend or terminate the Plan as it shall deem advisable, subject to any requirement for
stockholder approval imposed by applicable law, including the rules and regulations of the
principal U.S. national securities exchange on which the Shares are traded; provided that the
Board may not amend the Plan in any manner that would result in noncompliance with Rule 16b-3 under
the Exchange Act; and further provided that the Board may not, without the approval of the
Company’s stockholders, amend the Plan to (a) expand the class of persons who are Participants
eligible to receive Awards under the Plan, or (b) amend Section 6.2(f) to eliminate the
requirements relating to stockholder approval. The Board may not (except pursuant to Section
11.2 or in connection with a Change in Control), without the approval of the Company’s
stockholders, cancel an Option or Stock Appreciation Right in exchange for cash or take any action
with respect to an Option or Stock Appreciation Right that would be treated as a repricing under
the rules and regulations of the principal securities exchange on which the Shares are traded,
including a reduction of the exercise price of an Option or the grant price of a Stock Appreciation
Right or the exchange of an Option or Stock Appreciation Right for another Award. In addition, no
amendments to, or termination of, the Plan shall impair the rights of a Participant in any material
respect under any Award previously granted without such Participant’s consent.

11.2 Adjustments. In the event of any merger, reorganization, consolidation,
recapitalization, dividend or distribution (whether in cash, shares or other property, other than a
regular cash dividend), stock split, reverse stock split, spin-off or similar transaction or other
change in corporate structure affecting the Shares or the value thereof, such adjustments and other
substitutions shall be made to the Plan and to Awards as the Committee deems equitable or
appropriate taking into consideration the accounting and tax consequences, including such
adjustments in the aggregate number, class and kind of securities that may be delivered under the
Plan, in the number, class, kind and option or exercise price of securities subject to outstanding
Awards granted under the Plan (including, if the Committee deems appropriate, the substitution of
similar options to purchase the shares of, or other awards denominated in the shares of, another
company) as the Committee may determine to be appropriate; provided, however, that the number of
Shares subject to any Award shall always be a whole number.

11.3 Transferability of Awards. Except as provided below, no Award and no Shares that have
not been issued or as to which any applicable restriction, performance or deferral period has not
lapsed, may be sold, assigned, transferred, pledged or otherwise encumbered, other than by will or
the laws of descent and distribution, and such Award may be exercised during the life of the
Participant only by the Participant or the Participant’s guardian or legal representative. To the
extent and under such terms and conditions as determined by the Committee, a Participant may assign
or transfer an Award without consideration (each transferee thereof, a “Permitted Assignee”) (i) to
the Participant’s spouse, children or grandchildren (including any adopted and step children or
grandchildren), parents, grandparents or siblings, (ii) to a trust for the benefit of one or more
of the Participant or the persons referred to in clause (i), (iii) to a partnership, limited
liability company or corporation in which the Participant or the persons referred to in clause (i)
are the only partners, members or shareholders or (iv) for charitable donations; provided that such
Permitted Assignee shall be bound by and subject to all of the terms and conditions of the Plan and
the Award Agreement relating to the transferred Award and shall execute an agreement satisfactory
to the Company evidencing such obligations; and provided further that such Participant shall remain
bound by the terms and conditions of the Plan. The Company shall cooperate with any Permitted
Assignee and the Company’s transfer agent in effectuating any transfer permitted under this
Section.

 

14

 

11.4 Termination of Employment or Services. The Committee shall determine and set forth in
each Award Agreement whether any Awards granted in such Award Agreement will continue to be
exercisable, continue to vest or be earned and the terms of such exercise, vesting or earning, on
and after the date that a Participant ceases to be employed by or to provide services to the
Company or any Subsidiary (including as a Director), whether by reason of death, disability,
voluntary or involuntary termination of employment or services, or otherwise. The date of
termination of a Participant’s employment or services will be determined by the Committee, which
determination will be final.

11.5 Deferral; Dividend Equivalents. The Committee shall be authorized to establish
procedures pursuant to which the payment of any Award may be deferred. Subject to the provisions
of the Plan and any Award Agreement, the recipient of an Award other than an Option or Stock
Appreciation Right may, if so determined by the Committee, be entitled to receive, currently or on
a deferred basis, amounts equivalent to cash, stock or other property dividends on Shares
(“Dividend Equivalents”) with respect to the number of Shares covered by the Award, as determined
by the Committee, in its sole discretion. The Committee may provide that the Dividend Equivalents
(if any) shall be deemed to have been reinvested in additional Shares or otherwise reinvested and
may provide that the Dividend Equivalents are subject to the same vesting or performance conditions
as the underlying Award. Notwithstanding the foregoing, Dividend Equivalents credited in
connection with an Award that vests based on the achievement of performance goals shall be subject
to restrictions and risk of forfeiture to the same extent as the Award with respect to which such
Dividend Equivalents have been credited.

12. MISCELLANEOUS

12.1 Award Agreements. Each Award Agreement shall either be (a) in writing in a form approved
by the Committee and executed by the Company by an officer duly authorized to act on its behalf, or
(b) an electronic notice in a form approved by the Committee and recorded by the Company (or its
designee) in an electronic recordkeeping system used for the purpose of tracking one or more types
of Awards as the Committee may provide; in each case and if required by the Committee, the Award
Agreement shall be executed or otherwise electronically accepted by the recipient of the Award in
such form and manner as the Committee may require. The Committee may authorize any officer of the
Company to execute any or all Award Agreements on behalf of the Company. The Award Agreement shall
set forth the material terms and conditions of the Award as established by the Committee consistent
with the provisions of the Plan.

12.2 Tax Withholding. The Company shall have the right to make all payments or distributions
pursuant to the Plan to a Participant (or a Permitted Assignee thereof) net of any applicable
federal, state and local taxes required to be paid or withheld as a result of (a) the grant of any
Award, (b) the exercise of an Option or Stock Appreciation Right, (c) the delivery of Shares or
cash, (d) the lapse of any restrictions in connection with any Award or (e) any other event
occurring pursuant to the Plan. The Company or any Subsidiary shall have the right to withhold
from wages or other amounts otherwise payable to a Participant (or Permitted Assignee) such
withholding taxes as may be required by law, or to otherwise require the Participant (or Permitted
Assignee) to pay such withholding taxes. If the Participant (or Permitted Assignee) shall fail to
make such tax payments as are required, the Company

 

15

 

or its Subsidiaries shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to such Participant (or Permitted Assignee) or to take
such other action as may be necessary to satisfy such withholding obligations. The Committee shall
be authorized to establish procedures for election by Participants (or Permitted Assignee) to
satisfy such obligation for the payment of such taxes by tendering previously acquired Shares
(either actually or by attestation, valued at their then Fair Market Value), or by directing the
Company to retain Shares (up to the minimum required tax withholding rate for the Participant (or
Permitted Assignee) or such other rate that will not cause an adverse accounting consequence or
cost) otherwise deliverable in connection with the Award.

12.3 Right of Discharge Reserved; Claims to Awards. Nothing in the Plan nor the grant of an
Award hereunder shall confer upon any Participant the right to continue in the employment or
service of the Company or any Subsidiary or affect any right that the Company or any Subsidiary may
have to terminate the employment or service of (or to demote) any such Participant at any time for
any reason. The Company shall not be liable for the loss of existing or potential profit from an
Award granted in the event of termination of an employment or other relationship. No Participant
shall have any claim to be granted any Award under the Plan, and there is no obligation for
uniformity of Participants under the Plan.

12.4 Cancellation of Award; Forfeiture of Gain. Notwithstanding anything to the contrary
contained herein, an Award Agreement may provide that:

(a) In the event of a restatement of the Company’s financial statements, the Committee shall
have the right to review any Award, the amount, payment or vesting of which was based on an entry
in the financial statements that are the subject of the restatement. If the Committee determines,
based on the results of the restatement, that a lesser amount or portion of an Award should have
been paid or vested, it may (i) cancel all or any portion of any outstanding Awards and (ii)
require the Participant or other person to whom any payment has been made or shares or other
property have been transferred in connection with the Award to forfeit and pay over to the Company,
on demand, all or any portion of the gain (whether or not taxable) realized upon the exercise of
any Option or Stock Appreciation Right and the value realized (whether or not taxable) on the
vesting or payment of any other Award during the period beginning twelve months preceding the date
of the restatement and ending with the date of cancellation of any outstanding Awards.

(b) If the Participant, without the consent of the Company, while employed by or providing
services to the Company or any Subsidiary or after termination of such employment or service,
violates a non-competition, non-solicitation or non-disclosure covenant or agreement or otherwise
engages in activity that is in conflict with or adverse to the interest of the Company or any
Subsidiary, as determined by the Committee in its sole discretion, then (i) any outstanding, vested
or unvested, earned or unearned portion of the Award may, at the Committee’s discretion, be
canceled and (ii) the Committee, in its discretion, may require the Participant or other person to
whom any payment has been made or Shares or other property have been transferred in connection with
the Award to forfeit and pay over to the Company, on demand, all or any portion of the gain
(whether or not taxable) realized upon the exercise of any Option or Stock Appreciation Right and
the value realized (whether or not taxable) on the
vesting or payment of any other Award during the time period specified in the Award Agreement.

 

16

 

12.5 Stop Transfer Orders. All certificates for Shares delivered under the Plan pursuant to
any Award shall be subject to such stop-transfer orders and other restrictions as the Committee may
deem advisable under the rules, regulations and other requirements of the SEC, any stock exchange
upon which the Shares are then listed, and any applicable federal or state securities law, and the
Committee may cause a legend or legends to be put on any such certificates to make appropriate
reference to such restrictions.

12.6 Nature of Payments. All Awards made pursuant to the Plan are in consideration of
services performed or to be performed for the Company or any Subsidiary, division or business unit
of the Company. Any income or gain realized pursuant to Awards under the Plan constitutes a
special incentive payment to the Participant and shall not be taken into account, to the extent
permissible under applicable law, as compensation for purposes of any of the employee benefit plans
of the Company or any Subsidiary except as may be determined by the Committee or by the Board or
board of directors of the applicable Subsidiary.

12.7 Other Plans. Nothing contained in the Plan shall prevent the Board from adopting other
or additional compensation arrangements, subject to stockholder approval if such approval is
required; and such arrangements may be either generally applicable or applicable only in specific
cases.

12.8 Severability. The provisions of the Plan shall be deemed severable. If any provision of
the Plan shall be held unlawful or otherwise invalid or unenforceable in whole or in part by a
court of competent jurisdiction or by reason of change in a law or regulation, such provision shall
(a) be deemed limited to the extent that such court of competent jurisdiction deems it lawful,
valid and/or enforceable and as so limited shall remain in full force and effect, and (b) not
affect any other provision of the Plan or part thereof, each of which shall remain in full force
and effect. If the making of any payment or the provision of any other benefit required under the
Plan shall be held unlawful or otherwise invalid or unenforceable by a court of competent
jurisdiction, such unlawfulness, invalidity or unenforceability shall not prevent any other payment
or benefit from being made or provided under the Plan, and if the making of any payment in full or
the provision of any other benefit required under the Plan in full would be unlawful or otherwise
invalid or unenforceable, then such unlawfulness, invalidity or unenforceability shall not prevent
such payment or benefit from being made or provided in part, to the extent that it would not be
unlawful, invalid or unenforceable, and the maximum payment or benefit that would not be unlawful,
invalid or unenforceable shall be made or provided under the Plan.

12.9 Construction. As used in the Plan, the words “include” and “including,” and variations
thereof, shall not be deemed to be terms of limitation, but rather shall be deemed to be followed
by the words “without limitation.”

 

17

 

12.10 Unfunded Status of the Plan. The Plan is intended to constitute an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a 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 the Shares or payments in lieu of or with respect to Awards hereunder; provided,
however, that the existence of such trusts or other arrangements is consistent with the unfunded
status of the Plan.

12.11 Governing Law. The Plan and all determinations made and actions taken thereunder, to
the extent not otherwise governed by the Code or the laws of the United States, shall be governed
by the laws of the State of Delaware, without reference to principles of conflict of laws, and
construed accordingly.

12.12 Effective Date of Plan; Termination of Plan. The Plan shall be effective on the date
the Plan is approved by the Board of Directors of the Company. The Plan shall not require approval
by the Company’s stockholders. Awards may be granted under the Plan at any time and from time to
time on or prior to June 30, 2013, on which date the Plan will expire except as to Awards then
outstanding under the Plan. Such outstanding Awards shall remain in effect until they have been
exercised or terminated, or have expired.

12.13 Foreign Employees. Awards may be granted to Participants who are foreign nationals or
employed outside the United States, or both, on such terms and conditions different from those
applicable to Awards to Participants providing services in the United States as may, in the
judgment of the Committee, be necessary or desirable in order to recognize differences in local law
or tax policy. The Committee also may impose conditions on the exercise or vesting of Awards in
order to minimize the Company’s obligation with respect to tax equalization for Participants on
assignments outside their home country.

12.14 Compliance with Section 409A of the Code. This Plan is intended to comply and shall be
administered in a manner that is intended to comply with Section 409A of the Code and shall be
construed and interpreted in accordance with such intent. To the extent that an Award or the
payment, settlement or deferral thereof is subject to Section 409A of the Code, the Award shall be
granted, paid, settled or deferred in a manner that will comply with Section 409A of the Code,
including regulations or other guidance issued with respect thereto, except as otherwise determined
by the Committee. Any provision of this Plan that would cause the grant of an Award or the
payment, settlement or deferral thereof to fail to satisfy Section 409A of the Code shall be
amended to comply with Section 409A of the Code on a timely basis, which may be made on a
retroactive basis, in accordance with regulations and other guidance issued under Section 409A of
the Code.

12.15 No Registration Rights; No Right to Settle in Cash. The Company has no obligation to
register with any governmental body or organization (including, without limitation, the SEC) any of
(a) the offer or issuance of any Award, (b) any Shares issuable upon the exercise of any Award, or
(c) the sale of any Shares issued upon exercise of any Award, regardless of whether the Company in
fact undertakes to register any of the foregoing. In particular, in the event that any of (x) any
offer or issuance of any Award, (y) any Shares issuable upon exercise of any Award, or (z) the sale
of any Shares issued upon exercise of any Award are not registered with any governmental body or
organization (including, without limitation, the SEC), the
Company will not under any circumstance be required to settle its obligations, if any, under
this Plan in cash.

 

18

 

12.16 Data Privacy. As a condition of acceptance of an Award, the Participant explicitly and
unambiguously consents to the collection, use and transfer, in electronic or other form, of
personal data as described in this Section by and among, as applicable, the Company and its
Subsidiaries for the exclusive purpose of implementing, administering and managing the
Participant’s participation in the Plan. The Participant understands that the Company and its
Subsidiaries hold certain personal information about the Participant, including the Participant’s
name, home address and telephone number, date of birth, social insurance number or other
identification number, salary, nationality, job title, any shares of stock or directorships held in
the Company or any Subsidiary, details of all Awards or any other entitlement to Shares awarded,
canceled, exercised, vested, unvested or outstanding in the Participant’s favor, for the purpose of
implementing, managing and administering the Plan (the “Data”). The Participant further
understands that the Company and its Subsidiaries may transfer the Data amongst themselves as
necessary for the purpose of implementation, management and administration of the Participant’s
participation in the Plan, and that the Company and its Subsidiaries may each further transfer the
Data to any third parties assisting the Company in the implementation, management, and
administration of the Plan. The Participant understands that these recipients may be located in
the Participant’s country, or elsewhere, and that the recipient’s country may have different data
privacy laws and protections than the Participant’s country. The Participant understands that he
or she may request a list with the names and addresses of any potential recipients of the Data by
contacting his or her local human resources representative. The Participant, through participation
in the Plan and acceptance of an Award under the Plan, authorizes such recipients to receive,
possess, use, retain and transfer the Data, in electronic or other form, for the purposes of
implementing, administering and managing the Participant’s participation in the Plan, including any
requisite transfer of such Data as may be required to a broker or other third party with whom the
Participant may elect to deposit any Shares. The Participant understands that the Data will be
held only as long as is necessary to implement, manage, and administer the Participant’s
participation in the Plan. The Participant understands that he or she may, at any time, view the
Data, request additional information about the storage and processing of the Data, require any
necessary amendments to the Data, or refuse or withdraw the consents herein in writing, in any case
without cost, by contacting his or her local human resources representative. The Participant
understands that refusal or withdrawal of consent may affect the Optionee’s ability to participate
in the Plan. For more information on the consequences of refusal to consent or withdrawal of
consent, the Optionee understands that he or she may contact his or her local human resources
representative.

12.17 Indemnity. To the extent allowable pursuant to applicable law, each member of the
Committee or of the Board and any person to whom the Committee has delegated any of its authority
under the Plan shall be indemnified and held harmless by the Company from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by such person in connection
with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or
in which he or she may be involved by reason of any action or failure to act pursuant to the Plan
and against and from any and all amounts paid by him or her in satisfaction of judgment in such
action, suit, or proceeding against him or her; provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right of
indemnification shall not be exclusive of any other rights of indemnification to which such persons
may be entitled pursuant to the Company’s Certificate of Incorporation or By-laws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

12.18 Captions. The captions in the Plan are for convenience of reference only, and are not
intended to narrow, limit or affect the substance or interpretation of the provisions contained
herein.

 

19exv10w2wi

Exhibit 10.2(i)

NONQUALIFIED STOCK OPTION AGREEMENT

FINGERHUT DIRECT MARKETING, INC.

2003 EQUITY INCENTIVE PLAN

(EXECUTIVES)

     THIS AGREEMENT, made effective as of this ___ day of ________, 20___ (the “Issue Date”) by and
between Fingerhut Direct Marketing, Inc. , a Delaware corporation (the “Company”), and
________________ (“Optionee”).

WITNESSETH:

     WHEREAS, Optionee on the date hereof is a key employee or officer of the Company or one of its
Affiliates; and

     WHEREAS, the Company wishes to grant a nonqualified stock option to Optionee to purchase
shares of the Company’s Common Stock pursuant to the Company’s 2003 Equity Incentive Plan (the
“Plan”); and

     WHEREAS, the Administrator of the Plan has authorized the grant of a nonqualified stock option
to Optionee and has determined that, as of the effective date of this Agreement, the fair market
value of the Company’s Common Stock is $0.80 per share;

     NOW, THEREFORE, in consideration of the premises and of the mutual covenants herein contained,
the parties hereto agree as follows:

     1. Grant of Option. The Company hereby grants to Optionee on the date set forth above
(the “Date of Grant”), the right and option (the “Option”) to purchase all or portions of an
aggregate of _______________________ (_______) shares of Common Stock at a per share price of
$______ the terms and conditions set forth herein, and subject to adjustment pursuant to Section 12
of the Plan. This Option is not intended to be an incentive stock option within the meaning of
Section 422, or any successor provision, of the Internal Revenue Code of 1986, as amended (the
“Code”), and the regulations thereunder.

     2. Duration and Exercisability.

          a. General. The term during which this Option may be exercised shall terminate on
a date which is ten (10) years from the Issue Date (the “Expiration Date”), except as otherwise
provided in Paragraphs 2(b) through 2(f) or Paragraph 5 below. This Option shall become exercisable
as follows:

               (i) Fifty percent (50%) of the aggregate number of shares specified in Paragraph 1 shall
become exercisable according to the following schedule:

 

 

	 	 	 
	Vesting Date	 	Percentage of Shares
	 
	 
	 	12.5%
	 
	 	 
	 
	 	12.5%
	 
	 	 
	 
	 	12.5%
	 
	 	 
	 
	 	12.5%
	 
	 	 

               (ii) The fifty percent (50%) of the aggregate number of shares specified in Paragraph 1 shall
become vested according to the following schedule if the Company has achieved at least 80% of the
targeted earnings before interest and taxes (“EBIT”) established by the Company’s Board of
Directors for the fiscal year ending immediately prior to the applicable vesting date:

	 	 	 
	Vesting Date	 	Percentage of Shares
	 
	 
	 	12.5%
	 
	 	 
	 
	 	12.5%
	 
	 	 
	 
	 	12.5%
	 
	 	 
	 
	 	12.5%
	 
	 	 

Notwithstanding the foregoing, all of such remaining shares shall become fully vested and
exercisable six (6) years after the Grant Date, whether or not the Company has achieved at least
80% of the targeted EBIT in any prior fiscal year.

               (iii) Once the Option becomes exercisable to the extent of any of the aggregate number of
shares specified in Paragraph 1, Optionee may continue to exercise this Option with respect to such
shares under the terms and conditions of this Agreement until the termination of the Option as
provided herein. If Optionee does not purchase upon an exercise of this Option the full number of
shares which Optionee is then entitled to purchase, Optionee may purchase upon any subsequent
exercise prior to this Option’s termination such previously unpurchased shares in addition to those
Optionee is otherwise entitled to purchase.

          b. Termination of Employment (other than Termination for Cause, Retirement, Disability
or Death). If Optionee’s employment with the Company or any Affiliate is terminated for any
reason other than termination by the Company for “cause,” retirement, disability, or death, this
Option shall completely terminate on the earliest of (i) the close of business on the
twenty-four-month anniversary date of such termination of employment, (ii) ninety (90) days
following the effective date of an initial public offering of the Company’s CommonStock if the
Company’s Common Stock is not publicly-traded on the date of such termination of employment, or
ninety (90) days following the date of such termination of employment if the Company’s Common Stock
is publicly-traded on such date, and (iii) the Expiration Date of this Option stated in Paragraph
2(a) above. In such period following the termination of Optionee’s employment, this Option shall be
exercisable only to the extent the Option was exercisable on the vesting date immediately preceding
such termination of

 

 

employment, but had not previously been exercised. To the extent this Option was not
exercisable upon such termination of employment, or if Optionee does not exercise the Option within
the time specified in this Paragraph 2(b), all rights of Optionee under this Option shall be
forfeited.

          c. Termination of Employment for Cause. If Optionee’s employment with the Company or
any Affiliate is terminated for “cause,” the unexercised portion of this Option shall immediately
expire, and all rights of Optionee under this Option shall be forfeited. Solely for purposes of
this Paragraph 2(c), “cause” shall mean (i) Optionee being charged with a felony or convicted of
any criminal misdemeanor or more serious act; (ii) any intentional and/or willful act of fraud or
dishonesty by Optionee related to or connected with Optionee’s employment by the Company or any of
its Affiliates; (iii) the willful and/or continued failure, neglect or refusal by Optionee to
perform his or her employment duties with the Company or any of its Affiliates, (iv) a material
violation of the Company’s or an Affiliate’s policies or codes of conduct; or (v) the willful
and/or material breach by Optionee of any agreement between Optionee and the Company or any of its
Affiliates, including but not limited to an employment agreement or a noncompetition agreement.

          d. Retirement. If Optionee’s employment with the Company or any Affiliate terminates
because of retirement, this Option shall terminate on the earliest of (i) the close of business on
the twenty-four-month anniversary date of such termination of employment, (ii) ninety (90) days
following the effective date of an initial public offering of the Company’s Common Stock, and (iii)
the expiration date of this Option stated in Paragraph 2(a) above. In such period following the
termination of Optionee’s employment, this Option shall be fully exercisable to the extent of 100%
of the aggregate number of shares specified in Paragraph 1, minus any shares previously purchased.
If Optionee does not exercise the Option within the time specified in this Paragraph 2(d), all
rights of Optionee under this Option shall be forfeited. Solely for purposes of this Paragraph
2(d), “retirement” means termination on or after attaining age 65 and completing at least ten (10)
years of service with the Company or any Affiliate.

          e. Disability. If Optionee’s employment terminates because of disability (as defined
in Code Section 22(e), or any successor provision), this Option shall terminate on the earliest of
(i) the close of business on the twenty-four-month anniversary date of such termination of
employment, (ii) ninety (90) days following the effective date of an initial public offering of the
Company’s Common Stock, and (iii) the expiration date of this Option stated in Paragraph 2(a)
above. In such period following the termination of Optionee’s employment, this Option shall be
fully exercisable to the extent of 100% of the aggregate number of shares specified in Paragraph 1,
minus any shares previously purchased. If Optionee does not exercise the Option within the time
specified in this Paragraph 2(e), all rights of Optionee under this Option shall be forfeited.

          f. Death. In the event of Optionee’s death, this Option shall terminate on the
earliest of (i) the close of business on the twenty-four-month anniversary date of such termination
of employment, (ii) ninety (90) days following the effective date of an initial public offering of
the Company’s Common Stock, and (iii) the expiration date of this Option stated in Paragraph 2(a)
above. In such period following Optionee’s death, this Option shall be exercisable

 

 

by the person or persons to whom Optionee’s rights under this Option shall have passed by
Optionee’s will or by the laws of descent and distribution to the extent of 100% of the aggregate
number of shares specified in Paragraph 1, minus any shares previously purchased. If such person or
persons do not exercise this Option within the time specified in this Paragraph 2(f), all rights
under this Option shall be forfeited.

3. Manner of Exercise.

          a. General. The Option may be exercised only by Optionee (or other proper party in the
event of death or incapacity), subject to the conditions of the Plan and subject to such other
administrative rules as the Administrator may deem advisable, by delivering within the Option
Period written notice of exercise to the Company at its principal office. The notice shall state
the number of shares as to which the Option is being exercised and shall be accompanied by payment
in full of the Option price for all shares designated in the notice. The exercise of the Option
shall be deemed effective upon receipt of such notice by the Company and upon payment that complies
with the terms of the Plan and this Agreement. The Option may be exercised with respect to any
number or all of the shares as to which it can then be exercised and, if partially exercised, may
be so exercised as to the unexercised shares any number of times during the Option period as
provided herein.

          b. Form of Payment. Subject to approval by the Administrator, payment of the option
price by Optionee shall be in the form of cash, personal check, certified check or mature,
previously-acquired shares of Common Stock of the Company, broker-assisted exercise, or any
combination thereof; provided, however, that Optionee shall not be permitted to pay the option
price in the form of a broker-assisted exercise or in the form of mature, previously-acquired
shares of Common Stock until after the effective date of an initial public offering of the
Company’s Common Stock; and provided, further, that Optionee shall not be permitted to pay the
option price in the form of a broker-assisted exercise or in the form of mature,
previously-acquired shares of Common Stock if payment in such form will cause the Company to
recognize a compensation expense under generally accepted accounting principles. Any stock tendered
as part of such payment shall be valued at its Fair Market Value as provided in the Plan. For
purposes of this Agreement, “mature, previously-acquired shares of Common Stock” and
“broker-assisted exercise” shall have the meaning set forth in Section 8 of the Plan. The
Administrator may, in its discretion, permit Optionee to tender such mature, previously-acquired
shares through the actual delivery of such shares or through attestation of ownership on such forms
as the Administrator may prescribe.

          c. Stock Transfer Records. As soon as practicable after the effective exercise of all
or any part of the Option, Optionee shall be recorded on the stock transfer books of the Company as
the owner of the shares purchased, and the Company shall deliver to Optionee one or more duly
issued stock certificates evidencing such ownership. All requisite original issue or transfer
documentary stamp taxes shall be paid by the Company.

4. Miscellaneous.

          a. Employment-at-Will; Rights as Shareholder. This Agreement shall not confer on
Optionee any right with respect to continuance of employment by the Company or any

 

 

of its Affiliates, nor will it interfere in any way with the right of the Company to terminate
such employment. Optionee’s employment relationship with the Company and its Affiliates shall be
employment-at-will, and nothing in this Agreement shall be construed as creating an employment
contract for any specified term between Optionee and the Company or any Affiliate. Optionee shall
have no rights as a shareholder with respect to shares subject to this Option until such shares
have been issued to Optionee upon exercise of this Option. No adjustment shall be made for
dividends (ordinary or extraordinary, whether in cash, securities or other property), distributions
or other rights for which the record date is prior to the date such shares are issued, except as
provided in Section 12 of the Plan.

          b. Securities Law Compliance. The exercise of all or any parts of this Option shall
only be effective at such time as counsel to the Company shall have determined that the issuance
and delivery of Common Stock pursuant to such exercise will not violate any state or federal
securities or other laws. Optionee may be required by the Company, as a condition of the
effectiveness of any exercise of this Option, to agree in writing that all Common Stock to be
acquired pursuant to such exercise shall be held, until such time that such Common Stock is
registered and freely tradable under applicable state and federal securities laws, for Optionee’s
own account without a view to any further distribution thereof, that the certificates for such
shares shall bear an appropriate legend to that effect and that such shares will be not transferred
or disposed of except in compliance with applicable state and federal securities laws.

          c. Mergers, Recapitalizations, Stock Splits, Etc. Pursuant and subject to Section 12
of the Plan, certain changes in the number or character of the Common Stock of the Company (through
merger, consolidation, exchange, reorganization, divestiture (including a spinoff), liquidation,
recapitalization, stock split, stock dividend or otherwise) shall result in an adjustment,
reduction or enlargement, as appropriate, in Optionee’s rights with respect to any unexercised
portion of the Option (i.e., Optionee shall have such “anti-dilution” rights under the
Option with respect to such events, but shall not have “preemptive” rights).

          d. Shares Reserved. The Company shall at all times during the option period reserve
and keep available such number of shares as will be sufficient to satisfy the requirements of this
Agreement.

          e. Withholding Taxes. In order to permit the Company to comply with all applicable
federal or state income tax laws or regulations, the Company may take such action as it deems
appropriate to insure that, if necessary, all applicable federal or state payroll, income or other
taxes are withheld from any amounts payable by the Company to the Optionee. If the Company is
unable to withhold such federal and state taxes, for whatever reason, the Optionee hereby agrees to
pay to the Company an amount equal to the amount the Company would otherwise be required to
withhold under federal or state law.

          f. Nontransferability. During the lifetime of Optionee, the accrued Option shall be
exercisable only by Optionee or by the Optionee’s guardian or other legal representative, and shall
not be assignable or transferable by Optionee, in whole or in part, other than by will or by the
laws of descent and distribution.

 

 

          g. 2003 Equity Incentive Plan. The Option evidenced by this Agreement is granted
pursuant to the Plan, a copy of which Plan has been made available to Optionee and is hereby
incorporated into this Agreement. This Agreement is subject to and in all respects limited and
conditioned as provided in the Plan. The Plan governs this Option and, in the event of any
questions as to the construction of this Agreement or in the event of a conflict between the Plan
and this Agreement, the Plan shall govern, except as the Plan otherwise provides.

          h. Lockup Period Limitation. Optionee agrees that in the event the Company advises
Optionee that it plans an underwritten public offering of its Common Stock in compliance with the
Securities Act of 1933, as amended, and that the underwriter(s) seek to impose restrictions under
which certain shareholders may not sell or contract to sell or grant any option to buy or otherwise
dispose of part or all of their stock purchase rights of the underlying Common Stock, Optionee
hereby agrees that for a period not to exceed 180 days from the prospectus, Optionee will not sell
or contract to sell or grant an option to buy or otherwise dispose of this option or any of the
underlying shares of Common Stock without the prior written consent of the underwriter(s) or its
representative(s).

          i. Blue Sky Limitation. Notwithstanding anything in this Agreement to the contrary,
in the event the Company makes any public offering of its securities and it is determined that it
is necessary to reduce the number of issued but unexercised stock purchase rights so as to comply
with any state securities or Blue Sky law limitations with respect thereto, and such determination
is affirmed by the Board of Directors, unless the Board of Directors determines otherwise, (i) the
exercisability of this Option and the date on which this Option must be exercised shall be
accelerated, provided that the Company agrees to give Optionee 15 days’ prior written notice of
such acceleration, and (ii) any portion of this Option or any other option granted to Optionee
pursuant to the Plan which is not exercised prior to or contemporaneously with such public offering
shall be canceled. Notice shall be deemed given when delivered personally or when deposited in the
United States mail, first class postage prepaid and addressed to Optionee at the address of
Optionee on file with the Company.

          J. Accounting Compliance. Optionee agrees that, if a merger, reorganization,
liquidation or other “transaction” as defined in Section 12 of the Plan occurs, and Optionee is an
“affiliate” of the Company or any Affiliate (as defined in applicable legal and accounting
principles) at the time of such transaction, Optionee will comply with all requirements of Rule 145
of the Securities Act of 1933, as amended, and the requirements of such other legal or accounting
principles, and will execute any documents necessary to ensure such compliance.

          k. Right of First Refusal.

               (i) Notice to Company. Optionee shall not sell, assign, give, bequest or
otherwise transfer or dispose of any shares of Common Stock acquired through the exercise of this
Option without first giving written notice to the Company of Optionee’s intent to sell, transfer or
otherwise dispose of such Stock. Such notice shall specify the number of shares of Common Stock
Optionee intends to sell or transfer. The Company shall have the right to repurchase all or any
portion of such Stock at any time within thirty (30) days after the date it receives such notice of
sale at a price determined pursuant to Paragraph 4(k)(iii) below.

 

 

               (ii) Exercise of Right.

                    A. The Company shall notify Optionee, in writing, of its exercise of its right to
repurchase all or a portion of the Stock specified in Optionee’s notice of sale or other transfer.
Such notice shall be signed by a member of the Board.

                    B. The Company’s election to exercise its right to repurchase all or a portion of
the Stock specified in Optionee’s notice shall be approved by a majority vote of the Board, or by
written resolution of all members of the Board entitled to participate in such action, provided
that the Board may authorize a standing order electing to repurchase all shares tendered during a
stipulated time period. In no event shall Optionee participate in the Company’s election to
exercise its right to repurchase Optionee’s Stock in an individually authorized transaction if he
is a member of the Board.

                    C. As promptly as practicable after the Company’s exercise of its right to
repurchase all or a portion of the Stock specified in the Optionee’s notice, the Company shall
deliver to Optionee a lump-sum cash payment equal to the purchase price determined under Paragraph
4(k)(iii) below, and Optionee shall deliver the stock certificates representing such Stock,
properly endorsed for transfer in blank, to the Company for cancellation.

                    D. If the Board notifies Optionee, in writing, that the
Company will not exercise its right to repurchase all or any portion of the Stock specified in
Optionee’s notice, or if the Board fails to exercise the Company’s right to repurchase such Stock
during the thirty-day period described above, the Company’s right to repurchase such Stock will
lapse and Optionee shall have the right to sell or transfer the Stock specified in Optionee’s
notice for a period of sixty (60) days thereafter, subject to any restrictions imposed by
applicable securities laws. If Optionee does not sell or transfer such stock within this sixty-day
period, all of the provisions of this Paragraph 4(k) shall again apply.

                    E. If the Board notifies Optionee, in writing, that the
Company will not exercise its right to repurchase all or any portion of the stock specified in
Optionee’s notice, or if the Board fails to exercise the Company’s right to repurchase such stock
during the thirty-day period described above, and all or any portion of such stock is subsequently
sold or otherwise transferred, the restrictions contained in this Paragraph 4(k) shall not apply to
the stock so transferred.

               (iii) Purchase Price for Stock. If the Company exercises its right to repurchase
all or any portion of the Stock specified in Optionee’s notice, the Company shall pay Optionee an
amount equal to the greater of: (A) the price offered in the proposed transaction giving rise to
such right of repurchase, and (B) the Fair Market Value of the Company’s Common Stock, as defined
in the Plan, as of the date the Company received Optionee’s notice of sale or other transfer.

               (iv) Investor Required Agreements. If in connection with the consummation of an
equity financing by the Company other than a public offering by the Company, the equity investor or
investors require as a condition to their making an investment in

 

 

the Company that one or more groups of optionees, with respect to shares of stock that may be
owned by Optionee, enter into buy-sell, voting, co-sale, right of first refusal or other agreements
with the Company and/or such investor or investors, and if the Optionee is a member of such group
or groups of optionees, upon written request of the Company, the Optionee agrees to enter into such
agreement or agreements, provided, however, that, without Optionee’s consent, which consent shall
not be unreasonably withheld, any rights of first refusal or other call options on Optionee’s
shares shall not be a price materially lower than the price that would apply under Paragraph
4(k)(iii) above.

               (iv) Initial Public Offering. The provisions of this Paragraph 4(k) shall no
longer apply on the effective date of an initial public offering of the Company’s Common Stock.

          1. Stock Legend. The Administrator may require that the certificates for any
shares of Common Stock purchased by Optionee (or, in the case of death, Optionee’s successors)
shall bear an appropriate legend to reflect the restrictions of Paragraph 4(b) and Paragraphs 4(h)
through 4(k) of this Agreement; provided, however, that failure to so endorse any of such
certificates shall not render invalid or inapplicable Paragraph 4(k).

          m. Scope of Agreement. This Agreement shall bind and inure to the benefit of the
Company, its Affiliates and its successors and assigns and Optionee and any successor or successors
of Optionee permitted by Paragraph 2 or Paragraph 4(f) above.

5. Change of Control.

          a. No Acceleration. The exercisability of this Option shall not accelerate upon a
Change of Control of the Company if (i) Optionee’s employment continues with the surviving entity
immediately following such Change of Control, (ii) the surviving entity assumes this Option or
replaces this Option with an option for an equivalent number of such entity’s voting securities and
substantially similar terms, including but not limited to the vesting period set forth in Paragraph
2 and a ratio of exercise price to fair market value that is equivalent to such ratio under this
Option immediately prior to such Change of Control, and (iii) the surviving entity agrees that the
Optionee’s vesting under this option or such replacement option, as the case may be, will
accelerate if the Optionee’s employment is terminated by the surviving entity without cause within
twenty-four (24) months after the Change of Control.

          b. Acceleration. Notwithstanding anything in the Plan or this Agreement to the
contrary, if connection with a Change of Control, the terms of Paragraph 5(a)(i), (ii) and (iii)
are not met, then this Option shall become immediately exercisable upon such Change of Control to
the extent of 100% of the aggregate number of shares specified in Paragraph 1, minus any shares or
securities previously purchased by Optionee, and shall remain exercisable until the earliest of (i)
the close of business on the twenty-four-month anniversary date of such termination of employment,
(ii) the expiration date stated in Paragraph 2(a) above, and (iii) the date determined by the Board
in connection with the terms of the Plan (including, without limitation, upon consummation of the
Change of Control, if so determined by the Board). If Optionee does not exercise this Option or the
replacement option, as the case may be, within the

 

 

time specified in this Paragraph 5(b), all rights of Optionee under this Option or the
replacement option shall be forfeited.

          c. Defined. For purposes of this Paragraph 5, a “Change of Control” means:

               i. The consummation of any merger, consolidation, exchange, or reorganization to which the
Company is a party if the individuals and entities who were shareholders of the Company immediately
prior to the effective date of such transaction have, immediately following the effective date of
such transaction, beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of less than twenty percent (20%) of the total combined voting power of all classes of
securities issued by the surviving corporation for the election of directors of the surviving
corporation;

               ii. A liquidation of the Company.

               iii. A sale, lease or other transfer of all or substantially all of the assets of the Company
to any person or entity which is not an Affiliate of the Company; or

               iv. The acquisition, without prior approval by resolution adopted by the Board, of direct or
indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of securities of the Corporation representing, in the aggregate, eighty percent (80%) or more of
the total combined voting power of all classes of the Company’s then-issued and outstanding
securities by any person or entity or by a group of associated persons or entities acting in
concert; provided, however, that a change of control will not be deemed to occur if such
acquisition is initiated by Optionee or an entity in which Optionee owns eighty percent (80%) or
more of the total combined voting power of all classes of such entity’s securities, or if Optionee
or such entity is a member of the group of associated persons or entities acting in concert.

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the day
and year first above written.

	 	 	 	 	 
	 	FINGERHUT DIRECT MARKETING, INC.

 	 
	 	By:  	 	 
	 	 	Its: 	 	 
	 	 	 	 
	 	 	 
	 	 	Optionee

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