Document:

EX-4.3

 

    Exhibit 4.3

 

    CORNING
    NATURAL GAS CORPORATION

    

 

    and

    

 

    Registrar
    and Transfer Company, as Warrant Agent

 

 

    WARRANT
    AGREEMENT

    Dated as of
    [          ],
    2007

 

    WARRANT AGREEMENT (the “Agreement”) dated as of
    [          ],
    2007 between CORNING NATURAL GAS CORPORATION, a New York
    corporation (the “Corporation”), and REGISTRAR AND
    TRANSFER COMPANY, a New Jersey corporation, as Warrant Agent
    (the “Warrant Agent”).

 

    WHEREAS, the Corporation proposes to issue common stock purchase
    Warrants, as hereinafter described (the “Warrants”),
    which in the aggregate initially entitle the holders thereof
    (the words “holders” or “holder” meaning the
    registered holders or registered holder of the Warrants) to
    purchase up to 354,843 shares of common stock of the
    Corporation (the “Common Stock”) which constitute 22%
    of the Common Stock outstanding (on a fully diluted basis) on
    the date hereof (the Common Stock issuable on exercise of the
    Warrants being referred to herein as the “Warrant
    Shares”).

 

    WHEREAS, the Corporation desires the Warrant Agent to act on
    behalf of the Corporation, and the Warrant Agent is willing so
    to act, in connection with the issuance, transfer, exchange and
    exercise of Warrants and other matters as provided herein;

 

    NOW, THEREFORE, in consideration of the premises and the mutual
    agreements herein set forth, the parties hereto agree as follows:

 

    Section 1.  Appointment
    of Warrant Agent.  The Corporation hereby
    appoints the Warrant Agent to act as agent for the Corporation
    in accordance with the instructions set forth hereinafter in
    this Agreement, and the Warrant Agent hereby accepts such
    appointment. The Corporation may from time to time appoint such
    Co-Warrant Agents as it may deem necessary or desirable upon ten
    (10) days prior written notice to the Warrant Agent. The
    Warrant Agent shall have no duty to supervise, and shall in no
    event be liable for, the acts or omissions of any such
    Co-Warrant Agent.

 

    Section 2.  Warrant
    Certificates.  The certificates evidencing the
    Warrants (the “Warrant Certificates”) to be delivered
    pursuant to this Agreement shall be in registered form only and
    shall be substantially in the form set forth in Exhibit A
    attached hereto.

 

    Section 3.  Execution
    of Warrant Certificates.  The Warrant
    Certificates shall be signed on behalf of the Corporation by its
    Chairman of the Board or its President and by its Secretary or
    an Assistant Secretary. Each such signature upon the Warrant
    Certificates may be in the form of a facsimile signature of the
    present or any future Chairman of the Board, President,
    Secretary or Assistant Secretary and may be imprinted or
    otherwise reproduced on the Warrant Certificates and for that
    purpose the Corporation may adopt and use the facsimile
    signature of any person who shall have been Chairman of the
    Board, President, Secretary or Assistant Secretary,
    notwithstanding the fact that at the time the Warrant
    Certificates shall be countersigned and delivered or disposed of
    he or she shall have ceased to hold such office.

 

    In case any officer of the Corporation who shall have signed any
    of the Warrant Certificates shall cease to be such officer
    before the Warrant Certificates so signed shall have been
    countersigned by the Warrant Agent, or disposed of by the
    Corporation, such Warrant Certificates nevertheless may be
    countersigned and delivered or disposed of as though such person
    had not ceased to be such officer of the Corporation; and any
    Warrant Certificate may be signed on behalf of the Corporation
    by any person who, at the actual date of the execution of such
    Warrant Certificate, shall be a proper officer of the
    Corporation to sign such Warrant Certificate, although at the
    date of the execution of this Agreement any such person was not
    such officer.

 

    Warrant Certificates shall be dated the date of countersignature
    by the Warrant Agent.

 

    Section 4.  Registration
    and Countersignature.  The Warrant Agent, on
    behalf of the Corporation, shall hold the Warrant Certificates
    pre-numbered and unregistered.

 

 

    The Warrant Certificates shall be manually countersigned by the
    Warrant Agent and shall not be valid for any purpose unless so
    countersigned. The Warrant Agent shall, upon written
    instructions of the Chairman of the Board or the President of
    the Corporation, initially countersign, issue and deliver
    Warrants collectively for all Warrants outstanding entitling the
    holders thereof to purchase not more than the number of Warrant
    Shares referred to above in the first recital hereof and shall
    countersign and deliver Warrants as otherwise provided in this
    Agreement.

 

    The Corporation and the Warrant Agent may deem and treat the
    registered holder(s) of the Warrant Certificates as the absolute
    owner(s) thereof (notwithstanding any notation of ownership or
    other writing thereon made by anyone), for all purposes, and
    neither the Corporation nor the Warrant Agent shall be affected
    by any notice to the contrary.

 

    Section 5.  Registration
    of Transfers and Exchanges.  The Warrant Agent
    shall from time to time, subject to the limitations of
    Section 6 hereof, register the transfer of any outstanding
    Warrant Certificates upon the records to be maintained by it for
    that purpose, upon surrender thereof duly endorsed or
    accompanied (if so required by the Warrant Agent) by a written
    instrument or instruments of transfer in form satisfactory to
    the Warrant Agent, duly executed by the registered holder or
    holders thereof or by the duly appointed legal representative
    thereof or by a duly authorized attorney. Upon any such
    registration of transfer, a new Warrant Certificate shall be
    issued to the transferee(s) and the surrendered Warrant
    Certificate shall be cancelled by the Warrant Agent. Cancelled
    Warrant Certificates shall thereafter be disposed of by the
    Warrant Agent in its customary manner.

 

    Subject to the terms of this Agreement, Warrant Certificates may
    be exchanged at the option of the holder(s) thereof, when
    surrendered to the Warrant Agent at its principal corporate
    trust office, which is currently located at the address listed
    in Section 19 hereof, for another Warrant Certificate or
    other Warrant Certificates of like tenor and representing in the
    aggregate a like number of Warrants. Any holder desiring to
    exchange a Warrant Certificate shall deliver a written request
    to the Warrant Agent, and shall surrender, duly endorsed or
    accompanied (if so required by the Warrant Agent) by a written
    instrument or instruments of transfer in form satisfactory to
    the Warrant Agent, the Warrant Certificate or Certificates to be
    so exchanged. Warrant Certificates surrendered for exchange
    shall be cancelled by the Warrant Agent. Such cancelled Warrant
    Certificates shall then be disposed of by such Warrant Agent in
    its customary manner.

 

    The Warrant Agent is hereby authorized to countersign, in
    accordance with the provisions of this Section 5 and of
    Section 4 hereof, the new Warrant Certificates required
    pursuant to the provisions of this Section 5.

 

    Section 6.  Terms
    of Warrants.  The initial exercise price at
    which Warrant Shares shall be purchasable upon the exercise of
    Warrants (the “Exercise Price”) shall be
    $19.00 per share. Fractional shares shall not be issued
    upon the exercise of any Warrant, but, in any case where the
    exercise of a holder’s Warrants could result in the receipt
    of a fractional interest in a share of Common Stock, the number
    of shares issued to the holder will be rounded up to the nearest
    whole number. The Warrants shall be initially exercisable in the
    aggregate for that number of shares of Common Stock equal to 22%
    of the fully diluted Common Stock outstanding on the date hereof
    (calculated after giving effect to the exercise of such Warrants
    and all options, warrants and rights to acquire Common Stock and
    the conversion of all convertible securities for the maximum
    number of shares of Common Stock obtainable whether or not such
    options, warrants or rights are then exercisable or vested and
    whether or not such convertible securities are then convertible).

 

    Subject to the terms of this Agreement, each Warrant holder
    shall have the right, which may be exercised until
    5:00 p.m., New York City time on <expiration
    date>, 2011, to receive from the Corporation the number of
    fully paid and nonassessable Warrant Shares which the holder may
    at the time be entitled to receive on exercise of such Warrants
    and payment of the Exercise Price then in effect for such
    Warrant Shares. Each Warrant not exercised prior to
    5:00 p.m., New York City time, on <expiration
    date>, 2011, shall become void and all rights thereunder
    and all rights in respect thereof under this Agreement shall
    cease as of such time. No adjustments as to dividends will be
    made upon exercise of the Warrants.

 

    A Warrant may be exercised upon surrender to the Corporation at
    the principal stock transfer office of the Warrant Agent, which
    is currently located at the address listed in Section 19
    hereof, of the certificate or certificates evidencing the
    Warrants to be exercised with the form of election to purchase
    appearing on the reverse side of the certificate filled in and
    signed and such other documentation as the Warrant Agent may
    reasonably request, and

    

    2

 

    upon payment to the Warrant Agent for the account of the
    Corporation of the Exercise Price which is set forth in the form
    of Warrant Certificate attached hereto as Exhibit A as
    adjusted as herein provided, for the number of Warrant Shares in
    respect of which such Warrants are then exercised. Payment of
    the aggregate Exercise Price shall be made (i) in cash or
    by certified or official bank check payable to the order of
    Registrar and Transfer Company, or the equivalent thereof or
    (ii) in the manner provided in this Section 6.

 

    Subject to the provisions of Section 7 hereof, upon such
    surrender of Warrants and payment of the Exercise Price, the
    Warrant Agent shall issue and cause to be delivered with all
    reasonable dispatch to and in such name or names as the Warrant
    holder may designate, a certificate or certificates for the
    number of full Warrant Shares issuable upon the exercise of such
    Warrants. Such certificate or certificates shall be deemed to
    have been issued and any person so designated to be named
    therein shall be deemed to have become a holder of record of
    such Warrant Shares as of the date of the surrender of such
    Warrants and payment of the Exercise Price.

 

    The Warrants shall be exercisable, at the election of the
    holders thereof, either in full or from time to time in part
    and, in the event that a certificate evidencing Warrants is
    exercised in respect of fewer than all of the Warrant Shares
    issuable on such exercise at any time prior to the date of
    expiration of the Warrants, a new certificate evidencing the
    remaining Warrant or Warrants will be issued, and the Warrant
    Agent is hereby irrevocably authorized to countersign and to
    deliver the required new Warrant Certificate or Certificates
    pursuant to the provisions of this Section 6 and of
    Section 4 hereof, and the Corporation, whenever required by
    the Warrant Agent, shall supply the Warrant Agent with Warrant
    Certificates duly executed on behalf of the Corporation for such
    purpose. The Warrant Agent may assume that any Warrant presented
    for exercise is permitted to be so exercised under applicable
    law and shall have no liability for acting in reliance on such
    assumption.

 

    All Warrant Certificates surrendered upon exercise of Warrants
    shall be canceled by the Warrant Agent. Such canceled Warrant
    Certificates shall then be disposed of by the Warrant Agent in
    its customary manner. The Warrant Agent shall account promptly
    to the Corporation with respect to Warrants exercised and
    concurrently pay to the Corporation all monies received by the
    Warrant Agent for the purchase of the Warrant Shares through the
    exercise of such Warrants.

 

    The Warrant Agent shall keep copies of this Agreement and any
    notices given or received hereunder available for inspection by
    the holders with reasonable prior written notice during normal
    business hours at its office. The Corporation shall supply the
    Warrant Agent from time to time with such numbers of copies of
    this Agreement as the Warrant Agent may request.

 

    Section 7.  Payment
    of Taxes.  The Corporation covenants and
    agrees that it shall pay when due and payable any and all
    federal and state documentary or stamp taxes (other than federal
    or state income taxes or similar laws) or other costs which may
    be payable in respect of the issue of the Warrants or any Common
    Stock or certificates therefor issuable upon the exercise of the
    Warrants (provided, however, the Corporation’s obligations
    to any holder in this regard will in all events be conditioned
    upon such holder cooperating with the Corporation in any
    reasonable arrangement designed to minimize or eliminate any
    such taxes), except that, if Warrant Shares or new Warrants
    shall be registered in a name or names other than the name of
    any holder, funds sufficient to pay all transfer taxes payable
    as a result of such transfer shall be paid by such holder at the
    time of delivery of the election to purchase.

 

    Section 8.  Mutilated
    or Missing Warrant Certificates.  In case any
    of the Warrant Certificates shall be mutilated, lost, stolen or
    destroyed, the Corporation shall issue and the Warrant Agent
    shall countersign, in exchange and substitution for and upon
    cancellation of the mutilated Warrant Certificate, or in lieu of
    and substitution for the Warrant Certificate lost, stolen or
    destroyed, a new Warrant Certificate of like tenor and
    representing an equivalent number of Warrants, but only upon
    receipt of evidence satisfactory to the Corporation and the
    Warrant Agent of such loss, theft or destruction of such Warrant
    Certificate and indemnity, also satisfactory to the Corporation
    and the Warrant Agent. Except as otherwise provided herein, in
    the case of the loss, theft, or destruction of a Warrant
    Certificate, Corporation shall pay all expenses, taxes and other
    charges payable in connection with any replacement of such
    Warrant Certificate.

 

    Section 9.  Reservation
    of Warrant Shares.  The Corporation shall at
    all times reserve and keep available out of its authorized but
    unissued Common Stock (or out of shares of Common Stock held in
    its treasury) solely for the purpose of issuance upon the
    exercise of the Warrants, the maximum number of Warrant Shares
    issuable upon

    

    3

 

    the exercise of the Warrants. The Warrant Agent shall have no
    duty to verify availability of such shares set aside by the
    Corporation.

 

    The Corporation or, if appointed, the transfer agent for the
    Common Stock (the “Transfer Agent”) and every
    subsequent transfer agent for any shares of the
    Corporation’s Common Stock issuable upon the exercise of
    any of the Warrants will be irrevocably authorized and directed
    at all times to reserve such number of authorized stock
    certificates as shall be required for such purpose. The
    Corporation will keep a copy of this Agreement on file with the
    Transfer Agent and with every subsequent transfer agent for any
    shares of the Corporation’s Common Stock issuable upon the
    exercise of the Warrants. The Corporation will supply such
    Transfer Agent with duly executed certificates for such
    purposes. The Corporation will furnish such Transfer Agent a
    copy of all notices of adjustments and certificates transmitted
    to each holder pursuant to Section 11 hereof.

 

    The Corporation covenants and agrees that all shares of Common
    Stock that may be issued upon the exercise of the rights
    represented by the Warrants shall, upon issuance, be validly
    issued, fully paid and nonassessable, and free from all taxes,
    liens, preemptive rights and charges with respect to the issue
    thereof. The Corporation shall take all such actions as may be
    necessary to ensure that all such Warrant Shares may be so
    issued without violation by the Corporation of any applicable
    law or governmental regulation or any requirements of any
    domestic securities exchange or quotation system upon which
    shares of Common Stock or other securities constituting Warrant
    Shares may be listed or quoted (except for official notice of
    issuance which shall be immediately delivered by the Corporation
    upon each such issuance).

 

    Section 10.  Adjustment
    of Number of Warrant Shares and Exercise Price.

 

    (a) Adjustment of Number of Shares.  Upon
    each adjustment of the Warrant Price as provided in
    subsection (b) of this Section 10, each holder
    shall thereafter be entitled to purchase, at the Warrant Price
    resulting from such adjustment, only the number of shares
    (calculated to the nearest whole share) obtained by multiplying
    the Warrant Price in effect immediately prior to such adjustment
    by the number of shares purchasable by such holder pursuant
    hereto immediately prior to such adjustment and dividing the
    product thereof by the Warrant Price resulting from such
    adjustment.

 

    (b) Adjustment in Exercise Price.  The
    Warrant Price shall be subject to adjustment from time to time
    as follows:

 

    (i) If, at any time during the Term of this Agreement, the
    number of shares of Common Stock outstanding is increased by a
    stock dividend payable in shares of Common Stock or by a
    subdivision or
    split-up of
    shares of Common Stock, then, following the record date fixed
    for the determination of holders of Common Stock entitled to
    receive such stock dividend, subdivision or
    split-up,
    the Warrant Price shall be appropriately decreased so that the
    number of shares of Common Stock issuable upon the exercise
    hereof shall be increased in proportion to such increase in
    outstanding shares.

 

    (ii) If, at any time during the Term of this Warrant, the
    number of shares of Common Stock outstanding is decreased by a
    combination of the outstanding shares of Common Stock, then,
    following the record date for such combination, the Warrant
    Price shall be appropriately increased so that the number of
    shares of Common Stock issuable upon the exercise hereof shall
    be decreased in proportion to such decrease in outstanding
    shares.

 

    (iii) Whenever the Warrant Price shall be adjusted as
    provided in this Section 10, the Corporation shall promptly
    prepare a statement showing the facts requiring such adjustment
    and the Warrant Price that shall be in effect after such
    adjustment, setting forth in reasonable detail and certifying
    the calculation of such adjustment. The Corporation shall cause
    a copy of such statement (i) to be filed with the Warrant
    Agent and (ii) to be sent by mail, first class postage
    prepaid, to each holder at its, his or her address appearing on
    the Warrant register. Where appropriate, such copy may be given
    in advance and may be included as part of the notice required to
    be mailed under the provisions of clause (v) of this
    Section 10(b). The Warrant Agent shall be fully protected
    in relying on any such statement and on any adjustment therein
    contained and shall not be deemed to have knowledge of such
    adjustment unless and until it shall have received such
    statement.

    

    4

 

 

    (iv) Adjustments made pursuant to this Section 10
    shall be made on the date such dividend, subdivision,
    split-up,
    combination or distribution, as the case may be, is made, and
    shall become effective at the opening of business on the
    business day next following the record date for the
    determination of stockholders entitled to such dividend,
    subdivision,
    split-up,
    combination or distribution.

 

    (v) In the event the Corporation shall propose to take any
    action of the types described in this Section 10, the
    Corporation shall forward, at the same time and in the same
    manner, to holder such notice, if any, which the Corporation
    shall give to the holders of capital stock of the Corporation.

 

    (vi) In any case in which the provisions of this
    Section 10 shall require that an adjustment shall become
    effective immediately after a record date for an event, the
    Corporation may defer until the occurrence of such event,
    issuing to any holder of all or any part of any Warrant that
    exercised all or part of such Warrant after such record date,
    and before the occurrence of such event, the additional shares
    of capital stock issuable upon such exercise by reason of the
    adjustment required by such event over and above the shares of
    capital stock issuable upon such exercise before giving effect
    to such adjustment exercise; provided, however, that the
    Corporation shall deliver to such holder a due bill or other
    appropriate instrument evidencing such holder’s right to
    receive such additional shares upon the occurrence of the event
    requiring such adjustment.

 

    (c) Mergers, Consolidation, Sales.  In the
    case of any proposed consolidation or merger of the Corporation
    with another entity, or the proposed sale of all or
    substantially all of its assets to another person or entity, or
    any proposed reorganization, recapitalization, reclassification
    of the capital stock of the Corporation or other transaction,
    then, as a condition of such consolidation, merger, sale,
    reorganization, recapitalization, reclassification or other
    transaction, the Corporation shall give 30 days’ prior
    written notice thereof to Warrant holders and lawful and
    adequate provision shall be made whereby holders shall
    thereafter have the right to receive upon the basis and upon the
    terms and conditions specified herein, in lieu of the shares of
    the Common Stock of the Corporation immediately theretofore
    purchasable hereunder, such shares of stock, securities or
    assets as may (by virtue of such consolidation, merger, sale,
    reorganization, recapitalization, reclassification or other
    transaction) be issued or payable with respect to or in exchange
    for the number of shares of such Common Stock purchasable
    hereunder immediately before such consolidation, merger, sale,
    reorganization, recapitalization, reclassification or other
    transaction. In any such case appropriate provision shall be
    made with respect to the rights and interests of the holders to
    the end that the provisions hereof shall thereafter be
    applicable as nearly as may be practicable, in relation to any
    shares of stock, securities or assets thereafter deliverable
    upon the exercise of the Warrants. The Corporation shall not
    effect any such consolidation, merger, sale, reorganization,
    recapitalization, reclassification or other transaction unless,
    prior to the consummation thereof, the successor entity (if
    other than the Corporation) resulting from such consolidation,
    merger, sale, reorganization, recapitalization, reclassification
    or other transaction (including a purchaser of all or
    substantially all the Corporation’s assets) assumes by
    written instrument the obligation to deliver to each holder of
    Warrants such shares of stock, securities or assets as, in
    accordance with the foregoing provisions, such holder may be
    entitled to acquire upon exercise of Warrants.

 

    (d) Warrant Agent’s Disclaimer.  The
    Warrant Agent has no duty to determine when an adjustment under
    this Section 10 should be made, how it should be made or
    what it should be. The Warrant Agent makes no representation as
    to the validity or value of any securities or assets issued upon
    exercise of Warrants. The Warrant Agent shall not be responsible
    for the Corporation’s failure to comply with this section.

 

    (e) Form of Warrants.  Irrespective of any
    adjustments in the number or kind of shares issuable upon the
    exercise of the Warrants or the Exercise Price, Warrants
    theretofore or thereafter issued may continue to express the
    same number and kind of shares and Exercise Price as are stated
    in the Warrants initially issuable pursuant to this Agreement.

 

    Section 11.  Special
    Arrangements of the Corporation.  The
    Corporation covenants and agrees with each holder of a Warrant
    that during the Term of such Warrant, unless otherwise approved
    by such holder:

 

    (a) Certain Actions.  The Corporation
    shall not amend its certificate of incorporation to eliminate as
    an authorized class of capital stock that class denominated as
    “Common Stock” on the date hereof. The Corporation
    shall not, and shall not permit its subsidiaries to, directly or
    indirectly, by any action (including, without limitation,
    reincorporation in a jurisdiction other than New York, amending
    its Certificate of

    

    5

 

    Incorporation (as may be amended
    and/or
    restated from time to time) or through any merger, sale,
    consolidation, reorganization, reclassification, issuance or
    sale of securities or any other action) avoid or seek to avoid
    the observance or performance of any terms of this Agreement or
    the Warrants or impair or diminish the value of the Warrants,
    but shall at all times in good faith assist in the carrying out
    of all such terms of this Agreement and the Warrants. Without
    limiting the generality of the foregoing, the Corporation shall
    (A) obtain all such authorizations, exemptions or consents
    from any public regulatory body having jurisdiction thereof as
    may be necessary to enable the Corporation to perform its
    obligations under this Agreement and the Warrants and
    (B) not undertake any reverse stock split, combination,
    reorganization or other reclassification of its capital stock
    which would have the effect of making the Warrants exercisable
    for less than one share of Common Stock (except as permitted
    under Section 10 hereof).

 

    (b) Shall Bind Successors.  This
    Agreement, the Warrants and the rights evidenced hereby and
    thereby shall be binding upon the successors of the Corporation.

 

    (c) No Exercise Interference; Par
    Value.  The Corporation shall not close its books
    against the transfer of any Warrant or of any Warrant Shares
    issued or issuable upon the exercise of any Warrant in any
    manner which interferes with the timely exercise of any Warrant.
    The Corporation shall from time to time take all such action as
    may be necessary to assure that the par value per share of the
    unissued Warrant Shares acquirable upon exercise of the Warrants
    is at all times equal to or less than the Warrant Price then in
    effect.

 

    (d) Governmental Filings.  The Corporation
    shall assist and cooperate with any reasonable request by any
    holder of any Warrant which is required to make any governmental
    filings or obtain any governmental approvals prior to or in
    connection with any exercise of any Warrant.

 

    (e) Notices of Certain Actions.  The
    Corporation shall give written notice to the holders at least
    30 days prior to the date on which the Corporation closes
    its books or takes a record (A) with respect to any
    dividend or distribution upon the Common Stock, (B) with
    respect to any pro rata subscription offer to holders of Common
    Stock, or (C) for determining rights to vote with respect
    to any recapitalization, reorganization, reclassification,
    consolidation, merger, dissolution, liquidation or sale of all
    or substantially all of the Corporation’s assets or other
    transaction which is effected in such a way that holders of
    Common Stock are entitled to receive (either directly or upon
    subsequent liquidation) stock, securities or assets with respect
    to or in exchange for Common Stock.

 

    Section 12.  Maintenance
    of Registration and Qualification of Common
    Stock.  The Corporation shall use its best
    efforts to maintain the effectiveness of the Corporation’s
    Registration Statement (No.
    [          ])
    on
    Form S-3
    filed with the Securities and Exchange Commission for the
    registration of the Warrant Shares, and keep current a
    prospectus in those states in which the Warrants were initially
    offered by the Corporation, for so long as the holders are
    entitled to exercise any Warrants. However, that upon the
    occurrence of any event that would cause the Registration
    Statement not to be effective and usable for the issuance of the
    Warrant Shares upon the exercise of any Warrant, the Corporation
    may refuse to allow any Warrant to be exercised until the
    Corporation has cured such defect.

 

    Section 13.  Notices
    to Warrant Holders.  Any notice or other
    document required or permitted to be given or delivered to
    holders shall be delivered at, or sent by certified or
    registered mail to, each holder at its, his or her address
    appearing on the Warrant register. Any notice so addressed and
    mailed by registered or certified mail shall be deemed to be
    given when so mailed. Any notice so addressed and otherwise
    delivered shall be deemed to be given when actually received by
    the addressee.

 

    Nothing contained in this Agreement or in any of the Warrant
    Certificates shall be construed as conferring upon the holders
    thereof the right to vote or to consent or to receive notice as
    shareholders in respect of the meetings of shareholders or the
    election of directors of the Corporation or any other matter, or
    any rights whatsoever as shareholders of the Corporation.

 

    Section 14.  Public
    Offering; Sale of
    Corporation.  Notwithstanding any other
    provision hereof, if an exercise of any portion of any Warrant
    is to be made in connection with a public offering or a sale of
    the Corporation (pursuant to a merger, sale of stock or
    otherwise), such exercise may at the election of the holder of
    such Warrant be

    

    6

 

    conditioned upon the consummation of such transaction, in which
    case such exercise shall not be deemed to be effective until
    immediately prior to consummation of such transaction.

 

    Section 15.  Representations
    of the Corporation.  The Corporation has all
    requisite corporate power and authority to enter into and
    perform its obligations under this Agreement and the Warrants,
    to deliver the Agreement to the Warrant Agent and to issue and
    deliver the Warrants to the holders. The execution, delivery,
    and performance by the Corporation of its obligations under this
    Agreement and the Warrants, including the issuance and delivery
    of the Warrants to the purchaser, have been duly authorized by
    all necessary corporate action on the part of the Corporation.
    This Agreement has been duly executed and delivered by the
    Corporation and is a legal, valid, and binding obligation of the
    Corporation and is enforceable against the Corporation in
    accordance with its terms.

 

    Section 16.  Merger,
    Consolidation or Change of Name of Warrant
    Agent.  Any corporation into which the Warrant
    Agent may be merged or with which it may be consolidated, or any
    corporation resulting from any merger or consolidation to which
    the Warrant Agent shall be a party, or any corporation
    succeeding to all or substantially all the corporate trust or
    agency business of the Warrant Agent, shall be the successor to
    the Warrant Agent hereunder without the execution or filing of
    any paper or any further act on the part of any of the parties
    hereto, provided that such corporation would be eligible for
    appointment as a successor warrant agent under the provisions of
    Section 18. In case at the time such successor to the
    Warrant Agent shall succeed to the agency created by this
    Agreement, and in case at that time any of the Warrant
    Certificates shall have been countersigned but not delivered,
    any such successor to the Warrant Agent may adopt the
    countersignature of the original Warrant Agent; and in case at
    that time any of the Warrant Certificates shall not have been
    countersigned, any successor to the Warrant Agent may
    countersign such Warrant Certificates either in the name of the
    predecessor Warrant Agent or in the name of the successor to the
    Warrant Agent; and in all such cases such Warrant Certificates
    shall have the full force and effect provided in the Warrant
    Certificates and in this Agreement.

 

    In case at any time the name of the Warrant Agent shall be
    changed and at such time any of the Warrant Certificates shall
    have been countersigned but not delivered, the Warrant Agent
    whose name has been changed may adopt the countersignature under
    its prior name, and in case at that time any of the Warrant
    Certificates shall not have been countersigned, the Warrant
    Agent may countersign such Warrant Certificates either in its
    prior name or in its changed name, and in all such cases such
    Warrant Certificates shall have the full force and effect
    provided in the Warrant Certificates and in this Agreement.

 

    Section 17.  Warrant
    Agent.  The Warrant Agent undertakes the
    duties and obligations imposed by this Agreement (and no implied
    duties or obligations shall be read into this Agreement against
    the Warrant Agent) upon the following terms and conditions, by
    all of which the Corporation and the holders of Warrants, by
    their acceptance thereof, shall be bound:

 

    (a) The statements contained herein and in the Warrant
    Certificates shall be taken as statements of the Corporation and
    the Warrant Agent assumes no responsibility for the correctness
    of any of the same except such as describe the Warrant Agent or
    action taken or to be taken by it. The Warrant Agent assumes no
    responsibility with respect to the distribution of the Warrant
    Certificates except as herein otherwise provided.

 

    (b) The Warrant Agent shall not be responsible for any
    failure of the Corporation to comply with any of the covenants
    contained in this Agreement or in the Warrant Certificates to be
    complied with by the Corporation.

 

    (c) The Warrant Agent may consult at any time with counsel
    of its own selection (who may be counsel for the
    Corporation), which counsel shall be generally recognized as
    having competence in the subject matter under consideration, and
    the Warrant Agent shall incur no liability or responsibility to
    the Corporation or to any holder of any Warrant Certificate in
    respect of any action taken, suffered or omitted by it hereunder
    in good faith and in accordance with the opinion or the advice
    of such counsel. The Warrant Agent may execute any of the trusts
    or powers hereunder or perform any duties hereunder either
    directly or by or through agents or attorneys and the Warrant
    Agent shall not be responsible for any misconduct or negligence
    on the part of any agent or attorney appointed with due care by
    it hereunder.

 

    (d) The Warrant Agent may conclusively rely, as to the
    truth of the statements and the correctness of the opinions
    expressed therein, upon certificates or opinions furnished to
    the Warrant Agent and conforming to the

    

    7

 

    requirements of this Agreement. The Warrant Agent shall incur no
    liability or responsibility to the Corporation or to any holder
    of any Warrant Certificate for any action taken in reliance on
    any Warrant Certificate, certificate of shares, notice,
    resolution, waiver, consent, order, certificate, or other paper,
    document or instrument (whether in its original or facsimile
    form) believed by it to be genuine and to have been signed, sent
    or presented by the proper party or parties.

 

    (e) The Corporation agrees to pay to the Warrant Agent such
    compensation for all services rendered by the Warrant Agent in
    the administration and execution of this Agreement as the
    Corporation and the Warrant Agent shall agree in writing to
    reimburse the Warrant Agent for all expenses, taxes and
    governmental charges and other charges of any kind and nature
    incurred by the Warrant Agent in the execution of this Agreement
    (including fees and expenses of its counsel) and to indemnify
    the Warrant Agent (and any predecessor Warrant Agent) and save
    it harmless against any and all claims (whether asserted by the
    Corporation, a holder or any other person), damages, losses,
    expenses (including taxes other than taxes based on the income
    of the Warrant Agent), liabilities, including judgments, costs
    and counsel fees and expenses, for anything done or omitted by
    the Warrant Agent in the execution of this Agreement except as a
    result of its gross negligence or willful misconduct. The
    provisions of this Section 17(e) shall survive the
    expiration of the Warrants and the termination of this Agreement.

 

    (f) The Warrant Agent shall be under no obligation to
    institute any action, suit or legal proceeding or to take any
    other action likely to involve expense unless the Corporation or
    one or more registered holders of Warrant Certificates shall
    furnish the Warrant Agent with security and indemnity
    satisfactory to it for any costs and expenses which may be
    incurred, but this provision shall not affect the power of the
    Warrant Agent to take such action as it may consider proper,
    whether with or without any such security or indemnity. All
    rights of action under this Agreement or under any of the
    Warrants may be enforced by the Warrant Agent without the
    possession of any of the Warrant Certificates or the production
    thereof at any trial or other proceeding relative thereto, and
    any such action, suit or proceeding instituted by the Warrant
    Agent shall be brought in its name as Warrant Agent and any
    recovery of judgment shall be for the ratable benefit of the
    registered holders of the Warrants, as their respective rights
    or interests may appear.

 

    (g) The Warrant Agent, and any shareholder, director,
    officer or employee of it, may buy, sell or deal in any of the
    Warrants or other securities of the Corporation or become
    pecuniarily interested in any transaction in which the
    Corporation may be interested, or contract with or lend money to
    the Corporation or otherwise act as fully and freely as though
    it were not Warrant Agent under this Agreement. Nothing herein
    shall preclude the Warrant Agent from acting in any other
    capacity for the Corporation or for any other legal entity.

 

    (h) The Warrant Agent shall act hereunder solely as agent
    for the Corporation, and its duties shall be determined solely
    by the provisions hereof. The Warrant Agent shall not be liable
    for anything which it may do or refrain from doing in connection
    with this Agreement except for its own gross negligence or
    willful misconduct. The Warrant Agent shall not be liable for
    any error of judgment made in good faith by it, unless it shall
    be proved that the Warrant Agent was grossly negligent in
    ascertaining the pertinent facts. Notwithstanding anything in
    this Agreement to the contrary, in no event shall the Warrant
    Agent be liable for special, indirect, punitive or consequential
    loss or damage of any kind whatsoever (including but not limited
    to lost profits), even if the Warrant Agent has been advised of
    the likelihood of the loss or damage and regardless of the form
    of the action.

 

    (i) The Warrant Agent shall not at any time be under any
    duty or responsibility to any holder of any Warrant Certificate
    to make or cause to be made any adjustment of the Exercise Price
    or number of the Warrant Shares or other securities or property
    deliverable as provided in this Agreement, or to determine
    whether any facts exist which may require any of such
    adjustments, or with respect to the nature or extent of any such
    adjustments, when made, or with respect to the method employed
    in making the same. The Warrant Agent shall not be accountable
    with respect to the validity or value or the kind or amount of
    any Warrant Shares or of any securities or property which may at
    any time be issued or delivered upon the exercise of any Warrant
    or with respect to whether any such Warrant Shares or other
    securities will when issued be validly issued and fully paid and
    nonassessable, and makes no representation with respect thereto.

    

    8

 

 

    (j) Notwithstanding anything in this Agreement to the
    contrary, neither the Corporation nor the Warrant Agent shall
    have any liability to any holder of a Warrant Certificate or
    other Person as a result of its inability to perform any of its
    obligations under this Agreement by reason of any preliminary or
    permanent injunction or other order, decree or ruling issued by
    a court of competent jurisdiction or by a governmental,
    regulatory or administrative agency or commission, or any
    statute, rule, regulation or executive order promulgated or
    enacted by any governmental authority prohibiting or otherwise
    restraining performance of such obligation; provided that the
    Corporation must use its reasonable best efforts to have any
    such order, decree or ruling lifted or otherwise overturned as
    soon as possible.

 

    (k) Any application by the Warrant Agent for written
    instructions from the Corporation may, at the option of the
    Warrant Agent, set forth in writing any action proposed to be
    taken or omitted by the Warrant Agent under this Agreement and
    the date on
    and/or after
    which such action shall be taken or such omission shall be
    effective. The Warrant Agent shall not be liable for any action
    taken by, or omission of, the Warrant Agent in accordance with a
    proposal included in such application on or after the date
    specified in such application (which date shall not be less than
    three Business Days after the date any officer of the
    Corporation actually receives such application, unless any such
    officer shall have consented in writing to any earlier date)
    unless prior to taking any such action (or the effective date in
    the case of an omission), the Warrant Agent shall have received
    written instructions in response to such application specifying
    the action to be taken or omitted.

 

    (l) No provision of this Agreement shall require the
    Warrant Agent to expend or risk its own funds or otherwise incur
    any financial liability in the performance of any of its duties
    hereunder or in the exercise of its rights.

 

    (m) In addition to the foregoing, the Warrant Agent shall
    be protected and shall incur no liability for, or in respect of,
    any action taken or omitted by it in connection with its
    administration of this Agreement if such acts or omissions are
    in reliance upon the proper execution of the certification
    concerning beneficial ownership appended to the form of
    assignment and the form of the election attached hereto unless
    the Warrant Agent shall have actual knowledge that, as executed,
    such certification is untrue, or the non-execution of such
    certification including, without limitation, any refusal to
    honor any otherwise permissible assignment or election by reason
    of such non-execution.

 

    Section 18.  Change
    of Warrant Agent.  The Warrant Agent may at
    any time resign as Warrant Agent upon written notice to the
    Corporation. If the Warrant Agent shall become incapable of
    acting as Warrant Agent, the Corporation shall appoint a
    successor to such Warrant Agent. If the Corporation shall fail
    to make such appointment within a period of 30 days after
    it has been notified in writing of such resignation or of such
    incapacity by the Warrant Agent or by the registered holder of a
    Warrant Certificate, then the registered holder of any Warrant
    Certificate or the Warrant Agent may apply, at the expense of
    the Corporation, to any court of competent jurisdiction for the
    appointment of a successor to the Warrant Agent. Pending
    appointment of a successor to such Warrant Agent, either by the
    Corporation or by such a court, the duties of the Warrant Agent
    shall be carried out by the Corporation. The holders of a
    majority of the unexercised Warrants shall be entitled at any
    time to remove the Warrant Agent and appoint a successor to such
    Warrant Agent. If a Successor Warrant Agent shall not have been
    appointed within 30 days of such removal, the Warrant Agent
    may apply, at the expense of the Corporation, to any court of
    competent jurisdiction for the appointment of a successor to the
    Warrant Agent. Such successor to the Warrant Agent need not be
    approved by the Corporation or the former Warrant Agent. After
    appointment the successor to the Warrant Agent shall be vested
    with the same powers, rights, duties and responsibilities as if
    it had been originally named as Warrant Agent without further
    act or deed; but the former Warrant Agent upon payment of all
    fees and expenses due it and its agents and counsel shall
    deliver and transfer to the successor to the Warrant Agent any
    property at the time held by it hereunder and execute and
    deliver any further assurance, conveyance, act or deed necessary
    for the purpose. Failure to give any notice provided for in this
    Section 18, however, or any defect therein, shall not
    affect the legality or validity of the appointment of a
    successor to the Warrant Agent.

 

    Section 19.  Notices
    to Corporation and Warrant Agent.  Any notice
    or demand authorized by this Agreement to be given or made by
    the Warrant Agent or by the registered holder of any Warrant
    Certificate to or on the Corporation shall be sufficiently given
    or made when and if delivered by hand or by courier, or
    deposited in

    

    9

 

    the mail, first class or registered, postage prepaid, or by
    telecopy confirmed in writing, and addressed (until another
    address is filed in writing by the Corporation with the Warrant
    Agent), as follows:

 

    Corning Natural Gas Corporation

    330 W. William St.

    Corning, New York 14830

    Attention: President

 

    In case the Corporation shall fail to maintain such office or
    agency or shall fail to give such notice of the location or of
    any change in the location thereof, presentations may be made
    and notices and demands may be served at the principal corporate
    trust office of the Warrant Agent.

 

    Any notice pursuant to this Agreement to be given by the
    Corporation or by the registered holder(s) of any Warrant
    Certificate to the Warrant Agent shall be sufficiently given
    when and if delivered by hand or by courier, or deposited in the
    mail, first-class or registered, postage prepaid, or by telecopy
    confirmed in writing, and addressed (until another address is
    filed in writing by the Warrant Agent with the Corporation) to
    the Warrant Agent as follows:

 

    Registrar and Transfer Company

    10 Commerce Drive

    Cranford, New Jersey 07016

    Attention: Account Executive

 

    Section 20.  Supplements
    and Amendments.  The Corporation and the
    Warrant Agent may from time to time supplement or amend this
    Agreement without the approval of any holders of Warrant
    Certificates in order to cure any ambiguity or to correct or
    supplement any provision contained herein which may be defective
    or inconsistent with any other provision herein, or to make any
    other provisions in regard to matters or questions arising
    hereunder which the Corporation and the Warrant Agent may deem
    necessary or desirable and which shall not in any way adversely
    affect the interests of the holders of Warrant Certificates.
    Upon the delivery of a certificate from an appropriate officer
    of the Corporation which states that the proposed supplement or
    amendment is in compliance with the terms of this
    Section 20, the Warrant Agent shall execute such supplement
    or amendment. Notwithstanding anything in this Agreement to the
    contrary, the prior written consent of the Warrant Agent must be
    obtained in connection with any supplement or amendment which
    alters the rights or duties of the Warrant Agent. The
    Corporation and the Warrant Agent may amend any provision herein
    with the consent of the holders of Warrants exercisable for a
    majority of the Warrant Shares issuable on exercise of all
    outstanding Warrants.

 

    Section 21.  Successors.  All
    the covenants and provisions of this Agreement by or for the
    benefit of the Corporation or the Warrant Agent shall bind and
    inure to the benefit of their respective successors and assigns
    hereunder.

 

    Section 22.  Termination.  This
    Agreement will terminate on any earlier date if all Warrants
    have been exercised or expired without exercise. The provisions
    of Section 17 hereof shall survive such termination.

 

    Section 23.  Governing
    Law.  This Agreement and each Warrant
    Certificate issued hereunder shall be deemed to be a contract
    made under the laws of the State of New York, and the validity,
    interpretation, and enforcement of this Agreement and each
    Warrant Certificate shall be governed by and construed in
    accordance with the internal laws of said State without giving
    effect to the conflict of law principles thereof. The parties
    agree that, all actions and proceedings arising out of this
    Agreement or any of the transactions contemplated hereby, shall
    be brought in Steuben County, New York and that, in connection
    with any such action or proceeding, submit to the jurisdiction
    of, and venue in, such court. Each of the parties hereto also
    irrevocably waives all right to trial by jury in any action,
    proceeding or counterclaim arising out of this Agreement or the
    transactions contemplated hereby.

    

    10

 

 

    Section 24.  Benefits
    of This Agreement.  Nothing in this Agreement
    shall be construed to give to any person or corporation other
    than the Corporation, the Warrant Agent and the registered
    holders of the Warrant Certificates any legal or equitable
    right, remedy or claim under this Agreement, and this Agreement
    shall be for the sole and exclusive benefit of the Corporation,
    the Warrant Agent and the registered holders of the Warrant
    Certificates.

 

    Section 25.  Counterparts.  This
    Agreement may be executed in any number of counterparts and each
    of such counterparts shall for all purposes be deemed to be an
    original, and all such counterparts shall together constitute
    but one and the same instrument.

 

    Section 26.  Force
    Majeure.  In no event shall the Warrant Agent
    be responsible or liable for any failure or delay in the
    performance of its obligations under this Agreement arising out
    of or caused by, directly or indirectly, forces beyond its
    reasonable control, including without limitation strikes, work
    stoppages, accidents, acts of war or terrorism, civil or
    military disturbances, nuclear or natural catastrophes or acts
    of God, and interruptions, loss or malfunctions of utilities,
    communications or computer (software or hardware) services.

 

    <Signature
    page follows>

    

    11

 

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

 

    CORNING NATURAL GAS CORPORATION

 

    By: Michael I. German

    Its: President and Chief Executive Officer

 

    By: Firouzeh Sarhangi

    Its: Chief Financial Officer

 

    REGISTRAR AND TRANSFER COMPANY,

    as Warrant Agent

 

			
	 	    By: 
	

    Authorized Signatory

    

    12EX-10.1

 

Exhibit 10.1

HORSEHEAD HOLDING CORP.

AMENDED AND RESTATED 2006 LONG-TERM EQUITY INCENTIVE PLAN

1. Purpose.

     This plan shall be known as the Horsehead Holding Corp. Amended and Restated 2006 Long-Term
Equity Incentive Plan (the “Plan”). The purpose of the Plan shall be to promote the long-term
growth and profitability of Horsehead Holding Corp. (the “Company”) and its Subsidiaries by (i)
providing certain directors, officers and employees of, and certain other individuals who perform
services for, the Company and its Subsidiaries with incentives to maximize stockholder value and
otherwise contribute to the success of the Company and (ii) enabling the Company to attract, retain
and reward the best available persons for positions of responsibility. Grants of incentive or
non-qualified stock options, stock appreciation rights (“SARs”), restricted stock, restricted stock
units, deferred stock units, performance awards, or any combination of the foregoing may be made
under the Plan.

2. Definitions

     (a) “Board of Directors” and “Board” mean the board of directors of the Company.

     (b) “Cause” means the occurrence of one or more of the following events:

          (i) Conviction of a felony or any crime or offense lesser than a felony involving the property
of the Company or a Subsidiary; or

          (ii) Conduct that has caused demonstrable and serious injury to the Company or a Subsidiary,
monetary or otherwise; or

          (iii) Willful refusal to perform or substantial disregard of duties properly assigned, as
determined by the Company or a Subsidiary, as the case may be; or

          (iv) Breach of duty of loyalty to the Company or a Subsidiary or any act of fraud or
dishonesty with respect to the Company or a Subsidiary.

     (c) “Change in Control” means the occurrence of one of the following events:

          (i) if any “person” or “group” as those terms are used in Sections 13(d) and 14(d) of the
Exchange Act or any successors thereto, other than an Exempt Person, is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act or any successor thereto), directly or
indirectly, of securities of the Company representing 50% or more of the combined voting power of
the Company’s then outstanding securities; or

          (ii) during any period of two consecutive years, individuals who at the beginning of such
period constitute the Board and any new directors whose election by the Board or nomination for
election by the Company’s stockholders was approved by at least two-thirds of the directors
then still in office who either were directors at the beginning of the period

1

 

or whose election was previously so approved, cease for any reason to constitute a majority thereof;
or

          (iii) consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation (A) which would result in all or a portion of the voting
securities of the Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the surviving entity) more
than 50% of the combined voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or (B) by which the corporate
existence of the Company is not affected and following which the Company’s chief executive officer
and directors retain their positions with the Company (and constitute at least a majority of the
Board); or

          (iv) consummation of a plan of complete liquidation of the Company or a sale or disposition by
the Company of all or substantially all the Company’s assets, other than a sale to an Exempt
Person.

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

     (e) “Committee” means the Compensation Committee of the Board, if any, which shall consist
solely of two or more members of the Board, and each member of the Committee shall be (i) a
“non-employee director” within the meaning of Rule 16b-3 under the Exchange Act, unless
administration of the Plan by “non-employee directors” is not then required in order for exemptions
under Rule 16b-3 to apply to transactions under the Plan, (ii) an “outside director” within the
meaning of Section 162(m) of the Code, unless administration of the Plan by “outside directors” is
not then required in order to qualify for tax deductibility under Section 162(m) of the Code, and
(iii) independent, as defined by the rules of the Nasdaq Stock Market or any national securities
exchange on which any securities of the Company are listed for trading, and if not listed for
trading, by the rules of the Nasdaq Stock Market.

     (f) “Common Stock” means the Common Stock, par value $0.01 per share, of the Company, and any
other shares into which such stock may be changed by reason of a recapitalization, reorganization,
merger, consolidation or any other change in the corporate structure or capital stock of the
Company.

     (g) “Competition” is deemed to occur if a person whose employment with the Company or its
Subsidiaries has terminated obtains a position as a full-time or part-time employee of, as a member
of the board of directors of, or as a consultant or advisor with or to, or acquires an ownership
interest in excess of 5% of, a corporation, partnership, firm or other entity that engages in any
of the businesses of the Company or any Subsidiary with which the person was involved in a
management role at any time during his or her last five years of employment with or other service
for the Company or any Subsidiaries.

     (h) “Disability” means a disability that would entitle an eligible participant to payment of
monthly disability payments under any Company disability plan or as otherwise determined by the
Committee.

2

 

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

     (j) “Exempt Person” means any employee benefit plan of the Company or any Subsidiary or a
trustee or other administrator or fiduciary holding securities under an employee benefit plan of
the Company or any Subsidiary or any underwriter who temporarily acquires securities in an
offering..

     (k) “Family Member” has the meaning given to such term in General Instructions A.1(a)(5) to
Form S-8 under the Securities Act of 1933, as amended, and any successor thereto.

     (l) “Fair Market Value” of a share of Common Stock of the Company means, as of the date in
question, the officially-quoted closing selling price of the stock (or if no selling price is
quoted, the bid price) on the principal securities exchange on which the Common Stock is then
listed for trading (including for this purpose the Nasdaq Global Select Market) (the “Market”) for
the applicable trading day or, if the Common Stock is not then listed or quoted in the Market, the
Fair Market Value shall be the fair value of the Common Stock determined in good faith by the
Board.

     (m) “Incentive Stock Option” means an option conforming to the requirements of Section 422 of
the Code and any successor thereto.

     (n) “Non-Employee Director” has the meaning given to such term in Rule 16b-3 under the
Exchange Act and any successor thereto.

     (o) “Non-qualified Stock Option” means any stock option other than an Incentive Stock Option.

     (p) “Other Company Securities” mean securities of the Company other than Common Stock, which
may include, without limitation, unbundled stock units or components thereof, debentures, preferred
stock, warrants and securities convertible into or exchangeable for Common Stock or other property.

     (q) “Retirement” means retirement as defined under any Company pension plan or retirement
program or termination of one’s employment on retirement with the approval of the Committee.

     (r) “Subsidiary” means a corporation or other entity of which outstanding shares or ownership
interests representing 50% or more of the combined voting power of such corporation or other entity
entitled to elect the management thereof, or such lesser percentage as may be approved by the
Committee, are owned directly or indirectly by the Company.

3. Administration.

     The Plan shall be administered by the Committee, if any; provided that the Board may, in its
discretion, at any time and from time to time, resolve to administer the Plan, in which case the
term “Committee” shall be deemed to mean the Board for all purposes herein. Subject

3

 

to the provisions of the Plan, the Committee shall be authorized to (i) select persons to
participate in the Plan, (ii) determine the form and substance of grants made under the Plan to
each participant, and the conditions and restrictions, if any, subject to which such grants will be
made, (iii) certify that the conditions and restrictions applicable to any grant have been met,
(iv) modify the terms of grants made under the Plan, (v) interpret the Plan and grants made
thereunder, (vi) make any adjustments necessary or desirable in connection with grants made under
the Plan to eligible participants located outside the United States and (vii) adopt, amend, or
rescind such rules and regulations, and make such other determinations, for carrying out the Plan
as it may deem appropriate. Decisions of the Committee on all matters relating to the Plan shall
be in the Committee’s sole discretion and shall be conclusive and binding on all parties. The
validity, construction, and effect of the Plan and any rules and regulations relating to the Plan
shall be determined in accordance with applicable federal and state laws and rules and regulations
promulgated pursuant thereto and the rules and regulations of the principal securities exchange on
which the Common Stock is then listed for trading. No member of the Committee and no officer of
the Company shall be liable for any action taken or omitted to be taken by such member, by any
other member of the Committee or by any officer of the Company in connection with the performance
of duties under the Plan, except for such person’s own willful misconduct or as expressly provided
by statute.

     The expenses of the Plan shall be borne by the Company. The Plan shall not be required to
establish any special or separate fund or make any other segregation of assets to assume the
payment of any award under the Plan, and rights to the payment of such awards shall be no greater
than the rights of the Company’s general creditors.

     Without limiting the generality of the provisions of Sections 3, 4, 6 or 18 or any other
section of this Plan, the Committee may, at any time or from time to time, and on such terms and
conditions (that are consistent with and not in contravention of the other provisions of this Plan)
as the Committee may, in its sole discretion, determine, enter into agreements (or take other
actions with respect to the options) for new awards containing terms (including exercise prices)
more (or less) favorable than the outstanding similar awards.

4. Shares Available for the Plan.

     Subject to adjustments as provided in Section 16 hereof, an aggregate of one million four
hundred eighty-nine thousand three hundred eighteen (1,489,318) shares of Common Stock may be
issued pursuant to the Plan, plus an automatic annual increase on the first day of each of the
Company’s fiscal years beginning in 2008 and ending in 2017 equal to the lesser of (i) one percent
(1%) of the shares of Common Stock outstanding on the last day of the immediately preceding fiscal
year or (ii) such lesser number of shares of Common Stock as determined by the Committee
(collectively, the “Shares”).

     Such Shares may be in whole or in part authorized and unissued or held by the Company as
treasury shares. If any grant under the Plan expires or terminates unexercised, becomes
unexercisable or is forfeited as to any Shares, or is tendered or withheld as to any shares in
payment of the exercise price of the grant or the taxes payable with respect to the exercise,
then such unpurchased, forfeited, tendered or withheld Shares shall thereafter be available
for further grants under the Plan.

4

 

5. Participation.

     Participation in the Plan shall be limited to those directors (including Non-Employee
Directors), officers (including non-employee officers) and employees of, and other individuals
performing services for, the Company or its Subsidiaries selected by the Committee (including
participants located outside the United States). Nothing in the Plan or in any grant thereunder
shall confer any right on a participant to continue in the service or employ as a director or
officer of or in the performance of services for the Company or a Subsidiary or shall interfere in
any way with the right of the Company or a Subsidiary to terminate the employment or performance of
services or to reduce the compensation or responsibilities of a participant at any time. By
accepting any award under the Plan, each participant and each person claiming under or through him
or her shall be conclusively deemed to have indicated his or her acceptance and ratification of,
and consent to, any action taken under the Plan by the Company, the Board or the Committee.

     Incentive Stock Options or Non-qualified Stock Options, SARs, restricted stock awards,
restricted stock unit or deferred stock unit awards, performance awards, or any combination
thereof, may be granted to such persons and for such number of Shares as the Committee shall
determine (such individuals to whom grants are made being sometimes herein called “optionees” or
“grantees,” as the case may be). Determinations made by the Committee under the Plan need not be
uniform and may be made selectively among eligible individuals under the Plan, whether or not such
individuals are similarly situated. A grant of any type made hereunder in any one year to an
eligible participant shall neither guarantee nor preclude a further grant of that or any other type
to such participant in that year or subsequent years.

6. Incentive and Non-qualified Options.

     The Committee may from time to time grant to eligible participants Incentive Stock Options,
Non-qualified Stock Options, or any combination thereof; provided that the Committee may grant
Incentive Stock Options only to eligible employees of the Company or its subsidiaries (as defined
for this purpose in Section 422(a)(2) of the Code or any successor thereto). In any one calendar
year, the Committee shall not grant to any one participant options to purchase a number of shares
of Common Stock in excess of eight hundred thousand (800,000) (as adjusted pursuant to Section 16
hereof). The options granted shall take such form as the Committee shall determine, subject to the
following terms and conditions.

     It is the Company’s intent that Non-qualified Stock Options granted under the Plan not be
classified as Incentive Stock Options, that Non-qualified Stock Options not give rise to plan
failure income inclusion under Section 409A(a)(1) of the Code, that Incentive Stock Options be
consistent with and contain or be deemed to contain all provisions required under Section 422 of
the Code and any successor thereto, and that any ambiguities in construction be interpreted in
order to effectuate such intent. If an Incentive Stock Option granted under the Plan does not
qualify as such for any reason, then to the extent of such non-qualification, the stock
option represented thereby shall be regarded as a Non-qualified Stock Option duly granted
under the Plan, provided that such stock option otherwise meets the Plan’s requirements for
Non-qualified Stock Options.

5

 

     (a) Price. The price per Share deliverable upon the exercise of each option (“exercise
price”) may not be less than 100% of the Fair Market Value of a share of Common Stock as of the
date of grant of the option, and in the case of the grant of any Incentive Stock Option to an
employee who, at the time of the grant, owns more than 10% of the total combined voting power of
all classes of stock of the Company or any of its Subsidiaries, the exercise price may not be less
than 110% of the Fair Market Value of a share of Common Stock as of the date of grant of the
option, in each case unless otherwise permitted by Section 422 of the Code or any successor
thereto.

     (b) Payment. Options may be exercised, in whole or in part, upon payment of the exercise
price of the Shares to be acquired. Unless otherwise determined by the Committee, payment shall be
made (i) in cash (including check, bank draft, money order or wire transfer of immediately
available funds), (ii) by delivery of outstanding shares of Common Stock with a Fair Market Value
on the date of exercise equal to the aggregate exercise price payable with respect to the options’
exercise, (iii) by simultaneous sale through a broker reasonably acceptable to the Committee of
Shares acquired on exercise, as permitted under Regulation T of the Federal Reserve Board or (iv)
by any combination of the foregoing.

     In the event a grantee elects to pay the exercise price payable with respect to an option
pursuant to clause (ii) above, (A) only a whole number of share(s) of Common Stock (and not
fractional shares of Common Stock) may be tendered in payment, (B) such grantee must present
evidence acceptable to the Company that he or she has owned any such shares of Common Stock
tendered in payment of the exercise price (and that such tendered shares of Common Stock have not
been subject to any substantial risk of forfeiture) for at least six months prior to the date of
exercise, and (C) Common Stock must be delivered to the Company. Delivery for this purpose may, at
the election of the grantee, be made either by (1) physical delivery of the certificate(s) for all
such shares of Common Stock tendered in payment of the price, accompanied by duly executed
instruments of transfer in a form acceptable to the Company, or (2) direction to the grantee’s
broker to transfer, by book entry, such shares of Common Stock from a brokerage account of the
grantee to a brokerage account specified by the Company. When payment of the exercise price is
made by delivery of Common Stock, the difference, if any, between the aggregate exercise price
payable with respect to the option being exercised and the Fair Market Value of the shares of
Common Stock tendered in payment (plus any applicable taxes) shall be paid in cash. No grantee may
tender shares of Common Stock having a Fair Market Value exceeding the aggregate exercise price
payable with respect to the option being exercised (plus any applicable taxes).

     (c) Terms of Options. The term during which each option may be exercised shall be
determined by the Committee, but if required by the Code and except as otherwise provided herein,
no option shall be exercisable in whole or in part more than ten years from the date it is granted,
and no Incentive Stock Option granted to an employee who at the time of the grant owns more than
10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries shall be exercisable more than five years from the date it
is granted. All rights to purchase Shares pursuant to an option shall, unless sooner terminated,
expire at the date designated by the Committee. The Committee shall determine the date on which
each option shall become exercisable and may provide that an option shall become

6

 

exercisable in
installments. The Shares constituting each installment may be purchased in whole or in part at any
time after such installment becomes exercisable, subject to such minimum exercise requirements as
may be designated by the Committee. Prior to the exercise of an option and delivery of the Shares
represented thereby, the optionee shall have no rights as a stockholder with respect to any Shares
covered by such outstanding option (including any dividend or voting rights).

     (d) Limitations on Grants. If required by the Code, the aggregate Fair Market Value
(determined as of the grant date) of Shares for which an Incentive Stock Option is exercisable for
the first time by any individual during any calendar year under all equity incentive plans of the
Company and its Subsidiaries (as defined in Section 422 of the Code or any successor thereto) may
not exceed $100,000.

     (e) Termination.

          (i) Death or Disability. If a participant ceases to be a director, officer or employee
of, or to perform other services for, the Company or any Subsidiary due to death or Disability, all
of the participant’s options and SARs shall become fully vested and exercisable and shall remain so
for a period of 180 days from the date of such death or Disability, but in no event after the
expiration date of the options and SARs; provided that the participant does not engage in
Competition during such 180-day period unless he or she received written consent to do so from the
Board or the Committee; provided further that the Board or Committee may extend such exercise
period (and related non-competition period) in its discretion, but in no event may such extended
exercise period extend beyond the expiration date of the options. Notwithstanding the foregoing,
if the Disability giving rise to the termination of employment is not within the meaning of Section
22(e)(3) of the Code or any successor thereto, Incentive Stock Options not exercised by such
participant within 90 days after the date of termination of employment will cease to qualify as
Incentive Stock Options and will be treated as Non-qualified Stock Options under the Plan if
required to be so treated under the Code.

          (ii) Retirement. If a participant ceases to be a director, officer or employee of, or to
perform other services for, the Company or any Subsidiary upon the occurrence of his or her
Retirement, (A) all of the participant’s options and SARs that were exercisable on the date of
Retirement shall remain exercisable for, and shall otherwise terminate at the end of, a period of
90 days after the date of Retirement, but in no event after the expiration date of the options or
SARs; provided that the participant does not engage in Competition during such 90 day period unless
he or she receives written consent to do so from the Board or the Committee; provided further that
the Board or Committee may extend such exercise period (and related non-competition period) in its
discretion, but in no event may such extended exercise period extend beyond the expiration date of
the options, and (B) all of the participant’s options and SARs that were not exercisable on the
date of Retirement shall be forfeited immediately upon such Retirement; provided, however, that
such options and SARs may become fully vested and exercisable in whole or in part in the discretion of the Committee. Notwithstanding the
foregoing, Incentive Stock Options not exercised by such participant within 90 days after
Retirement will cease to qualify as Incentive Stock Options and will be treated as Non-qualified
Stock Options under the Plan if required to be so treated under the Code.

7

 

          (iii) Discharge for Cause. If a participant ceases to be a director, officer or employee
of, or to perform other services for, the Company or a Subsidiary due to Cause, all of the
participant’s options and SARs shall expire and be forfeited immediately upon such cessation,
whether or not then exercisable.

          (iv) Other Termination. Unless otherwise determined by the Committee, if a participant
ceases to be a director, officer or employee of, or to otherwise perform services for, the Company
or a Subsidiary for any reason other than death, Disability, Retirement or Cause, (A) all of the
participant’s options and SARs that were exercisable on the date of such cessation shall remain
exercisable for, and shall otherwise terminate at the end of, a period of 30 days after the date of
such cessation, but in no event after the expiration date of the options or SARs; provided that the
participant does not engage in Competition during such 30-day period unless he or she receives
written consent to do so from the Board or the Committee; provided further that the Board or
Committee may extend such exercise period (and related non-competition period) in its discretion,
but in no event may such extended exercise period extend beyond the expiration date of the options,
and (B) all of the participant’s options and SARs that were not exercisable on the date of such
cessation shall be forfeited immediately upon such cessation. Notwithstanding the foregoing,
Incentive Stock Options not exercised within 90 days after termination will cease to qualify as an
Incentive Stock Option and will be treated as a Non-qualified Stock Option under the Plan if
required to be so treated under the Code.

          (v) Change in Control. If there is a Change in Control of the Company and a participant
is terminated other than for Cause from being a director, officer or employee of, or from
performing other services for, the Company or a Subsidiary within one year after such Change in
Control, all of the participant’s options and SARs shall become fully vested and exercisable upon
such termination and shall remain so for up to one year after the date of termination, but in no
event after the expiration date of the options or SARs. In addition, the Committee shall have the
authority to grant options and SARs that become fully vested and exercisable automatically upon a
Change in Control, whether or not the grantee is subsequently terminated. Notwithstanding the
foregoing, Incentive Stock Options not exercised within 90 days after a participant’s termination
will cease to qualify as an Incentive Stock Option and will be treated as a Non-qualified Stock
Option under the Plan if required to be so treated under the Code.

     (f) Forfeiture. If a participant exercises any of his or her options and SARs and, within
one year thereafter, either (i) is terminated from the Company or a Subsidiary for any of the
reasons specified in the definition of “Cause” set forth in Section 2(b), or (ii) engages in
Competition without having received written consent to do so from the Board or the Committee, then
the participant may, in the discretion of the Committee, be required to pay the Company the gain
represented by the difference between the aggregate selling price of the Shares acquired upon the
exercise of options or SARs (or, if the Shares were not then sold, their aggregate Fair
Market Value on the date of exercise) and the aggregate exercise price of the options or SARs
exercised (the “Option Gain”), without regard to any subsequent increase or decrease in the Fair
Market Value of the Common Stock. In addition, the Company may, in its discretion, deduct from any
payment of any kind (including salary or bonus) otherwise due to any such participant an amount
equal to the Option Gain.

8

 

     (g) Grant of Reload Options. The Committee may provide (either at the time of grant or
exercise of an option), in its discretion, for the grant to a grantee who exercises all or any
portion of an option (“Exercised Options”) and who pays all or part of such exercise price with
shares of Common Stock, of an additional option (a “Reload Option”) for a number of shares of
Common Stock equal to the sum (the “Reload Number”) of the number of shares of Common Stock
tendered for the Exercised Options plus, if so provided by the Committee, the number of shares of
Common Stock, if any, tendered by the grantee in connection with the exercise of the Exercised
Options to satisfy any federal, state or local tax withholding requirements. The terms of each
Reload Option, including the date of its expiration and the terms and conditions of its
exercisability and transferability, shall be the same as the terms of the Exercised Option to which
it relates, except that (i) the grant date for each Reload Option shall be the date of exercise of
the Exercised Option to which it relates and (ii) the exercise price for each Reload Option shall
be the Fair Market Value of the Common Stock on the grant date of the Reload Option.

7. Stock Appreciation Rights. The Committee shall have the authority to grant SARs under
this Plan. SARs shall be subject to such terms and conditions as the Committee may specify;
provided that (1) the exercise price of an SAR may never be less than the Fair Market Value of the
Shares subject to the SAR on the date the SAR is granted and no SAR may include any feature for the
deferral of compensation other than the deferral of recognition of income until the exercise of the
SAR.

     Prior to the exercise of the SAR, the participant shall have no rights as a stockholder with
respect to Shares covered by such outstanding SAR (including any dividend or voting rights).

     Upon the exercise of an SAR, the participant shall be entitled to a distribution in an amount
equal to (A) the difference between the Fair Market Value of a share of Common Stock on the date of
exercise and the exercise price of the SAR multiplied by (B) the number of Shares as to which the
SAR is exercised.

     All SARs will be exercised automatically on the last day prior to the expiration date of the
SAR so long as the Fair Market Value of a share of Common Stock on that date exceeds the exercise
price of the SAR.

8. Restricted Stock.

     The Committee may at any time and from time to time grant Shares of restricted stock under the
Plan to such participants and in such amounts as it determines. Each grant of Shares of restricted
stock shall specify the applicable restrictions on such Shares, the duration of such restrictions
(which shall be at least six months except as otherwise determined by the Committee or provided in the
third paragraph of this Section 8), and the time or times at
which such restrictions shall lapse with respect to all or a specified number of Shares that are
part of the grant.

     The participant will be required to pay the Company the aggregate par value of any Shares of
restricted stock (or such larger amount as the Board may determine to constitute capital under
Section 154 of the Delaware General Corporation Law, as amended, or any

9

 

successor thereto) within
ten days of the date of grant, unless such Shares of restricted stock are treasury shares. Unless
otherwise determined by the Committee, certificates representing Shares of restricted stock granted
under the Plan will be held in escrow by the Company on the participant’s behalf during any period
of restriction thereon and will bear an appropriate legend specifying the applicable restrictions
thereon, and the participant will be required to execute a blank stock power therefor. Except as
otherwise provided by the Committee, during such period of restriction the participant shall have
all of the rights of a holder of Common Stock, including but not limited to the rights to receive
dividends on terms and conditions specified by the Committee and to vote, and any stock or other
securities received as a distribution with respect to such participant’s restricted stock shall be
subject to the same restrictions as then in effect for the restricted stock.

     Except as otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company and its Subsidiaries due
to death, Disability or Retirement during any period of restriction, all restrictions on Shares of
restricted stock granted to such participant shall lapse. At such time as a participant ceases to
be a director, officer or employee of, or otherwise performing services for, the Company or its
Subsidiaries for any other reason, all Shares of restricted stock granted to such participant on
which the restrictions have not lapsed shall be immediately forfeited to the Company.

     If there is a Change in Control of the Company and a participant is terminated other than for
Cause from being a director, officer or employee of, or from performing other services for, the
Company or a subsidiary within one year after such Change in Control, all restrictions on Shares of
restricted stock granted to such participant shall lapse. In addition, the Committee shall have
the authority to grant shares of restricted stock with respect to which all restrictions shall
lapse automatically upon a Change in Control, whether or not the grantee is subsequently
terminated.

9. Restricted Stock Units; Deferred Stock Units.

     The Committee may at any time and from time to time grant restricted stock units under the
Plan to such participants and in such amounts as it determines. Each grant of restricted stock
units shall specify the applicable restrictions on such units, the duration of such restrictions
(which shall be at least six months except as otherwise determined by the Committee or provided in
the third paragraph of this Section 9), and the time or times at which such restrictions shall
lapse with respect to all or a specified number of units that are part of the grant.

     Each restricted stock unit shall be equivalent in value to one share of Common Stock and shall
entitle the participant to receive from the Company at the end of the vesting period (the “Vesting
Period”) applicable to such unit one Share, unless the participant elects in a timely fashion to
defer the receipt of such Shares, as provided below. Restricted stock units may be granted without
payment of cash or consideration to the Company; provided that participants shall be required to
pay to the Company the aggregate par value of the Shares received from the Company within ten days
of the issuance of such Shares unless such Shares are treasury shares.

10

 

     Except as otherwise provided by the Committee, during the Vesting Period the participant shall
not have any rights as a shareholder of the Company; provided that the participant shall have the
right to receive accumulated dividends on terms and conditions specified by the Committee or
distributions with respect to the corresponding number of shares of Common Stock underlying each
restricted stock unit at the end of the Vesting Period, unless such restricted stock units are
converted into deferred stock units, in which case such accumulated dividends or distributions
shall be paid by the Company to the participant at such time as the deferred stock units are
converted into Shares.

     Except as otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any Subsidiary due to
death, Disability or Retirement during any Vesting Period, all restrictions on restricted stock
units granted to such participant shall lapse and the participant shall then be entitled to receive
payment in Shares with respect to the applicable restricted stock units. At such time as a
participant ceases to be a director, officer or employee of, or otherwise performing services for,
the Company or any Subsidiary for any other reason, all restricted stock units granted to such
participant on which the restrictions have not lapsed shall be immediately forfeited to the
Company.

     If there is a Change in Control of the Company and a participant is terminated other than for
Cause from being a director, officer or employee of, or from performing other services for, the
Company or any Subsidiary within one year after such Change in Control, all restrictions on
restricted stock units granted to such participant shall lapse. In addition, the Committee shall
have the authority to grant restricted stock units with respect to which all restrictions shall
lapse automatically upon a Change in Control, whether or not the grantee is subsequently
terminated.

     If permitted by the Committee, a participant may elect by written notice to the Company, which
notice must be made before the later of (i) the close of the tax year preceding the year in which
the restricted stock units are granted or (ii) if consistent with Section 409A of the Code, 30 days
of first becoming eligible to participate in the Plan (or, if earlier, the last day of the tax year
in which the participant first becomes eligible to participate in the Plan) and on or prior to the
date the restricted stock units are granted, to defer the receipt of all or a portion of the Shares
due with respect to the vesting of such restricted stock units; provided that the Committee may
impose such additional restrictions with respect to the time at which a participant may elect to
defer receipt of Shares subject to the deferral election, and any other terms with respect to a
grant of restricted stock units to the extent the Committee deems necessary to enable the
participant to defer recognition of income with respect to such units until the Shares underlying
such units are issued or distributed to the participant. Upon such deferral, the restricted
stock units so deferred shall be converted into deferred stock units. Except as provided below,
delivery of Shares with respect to deferred stock units shall be made at the end of the deferral
period set forth in the participant’s deferral election notice (the “Deferral Period”). Deferral
Periods shall be no less than one year after the vesting date of the applicable restricted stock
units.

11

 

     Except as otherwise provided by the Committee, during such Deferral Period the participant
shall not have any rights as a shareholder of the Company; provided that, the participant shall
have the right to receive accumulated dividends or distributions with respect to the corresponding
number of shares of Common Stock underlying each deferred stock unit at the end of the Deferral
Period when such deferred stock units are converted into Shares.

     Except as otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any Subsidiary upon
his or her death prior to the end of the Deferral Period, the participant shall receive payment in
Shares in respect of such participant’s deferred stock units which would have matured or been
earned at the end of such Deferral Period as if the applicable Deferral Period had ended as of the
date of such participant’s death.

     Except as otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any Subsidiary upon
becoming disabled (as defined under Section 409A(a)(2)(C) of the Code) or Retirement or for any
other reason except termination for Cause prior to the end of the Deferral Period, the participant
shall receive payment in Shares in respect of such participant’s deferred stock units at the end of
the applicable Deferral Period or on such accelerated basis as the Committee may determine, to the
extent permitted by regulations issued under Section 409A(a)(3) of the Code.

     Except as otherwise provided by the Committee, if a participant ceases to be a director,
officer or employee of, or to otherwise perform services for, the Company or any Subsidiary due to
termination for Cause such participant shall immediately forfeit any deferred stock units which
would have matured or been earned at the end of the applicable Deferral Period.

     Except as otherwise provided by the Committee, in the event of a Change in Control that also
constitutes a “change in the ownership or effective control of” the Company, or a change in the
ownership of a substantial portion of the Company’s assets (in each case as determined under
regulations issued pursuant to Section 409A(a)(2)(A)(v) of the Code), a participant shall receive
payment in Shares in respect of such participant’s deferred stock units which would have matured or
been earned at the end of the applicable Deferral Period as if such Deferral Period had ended
immediately prior to the Change in Control; provided, however, that if an event that constitutes a
Change in Control hereunder does not constitute a “change in control” under Section 409A of the
Code (or the regulations promulgated thereunder), no payments with respect to the deferred stock
units shall be made under this paragraph to the extent such payments would constitute an
impermissible acceleration under Section 409A of the Code.

10. Performance Awards.

     Performance awards may be granted to participants at any time and from time to time as
determined by the Committee. The Committee shall have complete discretion in determining the size
and composition of performance awards granted to a participant. The period over which performance
is to be measured (a “performance cycle”) shall commence on

12

 

the date specified by the Committee and
shall end on the last day of a fiscal year specified by the Committee. A performance award shall
be paid no later than the 15th day of the third month following the completion of a
performance cycle. Performance awards may include (i) specific dollar-value target awards, (ii)
performance units, the value of each such unit being determined by the Committee at the time of
issuance, and/or (iii) performance Shares, the value of each such Share being equal to the Fair
Market Value of a share of Common Stock.

     The value of each performance award may be fixed or it may be permitted to fluctuate based on
a performance factor (e.g., return on equity) selected by the Committee.

     The Committee shall establish performance goals and objectives for each performance cycle on
the basis of such criteria and objectives as the Committee may select from time to time, including,
without limitation, the performance of the participant, the Company, one or more of its
Subsidiaries or divisions or any combination of the foregoing. During any performance cycle, the
Committee shall have the authority to adjust the performance goals and objectives for such cycle
for such reasons as it deems equitable.

     The Committee shall determine the portion of each performance award that is earned by a
participant on the basis of the Company’s performance over the performance cycle in relation to the
performance goals for such cycle. The earned portion of a performance award may be paid out in
Shares, cash, Other Company Securities, or any combination thereof, as the Committee may determine.

     A participant must be a director, officer or employee of, or otherwise perform services for,
the Company or its Subsidiaries at the end of the performance cycle in order to be entitled to
payment of a performance award issued in respect of such cycle; provided, however, that except as
otherwise determined by the Committee, if a participant ceases to be a director, officer or
employee of, or to otherwise perform services for, the Company and its Subsidiaries upon his or her
death, Retirement, or Disability prior to the end of the performance cycle, the participant shall
earn a proportionate portion of the performance award based upon the elapsed portion of the
performance cycle and the Company’s performance over that portion of such cycle.

     In the event of a Change in Control, a participant shall earn no less than the portion of the
performance award that the participant would have earned if the applicable performance cycle(s) had
terminated as of the date of the Change in Control.

11. Withholding Taxes.

          (a) Participant Election. Unless otherwise determined by the Committee, a participant may elect
to deliver shares of Common Stock (or have the Company withhold shares
acquired upon exercise of an option or SAR or deliverable upon grant or vesting of restricted
stock, as the case may be) to satisfy, in whole or in part, the amount the Company is required to
withhold for taxes in connection with the exercise of an option or SAR or the delivery of
restricted stock upon grant or vesting, as the case may be. Such election must be made on or
before the date the amount of tax to be withheld is determined. Once made, the election shall be
irrevocable. The fair market value of the shares to be withheld or delivered will be the Fair

13

 

Market Value as of the date the amount of tax to be withheld is determined. In the event a
participant elects to deliver or have the Company withhold shares of Common Stock pursuant to this
Section 11(a), such delivery or withholding must be made subject to the conditions and pursuant to
the procedures set forth in Section 6(b) with respect to the delivery or withholding of Common
Stock in payment of the exercise price of options.

          (b) Company Requirement. The Company may require, as a condition to any grant or exercise under
the Plan or to the delivery of certificates for Shares issued hereunder, that the grantee make
provision for the payment to the Company, either pursuant to Section 11(a) or this Section 11(b),
of federal, state or local taxes of any kind required by law to be withheld with respect to any
grant or delivery of Shares. The Company, to the extent permitted or required by law, shall have
the right to deduct from any payment of any kind (including salary or bonus) otherwise due to a
grantee, an amount equal to any federal, state or local taxes of any kind required by law to be
withheld with respect to any grant or delivery of Shares under the Plan.

12. Written Agreement; Vesting.

     Unless the Committee determines otherwise, each participant to whom a grant is made under the
Plan shall enter into a written agreement with the Company that shall contain such provisions,
including without limitation vesting requirements, consistent with the provisions of the Plan, as
may be approved by the Committee. Unless the Committee determines otherwise and except as
otherwise provided in Sections 6, 7, 8, 9 and 10 in connection with a Change in Control or certain
occurrences of termination, no grant under this Plan may be exercised, and no restrictions relating
thereto may lapse, within six months of the date such grant is made.

13. Transferability.

     Unless the Committee determines otherwise, no award granted under the Plan shall be
transferable by a participant other than by will or the laws of descent and distribution or to a
participant’s Family Member by gift or a qualified domestic relations order as defined by the Code.
Unless the Committee determines otherwise, an option or SAR may be exercised only by the optionee
or grantee thereof; by his or her Family Member if such person has acquired the option or SAR by
gift or qualified domestic relations order; by the executor or administrator of the estate of any
of the foregoing or any person to whom the option or SAR is transferred by will or the laws of
descent and distribution; or by the guardian or legal representative of any of the foregoing;
provided that Incentive Stock Options may be exercised by any Family Member, guardian or legal
representative only if permitted by the Code and any regulations thereunder. All provisions of
this Plan shall in any event continue to apply to any award granted under the Plan and transferred
as permitted by this Section 13, and any transferee of any such award shall be bound by all
provisions of this Plan as and to the same extent as the applicable original
grantee.

14. Listing, Registration and Qualification.

     If the Committee determines that the listing, registration or qualification upon any
securities exchange or under any law of Shares subject to any option, SAR, performance award,

14

 

restricted stock unit, deferred stock unit or restricted stock grant is necessary or desirable as a
condition of, or in connection with, the granting of same or the issue or purchase of Shares
thereunder, no such option or SAR may be exercised in whole or in part, no such performance award
may be paid out, and no Shares may be issued, unless such listing, registration or qualification is
effected free of any conditions not acceptable to the Committee.

15. Transfer of Employee.

     The transfer of an employee from the Company to a Subsidiary, from a Subsidiary to the
Company, or from one Subsidiary to another shall not be considered a termination of employment; nor
shall it be considered a termination of employment if an employee is placed on military or sick
leave or such other leave of absence which is considered by the Committee as continuing intact the
employment relationship.

16. Adjustments.

     In the event of a reorganization, recapitalization, stock split, stock dividend, combination
of Shares, merger, consolidation, distribution of assets, or any other change in the corporate
structure or shares of the Company, the Committee shall make such adjustment as it deems
appropriate in the number and kind of Shares or other property available for issuance under the
Plan (including, without limitation, the total number of Shares available for issuance under the
Plan pursuant to Section 4), in the number and kind of options, SARs, Shares, restricted stock
units, deferred stock units or other property covered by grants previously made under the Plan, and
in the exercise price of outstanding options or SARS; provided, however, that the Committee shall
not be required to make any adjustment that would (i) require the inclusion of any compensation
deferred pursuant to provisions of the Plan (or an award thereunder) in a participant’s gross
income pursuant to Section 409A of the Code and the regulations issued thereunder from time to time
and/or (ii) cause any award made pursuant to the Plan to be treated as providing for the deferral
of compensation pursuant to such Code section and regulations. Any such adjustment shall be final,
conclusive and binding for all purposes of the Plan. In the event of any merger, consolidation or
other reorganization in which the Company is not the surviving or continuing corporation or in
which a Change in Control is to occur, all of the Company’s obligations regarding awards that were
granted hereunder and that are outstanding on the date of such event shall, on such terms as may be
approved by the Committee prior to such event, be (a) canceled in exchange for cash or other
property (but, with respect to vested deferred stock units, only if such merger, consolidation,
other reorganization, or Change in Control constitutes a “change in ownership or control” of the
Company or a “change in the ownership of a substantial portion” of the Company’s assets, as
determined pursuant to regulations issued under Section 409A(a)(2)(A)(v) of the Code) or (b) assumed by the surviving
or continuing corporation.

     Without limitation of the foregoing, in connection with any transaction of the type specified
by clause (iii) of the definition of a Change in Control in Section 2(c), the Committee may, in its
discretion, (i) cancel any or all outstanding options under the Plan in consideration for payment
to the holders thereof of an amount equal to the portion of the consideration that would have been
payable to such holders pursuant to such transaction if their options had been fully exercised
immediately prior to such transaction, less the aggregate exercise price that would

15

 

have been
payable therefor, or (ii) if the amount that would have been payable to the option holders pursuant
to such transaction if their options had been fully exercised immediately prior thereto would be
equal to or less than the aggregate exercise price that would have been payable therefor, cancel
any or all such options for no consideration or payment of any kind. Payment of any amount payable
pursuant to the preceding sentence may be made in cash or, in the event that the consideration to
be received in such transaction includes securities or other property, in cash and/or securities or
other property in the Committee’s discretion.

17. Amendment and Termination of the Plan.

     The Board of Directors or the Committee, without approval of the stockholders, may amend or
terminate the Plan, except that no amendment shall become effective without prior approval of the
stockholders of the Company if stockholder approval would be required by applicable law or
regulations or by any listing requirement of the principal stock exchange on which the Common Stock
is then listed.

     Notwithstanding any other provisions of the Plan, and in addition to the powers of amendment
set forth in this Section 17 and Section 18 hereof or otherwise, the provisions hereof and the
provisions of any award made hereunder may be amended unilaterally by the Committee from time to
time to the extent necessary (and only to the extent necessary) to prevent the implementation,
application or existence (as the case may be) of any such provision from (i) requiring the
inclusion of any compensation deferred pursuant to the provisions of the Plan (or an award
thereunder) in a participant’s gross income pursuant to Section 409A of the Code, and the
regulations issued thereunder from time to time and/or (ii) inadvertently causing any award
hereunder to be treated as providing for the deferral of compensation pursuant to such Code section
and regulations.

18. Amendment or Substitution of Awards under the Plan. 

     The terms of any outstanding award under the Plan may be amended from time to time by the
Committee in its discretion in any manner that it deems appropriate, including, but not limited to,
acceleration of the date of exercise of any award and/or payments thereunder or of the date of
lapse of restrictions on Shares (but only to the extent permitted by regulations issued under
Section 409A(a)(3) of the Code); provided that, except as otherwise provided in Section 16, no such
amendment shall adversely affect in a material manner any right of a participant under the award
without his or her written consent, and provided further that the Committee shall not reduce the
exercise price of any options or SARs awarded under the Plan without approval of the stockholders of the Company. The Committee may, in its discretion, permit holders of
awards under the Plan to surrender outstanding awards in order to exercise or realize rights under
other awards, or in exchange for the grant of new awards, or require holders of awards to surrender
outstanding awards as a condition precedent to the grant of new awards under the Plan, but only if
such surrender, exercise, realization, exchange, or grant (a) would not constitute a distribution
of deferred compensation for purposes of Section 409A(a)(3) of the Code or (b) constitutes a
distribution of deferred compensation that is permitted under regulations issued pursuant to
Section 409A(a)(3) of the Code.

16

 

19. Commencement Date; Termination Date.

     The Plan commenced on November 20, 2006. If required by the Code, the Plan will also be
subject to reapproval by the shareholders of the Company prior to the time required under the Code.

     Unless previously terminated upon the adoption of a resolution of the Board terminating the
Plan, the Plan shall terminate at the close of business on the ten year anniversary of the date of
the Purchase/Placement Agreement. No termination of the Plan shall materially and adversely affect
any of the rights or obligations of any person, without his or her written consent, under any grant
of options or other incentives theretofore granted under the Plan.

20. Severability. Whenever possible, each provision of the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of the Plan is held
to be prohibited by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder of the Plan.

21. Governing Law. The Plan shall be governed by the corporate laws of the State of Delaware,
without giving effect to any choice of law provisions that might otherwise refer construction or
interpretation of the Plan to the substantive law of another jurisdiction.

22. 409A

     Notwithstanding anything to the contrary contained herein, the Company shall not be
responsible for, or required to reimburse or otherwise make any participant whole for, any tax
imposed on any participant pursuant to Section 409A of the Code in respect of any grant under this
Plan.

17

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