Document:

EX-10.1

Exhibit 10.1

THE SCOTTS COMPANY LLC

EXECUTIVE RETIREMENT PLAN

As
Amended and Restated as of January 1, 2005

 

 

THE SCOTTS COMPANY LLC

EXECUTIVE RETIREMENT PLAN

As Amended and Restated as of January 1, 2005

Table of Contents

	 	 	 	 	 	 	 
	I.	 	NAME AND PURPOSE
	 	 	1	 
	 	 	 
	 	 	 	 
	II.	 	DEFINITIONS
	 	 	1	 
	 	 	 
	 	 	 	 
	III.	 	PARTICIPANTS
	 	 	6	 
	 	 	 
	 	 	 	 
	IV.	 	ACCOUNTS
	 	 	7	 
	 	 	 
	 	 	 	 
	V.	 	METHOD OF DISTRIBUTION OF DEFERRED COMPENSATION
	 	 	12	 
	 	 	 
	 	 	 	 
	VI.	 	ACCRUALS UNDER OTHER BENEFIT PLANS
	 	 	15	 
	 	 	 
	 	 	 	 
	VII.	 	PARTICIPANT’S RIGHTS
	 	 	15	 
	 	 	 
	 	 	 	 
	VIII.	 	NON-ALIENABILITY AND NONTRANSFERABILITY
	 	 	15	 
	 	 	 
	 	 	 	 
	IX.	 	ADMINISTRATION AND STANDARD OF REVIEW
	 	 	16	 
	 	 	 
	 	 	 	 
	X.	 	CLAIMS PROCEDURE
	 	 	16	 
	 	 	 
	 	 	 	 
	XI.	 	AMENDMENT AND TERMINATION
	 	 	18	 
	 	 	 
	 	 	 	 
	XII.	 	GENERAL PROVISIONS
	 	 	18	 
	 	 	 
	 	 	 	 
	XIII.	 	UNFUNDED STATUS OF THE PLAN
	 	 	20	 

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THE SCOTTS COMPANY LLC

EXECUTIVE RETIREMENT PLAN

As Amended and Restated as of January 1, 2005

	I.	 	Name and Purpose
	 
	 	 	The Scotts Company LLC Executive Retirement Plan (formerly The Scotts Company Executive
Retirement Plan) provides Eligible Employees the opportunity to defer salary and certain
bonuses and supplements the benefits Eligible Employees accrue under The Scotts Company LLC
Retirement Savings Plan (formerly The Scotts Company Retirement Savings Plan). The Plan is
unfunded. It is intended that the Plan be exempt from the funding, participation, vesting
and fiduciary provisions of Title I of ERISA.
	 
	 	 	The Plan is subject to Code Section 409A. The provisions of the Plan apply to: (a) any
Participant who is receiving or accruing benefits on the Effective Date; (b) any individual
who becomes a Participant on or after the Effective Date; and (c) any Participant who
retires, becomes Disabled, dies or terminates employment in accordance with the Plan on or
after the Effective Date.
	 
	 	 	Effective with respect to calendar years beginning on or after January 1, 2009, and fiscal
years beginning on or after October 1, 2008, the Plan is revised to eliminate provisions
pertaining to bonuses earned under the Executive Management Incentive Plan in favor of
broader definitions of bonuses and Performance Awards.
	 
	II.	 	Definitions
	 
	 	 	The following terms have the indicated meanings.
	 
	 	 	“Account” or “Accounts,” as applicable, means the separate Account or a subaccount
established for each Participant pursuant to Section IV of the Plan. A Participant’s
Account shall consist of an Incentive Deferral Account (effective January 1, 2009;
previously the Deferred Executive Management Incentive Pay Account), a Deferred Compensation
Account, a Matching Account, a Retirement Account, a Transitional Contributions Account and
a Retention Award Account. Accounts are phantom accounts maintained solely for bookkeeping
purposes.
	 
	 	 	“Adjustments” means the credits to or debits from Accounts as provided in Section IV.
	 
	 	 	“Affiliate” means any business organization or legal entity that, directly or indirectly,
controls, is controlled by, or is under common control with, the Company. For purposes of
this definition, control (including the terms controlling, controlled by, and under common
control with) includes the possession, direct or indirect, of the power to vote 50% or more
of the voting equity securities, membership interests or other voting interests, or to
direct or cause the direction of the management and policies of, such

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	 	 	business organization or other legal entity, whether through the ownership of equity
securities, membership interests or other voting interests, by contract or otherwise.

	 	 	“Beneficiary” means the person or persons designated in writing as such and filed with the
recordkeeper at any time by a Participant. Any such designation may be withdrawn or changed
in writing (without the consent of the Beneficiary), but only the last designation on file
with the recordkeeper shall be effective. Notwithstanding any contrary provision, a change
in the identity of the Beneficiary may not, and shall not, change the form and time of
payment previously elected by the Participant for distribution of his or her Account or the
applicable portion thereof.
	 
	 	 	“Benefits Administrative Committee” means: (a) the administrative committee appointed to
administer the tax qualified retirement plans which are sponsored by the Employer; or (b)
any person or entity to which the Benefits Administrative Committee delegates any of the
administrative or ministerial duties assigned to it under the Plan.
	 
	 	 	“Board” means the Board of Directors of the Corporation.
	 
	 	 	“Bonus Deferral Election” means, with respect to calendar or fiscal years beginning on or
after January 1, 2009, as applicable, a timely-made election to defer a bonus which does not
constitute a Performance Award pursuant to the Plan.
	 
	 	 	“Change of Control” means the occurrence of any of the following:

	 	(a)	 	Board Composition. Individuals who, as of July 1, 2008, constitute the
Board (the “Incumbent Board”) cease, within a 12-month period, for any reason (other
than death) to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to such date whose
appointment, election, or nomination for election by the Corporation’s shareholders,
was endorsed by at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the Incumbent
Board; or
	 
	 	(b)	 	Stock Acquisition. (A) One or more acquisitions, by any individual,
entity or group (within the meanings of Treasury Regulation Sections
1.409A-3(i)(5)(v)(B) and (vi)(D)) (a “Person”), of 30% or more of the then outstanding
voting securities of the Corporation (the “Outstanding Voting Securities”), during any
12-month period ending on the date of the most recent acquisition by that Person; or
(B) an acquisition that results in ownership by a Person of either (y) shares
representing more than 50% of the total fair market value of the Corporation’s then
outstanding stock (the “Outstanding Stock”) or (z) shares representing more
than 50% of the then Outstanding Voting Securities; provided, however,
that for purposes of this paragraph (b), the following acquisitions of shares of the
Corporation shall not be taken into account in the determination of whether a Change of
Control has occurred: (1) any acquisition directly from the Corporation; (2) any cash
acquisition by the Corporation or an Affiliate; (3) any

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	 	 	 	acquisition by any employee benefit plan (or related trust) sponsored or maintained
by the Corporation or an Affiliate; (4) an acquisition by a Person that prior to the
acquisition had already acquired more shares than necessary to satisfy the
applicable 30% or 50% threshold; or (5) any acquisition by the Hagedorn Partnership,
L.P. or any party related to the Hagedorn Partnership, L.P., as determined by the
Committee; or
	 
	 	(c)	 	Business Combination. Consummation of a reorganization, merger or
consolidation of the Corporation (a “Business Combination”), in each case, that results
in either a change in ownership contemplated in subparagraph (B) of paragraph (b) above
or a change in the Incumbent Board contemplated by paragraph (a) above; or
	 
	 	(d)	 	Sale or Disposition of Assets. One or more Persons acquires (or has
acquired during the 12-month period ending on the date of the most recent acquisition
by such Persons) assets from the Corporation that have a total gross fair market value
equal to more than 40% of the total gross fair market value of all of the assets of the
Corporation (without regard to liabilities of the Corporation or associated with such
assets) immediately before such acquisition or acquisitions; provided that such sale or
disposition is not to:

	 	(i)	 	a shareholder of the Corporation (immediately before the asset
transfer) in exchange for or with respect to the Corporation’s Outstanding
Stock;
	 
	 	(ii)	 	an entity, 50% or more of the total value or voting power of
which is owned, directly or indirectly, by the Corporation;
	 
	 	(iii)	 	a Person that owns, directly or indirectly, 50% or more of the
total value or voting power of the Corporation’s Outstanding Stock; or
	 
	 	(iv)	 	an entity, at least 50% of the total value or voting power of
which is owned, directly or indirectly, by a Person described in paragraph
(d)(iii) above.

	 	 	 	Except as otherwise specifically provided in paragraph (d)(i) above, a Person’s
status is determined immediately after the transfer.

	 	 	“Code” or “IRC” means the Internal Revenue Code of 1986, as amended from time to time.
	 
	 	 	“Committee” means the Compensation and Organization Committee of the Board.
	 
	 	 	“Company” means The Scotts Company, and, effective on and after March 18, 2005, Company
means The Scotts Company LLC.

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	 	 	“Company Stock Fund” means a fund similar to the Company stock fund existing under the
Qualified Plan which holds common stock of the Corporation and which shall be used as a
benchmark hereunder so long as a Company stock fund exists as an investment option under the
Qualified Plan. The Investment Committee shall have no responsibility for or discretion
over the use of such fund as a benchmark hereunder.
	 
	 	 	“Compensation” means salary and amounts received in lieu of salary (including, but not
limited to, paid time off, vacation pay, salary continuation and short term disability
benefits).
	 
	 	 	“Compensation Deferral Election” means an Eligible Employee’s election, in a manner
prescribed by the Benefits Administrative Committee, to defer Compensation pursuant to the
Plan.
	 
	 	 	“Corporation” means The Scotts Miracle-Gro Company.
	 
	 	 	“Disabled” or “Disability” means that the Participant is, by reason of any medically
determinable physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of at least three months under an accident and health plan
covering employees of the Company or its Affiliates.
	 
	 	 	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to
time.
	 
	 	 	“Effective Date” means January 1, 2005, unless otherwise specifically provided herein or
required by law.
	 
	 	 	“Eligible Employee” has the meaning specified in Section III.
	 
	 	 	“Employee” means an individual employed as a common law employee of the Employer.
	 
	 	 	“Employer” means the Company and its Affiliates.
	 
	 	 	“Executive Management Incentive Pay” means any bonus earned under the Executive Management
Incentive Plan with respect to calendar years beginning before January 1, 2009, or fiscal
years beginning before October 1, 2008, as applicable.
	 
	 	 	“Executive Management Incentive Pay Deferral Election” means, with respect to calendar years
beginning before January 1, 2009, or fiscal years beginning before October 1, 2008, as
applicable, an Eligible Employee’s election, in a manner prescribed by the Benefits
Administrative Committee, to defer Executive Management Incentive Pay pursuant to the Plan.

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	 	 	“Executive Management Incentive Plan” means The Scotts Company LLC Amended and Restated
Executive/Management Incentive Plan (known from and after November 5, 2008, as The Scotts
Company LLC Amended and Restated Executive Incentive Plan).
	 
	 	 	“Investment Committee” means: (a) the Scotts Miracle-Gro Investment Committee appointed to
monitor all investment and related activities associated with the Outside Investment Funds;
or (b) any person or entity to which the Investment Committee delegates any of the
investment duties assigned to it under the Plan.
	 
	 	 	“Investment Fund” means the Company Stock Fund or one of the Outside Investment Funds used
as an earnings benchmark with respect to Participants’ Accounts.
	 
	 	 	“Outside Investment Fund” means an Investment Fund, other than the Company Stock Fund, which
has been designated by the Investment Committee as available to use as an earnings benchmark
with respect to Participants’ Accounts.
	 
	 	 	“Participant” has the meaning specified in Section III.
	 
	 	 	“Performance Award” means an annual bonus payable pursuant to a plan or program maintained
by an Employer which constitutes performance-based compensation under Treasury Regulation
Section 1.409A-1(e).
	 
	 	 	“Performance Award Deferral Election” means, with respect to calendar years beginning on or
after January 1, 2009, or fiscal years beginning on or after October 1, 2008, as applicable,
an Eligible Employee’s election to defer, in a manner prescribed by the Benefits
Administrative Committee, a Performance Award pursuant to the Plan.
	 
	 	 	“Plan” means The Scotts Company LLC Executive Retirement Plan, as reflected in this
document, as amended from time to time after the Effective Date.
	 
	 	 	“Plan Year” means the calendar year.
	 
	 	 	“Qualified Plan” means The Scotts Company LLC Retirement Savings Plan, and any amendments
thereto.
	 
	 	 	“Retention Award” means an award, allocable to a Participant’s Retention Award Account in
accordance with Section IV.D.(5). The designation of the Participants who receive a
Retention Award and the amount of each Retention Award shall be determined by the Committee
in its discretion. Each Retention Award shall be evidenced by a written agreement between
the Employer and the Participant. The written agreement shall set forth the terms and
conditions governing the Retention Award and shall be consistent with the applicable
provisions of the Plan.
	 
	 	 	“Separation from Service” means a Participant’s termination of employment with the Company
and its Affiliates for any reason. A termination of employment will occur when the
Participant and the Company and its Affiliates reasonably anticipate that (i) no

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	 	 	further services will be performed by the Participant after a certain date or (ii) the level
of bona fide services which the Participant is expected to perform for the Company and its
Affiliates, as an employee or otherwise, as of a certain date is expected to permanently
decrease to a level equal to 20% or less of the average level of services performed by the
Participant during the immediately preceding 36-month period (or the Participant’s entire
period of service if less than 36 months). Further, for purposes of the Plan, a termination
of employment is deemed to occur on the first date following six months after a Participant
is first on a military leave, sick leave or other bona fide leave of absence. Such
six-month period may be extended if the Participant retains a right to reemployment with the
Company or its Affiliates under applicable statute or contract. Notwithstanding the
foregoing, where a leave of absence is due to a medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last for a
continuous period of not less than six months and where such impairment causes the
Participant to be unable to perform the duties of his or her position of employment or any
substantially similar position of employment with the Company, a 29-month period of absence
may be substituted for such six-month period. Whether there has been a termination of
employment will be determined by the Benefits Administrative Committee, taking into account
all of the facts and circumstances at the time of the termination of employment in
accordance with the guidelines described in Treasury Regulation Section 1.409-1(h).

	 	 	“Statutory Limits” means the following:

	 	(a)	 	the maximum recognizable annual compensation under Code Section 401(a)(17) —
the “Pay Cap”;
	 
	 	(b)	 	the maximum annual additions under Code Section 415(c) — the “415 Limit”;
	 
	 	(c)	 	the deferral limit under Code Section 402(g) — the “Deferral Limit”; and
	 
	 	(d)	 	the limits on contributions for highly compensated employees under Code
Sections 401(k)(3) — the “ADP Test” — and 401(m)(2) — the “ACP Test.”

	III.	 	Participants
	 
	 	 	Each Employee in Band G or above is an Eligible Employee and may elect to participate in the
Plan. Each Eligible Employee who elects to participate in the Plan or for whom Employer
contributions are credited in accordance with Section IV shall be a Participant in the Plan.
A Participant shall continue to participate in the Plan until his or her status as a
Participant is terminated by: (a) a complete distribution of his or her Accounts pursuant to
the terms of the Plan; (b) the termination of the Plan; or (c) a written directive of the
Benefits Administrative Committee. Furthermore, each such Participant shall be deemed to be
a “Specified Employee,” as defined in Code Section 409A(a)(2)(B)(i) and Treasury Regulation
Section 1.409A-1(i).

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	IV.	 	Accounts

	 	A.	 	Establishment of Accounts. The recordkeeper will establish an Account
for each Participant. A Participant’s Account shall consist of an Incentive Deferral
Account (effective January 1, 2009; previously a Deferred Executive Management
Incentive Pay Account), a Deferred Compensation Account, a Matching Account, a
Retirement Account, a Transitional Contributions Account and a Retention Award Account.
	 
	 	B.	 	Election of Participant to Defer Incentive Pay.

	 	(1)	 	An Eligible Employee may, at the discretion of the Committee,
elect to have a percentage of any Performance Award that may be awarded to him
or her by the Employer for, as applicable, (i) the Plan Year or (ii) the fiscal
year ending in the following Plan Year, allocated to his or her Incentive
Deferral Account and paid on a deferred basis pursuant to the terms of the
Plan. To make an election with respect to a Performance Award, an Eligible
Employee must advise the Employer of his or her election in writing or by
filing an election electronically, using procedures prescribed by the Benefits
Administrative Committee. Such elections must be made on or before the date
prescribed by the Benefits Administrative Committee, which shall be no later
than December 31 of the calendar year preceding, as applicable, (i) the Plan
Year to which the Performance Award relates or (ii) the Plan Year in which the
fiscal year to which the Performance Award relates ends. In no event may a
deferral election be made with respect to any portion of a Performance Award
that is “readily ascertainable,” i.e., both calculable and
substantially certain to be paid at the time of the election. Further, for
such election to be effective, an Eligible Employee must have provided services
for the Employer continuously from the beginning of the applicable performance
period. Finally, deferral elections made with respect to Performance Awards
that become payable as a result of death or Disability, or in the event of a
Change of Control, without regard to the satisfaction of the applicable
performance criteria, do not constitute performance-based compensation and
shall not be effective unless made by December 31 of the calendar year
preceding the beginning of the calendar or fiscal year to which such award
relates.
	 
	 	(2)	 	An Eligible Employee may, at the discretion of the Committee,
elect to have a percentage of any bonus (other than a Performance Award)
allocated to his or her Incentive Deferral Account and paid on a deferred basis
pursuant to the terms of the Plan. The Eligible Employee must advise the
Employer of his or her election, in writing or by filing an election
electronically using procedures prescribed by the Benefits Administrative
Committee, on or before the date prescribed by the

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	 	 	 	Benefits Administrative Committee, which shall be no later than the date
described in (a), (b) or (c) below:
	 
	 	(a)	 	Except as provided in (b) and (c) below, the last date for
filing a Bonus Deferral Election shall be December 31 of the calendar year
prior to the beginning of the Plan Year or fiscal year in which any services
related to the bonus will be performed.
	 
	 	(b)	 	This clause (b) applies to a bonus that would be exempt from
Code Section 409A as a “short term deferral” (absent an election to defer the
bonus). The last date for filing a Bonus Deferral Election with respect to a
bonus described in the preceding sentence shall be the date that is 12 months
before the date that the Eligible Employee’s right to receive the bonus becomes
nonforfeitable (the “Vesting Date”), but only if the Bonus Deferral Election
provides for a distribution of the bonus and related Adjustments (i) on a
specified date that is at least five years after the Vesting Date or (ii) on
the later of the date on which Separation from Service occurs or a specified
date that is at least five years after the Vesting Date. The preceding
sentence notwithstanding, a bonus deferred under this clause (b) and the
related Adjustments shall be payable upon a Change of Control if the Eligible
Employee is an “affected Participant” (as described in Section V.G. of the
Plan).
	 
	 	(c)	 	This clause (c) applies to a bonus if the right to receive the
bonus payment is forfeitable unless the Eligible Employee continues to provide
services to an Employer for a period of at least 12 months after the date that
the bonus opportunity is awarded to the Eligible Employee (the “Award Date”).
The last date for filing a Bonus Deferral Election with respect to a bonus
described in the preceding sentence shall be the date that is both (i) not more
than 29 days after the Award Date and (ii) at least 12 months before the
Vesting Date. Notwithstanding the two preceding sentences, if the bonus
becomes payable as a result of death or Disability or a Change of Control, the
Bonus Deferral Election shall not be effective unless it was filed on or before
the date prescribed in clause (a) above.
	 
	 	(3)	 	Notwithstanding the preceding paragraph, prior to calendar
years beginning on or after January 1, 2009, or fiscal years beginning on or
after October 1, 2008, as applicable, for the Plan Year in which an Employee
first becomes a Participant in the Plan, an Eligible Employee may complete an
Executive Management Incentive Pay Deferral Election at any time within 30 days
following the date on which he or she first became a Participant in the Plan or
any plan which is required to be aggregated with the Plan under Treasury
Regulation Section 409A-1(c)(2). Such Executive Management Incentive Pay
Deferral Election shall apply only to Executive Management Incentive Pay paid
for services performed by the Eligible Employee after the date on which the
Executive

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	 	 	 	Management Incentive Pay Deferral Election is received by the recordkeeper.
Notwithstanding any contrary Executive Management Incentive Pay Deferral
Election made by an Eligible Employee, such Executive Management Incentive
Pay Deferral Election shall apply to no more than an amount equal to the
total Executive Management Incentive Pay for the performance period
multiplied by the ratio of the number of days remaining in the performance
period after such Executive Management Incentive Pay Deferral Election over
the total number of days in the performance period.
	 
	 	(4)	 	If an Executive Management Incentive Pay Deferral Election, a
Performance Award Deferral Election or a Bonus Deferral Election is submitted
to the recordkeeper in accordance with this Section IV.B., the Employer will
credit to the Participant’s Deferred Executive Management Incentive Pay Account
or Incentive Deferral Account, as applicable, the amount of any timely deferral
determined in accordance with this Section IV.B. All such deferral elections
(other than elections under Section IV.B.(3)) become irrevocable no later than
December 31 of the calendar year in which such deferral elections are made.

	 	C.	 	Election of Participant to Defer Compensation.

	 	(1)	 	Each Eligible Employee may elect to have a percentage of his or
her Compensation, for all pay periods commencing: (a) after the Participant has
reached the Deferral Limit applicable to the Qualified Plan; or (b) with the
pay period in which the Participant’s Compensation exceeds the Pay Cap,
deferred and allocated to his or her Deferred Compensation Account and paid
pursuant to the terms of the Plan. To exercise such election for any Plan
Year, on or before the date prescribed by the Benefits Administrative Committee
(which shall be no later than December 31 of the calendar year preceding the
Plan Year in which the services relating to such Compensation are performed),
the Eligible Employee must advise the Employer of his or her election in
writing or by filing an election electronically using procedures prescribed by
the Benefits Administrative Committee. Such Compensation Deferral Election
shall apply only to Compensation earned by and payable to the Participant after
the date on which the Compensation Deferral Election is received by the
recordkeeper. A Participant shall be permitted, pursuant to this Section
IV.C., to defer amounts of his or her Compensation that could otherwise have
been contributed to the Qualified Plan for such Plan Year were it not for the
application of any of the Statutory Limits.
	 
	 	(2)	 	Notwithstanding the preceding paragraph, for the Plan Year in
which an Eligible Employee first becomes a Participant, such Eligible Employee
may complete a Compensation Deferral Election at any time within 30 days
following the date on which he or she became a Participant. Such

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	 	 	 	Compensation Deferral Election shall apply only to Compensation earned by
and payable to the Eligible Employee after the date on which the
Compensation Deferral Election is received by the recordkeeper.
	 
	 	(3)	 	If a Compensation Deferral Election is submitted to the
recordkeeper in accordance with this Section IV.C., the Employer will allocate
to the Participant’s Deferred Compensation Account the amount of Compensation
determined in accordance with this Section IV.C. All such Compensation
Deferral Elections become irrevocable no later than December 31 of the calendar
year preceding the Plan Year to which a Participant’s Compensation Deferral
Election relates.

	 	D.	 	Employer Contributions.

	 	(1)	 	Retirement Contribution. For each applicable pay
period, the Employer will allocate to each Eligible Employee’s Retirement
Account an amount equal to the Retirement Contribution (as defined in the
Qualified Plan) he or she would have received under the Qualified Plan with
respect to his or her compensation (as defined in the Qualified Plan, but
without regard to the Pay Cap), minus the Retirement Contribution actually
allocated under the Qualified Plan.
	 
	 	(2)	 	Matching Contributions. The Employer shall credit
matching contributions to the Matching Account of each Participant who elects
to defer Compensation in accordance with Section IV.C. For each pay period,
the amount of such matching contribution credits will be equal to the matching
contributions that would have been made under the Qualified Plan (assuming the
Statutory Limits were inapplicable) based on deferrals under Section IV.C. of
this Plan and the Compensation on which such deferrals are based.
	 
	 	(3)	 	Transitional Contributions. No Transitional
Contributions (as defined in the Qualified Plan) shall be made to any
Participant’s Account for any Plan Year beginning on or after January 1, 2003.
	 
	 	(4)	 	Ineligibility for Employer Contributions.
Notwithstanding the foregoing, no contributions shall be made for or allocated
to Joseph D. Dioguardi under this Section IV.D.
	 
	 	(5)	 	Retention Awards. The Employer shall allocate an
amount equal to the Participant’s Retention Award, if any, to the Participant’s
Retention Award Account.

	 	E.	 	Investment Funds. The Investment Committee may change or discontinue
the Investment Funds used as investment benchmarks under the Plan, other than the

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	 	 	 	Company Stock Fund, for the measure of appreciation or depreciation of previously
credited amounts.
	 
	 	F.	 	Outside Investment Funds. Each Participant shall direct the portion of
future credits to, and the existing balance of, the Participant’s Account that is to be
treated as invested in one or more of the Outside Investment Funds. A Participant may
change his or her direction among the Outside Investment Funds as of any business day
by providing instructions in such manner as may be prescribed by the Benefits
Administrative Committee, subject to any applicable restrictions under an Outside
Investment Fund. If a Participant does not designate one or more of the Outside
Investment Funds, his or her Account will be treated as having been credited to the
Investment Fund designated by the Investment Committee at the time as the default fund
under the Qualified Plan.
	 
	 	G.	 	Company Stock Fund. Unless the Company Stock Fund is discontinued or
frozen as an investment option under the Qualified Plan, a Participant may direct that
all or a portion of future credits to the Participant’s Account be treated as invested
in the Company Stock Fund. A Participant’s direction to have amounts treated as
invested in the Company Stock Fund shall be irrevocable as to amounts so treated
pursuant to such direction (i.e., amounts treated as invested in the Company Stock Fund
cannot subsequently be treated as invested in an Outside Investment Fund). If the
Company stock fund is discontinued as an investment option under the Qualified Plan,
the Company Stock Fund will be discontinued under this Plan. If the Company stock fund
is merely frozen as an investment option under the Qualified Plan, the Company Stock
Fund will also be frozen under this Plan.
	 
	 	H.	 	Adjustment of Account Balances and Other Rules. As of each business
day, the recordkeeper shall credit or debit the balances in a Participant’s Accounts
with Adjustments that mirror the appreciation or depreciation experienced by the
Investment Funds against which such Participant’s Account is benchmarked. For this
purpose, appreciation shall include interest, dividends and other distributions which
would have been paid on such Investment Funds. Any such amounts shall be deemed to
have been reinvested in the applicable Investment Fund pursuant to procedures approved
by the Benefits Administrative Committee. The crediting or debiting of Adjustments
shall occur so long as there is a balance in the Participant’s Account, regardless of
whether such Participant has terminated employment with the Employer or has died. The
Benefits Administrative Committee may prescribe any reasonable method or procedure
regarding accounting for Adjustments.
	 
	 	 	 	The Benefits Administrative Committee may from time to time establish policies or
rules consistent with Code Section 409A and the regulations promulgated thereunder
to govern the manner and form in which Executive Management Incentive Pay Deferral
Elections, Performance Award Deferral Elections, Bonus Deferral Elections and
Compensation Deferral Elections may be made as well as the manner in which the
amount of any deferral, contribution, credit or

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	 	 	 	Adjustment is determined, made or allocated under the Plan. Notwithstanding any
contrary Plan provision, all contributions and deferrals credited to a Participant’s
Accounts shall be subject to the restrictions described in Section XII.H. of the
Plan.

	 	I.	 	FICA. Deferrals and Adjustments shall, to the extent required by law,
be taken into account as “wages” for purposes of the employment taxes imposed by the
Federal Insurance Contributions Act in accordance with regulations promulgated by the
Internal Revenue Service.

	V.	 	Method of Distribution of Deferred Compensation

	 	A.	 	Time of Distribution. Amounts credited to a Participant’s Accounts
(other than the Retention Award Account) shall be distributed to the Participant upon
the earliest to occur of: (a) the Participant’s Separation from Service, (b) the
Participant’s death, (c) the Participant’s Disability or, if applicable, (d) a date
certain elected by the Participant. Effective for calendar years beginning on or after
January 1, 2009, or fiscal years beginning on or after October 1, 2008, as applicable,
a Participant shall elect a single time or event of distribution with respect to any
Compensation Deferral Election (other than elections made under Section IV.C.(2) in
such calendar year), Performance Award Deferral Election or Bonus Deferral Election
made in the same calendar year, and shall deliver such time or event of distribution
election to the recordkeeper at the time the deferral elections for the applicable
calendar and fiscal years are made. If no time or event of distribution election is
made with respect to any such deferral, the portion of the Participant’s Account
relating thereto shall be distributed on the Participant’s Separation from Service for
any reason.
	 
	 	 	 	Amounts credited to a Participant’s Retention Award Account shall be distributed in
accordance with the written agreement evidencing the Participant’s Retention Award.
	 
	 	 	 	Subject to the next sentence, a distribution shall be made, or distributions shall
commence, as applicable, within 90 days of a distribution event. Notwithstanding
any contrary provision, if the distribution event giving rise to the distribution or
commencement of distributions is a Participant’s Separation from Service, then the
distribution shall be made, or distributions shall commence, as applicable, no
earlier than the date that is six months after the Separation from Service.
	 
	 	 	 	For any distribution subject to the six-month delay, (i) if such distribution is to
be made in a lump sum, then the distribution following the six-month delay shall be
equal to the Participant’s Account balance at the time of such distribution; and
(ii) if such distribution is to be made in annual installments, then the amount of
the first distribution shall be the amount of the installment that would have been
paid following the Participant’s Separation from Service if such six-month delay 

12

 

	 	 	 	were not
applicable (or the Participant’s Account balance at the time of payment, if less).
Any amount distributable under (ii) above shall be paid as of the first day of the
month following such six-month period.

	 	B.	 	Form of Distribution. Effective with respect to deferrals pertaining
to calendar years beginning on or after January 1, 2009, or fiscal years beginning on
or after October 1, 2008, as applicable, amounts credited to a Participant’s Account
(other than the Retention Award Account) shall be distributed to the Participant either
in a single lump sum payment or in substantially equal annual installments over a
period of five, 10 or 15 years. Amounts credited to a Participant’s Retention Award
Account shall be distributed in accordance with the written agreement between the
Employer and the Participant evidencing the Participant’s Retention Award. To the
extent that an Account is distributed in installment payments, the undisbursed portions
of such Account shall continue to be credited with Adjustments in accordance with the
applicable provisions of Section IV.H. Effective for calendar years beginning on or
after January 1, 2009, or fiscal years beginning on or after October 1, 2008, as
applicable, a Participant shall elect one form of distribution with respect to any
Compensation Deferral Election (other than elections made under Section IV.C.(2) in
such calendar year), Performance Award Deferral Election or Bonus Deferral Election
made in the same calendar year, and shall deliver such form of distribution election to
the recordkeeper at the time the deferral elections for the applicable calendar or
fiscal years are made, or in the case of distributions from the Retention Award
Account, in accordance with the written agreement evidencing the Participant’s
Retention Award. Distributions of amounts benchmarked to Investment Funds other than
the Company Stock Fund shall be made in cash. Distributions of amounts benchmarked to
the Company Stock Fund shall be distributed in the greatest whole number of common
shares of the Company (effective on and after March 18, 2005, the greatest whole number
of common shares of the Corporation) that can be distributed based on the amount
benchmarked to the Company Stock Fund (after any applicable withholding), plus cash for
any fractional share. If no form of distribution is elected by the Participant, the
Participant’s Account (other than the Retention Award Account) shall be distributed in
the form of a single lump sum payment and the Retention Award Account shall be
distributed in accordance with the written agreement evidencing the Participant’s
Retention Award.
	 
	 	C.	 	Death Benefit. If a Participant dies (either before or after payment
of benefits have commenced under this Section V), his or her Account shall be paid to
the Beneficiary designated by the Participant. If there is no designated Beneficiary
or no designated Beneficiary surviving at a Participant’s death, payment of the
Participant’s Account shall be made to the Participant’s estate in a single lump sum
payment within 90 days after the Participant’s death. In the event of a Participant’s
death after distribution of his or her Account has begun, to the extent that there is a
surviving Beneficiary, payment of such Account shall continue in the form of
distribution in effect prior to the Participant’s death. If a Participant

13

 

	 	 	 	dies prior to the commencement of distribution of his or her Account, his or her
Beneficiary, if any, shall receive distribution of such Account in the form of
distribution previously elected by the Participant. If a Beneficiary begins to receive
any payment pursuant to this Section V.C., but dies prior to the time that all amounts
have been distributed, any remaining amount shall be paid in a single lump sum payment
to the estate of the Beneficiary.

	 	D.	 	Taxes. In the event any taxes are required by law to be withheld or
paid from any payments made pursuant to the Plan, the recordkeeper shall deduct such
amounts from such payments and shall transmit or cause to be transmitted the withheld
amounts to the appropriate taxing authority.
	 
	 	E.	 	Unforeseeable Emergency Distributions. Prior to the date a
Participant’s Account becomes payable, the Benefits Administrative Committee, in its
sole discretion, may elect to distribute all or a portion of such Account in the event
such Participant requests a distribution due to an Unforeseeable Emergency, as
described under Treasury Regulation Section 1.409A-3(i)(3). Any distribution under
this Section V.E. shall comply with the Unforeseeable Emergency requirements of Code
Section 409A and the regulations promulgated thereunder, which are incorporated herein
by reference. Any distribution on account of an Unforeseeable Emergency shall not
exceed the amount required to satisfy the Unforeseeable Emergency, plus amounts
necessary to pay taxes reasonably anticipated as a result of such distribution, after
taking into account the extent to which the Unforeseeable Emergency may be relieved
through reimbursement or compensation by insurance or otherwise, by liquidation of the
Participant’s assets (to the extent that such liquidation would not itself cause a
severe financial hardship) or by stopping deferrals under the Plan. The Participant’s
request shall state the nature of the severe financial hardship, the total amount
requested to be distributed from his or her Plan Accounts and the total amount of the
actual expense incurred or expected to be incurred on account of the Unforeseeable
Emergency.
	 
	 	F.	 	Small Benefit Distribution. This subsection shall apply to the
distribution of a Participant’s Accounts commencing on or after January 1, 2009. If
the value of the Participant’s Accounts (and all other nonqualified deferred
compensation plan benefits required to be combined with the Plan under Treasury
Regulation Section 1.409A-(1)(c)(2)) is not greater than the applicable dollar amount
under Code Section 402(g)(1)(B) at the time of distribution, then such benefit shall be
paid in the form of a single lump sum notwithstanding any contrary Plan provision. Any
such distribution is subject, if applicable, to the delay in payment rule relating to
Separation from Service events, as set forth in Section V.A. of the Plan.
	 
	 	G.	 	Distributions in the Event of a Change of Control. Notwithstanding any
other provision of the Plan, an affected Participant shall receive all amounts due the
Participant hereunder in a lump sum as soon as practicable after a Change of 

14

 

	 	 	 	Control,
and in all events within 30 days thereof. For purposes of this Section
V.G., an “affected Participant” is any Participant who is or was providing services:
(i) to a corporation at the time of a Change of Control relating to such
corporation; (ii) to a corporation which is liable for payments to the extent of the
services provided to such corporation by the Participant or for which there is a
bona fide business purpose for such corporation to be liable for such payments
(other than avoidance of Federal income tax); or (iii) to a corporation which is a
majority shareholder of a corporation identified in Section V.G.(i) or (ii) or any
corporation in a chain of corporations in which each corporation is a majority
shareholder of another corporation in the chain, ending in a corporation identified
in Section V.G.(i) or (ii). This Section V.G. shall not apply to a Participant’s
Retention Award Account.

	VI.	 	Accruals under Other Benefit Plans
	 
	 	 	Amounts deferred under the Plan shall not be taken into account in calculating benefits or
contributions under any employee benefit plan maintained by the Employer, including, but not
limited to, any pension plan or retirement plan (qualified under Section 401(a) of the Code
or otherwise), the amount of life insurance payable under any life insurance plan or the
amount of any disability benefit payments payable under any disability plan, except to the
extent specifically provided in any such plan. Amounts deferred by a Participant under the
Plan shall be taken into account in determining credits or accruals under Sections IV.B., C.
and D. (other than IV.D.(1)).

	VII.	 	Participant’s Rights
	 
	 	 	Establishment of the Plan shall not be construed as giving any Participant the right to be
retained in the Employer’s service or employ or the right to receive any benefits not
specifically provided by the Plan. A Participant shall not have any interest in amounts
deferred, Employer contributions or Adjustments credited to his or her Account until such
Account is distributed in accordance with the Plan. All deferrals and all amounts held for
the Account of a Participant under the Plan shall remain the sole property of the Employer,
subject to the claims of its general creditors and available for its use for whatever
purposes desired. With respect to amounts deferred or otherwise held for the Account of a
Participant, the Participant is merely a general creditor of the Employer. The obligation
of the Employer hereunder is purely contractual and shall not be deemed to be or considered
funded or secured in any way.

	VIII.	 	Non-alienability and Nontransferability
	 
	 	 	Except to the extent required by law or as provided in Section XII.H., the rights of a
Participant to distributions as provided in the Plan shall not be assigned, transferred,
pledged or encumbered or be subject in any manner to alienation or anticipation unless

15

 

	 	 	required under applicable law. No Participant may borrow against his or her Account. No
Account shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, whether
voluntary or involuntary, including, but not limited to, any liability which is for alimony
or other payments for the support of a spouse or former spouse, or for any other relative of
any Participant, unless specifically required by applicable law.

	IX.	 	Administration and Standard of Review
	 
	 	 	The Plan shall be administered by the Benefits Administrative Committee. The Benefits
Administrative Committee shall have authority to adopt rules and regulations for carrying
out the Plan and, in its sole and absolute discretion, to interpret, construe and implement
the provisions hereof. Subject to the provisions of Section X below, any decision or
interpretation of any provision of the Plan adopted by the Benefits Administrative Committee
shall be final and conclusive. The acts and decisions of the Benefits Administrative
Committee shall not be overturned and shall be binding on all individuals and parties unless
such acts and decisions are ruled by a court of competent jurisdiction to be arbitrary and
capricious. A Participant who is also a member of the Benefits Administrative Committee
shall not participate in any decision involving any request made by him or her or relating
in any way solely to his or her rights, duties and obligations as a Participant under the
Plan.

	X.	 	Claims Procedure

	 	A.	 	Filing Claims. Any Participant or Beneficiary entitled to benefits
under the Plan may file a claim for benefits with the Benefits Administrative Committee
(or its designee).
	 
	 	B.	 	Notification to Claimant. If a claim is wholly or partially denied,
the Benefits Administrative Committee (or its designee) will furnish written or
electronic (in accordance with Department of Labor Regulations Section 2520.104b-1(c))
notification of the decision to the claimant within 90 days of receipt of the claim in
a manner calculated to be understood by the claimant. Such notification shall contain
the following information:

	 	(1)	 	the specific reason or reasons for the denial;
	 
	 	(2)	 	specific reference to pertinent Plan provisions upon which the
denial is based;

	 	(3)	 	a description of any additional material or information
necessary for the claimant to perfect the claim and an explanation of why such
material or information is necessary; and

16

 

	 	(4)	 	a description of the Plan’s claims review procedures describing
the steps to be taken and the applicable time limits to submit claims for
review, including a statement of the claimant’s right to bring a civil action
under ERISA section 502(a) following an adverse benefit determination on
review.

	 	 	 	If special circumstances require an extension of time for the Benefits
Administrative Committee (or its designee) to process the claim, the 90-day period
may be extended for an additional 90 days. Prior to the termination of the initial
90-day period, the claimant shall be furnished with a written or electronic notice
setting forth the reason for the extension. The notice shall indicate the special
circumstances requiring an extension of time and the date by which the Benefits
Administrative Committee (or its designee) expects to render the benefit
determination.

	 	C.	 	Review Procedure. A claimant or his or her authorized representative
may, with respect to any denied claim:

	 	(1)	 	request a full and fair review upon a written application filed
within 60 days after receipt by the claimant of written or electronic
notification of the denial of his or her claim;
	 
	 	(2)	 	submit written comments, documents, records and other
information relating to the claim for benefits; and
	 
	 	(3)	 	upon request, and free of charge, be provided reasonable access
to and copies of documents and records and other information relevant to the
claim for benefits.

	 	 	 	Upon receipt of a timely, written application for review, the Benefits
Administrative Committee (or its designee) shall undertake a review, taking into
account all comments, documents, records and information submitted by the claimant
relating to the claim without regard to whether the information was submitted or
considered in the initial benefit determination. If the claimant (or his or her
duly authorized representative) fails to appeal the initial benefit determination to
the Benefits Administrative Committee (or its designee) in writing within the
prescribed period of time, then the Benefits Administrative Committee’s (or its
designee’s) adverse determination shall be final, binding and conclusive.
	 
	 	 	 	Any request or submission must be in writing and directed to the Benefits
Administrative Committee (or its designee). The Benefits
Administrative Committee (or its designee) will have the sole responsibility for the review of any
denied claim and will take all steps appropriate in the light of its findings.

17

 

	 	D.	 	Decision on Review. The Benefits Administrative Committee (or its
designee) will render a decision upon review no later than 60 days after receipt of the
request for review. If special circumstances (such as the need to hold a hearing on
any matter pertaining to the denied claim) warrant additional time, the decision will
be rendered as soon as possible, but not later than 120 days after receipt of the
request for review. Written notice specifying the circumstances requiring an extension
will be furnished to the claimant prior to the commencement of the extension. The
decision on review will be in writing and will include specific reasons for the
decision, written in a manner calculated to be understood by the claimant, as well as
specific references to the pertinent provisions of the Plan on which the decision is
based. If the decision on review is not furnished to the claimant within the time
limits prescribed above, the claim will be deemed denied on review.

	XI.	 	Amendment and Termination
	 
	 	 	The Plan may, at any time and from time to time, be amended or modified by the Committee or
its delegate without the consent of any Participant or Beneficiary, provided that no such
amendment or modification may either accelerate the payment of the Participant’s Account or
delay such payment, resulting in a subsequent deferral of compensation. The Committee or
its delegate may also terminate and liquidate the Plan without the consent of the
Participant or Beneficiary. Any such liquidation and termination of the Plan shall be made
in accordance with the termination and liquidation requirements of and under the
circumstances described under Treasury Regulation Section 1.409A-3(j)(4)(ix). Any amendment
or termination of the Plan will become effective as to a Participant on the date established
by the Committee or its delegate. However, no amendment, modification or termination of the
Plan shall, without the consent of the Participant, adversely affect such Participant’s
rights with respect to amounts then credited to his or her Account. Actions may be taken by
the Committee or its delegate at any time and in any manner not prohibited by law.

	XII.	 	General Provisions

	 	A.	 	Controlling Law. Except to the extent superseded by federal law, the
laws of the State of Ohio shall be controlling in all matters relating to the Plan,
including construction and performance hereof.
	 
	 	B.	 	Captions. The captions of Sections and paragraphs of the Plan are for
convenience of reference only and shall not control or affect the meaning or
construction of any of its provisions.
	 
	 	C.	 	Facility of Payment. Any amounts payable hereunder to any person who
is under legal disability or who, in the judgment of the Benefits Administrative
Committee, is unable to properly manage his or her financial affairs, may be paid

18

 

	 	 	 	to
the legal representative of such person or may be applied for the benefit of such
person in any manner which the Benefits Administrative Committee may select. Any such
payment shall be deemed to be payment for such person’s Account and shall be a complete
discharge of all liability of the Employer with respect to the amount so paid.

	 	D.	 	Administrative Expenses. All expenses of administering the Plan shall
be borne by the Employer and no part thereof shall be charged against any Participant’s
Account or any amounts distributable hereunder.
	 
	 	E.	 	Severability. Any provision of the Plan prohibited by the law of any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such
prohibition, without invalidating the remaining provisions hereof.
	 
	 	F.	 	Personal Liability. Except as otherwise expressly provided herein, no
member of the Benefits Administrative Committee, and no officer, employee or agent of
the Employer, shall have any liability to any person, firm or corporation based on or
arising out of the Plan, except in the case of willful misconduct or fraud.
	 
	 	G.	 	Amendment to Qualified Plan or Changes to Employer Contributions and
Participant Deferrals under Qualified Plan. Notwithstanding any contrary provision
in this Plan, with respect to any change or addition to, any deletion from or any
modification of (collectively, an “Amendment”) the underlying Qualified Plan or change
in the Company or Participant contributions and/or deferrals under the Qualified Plan
during any Plan Year (collectively, a “Contribution Change”), where such Amendment or
Contribution Change causes the Plan to be non-compliant with Code Section 409A and the
regulations promulgated thereunder (including, but not limited to, Treasury Regulation
Section 1.409A-2(a)(9)) or accelerates the payment of the Participant’s Account or
delays such payment, resulting in a subsequent deferral of compensation, such Amendment
and/or Contribution Change shall be disregarded with respect to Employer contributions,
Participant deferrals, Participants’ Accounts, Compensation, Executive Management
Incentive Pay Deferral Elections, Performance Award Deferral Elections or Bonus
Deferral Elections under or credited pursuant to the Plan or to any form or time of
payment applicable to Plan benefits to the extent that the same either may cause the
Plan to be or is itself non-compliant with Code Section 409A or the regulations
promulgated thereunder.
	 
	 	H.	 	Right to Offset. If the Benefits Administrative Committee determines
that a Participant is, for any reason, indebted to the Company or its Affiliates, the
Benefits Administrative Committee and the Company may offset such indebtedness,
including any interest accruing thereon, against distributions otherwise due under the
Plan provided that:

	 	(1)	 	such debt is incurred in the ordinary course of the service
relationship between the Participant and the Company;

19

 

	 	(2)	 	in any taxable year of the Company, the entire amount of
reduction does not exceed $5,000; and
	 
	 	(3)	 	the reduction is made at the same time and in the same amount
as the debt otherwise would have been due and collected from the Participant.

	 	 	 	An election by the Company not to offset such indebtedness against distributions
otherwise due under the Plan will not constitute a waiver of the Company’s claim for
such indebtedness or obligation.

	XIII.	 	Unfunded Status of the Plan
	 
	 	 	Any and all payments made to any Participant pursuant to the Plan shall be made only from
the general assets of the Employer. All Accounts under the Plan shall be for bookkeeping
purposes only and shall not represent a claim against specific assets of the Employer.
Nothing contained in the Plan shall be deemed to create a trust of any kind or create any
fiduciary relationship. Notwithstanding the foregoing, the Employers may, in their
discretion and to the extent such funding would not trigger a tax on affected Participants
under Code Section 409A(b)(3), establish a trust to assist them in discharging all or a
portion of the benefits payable under the Plan. The assets of such trust shall remain, at
all times, the assets of the Employers subject to the claims of their creditors. Amounts
distributed from any such trust shall discharge the Company’s obligation with respect to the
benefits in question.

20

 

     IN WITNESS WHEREOF, The Scotts Company LLC, through its duly authorized officer, has
caused the Plan document to be executed this 30th day of December, 2008, effective January
1, 2005, except as otherwise specifically provided herein or required by law.

	 	 	 	 	 
	 	THE SCOTTS COMPANY LLC

 	 
	 	By:  	/s/ Denise S. Stump
 	 
	 	 	Name:  	Denise S. Stump 	 
	 	 	Title:  	Executive Vice President, Global Human
ResourcesEX-10.1

EXHIBIT 10.1

INDEMNIFICATION AGREEMENT

ADEONA PHARMACEUTICALS, INC.

     THIS INDEMNIFICATION AGREEMENT (the “Agreement”) is made and entered into as of
December 30, 2008, between ADEONA PHARMACEUTICALS, INC., a Delaware corporation (the
“Corporation”), and the undersigned director and/or officer of the Corporation
(“Indemnitee”). Defined terms shall have the meaning ascribed to them in Section 0
below.

Background

     Indemnitee is a member of the Board of Directors and/or an officer of the Corporation and as
such performs a valuable service for the Corporation. To induce Indemnitee to continue to serve on
the Board of Directors and/or as an officer, the Corporation has agreed to provide to Indemnitee
the indemnifications and other rights described herein. The Corporation enters this Agreement
pursuant to the authority contained in its Certificate of Incorporation and Bylaws and the
provisions of the General Corporation Law of the State of Delaware (the “DGCL”).
Specifically, with respect to the DGCL, the Corporation enters this Agreement relying on the
provision stating that indemnification authorized by the DGCL is not exclusive.

     The Corporation’s Certificate of Incorporation includes a provision eliminating or limiting
the personal liability of a director to the Corporation pursuant to paragraph (7) of subsection (b)
of Section 102 of the DGCL and, as a result, the DGCL permits the Corporation to indemnify and
advance expenses to the Indemnitee so long as the Indemnitee has not breached his or her duty of
loyalty to the Corporation or its stockholders, committed acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, violated Section 174 of the
DGCL or entered into transactions from which the Indemnitee derived an improper personal benefit.
The Corporation desires to provide to Indemnitee the additional indemnification rights set forth in
this Agreement, and Indemnitee desires to obtain such rights, all upon the terms and subject to the
conditions set forth in this Agreement.

     The Board of Directors of the Corporation (the “Board”) has determined that the
increased difficulty in attracting and retaining such persons is detrimental to the best interests
of the Corporation’s stockholders and that the Corporation should act to assure such persons that
there will be increased certainty of such protection in the future. The Board has also determined
that it is reasonable, prudent and necessary for the Corporation contractually to obligate itself
to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by
applicable law so that they will serve or continue to serve the Corporation free from undue concern
that they will not be so indemnified.

     This Agreement is intended as a supplement to and in furtherance of the By-laws of the
Corporation and any resolutions adopted pursuant thereto, and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of Indemnitee thereunder, and Indemnitee does not
regard the protection available under the Corporation’s By-laws and insurance as adequate in the
present circumstances, and may not be willing to serve as an officer or a director without adequate
protection, and the Corporation desires Indemnitee to serve in such capacity. Indemnitee is
willing to serve, continue to serve and to take on additional service for or on behalf of the
Corporation on the condition that he or she be so indemnified.

     NOW, THEREFORE, in consideration of Indemnitee’s agreement to serve as a director and/or
officer of the Corporation as of and after the date hereof, the parties hereto agree as follows:

 

 

TERMS OF AGREEMENT

     1. Indemnity of Indemnitee. The Corporation hereby agrees to hold harmless and
indemnify Indemnitee to the fullest extent permitted by law, as such may be amended from time to
time. In furtherance of the foregoing indemnification, and without limiting the generality
thereof:

          (a) Proceedings Other Than Proceedings by or in the Right of the Corporation.
Indemnitee shall be entitled to the rights of indemnification provided in this Section 1(a)
if, by reason of his or her Corporate Status, the Indemnitee is, or is threatened to be made, a
party to or participant in any Proceeding other than a Proceeding by or in the right of the
Corporation. Pursuant to this Section 1(a), Indemnitee shall be indemnified against all
Expenses, judgments, penalties, fines and amounts paid in settlement actually and reasonably
incurred by him or her, or on his or her behalf, in connection with such Proceeding or any claim,
issue or matter therein, if the Indemnitee acted in good faith and in a manner the Indemnitee
reasonably believed to be in or not opposed to the best interests of the Corporation, and with
respect to any criminal Proceeding, had no reasonable cause to believe the Indemnitee’s conduct was
unlawful.

          (b) Proceedings by or in the Right of the Corporation. Indemnitee shall be entitled
to the rights of indemnification provided in this Section 1(b) if, by reason of his or her
Corporate Status, the Indemnitee is, or is threatened to be made, a party to or participant in any
Proceeding brought by or in the right of the Corporation. Pursuant to this Section 1(b),
Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the
Indemnitee, or on the Indemnitee’s behalf, in connection with such Proceeding if the Indemnitee
acted in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to
the best interests of the Corporation; provided, however, if applicable law so provides, no
indemnification against such Expenses shall be made in respect of any claim, issue or matter in
such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Corporation
unless and to the extent that a court of competent jurisdiction shall determine that such
indemnification may be made.

          (c) Indemnification for Expenses of a Party Who is Wholly or Partly Successful.
Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, by reason
of his or her Corporate Status, a party to and is successful, on the merits or otherwise, in any
Proceeding, he or she shall be indemnified to the maximum extent permitted by law, as such may be
amended from time to time, against all Expenses actually and reasonably incurred by him or her or
on his or her behalf in connection therewith. If Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the Corporation shall indemnify Indemnitee against
all Expenses actually and reasonably incurred by him or her or on his or her behalf in connection
with each successfully resolved claim, issue or matter. For purposes of this Section and without
limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with
or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

     2. Additional Indemnity. In addition to, and without regard to any limitations on,
the indemnification provided for in Section 1 of this Agreement, the Corporation shall and
hereby does indemnify and hold harmless Indemnitee against all Expenses, judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by him or her or on his or
her behalf if, by reason of his Corporate Status, he or she is, or is threatened to be made, a
party to or participant in any Proceeding (including a Proceeding by or in the right of the
Corporation), including, without limitation, all liability arising out of the negligence or active
or passive wrongdoing of Indemnitee. The only limitation that shall exist upon the Corporation’s
obligations pursuant to this Agreement shall be that the Corporation shall not be obligated to make
any payment to Indemnitee that is finally determined (under the procedures, and subject to the
presumptions, set forth in Sections 6 and 7 hereto) to be unlawful.

 

 

     3. Contribution.

          (a) Whether or not the indemnification provided in Sections 1 and 2 hereof is
available, in respect of any threatened, pending or completed action, suit or proceeding in which
the Corporation is jointly liable with Indemnitee (or would be if joined in such action, suit or
proceeding), the Corporation shall pay, in the first instance, the entire amount of any judgment or
settlement of such action, suit or proceeding without requiring Indemnitee to contribute to such
payment and the Corporation hereby waives and relinquishes any right of contribution it may have
against Indemnitee. The Corporation shall not enter into any settlement of any action, suit or
proceeding in which the Corporation is jointly liable with Indemnitee (or would be if joined in
such action, suit or proceeding) unless such settlement provides for a full and final release of
all claims asserted against Indemnitee.

          (b) Without diminishing or impairing the obligations of the Corporation set forth in the
preceding subparagraph, if, for any reason, Indemnitee shall elect or be required to pay all or any
portion of any judgment or settlement in any threatened, pending or completed action, suit or
proceeding in which the Corporation is jointly liable with Indemnitee (or would be if joined in
such action, suit or proceeding), the Corporation shall contribute to the amount of expenses
(including attorneys’ fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred and paid or payable by Indemnitee in proportion to the relative benefits
received by the Corporation and all directors of the Corporation, other than Indemnitee, who are
jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on the
one hand, and Indemnitee, on the other hand, from the transaction from which such action, suit or
proceeding arose; provided, however, that the proportion determined on the basis of relative
benefit may, to the extent necessary to conform to law, be further adjusted by reference to the
relative fault of the Corporation and all directors of the Corporation other than Indemnitee who
are jointly liable with Indemnitee (or would be if joined in such action, suit or proceeding), on
the one hand, and Indemnitee, on the other hand, in connection with the events that resulted in
such expenses, judgments, fines or settlement amounts, as well as any other equitable
considerations which the applicable law may require to be considered. The relative fault of the
Corporation and all directors of the Corporation, other than Indemnitee, who are jointly liable
with Indemnitee (or would be if joined in such action, suit or proceeding), on the one hand, and
Indemnitee, on the other hand, shall be determined by reference to, among other things, the degree
to which their actions were motivated by intent to gain personal profit or advantage, the degree to
which their liability is primary or secondary and the degree to which their conduct is active or
passive.

          (c) The Corporation hereby agrees to fully indemnify and hold Indemnitee harmless from any
claims of contribution which may be brought by directors of the Corporation, other than Indemnitee,
who may be jointly liable with Indemnitee.

          (d) To the fullest extent permissible under applicable law, if the indemnification provided
for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Corporation, in
lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for
judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for
Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in
such proportion as is deemed fair and reasonable in light of all of the circumstances of such
Proceeding in order to reflect (i) the relative benefits received by the Corporation and Indemnitee
as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the
relative fault of the Corporation (and its directors, officers, employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).

     4. Indemnification for Expenses of a Witness. Notwithstanding any other provision of
this Agreement, to the extent that Indemnitee is, by reason of his or her Corporate Status, a
witness in any

 

 

Proceeding to which Indemnitee is not a party, he or she shall be indemnified against all
Expenses actually and reasonably incurred by him or her or on his or her behalf in connection
therewith.

     5. Limitations. The Corporation shall not be obligated to make any payment to
Indemnitee that is finally determined (under the procedures, and subject to the presumptions, set
forth in Sections 0 and 0 hereof) to be unlawful. Additionally, the Corporation
shall not be obligated to indemnify the Indemnitee for expenses or liabilities of any type
whatsoever (including, but not limited to, judgments, fines, ERISA excise taxes and penalties, and
amounts paid in settlement) for which payment is actually made to or on behalf of Indemnitee under
a valid and collectible insurance policy of D&O Insurance of the Corporation, or under a valid and
enforceable indemnity clause, by-law or agreement of the Corporation.

     6. Advancement of Expenses. Notwithstanding any other provision of this Agreement,
the Corporation shall advance all Expenses incurred by or on behalf of Indemnitee in connection
with any Proceeding by reason of Indemnitee’s Corporate Status within thirty (30) days after the
receipt by the Corporation of a statement or statements from Indemnitee requesting such advance or
advances from time to time, whether prior to or after final disposition of such Proceeding. Such
statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall
include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not entitled to be
indemnified against such Expenses. Any advances and undertakings to repay pursuant to this
Section 0 shall be unsecured and interest free. Indemnitee hereby undertakes to repay
amounts advanced only if, and to the extent that, it shall be determined ultimately that the
Indemnitee is not entitled to indemnification or contribution by the Corporation as authorized
hereby.

     7. Procedures and Presumptions for Determination of Entitlement to Indemnification.
It is the intent of this Agreement to secure for Indemnitee rights of indemnity that are as
favorable as may be permitted under the DGCL and public policy of the state of the Corporation’s
incorporation. Accordingly, the parties agree that the following procedures and presumptions shall
apply in the event of any question as to whether Indemnitee is entitled to indemnification under
this Agreement:

          (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Corporation
a written request, including therein or therewith such documentation and information as is
reasonably available to Indemnitee and is reasonably necessary to determine whether and to what
extent Indemnitee is entitled to indemnification. The Secretary of the Corporation shall, promptly
upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has
requested indemnification.

          (b) Upon written request by Indemnitee for indemnification pursuant to the first sentence of
Section 7(a) hereof, a determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall be made in the specific case by one of the following three
methods, which, except as provided in the sentence below, shall be at the election of the Board:
(1) by a majority vote of the disinterested directors, even though less than a quorum, by a
committee of disinterested directors designated by a majority vote of the disinterested directors,
even though less than a quorum, (2) if there are no disinterested directors or if the disinterested
directors so direct, by independent legal counsel in a written opinion to the Board, a copy of
which shall be delivered to the Indemnitee, or (3) if so directed by the Board, by the stockholders
of the Corporation. Notwithstanding the above sentence, and to the extent allowed by applicable
law, in the event of a Change of Control, the determination with respect to an Indemnitee’s
entitlement to indemnification shall be made by independent legal counsel in a written opinion to
the Board, a copy of which shall be delivered to the Indemnitee. For purposes hereof,
disinterested directors are those members of the Board who are not parties to the action, suit or
proceeding in respect of which indemnification is sought by Indemnitee.

 

 

          (c) If the determination of entitlement to indemnification is to be made by Independent
Counsel pursuant to Section 7(b) hereof, the Independent Counsel shall be selected as
provided in this Section 7(c). The Independent Counsel shall be selected by the Board.
Indemnitee may, within 10 days after such written notice of selection shall have been given,
deliver to the Corporation, as the case may be, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the Independent Counsel so
selected does not meet the requirements of “Independent Counsel” as defined in Section
14 of this Agreement, and the objection shall set forth with particularity the factual basis of
such assertion. Absent a proper and timely objection, the person so selected shall act as
Independent Counsel. If a written objection is made and substantiated, the Independent Counsel
selected may not serve as Independent Counsel unless and until such objection is withdrawn or a
court has determined that such objection is without merit. If, within 20 days after submission by
Indemnitee of a written request for indemnification pursuant to Section 7(a) hereof, no
Independent Counsel shall have been selected and not objected to, either the Corporation or
Indemnitee may petition a court of competent jurisdiction for resolution of any objection which
shall have been made by the Indemnitee to the Corporation’s selection of Independent Counsel and/or
for the appointment as Independent Counsel of a person selected by the court or by such other
person as the court shall designate, and the person with respect to whom all objections are so
resolved or the person so appointed shall act as Independent Counsel under Section 7(b)
hereof. The Corporation shall pay any and all reasonable fees and expenses of Independent Counsel
incurred by such Independent Counsel in connection with acting pursuant to Section 7(b)
hereof, and, unless a court of competent jurisdiction finds that each of the claims and/or defenses
of the Indemnitee in any such proceeding was frivolous or made in bad faith, the Corporation shall
pay all reasonable fees and expenses incident to the procedures of this Section7(c),
regardless of the manner in which such Independent Counsel was selected or appointed.

          (d) In making a determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that Indemnitee is entitled to
indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the
burden of proof and the burden of persuasion by clear and convincing evidence. Neither the failure
of the Corporation (including by its directors or independent legal counsel) to have made a
determination prior to the commencement of any action pursuant to this Agreement that
indemnification is proper in the circumstances because Indemnitee has met the applicable standard
of conduct, nor an actual determination by the Corporation (including by its directors or
independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall
be a defense to the action or create a presumption that Indemnitee has not met the applicable
standard of conduct.

          (e) Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on
the records or books of account of the Enterprise, including financial statements, or on
information supplied to Indemnitee by the officers of the Enterprise in the course of their duties,
or on the advice of legal counsel for the Enterprise or on information or records given or reports
made to the Enterprise by an independent certified public accountant or by an appraiser or other
expert selected with reasonable care by the Enterprise. In addition, the knowledge and/or actions,
or failure to act, of any director, officer, agent or employee of the Enterprise shall not be
imputed to Indemnitee for purposes of determining the right to indemnification under this
Agreement. Whether or not the forgoing provisions of this Section 7(e) are satisfied, it
shall in any event be presumed that Indemnitee has at all times acted in good faith and in a manner
he or she reasonably believed to be in or not opposed to the best interests of the Corporation.
Anyone seeking to overcome this presumption shall have the burden of proof and the burden of
persuasion by clear and convincing evidence.

          (f) If the person, persons or entity empowered or selected under Section 7 to
determine whether Indemnitee is entitled to indemnification shall not have made a determination
within sixty (60) days after receipt by the Corporation of the request therefor, the requisite
determination of entitlement to

 

 

indemnification shall be deemed to have been made and Indemnitee shall be entitled to such
indemnification absent (i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee’s statement not materially misleading, in connection
with the request for indemnification, or (ii) a prohibition of such indemnification under
applicable law; provided, however, that such 60-day period may be extended for a reasonable time,
not to exceed an additional thirty (30) days, if the person, persons or entity making such
determination with respect to entitlement to indemnification in good faith requires such additional
time to obtain or evaluate documentation and/or information relating thereto; and provided,
further, that the foregoing provisions of this Section 7(f) shall not apply if the
determination of entitlement to indemnification is to be made by the stockholders pursuant to
Section 7(b) of this Agreement and if (A) within fifteen (15) days after receipt by the
Corporation of the request for such determination, the Board or the Disinterested Directors, if
appropriate, resolve to submit such determination to the stockholders for their consideration at an
annual meeting thereof to be held within seventy-five (75) days after such receipt and such
determination is made thereat, or (B) a special meeting of stockholders is called within fifteen
(15) days after such receipt for the purpose of making such determination, such meeting is held for
such purpose within sixty (60) days after having been so called and such determination is made
thereat.

          (g) Indemnitee shall cooperate with the person, persons or entity making such determination
with respect to Indemnitee’s entitlement to indemnification, including providing to such person,
persons or entity upon reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee
and reasonably necessary to such determination. Any Independent Counsel, member of the Board or
stockholder of the Corporation shall act reasonably and in good faith in making a determination
regarding the Indemnitee’s entitlement to indemnification under this Agreement. Any costs or
expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating
with the person, persons or entity making such determination shall be borne by the Corporation
(irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the
Corporation hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

          (h) The Corporation acknowledges that a settlement or other disposition short of final
judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption
and uncertainty. In the event that any action, claim or proceeding to which Indemnitee is a party
is resolved in any manner other than by adverse judgment against Indemnitee (including, without
limitation, settlement of such action, claim or proceeding with or without payment of money or
other consideration) it shall be presumed that Indemnitee has been successful on the merits or
otherwise in such action, suit or proceeding. Anyone seeking to overcome this presumption shall
have the burden of proof and the burden of persuasion by clear and convincing evidence.

          (i) The termination of any Proceeding or of any claim, issue or matter therein, by judgment,
order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not
(except as otherwise expressly provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and
in a manner which he or she reasonably believed to be in or not opposed to the best interests of
the Corporation or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause
to believe that his or her conduct was unlawful.

     8. Remedies of Indemnitee.

          (a) In the event that (i) a determination is made pursuant to Section 7 of this
Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement
of Expenses is not timely made pursuant to Section 6 of this Agreement, (iii) no
determination of entitlement to indemnification is made pursuant to Section 7(b) of this
Agreement within thirty (30) days after receipt by the Corporation of the request for
indemnification, (iv) payment of indemnification is not made pursuant to this Agreement within ten
(10) days after receipt by the Corporation of a written request therefor or (v) payment of
indemnification is not made

 

 

within ten (10) days after a determination has been made that Indemnitee is entitled to
indemnification or such determination is deemed to have been made pursuant to Section 7 of
this Agreement, Indemnitee shall be entitled to an adjudication in an appropriate court of
competent jurisdiction of Indemnitee’s entitlement to such indemnification. Indemnitee shall
commence such proceeding seeking an adjudication within 180 days following the date on which
Indemnitee first has the right to commence such proceeding pursuant to this Section 8.
Alternatively, with respect to the matter described in clause (ii) in the previous sentence,
Indemnitee at his or her option may seek an award in arbitration to be conducted by a single
arbitrator pursuant to the rules of the American Arbitration Association, such award to be made
within sixty (60) days following the filing of the demand for arbitration, to which selection of
arbitration at Indemnitee’s option the Corporation hereby agrees. The Corporation shall not oppose
Indemnitee’s right to seek any such adjudication or arbitration.

          (b) In the event that a determination shall have been made pursuant to Section 7(b) of
this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or
arbitration commenced pursuant to this Section 8 shall be conducted in all respects as a de
novo trial on the merits, and Indemnitee shall not be prejudiced by reason of the adverse
determination under Section 7(b).

          (c) If a determination shall have been made pursuant to Section 7(b) of this Agreement
that Indemnitee is entitled to indemnification, the Corporation shall be bound by such
determination in any judicial proceeding or arbitration commenced pursuant to this Section
8, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material
fact necessary to make Indemnitee’s misstatement not materially misleading in connection with the
application for indemnification, or (ii) a prohibition of such indemnification under applicable
law.

          (d) In the event that Indemnitee, pursuant to this Section 8, seeks a judicial
adjudication or arbitration of his or her rights under, or to recover damages for breach of, this
Agreement, or to recover under any directors’ and officers’ liability insurance policies maintained
by the Corporation, the Corporation shall pay on his or her behalf, in advance, any and all
expenses (of the types described in the definition of Expenses in Section 14 of this
Agreement) actually and reasonably incurred by him or her in such judicial adjudication or
arbitration, as well as reasonable compensation for Indemnitee’s time actually spent with respect
to such action or proceeding, unless the Indemnitee ultimately is determined to not be entitled to
such indemnification, advancement of expenses or insurance recovery.

          (e) The Corporation shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 8 that the procedures and presumptions of
this Agreement are not valid, binding and enforceable and shall stipulate in any such court that
the Corporation is bound by all the provisions of this Agreement. The Corporation shall indemnify
Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10)
days after receipt by the Corporation of a written request therefore) advance, to the extent not
prohibited by law, such expenses to Indemnitee, which are incurred by Indemnitee in connection with
any action brought by Indemnitee for indemnification or advance of Expenses from the Corporation
under this Agreement or under any directors’ and officers’ liability insurance policies maintained
by the Corporation, unless the Indemnitee ultimately is determined to not be entitled to such
indemnification, advancement of Expenses or insurance recovery, as the case may be.

          (f) Notwithstanding anything in this Agreement to the contrary, no determination as to
entitlement to indemnification under this Agreement shall be required to be made prior to the final
disposition of the Proceeding.

 

 

     9. Non-Exclusivity; Survival of Rights; Insurance; Subrogation.

          (a) The rights of indemnification as provided by this Agreement shall not be deemed exclusive
of any other rights to which Indemnitee may at any time be entitled under applicable law, the
certificate of incorporation of the Corporation, the Bylaws, any agreement, a vote of stockholders,
a resolution of directors or otherwise. No amendment, alteration or repeal of this Agreement or of
any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in
respect of any action taken or omitted by such Indemnitee in his or her Corporate Status prior to
such amendment, alteration or repeal. To the extent that a change in the DGCL, whether by statute
or judicial or arbitration decision, permits greater indemnification than would be afforded
currently under the Bylaws and this Agreement, it is the intent of the parties hereto that
Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right
or remedy herein conferred is intended to be exclusive of any other right or remedy, and every
other right and remedy shall be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other right or remedy.

          (b) To the extent that the Corporation maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents or fiduciaries of the Corporation
or of any other corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise that such person serves at the request of the Corporation, Indemnitee shall be covered
by such policy or policies in accordance with its or their terms to the maximum extent of the
coverage available for any director, officer, employee, agent or fiduciary under such policy or
policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the
Corporation has director and officer liability insurance in effect, the Corporation shall give
prompt notice of the commencement of such proceeding to the insurers in accordance with the
procedures set forth in the respective policies. The Corporation shall thereafter take all
necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all
amounts payable as a result of such proceeding in accordance with the terms of such policies.

          (c) In the event of any payment under this Agreement, the Corporation shall be subrogated to
the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all
papers required and take all action necessary to secure such rights, including execution of such
documents as are necessary to enable the Corporation to bring suit to enforce such rights.

          (d) The Corporation shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually
received such payment under any insurance policy, contract, agreement or otherwise.

          (e) The Corporation’s obligation to indemnify or advance Expenses hereunder to Indemnitee who
is or was serving at the request of the Corporation as a director, officer, employee or agent of
any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise
shall be reduced by any amount Indemnitee has actually received as indemnification or advancement
of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise.

     10. Exception to Right of Indemnification. Notwithstanding any provision in this
Agreement, the Corporation shall not be obligated under this Agreement to:

          (a) make any indemnity in connection with any claim made against Indemnitee:

               (i) for which payment has actually been made to or on behalf of Indemnitee under any insurance
policy or other indemnity provision, except with respect to any excess beyond the amount paid under
any insurance policy or other indemnity provision; or

 

 

               (ii) for an accounting of profits made from the purchase and sale (or sale and purchase) by
Indemnitee of securities of the Corporation within the meaning of Section 16(b) of the Securities
Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law; or

               (iii) in connection with any Proceeding (or any part of any Proceeding) initiated by
Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee
against the Corporation or its directors, officers, employees or other indemnitees, unless (i) the
Board authorized the Proceeding (or any part of any Proceeding) prior to its initiation or (ii) the
Corporation provides the indemnification, in its sole discretion, pursuant to the powers vested in
the Corporation under applicable law;

          (b) indemnify the Indemnitee for any expenses incurred by the Indemnitee with respect to any
proceeding instituted by the Indemnitee to enforce or interpret this Agreement, if a court of
competent jurisdiction determines that each of the material assertions made by the Indemnitee in
such proceeding was not made in good faith or was frivolous; or

          (c) indemnify the Indemnitee under this Agreement for any amounts paid in settlement of a
proceeding unless the Corporation consents to such settlement, which consent shall not be
unreasonably withheld.

     11. Duration of Agreement. All agreements and obligations of the Corporation
contained herein shall continue during the period Indemnitee is an officer or director of the
Corporation (or is or was serving at the request of the Corporation as an officer, director,
employee or agent of another corporation, partnership, joint venture, trust or other enterprise)
for a period of not less than three years thereafter, and in any case, shall continue thereafter so
long as Indemnitee shall be subject to any Proceeding (or any proceeding commenced under
Section 8 hereof) by reason of his or her Corporate Status, whether or not he or she is
acting or serving in any such capacity at the time any liability or expense is incurred for which
indemnification can be provided under this Agreement. This Agreement shall, without any further
action required by any party, be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors (including any direct or indirect successor by
purchase, merger, consolidation or otherwise to all or substantially all of the business or assets
of the Corporation), assigns, spouses, heirs, executors and personal and legal representatives.

     12. Security. To the extent requested by Indemnitee and approved by the Board, the
Corporation may at any time and from time to time provide security to Indemnitee for the
Corporation’s obligations hereunder through an irrevocable bank line of credit, funded trust or
other collateral. Any such security, once provided to Indemnitee, may not be revoked or released
without the prior written consent of the Indemnitee.

     13. Enforcement.

          (a) The Corporation expressly confirms and agrees that it has entered into this Agreement and
assumes the obligations imposed on it hereby in order to induce Indemnitee to serve as an officer
or director of the Corporation, and the Corporation acknowledges that Indemnitee is relying upon
this Agreement in serving as an officer or director of the Corporation.

          (b) This Agreement constitutes the entire agreement between the parties hereto with respect to
the subject matter hereof and supersedes all prior agreements and understandings, oral, written and
implied, between the parties hereto with respect to the subject matter hereof.

 

 

     14. Definitions. For purposes of this Agreement:

          (a) “Change in Control” shall be deemed to occur upon the earliest to occur after the
date of this Agreement of any of the following events:

               (i) Change in Board.  During any period of two (2) consecutive years (not including
any period prior to the execution of this Agreement), individuals who at the beginning of such
period constitute the Board cease for any reason to constitute a least a majority of the members of
the Board;

               (ii) Corporate Transactions.  The effective date of a merger or consolidation of the
Corporation with any other entity, other than a merger or consolidation which would result in the
voting securities of the Corporation outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 51% of the combined voting power of the voting
securities of the surviving entity outstanding immediately after such merger or consolidation and
with the power to elect at least a majority of the board of directors or other governing body of
such surviving entity; and

               (iii) Liquidation.  The approval by the stockholders of the Corporation of a complete
liquidation of the Corporation or an agreement for the sale or disposition by the Corporation of
all or substantially all of the Corporation’s assets.

          (b) “Corporate Status” describes the status of a person who is or was a director,
officer, employee, agent or fiduciary of the Corporation or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise that such person is or was serving
at the express written request of the Corporation.

          (c) “Disinterested Director” means a director of the Corporation who is not and was
not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

          (d) “Enterprise” shall mean the Corporation and any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving
at the express written request of the Corporation as a director, officer, employee, agent or
fiduciary.

          (e) “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended.

          (f) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and
binding costs, telephone charges, postage, delivery service fees and all other disbursements or
expenses of the types customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, participating, or being or preparing to be a witness in a
Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting
from any Proceeding, including without limitation the premium, security for, and other costs
relating to any cost bond, supersede as bond, or other appeal bond or its equivalent. Expenses,
however, shall not include amounts paid in settlement by Indemnitee or the amount of judgments,
fines, ERISA excise taxes or penalties, or amounts paid in settlement of a proceeding against
Indemnitee.

          (g) “Independent Counsel” means a law firm, or a member of a law firm, that is
experienced in matters of corporation law and neither presently is, nor in the past five years has
been, retained to represent: (i) the Corporation or Indemnitee in any matter material to either
such party (other than with respect to matters concerning Indemnitee under this Agreement, or of
other indemnitees under similar indemnification agreements), or (ii) any other party to the
Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing,
the term “Independent Counsel” shall not include any person who, under the

 

 

applicable standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Corporation or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement. The Corporation agrees to pay the reasonable fees of the
Independent Counsel referred to above and to fully indemnify such counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its
engagement pursuant hereto.

          (h) “Proceeding” includes any threatened, pending or completed action, suit,
arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing
or any other actual, threatened or completed proceeding, whether brought by or in the right of the
Corporation or otherwise and whether civil, criminal, administrative or investigative, in which
Indemnitee was, is or will be involved as a party or otherwise, by reason of the fact that
Indemnitee is or was a director or officer of the Corporation, by reason of any action taken by him
or her or of any inaction on his or her part while acting as a director or officer of the
Corporation, or by reason of the fact that he or she is or was serving at the request of the
Corporation as a director, officer, agent or fiduciary of another corporation, partnership, joint
venture, trust or other Enterprise; in each case whether or not he or she is acting or serving in
any such capacity at the time any liability or expense is incurred for which indemnification can be
provided under this Agreement; including one pending on or before the date of this Agreement, but
excluding one initiated by an Indemnitee pursuant to Section 0 of this Agreement to enforce
his or her rights under this Agreement.

     15. Severability. The invalidity of unenforceability of any provision hereof shall in
no way affect the validity or enforceability of any other provision. Without limiting the
generality of the foregoing, this Agreement is intended to confer upon Indemnitee indemnification
rights to the fullest extent permitted by applicable laws. In the event any provision hereof
conflicts with any applicable law, such provision shall be deemed modified, consistent with the
aforementioned intent, to the extent necessary to resolve such conflict.

     16. Modification and Waiver. No supplement, modification, termination or amendment of
this Agreement shall be binding unless executed in writing by both of the parties hereto. No
waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing
waiver.

     17. Notice By Indemnitee. Indemnitee agrees promptly to notify the Corporation in
writing upon being served with or otherwise receiving any summons, citation, subpoena, complaint,
indictment, information or other document relating to any Proceeding or matter which may be subject
to indemnification covered hereunder. The failure to so notify the Corporation shall not relieve
the Corporation of any obligation which it may have to Indemnitee under this Agreement or otherwise
unless and only to the extent that such failure or delay materially prejudices the Corporation.

     18. Notices. All notices and other communications given or made pursuant to this
Agreement shall be in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during
normal business hours of the recipient, and if not so confirmed, then on the next business day, (c)
five (5) days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier,
specifying next day delivery, with written verification of receipt. All communications shall be
sent:

          To Indemnitee at the address set forth below his or her signature hereto.

 

 

          To the Corporation at:

          Adeona Pharmaceuticals, Inc.

          3930 Varsity Drive

          Ann Arbor MI, 48108

          Facsimile: (734) 332-7878

          Attention: Chief Executive Officer

or to such other address as may have been furnished to Indemnitee by the Corporation or to the
Corporation by Indemnitee, as the case may be.

     19. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and the same
Agreement. This Agreement may also be executed and delivered by facsimile signature and in two or
more counterparts, each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

     20. Headings. The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement or to affect the
construction thereof.

     21. Governing Law. This Agreement and the legal relations among the parties shall be
governed by, and construed and enforced in accordance with, the laws of the State of Delaware,
without regard to its conflict of laws rules; provided, however, that in the event
that the Corporation’s successor in interest pursuant to a merger, consolidation or similar
transaction is incorporated in a state other than Delaware, then this Agreement and the legal
relations among the parties shall, from the effective time of such transaction forward, be governed
by, construed and enforced in accordance with the laws of the state of incorporation of such
Corporation’s successor, without giving effect to principles of conflicts of law.

[Signatures on following page]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement on and as of
the day and year first above written.

	 	 	 	 	 
	 	ADEONA PHARMACEUTICALS, INC.

a Delaware corporation

 	 
	 	By:  	 	 
	 	Print Name:  	 	 
	 	Title:  	 	 
	 
	 	INDEMNITEE

 	 
	 	By:  	 	 
	 	Print Name:  	 	 
	 	Address:

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