Document:

EX-10.5

Exhibit 10.5

THE O’GARA GROUP, INC.

2008 STOCK INCENTIVE PLAN

(Adopted
October 3, 2008)

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE I. PURPOSE	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II. DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE III. ADMINISTRATION	 	 	7	 
	 
	 	 	 	 	 	 
	3.1

	 	The Committee
	 	 	7	 
	3.2

	 	Powers of the Committee
	 	 	7	 
	3.3

	 	Guidelines
	 	 	8	 
	3.4

	 	Delegation of Authority
	 	 	8	 
	3.5

	 	Decisions Final
	 	 	8	 
	3.6

	 	Award Agreements
	 	 	8	 
	 
	 	 	 	 	 	 
	ARTICLE IV. SHARES SUBJECT TO PLAN	 	 	8	 
	 
	 	 	 	 	 	 
	4.1

	 	Shares Available for Issuance of Awards
	 	 	8	 
	4.2

	 	Maximum Awards Per Participant
	 	 	8	 
	4.3

	 	Re-Use of Shares
	 	 	9	 
	4.4

	 	Adjustment Provisions
	 	 	9	 
	 
	 	 	 	 	 	 
	ARTICLE V. EFFECTIVE DATE AND DURATION OF PLAN	 	 	10	 
	 
	 	 	 	 	 	 
	5.1

	 	Effective Date
	 	 	10	 
	5.2

	 	Duration of Plan
	 	 	10	 
	 
	 	 	 	 	 	 
	ARTICLE VI. STOCK OPTIONS	 	 	10	 
	 
	 	 	 	 	 	 
	6.1

	 	Grants
	 	 	10	 
	6.2

	 	Terms of Options
	 	 	10	 
	6.3

	 	Incentive Stock Options
	 	 	12	 
	 
	 	 	 	 	 	 
	ARTICLE VII. STOCK APPRECIATION RIGHTS	 	 	13	 
	 
	 	 	 	 	 	 
	7.1

	 	Stock Appreciation Rights
	 	 	13	 
	7.2

	 	Terms and Conditions of Stock Appreciation Rights
	 	 	13	 
	 
	 	 	 	 	 	 
	ARTICLE VIII. RESTRICTED AND UNRESTRICTED STOCK AWARDS	 	 	14	 
	 
	 	 	 	 	 	 
	8.1

	 	Grants of Restricted Stock Awards
	 	 	14	 
	8.2

	 	Terms and Conditions of Restricted Stock Awards
	 	 	14	 
	8.3

	 	Unrestricted Stock Awards
	 	 	15	 

-i-

 

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	ARTICLE IX. PERFORMANCE AWARDS	 	 	15	 
	 
	 	 	 	 	 	 
	9.1

	 	Performance Awards
	 	 	15	 
	9.2

	 	Terms and Conditions of Performance Awards
	 	 	16	 
	 
	 	 	 	 	 	 
	ARTICLE X. TERMINATION OF AWARDS	 	 	17	 
	 
	 	 	 	 	 	 
	10.1

	 	Termination of Awards to Employees and Directors
	 	 	17	 
	10.2

	 	Termination of Awards to Advisors
	 	 	18	 
	10.3

	 	Acceleration of Vesting Upon Termination
	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE XI. CHANGE IN CONTROL; MERGER, CONSOLIDATION, ETC.	 	 	18	 
	 
	 	 	 	 	 	 
	11.1

	 	Separation from Service After Change of Control
	 	 	18	 
	11.2

	 	Merger, Consolidation, Etc.
	 	 	19	 
	11.3

	 	Applicability of Article XI
	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE XII. TERMINATION OR AMENDMENT OF THIS PLAN	 	 	20	 
	 
	 	 	 	 	 	 
	12.1

	 	Termination or Amendment
	 	 	20	 
	 
	 	 	 	 	 	 
	ARTICLE XIII. GENERAL PROVISIONS	 	 	20	 
	 
	 	 	 	 	 	 
	13.1

	 	No Right to Continued Employment
	 	 	20	 
	13.2

	 	Awards to Persons Outside the United States
	 	 	20	 
	13.3

	 	Non-Transferability of Awards
	 	 	20	 
	13.4

	 	Limitations on Repricing, Exchange and Repurchase of Awards
	 	 	21	 
	13.5

	 	Other Plans
	 	 	21	 
	13.6

	 	Unfunded Plan
	 	 	21	 
	13.7

	 	Withholding of Taxes
	 	 	22	 
	13.8

	 	Right of Recapture
	 	 	22	 
	13.9

	 	Governing Law
	 	 	22	 
	13.10

	 	Liability
	 	 	22	 
	13.11

	 	Successors
	 	 	23	 
	13.12

	 	Transactions Involving Common Stock
	 	 	23	 
	13.13

	 	Compliance with Securities Law
	 	 	23	 
	13.14

	 	Required Delay in Payment to a Specified Employee Pursuant to a
Separation from Service
	 	 	23	 
	13.15

	 	Exemption from, or Compliance with, Section 409A
	 	 	23	 

-ii-

 

THE O’GARA GROUP, INC.

2008 STOCK INCENTIVE PLAN

ARTICLE I.

PURPOSE

     The purpose of this 2008 Stock Incentive Plan (the “Plan”) is to promote the long-term
growth and financial success of The O’Gara Group, Inc. (the “Company”) and its subsidiaries
by enabling the Company to compete successfully in attracting and retaining employees, directors,
and consultants and advisors of outstanding ability, stimulating the efforts of those persons to
achieve the Company’s long-range performance goals and objectives, and encouraging the
identification of their interests with those of the Company’s shareholders.

ARTICLE II.

DEFINITIONS

     For purposes of this Plan, the following terms shall have the following meanings:

     2.1 “Advisor” means a person who provides bona fide consulting or advisory services to
the Company or a Subsidiary and whose Shares subject to an Award are eligible for registration on
Form S-8 under the Securities Act of 1933.

     2.2 “Award” means any form of Stock Option, Restricted Stock Award, Unrestricted
Stock Award, Performance Award or Stock Appreciation Right granted under this Plan.

     2.3 “Award Agreement” means a written or electronic agreement setting forth the terms
of an Award.

     2.4 “Award Date” means the date designated by the Committee as the date upon which an
Award is granted.

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

     2.6 “Cause” means, unless otherwise defined in an Award Agreement, the occurrence of
any one or more of the following events with respect to a Participant:

     (i) conviction (including any plea of guilty or nolo contendere) of any felony
criminal offense or criminal offense involving moral turpitude or controlled substances; or

1

 

     (ii) violation of any policy or procedure of the Company or a Subsidiary applicable to
the Participant which is deemed in good faith by the Board to be harmful, monetarily or
otherwise, to the Company or Subsidiary; or

     (iii) violation of any provision of any written agreement between the Company (or a
Subsidiary) and the Participant that permits termination of such agreement; or

     (iv) failure to perform satisfactorily, in the judgment of the Board, a substantial
portion of the Participant’s duties to the Company or any Subsidiary after having been
advised by the Company or Subsidiary that his or her performance has been deemed
unsatisfactory; or

     (v) any type of disloyalty to the Company or a Subsidiary, including, without
limitation, fraud, embezzlement, theft, or dishonesty in the course of a Participant’s
employment or business relationship with the Company or Subsidiary; or

     (vi) unauthorized disclosure of trade secrets or confidential information of the
Company or a Subsidiary.

     2.7 “Change in Control” means the occurrence after the Effective Date of any of the
following events:

     (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange
Act), other than an Exempt Entity, becomes the “beneficial owner” (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to have
“beneficial ownership” of all shares that such person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time), directly or
indirectly, of 50% or more of the total voting power of all of the Company’s
then-outstanding voting securities (“Voting Shares”);

     (ii) on any date, the individuals who constituted the Company’s Board at the beginning
of the two-year period immediately preceding such date (together with any new directors
whose election by the Company’s Board, or whose nomination for election by the Company’s
shareholders, was approved by a vote of at least two-thirds of the directors then still in
office who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to constitute a
majority of the directors then in office; or

     (iii) immediately after a merger or consolidation of the Company or any Subsidiary of
the Company with or into, or the sale or other disposition of all or substantially all of
the Company’s assets to, any other corporation (where pursuant to the terms of such
transaction outstanding Awards are assumed by the surviving, resulting or acquiring
corporation or new Awards are substituted therefor), the Voting Shares of the Company
outstanding immediately prior to

2

 

such transaction do not represent (either by remaining outstanding or by being
converted into voting securities of the surviving, resulting or acquiring entity or any
parent thereof) more than 50% of the total voting power of the voting securities of the
Company or surviving, resulting or acquiring entity or any parent thereof outstanding
immediately after such merger or consolidation.

     2.8 “Code” means the United States Internal Revenue Code of 1986, as amended, and any
applicable regulations and rulings thereunder. Reference to any Section of the Code includes the
provisions of that Section as it may be amended from time to time or replaced by any other
section(s) or statute of like intent and purpose.

     2.9 “Committee” means the committee of Directors of the Company appointed by the Board
to administer the Plan. If at any time all members of the Committee are not “non-employee
directors” as defined in Rule 16b-3 under the Exchange Act and “outside directors” as defined in
the regulations under Section 162(m) of the Code, the Committee shall form a subcommittee of at
least two directors who meet these criteria, which subcommittee shall approve all (i) Awards to and
transactions with persons subject to the reporting requirements of Section 16 of the Exchange Act
and (ii) Awards intended to result in the payment of Performance-Based Compensation to persons who
are “covered employees” as defined in the regulations under Code Section 162(m).

     2.10 “Common Stock” means the Company’s common stock, no par value per share, and any
successor security.

     2.11 “Company” means The O’Gara Group, Inc.

     2.12 “Director” means any person serving on the Board of Directors of the Company or
any of its Subsidiaries who is not an Officer (or officer) or Employee of the Company or any
Subsidiary.

     2.13 “Disability” means (i) a “permanent and total disability” within the meaning of
Section 22(e)(3) of the Code as determined by the Committee in good faith upon receipt of medical
advice from one or more individuals, selected by the Committee, who are qualified to give
professional medical advice, or (ii) in the case of an Employee, a disability that qualifies as a
long-term disability under the Company’s or a Subsidiary’s Long Term Disability insurance, or (iii)
any other definition of disability set forth in an Award Agreement.

     2.14 “Effective Date” means the date on which this Plan is approved by the
shareholders of the Company.

     2.15 “Eligible Person” means any person who is either an Employee, a Director or an
Advisor.

     2.16 “Employee” means (i) any employee (including any officer) of the Company or a
Subsidiary, including any such employee who is on an approved leave of absence or layoff, or is
subject to a disability which does not qualify as a Disability, or (ii) any

3

 

person who has received and accepted an offer of employment from the Company or a Subsidiary.

     2.17 “Exchange Act” means the Securities Exchange Act of 1934.

     2.18 “Exempt Entity” means (i) an underwriter temporarily holding securities pursuant
to an offering of such securities and (ii) the Company, any of its Subsidiaries or any employee
benefit plan (or related trust) sponsored or maintained by the Company or any of its Subsidiaries.

     2.19 “Exercise Price” means the price per share at which Common Stock may be purchased
upon the exercise of an Option or other Award.

     2.20 “Fair Market Value” means, as of any date other than the date of an initial
public offering, the closing price of a Share on that date on The NASDAQ Stock Market (or such
other national securities exchange or market system on which the Shares are primarily traded) or,
if the Shares were not traded on such day, then the next preceding day on which the Shares were
traded, all as reported by such source as the Committee may select. If the Shares are not traded
on a national securities exchange or other market system, Fair Market Value shall be determined by
the Committee in accordance with Section 409A of the Code. Solely as of the date of an initial
public offering, the “Fair Market Value” of a Share shall mean the price to the public pursuant to
the form of final prospectus used in connection with the initial public offering, as indicated on
the cover page of such prospectus or otherwise.

     2.21 “Immediate Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law of the Participant and shall include
adoptive relationships; provided, however, that if the Committee adopts a different definition of
“immediate family” (or similar term) in connection with the transferability of an Award (other than
an Incentive Stock Option) made under this Plan, such definition shall apply, without further
action of the Board.

     2.22 “Incentive Stock Option” means any Stock Option awarded under Article VI of this
Plan intended to be and designated as an “Incentive Stock Option” within the meaning of Section 422
of the Code.

     2.23 “Non-Qualified Stock Option” means any Stock Option awarded under Article VI of
this Plan that is not an Incentive Stock Option.

     2.24 “Officer” means a person who has been determined to be an officer of the Company
under Exchange Act Rule 16a-1(f) in a resolution adopted by the Board.

     2.25 “Participant” means an Eligible Person to whom an Award has been made pursuant to
this Plan.

     2.26 “Performance Award” means an Award granted pursuant to Article IX of this Plan.

4

 

     2.27 “Performance-Based Compensation” means compensation intended to satisfy the
requirements for “performance-based compensation” within the meaning of Section 162(m) of the Code.

     2.28 “Performance Measures” means any one or more of the following, as selected by the
Committee and applied to the Company as a whole or individual units thereof, and measured either
absolutely or relative to a designated group of comparable companies: (i) earnings before interest,
taxes, depreciation, and amortization (“EBITDA”); (ii) appreciation in the Fair Market Value, book
value or other measure of value of the Common Stock; (iii) cash flow; (iv) earnings (including,
without limitation, earnings per share); (v) return on equity; (vi) return on investment; (vii)
total stockholder return; (viii) return on capital; (ix) return on assets or net assets; (x)
revenue; (xi) income (including, without limitation, net income); (xii) operating income
(including, without limitation, net operating income); (xiii) operating profit (including, without
limitation, net operating profit); (xiv) operating margin; (xv) return on operating revenue; and
(xvi) market share.

     2.29 “Performance Period” means the period of time over which criteria relating to a
Performance Award, or other Award containing performance criteria, are measured.

     2.30 “Reference Price” with respect to a SAR means a dollar amount determined by the
Committee at the time of grant.

     2.31 “Restricted Shares” or “Restricted Stock” means Shares of Common Stock
issued pursuant to a Restricted Stock Award which are subject to the restrictions set forth in the
related Award Agreement.

     2.32 “Restricted Stock Award” means an award of a fixed number of Restricted Shares,
or a fixed number of Restricted Stock Units, that is subject to forfeiture provisions and other
conditions set forth in the Award Agreement.

     2.33 “Restricted Stock Units” means notional units, maintained on the books of the
Company, representing Shares of Common Stock that are the subject of a Restricted Stock Award.

     2.34 “Retirement” means an Employee’s or Director’s Separation from Service (in each
case other than by reason of death or Disability or for Cause) on or after (i) attainment of age 65
or (ii) attainment of age 55 with 10 years of employment with, or service on the Board of, the
Company or a Subsidiary.

     2.35 “Separation from Service” or “Separates from Service” has the meaning
ascribed to such term in Section 409A of the Code.

     2.36 “Share” means one share of the Company’s Common Stock.

     2.37 “Short-term Deferral Deadline” means the last day on which a payment or the
delivery of Shares would qualify as a short-term deferral under Treasury

5

 

Regulation § 1.409-1(b)(4). A payment or delivery of Shares that occurs no later of the 15th
day of the third month following the Participant’s first taxable year in which an Award is no
longer subject to a substantial risk of forfeiture (within the meaning of Section 409A of the Code)
or the 15th day of the third month following the end of the Company’s first taxable year in which
an Award is no longer subject to a substantial risk of forfeiture (within the meaning of Section
409A of the Code) generally qualifies as a short-term deferral.

     2.38 “Stock Appreciation Right” or “SAR” means the right to receive, for each
unit of the SAR, an amount of cash, a number of Shares or a combination thereof equal in value to
the excess of the Fair Market Value of one Share on the date of exercise of the SAR over the
Reference Price of the SAR.

     2.39 “Stock Option” or “Option” means the right to purchase Shares of Common
Stock granted pursuant to Article VI of this Plan.

     2.40 “Subsidiary” means, with respect to grants of Awards other than Incentive Stock
Options, any entity directly or indirectly controlled by the Company or any entity, including an
acquired entity, in which the Company has a controlling interest (as defined in Treasury Regulation
§ 1.409A-1(b)(5)(iii)), as determined by the Committee in its sole discretion.

          With respect to grants of Incentive Stock Options, the term “Subsidiary” means any
corporation and any other entity considered a subsidiary as defined in Section 424(f) of the Code.

     2.41 “Term” means the period beginning on the Award Date and ending on the expiration
date of such Award.

     2.42 “Transfer” means alienate, attach, sell, assign, pledge, encumber or otherwise
dispose of; and the terms “Transferred” or “Transferable” have corresponding
meanings.

     2.43 “Unrestricted Stock Award” means an Award granted pursuant to Section 8.3.

     2.44 “Vest,” along with the correlative terms “vested” or “vesting,” means, in the
case of any Award, to become exercisable or become free of restrictions and other conditions,
including those related solely to the passage of time and those involving attainment of performance
or other criteria. The Committee shall determine at the time an Award is granted what level of
performance shall be deemed to have been satisfied in the event that the Award vests in whole or
part pursuant to this Plan prior to the end of any Performance Period specified for the Award.

6

 

ARTICLE III.

ADMINISTRATION

     3.1 The Committee. This Plan shall be administered and interpreted by the Committee.
Any function of the Committee, other than a function necessary to preserve the status of an Award
as Performance-Based Compensation, also may be performed by the Board. Actions of the Committee
may be taken by a majority of its members at a meeting or by the unanimous written consent of all
of its members without a meeting. No action by unanimous written consent shall become effective
prior to the time that the last written consent (which may be provided electronically) has been
received by the Secretary of the Company.

     3.2 Powers of the Committee. Subject to the express provisions of the Plan, the
Committee shall have the power and authority to operate, manage and administer the Plan on behalf
of the Company, which includes, but is not limited to, the power and authority:

     (i) to grant to Eligible Persons one or more Awards consisting of any or a combination
of Stock Options, Restricted Shares, Restricted Stock Units, Unrestricted Stock,
Performance Awards, and Stock Appreciation Rights;

     (ii) to select the Eligible Persons to whom Awards may be granted;

     (iii) to determine the types and combinations of Awards to be granted to Eligible
Persons;

     (iv) to determine the number of Shares or units which may be subject to each Award;

     (v) to determine the terms and conditions, not inconsistent with the terms of the
Plan, of any Award (including, but not limited to, the term, price, exercisability, method
of exercise and payment, any restriction or limitation on transfer, any applicable
performance measures, goals or other criteria, any vesting schedule or acceleration, or any
forfeiture provisions or waiver, regarding any Award) and the related Shares (including,
but not limited to, any holding period for those Shares after grant, exercise or settlement
of the Award), based on such factors as the Committee shall determine; and

     (vi) to modify or waive any restrictions, contingencies or limitations contained in,
and grant extensions to the terms or exercise periods of, or accelerate the vesting of, any
outstanding Awards, as long as such modifications, waivers, extensions or accelerations
would not either cause the Award to be treated as the granting of a new Award or an
extension of the Award under Code Section 409A that is not exempt from, or compliant with,
the requirements of Section 409A or be inconsistent with the terms of the Plan, but no such
changes shall materially impair the rights of any Participant without his or her consent
unless required by law or integrally related to a requirement of law.

7

 

     3.3 Guidelines. The Committee will have the authority and discretion to interpret the
Plan and any Awards granted under the Plan, to establish, amend, and rescind any rules and
regulations relating to the Plan, and to make all other determinations that may be necessary or
advisable for the administration of the Plan. The Committee may correct any defect, supply any
omission or reconcile any inconsistency in the Plan or in any related Award Agreement in the manner
and to the extent it deems necessary to carry the Plan into effect.

     3.4 Delegation of Authority. The Committee may delegate to one or more of the
Company’s Officers or (in the case of ministerial duties only) other employees all or any portion
of the Committee’s authority, powers, responsibilities and administrative duties under the Plan,
with such conditions and limitations as the Committee shall prescribe in writing; provided,
however, that only the Committee is authorized to grant Awards to, or make any decisions with
respect to Awards granted to, Officers and Directors. A record of all actions taken by any Officer
to whom the Committee has delegated a portion of its powers or responsibilities shall be filed with
the minutes of the meetings of the Committee and shall be made available for review by the
Committee upon request.

     3.5 Decisions Final. Any action, decision, interpretation or determination by or at
the direction of the Committee (or of any person acting under a delegation pursuant to Section 3.4)
concerning the application or administration of the Plan or any Award(s) shall be final and binding
upon all persons and need not be uniform with respect to its determination of recipients, amount,
timing, form, terms or provisions of Awards.

     3.6 Award Agreements. Each Award under the Plan shall be evidenced by an Award
Agreement substantially in the form approved by the Committee from time to time.

ARTICLE IV.

SHARES SUBJECT TO PLAN

     4.1 Shares Available for Issuance of Awards. Subject to adjustment as provided in
Section 4.4, the aggregate number of Shares which may be issued under this Plan shall not exceed
100,000 Shares. As determined from time to time by the Committee, the Shares available under this
Plan for grants of Awards may consist either in whole or in part of authorized but unissued Shares
or Shares that have been reacquired by the Company following original issuance. The maximum number
of Shares that may be issued upon the exercise of Incentive Stock Options shall be 100,000. For
purposes of this Section 4.1, Shares shall be counted as provided in Section 4.3.

     4.2 Maximum Awards Per Participant. The number of shares covered by Options, together
with the number of SAR units, granted to any one individual shall not exceed 30,000 during any one
calendar-year period; provided, however, that this limitation shall be 35,000 Shares, together with
SAR units, in the case of an inducement

8

 

Award made at the time of an Employee’s initial hiring. If a previously granted Option or SAR
is forfeited, cancelled or deemed cancelled, such Option or SAR shall continue to be counted
against the maximum number of Shares or units that may be granted to any one Participant during any
one year.

     No more than 18,750 Shares of Common Stock may be issued in payment of Performance Awards
denominated in Shares of Common Stock, and no more than $1,500,000 in cash (or Fair Market Value if
paid in Shares of Common Stock) may be paid pursuant to Performance Awards denominated in dollars,
granted in each case to any one individual during any one calendar-year period that are intended to
be Performance-Based Compensation. If delivery of Shares earned under a Performance Award is
delayed, any additional Shares attributable to dividends paid during such period of delayed
delivery shall be disregarded for purposes of this paragraph.

     4.3 Re-Use of Shares. If any Award granted under this Plan shall expire, terminate or
be forfeited or canceled for any reason before it has vested or been exercised in full, the number
of unissued or undelivered Shares subject to such Award shall again be available for future grants.
The Committee may make such other determinations regarding the counting of Shares issued pursuant
to this Plan as it deems necessary or advisable, provided that such determinations are permitted by
law. Notwithstanding the foregoing, Shares that are tendered to or withheld by the Company as full
or partial payment in connection with any Award under the Plan, as well as any Shares tendered to
or withheld by the Company to satisfy the tax withholding obligations related to any Stock Option
or SAR, shall not be available for subsequent Awards under the Plan. In addition, a SAR settled in
Shares of Common Stock shall be considered settled in full against the number of Shares available
for award.

     4.4 Adjustment Provisions.

          (a) Adjustment for Change in Capitalization. If the Company shall at any time after the
Effective Date change the number of issued Shares without new consideration to the Company (such as
by stock dividend, stock split, reverse stock split, recapitalization, reorganization, exchange of
shares, liquidation, combination or other change in corporate structure affecting the Shares) or
make a distribution to stockholders of cash or property (such as a large nonrecurring cash dividend
or in a spin-off or split-up) which has a substantial impact on the value of outstanding Shares
(collectively, an “Equity Restructuring”), then the numbers of Shares and SAR units
specified in Sections 4.1 and 4.2, the specified or fixed numbers of Shares or SAR units covered by
each outstanding Award, and, if applicable, the Option Price, Reference Price, or performance goals
for each outstanding Award (the “Adjusted Items”) shall be proportionately and equitably
adjusted; provided that (i) adjustments made in the number of Shares with respect to which
Incentive Stock Options may be or have been granted shall be made in accordance with Code Section
424, (ii) adjustments made in the numbers of Shares or SAR units covered by each outstanding Award
shall be made in accordance with Section 409A of the Code, and (iii) fractions of a Share will not
be issued but either will be replaced by a cash payment equal to the Fair Market Value of such
fraction of a Share or will be rounded down to the nearest whole Share, as determined by the
Committee. The

9

 

determination of whether an Equity Restructuring has occurred, and what adjustments are to be
made to Adjusted Items, shall be made by the Committee in good faith in such manner as it deems
necessary or appropriate in order to prevent enlargement or dilution of the rights and benefits (or
potential benefits) intended to be made available under the Plan.

          (b) Other Equitable Adjustments. Notwithstanding any other provision of the Plan, and without
affecting the number of Shares or SAR units reserved or available hereunder, the Committee may
authorize the issuance, continuation or assumption of Awards or provide for equitable adjustments
or changes in the terms of Awards, in connection with any merger, consolidation, sale of assets,
acquisition of property or stock or similar occurrence in which the Company is the continuing or
surviving corporation, upon such terms and conditions as it deems equitable and appropriate;
provided, that adjustments to the numbers and types of Shares or SAR units covered by each
outstanding Award shall be made in accordance with Section 409A of the Code.

ARTICLE V.

EFFECTIVE DATE AND DURATION OF PLAN

     5.1 Effective Date. This Plan shall become effective on the Effective Date.

     5.2 Duration of Plan. No Award shall be granted under this Plan on or after the tenth
anniversary of the Effective Date or after such earlier date on which the Plan is terminated by the
Board pursuant to Article XII.

ARTICLE VI.

STOCK OPTIONS

     6.1 Grants. Stock Options may be granted alone or in addition to other Awards granted
under this Plan. Each Option granted shall be designated as either a Non-Qualified Stock Option or
an Incentive Stock Option. One or more Stock Options may be granted to any Eligible Person, except
that Incentive Stock Options may only be granted to Employees.

     6.2 Terms of Options. Except as otherwise required by Section 6.3, Options granted
under this Plan shall be subject to the following terms and conditions and shall be in such form
and contain such additional terms and conditions, not inconsistent with the terms of this Plan, as
the Committee shall deem desirable:

          (a) Exercise Price. The Exercise Price per share of Common Stock purchasable under a Stock
Option shall be determined by the Committee at the time of

10

 

grant, except that in no event shall the Exercise Price be less than 100% of Fair Market Value
on the Award Date.

          (b) Option Term. The Term of each Stock Option shall be fixed by the Committee, but no Stock
Option shall be exercisable more than ten (10) years after its Award Date.

          (c) Exercisability. A Stock Option shall be exercisable at such time or times and subject to
such terms and conditions as shall be specified in the Award Agreement; provided, however, that an
Option may not be exercised as to less than one hundred (100) Shares at any time unless the number
of Shares for which the Option is exercised is the total number available for exercise at that time
under the terms of the Option. To the extent exercisable, a Stock Option may be exercised in whole
or in part at any time during its Term by giving written notice of exercise to the Company
specifying the number of Shares to be purchased, accompanied by payment in full of the Exercise
Price for the Shares being purchased.

          (d) Consideration. The Exercise Price for Shares acquired pursuant to an Option shall be
paid, to the extent then permitted by applicable statutes and regulations and as determined by the
Committee in its sole discretion, by any combination of the methods of payment set forth below.
The Committee may at any time grant Options that do not permit all of the following methods of
payment (or otherwise restrict the ability to use certain methods), or grant Options that require
the consent of the Company to utilize a particular method of payment, and may, in each case, impose
any such limitation or requirement on one or more specified Participants notwithstanding that other
Participants are not so constrained. The methods of payment permitted by this Section 6(d) are:

               (i) cash, check, bank draft or money order payable to the Company;

               (ii) delivery of a properly executed notice of exercise together with irrevocable
instructions to a broker providing for the assignment to the Company of the proceeds of a
sale or loan with respect to some or all of the Shares being acquired upon the exercise of
an Option (including, without limitation, through an exercise procedure complying with the
provisions of Regulation T as promulgated from time to time by the Board of Governors of
the Federal Reserve System);

               (iii) tender to the Company (either by actual delivery or attestation to the
ownership) of Shares of Common Stock owned by the Participant and having a Fair Market
Value of not less than the Exercise Price;

               (iv) a “net exercise” arrangement pursuant to which the Company reduces the number of
Shares issued upon exercise by the largest whole number of Shares with a Fair Market Value
that does not exceed the aggregate exercise price and accepts a cash or other payment from
the Participant to satisfy

11

 

any remaining fractional share amount; provided, that the number of Shares available
for future exercise under an Option shall be reduced by the numbers of Shares (A) used to
pay the exercise price pursuant to the “net exercise,” (B) delivered to the Participant as
a result of such exercise and (C) if any, withheld to satisfy tax withholding obligations;
or

               (v) any other form of legal consideration that may be acceptable to the Committee.

          (e) Non-Transferability. Stock Options shall be Transferable only to the extent provided in
Section 13.3 of this Plan.

          (f) Termination. Except as provided in Article XI, Stock Options shall terminate in
accordance with Article X of this Plan.

          (g) No Right to Defer. In no event shall a Stock Option awarded under this Plan include any
feature for the deferral of compensation other than the deferral of recognition of income until the
later of exercise or disposition of the Stock Option under Treas. Reg. § 1.83-7, or the time the
Shares acquired pursuant to the exercise of the Stock Option first become substantially vested (as
defined in Treas. Reg. § 1.83-3(b)).

          (h) Fixed Number of Shares. The number of Shares subject to a Stock Option shall be fixed on
the Award Date.

     6.3 Incentive Stock Options. Incentive Stock Options shall be subject to the
following terms and conditions:

          (a) Award Agreement. Any Award Agreement relating to an Incentive Stock Option shall contain
such terms and conditions as are required for the Option to be an “incentive stock option” as that
term is defined in Section 422 of the Code.

          (b) Ten Percent Shareholder. An Incentive Stock Option granted to any person who, at the time
of the Award, owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the
Code) Shares possessing more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company and its Subsidiaries shall have (i) an Option Price at least equal
to 110% of the Fair Market Value of a Share on the Award Date and (ii) a Term expiring no later
than five (5) years from the Award Date.

          (c) $100,000 per year Limitation. To the extent that the aggregate Fair Market Value
(determined as of the Award Date) of the Shares with respect to which Incentive Stock Options first
become exercisable by a person during any calendar year (under all plans of the Company and its
Subsidiaries) exceeds $100,000, the excess portion of such options shall be treated as
Non-Qualified Stock Options.

12

 

          (d) Qualification under the Code. Notwithstanding anything in this Plan to the contrary, no
term of this Plan relating to Incentive Stock Options shall be interpreted, amended or altered, nor
shall any discretion or authority granted under this Plan be exercised, so as to disqualify this
Plan under Article 422 of the Code, or, without the consent of an affected Participant, to
disqualify any Incentive Stock Option under Section 422 of the Code, except as may result pursuant
to the provisions of Article XI.

          (e) Notification of Disqualifying Disposition. Each Award Agreement with respect to an
Incentive Stock Option shall require the Participant to notify the Company of any disposition of
Shares of Common Stock issued pursuant to the exercise of such Option under the circumstances
described in Section 421(b) of the Code (relating to certain disqualifying dispositions), within
ten (10) days of such disposition.

ARTICLE VII.

STOCK APPRECIATION RIGHTS

     7.1 Stock Appreciation Rights. The Committee may, in its discretion, grant Stock
Appreciation Rights to any Eligible Person. Any SAR granted shall be for a specified number of
units and have such terms and conditions, not inconsistent with this Plan, as are established by
the Committee in connection with the Award.

     7.2 Terms and Conditions of Stock Appreciation Rights. SARs granted pursuant to this
Article VII shall be subject to the following terms and conditions:

          (a) Reference Price. The Reference Price per Share unit subject to a SAR shall be determined
by the Committee at the time of grant, except that in no event shall the Reference Price be less
than 100% of Fair Market Value on the Award Date.

          (b) Term. The Term of each SAR shall be fixed by the Committee, but no SAR shall be
exercisable more than ten (10) years after its Award Date.

          (c) Exercise. A SAR shall be exercisable at such time or times and subject to such terms and
conditions as shall be specified in the Award Agreement.

          (d) Distribution. The Committee shall determine in its sole discretion, at or after the Award
Date, whether Shares, cash or a combination thereof shall be delivered to the holder upon exercise
of a SAR. Shares so delivered shall be valued at their Fair Market Value on the date of the SAR’s
exercise.

          (e) Non-Transferability. SARs shall be Transferable only to the extent provided in Section
13.3 of this Plan.

          (f) Termination. Except as provided in Article XI, SARs shall terminate in accordance with
Article X of this Plan.

13

 

          (g) No Right to Defer. In no event shall a SAR awarded under this Plan include any feature
for the deferral of compensation other than the deferral of recognition of income until the
exercise of the SAR.

          (h) Fixed Number of Shares. The number of Shares subject to a SAR shall be fixed on the Award
Date.

ARTICLE VIII.

RESTRICTED AND UNRESTRICTED STOCK AWARDS

     8.1 Grants of Restricted Stock Awards. The Committee may, in its discretion, grant
one or more Awards of Restricted Shares or Restricted Stock Units to any Eligible Person. Each
Restricted Stock Award shall specify the number of Shares to be issued to the Participant, the date
of such issuance, the price, if any, to be paid for such Shares by the Participant and the
restrictions imposed on such Shares. Each Restricted Stock Award shall be subject to one or more
conditions determined by the Committee that would cause the Award to be treated as subject to a
substantial risk of forfeiture (within the meaning of Section 83 or Section 409A of the Code),
including but not limited to conditions relating to the attainment of specified performance goals,
continued employment or such other limitations or restrictions as the Committee may determine.

     8.2 Terms and Conditions of Restricted Stock Awards. Restricted Stock Awards shall be
subject to the following provisions:

          (a) Issuance of Shares. Restricted Shares shall be issued immediately upon grant, except that
Restricted Shares payable in settlement of an Award of Restricted Stock Units may be issued upon
vesting of such Award. Upon vesting of an Award of Restricted Stock Units, unrestricted Shares or
Restricted Shares shall be issued in accordance with the provisions of the Award Agreement, but in
no event will unrestricted Shares be delivered later than the Short-term Deferral Deadline;
provided that a Participant may defer delivery of unrestricted Shares or Restricted Shares payable
in settlement of an Award of Restricted Stock Units to a date or dates after the Restricted Stock
Award is no longer subject to a substantial risk of forfeiture (within the meaning of Section 409A
of the Code) if the terms of the Restricted Stock Award and any deferral election comply with the
requirements of Section 409A of the Code.

          (b) Stock Powers and Custody. With respect to Restricted Shares that are issued immediately
upon grant or in settlement of an Award of Restricted Stock Units, the Committee may require the
Participant to deliver a duly signed stock power, endorsed in blank, relating to the Restricted
Shares covered by the Award and may impose other appropriate transfer restrictions on those Shares.
The Committee may also require that the stock certificates evidencing such Shares be held in
custody by the Company until the restrictions on them shall have lapsed.

14

 

          (c) Stockholder Rights. Unless otherwise determined by the Committee at the time of grant,
Participants issued Restricted Shares shall be entitled to dividend and voting rights in respect of
those Shares. No voting or dividend equivalent rights shall apply in respect of any Restricted
Stock Units that are awarded.

          (d) Non-Transferability. Until they are vested, Restricted Stock Awards shall not be
Transferable except in accordance with the provisions of Section 13.2 of this Plan.

          (e) Termination. Restricted Stock Awards shall terminate in accordance with Article X of this
Plan.

     8.3 Unrestricted Stock Awards. The Committee may make Awards of unrestricted Common
Stock to (i) Employees in full or partial payment of annual bonus awards or in recognition of
outstanding achievements or contributions or (ii) Directors for service on the Board. Unrestricted
Shares issued under this Section 8.3 may be issued for no cash consideration. In the event an
Unrestricted Stock Award is granted, the Shares subject to such Award shall be issued immediately
upon (or as promptly as is administratively practicable after) grant; provided that a Participant
may defer delivery of the Shares subject to an Unrestricted Stock Award to a later date or dates if
the terms of the Unrestricted Stock Award and any deferral election comply with the requirements of
Section 409A of the Code.

ARTICLE IX.

PERFORMANCE AWARDS

     9.1 Performance Awards. The Committee may, in its discretion, grant Performance
Awards to Eligible Persons in accordance with the following terms and conditions:

          (a) Grant. A Performance Award shall consist of the right to receive, at the end of a
specified Performance Period, either (i) Shares, cash of an equivalent value or a combination of
the two or (ii) a fixed-dollar amount payable in cash, Shares or a combination of the two. The
Committee shall determine the Eligible Persons to whom and the time or times at which Performance
Awards shall be granted, the number of Shares or the amount of cash to be awarded to any person,
the duration of the Performance Period, the conditions under which a Participant’s Performance
Award will vest, and the other terms and conditions of the Performance Award in addition to those
set forth in Section 9.2.

          (b) Performance Criteria and Performance-Based Compensation. At the time of grant, the
Committee shall designate any Performance Award granted to a Participant that is intended to be
Performance-Based Compensation. Any Performance Award designated as intended to be
Performance-Based Compensation shall be

15

 

conditioned on the achievement of one or more objective performance goals, based on one or
more Performance Measures, to the extent required by Code Section 162(m). Any Performance Award
under this Section 9.1 not designated as intended to be Performance-Based Compensation may be
conditioned on such performance goals, factors, or criteria as the Committee shall determine. Each
Performance Award shall be subject to one or more conditions determined by the Committee that would
cause the Award to be treated as subject to a substantial risk of forfeiture (within the meaning of
Section 409A of the Code).

          (c) Other Criteria. The Committee, in its discretion, may provide that, despite the
achievement of the objective performance goals required for receipt of a specified level of payment
or distribution of a Performance Award, the amount of the payment or distribution will be subject
to reduction unless other goals or criteria also are satisfied.

          (d) Attainment of Performance Goals. Subject to Section 9.2(d), a Participant otherwise
entitled to receive a Performance Award, or portion thereof, that is intended to be
Performance-Based Compensation for any Performance Period shall not receive a settlement of the
award or portion until the Committee has determined that the applicable performance goal(s) have
been attained. To the extent that the Committee exercises discretion in making the determination
required by this Section 9.1(d), such exercise of discretion may not result in an increase in the
amount of the award.

          If a Participant is promoted, demoted or transferred to a different business unit of the
Company or a Subsidiary during a Performance Period, then, to the extent the Committee determines
appropriate, the Committee may adjust, change or eliminate the performance goals or the applicable
Performance Period as it deems appropriate in order to make them appropriate and comparable to the
initial performance goals or Performance Period.

     9.2 Terms and Conditions of Performance Awards. Performance Awards granted pursuant
to this Article IX shall be subject to the following terms and conditions:

          (a) Shareholder Rights. A Participant receiving a Performance Award shall not be entitled to
dividend or voting rights in respect of the Shares covered by the Performance Award until the Award
has vested in whole or part and any Shares earned have been issued.

          (b) Payment. Subject to the provisions of the Award Agreement and this Plan (including
Sections 9.1(c) and (d), if applicable), at the expiration of the Performance Period, share
certificates, cash or both (as the Committee may determine) shall be delivered to the Participant,
or his or her legal representative or guardian, in a number or an amount equal to the vested
portion of the Performance Award; provided that, to the extent that distribution is made in Shares,
the Shares shall be subject to any restrictions that may have been specified by the Committee at
the time of grant. In no event shall the shares certificates, cash or both be delivered later than
the Short-term Deferral Deadline. Notwithstanding the foregoing, a Participant may defer payment

16

 

under a Performance Award to a date or dates after the Performance Award is no longer subject
to a substantial risk of forfeiture if the terms of the Performance Award and any deferral election
comply with the requirements of Section 409A of the Code.

          (c) Non-Transferability. Performance Awards shall not be Transferable except in accordance
with the provisions of Section 13.3 of this Plan.

          (d) Termination. Performance Awards shall terminate in accordance with Article X of this
Plan.

ARTICLE X.

TERMINATION OF AWARDS

     10.1 Termination of Awards to Employees and Directors. Subject to the provisions of
Section 10.3, all Awards issued to Employees and Directors under this Plan shall terminate as
follows:

          (a) Termination by Reason of Death, Disability or Retirement. Unless otherwise determined by
the Committee at the time of grant, if such a Participant Separates from Service by reason of his
or her death, Disability or Retirement, (i) all of the Participant’s Restricted Stock Awards and
Performance Awards that are not fully (100%) vested and any unexercisable Stock Options and SARs
will terminate immediately and (ii) any then-exercisable Stock Options and SARs may thereafter be
exercised by the Participant or by the Participant’s beneficiary or legal representative for a
period of one (1) year after the date of such Separation from Service or until the expiration of
the stated term of the Award, whichever period is shorter.

          (b) Termination for Cause and Similar Events. If (1) such a Participant Separates from
Service for Cause, or (2) after separation for any other reason, the Committee determines in its
discretion either (A) that, while employed, the Participant had engaged in an act which would have
warranted Separation from Service for Cause or (B) that, after separation, the Participant has
engaged in conduct that violates any continuing obligation or duty of the Participant in respect of
the Company or any Subsidiary (including, but not limited to, disclosing or misusing any
confidential information or material concerning the Company or a Subsidiary), the Participant shall
forfeit all of his or her rights to any outstanding Awards that have not been exercised or that
remain subject to any restrictions or performance or other conditions, and all of such unexercised
or restricted Awards shall terminate upon the earlier to occur of the date of Separation from
Service or the date of the Committee determination.

          (c) Other Termination. Unless otherwise determined by the Committee at the time of grant, if
such a Participant Separates from Service for any reason other than death, Disability, Retirement
or Cause, any portions of the Participant’s Restricted Stock Awards and Performance Awards that are
not vested and any

17

 

unexercisable Stock Options and SARs will terminate immediately and any then-exercisable Stock
Options and SARs will terminate on the earlier to occur of the stated expiration date of the Awards
or the day three (3) months after such Separation from Service (except that, if the Participant
dies within three months following Separation from Service, such Stock Options and SARs may be
exercised for one (1) year after the date of death).

          (d) Extension if Participant Subject to Section 16(b). Notwithstanding the foregoing, if a
sale within the applicable time periods set forth in Section 10.1(a) or (c) of Shares acquired upon
the exercise of a Stock Option would subject the Participant to suit under Section 16(b) of the
Exchange Act, the Option shall remain exercisable until the earliest to occur of (i) the tenth
(10th) day following the date on which a sale of such Shares by the Participant would no
longer be subject to such suit, (ii) the one hundred and ninetieth (190th) day after the
Participant’s Separation from Service, or (iii) the stated expiration date of the Option.

     10.2 Termination of Awards to Advisors. An Award granted to an Advisor shall
terminate as provided in the Award Agreement.

     10.3 Acceleration of Vesting Upon Termination. Upon a Participant’s Separation from
Service, excluding, however, any Participant who has been terminated for Cause, the Committee may,
in its sole discretion, accelerate the vesting of, or otherwise cause to be exercisable or free of
restrictions, all or part of any Award held by the Participant so that such Award will be fully or
partially exercisable as of the date of Separation from Service or such other date as the Committee
may choose; provided, however, that such acceleration or waiver of restrictions shall not cause the
Award to be treated as the granting of a new Award or an extension of the Award under Section 409A
of the Code that is not exempt from, or compliant with, the requirements of Section 409A.

ARTICLE XI.

CHANGE IN CONTROL; MERGER, CONSOLIDATION, ETC.

     11.1 Separation from Service After Change of Control. If within three (3) months
after a Change of Control (or such longer period as is determined by the Committee at or after
grant or is otherwise specified in an agreement between the Participant and the Company) an
Employee Separates from Service as a result of the termination of such relationship by an express
action of the Company or a Subsidiary for any reason other than Cause, or a Director Separates from
Service on the Board for any reason other than death, Disability, Retirement or Cause, all of the
outstanding Awards held by that Participant on the date of Separation from Service shall become
fully (100%) vested, regardless of any remaining Performance Periods or other performance criteria
that otherwise would be applicable. In that event, (i) all Stock Options and SARs held by the
Participant on the date of Separation from Service shall be exercisable for a period ending on the
earlier to occur of the first anniversary of the date of separation or the respective stated
expiration dates of the Stock Options and SARs, (ii) all Restricted

18

 

Shares not previously delivered to the Participant shall be delivered immediately, free of
restrictions (other than any imposed by law), but in no event later than the Short-term Deferral
Deadline, and (iii) all Restricted Stock Units and Performance Awards shall be paid in full within
30 days following the date of the Participant’s Separation from Service, but in no event later than
such Short-term Deferral Deadline.

     11.2 Merger, Consolidation, Etc. If the Company, pursuant to action by its Board of
Directors, proposes to (1) merge into, consolidate with or sell or otherwise dispose of all or
substantially all of its assets to another corporation or other entity and provision is not made
pursuant to the terms of the transaction for the assumption by the surviving, resulting or
acquiring corporation of outstanding Awards under the Plan, or the substitution of new Awards
therefore, or (2) dissolve or liquidate, then (A) the Committee shall cause written notice of the
proposed transaction to be given to each Participant not less than 30 days prior to the anticipated
date on which such proposed transaction is to be consummated, and (B) all outstanding Awards that
are not so assumed or substituted for shall become fully (100%) vested (regardless of any remaining
Performance Periods or other performance criteria that otherwise would be applicable) immediately
prior, but subject, to actual consummation of the transaction. Prior to a date specified in the
notice, which shall not be more than 3 days prior to the consummation of the transaction, each
Participant shall have the right to exercise all Stock Options and SARs held by such Participant
that are not so assumed or substituted for on the following basis: (i) the exercise shall be
conditioned on consummation of the transaction, (ii) the exercise shall be effective immediately
prior to the consummation of the transaction, and (iii) the Option Price for any such Stock Options
shall not be required to be paid until 3 days after written notice by the Company to the
Participant that the transaction has been consummated. If the transaction is consummated, each
Stock Option and SAR, to the extent not previously exercised prior to the date specified in the
foregoing notice of proposed transaction, shall terminate upon the consummation of the transaction
and all Awards that remain deliverable or payable shall be delivered or paid in full within 30 days
following the date of consummation of the transaction. If the transaction is abandoned, (a) any
and all conditional exercises of Stock Options and SARs in accordance with this Section 11.2 shall
be deemed annulled and of no force or effect and (b) to the extent that any Award shall have vested
solely by operation of this Section 11.2, such vesting shall be deemed annulled and of no force or
effect and the vesting provisions of the Award shall be reinstated.

     11.3 Applicability of Article XI. The provisions of this Article XI shall apply to
all Awards granted under the Plan, unless and to the extent that the Committee expressly provides
otherwise in the terms of an Award at the time it is granted; provided that nothing in this Article
XI shall preclude the Committee or the Board from providing, at any time, for the “cash out” of
Awards in connection with a Change of Control or with any of the events specified in clauses (1)
and (2) of Section 11.2.

19

 

ARTICLE XII.

TERMINATION OR AMENDMENT OF THIS PLAN

     12.1 Termination or Amendment. The Board may at any time, amend, in whole or in part,
any or all of the provisions of this Plan, or suspend or terminate it entirely; provided, however,
that, unless otherwise required by law or integrally related to a requirement of law, the rights of
a Participant with respect to any Awards granted prior to such amendment, suspension or termination
may not be materially impaired without the consent of such Participant. In addition, no amendment
may be made without first obtaining shareholder approval if such approval is required under any
applicable law, regulation or rule, including the rules of any stock exchange on which the Common
Stock is listed. Notwithstanding anything in this Plan or in any Award Agreement to the contrary,
the Board or the Committee (as applicable) may, in its sole and absolute discretion and without the
consent of any Participant, amend the Plan or any Award, to take effect retroactively or otherwise,
as it deems necessary or advisable for the purpose of conforming the Plan or Award to any present
or future law, regulation or rule applicable to the Plan, including, but not limited to, Section
409A of the Code and all applicable guidance promulgated thereunder.

ARTICLE XIII.

GENERAL PROVISIONS

     13.1 No Right to Continued Employment. The adoption of this Plan and the granting of
Awards hereunder shall not confer upon any Employee the right to continued employment nor shall it
interfere in any way with the right of the Company or any Subsidiary to terminate the employment of
any Employee at any time.

     13.2 Awards to Persons Outside the United States. To the extent necessary or
appropriate to comply with foreign law or practice, the Committee may, without amending this Plan:
(i) establish special rules applicable to Awards granted to Eligible Persons who are either or both
foreign nationals or employed outside the United States, including rules that differ from those set
forth in this Plan, and (ii) grant Awards to such Eligible Persons in accordance with those rules;
provided that such special rules and provisions of the Award Agreements evidencing such Awards do
not cause the Plan or such Awards to be considered to be compensatory arrangements subject to the
requirements of Section 409A of the Code in violation of the exemption for foreign arrangements
contained in any guidance issued thereunder.

     13.3 Non-Transferability of Awards. Except as provided in the following sentence, no
Award or benefit payable under this Plan shall be Transferable by the Participant during his or her
lifetime, nor shall it be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of a Participant or the
Participant’s beneficiary, except transfer by will or by

20

 

the laws of descent and distribution; and no Award shall be exercisable by anyone other than
the Participant or the Participant’s guardian or legal representative during such Participant’s
lifetime. The Committee may in its sole discretion, at the time of grant, permit a Participant to
transfer a Non-Qualified Stock Option, SAR, Restricted Stock Award or Performance Award for no
consideration to a member of, or for the benefit of, the Participant’s Immediate Family (including,
without limitation, to a trust in which members of the Immediate Family have more than a 50%
beneficial interest, to a partnership or limited liability company for one or more members of the
Immediate Family, or to a foundation in which members of the Immediate Family hold more than 50% of
the voting interests), subject to such limits as the Committee may establish and so long as the
transferee remains subject to all the terms and conditions applicable to such Award. The following
shall be considered transfers for no consideration: (i) a transfer under a domestic relations order
in settlement of marital property rights, and (ii) a transfer to an entity in which more than 50%
of the voting interests are owned by the Participant or members of the Participant’s Immediate
Family, in exchange for an interest in that entity.

     13.4 Limitations on Repricing, Exchange and Repurchase of Awards. Notwithstanding any
other provisions of this Plan, without shareholder approval and the consent of each affected
Participant, this Plan does not permit (i) any decrease in the Exercise Price, Reference Price or
other purchase price of an Award or any other decrease in the pricing of an outstanding Award, (ii)
the issuance of any substitute Option or SAR with a lower Exercise Price or Reference Price than an
existing Option or SAR which is forfeited or cancelled in exchange for the substitute Option or
SAR, or (iii) the repurchase by the Company of any Option or SAR with an Exercise Price or
Reference Price above Fair Market Value at the time of such repurchase. Additionally, in no event
shall any offer to reprice, exchange or repurchase an Award cause the original Award, the newly
granted Award or the consideration to be paid upon repurchase to be treated as the granting of a
new Award or an extension of the Award under Section 409A of the Code that is not exempt from, or
compliant with, the requirements of Section 409A.

     13.5 Other Plans. In no event shall the value of, or income arising from, any Awards
issued under this Plan be treated as compensation for purposes of any pension, profit sharing, life
insurance, disability or other retirement or welfare benefit plan now maintained or hereafter
adopted by the Company or any Subsidiary, unless such plan specifically provides to the contrary.

     13.6 Unfunded Plan. For purposes of the Employee Retirement Income Security Act of
1974, this Plan is intended to constitute an unfunded plan of incentive compensation, and it is not
intended to provide retirement income, to result in a deferral of income for periods extending to
the termination of employment or beyond, or to provide welfare benefits. This Plan shall be
unfunded and shall not create (or be construed to create) a trust or a separate fund or funds.
This Plan shall not establish any fiduciary relationship between the Company or any of its
Subsidiaries and any Participant or any other person. To the extent any person holds any rights by
virtue of an Award granted under this Plan, such rights shall be no greater than the rights of an
unsecured general creditor of the Company.

21

 

     13.7 Withholding of Taxes. The Company shall have the right to deduct from any
payment to be made pursuant to this Plan, or to otherwise require, prior to the issuance or
delivery of any Shares or the payment of any cash to a Participant, payment by the Participant of
any Federal, state, local or foreign taxes which the Company reasonably believes are required by
law to be withheld. The Committee may permit all or a portion of any such withholding obligation
(not exceeding the minimum amount required to be so withheld) to be satisfied by reducing the
number of Shares otherwise deliverable or by accepting the delivery of Shares previously owned by
the Participant, which Shares shall be valued at the Fair Market Value of the Common Stock on the
date on which the amount of tax to be withheld is determined. Any fraction of a Share required to
satisfy such tax obligations shall be disregarded and the amount due shall be paid instead in cash
by the Participant. The Company or a Subsidiary may also withhold from any future earnings of
salary, bonus or any other payment due to the Participant the amount necessary to satisfy any
outstanding tax withholding obligations related to the grant or exercise of any Award granted
pursuant to this Plan.

     13.8 Right of Recapture. If at any time within one year after the date on which a
Participant exercises an Option or SAR, or on which Restricted Stock vests, or on which a
Performance Award is paid to a Participant, or on which income otherwise is realized by a
Participant in connection with an Award (each of which events shall be a “Realization
Event”), (a) a Participant Separates from Service for Cause or (b) after separation for any
other reason, the Committee determines in its discretion either (1) that, while employed, the
Participant had engaged in an act which would have warranted Separation from Service for Cause or
(2) that, after separation, the Participant has engaged in conduct that violates any continuing
obligation or duty of the Participant in respect of the Company or any Subsidiary (including, but
not limited to, disclosing or misusing any confidential information or material concerning the
Company or a Subsidiary), then any gain realized by the Participant from the Realization Event
shall be paid by the Participant to the Company upon notice from the Company. Such gain shall be
determined as of the date of the Realization Event, without regard to any subsequent change in the
Fair Market Value of a share of Common Stock. The Company or a Subsidiary shall have the right to
offset such gain against any amounts otherwise owed to the Participant by the Company or a
Subsidiary (whether as wages, vacation pay, or pursuant to any benefit plan or other compensatory
arrangement).

     13.9 Governing Law. This Plan and all actions taken in connection with it shall be
governed by the laws of the State of Ohio, without regard to the principles of conflict of laws.

     13.10 Liability. No employee of the Company or a Subsidiary nor member of the
Committee or the Board shall be liable for any action or determination taken or made in good faith
with respect to the Plan or any Award granted hereunder and, to the fullest extent permitted by
law, all employees and members of the Committee and the Board shall be indemnified by the Company
and its Subsidiaries for any liability and expenses which they may incur through any claim or cause
of action arising under or in connection with this Plan or any Awards granted under this Plan.

22

 

     13.11 Successors. All obligations of the Company under this Plan shall be binding
upon and inure to the benefit of any successor to the Company, whether the existence of such
successor is the result of a direct or indirect purchase, merger, consolidation or otherwise, of
all or substantially all of the business, stock and/or assets of the Company.

     13.12 Transactions Involving Common Stock. Under no circumstances shall the Shares
issued under this Plan include or be subject to a permanent mandatory repurchase obligation (other
than a right of first refusal) or put or call right if the Share price under such right or
obligation is based on a purchase price other than a purchase price equal to the Fair Market Value
of such Shares.

     13.13 Compliance with Securities Law. The grant of Awards and the issuance of Shares
pursuant to any Award shall be subject to compliance with all applicable requirements of federal,
state and foreign law with respect to such securities and the requirements of any stock exchange on
which the Common Stock is listed. In addition, no Award may be exercised or Shares issued pursuant
to an Award unless (a) a registration statement under the Securities Act of 1933 shall at the time
of such exercise or issuance be in effect with respect to the Shares issuable pursuant to the Award
or (b) in the opinion of legal counsel to the Company, such Shares may be issued in accordance with
the terms of an applicable exemption from the registration requirements of the Securities Act. The
inability of the Company to obtain from any regulatory body having jurisdiction the authority, if
any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any
Shares under this Plan shall relieve the Company of any liability in respect of the failure to
issue or sell the Shares as to which requisite authority has not been obtained. As a condition to
issuance of any Shares, the Company may require the Participant to satisfy any qualifications that
may be necessary or appropriate, to evidence compliance with any applicable law or regulation and
to make any representation or warranty with respect thereto as may be requested by the Company.

     13.14 Required Delay in Payment to a Specified Employee Pursuant to a Separation from
Service. Notwithstanding anything herein or in an Award Agreement to the contrary, in the case
of any Participant who is a specified employee (as defined in Section 409A of the Code) as of the
date of his or her Separation from Service, no payment (including the delivery of Shares) of an
Award that is subject to Section 409A shall be made under this Plan on account of such Separation
from Service before the date that is six months after the date of such separation (or, if earlier
than the end of the six-month period, the date of death of the Participant). Any payments
(including the delivery of Shares) of an Award that is subject to Section 409A of the Code to which
a Participant who is a specified employee would otherwise be entitled during the first six months
following the date of Separation from Service shall be accumulated and paid on the first day of the
seventh month following the date of Separation from Service. Notwithstanding the foregoing, this
Section shall not apply to a payment made under a domestic relations order or for the payment of
employment taxes.

     13.15 Exemption from, or Compliance with, Section 409A. For federal income tax purposes,
the Plan and the Awards granted hereunder are intended to be either

23

 

exempt from, or compliant with, Section 409A of the Code. This Plan and all Awards granted
hereunder shall be interpreted, operated and administered in a manner consistent with these
intentions.

24EX-10.18

Exhibit 10.18

January 8, 2009

Mr. Steve Ratterman

Chief Financial Officer

The O’Gara Group, Inc.

7870 East Kemper Road

Suite 460

Cincinnati, Ohio 45249

			
	RE:	 	Proposed $35,000,000 in Senior Secured Credit Facilities

Dear Steve:

It is our understanding that The O’Gara Group, Inc. (the “Company” or the “Borrower”) proposes to
undertake the Transaction described in the Summary of Terms and Conditions (the “Summary”) attached
hereto and has requested that PNC Bank, National Association (“PNC Bank”), provide a portion of the
$35,000,000 in senior secured credit facilities consisting of (i) a revolving credit facility in an
amount not to exceed $25,000,000 and (ii) a term loan facility of up to $10,000,000 (the “Credit
Facilities”) and PNC Capital Markets LLC (“PNC Capital Markets” or the “Arranger”) arrange and
syndicate the Credit Facilities (the “Financing”) for the proposed Transaction.

We are pleased to inform you of (i) PNC Bank’s commitment to provide $30,000,000 and (ii) First
Commonwealth Bank’s (“First Commonwealth” and together with PNC Bank, the “Banks”) commitment to
provide $5,000,000 of the Financing described in the attached Summary, subject to the terms and
conditions referred to in this letter and the Summary. In addition, PNC Capital Markets is pleased
to inform you of its agreement to act as the lead arranger and bookrunner, and PNC Bank is pleased
to inform you of its agreement to act as the Administrative Agent (the “Administrative Agent”) for
the Financing, in each case subject to the terms and conditions referred to in this letter, the
Summary and the Fee Letter (dated as of this date (the “Fee Letter”). This Commitment Letter (as
defined below), Fee Letter and Summary are being provided in replacement of that certain commitment
letter, fee letter and summary dated October 24, 2008, which superseded that certain commitment
letter, fee letter and summary dated August 21, 2008.

The Summary includes a description of the principal terms of the proposed credit facilities
connected with the Financing, and is intended as a framework for the documentation and as a basis
for further discussion of the Financing’s terms, as appropriate. The Financing will be documented
in a definitive credit agreement (the “Credit Agreement”) reasonably satisfactory to all parties
hereto and other agreements, instruments, certificates, and documents called for by the Credit
Agreement or which the Arranger or the Banks may otherwise require (collectively, the “Credit
Documents”), to be delivered at the closing of
the Financing (the “Closing”). The Credit Documents shall prevail over the terms of this letter;
provided, however, that the provisions of this letter regarding syndication of the Financing shall
survive the execution and delivery of the Credit Documents.

 

 

The Banks’ obligations are conditioned on the execution and delivery of the Credit Documents in
form and content reasonably satisfactory to the Company, the Arranger and PNC Bank. Because not
all of the terms can be set forth in the Summary, a failure by PNC Bank or the Company to agree on
the definitive terms of the Credit Documents will not constitute a breach of this commitment. The
obligations of the Arranger and the Banks pursuant to this letter are also subject to acceptance by
the Company as provided below and the statutory and other regulatory requirements under which PNC
Bank and the Arranger are governed.

In addition to the terms and conditions set forth in the Summary, the Banks’ commitments to provide
the proposed Financing are further subject to: (i) PNC Bank’s satisfaction with the organization
and legal structure, significant contracts, and tax, labor, environmental, ERISA, and other matters
relating to the Company and its subsidiaries, both before and after consummation of the
Transaction; (ii) there being no material adverse change in the condition (financial or otherwise),
business, operations, properties or prospects of the Company and its subsidiaries or of the Pending
Acquisitions (as defined in the Summary) since December 31, 2007; (iii) the accuracy and
completeness of all representations made by or on behalf of the Company to the lenders and all
information furnished by or on behalf of the Company to the lenders (including the Arranger and
Administrative Agent); and (iv) the Company’s compliance with the terms of this Commitment Letter,
including, without limitation, the payment in full of all reasonable fees, expenses and other
amounts payable under this Commitment Letter. To assist in due diligence, the Company agrees that
the Arranger or Administrative Agent may, in their discretion, request further due diligence items
from the Company and retain experts or consultants in connection with the Financing.

PNC Capital Markets will manage all aspects of the syndication of the Financing in consultation
with the Company, including the timing of all offers to potential lenders, the determination of the
amounts offered to potential lenders, the acceptance of engagements of the lenders and the
compensation to be provided to the lenders.

The Company shall take all action as the Arranger may reasonably request to assist the Arranger in
forming a syndicate acceptable to it and the Company. The Company’s assistance in forming such a
syndicate shall include, but not be limited to, (i) making senior management and representatives of
the Company available to participate in information meetings with potential lenders at such times
and places as the Arranger may reasonably request; (ii) using its best efforts to ensure that the
syndication efforts benefit from the Company’s lending relationships; and (iii) providing the
Arranger with all information reasonably requested by them to successfully complete the
syndication.

PNC Bank shall act as the Administrative Agent for the Financing and PNC Capital Markets shall act
as sole lead arranger and bookrunner. No additional agents, co-agents, arrangers or bookrunners
will be appointed, or other titles conferred, without the consent of PNC Capital Markets.

This letter is issued in reliance on the information provided to the Administrative Agent and the
Arranger by the Company in connection with the Company’s request for the Financing and the
information in any supporting document or material. The Company represents and warrants that (i)
all written information (other than financial projections referred to in clause (ii) below) that it
has made or will hereafter make available to the Administrative Agent or the Arranger or any
potential lender by or on behalf of the Company in connection with the Financing and other
transactions contemplated hereby is and will, on the date so provided, be complete and correct in
all material respects and does not and will not, on the date so provided, contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements contained therein not misleading in light of circumstances under which the statements
were made and (ii) all financial projections, if any, that have been or will be prepared by the
Company and made available to the Administrative Agent, the Arranger or any potential lender have
been or will be, on the date provided, prepared in good faith based upon reasonable assumptions (it
being

2

 

understood that such projections are subject to significant uncertainties and contingencies, many
of which are beyond the Company’s control, and that no assurance can be given that the projections
will be realized). The Company agrees to promptly supplement the information supplied by it and
the projections supplied by it from time to time so that all such information and projections as
supplemented shall be complete and correct in all material respects and will not contain any untrue
statement of a material fact or omit to state a material fact necessary in order to make the
statements contained therein not misleading in light of circumstances under which the statements
were made. The Administrative Agent may terminate this engagement if there has been any material
misrepresentation or material inaccuracy in the information heretofore provided or any failure to
include material information necessary in order to make the information heretofore provided
complete and correct in all material respects.

This Commitment Letter may not be assigned by the Company and no rights of the Company hereunder
may be transferred and no obligations may be delegated without the prior written consent of the
Administrative Agent or PNC Capital Markets. The commitment of PNC Bank shall be ratably and
irrevocably reduced by the amount of the commitment from any prospective lender to provide a
portion of the Financing, effective upon delivery of written evidence of such lender’s commitment
to the Company.

No modification or waiver of any of the terms and conditions of this engagement will be valid and
binding unless agreed to in writing by the Company, the Administrative Agent and the Arranger.
When accepted, this letter (the “Commitment Letter”), including the attached Summary, and the fee
letter dated as of this date (the “Fee Letter”) shall constitute the entire agreement between the
Administrative Agent and PNC Capital Markets on the one hand, and the Company, on the other hand,
concerning the Financing and replaces all prior understandings, statements and negotiations. The
Summary and the Fee Letter are integral parts of this Commitment Letter.

The Administrative Agent’s commitment hereunder will expire on January 9, 2009, unless on or before
that date the Company signs and returns the enclosed copy of this Commitment Letter along with the
Fee Letter and the Acceptance Fee (receipt of which is hereby acknowledged) as specified in the Fee
Letter. Once accepted, the Administrative Agent’s commitment under this letter will expire on
February 17, 2009 if the Financing has not closed on or before that date. These expiration dates
may only be extended in writing by the Administrative Agent and PNC Capital Markets.

The remainder of this letter sets forth our mutual understanding as to the services to be performed
by the Arranger in syndicating the Financing, the obligations of the Company, compensation to PNC
Bank and PNC Capital Markets well as the general terms and conditions of PNC Capital Markets’
engagement (the “Engagement”) and the engagement of the Administrative Agent.

The Arranger will syndicate the Financing based upon information supplied by, among others, the
Company, consultants, appraisers and prospective lenders. Proposed terms and conditions of the
Financing as of the date hereof are summarized herein and in the Summary.

The Arranger shall introduce interested lenders to the Company and assist the Company with any and
all negotiations with such interested lenders concerning the Financing. The Company hereby
consents to the transfer of information regarding the Company and its subsidiaries between PNC
Capital Markets, PNC Bank and their respective affiliates and other prospective lenders.

The Company agrees to provide the Arranger, PNC Bank and their legal counsel and consultants with
such information and access to the officers, directors, employees, accountants and legal counsel of
such Company as may be reasonably requested by the Arranger for the purpose of preparing a
Confidential Information Memorandum (the “Memorandum”) together with any supplemental information
which the lenders may require. The information may include, but may not be limited to, general
industry

3

 

information, information about such Company and its subsidiaries, historical financial statements
and financial projections over the term of the Financing.

The Company agrees that prior to delivery of the Memorandum to any other lender, a senior officer
of the Company will review the Memorandum and will provide a letter stating that the Memorandum is
complete and correct in all material respects and does not contain any untrue statements of a
material fact, or omit to state any matter necessary to make the Memorandum not material
misleading.

Until the completion of the primary syndication of the Financing (as determined by the Arranger),
the Company agrees that, except as contemplated in this letter and the Summary, neither it nor any
of its subsidiaries shall enter into any (i) acquisitions (except for the Pending Acquisitions as
specifically noted in the Summary), (ii) other credit facilities or (iii) issue any indebtedness
for borrowed money whether syndicated, publicly or privately placed, if such acquisition, facility
or issue might, in the Arranger’s reasonable judgment, have a detrimental effect on the successful
completion of the Financing, and will advise the Arranger immediately if any acquisition, issue or
facility is contemplated.

PNC Capital Markets and PNC Bank shall be reimbursed from time to time by the Company upon request
for all reasonable out-of-pocket expenses (whether incurred before or after the date hereof) which
they may incur while performing services hereunder, including in connection with the negotiation,
preparation, due diligence, execution, syndication, delivery and enforcement of this letter, the
Credit Documents and other documentation and any assignment or participation of PNC Bank’s
interests herein. These include, without limitation, reasonable fees and expenses of legal
counsel, appraisers and consultants. Such reimbursement shall not be contingent upon the Closing
or execution of the Credit Documents.

The Company agrees to pay the fees set forth in the Summary and the Fee Letter.

The Administrative Agent, Arranger and the Company each confirm that it has the requisite power and
authority to enter into this letter and to perform its respective undertakings hereunder.

The Arranger will use reasonable efforts to provide the advice, assistance and services described
above. The Arranger does not, however, warrant, represent, promise, guarantee or otherwise provide
assurances that the Financing will be closed.

By executing this letter, the Company agrees to indemnify and hold harmless PNC Capital Markets,
the Administrative Agent and each of their respective affiliates and each of their respective
officers, directors, employees, advisors and agents (each an “Indemnified Person”) from and against
any and all losses, claims, damages, liabilities, costs and expenses (including without limitation
reasonable fees and expenses of legal counsel), joint or several, which may be incurred by or
asserted or awarded against any Indemnified Person (including, without limitation, in connection
with any investigation, litigation or other proceeding or preparation of a defense in connection
therewith), in each case arising out of or in connection with the Engagement or the Financing, this
letter, the Summary, the Fee Letter, the Pending Acquisitions or any other transaction contemplated
by any of the foregoing, except to the extent such claim, damage, loss, liability, cost or expense
results from such Indemnified Person’s own gross negligence or willful misconduct. In the case of
an investigation, litigation or other proceeding to which the indemnity in this paragraph applies,
such indemnity shall be effective whether or not such investigation, litigation or proceeding is
brought by the Company, any of its directors, security holders or creditors, an Indemnified Person
or any other person or an Indemnified Person is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated.

No Indemnified Person shall have any liability (whether in contract, tort or otherwise) to the
Company or any of its security holders or creditors for or in connection with the transactions
contemplated hereby,

4

 

except to the extent such liability results from such Indemnified Person’s own gross negligence or
willful misconduct. In no event, however, shall any Indemnified Person be liable on any theory of
liability for any special, indirect, consequential or punitive damages (including, without
limitation, any loss of profits, business or anticipated savings).

The Arranger’s services hereunder may be terminated by the Company upon thirty days’ written notice
to the Arranger. Notwithstanding any termination of such services or this letter, the Arranger and
Administrative Agent shall be entitled to the expenses and fees described above, and the Company’s’
indemnification obligation outlined above will continue. In the event the Arranger’s services are
terminated by the Company, the engagement of the Administrative Agent shall also terminate.

The Company acknowledges that the Arranger and/or one or more of its respective affiliates may
provide financing, equity capital, financial advisory and/or other services to parties whose
interests may conflict with the Company’s interests. Neither the Arranger nor any affiliate of the
Arranger will furnish confidential information obtained from the Company to any of their other
customers. Furthermore, the Arranger and no affiliate of the Arranger will make available to the
Company confidential information that it has obtained or may obtain from any other person.

PNC Capital Markets hereby notifies you that pursuant to the requirements of the U.S.A. PATRIOT ACT
(Title III of Pub. 107 56 (signed into law October 26, 2001))(the “Patriot Act”), it and each of
the Lenders may be required to obtain, verify and record information that identifies you and your
affiliates, which information may include your or their respective names and addresses, and other
information that will allow PNC Capital Markets and each of the Lenders to identify you or any of
then in accordance with the Patriot Act. This notice is given in accordance with the requirements
of the Patriot Act and is effective for PNC Capital Markets and each of the Lenders.

Upon closing, PNC Capital Markets shall be entitled to place a “tombstone” advertisement in various
publications subject to the Company’s approval of the contents of such advertisement, which
approval shall not be unreasonably withheld or delayed.

The terms contained in this letter and the Summary are confidential and, except for disclosure to
the Company’s board of directors, the Company’s officers and employees, the United States
Securities and Exchange Commission for purposes of filing this letter and Summary in the Company’s
Form S-1 Registration Statement and related amendments, the respective boards of directors of the
sellers under the Pending Acquisitions (the “Sellers”) and their controlling affiliates, the
respective officers and employees of the Sellers and their controlling affiliates, professional
advisors retained by the Company or the Sellers and their controlling affiliates in connection with
this transaction, or as may be required by law, may not be disclosed in whole or in part to any
other person or entity without prior written consent of the Arranger. This letter is solely for
the benefit of the Company and no other person or entity shall obtain any rights hereunder or be
entitled to rely or claim reliance upon the terms and conditions hereof.

PNC Capital Markets and the Administrative Agent each agree to keep any information delivered or
made available by the Company confidential from anyone other than its affiliates, employees,
officers, attorneys and other advisors (its “Representatives”) who are or are expected to become
engaged in evaluating, approving, structuring or administering the Financing or rendering legal
advice in connection therewith, provided that nothing herein shall prevent PNC Capital Markets or
PNC Bank from disclosing such information (a) to potential lenders subject to customary
confidentially provisions, (b) upon the order of any administrative agency or other governmental
authority, (c) upon the request or demand of any government regulatory agency or authority, (d) to
the extent that such information has been publicly disclosed other than as a result of a disclosure
by it or its Representatives, and (e) otherwise as required by law.

5

 

This letter is solely for the benefit of the Company and no other person or entity shall obtain any
rights hereunder or be entitled to rely or claim reliance upon the terms and conditions hereof.
This letter does not create a fiduciary relationship among the parties. The representations and
warranties of the Company herein and the provisions hereof relating to fees, indemnification, costs
and expenses, confidentiality, governing law and waiver of jury trial shall survive the termination
of this letter and the engagements hereunder.

This letter shall be governed by and construed in accordance with the laws of the State of New
York. This Commitment Letter may be executed in any number of counterparts, each of which, when so
executed, shall be deemed to be an original and all of which, taken together, shall constitute one
and the same Commitment Letter. Delivery of an executed counterpart of a signature page to this
Commitment Letter by telecopier shall be as effective as delivery of an original executed
counterpart of this Commitment Letter. The provisions hereof related to syndication, information,
indemnification and confidentiality shall survive the termination of the undertakings of the
Arranger and Administrative Agent hereunder. The Company acknowledges that information and
documents relating to the Financing may be transmitted through Debtdomain, the internet or similar
electronic transmission systems.

WAIVER OF JURY TRIAL. THE COMPANY IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY HAVE TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR CLAIM OF ANY NATURE RELATING TO THIS COMMITMENT LETTER OR THE FEE
LETTER, OR ANY TRANSACTION CONTEMPLATED IN EITHER DOCUMENT OR THE ACTIONS OF THE PARTIES HERETO OR
ANY OF THEIR AFFILIATES IN THE NEGOTIATION, PERFORMANCE OR ENFORCEMENT OF ANY OF THE FOREGOING.
THE COMPANY ACKNOWLEDGES THAT THE FOREGOING WAIVER IS KNOWING AND VOLUNTARY. THE COMPANY FURTHER
ACKNOWLEDGES THAT IT HAS READ AND UNDERSTOOD THE PROVISIONS OF THIS ENGAGEMENT LETTER AND THE FEE
LETTER, AND HAS BEEN ADVISED BY COUNSEL WITH RESPECT THERETO AS NECESSARY AND APPROPRIATE.

If the foregoing accurately sets forth your understanding, please indicate your acceptance hereof
by signing the enclosed copy of this letter and returning it, together with the Fee Letter, to
Connie Cesario, Managing Director, PNC Capital Markets LLC , One PNC Plaza, 249 Fifth Avenue,
Pittsburgh, PA 15222 (fax: 412-762-2760) at or before 5 p.m. (eastern standard time) on January 9,
2009 the time at which the undertakings of the Arranger and Administrative Agent hereunder (if not
so accepted prior thereto) will terminate. If the Company elects to deliver this Commitment Letter
by telecopier, please arrange for the executed original to follow by next-day courier. We are
pleased to have this opportunity and very much look forward to working with you.

6

 

Sincerely,

	 	 	 	 	 
	PNC Bank, National Association	 	 
	 
	 	 	 	 
	/s/ Christopher Belletti	 	 
	 	 	 
	Senior Vice President	 	 
	 
	 	 	 	 
	First Commonwealth Bank	 	 
	 
	 	 	 	 
	/s/ Stephen J. Orban	 	 
	 	 	 
	Stephen J. Orban	 	 
	Vice President	 	 
	 
	 	 	 	 
	PNC Capital Markets LLC	 	 
	 
	 	 	 	 
	/s/ Peter Hilton	 	 
	 	 	 
	Senior Managing Director	 	 
	 
	Agreed to and accepted:	 	 
	 
	 	 	 	 
	The O’Gara Group, Inc.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Steven P. Ratterman
	 	 
	 

	 	 	 	 
	Date: January 9, 2009	 	 

7

 

THE O’GARA GROUP, INC.

SUMMARY OF TERMS AND CONDITIONS

	 	 	 
	Borrower:

	 	The O’Gara Group, Inc. (the “Borrower”).
	 
	 	 
	Guarantors:

	 	To include all existing and hereinafter acquired, or created direct and indirect
domestic subsidiaries of the Borrower and the guarantee of all foreign
subsidiaries (the “Guarantors” and together with the Borrower, the “Loan
Parties”) except where, (i) the delivery of a guarantee is restricted by the
jurisdiction in which such foreign subsidiary is organized, (ii) the giving of
a guarantee by such foreign subsidiary would result in material increased tax
liabilities for the Borrower and its consolidated subsidiaries, taken as a whole
or (iii) the costs of obtaining a guaranty in any particular foreign
jurisdiction are unreasonably excessive in relation to the benefits to the
Lenders (as hereinafter defined) afforded thereby.
	 
	 	 
	Administrative Agent:

	 	PNC Bank, National Association (the “Administrative Agent”).
	 
	 	 
	Lead Arranger:

	 	PNC Capital Markets LLC (the “Arranger”).
	 
	 	 
	Lenders:

	 	Lending institutions acceptable to the Arranger and the Borrower (collectively,
the “Lenders”).
	 
	 	 
	Transaction:

	 	Simultaneous with closing of the Credit Facilities (defined below) and a pending
Initial Public Offering (“IPO”), the Borrower will acquire Finanziaria
Industriale S.p.A. (together with its wholly- and partially- owned subsidiaries,
“Isoclima”), Transportadora de Proteccion y Seguridad, S.A. de C.V. (“TPS”), and
OmniTech Partners, Inc., Optical Systems Technology, Inc. and Keystone Applied
Technologies, Inc. (collectively, “OmniTech”) (OmniTech, together with Isoclima
and TPS, the “Pending Acquisitions”) using the proceeds from the IPO, borrowings
under the Credit Facilities and issuances of its common stock (the
“Transaction”).
	 
	 	 
	Credit Facilities:

	 	$35,000,000 in Senior Secured Credit Facilities (defined below).
	 
	 	 
	 

	 	a)    $25,000,000 Senior Secured Revolving Credit Facility with a $10,000,000
sublimit for the issuance of letters of credit (the “Revolver”), a $2,000,000
sublimit for swingline borrowings and a $5,000,000 sublimit for loans
denominated in an Alternate Currency. Borrowings under the swing line will
reduce availability under the Revolver. Pricing on swingline borrowings to be
based on the Agent’s offered rate plus the applicable LIBOR margin then in
effect.

	 
	 	 
	 

	 	      Alternate Currency means, with respect to any Revolver loan, Euros and Pesos to
the extent that such currency is freely tradable and exchangeable into U.S.
Dollars in the London or other applicable interbank market and for which an
exchange rate can be determined by reference to the Bloomberg Financial Markets
system.

	 
	 	 
	 

	 	b)   $10,000,000 Senior Secured Term Loan (the “Term Loan” and together with the
Revolver, the “Credit Facilities”).

	 
	 	 
	Accordion Feature:

	 	At or after the Closing Date, the Borrower shall have the option to increase the
Term Loan in an amount not to exceed $15,000,000 without the consent of the
Lenders.

8

 

	 	 	 
	 

	 	The Borrower may solicit any Lender and/or any other financial institution
reasonably satisfactory to the Agent and the Borrower to provide such additional
or new commitments. No Lender shall be committed to provide any incremental
commitment until it expressly agrees to provide such commitment.
	 
	 	 
	Purpose:

	 	The Credit Facilities shall be used to (i) partially finance the Pending
Acquisitions, (ii) pay fees and expenses in connection with the Transaction,
(iii) refinance certain existing indebtedness, and (iv) with respect to the
Revolver, to fund working capital, Permitted Acquisitions, capital expenditures
and other general corporate purposes of the Borrower and its subsidiaries,
including the issuance of letters of credit. Refer to Exhibit I for Estimated
Sources and Uses at closing.
	 
	 	 
	Execution Date:

	 	On or before January 16, 2009.
	 
	 	 
	Closing (funding) 

Date:

	 	On or before February 17, 2009.
	Maturity:

	 	a)    Three years from the Closing Date.

	 
	 	 
	 

	 	b)    Three years from the Closing Date.

	 
	 	 
	Repayment:

	 	a)   At maturity. Until maturity, the Borrower may borrow, repay and reborrow an
amount not to exceed the amount of the Revolver less outstanding letters of
credit and swingline borrowings.

	 
	 	 
	 

	 	b)   In quarterly principal payments based upon annual reductions as follows:

Year 1:      $2,000,000

Year 2:      $3,000,000

Year 3:      $5,000,000

	 
	 	 
	 

	 	      The full amount of the Term Loan must be drawn in a single drawing on the
Closing Date. No amount of the Term Loan may be re-borrowed (although LIBOR
rollovers and conversions will be permitted).

	 
	 	 
	Interest Rate and 

Letters of Credit
Fees:

	 	Interest rates and letter of credit fees for the Credit Facilities will be
subject to a performance based pricing grid which is attached hereto. The basis
for pricing will be based on the Borrower’s Leverage Ratio per the attached
pricing grid, see Exhibit II. Initial pricing (as expressed in basis points) is
expected to be as follows:
	 
	 	 

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	LIBOR Margin	 	Base Rate Margin
	 	 	Revolver
	 	 	L + 450	 	 	BR + 350
	 	 	Term Loan
	 	 	L + 450	 	 	BR + 350

	 	 	 
	Base Rate Option:

	 	The Base Rate (“BR”) is the higher of (i) the Agent’s prime rate (ii) the
Federal Funds rate plus 1/2 % and (iii) the Daily LIBOR Rate plus 100 basis
points. Interest on the Base Rate borrowings is calculated on an actual/360 and
is paid quarterly.
	 
	 	 
	 

	 	For purposes of this definition, Daily LIBOR Rate shall mean, for any day, the
rate per annum determined by the Agent by dividing the (x) the Published Rate by
(y) a number equal to 1.00 minus the percentage prescribed by the Federal
Reserve for determining the maximum reserve requirements with respect to any
Eurocurrency funding by banks on

9

 

	 	 	 
	 

	 	such day. Published Rate shall mean the rate
of interest published each business day in The Wall Street Journal “Monday
Rates” listing under the caption “London Interbank Offered Rates” for a one
month period (or, if no such rate is published therein for any reason, then the
Published Rate shall be the Eurodollar rate for a one month period as published
in another publication determined by the Agent.
	 
	 	 
	LIBOR Option:

	 	Interest on LIBOR borrowings is calculated on an actual/360 day basis and is
payable the earlier of quarterly or on the last day of each interest period.
LIBOR advances will be available for periods of 1, 2, 3 or 6 months. LIBOR
pricing will be adjusted for any statutory reserves.
	 
	 	 
	Letters of Credit:

	 	The Borrower shall pay letter of credit fees equal to the then applicable spread
above LIBOR on the aggregate face amount of standby letters of credit issued
under the Revolver to each Lender quarterly in proportion to such Lender’s
commitment. In addition, the Borrower shall pay the Issuing Lender a 1/4%
fronting fee, payable quarterly, on the aggregate face amount of such letters of
credit.
	 
	 	 
	Default Rate:

	 	Subsequent to an Event of Default which continues beyond any applicable cure
period, outstandings shall bear interest at 2% over the rate of interest
applicable under the Base Rate pricing option.
	 
	 	 
	Interest Rate 

Protection:

	 	The Borrower shall enter into interest rate protection agreements for a period
of not less than two (2) years in a form acceptable to the Administrative Agent
on at least 50% of the outstandings on the Term Loan. The interest rate
protection agreements shall be entered within 60 days of closing on the Term
Loan.
	 
	 	 
	 

	 	If an interest rate protection agreement is provided by one of the Lenders, such
interest rate protection may be secured by liens which are pari passu with those
securing the Credit Facilities to the extent of such institution’s credit
exposure. Such institution shall calculate its credit exposure in a reasonable
and customary manner.  

Documentation for interest rate protection shall conform to ISDA standards and
must be acceptable to the Agent with respect to inter-creditor issues.
	 
	 	 
	Yield Protection:

	 	The Borrower shall pay the Lenders such additional amounts as will compensate
the Lenders in the event applicable law, or change in law, subjects the Lenders
to reserve requirements, capital requirements, taxes (except for taxes on the
overall net income of the Lenders) or other charges which increase the cost or
reduce the yield to the Lenders, under customary yield protection provisions.
	 
	 	 
	Expenses:

	 	The Borrower shall pay all of the Arranger’s and Administrative Agent’s costs
and expenses associated with the preparation, due diligence, administration,
syndication and enforcement of all documentation executed in connection with the
Credit Facilities, including, without limitation, the legal fees of counsel to
the Administrative Agent and the Arranger, regardless of whether or not the
Credit Facilities close.
	 
	 	 
	Fees:
	 	 
	Commitment Fee:

	 	A Commitment Fee of 50 basis points shall be paid on the unused portion of the
Revolver payable to each Lender quarterly in arrears in proportion to such
Lender’s commitment.

10

 

	 	 	 
	Collateral:

	 	The Credit Facilities will have a first priority security interest on all
tangible and intangible existing and subsequently acquired property, including,
but not limited to, receivables, inventory, equipment, furniture, fixtures,
improvements, intangibles and owned real property of the Loan Parties. First
priority perfected lien on 100% of the common stock of each domestic subsidiary
of the Borrower, and in the event that a guarantee by foreign subsidiaries would
have adverse tax consequences, 65% of the Company’s first tier foreign
subsidiaries; to include an applicable pledge of all subsequently acquired or
formed subsidiaries.
	 
	 	 
	Voluntary 

Prepayments:

	 	Outstandings or commitments under the Credit Facilities may be prepaid or
terminated at the Borrower’s option without premium or penalty, in minimum
principal amounts to be agreed, subject to reimbursement of any costs associated
with prepayments of LIBOR advances or any other provisions contained in the
credit agreement.
	 
	 	 
	 

	 	Voluntary prepayments of the Term Loan shall be applied in the inverse order of
scheduled payments and may not be reborrowed.
	 
	 	 
	Mandatory

	 	Mandatory prepayments of the Term Loan shall be required in an amount equal to:
	Prepayments:
	 	 
	 

	 	(i)   100% of the net proceeds of material additional indebtedness, with
appropriate exceptions to be agreed upon, including, in any event any debt
otherwise permitted under the documentation for the Credit Facilities.

	 
	 	 
	 

	 	(ii)  50% of the net proceeds of any equity issuance, excluding the pending IPO
and any follow-on public equity offerings.

	 
	 	 
	 

	 	(iii)  100% of the net cash proceeds from non-ordinary course material asset or
property sales, subject to certain reinvestment exceptions and time periods.

	 
	 	 
	 

	 	(iv)  100% of the net proceeds from any recovery event, with appropriate baskets
to be agreed upon and subject to reinvestment rights and time periods.

	 
	 	 
	 

	 	(v)   100% of the outstandings under the Revolver that exceed the Revolver
commitment as a result of a fluctuation in exchange rates between Alternate
Currency and U.S. Dollars.

	 
	 	 
	 

	 	Payments (i) through (v) will be first applied to reduce the Term Loan in
inverse order to the remaining principal payments and then to the Revolver
outstandings, if any. Mandatory prepayments of the Term Loan may not be
reborrowed. Payment (vi) is only applicable to the Revolver.
	 
	 	 
	 

	 	All payments (including voluntary prepayments) shall be accompanied by (i)
payment of accrued interest on the amount prepaid to the date of prepayment, and
(ii) in the case of a prepayment of a LIBOR Loan, compensation to the Lenders
for break funding.
	 
	 	 
	Representations and
Warranties:

	 	Usual and customary for transactions of this type including those listed below
and such additional Representations and Warranties as may be required by the
Arranger and Lenders.
	 
	 	 
	 

	 	a. Organization and qualification.

11

 

	 	 	 
	                                                       	 	 
	                                                        	 	 
	 
	 	 
	 

	 	b.    Capitalization and ownership.
	 
	 	 
	 

	 	c.    Subsidiaries.
	 
	 	 
	 

	 	d.    Power and authority.
	 
	 	 
	 

	 	e.    Validity, binding effect and enforceability.
	 
	 	 
	 

	 	f.    No conflict.
	 
	 	 
	 

	 	g.    Litigation.
	 
	 	 
	 

	 	h.    Title to properties.
	 
	 	 
	 

	 	i.    Financial statements; no material adverse change.
	 
	 	 
	 

	 	j.    Use of proceeds; margin stock.
	 
	 	 
	 

	 	k.    Full disclosure.
	 
	 	 
	 

	 	l.    Taxes.
	 
	 	 
	 

	 	m.    Consents and approvals.
	 
	 	 
	 

	 	n.    No Event of Default.
	 
	 	 
	 

	 	o.    Patents, trademarks, copyrights, licenses.
	 
	 	 
	 

	 	p.    Solvency.
	 
	 	 
	 

	 	q.    Perfection and priority of liens securing the Credit Facilities.
	 
	 	 
	 

	 	r.    Insurance.
	 
	 	 
	 

	 	s.    Compliance with laws.
	 
	 	 
	 

	 	t.    Material contracts.
	 
	 	 
	 

	 	u.    Investment companies.
	 
	 	 
	 

	 	v.    Plans and benefit arrangements.
	 
	 	 
	 

	 	w.    Employment matters.
	 
	 	 
	 

	 	x.    Environmental matters.
	 
	 	 
	 

	 	y.    Senior debt status.
	 
	 	 
	 

	 	z.    Anti-terrorism laws.

12

 

	 	 	 
	Conditions Precedent 

 To Closing:

	 	The loan documentation will contain conditions to the effectiveness of the
Credit Facilities reasonably satisfactory to the Lenders including, but not
limited to the following:
	 
	 	 
	 

	 	a.   The Company shall have acquired the stock of the Pending Acquisitions on
terms and conditions acceptable to the Arranger, the Administrative Agent and
Lenders in their sole discretion, including without limitation, documentation,
title to assets, purchase price adjustments, and liabilities assumed.

	 
	 	 
	 

	 	b.    A certified copy of the stock purchase agreements for the Pending
Acquisitions (including all amendments, supplements, schedules and exhibits
thereto), which shall provide for an aggregate cash purchase price not to exceed
$144,000,000 million (excluding Transaction expenses). The Borrower shall have
raised a minimum of $142,000,000 in gross equity proceeds through an IPO of its
common stock.

	 
	 	 
	 

	 	c.   Satisfactory evidence that, after giving effect to the Transaction, (i) the
Borrowers’ trailing twelve month PF Adjusted EBITDA for the fiscal period ended
September 30, 2008, as determined in accordance with GAAP, shall be at least
equal to $24,600,000, (ii) the ratio of pro forma total debt at closing to total
trailing twelve month PF Adjusted EBITDA for the fiscal period ended September
30, 2008 shall not exceed 3.25x and (iii) the ratio of pro forma total debt at
closing less Isoclima debt at closing to total trailing twelve month PF Adjusted
EBITDA for the fiscal period ended September 30, 2008 less Isoclima PF Adjusted
EBITDA for the fiscal period ended September 30, 2008 shall not exceed 3.00x.

	 
	 	 
	 

	 	d.    Any existing credit agreements and the obligations thereunder shall have been
repaid in full and all related documentation and liens shall have been
terminated with the exception of debt to be assumed as part of the Pending
Acquisitions, including the debt of the Italian subsidiary which may remain
outstanding as of the Closing Date in an amount not to exceed 40,600,000 Euros.

	 
	 	 
	 

	 	e.    Negotiation, execution and delivery of definitive documentation with respect
to the Credit Facilities satisfactory to the Borrower, the Administrative Agent
and the Lenders.

	 
	 	 
	 

	 	f.    Closing certificate as to the accuracy of Representations and Warranties,
compliance with covenants and absence of an Event of Default or Potential
Default.

	 
	 	 
	 

	 	g.    Certified resolutions, incumbency certificate and corporate documents.

	 
	 	 
	 

	 	h.    Search of lien, tax and judgment filings in various jurisdictions.

	 
	 	 
	 

	 	i.    The Lenders shall have been granted on the Closing Date first-priority
perfected liens and guarantees to the extent required and shall have received
such other reports, documents and agreements as are customarily delivered in
connection with security interests in the types of assets subject to such liens.

	 
	 	 
	 

	 	j.    Environmental assessment (including flood plain determination) and review of
title and related documentation as may be required by the Administrative Agent.

13

 

	 	 	 
	 

	 	k.   The Borrower shall have delivered projected consolidated financial statements
(including a pro forma opening balance sheet, pro forma statements of operations
and cash flows) for 2008 through 2011 that are reasonably acceptable to the
Lenders and the Arranger.

	 
	 	 
	 

	 	l.   All regulatory approvals and licenses, absence of any legal or regulatory
prohibitions or restrictions.

	 
	 	 
	 

	 	m.  Delivery of satisfactory and customary legal opinion(s) of Loan Parties’ and
Pending Acquisition counsel, including secured transaction and perfection
opinion.

	 
	 	 
	 

	 	n.   No material adverse change with respect to the Company and its subsidiaries.

	 
	 	 
	 

	 	o.    No material litigation.

	 
	 	 
	 

	 	p.    Evidence of required insurance.

	 
	 	 
	 

	 	q.    Payment of all fees and expenses subject to reimbursement.

	 
	 	 
	Conditions Precedent

 To All Loans:

	 	Usual and customary for transactions of this type, to include without limitation
the following covenants applicable to the Borrower and its subsidiaries:
	 
	 	 
	 

	 	a.    All Representations and Warranties are true and correct in all material
respects on and as of the date of any borrowing, before and after giving effect
to such borrowing and to the application of the proceeds therefrom, as though
made on and as of such date; and,

	 
	 	 
	 

	 	b.    No Event of Default or event, which, with the giving of notice or passage of
time or both, would be an Event of Default, has occurred and is continuing, or
would result from such Borrowing.

	 
	 	 
	Affirmative 

Covenants:

	 	Usual and customary for transactions of this type, to include without limitation
the following covenants applicable to the Borrower and its subsidiaries:
	 
	 	 
	 

	 	a.    Maintenance of books, records and inspection.
	 
	 	 
	 

	 	b.    Maintenance of insurance.
	 
	 	 
	 

	 	c.    Payment of taxes.
	 
	 	 
	 

	 	d.    Preservation of corporate existence, rights and authority.
	 
	 	 
	 

	 	e.    Maintenance of properties and leases.
	 
	 	 
	 

	 	f.    Maintenance of patents, trademarks, etc.
	 
	 	 
	 

	 	g.   Compliance with laws (including environmental laws and ERISA matters) and
material contractual obligations.

	 
	 	 
	 

	 	h.    Use of proceeds.
	 
	 	 

14

 

	 	 	 
	 

	 	i.    Subordination of intercompany loans.
	 
	 	 
	 

	 	j.   A portion of all foreign cash flow from offshore subsidiaries, other than the
minimum amount necessary to service the permitted indebtedness of the offshore
subsidiaries, shall be repatriated on a regular basis and at least on a
quarterly basis in an amount as necessary to service domestic Fixed Charges.

	 
	 	 
	Negative Covenants:

	 	Usual and customary for transactions of this nature with respect to the Borrower
and the Guarantors, including, but not limited to, the following:
	 
	 	 
	 

	 	a.   Maximum Leverage Ratio – The ratio of Consolidated Indebtedness to
Consolidated EBITDA calculated at the end of each fiscal quarter for the four
fiscal quarters then ended, according to the following schedule with step-downs:

	 	 	 	 	 
	Period	 	Level
	3/31/09
	 	 	2.75x	 
	6/30/09
	 	 	2.75x	 
	9/30/09
	 	 	2.75x	 
	12/31/09
	 	 	2.50x	 
	3/31/2010 through 12/31/2010
	 	 	2.50x	 
	3/31/2011 and thereafter
	 	 	2.25x	 

	 	 	 
	 

	 	b.   Minimum Fixed Charge Coverage Ratio – As of the end of each fiscal quarter,
the ratio of EBITDA less capital expenditures to Fixed Charges (to be defined in
the loan documentation) (“Fixed Charge Coverage Ratio”), as measured on a
rolling four quarter at each fiscal quarter end (unless otherwise noted below)
according to the following schedule:

	 	 	 	 	 
	Period	 	Level
	9/30/09 (9 months ended)
	 	 	1.10x	 
	12/31/09
	 	 	1.10x	 
	3/30/2010 and thereafter
	 	 	1.25x	 

	 	 	 
	 

	 	c.   Maximum Capital Expenditures – Capital expenditures shall not exceed the
following amounts on an annual basis:

	 	 	 	 	 
	Fiscal Year End	 	 Level
	12/31/2009
	 	$	7,000,000	 
	12/31/2010
	 	$	6,500,000	 
	12/31/2011
	 	$	6,000,000	 

	 	 	 
	 

	 	d.    Minimum PF Adjusted EBITDA, as measured on a rolling four quarter basis at
each fiscal quarter end according to the following schedule:

	 	 	 	 	 
	LTM Period	 	Level
	3/31/09
	 	$	26,500,000	 
	6/30/09
	 	$	26,500,000	 
	9/30/09
	 	$	26,500,000	 

	 	 	 
	 

	 	       Minimum PF Adjusted EBITDA shall not be tested after the quarter ended September
30, 2009.

	 	 	 
	 

	 	e.   Limitation on Acquisitions – Maximum pro forma Leverage Ratio at close of a

15

 

	 	 	 
	 

	 	       Permitted Acquisition shall be 2.25x. $10,000,000 of unused availability under
the Revolver after giving effect to such acquisition. Other conditions included
in the loan documentation.

	 
	 	 
	 

	 	f.    Limitations on joint ventures or creation of non wholly-owned subsidiaries.

	 
	 	 
	 

	 	g.    Limitations on asset divestitures.

	 
	 	 
	 

	 	h.   Limitations on additional indebtedness/guarantee obligations, liens and
investments.

	 
	 	 
	 

	 	i.   Limitation on dividends, redemptions and repurchases with respect to capital
stock.

	 
	 	 
	 

	 	j.    Limitation on changes in line of business conducted by Borrower and
Guarantors.

	 
	 	 
	 

	 	k.   Limitations on transactions with affiliates.  

Other Negative Covenants with respect to the Borrower and the Guarantors as
reasonably appropriate.

	 
	 	 
	Reporting 

Requirements:

	 	a.    Within 45 days after each of the first three fiscal quarters, financial
statements of the Borrower and its subsidiaries, consisting of a consolidated
and consolidating balance sheet as of the end of such fiscal quarter and related
consolidated and consolidating statements of income, retained earnings and cash
flows for the fiscal quarter then ended and the fiscal year through that date,
all in reasonable detail and certified by the Chief Executive Officer, President
or Chief Financial Officer of the Borrower as having been prepared in accordance
with GAAP.

	 
	 	 
	 

	 	b.    Provide within 90 days after the end of each fiscal year of the Borrower,
financial statements of the Borrower and its subsidiaries consisting of a
consolidated and consolidating statements of income, retained earnings and cash
flows for the fiscal year then ended, and with respect to such consolidated
financial statements, audited by independent certified public accountants of
nationally recognized standing satisfactory to the Administrative Agent and
including an unqualified opinion.

	 
	 	 
	 

	 	c.    Concurrent with delivery of the financial statements, a compliance
certificate signed by the Chief Executive Officer, President or Chief Financial
Officer of the Borrower.

	 
	 	 
	 

	 	d.    Annual budget and forecast.

	 
	 	 
	 

	 	e.    Delivery of notices of default, material litigation and material governmental
and environmental proceedings.

	 
	 	 
	 

	 	f.   Other information as reasonably requested.

	 
	 	 
	Events of Default:

	 	a.    Payment default.
	 
	 	 
	 

	 	b.    Breach of Representations or Warranties.
	 
	 	 
	 

	 	c.    Violation of covenant(s).
	 
	 	 
	                                                       
	 

	 	d.    Cross default
to any other indebtedness.
	                                                        

16

 

	 	 	 
	 

	 	e.    Bankruptcy, insolvency.
	 
	 	 
	 

	 	f.    Change of control.
	 
	 	 
	 

	 	g.    Judgments.
	 
	 	 
	 

	 	Other Events of Default as appropriate.
	 
	 	 
	Required Lenders:

	 	Amendments and waivers of the definitive credit documentation will require the
approval of Lenders holding loans and commitments representing more than 50% of
the aggregate amount of loans and commitments under the Credit Facilities (the
“Required Lenders”), except that the consent of all the Lenders affected thereby
shall be required with respect to any amendment or waiver that (i) increases the
amount of the Revolver or Term Loan commitments, (ii) extension of the Revolver
or Term Loan expiration date, (iii) postpones or delays any date fixed for
payment of principal, interest or fees, (iv) reduces the interest rate or
decreases the amount of any payment of principal, interest, fees, or other
amounts payable, (v) changes the percentage of the aggregate commitments or
principal amounts required for any Lender or the Lenders to take action, (vi)
changes the pro rata shares of the Lenders, (vii) releases a material amount of
collateral (if lien on collateral is then in effect) or releases a Guarantor
(other than in connection with a permitted sale of assets) or (viii) changes any
provision of the credit agreement that requires unanimous consent of Lenders.
	 
	 	 
	Governing Law:

	 	State of New York.
	 
	 	 
	Agent’s Counsel

	 	Buchanan Ingersoll & Rooney PC.

17

 

Exhibit I

Estimated Sources and Uses

	 	 	 	 	 	 	 	 	 	 	 
	Sources of Funds	 	 	 	 	 	Uses of Funds	 	 	 	 
	Revolver
	 	$	12,675,000	 	 	Isoclima Purchase Price	 	$	80,204,000	 
	Term Loan
	 	 	10,000,000	 	 	TPS Purchase Price	 	 	35,863,000	 
	IPO
	 	 	144,000,000	 	 	OmniTech Purchase Price	 	 	27,542,000	 
	Assumed Isoclima Debt
	 	 	53,774,000	 	 	Repay Isoclima Debt	 	 	53,774,000	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	Repay O’Gara Debt	 	 	8,132,000	 
	 
	 	 	 	 	 	Repay TPS Debt	 	 	2,474,000	 
	 
	 	 	 	 	 	Repay OmniTech Debt	 	 	230,000	 
	 
	 	 	 	 	 	Fees and Expenses	 	 	12,230,000	 
	 
	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Total Sources
	 	$	220,449,000	 	 	Total Uses	 	$	220,449,000	 

18

 

Exhibit II

Pricing Grid

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	Revolver 	 	Credit Facilities	 	Credit Facilities
	Level	 	Total Leverage Ratio	 	Commitment Fee	 	LIBOR Spread	 	Base Rate Spread
	I

	 	If the Leverage
Ratio is less than
or equal to 1.50 to
1.00.
	 	 	50	 	 	 	300	 	 	 	200	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	II

	 	If the Leverage
Ratio is greater
than 1.50 to 1.0
but less than or
equal to 2.00 to
1.0.
	 	 	50	 	 	 	350	 	 	 	250	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	III

	 	If the Leverage
Ratio is greater
than 2.00 to 1.0
but less than 2.50
to 1.0.
	 	 	50	 	 	 	400	 	 	 	300	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	IV

	 	If the Leverage
Ratio is greater
than 2.50 to 1.0
	 	 	50	 	 	 	450	 	 	 	350	 

Note:

			
	1.	 	All pricing is expressed in basis points.
	 
	2.	 	Letter of Credit fees shall be equal to the Revolver spread over LIBOR.
	 
	3.	 	Pricing shall be locked at Level IV until delivery of the March 31, 2009 compliance certificate.

19

 

Exhibit III

Select Definitions

Consolidated EBITDA for any period of determination shall mean (i) the sum of net income,
depreciation, depletion, amortization, interest expense, income tax expense, non-cash loss on
derivative items (SFAS 133 and its successors), non-cash purchase accounting adjustments (SFAS 141
and its successors), non-cash foreign currency transaction losses (SFAS 52 and its successors),
other non-cash charges to net income, non-recurring Transaction Expenses paid during such period
which are expensed and not capitalized, excess compensation paid for and expensed by Transportadora
de Proteccion y Seguridad, S.A. de C.V. during the 2008 fiscal year in an amount not to exceed
$2,100,000 for such fiscal year, a founders bonus paid for and expensed by the Borrower during the
2008 fiscal year in an amount not to exceed $1,000,000 for such fiscal year, and a non-cash stock
option expense incurred by the Borrower during the 2008 fiscal year in an amount not to exceed
$1,100,000 for such fiscal year minus (ii) non-cash credits to net income, in each case of the
Borrower and its Subsidiaries for such period determined and consolidated in accordance with GAAP.
For purposes of this definition, with respect to a business acquired by the Loan Parties pursuant
to an acquisition (including the Pending Acquisitions), Consolidated EBITDA shall be calculated on
a pro forma basis, using historical numbers, in accordance with GAAP as if the acquisition had been
consummated at the beginning of such period. Additionally, for purposes of this definition, with
respect to a business or assets disposed of, Consolidated EBITDA shall be calculated as if such
disposition had been consummated at the beginning of such period.

Transaction
Expense shall mean any expenses incurred in connection with an
acquisition (including the Pending Acquisitions) provided that such acquisition actually occurs.

20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00151-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00151-of-00352.parquet"}]]