Document:

exv10w7

 

Exhibit 10.7

STOCK OPTION AGREEMENT

ORION ENERGY SYSTEMS, LTD.

2003 STOCK OPTION PLAN

     This AGREEMENT dated as of this ___day of ___, 2007, by and between Orion Energy
Systems, Ltd., a Wisconsin corporation (the “Company”), and ___(the “Grantee”).

     WHEREAS, the Company has adopted the Orion Energy Systems, Ltd. 2003 Stock Option Plan (the
“Plan”) to permit nonqualified stock options to purchase shares of the Company’s common stock
(“Stock”) to be granted to certain employees, officers and directors of the Company and its
subsidiaries, and to other eligible participants, as determined by and through the Board of
Directors of the Company (the “Board”) in its discretion; and

     WHEREAS, the Company desires the Grantee to remain motivated and dedicated to making valuable
contributions to the long-term success of the Company by providing him with a means to acquire or
to increase his proprietary interest in the Company’s equity.

     NOW, THEREFORE, in consideration of the premises and of the covenants and agreements herein
set forth, the parties hereby mutually covenant and agree as follows:

     1. Option Grant. Subject to the terms and conditions of the Plan, a copy of which is
attached hereto and made a part hereof, and this Agreement, the Company grants to the Grantee the
option to purchase from the Company all or any part of an aggregate number of ___shares of
Stock of the Company (such shares of Stock are referred to as the “Optioned Shares”, and the option
to purchase the Optioned Shares is referred to as the “Option”). The Option is not intended to
qualify as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue
Code.

     2. Exercise Price. The exercise price to be paid by the Grantee for the Optioned
Shares is $  per share.

     3. Vesting. Subject to the conditions stated herein and in the Plan, the right to
exercise the Option shall vest in and become exercisable by the Grantee as of the dates and as to
the number of Optioned Shares as set forth below.

	 	 	 	 	 
	Date

	 	# of Optioned Shares Exercisable
	 	Total # of Optioned Shares Exercisable
	 

	 	 

	 	 

     4. Exercise.

     (a) In the event that the Grantee ceases to be employed by, or provide service to, the
Company for any reason other than a “disability”, death, or termination for “cause” (as
defined in the Plan), the Option may be exercised, to the extent of the number of Optioned
Shares exercisable by the Grantee at the date of such termination, in whole or in part,
within 90 days after the date on which the Grantee ceases to be employed by, or provide
service to, the Company, and not thereafter, but in no event shall the date of

 

 

exercise be any later than the date of expiration of the Option term. The portion of
the Option that is not vested in the Grantee, and therefore not exercisable, as of the date
on which the Grantee ceases to be employed by, or provide service to, the Company shall
terminate as of such date.

     (b) In the event the Grantee ceases to be employed by, or provide service to, the
Company on account of a termination for “cause,” the Option shall forthwith terminate as of
the date the Grantee ceases to be employed by, or provide service to, the Company. In
addition, the Grantee shall automatically forfeit all Optioned Shares underlying any
exercised portion of the Option for which the Company has not yet delivered the share
certificates, upon refund by the Company of the exercise price paid by the Grantee for such
            shares. Upon any exercise of an Option, the Company may withhold delivery of share
certificates pending resolution of an inquiry that could lead to a finding resulting in a
forfeiture.

     (c) In the event that the Grantee ceases to be employed by, or provide service to, the
Company on account of a “disability”, or death, the Option shall remain exercisable pursuant
to the terms of the Plan.

     5. Exercise of Option and Method of Payment. The Grantee may exercise his/her Option
only upon written notice as provided in the Plan. Payment of the exercise price of the Optioned
Shares being purchased is due in full upon such exercise in cash or by check or in any other manner
permitted by the Plan with the consent of the Board or by a committee appointed by the Board as
permitted under the terms of the Plan (the “Committee”).

     6. Withholding. The exercise of the Option shall be subject to applicable federal
(including FICA), state and local tax withholding requirements. The Company shall have the right
to deduct from other wages paid to the Grantee, any federal, state or local taxes required by law
to be withheld with respect to the Option. The Company may require the Grantee or other person
exercising the Option to pay to the Company the amount of any such taxes that the Company is
required to withhold, or the Company may deduct from other wages paid by the Company the amount of
any withholding taxes due.

     7. Committee Determinations. As a condition of the granting of the Option, the
Grantee agrees that the Committee shall have full power and authority to administer and interpret
the Plan and this Agreement, to make factual determinations and to adopt or amend such rules,
regulations, agreements and instruments for implementing the Plan and for the conduct of its
business as it deems necessary or advisable, in its sole discretion. Further, the Grantee agrees
that the Committee’s interpretations of the Plan and this Agreement and all determinations made by
the Committee shall be final, binding, and conclusive on all persons having any interest in the
Plan or this Agreement. All powers of the Committee shall be executed in its sole discretion, in
the best interest of the Company, not as a fiduciary, and in keeping with the objectives of the
Plan and need not be uniform as to similarly situated individuals.

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     8. Transferability of Option.

     (a) Nontransferability of Option. Except as provided below, only the Grantee may
exercise rights under this Option during Grantee’s lifetime. A Grantee may not transfer
those rights except by will or by the laws of descent and distribution, or if permitted in
any specific case by the Committee pursuant to a domestic relations order. When a Grantee
dies, the personal representative or other person entitled to succeed to the rights of the
Grantee (“Successor Grantee”) may exercise such rights. A Successor Grantee must furnish
proof satisfactory to the Company of his or her right to succeed to the Option (but only to
the extent of the number of Optioned Shares exercisable hereunder) under the Grantee’s will
or under the applicable laws of descent and distribution.

     (b) Transfer of Option. Notwithstanding the foregoing, a Grantee may transfer
the Option to family members, or one or more trusts or other entities for the benefit of or
owned by family members, consistent with applicable securities laws; provided that the
Grantee receives no consideration for the transfer of the Option and the transferred Option
shall continue to be subject to the same terms and conditions as were applicable to the
Option immediately before the transfer.

     9. Term. This Option may not be exercised more than ten (10) years from the date of
its grant, and may be exercised during such term only in accordance with the terms of the Plan and
this Agreement.

     10. Whole Shares. The Option may be exercised for whole shares of Stock only.

     11. Limitations on Issuance, Transfer or Sale of Shares. The issuance of shares upon
exercise of the Option and the subsequent transfer and sale of such shares are limited by the terms
of the Plan.

     12. Governing Plan Document. This Option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of this Option, and is further subject to all
interpretations, amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan.

     13. Applicable Laws. The grant of the Option and the issuance of shares of Stock
pursuant to this Agreement and the subsequent transfer of such shares are subject to all applicable
laws, statutes, rules and regulations and to such approvals by governmental agencies or national
securities exchanges as may be required.

     14. Binding Effect. The provisions of this Agreement shall be binding upon and shall
inure to the benefit of the Grantee and the Company and their respective heirs, personal
representatives, successors and assigns.

     15. Entire Agreement. This Agreement constitutes the entire agreement of the parties.
Except as specifically set forth in Schedule A attached hereto, this Agreement supersedes
any and all other agreements, both verbal and written, between the parties hereto with respect to
options to purchase the Company’s Stock or any other security of the Company.

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     Grantee represents and warrants that, except as specifically set forth in Schedule A,
Grantee has no other outstanding options to purchase any Company Stock or other security of the
Company other than the Options that are described in this Agreement or any similar agreement of
even date, and hereby releases Company from any and all claims and liabilities relating thereto.

	 	 	 	 	 
	 	ORION ENERGY SYSTEMS, LTD.

 	 
	 	By:  	
 	 
	 	 	
Its: President 	 
	 	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	By:  	
 	 
	 	 	
Its: Secretary 	 
	 	 	 	 
	 

     The Grantee acknowledges receipt of a copy of the Plan, a copy of which is annexed hereto, and
represents that he is familiar with the terms and provisions thereof. The Grantee hereby accepts
this Option subject to all the terms and provisions of the Plan.

	 	 	 	 	 
	 	GRANTEE

	 	
 	 
	 	 	 
	 	 	 
	 	SSN:	
 	 
	 	 	 
	 	 	 
	 	ADDRESS:	 
	 	 	 
	 	
 	 
	 	 	 
	 	
 	 
	 	 	 
	 	
 	 

4exv10w9

 

Exhibit 10.9

ORION ENERGY SYSTEMS, INC.

2004 STOCK AND INCENTIVE AWARDS PLAN

As Amended and Restated Effective                     , 2007 [IPO Date]

Section 1. Purpose

          This 2004 Stock and Incentive Awards Plan, previously called the Equity Incentive Plan (the
“Plan”), has been established by Orion Energy Systems, Inc. to advance two complementary purposes:
(i) to attract and retain outstanding individuals to serve as officers, directors, employees,
consultants and advisors and (ii) to increase shareholder value. The Plan is intended to enhance
the Company’s ability to attract, retain and motivate persons who make or are expected to make
important contributions to the Company, its Subsidiaries or Affiliates, by providing such persons
with equity ownership opportunities and performance-based incentives, thereby better aligning the
interests of such persons with those of the Company’s shareholders.

Section 2. Definitions

          “409A Subsidiary” means any corporation or other entity in an unbroken chain of corporations
or other entities, beginning with the Company, in which each corporation or other entity (other
than the last corporation or entity in the chain) has a controlling interest (within the meaning of
Treasury regulation §1.414(c)-2(b)(2)(i) except that the phrase “at least 50 percent” shall be used
in place of “at least 80 percent” each place it appears therein) in the corporation or other
entity; provided that the phrase “at least 20 percent” may be used in place of “at least 50
percent” with respect to the grant of non-qualified stock options or stock appreciation rights made
to eligible individuals based on legitimate business criteria of the Company within the meaning of
Code section 409A.

          “Act” means the Securities Act of 1933, as amended from time to time. Any reference to a
specific provision of the Act shall include any successor provision thereto.

          “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations of the Act;

          “Award” means any award granted under the Plan.

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

          “Beneficial Owner” means a Person, with respect to any securities which:

     (i) such Person or any of such Person’s Affiliates or Associates has
the right to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights,
rights, warrants or options, or otherwise; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or on

 

 

behalf of such Person or any of such Person’s Affiliates or Associates
until such tendered securities are accepted for purchase;

     (ii) such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has the right to vote or dispose of or has
“beneficial ownership” of (as determined pursuant to Rule l3d-3 of the
General Rules and Regulations under the Act), including pursuant to any
agreement, arrangement or understanding; provided, however, that a Person
shall not be deemed the Beneficial Owner of, or to beneficially own, any
security under this clause (ii) as a result of an agreement,
arrangement or understanding to vote such security if the agreement,
arrangement or understanding: (A) arises solely from a revocable proxy or
consent given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules
and regulations under the Act and (B) is not also then reportable on a
Schedule l3D under the Act (or any comparable or successor report); or

     (iii) are beneficially owned, directly or indirectly, by any other
Person with which such Person or any of such Person’s Affiliates or
Associates has any agreement, arrangement or understanding for the purpose
of acquiring, holding, voting (except pursuant to a revocable proxy as
described in clause (ii) above) or disposing of any voting
securities of the Company.

          “Change of Control” means, unless specified otherwise in an award agreement, the occurrence of
any of the following: shareholders

     (iv) any Person (other than (A) the Company or any of its subsidiaries,
(B) a trustee or other fiduciary holding securities under any employee
benefit plan of the Company or any of its subsidiaries, (C) an underwriter
temporarily holding securities pursuant to an offering of such securities or
(D) a corporation owned, directly or indirectly, by the shareholders of the
Company in substantially the same proportions as their ownership of stock in
the Company (“Excluded Persons”)) is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company or its Affiliates after the IPO Date, pursuant to
express authorization by the Board that refers to this exception)
representing twenty percent (20%) or more of either the then outstanding
shares of common stock of the Company or the combined voting power of the
Company’s then outstanding voting securities; or

     (v) the following individuals cease for any reason to constitute a
majority of the number of directors of the Company then serving: (A)
individuals who, on the IPO Date, constituted the Board and (B) any new
director (other than a director whose initial assumption of office is
in connection with an actual or threatened election contest, including but
not

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limited to a consent solicitation, relating to the election of directors
of the Company, as such terms are used in Rule 14a-11 of Regulation 14A
under the Act) whose appointment or election by the Board or nomination for
election by the Company’s shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors on the IPO Date, or whose appointment, election or nomination for
election was previously so approved (collectively the “Continuing
Directors”); provided, however, that individuals who are appointed to the
Board pursuant to or in accordance with the terms of an agreement relating
to a merger, consolidation, or share exchange involving the Company (or any
direct or indirect subsidiary of the Company) shall not be Continuing
Directors for purposes of this Agreement until after such individuals are
first nominated for election by a vote of at least two-thirds (2/3) of the
then Continuing Directors and are thereafter elected as directors by the
shareholders of the Company at a meeting of shareholders held following
consummation of such merger, consolidation, or share exchange; and, provided
further, that in the event the failure of any such persons appointed to the
Board to be Continuing Directors results in a Change of Control, the
subsequent qualification of such persons as Continuing Directors shall not
alter the fact that a Change of Control occurred; or

     (vi) the consummation of a merger, consolidation or share exchange of
the Company with any other corporation or the issuance of voting securities
of the Company in connection with a merger, consolidation or share exchange
of the Company (or any direct or indirect subsidiary of the Company), in
each case, which requires approval of the shareholders of the Company, other
than (A) a merger, consolidation or share exchange which would result in the
voting securities of the Company outstanding immediately prior to such
merger, consolidation or share exchange continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least fifty percent (50%) of the
combined voting power of the voting securities of the Company or such
surviving entity or any parent thereof outstanding immediately after such
merger, consolidation or share exchange, or (B) a merger, consolidation or
share exchange effected to implement a recapitalization of the Company (or
similar transaction) in which no Person (other than an Excluded Person) is
or becomes the Beneficial Owner, directly or indirectly, of securities of
the Company (not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or its Affiliates
after the IPO Date, pursuant to express authorization by the Board that
refers to this exception) representing twenty percent (20%) or more of
either the then outstanding shares of common stock of the Company or the combined
voting power of the Company’s then outstanding voting securities; or

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     (vii) the consummation of a plan of complete liquidation or dissolution
of the Company or a sale or disposition by the Company of all or
substantially all of the Company’s assets (in one transaction or a series of
related transactions within any period of 24 consecutive months), in each
case, which requires approval of the shareholders of the Company, other than
a sale or disposition by the Company of all or substantially all of the
Company’s assets to an entity at least seventy-five percent (75%) of the
combined voting power of the voting securities of which are owned by Persons
in substantially the same proportions as their ownership of the Company
immediately prior to such sale.

          Notwithstanding the foregoing, no “Change of Control” shall be deemed to have occurred if
there is consummated any transaction or series of integrated transactions immediately following
which the record holders of the common stock of the Company immediately prior to such transaction
or series of transactions continue to own, directly or indirectly, in the same proportions as their
ownership in the Company, an entity that owns all or substantially all of the assets or voting
securities of the Company immediately following such transaction or series of transactions.

          Notwithstanding the foregoing, if an Award is considered deferred compensation subject to the
provisions of Code section 409A, and if a payment under such Award is triggered upon a “Change of
Control,” then the foregoing definition shall be deemed amended as necessary to comply with Code
section 409A.

          “Code” means the Internal Revenue Code of 1986, as amended from time to time, and all
regulations promulgated thereunder. Any reference to a specific provision of the Code shall
include any successor provision thereto.

          “Committee” means a committee appointed by the Board to administer the Plan. On and after the
IPO Date, “Committee” means the compensation committee of the Board, each member of which shall
qualify as a “nonemployee director” within the meaning of Rule 16b3 and as an “outside director”
within the meaning of Code section 162(m).

          “Company” means Orion Energy Systems, Inc., a Wisconsin corporation, and any successor
thereto.

          “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. Any
reference to a specific provision of the Exchange Act shall include any successor provision
thereto.

          “Fair Market Value” means the value of a share of Stock on the relevant date as determined by
the Committee in good faith. In determining Fair Market Value, the Committee may, but shall not be
required to, rely on the most recent valuation determined by an independent
appraiser. On the IPO Date, “Fair Market Value” shall mean the price at which a share of
common stock of the Company is first sold to the public on the IPO Date. After the IPO Date, “Fair
Market Value” shall mean the closing price of a share of Stock on the relevant date on the
principal exchange on which the Stock is then traded, as reported in the Wall Street Journal, or if

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no sale shall have been made on such date, then on the last preceding day on which there was such a
sale; provided that in the event a share of Stock is sold on the principal exchange, “Fair Market
Value” in such case shall mean the actual sale price obtained for the share being sold.

          “IPO Date” means the date on which the shares of the Company’s voting Common Stock are first
sold to the public pursuant to an effective registration statement filed by the Company under the
Act.

          “Participant” means any eligible individual who is granted an Award hereunder.

          “Performance Goals” means any goals the Committee establishes that relate to one or more of
the following with respect to the Company or any one or more of its Subsidiaries, Affiliates or
other business units: net sales; cost of sales; revenue; gross income; net income; operating
income; income from continuing operations; earnings (including before taxes, and/or interest and/or
depreciation and amortization); earnings per share (including diluted earnings per share); price
per share; cash flow; net cash provided by operating activities; net cash provided by operating
activities less net cash used in investing activities; net operating profit; ratio of debt to debt
plus equity; return on shareholder equity; return on capital; return on assets; operating working
capital; average accounts receivable; economic value added; and customer satisfaction; operating
margin; profit margin; sales performance; sales quota attainment; new sales; cross/integrated
sales; customer engagement; internal revenue growth; and client retention. As to each Performance
Goal, the relevant measurement of performance shall be computed in accordance with generally
accepted accounting principles, if applicable; provided that, the Committee may, at the time of
establishing the Performance Goal(s), exclude the effects of (i) extraordinary, unusual and/or
non-recurring items of gain or loss, (ii) gains or losses on the disposition of a business, (iii)
changes in tax or accounting regulations or laws, or (iv) the effect of a merger or acquisition.
In the case of Awards that the Committee determines will not be considered performance-based
compensation under Code section 162(m), or for purposes of exercising discretion to reduce the
amount payable under any Award that is considered performance-based compensation under Code section
162(m), the Committee may establish other Performance Goals not listed in this Plan, including
subjective, individual goals. Where applicable, the Performance Goals may be expressed, without
limitation, in terms of attaining a specified level of the particular criterion or the attainment
of an increase or decrease (expressed as absolute numbers or a percentage) in the particular
criterion or achievement in relation to a peer group or other index. The Performance Goals may
include a threshold level of performance below which no payment will be made (or no vesting will
occur), levels of performance at which specified payments will be paid (or specified vesting will
occur), and a maximum level of performance above which no additional payment will be made (or at
which full vesting will occur).

          “Person” means any individual, firm, partnership, corporation or other entity, including any
successor (by merger or otherwise) of such entity, or a group of any of the foregoing acting in
concert.

          “Rule 16b3” means Rule 16b-3 under the Exchange Act.

          “Stock” means the Common Stock of the Company, no par value.

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          “Subsidiaries” means any corporate entity of which at least fifty percent (50%) of the equity
interest is held directly or indirectly by the Company.

Section 3. Effective Date of Plan

          The Plan shall become effective on September 30, 2004, subject, however, to the approval of
the Plan by the shareholders of the Company at the next annual meeting of shareholders within
twelve months following the date of adoption of the Plan by the Board. Awards granted under the
Plan prior to its approval by shareholders shall be contingent on such shareholder approval. The
Plan, as amended and restated, shall become effective on the IPO Date, subject, however, to the
approval of the amended and restated Plan by the shareholders of the Company at the next annual
meeting of shareholders within twelve months following the date of adoption of the Plan by the
Board.

Section 4. Administration

          4.1. Committee Authority. The Plan shall be administered by the Committee. If at any
time the Committee shall not be in existence, the Board shall administer the Plan. Subject to the
terms of the Plan and applicable law, the Committee shall have full power and discretionary
authority to: (a) grant Awards to eligible individuals under the Plan and to determine the type,
terms and conditions of such Awards and the number of shares of Stock to which such Awards shall
relate; (b) interpret and administer the Plan and any instrument or agreement relating to, or made
under, the Plan; (c) establish, amend, suspend, or waive such rules and regulations and appoint
such agents as it shall deem appropriate for the proper administration of the Plan; and (d) make
any other determination and take any other action that the Committee deems necessary or desirable
for the administration of the Plan. The Committee’s decisions and determinations under the Plan
need not be uniform and may be made selectively among eligible individuals, whether or not they are
similarly situated.

          4.2. Delegation to Other Committees. To the extent applicable law permits, the Board
may delegate to another committee of the Board or to one or more officers of the Company, or the
Committee may delegate to a sub-committee or to one or more officers of the Company, any or all of
the authority and responsibility of the Committee under the Plan; provided that no such delegation
is permitted with respect to Stock-based Awards made to individuals who are subject to Rule16b3 or
Code section 162(m) at the time any such delegated authority or responsibility is exercised unless
the delegation is to another committee of the Board consistently entirely of “nonemployee
directors” within the meaning of Rule 16b3 and as an “outside director” within the meaning of Code
section 162(m). If the Board or the Committee has made such a delegation, then all references to the Committee in this Plan include such
other committee, sub-committee or one or more officers to the extent of such delegation.

          4.3. Decisions Binding. All decisions, interpretations and other actions of the
Committee shall be final and binding on all Participants and any other individual with a right
under the Plan.

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          4.4. Waiver of Conditions. The Committee may, in whole or in part, waive any
conditions or other restrictions with respect to any Award granted under the Plan.

Section 5. Eligibility and Participation

          All employees and directors of the Company, its Subsidiaries and Affiliates and all
consultants or advisors who provide services to the Company, its Subsidiaries and Affiliates, are
eligible to be granted Awards under the Plan. The Committee shall designate each individual who
will become a Participant. An Award shall be granted exclusively as compensation for the
performance of those services the Participant is already performing or reasonably may be expected
to perform in his or her respective position within or for the Company, a Subsidiary or an
Affiliate. The Committee’s designation of a Participant in any year shall not require the
Committee to designate such person to receive an Award in any other year.

Section 6. Stock Subject to Plan; Limits on Awards

          6.1. Number. Subject to adjustment as provided in Section 6.3, the total number of
shares of Stock which may be issued under the Plan shall be one million (1,000,000) shares, plus
the total number of shares granted under the Company’s 2003 Stock Option Plan which are exchanged
for new shares under the Plan or which are cancelled under the Company’s 2003 Plan, plus effective
on the IPO Date, an additional two million five hundred thousand (2,500,000) shares.
The shares to be delivered under the Plan may consist, in whole or in part, of authorized but
unissued Stock or treasury Stock.

          6.2. Unused Stock; Unexercised Rights. If (a) any shares of Stock subject to an Award
granted under the Plan, or to which any Award relates, are forfeited, (b) an Award otherwise
terminates, expires or is canceled prior to the delivery of all of the shares of Stock or of other
consideration issuable or payable pursuant to such Award, or (c) an Award is settled in cash, then
the number of shares of Stock subject to such Award shall again be available for the granting of
additional Awards under the Plan.

     6.3. Limits on Awards. Subject to adjustment as provided in Section 6.4, the Company
may issue only an aggregate of one million (1,000,000) shares of Stock upon the exercise of
incentive stock options (within the meaning of Code section 422), and, after the IPO Date, no
Participant may be granted Awards that could result in such Participant:

          (a) receiving options for, and/or stock appreciation rights with respect to, more than
300,000 shares of Stock during any fiscal year of the Company;

          (b) receiving Awards of restricted stock and/or restricted stock units relating to more
than 150,000 shares of Stock during any fiscal year of the Company;

          (c) receiving Awards of performance shares, and/or Awards of performance units the
value of which is based on the Fair Market Value of shares of Common Stock, for more than
150,000 shares of Stock during any fiscal year of the Company;

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          (d) receiving Awards of performance units the value of which is not based on the Fair
Market Value of shares of Stock, for more than $2,000,000 during any fiscal year of the
Company;

          (e) receiving other Stock-based Awards pursuant to Section 13.1 relating to more than
100,000 Shares during any fiscal year of the Company;

          (f) receiving an annual incentive award in any single fiscal year of the Company that
would pay more than $2,000,000; or

          (g) receiving a long-term incentive award in any single fiscal year of the Company that
would pay more than $2,000,000.

In all cases, determinations under this Section 6.3 should be made in a manner that is consistent
with the exemption for performance-based compensation that Code section 162(m) provides.

          6.4. Adjustment in Capitalization. If: (a) the Company shall at any time be involved
in a merger or other transaction in which the Shares are changed or exchanged; (b) the Company
shall subdivide or combine the Stock or the Company shall declare a dividend payable in Stock,
other securities (other than stock purchase rights issued pursuant to the terms of any rights
agreement that the Company may authorize and issue in the future) or other property; (c) the
Company shall effect a cash dividend the amount of which, on a per share of Stock basis, exceeds
ten percent (10%) of the Fair Market Value of a share of Stock at the time the dividend is
declared, or the Company shall effect any other dividend or other distribution on the Stock in the
form of cash, or a repurchase of Stock, that the Board determines by resolution is special or
extraordinary in nature or that is in connection with a transaction that the Company characterizes
publicly as a recapitalization or reorganization involving the Shares; or (d) any other event shall
occur, which, in the case of this clause (d), in the judgment of the Board or Committee
necessitates an adjustment to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under this Plan, then the Committee shall, in such manner as it may
deem equitable to prevent dilution or enlargement of the benefits or potential benefits intended to
be made available under this Plan, adjust as applicable: (i) the number and type of shares of Stock
subject to the Plan and which thereafter may be made the subject of Awards under the Plan; (ii) the
per Participant Award limitations set forth in Section 6.3; (iii) the number and type of shares of
Stock subject to outstanding Awards; (iv) the grant, purchase or exercise price with respect to any
Award; and (v) to the extent such discretion does not cause an Award that is intended to qualify as
performance-based compensation under Code section 162(m) to lose its status as such, the
Performance Goals of an Award; or, if deemed appropriate, make provision for a cash payment to the
holder of an outstanding Award in exchange for cancellation of such Award or in lieu of any such adjustment; provided, however, in each case, that with respect to
awards of incentive stock options no such adjustment shall be authorized to the extent that such
authority would cause such options to cease to be treated as incentive stock options; and provided
further, however, that the number of shares of Stock subject to any Award payable or denominated in
Stock shall always be a whole number.

          Notwithstanding the foregoing, in the case of a stock dividend (other than a stock dividend
declared in lieu of an ordinary cash dividend) or subdivision or combination of the

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Stock (including a reverse stock split), if no action is taken by the Committee, adjustments contemplated
by this subsection that are proportionate shall nevertheless automatically be made as of the date
of such stock dividend or subdivision or combination of the Stock.

Section 7. Awards

          All Awards granted under the Plan shall be evidenced by a written award agreement that shall
specify the type of Award granted, the duration of the Award, the number of shares of Stock to
which the Award pertains and such other provisions as the Committee shall determine.

Section 8. Stock Options

          8.1. Grant of Options. Subject to any limitations set forth in the Plan, the
Committee shall have complete discretion in determining: (a) the eligible individuals to be granted
an option to purchase Stock; (b) the number of shares of Stock to be subject to the option, and all
other terms and conditions of the option; (c) whether the option is to be an incentive stock option
within the meaning of Code section 422 or a nonqualified stock option; provided that, incentive
stock options may be granted only to employees of the Company or a Subsidiary; and further provided
that if an option is granted to an individual who is not providing services to the Company or a
409A Subsidiary at the date of grant, such option shall be considered a deferred compensation
arrangement subject to Code section 409A to the extent provided therein; and (d) any other terms
and conditions of the option as determined by the Committee in its sole discretion.

          8.2. Incentive Stock Options. Incentive stock options shall be exercisable at purchase
prices of not less than one hundred percent (100%) of the Fair Market Value of the Stock on the
date of grant. Incentive stock options shall be exercisable over not more than ten (10) years
after date of grant and shall terminate not later than three (3) months after termination of
employment for any reason other than death or disability, except as otherwise provided by the
Committee. If the Participant should terminate employment as a result of a disability (within the
meaning of Code section 22(e)(3)), then the right of the Participant to exercise an incentive stock
option shall terminate not later than twelve (12) months after the date of such termination of
employment, except as otherwise provided by the Committee. In all other respects, the terms of any
incentive stock option granted under the Plan shall comply with the provisions of Code section 422.

          8.3. Nonqualified Stock Options. Nonqualified stock options will be exercisable at
purchase prices of not less than one hundred percent (100%) of the Fair Market Value of
the Stock on the date of grant. Nonqualified stock options will be exercisable over the period or
on the date as determined by the Committee, which may not be later than ten (10) years after the
date of grant, and shall terminate at such time as the Committee shall determine.

          8.4. Payment. The Committee shall determine the methods and the forms for payment of
the purchase price of options, including, but not limited to: (a) by cash; (b) by delivery of other
shares or securities of the Company having a then Fair Market Value equal to

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the purchase price of such shares (including by attestation); (c) by any combination of the foregoing; (d) by having the
Company withhold a number of shares otherwise deliverable pursuant to the exercise of the option
having a Fair Market Value on the date of exercise equal to some or all of the purchase price; or
(e) after the IPO Date, through a broker-facilitated cashless exercise procedure. Upon receipt of
the payment of the entire purchase price for the shares so purchased (plus any taxes required by
the Company to satisfy its withholding obligations pursuant to Section 18), certificates for such
shares shall be delivered to the Participant (or beneficiary). The number of shares of Stock
reserved for issuance under the Plan shall be reduced only by the number of shares issued.

          8.5. Limits on Incentive Stock Options. To the extent the aggregate Fair Market Value
of Stock (as determined on the date of grant), with respect to which incentive stock options
granted under the Plan, or any other plan of the Company or its Subsidiaries, are exercisable by a
Participant for the first time during any calendar year exceeds $100,000, then such option as to
the excess shall be treated as a nonqualified stock option.

Section 9. Stock Appreciation Rights

          9.1. Grant of Stock Appreciation Rights. The Committee shall have the discretion to
grant stock appreciation rights to any eligible individual; provided that if a stock appreciation
right is granted to an individual who is not providing services to the Company or a 409A Subsidiary
at the date of grant, such stock appreciation right shall be considered a deferred compensation
arrangement subject to Code section 409A to the extent provided therein. A stock appreciation
right may relate to an option, or may be granted independently of any option granted under the
Plan. Subject to the terms of the Plan, the grant price (provided that the grant price shall not
be less than the Fair Market Value of the shares subject to the stock appreciation right as
determined on the date of grant), term, methods of exercise, methods of settlement and any other
terms and conditions of any stock appreciation right shall be as determined by the Committee.

          9.2. Exercise or Maturity of Stock Appreciation Rights. The Committee may impose such
conditions or restrictions on the exercise of any stock appreciation right as it may deem
appropriate. Unless otherwise determined by the Committee, stock appreciation rights that relate to
a specific option granted under the Plan shall be exercisable or shall mature at such time or
times, on the conditions and to the extent and in the proportion, that any related option is
exercisable and may be exercised or mature for all or part of the shares of Stock subject to the
related option.

          9.3. Effect of Exercise on Related Option. Upon exercise of any number of stock
appreciation rights, the equivalent number of shares subject to any related option shall be reduced
and such shares may not again be subjected to an Award under the Plan. The exercise of any number
of options shall result in an equivalent reduction in the number of shares covered by the related
stock appreciation right and such shares may not again be subject to an Award under this Plan;
provided, however, that if a stock appreciation right was granted for less than all of the shares
covered by any related option, any such reduction shall be made at such time as, and only

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to the extent that, the number of shares exercised under the related option exceeds the number of shares
not covered by the stock appreciation right.

Section 10. Restricted Stock and Restricted Stock Units

          10.1. Awards. The Committee shall have discretion to issue restricted stock or
restricted stock units to any eligible individual, with or without payment therefor. Restricted
stock shall be subject to such terms and conditions as the Committee determines appropriate,
including, without limitation, restrictions on sale or other disposition and rights of the Company
to reacquire such restricted stock upon termination of the Participant’s employment or service
within specified periods. Restricted stock units shall be subject to such terms and conditions as
the Committee determines appropriate, including, without limitation, whether such units shall be
settled in cash or with shares of Stock. Without limitation, such terms and conditions may provide
that restricted stock or restricted stock units shall be subject to forfeiture if the Company
and/or the Participant fails to achieve one or more Performance Goals established by the Committee
over a designated period of time. The Committee shall certify in writing as to the degree of
achievement after completion of the performance period. Notwithstanding the foregoing, if the
restrictions imposed on restricted stock or restricted stock units lapse on the basis of the
passage of time, the minimum ratable period of restriction shall be three (3) years from the date
of grant of the Award, or if the restrictions lapse upon the achievement of one or more Performance
Goals, the performance period must be a minimum of one year; provided that the Committee may
provide in any award agreement or as determined in any individual case, that the restrictions shall
lapse or be waived in whole or part in the event of terminations resulting from specified causes
(such as death, disability or retirement) or upon a Change of Control.

          10.2. Registration. Any restricted stock granted under the Plan to a Participant may
be evidenced in such manner as the Committee may deem appropriate, including, without limitation,
book-entry registration or issuance of a stock certificate or certificates. In the event any stock
certificate is issued in respect of shares of restricted stock granted under the Plan to a
Participant, such certificate shall be registered in the name of the Participant and shall bear an
appropriate legend (as determined by the Committee) referring to the terms, conditions and
restrictions applicable to such restricted stock.

          10.3. Other Rights. Unless otherwise determined by the Committee, during the period
of restriction, Participants holding shares of restricted stock granted hereunder may exercise full
voting rights with respect to those shares (if applicable) and shall be entitled to receive all
dividends and other distributions paid or made with respect to those shares while they are so held;
provided, however, that the Committee may provide in any grant of shares of restricted stock that payment of dividends thereon may be deferred until termination of the
period of restriction and may be made subject to the same restrictions regarding forfeiture as
apply to such shares of restricted stock. If any such dividends or distributions are paid in shares
of Stock, the shares shall be subject to the same restrictions on transferability as the shares of
restricted stock with respect to which they were paid.

          10.4. Forfeiture. Except as otherwise determined by the Committee or as set forth in
an award agreement, upon termination of employment or service of a Participant for any

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reason during the applicable period of restriction, all shares of restricted stock and restricted stock
units still subject to restriction shall be forfeited by the Participant to the Company; provided,
however, that the Committee may, when it finds that a waiver would be in the best interests of the
Company, waive in whole or in part any or all remaining restrictions with respect to shares of
restricted stock or restricted stock units held by a Participant at such time.

Section 11. Performance Shares and Performance Units

          11.1. Issuance. The Committee shall have discretion to grant performance shares or
performance units to any eligible individual and shall have complete discretion in determining the
number of performance units or performance shares granted to a Participant.

          11.2. Performance Shares. The Committee may grant performance shares that the
Participant may earn in whole or in part if one or more Performance Goals established by the
Committee over a designated period of time consisting of one or more full fiscal years of the
Company, Subsidiary or Affiliate are met. The Committee shall certify in writing as to the degree
of achievement after completion of the performance period. The Committee shall have the discretion
to satisfy an obligation to deliver a Participant’s performance shares by delivery of less than the
number of shares of Stock earned together with a cash payment equal to the then Fair Market Value
of the shares not delivered. The number of shares of Stock reserved for issuance under the Plan
shall be reduced only by the number of shares delivered in respect of earned performance shares.
At the time of making an Award of performance shares, the Committee shall set forth the
consequences of the termination of a Participant’s employment or service prior to the expiration of
the designated performance period in respect of which the performance shares are awarded.

          11.3. Performance Units. The Committee may grant performance units to any eligible
individual that consist of monetary units that the Participant may earn in whole or in part if one
or more Performance Goals established by the Committee over a designated period of time consisting
of one or more full fiscal years of the Company, Subsidiary or Affiliate are met. The Committee
shall certify in writing as to the degree of achievement after completion of the performance
period. Payment of a performance unit earned may be in cash or in shares of Stock or in a
combination of both, as the Committee in its sole discretion determines. The number of shares of
Stock reserved for issuance under this Plan shall be reduced only by the number of shares delivered
in payment of performance units. At the time of making an Award of performance units, the Committee
shall set forth the consequences of the termination of a Participant’s employment or service prior
to the expiration of the designated performance period in respect of which the performance units
are awarded.

Section 12. Shares in Lieu of Cash

          The Committee is authorized to provide eligible individuals the opportunity to elect to
receive shares of Stock in lieu of all or a portion of any cash bonuses under any incentive
compensation programs and/or increases in base compensation, if any, or with respect to
non-employee directors, in lieu of fees for services as a director, as in effect from time to time.
Such shares shall be issued in an amount equal to (a) the equivalent dollar amount of compensation
a

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Participant has elected to receive in Stock (subject to limits prescribed by the Committee)
divided by (b) the Fair Market Value of a share of Stock (as determined by the Committee in advance
or on the date the cash compensation to which the bonus shares relate would otherwise be payable)
and shall be subject to such terms and conditions as the Committee deems appropriate, including,
without limitation, restrictions on sale or other disposition. Notwithstanding the provisions of
Section 6.1, if the Company satisfies its obligations to issue shares of Stock under this Section
12 by purchasing such shares on the principal exchange on which the Stock is then traded, such
purchased shares shall not reduce the total number of shares reserved for issuance under the Plan
as described in Section 6.1.

Section 13. Other Awards

          13.1. Other Stock-Based Awards. Other Awards, valued in whole or in part by reference
to, or otherwise based on, shares of Stock, may be granted either alone or in addition to or in
conjunction with other Awards for such consideration, if any, and in such amounts and having such
terms and conditions as the Committee may determine.

          13.2. Other Benefits. The Committee shall have the right to provide types of benefits
under the Plan in addition to those specifically listed, if the Committee believes that such
benefits would further the purposes for which the Plan was established.

          13.3. Limitations. Grants of other awards pursuant to this Section 13 that are
considered “full value” awards, such as grants of Stock, and that become vested on the basis of the
passage of time, must have a minimum ratable vesting period over three (3) years from the date of
grant, or if the award is earned based upon the attainment of one or more Performance Goals, then
the performance period must be a minimum of one year from the date of grant; provided that no
minimum vesting period shall be required for the grant of other stock-based awards if the number of
shares of Stock subject to such awards does not exceed five percent (5%) of the aggregate number of
shares reserved for issuance under Section 6.1.

Section 14. Annual Incentive Awards

          Subject to the terms of this Plan, the Committee is authorized to grant an annual incentive
award to eligible individuals, which award will provide for a cash payment if one or more
Performance Goals established by the Committee over a designated period of time consisting of one
full fiscal years of the Company, Subsidiary or Affiliate are met; provided that if the Award is
made in the year in which the IPO Date occurs, at the time of commencement of employment with the
Company or on the occasion of a promotion, then the Award may relate to a period shorter than one fiscal year. At the time of making an annual incentive award, the
Committee shall set forth the potential amount payable, the timing of payment, and the consequences
of the termination of a Participant’s employment or service prior to the expiration of the
designated performance period in respect of which the annual incentive award is made. The
Committee shall certify in writing as to the degree of achievement after completion of the
performance period.

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Section 15. Long-Term Incentive Awards

          Subject to the terms of this Plan, the Committee is authorized to grant a long-term incentive
award to eligible individuals, which award will provide for a cash payment if one or more
Performance Goals established by the Committee over a designated period of time consisting of more
than one full fiscal years of the Company, Subsidiary or Affiliate are met. At the time of making
a long-term incentive award, the Committee shall set forth the potential amount payable, the timing
of payment, and the consequences of the termination of a Participant’s employment or service prior
to the expiration of the designated performance period in respect of which the incentive award is
made. The Committee shall certify in writing as to the degree of achievement after completion of
the performance period.

Section 16. Transferability

          Each Award granted under the Plan shall not be transferable other than by will or the laws of
descent and distribution, except that a Participant may, to the extent allowed by the Committee and
in a manner specified by the Committee (a) designate in writing a beneficiary to exercise the Award
after the participant’s death; or (b) transfer any Award; provided, however, that an incentive
stock option may only be exercised by the Participant during the life of the Participant, and may
not be transferred other than by will or the laws of descent and distribution.

Section 17. Rights of Participants

          Nothing in the Plan shall interfere with or limit in any way the right of the Company,
Subsidiary or Affiliate to terminate any Participant’s employment or service at any time nor confer
upon any Participant any right to continue in the employ or service of the Company, Subsidiary or
Affiliate.

Section 18. Change of Control

          18.1. Effect of Change of Control. In order to preserve a Participant’s rights under
an Award in the event of a Change of Control, the Committee in its discretion may, at the time an
Award is made or at anytime thereafter, take one or more of the following actions: (a) provide for
the acceleration of any time period, or the deemed achievement of any Performance Goals, relating
to the exercise or realization of the Award; (b) provide for the purchase of the Award for an
amount of cash or other property that could have been received upon the exercise or realization of
the Award had the Award been currently exercisable or payable; (c) adjust the terms of the Award in
the manner determined by the Committee to reflect the Change of Control; (d) cause the Award to be assumed, or new right substituted therefor, by another entity; or
(e) make such other provision as the Committee may consider equitable and in the best interests of
the Company.

          Except as otherwise expressly provided in any agreement between a Participant and the Company
or an Affiliate, if the receipt of any payment by a Participant under the circumstances described
above with regards to Awards granted on or after the IPO Date, would result in the payment by the
Participant of any excise tax provided for in Section 280G and

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Section 4999 of the Code, then the amount of such payment shall be reduced to the extent required to prevent the imposition of such
excise tax.

          18.2. Amendment or Rescission. Notwithstanding anything contained in this Section 18,
the Board may, in its sole and absolute discretion, amend, modify or rescind the provisions of this
Section 18 if it determines that the operation of this Section 18 may prevent a transaction in
which the Company, a Subsidiary or any Affiliate is a party from receiving desired tax treatment,
including without limitation requiring that each Participant receive a replacement or substitute
Award issued by the surviving or acquiring corporation.

          18.3. Issuance or Assumption. Notwithstanding any other provision of this Plan, and
without affecting the number of Shares otherwise reserved or available under this Plan, in
connection with any merger, consolidation, acquisition of property or stock, or reorganization, the
Committee may authorize the issuance or assumption of awards under this Plan upon such terms and
conditions as it may deem appropriate.

Section 19. Amendment, Modification and Termination of Plan

          19.1. Amendments and Termination. The Board or Committee may at any time amend,
alter, suspend, discontinue or terminate the Plan, subject to the following limitations:

     (a) the Board must approve any amendment of this Plan to the extent the Company
determines such approval is required by: (i) action of the Board, (ii) applicable corporate
law, or (iii) any other applicable law;

     (b) shareholders must approve any amendment of this Plan to the extent the Company
determines such approval is required by: (i) Section 16 of the Exchange Act, (ii) the Code,
(iii) the listing requirements of any principal securities exchange or market on which the
Shares are then traded, or (iv) any other applicable law; and

     (c) shareholders must approve any of the following Plan amendments: (i) an amendment to
materially increase any number of Shares specified in Section 6.1 or the limits set forth in
Section 6.3) (except as permitted by Section 6.4), or (B) an amendment that would diminish
the protections afforded by Section 19.4.

The Committee may at any time amend any outstanding Award agreement; provided, however, that any
amendment that decreases or impairs the rights of a Participant under such agreement shall not be
effective unless consented to by the Participant in writing, except that Participant
consent shall not be required in the event an Award as amended, adjusted or cancelled under Section
6.4 or Section 18, and effective for Awards made on or after the IPO Date, the Committee need not
obtain Participant (or other interested party) consent for modification of an Award to the extent
deemed necessary to comply with any applicable law, the listing requirements of any principal
securities exchange or market on which the Shares are then traded, or to preserve favorable
accounting or tax treatment of any Award for the Company.

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          19.2. Term of Plan. Unless terminated earlier by the Board pursuant to Section 19.1,
the Plan shall terminate on, and no Award shall be granted under the Plan after, September 29,
2014.

          19.3. Survival Following Termination. Notwithstanding the foregoing, to the
extent provided in the Plan, the authority of (a) the Committee to amend, alter, adjust, suspend,
discontinue or terminate any Award, waive any conditions or restrictions with respect to any Award,
and otherwise administer the Plan and any Award and (b) the Board or Committee to amend the Plan,
shall extend beyond the date of the Plan’s termination. Termination of the Plan shall not affect
the rights of Participants with respect to Awards previously granted to them, and all unexpired
Awards shall continue in force and effect after termination of the Plan except as they may lapse or
be terminated by their own terms and conditions.

          19.4. Repricing and Backdating Prohibited. Notwithstanding anything in this Plan to
the contrary, and except for the adjustments provided in Section 6.4, neither the Committee nor any
other person may decrease the exercise price for any outstanding Option or SAR after the date of
grant nor allow a Participant to surrender an outstanding Option or SAR to the Company as
consideration for the grant of a new Option or SAR with a lower exercise price. In addition, the
Committee may not make a grant of an Option or SAR with a grant date that is effective prior to the
date the Committee takes action to approve such Award.

          19.5. Foreign Participation. To assure the viability of Awards granted to
Participants employed or residing in foreign countries, the Committee may provide for such special
terms as it may consider necessary or appropriate to accommodate differences in local law, tax
policy or custom. Moreover, the Committee may approve such supplements to, or amendments,
restatements or alternative versions of, this Plan as it determines is necessary or appropriate for
such purposes. Any such amendment, restatement or alternative versions that the Committee approves
for purposes of using this Plan in a foreign country will not affect the terms of this Plan for any
other country. In addition, all such supplements, amendments, restatements or alternative versions
must comply with the provisions of Section 19.1.

          19.6. Code section 409A. The provisions of Code section 409A are incorporated herein
by reference to the extent necessary for any Award that is subject to Code section 409A to comply
therewith.

Section 20. Taxes

          20.1. Withholding. The Company shall be entitled to withhold from any payment made
hereunder or from any payment otherwise owing to the holder of an Award, the
amount of any tax attributable to any amount payable, or shares of Stock deliverable, under
the Plan, after giving the person entitled to receive such amount or shares of Stock notice as far
in advance as practicable, and the Company may defer making payment or delivery under such Award if
any such tax may be pending unless and until indemnified to its satisfaction. The Committee may,
in its discretion, permit a Participant to pay all or a portion of the federal, state and local
withholding taxes arising in connection with the payment, realization or vesting of an Award by
electing to (a) have the Company withhold shares of Stock, (b) tender back shares of

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Stock received in connection with such benefit, or (c) deliver other previously owned shares of Stock, having a
Fair Market Value equal to the amount to be withheld; provided, however, that the amount to be
withheld shall not exceed the Participant’s statutory minimum total federal, state and local tax
obligations associated with the transaction. The election must be made on or before the date as of
which the amount of tax to be withheld is determined and otherwise as required by the Committee.
The Fair Market Value of fractional shares of Stock remaining after payment of the withholding
taxes shall be paid to the Participant in cash.

          20.2. Cash Bonus. The Committee may, in its discretion, grant a cash bonus to a
Participant to enable the Participant to pay all or a portion of the federal, state or local tax
liability incurred by the Participant upon the vesting, exercise, payment or settlement of any
Award. The Company shall deduct from any cash bonus such amount as may be required for the purpose
of satisfying the Company’s obligation to withhold federal, state or local taxes.

          20.3. No Guarantee of Tax Treatment. Notwithstanding any provisions of the Plan, the
Company does not guarantee to any Participant or any other Person with an interest in an Award that
(a) any Award intended to be exempt from Code section 409A shall be so exempt, (b) any Award
intended to comply with Code section 409A or Code section 422 shall so comply, (c) any Award shall
otherwise receive a specific tax treatment under any other applicable tax law, nor in any such case
will the Company or any Affiliate indemnify, defend or hold harmless any individual with respect to
the tax consequences of any Award.

Section 21. Stock Transfer Restrictions

          21.1. Restriction on Transfer. Shares of Stock issued under the Plan may not be sold
or otherwise disposed of except (a) pursuant to an effective registration statement under the Act,
or in a transaction which, in the opinion of counsel for the Company, is exempt from registration
under the Act; and (b) in compliance with state securities laws. Further, as a condition to
issuance of shares of Stock under the Plan, the Participant, his beneficiary or his heirs, legatees
or legal representatives, as the case may be, shall execute and deliver to the Company a
restrictive stock transfer agreement in such form, and subject to such terms and conditions, as
shall be reasonably determined or approved by the Committee, which agreement, among other things,
may impose certain restrictions on the sale or other disposition of any shares of Stock acquired
under the Plan. The Committee may waive the foregoing restrictions, in whole or in part, in any
particular case or cases or may terminate such restrictions whenever the Committee determines that
such restrictions afford no substantial benefit to the Company.

          21.2. Additional Restrictions; Legends. All shares delivered under the Plan pursuant
to any Award shall be subject to such stock transfer orders and other restrictions as the
Committee may deem advisable under the Plan and any applicable federal or state securities
laws, and the Committee may cause a legend or legends to be put on any certificates for Shares to
make appropriate references to such restrictions.

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Section 22. Miscellaneous

          22.1. Other Terms. The grant of any Award under the Plan may also be subject to other
provisions (whether or not applicable to the benefit awarded to any other participant) as the
Committee determines appropriate, including, without limitation, provisions for (a) the purchase of
Stock under options in installments; (b) the financing of the purchase of Stock under the options
in the form of a promissory note issued to the Company by a Participant on such terms and
conditions as the Committee determines; (c) restrictions on resale or other disposition; and (d)
compliance with federal or state securities laws and stock exchange or market requirements.

          22.2. No Fractional Shares. No fractional shares or other securities shall be issued
or delivered pursuant to the Plan, and the Committee shall determine (except as otherwise provided
in the Plan) whether cash, other securities or other property shall be paid or transferred in lieu
of any fractional shares or other securities, or whether such fractional shares or other securities
or any rights thereto shall be canceled, terminated or otherwise eliminated.

          22.3. General Restrictions. Notwithstanding any other provision of the Plan, the
Company shall have no liability to deliver any shares of Stock under the Plan or make any payment
unless such delivery or payment would comply with all applicable laws and the applicable
requirements of any securities exchange or similar entity.

          22.4. Issuance of Certificate. To the extent the Plan provides for the issuance of
shares of Stock, the issuance may be effected on a non-certificated basis, to the extent not
prohibited by applicable law or the applicable rules of any stock exchange.

          22.5. Employment and Service. The issuance of an Award shall not confer upon a
Participant any right with respect to continued employment or service with the Company or any
Affiliate, or the right to continue as a director, consultant or advisor. Unless determined
otherwise by the Committee, for purposes of the Plan and all Awards, the following rules shall
apply:

     (a) a Participant who transfers employment between the Company and its Affiliates, or
between Affiliates, will not be considered to have terminated employment;

     (b) a Participant who ceases to be a non-employee director because he or she becomes an
employee of the Company or an Affiliate shall not be considered to have ceased service as a
director with respect to any Award until such Participant’s termination of employment with
the Company and its Affiliates;

     (c) a Participant who ceases to be employed by the Company or an Affiliate and
immediately thereafter becomes a non-employee director of the Company or an
Affiliate, or a consultant or advisor to the Company or any Affiliate shall not be
considered to have terminated employment until such Participant’s service as a director of,
or consultant or advisor to, the Company and its Affiliates has ceased; and

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     (d) a Participant employed by an Affiliate will be considered to have terminated
employment when such entity ceases to be an Affiliate.

          Notwithstanding the foregoing, for purposes of an Award that is subject to Code section 409A,
if a Participant’s termination of employment or service triggers the payment of compensation under
such Award, then the Participant will be deemed to have terminated employment or service upon his
or her “separation from service” within the meaning of Code section 409A.

Section 23. Legal Construction

          23.1. Requirements of Law. The granting of Awards under the Plan and the issuance of
shares of Stock in connection with an Award, shall be subject to all applicable laws, rules and
regulations, and to such approvals by any governmental agencies or national securities exchanges as
may be required.

          23.2. Governing Law. The Plan, and all agreements hereunder, shall be construed in
accordance with and governed by the laws of the State of Wisconsin, without reference to any
conflict of law principles thereof. Any legal action or proceeding with respect to this Plan, any
Award or any award agreement, or for recognition and enforcement of any judgment in respect
thereof, may only be brought and determined in a court sitting in the County of Sheboygan in the
State of Wisconsin.

          23.3. Limitations on Actions. With regard to Awards granted on or after the IPO Date,
any legal action or proceeding with respect to this Plan, any Award or any award agreement, must be
brought within one year (365 days) after the day the complaining party first knew or should have
known of the events giving rise to the complaint.

          23.4. Severability. If any provision of the Plan or any award agreement or any Award
(a) is or becomes or is deemed to be invalid, illegal or unenforceable in any jurisdiction, or as
to any person or Award, or (b) would disqualify the Plan, any award agreement or any Award under
any law deemed applicable by the Committee, then such provision shall be construed or deemed
amended to conform to applicable laws, or if it cannot be so construed or deemed amended without,
in the determination of the Committee, materially altering the intent of the Plan, award agreement
or Award, such provision shall be stricken as to such jurisdiction, person or Award, and the
remainder of the Plan, such award agreement and such Award shall remain in full force and effect.

-19-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]