Document:

Leadership Equity Acquisition Plan III

 Exhibit 4.42 

 
 WPP PLC 

 
  

 
 LEADERSHIP EQUITY ACQUISITION PLAN III 

 
  

 
 Approved by the Company in General Meeting on 2 June 2009 and
adopted by the board of directors of the Company on 12 May 2009 
  

Hammonds LLP 
 7 Devonshire Square London EC2M 4YH DX
136546 Bishopsgate 2 
 Telephone +44 (0)20 7655 1000 Fax +44 (0)20 7655 1001 

 
 Website www.hammonds.com 

 
 Reference BDG/WPP.33-6 

 CONTENTS 

 

					
	1	  	PURPOSE	  	2
			
	2	  	INTERPRETATION	  	2
			
	3	  	ELIGIBILITY	  	8
			
	4	  	ACQUISITION OF INVESTMENT SHARES AND INVESTMENT OPTIONS	  	8
			
	5	  	PLAN LIMITS	  	9
			
	6	  	AWARDS	  	10
			
	7	  	COMMITMENT OF INVESTMENT SHARES AND INVESTMENT OPTIONS	  	12
			
	8	  	PERFORMANCE CONDITIONS	  	12
			
	9	  	CESSATION OF EMPLOYMENT	  	13
			
	10	  	VARIATION OF CAPITAL	  	14
			
	11	  	CHANGE OF CONTROL	  	14
			
	12	  	DISCHARGE OF AWARDS	  	17
			
	13	  	MISCELLANEOUS	  	18
			
	14	  	AMENDMENT	  	20
			
	15	  	DURATION	  	20
		
	 SCHEDULE 1
	  	21

  

 i 

	1	 	 PURPOSE 

  

The purpose of the Plan is to incentivise those executive directors of the Company and operating company executives whose
contributions transcend their day-to-day role. 
  

	2	 	 INTERPRETATION 

  

	2.1	 	 The following words and expressions have the following meanings in the Rules and in Schedule 1: 

 
 “Act” means the Companies Act 2006 as
amended. 
  
 “ADR” means an
American Depository Receipt representing, for the time being, 5 ordinary shares in the capital of the Company deposited with Citibank NA as depository under the Deposit Agreement between the Company and Citibank NA dated as of 19 November 2008
as amended from time to time or any other American depository receipt arrangement sponsored by the Company. 
  

“Annual Earnings” means an Eligible Person’s annual earnings for the time being, comprising his basic salary,
directorship fee (if applicable) and Target Bonus for a particular year. In the event of any dispute, such annual earnings will be as determined by the Compensation Committee. 

 
 “Award” means an award or grant made
to an Eligible Person subject to and on the terms of this Plan. 
  

“Award Period” means the period of 42 days commencing on: 

 

	 	(a)	 	 the date of approval of the Plan by the shareholders of the Company; 

 

	 	(b)	 	 any day on which the Company releases its results for any financial period; or 

 

	 	(c)	 	 the date of commencement of Employment of an Eligible Person (but only in respect of that Eligible Person). 

 
 “Bad Leaver” means a Participant
whose Employment terminates as a result of: 
  

	 	(a)	 	 termination by a Group Company of his Employment where that Participant: 

 

	 	(i)	 	 shall, in the opinion of the Compensation Committee, have committed any act or omission which entitles a Group Company to terminate his contract of employment
without notice; or 

  

	 	(ii)	 	 shall, in the opinion of the Compensation Committee, have committed any serious breach or repeated or continued breach (after warning in writing) of his
obligations under his contract of employment including, without limitation, ceasing to work full time for the Group without the prior consent of the relevant Group Company except in circumstances where the Participant retires with the prior consent
of the Company; or 

  

	 	(iii)	 	 shall have become prohibited by law from being a director or employee of a Group Company as a result of his own act, omission or misfeasance; or

  

 2 

	 	(iv)	 	 shall have been convicted of any criminal offence which is punishable by a custodial sentence or involves dishonesty or violence; or

  

	 	(v)	 	 shall have, otherwise than at the request of the relevant Group Company, resigned as a director or employee of the Group; or 

 

	 	(b)	 	 the voluntary leaving or giving notice voluntarily to leave Employment with the Group or voluntarily resigning as a director of any Group Company including,
for the avoidance of doubt, taking retirement without the prior consent of the relevant Group Company; or 

  

	 	(c)	 	 the wrongful termination by that Participant of his contract of employment with any Group Company unless the Company has agreed in writing that such
termination shall not constitute the Participant a Bad Leaver; 

  

provided that a Participant shall not be a Bad Leaver if he shall have been found to have been constructively dismissed by any Group
Company. 
  
 “Bonus Deferral
Programme” means the WPP plc Annual Bonus Deferral Programme adopted by the Company on 30 September 2008. 
  

“Change of Control Date” means the date on which a person obtains or persons obtain Control of the Company as
described in Rule 11.1(a) or 11.1(b). 
  

“Close Family” means, in relation to a person, that person’s spouse, civil partner, children and siblings and
such other persons as may be agreed to be Close Family from time to time by the Compensation Committee. 
  

“Company” means WPP plc a public limited company incorporated in Jersey under the Companies (Jersey) Law 1991 with
registered number 101749. 
  
 “Company
Secretary” means the company secretary of the Company from time to time. 
  

“Compensation Committee” means the compensation committee for the time being of the board of directors of the
Company. 
  
 “Control” has
the same meaning as in section 840 of the Income and Corporation Taxes Act 1988. 
  

“Eligible Person” means any employee (including an executive director) of a Group Company. 

 
 “Employment” means employment as a
director or employee of any Group Company. 
  

“Encumbrance” means any mortgage, charge, assignment or assignation by way of security, guarantee, debenture,
hypothecation, pledge, declaration of trust, lien, right of set-off or any other encumbrance (including any conditionality or forfeiture right) or security interest whatsoever, howsoever created or arising provided that the Compensation Committee
may determine that any particular encumbrance or security interest shall not be an Encumbrance for the purposes of this definition and, for the avoidance of doubt any Shares which are committed as Investment Shares or any Investment Option committed
to an existing Award under the Plan will be treated as 
  

 3 

 
being subject to an Encumbrance for the purposes of this definition except in relation to the Award to which they are committed. 

 
 “ESOP” means any of the WPP Group plc
Grantor Trust, the WPP Group plc ROW ESOP, the WPP Group plc UK ESOP and any other employee benefit trust in existence at the date of adoption of the Plan or as may otherwise be nominated from time to time by the Compensation Committee to operate in
conjunction with the Plan. 
  
 “Good
Leaver” means a Participant whose termination of Employment does not constitute him a Bad Leaver, including by reason of his ceasing to be in Employment as a result of: 

 

	 	(a)	 	 death; 

  

	 	(b)	 	 wrongful dismissal (being a termination by a Group Company without notice or payment in lieu of notice in circumstances where that Group Company was not
entitled to terminate the Employment of that Participant summarily) or constructive dismissal; 

  

	 	(c)	 	 permanent disability; 

  

	 	(d)	 	 serious long-term illness preventing the Participant from carrying out his duties of employment; or 

 

	 	(e)	 	 retirement on a basis agreed with the Company; 

  

provided that a Participant will cease to be treated as a Good Leaver if within six months of the date of cessation of his
Employment he takes up an employment or engagement with another company, business or organisation which the Compensation Committee considers to be a competitor of any part of the Group. 

 
 “Group” has the same meaning as in
section 1261 of the Act. 
  
 “Group
Company” means any member of the Group. 
  

“I&P Period” means the investment and performance period which is the period commencing on a date specified by
the Compensation Committee and ending on 31 December in the 5th year from the commencement of the I&P Period. 
  

“Interested” has the meaning set out in Rules 2.2 and 2.3. 

 
 “Investment Option” means an option
to purchase Shares the terms of which are consistent with any terms specified by the Compensation Committee at the relevant time and which is committed to the Plan by an Eligible Person to qualify for an Award in accordance with Rule 7 and which
becomes exercisable following the end of the I&P Period. 
  

“Investment Option Shares” means Shares that are the subject of an Investment Option. 

 
 “Investment Shares” means Shares
committed to the Plan by an Eligible Person to qualify for an Award in accordance with Rule 7. 
  

 4 

 “IO Commitment Date” means the date by which a Participant must

  

	 	(a)	 	 agree to commit Investment Shares; and 

  

	 	(b)	 	 commit an Investment Option (if applicable) 

  

to the Plan to be eligible for an Award which shall be such date in the year in which an Award is made as is determined by the
Compensation Committee but being a date which is not normally later than 31 December in that year, provided that the Compensation Committee may, in its discretion, decide to extend the date by which agreement to commit Investment Shares must be
received and/or by which an Investment Option (if applicable) must be committed to the Plan to such later date as it may determine, either for all Eligible Persons invited to apply for an Award or any one or more of them provided that the IO
Commitment Date must be before the relevant Awards are granted. 
  

“IRC” means the United States’ Internal Revenue Code of 1986, as amended. 

 
 “IS Commitment Date” means the date
by which Investment Shares must be committed to the Plan to be eligible for an Award which shall be such date in the year in which an Award is made as is determined by the Compensation Committee but being a date which is not normally later than
31 December in that year, provided that the Compensation Committee may, in its discretion, decide to extend the date by which Investment Shares must be committed to the Plan to such later date as it may determine, either for all Eligible
Persons invited to apply for an Award or any one or more of them. 
  

“ITEPA” means the Income Tax (Earnings and Pensions) Act 2003. 

 
 “Matching Shares” means the Shares
that are comprised in an Award in accordance with Rule 6.3. 
  

“Official List” means the Daily Official List of the UK Listing Authority. 

 
 “Participant” means a person who
holds an Award including, if relevant, his legal personal representatives. 
  

“Performance Conditions” means the conditions set out in Schedule 1 or such other conditions as may be determined
from time to time by the Compensation Committee pursuant to Rule 8. 
  

“Plan” means the WPP plc Leadership Equity Acquisition Plan III as from time to time amended in accordance with the
provisions of these Rules. 
  

“Relevant Event” means the earlier of 

 

	 	(a)	 	 the date on which an Employment terminates in circumstances where the Participant is a Good Leaver; or 

 

	 	(b)	 	 the Change of Control Date. 

  

“Relevant Proportion” means the proportion that the length of the period from the start of an I&P Period to the
occurrence of the Relevant Event bears to the length of that I&P Period (calculated in days). 
  

 5 

 “Rules” means the rules of the Plan. 

 
 “Schedule” means Schedule 1 to these
Rules. 
  
 “Share” means an
ordinary share in the capital of the Company and includes ADRs. 
  

“Target Bonus” means, in relation to any particular year, the target bonus which may be payable to an Eligible
Person in relation to that particular year and which is paid in cash or in Shares to be received either immediately or on a deferred basis. 
  

“Trading Day” means a day (excluding Saturdays, Sundays and Bank Holidays) on which clearing banks are generally
open for business in the City of London and in New York. 
  

“Treasury Shares” means any Shares which are purchased by the Company in accordance with Article 57 of the
Companies (Jersey) Law 1991 and held by the Company as treasury shares pursuant to Article 58A of the Companies (Jersey) Law 1991. 
  

“UK Listing Authority” means the United Kingdom Listing Authority, a division of the Financial Services Authority.

  
 “Value” means 

 

	 	(a)	 	 in the case of Shares, the average of: 

  

	 	(i)	 	 in the case of an ordinary share in the capital of the Company, the middle-market quotation of a Share on the Daily Official List; and

  

	 	(ii)	 	 in the case of ADRs, the average of the highest and lowest price of an ADR on a Trading Day on the NASDAQ National Market System or on such other trading
market as is for the time being the principal trading market for the ADR, 

  

in either case taken over the five Trading Days before the date on which such value is to be determined; and 

 

	 	(b)	 	 in the case of an Investment Option, the price payable to acquire the Investment Option. 

 
 “Vested Matching Shares” means the
number of Matching Shares comprised in an Award which is determined as at the end of the I&P Period as being the number of Matching Shares which vest in accordance with paragraph 5 of Schedule 1. 

 
 “Vesting Date” means the date
determined by the Compensation Committee to be the date on which restrictions attaching to Vested Matching Shares are to be released or Vested Matching Shares are to be transferred or issued (pursuant to the exercise of an option or otherwise) to a
Participant, or as he may direct, or to a depository in the case of ADRs, to discharge an Award which shall, in any event, be no later than 15 March in the year following the end of the I&P Period unless the Company is prohibited from
discharging the Award on that date in which case the Vesting Date will be the first available Trading Day when the Company is no longer prohibited from discharging that Award. 

 

 6 

	2.2	 	 An Eligible Person or Participant will be treated as Interested in Shares if those Shares are held by: 

 

	 	(a)	 	 the Eligible Person or Participant beneficially; 

  

	 	(b)	 	 a member of the Eligible Person’s or Participant’s Close Family beneficially; 

 

	 	(c)	 	 a family trust or pension trust (not including a pension scheme of any Group Company) in which the Eligible Person or Participant or a member of the Eligible
Person’s or Participant’s Close Family is interested; 

  

	 	(d)	 	 a private company in which the Eligible Person or Participant or a member of their Close Family is interested as to more than 25% of the voting power, income
and capital on a winding up; 

  

	 	(e)	 	 a nominee for any of the above; or 

  

	 	(f)	 	 an ESOP, but only in a case where the Participant’s entitlement to receive those Shares under an Award is not subject to any outstanding employment- or
performance-related conditions and the Participant has agreed with the Company to defer receipt of those Shares until a date after the first date on which those Shares could have first been delivered to the Participant; 

 
 and not (save with the written consent of the
Compensation Committee) subject to any Encumbrance provided that any Shares which are the subject of a Basic Share Award or a Basic Share Right will be treated as Shares in which an Eligible Person or Participant is Interested but, for the avoidance
of doubt, any Shares which are issued as Bonus Share Awards or pursuant to Bonus Shares Rights pursuant to the Bonus Deferral Programme shall not be treated as Shares in which an Eligible Person is Interested prior to: 

 

	 	(a)	 	 in the case of a Bonus Share Award, any contingency attaching to such award lapsing; and 

 

	 	(b)	 	 in the case of a Bonus Share Right, the option to acquire Shares pursuant to the rights being validly exercised, 

 
 and, also for the avoidance of doubt, any unexercised
options where the option price is more than a nominal amount shall also not be treated as Shares in which an Eligible Person or Participant is Interested. 
  

	2.3	 	 An Eligible Person or Participant will be treated as Interested in an Investment Option if that Investment Option is a subsisting Investment Option held by:

  

	 	(a)	 	 the Eligible Person or Participant beneficially; 

  

	 	(b)	 	 a member of the Eligible Person’s or Participant’s Close Family beneficially; 

 

	 	(c)	 	 a family trust or pension trust (not including a pension scheme of any Group Company) in which the Eligible Person or Participant is interested or a member of
the Eligible Person’s or Participant’s Close Family is interested; 

  

 7 

	 	(d)	 	 a private company in which the Eligible Person or Participant or their Close Family is interested as to more than 25% of the voting power, income and capital
on a winding up; or 

  

	 	(e)	 	 a nominee for any of the above; 

  

and not (save with the written consent of the Compensation Committee) subject to any Encumbrance. 

 

	2.4	 	 The terms Basic Share Award, Basic Share Right, Bonus Share Award and Bonus Shares Right will have the same meanings as they have in the rules of the Bonus
Deferral Programme as amended from time to time. 

  

	2.5	 	 Words importing the singular shall include the plural and vice versa and words importing the masculine shall include the feminine.

  

	2.6	 	 Any reference, express or implied, to an enactment includes references to: 

 

	 	(a)	 	 that enactment as amended, extended or applied by or under any other enactment; and 

 

	 	(b)	 	 any enactment which that enactment re-enacts (with or without modification). 

 

	2.7	 	 Any reference to a Rule is a reference to one of these Rules. 

  

	3	 	 ELIGIBILITY 

  

	3.1	 	 No person is entitled, by virtue of the provisions of the Plan, to participate as of right in the Plan. 

 

	3.2	 	 The Compensation Committee may decide from time to time which Eligible Persons may participate and the extent of their participation in the Plan.

  

	4	 	 ACQUISITION OF INVESTMENT SHARES AND INVESTMENT OPTIONS 

 

	4.1	 	 In order to participate in the Plan and to be eligible to receive and retain an Award an Eligible Person must: 

 

	 	(a)	 	 agree to commit to the Plan Shares in which he is Interested and, where agreed between the Compensation Committee and the Participant, acquire an Investment
Option in which he is Interested on or before the IO Commitment Date which the Compensation Committee has specified in relation to that Award; 

 

	 	(b)	 	 be Interested in that number of Investment Shares which are committed to the Plan in accordance with Rule 7 on or before the IS Commitment Date; and

  

	 	(c)	 	 remain Interested in that number of Investment Shares from the IS Commitment Date and in the Investment Option from the IO Commitment Date (if applicable) to
the end of the I&P Period. 

  

	4.2	 	 Subject to Rule 4.3 the maximum aggregate Value of Shares together with, if applicable, the Value of Investment Options (in both cases being the Value
determined as at the date of the letter from the Company to an Eligible Person inviting him to receive an 

  

 8 

	 	 
Award) which an Eligible Person may commit as Investment Shares and Investment Options (in aggregate) over: 

 

	 	(a)	 	 all Awards made to that Eligible Person under the Plan shall be 500 per cent. of the Eligible Person’s Annual Earnings; and

  

	 	(b)	 	 all Awards made to that Eligible Person under the Plan in respect of a particular I&P Period shall be 100% per cent of the Eligible Person’s
Annual Earnings 

  
 provided
that in respect of any particular Award, the Compensation Committee may prescribe a maximum aggregate Value of Investment Shares for that Award and (if applicable) the associated Investment Option lower than the aggregate Values necessary to reach
these limits. 
  

	4.3	 	 The maximum Value of an Investment Option for any particular Award must not exceed one-third of the Value of the Investment Shares in respect of that Award.
In respect of any particular Award, the Compensation Committee may prescribe a maximum Value of an Investment Option lower than one-third of the Value of the Investment Shares in respect of that Award. 

 

	4.4	 	 If, by the IS Commitment Date, a Participant has failed to commit the number of Investment Shares which it has been determined he should commit in relation to
an Award, then, except in such exceptional circumstances as the Compensation Committee may from time to time determine, that Award will lapse. In such exceptional circumstances, the Compensation Committee may determine that an Award will not lapse
but will be adjusted in such a manner as the Compensation Committee may decide, including (but not limited to) adjustments to: 

  

	 	(a)	 	 specify a later date by which the Investment Shares must be committed and Investment Option (if applicable) acquired; 

 

	 	(b)	 	 reduce the number of Investment Shares to be committed; 

 

	 	(c)	 	 allow a different Investment Option (if applicable) to be committed; 

 

	 	(d)	 	 reduce the number of Investment Option Shares (if applicable) comprised in the Award; and/or 

 

	 	(e)	 	 reduce the number of Matching Shares comprised in the Award. 

  

	4.5	 	 Neither the Company nor any Group Company shall grant, be a party to or negotiate any Investment Option. 

 

	5	 	 PLAN LIMITS 

  

The number of Shares in respect of which Awards may be granted under the Plan on any day which are to be satisfied by the issue of
Shares or the transfer of Treasury Shares when added to the aggregate of: 
  

	 	(a)	 	 the number of Shares or Treasury Shares which immediately prior to that day have been or are to be issued or (in the case of Treasury Shares) transferred to
satisfy outstanding Awards under the Plan; and 

  

 9 

	 	(b)	 	 the number of Shares or Treasury Shares which immediately prior to that day have been or are to be issued or (in the case of Treasury Shares) transferred to
satisfy options or awards granted or made under any other employees’ share scheme of the Company in the ten years immediately before that day 

 
 shall not exceed 10% of the issued ordinary share
capital of the Company for the time being. 
  

	6	 	 AWARDS 

  

	6.1	 	 The Compensation Committee may decide, from time to time, that the grant of an Award may be subject to the satisfaction of such conditions as it determines
and as it shall notify to an Eligible Person at the time that he is invited to participate. 

  

	6.2	 	 By agreeing to participate in the Plan (having been invited to do so) and by agreeing to commit Investment Shares and an Investment Option (if applicable) by
the Commitment Date in accordance with Rule 4, an Eligible Person shall be eligible to receive an Award granted by the Compensation Committee. Awards will normally be made during an Award Period, but exceptionally may be made at other times.

  

	6.3	 	 An Award shall relate to such number of Matching Shares as the Compensation Committee may determine not exceeding five Matching Shares per Participant for
each Investment Share and (if applicable) each Investment Option Share, in both cases, committed by the Participant in question. Subject to Rules 11.2 and 12.7, the number of Matching Shares which become Vested Matching Shares shall be determined at
the end of the I&P Period and will depend on the extent to which the Performance Conditions or other conditions as referred to in Rule 8 are satisfied. 

 

	6.4	 	 The Compensation Committee shall determine the form in which the Award is made and its full terms. In particular, the Award may take the form of any one or
more of the following, provided that the terms of the Award are consistent with the Plan: 

  

	 	(a)	 	 an award of Matching Shares, subject to restrictions, or a promise of Matching Shares; 

 

	 	(b)	 	 an option to acquire the Matching Shares exercisable for a nil or a nominal consideration; or 

 

	 	(c)	 	 such other form which the Compensation Committee considers has a substantially similar economic purpose or effect, 

 
 and the Compensation Committee may determine that an
Award may be satisfied by a Group Company or the trustees of an ESOP (with the agreement of such Group Company or trustees, as appropriate) or otherwise as it considers appropriate. 

 

	6.5	 	 A Participant shall become entitled to acquire, receive or retain (depending on the form of the Award) the number of Vested Matching Shares comprised in an
Award in accordance with the form of the Award under Rule 6.4 on the Vesting Date, only if both the following conditions are met: 

  

	 	(a)	 	 unless the Compensation Committee determines otherwise: 

 

 10 

	 	(i)	 	 the Participant remains Interested in the relevant number of Investment Shares and the Investment Option (if applicable) until the end of the I&P Period;
or 

  

	 	(ii)	 	 if a Participant ceases to be in Employment prior to the Vesting Date and is a Good Leaver, the Participant remains Interested in all of the relevant
Investment Shares and the Investment Option (if applicable) until the Vesting Date; and 

  

	 	(b)	 	 subject to Rules 9 and 11, if the Participant continues in Employment throughout the I&P Period and until the Vesting Date. 

 

	6.6	 	 The Participant shall cease to have any rights in respect of the number of Matching Shares comprised in an Award which are not Vested Matching Shares with
effect from the end of the I&P Period, and shall cease to have any rights in respect of all the Matching Shares comprised in an Award which shall lapse with effect from the earliest of: 

 

	 	(a)	 	 subject to Rules 9 and 11, the cessation of Employment; 

 

	 	(b)	 	 unless the Compensation Committee determines otherwise, his failure to remain Interested in accordance with Rule 6.5 in that number of Investment Shares and
the Investment Option (if applicable) that relates to that Award; 

  

	 	(c)	 	 subject to Rule 6.7, the date on which a Participant transfers, assigns, uses as security or otherwise charges an Award or turns an Award to account, or
attempts or purports to do any of the same; 

  

	 	(d)	 	 the date on which an Award lapses under Rule 6.8; and 

 

	 	(e)	 	 the date on which Rule 9.8 applies. 

  

	6.7	 	 An Award is personal to a Participant and cannot be transferred, assigned, used as security or otherwise charged or turned to account except that the Award
may be transferred if, immediately after the transfer, the Participant would be Interested in the Award within the meaning of Rule 2.2 if when applying the provisions of Rule 2.2 the word Shares in that Rule were replaced by the word Award (and
making such further changes to the wording of Rule 2.2 as are required to give effect to this Rule) but only for so long as the Participant remains so Interested. 

 

	6.8	 	 An Award shall lapse if the Participant commits an act of bankruptcy or enters into any arrangement with his creditors under any formal insolvency procedure.

  

	6.9	 	 The receipt of an Award shall not confer on the Participant (unless otherwise provided in the terms of the Award) any right to the allotment of a specified
number of Shares by the Company or to the transfer of a specified number of Shares from any particular transferor. The discharge of the Award shall be in accordance with Rule 12. 

 

	6.10	 	 If an Award is made in a form that does not confer on the Participant the right to receive dividends on the relevant Vested Matching Shares from the date the
Award is made, the Compensation Committee may provide that the Participant shall, subject to Rule 6.11, be entitled to receive at the time of the discharge of the Award to which the entitlement relates an issue or transfer of, or a release of
restrictions in respect of, that number of Shares which could have been purchased if: 

  

 11 

	 	(a)	 	 the dividends which would have been paid on such Vested Matching Shares (had the form of the Award conferred the right to receive dividends) been reinvested
in Shares on the date each dividend is paid after the date that the Award is made and during the I&P Period; and 

  

	 	(b)	 	 the dividends which would have been paid on Shares which would have been held pursuant to that reinvestment in Shares had those dividends been further
reinvested in Shares, again on the date each dividend is paid during the I&P Period. 

  

	6.11	 	 If a Participant is a Bad Leaver any right to receive additional Shares under Rule 6.10 shall, unless the Compensation Committee determines otherwise, lapse
on the date of termination of Employment. 

  

	6.12	 	 For the avoidance of doubt a Participant shall not be entitled to any voting rights in respect of Shares to be issued or transferred or released from
restrictions pursuant to Rule 6.10 until those Shares are actually issued or transferred or released from those restrictions to the Participant. 

 

	6.13	 	 If the Company and the Participant agree that an election under Section 431 ITEPA should be made, the Company and the Participant will both sign such an
election and do all such other things as are necessary to give effect to such an election. 

  

	7	 	 COMMITMENT OF INVESTMENT SHARES AND INVESTMENT OPTIONS 

  

	7.1	 	 Any Shares or Investment Option in which an Eligible Person is or becomes Interested for the purposes of Rule 4 shall be committed to the Plan and held under
arrangements approved by the Compensation Committee so as to constitute Investment Shares and an Investment Option (if applicable) of the Participant for a particular Award. 

 

	7.2	 	 The Compensation Committee shall be entitled to rely on a declaration in a form satisfactory to it that an Eligible Person or Participant is or continues to
be (respectively) Interested in the required number of Investment Shares and the Investment Option (if applicable). 

  

	7.3	 	 A Participant shall forthwith notify the Company Secretary if he ceases to be Interested in the number of Investment Shares required to be committed (or any
of them) and/or the Investment Option (if applicable). 

  

	7.4	 	 The commitment of Shares to the Plan as Investment Shares shall not of itself affect any right of the Eligible Person to dividends or other rights attaching
to those Shares. 

  

	7.5	 	 An Investment Option shall cease to be committed at the end of the I&P Period and from the end of the I&P Period the Participant shall be entitled to
release the Investment Option, exercise it or continue to hold it in accordance with its terms as the Participant may determine. 

  

	8	 	 PERFORMANCE CONDITIONS 

  

	8.1	 	 Subject to Rule 9.6, the number of Matching Shares comprised in an Award which become Vested Matching Shares shall be determined as soon as practicable
following the end of the I&P Period and will depend on the extent to which such Performance 

  

 12 

	 	 
Conditions or other conditions as the Compensation Committee shall, from time to time determine on the making of an Award, are satisfied. 

 

	8.2	 	 In the absence of a determination by the Compensation Committee to the contrary under Rule 8.1 above, the Performance Conditions set out in Schedule 1 will
apply to Awards granted under the Plan. 

  

	8.3	 	 If the Compensation Committee determines that exceptional circumstances have occurred or have prevailed at any time during the I&P Period applicable to an
Award, the Compensation Committee shall have the power to determine that the number of Matching Shares which may become Vested Matching Shares at the end of an I&P Period, in respect of all Awards having the same I&P Period, shall be varied
by such number as the Compensation Committee considers appropriate. 

  

	9	 	 CESSATION OF EMPLOYMENT 

  

	9.1	 	 Subject to Rules 9.3 and 9.4, if a Participant ceases to be in Employment prior to the Vesting Date of an Award, that Award shall lapse except to the extent
and on such terms and conditions that the Compensation Committee determines. 

  

	9.2	 	 For the avoidance of doubt, Rule 9.1 applies where a Participant is a Bad Leaver. 

 

	9.3	 	 If a Participant ceases to be in Employment in the first year of an I&P Period and is a Good Leaver the Award applicable to that I&P Period shall
lapse except to the extent that the Compensation Committee determines otherwise. 

  

	9.4	 	 Subject to Rule 9.3, if a Participant ceases to be in Employment prior to the Vesting Date and is a Good Leaver, Rule 6 shall apply as if:

  

	 	(a)	 	 the number of Matching Shares which the Participant could become entitled to acquire at the end of the I&P Period, depending on the extent to which the
Performance Conditions are satisfied at the end of the I&P Period under Rule 8; and 

  

	 	(b)	 	 the number of Shares which the Participant could become entitled to pursuant to Rule 6.10; 

 
 were reduced to the Relevant Proportion of the number
of Matching Shares and Shares respectively to which the Participant would have been entitled if his Employment had not terminated. 
  

	9.5	 	 In consequence of Rule 9.4: 

  

	 	(a)	 	 Rule 6.5(b) shall cease to apply; and 

  

	 	(b)	 	 the Participant shall become entitled to acquire, receive or retain (depending on the form of the Award) on the date determined pursuant to Rule 12:

  

	 	(i)	 	 a number of Matching Shares; and 

  

	 	(ii)	 	 the Shares issued, transferred or retained pursuant to Rule 6.10; 

 

 13 

 (reduced in either case to the Relevant Proportion in accordance with Rule 9.4), and
dependent, in both cases, on the extent to which the Performance Conditions are satisfied. 
  

	9.6	 	 If a Participant ceases to be in Employment by reason of his death or serious long term illness preventing the Participant from carrying out his duties of
employment, and unless the Compensation Committee determines otherwise, in respect of that Participant’s Award, the I&P Period will be treated as ending on the date of the Participant’s death or cessation of employment (or such other
date as the Compensation Committee may determine). 

  

	9.7	 	 Subject to any relevant legal or regulatory requirements prevailing in any relevant jurisdiction, for the purposes of this Rule a woman who ceases to be in
Employment due to pregnancy or confinement will be regarded as having ceased Employment on the date on which she indicates that she does not intend to return to work. In the absence of such indication and if she has not already returned to work she
will be regarded as having ceased Employment on the last day on which she is entitled to return to work. A woman who exercises her statutory right or any equivalent contractual right to return to work following pregnancy or confinement shall not be
treated as having ceased to be in Employment. 

  

	9.8	 	 If a Participant who has ceased to be in Employment breaches any contractual obligation owed to any Group Company relating to restrictions on that Participant
following the termination of his Employment the Participant’s Award shall be forfeited. 

  

	10	 	 VARIATION OF CAPITAL 

  

	10.1	 	 In the event of any increase or variation in the capital of the Company arising out of or in connection with a capitalisation issue, an offer to the holders
of Shares, a rights issue, a subdivision, consolidation or reduction of capital, special dividend, demerger, or other variation of capital, the terms of outstanding Awards and the terms on which Investment Shares and an Investment Option (if
applicable) have been committed to the Plan may be adjusted in such manner and on such terms as the Compensation Committee considers appropriate. An adjustment shall not have effect unless the auditors or other advisers appointed by the Compensation
Committee acting as experts and not arbitrators confirm that in their opinion the adjustment is fair and reasonable and such confirmation shall be final and binding. 

 

	10.2	 	 Participants shall be notified of any adjustment made under this Rule. 

 

	11	 	 CHANGE OF CONTROL 

  

	11.1	 	 Subject to Rule 11.4: 

  

	 	(a)	 	 if any person (and/or persons acting in concert) obtains Control of the Company as a result or in consequence of making a general offer to acquire the whole
of the issued share capital of the Company which is made subject to a condition such that if satisfied the person making the offer will have Control of the Company, or 

 

	 	(b)	 	 if any person (and/or persons acting in concert) obtains Control of the Company other than as a result of or in consequence of making such general offer but
the 

  

 14 

	 	 
offeror is bound by Rule 9 of the City Code on Takeovers and Mergers to make a general offer for the minority, 

 
 then: 

 

	 	(i)	 	 in relation to all outstanding Awards the I&P Period shall be deemed to end on the Change of Control Date; 

 

	 	(ii)	 	 the number of Vested Matching Shares which a Participant may become entitled to acquire shall be determined as at the Change of Control Date dependent on the
extent to which the Performance Conditions are satisfied at that date, having regard to Rules 11.2 and 11.3 below and subject to Rule 8.3; and 

 

	 	(iii)	 	 on the Change of Control Date the Participant shall cease to have any rights in respect of outstanding Awards except in relation to the Vested Matching Shares
under Rule 11.1(b)(ii). 

  

	11.2	 	 For the purpose of Rule 11.1 in determining TSR of the Company and the Comparator Group Companies, the End Period (as defined in Schedule 1) shall be deemed
to be a period ending on the Change of Control Date. 

  

	11.3	 	 The number of Vested Matching Shares which a Participant may become entitled to on a Change of Control shall be the number of Vested Matching Shares
determined by the application of Rules 11.1 and 11.2 reduced to the Relevant Proportion of the number of Matching Shares to which the Participant would have been potentially entitled if the Change of Control had not occurred.

  

	11.4	 	 If the value (as determined pursuant to Section 280G of IRC) of the Vested Matching Shares which a Participant may become entitled to acquire pursuant to
Rules 11.1, 11.2 and 11.3 upon a person or persons obtaining Control of the Company when aggregated with any other amounts which the Participant becomes entitled to receive or acquire upon that person or persons obtaining Control and which in either
case must be aggregated for the purposes of calculating the imposition of any excise tax pursuant to Section 4999 of IRC is equal to or exceeds by 20% or less three times the “base amount” (as defined in Section 280G(b)(3) of
IRC) for that Participant the number of Vested Matching Shares will be reduced, but only if the Participant would be better off by such reduction after taking into account all arrangements between the Participant and the Company, by such number as
shall be necessary to avoid the imposition of the excise tax imposed by Section 4999 of IRC on the amounts which the Participant is entitled to acquire or receives upon that person or persons obtaining Control of the Company.

  

	11.5	 	 If: 

  

	 	(a)	 	 under Part 18A of the Companies (Jersey) Law 1991 the Court sanctions a compromise or arrangement for the purposes of or in connection with a scheme for the
reconstruction of the Company or its amalgamation with any other company or companies; or 

  

	 	(b)	 	 a resolution is passed for the winding up of the Company for the purposes of or in connection with a reconstruction or division of the Company or its
business, 

  

 15 

 the terms of outstanding Awards and the terms on which Investment Shares and
Investment Options (if applicable) have been committed to the Plan will be varied in such manner as the Compensation Committee considers appropriate. A variation shall not have effect unless the auditors or other advisers appointed by the
Compensation Committee acting as experts and not as arbitrators confirm that in their opinion the variation is fair and reasonable and such confirmation shall be final and binding. 

 

	11.6	 	 If any company (the “Acquiring Company”) obtains Control of the Company in accordance with Rule 11.1 and: 

 

	 	(a)	 	 the Acquiring Company also obtains Control of another company (the “Target Company”) within such period as the Compensation Committee may determine
and, as a consequence of obtaining such Control, the Company and the Target Company become subsidiaries of the Acquiring Company; and 

  

	 	(b)	 	 the shareholders of the Company and the Target Company before the Acquiring Company obtained Control of the Company and the Target Company are the same
persons who substantially comprise the shareholders of the Acquiring Company after the Acquiring Company obtained such Control, 

  

then in relation any outstanding Awards the Compensation Committee may determine that the I&P Period shall not be deemed to end
on the Change of Control Date under Rule 11.1(b)(i) and it may determine (with the agreement of the Acquiring Company) that a Participant is required to release any outstanding Awards in consideration of the grant to the Participant by the Acquiring
Company of an equivalent award. 
  

	11.7	 	 For the purpose of Rule 11.6 an award granted pursuant to Rule 11.6 is an equivalent award to an Award if, but only if: 

 

	 	(a)	 	 the shares to which it relates are in the Acquiring Company, and it is subject to the provisions of the Plan in the same manner as the Award immediately prior
to its release; 

  

	 	(b)	 	 the shares to which it relates are of an equivalent value to the value of the Shares which were subject to the Award immediately prior to the release, and for
this purpose the Compensation Committee shall determine such equivalent value provided that the release of an Award and the grant of an equivalent award under Rule 11.4 shall not have effect unless the auditors or other advisers appointed by the
Compensation Committee acting as experts and not arbitrators confirm that in their opinion the equivalent value is fair and reasonable and such confirmation shall be final and binding; 

 

	 	(c)	 	 such award is subject to the Performance Conditions or such other performance conditions that the Compensation Committee determines are substantially no more
and no less onerous than the Performance Conditions; and 

  

	 	(d)	 	 Participant continues to be Interested in the relevant number of Investment Shares and the Investment Option (if applicable) in such manner as the
Compensation Committee determines provided that and so far as reasonably possible, the terms on which Investment Shares and the Investment Option are committed to Awards are substantially no more and no less onerous than before the Change of
Control. 

  

 16 

	11.8	 	 With effect from the release of an Award and the grant of an equivalent award pursuant to Rule 11.6 the Plan will be construed as if:

  

	 	(a)	 	 the equivalent award had been granted at the same time as the Award it replaces; 

 

	 	(b)	 	 references to the Company in the Rules were references to the Acquiring Company; and 

 

	 	(c)	 	 references to Shares were references to shares in the Acquiring Company 

 
 and the Compensation Committee may make such
amendments to these Rules and to the terms of existing awards as may be necessary to give effect to Rule 11.6. 
  

	12	 	 DISCHARGE OF AWARDS 

  

	12.1	 	 The manner in which an Award is discharged on the Vesting Date will depend on the form of the Award determined by the Compensation Committee under Rule 6.4.

  

	12.2	 	 Awards will be discharged by the transfer or issue of or the release of restrictions relating to the number of Vested Matching Shares to the Participant (or
as he may direct, or to a depository in the case of ADRs) normally from an ESOP or from Treasury Shares held by the Company. 

  

	12.3	 	 Following the end of the last financial year of the I&P Period, the Compensation Committee will determine the extent to which the Performance Conditions
have been satisfied such determination to be made at least one week before the Vesting Date. 

  

	12.4	 	 Subject to Rule 12.7, once the Compensation Committee has determined the extent to which the Performance Conditions have been satisfied in relation to an
Award and, subject to the Participant being in Employment on the Vesting Date (or if the Participant has been a Good Leaver and the provisions of Rule 9.4 apply or if the Compensation Committee has otherwise exercised its discretion under Rule 9),
the Compensation Committee will procure that the Award is discharged on the Vesting Date in accordance with Rule 12.2. 

  

	12.5	 	 Any transfer or issue of or release of restrictions relating to Vested Matching Shares to a Participant (or as he may direct or to a depository in the case of
ADRs) is subject to the Compensation Committee being satisfied that the transfer, issue or release would be lawful in any relevant jurisdiction. 

 

	12.6	 	 The transfer or issue of, or release of restrictions relating to, Shares under the Plan is subject to obtaining any approval or consent required under the
Listing Rules published by the United Kingdom Listing Authority, the Rules of the London Stock Exchange, the Admission and Disclosure Standards of the London Stock Exchange, and otherwise complying with the provision of City Code on Take-overs and
Mergers and any other applicable regulations or enactment (whether in the United Kingdom or overseas). The Participant shall do all things necessary to obtain, or obviate the need for, such approval or consent. 

 

	12.7	 	 If a Participant ceases to be in Employment by reason of his death or serious long term illness preventing the Participation from carrying out his duties of
employment, and unless the Compensation Committee exercises its discretion under Rule 9.6: 

  

 17 

	 	(a)	 	 the Participant’s Award shall be discharged in favour of his personal representatives prior to the Vesting Date (in the case of a Participant’s
death); 

  

	 	(b)	 	 the date upon which such discharge occurs will be within 6 months of the Participant ceasing to be in Employment; and 

 

	 	(c)	 	 the number of Matching Shares to be treated as Vested Matching Shares at the date the I&P Period shall be treated as ending under Rule 9.6 based upon the
extent to which the Performance Conditions would have been satisfied as at the date of death or termination of employment by reason of serious illness. 

  

	13	 	 MISCELLANEOUS 

  

	13.1	 	 The Plan shall be administered by the Compensation Committee whose decision on any matter concerning the Plan shall be final and binding unless it is a matter
in respect of which the Rules provide that the decision of the auditors or any other adviser is final and binding. 

  

	13.2	 	 The Compensation Committee or any committee or agent that they may from time to time delegate authority to, shall approve all documents required in connection
with Awards. 

  

	13.3	 	 The Compensation Committee may establish arrangements under which the cash value of an Award may be paid to an Eligible Person in lieu of the discharge of the
Award under Rule 12. 

  

	13.4	 	 The cost of establishing and operating the Plan (including but not limited to stamp duty and stamp duty reserve tax, if any, arising on a transfer of Shares
pursuant to Rule 12) shall be borne by the Company but may be recharged to the relevant Group Companies on such arm’s length basis as is considered appropriate from time to time. 

 

	13.5	 	 Any notice or other communication under or in connection with the Plan may be given by personal delivery, delivery by email or by sending the same by post, in
the case of a company to its registered office (or to such other address and person as may be specified by that company from time to time), and in the case of an individual to his last known address, or, where he is a director or employee of a Group
Member, either to his last known address or to the address of the place of business at which he performs the whole or substantially the whole of the duties of his office or employment or of any such office or employment.

  

	13.6	 	 Evidence that the notice was properly addressed, stamped and put in the post shall be conclusive evidence of posting. 

 

	13.7	 	 Participation in the Plan is a matter separate from any contract of employment or other agreement and any benefit conferred by the Plan shall not be counted
for pension or any other purpose. 

  

	13.8	 	 The rights and obligations of any individual under the terms of his office or employment with any Group Company will not be affected by his participation in
the Plan and the Plan does not form part of any contract of employment between any individual and any Group Company. 

  

	13.9	 	 A Participant shall have no entitlement by way of compensation or damages resulting from the termination of the office or employment (for any reason and
whether lawful or 

  

 18 

	 	 
not) by virtue of which he is or may be eligible to participate in the Plan or for the loss or reduction of any right or benefit or prospective right or benefit under the Plan which he might
otherwise have enjoyed whether the compensation is claimed for wrongful dismissal or otherwise. 

  

	13.10	 	 The Plan is intended to operate on a worldwide basis and, accordingly, the Compensation Committee may adopt any rate of exchange for converting any currency
into any other currency as it decides at any time and from time to time for any purpose in connection with the Plan. 

  

	13.11	 	 No obligation to transfer, issue or release any restrictions or procure the transfer or release of any restrictions of Shares shall arise, nor shall there be
any obligation to do any other thing in relation to a Participant under or in connection with the Plan or the making or vesting of any Award unless and until the Compensation Committee is satisfied in its discretion that either:

  

	 	(a)	 	 the Participant has made payment or has made arrangements (which may include where specified at the date of grant of an Award by the Compensation Committee,
validly electing for the Participant to be liable directly for any employer’s National Insurance contributions) satisfactory to the Compensation Committee for the payment to the relevant Group Company or other person of such sum as is, in the
sole discretion of the Compensation Committee, sufficient to settle any liability for any tax and/or, unless the Compensation Committee otherwise determines, social security contributions (which, within the UK shall include employees’ National
Insurance contributions, and where determined by the Compensation Committee at the time of the grant of the Award, employer’s National Insurance contributions) or the like (in any jurisdiction) which are or may be recovered from such person in
connection with the Plan or any Award and in respect of which the relevant Group Company or other person is or may be liable to account for or pay in any jurisdiction; or 

 

	 	(b)	 	 the Participant has entered into an agreement satisfactory to the Compensation Committee to ensure that such a payment will be made by the Participant.

  

	13.12	 	 Receipt of an Award shall authorise the Company or any person nominated by the Company at its sole discretion to sell such number of Vested Matching Shares as
it may estimate as being necessary to produce a cash sum sufficient to meet the liabilities referred to in Rule 13.11 and account to the relevant Group Company or other person and/or the relevant authorities in respect of such tax and/or social
security liabilities (in any jurisdiction) at the appropriate time. 

  

	13.13	 	 If a Participant owes a debt or other monetary obligation to a Group Company, the relevant Group Company has a charge over the Participant’s interest in
the Plan (but not over his Investment Shares). Satisfaction of an Award may be withheld until the Participant has discharged, to the satisfaction of the Compensation Committee, the debt or other monetary obligation. 

 

	13.14	 	 The Plan and any Award shall be governed by and construed in accordance with the laws of England and Wales and the Company and the Participants (together with
any Eligible Persons who do not become Participants) shall submit to the exclusive jurisdiction of the Courts of England and Wales. 

  

 19 

	14	 	 AMENDMENT 

  

	14.1	 	 Subject to Rules 14.2 and 14.4, the Compensation Committee may at any time alter or add to all or any provisions of the Plan, or the terms of all or any
Awards made under it, in any respect. 

  

	14.2	 	 No alteration or addition to the advantage of Eligible Persons or Participants shall be made under Rule 14.1 without the prior approval of the Company in
general meeting, other than a minor amendment to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favourable tax, exchange control or regulatory treatment for Eligible Persons, Participants
or Group Companies. 

  

	14.3	 	 The Compensation Committee may make such amendments and modifications to all or any provisions of the Plan as are necessary or required in order to take
account of laws and regulations in any jurisdiction which enable non-UK resident Eligible Persons to participant in the Plan including the establishment of separate plans in any such jurisdictions which replicate in all substantial respects the
provisions of the Plan. 

  

	14.4	 	 No alteration or addition shall be made to the terms of any Award made prior to the date of the alteration or addition which would adversely affect a
Participant’s interest in that Award in any material respect without the consent of the relevant Participant. 

  

	15	 	 DURATION 

  

No Award may be granted under the Plan after 31 December 2013 without the prior approval of the Company in general meeting.

  

 20 

 SCHEDULE 1 

 

	1	 	 DEFINITIONS 

  

	1.1	 	 The following words and expressions have the following meanings in this Schedule. 

 
 “Comparator Group” means the group of
companies which the Compensation Committee shall from time to time determine should be the Comparator Group (which shall be set out in the documentation granting the Award) and which shall be, at the date of adoption of the Plan the companies listed
below (the ticker numbers for the following companies are those used on the companies’ respective domestic exchanges): 
  

Aegis Group plc (GB:965756), Arbitron Inc (US:ARB), Dentsu Inc (JP:4324), GfK AG (DE:587530), Havas SA (FR:12188), Interpublic Group
of Companies Inc (US:IPG), Ipsos SA (FR:7329), Omnicom Group Inc (US:OMC) and Publicis Groupe SA (FR:13057). 
  

“Comparator Group Company” means a company in the Comparator Group. 

 
 “End Period” means a period of 6
months, ending on the last day of the I&P Period. 
  

“Market Capitalisation” means the average daily closing price, calculated in a common currency, of an ordinary
share or unit of common stock in the capital of each Comparator Group Company (as ascertained from the Official List or other relevant exchange on which that share or unit of common stock is quoted and as determined from time to time by the
Compensation Committee) during the Start Period, multiplied by the average number of ordinary shares or units of common stock in issue during the Start Period, provided that the Compensation Committee may decide that the market capitalisation of the
Company and/or any Comparator Group Company shall be determined using alternative appropriate data sources (including, but not limited to data supplied by Bloomberg or Datastream). 

 
 “Market Capitalisation Weighting”
means the proportion, expressed as a percentage, that the Market Capitalisation of a particular Comparator Group Company bears to the Market Capitalisation Sum. 

 
 “Market Capitalisation Sum” means the
sum of the Market Capitalisations of the Comparator Group (which, for the avoidance of doubt, does not include the Company). 
  

“Matching Factor” means the factor determined pursuant to paragraph 4 of this Schedule which is to be multiplied by
the number of Investment Shares and Investment Option Shares, in both cases, committed to the Plan in respect of an Award which shall determine the extent to which Matching Shares become Vested Matching Shares in relation to that Award under the
terms of the Plan. For the avoidance of doubt, the Matching Factor will not be greater than 500% and will not, in any circumstances, be less than 0. 
  

“Start Period” means a period of 6 months, ending on the day before the start of the relevant I&P Period.

  

 21 

 “TSR” means the total return to the holders of ordinary shares or
units of common stock in the capital of the Company or Comparator Group Company (as appropriate) based on: 
  

	 	(a)	 	 share price appreciation; and 

  

	 	(b)	 	 the assumed reinvestment of dividends, 

  

calculated in accordance with paragraph 3 of this Schedule. 

 

	2	 	 PERFORMANCE CONDITIONS 

  

	2.1	 	 Subject to the Compensation Committee determining otherwise (pursuant to Rule 8.2) the Performance Condition that will apply to Awards under the Plan will be
the TSR Condition. 

  

	2.2	 	 The TSR Condition is a comparison of the TSR of the Company over the I&P Period to the TSR of the respective Comparator Group Companies over the same
period determined in accordance with paragraph 4 below. 

  

	3	 	 CALCULATION OF TSR 

  

	3.1	 	 The TSR for the Company, and each Comparator Group Company over the I&P Period shall be calculated as follows: 

 

			
	 TSR = (End Value / Start Value) - 1
	  	
		
	 where:
	  	
		
	 End Value =
	  	 the average daily closing price of an ordinary share or unit of common stock in the capital of the Company or Comparator Group Company (as ascertained from the Official
List or other relevant exchange on which that share or unit of common stock is quoted and as determined from time to time by the Compensation Committee) during the End Period, multiplied by the End Shareholding.

		
	 Start Value =
	  	 the average daily closing price of an ordinary share or unit of common stock in the capital of the Company or Comparator Group Company (as ascertained from the Official
List or other relevant exchange on which that share or unit of common stock is quoted and as determined from time to time by the Compensation Committee) during the Start Period, multiplied by the Start Shareholding.

		
	 End Shareholding =
	  	 the Start Shareholding increased by that number of notional shares that could be acquired using dividends paid during the course of the I&P Period. For this
purpose,

  

 22 

			
		  	 dividends are assumed to be paid without any deduction or withholding in respect of tax on the Start Shareholding and the notional shares acquired from previous
dividend payments during the I&P Period and on the basis that dividends are assumed to be reinvested in full in notional shares at the closing price of a Share on the ex-dividend date relative to each such dividend. For the avoidance of doubt,
the number of notional shares may include fractions of one share.

		
	 Start Shareholding =
	  	 1,000 shares.

  

	3.2	 	 Notwithstanding the provisions of paragraph 3.1 the Compensation Committee may determine that the TSR of the Company and/or any Comparator Group Company shall
be performed using appropriate alternative data sources (including, but not limited to “total-return” data supplied by Bloomberg or Datastream). In this case, references to End Value and Start Value shall be construed accordingly.

  

	3.3	 	 The End Value and the Start Value for the Company and each Comparator Group Company shall be calculated in the same currency. 

 

	4	 	 CALCULATION OF THE MATCHING FACTOR 

  

	4.1	 	 At the end of the I&P Period the TSR for the Company and each Comparator Group Company shall be determined in accordance with paragraph 3 of this
Schedule. 

  

	4.2	 	 The Comparator Group Companies will then be ranked according to the TSR of each of them with the Comparator Group Company with the highest TSR ranking first.

  

	4.3	 	 The TSR of the Company will then be compared to the TSR of the Comparator Group Companies. 

 

	4.4	 	 The sum of the Market Capitalisation Weightings of the Comparator Group Companies whose TSR is less than the TSR of the Company is then calculated (the
“MCW Aggregate”). 

  

	4.5	 	 The Matching Factor will be determined by the application (consecutively) of the following two calculations: 

 

	 	(a)	 	 an amount will be calculated (the “Adjusted MCW Aggregate”) by applying the following formula: 

 
 Adjusted MCW Aggregate = MCW
Aggregate + ((TSRW -
TSRB) /
(TSRA -
TSRB) x MCF) 

 
 where: 

 

TSRA
 = the TSR of the company ranked above the Company 
  

TSRB
 = the TSR of the company ranked below the Company 
  

 23 

TSRW
 = the TSR of the Company 
  

MCF = Market Capitalisation Weighting of the company whose TSR ranked above the Company 

 

	 	(b)	 	 the Matching Factor is then calculated by the application of the following formula: 

 
 Matching Factor
=
MatchB + ((Adjusted MCW
Aggregate - MCWB) x
(MatchA -
MatchB) /
(MCWA -
MCWB)) 

 
 where 

 

MatchA
 = the Match (derived from the table set out below (the “Table”) associated with the Percentile Step above the Adjusted MCW Aggregate 

 

MatchB
 = Match (derived from the Table) associated with the Percentile Step below the Adjusted MCW Aggregate 
  

MCWA
 = the percentile (derived from the Table) associated with the Percentile Step above the Adjusted MCW Aggregate 

 

MCWB
 = the percentile (derived from the Table) associated with the Percentile Step below the Adjusted MCW Aggregate 

 
 and where the Matching Factors associated with
distinct percentile steps are defined as follows (and the term “Percentile Step” shall be construed accordingly): 
  

			
	 PERCENTILE
	  	 MATCH

	 90th percentile
	  	500%
	 80th percentile
	  	420%
	 70th percentile
	  	330%
	 60th percentile
	  	240%
	 50th percentile
	  	150%
	 40th percentile
	  	0%
	 30th percentile
	  	0%
	 20th percentile
	  	0%
	 10th percentile
	  	0%
	 Bottom
	  	0%

  

Provided that: 
  

	 	(c)	 	 if the Adjusted MCW Aggregate is less than 50% the Matching Factor will be zero; 

 

 24 

	 	(d)	 	 if the Adjusted MCW Aggregate is more than 90% the Matching Factor will be 500%; 

 

	 	(e)	 	 if the Adjusted MCW Aggregate is exactly equal to 50%, 60%, 70% or 90%, the Matching Factor shall be determined directly from the Table; and

  

	 	(f)	 	 if the Comparator Group Companies relevant to any particular Award are determined by the Compensation Committee to be different to those set in the definition
of that term, the Compensation Committee may amend this table or any part of it as it considers appropriate but on the basis that no such amendment shall materially advantage any Participants in respect of any existing Awards without the prior
approval of the Company in general meeting. 

  

	5	 	 APPLICATION OF THE MATCHING FACTOR 

  

The Matching Factor determined pursuant to paragraph 4 of this Schedule will be multiplied by the number of Investment Shares and
the number of Investment Option Shares relevant to an Award and the result of that calculation shall be the number of Vested Matching Shares in respect of that Award. 

 

 25Omnibus Agreement

 Exhibit 10.1 

DYNAMIC WORLDWIDE SOLAR ENERGY, LLC 

1501 Broadway 

25th
 Floor 
 New York, NY 10036 

April 29, 2010 
 DayStar
Technologies, Inc. 
 2972 Stender Way 

Santa Clara, CA 95054 
 Attention:
Mr. Magnus Ryde, 
      Chief Executive Officer 

Dear Sirs and Madams: 
 A. The
undersigned, Dynamic Worldwide Solar Energy, LLC, a Delaware limited liability company (“Dynamic”), hereby offers to provide DayStar Technologies, Inc., a Delaware corporation (the “Company”), with a bridge loan (the
“Loan”) of up to the principal amount of $3,000,000. The Loan will be evidenced by one or more Secured Convertible Promissory Notes (the “Notes”), in the form of Annex A attached hereto, to be issued to Dynamic pursuant to a
Purchase Agreement in the form of Annex B attached hereto (the “Purchase Agreement”). The Notes will mature six months from the First Closing (as hereinafter defined), subject to acceleration and mandatory prepayment upon the consummation
of the Equipment Loan (as hereinafter defined). 
 B. The obligations of the Company with respect to the Loan shall be secured
by security interests granted to Dynamic pursuant to a Security Agreement between the Company, as the debtor, and Dynamic, as the secured party, in the form of Annex C attached hereto (the “Security Agreement”); such security interests
shall rank pari passu with certain prior security interests granted to other creditors of the Company pursuant to an Intercreditor Agreement in the form of Annex D attached hereto (the “Intercreditor Agreement”).
Notwithstanding the foregoing, two of the Lenders (as defined in the Intercreditor Agreement), Peter A. Lacey (“Lacey”), the Chairman of the Board of the Company, and TD Waterhouse RRSP Account 230832S, in trust for Peter Alan Lacey as
beneficiary (Lacey and such trust being hereinafter referred to as the “Lacey Noteholders”), whose Secured Convertible Promissory Notes of the Company aggregate $2,885,000 in principal amount, have agreed with Dynamic, as a condition to
the First Closing (and, as a further such agreement, the Company has agreed to use its best efforts to obtain, as soon as possible after the date hereof, the same agreement from the other Lenders other than Dynamic), that if, within 90 days after
the First Closing), an Event of Default (as defined in the Notes) of a type referred to in Section 4(c) or 4(d) of the Notes or an Event of Default (as defined in the Security Agreement) of a type referred to in Section 5(c), 5(d) or 5(h)
of the Security Agreement shall have occurred, then, upon such occurrence, until the Notes shall have been paid in full, their respective security interests, and their respective rights to the payment and performance by the Company of the promissory
notes issued by the Company to them, shall be subordinate in every respect to the prior payment in full of the Notes. 

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 C. In the event that Dynamic shall fund, or arrange the funding of, all or part of the Loan,
the Company shall issue to Dynamic, or to Dynamic’s designees, (i) shares of its Common Stock, par value $0.01 per share (“Common Stock”), and (ii) seven-year Warrants for the Purchase of Shares of Common Stock, in the form
of Annex E attached hereto (the “Warrants”), all upon the terms and subject to the conditions set forth below. Any shares of Common Stock so issued by the Company or acquired by Dynamic or its designees upon conversion of the Notes or
exercise of the Warrants shall be acquired by Dynamic (or its designees) for investment and not for distribution, but all such shares shall be covered by a Registration Rights Agreement between the Company and Dynamic, in the form of Annex F
attached hereto, and the disposition of such shares shall be solely within the control of Dynamic. 
 D. Upon the acceptance by
the Company of the offer contained herein and the Company’s agreement to this letter agreement (“this Agreement”), Dynamic shall be obligated to fund to the Company the first installment of the Loan, in the amount of $650,000 (the
“First Tranche”), at a closing (the “First Closing”) to be held in New York, New York (at such location as shall be mutually agreed upon by the parties hereto) on the date hereof or as soon hereafter as is practicable
(provided, however, that this Agreement shall terminate, without any liability on the part of any party hereto, if the First Tranche shall not have been funded by the close of business on May 3, 2010). At the First Closing, the
Company shall issue to Dynamic (i) a Note in the principal amount of $650,000 (the “First Note”), convertible (at the option of the holder of the Note) into shares of Common Stock at the rate of one such share for each $0.30 of
indebtedness outstanding at the time of conversion, and (ii) a Warrant (the “First Warrant”) entitling the holder thereof to purchase 2,166,667 shares of Common Stock at an exercise price of $0.70 per share. The First Closing shall
also be conditioned upon the receipt by Dynamic of a schedule (accompanied by appropriate backup documentation) of how the proceeds of the First Tranche shall be applied and the execution by all parties thereto and delivery to Dynamic of
(A) the Purchase Agreement with respect to the First Note, (B) the Security Agreement with respect to the First Note, (C) the Intercreditor Agreement, (D) the Registration Rights Agreement with respect to any shares of Common
Stock which may be issued to Dynamic or its designees upon conversion of the First Note or exercise of the First Warrant and (E) all such further agreements, instruments and other documents (including, without limitation, certificates of
governmental officials and officers of the Company and legal opinions) as counsel to Dynamic may reasonably require. The documents referred to in the immediately-preceding sentence, together with the First Note, the First Warrant and the UCC-1
financing statements referred to below in this paragraph D, are hereinafter collectively referred to as the “Loan Documents”. Dynamic is hereby authorized by the Company, at or after the First Closing, to file UCC-1 financing statements
and/or other documentation to perfect the security interests granted to it pursuant to the Security Agreement. 

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 E. Following the First Closing, the Company may request from time to time, during the 90-day
period following the First Closing, that Dynamic fund, or arrange the funding of, further installments of the Loan, until Dynamic shall have advanced funds aggregating the $3,000,000 maximum amount of the Loan. Any such request shall be accompanying
by a schedule (accompanied by appropriate backup documentation) of how the proceeds of any such further installment shall be applied. The Company acknowledges that Dynamic has not yet completed its due diligence review of the Company and may, in its
sole discretion, for any reason or for no reason at all, decline to fund (or arrange the funding of) all or part of the amount of any such funding request made after the First Closing. In such event, Dynamic shall nevertheless retain all rights and
remedies (including, without limitation, its convertibility rights under the Notes and its share purchase rights under the Warrants) acquired by it with respect to the First Loan and any subsequent installments of the Loan (the “Subsequent
Tranches”) which it shall have funded. At the closing of the funding of any such further installment of the Loan (or, if not paid prior thereto, at the closing of the Equipment Loan (as hereinafter defined), the Company shall pay or reimburse
Dynamic for its legal expenses incurred prior thereto in connection with the transactions contemplated by this Agreement. 
 F.
At the closing for the funding of any Subsequent Tranche, all parties thereto shall execute and deliver to Dynamic Loan Documents comparable to the Loan Documents delivered at the First Closing, except for appropriate changes to reflect differences
in the amounts of the advances, the number of shares of Common Stock into which the Notes evidencing the Subsequent Loans shall be convertible and the number of shares that the respective holders of the Warrants issued in connection therewith shall
be entitled to purchase upon exercise thereof, which number shall be that number which equals the number of shares issuable upon conversion of the Note evidencing the installment of the Loan advanced in such Subsequent Tranche. The number of shares
issuable upon the conversion of the Note evidencing the installment of the Loan advanced in such Subsequent Tranche shall be calculated by dividing the principal amount of the Note by $0.30, provided, however, that the number of shares
into which the Notes evidencing the Loan may be converted shall in no event exceed 10,000,000. Loan Documents executed and delivered at the First Closing that provided for the funding of Subsequent Tranches therein need not be re-executed or amended
at the closing of such Subsequent Tranches unless Dynamic shall reasonably require that they be so re-executed or amended. The Parties understand and agree that the conversion price of subsequent Tranches will be adjusted after the implementation of
a reverse stock split. 

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 G. Contemporaneously with the execution and delivery of this Agreement, Bighorn Capital,
Inc. is issuing to the Company a commitment (the “Bighorn Commitment”), a copy of which is attached hereto as Annex G, to use its best efforts to obtain for the Company, within 90 days from the First Closing, a five-year equipment loan
(the “Equipment Loan”), to be secured by collateral consisting of equipment currently on order from European vendors, equipment needed to support operations and equipment already delivered and paid for (collectively, the
“Equipment”), as well as other assets of the Company, in an amount not less than the lesser of (i) 80% of the delivered and installed total purchase price for such equipment (for a total of approximately $35,200,000), or (ii) 80%
of the value of such equipment (as determined by the equipment lender in its sole judgment), provided, however, that the final principal amount of the Equipment Loan shall not be less than $21,000,000. The aggregate purchase price of
the Equipment is represented by the Company to be approximately $44,000,000, against which the Company has made cash deposits aggregating approximately $8,500,000 and has previously paid approximately $9,000,000 on Equipment previously delivered.
Based upon the Company’s representations as to the total cost of purchasing, shipping and installing such equipment and as to the balance due on the purchase price (and related expenses therefor), Dynamic and the Company believe that, upon the
closing of the Equipment Loan and the payment in full of any unpaid purchase price (and related expenses) for the Equipment, the Company is expected to realize net cash proceeds of not less than $4,000,000 and possibly up to $10,000,000 (from the
first proceeds of which, as will be provided in the Intercreditor Agreement executed and delivered at the First Closing, the promissory notes covered by the Intercreditor Agreement held by the Lenders (the “Bridge Loan Notes”) will, until
such proceeds are exhausted, be repaid in full, at the option of the respective Lenders holding the same, pro rata according to their respective principal balances, except that (A) if the Lenders shall agree (which agreement the
Company will use its best efforts to obtain), the Notes shall have priority and shall be paid in full before any payment shall be made on the Bridge Loan Notes, and (B) in the absence of such agreement by the Lenders, the Lacey Lenders agree to
provide Dynamic with its pro rata share under the existing Intercreditor Agreement up to the aggregate amount of the Lacey Loans. Prior, to the First Closing, the Company will provide to Bighorn all information necessary to enable
Bighorn to submit the Company’s application for the Equipment Loan to the proposed equipment lender. Thereafter, the Company will take all reasonable actions necessary to pursue such application and, upon the acceptance thereof, to consummate
the Equipment Loan, including, without limitation, the acceptance of such lender’s definitive commitment within three business days of the Company’s receipt thereof. The failure of the Company to comply with the foregoing obligations with
respect to its application for the Equipment Loan shall, following notice to the Company from Bighorn of such default and the failure of the Company to cure such default within three business days, cause the subordination of the security interests
of the Lenders other than Dynamic and right of such Lenders to payment and performance of their promissory notes issued by the Company referred to above in paragraph B to become immediately effective until the Equipment Loan shall have been
consummated; the Lacey Noteholders agree to the foregoing, and the Company agrees to use its best efforts to obtain, as soon as possible after the date hereof, the same agreement from the other Lenders other than Dynamic. The Company confirms that
the Board of Directors has approved the Big Horn 

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Commitment, and the officers of the Company have been so authorized to pursue actions required to prepare a final definitive Equipment Loan. If there is any material deviation in the terms of the
Equipment Loan from those outlined in the Commitment, adverse to the Company, the Company is not obligated to accept the terms of the Equipment Loan. 

H. In the event that, within 90 days from the date of the First Closing, either (i) Dynamic shall have made advances to the Company
under the Loan aggregating not less than $3,000,000 (or such lesser amount as the Company shall have agreed to accept in full satisfaction of Dynamic’s required advances under the Loan) or (ii) without regard to whether any advances under
the Loan beyond the First Tranche shall have been funded by Dynamic, Bighorn shall have fulfilled the Bighorn Commitment and the Equipment Loan shall have been consummated, then the Company shall, in addition to having paid to Bighorn, at the
closing of the Equipment Loan, all fees provided for in the Bighorn Commitment, (A) pay to Dynamic a fee in the amount of $1,500,000, and (B) issue and to such designee as Bighorn and Dynamic shall designate, a seven-year Warrant for the
Purchase of 5,000,000 Shares of Common Stock, in substantially the form of the Warrants (as hereinabove defined) to purchase, at an exercise price of $.30 per share ($2.70 on a post reverse split basis), shares of Common Stock which, as of the date
of their issuance, shall when taken together with the shares of Common Stock previously issued or then issuable to Dynamic (or its designee) upon conversion in full of the Notes and exercise in full of the Warrants, represent 19.9% of the total
issued and outstanding shares of Common Stock. In the event that the Equipment Loan shall not be consummated, due to circumstances within the control of the Company, when the equipment lender is ready, willing and able to consummate the Equipment
Loan upon the terms and conditions set forth in the definitive commitment executed by the Company and the equipment lender, then the Company shall be obligated, in addition to paying the fees provided for in the Bighorn Commitment and hereinabove in
this paragraph H, to issue to such designee as Bighorn and Dynamic shall designate, as liquidated damages, seven-year Warrants to purchase the same number of shares of Common Stock, at the same exercise price, as would have been issuable to such
designee if the Equipment Loan had been consummated. 
 I. In addition to the transactions described above with respect to the
Loan and the Equipment Loan, Dynamic has proposed to the Company that Dynamic assign, or cause to be assigned, to the Company, within 90 days from the First Closing and without regard to whether the Subsequent Tranches shall be funded or the
Equipment Loan shall be consummated, all of the right, title (direct or indirect) and interest which Dynamic expects it will acquire, within such 90-day period, in and to a contract (the “Contract”) with the Contract Entity (as hereinafter
defined), fully funded for the Contract Entity with financing arranged by Bighorn, for Dynamic to fabricate, construct and install, and otherwise develop and commence the operation of, a solar energy generation plant (the “Transaction”).
In connection with the assignment of the Contract to the Company, Dynamic will also assign to the Company Dynamic’s direct or indirect ownership interest in such plant. For purposes of this Agreement, it is understood that Dynamic’s
ownership 

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interest in such plant to be assigned to the Company may take the form of a 49% interest (the “Contract Interest”) in the entity (the “Contract Entity”) which will own such
plant and pay the Company (with the financing (the “Plant Construction Debt”) arranged by Bighorn) to construct and complete it. In any case, in connection with the assignment to the Company of the Contract and Dynamic’s ownership
interest in such plant or the Contract Interest (as the case may be), the Company will assume from Dynamic all liabilities and obligations associated with Dynamic’s interest in the Contract and Dynamic’s ownership interest in such plant or
the Contract Interest (as the case may be), including, without limitation, the obligation to repay and/or guarantee the repayment of 49% of the Plant Construction Debt. Provided that the First Closing has occurred and that Dynamic has consummated
its acquisition of the Contract and its 49% ownership interest in such plant (or in the Contract Entity, as the case may be), the Company shall be obligated (except as otherwise expressly provided below in this paragraph I), within the 90-day period
after the First Closing, to accept the aforesaid assignments and assumptions and, in consideration therefor, to issue and deliver (subject only to obtaining any required stockholder approval, listing approval and regulatory consents, which the
Company shall use its best efforts to obtain as expeditiously as possible), to such designee as Dynamic shall designate, shares of Common Stock which, as of the date of their issuance, shall, on a fully-diluted basis, without regard to any other
shares of Common Stock issuable to Dynamic or Bighorn (or the designee of either or both of them) upon conversion in full of the Notes and exercise in full of any Warrants, represent 52% of the total issued and outstanding shares of Common Stock.
Based upon the transaction description contained in this paragraph I and the representation of Dynamic that (i) its counsel with respect to such transaction shall be Chadbourne & Parke LLP (with the Company agreeing to provide Dynamic,
Bighorn and such counsel with a waiver of any conflict that might be deemed to exist as a result of such firm’s prior or contemporaneous representation of the Company) or a comparable major United States-based law firm, (ii) the Plant
Construction Debt shall be in an amount of approximately $90,000,000 and shall be provided by a United States-based (or branch of a United States-based) “money center bank”, (iii) the transaction shall be commercially sound,
(iv) the ownership assets to be acquired in the transaction shall be largely covered by political risk insurance, to the extent such insurance is commercially and reasonably available, and (v) the Valuation (as hereinafter defined) shall
not be less than $10,000,000, the Board of Directors of the Company has approved the execution of this Agreement and authorized the officers of the Company to commence the due diligence and other steps to prepare final definitive agreements with
respect to the Transaction as defined above. The Board of the Company is prepared to authorize a final agreement about the Transaction, provided, however, that the foregoing representation of Dynamic is not incorrect in any material
respect. If any such misrepresentation by Dynamic shall have occurred, the Company shall not be obligated to proceed with the transaction and shall not be liable to pay any breakup fee (as provided for below in paragraph J), but the Company shall
have no other recourse against Dynamic based upon such misrepresentation. In the event that a nationally-recognized investment banking or asset and business valuation firm mutually agreed upon by the Company and Dynamic (it being understood that the
firms named on 

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Schedule I attached hereto are acceptable to the Company), which shall be retained by the Company (at its sole expense) to determine the fair financial value to the Company (the
“Valuation”) of (A) the Contract, (B) Dynamic’s ownership interests in the plant (or in the Contract Interest, as the case may be) and (C) any other assets that may be assigned by Dynamic to the Company in connection
with the transaction contemplated by this paragraph I, including any liabilities thereto, and to issue a fairness opinion thereon, shall determine such value to be less than, or more than, $18,000,000, then the number of shares of Common Stock to be
so issued shall be adjusted proportionately downward, or proportionately upward, as the case may be. Dynamic understands that, until the Company has received any required approval of its stockholders, listing approval and regulatory consents (all of
which the Company shall seek to expeditiously obtain), the issuance of the shares of Common Stock to be so issued shall be delayed. At the meeting of the Company’s stockholders called to consider such required stockholder approval, the Company
will, if Dynamic shall so request, propose a slate of directors submitted by Dynamic for approval by the stockholders. Upon the issuance of such shares, (x) if such a slate has not been so elected, assuming Dynamic’s ownership interest in
the Company is at least 52%, the then-incumbent directors of the Company will, at the request of Dynamic, tender their resignations to the Company and otherwise cooperate in installing designees of Dynamic as directors of the Company occupying a
majority of the Company’s Board seats, and (y) a representative designated by Dynamic shall become a required authorized signatory on all checks or other withdrawals in excess of $1,000 from bank accounts of the Company. 

J. In the event that, after the First Closing, without regard to whether any advances under the Loan beyond the First Tranche shall have
been funded by Dynamic, Bighorn shall have fulfilled the Bighorn Commitment or the Equipment Loan shall have been consummated, Dynamic shall be ready, willing and able to assign the Contract to the Company as contemplated above in paragraph I but
the Company shall be unable to consummate the transaction contemplated by such paragraph I within the 90-day period following the First Closing because it shall have entered into, or agreed to enter into, a transaction with a third party which
(A) makes it impossible for the Company to consummate the transaction contemplated by paragraph I above or (B) would materially deprive Dynamic of the economic benefit to be derived by it from the transaction contemplated by such paragraph
I, then the Company shall promptly pay to Dynamic a “breakup fee” in the amount of $3,000,000 plus the amount of all of Dynamic’s reasonable, verifiable out-of-pocket expenses incurred in connection with the transactions contemplated
by this Agreement. If the Company shall receive an offer from a third party to enter into a transaction which, if agreed to or consummated, would entitle Dynamic to such “breakup fee”, then Dynamic shall be given written notice of such
offer and a right of first refusal to match such offer (with Dynamic being credited with the amount of its potential “breakup fee” in the Company’s determination of the value of the Dynamic counteroffer). 

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 K. In order to induce Dynamic to enter into this Agreement and consummate the transactions
contemplated hereby and in addition to any representations and warranties to be contained in the Loan Documents, the Company represents and warrants to Dynamic as follows: 

(i) The Company is a Delaware corporation duly organized and validly existing, will be in good standing under the laws of
the jurisdiction of its incorporation as soon as practicable following the First Closing (it being understood that proceeds from the First Tranche will be applied to pay fees and taxes owes to such jurisdiction of incorporation), has all requisite
power to own, lease and operate its properties and to carry on its business as now being conducted and as proposed to be conducted, and is duly qualified to do business and is in good standing in each jurisdiction in which it owns or leases property
or conducts any business and in which the failure to be so qualified could have a material adverse effect upon the Company. 

(ii) The Company has the requisite power and authority to enter into this Agreement and the Loan Documents and to
consummate the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Loan Documents to which the Company is a party and the consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Company, as hereinabove confirmed. The Company has duly executed and delivered this Agreement. This Agreement constitutes, and each Loan Document to which the Company is a party, when
executed and delivered by the Company, will constitute, the valid and binding obligation of the Company, enforceable against it in accordance with their respective terms, except as such enforceability may be limited by (A) bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting or relating to creditors’ rights generally, and (B) the availability of injunctive relief and other equitable remedies. 

(iii) The execution and delivery by the Company of this Agreement and the Loan Documents to which the Company is or will
be a party do not, and the performance by the Company of its obligations hereunder and thereunder and the consummation by the Company of the transactions contemplated hereby and thereby (in each case, with or without the giving of notice or lapse of
time, or both), will not, directly or indirectly, (A) violate the provisions of any of the charter documents of the Company, (B) except to the extent that the approval of the stockholders of the Company is required, violate or constitute a
default, an event of default or an event creating rights of acceleration, termination, cancellation, imposition of additional obligations or loss of rights under any contract (x) to which the

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Company is a party, (y) of which the Company is a beneficiary or (z) by which the Company or any of its assets is bound, (C) violate or conflict with any law, authorization or
order applicable to the Company, or give any governmental entity or other person the right to challenge any of the transactions contemplated by this Agreement or the Loan Documents or to exercise any remedy, obtain any relief under or revoke or
otherwise modify any rights held under, any such law, authorization or order, or (D) result in the creation of any lien or other encumbrance upon any of the assets owned or used by the Company. 

(iv) The Company has conducted, and is conducting, its business in compliance, in all material respects, with all
applicable laws. The Company has not received any notice regarding any violation of, conflict with, or failure to conduct its business in compliance with, any applicable law. 

(v) Except as disclosed in the Company’s prior publicly-available filings with the Securities and Exchange Commission
(the “SEC”) and in Schedule II attached hereto, there is no action, suit or proceeding, claim, arbitration, litigation or investigation (each, an “Action”) pending against the Company or, to the Company’s knowledge,
threatened against or affecting the Company, and, to the Company’s knowledge, no event has occurred or circumstance exists that may give rise or serve as a basis for any such Action. 

(vi) To the Company’s knowledge, no agent, broker, investment banker or other firm or person is or will be entitled
to any broker’s or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement and the Loan Documents. 

(vii) No representation or warranty by the Company in this Agreement, and no statement made by the Company in the Loan
Documents or any certificate or other document furnished or to be furnished to Company pursuant hereto, or in connection with the negotiation, execution or performance of this Agreement and the Loan Documents, contains or will, at the time of any
closing contemplated hereby contain, any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not misleading. Except as
specifically disclosed in the Company’s prior publicly-available filings with the SEC, there are no facts or circumstances of which the Company is aware that have had or could be expected to have, individually or in the aggregate, a material
adverse effect on the condition (financial or otherwise), operations, prospects or results of operations of the Company’s business. 

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 L. In order to induce the Company to enter into this Agreement and consummate the
transactions contemplated hereby and in addition to any representations and warranties to be contained in the Loan Documents, Dynamic represents and warrants to Dynamic as follows: 

(i) Dynamic is a Delaware limited liability company duly organized, validly existing and in good standing under the laws
of the jurisdiction of its formation, has all requisite power to own, lease and operate its properties and to carry on its business as now being conducted and as proposed to be conducted, and is duly qualified to do business and is in good standing
in each jurisdiction in which it owns or leases property or conducts any business and in which the failure to be so qualified could have a material adverse effect upon Dynamic. 

(ii) Dynamic has the requisite power and authority to enter into this Agreement and the Loan Documents and to consummate
the transactions contemplated hereby and thereby. The execution and delivery of this Agreement and the Loan Documents to which Dynamic is a party and the consummation of the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Dynamic. Dynamic has duly executed and delivered this Agreement. This Agreement constitutes, and each Loan Document to which Dynamic is a party, when executed and delivered by Dynamic, will constitute,
the valid and binding obligation of Dynamic, enforceable against it in accordance with their respective terms, except as such enforceability may be limited by (A) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to creditors’ rights generally, and (B) the availability of injunctive relief and other equitable remedies. 

(iii) The execution and delivery by Dynamic of this Agreement and the Loan Documents to which Dynamic is or will be a
party do not, and the performance by Dynamic of its obligations hereunder and thereunder and the consummation by Dynamic of the transactions contemplated hereby and thereby (in each case, with or without the giving of notice or lapse of time, or
both), will not, directly or indirectly, (A) violate the provisions of any of the organizational documents of Dynamic, (B) except to the extent that the approval of the stockholders of the Company is required, violate or constitute a
default, an event of default or an event creating rights of acceleration, termination, cancellation, imposition of additional obligations or loss of rights under any contract (x) to which Dynamic is a party, (y) of which Dynamic is a
beneficiary or (z) by which 

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Dynamic or any of its assets is bound, (C) violate or conflict with any law, authorization or order applicable to Dynamic, or give any governmental entity or other person the right to
challenge any of the transactions contemplated by this Agreement or the Loan Documents or to exercise any remedy, obtain any relief under or revoke or otherwise modify any rights held under, any such law, authorization or order, or (D) result
in the creation of any lien or other encumbrance upon any of the assets owned or used by Dynamic. 
 (iv) Dynamic
has conducted, and is conducting, its business in compliance, in all material respects, with all applicable laws. Dynamic has not received any notice regarding any violation of, conflict with, or failure to conduct its business in compliance with,
any applicable law. 
 (v) There is no Action pending against Dynamic or, to Dynamic’s knowledge, threatened
against or affecting Dynamic, and, to Dynamic’s knowledge, no event has occurred or circumstance exists that may give rise or serve as a basis for any such Action. 

(vi) To Dynamic’s knowledge, no agent, broker, investment banker or other firm or person is or will be entitled to
any broker’s or finder’s fee or any other commission or similar fee in connection with any of the transactions contemplated by this Agreement and the Loan Documents. 

(vii) No representation or warranty by Dynamic in this Agreement, and no statement made by Dynamic in the Loan Documents
or any certificate or other document furnished or to be furnished to Company pursuant hereto, or in connection with the negotiation, execution or performance of this Agreement and the Loan Documents, contains or will, at the time of any closing
contemplated hereby contain, any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not misleading. 

M. The Company shall indemnify and defend Dynamic and its members, managers, employees, agents, successors and assigns (the “Company
Indemnitees”) against, and shall hold them harmless from, any and all losses, liabilities, costs and expenses (including, without limitation, reasonable attorneys’ fees) resulting from, arising out of, or incurred by any Company Indemnitee
in connection with, or otherwise with respect to: 
 (i) the failure of any representation and warranty by the
Company contained in this Agreement, the Loan Documents or any certificate or other document furnished or to be furnished to Dynamic in connection with the transactions contemplated by this Agreement and the Loan Documents to be true and correct in
all material respects; or 

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 (ii) any breach of any covenant or agreement of the Company contained in
this Agreement, the Loan Documents or any certificate or other document furnished or to be furnished to Dynamic in connection with the transactions contemplated by this Agreement and the Loan Documents. 

N. Dynamic shall indemnify and defend the Company and its stockholders, directors, officers, employees, agents, successors and assigns
(the “Dynamic Indemnitees”) against, and shall hold them harmless from, any and all losses, liabilities, costs and expenses (including, without limitation, reasonable attorneys’ fees) resulting from, arising out of, or incurred by any
Dynamic Indemnitee in connection with, or otherwise with respect to: 
 (i) the failure of any representation and
warranty by the Company contained in this Agreement, the Loan Documents or any certificate or other document furnished or to be furnished to Dynamic in connection with the transactions contemplated by this Agreement and the Loan Documents to be true
and correct in all material respects; or 
 (ii) any breach of any covenant or agreement of Dynamic contained in
this Agreement, the Loan Documents or any certificate or other document furnished or to be furnished to the Company in connection with the transactions contemplated by this Agreement and the Loan Documents. 

O. If the offer contained herein is accepted by the Company, then, until May 3, 2010 and thereafter for 90 days following the First
Closing, it is understood that neither the Company, nor any of its affiliates or business associates, will, directly or indirectly solicit, negotiate, provide information to third parties or accept expressions of interest or offers from third
parties, or cause or permit anyone on their behalf to do any of the foregoing, with respect to any transaction which would (i) make it impossible for the Company to consummate the transaction contemplated by paragraph I above or
(ii) materially deprive Dynamic of the economic benefit to be derived by it from the transaction contemplated by such paragraph I. During such period of exclusivity, the Sellers and management of the Company and any parties acting on their
behalf agree not to directly or indirectly solicit, negotiate, provide information to outside parties or accept any other expressions of interest or offers for the Company. Notwithstanding the foregoing, during such period of exclusivity, the
Company may continue its current activities to seek additional working capital through a rights offering, license agreements, additional bridge loans and other transactions that would improve the Company’s financial condition without
interfering with, or diminishing the value (to the Company or Dynamic) of the transactions contemplated by this Agreement. 

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 P. The nature and terms of the transactions contemplated by this Agreement and the Loan
Documents, proprietary and confidential information and trade secrets of the respective businesses of the Company and Dynamic, the fact that the parties are in discussions of any kind and all information exchanged between the parties are to remain
strictly confidential. 
 Q. The Company will not disclose the terms of this Agreement except as may be required by the laws,
rules and regulations of the SEC or as may be required by the rules of NASDAQ, and will provide Dynamic, for comment, with a courtesy copy of any such proposed filing at least 24 hours prior to the release or filing thereof. The acceptance by the
Company of comments thereon from Dynamic shall be subject to the reasonable judgment of the Company’s attorneys. Except for the foregoing, neither the Company nor Dynamic will make any public announcement of any transaction contemplated by this
Agreement unless such announcement is approved in advance by both parties. 
 R. Any notice, request, demand, waiver, consent,
approval or other communication which is required or permitted hereunder shall be in writing and shall be deemed given (i) on the date established by the sender as having been delivered personally, (ii) on the date delivered by a private
courier as established by the sender by evidence obtained from the courier, (iii) on the date sent by facsimile, with confirmation of transmission, if sent during normal business hours of the recipient, if not, then on the next business day, or
(iv) on the fifth day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid. Such communications, to be valid, must be addressed to the intended party at its address hereinabove set forth, or to such
other address as shall have previously been provided to the sender by the intended party. 
 S. The terms and provisions of this
Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns. 

T. This Agreement and the Loan Documents shall be governed by and interpreted and enforced in accordance with the laws of the State of
New York, without giving effect to any choice of law or conflict of laws rules or provisions (whether of the State of New York or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New
York. 
 U. This Agreement may be executed in any number of counterparts, and any party hereto may execute any such counterpart,
each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Agreement shall become effective when each party hereto shall have
received a counterpart hereof signed by the other party hereto. The parties agree that the delivery of this Agreement, and the delivery of the Loan Documents and any other agreements and documents, may be effected by means of an exchange of
facsimile or electronic signatures. 

 DayStar Technologies, Inc. 

April 29, 2010 
 Page 14 of 15 

 

 V. No provision of this Agreement is intended to confer upon any person other than the
parties hereto any rights or remedies hereunder. 
 W. This Agreement, the Loan Documents and the other documents, instruments
and agreements specifically referred to herein or therein or delivered pursuant hereto or thereto set forth the entire understanding of the parties hereto with respect to the transactions contemplated by this Agreement. Any and all previous
agreements and understandings between or among the parties regarding the subject matter hereof, whether written or oral, are superseded by this Agreement. 

X. Any provision of this Agreement which is invalid or unenforceable in any jurisdiction shall be ineffective to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable the remaining provisions hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other
jurisdiction. 
 Y. The parties have participated jointly in the negotiation and drafting of this Agreement and the Loan
Documents. Any rule of construction or interpretation otherwise requiring this Agreement or the Loan Documents to be construed or interpreted against any party by virtue of the authorship of this Agreement or the Loan Documents shall not apply to
the construction and interpretation hereof and thereof. 
 Z. If the Company wishes to accept the offer contained herein,
whereupon this Agreement shall become a binding agreement enforceable in accordance with its terms, the Company should so indicate by signing the attached copy hereof and returning same to Dynamic prior to the close of business on April 28,
2010. 
 Very truly yours, 
  

			
	DYNAMIC WORLDWIDE SOLAR ENERGY, LLC
		
	By:	 	 /s/ Brad Zackson

		 	Brad Zackson, Manager
	
	The undersigned hereby accepts the offer set forth above and agrees to be bound by the foregoing Agreement:

 

 DayStar Technologies, Inc. 

April 29, 2010 
 Page 15 of 15 

 

			
	DAYSTAR TECHNOLOGIES, INC.
		
	By:	 	 /s/ Magnus Ryde

	Name:	 	Magnus Ryde
	Title:	 	Chief Executive Officer
	
	The undersigned hereby acknowledges and agrees to be bound by the provisions set forth above which are applicable to it:
	
	BIGHORN CAPITAL, INC.
		
	By:	 	 /s/ Robert Entler

	Name:	 	Robert Entler
	Title:	 	President
	
	The undersigned acknowledge and confirm their agreements set forth above in paragraphs B and G:
	
	TD Waterhouse RRSP Account 230832S
		
	By:	 	 /s/ Peter A. Lacey

	Name:	 	Peter A. Lacey
	Title:	 	Authorized Signatory
	
	Peter A. Lacey
	
	 /s/ Peter A. Lacey

	Peter A. Lacey

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