Document:

EX-10.29

Exhibit 10.29

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of June 18,
2008 (the “Effective Date”), between ENZON PHARMACEUTICALS, INC. (the “Company”), a
Delaware corporation with offices in Bridgewater, New Jersey, and CRAIG A.TOOMAN (the
“Executive”), a resident of New Jersey.

BACKGROUND

     A. The Company and the Executive are parties to an Employment Agreement (the “Original
Agreement”) dated January 5, 2005, as amended on June 10, 2005 (the “June 2005
Amendment”), pursuant to which Executive currently serves as Executive Vice President, Finance
and Chief Financial Officer of the Company.

     B. The Company and the Executive wish to amend and restate the Original Agreement on the terms
and conditions set forth herein.

TERMS

     In consideration of the foregoing premises, the mutual agreements set forth below and other
good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the
Original Agreement is hereby amended and restated in its entirety and the parties agree as follows:

     1. Employment. The Company hereby employs the Executive, and the Executive accepts
such employment and agrees to perform services for the Company, for the period and upon the other
terms and conditions set forth in this Agreement.

     2. Term. The term of the Executive’s employment hereunder (the “Term”) shall
commence on the Effective Date, and unless terminated at an earlier date in accordance with Section
9 hereof, shall extend through the third anniversary of the Effective Date, subject to automatic
renewal for an additional twenty-four (24) months, unless either party hereto receives written
notice from the other party no later than ninety (90) days prior to the third anniversary of the
Effective Date (a “first term notice of non-renewal”) that such other party does not wish
for the term hereof to continue beyond the third anniversary of the Effective Date, in which event
the term hereof and the Executive’s employment shall end at 5:00 PM Eastern Time on the third
anniversary of the Effective Date. If neither party provides a first term notice of non-renewal
prior to the third anniversary of the Effective Date, then the Term and the Executive’s employment
shall extend until 5:00 PM Eastern Time on the earlier of (a) the fifth (5th) anniversary of the
Effective Date and (b) the date that is twelve (12) months following the date on which either party
hereto receives written notice (an “extension term notice of non-renewal”) from the other
party that such other party does not wish for the term hereof to continue beyond such twelve (12)
month notice period. For the purposes of this Agreement, a “first term notice of

 

 

non-renewal” and an “extension term notice of non-renewal” shall be referred to collectively as a
“notice of non-renewal.”

     3. Position and Duties.

     (a) Service with Company. During the Term, the Executive agrees to perform such
employment duties for the Company in an executive and managerial capacity commensurate with the
position of Executive Vice President of Finance and Chief Financial Officer of the Company. As
Executive Vice President of Finance and Chief Financial Officer, the Executive shall have the
authority, duties and responsibilities associated with this position, including, without
limitation, the authority and duty generally to supervise and direct the finance and accounting
functions of the Company as well as such additional duties consistent with his position as assigned
by the Chief Executive Officer, reporting to the Chief Executive Officer, and subject to the
control and direction of the Chief Executive Officer of the Company, the Board of Directors of the
Company (the “Board”), or any duly authorized Committee of the Board, including the Finance and
Audit Committee. Additionally, Executive shall have serve as the senior executive overseeing the
human resources and information technology functions, with the senior most officer of the human
resources and information technology departments reporting directly to Executive, and Executive
shall have the authority, duties and responsibilities associated with such position, subject to the
control and direction of the Chief Executive Officer of the Company and the Board.

     (b) Performance of Duties.

	 	(i)	 	The Executive agrees to serve the Company faithfully and to the
best of his ability and to devote his full time, attention and efforts to the
business and affairs of the Company during his employment by the Company.
	 
	 	(ii)	 	The Executive will not render or perform services for any other
corporation, firm, entity or person which are inconsistent with the provisions
of this Agreement.
	 
	 	(iii)	 	While he remains employed by the Company, the Executive may
participate in reasonable charitable activities and personal investment
activities so long as such activities do not conflict or interfere with the
performance of his obligations under this Agreement. Subject to the prior
approval of the Board, which will not be unreasonably withheld, Executive may
join and serve on the board of directors of one other company, provided that
such other company is not a competitor of the Company and such service would
not interfere with Executive’s obligations to the Company hereunder or involve
or potentially involve a conflict of interest, as determined by the Board.

     (c) The Executive’s Representations and Warranties. The Executive represents and warrants to
the Company that his entering into and performing this Agreement will not constitute a breach of
any employment, consulting, non-competition or other agreement to which he is a

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party or any other obligation of the Executive. The Executive represents and warrants to the
Company that he has not been debarred under the Generic Drug Enforcement Act of 1992 (Sections
306-308 of the Federal Food, Drug and Cosmetic Act) nor has the Executive received notice of action
or threat of action of debarment. The Executive shall comply with the Company’s policies governing
the conduct of senior executives, including, without limitation, its Code of Conduct and Corporate
Values and its Employee Handbook, during the Term.

     4. Compensation.

     (a) Base Salary. The Company shall pay to the Executive, less applicable deductions
and withholdings, base salary (the “Base Salary”) at an annual rate of Five Hundred Five Thousand
Dollars ($505,000) per year, which Base Salary shall be paid in accordance with the Company’s
normal payroll procedures and policies for its senior management. The compensation payable to the
Executive during each fiscal year of the Company beginning after the Effective Date shall be
established by the Board or the Compensation Committee thereof following an annual performance
review, but in no event shall the annual rate of Base Salary for any successive year of the Term be
less than the highest annual rate of Base Salary in effect during the previous year of the Term.

     (b) Annual Bonus. The Executive shall be entitled to participate in the Company’s
bonus plan for management with respect to each fiscal year of the Company ending during the Term
(the “Bonus Plan”). Under the Bonus Plan, the Executive shall be eligible to receive a
performance-based cash bonus for each fiscal year ending during the Term in an amount, and based on
objective individual and/or corporate objectives, targets and factors (and evaluation as to the
extent of achievement thereof), to be established and determined by the Board in its discretion
following consultation between the Chief Executive Officer and the Executive prior to, or within
sixty (60) days after the commencement of, each fiscal year. Under the Bonus Plan for the
Executive, (i) the minimum cash bonus shall be zero (0), (ii) the target cash bonus shall equal 60%
of the Base Salary (the “Target Bonus”), and (iii) the maximum cash bonus shall equal 120% of Base
Salary.

     (c) Participation in Benefit Plans; Indemnification. While he is employed by the
Company, the Executive shall also be eligible to participate in any incentive and employee benefit
plans or programs which may be offered by the Company to the extent that the Executive meets the
requirements for each individual plan and in all other plans in which Company executives
participate. The Company provides no assurance as to the adoption or continuance of any particular
employee benefit plan or program, and, except as provided at Section 10 hereof, the Executive’s
participation in any such plan or program shall be subject to the provisions, rules and regulations
applicable thereto. During the Executive’s employment with the Company, and thereafter, the
Company shall indemnify the Executive and hold him harmless from and against any claim, liability
and expense (including, without limitation, reasonable attorney fees) made against or incurred by
him in connection with his employment by the Company, and cover him under a policy of directors and
officers liability insurance, in a manner and to the extent that is not less favorable to the
Executive as the indemnification protection and liability insurance coverage that is afforded by
the Company to any other senior officer or director.

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     (d) Expenses. The Company will pay or reimburse the Executive for all reasonable and
necessary out-of-pocket expenses incurred by him in the performance of his duties under this
Agreement, subject to the Company’s normal policies for expense verification.

     (e) Equity Grants. At the discretion of the Board (or its applicable committee), the
Executive shall be entitled to receive grants of stock options, restricted stock, restricted stock
units, and other equity awards or securities of the Company, subject to the terms of the Company’s
2001 Incentive Stock Plan, as amended, or such other equity compensation plans that may be adopted
by the Company from time to time, and any agreement thereunder (the “Stock Plan”). Nothing
contained herein shall be deemed to guarantee the Executive any additional grants of options,
restricted stock, restricted stock units, other equity awards or securities of the Company.

     (f) Vacation. The Executive shall be entitled to vacations in accordance with the
policy of the Company with respect to its senior management, in effect from time to time.

     (g) Tax and Financial Planning Services. During each year of the term of this
Agreement, Company agrees to reimburse Executive, up to $7,500 per fiscal year, for the costs of
all tax return preparation, including any United States, state, or local returns, as well as for
professional estate and financial planning services, if any, with Executive choosing the tax and
other professionals who will provide such services. The Company will pay Executive’s professional
fees incurred to negotiate this Agreement in an amount not to exceed $5,000.

     (h) Certain Legal Expenses. In the event of any legal proceedings, including without
limitation arbitration, between the Company and Executive with respect to any dispute hereunder in
which Executive prevails over the Company, the Company shall pay Executive’s reasonable legal fees
and expenses incurred in connection with such proceedings.

     5. Noncompetition and Confidentiality Covenant.

     (a) Noncompetition. The “Noncompete Period” shall be the Term plus the one (1) year
period immediately following termination of the Executive’s employment with the Company
irrespective of the reason for, or circumstances surrounding, such termination. In consideration
for the compensation payable to the Executive pursuant to this Agreement, during the Noncompete
Period, the Executive will not directly, or indirectly, whether as an officer, director,
stockholder, partner, proprietor, associate, employee, consultant, representative or otherwise,
become, or be interested in or associated with any other person, corporation, firm, partnership or
entity, engaged to a significant degree in (x) developing, manufacturing, marketing or selling
pharmaceuticals directed at acute lymphoblastic leukemia, invasive fungal infections, lymphomatous
meningitis, severe combined immunodeficiency, pharmaceuticals that are modified using polyethylene
glycol (i.e. pegylated compounds), pegylation, locked nucleic acid compounds, pharmaceuticals
targeted to the gene targets for which the Company has developed or is developing an RNA
antagonist, or mannose-binding lectin, or (y) any specific technology or specific area of business
in which the Company becomes involved to a significant degree during the Term. For purposes of the
preceding sentence, to determine whether any entity is engaged in such activities to a “significant
degree”, comparison will be made to the

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Company’s operations at that time. In other words, an entity will be deemed to be engaged in an
activity to a significant degree if the number of employees and/or amount of funds devoted by such
entity to such activity would be material to the Company’s operations at that time. The Executive
is hereby prohibited from ever using any of the Company’s proprietary information or trade secrets
to conduct any business, except for the Company’s business while the Executive is employed by the
Company as provided in Section 5(b) hereof. The provisions contained in this Section 5(a) shall
survive the termination of the Executive’s employment pursuant to Section 9 hereof or otherwise.
In the event the Executive breaches any of the covenants set forth in this Section 5(a), the
running of the period of restriction set forth herein shall be tolled for the period during which
the breach exists and recommence upon the Executive’s compliance with the terms of this Section
5(a).

     (b) Confidentiality.

     (i) The Executive acknowledges that, by reason of his employment by the Company, he will have
access to confidential information of the Company, including, but not limited to, information and
knowledge pertaining to products, inventions, discoveries, improvements, innovations, designs,
ideas, trade secrets, proprietary information, manufacturing, packaging, advertising, marketing,
distribution and sales methods, sales and profit figures, customer and vendor lists and
relationships between the Company and dealers, distributors, sales representatives, wholesalers,
customers, suppliers and others who have business dealings with them (collectively, “Confidential
Information”). The Executive acknowledges that such Confidential Information is a valuable and
unique asset of the Company and covenants that, both during and after the Term, he will not
disclose any Confidential Information to any person or entity, nor use the Confidential Information
for any purpose, except as his duties as an employee of the Company may require, without the prior
written authorization of the Board. The obligation of confidentiality imposed by this Section 5(b)
shall not apply to Confidential Information that otherwise becomes generally known to the public
through no act of the Employee in breach of this Agreement or any other party in violation of an
existing confidentiality agreement with the Company or which is required to be disclosed by a
specific order of a court or governmental agency.

     (ii) All Confidential Information, as well as any other records, designs, patents, business
plans, financial statements, manuals, memoranda, lists, research and development plans and
products, and other property delivered to or compiled by the Executive for or on behalf of the
Company or its vendors or customers that pertain to the
business of the Company shall be and remain the property of the Company, and be subject at all
times to its discretion and control. Likewise, all Confidential Information, as well as any other
formulae, correspondence, reports, records, charts, advertising materials and other similar data
pertaining to the business, activities or future plans of the Company (and all copies thereof) that
are collected by the Executive shall be delivered promptly to the Company without request by it
upon termination of the Executive’s employment.

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     (c) Nonsolicitation of Employees. During the Noncompete Period, the Executive shall
not, directly or indirectly, personally or through others, encourage to leave employment with the
Company, solicit for employment, or advise or recommend to any other person, firm, business, or
entity that they employ or solicit for employment, any employee of the Company or of any parent,
subsidiary, or affiliate of the Company.

     6. Ventures. If, during the term of his employment, the Executive is engaged in or
associated with the planning or implementing of any project, program, venture or relationship
involving the Company and a third party or parties, all rights in such project, program, venture or
relationship shall belong to the Company. Except as approved by the Board, the Executive shall not
be entitled to any interest in such project, program, venture or relationship or to any commission,
finder’s fee or other compensation in connection therewith other than the compensation to be paid
to the Executive as provided in this Agreement.

     7. Acknowledgment. The Executive agrees that the covenants and agreements contained in
Section 5 hereof are material to this Agreement; that each of such covenants is reasonable and
necessary to protect and preserve the Company’s interests, properties and business; that
irreparable loss and damage will be suffered by the Company should the Executive breach any of such
covenants and agreements; that each of such covenants and agreements is separate, distinct and
severable not only from the other of such covenants and agreements but also from the other and
remaining provisions of this Agreement; that the unenforceability or breach of any such covenants
or agreement shall not affect the validity or enforceability of any other such covenant or
agreement or any other provision of this Agreement; and that, in addition to other remedies
available to it, the Company shall be entitled to both temporary and permanent
injunctions and any other rights or remedies it may have, at law or in equity, to end or prevent a
breach or contemplated breach by the Executive of any such covenants or agreements.

     (a) Geographic Extent of the Executive’s Obligations Concerning Section 5. The
restrictions contained in Section 5 are limited to the United States. Given the nature of the
Company’s business, the restrictions contained in Section 5 cannot be limited to any particular
geographic region within the United States. Therefore, the obligations of the Executive under
Section 5 shall apply to any geographic area in which the Company (i) has engaged in business

during the period of the Executive’s employment with the Company or (ii) has otherwise established
during the period of the Executive’s employment with the Company its goodwill, business reputation
or any customer or vendor relations.

     (b) Limitation of Covenant. Ownership by the Executive, as a passive investment, of
less than five percent (5%) of the outstanding shares of capital stock or equity of any corporation
or other entity that is publicly traded shall not constitute a breach of Section 5.

     (c) Blue Pencil Doctrine. If the duration or geographical extent of, or business
activities covered by, Section 5 are in excess of what is valid and enforceable under applicable
law, then such provision shall be construed to cover only that duration, geographical extent or
activities that are valid and enforceable. The Executive acknowledges the uncertainty of the law in
this respect and expressly stipulates that this Agreement be given the construction which

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renders its provisions valid and enforceable to the maximum extent (not exceeding its express
terms) possible under applicable law.

     (d) Disclosure. The Executive shall disclose to any prospective employer, prior to
accepting or continuing employment, the existence of Section 5 of this Agreement and shall provide
such prospective employer with a copy of Section 5 of this Agreement. The obligation imposed by
this subsection 7(d) shall terminate one year after the termination of the Executive’s employment
with the Company.

     8. Intellectual Property and Related Matters.

     (a) Disclosure and Assignment. The Executive will promptly disclose in writing to the
Company complete information concerning each and every product, invention, discovery, practice,
process or method, whether patentable or not, made, developed, perfected, devised, conceived or
first reduced to practice by the Executive, either solely or in collaboration with others, during
the Term, or within six months thereafter, whether or not during regular working hours, relating
either directly or indirectly to the business, products, practices or techniques of the Company
(“Developments”). The Executive hereby acknowledges that any and all of the Developments are the
property of the Company and hereby assigns and agrees to assign to the Company any and all of the
Executive’s right, title and interest in and to any and all of the Developments. At the request of
the Company, the Executive will confer with the Company and its representatives for the purpose of
disclosing all Developments to the Company, as the Company shall reasonably request during the
period ending three (3) years after the end of the Term.

     (b) Limitation on Section 8(a). The provisions of Section 8(a) shall not apply to any
Development meeting the following conditions:

          (i) such Development was developed entirely on the Executive’s own time;

          (ii) such Development was made without the use of any Company equipment, supplies, facility or
trade secret or customer information;

          (iii) such Development does not relate (A) directly to the business of the Company or (B) to
the Company’s actual or demonstrably anticipated research or product or customer development; and

          (iv) such Development does not result from any work performed by the Executive for the
Company.

     (c) Assistance of the Executive. Upon request and without further compensation
therefor, but at no expense to the Executive, the Executive will do all lawful acts, including but
not limited to, the execution of papers and lawful oaths and the giving of testimony, that in the
opinion of the Company, may be necessary or desirable in enforcing the Company’s intellectual
property and trade secret rights, and for perfecting, affirming and recording the Company’s
complete ownership and title thereto.

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     (d) Records. The Executive will keep complete, accurate and authentic accounts, notes,
data and records of the Developments in the manner and form requested by the Company. Such
accounts, notes, data and records shall be the property of the Company, and, upon the earlier of
the Company’s request or the conclusion of his employment, the Executive will promptly surrender
same to the Company.

     (e) Copyrightable Material. All right, title and interest in all copyrightable
material that the Executive shall conceive or originate, either individually or jointly with
others, and which arise out of the performance of his duties under this Agreement or otherwise as
an employee of the Company, will be the property of the Company and are by this Agreement assigned
to the Company along with ownership of any and all copyrights in the copyrightable material. Upon
request and without further compensation therefor, but at no expense to the Executive, the
Executive shall execute all papers and perform all other acts necessary to assist the Company to
obtain and register copyrights on such materials in any and all countries. Where applicable, works
of authorship created by the Executive for the Company in performing his responsibilities under
this Agreement shall be considered “works made for hire,” as defined in the U.S. Copyright Act.

     (f) Know-How and Trade Secrets. All know-how and trade secret information conceived or
originated by the Executive that arises out of the performance of his obligations or
responsibilities under this Agreement or any related material or information shall be the property
of the Company, and all rights therein are by this Agreement assigned to the Company.

     9. Termination of Employment.

     (a) Grounds for Termination. The Executive’s employment pursuant to this Agreement
shall terminate prior to the expiration of the Term in the event that at any time:

     (i) the Executive dies,

     (ii) the Executive becomes disabled (as defined below), so that he cannot perform the
essential functions of his position with or without reasonable accommodation,

     (iii) the Board elects to terminate the Executive’s employment for “Cause” and notifies the
Executive in writing of such election,

     (iv) the Board elects to terminate the Executive’s employment without “Cause” and notifies the
Executive in writing of such election, or

     (v) the Executive elects to terminate his employment, without Good Reason and without
liability, and notifies the Board in writing of such election.

     If the Executive’s employment is terminated pursuant to clause (i), (ii) or (iii) of this
Section 9(a), such termination shall be effective immediately. If the Executive’s employment is
terminated pursuant to subsection (iv) of this Section 9(a), such termination shall be effective 30

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days after receipt of the notice of termination, and if pursuant to subsection (v) of this Section
9(a), such termination shall be effective 15 days after receipt of such notice.

     (b) “Cause” Defined. “Cause” shall mean (i) the willful engaging by the Executive in
illegal conduct or gross misconduct that is demonstrably and materially injurious to the Company,
(ii) the Executive’s willful refusal to perform his duties hereunder (other than any such failure
resulting from illness or incapacity) which refusal is demonstrably and materially injurious to the
Company, but only after the Executive has first received written notice of such alleged refusal,
and such refusal shall have continued for fifteen (15) days after such notice without cure by the
Executive, or (iii) the Executive’s material breach of his obligations under this Agreement which
breach is demonstrably and materially injurious to the Company, but only after the Executive has
first received written notice of such alleged breach and has failed to cure such breach within
fifteen (15) days after such notice; provided, however, that if the breach is not one that can be
reasonably cured, then the foregoing requirement in this clause (iii) for notice and opportunity to
cure shall not apply. For purposes of this Section 9(b), no act or failure to act on the
Executive’s part shall be deemed “willful” unless done, or omitted to be done, by the Executive not
in good faith and without reasonable belief that the Executive’s action or omission was in the best
interests of the Company. Notwithstanding the foregoing, the Executive shall not be deemed to have
been terminated for Cause unless and until the Company delivers to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of the Board (not
including the Executive, if he is then on the Board) at a meeting of the Board called and held for
such purpose (after reasonable notice to the Executive and an opportunity for the Executive,
together with counsel, to be heard before the Board) finding that, in the good faith opinion of the
Board, the Executive engaged in conduct set forth above and specifying the particulars thereof in
reasonable detail.

     (c) Termination by the Executive for Good Reason. The Executive’s employment pursuant
to this Agreement may be terminated by the Executive prior to the expiration of the Term in the
event the Executive has “Good Reason” to terminate his employment, which shall mean the following:

     (i) Any material adverse change in the Executive’s status or position, including, without
limitation, any material diminution in the Executive’s position, duties, responsibilities or
authority or the assignment to the Executive of any duties or responsibilities that are
inconsistent with the Executive’s status or position as of the Effective Date, excluding a
reduction or elimination of status, position, duties, responsibilities or authority with respect to
the human resources or information technology functions; or

     (ii) A reduction in the Executive’s annual Base Salary as the same may be increased from time
to time or failure to pay same; or

     (iii) A reduction in the Target Bonus which could be paid to the Executive under the Bonus
Plan below 60% of the Executive’s Base Salary or a failure to pay when due any bonus earned for a
completed performance period in accordance with the applicable bonus plan (“Earned Bonus”),
provided however, that the Company’s failure to

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actually award any bonus to the Executive, or the Company’s actually awarding a bonus to the
Executive which is less than the Target Bonus in each case in accordance with the applicable bonus
plan, shall not constitute Good Reason; or

     (iv) The breach by the Company of any of its material obligations under this Agreement; or

     (v) The relocation of the Company’s principal executive offices to a location that increases
the Executive’s commuting distance by more than thirty-five (35) miles or the Company requiring the
Executive to be based anywhere other than the Company’s principal executive offices, except for
required travel substantially consistent with the Executive’s business obligations; or

     (vi) The Company provides the Executive a notice of non-renewal of the Term under Section 2(b)
hereof.

     Prior to the Executive being permitted to terminate his employment for Good Reason, the
Company shall have sixty (60) days to cure any such alleged breach, assignment, reduction or
requirement, after the Executive provides the Company written notice of the actions or omissions
constituting such breach, assignment, reduction or requirement.

     (d) “Change of Control” Defined. Change of Control means the following:

     (i) “Board Change” which, for purposes of this Agreement, shall have occurred if, over any
twenty-four month period, a majority of the seats (other than vacant seats) on the Company’s Board
were to be occupied by individuals who were neither (A) nominated by at least one-half (1/2) of the
directors then in office (but excluding, for this

purpose, any such individual whose initial assumption of office occurs as a result of either
an actual or threatened election contest or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person (as defined herein) other than the Board) nor (B) appointed by
directors so nominated, or

     (ii) the acquisition by any individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934 (the “Exchange Act”) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a
majority of the then outstanding voting securities of the Company (the “Outstanding Company Voting
Securities”); provided, however, that the following acquisitions shall not constitute a Change of
Control: (A) any acquisition by the Company, or (B) any acquisition by any employee benefit plan
(or related trust) sponsored or maintained by the Company or any corporation controlled by the
Company, or (C) any public offering or private placement by the Company of its voting securities;
or

     (iii) a consolidation of the Company with another entity or a merger of the Company with
another entity in which neither the Company nor a corporation that, prior

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     to the merger or consolidation, was a subsidiary of the Company, shall be the surviving
entity; or

     (iv) a merger or consolidation of the Company following which either the Company or a
corporation that, prior to the merger or consolidation, was a subsidiary of the Company, shall be
the surviving entity, but a majority of the Outstanding Company Voting Securities is then owned by
a Person or Persons who were not “beneficial owners” of a majority of the Outstanding Company
Voting Securities immediately prior to such merger or consolidation; or

     (v) a voluntary or involuntary liquidation of the Company; or

     (vi) a sale or disposition by the Company of at least 80% of its assets in a single
transaction or a series of transactions (other than a sale or disposition of assets to a subsidiary
of the Company in a transaction not involving a Change of Control or a change in control of such
subsidiary).

     Transactions in which the Executive is part of the acquiring group do not constitute a Change
of Control.

     (e) “Disabled” Defined. As used in this Agreement, the term “disabled” means any
mental or physical condition that renders the Executive unable to perform the essential functions
of his position, with or without reasonable accommodation, for a period in excess of 180 days.

     (f) Surrender of Records and Property. Upon termination of his employment with the
Company, the Executive shall deliver promptly to the Company all records, manuals, books, lists,
blank forms, documents, letters, memoranda, notes, notebooks, reports, data, tables, calculations
or copies thereof that relate in any way to the business, products, practices or techniques of the
Company, and all other property, trade secrets and confidential information of the Company,
including, but not limited to, all documents that in whole or in part contain any trade secrets or
confidential information of the Company, which in any of these cases are in his possession or under
his control.

     10. Effect of Termination.

     (a) Termination Without Cause or for Good Reason or Upon the Company’s Notice of
Non-Renewal.

     In the event the Company terminates the Executive’s employment as the Company’s Executive Vice
President of Finance and Chief Financial Officer without Cause pursuant to Section 9(a)(iv) hereof,
the Executive terminates his employment for Good Reason pursuant to Section 9(c) hereof, or the
Company fails to renew the Term upon the expiration thereof under Section 2(a) or the Company
provides a notice of non-renewal under Section 2 hereof, then

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     (i) the Executive shall receive a lump sum cash payment within ten (10) days after the date of
termination of employment in an amount equal to one (1) year of his annual Base Salary at the time
of such termination;

     (ii) the Executive shall receive a lump sum cash payment within ten (10) days

after the date of termination of employment in an amount equal to the Target Bonus (based on
the Base Salary at the time of such termination) which would have been payable for the fiscal year
which commences immediately following the date of termination;

     (iii) if the Executive, and any spouse and/or dependents (“Family Members”) has medical and
dental coverage on the date of such termination under a group health plan sponsored by the Company,
the Company will reimburse the Executive for the total applicable premium cost for medical and
dental coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986, 29 U.S.C.
Sections 1161-1168; 26 U.S.C. Section 4980B(f), as amended, and all applicable regulations
(referred to collectively as “COBRA”) for the Executive and his Family Members for a period of up
to eighteen (18) months commencing on the date of such termination; provided, that the Company
shall have no obligation to reimburse the Executive for the premium cost of COBRA coverage as of
the date the Executive and his Family Members become eligible to obtain comparable benefits from a
subsequent employer;

     (iv) the Executive shall receive a lump sum cash payment within ten (10) days after the date
of termination of employment in an amount equal to (“Accrued Obligations”): (1) any unpaid Base
Salary through the date of termination, (2) any unpaid Earned Bonus for a performance period ending
prior to the date of termination, (3) accrued and unpaid vacation and (4) incurred and unreimbursed
business expenses;

     (v) the Executive shall receive a lump sum cash payment within ten (10) days after the date of
termination of employment in an amount equal to a pro rata amount of the Target Bonus (based on the
Base Salary at the time of such termination) for the fiscal year during which termination occurs;

     (vi) all options granted to the Executive pursuant to Section 4(e) of the Original Agreement
and pursuant to the June 2005 Amendment that have not vested at the time of such termination shall
vest immediately upon termination;

     (vii) all options granted to the Executive pursuant to Section 4(e) of the Original Agreement
and pursuant to the June 2005 Amendment that have vested or become vested at the time or as a
result of such termination will remain exercisable until their expiration dates;

     (viii) all shares of restricted stock granted to the Executive pursuant to Section 4(f) of the
Original Agreement that have not vested at the time of such termination shall vest immediately upon
such termination; and

12

 

     (ix) the Executive shall continue to be entitled to any deferred compensation and other unpaid
amounts and benefits earned and vested prior to or as a result of the Executive’s termination.

     (b) Termination For Cause. In the event the Company terminates the Executive’s
employment as the Company’s Executive Vice President of Finance and Chief Financial Officer for
Cause pursuant to Section 9(a)(iii) hereof, (i) the Executive shall be entitled to receive payment
of his Accrued Obligations, (ii) the Executive shall continue to be entitled to any deferred
compensation and other unpaid amounts and benefits earned and vested prior to the Executive’s
termination, (iii) all options to acquire shares in the Company held by the Executive which have
vested prior to the date of the Executive’s termination of employment shall remain exercisable
after such termination in accordance with the terms of the relevant plans and granting instruments,
(iv) all options granted to the Executive that have not vested prior to the date of the Executive’s
termination of employment will terminate as of the date of such termination and will be of no
further force and effect; and (v) all shares of restricted stock awarded to the Executive that have
not vested prior to the date of the Executive’s termination of employment shall be forfeited.

     (c) Death. In the event the Executive’s employment with the Company is terminated as a
result of the Executive’s death, (i) the Executive’s estate or the Executive’s duly designated
beneficiaries shall be entitled to payment of his Accrued Obligations; (ii) the Executive’s estate
or the Executive’s duly designated beneficiaries shall be entitled to a pro rata amount of the
Target Bonus (based on the Base Salary at the time of death) for the fiscal year in which he dies;
(iii) all options to acquire shares in the Company held by the Executive which have not vested at
the time of the Executive’s death will continue to vest in accordance with their terms and shall
remain exercisable (together with any options which had previously vested), until the earlier of
(A) one year from the date of death and (B) the end of the remaining exercise term of such options;
(iv) all shares of restricted stock awarded to the Executive shall fully vest; and (v) the
Executive’s estate or the Executive’s duly designated beneficiaries shall continue to be entitled
to any deferred compensation and other unpaid amounts and benefits earned and vested prior to the
Executive’s death. If the Executive’s Family Members have medical and dental coverage on the date
of such termination under a group health plan sponsored by the Company, the Company will reimburse
such Family Members for the total applicable premium cost for medical and dental coverage under
COBRA for such Family Members for a period of up to twenty-four (24) months commencing on the date
of such termination; provided the Company shall have no obligation to reimburse such Family Members
for the premium cost of COBRA coverage as of the date they become eligible to obtain comparable
benefits from another employer.

     (d) Disability. Upon termination of the Executive’s employment as the Company’s
Executive Vice President of Finance and Chief Financial Officer on account of the Executive’s
disability pursuant to Section 9(a)(ii) hereof, (i) the Executive shall be entitled to payment of
his Base Salary through the commencement of long term disability payments to the Executive under
any plan provided or paid for by the Company and other Accrued Obligations, (ii) the Executive
shall be entitled to a pro rata amount of the Target Bonus (based on the Base Salary at the time of
such termination) for the fiscal year in which his employment is terminated, (iii) the Executive
shall be entitled to all compensation and benefits to which the Executive is entitled pursuant to

13

 

the Company’s disability policies in effect as of the date of the Executive’s termination, (iv) all
options to acquire shares of the Company held by the Executive which have not vested at the date of
termination of employment will continue to vest in accordance with their terms, and shall remain
exercisable (together with any options which had previously vested), until the earlier of (A) one
year from the date of such termination of the Executive’s employment and (B) the end of the
remaining exercise term of such options, (v) all shares of restricted stock awarded to the
Executive shall fully vest; and (vi) the Executive shall continue to be entitled to any deferred
compensation and other unpaid amounts and benefits earned and vested prior to the Executive’s
termination. If the Executive and his Family Members have medical and dental coverage on the date
of such termination under a group health plan sponsored by the Company, the Company will reimburse
the Executive for the total applicable premium cost for medical and dental coverage under COBRA for
the Executive and his Family Members for a period of up to eighteen (18) months commencing on the
date of such termination; provided the Company shall have no obligation to reimburse the Executive
and his Family Members for the premium cost of COBRA coverage as of the date they become eligible
to obtain comparable benefits from another employer.

     (e) Voluntary Resignation Without Good Reason or upon the Executive’s Notice of
Non-Renewal. In the event the Executive voluntarily terminates his employment with the
Company without Good Reason, or the Executive’s employment terminates following the Executive
having provided the Company with a notice of non-renewal of the Term under Section 2 hereof, (i)
the Executive shall be entitled to receive payment of his Accrued Obligations, (ii) the Executive
shall continue to be entitled to any deferred compensation and other unpaid amounts and benefits
earned and vested prior to the Executive’s termination, (iii) all options to acquire shares of the
Company held by the Executive which have vested prior to the date of such termination shall remain
exercisable after such termination in accordance with the terms of the relevant plans and granting
instruments, (iv) all options to acquire shares of the Company held by the Executive which have not
vested prior to the date of such termination will terminate as of the date of such termination and
will be of no further force and effect, and (v) all shares of restricted stock awarded to the
Executive that have not vested prior to the date of the Executive’s termination of employment shall
be forfeited.

     (f) Termination Without Cause or For Good Reason In Connection With A Change in
Control. In the event the Company terminates Executive’s employment as the Company’s Executive
Vice President of Finance and Chief Financial Officer without Cause pursuant to Section 9(a)(iv)
hereof or Executive terminates such employment for Good Reason pursuant to Section 9(c) hereof
within the period which commences ninety (90) days before and ends one (1) year following a Change
in Control, in lieu of the provisions of Section 10(a) or 10(e) above,

     (i) Executive shall receive a lump sum cash payment within ten (10) days after the date of
termination of employment in an amount equal to his Accrued Obligations plus an amount equal to the
pro rated portion of the Target Bonus (based on the Base Salary at the time of such termination)
which would have been payable to Executive for the fiscal year during which such termination
occurs;

14

 

     (ii) Executive shall receive a lump sum cash payment within ten (10) days after the date of
termination in an amount equal to two (2) times the sum of the following: (1) his Base Salary at
the time of such termination and (2) the Target Bonus (based on the Base Salary at the time of such
termination) for the fiscal year in which such termination occurs;

          (iii) if Executive and his Family Members have medical and dental coverage on the date of such
termination under a group health plan sponsored by the Company, the Company will continue such
health plan coverage for Executive and his Family Members for a period of thirty six (36) months
commencing on the date of such termination, at a cost to Executive equal to the monthly premium
rate he would have paid had he been actively employed during such period; provided, (x) such
continuation coverage shall be coterminous with Executive’s entitlement to COBRA continuation
coverage, (y) the Company shall have no obligation to reimburse Executive for the premium cost of
such health plan continuation coverage as of the date Executive and his Family Members become
eligible to obtain comparable benefits from a subsequent employer;

     (iv) Executive shall continue to be entitled to any deferred compensation and other unpaid
amounts and benefits earned and vested prior to Executive’s termination.

     (g) Except as otherwise specifically provided under Section 10, all payments made to the
Executive under any of the subsections of this Section 10 that are based upon the Executive’s
salary or bonus shall be made at times and in a manner that is in accordance with the Company’s
standard payroll practices for senior management.

     (h) Notwithstanding anything else herein to the contrary, the Executive shall not be entitled
to realize or receive any termination related benefits provided for in this Section 10, including,
without limitation, all post-termination payments and the acceleration of option or restricted
stock or restricted stock unit vesting schedules unless the Executive shall have executed and
delivered to the Company a full release (reasonably satisfactory to the Company’s counsel) of all
claims against the Company and its affiliates, successors and assigns.

     (i) In the event the Executive becomes entitled to payments and/or the accelerated vesting of
options and/or restricted stock hereunder or any other payments, benefits or distributions (or
combination thereof) under this Agreement or otherwise, the entitlement of any of which is
contingent upon a change in the ownership or effective control of the Company or in the ownership
of a substantial portion of the assets of the Company pursuant to Section 280G of the Internal
Revenue Code (“Code”), the Company shall cause its independent auditors promptly to review, at the
Company’s expense, the applicability of Section 4999 of the Code to such payments, vesting,
benefits and/or distributions. If such auditors shall determine that any payment, benefit or
distribution (or combination thereof) of any type by the Company to Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (the
“Total Payments”), would be subject to the excise tax imposed by Section 4999 of the Code, or any
interest or penalties with respect to such excise tax (such excise tax, together with any such
interest and penalties, are collectively referred to as the “Excise Tax”), then Executive shall be
entitled to receive an additional cash payment (a “Gross Up

15

 

Payment”) within 30 days of such determination equal to an amount such that after payment by
Executive of all taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax, imposed upon the Gross Up Payment, Executive would retain an amount of
the Gross Up Payment equal to the Excise Tax imposed upon the Total Payments. For purposes of the
foregoing determination, Executive’s tax rate shall be deemed to be the highest statutory marginal
state and Federal tax rate (on a combined basis) (including his share of F.I.C.A. and Medicare
taxes) then in effect. If no determination by the Company’s auditors is made prior to the time a
tax return reflecting the Total Payments is required to be filed by Executive, Executive will be
entitled to receive a Gross Up Payment calculated on the basis of the Total Payments reported by
Executive in such tax return, within 30 days of the filing of such tax return. In all events, if
any tax authority determines that a greater Excise Tax should be imposed upon the Total Payments
than is determined by the Company’s independent auditors or reflected in Executive’s tax return
pursuant to this Section 10(f), the Executive shall be entitled to receive the full Gross Up
Payment calculated on the basis of the amount of Excise Tax determined to be payable by such tax
authority from the Company within 30 days of such determination. The Gross Up Payment shall be
made no later than Executive’s taxable year next following the year in which Executive remits the
relevant taxes.

     (j) If and when during the Term, the Company shall adopt (or amend) a severance plan generally
applicable to its executive officers (other than the Chief Executive Officer), which provides for
payments and benefits upon certain events of termination of employment in connection with a change
in control of the Company at levels that are greater than those provided herein under Section 10(f)
or 10(i) (or provide in connection with a change in control of the Company, for lump sum or
otherwise more accelerated payments than those provided for under Section 10(f)), then promptly
following adoption (or amendment) of such a plan, the Company and Executive agree to negotiate in
good faith an amendment to the provisions of Sections 10(f) or 10(i) to provide Executive with
comparable payments and benefits upon certain events of termination or otherwise in connection with
a change of control of the Company to those provided to other senior executive officers covered by
such plan with the same line of reporting to the Chief Executive Officer as Executive.
Notwithstanding the foregoing, it is understood that the Company may enter into individual
contractual arrangements with other executives for benefits, and nothing herein shall require the
Company to provide the same benefits or level of benefits to the Executive.

     11. Effect of Change of Control. In the event of a Change of Control, in addition to
any other consequences provided for in this Agreement:

     (a) all shares of restricted stock and restricted stock units awarded to the Executive shall
fully vest immediately prior to the Change of Control; and

     (b) all options to acquire shares of common stock of the Company held by the Executive shall
become fully vested immediately prior to the effective date of the Change of Control.

     The Executive shall have a reasonable opportunity to exercise all or any portion of such
options prior to the effective date of the Change of Control, and any options not exercised prior
to the effective date of the Change of Control shall terminate as of the effective date of the

16

 

Change of Control and will be of no further force or effect. To the extent that this Section 11 is
inconsistent with the provisions of the relevant plan and granting instruments under which such
options were issued, the Company and the Executive agree that such inconsistent provisions are
hereby superseded and the provisions of this Section 11 shall govern.

     12. Miscellaneous.

     (a) Entire Agreement. This Agreement (including the exhibits, schedules and other
documents referred to herein) contains the entire understanding between the parties hereto with
respect to the subject matter hereof and supersedes any prior understandings, agreements or
representations, written or oral, relating to the subject matter hereof.

     (b) Counterparts. This Agreement may be executed in separate counterparts, each of
which will be an original and all of which taken together shall constitute one and the same
agreement, and any party hereto may execute this Agreement by signing any such counterpart.

     (c) Severability. Whenever possible, each provision of this Agreement shall be
interpreted in such a manner as to be effective and valid under applicable law but if any provision
of this Agreement is held to be invalid, illegal or unenforceable under any applicable law or rule,
the validity, legality and enforceability of the other provisions of this Agreement will not be
affected or impaired thereby.

     (d) Successors and Assigns. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, personal representatives and, to the
extent permitted by subsection (e), successors and assigns. The Company will require its successors
to expressly assume its obligations under this Agreement.

     (e) Assignability. Neither this Agreement nor any right, remedy, obligation or
liability arising hereunder or by reason hereof shall be assignable (including by operation of law)
by either party without the prior written consent of the other party to this Agreement, except that
the Company may, without the consent of the Executive, assign its rights and obligations under this
Agreement to any corporation, firm or other business entity with or into which the Company may
merge or consolidate, or to which the Company may sell or transfer all or substantially all of its
assets, or of which 50% or more of the equity investment and of the voting control is owned,
directly or indirectly, by, or is under common ownership with, the Company. After any such
assignment by the Company, and provided that such assignment arises by operation of law or involves
an express written assumption by the assignee, the Company shall be immediately released and
discharged from all further liability hereunder and such assignee shall thereafter be deemed to be
the Company for the purposes of all provisions of this Agreement.

     (f) Modification, Amendment, Waiver or Termination. No provision of this Agreement may
be modified, amended, waived or terminated except by an instrument in writing signed by the parties
to this Agreement. No course of dealing between the parties will modify, amend, waive or terminate
any provision of this Agreement or any rights or obligations of any party under or by reason of
this Agreement. No delay on the part of the Company in exercising any right hereunder shall operate
as a waiver of such right. No waiver, express or implied, by the

17

 

Company of any right or any breach by the Executive shall constitute a waiver of any other right or
breach by the Executive.

     (g) Notices. All notices, consents, requests, instructions, approvals or other
communications provided for herein shall be in writing and delivered by personal delivery,
overnight courier, mail, electronic facsimile or e-mail addressed to the receiving party at the
address set forth herein. All such communications shall be effective when received.

Address for the Executive:

Mr. Craig Tooman

c/o: Enzon Pharmaceuticals, Inc.

685 Route 202/206

Bridgewater, NJ 08807

Address for the Company:

Enzon Pharmaceuticals, Inc.

685 Route 202/206

Bridgewater, New Jersey 08807

Attn: Legal Department

Any party may change the address set forth above by notice to each other party given as provided
herein.

     (h) Headings. The headings contained in this Agreement are for reference purposes only
and shall not in any way affect the meaning or interpretation of this Agreement.

     (i) Governing Law. All matters relating to the interpretation, construction, validity
and enforcement of this Agreement shall be governed by the internal laws of the State of New
Jersey, without giving effect to any choice of law provisions thereof.

     (j) Resolution of Certain Claims — Injunctive Relief. The Executive acknowledges that
it would be difficult to fully compensate the Company for damages resulting from any breach by him
of the provisions of this Agreement. Accordingly, the Executive agrees that, in addition to, but
not to the exclusion of any other available remedy, the Company shall have the right to enforce the
provisions of Sections 5 through 8 or 9(f) by applying for and obtaining temporary and permanent
restraining orders or injunctions from a court of competent jurisdiction without the necessity of
filing a bond therefor, and without the necessity of proving actual damages, and the Company shall
be entitled to recover from the Executive its reasonable attorneys’ fees and costs in enforcing the
provisions of Sections 5 through 8 or 9(f).

     (k) Third-Party Benefit. Nothing in this Agreement, express or implied, is intended to
confer upon any other person any rights, remedies, obligations or liabilities of any nature
whatsoever.

18

 

     (l) Withholding Taxes. The Company may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes as shall be required pursuant to any law or
governmental regulation or ruling.

     (m) Survival. The provisions of Section 4(c), 4(i) and Section 10 shall survive the
termination of the Executive’s employment and the termination of this Agreement.

     (n) Counterparts. This agreement may be executed in separate counterparts, all of
which taken together shall constitute one and the same agreement.

     (o) Section 409A. It is intended that any payment or benefit which is provided
pursuant to or in connection with this Agreement which is considered to be a deferral of
compensation within the meaning of Section 409A of the Code shall be paid and provided in a manner,
and at such time and in such form, as complies with the applicable requirements of Section 409A of
the Code to avoid the unfavorable tax consequences provided therein for non compliance. In
connection with effecting such compliance with Section 409A of the Code, the following shall apply:

          (i) Notwithstanding any other provision of this Agreement, to the extent any amount payable
under this Agreement would cause Executive to be liable for the additional tax imposed by Section
409A of the Code, the Agreement shall be amended in such manner as may be necessary to comply, or
to evidence or further evidence required compliance, with Section 409A of the Code; provided, no
such amendment shall be effective without Executive’s consent to the extent reducing the economic
value of the Agreement to Executive (as determined on a pre-tax basis).

          (ii) Neither Executive nor the Company shall take any action to accelerate or delay the
payment of any monies and/or provision of any benefits in any manner which would not be in
compliance with Section 409A of the Code (including any transition or grandfather rules
thereunder).

          (iii) If at the time of any separation from service (within the meaning of Treasury Regulation
Section 2.409A-1(m)) Executive is a specified employee (within the meaning of Treasury Regulation
Section 1.409A-1(i)), to the minimum extent required to satisfy Section 409A(a)(2)(B)(i) of the
Code and regulations thereunder, any payment or provision of benefits to Executive in connection
with his separation from service that would otherwise be paid or provided prior to the date that is
six (6) months following such separation from service shall be postponed and paid in a lump sum on
the first business day following the date that is six months after Executive’s separation from
service (the “409A Deferral Period”), and the remaining payments due to be made in installments or
periodically after 409A Deferral Period shall be made as otherwise scheduled. In the event
benefits are required to be so postponed, any such benefit may be provided during the 409A Deferral
Period at Executive’s expense, with Executive having a right to reimbursement from the Company
promptly after the 409A Deferral Period ends, and the balance of the benefits shall be provided as
otherwise scheduled.

19

 

     IN WITNESS WHEREOF, the parties hereto have executed, or caused to be executed by a duly
authorized representative, this Amended and Restated Employment Agreement as of the Effective Date.

	 	 	 	 	 
	ENZON PHARMACEUTICALS, INC.	 	 
	 
	 	 	 	 
	By: 

Name: 

Title:

	 	/s/ Jeffrey H. Buchalter
 

Jeffrey H. Buchalter

Chairman, President and Chief Executive Officer
	 	 

	 	 	 	 	 
	 	THE EXECUTIVE

 	 
	 	/s/ Craig A. Tooman
 	 
	 	Craig A. Tooman 	 
	 	 	 
	 

20exv4w4

Exhibit 4.4

MAIN STREET CAPITAL CORPORATION

2008 EQUITY INCENTIVE PLAN

1. PURPOSE.

     (A) General Purpose. The Plan has been established to advance the interests of Main
Street Capital Corporation (the “Company”) by providing for the grant of Awards to Participants. At
all times during such periods as the Company qualifies or is intended to qualify as a “business
development company” under the 1940 Act, the terms of the Plan shall be construed so as to conform
to the stock-based compensation requirements applicable to “business development companies” under
the 1940 Act. An Award or related transaction will be deemed to be permitted under the 1940 Act if
permitted by any exemptive or “no-action” relief granted by the Commission or its staff.

     (B) Available Awards. The purpose of the Plan is to provide a means by which eligible
recipients of Awards may be given an opportunity to benefit from increases in the value of the
Company’s Stock through the granting of Restricted Stock, Incentive Stock Options, Non-statutory
Stock Options, Dividend Equivalent Rights, Other Stock-Based Awards or Performance Awards.

     (C) Eligible Participants. All key Employees and all Employee Directors are eligible
to be granted Awards by the Board under the Plan; provided that, no person shall be granted Awards
of Restricted Stock unless such person is an Employee of the Company or an Employee of a
wholly-owned subsidiary of the Company.

2. DEFINITIONS.

     (A) “1940 Act” means the Investment Company Act of 1940, as amended, and the rules and
regulations promulgated thereunder.

     (B) “Affiliate” means any corporation or other entity that stands in a relationship to the
Company that would result in the Company and such corporation or other entity being treated as one
employer under Section 414(b) or Section 414(c) of the Code, except that in determining eligibility
for the grant of an Option by reason of service for an Affiliate, Sections 414(b) and 414(c) of the
Code shall be applied by substituting “at least 50%” for “at least 80%” under Section 1563(a)(1),
(2) and (3) of the Code and Treas. Regs. § 1.414(c)-2. The Company may at any time by amendment
provide that different ownership thresholds (consistent with Section 409A) apply. Notwithstanding
the foregoing provisions of this definition, except as otherwise determined by the Board, a
corporation or other entity shall be treated as an Affiliate only if its employees would be treated
as employees of the Company for purposes of the rules promulgated under the Securities Act of 1933,
as amended, with respect to the use of Form S-8.

 

 

     (C) “Award” means an award of Restricted Stock, Incentive Stock Options, Non-statutory Stock
Options, Dividend Equivalent Rights, Other Stock-Based Awards or Performance Awards granted
pursuant to the Plan.

     (D) “Board” means the Board of Directors of the Company.

     (E) “Cash Award” means an award denominated in cash.

     (F) “Code” means the Internal Revenue Code of 1986, as amended and in effect, or any successor
statute as from time to time in effect. Any reference to a provision of the Code shall be deemed to
include a reference to any applicable guidance (as determined by the Board) with respect to such
provision.

     (G) “Commission” means the Securities and Exchange Commission.

     (H) “Committee” means a committee of two or more members of the Board appointed by the Board
in accordance with Section 3(C).

     (I) “Company” means Main Street Capital Corporation, a Maryland corporation.

     (J) “Continuous Service” means the Participant’s uninterrupted service with the Company or an
Affiliate, whether as an Employee or Employee Director.

     (K) “Covered Transaction” means any of (i) a consolidation, merger, stock sale or similar
transaction or series of related transactions in which the Company is not the surviving corporation
or which results in the acquisition of all or substantially all of the Company’s then outstanding
common stock by a single person or entity or by a group of persons and/or entities acting in
concert, (ii) a sale or transfer of all or substantially all the Company’s assets, (iii) a
dissolution or liquidation of the Company or (iv) following such time as the Company has a class of
equity securities listed on a national securities exchange or quoted on an inter-dealer quotation
system, a change in the membership of the Board for any reason such that the individuals who, as of
the Effective Date, constitute the Board of Directors of the Company (the “Continuing Directors”)
cease for any reason to constitute at least a majority of the Board (a “Board Change”); provided,
however, that any individual becoming a director after the Effective Date whose election or
nomination for election by the Company’s shareholders was approved by a vote of at least a majority
of the Continuing Directors will be considered as though such individual were a Continuing
Director, but excluding for this purpose any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election contest (as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Securities Exchange Act of 1934, as amended) or
other actual or threatened solicitation of proxies or consents by or on behalf of any person or
entity other than the Board. Where a Covered Transaction involves a tender offer that is reasonably
expected to be followed by a merger described in clause (i) (as determined by the Board), the
Covered Transaction shall be deemed to have occurred upon consummation of the tender offer.

     (L) “Dividend Equivalent Rights” has the meaning set forth in Section 13.

     (M) “Effective Date” has the meaning set forth in Section 16.

 

 

     (N) “Employee” means any person employed by the Company or an Affiliate.

     (O) “Employee Director” means a member of the Board of Directors of the Company who is also an
Employee of the Company.

     (P) “Family Member” means any child, stepchild, grandchild, parent, stepparent, grandparent,
spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any person
sharing the Participant’s household (other than a tenant or employee), a trust in which these
persons have more than fifty percent of the beneficial interest, a foundation in which these
persons (or the Participant) control the management of assets, and any other entity in which these
persons (or the Participant) own more than fifty percent of the voting interests.

     (Q) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

     (R) “Non-Employee Director Plan” means the 2008 Non-Employee Director Restricted Stock Plan,
as from time to time amended and in effect.

     (S) “Non-statutory Stock Option” means an Option that is not an Incentive Stock Option.

     (T) “Option” means an Incentive Stock Option or a Non-statutory Stock Option granted pursuant
to the Plan.

     (U) “Other Stock-Based Award” means an Award described in Section 9 of this Plan that is not
covered by Section 7 or 8.

     (V) “Participant” means a person to whom an Award is granted pursuant to the Plan.

     (W) “Performance Award” means an Award made pursuant to this Plan that is subject to the
attainment of one or more performance goals.

     (X) “Performance Goal” means a standard established by the Committee to determine in whole or
in part whether a Qualified Performance Award shall be earned.

     (Y) “Permitted Transferee” means a Family Member of a Participant to whom an Award has been
transferred by gift.

     (Z) “Plan” means this 2008 Equity Incentive Plan, as from time to time amended and in effect.

     (AA) “Qualified Performance Award” means a Performance Award made to a Participant who is an
Employee that is intended to qualify as qualified performance-based compensation under
Section 162(m) of the Code, as described in Section 10(B) of the Plan.

 

 

     (BB) “Restricted Stock” means an Award of Stock for so long as the Stock remains subject to
restrictions requiring that it be forfeited to the Company if specified conditions are not
satisfied.

     (CC) “Securities Act” means the Securities Act of 1933, as amended.

     (DD) “Stock” means the common stock of the Company, par value $.01 per share.

3. ADMINISTRATION.

     (A) Administration By Board. The Board shall administer the Plan unless and until it
delegates administration to a Committee, as provided in Section 3(C).

     (B) Powers of the Board. The Board shall have the power, subject to the express
provisions of the Plan and applicable law:

     To determine from time to time which of the persons eligible under the Plan shall be
granted Awards; when and how each Award shall be granted and documented; what type or
combination of types of Awards shall be granted; the provisions of each Award granted, including
the time or times when a person shall be permitted to exercise an Award; and the number of
shares of Stock with respect to which an Award shall be granted to each such person.

     To construe and interpret the Plan and Awards granted under it, and to establish, amend and
revoke rules and regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Award documentation, in
such manner and to such extent as it shall deem necessary or expedient to make the Plan fully
effective.

     To amend the Plan or an Award as provided in Section 14.

     To terminate or suspend the Plan as provided in Section 15.

     Generally, to exercise such powers and to perform such acts as the Board deems necessary or
expedient to promote the best interests of the Company and that are not in conflict with the
provisions of the Plan.

     (C) Delegation to Committee. The Board may delegate the administration of the Plan to
a Committee or Committees composed of not less than two members of the Board, each of whom shall be
(i) a “Non-Employee Director” for purposes of Exchange Act Section 16 and Rule 16b-3 thereunder,
(ii) an “outside director” for purposes of Section 162(m) and the regulations promulgated under the
Code, and each of whom shall be, subject to any applicable transitional rules for newly public
issuers, “independent” within the meaning of the listing standards
of the Nasdaq stock market, and the term “Committee” shall apply to any persons to whom such
authority has been delegated; provided that a “required majority,” as defined in Section 57(o) of
the 1940 Act, must approve each issuance of Awards and Dividend Equivalent Rights in accordance
with Section 61(a)(3)(A)(iv) of the 1940 Act. If administration is delegated to a Committee, the
Committee shall have, in connection with the administration of the Plan, the

 

 

powers theretofore
possessed by the Board, including the power to delegate to a subcommittee any of the administrative
powers the Committee is authorized to exercise (and references in this Plan to the Board, other
than the Board reference at the end of this sentence and the Board references in the last sentence
of this subsection (c), shall thereafter be to the Committee or subcommittee), subject, however, to
such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest in the Board the
administration of the Plan, unless such actions are prohibited by the condition of exemptive relief
obtained from the Commission.

     (D) Effect of the Board’s Decision. Determinations, interpretations and constructions
made by the Board in good faith shall not be subject to review by any person and shall be final,
binding and conclusive on all persons.

4. AWARD AGREEMENTS.

     All Awards granted under the Plan will be evidenced by an agreement. The agreement
documenting the Award shall contain such terms and conditions as the Board shall deem advisable.
Agreements evidencing Awards made to different participants or at different times need not contain
similar provisions. In the case of any discrepancy between the terms of the Plan and the terms of
any Award agreement, the Plan provisions shall control.

5. SHARES SUBJECT TO THE PLAN; CERTAIN LIMITS.

     (A) Share Reserve. The maximum aggregate number of shares of Stock that may be issued
under the Plan pursuant to grants of Restricted Stock or Other Stock-Based Awards or the exercise
of Options is two million (2,000,000) shares.

     (B) Reversion of Shares to the Share Reserve. If any Award shall for any reason
expire or otherwise terminate, in whole or in part, the shares of Stock not acquired under such
Award shall revert to and again become available for issuance under the Plan.

     (C) Type of Shares. The shares of Stock subject to the Plan may be unissued shares or
reacquired shares bought on the market or otherwise. No fractional shares of Stock will be
delivered under the Plan.

     (D) Limits on Individual Grants. The maximum number of shares of Stock for which any
Employee or Employee Director may be granted Awards in any calendar year is five hundred thousand
(500,000) shares.

     (E) Limits on Grants of Restricted Stock. The combined maximum amount of Restricted
Stock that may be issued under the Plan and the Non-Employee Director Plan will be 10% of the
outstanding shares of Stock on the effective date of the plans plus 10% of the number of shares of
Stock issued or delivered by the Company (other than pursuant to compensation plans) during the
term of the plans. No one person shall be granted Awards of Restricted Stock relating to more than
25% of the shares available for issuance under this Plan.

     (F) No Grants in Contravention of 1940 Act. At all times during such periods as the
Company qualifies or is intended to qualify as a “business development company,” no Award

 

 

may be
granted under the Plan if the grant of such Award would cause the Company to violate the 1940 Act,
including, without limitation, Section 61(a)(3), and, if otherwise approved for grant, shall be
void and of no effect.

     (G) Limits on Number of Awards. The amount of voting securities that would result
from the exercise of all of the Company’s outstanding warrants, options, and rights, together with
any Restricted Stock issued pursuant to this Plan and the Non-Employee Director Plan, at the time
of issuance shall not exceed 25% of the outstanding voting securities of the Company, except that
if the amount of voting securities that would result from the exercise of all of the Company’s
outstanding warrants, options, and rights issued to the Company’s directors, officers, and
employees, together with any Restricted Stock issued pursuant to this Plan and the Non-Employee
Director Plan, would exceed 15% of the outstanding voting securities of the Company, then the total
amount of voting securities
that would result from the exercise of all outstanding warrants, options, and rights, together
with any Restricted Stock issued pursuant to this Plan and the Non-Employee Director Plan, at the
time of issuance shall not exceed 20% of the outstanding voting securities of the Company.

     (H) Date of Award’s Grant: The date on which the “required majority,” as defined in
Section 57(o) of the 1940 Act, approves the issuance of an Award will be deemed the date on which
such Award is granted.

6. ELIGIBILITY.

     Only Employees of the Company and Employees of a wholly-owned subsidiary of the Company may be
granted Awards. By accepting any Award granted hereunder, the Participant agrees to the terms of
the Award and the Plan. Notwithstanding any provision of this Plan to the contrary, awards of an
acquired company that are converted, replaced or adjusted in connection with the acquisition may
contain terms and conditions that are inconsistent with the terms and conditions specified herein,
as determined by the Board.

7. OPTION PROVISIONS.

     Each Option shall be evidenced by a written agreement containing such terms and conditions as
the Board shall deem appropriate. All Options shall be separately designated Incentive Stock
Options or Non-statutory Stock Options at the time of grant, and, if certificates are issued, a
separate certificate or certificates shall be issued for shares of Stock purchased on exercise of
each type of Option. The provisions of separate Options need not be identical, but, to the extent
relevant, each Option shall include (through incorporation by reference or otherwise) the substance
of each of the following provisions:

     (A) Time and Manner of Exercise. Unless the Board expressly provides otherwise, an
Option will not be deemed to have been exercised until the Board receives a notice of exercise (in
a form acceptable to the Board) signed by the appropriate person and accompanied by any payment
required under the Award. If the Option is exercised by any person other than the Participant, the
Board may require satisfactory evidence that the person exercising the Option has the right to do
so. No Option shall be exercisable after the expiration of ten (10) years from the date on which it
was granted.

 

 

     (B) Exercise Price of an Option. The exercise price for each Option shall not be less
than the closing stock price on the NASDAQ Global Select Market on the date of grant (or the price
on such other national securities exchange on which the stock is traded if the stock is not traded
on the NASDAQ Global Select Market on date of grant). If the stock is not traded on any national
securities exchange on the date of grant, the exercise price will not be less than the net asset
value of a share of stock, as determined by the Board in good faith, on the date of grant. If the
exercise price as so determined would be less than the “fair market value” of the Stock within the
meaning of the regulations under Section 409A of the Code, then the Options shall not be granted.
In the case of an Option granted to a 10% Holder and intended to qualify as an Incentive Stock
Option, the exercise price will not be less than 110% of the current market value determined as of
the date of grant. A “10% Holder” is an individual owning stock possessing more than 10% of the
total combined voting power of all classes of stock of the Company or its parent or subsidiary
corporations. No such Stock Option, once granted, may be repriced other than in accordance with the
1940 Act and the applicable stockholder approval requirements of the NASDAQ Global Select Market,
and in a manner that would continue to exclude the option from being subject to Section 409A of the
Code.

     (C) Consideration. The purchase price for Stock acquired pursuant to an Option shall
be paid in full at the time of exercise either (i) in cash, or, if so permitted by the Board and if
permitted by the 1940 Act and otherwise legally permissible, (ii) through a broker-assisted
exercise program acceptable to the Board, (iii) by such other means of payment as may be acceptable
to the Board, or (iv) in any combination of the foregoing permitted forms of payment.

     (D) Transferability of an Incentive Stock Option. An Incentive Stock Option shall not
be transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Participant only by the Participant.

     (E) Transferability of a Non-statutory Stock Option. A Non-statutory Stock Option
shall be transferable by will or by the laws of descent and distribution, or, to the extent
provided by the Board, by gift to a Permitted Transferee, and a Non-statutory Stock Option that is
nontransferable except at death shall be exercisable during the lifetime of the Participant only by
the Participant.

     (F) Limitation on Repurchase Rights. If an Option gives the Company the right to
repurchase shares of Common Stock issued pursuant to the Plan upon termination of employment of
such Participant, the terms of such repurchase right must comply with the 1940 Act.

     (G) Exercisability. The Board may determine the time or times at which an Option will
vest or become exercisable and the terms on which an Option requiring exercise will remain
exercisable. Notwithstanding the foregoing, vesting shall take place at the rate of at least 20%
per year over not more than five years from the date the award is granted, subject to reasonable
conditions such as continued employment; provided, however, that options may be subject to such
reasonable forfeiture conditions as the Board may choose to impose.

     (H) Termination of Continuous Service. Unless the Board expressly provides otherwise,
immediately upon the cessation of a Participant’s Continuous Service that portion, if

 

 

any, of any Option held by the Participant or the Participant’s Permitted Transferee that is not
then exercisable will terminate and the balance will remain exercisable for the lesser of (i) a
period of three months or (ii) the period ending on the latest date on which such Option could have
been exercised without regard to this Section 6(h), and will thereupon terminate subject to the
following provisions (which shall apply unless the Board expressly provides otherwise):

     if a Participant’s Continuous Service ceases by reason of death, or if a Participant
dies following the cessation of his or her Continuous Service but while any portion of any
Option then held by the Participant or the Participant’s Permitted Transferee is still
exercisable, the then exercisable portion, if any, of all Options held by the Participant or
the Participant’s Permitted Transferee immediately prior to the Participant’s death will
remain exercisable for the lesser of (A) the one year period ending with the first
anniversary of the Participant’s death or (B) the period ending on the latest date on which
such Option could have been exercised without regard to this Section 6(h)(i), and will
thereupon terminate; and

     if the Board in its sole discretion determines that the cessation of a Participant’s
Continuous Service resulted for reasons that cast such discredit on the Participant as to
justify immediate termination of his or her Options, all Options then held by the
Participant or the Participant’s Permitted Transferee will immediately terminate.

8. RESTRICTED STOCK PROVISIONS.

     Each grant of Restricted Stock shall be evidenced by a written agreement containing such terms
and conditions as the Board shall deem appropriate. The provisions of separate grants of Restricted
Stock need not be identical, but, to the extent relevant, each grant shall include (through
incorporation by reference or otherwise) the substance of each of the following provisions:

     (A) Consideration. To the extent permitted by the 1940 Act, Awards of Restricted
Stock may be made in exchange for past services or other lawful consideration.

     (B) Transferability of Restricted Stock. Except as the Board otherwise expressly
provides, Restricted Stock shall not be transferable other than by will or by the laws of descent
and distribution.

     (C) Vesting. The Board may determine the time or times at which shares of Restricted
Stock will vest.

     (D) Termination of Continuous Service. Unless the Board expressly provides otherwise,
immediately upon the cessation of a Participant’s Continuous Service that portion, if any, of any
Restricted Stock held by the Participant or the Participant’s Permitted Transferee that is not then
vested will thereupon terminate and the unvested shares will be returned to the Company and will be
available to be issued as Awards under this Plan.

 

 

	9.	 	OTHER STOCK-BASED AWARDS.

     The Board shall have the authority to determine the Participants who shall receive an Other
Stock-Based Award, which shall consist of any right that is (i) not an Award described in Sections
7 or 8 above and (ii) an Award of Shares or an Award denominated or payable in, valued in whole or
in part by reference to, or otherwise based on or related to, Shares (including, without
limitation, securities convertible into Shares), as deemed by the Board to be consistent with the
purposes of the Plan. Subject to the terms of the Plan and any applicable Award agreement, the
Board shall determine the terms and conditions of any such Other Stock-Based Award.

10. PERFORMANCE AWARD.

     Without limiting the type or number of Awards that may be made under the other provisions of
this Plan, an Award may be in the form of a Performance Award. The terms, conditions and
limitations applicable to an Award that is a Performance Award shall be determined by the
Committee. The Committee shall set performance goals in its discretion which, depending on the
extent to which they are met, will determine the value and/or amount of Performance Awards that
will be paid out to the Employee and/or the portion that may be exercised.

     (A) Non-qualified Performance Awards. Performance Awards granted to Employees that
are not intended to qualify as qualified performance based compensation under Section 162(m) of the
Code shall be based on achievement of such goals and be subject to such terms, conditions and
restrictions as the Committee or its delegate shall determine.

     (B) Qualified Performance Awards. Performance Awards granted to Employees under the
Plan that are intended to qualify as qualified performance based compensation under Section 162(m)
of the Code shall be paid, vested or otherwise deliverable solely on account of the attainment of
one or more pre-established, objective Performance Goals established by the Committee prior to the
earlier to occur of (x) 90 days after the commencement of the period of service to which the
Performance Goal relates or (y) the lapse of 25% of the period of service (as scheduled in good
faith at the time the goal is established), and in any event while the outcome is substantially
uncertain. A Performance Goal is objective if a third party having knowledge of the relevant facts
could determine whether the goal is met. Such a Performance Goal may be based on one or more
business criteria that apply to the Employee, one or more business segments, units, or divisions of
the Company, or the Company as a whole, and if so desired by the Committee, by comparison with a
peer group of companies. A Performance Goal may include one or more of the following:

	 	•	 	Stock price measures (including but not limited to growth measures and total
stockholder return);

	 	•	 	Net Investment Income or Net Realized Income per share (actual or targeted
growth);

	 	•	 	Economic value added (“EVA”);
	 
	 	•	 	Net Investment Income or Net Realized Income measures;

 

 

	 	•	 	Dividend and Dividends per share measures;
	 
	 	•	 	Cash flow and liquidity measures;
	 
	 	•	 	Return measures (including but not limited to return on capital employed, return
on equity, return on investment and return on assets);
	 
	 	•	 	Operating measures (including but not limited to productivity, efficiency, and
scheduling measures);
	 
	 	•	 	Expense targets (including but not limited to finding and development costs and
general and administrative expenses);
	 
	 	•	 	Corporate values measures (including but not limited to diversity commitment,
and ethics compliance).

     Unless otherwise stated, such a Performance Goal need not be based upon an increase or
positive result under a particular business criterion and could include, for example, maintaining
the status quo or limiting economic losses (measured, in each case, by reference to specific
business criteria). In interpreting Plan provisions applicable to Performance Goals and Qualified
Performance Awards, it is the intent of the Plan to conform with the standards of Section 162(m) of
the Code and Treasury Regulation §1.162-27(e)(2)(i), as to grants to those Employees whose
compensation is, or is likely to be, subject to Section 162(m) of the Code, and the Committee in
establishing such goals and interpreting the Plan shall be guided by such provisions. Prior to the
payment of any compensation based on the achievement of Performance Goals, the Committee must
certify in writing that applicable Performance Goals and any of the material terms thereof were, in
fact, satisfied. Subject to the foregoing provisions, the terms, conditions and limitations
applicable to any Qualified Performance Awards made pursuant to this Plan shall be determined by
the Committee.

11. MISCELLANEOUS.

     (A) Acceleration. The Board shall have the power to accelerate the time at which an
Award or any portion thereof vests or may first be exercised, regardless of the tax or other
consequences to the Participant or the Participant’s Permitted Transferee resulting from such
acceleration.

     (B) Stockholder Rights. No Participant or other person shall be deemed to be the
holder of, or to have any of the rights of a holder with respect to, any shares of Stock subject to
an Option unless and until such Award has been delivered to the Participant or other person upon
exercise of the Award. Holders of Restricted Stock shall have all the rights of a holder upon
issuance of the Restricted Stock Award including, without limitation, voting rights and the right
to receive dividends.

     (C) No Employment or Other Service Rights. Nothing in the Plan or any instrument
executed or Award granted pursuant thereto shall confer upon any Participant any right to continue
in the employment of, or to continue to serve as a director of, the Company or an

 

 

Affiliate or shall affect the right of the Company or an Affiliate to terminate (i) the
employment of the Participant (if the Participant is an Employee) with or without notice and with
or without cause or (ii) the service of an Employee Director (if the Participant is an Employee
Director) pursuant to the Bylaws of the Company or an Affiliate and any applicable provisions of
the corporate law of the state in which the Company or the Affiliate is incorporated. Nothing in
the Plan will be construed as giving any person any rights as a stockholder except as to shares of
Stock actually issued under the Plan. The loss of existing or potential profit in Awards will not
constitute an element of damages in the event of termination of service for any reason, even if the
termination is in violation of an obligation of the Company or an Affiliate to the Participant.

     (D) Legal Conditions on Delivery of Stock. The Company will not be obligated to
deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock
previously delivered under the Plan until: (i) the Company is satisfied that all legal matters in
connection with the issuance and delivery of such shares have been addressed and resolved; (ii) if
the outstanding Stock is at the time of delivery listed on any stock exchange or national market
system, the shares to be delivered have been listed or authorized to be listed on such exchange or
system upon official notice of issuance; and (iii) all conditions of the Award have been satisfied
or waived. If the sale of Stock has not been registered under the Securities Act, the Company may
require, as a condition to the grant or the exercise of the Award, such representations or
agreements as counsel for the Company may consider appropriate to avoid violation of the Securities
Act. The Company may require that certificates evidencing Stock issued under the Plan bear an
appropriate legend reflecting any restriction on transfer applicable to such Stock, and the Company
may hold the certificates pending lapse of the applicable restrictions.

     (E) Withholding Obligations. Each grant or exercise of an Award granted hereunder
shall be subject to the Participant’s having made arrangements satisfactory to the Board for the
full and timely satisfaction of all federal, state, local and other tax withholding requirements
applicable to such grant, exercise or exchange. The Company or its designated third party
administrator shall have the right to deduct applicable taxes from any Award payment and withhold,
at the time of delivery or vesting of cash or shares of Stock under this Plan, an appropriate
amount of cash or number of shares of Stock or a combination thereof for payment of taxes or other
amounts required by law or to take such other action as may be necessary in the opinion of the
Company to satisfy all obligations for withholding of such taxes. The Committee may also permit
withholding to be satisfied by the transfer to the Company of shares of Stock theretofore owned by
the holder of the Award with respect to which withholding is required. If shares of Stock are used
to satisfy tax withholding, such shares shall be valued based on the fair market value when the tax
withholding is required to be made.

     (F) Section 409A. Awards under the Plan are intended either to qualify for an
exemption from Section 409A or to comply with the requirements thereof, and shall be construed
accordingly.

12. ADJUSTMENTS UPON CHANGES IN STOCK.

     (A) Capitalization Adjustments. In the event of a stock dividend, stock split or
combination of shares (including a reverse stock split), recapitalization or other change in the
Company’s capital structure, the Board will make appropriate adjustments to the maximum

 

 

number of shares specified in Section 5(A) that may be delivered under the Plan, to the
maximum per-participant share limit described in Section 5(D) and will also make appropriate
adjustments to the number and kind of shares of stock or securities subject to Awards then
outstanding or subsequently granted, any exercise prices relating to Awards and any other provision
of Awards affected by such change. To the extent consistent with qualification of Incentive Stock
Options under Section 422 of the Code, the performance-based compensation rules of Section 162(m),
and continued exclusion from or compliance with Section 409A of the Code, where applicable, the
Board may also make adjustments of the type described in the preceding sentence to take into
account distributions to stockholders other than those provided for in such sentence, or any other
event, if the Board determines that adjustments are appropriate to avoid distortion in the
operation of the Plan and to preserve the value of Awards granted hereunder; provided, however,
that the exercise price of Awards granted under the Plan will not be adjusted unless the Company
receives an exemptive order from the Securities and Exchange Commission or written confirmation
from the staff of the Securities and Exchange Commission that the Company may do so.

     (B) Covered Transaction. Except as otherwise provided in an Award, in the event of a
Covered Transaction in which there is an acquiring or surviving entity, the Board may provide for
the assumption of some or all outstanding Awards, or for the grant of new awards in substitution
therefor, by the acquirer or survivor or an affiliate of the acquirer or survivor, in each case on
such terms and subject to such conditions as the Board determines. In the absence of such an
assumption or if there is no substitution, except as otherwise provided in the Award, each Award
will become fully vested or exercisable prior to the Covered Transaction on a basis that gives the
holder of the Award a reasonable opportunity, as determined by the Board, to participate as a
stockholder in the Covered Transaction following vesting or exercise, and the Award will terminate
upon consummation of the Covered Transaction.

13. DIVIDEND EQUIVALENT RIGHTS.

     The Board may provide for the payment of amounts in lieu of cash dividends or other cash
distributions (“Dividend Equivalent Rights”) with respect to Stock subject to an Award; provided,
however, that grants of Dividend Equivalent Rights must be approved by order of the Securities and
Exchange Commission. The Board may impose such terms, restrictions and conditions on Dividend
Equivalent Rights, including the date such rights will terminate, as it deems appropriate, and may
terminate, amend or suspend such Dividend Equivalent Rights at any time without the consent of the
Participant or Participants to whom such Dividend Equivalent Rights have been granted, if any.

14. AMENDMENT OF THE PLAN AND AWARDS.

     The Board may at any time or times amend the Plan or any outstanding Award for any purpose
which may at the time be permitted by law, and may at any time terminate the Plan as to any future
grants of Awards; provided, that except as otherwise expressly provided in the Plan the Board may
not, without the Participant’s consent, alter the terms of an Award so as to affect substantially
and adversely the Participant’s rights under the Award, unless the Board expressly reserved the
right to do so at the time of the grant of the Award. Any amendments to the Plan shall be
conditioned upon stockholder approval only to the extent, if any, such approval is

 

 

required by law (including the Code and applicable stock exchange requirements), as determined
by the Board.

15. TERMINATION OR SUSPENSION OF THE PLAN.

     (A) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of the date the
Plan is initially adopted by the Board or approved by the stockholders of the Company, whichever is
earlier. No Awards may be granted under the Plan while the Plan is suspended or after it is
terminated.

     (B) No Impairment of Rights. Suspension or termination of the Plan shall not impair
rights and obligations under any Awards granted while the Plan is in effect except with the written
consent of the Participant.

16. EFFECTIVE DATE OF PLAN.

     The Plan shall become effective upon approval by the stockholders of the Company, which
approval shall be within twelve (12) months before or after the date the Plan is adopted by the
Board; provided, however, that the Plan shall not be effective with respect to an Award of
Restricted Stock or the grant of Dividend Equivalent Rights unless the Company has received an
order of the Commission that permits such Award or grant (the “Effective Date”).

17. 1940 ACT.

     No provision of this Plan is intended to contravene any portion of the 1940 Act, and in the
event of any conflict between the provisions of the Plan or any Award and the 1940 Act, the
applicable Section of the 1940 Act shall control and all Awards under the Plan shall be so
modified. All Participants holding such modified Awards shall be notified of the change to their
Awards and such change shall be binding on such Participants.

18. INFORMATION RIGHTS OF PARTICIPANTS.

     The Company shall provide to each Participant who acquires Stock pursuant to the Plan, not
less frequently than annually, copies of annual financial statements (which need not be audited).
The Company shall not be required to provide such statements to key employees whose duties in
connection with the Company assure their access to equivalent information.

19. SEVERABILITY.

     If any provision of this Plan or any Award is or becomes or is deemed to be invalid, illegal,
or unenforceable in any jurisdiction or as to any Participant or Award, or would disqualify this
Plan or any Award under any applicable law, such provision shall be construed or deemed amended to
conform to the applicable laws, or if it cannot be construed or deemed amended without, in the
determination of the Board, materially altering the intent of this Plan or the Award, such
provision shall be stricken as to such jurisdiction, Participant or Award and the remainder of this
Plan and any such Award shall remain in full force and effect.

 

 

20. OTHER COMPENSATION ARRANGEMENTS.

     The existence of the Plan or the grant of any Award will not in any way affect the Company’s
right to award a person bonuses or other compensation in addition to Awards under the Plan.

21. WAIVER OF JURY TRIAL.

     By accepting an Award under the Plan, each Participant waives any right to a trial by jury in
any action, proceeding or counterclaim concerning any rights under the Plan and any Award, or under
any amendment, waiver, consent, instrument, document or other agreement delivered or which in the
future may be delivered in connection therewith, and agrees that any such action, proceedings or
counterclaim shall be tried before a court and not before a jury. By accepting an Award under the
Plan, each Participant certifies that no officer, representative, or attorney of the Company has
represented, expressly or otherwise, that the Company would not, in the event of any action,
proceeding or counterclaim, seek to enforce the foregoing waivers.

22. LIMITATION ON LIABILITY.

     Notwithstanding anything to the contrary in the Plan, neither the Company nor the Board, nor
any person acting on behalf of the Company or the Board, shall be liable to any Participant or to
the estate or beneficiary of any Participant by reason of any acceleration of income, or any
additional tax, asserted by reason of the failure of an Award to satisfy the requirements of
Section 422 or Section 409A or by reason of Section 4999 of the Code; provided, that nothing in
this Section 22 shall limit the ability of the Board or the Company to provide by express agreement
with a Participant for a gross-up payment or other payment in connection with any such tax or
additional tax.

23. GOVERNING LAW.

     The Plan and all Awards and actions hereunder shall be governed by the laws of the state of
Texas, with regard to the choice of law principles of any jurisdiction.

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