Document:

exv10w1

 

    APPENDIX A

 

    RAMCO-GERSHENSON
    PROPERTIES TRUST

    

 

    2009
    OMNIBUS LONG-TERM INCENTIVE PLAN

 

    Ramco-Gershenson Properties Trust, a Maryland real estate
    investment trust (the “Trust”), sets forth herein the
    terms of its 2009 Omnibus Long-Term Incentive Plan (the
    “Plan”), as follows:

 

    1. PURPOSE.  The Plan is intended to
    enhance the ability of the Trust, RGI, RGLP (as defined below)
    and the Subsidiaries and Affiliates of each of them to attract
    and retain highly qualified Trustees, officers, key employees
    and other persons and to motivate such persons to serve the
    Trust, RGI, RGLP, and the Subsidiaries of each of them and to
    improve the business results and earnings of the Trust and RGLP,
    by providing to such persons an opportunity to acquire or
    increase a direct proprietary interest in the operations and
    future success of the Trust. To this end, the Plan provides for
    the grant of Share options, Share appreciation rights,
    restricted Shares, restricted Share units, unrestricted Shares
    and dividend equivalent rights. Any of these awards may, but
    need not, be made as performance incentives to reward attainment
    of performance goals in accordance with the terms hereof. Share
    options granted under the Plan may be incentive stock options or
    non-qualified options, as provided herein.

 

    2. DEFINITIONS.  For purposes of
    interpreting the Plan and related documents (including Award
    Agreements), the following definitions shall apply:

 

    2.1 “Affiliate” means a person or entity
    which controls, is controlled by, or is under common control
    with the Trust, RGI or RGLP, as the case may be.

 

    2.2 “Award” means a grant of an Option,
    Share Appreciation Right, Restricted Shares, Restricted Share
    Units, Unrestricted Shares or Dividend Equivalent Rights under
    the Plan.

 

    2.3 “Award Agreement” means the written
    agreement between the Trust and a Participant that evidences and
    sets out the terms and conditions of an Award.

 

    2.4 “Benefit Arrangement” shall have the
    meaning set forth in Section 15 hereof.

 

    2.5 “Board” means the Board of Trustees of
    the Trust.

 

    2.6 “Cause” means, unless otherwise
    provided in an applicable written agreement with the Trust, RGI,
    RGLP or a Subsidiary or Affiliate of any of them, the commission
    of a felony, fraud, or willful misconduct, which has resulted
    in, or is likely to result in, damage to the Trust, RGI, RGLP or
    a Subsidiary or Affiliate of any of them, as the Committee may
    conclusively determine.

 

    2.7 “Change in Control” means an occasion
    upon which (i) any “person” (as such term is used
    in Section 13(d) and 14(d) of the Exchange Act) other than
    a trustee or other fiduciary holding securities under an
    employee benefit plan of the Trust, RGI, RGLP or a Subsidiary or
    Affiliate of any of them, is or becomes the “beneficial
    owner” (as defined in
    Rule 13d-3
    under the Exchange Act), directly or indirectly, of securities
    of the Trust representing 40% or more of the combined voting
    power (of the then-outstanding voting securities of the Trust
    entitled to vote generally in the election of Trustees) or
    combined total fair market value of the Trust’s then
    outstanding equity securities; or (ii) individuals who, as
    of April 21, 2009, constitute the Board (“Incumbent
    Board”) cease for any reason to constitute at least a
    majority of the Board; provided, however, that any
    individual becoming a Trustee subsequent to the date hereof
    whose election, or nomination for election by the Trust’s
    shareholders, was approved by a vote of at least a majority of
    the Trustees then comprising the Incumbent Board will be
    considered as though such individual were a member of the
    Incumbent Board, but excluding, for this purpose, any such
    individual whose initial assumption of office occurs as a result
    of an actual or threatened election contest with respect to the
    election or removal of directors or other actual or threatened
    solicitation of proxies or consents by or on behalf of a
    “person” other than the Board. Notwithstanding the
    preceding, to the extent “Change in Control” is a
    payment trigger, and not merely a vesting trigger, for any 409A
    Award, “Change in Control” means a change in the
    ownership or effective control of the Trust, or a change in the
    ownership of a substantial portion of the assets of the Trust,
    as described in Treas. Reg.
    Section 1.409A-3(i)(5),
    but replacing the term “Trust” for the term
    “Company” in such regulation.

    

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    2.8 “Code” means the Internal Revenue Code
    of 1986, as now in effect or as hereafter amended.

 

    2.9 “Committee” means the Compensation
    Committee of the Board, or, if the Board so elects, a different
    committee of, and designated from time to time by resolution of,
    the Board, which shall be constituted as provided in
    Section 3.1.

 

    2.10 “Corporate Transaction” means
    (i) the dissolution or liquidation of the Trust or a
    merger, consolidation, or reorganization of the Trust with one
    or more other entities in which the Trust is not the surviving
    entity, (ii) a sale of substantially all of the assets of
    the Trust to another person or entity which does not constitute
    a “related person” to the Trust, as such term is
    defined in the Treasury Regulations issued in connection with
    Section 409A of the Code, or (iii) any transaction
    (including without limitation a merger or reorganization in
    which the Trust is the surviving entity) which results in any
    person or entity (other than persons who are shareholders or
    Affiliates immediately prior to the transaction) owning more
    than 50% of the combined voting power of all classes of shares
    of the Trust.

 

    2.11 “Covered Employee” means a
    Participant who is a Covered Employee within the meaning of
    Section 162(m)(3) of the Code.

 

    2.12 “Disability” means a
    Participant’s physical or mental condition resulting from
    any medically determinable physical or mental impairment that
    renders such Participant incapable of engaging in any
    substantial gainful employment and that can be expected to
    result in death or that has lasted or can be expected to last
    for a continuous period of not less than 365 days.
    Notwithstanding the foregoing, a Participant shall not be deemed
    to be Disabled as a result of any condition that:

 

    (a) was contracted, suffered, or incurred while such
    Participant was engaged in, or resulted from such Participant
    having engaged in, a felonious activity;

 

    (b) resulted from an intentionally self-inflicted injury or
    an addiction to drugs, alcohol, or substances which are not
    administered under the direction of a licensed physician as part
    of a medical treatment plan; or

 

    (c) resulted from service in the Armed Forces of the United
    States for which such Participant received or is receiving a
    disability benefit or pension from the United States, or from
    service in the armed forces of any other country irrespective of
    any disability benefit or pension.

 

    The Disability of a Participant and the date on which a
    Participant ceases to be employed by reason of Disability shall
    be determined by the Trust, in accordance with uniform
    principles consistently applied, on the basis of such evidence
    as the Committee and the Trust deem necessary and desirable, and
    its good faith determination shall be conclusive for all
    purposes of the Plan. The Committee or the Trust shall have the
    right to require a Participant to submit to an examination by a
    physician or physicians and to submit to such reexaminations as
    the Committee or the Trust shall require in order to make a
    determination concerning the Participant’s physical or
    mental condition; provided, however, that a Participant may not
    be required to undergo a medical examination more often than
    once each 180 days, nor at any time after the normal date
    of the Participant’s Retirement. If any Participant engages
    in any occupation or employment (except for rehabilitation as
    determined by the Committee) for remuneration or profit, which
    activity would be inconsistent with the finding of Disability,
    or if the Committee, on the recommendation of the Trust,
    determines on the basis of a medical examination that a
    Participant no longer has a Disability, or if a Participant
    refuses to submit to any medical examination properly requested
    by the Committee or the Trust, then in any such event, the
    Participant shall be deemed to have recovered from such
    Disability. The Committee in its discretion may revise this
    definition of “Disability” for any grant, except to
    the extent that the Disability is a payment event under a 409A
    Award.

 

    2.13 “Dividend Equivalent Right” means a
    right, granted to a Participant under Section 13
    hereof, to receive cash, Shares, other Awards or other
    property equal in value to dividends paid with respect to a
    specified number of Shares, or other periodic payments.

 

    2.14 “Effective Date” means the date that
    the Plan is approved by the shareholders of the Trust, provided
    that such date is not more than one year after the approval of
    the Plan by the Board.

 

    2.15 “Exchange Act” means the Securities
    Exchange Act of 1934, as now in effect or as hereafter amended.

    

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    2.16 “Fair Market Value” means the value
    of a Share, determined as follows: if on the Grant Date or other
    determination date the Shares are listed on an established
    national or regional share exchange, is admitted to quotation on
    the New York Stock Exchange (“NYSE”) or is publicly
    traded on an established securities market, the Fair Market
    Value of a Share shall be the closing price of the Shares on
    such exchange or in such market (if there is more than one such
    exchange or market the Committee shall determine the appropriate
    exchange or market) on the Grant Date or such other
    determination date (or if there is no such reported closing
    price, the Fair Market Value shall be the mean between the
    highest bid and lowest asked prices or between the high and low
    sale prices on such trading day) or, if no sale of Shares is
    reported for such trading day, on the next preceding day on
    which any sale shall have been reported. If the Shares are not
    listed on such an exchange, quoted on such system or traded on
    such a market, Fair Market Value shall be the value of the
    Shares as determined by the Committee in good faith; provided
    that such valuation with respect to any Award that the Trust
    intends to be a stock right not providing for the deferral of
    compensation under Treas. Reg.
    Section 1.409A-1(b)(5)(i)
    (Non-Qualified Options) shall be determined by the reasonable
    application of a reasonable valuation method, as described in
    Treas. Reg
    Section 1.409A-1(b)(5)(iv)(B).

 

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

 

    2.18 “409A Award” means any Award that is
    treated as a deferral of compensation subject to the
    requirements of Code Section 409A.

 

    2.19 “Grant Date” means the date on which
    the Committee approves an Award or such later date as may be
    specified by the Committee.

 

    2.20 “Incentive Stock Option” means an
    “incentive stock option” within the meaning of
    Section 422 of the Code, or the corresponding provision of
    any subsequently enacted tax statute, as amended from time to
    time.

 

    2.21 “Non-Qualified Option” means an
    Option that is not an Incentive Stock Option.

 

    2.22 “Option” means an option to purchase
    Shares pursuant to the Plan.

 

    2.23 “Option Price” means the exercise
    price for each Share subject to an Option.

 

    2.24 “Other Agreement” shall have the
    meaning set forth in Section 15 hereof.

 

    2.25 “Outside Trustee” means a member of
    the Board who is not an officer or employee of the Trust, of
    RGI, of RGLP, or of any of their Affiliates.

 

    2.26 “Participant” means a person who
    receives or holds an Award under the Plan.

 

    2.27 “Performance Award” means an Award
    made subject to the attainment of performance goals (as
    described in Section 14) over a performance period
    of up to 10 years.

 

    2.28 “Plan” means Ramco-Gershenson
    Properties Trust 2009 Omnibus Long-Term Incentive Plan.

 

    2.29 “RGI” means Ramco-Gershenson, Inc., a
    Michigan corporation.

 

    2.30 “RGLP” means Ramco-Gershenson
    Properties, L.P., a Delaware limited partnership.

 

    2.31 “Restricted Share” means a Share
    awarded to a Participant pursuant to Section 10
    hereof.

 

    2.32 “Restricted Share Unit” means a
    bookkeeping entry representing the equivalent of a Share awarded
    to a Participant pursuant to Section 10 hereof.

 

    2.33 “Retirement” means termination of
    Service on or after age 62, or any other definition
    established by the Compensation Committee, in its discretion,
    either in any Award or in writing after the grant of any Award,
    provided

    

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    that the definition of Retirement with respect to the timing of
    payment (and not merely vesting) of any 409A Award cannot be
    changed after the Award is granted.

 

    2.34 “SAR Exercise Price” means the per
    share exercise price of an SAR granted to a Participant under
    Section 9 hereof.

 

    2.35 “Securities Act” means the Securities
    Act of 1933, as now in effect or as hereafter amended.

 

    2.36 “Service” means service as a Service
    Provider to the Trust, RGI, RGLP, or a Subsidiary or Affiliate
    of any of them. Unless otherwise stated in the applicable Award
    Agreement, a Participant’s change in position or duties
    shall not result in interrupted or terminated Service, so long
    as such Participant continues to be a Service Provider to the
    Trust, RGI, RGLP, or a Subsidiary or Affiliate of any of them.
    Subject to the preceding sentence, whether a termination of
    Service shall have occurred for purposes of the Plan shall be
    determined by the Committee, which determination shall be final,
    binding and conclusive. With respect to the timing of payment
    (and not merely vesting) of any 409A Award, whether a
    termination of Service shall have occurred shall be determined
    in accordance with the definition of “Separation from
    Service” under Treas. Reg.
    Section 1.409(A)-1(h).

 

    2.37 “Service Provider” means an employee,
    officer or Trustee of the Trust, RGI, RGLP, or a Subsidiary or
    Affiliate of any of them, or a consultant or adviser providing
    services to the Trust, RGI, RGLP, or a Subsidiary or Affiliate
    of any of them.

 

    2.38 “Share” or “Shares”
    means the common shares of beneficial interest of the Trust.

 

    2.39 “Share Appreciation Right” or
    “SAR” means a right granted to a Participant
    under Section 9 hereof.

 

    2.40 “Subsidiary” means any
    “subsidiary corporation” of the Trust, of RGI or of
    RGLP within the meaning of Section 424(f) of the Code.

 

    2.41 “Substitute Awards” means Awards
    granted upon assumption of, or in substitution for, outstanding
    awards previously granted by a company or other entity acquired
    by the Trust, RGI, RGLP, or a Subsidiary or Affiliate of any of
    them or with which the Trust, RGI, RGLP, or a Subsidiary or
    Affiliate of any of them combines.

 

    2.42 “Ten Percent Shareholder” means
    an individual who owns more than ten percent (10%) of the total
    combined voting power of all classes of outstanding shares of
    the Trust, RGI, RGLP or any of their Subsidiaries. In
    determining share ownership, the attribution rules of
    Section 424(d) of the Code shall be applied.

 

    2.43 “Termination Date” means the date
    upon which an Option shall terminate or expire, as set forth in
    Section 8.3 hereof.

 

    2.44 “Trust” means Ramco-Gershenson
    Properties Trust, a Maryland real estate investment trust.

 

    2.45 “Unrestricted Share Award” means an
    Award pursuant to Section 11 hereof.

 

    3. ADMINISTRATION OF THE PLAN

 

    3.1. Committee.  The Plan shall be
    administered by or pursuant to the direction of the Committee.
    The Committee shall have such powers and authorities related to
    the administration of the Plan as are consistent with the
    governing documents of the Trust and applicable law. The
    Committee shall have full power and authority to take all
    actions and to make all determinations required or provided for
    under the Plan, any Award or any Award Agreement and shall have
    full power and authority to take all such other actions and make
    all such other determinations not inconsistent with the specific
    terms and provisions of the Plan that the Committee deems to be
    necessary or appropriate to the administration of the Plan, any
    Award or any Award Agreement. All such actions and
    determinations shall be by the affirmative vote of a majority of
    the members of the Committee present at a meeting or by
    unanimous consent of the Committee executed in writing in
    accordance with the Trust’s governing documents and
    applicable law; provided, that subject to the governing
    documents of the Trust and applicable law, the Committee may
    delegate all or any portion of its authority under the Plan to a
    subcommittee of trustees
    and/or
    officers of the Trust for the purposes of determining or
    administering Awards granted to persons who are not then subject
    to the reporting requirements of Section 16 of the Exchange
    Act.. The interpretation and construction by the Committee of
    any provision of the Plan, any Award or any Award Agreement
    shall be final, binding and conclusive. The Committee shall
    consist of not less than three (3) members of the Board,
    which members shall be “Non-

    

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    Employee Trustees” as defined in
    Rule 16b-3
    under the Exchange Act (or such greater number of members which
    may be required by said
    Rule 16b-3)
    and which members shall qualify as “independent” under
    any applicable stock exchange rules.

 

    3.2. Terms of Awards.  Subject to the
    other terms and conditions of the Plan, the Committee shall have
    full and final authority to:

 

    (i) designate Participants,

 

    (ii) determine the type or types of Awards to be made to a
    Participant,

 

    (iii) determine the number of Shares to be subject to an
    Award,

 

    (iv) establish the terms and conditions of each Award
    (including, but not limited to, the exercise price of any
    Option, the nature and duration of any restriction or condition
    (or provision for lapse thereof) relating to the vesting,
    exercise, transfer, or forfeiture of an Award or the Shares
    subject thereto, and any terms or conditions that may be
    necessary to qualify Options as Incentive Stock Options) or to
    ensure exemption from or compliance with Code Section 409A,

 

    (v) prescribe the form of each Award Agreement evidencing
    an Award, and

 

    (vi) amend, modify, or supplement the terms of any
    outstanding Award. Notwithstanding the foregoing, no amendment,
    modification or supplement of any Award shall, without the
    consent of the Participant, impair the Participant’s rights
    under such Award, or subject to the requirements of Code
    Section 409A any Award that was excluded from Code
    Section 409A coverage upon grant.

 

    The Trust may retain the right in an Award Agreement to cause a
    forfeiture of the gain realized by a Participant on account of
    actions taken by the Participant in violation or breach of or in
    conflict with any employment agreement, non-competition
    agreement, any agreement prohibiting solicitation of employees,
    tenants or others of the Trust, RGI, RGLP, or a Subsidiary or
    Affiliate of any of them or any confidentiality obligation with
    respect to the Trust, RGI, RGLP, or a Subsidiary or Affiliate of
    any of them or otherwise in competition with the Trust, RGI,
    RGLP, or a Subsidiary or Affiliate of any of them, to the extent
    specified in such Award Agreement applicable to the Participant.
    Furthermore, unless the Committee provides otherwise in the
    applicable Award Agreement, the Trust may annul an Award if the
    Participant is an employee of the Trust, RGI, RGLP, or a
    Subsidiary or Affiliate of any of them and is terminated for
    Cause as defined in the applicable Award Agreement or the Plan,
    as applicable.

 

    Notwithstanding the foregoing, no amendment or modification may
    be made to an outstanding Option or SAR which reduces the Option
    Price or SAR Exercise Price, either by lowering the Option Price
    or SAR Exercise Price or by canceling the outstanding Option or
    SAR and granting a replacement or substitute Option or SAR with
    a lower exercise price without the approval of Trust’s
    shareholders, provided, that, appropriate adjustments may be
    made to outstanding Options and SARs pursuant to
    Section 17.

 

    3.3. Deferral Arrangement.  The Committee
    may permit or require the deferral of any award payment into a
    deferred compensation arrangement, subject to compliance with
    Section 409A, where applicable, and such rules and
    procedures as it may establish, which may include provisions for
    the payment or crediting of interest or dividend equivalents,
    including converting such credits into deferred Share
    equivalents and restricting deferrals to comply with hardship
    distribution rules affecting 401(k) plans. Notwithstanding the
    foregoing, no deferral shall be allowed if the deferral
    opportunity would violate Code Section 409A.

 

    3.4. No Liability.  No member of the Board
    or of the Committee shall be liable for any action or
    determination made in good faith with respect to the Plan or any
    Award or Award Agreement.

 

    3.5. Book Entry.  Notwithstanding any
    other provision of this Plan to the contrary, the Trust, RGI,
    RGLP, or a Subsidiary or Affiliate of any of them may elect to
    satisfy any requirement under this Plan for the delivery of
    Share certificates through the use of book-entry.

 

    4. SHARES SUBJECT TO THE PLAN

 

    Subject to adjustment as provided in Section 17
    hereof, the aggregate number of Shares available for
    issuance under the Plan shall be Nine Hundred Thousand
    (900,000). Shares issued or to be issued under the Plan shall be

    

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    authorized but unissued Shares or issued Shares that have been
    reacquired by the Trust, RGI, RGLP, or a Subsidiary or Affiliate
    of any of them. If any Shares covered by an Award are not
    purchased or are forfeited, or if an Award otherwise terminates
    without delivery of Shares subject thereto, then the number of
    Shares related to such Award and subject to such forfeiture or
    termination shall not be counted against the limit set forth
    above (or included for purposes of the calculation in the
    proviso, above), but shall again be available for making Awards
    under the Plan. If an Award (other than a Dividend Equivalent
    Right) is denominated in Shares, the number of Shares covered by
    such Award, or to which such Award relates, shall be counted on
    the date of grant of such Award against the aggregate number of
    Shares available for granting Awards under the Plan as provided
    above, and the following Shares shall be added back to the total
    number of Shares available under the Plan: (x) Shares that
    are subject to an Option or a share-settled Share Appreciation
    Right and are not issued upon the net settlement or net exercise
    of such Option or Share Appreciation Right, (y) Shares
    delivered to or withheld by the Trust, RGI, RGLP, or a
    Subsidiary or Affiliate of any of them to pay the exercise price
    or the withholding taxes under Options or Share Appreciation
    Rights, and (z) Shares repurchased on the open market with
    the proceeds of an Option exercise.

 

    The Committee shall have the right to substitute or assume
    Awards in connection with mergers, reorganizations, separations,
    or other transactions to which Section 424(a) of the Code
    applies. The number of Shares reserved pursuant to
    Section 4 may be increased by the corresponding
    number of Awards assumed and, in the case of a substitution, by
    the net increase in the number of Shares subject to Awards
    before and after the substitution.

 

    5. EFFECTIVE DATE, DURATION AND AMENDMENTS

 

    5.1. Effective Date.  The Plan shall be
    effective as of the Effective Date.

 

    5.2. Term.  The Plan shall terminate
    automatically ten (10) years after the Effective Date and
    may be terminated on any earlier date as provided in
    Section 5.3. The termination of the Plan shall not
    affect any Award outstanding on the date of such termination.

 

    5.3. Amendment and Termination of the
    Plan.  The Board may, at any time and from time to
    time, amend, suspend, or terminate the Plan as to any Shares as
    to which Awards have not been made. An amendment shall be
    contingent on approval of the Trust’s shareholders to the
    extent stated by the Board, required by applicable law or
    required by applicable stock exchange listing requirements. In
    addition, an amendment will be contingent on approval of the
    Trust’s shareholders if the amendment would:
    (i) materially increase the benefits accruing to
    Participants under the Plan, (ii) materially increase the
    aggregate number of Shares that may be issued under the Plan,
    (iii) materially modify the requirements as to eligibility
    for participation in the Plan, or (iv) except as permitted
    pursuant to the provisions of Section 17, reduce the
    Option Price of any previously granted Option or the grant price
    of any previously granted SAR, cancel any previously granted
    Options or SARs and grant substitute Options or SARs with a
    lower Option Price than the canceled Options or a lower grant
    price than the canceled SARs, or exchange any Options or SARs
    for cash, other awards, or Options or SARs with an Option Price
    or grant price that is less than the exercise price of the
    original Options or SARs. No Awards shall be made after
    termination of the Plan. No amendment, suspension or termination
    of the Plan shall (i) without the consent of the
    Participant, impair rights or obligations under any Award
    theretofore awarded under the Plan, nor (ii) accelerate any
    payment under any 409A Award except as otherwise permitted under
    Treas. Reg.
    Section 1.409A-3(j).

 

    6. AWARD ELIGIBILITY AND LIMITATIONS

 

    6.1. Service Providers and Other
    Persons.  Subject to this Section 6,
    Awards may be made under the Plan to: (i) any Service
    Provider to the Trust, RGI, RGLP, or a Subsidiary or Affiliate
    of any of them, including any Service Provider who is an officer
    or Trustee of the Trust, RGI, RGLP or a Subsidiary or Affiliate
    of any of them, as the Committee shall determine and designate
    from time to time, (ii) any Outside Trustee and
    (iii) any other individual whose participation in the Plan
    is determined to be in the best interests of the Trust by the
    Committee.

 

    6.2. Successive Awards and Substitute
    Awards.  An eligible person may receive more than
    one Award, subject to such restrictions as are provided herein.
    Notwithstanding Sections 8.1 and 9.1, the
    Option Price of an Option or the grant price of an SAR that is a
    Substitute Award may be less than 100% of the Fair Market Value
    of a Share on the original Grant Date provided that the Option
    Price or grant price is determined in accordance with the
    principles of Code Section 424 and the regulations
    thereunder.

    

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    6.3. Limitation on Shares Subject to
    Awards.  During any time when the Trust has a
    class of equity security registered under Section 12 of the
    Exchange Act:

 

    (i) the maximum number of Shares subject to Options or SARs
    that can be awarded under the Plan to any person eligible for an
    Award under Section 6 hereof is one hundred thousand
    (100,000) per calendar year; and

 

    (ii) the maximum number of Shares that can be awarded under
    the Plan, other than pursuant to an Option or SARs, to any
    person eligible for an Award under Section 6 hereof
    is one hundred thousand (100,000) per calendar year.

 

    The preceding limitations in this Section 6.3 are
    subject to adjustment as provided in Section 17
    hereof.

 

    7. AWARD AGREEMENT

 

    Each Award granted pursuant to the Plan shall be evidenced by an
    Award Agreement, in such form or forms as the Committee shall
    from time to time determine. Award Agreements granted from time
    to time or at the same time need not contain similar provisions
    but shall be consistent with the terms of the Plan. Each Award
    Agreement evidencing an Award of Options shall specify whether
    such Options are intended to be Non-Qualified Options or
    Incentive Stock Options, and in the absence of such
    specification such options shall be deemed Non-Qualified Options.

 

    8. TERMS AND CONDITIONS OF OPTIONS

 

    8.1. Option Price.  The Option Price of
    each Option shall be fixed by the Committee and stated in the
    Award Agreement evidencing such Option. The Option Price of each
    Option shall be at least the Fair Market Value on the Grant Date
    of a Share; provided, however, that in the event
    that a Participant is a Ten Percent Shareholder, the Option
    Price of an Option granted to such Participant that is intended
    to be an Incentive Stock Option shall be not less than
    110 percent of the Fair Market Value of a Share on the
    Grant Date.

 

    8.2. Vesting.  Subject to
    Sections 8.3, 8.4, 8.5 and 17.3 hereof, each Option
    granted under the Plan shall become exercisable at such times
    and under such conditions (including based on achievement of
    performance goals
    and/or
    future service requirements) as shall be determined by the
    Committee and stated in the Award Agreement. For purposes of
    this Section 8.2, fractional numbers of Shares
    subject to an Option shall be rounded to the next nearest whole
    number.

 

    8.3. Term.  Each Option granted under the
    Plan shall terminate, and all rights to purchase Shares
    thereunder shall cease, upon the expiration of ten years from
    the date such Option is granted, or under such circumstances and
    on such date prior thereto as is set forth in the Plan or as may
    be fixed by the Committee and stated in the Award Agreement
    relating to such Option (the “Termination Date”);
    provided, however, that in the event that the Participant
    is a Ten Percent Shareholder, an Option granted to such
    Participant that is intended to be an Incentive Stock Option
    shall not be exercisable after the expiration of five years from
    its Grant Date.

 

    8.4. Termination of Service.  Unless the
    Committee otherwise provides in an Award Agreement or in a
    written agreement with the Participant after the Award Agreement
    is issued, upon the termination of a Participant’s Service,
    except to the extent that such termination is due to death,
    Disability, Retirement, lay-off in connection with a reduction
    in force or Change in Control of the Trust or as otherwise
    specified in the Award Agreement, any Option held by such
    Participant that has not vested shall immediately be deemed
    forfeited and any otherwise vested Option or unexercised portion
    thereof shall terminate three (3) months after the date of
    such termination of Service, but in no event later than the date
    of expiration of the Option. If a Participant’s Service is
    terminated for Cause, the Option or unexercised portion thereof
    shall terminate as of the date of such termination. Unless the
    Committee otherwise provides in an Award Agreement or in a
    written agreement with the Participant after the Award Agreement
    is issued, if a Participant’s Service is terminated
    (i) due to Retirement or lay-off in connection with a
    reduction in force, the Option shall become fully vested and
    shall continue in accordance with its terms and shall expire
    upon its normal date of expiration (except that an Incentive
    Stock Option shall cease to be an Incentive Stock Option upon
    the expiration of three (3) months from the date of the
    Participant’s Retirement or lay-off and thereafter shall be
    a Non-Qualified Option), (ii) due to Disability, the Option
    shall become fully vested and shall continue in accordance with
    its terms and shall expire upon its normal date of expiration
    (except that an Incentive Stock Option shall cease to be an
    Incentive Stock Option upon the expiration of twelve
    (12) months from the date of the Participant’s
    termination

    

    A-7

 

    due to Disability and thereafter shall be a Non-Qualified
    Option) or (iii) due to death, any Option of the deceased
    Participant shall become fully vested and shall continue in
    accordance with its terms, may be exercised, to the extent of
    the number of Shares with respect to which
    he/she could
    have exercised the Option on the date of
    his/her
    death, by
    his/her
    estate, personal representative or beneficiary who acquires the
    Option by will or by the laws of descent and distribution, and
    shall expire on its normal date of expiration unless previously
    exercised (except that an Incentive Stock Option shall cease to
    be an Incentive Stock Option upon the expiration of twelve
    (12) months from the date of the Participant’s death
    and thereafter shall be a Non-Qualified Option). Such provisions
    shall be determined in the sole discretion of the Committee,
    need not be uniform among all Options issued pursuant to the
    Plan, and may reflect distinctions based on the reasons for
    termination of Service.

 

    8.5. Change in Control.  Unless the
    Committee otherwise provides in an Award Agreement or in a
    written agreement with the Participant after the Award Agreement
    is issued, in the event of a Change in Control, a
    Participant’s unvested Options shall become fully vested
    and may be exercised until their normal date of expiration.

 

    8.6. Limitations on Exercise of
    Option.  Notwithstanding any other provision of
    the Plan, in no event may any Option be exercised, in whole or
    in part, after the occurrence of an event referred to in
    Section 17 hereof which results in termination of
    the Option.

 

    8.7. Method of Exercise.  An Option that
    is exercisable may be exercised by the Participant’s
    delivery to the Trust of written notice of exercise on any
    business day, at the Trust’s principal office, on the form
    specified by the Committee. Such notice shall specify the number
    of Shares with respect to which the Option is being exercised
    and, except to the extent provided in Section 12.3
    or Section 12.4, shall be accompanied by payment
    in full of the Option Price of the Shares for which the Option
    is being exercised plus the amount (if any) of federal
    and/or other
    taxes which the Trust or an Affiliate may, in its judgment, be
    required to withhold with respect to an Award. The minimum
    number of Shares with respect to which an Option may be
    exercised, in whole or in part, at any time shall be the lesser
    of (i) 100 Shares or such lesser number set forth in
    the applicable Award Agreement and (ii) the maximum number
    of Shares available for purchase under the Option at the time of
    exercise.

 

    8.8. Rights of Holders of Options.  Unless
    otherwise stated in the applicable Award Agreement, a
    Participant holding or exercising an Option shall have none of
    the rights of a shareholder (for example, the right to receive
    cash or dividend payments or distributions attributable to the
    subject Shares or to direct the voting of the subject Shares)
    until the Shares covered thereby are fully paid and issued to
    the Participant. Except as provided in Section 17
    hereof, no adjustment shall be made for dividends, distributions
    or other rights for which the record date is prior to the date
    of such issuance.

 

    8.9. Delivery of Share
    Certificates.  Promptly after the exercise of an
    Option to purchase Shares by a Participant and the payment in
    full of the Option Price, unless the Trust shall then have
    uncertificated Shares, such Participant shall be entitled to the
    issuance of a Share certificate or certificates evidencing
    his/her
    ownership of the Shares purchased upon such exercise.

 

    8.10. Transferability of Options.  Except
    as provided in Section 8.11, during the lifetime of
    a Participant, only the Participant (or, in the event of legal
    incapacity or incompetency, the Participant’s guardian or
    legal representative) may exercise an Option. Except as provided
    in Section 8.11, no Option shall be assignable or
    transferable by the Participant to whom it is granted, other
    than by will or the laws of descent and distribution.

 

    8.11. Family Transfers.  If authorized in
    the applicable Award Agreement, a Participant may transfer, not
    for value, all or part of an Option which is not an Incentive
    Stock Option to any Family Members. For the purpose of this
    Section 8.11, a “not for value” transfer
    is a transfer which is (i) a gift to a trust for the
    benefit of the participant
    and/or one
    or more Family Members, or (ii) a transfer under a domestic
    relations order in settlement of marital property rights.
    Following a transfer under this Section 8.11, any
    such Option shall continue to be subject to the same terms and
    conditions as were applicable immediately prior to transfer.
    Subsequent transfers of transferred Options are prohibited
    except in accordance with this Section 8.11 or by
    will or the laws of descent and distribution. The events of
    termination of Service of Section 8.4 hereof shall
    continue to be applied with respect to the original Participant,
    following which the Option shall be exercisable by the
    transferee only to the extent, and for the periods specified, in
    Section 8.4.

    

    A-8

 

    8.12. Limitations on Incentive Stock
    Options.  An Option shall constitute an Incentive
    Stock Option only (i) if the Participant of such Option is
    an employee of the Trust or any Subsidiary of the Trust;
    (ii) to the extent specifically provided in the related
    Award Agreement; and (iii) to the extent that the aggregate
    Fair Market Value (determined at the time the Option is granted)
    of the Shares with respect to which all Incentive Stock Options
    held by such Participant become exercisable for the first time
    during any calendar year (under the Plan and all other plans of
    the Participant’s employer and its Affiliates) does not
    exceed $100,000. This limitation shall be applied by taking
    Options into account in the order in which they were granted.

 

    9. TERMS AND CONDITIONS OF SHARE APPRECIATION RIGHTS

 

    9.1. Right to Payment and Grant Price.  An
    SAR shall confer on the Participant to whom it is granted a
    right to receive, upon exercise thereof, the excess of
    (A) the Fair Market Value of one Share on the date of
    exercise over (B) the grant price of the SAR as determined
    by the Committee. The Award Agreement for an SAR shall specify
    the grant price of the SAR, which shall be at least the Fair
    Market Value of a Share on the Grant Date. SARs may be granted
    in conjunction with all or part of an Option granted under the
    Plan or at any subsequent time during the term of such Option,
    in conjunction with all or part of any other Award or without
    regard to any Option or other Award.

 

    9.2. Other Terms.  The Committee shall
    determine at the Grant Date or thereafter, the time or times at
    which and the conditions under which an SAR may be exercised
    (including based on achievement of performance goals
    and/or
    future service requirements), the time or times at which SARs
    shall cease to be or become exercisable following termination of
    Service or upon other conditions (provided that no SAR shall be
    exercisable following the tenth anniversary of its Grant Date),
    the method of exercise, method of settlement, form of
    consideration payable in settlement, method by or forms in which
    Shares will be delivered or deemed to be delivered to
    Participants, whether or not an SAR shall be in tandem or in
    combination with any other Award, and any other terms and
    conditions of any SAR.

 

    10. TERMS AND CONDITIONS OF RESTRICTED SHARES AND
    RESTRICTED SHARE UNITS

 

    10.1. Grant of Restricted Shares or Restricted Share
    Units.  Awards of Restricted Shares or Restricted
    Share Units may be made to eligible persons. Restricted Shares
    or Restricted Share Units may also be referred to as performance
    shares or performance share units. If so indicated in the Award
    Agreement at the time of grant, a Participant may vest in more
    than 100% of the number of Restricted Share Units awarded to the
    Participant.

 

    10.2. Restrictions.  At the time an Award
    of Restricted Shares or Restricted Share Units is made, the
    Committee may, in its sole discretion, establish a period of
    time (a “restricted period”) applicable to such
    Restricted Shares or Restricted Share Units, during which a
    portion of the Shares related to such Award shall become
    nonforfeitable or vest, on each anniversary of the Grant Date or
    otherwise, as the Committee may deem appropriate. Each Award of
    Restricted Shares or Restricted Share Units may be subject to a
    different restricted period. The Committee may, in its sole
    discretion, at the time a grant of Restricted Shares or
    Restricted Share Units is made, prescribe restrictions in
    addition to or other than the expiration of the restricted
    period, including the satisfaction of corporate or individual
    performance conditions, which may be applicable to all or any
    portion of the Restricted Shares or Restricted Share Units in
    accordance with Section 14.1 and 14.2.
    Neither Restricted Shares nor Restricted Share Units may be
    sold, transferred, assigned, pledged or otherwise encumbered or
    disposed of during the restricted period or prior to the
    satisfaction of any other restrictions prescribed by the
    Committee with respect to such Restricted Shares or Restricted
    Share Units. Each Participant may designate a beneficiary for
    the Restricted Shares or Restricted Share Units awarded to him
    or her under the Plan. If a Participant fails to designate a
    beneficiary, the Participant shall be deemed to have designated
    his or her estate as his or her beneficiary.

 

    10.3. Restricted Shares Certificates.  The
    Trust shall issue, in the name of each Participant to whom
    Restricted Shares have been granted, Share certificates
    representing the total number of Restricted Shares granted to
    the Participant, as soon as reasonably practicable after the
    Grant Date. The Committee may provide in an Award Agreement that
    either (i) the Trust shall hold such certificates for the
    Participant’s benefit until such time as the Restricted
    Shares are forfeited to the Trust or the restrictions lapse, or
    (ii) such certificates shall be delivered to the
    Participant, provided, however, that such certificates
    shall bear a legend or legends that comply with the applicable
    securities laws and regulations and makes appropriate reference
    to the restrictions imposed under the Plan and the Award
    Agreement.

    

    A-9

 

    10.4. Rights of Holders of Restricted
    Shares.  Unless the Committee otherwise provides
    in an Award Agreement, holders of Restricted Shares shall have
    the right to vote such Shares and the right to receive any
    dividends or distributions declared or paid with respect to such
    Shares. All distributions, if any, received by a Participant
    with respect to Restricted Shares as a result of any share
    split, share dividend, combination of shares, or other similar
    transaction shall be subject to the restrictions applicable to
    the original Award.

 

    10.5. Rights of Holders of Restricted Share Units.

 

    10.5.1. Dividend Rights.  Unless the
    Committee otherwise provides in an Award Agreement, holders of
    Restricted Share Units shall have no rights as shareholders of
    the Trust. The Committee may provide in an Award Agreement
    evidencing a grant of Restricted Share Units that the holder of
    such Restricted Share Units shall be entitled to receive, upon
    the payment of a cash dividend or distribution on outstanding
    Shares, or at any time thereafter, a cash payment for each
    Restricted Share Unit held equal to the per-share dividend, paid
    on the Shares in accordance with Section 13.

 

    10.5.2. Creditor’s Rights.  A holder
    of Restricted Share Units shall have no rights other than those
    of a general creditor of the Trust. Restricted Share Units
    represent an unfunded and unsecured obligation of the Trust,
    subject to the terms and conditions of the applicable Award
    Agreement.

 

    10.6. Termination of Service.  Unless the
    Committee otherwise provides in an Award Agreement or in a
    written agreement with the Participant after the Award Agreement
    is issued, upon the termination of a Participant’s Service,
    any Restricted Shares or Restricted Share Units held by such
    Participant that have not vested, or with respect to which all
    applicable restrictions and conditions have not lapsed, shall
    immediately be deemed forfeited, except to the extent that such
    termination is due to death, Disability, Retirement, lay-off in
    connection with a reduction in force or Change in Control or as
    otherwise specified in the Award Agreement. Further, the Award
    Agreement may specify that the vested portion of the Award shall
    continue to be subject to the terms of any applicable transfer
    or other restriction. Upon forfeiture of Restricted Shares or
    Restricted Share Units, the Participant shall have no further
    rights with respect to such Award, including but not limited to
    any right to vote Restricted Shares or any right to receive
    dividends with respect to Restricted Shares or Restricted Share
    Units.

 

    10.7. Delivery of Share.  Except as
    otherwise specified in an Award Agreement with respect to a
    particular Award of Restricted Shares or unless the Trust shall
    then have uncertificated Shares, within thirty (30) days of
    the expiration or termination of the restricted period, a
    certificate or certificates representing all Shares relating to
    such Award which have not been forfeited shall be delivered to
    the Participant or to the Participant’s beneficiary or
    estate, as the case may be. Except as otherwise specified with
    respect to a particular Award of Restricted Share Units or
    unless the Trust shall then have uncertificated Shares, within
    thirty (30) days of the satisfaction of the vesting
    criterion applicable to such Award, a certificate or
    certificates representing all Shares relating to such Award
    which have vested shall be issued or transferred to the
    Participant.

 

    11. TERMS AND CONDITIONS OF UNRESTRICTED SHARE AWARDS

 

    The Committee may, in its sole discretion, grant (or sell at
    such purchase price determined by the Committee) an Unrestricted
    Share Award to any Participant pursuant to which such
    Participant may receive Shares free of any restrictions
    (“Unrestricted Shares”) under the Plan. Unrestricted
    Share Awards may be granted or sold as described in the
    preceding sentence in respect of past services and other valid
    consideration, or in lieu of, or in addition to, any cash
    compensation due to such Participant.

 

    12. FORM OF PAYMENT FOR OPTIONS

 

    12.1. General Rule.  Payment of the Option
    Price for the Shares purchased pursuant to the exercise of an
    Option shall be made in cash or in cash equivalents acceptable
    to the Trust.

 

    12.2. Surrender of Shares.  To the extent
    approved by the Committee in its sole discretion, payment of the
    Option Price for Shares purchased pursuant to the exercise of an
    Option may be made all or in part through the tender to the
    Trust of Shares, which Shares, if acquired from the Trust, shall
    have been held for at least six months at the time of tender and
    which shall be valued, for purposes of determining the extent to
    which the Option Price has been paid thereby, at their Fair
    Market Value on the date of exercise or surrender.

    

    A-10

 

    12.3. Cashless Exercise.  To the extent
    permitted by law and to the extent permitted by the Committee in
    its sole discretion, payment of the Option Price for Shares
    purchased pursuant to the exercise of an Option may be made all
    or in part by delivery (on a form acceptable to the Committee)
    of an irrevocable direction to a registered securities broker
    acceptable to the Trust to sell Shares and to deliver all or
    part of the sales proceeds to the Trust in payment of the Option
    Price and any withholding taxes described in
    Section 18.3.

 

    12.4. Other Forms of Payment.  To the
    extent permitted by the Committee in its sole discretion,
    payment of the Option Price for Shares purchased pursuant to
    exercise of an Option may be made in any other form that is
    consistent with applicable laws, regulations and rules.

 

    13. TERMS AND CONDITIONS OF DIVIDEND EQUIVALENT
    RIGHTS

 

    13.1. Dividend Equivalent Rights.  A
    Dividend Equivalent Right is an Award entitling the recipient to
    receive credits based on cash distributions that would have been
    paid on the Shares specified in the Dividend Equivalent Right
    (or other Award to which it relates) if such Shares had been
    issued to and held by the recipient. A Dividend Equivalent Right
    may be granted hereunder to any Participant, provided that any
    Award of Dividend Equivalent Rights that is a 409A Award shall
    comply with the Code Section 409A requirements applicable
    to deferred compensation. Dividend Equivalent Rights may not be
    granted hereunder relating to Shares which are subject to
    Options or Share Appreciation Rights. The terms and conditions
    of Dividend Equivalent Rights shall be specified in the Award.
    Dividend equivalents credited to the holder of a Dividend
    Equivalent Right may be paid currently or may be deemed to be
    reinvested in additional Shares, which may thereafter accrue
    additional equivalents. Any such reinvestment shall be at Fair
    Market Value on the date that the distribution otherwise would
    have been paid. Dividend Equivalent Rights may be settled in
    cash or Shares or a combination thereof, in a single installment
    or installments, all determined in the sole discretion of the
    Committee. A Dividend Equivalent Right granted as a component of
    another Award may provide that such Dividend Equivalent Right
    shall be settled upon exercise, settlement, or payment of, or
    lapse of restrictions on, such other Award, unless such
    settlement would cause an Award that is otherwise exempt from
    Code Section 409A to become subject to Code
    Section 409A (e.g., in the case of a Non-Qualified Option).
    Such Dividend Equivalent Right shall expire or be forfeited or
    annulled under the same conditions as such other Award. A
    Dividend Equivalent Right granted as a component of another
    Award may also contain terms and conditions different from such
    other Award.

 

    13.2. Termination of Service.  Except as
    may otherwise be provided by the Committee either in the Award
    Agreement or in a written agreement with the Participant after
    the Award Agreement is issued, a Participant’s rights in
    all Dividend Equivalent Rights shall automatically terminate
    upon the Participant’s termination of Service for any
    reason.

 

    14. TERMS AND CONDITIONS OF PERFORMANCE AWARDS

 

    14.1. Performance Conditions.  The right
    of a Participant to exercise or receive a grant or settlement of
    any Performance Award, and the timing thereof, may be subject to
    such corporate or individual performance conditions as may be
    specified by the Committee. The Committee may use such business
    criteria and other measures of performance as it may deem
    appropriate in establishing any performance conditions, and may
    exercise its discretion to reduce the amounts payable under any
    Award subject to performance conditions, except as limited under
    Sections 14.2 hereof in the case of a Performance
    Award intended to qualify under Code Section 162(m).

 

    14.2. Performance Awards Granted to Designated Covered
    Employees.  If and to the extent that the
    Committee determines that a Performance Award to be granted to a
    Participant who is designated by the Committee as likely to be a
    Covered Employee should qualify as “performance-based
    compensation” for purposes of Code Section 162(m), the
    grant, exercise
    and/or
    settlement of such Performance Award shall be contingent upon
    achievement of pre-established performance goals and other terms
    set forth in this Section 14.2.

 

    14.2.1. Performance Goals Generally.  The
    performance goals for such Performance Awards shall consist of
    one or more business criteria and a targeted level or levels of
    performance with respect to each of such criteria, as specified
    by the Committee consistent with this Section 14.2.
    Performance goals shall be objective and shall otherwise meet
    the requirements of Code Section 162(m) and regulations
    thereunder including the requirement that the level or levels of
    performance targeted by the Committee result in the achievement
    of performance goals being “substantially uncertain.”
    The Committee may determine that such Performance Awards shall
    be

    

    A-11

 

    granted, exercised
    and/or
    settled upon achievement of any one performance goal or that two
    or more of the performance goals must be achieved as a condition
    to grant, exercise
    and/or
    settlement of such Performance Awards. Performance goals may
    differ for Performance Awards granted to any one Participant or
    to different Participants.

 

    14.2.2. Business Criteria.  One or more of
    the following business criteria for the Trust, on a consolidated
    basis,
    and/or
    specified Subsidiaries or business units of the Trust or the
    Trust (except with respect to the total shareholder return and
    earnings per share criteria), shall be used exclusively by the
    Committee in establishing performance goals for such Performance
    Awards: (1) total shareholder return (share price
    appreciation plus dividends), (2) net income,
    (3) earnings per share, (4) funds from operations,
    (5) funds from operations per share, (6) return on
    equity, (7) return on assets, (8) return on invested
    capital, (9) increase in the market price of Shares or
    other securities, (10) revenues, (11) net operating
    income, (12) comparable center net operating income,
    (13) operating margin (operating income divided by
    revenues), (14) earnings before interest, taxes,
    depreciation and amortization (EBITDA) or adjusted EBITDA,
    (15) the performance of the Trust in any one or more of the
    items mentioned in clauses (1) through (14) in
    comparison to the average performance of the companies used in a
    self-constructed peer group for measuring performance under an
    Award, or (16) the performance of the Trust in any one or
    more of the items mentioned in clauses (1) through
    (14) in comparison to a budget or target for measuring
    performance under an Award. Business criteria may be measured on
    an absolute basis or on a relative basis (i.e., performance
    relative to peer companies) and on a GAAP or non-GAAP basis.

 

    14.2.3. Timing For Establishing Performance
    Goals.  Performance goals shall be established, in
    writing, not later than 90 days after the beginning of any
    performance period applicable to such Performance Awards, or at
    such other date as may be required for “performance-based
    compensation” under Code Section 162(m).

 

    14.2.4. Settlement of Performance Awards; Other
    Terms.  Settlement of such Performance Awards
    shall be in Shares, other Awards or other property, in the
    discretion of the Committee. The Committee may, in its
    discretion, reduce the amount of a settlement otherwise to be
    made in connection with such Performance Awards. The Committee
    shall specify in the Award Agreement the circumstances in which
    such Performance Awards shall be paid or forfeited in the event
    of termination of Service by the Participant prior to the end of
    a performance period or settlement of Performance Awards.

 

    14.3. Written Determinations.  All
    determinations by the Committee as to the establishment of
    performance goals, the amount of any Performance Award pool or
    potential individual Performance Awards and as to the
    achievement of performance goals relating to Performance Awards
    shall be made in writing in the case of any Award intended to
    qualify under Code Section 162(m).

 

    14.4. Status of Section 14.2 Awards Under Code
    Section 162(m).  It is the intent of the
    Trust that Performance Awards under Section 14.2
    hereof granted to persons who are designated by the
    Committee as likely to be Covered Employees within the meaning
    of Code Section 162(m) and regulations thereunder shall, if
    so designated by the Committee, constitute “qualified
    performance-based compensation” within the meaning of Code
    Section 162(m) and regulations thereunder. Accordingly, the
    terms of Section 14.2, including the definitions of
    Covered Employee and other terms used therein, shall be
    interpreted in a manner consistent with Code Section 162(m)
    and regulations thereunder. The foregoing notwithstanding, the
    term Covered Employee as used herein shall mean only a person
    designated by the Committee, at the time of grant of Performance
    Awards, as likely to be a Covered Employee with respect to that
    fiscal year. If any provision of the Plan or any agreement
    relating to such Performance Awards does not comply or is
    inconsistent with the requirements of Code Section 162(m)
    or regulations thereunder, such provision shall be construed or
    deemed amended to the extent necessary to conform to such
    requirements.

 

    14.5 Dividends or Dividend Equivalents for Performance
    Awards.  Notwithstanding anything to the foregoing
    herein, the right to receive dividends, Dividend Equivalents or
    distributions with respect to a Performance Award shall only be
    granted to a Participant if and to the extent that the
    underlying Award is earned by the Participant.

    

    A-12

 

    15. PARACHUTE
    LIMITATIONS.  Notwithstanding any other provision
    of this Plan or of any other agreement, contract, or
    understanding heretofore or hereafter entered into by a
    Participant with the Trust, RGI, RGLP, or a Subsidiary or
    affiliate of any of them, except an agreement, contract, policy
    or understanding hereafter entered into that expressly modifies
    or excludes application of this paragraph (an “Other
    Agreement”), and notwithstanding any formal or informal
    plan or other arrangement for the direct or indirect provision
    of compensation to the Participant (including groups or classes
    of Participants or beneficiaries of which the Participant is a
    member), whether or not such compensation is deferred, is in
    cash, or is in the form of a benefit to or for the Participant
    (a “Benefit Arrangement”), if the Participant is a
    “disqualified individual,” as defined in
    Section 280G(c) of the Code, any Option, Restricted Shares
    or Restricted Share Units held by that Participant and any right
    to receive any payment or other benefit under this Plan shall
    not become exercisable or vested (i) to the extent that
    such right to exercise, vesting, payment, or benefit, taking
    into account all other rights, payments, or benefits to or for
    the Participant under this Plan, all Other Agreements, and all
    Benefit Arrangements, would cause any payment or benefit to the
    Participant under this Plan to be considered a “parachute
    payment” within the meaning of Section 280G(b)(2) of
    the Code as then in effect (a “Parachute Payment”)
    and (ii) if, as a result of receiving a Parachute
    Payment, the aggregate after-tax amounts received by the
    Participant from the Trust under this Plan, all Other
    Agreements, and all Benefit Arrangements would be less than the
    maximum after-tax amount that could be received by the
    Participant without causing any such payment or benefit to be
    considered a Parachute Payment. In the event that the receipt of
    any such right to exercise, vesting, payment, or benefit under
    this Plan, in conjunction with all other rights, payments, or
    benefits to or for the Participant under any Other Agreement or
    any Benefit Arrangement would cause the Participant to be
    considered to have received a Parachute Payment under this Plan
    that would have the effect of decreasing the after-tax amount
    received by the Participant as described in clause (ii) of
    the preceding sentence, then the Participant shall have the
    right, in the Participant’s sole discretion, to designate
    those rights, payments, or benefits under this Plan, any Other
    Agreements, and any Benefit Arrangements that should be reduced
    or eliminated so as to avoid having the payment or benefit to
    the Participant under this Plan be deemed to be a Parachute
    Payment, provided that any such payment or benefit that is
    excluded from the coverage of Code Section 409A shall be
    reduced or eliminated prior to the reduction or elimination of
    any benefit that is related to a 409A Award.

 

    16. REQUIREMENTS OF LAW

 

    16.1. General.  The Trust shall not be
    required to sell, deliver or cause to be issued any Shares under
    any Award if the sale or issuance of such Shares would
    constitute a violation by the Participant, any other individual
    exercising an Option, or the Trust, RGI, RGLP of any provision
    of any law or regulation of any governmental authority,
    including without limitation any federal or state securities
    laws or regulations. If at any time the Trust shall determine,
    in its discretion, that the listing, registration or
    qualification of any Shares subject to an Award upon any
    securities exchange or under any governmental regulatory body is
    necessary or desirable as a condition of, or in connection with,
    the issuance or purchase of shares hereunder, no Shares may be
    issued or sold to the Participant or any other individual
    exercising an Option pursuant to such Award unless such listing,
    registration, qualification, consent or approval shall have been
    effected or obtained free of any conditions not acceptable to
    the Trust, RGI, RGLP, and any delay caused thereby shall in no
    way affect the date of termination of the Award. Any
    determination in this connection by the Trust, RGI, RGLP shall
    be final, binding, and conclusive. The Trust may, but shall in
    no event be obligated to, cause to be registered any securities
    covered hereby pursuant to the Securities Act. The Trust shall
    not be obligated to take any affirmative action in order to
    cause the exercise of an Option or the issuance of Shares
    pursuant to the Plan to comply with any law or regulation of any
    governmental authority.

 

    16.2. Rule 16b-3.  During
    any time when the Trust has a class of equity security
    registered under Section 12 of the Exchange Act, it is the
    intent of the Trust that Awards pursuant to the Plan and the
    exercise of Options granted hereunder will qualify for the
    exemption provided by
    Rule 16b-3
    under the Exchange Act. To the extent that any provision of the
    Plan or action by the Committee does not comply with the
    requirements of
    Rule 16b-3,
    it shall be deemed inoperative to the extent permitted by law
    and deemed advisable by the Committee and shall not affect the
    validity of the Plan. In the event that
    Rule 16b-3
    is revised or replaced, the Board may exercise its discretion to
    modify this Plan in any respect necessary to satisfy the
    requirements of, or to take advantage of any features of, the
    revised exemption or its replacement.

    

    A-13

 

    17. EFFECT OF CHANGES IN CAPITALIZATION

 

    17.1. Changes in Shares.  If the number of
    outstanding Shares is increased or decreased or the Shares are
    changed into or exchanged for a different number or kind of
    shares or other securities of the Trust on account of any
    recapitalization, reclassification, share split, reverse split,
    combination of shares, exchange of shares, share dividend or
    other distribution payable in capital stock, or other increase
    or decrease in such Shares effected without receipt of
    consideration by the Trust, occurring after the Effective Date,
    the number and kinds of Shares for which grants of Options and
    other Awards may be made under the Plan (including the
    individual limits) shall be adjusted proportionately and
    accordingly by the Trust. In addition, the number and kind of
    Shares for which Awards are outstanding shall be adjusted
    proportionately and accordingly so that the proportionate
    interest of the Participant immediately following such event
    shall, to the extent practicable, be the same as immediately
    before such event. Any such adjustment in outstanding Options or
    SARs shall not change the aggregate Option Price or SAR Exercise
    Price payable with respect to Shares that are subject to the
    unexercised portion of an outstanding Option or SAR, as
    applicable, but shall include a corresponding proportionate
    adjustment in the Option Price or SAR Exercise Price per Share;
    provided, however, that all adjustments shall be made in
    compliance with Code Section 409A. The conversion of any
    convertible securities of the Trust shall not be treated as an
    increase in Shares effected without receipt of consideration.
    Notwithstanding the foregoing, in the event of any distribution
    to the Trust’s shareholders of securities of any other
    entity or other assets (including an extraordinary cash dividend
    but excluding a non-extraordinary dividend payable in cash or in
    shares of the Trust) without receipt of consideration by the
    Trust, the Trust may, in such manner as the Trust deems
    appropriate, adjust (i) the number and kind of Shares
    subject to outstanding Awards
    and/or
    (ii) the exercise price of outstanding Options and Share
    Appreciation Rights to reflect such distribution.

 

    17.2. Reorganization in which the Trust is the Surviving
    Entity.  Subject to Section 17.3
    hereof, if the Trust shall be the surviving entity in any
    reorganization, merger, or consolidation of the Trust with one
    or more other entities which does not constitute a Corporate
    Transaction, any Option or SAR theretofore granted pursuant to
    the Plan shall pertain to and apply to the securities to which a
    holder of the number of Shares subject to such Option or SAR
    would have been entitled immediately following such
    reorganization, merger, or consolidation, with a corresponding
    proportionate adjustment of the Option Price or SAR Exercise
    Price per share so that the aggregate Option Price or SAR
    Exercise Price thereafter shall be the same as the aggregate
    Option Price or SAR Exercise Price of the Shares remaining
    subject to the Option or SAR immediately prior to such
    reorganization, merger, or consolidation; provided, however,
    that all adjustments shall be made in compliance with Code
    Section 409A. Subject to any contrary language in an Award
    Agreement, any restrictions applicable to such Award shall apply
    as well to any replacement securities received by the
    Participant as a result of the reorganization, merger or
    consolidation. In the event of a transaction described in this
    Section 17.2, Restricted Share Units shall be
    adjusted so as to apply to the securities that a holder of the
    number of Shares subject to the Restricted Share Units would
    have been entitled to receive immediately following such
    transaction.

 

    17.3. Corporate Transaction.  Subject to
    the exceptions set forth in the last sentence of this
    Section 17.3, the last sentence of
    Section 17.4 and the requirements of
    Section 409A of the Code:

 

    (i) upon the occurrence of a Corporate Transaction, all
    outstanding Options and Restricted Shares shall be deemed to
    have vested, and all Restricted Share Units shall be deemed to
    have vested at their target levels and the Shares subject
    thereto shall be delivered, immediately prior to the occurrence
    of such Corporate Transaction, and

 

    (ii) either of the following two actions shall be taken:

 

    (A) fifteen days prior to the scheduled consummation of a
    Corporate Transaction, all Options and SARs outstanding
    hereunder shall become immediately exercisable and shall remain
    exercisable for a period of fifteen days, or

 

    (B) the Committee may elect, in its sole discretion, to
    cancel any outstanding Awards of Options, Restricted Shares,
    Restricted Share Units,
    and/or SARs
    and pay or deliver, or cause to be paid or delivered, to the
    holder thereof an amount in cash or securities having a value
    (as determined by the Committee acting in good faith), in the
    case of Restricted Shares or Restricted Share Units, equal to
    the

    

    A-14

 

    formula or fixed price per Share paid to holders of Shares and,
    in the case of Options or SARs, equal to the product of the
    number of Shares subject to the Option or SAR (the “Award
    Shares”) multiplied by the amount, if any, by which
    (I) the formula or fixed price per Share paid to holders of
    Shares pursuant to such transaction exceeds (II) the Option
    Price or SAR Exercise Price applicable to such Award Shares.

 

    With respect to the Trust’s establishment of an exercise
    window, (i) any exercise of an Option or SAR during such
    fifteen-day
    period shall be conditioned upon the consummation of the event
    and shall be effective only immediately before the consummation
    of the event, and (ii) upon consummation of any Corporate
    Transaction, the Plan and all outstanding but unexercised
    Options and SARs shall terminate. The Committee shall send
    written notice of an event that will result in such a
    termination to all individuals who hold Options and SARs not
    later than the time at which the Trust gives notice thereof to
    its shareholders. This Section 17.3 shall not apply
    to any Corporate Transaction to the extent that provision is
    made in writing in connection with such Corporate Transaction
    for the assumption or continuation of the Options, SARs,
    Restricted Shares and Restricted Share Units theretofore
    granted, or for the substitution for such Options, SARs,
    Restricted Shares and Restricted Share Units of new options,
    SARs, restricted shares and restricted shares units relating to
    the shares of a successor entity, or a parent or subsidiary
    thereof, with appropriate adjustments as to the number of shares
    (disregarding any consideration that is not common shares) and
    option and share appreciation right exercise prices, in which
    event the Plan, Options, SARs, Restricted Shares and Restricted
    Share Units theretofore granted shall continue in the manner and
    under the terms so provided. Appropriate adjustments shall be
    made taking into account Treas. Reg.
    Section 1.409A-1(b)(5)(v)(D)
    regarding substitutions and assumptions of stock rights by
    reason of a corporate transaction.

 

    17.4. Adjustments.  Adjustments under this
    Section 17 related to Shares or other securities of
    the Trust shall be made by the Committee, whose determination in
    that respect shall be final, binding and conclusive. No
    fractional Shares or other securities shall be issued pursuant
    to any such adjustment, and any fractions resulting from any
    such adjustment shall be eliminated in each case by rounding
    down to the nearest whole Share. The Committee shall determine
    the effect of a Corporate Transaction upon Awards other than
    Options, SARs, Restricted Shares and Restricted Share Units and
    such effect shall be set forth in the appropriate Award
    Agreement. The Committee may provide in the Award Agreements at
    the Grant Date, or any time thereafter with the consent of the
    Participant, for different provisions to apply to an Award in
    place of those described in Sections 17.1, 17.2 and
    17.3.

 

    17.5. No Limitations on Trust.  The making
    of Awards pursuant to the Plan shall not affect or limit in any
    way the right or power of the Trust, RGI, RGLP, or a Subsidiary
    or Affiliate of any of them to make adjustments,
    reclassifications, reorganizations, or changes of its capital or
    business structure or to merge, consolidate, dissolve, or
    liquidate, or to sell or transfer all or any part of its
    business or assets.

 

    18. GENERAL
    PROVISIONS

 

    18.1. Disclaimer of Rights.  No provision
    in the Plan or in any Award or Award Agreement shall be
    construed to confer upon any individual the right to remain in
    the employ or service of the Trust, RGI, RGLP, or a Subsidiary
    or Affiliate of any of them, or to interfere in any way with any
    contractual or other right or authority of the Trust, RGI, RGLP,
    or a Subsidiary or Affiliate of any of them either to increase
    or decrease the compensation or other payments to any individual
    at any time, or to terminate any employment or other
    relationship between any individual and the Trust, RGI, RGLP, or
    a Subsidiary or Affiliate of any of them. In addition,
    notwithstanding anything contained in the Plan to the contrary,
    unless otherwise stated in the applicable Award Agreement, no
    Award granted under the Plan shall be affected by any change of
    duties or position of the Participant, so long as such
    Participant continues to be a Trustee, officer, consultant or
    employee of the Trust, RGI, RGLP, or a Subsidiary or Affiliate
    of any of them. The obligation of the Trust to pay any benefits
    pursuant to this Plan shall be interpreted as a contractual
    obligation to pay only those amounts described herein, in the
    manner and under the conditions prescribed herein. The Plan
    shall in no way be interpreted to require the Trust to transfer
    any amounts to a third party or otherwise hold any amounts in
    trust or escrow for payment to any Participant or beneficiary
    under the terms of the Plan.

 

    18.2. Nonexclusivity of the Plan.  Neither
    the adoption of the Plan nor the submission of the Plan to the
    Trust’s shareholders for approval shall be construed as
    creating any limitations upon the right and authority of the
    Board to adopt such other incentive compensation arrangements
    (which arrangements may be applicable either

    

    A-15

 

    generally to a class or classes of individuals or specifically
    to a particular individual or particular individuals) as the
    Board in its discretion determines desirable, including, without
    limitation, the granting of options otherwise than under the
    Plan.

 

    18.3. Withholding Taxes.  The Trust, RGI,
    RGLP, or a Subsidiary or Affiliate of any of them, as the case
    may be, shall have the right to deduct from payments of any kind
    otherwise due to a Participant any federal, state, or local
    taxes of any kind required by law to be withheld with respect to
    the vesting of or other lapse of restrictions applicable to an
    Award or upon the issuance of any Shares upon the exercise of an
    Option or pursuant to an Award. At the time of such vesting,
    lapse, or exercise, the Participant shall pay to the Trust, RGI,
    RGLP, or a Subsidiary or Affiliate of any of them, as the case
    may be, any amount that the Trust, RGI, RGLP, or a Subsidiary or
    Affiliate of any of them may reasonably determine to be
    necessary to satisfy such withholding obligation. The Trust may
    elect to, or may cause RGI, RGLP, or a Subsidiary or Affiliate
    of any of them, to withhold Shares otherwise issuable to the
    Participant in satisfaction of a Participant’s withholding
    obligations at the statutory minimum withholding rate. Subject
    to the prior approval of the Trust, which may be withheld by the
    Trust in its sole discretion, the Participant may elect to
    satisfy such obligations, in whole or in part, by delivering to
    the Trust, RGI, RGLP, or a Subsidiary or Affiliate of any of
    them Shares already owned by the Participant, which Shares, if
    acquired from the Trust, shall have been held for at least six
    months at the time of tender. Any Shares so delivered or
    withheld shall have an aggregate Fair Market Value equal to such
    withholding obligations at the statutory minimum withholding
    rate. The Fair Market Value of the Shares used to satisfy such
    withholding obligation shall be determined by the Trust as of
    the date that the amount of tax to be withheld is to be
    determined. A Participant who has made an election pursuant to
    this Section 18.3 to deliver Shares may satisfy
    his/her
    withholding obligation only with Shares that are not subject to
    any repurchase, forfeiture, unfulfilled vesting, or other
    similar requirements.

 

    18.4. Captions.  The use of captions in
    this Plan or any Award Agreement is for the convenience of
    reference only and shall not affect the meaning of any provision
    of the Plan or such Award Agreement.

 

    18.5. Other Provisions.  Each Award
    granted under the Plan may contain such other terms and
    conditions not inconsistent with the Plan as may be determined
    by the Committee, in its sole discretion.

 

    18.6. Number and Gender.  With respect to
    words used in this Plan, the singular form shall include the
    plural form, the masculine gender shall include the feminine
    gender, etc., as the context requires.

 

    18.7. Severability.  If any provision of
    the Plan or any Award Agreement shall be determined to be
    illegal or unenforceable by any court of law in any
    jurisdiction, the remaining provisions hereof and thereof shall
    be severable and enforceable in accordance with their terms, and
    all provisions shall remain enforceable in any other
    jurisdiction.

 

    18.8. Governing Law.  The validity and
    construction of this Plan and the instruments evidencing the
    Awards hereunder shall be governed by the laws of the State of
    Michigan, other than any conflicts or choice of law rule or
    principle that might otherwise refer construction or
    interpretation of this Plan and the instruments evidencing the
    Awards granted hereunder to the substantive laws of any other
    jurisdiction.

 

    18.9. Section 409A of the Code.  The
    Board intends to comply with Code Section 409A, or an
    exclusion from Code Section 409A coverage, with regard to
    Awards hereunder and all provisions herein shall be interpreted
    accordingly.

 

    * * *

    

    A-16EX-10.1

MAJESCO ENTERTAINMENT COMPANY

AMENDED AND RESTATED 2004 EMPLOYEE, DIRECTOR AND CONSULTANT INCENTIVE PLAN

(as amended on April 21, 2009)

     This Amended and Restated 2004 Employee, Director and Consultant Incentive Plan amends and
restates in its entirety the Majesco Entertainment Company 2004 Employee, Director and Consultant
Stock Plan.

	 	1.	 	DEFINITIONS.

Unless otherwise specified or unless the context otherwise requires, the following terms, as
used in this Majesco Entertainment Company Amended and Restated 2004 Employee, Director and
Consultant Incentive Plan, have the following meanings:

Administrator means the Board of Directors, unless it has delegated power to
act on its behalf to the Committee, in which case the Administrator means the
Committee.

Affiliate means a corporation which, for purposes of Section 424 of the
Code, is a parent or subsidiary of the Company, direct or indirect.

Agreement means an agreement between the Company and a Participant delivered
pursuant to the Plan, in such form as the Administrator shall approve.

Board of Directors means the Board of Directors of the Company.

Cash Award shall mean an award of cash granted pursuant to the Plan.

Code means the United States Internal Revenue Code of 1986, as amended.

Committee means the committee of the Board of Directors to which the Board
of Directors has delegated power to act under or pursuant to the provisions of the
Plan.

Common Stock means shares of the Company’s common stock, $0.001 par value
per share.

Company means Majesco Entertainment Company, a Delaware corporation.

Disability or Disabled means permanent and total disability as
defined in Section 22(e)(3) of the Code.

Employee means any employee of the Company or of an Affiliate (including,
without limitation, an employee who is also serving as an officer or director of the

 

 

Company or of an Affiliate), designated by the Administrator to be eligible to be granted one or
more Cash Awards or Stock Rights under the Plan.

Fair Market Value of a Share of Common Stock means:

(1) If the Common Stock is listed on a national securities exchange or traded in the
over-the-counter market and sales prices are regularly reported for the Common
Stock, the closing or last price of the Common Stock on the Composite Tape or other
comparable reporting system for the trading day immediately preceding the applicable
date;

(2) If the Common Stock is not traded on a national securities exchange but is
traded on the over-the-counter market, if sales prices are not regularly reported
for the Common Stock for the trading day referred to in clause (1), and if bid and
asked prices for the Common Stock are regularly reported, the mean between the bid
and the asked price for the Common Stock at the close of trading in the
over-the-counter market for the trading day on which Common Stock was traded
immediately preceding the applicable date; and

(3) If the Common Stock is neither listed on a national securities exchange nor
traded in the over-the-counter market, such value as the Administrator, in good
faith, shall determine.

ISO means an option meant to qualify as an incentive stock option under
Section 422 of the Code.

Non-Qualified Option means an option which is not intended to qualify as an
ISO.

Option means an ISO or Non-Qualified Option granted under the Plan.

Participant means an Employee, director or consultant of the Company or an
Affiliate to whom one or more Cash Awards and/or Stock Rights are granted under the
Plan. As used herein, “Participant” shall include “Participant’s Survivors” where
the context requires.

Performance Goal means the goal or goals, if any, established by the
Administrator based on one or more of the following business criteria that are to be
achieved during a Performance Cycle determined by the Administrator: Earnings per
share, operating income, net income, cash flow, gross profit, return on investment,
gross margin, working capital, earnings before interest and tax (EBIT), earnings
before interest, tax, depreciation and amortization (EBITDA), return on equity,
return on assets, return on capital, revenue growth, total shareholder return, and
economic value added, customer satisfaction, technology leadership, number of new
patents, employee retention, market share, market segment share, product release
schedules, new product innovation, product cost reduction through advanced
technology, brand recognition/acceptance, and product ship targets. Performance
Goals may be based (as the Administrator deems appropriate) on (a) Company-wide
performance, (b) performance of a

2

 

subsidiary, division, region, department, function, plant, facility or other operational unit of
the Company, (c) individual performance (if applicable), or (d) any combination of the
foregoing. Performance Goals may be set in any manner determined by the Administrator,
including looking to achievement on an absolute basis or on a relative basis to prior periods
or in relation to peer group, indexes or other external measure of the selected criteria.
When the Administrator sets Performance Goals that are intended for “performance-based
compensation” within the meaning of Section 162(m) of the Code, the Administrator shall
establish the general objective rules that the Administrator will use to determine the extent,
if any, that such Performance Goals have been met. In establishing the objective rules, the
Administrator may take into account any extraordinary or one-time or other non-recurring items
of income or expense or gain or loss or any events, transactions or other circumstances that
the Administrator deems relevant in light of the nature of the Performance Goals set for the
Participant or the assumptions made by the Administrator regarding such goals.

Performance Cycle means the period selected by the Administrator during
which performance is measured for the purpose of determining the extent to which a
Performance Goal has been achieved.

Plan means this Majesco Entertainment Company Amended and Restated 2004
Employee, Director and Consultant Incentive Plan.

Shares means shares of the Common Stock as to which Stock Rights have been
or may be granted under the Plan or any shares of capital stock into which the
Shares are changed or for which they are exchanged within the provisions of
Paragraph 3 of the Plan. The Shares issued under the Plan may be authorized and
unissued shares or shares held by the Company in its treasury, or both.

Stock Appreciation Right means the right to receive an amount equal to the
excess of the Fair Market Value of a share of Common Stock (as determined on the
date of exercise) over the purchase price of a share of Common Stock on the date a
stock appreciation right is granted.

Stock-Based Award means a grant by the Company under the Plan of an equity
award or equity based award which is not an Option or Stock Grant.

Stock Grant means a grant by the Company of Shares under the Plan.

Stock Right means a right to Shares or the value of Shares of the Company
granted pursuant to the Plan — an ISO, a Non-Qualified Option, a Stock Grant or a
Stock-Based Award.

Survivor means a deceased Participant’s legal representatives and/or any
person or persons who acquired the Participant’s rights to a Cash Award or Stock
Right by will or by the laws of descent and distribution.

3

 

	 	2.	 	PURPOSES OF THE PLAN.

     The Plan is intended to encourage ownership of Shares by Employees and directors of and
certain consultants to the Company in order to attract such people, to induce them to work for the
benefit of the Company or of an Affiliate and to provide additional incentive for them to promote
the success of the Company or of an Affiliate. The Plan provides for the granting of ISOs,
Non-Qualified Options, Stock Grants, Stock-Based Awards and Cash Awards.

	 	3.	 	SHARES SUBJECT TO THE PLAN.

     (a) The number of Shares which may be issued from time to time pursuant to this Plan shall be
10,642,857, or the equivalent of such number of Shares after the Administrator, in its sole
discretion, has interpreted the effect of any future stock split, stock dividend, combination,
recapitalization or similar transaction in accordance with Paragraph 25 of the Plan.

     (b) The grant of any Stock Right other than an Option or a Stock Appreciation Right shall for
purposes of Paragraph 3(a), reduce the number of Shares available for issuance under this Plan by
1.18 Shares for each such Share actually subject to the Stock Right and shall be deemed for
purposes of this Paragraph 3, as a Stock Right of 1.18 Shares for each such Share actually subject
to the Stock Right. The grant of an Option or a Stock Appreciation Right shall be deemed for
purposes of this Paragraph 3, as a Stock Right for one Share for each such Share actually subject
to the Stock Right. Notwithstanding the foregoing, Stock Appreciation Rights to be settled in
shares of Common Stock shall be counted in full against the number of Shares available for issuance
under the Plan, regardless of the number of exercise gain shares issued upon the settlement of the
Stock Appreciation Right.

     (c) If an Option ceases to be “outstanding”, in whole or in part (other than by exercise), or
if the Company shall reacquire (at no more than its original issuance price) any Shares issued
pursuant to a Stock Grant or Stock Based Award, or if any Stock Right expires or is forfeited,
cancelled, or otherwise terminated or results in any Shares not being issued, the unissued Shares
which were subject to such Stock Right shall again be available for issuance from time to time
pursuant to this Plan and in accordance with the provision of Paragraph 3(b) above.
Notwithstanding the foregoing, if a Stock Right is exercised, in whole or in part, by tender of
Shares or if the Company’s tax withholding obligation is satisfied by withholding Shares, the
number of Shares deemed to have been issued under the Plan for purposes of the limitation set forth
in Paragraph 3(a) above shall be the number of Shares that were subject to the Stock Right or
portion thereof, and not the net number of Shares actually issued and any Stock Appreciation Right
to be settled in shares of Common Stock shall be counted in full against the number of Shares
available for issuance under the Plan, regardless of the number of exercise gain shares issued upon
the settlement of the Stock Appreciation Right.

	 	4.	 	ADMINISTRATION OF THE PLAN.

     The Administrator of the Plan will be the Board of Directors, except to the extent the Board
of Directors delegates its authority to the Committee, in which case the Committee shall be the
Administrator. Subject to the provisions of the Plan, the Administrator is authorized to:

4

 

	 	a.	 	Interpret the provisions of the Plan and all Stock Rights and Cash Awards and
make all rules and determinations which it deems necessary or advisable for the
administration of the Plan;
	 
	 	b.	 	Determine which Employees, directors and consultants shall be granted Stock
Rights and Cash Awards;
	 
	 	c.	 	Determine the number of Shares for which a Stock Right or Stock Rights shall be
granted, provided, however, that in no event shall Stock Rights with respect to more
than 1,000,000 Shares be granted to any Participant in any fiscal year. Determine the
amount of any Cash Award, provided, however the maximum payment which may become
payable to a Participant with respect to a Cash Award in any calendar year is
$2,000,000.
	 
	 	d.	 	Specify the terms and conditions upon which Stock Rights and Cash Awards may be
granted; and
	 
	 	e.	 	Adopt any sub-plans applicable to residents of any specified jurisdiction as it
deems necessary or appropriate in order to comply with or take advantage of any tax or
other laws applicable to the Company or to Plan Participants or to otherwise facilitate
the administration of the Plan, which sub-plans may include additional restrictions or
conditions applicable to Cash Awards, Stock Rights or Shares issuable pursuant to a
Stock Right.

provided, however, that all such interpretations, rules, determinations, terms and conditions shall
be made and prescribed in the context of not causing any adverse tax consequences under Section
409A of the Code and preserving the tax status under Section 422 of the Code of those Options which
are designated as ISOs. Subject to the foregoing, the interpretation and construction by the
Administrator of any provisions of the Plan or of any Cash Award or Stock Right granted under it
shall be final, unless otherwise determined by the Board of Directors, if the Administrator is the
Committee. In addition, if the Administrator is the Committee, the Board of Directors may take any
action under the Plan that would otherwise be the responsibility of the Committee.

     If permissible under applicable law, the Board of Directors or the Committee may allocate all
or any portion of its responsibilities and powers to any one or more of its members and may
delegate all or any portion of its responsibilities and powers to any other person selected by it.
Any such allocation or delegation may be revoked by the Board of Directors or the Committee at any
time.

	 	5.	 	ELIGIBILITY FOR PARTICIPATION.

     The Administrator will, in its sole discretion, name the Participants in the Plan, provided,
however, that each Participant must be an Employee, director or consultant of the Company or of an
Affiliate at the time a Stock Right or Cash Award is granted. Notwithstanding the foregoing, the
Administrator may authorize the grant of a Stock Right or Cash Award to a person not then

5

 

an Employee, director or consultant of the Company or of an Affiliate; provided, however, that the
actual grant of such Stock Right or Cash Award shall be conditioned upon such person becoming
eligible to become a Participant at or prior to the time of the execution of the Agreement
evidencing such Stock Right or Cash Award. ISOs may be granted only to Employees. Non-Qualified
Options, Stock Grants, Stock-Based Awards and Cash Awards may be granted to any Employee, director
or consultant of the Company or an Affiliate. The granting of any Stock Right or Cash Award to any
individual shall neither entitle that individual to, nor disqualify him or her from, participation
in any other grant of any Stock Right or Cash Award.

	 	6.	 	TERMS AND CONDITIONS OF OPTIONS.

     Each Option shall be set forth in writing in an Option Agreement, duly executed by the Company
and, to the extent required by law or requested by the Company, by the Participant. The
Administrator may provide that Options be granted subject to such terms and conditions, consistent
with the terms and conditions specifically required under this Plan, as the Administrator may deem
appropriate including, without limitation, subsequent approval by the shareholders of the Company
of this Plan or any amendments thereto. The Option Agreements shall be subject to at least the
following terms and conditions:

	 	A.	 	Non-Qualified Options: Each Option intended to be a Non-Qualified
Option shall be subject to the terms and conditions which the Administrator determines
to be appropriate and in the best interest of the Company, subject to the following
minimum standards for any such Non-Qualified Option:

	 	a.	 	Option Price: Each Option Agreement shall state the option
price (per share) of the Shares covered by each Option, which option price
shall be determined by the Administrator but shall not be less than the Fair
Market Value per share of Common Stock.
	 
	 	b.	 	Number of Shares: Each Option Agreement shall state the number
of Shares to which it pertains;
	 
	 	c.	 	Option Periods: Each Option Agreement shall state the date or
dates on which it first is exercisable and the date after which it may no
longer be exercised, and may provide that the Option rights accrue or become
exercisable in installments over a period of months or years, or upon the
occurrence of certain conditions or the attainment of stated goals or events
including, but not limited to, the Performance Goals; and
	 
	 	d.	 	Option Conditions: Exercise of any Option may be conditioned
upon the Participant’s execution of a Share purchase agreement in form
satisfactory to the Administrator providing for certain protections for the
Company and its other shareholders, including requirements that:

	 	i.	 	The Participant’s or the Participant’s
Survivors’ right to sell or transfer the Shares may be restricted; and

6

 

	 	ii.	 	The Participant or the Participant’s Survivors
may be required to execute letters of investment intent and must also
acknowledge that the Shares will bear legends noting any applicable
restrictions.

	 	e.	 	Each Non-Qualified Option shall terminate not more than seven
years from the date of the grant or at such earlier time as the Option
Agreement may provide.

	 	B.	 	ISOs: Each Option intended to be an ISO shall be issued only to an
Employee and be subject to the following terms and conditions, with such additional
restrictions or changes as the Administrator determines are appropriate but not in
conflict with Section 422 of the Code and relevant regulations and rulings of the
Internal Revenue Service:

	 	a.	 	Minimum standards: The ISO shall meet the minimum standards
required of Non-Qualified Options, as described in Paragraph 6(A) above, except
clause (a) thereunder.
	 
	 	b.	 	Option Price: Immediately before the ISO is granted, if the
Participant owns, directly or by reason of the applicable attribution rules in
Section 424(d) of the Code:

	 	i.	 	10% or less of the total combined
voting power of all classes of stock of the Company or an Affiliate,
the Option price per share of the Shares covered by each ISO shall not
be less than 100% of the Fair Market Value per share of the Shares on
the date of the grant of the Option; or
	 
	 	ii.	 	More than 10% of the total combined voting
power of all classes of stock of the Company or an Affiliate, the
Option price per share of the Shares covered by each ISO shall not be
less than 110% of the said Fair Market Value on the date of grant.

	 	c.	 	Term of Option: For Participants who own:

	 	i.	 	10% or less of the total combined
voting power of all classes of stock of the Company or an Affiliate,
each ISO shall terminate not more than seven years from the date of the
grant or at such earlier time as the Option Agreement may provide; or
	 
	 	ii.	 	More than 10% of the total combined voting
power of all classes of stock of the Company or an Affiliate, each ISO
shall terminate not more than five years from the date of the grant or
at such earlier time as the Option Agreement may provide.

	 	d.	 	Limitation on Yearly Exercise: The Option Agreements shall
restrict the amount of ISOs which may become exercisable in any calendar year
(under this or any other ISO plan of the Company or an Affiliate) so that

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	 	 	 	the aggregate Fair Market Value (determined at the time each ISO is granted) of the stock with
respect to which ISOs are exercisable for the first time by the Participant in any calendar
year does not exceed $100,000.

	 	7.	 	TERMS AND CONDITIONS OF STOCK GRANTS.

     Each offer of a Stock Grant to a Participant shall state the date prior to which the Stock
Grant must be accepted by the Participant, and the principal terms of each Stock Grant shall be set
forth in an Agreement, duly executed by the Company and, to the extent required by law or requested
by the Company, by the Participant. The Agreement shall be in a form approved by the Administrator
and shall contain terms and conditions which the Administrator determines to be appropriate and in
the best interest of the Company, subject to the following minimum standards:

	 	a.	 	Each Agreement shall state the purchase price (per share), if any, of the
Shares covered by each Stock Grant, which purchase price shall be determined by the
Administrator but shall not be less than the minimum consideration required by the
Delaware General Corporation Law on the date of the grant of the Stock Grant;
	 
	 	b.	 	Each Agreement shall state the number of Shares to which the Stock Grant
pertains; and
	 
	 	c.	 	Each Agreement shall include the terms of any right of the Company to restrict
or reacquire the Shares subject to the Stock Grant, including the time and events upon
which such reacquisition rights shall accrue including, but not limited to, the
attainment of any Performance Goals, and the purchase price therefor, if any.

	 	8.	 	TERMS AND CONDITIONS OF OTHER STOCK-BASED AWARDS.

     The Board shall have the right to grant other Stock-Based Awards based upon the Common Stock
having such terms and conditions as the Board may determine, including, without limitation, the
grant of Shares based upon certain conditions including, but not limited to, the Performance Goals,
the grant of securities convertible into Shares and the grant of Stock Appreciation Rights, phantom
stock awards or stock units. The principal terms of each Stock-Based Award shall be set forth in
an Agreement, duly executed by the Company and, to the extent required by law or requested by the
Company, by the Participant. The Agreement shall be in a form approved by the Administrator and
shall contain terms and conditions which the Administrator determines to be appropriate and in the
best interest of the Company. Notwithstanding the foregoing, each Stock Appreciation Right shall
(i) have a purchase price which shall not be less than the Fair Market Value per Share of Common
Stock and (ii) terminate not more than seven years from the date of the grant or at such earlier
time as the Agreement therefor may provide.

8

 

     The Company intends that the Plan and any Stock-Based Awards granted hereunder be exempt from
the application of Section 409A of the Code or meet the requirements of paragraphs (2), (3) and (4)
of subsection (a) of Section 409A of the Code (and any successor provisions of the Code) and the
regulations and other guidance issued thereunder (the “Requirements”), to the extent applicable,
and be operated in accordance with such Requirements so that any compensation deferred under any
Stock-Based Award (and applicable investment earnings) shall not be included in income under
Section 409A of the Code. Any ambiguities in the Plan shall be construed to effect the intent as
described in this Paragraph 8.

	 	9.	 	TERMS AND CONDITIONS OF CASH AWARDS.

     The Administrator is authorized, subject to limitations under applicable law, to grant to any
Participant a Cash Award, including as a short-term incentive bonus award, whether awarded
separately or as a supplement to any Stock Right. The Administrator shall determine the terms and
conditions of such Cash Awards. The Administrator acting in its absolute discretion may make Cash
Awards subject to one or more Performance Goals that the Administrator deems appropriate for
Participants generally or for a Participant in particular, and shall establish the Performance
Cycle for satisfying the same. If the Cash Award is a short-term incentive bonus that is intended
to qualify as “performance-based compensation” under Section 162(m) of the Code, the right to
receive such Cash Award shall be conditional upon the achievement of objective Performance Goals
that have been established by the Administrator in writing not later than the earlier of (i) 90
days after the beginning of a Performance Cycle and (ii) the date by which no more than 25% of a
Performance Cycle has elapsed.

     The Administrator shall certify in writing the extent, if any, to which the Performance Goals
for a Performance Cycle of a short-term incentive bonus that is intended to qualify as
“performance-based compensation” under Section 162(m) of the Code have been met and shall determine
the Cash Award payable to a Participant based on the extent to which he or she met his or her
Performance Goals. If the Administrator certifies that a Cash Award is payable to a Participant
for any Performance Cycle, such Cash Award shall be paid as soon as practical after such
certification has been made, but in no event later than 21/2 months after the end of the calendar
year in which the Performance Cycle ends. However, to the extent permitted by applicable law, no
Participant shall have a nonforfeitable right to the payment of a bonus for any Performance Cycle
if his or her employment with the Company has terminated for any reason whatsoever (other than
death, Disability or retirement) before the date the bonus actually is paid. It is intended that a
Cash Award be exempt from the application of Section 409A of the Code as a “short-term deferral.”

9

 

	 	10.	 	EXERCISE OF OPTIONS AND ISSUE OF SHARES.

     An Option (or any part or installment thereof) shall be exercised by giving written notice to
the Company or its designee, together with provision for payment of the full purchase price in
accordance with this Paragraph for the Shares as to which the Option is being exercised, and upon
compliance with any other condition(s) set forth in the Agreement. Such notice shall be signed by
the person exercising the Option, shall state the number of Shares with respect to which the Option
is being exercised and shall contain any representation required by the Plan or the Agreement.
Payment of the purchase price for the Shares as to which such Option is being exercised shall be
made (a) in United States dollars in cash or by check, or (b) at the discretion of the
Administrator, through delivery of shares of Common Stock having a Fair Market Value equal as of
the date of the exercise to the cash exercise price of the Option, or (c) at the discretion of the
Administrator, by having the Company retain from the shares otherwise issuable upon exercise of the
Option, a number of shares having a Fair Market Value equal as of the date of exercise to the
exercise price of the Option, or (d) at the discretion of the Administrator, by delivery of the
grantee’s personal recourse note, bearing interest payable not less than annually at no less than
100% of the applicable Federal rate, as defined in Section 1274(d) of the Code, with or without the
pledge of such Shares as collateral, or (e) at the discretion of the Administrator, in accordance
with a cashless exercise program established with a securities brokerage firm, and approved by the
Administrator, or (f) at the discretion of the Administrator, by any combination of (a), (b), (c),
(d) and (e) above, or (g) at the discretion of the Administrator, payment of such other lawful
consideration as the Board may determine. Notwithstanding the foregoing, the Administrator shall
accept only such payment on exercise of an ISO as is permitted by Section 422 of the Code.

     The Company shall then reasonably promptly deliver the Shares as to which such Option was
exercised to the Participant (or to the Participant’s Survivors, as the case may be). In
determining what constitutes “reasonably promptly,” it is expressly understood that the issuance
and delivery of the Shares may be delayed by the Company in order to comply with any law or
regulation (including, without limitation, state securities or “blue sky” laws) which requires the
Company to take any action with respect to the Shares prior to their issuance. The Shares shall,
upon delivery, be fully paid, non-assessable Shares.

     The Administrator shall have the right to accelerate the date of exercise of any installment
of any Option; provided that the Administrator shall not accelerate the exercise date of any
installment of any Option granted to an Employee as an ISO (and not previously converted into a
Non-Qualified Option pursuant to Paragraph 28) without the prior approval of the Employee if such
acceleration would violate the annual vesting limitation contained in Section 422(d) of the Code,
as described in Paragraph 6.B.d.

     The Administrator may, in its discretion, amend any term or condition of an outstanding Option
provided (i) such term or condition as amended is permitted by the Plan, (ii) any such amendment
shall be made only with the consent of the Participant to whom the Option was granted, or in the
event of the death of the Participant, the Participant’s Survivors, if the amendment is adverse to
the Participant, and (iii) any such amendment of any Option shall be made only after the
Administrator determines whether such amendment would constitute a “modification” of any Option
which is an ISO (as that term is defined in Section 424(h) of the

10

 

Code) or would cause any adverse tax consequences for the holder of such Option including, but not
limited to, pursuant to Section 409A of the Code.

	 	11.	 	ACCEPTANCE OF STOCK GRANTS AND STOCK-BASED AWARDS AND  ISSUE OF SHARES.

     A Stock Grant or Stock-Based Award (or any part or installment thereof) shall be accepted by
executing the applicable Agreement and delivering it to the Company or its designee, together with
provision for payment of the full purchase price, if any, in accordance with this Paragraph for the
Shares as to which such Stock Grant or Stock-Based Award is being accepted, and upon compliance
with any other conditions set forth in the applicable Agreement. Payment of the purchase price for
the Shares as to which such Stock Grant or Stock-Based Award is being accepted shall be made (a) in
United States dollars in cash or by check, or (b) at the discretion of the Administrator, through
delivery of shares of Common Stock having a Fair Market Value equal as of the date of acceptance of
the Stock Grant or Stock-Based Award to the purchase price of the Stock Grant or Stock-Based Award,
or (c) at the discretion of the Administrator, by delivery of the grantee’s personal note, for full
or partial recourse as determined by the Administrator, bearing interest payable not less than
annually at no less than 100% of the applicable Federal rate, as defined in Section 1274(d) of the
Code, or (d) at the discretion of the Administrator, by any combination of (a), (b) and (c) above.

     The Company shall then, if required pursuant to the applicable Agreement, reasonably promptly
deliver the Shares as to which such Stock Grant or Stock-Based Award was accepted to the
Participant (or to the Participant’s Survivors, as the case may be), subject to any escrow
provision set forth in the applicable Agreement. In determining what constitutes “reasonably
promptly,” it is expressly understood that the issuance and delivery of the Shares may be delayed
by the Company in order to comply with any law or regulation (including, without limitation, state
securities or “blue sky” laws) which requires the Company to take any action with respect to the
Shares prior to their issuance.

     The Administrator may, in its discretion, amend any term or condition of an outstanding Stock
Grant, Stock-Based Award or applicable Agreement provided (i) such term or condition as amended is
permitted by the Plan, (ii) any such amendment shall be made only with the consent of the
Participant to whom the Stock Grant or Stock-Based Award was made, if the amendment is adverse to
the Participant, and (iii) any such amendment shall only be made after the Administrator determines
whether such amendment would cause any adverse tax consequences to the Participant including, but
not limited to, pursuant to Section 409A of the Code.

	 	12.	 	RIGHTS AS A SHAREHOLDER.

     No Participant to whom a Stock Right has been granted shall have rights as a shareholder with
respect to any Shares covered by such Stock Right, except after due exercise of the Option or
acceptance of the Stock Grant or as set forth in any Agreement and tender of the full purchase
price, if any, for the Shares being purchased pursuant to such exercise or acceptance and
registration of the Shares in the Company’s share register in the name of the Participant.

	 	13.	 	ASSIGNABILITY AND TRANSFERABILITY.

11

 

     By its terms, a Cash Award or Stock Right granted to a Participant shall not be transferable
by the Participant other than by will or by the laws of descent and distribution. The designation
of a beneficiary of a Cash Award or Stock Right by a Participant, with the prior approval of the
Administrator and in such form as the Administrator shall prescribe, shall not be deemed a transfer
prohibited by this Paragraph. Except as provided above, a Cash Award or Stock Right shall only be
exercisable or may only be accepted, during the Participant’s lifetime, only by such Participant
(or by his or her legal representative) and shall not be assigned, pledged or hypothecated in any
way (whether by operation of law or otherwise) and shall not be subject to execution, attachment or
similar process. Any attempted transfer, assignment, pledge, hypothecation or other disposition of
any Cash Award or Stock Right or of any rights granted thereunder contrary to the provisions of
this Plan, or the levy of any attachment or similar process upon a Cash Award or Stock Right, shall
be null and void.

	 	14.	 	EFFECT ON OPTIONS OF TERMINATION OF SERVICE OTHER THAN  “FOR CAUSE” OR DEATH
OR DISABILITY.

     Except as otherwise provided in a Participant’s Option Agreement, in the event of a
termination of service (whether as an employee, director or consultant) with the Company or an
Affiliate before the Participant has exercised an Option, the following rules apply:

	 	a.	 	A Participant who ceases to be an employee, director or consultant of the
Company or of an Affiliate (for any reason other than termination “for cause”,
Disability, or death for which events there are special rules in Paragraphs 15, 16, and
17, respectively), may exercise any Option granted to him or her to the extent that the
Option is exercisable on the date of such termination of service, but only within such
term as the Administrator has designated in a Participant’s Option Agreement.
	 
	 	b.	 	Except as provided in Subparagraph (c) below, or Paragraph 16 or 17, in no
event may an Option intended to be an ISO, be exercised later than three months after
the Participant’s termination of employment.
	 
	 	c.	 	The provisions of this Paragraph, and not the provisions of Paragraph 16 or 17,
shall apply to a Participant who subsequently becomes Disabled or dies after the
termination of employment, director status or consultancy, provided, however, in the
case of a Participant’s Disability or death within three months after the termination
of employment, director status or consultancy, the Participant or the Participant’s
Survivors may exercise the Option within one year after the date of the Participant’s
termination of service, but in no event after the date of expiration of the term of the
Option.
	 
	 	d.	 	Notwithstanding anything herein to the contrary, if subsequent to a
Participant’s termination of employment, termination of director status or termination
of consultancy, but prior to the exercise of an Option, the Board of Directors
determines that, either prior or subsequent to the Participant’s termination, the

12

 

	 	 	 	Participant engaged in conduct which would constitute “cause”, then such Participant shall
forthwith cease to have any right to exercise any Option.
	 
	 	e.	 	A Participant to whom an Option has been granted under the Plan who is absent
from work with the Company or with an Affiliate because of temporary disability (any
disability other than a permanent and total Disability as defined in Paragraph 1
hereof), or who is on leave of absence for any purpose, shall not, during the period of
any such absence, be deemed, by virtue of such absence alone, to have terminated such
Participant’s employment, director status or consultancy with the Company or with an
Affiliate, except as the Administrator may otherwise expressly provide; provided
however that for ISOs any leave of absence granted by the Administrator of greater than
ninety days unless pursuant to a contract or statute that guarantees the right to
reemployment shall cause such ISO to become a Non-Qualified Option.
	 
	 	f.	 	Except as required by law or as set forth in a Participant’s Agreement, Options
granted under the Plan shall not be affected by any change of a Participant’s status
within or among the Company and any Affiliates, so long as the Participant continues to
be an employee, director or consultant of the Company or any Affiliate.

	 	15.	 	EFFECT ON OPTIONS OF TERMINATION OF SERVICE “FOR CAUSE”.

     Except as otherwise provided in a Participant’s Option Agreement, the following rules apply if
the Participant’s service (whether as an employee, director or consultant) with the Company or an
Affiliate is terminated “for cause” prior to the time that all his or her outstanding Options have
been exercised:

	 	a.	 	All outstanding and unexercised Options as of the time the Participant is
notified his or her service is terminated “for cause” will immediately be forfeited.
	 
	 	b.	 	For purposes of this Plan, “cause” shall include (and is not limited to)
dishonesty with respect to the Company or any Affiliate, insubordination, substantial
malfeasance or non-feasance of duty, unauthorized disclosure of confidential
information, breach by the Participant of any provision of any employment, consulting,
advisory, nondisclosure, non-competition or similar agreement between the Participant
and the Company, and conduct substantially prejudicial to the business of the Company
or any Affiliate. The determination of the Administrator as to the existence of
“cause” will be conclusive on the Participant and the Company.
	 
	 	c.	 	“Cause” is not limited to events which have occurred prior to a Participant’s
termination of service, nor is it necessary that the Administrator’s finding of “cause”
occur prior to termination. If the Administrator determines, subsequent to a
Participant’s termination of service but prior to the exercise of an Option, that
either prior or subsequent to the Participant’s termination the Participant engaged

13

 

	 	 	 	in conduct which would constitute “cause”, then the right to exercise any Option is forfeited.
	 
	 	d.	 	Any definition in an agreement between the Participant and the Company or an
Affiliate, which contains a conflicting definition of “cause” for termination and which
is in effect at the time of such termination, shall supersede the definition in this
Plan with respect to that Participant.

	 	16.	 	EFFECT ON OPTIONS OF TERMINATION OF SERVICE FOR DISABILITY.

     Except as otherwise provided in a Participant’s Option Agreement, a Participant who ceases to
be an employee, director or consultant of the Company or of an Affiliate by reason of Disability
may exercise any Option granted to such Participant:

	 	a.	 	To the extent that the Option has become exercisable but has not been exercised
on the date of Disability; and
	 
	 	b.	 	In the event rights to exercise the Option accrue periodically over time, to
the extent of a pro rata portion through the date of Disability of any additional
vesting rights that would have accrued on the next vesting date had the Participant not
become Disabled. The proration shall be based upon the number of days accrued in the
current vesting period prior to the date of Disability.

     A Disabled Participant may exercise such rights only within the period ending one year after
the date of the Participant’s termination of employment, directorship or consultancy, as the case
may be, notwithstanding that the Participant might have been able to exercise the Option as to some
or all of the Shares on a later date if the Participant had not become Disabled and had continued
to be an employee, director or consultant or, if earlier, within the originally prescribed term of
the Option.

     The Administrator shall make the determination both of whether Disability has occurred and the
date of its occurrence (unless a procedure for such determination is set forth in another agreement
between the Company and such Participant, in which case such procedure shall be used for such
determination). If requested, the Participant shall be examined by a physician selected or
approved by the Administrator, the cost of which examination shall be paid for by the Company.

	 	17.	 	EFFECT ON OPTIONS OF DEATH WHILE AN EMPLOYEE, DIRECTOR OR  CONSULTANT.

     Except as otherwise provided in a Participant’s Option Agreement, in the event of the death of
a Participant while the Participant is an employee, director or consultant of the Company or of an
Affiliate, such Option may be exercised by the Participant’s Survivors:

	 	a.	 	To the extent that the Option has become exercisable but has not been exercised
on the date of death; and

14

 

	 	b.	 	In the event rights to exercise the Option accrue periodically over time, to
the extent of a pro rata portion through the date of death of any additional vesting
rights that would have accrued on the next vesting date had the Participant not died.
The proration shall be based upon the number of days accrued in the current vesting
period prior to the Participant’s date of death.

     If the Participant’s Survivors wish to exercise the Option, they must take all necessary steps
to exercise the Option within one year after the date of death of such Participant, notwithstanding
that the decedent might have been able to exercise the Option as to some or all of the Shares on a
later date if he or she had not died and had continued to be an employee, director or consultant
or, if earlier, within the originally prescribed term of the Option.

	 	18.	 	EFFECT OF TERMINATION OF SERVICE ON UNACCEPTED STOCK  GRANTS AND STOCK-BASED
AWARDS.

     In the event of a termination of service (whether as an employee, director or consultant) with
the Company or an Affiliate for any reason before the Participant has accepted a Stock Grant or
Stock-Based Award, such offer shall terminate.

     For purposes of this Paragraph 18 and Paragraph 19 below, a Participant to whom a Stock Grant
or Stock-Based Award has been offered and accepted under the Plan who is absent from work with the
Company or with an Affiliate because of temporary disability (any disability other than a permanent
and total Disability as defined in Paragraph 1 hereof), or who is on leave of absence for any
purpose, shall not, during the period of any such absence, be deemed, by virtue of such absence
alone, to have terminated such Participant’s employment, director status or consultancy with the
Company or with an Affiliate, except as the Administrator may otherwise expressly provide.

     In addition, for purposes of this Paragraph 18 and Paragraph 19 below, any change of
employment or other service within or among the Company and any Affiliates shall not be treated as
a termination of employment, director status or consultancy so long as the Participant continues to
be an employee, director or consultant of the Company or any Affiliate.

	 	19.	 	EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE OTHER  THAN “FOR CAUSE” OR
DEATH OR DISABILITY.

     Except as otherwise provided in a Participant’s Agreement, in the event of a termination of
service (whether as an employee, director or consultant), other than termination “for cause,”
Disability, or death for which events there are special rules in Paragraphs 20, 21, and 22,
respectively, before all Company rights of repurchase shall have lapsed, then the Company shall
have the right to repurchase that number of Shares subject to a Stock Grant as to which the
Company’s repurchase rights have not lapsed.

15

 

	 	20.	 	EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE “FOR  CAUSE”.

     Except as otherwise provided in a Participant’s Agreement, the following rules apply if the
Participant’s service (whether as an employee, director or consultant) with the Company or an
Affiliate is terminated “for cause”:

	 	a.	 	All Shares subject to any Stock Grant shall be immediately subject to
repurchase by the Company at the purchase price, if any, thereof.
	 
	 	b.	 	For purposes of this Plan, “cause” shall include (and is not limited to)
dishonesty with respect to the employer, insubordination, substantial malfeasance or
non-feasance of duty, unauthorized disclosure of confidential information, breach by
the Participant of any provision of any employment, consulting, advisory,
nondisclosure, non-competition or similar agreement between the Participant and the
Company, and conduct substantially prejudicial to the business of the Company or any
Affiliate. The determination of the Administrator as to the existence of “cause” will
be conclusive on the Participant and the Company.
	 
	 	c.	 	“Cause” is not limited to events which have occurred prior to a Participant’s
termination of service, nor is it necessary that the Administrator’s finding of “cause”
occur prior to termination. If the Administrator determines, subsequent to a
Participant’s termination of service, that either prior or subsequent to the
Participant’s termination the Participant engaged in conduct which would constitute
“cause,” then the Company’s right to repurchase all of such Participant’s Shares shall
apply.
	 
	 	d.	 	Any definition in an agreement between the Participant and the Company or an
Affiliate, which contains a conflicting definition of “cause” for termination and which
is in effect at the time of such termination, shall supersede the definition in this
Plan with respect to that Participant.

	 	21.	 	EFFECT ON STOCK GRANTS OF TERMINATION OF SERVICE FOR  DISABILITY.

     Except as otherwise provided in a Participant’s Agreement, the following rules apply if a
Participant ceases to be an employee, director or consultant of the Company or of an Affiliate by
reason of Disability: to the extent the Company’s rights of repurchase have not lapsed on the date
of Disability, they shall be exercisable; provided, however, that in the event such rights of
repurchase lapse periodically over time, such rights shall lapse to the extent of a pro rata
portion of the Shares subject to such Stock Grant through the date of Disability as would have
lapsed had the Participant not become Disabled. The proration shall be based upon the number of
days accrued prior to the date of Disability.

     The Administrator shall make the determination both of whether Disability has occurred and the
date of its occurrence (unless a procedure for such determination is set forth in another agreement
between the Company and such Participant, in which case such procedure shall be

16

 

used for such determination). If requested, the Participant shall be examined by a physician
selected or approved by the Administrator, the cost of which examination shall be paid for by the
Company.

	 	22.	 	EFFECT ON STOCK GRANTS OF DEATH WHILE AN EMPLOYEE,  DIRECTOR OR
CONSULTANT.

     Except as otherwise provided in a Participant’s Agreement, the following rules apply in the
event of the death of a Participant while the Participant is an employee, director or consultant of
the Company or of an Affiliate: to the extent the Company’s rights of repurchase have not lapsed
on the date of death, they shall be exercisable; provided, however, that in the event such rights
of repurchase lapse periodically over time, such rights shall lapse to the extent of a pro rata
portion of the Shares subject to such Stock Grant through the date of death as would have lapsed
had the Participant not died. The proration shall be based upon the number of days accrued prior
to the Participant’s death.

	 	23.	 	PURCHASE FOR INVESTMENT.

     Unless the offering and sale of the Shares to be issued upon the particular exercise or
acceptance of a Stock Right shall have been effectively registered under the Securities Act of
1933, as now in force or hereafter amended (the “1933 Act”), the Company shall be under no
obligation to issue the Shares covered by such exercise unless and until the following conditions
have been fulfilled:

	 	a.	 	The person(s) who exercise(s) or accept(s) such Stock Right shall warrant to
the Company, prior to the receipt of such Shares, that such person(s) are acquiring
such Shares for their own respective accounts, for investment, and not with a view to,
or for sale in connection with, the distribution of any such Shares, in which event the
person(s) acquiring such Shares shall be bound by the provisions of the following
legend which shall be endorsed upon the certificate(s) evidencing their Shares issued
pursuant to such exercise or such grant:

	 	 	 	“The shares represented by this certificate have been taken for investment
and they may not be sold or otherwise transferred by any person, including a
pledgee, unless (1) either (a) a Registration Statement with respect to such
shares shall be effective under the Securities Act of 1933, as amended, or
(b) the Company shall have received an opinion of counsel satisfactory to it
that an exemption from registration under such Act is then available, and
(2) there shall have been compliance with all applicable state securities
laws.”

	 	b.	 	At the discretion of the Administrator, the Company shall have received an
opinion of its counsel that the Shares may be issued upon such particular exercise or
acceptance in compliance with the 1933 Act without registration thereunder.

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	 	24.	 	DISSOLUTION OR LIQUIDATION OF THE COMPANY.

     Upon the dissolution or liquidation of the Company, all Options granted under this Plan which
as of such date shall not have been exercised and all Stock Grants and Stock-Based Awards which
have not been accepted will terminate and become null and void; provided, however, that if the
rights of a Participant or a Participant’s Survivors have not otherwise terminated and expired, the
Participant or the Participant’s Survivors will have the right immediately prior to such
dissolution or liquidation to exercise or accept any Stock Right to the extent that the Stock Right
is exercisable or subject to acceptance as of the date immediately prior to such dissolution or
liquidation. Upon the dissolution or liquidation of the Company, any outstanding Cash Awards or
Stock-Based Awards shall immediately terminate unless otherwise determined by the Administrator or
specifically provided in the applicable Agreement.

	 	25.	 	ADJUSTMENTS.

     Upon the occurrence of any of the following events, a Participant’s rights with respect to any
Stock Right granted to him or her hereunder shall be adjusted as hereinafter provided, unless
otherwise specifically provided in a Participant’s Agreement:

     A. Stock Dividends and Stock Splits. If (i) the shares of Common Stock shall be
subdivided or combined into a greater or smaller number of shares or if the Company shall issue any
shares of Common Stock as a stock dividend on its outstanding Common Stock, or (ii) additional
shares or new or different shares or other securities of the Company or other non-cash assets are
distributed with respect to such shares of Common Stock, the number of shares of Common Stock
deliverable upon the exercise of an Option or acceptance of a Stock Grant shall be appropriately
increased or decreased proportionately, and appropriate adjustments shall be made including, in the
purchase price per share, to reflect such events. The number of Shares subject to the limitations
in Paragraphs 3 and 4(c) shall also be proportionately adjusted upon the occurrence of such events.

     B. Corporate Transactions. If the Company is to be consolidated with or acquired by
another entity in a merger, sale of all or substantially all of the Company’s assets other than a
transaction to merely change the state of incorporation (a “Corporate Transaction”), the
Administrator or the board of directors of any entity assuming the obligations of the Company
hereunder (the “Successor Board”), shall, as to outstanding Options, either (i) make appropriate
provision for the continuation of such Options by substituting on an equitable basis for the Shares
then subject to such Options either the consideration payable with respect to the outstanding
shares of Common Stock in connection with the Corporate Transaction or securities of any successor
or acquiring entity; or (ii) upon written notice to the Participants, provide that all Options must
be exercised (either to the extent then exercisable or, at the discretion of the Administrator, or,
upon a change of control of the Company, all Options being made fully exercisable for purposes of
this Subparagraph), within a specified number of days of the date of such notice, at the end of
which period the Options shall terminate; or (iii) terminate all Options in exchange for a cash
payment equal to the excess of the Fair Market Value of the Shares subject to such Options (either
to the extent then exercisable or, at the discretion of the Administrator, all Options being made
fully exercisable for purposes of this Subparagraph) over the exercise price thereof.

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     With respect to outstanding Stock Grants, the Administrator or the Successor Board, shall
either (i) make appropriate provisions for the continuation of such Stock Grants by substituting on
an equitable basis for the Shares then subject to such Stock Grants either the consideration
payable with respect to the outstanding Shares of Common Stock in connection with the Corporate
Transaction or securities of any successor or acquiring entity; or (ii) upon written notice to the
Participants, provide that all Stock Grants must be accepted (to the extent then subject to
acceptance) within a specified number of days of the date of such notice, at the end of which
period the offer of the Stock Grants shall terminate; or (iii) terminate all Stock Grants in
exchange for a cash payment equal to the excess of the Fair Market Value of the Shares subject to
such Stock Grants over the purchase price thereof, if any. In addition, in the event of a
Corporate Transaction, the Administrator may waive any or all Company repurchase rights with
respect to outstanding Stock Grants.

     C. Recapitalization or Reorganization. In the event of a recapitalization or
reorganization of the Company other than a Corporate Transaction pursuant to which securities of
the Company or of another corporation are issued with respect to the outstanding shares of Common
Stock, a Participant upon exercising an Option or accepting a Stock Grant after the
recapitalization or reorganization shall be entitled to receive for the purchase price paid upon
such exercise or acceptance the number of replacement securities which would have been received if
such Option had been exercised or Stock Grant accepted prior to such recapitalization or
reorganization.

     D. Adjustments to Cash Awards and Stock-Based Awards. Upon the happening of any of
the events described in Subparagraphs A, B or C above, any outstanding Cash Award and Stock-Based
Award shall be appropriately adjusted to reflect the events described in such Subparagraphs. The
Administrator or the Successor Board shall determine the specific adjustments to be made under this
Paragraph 25 and, subject to Paragraph 4, its determination shall be conclusive.

     E. Modification of Options. Notwithstanding the foregoing, any adjustments made
pursuant to Subparagraph A, B or C above with respect to Options shall be made only after the
Administrator determines whether such adjustments would constitute a “modification” of any ISO (as
that term is defined in Section 424(h) of the Code) or would cause any adverse tax consequences for
the holders of such Options, including, but not limited to, pursuant to Section 409A of the Code.
If the Administrator determines that such adjustments made with respect to Options would constitute
a modification or other adverse tax consequence, it may refrain from making such adjustments,
unless the holder of an Option specifically agrees in writing that such adjustment be made and such
writing indicates that the holder has full knowledge of the consequences of such “modification” on
his or her income tax treatment with respect to the Option. This paragraph shall not apply to the
acceleration of the vesting of any ISO that would cause any portion of the ISO to violate the
annual vesting limitation contained in Section 422(d) of the Code, as described in Paragraph 6B(d).

	 	26.	 	ISSUANCES OF SECURITIES.

     Except as expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall affect, and no

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adjustment by reason thereof shall be made with respect to, the number or price of shares subject
to Stock Rights. Except as expressly provided herein, no adjustments shall be made for dividends
paid in cash or in property (including without limitation, securities) of the Company prior to any
issuance of Shares pursuant to a Stock Right.

	 	27.	 	FRACTIONAL SHARES.

     No fractional shares shall be issued under the Plan and the person exercising a Stock Right
shall receive from the Company cash in lieu of such fractional shares equal to the Fair Market
Value thereof.

	 	28.	 	CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS; TERMINATION  OF ISOs.

     The Administrator, at the written request of any Participant, may in its discretion take such
actions as may be necessary to convert such Participant’s ISOs (or any portions thereof) that have
not been exercised on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the Participant is an employee of the Company or an
Affiliate at the time of such conversion. At the time of such conversion, the Administrator (with
the consent of the Participant) may impose such conditions on the exercise of the resulting
Non-Qualified Options as the Administrator in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall be deemed to give
any Participant the right to have such Participant’s ISOs converted into Non-Qualified Options, and
no such conversion shall occur until and unless the Administrator takes appropriate action. The
Administrator, with the consent of the Participant, may also terminate any portion of any ISO that
has not been exercised at the time of such conversion.

	 	29.	 	WITHHOLDING.

     In the event that any federal, state, or local income taxes, employment taxes, Federal
Insurance Contributions Act (“F.I.C.A.”) withholdings or other amounts are required by applicable
law or governmental regulation to be withheld from the Participant’s salary, wages or other
remuneration in connection with the exercise or acceptance of a Cash Award or Stock Right or in
connection with a Disqualifying Disposition (as defined in Paragraph 30) or upon the lapsing of any
right of repurchase, the Company may withhold from the Participant’s compensation, if any, or may
require that the Participant advance in cash to the Company, or to any Affiliate of the Company
which employs or employed the Participant, the statutory minimum amount of such withholdings unless
a different withholding arrangement, including the use of shares of the Company’s Common Stock or a
promissory note, is authorized by the Administrator (and permitted by law). For purposes hereof,
the fair market value of the shares withheld for purposes of payroll withholding shall be
determined in the manner provided in Paragraph 1 above, as of the most recent practicable date
prior to the date of exercise. If the fair market value of the shares withheld is less than the
amount of payroll withholdings required, the Participant may be required to advance the difference
in cash to the Company or the Affiliate

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employer. The Administrator in its discretion may condition the exercise of an Option for less
than the then Fair Market Value on the Participant’s payment of such additional withholding.

	 	30.	 	NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION.

     Each Employee who receives an ISO must agree to notify the Company in writing immediately
after the Employee makes a Disqualifying Disposition of any shares acquired pursuant to the
exercise of an ISO. A Disqualifying Disposition is defined in Section 424(c) of the Code and
includes any disposition (including any sale or gift) of such shares before the later of (a) two
years after the date the Employee was granted the ISO, or (b) one year after the date the Employee
acquired Shares by exercising the ISO, except as otherwise provided in Section 424(c) of the Code.
If the Employee has died before such stock is sold, these holding period requirements do not apply
and no Disqualifying Disposition can occur thereafter.

	 	31.	 	TERMINATION OF THE PLAN.

     The Plan will terminate on February 13, 2018, the date which is ten years from the
earlier of the date of its initial adoption by the Board of Directors and the date of its
approval by the shareholders. The Plan may be terminated at an earlier date by vote of the
shareholders or the Board of Directors of the Company; provided, however, that any such earlier
termination shall not affect any Agreements executed prior to the effective date of such
termination.

	 	32.	 	AMENDMENT OF THE PLAN AND AGREEMENTS.

     The Plan may be amended by the shareholders of the Company. The Plan may also be amended by
the Administrator, including, without limitation, to the extent necessary to qualify any or all
outstanding Stock Rights granted under the Plan or Stock Rights to be granted under the Plan for
favorable federal income tax treatment (including deferral of taxation upon exercise) as may be
afforded incentive stock options under Section 422 of the Code, and to the extent necessary to
qualify the shares issuable upon exercise or acceptance of any outstanding Stock Rights granted, or
Stock Rights to be granted, under the Plan for listing on any national securities exchange or
quotation in any national automated quotation system of securities dealers. Any amendment approved
by the Administrator which the Administrator determines is of a scope that requires shareholder
approval shall be subject to obtaining such shareholder approval. Any modification or amendment of
the Plan shall not, without the consent of a Participant, adversely affect his or her rights under
a Cash Award or Stock Right previously granted to him or her. With the consent of the Participant
affected, the Administrator may amend outstanding Agreements in a manner which may be adverse to
the Participant but which is not inconsistent with the Plan. In the discretion of the
Administrator, outstanding Agreements may be amended by the Administrator in a manner which is not
adverse to the Participant. Notwithstanding the foregoing, the Administrator shall not allow
either (a) the cancellation of outstanding Options or Stock Appreciation Rights and the grant in
substitution therefore of new Stock Rights having a lower exercise price or (b) the amendment of
outstanding Options or Stock Appreciation Rights to reduce the exercise price thereof without
shareholder approval.

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	 	33.	 	EMPLOYMENT OR OTHER RELATIONSHIP.

     Nothing in this Plan or any Agreement shall be deemed to prevent the Company or an Affiliate
from terminating the employment, consultancy or director status of a Participant, nor to prevent a
Participant from terminating his or her own employment, consultancy or director status or to give
any Participant a right to be retained in employment or other service by the Company or any
Affiliate for any period of time.

	 	34.	 	GOVERNING LAW.

     This Plan shall be construed and enforced in accordance with the law of the State of Delaware.

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