Document:

exv10w3

 

Exhibit 10.3

NON-COMPETITION, NON-DISCLOSURE AND NON-SOLICITATION AGREEMENT

     This Non-Competition, Non-Disclosure and Non-Solicitation Agreement (this “Agreement”)
is dated as of the 31st day of March, 2006, and is made between Denis Enberg (“Enberg”) and
Electric City Corp., a Delaware corporation (the “Company”).

W I T N E S S E T H:

     WHEREAS, Enberg, Eugene Borucki (“Borucki”) and the Company are parties to that
certain Stock Purchase Agreement dated as of March 31, 2006 providing for the sale by the Company
to Borucki and Enberg of all of the issued and outstanding capital stock of Great Lakes Controlled
Energy Corporation, a Delaware corporation (“Great Lakes”) in return for the consideration
to be paid by Borucki and Enberg specified in such Stock Purchase Agreement; and

     WHEREAS, at all times prior to the date hereof while Great Lakes was a subsidiary of the
Company, Enberg has been employed by the Company and by Great Lakes, and accordingly, Enberg has
had access to and gained knowledge of certain information that the Company and Enberg agree is
proprietary and confidential to the Company and is not generally available to the public or to
competitors of the Company; and

     WHEREAS, the execution and delivery of this Agreement is a condition precedent to the
Company’s obligations to close the sale of Great Lakes under such Stock Purchase Agreement;

     NOW THEREFORE, the parties hereto hereby agree as follows:

     1. Definitions. As used in this Agreement, the following terms shall have the
following meanings:

      “Business” shall mean the ballasted lighting power reduction business that the
Company and its subsidiaries are currently engaged in.

      “Confidential Information” shall mean information (in any form or media)
regarding the Company’s technology, products, customers, prospective customers (including
lists of customers and prospective customers) methods of operation, billing rates, billing
procedures, suppliers, business methods, finances, management, employees, employee
compensation, or any other business information relating to the Business (whether
constituting a trade secret or proprietary or otherwise) which has value to the Company and
is generally treated by the Company as being confidential; provided,
however, that Confidential Information shall not include any information that (i)
has been voluntarily disclosed to the public by the Company (except where such public
disclosure has been made without authorization), or (ii) has been independently developed
and disclosed by others, or (iii) otherwise enters the public domain through lawful means,
or

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(iv) relates to Great Lakes’ building automation and controls business and not to the
Business.

      “Energy Saver” shall mean the energy saving device which the Company sells
under the name and trademark Energy Saver®, which device permits the user to reduce the
electric power used by lighting systems.

      “Energy Saver Business” shall mean the Company’s business of making, marketing,
selling and installing Energy Savers.

      “Person” shall mean any individual, partnership, joint venture, corporation,
trust, limited liability company, unincorporated organization, or other entity (including a
governmental agency or authority); provided, however, that the term “Person”
shall not include the Company or any subsidiary of the Company (excluding Great Lakes during
the period when it was a subsidiary of the Company).

      “Restricted Business” shall mean the Energy Saver Business.

      “Territory” shall mean North America.

     2. Covenants of Enberg. Enberg covenants and agrees that he will not, directly or
indirectly, either alone or jointly, with or on behalf of others, expressly or impliedly, whether
as principal, partner, agent, shareholder, director, employee, consultant or otherwise during the
period commencing on the date hereof and ending five (5) years hereafter:

      (a) engage in the Restricted Business in the Territory, or own, manage, operate, join,
control, assist, participate in, or be connected with, directly or indirectly (and including
as an officer, director, member, manager, partner, proprietor, consultant, independent
contractor, or lender), any Person who is, directly or indirectly, engaged in the Restricted
Business in the Territory;

      (b) disclose to any Person, or use or otherwise exploit for his own benefit or for the
benefit of any such Person, any Confidential Information; or

      (c) request, solicit, or induce any employee of the Company or any of its subsidiaries
to terminate his employment with the Company or such subsidiary and accept employment with
Great Lakes (excluding persons employed by Great Lakes as of the date hereof).

     Enberg acknowledges that (i) the Company’s Confidential Information is confidential and
proprietary to the Company; (ii) the Company takes reasonable steps to safeguard the
confidentiality of its Confidential Information and to prevent the disclosure of such information
to competitors or other third parties, including the execution of agreements such as this; (iii)
the Confidential Information has and derives independent economic value and is not generally known
to competitors or others who would be able to derive economic value from it, and (iv) the

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Company
does not disseminate the Confidential Information to the public. Enberg further acknowledges and
agrees that:

      (x) the prohibitions against disclosure of Confidential Information provided in this
Agreement are in addition to, and not in lieu of, any rights or remedies which the Company
may have available pursuant to the laws of any jurisdiction or at common law to prevent the
disclosure of trade secrets or proprietary information, and the enforcement by the Company
of its rights and remedies pursuant to this Agreement shall not be construed as a waiver of
any other rights or available remedies which it may possess in law or equity absent this
Agreement, and

      (y) Enberg’s breach of any covenant contained in this Agreement will result in
irreparable injury to the Company and that the Company’s remedy at law for such a breach
will be inadequate and will be extremely difficult to calculate or determine.

Accordingly, Enberg agrees and consents that, upon any such breach, the Company shall, in addition
to all other remedies available to it at law or in equity, be entitled to both preliminary and
permanent injunctions (without bond) to prevent or halt any such breach or threatened breach.

     3. GENERAL PROVISIONS.

     (a) Notices. All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and shall be given (and
deemed to have been duly given) in accordance with the Stock Purchase Agreement.

     (b) Expenses. Each party hereto shall pay its own expenses in connection with this
Agreement and the consummation of the transactions contemplated hereby, whether or not such
transactions shall be consummated.

     (c) Binding Effect; Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted assigns.

     (d) Amendment; Waivers, Etc. No amendment, modification or discharge of this
Agreement, and no waiver hereunder, shall be valid or binding unless set forth in writing and duly
executed by the party against whom enforcement of the amendment, modification, discharge or waiver
is sought. Any such waiver shall constitute a waiver only with respect to the specific matter
described in such writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time. Neither the waiver by either of the parties hereto of a
breach of or a default under any of the provisions of this Agreement, nor the failure by any of the
parties, on one or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or privileges
hereunder.

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     (e) Entire Agreement. This Agreement constitutes the entire agreement and supersedes
all prior agreements and understandings, both written and oral, between the parties with respect to
the subject matter hereof.

     (f) Severability. If any provision, including any phrase, sentence, clause, section
or subsection, of this Agreement is invalid, inoperative or unenforceable for any reason, such
circumstances shall not have the effect of rendering such provision in question invalid,
inoperative or unenforceable in any other case or circumstance, or of rendering any other provision
herein contained invalid, inoperative or unenforceable to any extent whatsoever; provided that the
material economic terms of the transaction are not materially modified by such circumstances.

     (g) Headings. The headings contained in this Agreement are for the convenience of the
parties only and shall not affect the meaning or interpretation of this Agreement.

     (h) Counterparts; Facsimile. This Agreement may be executed in counterparts, each of
which shall be deemed an original and all of which shall together constitute one and the same
instrument. The reproduction of signatures by means of telecopying device shall be treated as
though such reproductions are executed originals.

     (i) Governing Law. This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Illinois, without giving effect to the principles of
conflicts of laws thereof.

[Balance of page intentionally left blank; signature page follows.]

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     IN WITNESS WHEREOF, the parties hereto have duly executed this Non-Competition, Non-Disclosure
and Non-Solicitation Agreement as of the date first above written.

	 	 	 	 	 
	 	 	 
	 	/s/ Denis Enberg
 	 
	 	Denis Enberg 	 
	 	 	 
	 
	 	ELECTRIC CITY CORP.

 	 
	 	By:  	/s/ Jeffrey Mistarz
 	 
	 	Name:  	Jeffrey Mistarz 	 
	 	Title:  	Chief Financial Officer & Treasurer 	 
	 

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Exhibit 10(a)

LINDSAY MANUFACTURING CO.

2006 LONG-TERM INCENTIVE PLAN

(Effective February 6, 2006)

     1. Purpose. The purpose of Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan
(the “Plan”) is to attract and retain employees and directors for Lindsay Manufacturing Co. and its
subsidiaries and to provide such persons with incentives and rewards for superior performance.

     2. Definitions. As used in this Plan, the following terms shall be defined as set
forth below:

     2.1 “Award” means any Options, Stock Appreciation Rights, Restricted
Shares, Deferred Shares (Restricted Stock Units), Performance Shares or Performance Units
granted under the Plan.

     2.2 “Award Agreement” means an agreement, certificate, resolution or other
form of writing or other evidence approved by the Committee which sets forth the terms
and conditions of an Award. An Award Agreement may be in an electronic medium, may be
limited to a notation on the Company’s books and records and, if approved by the
Committee, need not be signed by a representative of the Company or a Participant.

     2.3 “Base Price” means the price to be used as the basis for determining
the Spread upon the exercise of a Freestanding Stock Appreciation Right.

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

     2.5 “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     2.6 “Committee” means the committee of the Board described in Section 4.

     2.7 “Company” means Lindsay Manufacturing Co., a Delaware corporation, or
any successor corporation.

     2.8 “Deferral Period” means the period of time during which Deferred
Shares (Restricted Stock Units) are subject to deferral limitations under Section 8.

     2.9 “Deferred Shares” or “Restricted Stock Units” means an Award pursuant
to Section 8 of the right to receive Shares at the end of a specified Deferral Period.

     2.10 “Employee” means any person, including an officer, employed by the
Company or a Subsidiary.

     2.11 “Fair Market Value” means the fair market value of the Shares as
determined by the Committee from time to time. Unless otherwise determined by the
Committee, the fair market value shall be the closing price for the Shares reported on a
consolidated basis on the New York Stock Exchange on the relevant date or, if there were
no sales on such date, the closing price on the nearest preceding date on which sales
occurred.

     2.12 “Freestanding Stock Appreciation Right” means a Stock Appreciation
Right granted pursuant to Section 6 that is not granted in tandem with an Option or
similar right.

     2.13 “Grant Date” means the date specified by the Committee on which a
grant of an Award shall become effective, which shall not be earlier than the date on
which the Committee takes action with respect thereto.

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     2.14 “Incentive Stock Option” means any Option that is intended to qualify
as an “incentive stock option” under Code Section 422 or any successor provision.

     2.15 “Nonemployee Director” means a member of the Board who is not an
Employee.

     2.16 “Nonqualified Stock Option” means an Option that is not intended to
qualify as an Incentive Stock Option.

     2.17 “Option” means any option to purchase Shares granted under Section 5.

     2.18 “Optionee” means the person so designated in an agreement evidencing
an outstanding Option.

     2.19 “Option Price” means the purchase price payable upon the exercise of
an Option.

     2.20 “Participant” means an Employee or Nonemployee Director who is
selected by the Committee to receive benefits under this Plan, provided that only
Employees shall be eligible to receive grants of Incentive Stock Options.

     2.21 “Performance Objectives” means the performance objectives established
pursuant to this Plan for Participants who have received Awards. Performance Objectives
may be described in terms of Company-wide objectives or objectives that are related to
the performance of the individual Participant or the Subsidiary, division, department or
function within the Company or Subsidiary in which the Participant is employed.
Performance Objectives may be measured on an absolute or relative basis. Relative
performance may be measured by a group of peer companies or by a financial market index.
Any Performance Objectives applicable to a Qualified Performance–Based Award shall be
limited to specified levels of or increases in the Company’s or Subsidiary’s return on
equity, diluted earnings per share, total earnings, earnings growth, return on capital,
return on assets, earnings before interest and taxes, sales, sales growth, gross margin
return on investment, increase in the fair market value of the Shares, share price
(including but not limited to, growth measures and total stockholder return), operating
income or profit, net earnings, cash flow (including, but not limited to, operating cash
flow and free cash flow), cash flow return on investment (which equals net cash flow
divided by total capital), inventory turns, financial return ratios, total return to
shareholders, market share, earnings measures/ratios, economic value added (EVA), balance
sheet measurements such as receivable turnover, internal rate of return, increase in net
present value or expense targets, working capital measurements (such as average working
capital divided by sales), customer or dealer satisfaction surveys and productivity. Any
Performance Objectives may provide for adjustments to exclude the impact of any
significant acquisitions or dispositions of businesses by the Company, one-time
non-operating charges, or accounting changes (including the early adoption of any
accounting change mandated by any governing body, organization or authority). Except in
the case of a Qualified Performance–Based Award, if the Committee determines that a
change in the business, operations, corporate structure or capital structure of the
Company, or the manner in which it conducts its business, or other events or
circumstances render the Performance Objectives unsuitable, the Committee may modify such
Performance Objectives or the related minimum acceptable level of achievement, in whole
or in part, as the Committee deems appropriate and equitable.

     2.22 “Performance Period” means a period of time established under Section
9 within which the Performance Objectives relating to Performance Shares, Performance
Units, Deferred Shares (Restricted Stock Units) or Restricted Shares are to be achieved.

     2.23 “Performance Share” means a bookkeeping entry that records the
equivalent of one Share awarded pursuant to Section 9.

     2.24 “Performance Unit” means a bookkeeping entry that records a unit
equivalent to $1.00 awarded pursuant to Section 9.

     2.25 “Predecessor Plan” means the Lindsay Manufacturing Co. 2001 Long-Term
Incentive Plan.

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     2.26 “Qualified Performance–Based Award” means an Award or portion of an
Award that is intended to satisfy the requirements for “qualified performance–based
compensation” under Code Section 162(m). The Committee shall designate any Qualified
Performance–Based Award as such at the time of grant.

     2.27 “Restricted Shares” means Shares granted under Section 7 subject to a
substantial risk of forfeiture.

     2.28 “Shares” means shares of the Common Stock of the Company, $1.00 par
value, or any security into which Shares may be converted by reason of any transaction or
event of the type referred to in Section 11.

     2.29 “Spread” means, in the case of a Freestanding Stock Appreciation
Right, the amount by which the Fair Market Value on the date when any such right is
exercised exceeds the Base Price specified in such right or, in the case of a Tandem
Stock Appreciation Right, the amount by which the Fair Market Value on the date when any
such right is exercised exceeds the Option Price specified in the related Option.

     2.30 “Stock Appreciation Right” means a right granted under Section 6,
including a Freestanding Stock Appreciation Right or a Tandem Stock Appreciation Right.

     2.31 “Subsidiary” means a corporation or other entity in which the Company
has a direct or indirect ownership or other equity interest, provided that for purposes
of determining whether any person may be a Participant for purposes of any grant of
Incentive Stock Options, “Subsidiary” means any corporation (within the meaning of the
Code) in which the Company owns or controls directly or indirectly more than 50 percent
of the total combined voting power represented by all classes of stock issued by such
corporation at the time of such grant.

     2.32 “Tandem Stock Appreciation Right” means a Stock Appreciation Right
granted pursuant to Section 6 that is granted in tandem with an Option or any similar
right granted under any other plan of the Company.

     3. Shares Available Under the Plan.

     3.1 Reserved Shares. Subject to adjustments as provided in Sections 3.5
and 11, the maximum number of Shares that may be (i) issued or transferred upon the
exercise of Options or Stock Appreciation Rights, (ii) awarded as Restricted Shares and
released from substantial risk of forfeiture, (iii) issued or transferred in payment of
Deferred Shares (Restricted Stock Units) or Performance Shares, or (iv) issued or
transferred in payment of dividend equivalents paid with respect to Awards, shall not in
the aggregate exceed 600,000 Shares. Such Shares may be Shares of original issuance,
Shares held in Treasury, or Shares that have been reacquired by the Company.

     3.2 Reduction Ratio. For purposes of Section 3.1, the number of Shares
available for issuance under the Plan shall be reduced by two (2) Shares for each Share
issued and transferred in settlement of an Award other than an Option and one (1) Share for each Share issued
and transferred upon exercise of an Option. For purposes of Section 3.1, shares which
are withheld from Awards to satisfy withholding taxes shall be treated as having been
issued or transferred, and Shares which are tendered as payment of the Option Price shall
not be added back as additional Shares available for issuance under the Plan.

     3.3 ISO Maximum. In no event shall the number of Shares issued upon the
exercise of Incentive Stock Options exceed 600,000 Shares, subject to adjustment as
provided in Section 11.

     3.4 Maximum Awards. No Participant may receive Awards representing more
than 350,000 Shares in any rolling 36-month period, subject to adjustment as provided in
Section 11. In addition, the maximum number of Performance Units that may be granted to
a Participant in any rolling 36-month period is 5,000,000.

     3.5 Expired, Forfeited and Unexercised Awards. If any Option granted
under this Plan expires, is forfeited or becomes unexercisable for any reason without
having been exercised or paid in full, the Shares subject

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thereto which were not
exercised shall be available for future Awards under the Plan. Likewise, if any stock
option that was outstanding on December 1, 2005 under the Company’s Predecessor Plan or
Amended and Restated 1988 and 1991 Long-Term Incentive Plans or the stock options for
350,000 shares granted to Richard W. Parod on March 8, 2000 expires, is forfeited or
becomes unexercisable for any reason, the shares subject thereto which were not exercised
shall be added to the number of Shares which are available for Awards under Section 3.1.
If any Restricted Shares or other Awards made in Shares under this Plan that reduce the
number of Shares available for future Awards using a 2 for 1 share reduction ratio under
Section 3.2 are forfeited, such shares shall be restored for future Awards under this
Plan on a 2 for 1 share increase basis. Likewise, if any restricted stock units granted
under the Predecessor Plan are forfeited, the Shares which are forfeited shall be added
to the number of shares which are available for Awards under Section 3.1 using a 2 for 1
share increase basis.

     4. Plan Administration.

     4.1 Board Committee Administration. This Plan shall be administered by
the Compensation Committee appointed by the Board from among its members, provided that
the full Board may at any time act as the Committee. The interpretation and construction
by the Committee of any provision of this Plan or of any Award Agreement and any
determination by the Committee pursuant to any provision of this Plan or any such
agreement, notification or document shall be final and conclusive. No member of the
Committee shall be liable to any person for any such action taken or determination made
in good faith. It is intended that the Compensation Committee will consist solely of
persons who, at the time of their appointment, each qualified as a “Non-Employee
Director” under Rule 16b-3(b)(3)(i) promulgated under the Securities Exchange Act of 1934
and, to the extent that relief from the limitation of Code Section 162(m) is sought, as
an “Outside Director” under Section 1.162-27(e)(3)(i) of the Treasury Regulations issued
under Code Section 162(m).

     4.2 Committee Delegation. The Committee may delegate to one or more
officers of the Company the authority to grant Awards to Participants who arc not
directors or executive officers of the Company, provided that the Committee shall have
fixed the total number of Shares or Performance Units subject to such grants. Any such
delegation shall be subject to the limitations of Section 157(c) of the Delaware General
Corporation Law.

     4.3 Awards to Non-Employee Directors. Notwithstanding any other provision
of this Plan to the contrary, all Awards to Non-Employee Directors must be authorized by
the full Board pursuant to recommendations made by the Compensation Committee.

     5. Options. The Committee may from time to time authorize grants to Participants of
Options to purchase Shares upon such terms and conditions as the Committee may determine in
accordance with the following provisions:

     5.1 Number of Shares. Each grant shall specify the number of Shares to
which it pertains.

     5.2 Option Price. Each grant shall specify an Option Price per Share,
which shall be equal to or greater than the Fair Market Value per Share on the Grant
Date.

     5.3 Consideration. Each grant shall specify the form of consideration to
be paid in satisfaction of the Option Price and the manner of payment of such
consideration, which may include (i) cash in the form of currency or check or other cash
equivalent acceptable to the Company, (ii) nonforfeitable, unrestricted Shares owned by
the Optionee which have a value at the time of exercise that is equal to the Option
Price, (iii) any other legal consideration that the Committee may deem appropriate,
including without limitation any form of consideration authorized under Section 5.4, on
such basis as the Committee may determine in accordance with this Plan, or (iv) any
combination of the foregoing.

     5.4 Payment of Option Price in Shares. On or after the Grant Date of any
Option other than an Incentive Stock Option, the Committee may determine that payment of
the Option Price may also be made in whole or in part in the form of Restricted Shares or
other Shares that are subject to risk of forfeiture or restrictions on transfer. Unless
otherwise determined by the Committee, whenever any Option Price is paid in whole or in
part by means of any of the forms of consideration specified in this Section 5.4, the
Shares received by the Optionee upon the exercise of the Options shall be subject to the
same risks of forfeiture or restrictions on transfer as those that applied to the
consideration surrendered by the Optionee, provided that such risks of forfeiture and
restrictions

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on transfer shall apply only to the same number of Shares received by the
Optionee as applied to the forfeitable or restricted Shares surrendered by the Optionee.

     5.5 Cashless Exercise. To the extent permitted by applicable law, the
Option Price and any applicable statutory minimum withholding taxes may be paid from the
proceeds of sale through a bank or broker on the date of exercise of some or all of the
Shares to which the exercise relates.

     5.6 Performance–Based Options. Any grant of an Option may specify
Performance Objectives that must be achieved as a condition to exercise of the Option.

     5.7 Vesting. Each Option grant may specify a period of continuous
employment of the Optionee by the Company or any Subsidiary (or, in the case of a
Nonemployee Director, service on the Board) that is necessary before the Options or
installments thereof shall become exercisable, and any grant may provide for the earlier
exercise of such rights in the event of a change in control of the Company or other
similar transaction or event.

     5.8 ISO Dollar Limitation. Options granted under this Plan may be
Incentive Stock Options, Nonqualified Stock Options or a combination of the foregoing,
provided that only Nonqualified Stock Options may be granted to Nonemployee Directors.
Each grant shall specify whether (or the extent to which) the Option is an Incentive
Stock Option or a Nonqualified Stock Option. Notwithstanding any such designation, to
the extent that the aggregate Fair Market Value of the Shares with respect to which
Options designated as Incentive Stock Options are exercisable for the first time by an
Optionee during any calendar year (under all plans of the Company) exceeds $100,000, such
Options shall be treated as Nonqualified Stock Options.

     5.9 Exercise Period. No Option granted under this Plan may be exercised
more than ten years from the Grant Date.

     5.10 Award Agreement. Each grant shall be evidenced by an Award Agreement
containing such terms and provisions as the Committee may determine consistent with this
Plan.

     6. Stock Appreciation Rights. The Committee may also authorize grants to
Participants of Stock Appreciation Rights. A Stock Appreciation Right is the right of the
Participant to receive from the Company an amount, which shall be determined by the Committee and
shall be expressed as a percentage (not exceeding 100 percent) of the Spread at the time of the
exercise of such right. Any grant of Stock Appreciation Rights under this Plan shall be upon such
terms and conditions as the Committee may determine in accordance with the following provisions:

     6.1 Payment in Cash or Shares. Any grant may specify that the amount
payable upon the exercise of a Stock Appreciation Right will be paid by the Company in
cash, Shares or any combination thereof or may grant to the Participant or reserve to the
Committee the right to elect among those alternatives.

     6.2 Maximum SAR Payment. Any grant may specify that the amount payable
upon the exercise of a Stock Appreciation Right shall not exceed a maximum specified by
the Committee on the Grant Date.

     6.3 Exercise Period. Any grant may specify (i) a waiting period or
periods before Stock Appreciation Rights shall become exercisable and (ii) permissible
dates or periods on or during which Stock Appreciation Rights shall be exercisable.

     6.4 Change in Control. Any grant may specify that a Stock Appreciation
Right may be exercised only in the event of a change in control of the Company or other
similar transaction or event.

     6.5 Dividend Equivalents. On or after the Grant Date of any Stock
Appreciation Rights, the Committee may provide for the payment to the Participant of
dividend equivalents thereon in cash or Shares on a current, deferred or contingent basis
with respect to any or all dividends or other distributions paid by the Company.

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     6.6 Award Agreement. Each grant shall be evidenced by an Award Agreement
which shall describe the subject Stock Appreciation Rights, identify any related Options,
state that the Stock Appreciation Rights are subject to all of the terms and conditions
of this Plan and contain such other terms and provisions as the Committee may determine
consistent with this Plan.

     6.7 Tandem Stock Appreciation Rights. Each grant of a Tandem Stock
Appreciation Right shall provide that such Tandem Stock Appreciation Right may be
exercised only (i) at a time when the related Option (or any similar right granted under
any other plan of the Company) is also exercisable and the Spread is positive and (ii) by
surrender of the related Option (or such other right) for cancellation.

     6.8 Exercise Period. No Stock Appreciation Right granted under this Plan
may be exercised more than ten years from the Grant Date.

     6.9 Freestanding Stock Appreciation Rights. Regarding Freestanding Stock
Appreciation Rights only:

     (a) Each grant shall specify in respect of each Freestanding Stock
Appreciation Right a Base Price per Share, which shall be equal to or greater than
the Fair Market Value on the Grant Date;

     (b) Successive grants may be made to the same Participant regardless
of whether any Freestanding Stock Appreciation Rights previously granted to such
Participant remain unexercised; and

     (c) Each grant shall specify the period or periods of continuous
employment of the Participant by the Company or any Subsidiary (or, in the case of a
Nonemployee Director, service on the Board) that are necessary before the
Freestanding Stock Appreciation Rights or installments thereof shall become
exercisable, and any grant may provide for the earlier exercise of such rights in
the event of a change in control of the Company or other similar transaction or
event.

     7. Restricted Shares. The Committee may also authorize grants to Participants of
Restricted Shares upon such terms and conditions as the Committee may determine in accordance with
the following provisions:

     7.1 Transfer of Shares. Each grant shall constitute an immediate transfer
of the ownership of Shares to the Participant in consideration of the performance of
services, subject to the substantial risk of forfeiture and restrictions on transfer
hereinafter referred to.

     7.2 Consideration. Each grant may be made without additional
consideration from the Participant or in consideration of a payment by the Participant
that is less than the Fair Market Value on the Grant Date.

     7.3 Substantial Risk of Forfeiture. Each grant shall provide that the
Restricted Shares covered thereby shall be subject to a “substantial risk of forfeiture”
within the meaning of Code Section 83 for a period to be determined by the Committee on
the Grant Date, and any grant or sale may provide for the earlier termination of such
risk of forfeiture in the event of a change in control of the Company or other similar
transaction or event.

     7.4 Dividend, Voting and Other Ownership Rights. Unless otherwise
determined by the Committee, an award of Restricted Shares shall entitle the Participant
to dividend, voting and other ownership rights during the period for which such
substantial risk of forfeiture is to continue.

     7.5 Restrictions on Transfer. Each grant shall provide that, during the
period for which such substantial risk of forfeiture is to continue, the transferability
of the Restricted Shares shall be prohibited or restricted in the manner and to the
extent prescribed by the Committee on the Grant Date. Such restrictions may include,
without limitation, rights of repurchase or first refusal in the Company or provisions
subjecting the Restricted Shares to a continuing substantial risk of forfeiture in the
hands of any transferee.

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     7.6 Performance–Based Restricted Shares. Any grant or the vesting thereof
may be further conditioned upon the attainment of Performance Objectives established by
the Committee in accordance with the applicable provisions of Section 9 regarding
Performance Shares and Performance Units.

     7.7 Dividends. Any grant may require that any or all dividends or other
distributions paid on the Restricted Shares during the period of such restrictions be
automatically sequestered and paid on a deferred basis when the restrictions lapse or
reinvested on an immediate or deferred basis in additional Shares, which may be subject
to the same restrictions as the underlying Award or such other restrictions as the
Committee may determine.

     7.8 Award Agreements. Each grant shall be evidenced by an Award Agreement
containing such terms and provisions as the Committee may determine consistent with this
Plan. Unless otherwise directed by the Committee, all certificates representing
Restricted Shares, together with a stock
power that shall be endorsed in blank by the Participant with respect to such
Shares, shall be held in custody by the Company until all restrictions thereon lapse.

     8. Deferred Shares (Restricted Stock Units). The Committee may authorize grants of
Deferred Shares (Restricted Stock Units) to Participants upon such terms and conditions as the Committee may determine in
accordance with the following provisions:

     8.1 Deferred Compensation. Each grant shall constitute the agreement by
the Company to issue or transfer Shares to the Participant in the future in consideration
of the performance of services, subject to the fulfillment during the Deferral Period of
such conditions as the Committee may specify.

     8.2 Consideration. Each grant may be made without additional
consideration from the Participant or in consideration of a payment by the Participant
that is less than the Fair Market Value on the Grant Date.

     8.3 Deferral Period. Each grant shall provide that the Deferred Shares
(Restricted Stock Units) covered thereby shall be subject to a Deferral Period, which
shall be fixed by the Committee on the Grant Date, and any grant or sale may provide for
the earlier termination of such period in the event of a change in control of the Company
or other similar transaction or event.

     8.4 Dividend Equivalents and Other Ownership Rights. During the Deferral
Period, the Participant shall not have any right to transfer any rights under the subject
Award, shall not have any rights of ownership in the Deferred Shares and shall not have
any right to vote such shares, but the Committee may on or after the Grant Date authorize
the payment of dividend equivalents on such shares in cash or additional Shares on a
current, deferred or contingent basis with respect to any or all dividends or other
distributions paid by the Company.

     8.5 Performance Objectives. Any grant or the vesting thereof may be
further conditioned upon the attainment of Performance Objectives established by the
Committee in accordance with the applicable provisions of Section 9 regarding Performance
Shares and Performance Units.

     8.6 Award Agreement. Each grant shall be evidenced by an Award Agreement
containing such terms and provisions as the Committee may determine consistent with this
Plan.

     9. Performance Shares and Performance Units. The Committee may also authorize
grants of Performance Shares and Performance Units, which shall become
payable to the Participant upon the achievement of specified Performance
Objectives, upon such terms and conditions as the Committee may determine in accordance with the
following provisions:

     9.1 Number of Performance Shares or Units. Each grant shall specify the
number of Performance Shares or Performance Units to which it pertains, which may be
subject to adjustment to reflect changes in compensation or other factors.

38

 

     9.2 Performance Period. The Performance Period with respect to each
Performance Share or Performance Unit shall be determined by the Committee and set forth
in the Award Agreement and may be subject to earlier termination in the event of a change
in control of the Company or other similar transaction or event.

     9.3 Performance Objectives. Each grant shall specify the Performance
Objectives that are to be achieved by the Participant.

     9.4 Threshold Performance Objectives. Each grant may specify in respect
of the specified Performance Objectives a minimum acceptable level of achievement below
which no payment will be made and may set forth a formula for determining the amount of any payment
to be made if performance is at or above such minimum acceptable level but falls short of
the maximum achievement of the specified Performance Objectives.

     9.5 Payment of Performance Shares and Units. Each grant shall specify the
time and manner of payment of Performance Shares or Performance Units that shall have
been earned, and any grant may specify that any such amount will be paid by the Company
in cash, Shares or any combination thereof or may grant to the Participant or reserve to
the Committee the right to elect among those alternatives.

     9.6 Maximum Payment. Any grant of Performance Shares may specify that the
amount payable with respect thereto may not exceed a maximum specified by the Committee
on the Grant Date. Any grant of Performance Units may specify that the amount payable,
or the number of Shares issued, with respect thereto may not exceed maximums specified by
the Committee on the Grant Date.

     9.7 Dividend Equivalents. Any grant of Performance Shares may provide for
the payment to the Participant of dividend equivalents thereon in cash or additional
Shares on a current, deferred or contingent basis with respect to any or all dividends or
other distributions paid by the Company.

     9.8 Adjustment of Performance Objectives. If provided in the terms of the
grant, the Committee may adjust Performance Objectives and the related minimum acceptable
level of achievement if, in the sole judgment of the Committee, events or transactions
have occurred after the Grant Date that are unrelated to the performance of the
Participant and result in distortion of the Performance Objectives or the related minimum
acceptable level of achievement.

     9.9 Award Agreement. Each grant shall be evidenced by an Award Agreement
which shall state that the Performance Shares or Performance Units are subject to all of
the terms and conditions of this Plan and such other terms and provisions as the
Committee may determine consistent with this Plan.

     10. Transferability.

     10.1 Transfer Restrictions. Except as provided in Sections 10.2 and 10.4,
no Award granted under this Plan shall be transferable by a Participant other than upon
death by will or the laws of descent and distribution or designation of a beneficiary in
a form acceptable to the Committee, and Options and Stock Appreciation Rights shall be
exercisable during a Participant’s lifetime only by the Participant or, in the event of
the Participant’s legal incapacity, by his guardian or legal representative acting in a
fiduciary capacity on behalf of the Participant under state law. Any attempt to transfer
an Award in violation of this Plan shall render such Award null and void.

     10.2 Limited Transfer Rights. The Committee may expressly provide in an
Award Agreement (or an amendment to an Award Agreement) that a Participant may transfer
such Award (other than an Incentive Stock Option), in whole or in part, to a spouse or
lineal descendant (a “Family Member”), a trust for the exclusive benefit of Family
Members, a partnership or other entity in which all the beneficial owners are Family
Members, or any other entity affiliated with the Participant that may be approved by the
Committee. Subsequent transfers of Awards shall be prohibited except in accordance with
this Section 10.2. All terms and conditions of the Award, including provisions relating
to the termination of the Participant’s employment or service with the Company or a
Subsidiary, shall continue to apply following a transfer made in accordance with this
Section 10.2.

39

 

     10.3 Restrictions on Transfer. Any Award made under this Plan may provide
that all or any part of the Shares that are (i) to be issued or transferred by the
Company upon the exercise of Options or Stock Appreciation Rights, upon the termination
of the Deferral Period applicable to Deferred Shares (Restricted Stock Units) or upon
payment under any grant of Performance Shares or
Performance Units, or (ii) no longer subject to the substantial risk of forfeiture
and restrictions on transfer referred to in Section 7, shall be subject to further
restrictions upon transfer.

     10.4 Domestic Relations Orders. Notwithstanding the foregoing provisions
of this Section 10, any Award made under this Plan may be transferred as necessary to
fulfill any domestic relations order as defined in Code Section 414(p)(1)(B).

     10.5 Adjustments. The Committee may make or provide for such adjustments
in the (a) number of Shares covered by outstanding Options, Stock Appreciation Rights,
Deferred Shares (Restricted Stock Units), Restricted Shares and Performance Shares
granted hereunder, (b) prices per share applicable to such Options and Stock Appreciation
Rights, and (c) kind of shares covered thereby (including shares of another issuer), as
the Committee in its sole discretion may in good faith determine to be equitably required
in order to prevent dilution or enlargement of the rights of Participants that otherwise
would result from (x) any stock dividend, stock split, combination or exchange of Shares,
recapitalization or other change in the capital structure of the Company, (y) any merger,
consolidation, spin–off, spin–out, split–off, split–up, reorganization, partial or
complete liquidation or other distribution of assets (other than a normal cash dividend),
issuance of rights or warrants to purchase securities or (z) any other corporate
transaction or event having an effect similar to any of the foregoing. Moreover, in the
event of any such transaction or event, the Committee may provide in substitution for any
or all outstanding Awards under this Plan such alternative consideration as it may in
good faith determine to be equitable under the circumstances and may require in
connection therewith the cancellation or surrender of all Awards so replaced. The
Committee may also make or provide for such adjustments in each of the limitations
specified in Section 3 as the Committee in its sole discretion may in good faith
determine to be appropriate in order to reflect any transaction or event described in
this Section 11.

     10.6 Change in Control. The Committee shall also be authorized to
determine and specify in any Award Agreement provisions which shall apply upon a change
in control of the Company and for such purposes to define a change in control of the
Company. Unless otherwise defined in an Award Agreement, a “Change in Control” of the
Company for purposes of Awards made under this Plan shall mean any of the following
events: (a) a dissolution or liquidation of the Company, (b) a sale of substantially all
of the assets of the Company, (c) a merger or combination involving the Company after
which the owners of Common Stock of the Company immediately prior to the merger or
combination own less than 50% of the outstanding shares of common stock of the surviving
corporation, or (d) the acquisition of more than 50% of the outstanding shares of Common
Stock of the Company, whether by tender offer or otherwise, by any “person” (as such term
is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934) other than a
trustee or other fiduciary holding securities under an employee benefit plan of the
Company. The decision of the Committee as to whether a Change in Control has occurred
shall be conclusive and binding.

     10.7 Cash-Out. In connection with any change in control, the Committee,
without the consent of Participants, may determine that (i) any or all outstanding
Options or Stock Appreciation Rights shall be automatically exercised and cashed out in
exchange for a cash payment for such Options and Stock Appreciation Rights which may not
exceed the Spread between the Option Price or Base Price and Fair Market Value on the
date of exercise, and (ii) any or all other outstanding Awards shall be cashed out in
exchange for such consideration as the Committee may in good faith determine to be
equitable under the circumstances.

     11. Fractional Shares. The Company shall not be required to issue any fractional
Shares pursuant to this Plan. The Committee may provide for the elimination of fractions or for
the settlement thereof in cash.

     12. Withholding Taxes. To the extent that the Company is required to withhold
federal, state, local or foreign taxes in connection with any payment made or benefit realized by a
Participant or other person under this Plan, it shall be a condition to the receipt of such payment
or the realization of such benefit that the Participant or such other person make arrangements
satisfactory to the Company for payment of all such taxes required to be withheld. At the
discretion of the Committee, such arrangements may include relinquishment of a portion of such
benefit. The Fair Market Value of any Shares

40

 

withheld or tendered to satisfy any such tax
withholding obligations shall not exceed the amount determined by the applicable minimum statutory
tax withholding rates.

     13. Certain Terminations of Employment, Hardship and Approved Leaves of Absence.
Notwithstanding any other provision of this Plan to the contrary, in the event of termination of
employment by reason of death, disability, normal retirement, early retirement with the consent of
the Company or leave of absence approved by the Company, or in the event of hardship or other
special circumstances, of a Participant who holds an Option or Stock Appreciation Right that is not
immediately and fully exercisable, any Restricted Shares as to which the substantial risk of
forfeiture or the prohibition or restriction on transfer has not lapsed, any Deferred Shares
(Restricted Stock Units) as to which the Deferral Period is not complete, any Performance Shares or
Performance Units that have not been fully earned, or any Shares that are subject to any transfer
restriction pursuant to Section 10.3, the Committee may in its sole discretion take any action that
it deems to be equitable under the circumstances or in the best interests of the Company,
including, without limitation, waiving or modifying any limitation or requirement with respect to
any Award under this Plan. However, any such actions taken by the Committee must comply with the
provisions of Section 21 and the requirements of Code Section 409A.

     14. Foreign Participants. In order to facilitate the making of any grant or
combination of grants under this Plan, the Committee may provide for such special terms for Awards
to Participants who are foreign nationals, or who are employed by or perform services for the
Company or any Subsidiary outside of the United States of America, as the Committee may consider
necessary or appropriate to accommodate differences in local law, tax policy or custom. Moreover,
the Committee may approve such supplements to, or amendments, restatements or alternative versions
of, this Plan as it may consider necessary or appropriate for such purposes without thereby
affecting the terms of this Plan as in effect for any other purpose, provided that no such
supplements, amendments, restatements or alternative versions shall include any provisions that are
inconsistent with the terms of this Plan, as then in effect, unless this Plan could have been
amended to eliminate such inconsistency without further approval by the stockholders of the
Company.

     15. Amendments and Other Matters.

     15.1 Plan Amendments. This Plan may be amended from time to time by the
Board, but no such amendment shall increase any of the limitations specified in Section
3, other than to reflect an adjustment made in accordance with Section 11, without the
further approval of the stockholders of the Company. The Board may condition any
amendment on the approval of the stockholders of the Company if such approval is
necessary or deemed advisable with respect to the applicable listing or other
requirements of a national securities exchange or other applicable laws, policies or
regulations.

     15.2 Award Deferrals. The Committee may permit Participants to elect to
defer the issuance of Shares or the settlement of Awards in cash under the Plan pursuant
to such rules, procedures or programs as it may establish for purposes of this Plan. In
the case of an award of Restricted Shares, the deferral may be effected by the
Participant’s agreement to forego or exchange his of her award of Restricted Shares and
receive an award of Deferred Shares (Restricted Stock Units). The Committee also may
provide that deferred settlements include the payment or crediting of interest on the
deferral amounts, or the payment or crediting of dividend equivalents where the deferral
amounts are denominated in Shares. However, any Award deferrals which the Committee
permits must comply with the provisions of Section 21 and the requirements of Code
Section 409A.

     15.3 Conditional Awards. The Committee may condition the grant of any
award or combination of Awards under the Plan on the surrender or deferral by the
Participant of his or her right to receive a cash bonus or other compensation otherwise
payable by the Company or any Subsidiary to the Participant, provided that any such grant
must comply with the provisions of Section 21 and the requirements of Code Section 409A.

     15.4 Repricing Prohibited. The Committee shall not reprice any
outstanding Option, directly or indirectly, without the approval of the stockholders of
the Company, provided that nothing
herein shall prevent the Committee from taking any action provided for in Section
11. For this purpose, repricing of an Option shall include (i) reducing the exercise
price of an Option or (ii) cancelling or settling for cash or other consideration an
outstanding Option and granting a replacement Option at a lower exercise price, within
six months before or after the cancellation.

41

 

     15.5 No Employment Right. This Plan shall not confer upon any Participant
any right with respect to continuance of employment or other service with the Company or
any Subsidiary and shall not interfere in any way with any right that the Company or any
Subsidiary would otherwise have to terminate any Participant’s employment or other
service at any time.

     15.6 Tax Qualification. To the extent that any provision of this Plan
would prevent any Option that was intended to qualify under particular provisions of the
Code from so qualifying, such provision of this Plan shall be null and void with respect
to such Option, provided that such provision shall remain in effect with respect to other
Options, and there shall be no further effect on any provision of this Plan.

     15.7 Amendments to Comply with Laws, Regulations or Rules.
Notwithstanding any other provision of the Plan or any Award Agreement to the contrary,
in its sole and absolute discretion and without the consent of any Participant, the Board
may amend the Plan, and the Committee may amend any Award Agreement, to take effect
retroactively or otherwise as it deems necessary or advisable for the purpose of
conforming the Plan or such Award Agreement to any present or future law, regulation or
rule applicable to the Plan, including, but not limited to, Code Section 409A.

     16. Effective Date. This Plan shall become effective upon its approval by the
stockholders of the Company.

     17. Termination. This Plan shall terminate on the tenth anniversary of the date
upon which it is approved by the stockholders of the Company, and no Award shall be granted after
that date.

     18. Limitations Period. Any person who believes he or she is being denied any
benefit or right under the Plan may file a written claim with the Committee. Any claim must be
delivered to the Committee within forty-five (45) days of the specific event giving rise to the
claim. Untimely claims will not be processed and shall be deemed denied. The Committee, or its
designated agent, will notify the Participant of its decision in writing as soon as
administratively practicable. Claims not responded to by the Committee in writing within ninety
(90) days of the date the written claim is delivered to the Committee shall be deemed denied. The
Committee’s decision shall be final, conclusive and binding on all persons. No lawsuit relating to
the Plan may be filed before a written claim is filed with the Committee and is denied or deemed
denied, and any lawsuit must be filed within one year of such denial or deemed denial or be forever
barred.

     19. Governing Law. The validity, construction and effect of this Plan and any Award
hereunder will be determined in accordance with the Delaware General Corporation Law, except to the
extent governed by applicable federal law.

     20. Compliance with Code Section 409A.

     20.1 Awards Subject to Section 409A. The provisions of this Section 21
shall apply to any Award or portion thereof that is or becomes subject to Code Section
409A (“Section 409A”), notwithstanding any provision to the contrary contained in the
Plan or the Award Agreement applicable to such Award. Awards subject to Section 409A
include, without limitation:

     (a) Any Nonstatutory Stock Option or Stock Appreciation Right that
permits the deferral of compensation other than the deferral of recognition of
income until the exercise of the Award.

     (b) Any other Award that either (i) provides by its terms for
settlement of all or any portion of the Award on one or more dates following the
Short-Term Deferral Period (as defined below) or (ii) permits or requires the
Participant to elect one or more dates on which the Award will be settled.

Subject to any applicable U.S. Treasury Regulations promulgated pursuant to Section 409A
or other applicable guidance, the term “Short-Term Deferral Period” means the period
ending on the later of (i) the date that is two and one-half months from the end of the
Company’s fiscal year in which the applicable portion of the Award is no longer subject
to a substantial risk of forfeiture or (ii) the date that is two and one-half months from
the end of the Participant’s taxable year in which the applicable portion of the Award is
no longer subject to a substantial risk of

42

 

forfeiture. For this purpose, the term
“substantial risk of forfeiture” shall have the meaning set forth in any applicable U.S.
Treasury Regulations promulgated pursuant to Section 409A or other applicable guidance.

     20.2 Deferral and/or Distribution Elections. Except as otherwise
permitted or required by Section 409A or any applicable U.S. Treasury Regulations
promulgated pursuant to Section 409A or other applicable guidance, the following rules
shall apply to any deferral and/or distribution elections (each, an “Election”) that may
be permitted or required by the Committee pursuant to an Award subject to Section 409A:

     (a) All Elections must be in writing and specify the amount of the
distribution in settlement of an Award being deferred, as well as the time and form
of distribution as permitted by this Plan.

     (b) All Elections shall be made by the end of the Participant’s
taxable year prior to the year in which services commence for which an Award may be
granted to such Participant; provided, however, that if the Award qualifies as
“performance-based compensation” for purposes of Section 409A and is based on
services performed over a period of at least twelve (12) months, then the Election
may be made no later than six (6) months prior to the end of such period.

     (c) Elections shall continue in effect until a written election to
revoke or change such Election is received by the Company, except that a written
election to revoke or change such Election must be made prior to the last day for
making an Election determined in accordance with paragraph (b) above or as permitted
by Section 21.3.

     20.3 Subsequent Elections. Any Award subject to Section 409A which
permits a subsequent Election to delay the distribution or change the form of
distribution in settlement of such Award shall comply with the following requirements:

     (a) No subsequent Election may take effect until at least twelve (12)
months after the date on which the subsequent Election is made;

     (b) Each subsequent Election related to a distribution in settlement
of an Award not described in Section 21.4(b), 21.4(c) or 21.4(f) must result in a
delay of the distribution for a period of not less than five (5) years from the date
such distribution would otherwise have been made; and

     (c) No subsequent Election related to a distribution pursuant to
Section 21.4(d) shall be made less than twelve (12) months prior to the date of the
first scheduled payment under such distribution.

     20.4 Distributions Pursuant to Deferral Elections. No distribution in
settlement of an Award subject to Section 409A may commence earlier than:

     (a) Separation from service (as determined pursuant to U.S. Treasury
Regulations or other applicable guidance);

     (b) The date the Participant becomes Disabled (as defined below);

     (c) Death;

     (d) A specified time (or pursuant to a fixed schedule) that is either
(i) specified by the Committee upon the grant of an Award and set forth in the Award
Agreement evidencing such Award or (ii) specified by the Participant in an Election
complying with the requirements of Section 21.2 and/or 21.3, as applicable;

     (e) To the extent provided by U.S. Treasury Regulations promulgated
pursuant to Section 409A or other applicable guidance, a change in the ownership or
effective control or the Company or in the ownership of a substantial portion of the
assets of the Company; or

43

 

     (f) The occurrence of an Unforeseeable Emergency (as defined below).

Notwithstanding anything else herein to the contrary, to the extent that a Participant is
a “Specified Employee” (as defined in Code Section 409A(a)(2)(B)(i)), no distribution
pursuant to Section 21.4(a) in settlement of an Award subject to Section 409A may be made
before the date which is six (6) months after such Participant’s date of separation from
service, or, if earlier, the date of the Participant’s death.

     20.5 Unforeseeable Emergency. The Committee shall have the authority to
provide in the Award Agreement evidencing any Award subject to Section 409A for
distribution in settlement of all or a portion of such Award in the event that a
Participant establishes, to the satisfaction of the Committee, the occurrence of an
Unforeseeable Emergency (as defined in Section 409A). In such event, the amount(s)
distributed with respect to such Unforeseeable Emergency cannot exceed the amounts
necessary to satisfy such Unforeseeable Emergency plus amounts necessary to pay taxes
reasonably anticipated as a result of such distribution(s), after taking into account the
extent to which such hardship is or may be relieved through reimbursement or compensation
by insurance or otherwise or by liquidation of the Participant’s assets (to the extent
the liquidation of such assets would not itself cause severe financial hardship). All
distributions with respect to an Unforeseeable Emergency shall be made in a lump sum as
soon as practicable following the Committee’s determination that an Unforeseeable
Emergency has occurred. The occurrence of an Unforeseeable Emergency shall be judged and
determined by the Committee. The Committee’s decision with respect to whether an
Unforeseeable Emergency has occurred and the manner in which, if at all, the distribution
in settlement of an Award shall be altered or modified, shall be final, conclusive, and
not subject to approval or appeal.

     20.6 Disabled. The Committee shall have the authority to provide in the
Award Agreement evidencing any Award subject to Section 409A for distribution in
settlement of such Award in the event that the Participant becomes Disabled. A
Participant shall be considered “Disabled” if either:

     (a) the Participant is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which
can be expected to result in death or can be expected to last for a continuous
period of not less than twelve (12) months, or

     (b) the Participant is, by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months,
receiving income replacement benefits for a period of not less than three (3) months
under an accident and health plan covering employees of the Participant’s employer.

All distributions payable by reason of a Participant becoming Disabled shall be paid in a
lump sum or in periodic installments as established by the Participant’s Election,
commencing as soon as practicable following the date the Participant becomes Disabled.
If the Participant has made no Election with respect to distributions upon becoming
Disabled, all such distributions shall be paid in a lump sum as soon as practicable
following the date the Participant becomes Disabled.

     20.7 Death. If a Participant dies before complete distribution of amounts
payable upon settlement of an Award subject to Section 409A, such undistributed amounts
shall be distributed to his or her beneficiary under the distribution method for death
established by the Participant’s Election as soon as administratively possible following
receipt by the Committee of satisfactory notice and confirmation of the Participant’s
death. If the Participant has made no Election with respect to distributions upon death,
all such distributions shall be paid in a lump sum as soon as practicable following the
date of the Participant’s death.

     20.8 No Acceleration of Distributions. Notwithstanding anything to the
contrary herein, this Plan does not permit the acceleration of the time or schedule of
any distribution under this Plan in settlement of an Award subject to Section 409A,
except as provided by Section 409A and/or U.S. Treasury Regulations promulgated pursuant
to Section 409A or other applicable guidance.

     21. Predecessor Plan. Upon stockholder approval of this Plan pursuant to Section
17, no new awards will be granted under the Predecessor Plan, and any awards for Shares granted
under the Predecessor Plan after December 1, 2005 will reduce the number of Shares available for
Awards under Section 3.1 using the share reduction ratios set
forth in Section 3.2.

44

 

LINDSAY MANUFACTURING CO.

Restricted Stock Units

Granted Pursuant to the

2006 Long-Term Incentive Plan 

Agreement with U.S. Employee

Lindsay Manufacturing Co. (“Company”) grants to you, as a matter of separate inducement and not in
lieu of salary or other compensation for services, the following award of Restricted Stock Units
(“Units”) pursuant to the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”). Except
as otherwise specified in the attached Terms and Conditions or herein, vesting of the Units is
conditioned upon you being continuously employed by the Company or a subsidiary from the Grant Date
to each relevant vesting date.

Restricted Stock Units

You are awarded the following Restricted Stock Units. Each Unit is the equivalent of one Share of
Common Stock and will be distributed on the relevant vesting date (or as soon thereafter as
practicable) in the form of Shares of Common Stock. The Units will vest ratably (one-third each
year) on November 1 of the next three calendar years following the Grant Date.

	 	 	 	 	 	 	 
	Grantee:

	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Grant Date:	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 	 	 
	Units
Awarded: 	 	 	 	 
	 

	 	 	 	 	 

You acknowledge that you have received this Agreement with the attached Terms and Conditions, and
you agree to accept and be bound by the provisions of the Plan and this Agreement including the
Terms and Conditions effective as of the Grant Date.

	 	 	 	 	 	 	 
	 	 	LINDSAY MANUFACTURING CO.  
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

I have received a copy of LMC Policy No. 14 concerning “Notice of Confidentiality of
Information/Restrictions on “Trading” in Stock” and understand and agree to comply with said
Policy.

	 	 	 	 	 	 	 
	 	 	GRANTEE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 

 

 

GRANT DATE:                     

LINDSAY MANUFACTURING CO.

2006 LONG-TERM INCENTIVE PLAN

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

GRANTED TO U.S. EMPLOYEES

These terms and condition are made part of the Agreement dated as of the Grant Date indicated above
awarding Restricted Stock Units pursuant to the terms of the Lindsay Manufacturing Co. 2006
Long-Term Incentive Plan (“Plan”). All capitalized terms used herein shall have the meaning set
forth in the Plan, unless the Agreement (including these terms and conditions) specifies a
different meaning.

          Section 1. Form and Purpose of Award. Each Restricted Stock Unit (“Unit”)
represents a non-transferable right to receive one Share of the Company’s Common Stock ($1.00 par
value) on the applicable vesting date (or as soon thereafter as practicable). The purpose of this
award is to motivate your future performance and to align your interests with those of the Company
and its shareholders.

          Section 2. Special Cash Dividend Equivalents. If any special cash dividend (other
than regular quarterly dividends) is paid by the Company on its Common Stock while Restricted Stock
Units under this award are outstanding, you will be credited with additional Units, the number of
which shall be determined by first (i) multiplying the number of your outstanding Units on the
payment date of the special cash dividend (“Dividend Payment Date”) by the per share dollar amount
of the special cash dividend, and then (ii) dividing the resulting amount by the Fair Market Value
of a Share of Common Stock on the Dividend Payment Date (such additional Units being referred to
herein as “Special Cash Dividend Equivalents”). Additional Units which are credited as Special
Cash Dividend Equivalents will be treated for purposes of vesting and payment (and any other
applicable terms and conditions) as if part of the original Units in relation to which such
additional Units are credited as Special Cash Dividend Equivalents. No cash payment or dividend
equivalent shall be payable in connection with any regular quarterly dividends which are paid by
the Company on its Common Stock.

          Section 3. Vesting Dates/Vesting Periods.

          3.1 The Units will vest according to the vesting schedule in your Agreement, provided that
you are continuously employed by the Company through the relevant vesting date or you meet the
requirements for vesting described below. The period from the Grant Date to each vesting date will
be a separate vesting period.

          3.2 All outstanding Units shall become fully vested and immediately payable upon a Change
in Control (as such term is defined in the Plan) of the Company.

          3.3 All outstanding Units shall become fully vested and immediately payable if your
employment with the Company is terminated due to your death or permanent and total disability. In
the event of your death, your outstanding Units will be distributed in Shares of Common Stock to
your designated beneficiary on file with the Company, or if no beneficiary has been designated or
survives you, then to your estate.

          3.4 Except as provided in this Section 3, all of your outstanding Units shall be forfeited
if your employment with the Company terminates for any reason (including retirement) prior to the
relevant vesting date set forth in the vesting schedule in your Agreement.

          Section 4. Withholding Taxes. The Company will retain from each distribution the
number of Shares of Common Stock required to satisfy the statutory minimum required amount of
Federal and State tax withholding obligations.

- 1 -

 

          Section 5. Miscellaneous Provisions.

          5.1 Restricted Stock Units do not convey the rights of ownership of Shares of Common Stock
and do not carry voting rights. Shares of Common Stock will not be issued to you until Units have
vested, and Shares will be issued in accordance with the Company’s procedures for issuing Common
Stock. The Company’s obligation hereunder is unfunded.

          5.2 All outstanding Units shall be appropriately adjusted as determined by the Committee in
the event of any stock dividends, stock splits or reverse stock splits of Common Stock of the
Company. No fractional Shares of Common Stock will be issued. The Company may make such
adjustments as it deems appropriate to eliminate fractional Share interests.

          5.3 The Agreement may only be amended in writing with the approval of the Committee. The
Agreement will be binding upon any successor in interest to Lindsay Manufacturing Co. by merger or
otherwise.

          5.4 Nothing contained in the Agreement shall confer on the Grantee any right with respect
to continuation of employment with the Company, or interfere with the right of the Company to
terminate at any time and for any reason the employment of the Grantee.

          5.5 The Units and rights under the Agreement may not be sold, conveyed, assigned,
transferred, pledged or otherwise disposed of or encumbered at any time, except upon the Grantee’s
death by will or the laws of descent and distribution or written designation of a beneficiary by
the Grantee in a form acceptable to the Company. Any attempted action in violation of this
paragraph shall be null, void and without effect.

          5.6 The Company intends that the grant of Units under the Agreement will not be subject to
Section 409A of the Internal Revenue Code of 1986, as amended, because all payments with respect to
the Units will qualify for the exception from coverage under Section 409A for short-term deferrals.
The Agreement shall be interpreted in a manner which is consistent with the foregoing intent. The
Committee may not take any action or exercise any discretion under the Plan in a manner which will
cause the Units granted under the Agreement to be subject to Code Section 409A. Each payment which
becomes due under the Agreement shall be made as soon as practicable on or after the date when the
right to receive the payment vests. The latest date for any payment shall be the end of the
calendar year in which the Grantee’s right to receive the payment becomes vested, or if this is not
practicable, not later than the 15th day of the third month following the end of such
calendar year.

- 2 -

 

LINDSAY MANUFACTURING CO.

Restricted Stock Units

Granted Pursuant to the

2006 Long-Term Incentive Plan 

Agreement with Director

Lindsay Manufacturing Co. (“Company”) grants to you, as a matter of separate inducement and not in
lieu of other compensation for services, the following award of Restricted Stock Units (“Units”)
pursuant to the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan (“Plan”). Except as
otherwise specified in the attached Terms and Conditions or herein, vesting of the Units is
conditioned upon you continuing to serve as a Director of the Company from the Grant Date to the
vesting date.

Restricted Stock Units

You are awarded the following Restricted Stock Units. Each Unit is the equivalent of one Share of
Common Stock and will be distributed on the vesting date (or as soon thereafter as practicable) in
the form of Shares of Common Stock. The Units will vest on November 1 next following the Grant
Date.

	 	 	 	 	 	 	 
	Grantee: 

	 	 	 	 	 	 
	 	 	 	 
	 
	 	 	 	 	 	 
	Grant Date:	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 	 	 
	Units Awarded:	 	 	 	 
	 

	 	 	 	 	 

You acknowledge that you have received this Agreement with the attached Terms and Conditions, and
you agree to accept and be bound by the provisions of the Plan and this Agreement including the
Terms and Conditions effective as of the Grant Date.

	 	 	 	 	 	 	 
	 	 	LINDSAY MANUFACTURING CO.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 

I have received a copy of LMC Policy No. 14 concerning “Notice of Confidentiality of
Information/Restrictions on “Trading” in Stock” and understand and agree to comply with said
Policy.

	 	 	 	 	 	 	 
	 	 	GRANTEE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 

 

 

GRANT DATE:                     

LINDSAY MANUFACTURING CO.

2006 LONG-TERM INCENTIVE PLAN

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

GRANTED TO DIRECTORS

These terms and condition are made part of the Agreement dated as of the Grant Date indicated above
awarding Restricted Stock Units pursuant to the terms of the Lindsay Manufacturing Co. 2006
Long-Term Incentive Plan (“Plan”). All capitalized terms used herein shall have the meaning set
forth in the Plan, unless the Agreement (including these terms and conditions) specifies a
different meaning.

          Section 1. Form and Purpose of Award. Each Restricted Stock Unit (“Unit”)
represents a non-transferable right to receive one Share of the Company’s Common Stock ($1.00 par
value) on the vesting date (or as soon thereafter as practicable). The purpose of this award is to
motivate your future performance and to align your interests with those of the Company and its
shareholders.

          Section 2. Special Cash Dividend Equivalents. If any special cash dividend (other
than regular quarterly dividends) is paid by the Company on its Common Stock while Restricted Stock
Units under this award are outstanding, you will be credited with additional Units, the number of
which shall be determined by first (i) multiplying the number of your outstanding Units on the
payment date of the special cash dividend (“Dividend Payment Date”) by the per share dollar amount
of the special cash dividend, and then (ii) dividing the resulting amount by the Fair Market Value
of a Share of Common Stock on the Dividend Payment Date (such additional Units being referred to
herein as “Special Cash Dividend Equivalents”). Additional Units which are credited as Special
Cash Dividend Equivalents will be treated for purposes of vesting and payment (and any other
applicable terms and conditions) as if part of the original Units in relation to which such
additional Units are credited as Special Cash Dividend Equivalents. No cash payment or dividend
equivalent shall be payable in connection with any regular quarterly dividends which are paid by
the Company on its Common Stock.

          Section 3. Vesting Dates/Vesting Periods.

          3.1 The Units will vest on November 1 next following the Grant Date, provided that you are
continuing to serve as a Director of the Company through the vesting date or you meet the
requirements for vesting described below.

          3.2 All outstanding Units shall become fully vested and immediately payable upon a Change
in Control (as such term is defined in the Plan) of the Company.

          3.3 All outstanding Units shall become fully vested and immediately payable if your service
as a Director of the Company is terminated due to your death or permanent and total disability. In
the event of your death, your outstanding Units will be distributed in Shares of Common Stock to
your designated beneficiary on file with the Company, or if no beneficiary has been designated or
survives you, then to your estate.

          3.4 Except as provided in this Section 3, all of your outstanding Units shall be forfeited
if your service as a Director of the Company terminates for any reason (including retirement) prior
to the vesting date set forth in Section 3.1 above.

          Section 4. No Withholding Taxes. There are no withholding taxes applicable to this
award.

          Section 5. Miscellaneous Provisions.

          5.1 Restricted Stock Units do not convey the rights of ownership of Shares of Common Stock
and do not carry voting rights. Shares of Common Stock will not be issued to you until Units have
vested, and

- 1 -

 

Shares will be issued in accordance with the Company’s procedures for issuing Common Stock.
The Company’s obligation hereunder is unfunded.

          5.2 All outstanding Units shall be appropriately adjusted as determined by the Committee in
the event of any stock dividends, stock splits or reverse stock splits of Common Stock of the
Company. No fractional Shares of Common Stock will be issued. The Company may make such
adjustments as it deems appropriate to eliminate fractional Share interests.

          5.3 The Agreement may only be amended in writing with the approval of the Board upon
recommendation of the Committee. The Agreement will be binding upon any successor in interest to
Lindsay Manufacturing Co. by merger or otherwise.

          5.4 Nothing contained in the Agreement shall confer on the Grantee any right with respect
to continuation of service as a Director of the Company.

          5.5 The Units and rights under the Agreement may not be sold, conveyed, assigned,
transferred, pledged or otherwise disposed of or encumbered at any time, except upon the Grantee’s
death by will or the laws of descent and distribution or written designation of a beneficiary by
the Grantee in a form acceptable to the Company. Any attempted action in violation of this
paragraph shall be null, void and without effect.

          5.6 The Company intends that the grant of Units under the Agreement will not be subject to
Section 409A of the Internal Revenue Code of 1986, as amended, because all payments with respect to
the Units will qualify for the exception from coverage under Section 409A for short-term deferrals.
The Agreement shall be interpreted in a manner which is consistent with the foregoing intent. The
Committee and Board may not take any action or exercise any discretion under the Plan in a manner
which will cause the Units granted under the Agreement to be subject to Code Section 409A. Each
payment which becomes due under the Agreement shall be made as soon as practicable on or after the
date when the right to receive the payment vests. The latest date for any payment shall be the end
of the calendar year in which the Grantee’s right to receive the payment becomes vested, or if this
is not practicable, not later than the 15th day of the third month following the end of
such calendar year.

- 2 -

 

[NAME OF LINDSAY FOREIGN SUBSIDIARY]

AGREEMENT FOR CASH RESTRICTED STOCK UNITS

     THIS AGREEMENT is made and entered into this            day of                                         , 200     , by and
between [name of Lindsay Foreign Subsidiary] (hereinafter, “Employer”) and
                                                             (hereinafter “Grantee”).

W I T N E S S E T H:

     WHEREAS, Employer recognizes the value to it of the continuance of the services of Grantee as
an employee, and desires to furnish Grantee a greater personal interest in the success of Employer
and an added incentive to remain employed with Employer;

     NOW, THEREFORE, in consideration of the above premises and mutual covenants contained herein,
and in consideration of Grantee’s future and continuing service on behalf of Employer, the parties
hereby agree as follows:

     1. Grant of Units. Employer hereby grants to Grantee, as a matter of separate
inducement and not in lieu of salary or other compensation for services, the following award of
Cash Restricted Stock Units (“Units”). Except as otherwise specified herein, vesting of the Units
is conditioned upon Grantee being continuously employed by the Employer from the Grant Date to each
relevant vesting date.

Cash Restricted Stock Units

Grantee is awarded the following Cash Restricted Stock Units. Each Unit is the cash equivalent of
one share of Common Stock of Lindsay Manufacturing Co. (“Parent”) and will be distributed on the
relevant vesting date (or as soon thereafter as practicable) in the form of a cash payment. The
Units will vest ratably (one-third each year) on November 1 of the next three calendar years
following the Grant Date.

	 	 	 	 	 
	Grant Date:

	 	 	 	 
	 

	 	 	 	 

	 	 	 	 	 
	Units Awarded:

	 	 	 	 
	 

	 	 	 	 

     2. No Employment Rights. This Agreement shall not be construed to confer upon
Grantee any right to continue employment with the Employer, nor does it interfere with the right of
the Employer to terminate the employment of Grantee at any time with or without cause.

     3. No Acquired Rights. Grantee understands and agrees that the grant of Units
provided under this Agreement is completely discretionary in nature and is not to be considered
part of Grantee’s salary or compensation for purposes of calculating any severance, resignation,
redundancy, end-of-service payments, bonuses, long-term service awards, pension or retirement
benefits or similar payments, except as otherwise required under local law. Grantee further
understands and agrees that the grant of Units under this Agreement does not create any obligation
on the part of the Employer to grant Units or other rights to Grantee in the future.

     4. Forfeiture of Units. Grantee expressly acknowledges that, in the event
Grantee’s employment with the Employer is terminated prior to vesting of Units granted hereunder
for any reason, then all unvested Units granted hereunder to Grantee shall be cancelled, and
Grantee shall not be entitled to any payment therefor.

     5. Data Privacy Consent. Grantee hereby requests and gives consent to Employer to
access, store, process and transfer various personal data relating to Grantee, as often as
necessary, to Parent and any designated third party administrator located abroad, any overseas
broker and any other legitimate third parties for the purpose of implementing, administering and
managing the Grantee’s award under the Agreement and any other
compensation or

 

 

incentive plan or arrangement of Employer, Parent or its subsidiaries in which
Grantee is eligible to participate. Grantee further understands that Grantee may, at any time,
view the Grantee’s personal data so held and make any necessary amendments and corrections to the
data, and withdraw this consent at any time in writing. Grantee hereby agrees that neither
Employer, Parent or any of Parent’s subsidiaries, any designated plan administrator, any designated
broker, or any legitimate third party appointed by Parent shall be liable for any loss or damage,
whether direct or indirect or consequential, incurred by Grantee arising from the use of such
personal data as authorized herein.

     6. Successors and Assigns. The rights and obligations of the parties under this
Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of
Employer and to the personal representatives, executors, administrators and heirs of Grantee.

     7. Applicable Law. This Plan shall be construed in accordance with applicable
United States of America federal law and, to the extent otherwise applicable, the laws of the State
of Delaware.

     8. Entire Agreement. This Agreement (including the attached terms and conditions)
contains the entire agreement of the parties regarding the subject matter hereof.

     IN WITNESS WHEREOF, the parties have executed this Agreement effective as of the date and year
first above written.

	 	 	 	 	 	 	 
	 	 	[NAME OF LINDSAY FOREIGN SUBSIDIARY]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 
	 

	 	Its:	 	 	 	 
	 

	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	GRANTEE	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 

- 2 -

 

GRANT DATE:                     

[NAME OF LINDSAY FOREIGN SUBSIDIARY]

TERMS AND CONDITIONS OF CASH RESTRICTED STOCK UNITS

These terms and condition are made part of the Agreement dated as of the Grant Date indicated above
awarding Cash Restricted Stock Units.

          Section 1. Form and Purpose of Award. Each Cash Restricted Stock Unit (“Unit”)
represents a non-transferable right to receive in cash the “fair market value” of one share of
Common Stock ($1.00 par value) of Lindsay Manufacturing Co. (“Parent”) on the applicable vesting
date. The purpose of this award is to motivate your future performance and to align your interests
with those of the Employer, Parent and its shareholders. For purposes of the Agreement, the “fair
market value” of one share of Parent’s Common Stock shall be the last price per share at which the
Common Stock is sold in the regular way on the New York Stock Exchange or other national securities
exchange or NASDAQ on the relevant vesting date or, in the absence of any reported sales on such
day, the first preceding day on which there were such sales. The “fair market value” shall be
determined based on United States dollars. All payments which become due under the Agreement shall
be converted to local currency at the time each payment is made based on the then current exchange
rate.

          Section 2. Special Cash Dividend Equivalents. If any special cash dividend (other
than regular quarterly dividends) is paid by Parent on its Common Stock while Cash Restricted Stock
Units under this award are outstanding, you will be credited with additional Units, the number of
which shall be determined by first (i) multiplying the number of your outstanding Units on the
payment date of the special cash dividend (“Dividend Payment Date”) by the per share dollar amount
of the special cash dividend, and then (ii) dividing the resulting amount by the “fair market
value” of a share of Common Stock on the Dividend Payment Date (such additional Units being
referred to herein as “Special Cash Dividend Equivalents”). Additional Units which are credited as
Special Cash Dividend Equivalents will be treated for purposes of vesting and payment (and any
other applicable terms and conditions) as if part of the original Units in relation to which such
additional Units are credited as Special Cash Dividend Equivalents. No cash payment or dividend
equivalent shall be payable in connection with any regular quarterly dividends which are paid by
Parent on its Common Stock.

          Section 3. Vesting Dates/Vesting Periods.

          3.1 The Units will vest according to the vesting schedule in your Agreement, provided that
you are continuously employed by the Employer through the relevant vesting date or you meet the
requirements for vesting described below. The period from the Grant Date to each vesting date will
be a separate vesting period.

          3.2 All outstanding Units shall become fully vested and immediately payable upon a Change
in Control (as such term is defined in the Lindsay Manufacturing Co. 2006 Long-Term Incentive Plan
(“Plan”)) of Parent.

          3.3 All outstanding Units shall become fully vested and immediately payable if your
employment with the Employer is terminated due to your death or permanent and total disability. In
the event of your death, the value of your outstanding Units will be distributed in cash to your
designated beneficiary on file with the Employer, or if no beneficiary has been designated or
survives you, then to your estate.

          3.4 Except as provided in this Section 3, all of your outstanding Units shall be forfeited
if your employment with the Employer terminates for any reason (including retirement) prior to the
relevant vesting date set forth in the vesting schedule in your Agreement.

          Section 4. Withholding Taxes. All payments of the vested portion of Units shall be
subject to applicable withholding and reporting according to applicable law. The Employer will
retain from each distribution the required amount of tax withholding obligations.

 

 

          Section 5. Miscellaneous Provisions.

          5.1 Cash Restricted Stock Units do not convey the rights of ownership of Common Stock and
do not carry voting rights. The Employer’s obligation hereunder is unfunded.

          5.2 All outstanding Units shall be appropriately adjusted as determined by the Committee
which administers the Plan in the event of any stock dividends, stock splits or reverse stock
splits of Common Stock of Parent.

          5.3 The Agreement may only be amended in writing with the approval of the President of
Parent. The Agreement will be binding upon any successor in interest to the Employer by merger or
otherwise.

          5.4 Nothing contained in the Agreement shall confer on the Grantee any right with respect
to continuation of employment with the Employer, or interfere with the right of the Employer to
terminate at any time and for any reason the employment of the Grantee.

          5.5 The Units and rights under the Agreement may not be sold, conveyed, assigned,
transferred, pledged or otherwise disposed of or encumbered at any time, except upon the Grantee’s
death by will or the laws of descent and distribution or written designation of a beneficiary by
the Grantee in a form acceptable to the Employer. Any attempted action in violation of this
paragraph shall be null, void and without effect.

          5.6 The Employer and Parent intend that the grant of Units under the Agreement will not be
subject to Section 409A of the Internal Revenue Code of 1986, as amended, because all payments with
respect to the Units will qualify for the exceptions from coverage under Section 409A for
short-term deferrals and foreign arrangements. The Agreement shall be interpreted in a manner
which is consistent with the foregoing intent. Each payment which becomes due under the Agreement
shall be made as soon as practicable on or after the date when the right to receive the payment
vests. The latest date for any payment shall be the end of the calendar year in which the
Grantee’s right to receive the payment becomes vested, or if this is not practicable, not later
than the 15th day of the third month following the end of such calendar year.

- 1 -

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