Document:

EX-10.1

EMPLOYMENT AGREEMENT

EMPLOYMENT AGREEMENT dated as of May 22, 2007, by and between RAIT FINANCIAL TRUST and JAMES
J. SEBRA the “Executive”).

WHEREAS, the Executive entered into an employment agreement with Taberna Realty Finance Trust
(“Taberna”) dated January 1, 2006 (the “Prior Agreement”);

WHEREAS, a subsidiary of RAIT FINANCIAL TRUST (formerly RAIT INVESTMENT TRUST) (the “Company”)
merged with Taberna, and Taberna thereby became a subsidiary of the Company (the “Merger”);

WHEREAS, the Company wishes to employ the Executive, and the Executive wishes to accept such
employment on the terms set forth below, effective May 22, 2007 (the “Effective Date”); and

WHEREAS, this agreement supersedes all previous agreements between the Executive and Taberna,
including the Prior Agreement:

Accordingly, the parties hereto agree as follows:

1. Term. The Company hereby employs the Executive, and the Executive accepts such
employment, for an initial term commencing on the Effective Date and continuing for a three-year
period following such date, unless sooner terminated in accordance with the provisions of Section 4
or Section 5; with such employment to continue for successive one-year periods in accordance with
the terms of this Agreement (subject to termination as aforesaid) unless either party notifies the
other party of non-renewal in writing prior to three months before the expiration of the initial
term and each annual renewal, as applicable (the period during which the Executive is employed
hereunder being hereinafter referred to as the “Term”).

2. Duties. During the Term, the Executive shall be employed by the Company and its
subsidiaries as Senior Vice President — Finance and Chief Accounting Officer of the Company,
reporting directly to the Chief Financial Officer, and, as such, the Executive shall faithfully
perform for the Company the duties of said offices and shall perform such other comparable duties
of an executive, managerial or administrative nature as shall be specified and designated from time
to time by the board of trustees of the Company (the “Board”). The Executive shall devote
substantially all of his business time and effort to the performance of his duties hereunder.

3. Compensation.

3.1 Salary. The Company shall pay the Executive during the Term a salary at a minimum
rate of $300,000 per annum (the “Annual Salary”), in accordance with the customary payroll
practices of the Company applicable to senior executives. The Board periodically shall review the
Executive’s Annual Salary and may provide for such increases therein as it may in its discretion
deem appropriate; provided that the Executive’s Annual Salary shall be increased by no less than
10% per annum on each of the first and second anniversaries of this Agreement. (Any such increased
salary shall constitute the “Annual Salary” as of the time of the increase.)

3.2 Bonus. During the Term, in addition to the Annual Salary, for each fiscal year of
the Company ending during the Term, the Executive shall have the opportunity to receive an annual
bonus in an amount and on such terms to be determined by the Company. Nothing contained in the
foregoing shall limit the Executive’s eligibility to receive any other bonus under any other bonus
plan, stock option or equity–based plan, or other policy or program of the Company.

3.3 Equity Compensation Plan. Executive shall be entitled to otherwise participate in
the Company’s 2005 Equity Compensation Plan (the “Plan”),and other Company equity plans and may
without limitation be granted Options (as such term is defined in the Plan) to purchase the
Company’s common shares and restricted shares under the Plan in the discretion of the Compensation
Committee.

3.4 Benefits-In General. The Executive shall be permitted during the Term to
participate in any group life, hospitalization or disability insurance plans, health programs,
retirement plans, 401k plans, fringe benefit programs and other benefits that may be available to
other senior executives of the Company generally, in each case to the extent that the Executive is
eligible under the terms of such plans or programs.

3.5 Vacation. The Executive shall be entitled to vacation of no less than 20 business
days per year, to be credited in accordance with the Company’s policies.

3.6 Expenses-In General. The Company shall pay or reimburse the Executive for all
ordinary and reasonable out-of-pocket expenses actually incurred (and, in the case of
reimbursement, paid) by the Executive during the Term in the performance of the Executive’s
services under this Agreement, in accordance with the Company’s policies regarding such
reimbursements.

4. Termination upon Death or Disability. If the Executive dies during the Term, the
Term shall terminate as of the date of death, and the obligations of the Company to or with respect
to the Executive shall terminate in their entirety upon such date except as otherwise provided
under this Section 4. If the Executive is unable to perform substantially and continuously the
duties assigned to him due to a disability as defined for purposes of the Company’s long-term
disability plan then in effect, or, if no such plan is in effect, by virtue of ill health or other
disability for more than 180 consecutive or non-consecutive days out of any consecutive 12-month
period, the Company shall have the right, to the extent permitted by law, to terminate the
employment of the Executive upon notice in writing to the Executive. Upon termination of
employment due to death or disability, (i) the Executive (or the Executive’s estate or
beneficiaries in the case of the death of the Executive) shall be entitled to receive any Annual
Salary and other benefits earned and accrued under this Agreement prior to the date of termination
(and reimbursement under this Agreement for expenses incurred prior to the date of
termination);(ii) the Executive shall be entitled to receive an amount equal to his Annual Salary
for the remainder of the year in which termination occurs; (iii)  without duplication of any
amounts due under clauses (i) and (ii), the Executive (or the Executive’s estate or beneficiaries
in the case of the death of the Executive) shall receive an amount equal to the annual bonus that,
in the absence of such termination, would have been payable for the fiscal year in which
termination occurs, payable at such time as would have applied in the absence of such termination,
with such amount to be multiplied by a fraction (x) the numerator of which is the number of days in
the fiscal year preceding the termination and (y) the denominator of which is 365; (iv) all
outstanding unvested equity-based awards pursuant to the Plan held by the Executive shall fully
vest and become immediately exercisable, as applicable, and subject to the terms of such awards;
and (v) the Executive (or the Executive’s estate or beneficiaries in the case of the death of the
Executive) shall have no further rights to any other compensation or benefits hereunder, or any
other rights hereunder (but, for the avoidance of doubt, shall receive such disability and death
benefits as may be provided under the Company’s plans and arrangements in accordance with their
terms).

5. Certain Terminations of Employment; Certain Benefits.

5.1 Termination by the Company for Cause; Termination by the Executive without Good
Reason.

(a) For purposes of this Agreement, “Cause” shall mean the Executive’s:

	 	(i)	 	commission of, and indictment for or formal
admission to a felony, or any crime of moral turpitude, dishonesty, or
breach of the Company’s code of ethics, or any crime involving the
Company;

	 	(ii)	 	engagement in fraud, misappropriation or
embezzlement;

	 	(iii)	 	continued gross insubordination after written notice thereof by
the Board;

	 	(iv)	 	continued failure to materially adhere to the
directions of the Board, to adhere to the Company’s written policies
and practices or to devote a substantial majority of his business time
and efforts to the Company and its subsidiaries; or

	 	(v)	 	material breach of any of the provisions of Section 6.

provided that the Company shall not be permitted to terminate the Executive for Cause except on
written notice given to the Executive at any time not more than 30 days following the occurrence of
any of the events described in clause (ii) through (v) above (or, if later, the Company’s knowledge
thereof). No termination for Cause under clause (i) through (v) shall be effective unless the
Board makes a determination that Cause exists after notice to the Executive, and the Executive has
been provided with an opportunity (with counsel of his choice) to contest the determination at a
meeting of the Board.

(b) The Company may terminate this Agreement and the Executive’s employment hereunder for
Cause, and the Executive may terminate his employment on at least 30 days’ written notice given to
the Company. If the Company terminates the Executive for Cause, or the Executive terminates his
employment and the termination by the Executive is not for Good Reason in accordance with Section
5.2, (i) the Executive shall receive Annual Salary and other benefits (including any bonus for a
fiscal year completed before termination and awarded but not yet paid, or in the event of a partial
fiscal year, a pro rata bonus earned through the date of such termination, which is to be
calculated based on the bonus earned in the prior fiscal year) earned and accrued under this
Agreement prior to the termination of employment (and reimbursement under this Agreement for
expenses incurred prior to the termination of employment); and (ii) the Executive shall have no
further rights to any other compensation or benefits under this Agreement on or after the
termination of employment.

5.2 Termination by the Company without Cause; Termination by the Executive for Good
Reason.

(a) For purposes of this Agreement, “Good Reason” shall mean, unless otherwise consented to by
the Executive,

	 	(i)	 	the material reduction of the Executive’s
title, authority, duties and responsibilities or the assignment to the
Executive of duties materially inconsistent with the Executive’s
position or positions with the Company;

	 	(ii)	 	a reduction in Annual Salary of the Executive;
or

	 	(iii)	 	the Company’s material and willful breach of
this Agreement.

Notwithstanding the foregoing, (i) Good Reason shall not be deemed to exist unless notice of
termination on account thereof (specifying a termination date no later than 30 days from the date
of such notice) is given no later than 30 days after the time at which the event or condition
purportedly giving rise to Good Reason first occurs or arises and (ii) if there exists (without
regard to this clause (ii)) an event or condition that constitutes Good Reason, the Company shall
have 15 days from the date notice of such a termination is given to cure such event or condition
and, if the Company does so, such event or condition shall not constitute Good Reason hereunder.

(b) The Company may terminate the Executive’s employment and the Executive may terminate the
Executive’s employment with the Company at any time for any reason or no reason. If the Company
terminates the Executive’s employment and the termination is not covered by Section 4 or 5.1, or
the Executive terminates his employment for Good Reason or in the event of non-renewal of this
Agreement by the Company, as described in Section 1:

	 	(i)	 	the Executive shall receive a single-sum
payment equal to accrued but unpaid Annual Salary and other benefits
(including any bonus for a calendar year completed before termination)
earned and accrued under this Agreement prior to the termination of
employment (and reimbursement under this Agreement for expenses
incurred prior to the termination of employment);

	 	(ii)	 	the Executive shall receive a single-sum
payment of an amount equal to the sum of (X) his Annual Salary (at the
rate in effect immediately prior to termination) plus (Y) the highest
bonus earned in the preceeding three year period prior to termination,
with such sum multiplied by 1.5; and

	 	(iii)	 	all outstanding unvested equity-based awards
(including without limitation Options, Restricted Shares and phantom
units) held by the Executive shall fully vest and shall become
immediately exercisable, as applicable.

If payments due to Executive are subject to the requirements of Prop. Treas. Reg. § 1.409A-3(g)(2)
(or any successor provision), then notwithstanding any other provision of this Agreement (or any
otherwise applicable plan, policy, agreement or arrangement), such payments that are otherwise due
within six months following Executive’s separation from service will be deferred (with interest at
5% per annum) and paid to Executive in a lump sum immediately following that six month period.

5.3 Change of Control. Without duplication of the foregoing, upon a “Change of
Control” (as defined below) while the Executive is employed, all outstanding unvested equity-based
awards shall fully vest and shall become immediately exercisable, as applicable. In addition, if,
after a Change of Control, the Executive terminates his employment with the Company within the
six-month anniversary of the Change of Control, such termination shall be deemed a termination by
the Executive for Good Reason covered by Section 5.2. For purposes of this Agreement, “Change in
Control” shall mean the happening of any of the following:

	 	(i)	 	any “person,” including a “group” (as such
terms are used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”), but excluding the
Company, any entity controlling, controlled by or under common control
with the Company, any employee benefit plan of the Company or any such
entity, and Executive and any “group” (as such term is used in Section
13(d)(3) of the Exchange Act) of which the Executive is a member) is or
becomes the “beneficial owner” (as defined in Rule 13(d)(3) under the
Exchange Act), directly or indirectly, of securities of the Company
representing 30% or more of either (A) the combined voting power of the
Company’s then outstanding securities or (B) the then outstanding
common shares of the Company (in either such case other than as a
result of an acquisition of securities directly from the Company);
provided, however, that, in no event shall a Change in Control be
deemed to have occurred upon an initial public offering or a subsequent
public offering of the common shares under the Securities Act of 1933,
as amended;

	 	(ii)	 	any consolidation or merger of the Company
where the shareholders of the Company, immediately prior to the
consolidation or merger, would not, immediately after the consolidation
or merger, beneficially own (as such term is defined in Rule 13d-3
under the Exchange Act), directly or indirectly, shares representing in
the aggregate 50% or more of the combined voting power of the
securities of the corporation issuing cash or securities in the
consolidation or merger (or of its ultimate parent corporation, if
any);

	 	(iii)	 	there shall occur (A) any sale, lease, exchange or other transfer
(in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of
the assets of the Company, other than a sale or disposition by the
Company of all or substantially all of the Company’s assets to an
entity, at least 50% of the combined voting power of the voting
securities of which are owned by “persons” (as defined above) in
substantially the same proportion as their ownership of the Company
immediately prior to such sale or (B) the approval by shareholders of
the Company of any plan or proposal for the liquidation or dissolution
of the Company; or

	 	(iv)	 	the members of the Board at the beginning of any consecutive
24-calendar-month period (the “Incumbent Directors”) cease for any
reason other than due to death to constitute at least a majority of the
members of the Board; provided that any director whose election, or
nomination for election by the Company’s shareholders, was approved by
a vote of at least a majority of the members of the Board then still in
office who were members of the Board at the beginning of such
24-calendar-month period, shall be deemed to be an Incumbent Director.

5.4 Parachutes. If any amount payable to or other benefit receivable by the Executive
pursuant to this Agreement is deemed to constitute a Parachute Payment (as defined below), alone or
when added to any other amount payable or paid to or other benefit receivable or received by the
Executive which is deemed to constitute a Parachute Payment (whether or not under an existing plan,
arrangement or other agreement), and would result in the imposition on the Executive of an excise
tax under Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”), then, in
addition to any other benefits to which the Executive is entitled under this Agreement, the
Executive shall be paid by the Company an amount in cash equal to the sum of the excise taxes
payable by the Executive by reason of receiving Parachute Payments plus the amount necessary to put
the Executive in the same after-tax position (taking into account any and all applicable federal,
state and local excise, income or other taxes at the highest applicable rates on such Parachute
Payments and on any payments under this Section 5.4 as if no excise taxes had been imposed with
respect to Parachute Payments). “Parachute Payment” shall mean a “parachute payment” as defined in
Section 280G of the Code. The calculation under this Section 5.4 shall be as determined by the
Company’s accountants.

6. Covenants of the Executive.

6.1 Covenant Against Competition; Other Covenants. The Executive acknowledges that
(i) the principal business of the Company (which expressly includes for purposes of this Section 6
(and any related enforcement provisions hereof), its successors and assigns) is the structuring,
organization, consulting with, managing, servicing or otherwise engaging in the business of pooling
trust preferred securities or providing financing through the issuance of similar debt securities
or equity securities issued by REITs or real estate operating companies or their affiliates,
wherever located, whether in a “CDO” structure or otherwise (such business herein being referred to
as the “Business”); (ii) the Company is one of the limited number of persons who have developed
such a business; (iii) the Company’s Business is, in part, national in scope; (iv) the Executive’s
work for the Company has given and will continue to give him access to the confidential affairs and
proprietary information of the Company; (v) the covenants and agreements of the Executive contained
in this Section 6 are essential to the business and goodwill of the Company; and (vi) the Company
would not have entered into this Agreement but for the covenants and agreements set forth in this
Section 6. Accordingly, the Executive covenants and agrees that:

(a) By and in consideration of the salary and benefits to be provided by the Company
hereunder, and subject to Executive receiving all monies due to him under the severance
arrangements set forth herein, and further in consideration of the Executive’s exposure to the
proprietary information of the Company, the Executive covenants and agrees that, during the period
commencing on the date hereof and ending eighteen (18) months following the date upon which the
Executive shall cease to be an employee of the Company and its affiliates, he shall not in the
United States, directly or indirectly, except with the prior approval of the Board, (i) engage in
the Business (other than for the Company or its affiliates), or (ii) render any services in
furtherance of the Business to any person, corporation, partnership or other entity engaged in the
Business, or who has taken substantial measures, or made investments, evidencing an intention to
engage in the Business other than incidentally as is necessary to engage in its principal business,
or for any Originator (defined below); or (iii) become interested in any Originator or any person,
corporation, partnership or other entity (other than the Company or its affiliates) principally
engaged in the Business, as a partner, shareholder, principal, agent, employee, consultant or in
any other relationship or capacity; provided, however, that, notwithstanding the foregoing, the
Executive may invest in securities of any entity, solely for investment purposes and without
participating in the business thereof, if (A) such securities are traded on any national securities
exchange or the National Association of Securities Dealers, Inc. Automated Quotation System, and
(B) the Executive is not a controlling person of, or a member of a group which controls, such
entity (except to the extent expressly permitted herein). In addition, the restrictions of this
Section 6(a) shall not apply to any existing investments or other activities of the Executive which
have been disclosed in writing to and approved by the Board prior to the date hereof. For purposes
of this Agreement, “Originator” shall mean a person, corporation, partnership or entity who (x) at
any point prior to the date of Executive’s termination hereunder was paid fees or earned any fees
or entered into any agreement with the Company or its affiliates in respect of the origination of
any financing transaction by or placement of securities or issued by REITs, real estate operating
companies or their affiliates, wherever located, into or through a CDO transaction or warehouse
line in which the Company or any of its affiliates acted as collateral manager, or (y) which the
Company engaged or plans to engage for the purpose of the placement of securities into a CDO
transaction or warehouse line.

(b) During and after the period of the Executive’s employment with the Company and its
affiliates, the Executive shall keep secret and retain in strictest confidence all confidential
matters relating to the Company’s Business and the business of any of its affiliates and to the
Company and any of its affiliates, learned by the Executive heretofore or hereafter directly or
indirectly from the Company or any of its affiliates (the “Confidential Company Information”); and
shall not disclose such Confidential Company Information to anyone outside of the Company except
with the Company’s express written consent and except for Confidential Company Information which is
at the time of receipt or thereafter becomes publicly known through no wrongful act of the
Executive or is received from a third party not under an obligation to keep such information
confidential and without breach of this Agreement.

(c) During the period commencing on the date hereof and ending eighteen (18) months following
the date upon which the Executive shall cease to be an employee of the Company and its affiliates,
the Executive shall not, without the Company’s prior written consent, directly or indirectly,
knowingly (i) solicit or encourage to leave the employment or other service of the Company, or any
of its affiliates, any employee or independent contractor thereof or (ii) hire (on behalf of the
Executive or any other person or entity) any employee who has left the employment of the Company or
any of its affiliates within the eighteen (18) month period which follows the termination of such
employee’s employment with the Company and its affiliates, and (iii) the Executive will not,
whether for his own account or for the account of any other person, firm, corporation or other
business organization, intentionally interfere with the Company’s or any of its affiliates’
relationship with, or endeavor to entice away from the Company or any of its affiliates, any person
who during the Term is or was a customer or client of the Company or any of its affiliates.

6.2 Rights and Remedies upon Breach. The Executive acknowledges and agrees that any
breach by him of any of the provisions of Section 6.1 (the “Restrictive Covenants”) would result in
irreparable injury and damage for which money damages would not provide an adequate remedy.
Therefore, if the Executive breaches, or threatens to commit a breach of, any of the provisions of
Section 6.1, the Company and its affiliates, in addition to, and not in lieu of, any other rights
and remedies available to the Company and its affiliates under law or in equity (including, without
limitation, the recovery of damages), shall have the right and remedy to have the Restrictive
Covenants specifically enforced by any court having equity jurisdiction, including, without
limitation, the right to an entry against the Executive of restraining orders and injunctions
(preliminary, mandatory, temporary and permanent) against violations, threatened or actual, and
whether or not then continuing, of such covenants.

7. Other Provisions.

7.1 Severability. The Executive acknowledges and agrees that (i) he has had an
opportunity to seek advice of counsel in connection with this Agreement and (ii) the Restrictive
Covenants are reasonable in geographical and temporal scope and in all other respects. If it is
determined that any of the provisions of this Agreement, including, without limitation, any of the
Restrictive Covenants, or any part thereof, is invalid or unenforceable, the remainder of the
provisions of this Agreement shall not thereby be affected and shall be given full effect, without
regard to the invalid portions.

7.2 Duration and Scope of Covenants. If any court or other decision-maker of
competent jurisdiction determines that any of the Executive’s covenants contained in this
Agreement, including, without limitation, any of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or geographical scope of such provision, then, after such
determination has become final and unappealable, the duration or scope of such provision, as the
case may be, shall be reduced so that such provision becomes enforceable and, in its reduced form,
such provision shall then be enforceable and shall be enforced.

7.3 Enforceability; Jurisdiction; Arbitration. Any controversy or claim arising out
of or relating to this Agreement or the breach of this Agreement (other than a controversy or claim
arising under Section 6, to the extent necessary for the Company (or its affiliates, where
applicable) to avail itself of the rights and remedies referred to in Section 6.2) that is not
resolved by the Executive and the Company (or its affiliates, where applicable) shall be submitted
to arbitration in Philadelphia, Pennsylvania in accordance with the law of the Commonwealth of
Pennsylvania and the procedures of the American Arbitration Association. The determination of the
arbitrator(s) shall be conclusive and binding on the Company (or its affiliates, where applicable)
and the Executive and judgment may be entered on the arbitrator(s)’ award in any court having
jurisdiction.

7.4 Notices. Any notice or other communication required or permitted hereunder shall
be in writing and shall be delivered personally, telegraphed, telexed, sent by facsimile
transmission or sent by certified, registered or express mail, postage prepaid. Any such notice
shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile
transmission or, if mailed, five days after the date of deposit in the United States mails as
follows:

	 	(i)	 	If to the Company to:

RAIT Financial Trust

	 	2929	 	Arch Street, Cira Centre

	 	 	 	17th Floor

	 	 	 	Philadelphia, PA 19104

	 	 	 	Attention: Raphael Licht, Chief Legal and Administrative Officer

	 	(ii)	 	If to the Executive, to the address set forth
in the Company’s personnel files for said Executive.

Any such person may by notice given in accordance with this Section 7.5 to the other parties hereto
designate another address or person for receipt by such person of notices hereunder.

7.5 Entire Agreement. This Agreement contains the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior agreements, written or
oral, with respect thereto.

7.6 Waivers and Amendments. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the
parties or, in the case of a waiver, by the party waiving compliance. No delay on the part of any
party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege nor any single or
partial exercise of any such right, power or privilege, preclude any other or further exercise
thereof or the exercise of any other such right, power or privilege.

7.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF
LAW WHICH COULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE COMMONWEALTH
OF PENNSYLVANIA.

7.8 Assignment. This Agreement shall be binding upon and inure to the benefit of the
Parties and their respective successors, heirs (in the case of the Executive) and assigns. No
rights or obligations of the Company under this Agreement may be assigned or transferred by the
Company except that such rights or obligations may be assigned or transferred, subject to Section
5.3, pursuant to a merger or consolidation in which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the Company; provided,
however, that the assignee or transferee is the successor to all or substantially all of the assets
of the Company and such assignee or transferee assumes the liabilities, obligations and duties of
the Company, as contained in this Agreement, either contractually or as a matter of law.

7.9 Withholding. The Company shall be entitled to withhold from any payments or
deemed payments any amount of tax withholding it determines to be required by law.

7.10 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors, permitted assigns, heirs, executors and legal
representatives.

7.11 Counterparts. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original but all such
counterparts together shall constitute one and the same instrument. Each counterpart may consist
of two copies hereof each signed by one of the parties hereto.

7.12 Survival. Anything contained in this Agreement to the contrary notwithstanding,
the provisions of Sections 5 and 6 and any other provisions of this Agreement expressly imposing
obligations that survive termination of Executive’s employment hereunder, and the other provisions
of this Section 7 to the extent necessary to effectuate the survival of such provisions, shall
survive termination of this Agreement and any termination of the Executive’s employment hereunder.

7.13 Existing Agreements. The Executive represents to the Company that he is not
subject or a party to any employment or consulting agreement, non-competition covenant or other
agreement, covenant or understanding which might prohibit him from executing this Agreement or
limit his ability to fulfill his responsibilities hereunder. The Executive, the Company and
Taberna hereby waive any and all rights under the Prior Agreement and agree that the Prior
Agreement is terminated as of the Effective Date. Nothing herein shall diminish Executive’s rights
or entitlements under his restricted share or other equity based awards.

7.14 Headings. The headings in this Agreement are for reference only and shall not
affect the interpretation of this Agreement.

1

IN WITNESS WHEREOF, the parties hereto have signed their names as of the day and year first
above written.

By: JAMES J. SEBRA

/s/ James J. Sebra     

	 	 	By: RAIT
FINANCIAL TRUST

By: /s/ Raphael Licht

Name: Raphael Licht

Title: Chief Legal Officer, Chief

Administrative Officer            and Secretary

Agreed as to Section 7.13

TABERNA REALTY FINANCE TRUST

By: /s/ Raphael Licht 

Name: Raphael Licht

Title: Executive Vice President, Chief Legal Officer, Chief Administrative Officer and

Secretary

2EX-10.1

SKECHERS U.S.A., INC.

2007 INCENTIVE AWARD PLAN

ARTICLE 1.

PURPOSE

The purpose of the Skechers U.S.A., Inc. 2007 Incentive Award Plan (the “Plan”) is to
promote the success and enhance the value of Skechers U.S.A., Inc. (the “Company”) by
linking the personal interests of the members of the Board, Employees, and Consultants to those of
Company stockholders and by providing such individuals with an incentive for outstanding
performance to generate superior returns to Company stockholders. The Plan is further intended to
provide flexibility to the Company in its ability to motivate, attract, and retain the services of
members of the Board, Employees, and Consultants upon whose judgment, interest, and special effort
the successful conduct of the Company’s operation is largely dependent.

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.

2.1 “Award” means an Option, a Restricted Stock award, a Stock Appreciation Right
award, a Performance Share award, a Performance Stock Unit award, a Dividend Equivalents award, a
Stock Payment award, a Deferred Stock award, a Restricted Stock Unit award, a Performance Bonus
Award, or a Performance-Based Award granted to a Participant pursuant to the Plan.

2.2 “Award Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award, including through electronic medium.

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

2.4 “Change in Control” means and includes each of the following:

(a) A transaction or series of transactions (other than an offering of Stock to the general
public through a registration statement filed with the Securities and Exchange Commission) whereby
any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2)
of the Exchange Act) (other than the Company, any of its subsidiaries, any member of the Greenberg
Group, an employee benefit plan maintained by the Company or any of its subsidiaries or a “person”
that, prior to such transaction, directly or indirectly controls, is controlled by, or is under
common control with, the Company) directly or indirectly acquires beneficial ownership (within the
meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50%
of the total combined voting power of the Company’s securities outstanding immediately after such
acquisition; or

(b) During any period of two consecutive years, individuals who, at the beginning of such
period, constitute the Board together with any new director(s) (other than a director designated by
a person who shall have entered into an agreement with the Company to effect a transaction
described in Section 2.4(a) or Section 2.4(c)) whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the two-year period or
whose election or nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or

(c) The consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets in any single transaction or series of related transactions or (z) the
acquisition of assets or stock of another entity, in each case other than a transaction:

(i) Which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted into
voting securities of the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of
the Company’s assets or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a majority of the
combined voting power of the Successor Entity’s outstanding voting securities immediately after the
transaction, and

(ii) After which no person or group (other than any member of the Greenberg Group)
beneficially owns voting securities representing 50% or more of the combined voting power of the
Successor Entity; provided, however, that no person or group shall be treated for purposes of this
Section 2.4(c)(ii) as beneficially owning 50% or more of combined voting power of the Successor
Entity solely as a result of the voting power held in the Company prior to the consummation of the
transaction; or

(d) The Company’s stockholders approve a liquidation or dissolution of the Company.

The Committee shall have full and final authority, which shall be exercised in its discretion, to
determine conclusively whether a Change in Control of the Company has occurred pursuant to the
above definition, and the date of the occurrence of such Change in Control and any incidental
matters relating thereto.

	 	 	 
	2.5

	 	“Code” means the Internal Revenue Code of 1986, as amended.
	
 
	 	 
	2.6

	 	“Committee” means the committee of the Board described in Article 12.
	
 
	 	 
	2.7

	 	“Company” means Skechers U.S.A., Inc., a Delaware corporation, or any successor thereto.
	
 
	 	 

2.8 “Consultant” means any consultant or adviser if: (a) the consultant or adviser
renders bona fide services to the Company or any Subsidiary; (b) the services rendered by the
consultant or adviser are not in connection with the offer or sale of securities in a
capital-raising transaction and do not directly or indirectly promote or maintain a market for the
Company’s securities; and (c) the consultant or adviser is a natural person.

2.9 “Covered Employee” means an Employee who is, or could be, a “covered employee”
within the meaning of Section 162(m) of the Code.

2.10 “Deferred Stock” means a right to receive a specified number of shares of Stock
during specified time periods pursuant to Section 8.5.

2.11 “Director” means a member of the Board, or as applicable, a member of the board
of directors of a Subsidiary.

2.12 “Disability” means that the Participant qualifies to receive long-term disability
payments under the Company’s long-term disability insurance program, as it may be amended from time
to time.

2.13 “Dividend Equivalents” means a right granted to a Participant pursuant to
Section 8.3 to receive the equivalent value (in cash or Stock) of dividends paid on Stock.

2.14 “Effective Date” shall have the meaning set forth in Section 13.1.

2.15 “Eligible Individual” means any person who is an Employee, a Consultant or an
Independent Director, as determined by the Committee.

2.16 “Employee” means any officer or other employee (as defined in accordance with
Section 3401(c) of the Code) of the Company or any Subsidiary.

2.17 “Equity Restructuring” shall mean a nonreciprocal transaction between the Company
and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or
recapitalization through a large, nonrecurring cash dividend, that affects the shares of Stock (or
other securities of the Company) or the share price of Stock (or other securities) and causes a
change in the per share value of the Stock underlying outstanding Awards.

2.18 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

2.19 “Fair Market Value” means, as of any given date, (a) if Stock is traded on any
established stock exchange, the closing price of a share of Stock as reported in the Wall Street
Journal (or such other source as the Company may deem reliable for such purposes) for such date, or
if no sale occurred on such date, the first trading date immediately prior to such date during
which a sale occurred; or (b) if Stock is not traded on an exchange but is quoted on a national
market or other quotation system, the last sales price on such date, or if no sales occurred on
such date, then on the date immediately prior to such date on which sales prices are reported; or
(c) if Stock is not publicly traded, the fair market value established by the Committee acting in
good faith.

2.20 “Greenberg Group” means Robert Greenberg, M. Susan Greenberg, any member of their
family, the Greenberg Family Trust, or any entity controlled by any of the foregoing.

2.21 “Incentive Stock Option” means an Option that is intended to meet the
requirements of Section 422 of the Code or any successor provision thereto.

2.22 “Independent Director” means a Director of the Company who is not an Employee.

2.23 “Non-Employee Director” means a Director of the Company who qualifies as a
“Non-Employee Director” as defined in Rule 16b-3(b)(3) under the Exchange Act or any successor
rule.

2.24 “Non-Qualified Stock Option” means an Option that is not intended to be an
Incentive Stock Option or that is intended to be an Incentive Stock Option but fails to qualify as
such.

2.25 “Option” means a right granted to a Participant pursuant to Article 5 of the Plan
to purchase a specified number of shares of Stock at a specified price during specified time
periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.

2.26 “Participant” means any Eligible Individual who, as a member of the Board,
Consultant or Employee, has been granted an Award pursuant to the Plan.

2.27 “Performance-Based Award” means an Award, other than an Option or SAR, granted to
selected Covered Employees which the Committee determines shall be subject to the terms and
conditions set forth in Article 9. All Performance-Based Awards are intended to qualify as
Qualified Performance-Based Compensation.

2.28 “Performance Bonus Award” has the meaning set forth in Section 8.7.

2.29 “Performance Criteria” means the criteria that the Committee selects for purposes
of establishing the Performance Goal or Performance Goals for a Participant for a Performance
Period. The Performance Criteria that will be used to establish Performance Goals are limited to
the following: net earnings (either before or after interest, taxes, depreciation and
amortization), economic value-added, sales or revenue, net income (either before or after taxes),
operating earnings, cash flow (including, but not limited to, operating cash flow and free cash
flow), cash flow return on capital, return on net assets, return on stockholders’ equity, return on
assets, return on capital, stockholder returns, return on sales, gross or net profit margin,
productivity, expense, margins, operating efficiency, customer satisfaction, working capital,
earnings per share, price per share of Stock, and market share, any of which may be measured either
in absolute terms, by comparison to performance in an earlier period or periods, or as compared to
any incremental increase or as compared to results of a peer group, industry index, or other
company or companies. The Committee shall define in an objective fashion the manner of calculating
the Performance Criteria it selects to use for such Performance Period for such Participant.

2.30 “Performance Goals” means, for a Performance Period, the goals established in
writing by the Committee for the Performance Period based upon the Performance Criteria. Depending
on the Performance Criteria used to establish such Performance Goals, the Performance Goals may be
expressed in terms of overall Company performance or the performance of a division, business unit,
or an individual. The Committee, in its discretion, may, within the time prescribed by Section
162(m) of the Code, adjust or modify the calculation of Performance Goals for such Performance
Period in order to prevent the dilution or enlargement of the rights of Participants (a) in the
event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event,
or development, or (b) in recognition of, or in anticipation of, any other unusual or nonrecurring
events affecting the Company, or the financial statements of the Company, or in response to, or in
anticipation of, changes in applicable laws, regulations, accounting principles, or business
conditions.

2.31 “Performance Period” means the one or more periods of time, which may be of
varying and overlapping durations, as the Committee may select, over which the attainment of one or
more Performance Goals will be measured for the purpose of determining a Participant’s right to,
and the payment of, a Performance-Based Award.

2.32 “Performance Share” means a right granted to a Participant pursuant to Section
8.1, to receive Stock, the payment of which is contingent upon achieving certain Performance Goals
or other performance-based targets established by the Committee.

2.33 “Performance Stock Unit” means a right granted to a Participant pursuant to
Section 8.2 hereof, to receive Stock, the payment of which is contingent upon achieving certain
Performance Goals or other performance-based targets established by the Committee.

2.34 “Plan” means this Skechers U.S.A., Inc. 2007 Incentive Award Plan, as it may be
amended from time to time.

2.35 “Qualified Performance-Based Compensation” means any compensation that is
intended to qualify as “qualified performance-based compensation” as described in
Section 162(m)(4)(C) of the Code.

2.36 “Restricted Stock” means Stock awarded to a Participant pursuant to Article 6
that is subject to certain restrictions and may be subject to risk of forfeiture.

2.37 “Restricted Stock Unit” means an Award granted pursuant to Section 8.6.

2.38 “Securities Act” shall mean the Securities Act of 1933, as amended.

2.39 “Stock” means the Class A Common Stock of the Company, $0.001 par value per
share, and such other securities that may be substituted for Stock pursuant to Article 11.

2.40 “Stock Appreciation Right” or “SAR” means a right granted pursuant to
Article 7 to receive a payment equal to the excess of the Fair Market Value of a specified number
of shares of Stock on the date the SAR is exercised over the exercise price of the SAR as set forth
in the applicable Award Agreement, which per share exercise price shall not be less than the Fair
Market Value of a share of Stock on the date the SAR is granted.

2.41 “Stock Payment” means (a) a payment in the form of shares of Stock, or (b) an
option or other right to purchase shares of Stock, as part of any bonus, deferred compensation or
other arrangement, made in lieu of all or any portion of the compensation, granted pursuant to
Section 8.4.

2.42 “Subsidiary” means any “subsidiary corporation” as defined in Section 424(f) of
the Code and any applicable regulations promulgated thereunder or any other entity of which a
majority of the outstanding voting stock or voting power is beneficially owned directly or
indirectly by the Company.

ARTICLE 3.

SHARES SUBJECT TO THE PLAN

3.1 Number of Shares.

(a) Subject to Article 11 and Section 3.1(b), the aggregate number of shares of Stock which
may be issued or transferred pursuant to Awards under the Plan is 7,500,000.

(b) To the extent that an Award terminates, expires, or lapses for any reason, or is settled
in cash, any shares of Stock subject to the Award shall again be available for the grant of an
Award pursuant to the Plan. Additionally, any shares of Stock tendered or withheld to satisfy the
grant or exercise price or tax withholding obligation pursuant to any Award shall again be
available for the grant of an Award pursuant to the Plan. To the extent permitted by applicable
law or any exchange rule, shares of Stock issued in assumption of, or in substitution for, any
outstanding awards of any entity acquired in any form of combination by the Company or any
Subsidiary shall not be counted against shares of Stock available for grant pursuant to this Plan.
To the extent that a SAR is exercised for, or settled in, Stock, the full number of shares subject
to such SAR shall be counted for purposes of calculating the aggregate number of shares of Stock
available for issuance under the Plan as set forth in Section 3.1(a), regardless of the actual
number of shares issued upon such exercise or settlement. The payment of Dividend Equivalents in
cash in conjunction with any outstanding Awards shall not be counted against the shares available
for issuance under the Plan. Notwithstanding the provisions of this Section 3.1(b), no shares of
Stock may again be optioned, granted or awarded if such action would cause an Incentive Stock
Option to fail to qualify as an incentive stock option under Section 422 of the Code.

3.2 Stock Distributed. Any Stock distributed pursuant to an Award may consist, in
whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open
market.

3.3 Limitation on Number of Shares Subject to Awards. Notwithstanding any provision
in the Plan to the contrary, and subject to Article 11, the maximum number of shares of Stock with
respect to one or more Awards that may be granted to any one Participant during any calendar year
shall be 750,000 and the maximum amount that may be paid in cash to any one Participant during any
calendar year with respect to one or more Performance-Based Awards not denominated in Stock or
otherwise for which the foregoing limitation would not be an effective limitation shall be
$5,000,000.

ARTICLE 4.

ELIGIBILITY AND PARTICIPATION

4.1 Eligibility. Each Eligible Individual shall be eligible to be granted one or more
Awards pursuant to the Plan.

4.2 Participation. Subject to the provisions of the Plan, the Committee may, from
time to time, select from among all Eligible Individuals, those to whom Awards shall be granted and
shall determine the nature and amount of each Award. No Eligible Individual shall have any right
to be granted an Award pursuant to this Plan.

4.3 Foreign Participants. Notwithstanding any provision of the Plan to the contrary,
in order to comply with the laws in other countries in which the Company and its Subsidiaries
operate or have Eligible Individuals, the Committee, in its sole discretion, shall have the power
and authority to: (i) determine which Subsidiaries shall be covered by the Plan; (ii) determine
which Eligible Individuals outside the United States are eligible to participate in the Plan; (iii)
modify the terms and conditions of any Award granted to Eligible Individuals outside the United
States to comply with applicable foreign laws; (iv) establish subplans and modify exercise
procedures and other terms and procedures, to the extent such actions may be necessary or advisable
(any such subplans and/or modifications shall be attached to this Plan as appendices); provided,
however, that no such subplans and/or modifications shall increase the share limitations contained
in Sections 3.1 and 3.3; and (v) take any action, before or after an Award is made, that it deems
advisable to obtain approval or comply with any necessary local governmental regulatory exemptions
or approvals. Notwithstanding the foregoing, the Committee may not take any actions hereunder, and
no Awards shall be granted, that would violate the Exchange Act, the Code, any securities law or
governing statute or any other applicable law.

ARTICLE 5.

STOCK OPTIONS

5.1 General. The Committee is authorized to grant Options to Eligible Individuals on
the following terms and conditions:

(a) Exercise Price. The exercise price per share of Stock subject to an Option shall
be determined by the Committee and set forth in the Award Agreement; provided that the per share
exercise price for any Option shall not be less than 100% of the Fair Market Value of a share of
Stock on the date of grant.

(b) Time and Conditions of Exercise. The Committee shall determine the time or times
at which an Option may be exercised in whole or in part; provided that the term of any Option
granted under the Plan shall not exceed ten years. The Committee shall also determine the
performance or other conditions, if any, that must be satisfied before all or part of an Option may
be exercised.

(c) Payment. The Committee shall determine the methods by which the exercise price of
an Option may be paid, the form of payment including, without limitation: (i) cash, (ii) shares of
Stock held for such period of time as may be required by the Committee in order to avoid adverse
accounting consequences to the Company and having a Fair Market Value on the date of delivery equal
to the aggregate exercise price of the Option or exercised portion thereof, including shares that
would otherwise be issuable or transferable upon exercise of the Option, or (iii) other property
acceptable to the Committee (including through the delivery of a notice that the Participant has
placed a market sell order with a broker with respect to shares of Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that
payment of such proceeds is then made to the Company at such time as may be required by the Company
not later than the settlement of such sale). The Committee shall also determine the methods by
which shares of Stock shall be delivered or deemed to be delivered to Participants.
Notwithstanding any other provision of the Plan to the contrary, no Participant who is a Director
or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act
shall be permitted to pay the exercise price of an Option, or continue any extension of credit with
respect to the exercise price of an Option with a loan from the Company or a loan arranged by the
Company in violation of Section 13(k) of the Exchange Act.

(d) Evidence of Grant. All Options shall be evidenced by an Award Agreement between
the Company and the Participant. The Award Agreement shall include such additional provisions as
may be specified by the Committee.

5.2 Incentive Stock Options. Incentive Stock Options may be granted only to employees
of the Company or any “parent corporation” or “subsidiary corporation” of the Company within the
meaning of Section 424(e) and 424(f), respectively, of the Code, and the terms of any Incentive
Stock Options granted pursuant to the Plan, in addition to the requirements of Section 5.1, must
comply with the provisions of this Section 5.2.

(a) Dollar Limitation. The aggregate Fair Market Value (determined as of the time the
Option is granted) of all shares of Stock with respect to which Incentive Stock Options are first
exercisable by a Participant in any calendar year may not exceed $100,000 or such other limitation
as imposed by Section 422(d) of the Code or any successor provision. To the extent that Incentive
Stock Options are first exercisable by a Participant in excess of such limitation, the excess shall
be considered Non-Qualified Stock Options.

(b) Ten Percent Owners. An Incentive Stock Option may not be granted to any
individual who, at the date of grant, owns stock possessing more than ten percent of the total
combined voting power of all classes of Stock of the Company or any “parent corporation” or
“subsidiary corporation” of the Company within the meaning of Section 424(e) and 424(f),
respectively, of the Code, unless such Option is granted at a price that is not less than 110% of
Fair Market Value on the date of grant and the Option is exercisable for no more than five years
from the date of grant.

(c) Notice of Disposition. The Participant shall give the Company prompt notice of
any disposition of shares of Stock acquired by exercise of an Incentive Stock Option within (i) two
years from the date of grant of such Incentive Stock Option or (ii) one year after the transfer of
such shares of Stock to the Participant.

(d) Right to Exercise. During a Participant’s lifetime, an Incentive Stock Option may
be exercised only by the Participant.

(e) Failure to Meet Requirements. Any Option (or portion thereof) purported to be an
Incentive Stock Option, which, for any reason, fails to meet the requirements of Section 422 of the
Code shall be considered a Non-Qualified Stock Option.

5.3 Granting of Options to Independent Directors. The Board may from time to time, in
its sole discretion, and subject to the limitations of the Plan:

(a) Select from among the Independent Directors (including Independent Directors who have
previously been granted Options under the Plan) such of them as in its opinion should be granted
Options;

(b) Subject to Section 3.3, determine the number of shares of Stock that may be purchased upon
exercise of the Options granted to such selected Independent Directors; and

(c) Subject to the provisions of this Article 5, determine the terms and conditions of such
Options, consistent with the Plan.

Options granted to Independent Directors shall be Non-Qualified Stock Options.

ARTICLE 6.

RESTRICTED STOCK AWARDS

6.1 Grant of Restricted Stock. The Committee is authorized to make Awards of
Restricted Stock to any Eligible Individual selected by the Committee in such amounts and subject
to such terms and conditions as determined by the Committee. All Awards of Restricted Stock shall
be evidenced by an Award Agreement.

6.2 Issuance and Restrictions. Restricted Stock shall be subject to such restrictions
on transferability and other restrictions as the Committee may impose (including, without
limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on
the Restricted Stock). These restrictions may lapse separately or in combination at such times,
pursuant to such circumstances, in such installments, or otherwise, as the Committee determines at
the time of the grant of the Award or thereafter.

6.3 Forfeiture. Except as otherwise determined by the Committee at the time of the
grant of the Award or thereafter, upon termination of employment or service during the applicable
restriction period, Restricted Stock that is at that time subject to restrictions shall be
forfeited; provided, however, that the Committee may (a) provide in any Restricted Stock Award
Agreement that restrictions or forfeiture conditions relating to Restricted Stock will lapse in
whole or in part in the event of terminations resulting from specified causes, and (b) provide in
other cases for the lapse in whole or in part of restrictions or forfeiture conditions relating to
Restricted Stock.

6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan
may be evidenced in such manner as the Committee shall determine. If certificates representing
shares of Restricted Stock are registered in the name of the Participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse.

ARTICLE 7.

STOCK APPRECIATION RIGHTS

7.1 Grant of Stock Appreciation Rights.

(a) A Stock Appreciation Right may be granted to any Eligible Individual selected by the
Committee. A Stock Appreciation Right shall be subject to such terms and conditions not
inconsistent with the Plan as the Committee shall impose and shall be evidenced by an Award
Agreement.

(b) A Stock Appreciation Right shall entitle the Participant (or other person entitled to
exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion
of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to
receive from the Company an amount equal to the product of (i) the excess of (A) the Fair Market
Value of the Stock on the date the Stock Appreciation Right is exercised over (B) the per share
exercise price of the Stock Appreciation Right, which exercise price shall not be less than the
Fair Market Value of the Stock on the date the Stock Appreciation Right was granted and (ii) the
number of shares of Stock with respect to which the Stock Appreciation Right is exercised, subject
to any limitations the Committee may impose. The Committee shall determine the time or times at
which a Stock Appreciation Right may be exercised in whole or in part; provided that the term of
any Stock Appreciation Right granted under the Plan shall not exceed ten years.

7.2 Payment and Limitations on Exercise.

(a) Subject to Section 7.2(b), payment of the amounts determined under Section 7.1(b) above
shall be in cash, in Stock (based on its Fair Market Value as of the date the Stock Appreciation
Right is exercised) or a combination of both, as determined by the Committee in the Award
Agreement.

(b) To the extent any payment under Section 7.1(b) is effected in Stock, it shall be made
subject to satisfaction of all provisions of Article 5 above pertaining to Options.

ARTICLE 8.

OTHER TYPES OF AWARDS

8.1 Performance Share Awards. Any Eligible Individual selected by the Committee may
be granted one or more Performance Share awards which shall be denominated in a number of shares of
Stock and which may be linked to any one or more of the Performance Criteria or other specific
performance criteria determined appropriate by the Committee, in each case on a specified date or
dates or over any period or periods determined by the Committee. In making such determinations,
the Committee shall consider (among such other factors as it deems relevant in light of the
specific type of award) the contributions, responsibilities and other compensation of the
particular Participant.

8.2 Performance Stock Units. Any Eligible Individual selected by the Committee may be
granted one or more Performance Stock Unit awards which shall be denominated in unit equivalent of
shares of Stock and/or units of value including dollar value of shares of Stock and which may be
linked to any one or more of the Performance Criteria or other specific performance criteria
determined appropriate by the Committee, in each case on a specified date or dates or over any
period or periods determined by the Committee. In making such determinations, the Committee shall
consider (among such other factors as it deems relevant in light of the specific type of award) the
contributions, responsibilities and other compensation of the particular Participant.

8.3 Dividend Equivalents.

(a) Any Eligible Individual selected by the Committee may be granted Dividend Equivalents
based on the dividends declared on the shares of Stock that are subject to any Award, to be
credited as of dividend payment dates, during the period between the date the Award is granted and
the date the Award is exercised, vests or expires, as determined by the Committee. Such Dividend
Equivalents shall be converted to cash or additional shares of Stock by such formula and at such
time and subject to such limitations as may be determined by the Committee.

(b) Dividend Equivalents granted with respect to Options or SARs that are intended to be
Qualified Performance-Based Compensation shall be payable, with respect to pre-exercise periods,
regardless of whether such Option or SAR is subsequently exercised.

8.4 Stock Payments. Any Eligible Individual selected by the Committee may receive
Stock Payments in the manner determined from time to time by the Committee; provided that unless
otherwise determined by the Committee, such Stock Payments shall be made in lieu of base salary,
bonus, or other cash compensation otherwise payable to such Participant. The number of shares
shall be determined by the Committee and may be based upon the Performance Criteria or other
specific performance criteria determined appropriate by the Committee, determined on the date such
Stock Payment is made or on any date thereafter.

8.5 Deferred Stock. Any Eligible Individual selected by the Committee may be granted
an award of Deferred Stock in the manner determined from time to time by the Committee. The number
of shares of Deferred Stock shall be determined by the Committee and may be linked to the
Performance Criteria or other specific performance criteria determined to be appropriate by the
Committee, in each case on a specified date or dates or over any period or periods determined by
the Committee. Stock underlying a Deferred Stock award will not be issued until the Deferred Stock
award has vested, pursuant to a vesting schedule or performance criteria set by the Committee.
Unless otherwise provided by the Committee, a Participant awarded Deferred Stock shall have no
rights as a Company stockholder with respect to such Deferred Stock until such time as the Deferred
Stock Award has vested and the Stock underlying the Deferred Stock Award has been issued.

8.6 Restricted Stock Units. The Committee is authorized to make Awards of Restricted
Stock Units to any Eligible Individual selected by the Committee in such amounts and subject to
such terms and conditions as determined by the Committee. At the time of grant, the Committee
shall specify the date or dates on which the Restricted Stock Units shall become fully vested and
nonforfeitable, and may specify such conditions to vesting as it deems appropriate. At the time of
grant, the Committee shall specify the maturity date applicable to each grant of Restricted Stock
Units which shall be no earlier than the vesting date or dates of the Award and may be determined
at the election of the grantee. On the maturity date, the Company shall, subject to Section
10.5(b), transfer to the Participant one unrestricted, fully transferable share of Stock for each
Restricted Stock Unit scheduled to be paid out on such date and not previously forfeited.

8.7 Performance Bonus Awards. Any Eligible Individual selected by the Committee may
be granted a cash bonus (a “Performance Bonus Award”) payable upon the attainment of
Performance Goals that are established by the Committee and relate to one or more of the
Performance Criteria or other specific performance criteria determined to be appropriate by the
Committee, in each case on a specified date or dates or over any period or periods determined by
the Committee. Any such Performance Bonus Award paid to a Covered Employee may be a
Performance-Based Award and be based upon objectively determinable bonus formulas established in
accordance with Article 9.

8.8 Term. Except as otherwise provided herein, the term of any Award of Performance
Shares, Performance Stock Units, Dividend Equivalents, Stock Payments, Deferred Stock or Restricted
Stock Units shall be set by the Committee in its discretion.

8.9 Exercise or Purchase Price. The Committee may establish the exercise or purchase
price, if any, of any Award of Performance Shares, Performance Stock Units, Deferred Stock, Stock
Payments or Restricted Stock Units; provided, however, that such price shall not be less than the
par value of a share of Stock on the date of grant, unless otherwise permitted by applicable state
law.

8.10 Exercise upon Termination of Employment or Service. An Award of Performance
Shares, Performance Stock Units, Dividend Equivalents, Deferred Stock, Stock Payments and
Restricted Stock Units shall only vest or be exercisable or payable while the Participant is an
Employee, Consultant or Director, as applicable; provided, however, that the Committee in its sole
and absolute discretion may provide that an Award of Performance Shares, Performance Stock Units,
Dividend Equivalents, Stock Payments, Deferred Stock or Restricted Stock Units may be exercised or
paid subsequent to a termination of employment or service, as applicable, or following a Change in
Control of the Company, or because of the Participant’s retirement, death or Disability, or
otherwise; provided, however, that, to the extent required to preserve tax deductibility under
Section 162(m) of the Code, any such provision with respect to Performance Shares or Performance
Stock Units that are intended to constitute Qualified Performance-Based Compensation shall be
subject to the requirements of Section 162(m) of the Code that apply to Qualified Performance-Based
Compensation.

8.11 Form of Payment. Payments with respect to any Awards granted under this Article
8 shall be made in cash, in Stock or a combination of both, as determined by the Committee.

ARTICLE 9.

PERFORMANCE-BASED AWARDS

9.1 Purpose. The purpose of this Article 9 is to provide the Committee the ability to
qualify Awards other than Options and SARs and that are granted pursuant to Articles 6 and 8 as
Qualified Performance-Based Compensation. If the Committee, in its discretion, decides to grant a
Performance-Based Award to a Covered Employee, the provisions of this Article 9 shall control over
any contrary provision contained in Articles 6 or 8; provided, however, that the Committee may in
its discretion grant Awards to Covered Employees that are based on Performance Criteria or
Performance Goals but that do not satisfy the requirements of this Article 9.

9.2 Applicability. This Article 9 shall apply only to those Covered Employees
selected by the Committee to receive Performance-Based Awards. The designation of a Covered
Employee as a Participant for a Performance Period shall not in any manner entitle the Participant
to receive an Award for the period. Moreover, designation of a Covered Employee as a Participant
for a particular Performance Period shall not require designation of such Covered Employee as a
Participant in any subsequent Performance Period and designation of one Covered Employee as a
Participant shall not require designation of any other Covered Employee as a Participant in such
Performance Period or in any other Performance Period.

9.3 Procedures with Respect to Performance-Based Awards. To the extent necessary to
comply with the Qualified Performance-Based Compensation requirements of Section 162(m)(4)(C) of
the Code, with respect to any Award granted under Articles 6 or 8 which may be granted to one or
more Covered Employees, no later than ninety (90) days following the commencement of any fiscal
year in question or any other designated fiscal period or period of service (or such other time as
may be required or permitted by Section 162(m) of the Code), the Committee shall, in writing, (a)
designate one or more Covered Employees, (b) select the Performance Criteria applicable to the
Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable,
which may be earned for such Performance Period, and (d) specify the relationship between
Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be
earned by each Covered Employee for such Performance Period. Following the completion of each
Performance Period, the Committee shall certify in writing whether the applicable Performance Goals
have been achieved for such Performance Period. In determining the amount earned by a Covered
Employee, the Committee shall have the right to reduce or eliminate (but not to increase) the
amount payable at a given level of performance to take into account additional factors that the
Committee may deem relevant to the assessment of individual or corporate performance for the
Performance Period.

9.4 Payment of Performance-Based Awards. Unless otherwise provided in the applicable
Award Agreement, a Participant must be employed by the Company or a Subsidiary on the day a
Performance-Based Award for such Performance Period is paid to the Participant. Furthermore, a
Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a
Performance Period only if the Performance Goals for such period are achieved. In determining the
amount earned under a Performance-Based Award, the Committee may reduce or eliminate the amount of
the Performance-Based Award earned for the Performance Period, if in its sole and absolute
discretion, such reduction or elimination is appropriate.

9.5 Additional Limitations. Notwithstanding any other provision of the Plan, any
Award which is granted to a Covered Employee and is intended to constitute Qualified
Performance-Based Compensation shall be subject to any additional limitations set forth in Section
162(m) of the Code (including any amendment to Section 162(m) of the Code) or any regulations or
rulings issued thereunder that are requirements for qualification as qualified performance-based
compensation as described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended
to the extent necessary to conform to such requirements.

ARTICLE 10.

PROVISIONS APPLICABLE TO AWARDS

10.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the
discretion of the Committee, be granted either alone, in addition to, or in tandem with, any other
Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards
may be granted either at the same time as or at a different time from the grant of such other
Awards.

10.2 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements
that set forth the terms, conditions and limitations for each Award, as determined by the
Committee, and which may include the term of an Award, the provisions applicable in the event the
Participant’s employment or service terminates, and the Company’s authority to unilaterally or
bilaterally amend, modify, suspend, cancel or rescind an Award.

10.3 Limits on Transfer. No right or interest of a Participant in any Award may be
pledged, encumbered, or hypothecated to or in favor of any party other than the Company or a
Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any
other party other than the Company or a Subsidiary. Except as otherwise provided by the Committee,
no Award shall be assigned, transferred, or otherwise disposed of by a Participant other than by
will or the laws of descent and distribution or pursuant to beneficiary designation procedures
approved from time to time by the Committee (or the Board in the case of Awards granted to
Independent Directors). The Committee by express provision in the Award or an amendment thereto
may permit an Award to be transferred to, exercised by and paid to certain persons or entities
related to the Participant, including but not limited to members of the Participant’s family,
charitable institutions, or trusts or other entities whose beneficiaries or beneficial owners are
members of the Participant’s family and/or charitable institutions, or to such other persons or
entities as may be expressly approved by the Committee, pursuant to such conditions and procedures
as the Committee may establish; provided, however, that no such transfer of an Incentive Stock
Option shall be permitted to the extent that such transfer would cause the Incentive Stock Option
to fail to qualify as an “incentive stock option” under Section 422 of the Code. Any permitted
transfer shall be subject to the condition that the Committee receive evidence satisfactory to it
that the transfer is being made for estate and/or tax planning purposes (or to a “blind trust” in
connection with the Participant’s termination of employment or service with the Company or a
Subsidiary to assume a position with a governmental, charitable, educational or similar non-profit
institution) and on a basis consistent with the Company’s lawful issue of securities.

10.4 Beneficiaries. Notwithstanding Section 10.3, a Participant may, in the manner
determined by the Committee, designate a beneficiary to exercise the rights of the Participant and
to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary,
legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is
subject to all terms and conditions of the Plan and any Award Agreement applicable to the
Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the Committee. If the Participant is
married and resides in a community property state, a designation of a person other than the
Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s
interest in the Award shall not be effective without the prior written consent of the Participant’s
spouse. If no beneficiary has been designated or survives the Participant, payment shall be made
to the person entitled thereto pursuant to the Participant’s will or the laws of descent and
distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a
Participant at any time provided the change or revocation is filed with the Committee.

10.5 Stock Certificates; Book Entry Procedures.

(a) Notwithstanding anything herein to the contrary, the Company shall not be required to
record, issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of
any Award, unless and until the Board has determined, with advice of counsel, that the recordation,
issuance and delivery of such shares or certificates is in compliance with all applicable laws,
regulations of governmental authorities and, if applicable, the requirements of any exchange on
which the shares of Stock are listed or traded. All Stock certificates delivered pursuant to the
Plan are subject to any stop-transfer orders and other restrictions as the Committee deems
necessary or advisable to comply with federal, state, or foreign jurisdiction, securities or other
laws, rules and regulations and the rules of any national securities exchange or automated
quotation system on which the Stock is listed, quoted, or traded. The Committee may place legends
on any Stock certificate to reference restrictions applicable to the Stock. In addition to the
terms and conditions provided herein, the Board may require that a Participant make such reasonable
covenants, agreements, and representations as the Board, in its discretion, deems advisable in
order to comply with any such laws, regulations, or requirements. The Committee shall have the
right to require any Participant to comply with any timing or other restrictions with respect to
the settlement or exercise of any Award, including a window-period limitation, as may be imposed in
the discretion of the Committee.

(b) Notwithstanding any other provision of the Plan, unless otherwise determined by the
Committee or required by any applicable law, rule or regulation, the Company shall not deliver to
any Participant certificates evidencing shares of Stock issued in connection with any Award and
instead such shares of Stock shall be recorded in the books of the Company (or, as applicable, its
transfer agent or stock plan administrator).

10.6 Paperless Administration. In the event that the Company establishes, for itself
or using the services of a third party, an automated system for the documentation, granting or
exercise of Awards, such as a system using an internet website or interactive voice response, then
the paperless documentation, granting or exercise of Awards by a Participant may be permitted
through the use of such an automated system.

ARTICLE 11.

CHANGES IN CAPITAL STRUCTURE

11.1 Adjustments.

(a) In the event of any stock dividend, stock split, combination or exchange of shares,
merger, consolidation or other distribution (other than normal cash dividends) of Company assets to
stockholders, or any other change affecting the shares of Stock or the share price of the Stock
other than an Equity Restructuring, the Committee shall make such proportionate adjustments, if
any, as the Committee in its discretion may deem appropriate to reflect such change with respect to
(a) the aggregate number and kind of shares that may be issued under the Plan (including, but not
limited to, adjustments of the limitations in Sections 3.1 and 3.3); (b) the terms and conditions
of any outstanding Awards (including, without limitation, any applicable performance targets or
criteria with respect thereto); and (c) the grant or exercise price per share for any outstanding
Awards under the Plan. Any adjustment affecting an Award intended as Qualified Performance-Based
Compensation shall be made consistent with the requirements of Section 162(m) of the Code.

(b) In the event of any transaction or event described in Section 11.1(a) or any unusual or
nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the
financial statements of the Company or any affiliate, or of changes in applicable laws, regulations
or accounting principles, the Committee, in its sole and absolute discretion, and on such terms and
conditions as it deems appropriate, either by the terms of the Award or by action taken prior to
the occurrence of such transaction or event and either automatically or upon the Participant’s
request, is hereby authorized to take any one or more of the following actions whenever the
Committee determines that such action is appropriate in order to prevent dilution or enlargement of
the benefits or potential benefits intended to be made available under the Plan or with respect to
any Award under the Plan, to facilitate such transactions or events or to give effect to such
changes in laws, regulations or principles:

(i) To provide for either (A) termination of any such Award in exchange for an amount of cash,
if any, equal to the amount that would have been attained upon the exercise of such Award or
realization of the Participant’s rights (and, for the avoidance of doubt, if as of the date of the
occurrence of the transaction or event described in this Section 11.1, the Committee determines in
good faith that no amount would have been attained upon the exercise of such Award or realization
of the Participant’s rights, then such Award may be terminated by the Company without payment) or
(B) the replacement of such Award with other rights or property selected by the Committee in its
sole discretion;

(ii) To provide that such Award be assumed by the successor or survivor corporation, or a
parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards
covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and prices;

(iii) To make adjustments in the number and type of shares of Stock (or other securities or
property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock
or Deferred Stock and/or in the terms and conditions of (including the grant or exercise price),
and the criteria included in, outstanding options, rights and awards and options, rights and awards
which may be granted in the future;

(iv) To provide that such Award shall be exercisable or payable or fully vested with respect
to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the
applicable Award Agreement; and

(v) To provide that the Award cannot vest, be exercised or become payable after such event.

(c) In connection with the occurrence of any Equity Restructuring, and notwithstanding
anything to the contrary in Sections 11.1(a) and 11.1(b):

(i) The number and type of securities subject to each outstanding Award and the exercise price
or grant price thereof, if applicable, will be proportionately adjusted. The adjustments provided
under this Section 11.1(c)(i) shall be nondiscretionary and shall be final and binding on the
affected Participant and the Company; and

(ii) The Committee shall make such proportionate adjustments, if any, as the Committee in its
discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate
number and kind of shares that may be issued under the Plan (including, but not limited to,
adjustments of the limitations in Sections 3.1 and 3.3).

11.2 Acceleration Upon a Change in Control. Notwithstanding Section 11.1, and except
as may otherwise be provided in any applicable Award Agreement or other written agreement entered
into between the Company and a Participant, if a Change in Control occurs and a Participant’s
Awards are not converted, assumed, or replaced by a successor entity, then immediately prior to the
Change in Control any such outstanding Awards shall become fully exercisable and all forfeiture
restrictions on such Awards shall lapse. Upon, or in anticipation of, a Change in Control, the
Committee may cause any and all Awards outstanding hereunder to terminate at a specific time in the
future, including but not limited to the date of such Change in Control, and shall give each
Participant the right to exercise such Awards during a period of time as the Committee, in its sole
and absolute discretion, shall determine.

11.3 No Other Rights. Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend, any increase or decrease in the number of shares of stock of any class or
any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Committee under the Plan, no
issuance by the Company of shares of stock of any class, or securities convertible into shares of
stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award.

ARTICLE 12.

ADMINISTRATION

12.1 Committee. Unless and until the Board delegates administration of the Plan to a
Committee as set forth below, the Plan shall be administered by the full Board, and for such
purposes the term “Committee” as used in this Plan shall be deemed to refer to the Board. The
Board, at its discretion or as otherwise necessary to comply with the requirements of Section
162(m) of the Code, Rule 16b-3 promulgated under the Exchange Act or to the extent required by any
other applicable rule or regulation, may delegate administration of the Plan to a Committee
consisting of two or more members of the Board. Unless otherwise determined by the Board, the
Committee shall consist solely of two or more members of the Board each of whom is an “outside
director,” within the meaning of Section 162(m) of the Code, a Non-Employee Director and an
“independent director” under the rules of the New York Stock Exchange (or other principal
securities market on which shares of Stock are traded, if any). Any action taken by the Committee
shall be valid and effective, whether or not members of the Committee at the time of such action
are later determined not to have satisfied the requirements for membership set forth in this
Section 12.1 or otherwise provided in any charter of the Committee. Notwithstanding the foregoing:
(a) the full Board, acting by a majority of its members in office, shall conduct the general
administration of the Plan with respect to all Awards granted to Independent Directors and for
purposes of such Awards the term “Committee” as used in this Plan shall be deemed to refer to the
Board and (b) the Committee may delegate its authority hereunder to the extent permitted by Section
12.5. In its sole discretion, the Board may at any time and from time to time exercise any and all
rights and duties of the Committee under the Plan except with respect to matters which under Rule
16b-3 under the Exchange Act or Section 162(m) of the Code, or any regulations or rules issued
thereunder, are required to be determined in the sole discretion of the Committee. The governance
of the Committee shall be subject to the charter of the Committee as approved by the Board.

12.2 Action by the Committee. Each member of the Committee is entitled to, in good
faith, rely or act upon any report or other information furnished to that member by any officer or
other employee of the Company or any Subsidiary, the Company’s independent certified public
accountants, or any executive compensation consultant or other professional retained by the Company
to assist in the administration of the Plan.

12.3 Authority of Committee. Subject to any specific designation in the Plan, the
Committee has the exclusive power, authority and discretion to:

(a) Designate Participants to receive Awards;

(b) Determine the type or types of Awards to be granted to each Participant;

(c) Determine the number of Awards to be granted and the number of shares of Stock to which an
Award will relate;

(d) Determine the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any reload provision, any
restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers thereof, any
provisions related to non-competition and recapture of gain on an Award, based in each case on such
considerations as the Committee in its sole discretion determines; provided, however, that the
Committee shall not have the authority to accelerate the vesting or waive the forfeiture of any
Performance-Based Awards;

(e) Determine whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other
property, or an Award may be canceled, forfeited, or surrendered;

(f) Prescribe the form of each Award Agreement, which need not be identical for each
Participant;

(g) Decide all other matters that must be determined in connection with an Award;

(h) Establish, adopt, or revise any rules and regulations as it may deem necessary or
advisable to administer the Plan;

(i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement; and

(j) Make all other decisions and determinations that may be required pursuant to the Plan or
as the Committee deems necessary or advisable to administer the Plan.

12.4 Decisions Binding. The Committee’s interpretation of the Plan, any Awards
granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the
Committee with respect to the Plan are final, binding, and conclusive on all parties.

12.5 Delegation of Authority. To the extent permitted by applicable law, the Board
may from time to time delegate to a committee of one or more members of the Board or one or more
officers of the Company the authority to grant or amend Awards to Participants other than (a)
Employees who are subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c) officers
of the Company (or Directors) to whom authority to grant or amend Awards has been delegated
hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Board
specifies at the time of such delegation, and the Board may at any time rescind the authority so
delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section
12.5 shall serve in such capacity at the pleasure of the Board.

ARTICLE 13.

EFFECTIVE AND EXPIRATION DATE

13.1 Effective Date. The Plan is effective as of the date the Plan is approved by the
Company’s stockholders (the “Effective Date”). The Plan will be deemed to be approved by
the stockholders if it is approved either:

(a) By a majority of the votes cast at a duly held stockholders meeting at which a quorum
representing a majority of outstanding voting stock is, either in person or by proxy, present and
voting on the Plan; or

(b) By a method and in a degree that would be treated as adequate under Delaware law in the
case of an action requiring stockholder approval.

13.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant
to the Plan after, the tenth anniversary of the Effective Date, except that no Incentive Stock
Options may be granted under the Plan after the tenth anniversary of the date the Plan is adopted
by the Board. Any Awards that are outstanding on the tenth anniversary of the Effective Date shall
remain in force according to the terms of the Plan and the applicable Award Agreement.

ARTICLE 14.

AMENDMENT, MODIFICATION, AND TERMINATION

14.1 Amendment, Modification, and Termination. Subject to Section 15.14, with the
approval of the Board, at any time and from time to time, the Committee may terminate, amend or
modify the Plan; provided, however, that (a) to the extent necessary and desirable to comply with
any applicable law, regulation, or stock exchange rule, the Company shall obtain stockholder
approval of any Plan amendment in such a manner and to such a degree as required, and (b)
stockholder approval shall be required for any amendment to the Plan that (i) increases the number
of shares available under the Plan (other than any adjustment as provided by Article 11), (ii)
permits the Committee to grant Options or SARs with an exercise price that is below Fair Market
Value on the date of grant, or (iii) permits the Committee to extend the exercise period for an
Option or SAR beyond ten years from the date of grant. Notwithstanding any provision in this Plan
to the contrary, absent approval of the stockholders of the Company, no Option or SAR may be
amended to reduce the per share exercise price of the shares subject to such Option or SAR below
the per share exercise price as of the date the Option or SAR is granted and, except as permitted
by Article 11, no Option or SAR may be granted in exchange for, or in connection with, the
cancellation or surrender of an Option or SAR having a higher per share exercise price.

14.2 Awards Previously Granted. Except with respect to amendments made pursuant to
Section 15.14, no termination, amendment, or modification of the Plan shall adversely affect in any
material way any Award previously granted pursuant to the Plan without the prior written consent of
the Participant.

ARTICLE 15.

GENERAL PROVISIONS

15.1 No Rights to Awards. No Eligible Individual or other person shall have any claim
to be granted any Award pursuant to the Plan, and neither the Company nor the Committee is
obligated to treat Eligible Individuals, Participants or any other persons uniformly.

15.2 No Stockholders Rights. Except as otherwise provided herein, a Participant shall
have none of the rights of a stockholder with respect to shares of Stock covered by any Award until
the Participant becomes the record owner of such shares of Stock.

15.3 Withholding. The Company or any Subsidiary shall have the authority and the
right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient
to satisfy federal, state, local and foreign taxes (including the Participant’s employment tax
obligations) required by law to be withheld with respect to any taxable event concerning a
Participant arising as a result of this Plan. The Committee may in its discretion and in
satisfaction of the foregoing requirement allow a Participant to elect to have the Company withhold
shares of Stock otherwise issuable under an Award (or allow the return of shares of Stock) having a
Fair Market Value equal to the sums required to be withheld. Notwithstanding any other provision
of the Plan, the number of shares of Stock which may be withheld with respect to the issuance,
vesting, exercise or payment of any Award (or which may be repurchased from the Participant of such
Award within six months (or such other period as may be required by the Committee in order to avoid
adverse accounting consequences to the Company) after such shares of Stock were acquired by the
Participant from the Company) in order to satisfy the Participant’s federal, state, local and
foreign income and payroll tax liabilities with respect to the issuance, vesting, exercise or
payment of the Award shall be limited to the number of shares which have a Fair Market Value on the
date of withholding or repurchase equal to the aggregate amount of such liabilities based on the
minimum statutory withholding rates for federal, state, local and foreign income tax and payroll
tax purposes that are applicable to such supplemental taxable income.

15.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate
any Participant’s employment or services at any time, nor confer upon any Participant any right to
continue in the employ or service of the Company or any Subsidiary.

15.5 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a Participant pursuant to an
Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights
that are greater than those of a general creditor of the Company or any Subsidiary.

15.6 Indemnification. To the extent allowable pursuant to applicable law, each member
of the Committee or of the Board shall be indemnified and held harmless by the Company from any
loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or proceeding to which he or she may be
a party or in which he or she may be involved by reason of any action or failure to act pursuant to
the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in
such action, suit, or proceeding against him or her; provided he or she gives the Company an
opportunity, at its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be entitled pursuant to
the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any
power that the Company may have to indemnify them or hold them harmless.

15.7 Relationship to Other Benefits. No payment pursuant to the Plan shall be taken
into account in determining any benefits pursuant to any pension, retirement, savings, profit
sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary except to
the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

15.8 Expenses. The expenses of administering the Plan shall be borne by the Company
and its Subsidiaries.

15.9 Titles and Headings. The titles and headings of the Sections in the Plan are for
convenience of reference only and, in the event of any conflict, the text of the Plan, rather than
such titles or headings, shall control.

15.10 Fractional Shares. No fractional shares of Stock shall be issued and the
Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional
shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate.

15.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any Participant who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth
in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 under the Exchange Act) that are requirements for the application of such exemptive
rule. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder
shall be deemed amended to the extent necessary to conform to such applicable exemptive rule.

15.12 Government and Other Regulations. The obligation of the Company to make payment
of awards in Stock or otherwise shall be subject to all applicable laws, rules, and regulations,
and to such approvals by government agencies as may be required. The Company shall be under no
obligation to register pursuant to the Securities Act, as amended, any of the shares of Stock paid
pursuant to the Plan. If the shares paid pursuant to the Plan may in certain circumstances be
exempt from registration pursuant to the Securities Act, as amended, the Company may restrict the
transfer of such shares in such manner as it deems advisable to ensure the availability of any such
exemption.

15.13 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of Delaware.

15.14 Section 409A. To the extent that the Committee determines that any Award
granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such
Award shall incorporate the terms and conditions required by Section 409A of the Code. To the
extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section
409A of the Code and Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance that may be issued
after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event
that following the Effective Date the Committee determines that any Award may be subject to Section
409A of the Code and related Department of Treasury guidance (including such Department of Treasury
guidance as may be issued after the Effective Date), the Committee may adopt such amendments to the
Plan and the applicable Award Agreement or adopt other policies and procedures (including
amendments, policies and procedures with retroactive effect), or take any other actions, that the
Committee determines are necessary or appropriate to (a) exempt the Award from Section 409A of the
Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award,
or (b) comply with the requirements of Section 409A of the Code and related Department of Treasury
guidance and thereby avoid the application of any penalty taxes under such Section.

* * * * *

I hereby certify that the foregoing Plan was duly adopted by the Board of Directors of Skechers
U.S.A., Inc. on April 16, 2007.

* * * * *

I hereby certify that the foregoing Plan was approved by the stockholders of Skechers U.S.A., Inc.
on May 24, 2007.

Executed on this 24th day of May, 2007.

/s/ Philip Paccione

Corporate Secretary

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