Document:

f8k060211ex10iii_brt.htm

Exhibit 10.3

 

Execution Version

 

PLEDGE AND SECURITY AGREEMENT

 

THIS PLEDGE AND SECURITY AGREEMENT, dated as of June 2, 2011, is made by BRT TORCH MEMBER LLC, a Delaware limited liability company (“Pledgor”), in favor of DEBT OPPORTUNITY FUND III, LLC, a Delaware limited liability company (“Pledgee”).

 

RECITALS

 

A.          Pledgor and Pledgee have entered into that certain Limited Liability Company Agreement (the “Operating Agreement”) of BRTL LLC, a Delaware limited liability company (the “Company”).

 

B.           Pursuant to Section 7.06 and/or Section 9.13 of the Operating Agreement, Pledgor may from time to time owe to Pledgee a Net Clawback Amount (the total of all such Net Clawback Amount outstanding from time to time, the “Obligations”).

 

C.           In order to induce Pledgee to enter into the Operating Agreement, and in order to further secure in part the Obligations, Pledgee has required that Pledgor execute and deliver this Agreement to Pledgee.

 

Now, therefore, in consideration of the above Recitals and the mutual covenants and agreements hereinafter set forth, and subject to the terms and conditions hereof, Pledgor and Pledgee hereby represent, warrant, covenant and agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Capitalized terms used but not defined herein shall have the meanings given thereto in the Operating Agreement.  As used herein, the following terms have the meanings indicated:

 

(a)             “Agreement” means this Pledge and Security Agreement, as the same may from time to time be modified, supplemented or amended and restated.

 

(b)             “Collateral” has the meaning provided in Section 2.1(a).

 

(c)             “Company” has the meaning provided in the Recitals.

 

(d)             “Event of Default” has the meaning provided in Section 2.3.

 

(e)             “Membership Interests” means any and all rights in the capital, profits, losses, gains, distributions or other economic interests of any type of, in or to the Company and any right to vote or otherwise direct the affairs of the Company.

 

(f)              “Obligations” has the meaning provided in the Recitals.

 

 

  

 

  

 

(g)             “Operating Agreement” has the meaning provided in the Recitals.

 

(h)             “Pledgee” has the meaning provided in the preamble of this Agreement.

 

(i)              “Pledged Interests” has the meaning provided in Section 2.1(b).

 

(j)              “Pledgor” has the meaning provided in the preamble of this Agreement.

 

(k)             “Receipts” means all of Pledgor’s dividends and/or distributions, and rights to dividends and/or distributions, of any kind from any of the Collateral and all proceeds thereof, and all other income, cash flow, profits, and all other fees and payments of any nature whatsoever arising from the Membership Interests.

 

(l)              “UCC” and “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in the State of New York.

 

ARTICLE II

 

PLEDGE OF MEMBERSHIP INTERESTS

Section 2.1.        Pledge.

 

(a)             Pledgor hereby transfers, grants, bargains, sells, conveys, hypothecates, pledges, sets over, endorses over and delivers unto Pledgee, and grants to Pledgee, as security for the Obligations, a security interest in (i) all of Pledgor’s right, title and interest in the Membership Interests and all proceeds thereof, (ii) any warrants, rights or options issued to the holders of, or otherwise in respect of, the Membership Interests, (iii) all Receipts, (iv) all other property hereafter delivered to Pledgee in substitution for or in addition to the foregoing in respect of the Membership Interests, all certificates and instruments representing or evidencing such property, and all cash, securities, interest, dividends, rights and other property at any time and from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all thereof, and (v) any and all proceeds resulting from the items described in clauses (i), (ii) (iii) and (iv), regardless of whether the items described in clauses (i), (ii), (iii) and (iv) are now owned by Pledgor or hereafter acquired and whether now existing or hereafter coming into existence (collectively, the “Collateral”).

 

(b)             Delivery of Collateral.

 

Pledgor agrees to deliver or cause to be delivered to Pledgee in accordance with Section 3.2(i), any and all certificated membership interests or other certificated securities now or hereafter included in the Collateral (all such securities, the “Pledged Interests”), together with any endorsement, accompanied by one or more undated instruments of transfer duly executed in blank reasonably satisfactory to Pledgee and by such other instruments and documents as Pledgee may reasonably request to further evidence or perfect the security interest and other rights granted herein.

 

 

  

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Section 2.2.        [Intentionally Omitted]

 

Section 2.3.        Events of Default.  The occurrence and continuance of any of the following events shall constitute an “Event of Default” hereunder:

 

(a)            Pledgor shall fail to pay to Pledgee the Net Clawback Amount as and when required by Section 7.06 and/or Section 9.13 of the Operating Agreement and such failure to pay has not been cured within ten (10) days after written notice from Pledgee;

 

(b)           Pledgor shall fail to perform or observe any term, covenant or agreement contained herein on its respective part to be performed or observed if such failure shall remain unremedied for 30 days after written notice thereof shall have been given to Pledgor by Pledgee; provided, however, if (i) such failure is susceptible to cure, but cannot reasonably be cured within such 30 day period, (ii) Pledgor shall have commenced to cure such failure within said 30 day period, and thereafter diligently and expeditiously proceeds to cure the same, and (iii) there is no material impairment or deterioration of the value of the Collateral during the extended cure period, then such 30 day period shall be extended for an additional 45 days;

 

(c)            The placement, issuance or filing of any levy, attachment, garnishment or similar process against the Collateral, or the commencement of any proceeding in connection therewith or of any other judicial process of, upon or in respect of, the Collateral; or

 

(d)            Except as may permitted under the Operating Agreement and subject to compliance with Section 3.2(b)(i) hereof, Pledgor shall sell, assign, transfer, pledge, encumber, dispose of, grant a security interest in, or otherwise convey any of the Collateral without the prior written consent of Pledgee, which consent may be withheld in Pledgee’s sole discretion.

 

Section 2.4.        Remedies upon an Event of Default.

 

(a)             If an Event of Default shall have occurred and be continuing, subject to Section 7.06(e) of the Operating Agreement, Pledgee shall be entitled to exercise all the rights and remedies of a secured party upon default under the UCC, including sale of the Collateral.  In furtherance and not in limitation of the foregoing, Pledgor agrees that, to the extent notice of sale shall be required by law, at least ten (10) days’ notice to Pledgor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification.  Each purchaser at any such sale shall hold the property so sold absolutely free from any claim or right on the part of Pledgor, and Pledgor hereby waives and releases to the fullest extent permitted by law any right or equity of redemption with respect to the Collateral after sale hereunder, and all rights, if any, of marshaling the Collateral and any other security for the Obligations or otherwise, and all rights, if any, of stay and/or appraisal which it now has or may any time in the future have under rule of law or statute now existing or hereafter enacted.  At any such sale, unless prohibited by applicable law, Pledgee may bid for and purchase (by bidding in Obligations or otherwise) all or any part of the Collateral so sold free from any such right or equity of redemption.  Pledgee shall not be liable for failure to collect or realize upon any or all of the Collateral or for any delay in so doing nor shall it be under any obligation to take any action whatsoever with regard thereto.

 

  

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(b)             Each right, power and remedy of Pledgee provided for in this Agreement or now or hereafter existing at law or in equity or by statute shall be cumulative and concurrent and shall be in addition to every other such right, power or remedy.  The exercise or beginning of the exercise by Pledgee of any one or more of the rights, powers or remedies provided for in this Agreement or now or hereafter existing at law or in equity or by statute or otherwise shall not preclude the simultaneous or later exercise by Pledgee of all such other rights, powers or remedies, and no failure or delay on the part of Pledgee to exercise any such right, power or remedy shall operate as a waiver thereof.

 

(c)             All moneys collected by Pledgee upon any sale or other disposition of the Collateral, together with all other moneys received by Pledgee hereunder, shall be applied as follows:

 

(i)       First, to the payment of all costs and expenses, if any, of Pledgee incurred in connection with such sale or disposition or otherwise payable under this Agreement;

 

(ii)      Second, to the payment of the Obligations in such order as Pledgee shall determine in its discretion; and

 

(iii)     Third, to the extent remaining after the application pursuant to the preceding clauses (i) and (ii), to Pledgor or to whomever may be lawfully entitled to receive such payment.

 

(d)             It is understood and agreed that Pledgor shall remain liable to the extent of any deficiency between (i) the amount of the proceeds of the Collateral applied pursuant to Section 2.4 and (ii) the outstanding amount of the Obligations.

 

(e)             Upon any sale of the Collateral by Pledgee hereunder, the receipt by Pledgee or the officer making the sale of the purchase price shall be a sufficient discharge to the purchaser or purchasers of the Collateral so sold, and such purchaser or purchasers shall not be obligated to see to the application of any part of the purchase money paid over to Pledgee or such officer or be answerable in any way for the misapplication or nonapplication thereof.

 

Section 2.5.        Further Assurances.  Pledgor shall cause to be filed at its sole cost and expense such UCC financing statements, in all applicable recording offices of each applicable jurisdiction, as are required to perfect the security interest of Pledgee in the Collateral, and will promptly provide Pledgee with certified copies thereof with evidence of filing indicated thereon.  In addition, Pledgor shall, at Pledgor’s sole cost and expense, from time to time as reasonably requested by Pledgee, prepare, execute, acknowledge, record, register, file and/or deliver to Pledgee such other instruments, agreements, certificates and documents (including the preparation and filing of UCC financing statements and continuations thereof) as Pledgee may reasonably request to evidence, confirm, perfect and maintain the liens granted or required to be granted to Pledgee by this Agreement, and shall fully cooperate with Pledgee and perform all additional acts which are necessary to effect the purposes of the this Agreement.

 

 

  

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Section 2.6.        Termination and Release of Pledge.  Upon the expiration or earlier termination of the existence of the Company and the indefeasible repayment in full of any outstanding Obligations, the pledge of the Collateral contained in this Article II shall automatically terminate and Pledgee, at the request and expense of Pledgor, will execute and deliver to Pledgor a proper instrument or instruments acknowledging the satisfaction and termination of such pledge, and will duly assign, transfer and deliver to Pledgor (without recourse and without any representation or warranty except that it has not previously encumbered or sold such Collateral in violation of this Agreement) such of the Collateral as may be in the possession of Pledgee and as has not theretofore been sold or otherwise applied or released pursuant to this Agreement, together with any moneys at the time held by Pledgee hereunder.  In the event that all or any part of the Collateral is sold in connection with a sale permitted by terms of this Agreement or is otherwise released at the direction of Pledgee, and the proceeds of such sale or sales or from such release are to be applied in accordance with the terms of this Agreement to the extent required to be so applied, Pledgee, at the request and expense of Pledgor, will release such Collateral from this Agreement, and will duly assign, transfer and deliver to Pledgor (without recourse and without any representation or warranty except that it has not previously encumbered or sold such Collateral in violation of this Agreement) such of the Collateral as is then being (or has been) so sold or released and as may be in possession of Pledgee and has not theretofore been released pursuant to this Agreement.

 

Section 2.7.        Bankruptcy.  Without limitation of the absolute nature of this Agreement, Pledgor and Pledgee agree that (a) this Agreement shall constitute a “security agreement” for purposes of 11 U.S.C. Section 552(b), (b) the security interests created by this Agreement extend to property of Pledgor acquired before the commencement of a case in bankruptcy and to all amounts of Collateral paid as payments, and (c) such security interests shall extend to all such payments acquired by the estate after the commencement of any case in bankruptcy.  Pledgor and Pledgee confirm that (i) this Agreement, (ii) the obligations of Pledgor hereunder, and (iii) the security interests created by Pledgor hereunder not constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any other federal, state or foreign bankruptcy, insolvency, receivership or similar law to the extent applicable to this Agreement, the obligations of Pledgor hereunder or the security interests created by Pledgor hereunder.  To effectuate the foregoing intention, the parties hereby irrevocably agree that the obligations of Pledgor under this Agreement shall be limited to the maximum amount as will result in the obligations of Pledgor under this Agreement not constituting a fraudulent transfer or conveyance.

 

ARTICLE III

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 3.1.        Representations and Warranties.  Pledgor represents and warrants that on the date hereof:

 

(a)             Pledgor is the sole owner of the Membership Interests.

 

 

  

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(b)            Pledgor is the sole owner, beneficially and of record, of interests in the Collateral, subject to no pledge, lien, mortgage, security interest, charge, option or other encumbrance whatsoever, except the liens and security interests created by this Agreement.  No financing statement covering the Collateral, or any part thereof, has been or will be filed with any filing officer, except as required hereunder.

 

(c)            Pledgor has the right in and good title to the Collateral and has full right, power and authority to pledge the Collateral pursuant to this Agreement and to execute, deliver and perform its obligations in accordance with the terms of this Agreement, without the consent or approval of any person or entity other than Pledgee.

 

(d)            The Membership Interests are uncertificated and no other ownership or beneficial interest in any portion of the Collateral is evidenced by any certificate or any other document that is an instrument (as defined in the Uniform Commercial Code).

 

(e)            This Agreement has been duly executed and delivered by Pledgor.

 

(f)             This Agreement constitutes a legal, valid and binding obligation of Pledgor, enforceable against Pledgor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, moratorium or similar laws affecting the enforcement or creditors’ rights generally.

 

(g)            Once the pledge of the Collateral hereunder is effective and the related UCC Financing Statement has been filed, Pledgee will have a valid, legal and perfected first priority security interest in all of the Collateral as to which perfection is governed by filing.

 

(h)            Pledgor’s complete legal name is set forth in the preamble of this Agreement.  All records of Pledgor relative to the Collateral are and will be kept at Pledgor’s principal place of business which as of the date hereof is located at c/o BRT Realty Trust, 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021, Attn:  Jeffrey A. Gould, President.

 

(i)              No dispute, right of setoff, counterclaim or defenses exist with respect to any part of the Collateral.

 

Section 3.2.        Covenants.

 

(a)             Pledgor covenants and agrees that it will defend Pledgee’s right, title and security interest in and to the Collateral and the respective proceeds thereof against the claims and demands of all persons whomsoever.

 

(b)             Pledgor covenants and agrees that, without in each case the prior written consent of Pledgee,

 

 

  

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(i)       Pledgor will not sell, transfer or convey any interest in, or suffer or permit any pledge, lien, security interest, charge, option or other encumbrance to be created upon or with respect to the Collateral and the respective proceeds thereof (except the liens and security interests created by this Agreement); and any such transfer shall be subject to this Agreement, and the transferee shall assume the obligations of Pledgor with respect to such Collateral and the proceeds thereof; provided that Pledgor may transfer its interest in the Membership Interests as permitted pursuant to Section 8.03 of the Operating Agreement or as otherwise permitted by Pledgee in writing so long as the transferee provides a pledge of its interest in the transfereed Membership Interests in the same form and substance of this Agreement;

 

(ii)      Pledgor (1) will not amend, modify or supplement any Pledged Interests without the prior written consent of Pledgee and (2) will defend its title or interest thereto or therein against any and all pledges, liens, security interests, charges, options or other encumbrances of any nature, however arising of all persons whomsoever; provided that the foregoing shall not prohibit amendments to the Operating Agreement permitted pursuant to the terms thereof or with the written consent of the TL Member to be granted or withheld in its sole discretion; and

 

(iii)     Pledgor will not permit or suffer to be issued or consent to the issuance of any additional limited liability company membership interests in the Company that would cause a dilution of the Membership Interests but only to the extent Pledgor has the right or authority to prohibit or consent to the same.

 

(c)             Pledgor covenants and agrees that it will take no action that would violate any of the terms of this Agreement.

 

(d)             Pledgor covenants and agrees that it will take no action that would cause any of the representations contained in Section 3.1 to fail to be true at any time.

 

(e)             Pledgor covenants and agrees, for purposes of hereafter assuring the proper filing of financing statements and other security instruments, and the location of such filings, Pledgor will not, without giving Pledgee at least 10 days’ prior notice, change its name, address of residence or place of business (which are as set forth in Section 3.1(h)).

 

(f)             Pledgor covenants and agrees that it will defend Pledgee’s right, title and security interest in and to the Collateral and the respective proceeds thereof against the claims and demands of all persons whomsoever.

 

(g)             Pledgor covenants and agrees that it shall pay all taxes and other charges against the Collateral, shall not use the Collateral illegally, and shall not permit to exist any loss, theft, damage or destruction of the Collateral and shall not permit to exist any levy, seizure or attachment of the Collateral.

 

(h)             Pledgor covenants and agrees that it will not assent to or enter into any amendment or modification, directly or indirectly, of the Company’s organizational documents except as expressly provided pursuant to the terms thereof or with the prior written consent of the TL Member to be granted or withheld in its sole discretion.

 

 

  

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(i)              Pledgor covenants and agrees that, within sixty (60) says of the date hereof, Pledgor shall cause the Membership Interests of the Company to be represented by a membership certificate issued by the Company to Pledgor as a member of the Company.  In which case, the following shall apply:

 

(i)       Pledgor’s membership certificate shall represent Pledgor’s entire membership interest in the Company;

 

(ii)      Pledgor’s membership interest in the Company shall for all purposes be personal property;

 

(iii)     No member shall have any interest in the specific property of the Company;

 

(iv)    All membership certificates shall be a certificated security for purpose of Article 8 of the Uniform Commercial Code of the State of New York and the Uniform Commercial Code of any other jurisdiction;

 

(v)     All membership certificates shall bear the following legend:   “This certificate evidences an interest in BRTL LLC and shall be a security for purposes of Article 8 of the Uniform Commercial Code of the State of New York and the Uniform Commercial Code of any other jurisdiction.”  The foregoing provision shall not be amended, and no such purported amendment to this provision shall be effective until all outstanding membership certificates have been surrendered for cancellation.

 

ARTICLE IV  

 

MISCELLANEOUS

 

Section 4.1.        Survival.  This Agreement and all covenants, agreements, representations and warranties made herein and in the certificates delivered pursuant hereto shall survive the execution and delivery of this Agreement, and shall continue in full force and effect so long as any portion of the Obligations is outstanding and unpaid or such longer period as is set forth herein.  Whenever in this Agreement any of the parties hereto is referred to, such reference shall be deemed to include the permitted successors and permitted assigns of such party.  All covenants, promises and agreements in this Agreement contained, by or on behalf of Pledgor,  shall bind Pledgor and its successors and assigns, and shall inure to the benefit of Pledgee and its successors and assigns.

 

Section 4.2.        Governing Law.

 

(a)             This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

(b)            Any legal suit, action or proceeding against Pledgor or Pledgee arising out of or relating to this Agreement may be instituted in any federal or state court in New York, New York.  Pledgor hereby (i) irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum, and (ii) irrevocably submits to the nonexclusive jurisdiction of any such court in any such suit, action or proceeding.

 

 

  

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Section 4.3.        Modification; Waiver in Writing.  This Agreement may not be amended or waived, nor shall any consent or approval of Pledgee be granted hereunder, unless such amendment, waiver, consent or approval is in writing signed by Pledgee and Pledgor.

 

Section 4.4.        Notices.  Any notice, communication or request required or permitted to be given hereunder shall be given in accordance with Section 12.04 of the Operating Agreement.

 

Section 4.5.        Severability.  Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

Section 4.6.        Counterparts.  A party to this Agreement may deliver executed signature pages to this Agreement by facsimile transmission or electronic mail attachment to any other parties, which facsimile copy or electronic mail attachment shall be deemed to be an original executed signature page; provided, however, that such party shall deliver an original signature page to the other ppromptly thereafter.  This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which counterparts together shall constitute one agreement with the same effect as if the parties to this Agreement had signed the same signature page.

 

Section 4.7.        Expenses.  Pledgor will upon demand pay to Pledgee the amount of any and all out-of-pocket expenses, including, without being limited to, the reasonable fees and expenses of its counsel and of any experts and agents, that Pledgee may incur in connection with the custody, preservation, use or operation of, or the sale of, collection from or other realization upon, any of the Collateral, the exercise or enforcement of any of the rights of Pledgee hereunder or the failure by Pledgor to perform or observe any of the provisions hereof.

 

 

 

(signatures appear on next page)

 

  

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IN WITNESS WHEREOF, Pledgor and Pledgee have each caused this Agreement to be duly executed by its respective duly authorized representative, all as of the day and year first above written.

 

 

	 	PLEDGOR
	 	 
	 	
BRT TORCH MEMBER LLC, 

a Delaware limited liability company

	 	 	 
	
 

	
By: 

	/s/ Mark H. Lundy
	 	 	Name: Mark H. Lundy
	 	 	Title: Senior Vice President
	 	 	 

 

 

	 	PLEDGOR
	 	 
	 	
DEBT OPPORTUNITY FUND III, LLC, 

a Delaware limited liability company

	 	 	 
	
 

	
By: 

	/s/ Trevor Rozowsky
	 	 	Name: Trevor Rozowsky
	 	 	Title: Managing Director
	 	 	 

 

Joinder of the Company

The undersigned hereby acknowledges and approves Pledgor’s pledge of its membership interests in BRTL LLC in accordance with the terms of this Agreement.

 

 

	 	BRTL LLC,  a Delaware limited liability company
	 	 
	 	By:  	BRT Torch Member LLC, a Delaware limited liability company, its managing member

 

	
 

	 	
By: 

	/s/ Mark H. Lundy
	 	 	 	Name: Mark H. Lundy
	 	 	 	Title: Senior Vice PresidentEX-10.1

EXHIBIT 10.1

AVATAR HOLDINGS INC.

AMENDED AND RESTATED 1997 INCENTIVE AND CAPITAL ACCUMULATION PLAN

(2011 RESTATEMENT)

1. Purpose. The Avatar Holdings Inc. Amended and Restated 1997 Incentive and Capital
Accumulation Plan (2011 Restatement) (the “Plan”) is intended to provide incentives which will
attract, retain and motivate highly competent persons as directors, officers or employees of Avatar
Holdings Inc. (the “Company”) and of any subsidiary corporation now existing or hereafter formed or
acquired, by providing them opportunities to acquire shares of the common stock, par value $1.00
per share, of the Company (“Common Stock”) or to receive monetary payments based on the value of
such shares pursuant to the Benefits (as defined below) described herein. Furthermore, the Plan is
intended to assist in aligning the interests of the Company’s employees to those of its
stockholders.

2.  Administration.

(a) The Plan will be administered by a committee or committees of the Board of Directors of
the Company (the “Board”) or a subcommittee of a committee of the Board, appointed by the Board
from among its members (the “Committee”), and shall be comprised, unless otherwise determined by
the Board, solely of not less than two members who shall be (i) “Non-Employee Directors” within the
meaning of Rule 16b-3(b)(3) (or any successor rule) promulgated under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) and (ii) “outside directors” within the meaning of
Treasury Regulation Section 1.162-27(e)(3) under Section 162(m) of the Internal Revenue Code of
1986, as amended (the “Code”). Benefits (as defined in Section 4 hereof) granted hereunder to
non-employee directors of the Company shall be made by the Nominating and Corporate Governance
Committee of the Board (or such other committee as may be determined by the Board). The Committee
is authorized, subject to the provisions of the Plan, to establish such rules and regulations as it
deems necessary for the proper administration of the Plan and to make such determinations and
interpretations and to take such action in connection with the Plan and any Benefits (as defined in
Section 4 hereof) granted hereunder as it deems necessary or advisable, including the right to
establish the terms and conditions of Benefits, to accelerate the vesting or exercisability of
Benefits and to cancel Benefits. The Committee may determine the extent to which any Benefit under
the Plan is required to comply, or not comply, with Section 409A of the Code. All determinations
and interpretations made by the Committee shall be binding and conclusive on all participants and
their legal representatives. No member of the Board of Directors, no member of the Committee and no
employee of the Company shall be liable for any act or failure to act hereunder, except in
circumstances involving his or her bad faith, gross negligence or willful misconduct, or for any
act or failure to act hereunder by any other member or employee or by any agent to whom duties in
connection with the administration of this Plan have been delegated. The Company shall indemnify
members of the Committee and any agent of the Committee who is an employee of the Company or any of
its subsidiaries, against any and all liabilities or expenses to which they may be subjected by
reason of any act or failure to act with respect to their duties on behalf of the Plan, except in
circumstances involving such person’s bad faith, gross negligence or willful misconduct.

(b) The Committee may delegate to one or more of its members, or to one or more agents, such
administrative duties as it may deem advisable, and the Committee, or any person to whom it has
delegated duties as aforesaid, may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may have under the Plan. The Committee may employ such
legal or other counsel, consultants and agents as it may deem desirable for the administration of
the Plan and may rely upon any opinion or computation received from any such counsel, consultant or
agent. Expenses incurred by the Committee in the engagement of such  counsel, consultant or agent
shall be paid by the Company, or the subsidiary or affiliate whose employees have participated in
the Plan, as determined by the Committee.

3.  Participants. Participants will consist of such directors, officers or employees of the Company
and any subsidiary corporation of the Company as the Committee in its sole discretion determines to
be in a position to impact the success and future growth and profitability of the Company and whom
the Committee may designate from time to time to receive Benefits under the Plan. Designation of a
participant in any year shall not require the Committee to designate such person to receive a
Benefit in any other year or, once designated, to receive the same type or amount of Benefit as
granted to the participant in any other year. The Committee shall consider such factors as it deems
pertinent in selecting participants and in determining the type and amount of their respective
Benefits.

4.  Type of Benefits. Benefits under the Plan may be granted in any one or a combination of
(a) Stock Options, (b) Stock Appreciation Rights, (c) Stock Awards, (d) Performance Awards, and
(e) Stock Units (each as described below, and collectively, the “Benefits”). Stock Awards,
Performance Awards, and Stock Units may, as determined by the Committee in its discretion,
constitute Performance-Based Awards, as described in Section 11 hereof. Benefits shall be evidenced
by agreements (which need not be identical) in such forms as the Committee may from time to time
approve; provided, however, that in the event of any conflict between the provisions of the Plan
and any such agreements, the provisions of the Plan shall prevail.

5.  Common Stock Available Under the Plan. Subject to the provisions of this Section 5 and any
adjustments made in accordance with Section 12 hereof, the aggregate number of shares of Common
Stock that may be subject to Benefits granted under this Plan shall be 2,200,000 shares of Common
Stock, which may be authorized and unissued or treasury shares. The maximum number of shares of
Common Stock with respect to which Incentive Stock Options may be granted shall not exceed 700,000.
The maximum number of shares of Common Stock with respect to which Benefits may be granted or
measured to any individual participant under the Plan during the term of the Plan shall not exceed
900,000, subject to adjustments made in accordance with Section 12 hereof). Any shares of Common
Stock subject to a Stock Option or Stock Appreciation Right which for any reason is cancelled or
terminated without having been exercised, any shares subject to Stock Awards, Performance Awards or
Stock Units which are forfeited, any shares subject to Performance Awards settled in cash or any
shares delivered to the Company as part or full payment for the exercise of a Stock Option or Stock
Appreciation Right, and any shares withheld by the Company to satisfy tax withholding with respect
to Benefits shall again be available for Benefits under the Plan. The preceding sentence shall
apply only for purposes of determining the aggregate number of shares of Common Stock subject to
Benefits under the Plan but shall not apply for purposes of determining the maximum number of
shares of Common Stock with respect to which Benefits (including the maximum number of shares of
Common Stock subject to Stock Options and Stock Appreciation Rights) that may be granted to any
individual participant under the Plan.

6.  Stock Options. Stock Options will consist of awards from the Company that will enable the
holder to purchase a number of shares of Common Stock, at set terms. Stock Options may be
“incentive stock options” (“Incentive Stock Options”), within the meaning of Section 422 of the
Code, or Stock Options which do not constitute Incentive Stock Options (“Nonqualified Stock
Options”). The Committee will have the authority to grant to any participant one or more Incentive
Stock Options, Nonqualified Stock Options, or both types of Stock Options (in each case with or
without Stock Appreciation Rights). Each Stock Option shall be subject to such terms and conditions
consistent with the Plan as the Committee may impose from time to time, subject to the following
limitations:

(a) Exercise Price. Each Stock Option granted hereunder shall have such per-share exercise
price as the Committee may determine at the date of grant; provided, however, that the per-share
exercise price shall not be less than 100% of the Fair Market Value (as defined below) of the
Common Stock on the date the Stock Option is granted. 

(b) Payment of Exercise Price. The option exercise price may be paid in cash or, in the
discretion of the Committee, by the delivery of shares of Common Stock of the Company then owned by
the participant, by the withholding of shares of Common Stock for which a Stock Option is
exercisable, or by a combination of these methods, on such terms and conditions as the Committee
shall determine in its sole discretion. In the discretion of the Committee, payment may also be
made by delivering a properly executed exercise notice to the Company together with a copy of
irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan
proceeds to pay the exercise price. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms. The Committee may prescribe
any other method of paying the exercise price that it determines to be consistent with applicable
law and the purpose of the Plan, including, without limitation, in lieu of the exercise of a Stock
Option by delivery of shares of Common Stock of the Company then owned by a participant, providing
the Company with a notarized statement attesting to the number of shares owned, where, upon
verification by the Company, the Company would issue to the participant only the number of
incremental shares to which the participant is entitled upon exercise of the Stock Option. In
determining which methods a participant may utilize to pay the exercise price, the Committee may
consider such factors as it determines are appropriate.  

(c) Exercise Period. Stock Options granted under the Plan shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the Committee; provided,
however, that no Stock Option shall be exercisable later than ten years after the date it is
granted except in the event of a participant’s death, in which case, the exercise period of such
participant’s Stock Options may be extended beyond such period but no later than one year after the
participant’s death. All Stock Options shall terminate at such earlier times and upon such
conditions or circumstances as the Committee shall in its discretion set forth in such option
agreement at the date of grant.  

(d) Limitations on Incentive Stock Options. Incentive Stock Options may be granted only to
participants who are employees of the Company or subsidiary corporation of the Company at the date
of grant. The aggregate Fair Market Value (determined as of the time the Stock Option is granted)
of the Common Stock with respect to which Incentive Stock Options are exercisable for the first
time by a participant during any calendar year (under all option plans of the Company) shall not
exceed $100,000. For purposes of the preceding sentence, Incentive Stock Options will be taken into
account in the order in which they are granted. The per share exercise price of an Incentive Stock
Option shall not be less than 100% of the Fair Market Value of the Common Stock on the date of
grant, and no Incentive Stock Option may be exercised later than ten years after the date it is
granted; provided, however, Incentive Stock Options may not be granted to any participant who, at
the time of grant, owns stock possessing (after the application of the attribution rules of
Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any subsidiary corporation of the Company, unless the exercise price is
fixed at not less than 110% of the Fair Market Value of the Common Stock on the date of grant and
the exercise of such option is prohibited by its terms after the expiration of five years from the
date of grant of such option. In addition, no Incentive Stock Option may be issued to a participant
in tandem with a Nonqualified Stock Option.

(e) Limitation on Repricing. Unless such action is approved by the Company’s stockholders in
accordance with applicable law: (i) no outstanding Stock Option granted under the Plan may be
amended to provide an exercise price that is lower than the then-current exercise price of such
outstanding Stock Option (other than adjustments to the exercise price pursuant to Section 12);
(ii) the Committee may not cancel any outstanding Stock Option and grant in substitution therefore
new Benefits under the Plan covering the same or a different number of shares of Common Stock and
having an exercise price lower than the then-current exercise price of the cancelled Stock Option
(other than adjustments to the exercise price pursuant to Section 12); and (iii) the Committee may
not authorize the repurchase of an outstanding Stock Option which has an exercise price that is
higher than the then-current fair market value of the Common Stock (other than adjustments to the
exercise price pursuant to Section 12).

7.  Stock Appreciation Rights. The Committee may, in its discretion, grant Stock Appreciation
Rights to the holders of any Stock Options granted hereunder. In addition, Stock Appreciation
Rights may be granted independently of, and without relation to, options. A Stock Appreciation
Right means a right to receive a payment, in cash, Common Stock or a combination thereof, in an
amount equal to the excess of (x) the Fair Market Value, or other specified valuation, of a
specified number of shares of Common Stock on the date the right is exercised over (y) the Fair
Market Value, or other specified valuation (which shall be no less than the Fair Market Value), of
such shares of Common Stock on the date the right is granted, all as determined by the Committee;
provided, however, that if a Stock Appreciation Right is granted in tandem with or in substitution
for a Stock Option, the designated Fair Market Value in the award agreement may be the Fair Market
Value on the date such Stock Option was granted. Each Stock Appreciation Right shall be subject to
such terms and conditions as the Committee shall impose from time to time.

8.  Stock Awards. The Committee may, in its discretion, grant Stock Awards (which may include
mandatory payment of bonus incentive compensation in stock) consisting of Common Stock issued or
transferred to participants with or without other payments therefor. Stock Awards may be subject to
such terms and conditions as the Committee determines appropriate, including, without limitation,
restrictions on the sale or other disposition of such shares, the right of the Company to reacquire
such shares for no consideration upon termination of the participant’s service within specified
periods, and may constitute Performance-Based Awards, as described in Section 11 hereof. The
Committee may require the participant to deliver a duly signed stock power, endorsed in blank,
relating to the Common Stock covered by such an award. The Committee may also require that the
stock certificates evidencing such shares be held in custody or bear restrictive legends until the
restrictions thereon shall have lapsed. The Stock Award shall specify whether the participant shall
have, with respect to the shares of Common Stock subject to a Stock Award, all of the rights of a
holder of shares of Common Stock of the Company, including the right to receive dividends and to
vote the shares.

9.  Performance Awards.

(a) Performance Awards may be granted to participants at any time and from time to time, as
shall be determined by the Committee. Performance Awards may constitute Performance-Based Awards,
as described in Section 11 hereof. The Committee shall have complete discretion in determining the
number, amount and timing of awards granted to each participant. Such Performance Awards may be in
the form of shares of Common Stock or Stock Units. Performance Awards may be awarded as short-term
or long-term incentives. Performance targets may be based upon, without limitation, Company-wide,
divisional and/or individual performance.

(b) With respect to those Performance Awards that are not intended to constitute
Performance-Based Awards, the Committee shall have the authority at any time to make adjustments to
performance targets for any outstanding Performance Awards which the Committee deems necessary or
desirable unless at the time of establishment of such targets the Committee shall have precluded
its authority to make such adjustments.

(c) Payment of earned Performance Awards shall be made in accordance with terms and conditions
prescribed or authorized by the Committee. The participant may elect to defer, or the Committee may
require or permit the deferral of, the receipt of Performance Awards upon such terms as the
Committee deems appropriate. Notwithstanding anything in this Section 9 to the contrary, any
deferral of payment with respect to Performance Awards shall be compliant with or exempt from the
application of Code Section 409A.

10.  Stock Units.

(a) The Committee may, in its discretion, grant Stock Units to participants hereunder. The
Committee shall determine the criteria for the vesting of Stock Units. Stock Units may constitute
Performance-Based Awards as described in Section 11 hereof. A Stock Unit granted by the Committee
shall provide payment in shares of Common Stock at such time as the award agreement shall specify.
Shares of Common Stock issued pursuant to this Section 10 may be issued with or without other
payments therefor as may be required by applicable law or such other consideration as may be
determined by the Committee. The Committee shall determine whether a participant granted a Stock
Unit shall be entitled to a Dividend Equivalent Right (as defined below).

(b) Upon vesting of a Stock Unit, unless the Committee has determined to defer payment with
respect to such unit or a participant has elected, upon such terms as the Committee deems
appropriate, to defer payment under subsection (c) below, shares of Common Stock representing the
Stock Units shall be distributed to the participant unless the Committee, with the consent of the
participant, provides for the payment of the Stock Units in cash or partly in cash and partly in
shares of Common Stock equal to the value of the shares of Common Stock which would otherwise be
distributed to the participant.

(c) The Committee may permit a participant to elect not to receive Common Stock upon the
vesting of such Stock Unit and for the Company to continue to maintain the Stock Unit on its books
of account. In such event, the value of a Stock Unit shall be payable in shares of Common Stock
pursuant to the agreement of deferral. Notwithstanding anything in this Section 10 to the contrary,
any deferral of payment with respect to Stock Units shall be compliant with or exempt from the
application of Code Section 409A.

(d) A “Stock Unit” means a notional account representing one share of Common Stock. A
“Dividend Equivalent Right” means the right to receive the amount of any dividend paid on the share
of Common Stock underlying a Stock Unit, which shall be payable in cash or in the form of
additional Stock Units.

11.  Performance-Based Awards. Certain Benefits granted under the Plan may be granted in a manner
such that the Benefits qualify for the performance-based compensation exemption of Section 162(m)
of the Code (“Performance-Based Awards”). As determined by the Committee in its sole discretion,
either the granting or vesting of such Performance-Based Awards shall be based on achievement of
amounts, hurdle rates, growth rates, and/or reductions in one or more business criteria that apply
to the individual participant, one or more geographic or business segments, one or more business
units of the Company or the Company as a whole. The business criteria shall be as follows,
individually or in combination: net sales, pretax income before allocation of corporate overhead
and bonus, budget, earnings per share, net income, division, group or corporate financial goals,
return on stockholders’ equity, return on assets, attainment of strategic and operational
initiatives, appreciation in and/or maintenance of the price of the Common Stock or any other
publicly-traded securities of the Company, market share, gross profits, earnings before interest
and taxes, earnings before interest, taxes, depreciation and amortization, net income before taxes,
taxes, economic value-added models or reductions in costs. In addition, Performance-Based Awards
may include comparisons to the performance of other companies or to market indices, such
performance to be measured by one or more of the foregoing business criteria. Furthermore, the
measurement of performance against goals may exclude the impact of charges for restructurings,
discontinued operations, extraordinary items and other unusual or non-recurring items, and the
cumulative effects of accounting changes, each as defined by generally accepted accounting
principles as identified in the financial statements, notes to the financial statements or
management’s discussion and analysis. With respect to Performance-Based Awards, (i) the Committee
shall establish in writing (x) the performance goals applicable to a given period, and such
performance goals shall state, in terms of an objective formula or standard, the method for
computing the amount of compensation payable to the participant if such performance goals are
obtained and (y) the individual employees or class of employees to which such performance goals
apply no later than 90 days after the commencement of such period (but in no event after 25% of
such period has elapsed) and (ii) no Performance-Based Awards shall be payable to or vest with
respect to, as the case may be, any participant for a given period until the Committee certifies in
writing that the objective performance goals (and any other material terms) applicable to such
period have been satisfied. With respect to any Benefits intended to qualify as Performance-Based
Awards, after establishment of a performance goal, the Committee shall not revise such performance
goal or increase the amount of compensation payable thereunder (as determined in accordance with
Section 162(m) of the Code) upon the attainment of such performance goal. Notwithstanding the
preceding sentence, the Committee may reduce or eliminate the number of shares of Common Stock or
cash granted or the number of shares of Common Stock vested upon the attainment of such performance
goal.

12.  Adjustment Provisions; Change in Control.

(a) If there shall be any change in the Common Stock of the Company, through merger,
consolidation, reorganization, recapitalization, stock dividend, stock split, reverse stock split,
split up, spinoff, combination of shares, exchange of shares, dividend in kind or other like change
in capital structure or distribution (other than normal cash dividends) to stockholders of the
Company, an adjustment shall be made to each outstanding Stock Option and Stock Appreciation Right
such that each such Stock Option and Stock Appreciation Right shall thereafter be exercisable for
such securities, cash and/or other property as would have been received in respect of the Common
Stock subject to such Stock Option or Stock Appreciation Right had such Stock Option or Stock
Appreciation Right been exercised in full immediately prior to such change or distribution, and
such an adjustment shall be made successively each time any such change shall occur. In addition,
in the event of any such change or distribution or any extraordinary dividend or distribution of
cash or other assets, in order to prevent dilution or enlargement of participants’ rights under the
Plan, the Committee will have authority to adjust, in an equitable manner, the number and kind of
shares that may be issued under the Plan, the number and kind of shares subject to outstanding
Benefits, the exercise price applicable to outstanding Benefits, and the Fair Market Value of the
Common Stock and other value determinations applicable to outstanding Benefits. Appropriate
adjustments may also be made by the Committee in the terms of any Benefits under the Plan to
reflect such changes or distributions (and any extraordinary dividend or distribution of cash or
other assets) and to modify any other terms of outstanding Benefits on an equitable basis,
including modifications of performance targets and changes in the length of performance periods. In
addition, other than with respect to Stock Options, Stock Appreciation Rights and other awards
intended to constitute Performance-Based Awards, the Committee is authorized to make adjustments to
the terms and conditions of, and the criteria included in, Benefits in recognition of unusual or
nonrecurring events affecting the Company or the financial statements of the Company, or in
response to changes in applicable laws, regulations, or accounting principles.

(b) Notwithstanding any other provision of this Plan, in the event of a Change in Control (as
defined below), the Committee, in its discretion, may take such actions as it deems appropriate
with respect to outstanding Benefits, including, without limitation, accelerating the
exercisability or vesting of such Benefits, or such other actions provided in an agreement approved
by the Board in connection with a Change in Control and such Benefits shall be subject to the terms
of such agreement as the Committee, in its discretion, shall determine. The Committee, in its
discretion, may determine that, upon the occurrence of a Change in Control of the Company, each
Stock Option and Stock Appreciation Right outstanding hereunder shall terminate within a specified
number of days after notice to the holder, and such holder shall receive, with respect to each
share of Common Stock subject to such Stock Option or Stock Appreciation Right, an amount equal to
the excess of the Fair Market Value of such shares of Common Stock immediately prior to the
occurrence of such Change in Control over the exercise price per share of such Stock Option or
Stock Appreciation Right; such amount to be payable in cash, in one or more kinds of property
(including the property, if any, payable in the transaction) or in a combination thereof, as the
Committee, in its discretion, shall determine.

 

For purposes of this Section 12(b), a “Change in Control” of the Company shall be deemed to have
occurred upon any of the following events:

 

(A) A person or entity or group of persons or entities, acting in concert, shall become the
direct or indirect beneficial owner (within the meaning of Rule 13d-3 of the Exchange Act) of
securities of the Company representing fifty-one percent (51%) or more of the combined voting power
of the issued and outstanding common stock of the Company (a “Significant Owner”), unless such
shares are originally issued to such Significant Owner by the Company; or

 

(B) The majority of the Company’s Board of Directors is no longer comprised of the incumbent
directors who constitute the Board of Directors on the Effective Date (as defined in Section 22(a)
hereof) and any other individual(s) who becomes a director subsequent to the Effective Date whose
initial election or nomination for election as a director, as the case may be, was approved by at
least a majority of the directors who comprised the incumbent directors as of the date of such
election or nomination; or

 

(C) A sale of all or substantially all of the assets of the Company; or 

(D) The Board of Directors shall approve any merger, consolidation, or like business
combination or reorganization of the Company, the consummation of which would result in the
occurrence of any event described in clause (C) above, and such transaction shall have been
consummated.

13.  Nontransferability. Each Benefit granted under the Plan to a participant shall not be
transferable otherwise than by will or the laws of descent and distribution, and shall be
exercisable, during the participant’s lifetime, only by the participant. In the event of the death
of a participant, each Stock Option or Stock Appreciation Right theretofore granted to him or her
shall be exercisable during such period after his or her death as the Committee shall in its
discretion set forth in such option or right at the date of grant and then only by the executor or
administrator of the estate of the deceased participant or the person or persons to whom the
deceased participant’s rights under the Stock Option or Stock Appreciation Right shall pass by will
or the laws of descent and distribution. Notwithstanding the foregoing, at the discretion of the
Committee, an award of a Benefit other than an Incentive Stock Option may permit the
transferability of a Benefit by a participant solely to the participant’s spouse, siblings,
parents, children and grandchildren or trusts for the benefit of such persons or partnerships,
corporations, limited liability companies or other entities owned solely by such persons, including
trusts for such persons, subject to any restriction included in the award of the Benefit.

14.  Other Provisions. The award of any Benefit under the Plan may also be subject to such other
provisions (whether or not applicable to the Benefit awarded to any other participant) as the
Committee determines appropriate, including, without limitation, for the installment purchase of
Common Stock under Stock Options, for the installment exercise of Stock Appreciation Rights, for
the forfeiture of, or restrictions on resale or other disposition of, Common Stock acquired under
any form of Benefit, for the acceleration of exercisability or vesting of Benefits in the event of
a change of control of the Company (whether or not a Change in Control), for the payment of the
value of Benefits to participants in the event of a change of control of the Company (whether or
not a Change in Control), or to comply with federal and state securities laws, or understandings or
conditions as to the participant’s employment or service in addition to those specifically provided
for under the Plan.

15.  Fair Market Value. For purposes of this Plan and any Benefits awarded hereunder, Fair Market
Value shall be the closing price of the Company’s Common Stock on the date of calculation (or on
the last preceding trading date if Common Stock was not traded on such date) if the Company’s
Common Stock is readily tradeable on a national securities exchange or other market system, and if
the Company’s Common Stock is not readily tradeable, Fair Market Value shall mean the amount
determined in good faith by the Committee as the fair market value of the Common Stock of the
Company.

16.  Withholding. All payments or distributions of Benefits made pursuant to the Plan shall be net
of any amounts required to be withheld pursuant to applicable federal, state and local tax
withholding requirements at the minimum statutory withholding rates. If the Company proposes or is
required to distribute Common Stock pursuant to the Plan, it may require the recipient to remit to
it or to the corporation that employs such recipient an amount sufficient to satisfy such tax
withholding requirements prior to the delivery of any certificates for such Common Stock. In lieu
thereof, the Company or the employing corporation shall have the right to withhold the amount of
such taxes from any other sums due or to become due from such corporation to the recipient as the
Committee shall prescribe. The Committee may, in its discretion and subject to such rules as it may
adopt (including any as may be required to satisfy applicable tax and/or non-tax regulatory
requirements), permit an optionee or award or right holder to pay all or a portion of the federal,
state and local withholding taxes arising in connection with any Benefit consisting of shares of
Common Stock by electing to have the Company withhold shares of Common Stock (or by electing to pay
with already owned shares) having a Fair Market Value equal to the amount of tax to be withheld,
such tax calculated at minimum statutory withholding rates.

17.  Tenure. A participant’s right, if any, to continue to serve the Company or any of its
subsidiaries or affiliates as a director, officer, employee or otherwise, shall not be enlarged or
otherwise affected by his or her designation as a participant under the Plan.

18.  Unfunded Plan. Participants shall have no right, title, or interest whatsoever in or to any
investments which the Company may make to aid it in meeting its obligations under the Plan. Nothing
contained in the Plan, and no action taken pursuant to its provisions, shall create or be construed
to create a trust of any kind, or a fiduciary relationship between the Company and any participant,
beneficiary, legal representative or any other person. To the extent that any person acquires a
right to receive payments from the Company under the Plan, such right shall be no greater than the
right of an unsecured general creditor of the Company. All payments to be made hereunder shall be
paid from the general funds of the Company and no special or separate fund shall be established and
no segregation of assets shall be made to assure payment of such amounts except as expressly set
forth in the Plan. The Plan is not intended to be subject to the Employee Retirement Income
Security Act of 1974, as amended.

19.  No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered
pursuant to the Plan or any Benefit. The Committee shall determine whether cash, or Benefits, or
other property shall be issued or paid in lieu of fractional shares or whether such fractional
shares or any rights thereto shall be forfeited or otherwise eliminated.

20.  Duration, Amendment and Termination. No Benefit shall be granted more than ten years after the
Effective Date. The Committee may amend the Plan from time to time or suspend or terminate the Plan
at any time. However, no action authorized by this Section 20 shall reduce the amount of any
existing Benefit or change the terms and conditions thereof without the participant’s consent. No
amendment of the Plan may be made without approval of the stockholders of the Company if the
amendment will: (i) increase the aggregate number of shares of Common Stock which may be issued
under the Plan; (ii) increase the maximum number of shares with respect to Benefits that may be
granted to any individual under the Plan; (iii) change the types of business criteria on which
Performance-Based Awards are to be based under the Plan; or (iv) modify the requirements as to
eligibility for participation in the Plan.

21.  Governing Law. This Plan, Benefits granted hereunder and actions taken in connection herewith
shall be governed and construed in accordance with the laws of the State of Delaware (regardless of
the law that might otherwise govern under applicable Delaware principles of c

22.  Effective Date.

(a) The Plan shall be effective as of October 25, 2010, the date as of which the Plan was
adopted by the Committee (the “Effective Date”), provided that the Plan is approved by the
stockholders of the Company at an annual meeting or any special meeting of stockholders of the
Company within 12 months of the Effective Date, and such approval of stockholders shall be a
condition to the right of each participant to receive any Benefits hereunder. Any Benefits granted
under the Plan prior to such approval of stockholders shall be effective as of the date of grant
(unless, with respect to any Benefit, the Committee specifies otherwise at the time of grant), but
no such Benefit may be exercised or settled and no restrictions relating to any Benefit may lapse
prior to such stockholder approval, and if stockholders fail to approve the Plan as specified
hereunder, any such Benefit shall be cancelled.

(b) This Plan shall terminate on October 25, 2020 (unless sooner terminated by the Committee).

June 2, 2011

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