Exhibit 10.1

VIASAT, INC.

1996 EQUITY PARTICIPATION PLAN

PERFORMANCE STOCK OPTION AGREEMENT

 

Grant:              “Target” Number of Options     
Name:                                                                         

                 “Maximum” Number of Options

     Grant Date:                                       
                                   Signature:                            
                                      Exercise Price Per Share:
$                                                
Expiration Date:                                                         Type of
Option: Non-Qualified Stock Option     

ACCEPTANCE OF AWARD:

By signing where indicated above, you agree to be bound by the terms and
conditions of this Performance Stock Option Award Agreement (the “Agreement”)
and the 1996 Equity Participation Plan of ViaSat, Inc. (as amended from time to
time, the “Plan”). You acknowledge that you have reviewed and fully understand
all of the provisions of this Agreement and the Plan, and have had the
opportunity to obtain advice of counsel prior to accepting the grant of Options
pursuant to this Agreement. You hereby agree to accept as binding, conclusive
and final all decisions or interpretations of the Compensation and Human
Resources Committee of the Board (the “Committee”) upon any questions relating
to this Agreement and the Plan.

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TERMS AND CONDITIONS OF OPTION AWARD:

1.    Grant of Option.

(a)    Grant of Option. In consideration of your past and/or continued
employment with or service to ViaSat, Inc. (the “Company”) or a Subsidiary and
for other good and valuable consideration, effective as of the Grant Date, the
Company grants to you the Option to purchase any part or all of an aggregate of
the number of shares of Common Stock set forth in this Agreement, and upon the
terms and conditions set forth in the Plan and this Agreement. For the avoidance
of doubt, the Option covers the “Maximum” Number of Options set forth in this
Agreement, subject to the vesting and forfeiture provisions contained herein.
The Option is a Non-Qualified Stock Option.

(b)    Exercise Price. The exercise price of the shares of Common Stock subject
to the Option shall be as set forth on the first page of this Agreement, without
commission or other charge.

2.    Vesting and Exercisability.

(a)    Vesting and Exercisability. Subject to Sections 2(b), and 8, the Option
shall become vested and exercisable in such amounts and at such times as are set
forth in Exhibit A. The Performance-Vested Options (as defined in Exhibit A)
shall be exercisable on and after the Certification Date (as defined in Exhibit
A) but only to the extent the Performance-Vested Options are then also
Time-Vested Options (or as and when the Performance-Vested Options also become
Time-Vested Options thereafter) as provided in Exhibit A. Notwithstanding
anything to the contrary in this Agreement or Exhibit A, in no event may the
Option be exercised prior to the Certification Date (as defined in Exhibit A).

(b)    Expiration of Option. Subject to Section 10.3 of the Plan, the Option may
not be exercised to any extent by anyone after the first to occur of the
following events:

(i)    The expiration of six years from the Grant Date;

(ii)    The expiration of three months following the date of your Termination of
Service (as defined below), unless such termination occurs by reason of your
death, Permanent Disability (as defined below) or discharge for Cause (as
defined below), or you die within said three-month period; provided, however,
that, if such termination occurs prior to the Certification Date, that portion
of your Performance-Vested Options that are Time-Vested Options as of the date
of your Termination of Service shall remain exercisable until the date that is
three months following the Certification Date;

(iii)    The expiration of one year following the date of your Termination of
Service if your termination is by reason of your death or Permanent Disability
(as defined below) or you die within the three-month period following your
Termination of Service; provided, however, that, if such termination occurs
prior to the Certification Date, that portion of your Performance-Vested Options
that are Time-Vested Options as of the date of your Termination of Service shall
remain exercisable until the date that is three months following the
Certification Date; or

(iv)    The date of your Termination of Service as a result of your discharge
for Cause; provided, however, if your Termination of Service as a result of your
discharge for Cause occurs after a Change in Control (as defined in Exhibit A),
the period in this clause (iv) shall be thirty days following the date of your
Termination of Service.

 

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For purposes of this Agreement, “Termination of Service” means the last to occur
of your Termination of Consultancy, Termination of Directorship or Termination
of Employment, as applicable. You shall not be deemed to have a Termination of
Service merely because of a change in the capacity in which you render service
to the Company or any Subsidiary (i.e., you are an Employee and become a
consultant) or a change in the entity for which you render such service (i.e.,
an Employee of the Company becomes an Employee of a Subsidiary), unless
following such change in capacity or service you are no longer serving as an
Employee, Director or consultant of the Company or any Subsidiary.

For purposes of this Agreement, “Permanent Disability” means that you are unable
to perform your duties by reason of any medically determined physical or mental
impairment which can be expected to result in death or which has lasted or is
expected to last for a continuous period of at least twelve (12) months, as
reasonably determined by the Committee, in its discretion.

For purposes of this Agreement, “Cause,” unless otherwise defined in an
employment or services agreement between you and the Company or any Subsidiary,
shall mean your substantial failure to perform duties as an Employee, Director
or consultant, dishonesty, fraud, gross negligence or misconduct against the
Company or any Subsidiary or affiliate, unauthorized use or disclosure of
confidential information or trade secrets of the Company or any Subsidiary or
affiliate, or conviction of, or plea of nolo contendere to, a crime punishable
by law (except misdemeanor violations), in each case as determined by the
Committee, and its determination shall be final and binding.

3.    Exercise of Option.

(a)    Partial Exercise. Subject to Section 2(a), any vested and exercisable
portion of the Option or the entire Option, if then wholly vested and
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 2(b);
provided, however, that each partial exercise shall be for not less than one
share of Common Stock and shall be for whole shares only.

(b)    Manner of Exercise. The Option, or any exercisable portion thereof, may
be exercised solely by delivery to the Secretary of the Company (or any third
party administrator or other person or entity designated by the Company) of all
of the following prior to the time when the Option or such portion thereof
becomes unexercisable under Section 2(b):

(i)    An Exercise Notice signed or electronically accepted by you or any other
person then entitled to exercise the Option or portion thereof, stating that the
Option or portion thereof is thereby exercised, such notice in such form as is
prescribed by the Committee and complying with all applicable rules established
by the Committee; and

(ii)    Subject to Section 5.2(d) of the Plan, the receipt by the Company of
full payment for the shares of Common Stock with respect to which the Option or
portion thereof is exercised, which may be in one of the following forms of
consideration:

(A)    By cash or check payable to the Company; or

(B)    With the consent of the Committee, by delivery of shares of Common Stock
then issuable upon exercise of the Option having a Fair Market Value on the date
of delivery equal to the aggregate exercise price of the Option or exercised
portion thereof; or

(C)    With the consent of the Committee such payment may be made, in whole or
in part, through the delivery of shares of Common Stock owned by you, duly
endorsed for

 

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transfer to the Company with a Fair Market Value on the date of delivery equal
to the aggregate exercise price of the Option or exercised portion thereof and
held by you for such period of time (if any) as may be necessary to avoid
adverse accounting consequences;

(D)    Through the delivery of a notice that you have placed a market sell order
with a broker with respect to shares of Common 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 made to the Company
upon settlement of such sale; or

(E)    With the consent of the Committee, through the delivery of property of
any kind which constitutes good and valuable consideration; or

(F)    Subject to any applicable laws, any combination of the consideration
provided in the foregoing paragraphs (A) through (E); and

(iii)    Such representations and documents as the Committee, in its absolute
discretion, deems necessary or advisable to effect compliance with all
applicable provisions of the Securities Act of 1933, as amended, and any other
federal or state securities laws or regulations. The Committee or Board may, in
its absolute discretion, also take whatever additional actions it deems
appropriate to effect such compliance including, without limitation, placing
legends on share certificates and book entries and issuing stop-transfer notices
to agents and registrars; and

(iv)    The receipt by the Company of payment of any applicable withholding tax,
which may be in the form of consideration permitted under Section 3(b)(ii),
subject to Section 3(d) below and Section 10.4 of the Plan; and

(v)    In the event the Option or portion thereof shall be exercised by any
person or persons other than you, appropriate proof of the right of such person
or persons to exercise the Option.

Notwithstanding any of the foregoing, the Committee shall have the right to
specify all conditions of the manner of exercise, which conditions may vary by
country and which may be subject to change from time to time.

(c)    Rights as Stockholder; Issuance of Shares. Neither you nor any person
claiming under or through you shall be, nor have any of the rights or privileges
of, a stockholder of the Company in respect of any shares purchasable upon the
exercise of any part of the Option unless and until certificates representing
such shares have been issued by the Company or book entries evidencing such
shares have been made by the Company. The issuance of shares of Common Stock
pursuant to exercise of the Option is subject to the conditions set forth in
Section 5.3 of the Plan.

(d)    Tax Withholding.

(i)    The Company has the authority to deduct or withhold, or require you to
remit to the Company, an amount sufficient to satisfy applicable Federal, state,
local and foreign taxes (including any FICA obligation) required by law to be
withheld with respect to any taxable event arising from the vesting of the
Option, the exercise of the Option and/or receipt of the shares of Common Stock
upon exercise of the Option.

 

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(ii)    The Company may refuse to honor the exercise of the Option and/or refuse
to issue any Common Stock upon exercise of your Option to you until your tax
withholding obligations are satisfied. To the maximum extent permitted by law,
the Company has the right to retain without notice from shares issuable under
this Agreement or from salary payable to you, shares or cash having a value
sufficient to satisfy your tax withholding obligation.

4.    Option Not Transferable.

(a)    The Option may not be sold, pledged, assigned or transferred in any
manner other than by will or the laws of descent and distribution or pursuant to
a QDRO, unless and until the shares underlying the Option have been issued, and
all restrictions applicable to such shares have lapsed. Neither the Option nor
any interest or right therein shall be liable for the debts, contracts or
engagements of you or your successors in interest or shall be subject to
disposition by transfer, alienation, anticipation, pledge, encumbrance,
assignment or any other means whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to
the extent that such disposition is permitted by the preceding sentence.

(b)    During your lifetime, only you may exercise the Option or any portion
thereof, unless it has been disposed of pursuant to a QDRO. After your death,
any exercisable portion of the Option may, prior to the time when the Option
becomes unexercisable under Section 2(b), be exercised by your personal
representative or by any person empowered to do so under your will or under the
then applicable laws of descent and distribution.

5.    Restrictive Legends and Stop-Transfer Orders.

(a)    Shares issued upon the exercise of the Option shall be issued to you, at
the sole discretion of the Committee, in either (i) uncertificated form, with
the shares recorded in your name in the books and records of the Company’s
transfer agent with appropriate notations regarding any restrictions imposed
pursuant to this Agreement, or (ii) certificate form. The share certificate or
certificates or book entry evidencing the shares of Common Stock purchased
hereunder shall be endorsed with any legends that may be required by state or
federal securities laws.

(b)    You agree that, in order to ensure compliance with the restrictions
referred to herein, the Company may issue appropriate “stop transfer”
instructions to its transfer agent, if any, and that, if the Company transfers
its own securities, it may make appropriate notations to the same effect in its
own records.

(c)    The Company shall not be required: (i) to transfer on its books any
shares of Common Stock that have been sold or otherwise transferred in violation
of any of the provisions of this Agreement, or (ii) to treat as owner of such
shares of Common Stock or to accord the right to vote or pay dividends to any
purchaser or other transferee to whom such shares shall have been so
transferred.

6.    Notices. Any notice to be given under the terms of this Agreement to the
Company shall be addressed to the Company in care of the Secretary of the
Company at the Company’s principal executive office, and any notice to be given
to you shall be addressed to you at the most recent address in the Company’s
payroll records. By a notice given pursuant to this Section 6, either party may
hereafter designate a different address for notices to be given to that party.
Any notice which is required to be given to you shall, if you are then deceased,
be given to the person entitled to exercise the Option pursuant to Section 4(b)
by written notice under this Section 6. Any notice shall be deemed duly given
when sent via email or when sent by certified mail (return receipt requested)
and deposited (with postage prepaid) in a post office or branch post office
regularly maintained by the United States Postal Service.

 

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7.    Titles. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.

8.    Conformity to Securities Laws. You acknowledge that the Plan and this
Agreement are intended to conform to the extent necessary with all provisions of
the Securities Act and the Exchange Act and any and all regulations and rules
promulgated by the Securities and Exchange Commission thereunder, and state
securities laws and regulations. Notwithstanding anything herein to the
contrary, the Plan shall be administered, and the Option is granted and may be
exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and this
Agreement shall be deemed amended to the extent necessary to conform to such
laws, rules and regulations.

9.    Amendments. This Agreement may not be modified, amended or terminated
except by a written instrument, signed or electronically accepted by you or such
other person as may be permitted to exercise the Option pursuant to Section 4(b)
and by a duly authorized representative of the Company.

10.    Successors and Assigns. The Company may assign any of its rights under
this Agreement to single or multiple assignees, and this Agreement shall inure
to the benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Agreement shall be binding upon
you and your heirs, executors, administrators, successors and assigns.

11.    Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan or this Agreement, if you are subject to Section 16 of the
Exchange Act, the Plan, the Option and this Agreement 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 of the
Exchange Act) that are requirements for the application of such exemptive rule.
To the extent permitted by applicable law, this Agreement shall be deemed
amended to the extent necessary to conform to such applicable exemptive rule.

12.    Entire Agreement. The Plan and this Agreement constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings
and agreements of the Company and you with respect to the subject matter hereof.

13.    No Effect on Employment. Nothing in the Plan or this Agreement shall be
interpreted to interfere with or limit in any way the right of the Company or
any Subsidiary to terminate your employment or services at any time, nor confer
upon you the right to continue in the employ or service of the Company or any
Subsidiary.

14.    Plan Governs. This Option award is granted under and governed by the
terms and conditions of the Plan. You acknowledge and agree that the Plan has
been introduced voluntarily by the Company and in accordance with its terms it
may be amended, cancelled, or terminated by the Company, in its sole discretion,
at any time. The grant of Options under the Plan is a one-time benefit and does
not create any contractual or other right to receive an award of Options or
benefits in lieu of Options in the future. Future awards of Options, if any,
will be at the sole discretion of the Company, including, but not limited to,
the timing of the award, the number of shares and vesting provisions. By
execution of this Agreement, you consent to the provisions of the Plan and this
Agreement. Defined terms used herein shall have the meaning set forth in the
Plan, unless otherwise defined herein.

 

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15.    Governing Law and Venue.

(a)    The Option grant and the provisions of this Agreement are governed by,
and subject to, the laws of the State of California, without regard to the
conflict of law provisions, as provided in the Plan.

(b)    For purposes of any action, lawsuit or other proceedings brought to
enforce this Agreement, relating to it, or arising from it, the parties hereby
submit to and consent to the sole and exclusive jurisdiction of the courts of
San Diego County, California, or the federal courts for the United States for
the Southern District of California, and no other courts, where this grant is
made and/or to be performed.

16.    Electronic Delivery and Acceptance. The Company may, in its sole
discretion, decide to deliver any documents related to current or future
participation in the Plan by electronic means. You hereby consent to receive
such documents by electronic delivery and agree to participate in the Plan
through an on-line or electronic system established and maintained by the
Company or a third party designated by the Company.

17.    Severability. The provisions of this Agreement are severable, and if any
one or more provisions are determined to be illegal or otherwise unenforceable,
in whole or in part, the remaining provisions shall nevertheless be binding and
enforceable.

18.    Imposition of Other Requirements. The Company reserves the right to
impose other requirements on your participation in the Plan, on the Option and
on any shares of Common Stock acquired under the Plan, to the extent the Company
determines it is necessary or advisable for legal or administrative reasons, and
to require you to sign any additional agreements or undertakings that may be
necessary to accomplish the foregoing.

19.    Waiver. You acknowledge that a waiver by the Company of breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
other provision of this Agreement, or of any subsequent breach by you or any
other Grantee.

 

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EXHIBIT A

VESTING AND EXERCISABILITY SCHEDULE

Capitalized terms used in this Exhibit A and not defined in Section 5 below
shall have the meanings given them in the Agreement to which this Exhibit A is
attached.

1.    Options Must Be Vested and Exercisable. You shall be able to exercise your
Options but only to the extent such Options have both (a) become
Performance-Vested Options (as defined below) on and after the Certification
Date pursuant to performance vesting in Section 3, and (b) Time-Vested Options
(as defined below) pursuant to the time-based vesting in Section 2 (or if not
then vested on such Certification Date, as and when such Performance-Vested
Options become Time-Vested Options thereafter pursuant to the time-based vesting
in Section 2).

2.    Time-Based Vesting. Subject to the conditions and limitations on
exercisability of the Option award set forth in Section 3 below, such percentage
of the Performance-Vested Options shall also be considered “Time-Vested Options”
as is determined pursuant to this Section 2:

(a)    Time-Based Vesting. Subject to clauses 2(b) and 2(c) below, twenty-five
percent (25%) of those Options that become Performance-Vested Options, if any,
shall become Time-Vested Options on each of the first four anniversaries of the
Grant Date, subject to your continued employment or service with the Company or
a Subsidiary through each applicable vesting date.

(b)    Effect of Termination Due to Death or Permanent Disability.
Notwithstanding Section 2(a) above, in the event of your Termination of Service
as a result of your death or Permanent Disability, one hundred percent (100%) of
the Performance-Vested Options, if any, shall become Time-Vested Options and
shall be vested and exercisable on the Certification Date (or, if such
Termination of Service occurs after the Certification Date, on the date of your
Termination of Service).

(c)    Effect of Other Terminations. Notwithstanding Section 2(a) above, in the
event of your Termination of Service for any reason other than your death or
Permanent Disability, such percentage of the Performance-Vested Options, if any,
as were Time-Vested Options pursuant to this Section 2 as of the date of your
Termination of Service shall be vested and exercisable on the Certification Date
(or, if such Termination of Service occurs after the Certification Date, on the
date of your Termination of Service) and no additional Options shall become
Time-Based Options thereafter ; provided, however, that the Option shall be
subject to any accelerated vesting as may be provided in any employment or
severance agreement between you and the Company, which accelerated vesting shall
increase the percentage of Time-Vested Options, if any, under this Agreement.

3.    Performance Vesting. Subject to the vesting provisions of Section 2 above
and clauses (b) and (c) below, the Option shall be released from the
restrictions on exercisability in this Agreement and shall become
“Performance-Vested Options” based on the Company’s Relative TSR Ranking for the
Performance Period as follows:

(a)    Measurement Date Occurs On October 31, [insert grant year + 4]. In the
event the Measurement Date is October 31, [insert grant year + 4], such number
of Options shall be released from the restrictions on exercisability in this
Agreement on the Certification Date by multiplying (i) the “Target” Number of
Options subject to this Option award, by (ii) the TSR Performance Multiplier
determined as of the Measurement Date (rounded to the nearest whole share) (such
number of Options, the “Performance-Vested Options”).

 

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(b)    Measurement Date Occurs As a Result of Change in Control.

(i)    Notwithstanding Section 3(a) above, in the event of a Change in Control
prior to October 31, [insert grant year + 4], the “Performance-Vested Options”
shall be determined as of immediately prior to such Change in Control and shall
be determined by multiplying (A) the “Target” Number of Options subject to this
Agreement, multiplied by (B) the greater of (1) one hundred percent (100%) or
(2) the TSR Performance Multiplier as of the Measurement Date, as determined by
the Committee and certified in writing immediately prior to such Change in
Control.

(ii)    In the event of a Change in Control on or after October 31, [insert
grant year + 4], if the Certification Date has not yet occurred prior to the
date of such Change in Control, the “Performance-Vested Options” shall be
determined as of immediately prior to such Change in Control and shall be
determined by multiplying equal to (A) the “Target” Number of Options subject to
this Agreement, multiplied by (B) the TSR Performance Multiplier as of the
Measurement Date.

(iii)    In the event of a Change in Control prior to the date on which all of
the Performance-Vested Options have also become Time-Vested Options pursuant to
Section 2 above, you shall continue to be eligible to vest in such
Performance-Vested Options pursuant to Section 2 following the date of such
Change in Control.

4.    Forfeiture. Any portion of this Option award and any Options which do not
become (or are no longer eligible to become) Time-Vested Options and/or
Performance-Vested Options as a result of your Termination of Service prior to
the fourth anniversary of the Grant Date or as a result of less than the
“Maximum” Number of Options subject to this Option award becoming
“Performance-Vested Options” by reason of the TSR Performance Multiplier being
less than 175% shall automatically and without further action be cancelled and
forfeited by you on the date of your Termination of Service or the Measurement
Date, as applicable, and you shall have no further right or interest in or with
respect to such portion of this Option award. In no event will more than the
“Maximum” Number of Options subject to this Option award vest and become
exercisable pursuant to this Exhibit A.

4.    Definitions. For purposes of this Exhibit A, the following terms shall
have the meanings given below:

(a)     “Beginning Market Value” means, for each of the Company and the Peer
Companies for the Performance Period, the average of the closing price per share
of the company’s stock for the twenty (20) consecutive trading days beginning
with and including the first day of the Performance Period (or, if the first day
of the Performance Period is not a trading day, the immediately preceding
trading day) as published in The Wall Street Journal or such other authoritative
source as the Committee may determine.

(b)    “Certification Date” means the date on which the Committee certifies the
TSR Performance Multiplier, which certification shall occur no later than thirty
(30) days following the Measurement Date; provided, however, that in the event
the Measurement Date is the date of a Change in Control, the Certification Date
shall be the date of such Change in Control.

(c)    “Change in Control” shall mean and include each of the following:

(i)     A transaction or series of transactions (other than an offering of the
Company’s Common 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,
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 forty
percent (40%) of the total combined voting power of the Company’s securities
outstanding immediately after such acquisition;

 

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(ii)     The individuals who, as of the Grant Date are members of the Board (the
“Incumbent Board”), cease for any reason to constitute at least two-thirds of
the members of the Board; provided, however, that if the election, or nomination
for election by the Company’s common stockholders, of any new director was
approved by a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this definition, be considered as a member of
the Incumbent Board; provided, further, however, that no individual shall be
considered a member of the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened “Election Contest” (as
described in Rule 14a-11 promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board (a “Proxy Contest”) including by reason of any agreement intended
to avoid or settle any Election Contest or Proxy Contest; or

(iii)     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:

(A)    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

(B)    After which no person or group beneficially owns voting securities
representing forty percent (40%) 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 4(b)(iii)(B) as beneficially owning 40% 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.

The Board 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.

(d)    “Ending Market Value” means, for each of the Company and the Peer
Companies for the Performance Period, (i) in the event the Measurement Date is
October 31, [insert grant year + 4], the average of the closing price per share
of the company’s stock for the last twenty (20) consecutive trading days ending
with and including the Measurement Date, or (ii) in the event the Measurement
Date is the date of a Change in Control, the closing price per share of the
company’s stock on the Measurement Date (or if the Measurement Date is not a
trading day, the immediately preceding trading day) as published in The Wall
Street Journal or such other authoritative source as the Committee may
determine.

(e)    “Measurement Date” means the first to occur of (a) October 31, [insert
grant year + 4], or (b) the date on which a Change in Control occurs (or, in
each case, if such date is not a trading day, the immediately preceding trading
day).

(f)    “Peer Companies” means those companies included in the S&P Mid Cap 400
Index on the first day of the Performance Period (or if the first day of the
Performance Period is not a trading day, the immediately preceding trading day)
and which remain publicly-traded and listed on a national securities exchange
through the last day of the Performance Period (or if the last day of the
Performance Period is not a trading day, the immediately preceding trading day).

 

A-9

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(g)    “Performance Period” means the period beginning on November 1, [insert
grant year] and ending on the earlier to occur of (i) October 31, [insert grant
year + 4], or (ii) the date of a Change in Control.

(h)    “Relative TSR Ranking” means the Company’s TSR relative to the TSRs of
the Peer Companies. The Company’s Relative TSR Ranking will be determined by
ranking the Company and the Peer Companies from highest to lowest according to
their respective TSRs. After this ranking, the percentile performance of the
Company relative to the Peer Companies will be determined as follows:

P = 1 – ((R-1)/(N-1))

 

  Where: “P” represents the Company’s percentile performance, which will be
rounded, if necessary, to the nearest whole percentile by application of regular
rounding.

“N” represents the number of Peer Companies.

“R” represents the Company’s ranking among the Peer Companies.

(i)    “TSR” means, with respect to the Performance Period, the total value
delivered to stockholders of the Company (or of a Peer Company, as applicable),
as measured by the change in the price of the Common Stock of the Company (or
common stock of a Peer Company, as applicable) over the Performance Period
(positive or negative) from the Beginning Market Value for the Performance
Period to the Ending Market Value for such Performance Period, plus dividends
paid over the Performance Period assuming dividends are reinvested based on the
price of the Common Stock of the Company (or common stock of a Peer Company, as
applicable) on the last trading day of the month during which the ex-dividend
date occurs.

(j)    The “TSR Performance Multiplier” means, for the Performance Period, the
performance multiplier determined pursuant to the chart below based on the
Company’s Relative TSR Ranking. If the Company achieves a Relative TSR Ranking
that falls between the foregoing levels, the Performance Multiplier will be
determined by linear interpolation between the applicable levels.

 

Relative TSR Ranking Relative to the S&P Mid Cap

400 for the Performance Period

   TSR Performance Multiplier  

At or above the 90th Percentile

     175 % 

At the 80th Percentile

     160 % 

At the 70th Percentile

     140 % 

At the 60th Percentile

     120 % 

At the 50th Percentile

     100 % 

At the 40th Percentile

     80 % 

At the 30th Percentile

     60 % 

At or Below the 25th Percentile

     0 % 

 

A-10