exv10w1






Exhibit 10.1




IPG PHOTONICS CORPORATION

2006 INCENTIVE COMPENSATION PLAN

(As Amended July 28, 2011)



IPG Photonics Corporation (the “Company”) originally established the IPG Photonics Corporation 2006
Incentive Compensation Plan for the benefit of its eligible Participants (as hereinafter defined)
for the purposes hereinafter set forth. The Plan permits the award of Stock Options, Restricted
Stock, Performance Shares, Performance Units, Stock Units, Cash, and SARs. The Company amended the
Plan effective February 23, 2011, and adopted this further amendment of the Plan effective July 28,
2011.





	1.	 	DEFINITIONS




The following terms shall have the following meanings unless the context indicates otherwise:





	1.1.	 	“Affiliate” shall mean a corporation that, for purposes of Section 422 of the Code, is a
Parent or Subsidiary of the Company within the meaning of Sections 424(e) and 424(f) of the
Code.
	 
	1.2.	 	“Award” shall mean a Stock Option, a SAR, a Restricted Stock Award, a Stock Unit, a
Performance Share, a Performance Unit, or a Cash Award.
	 
	1.3.	 	“Award Agreement” shall mean an agreement between the Company and a Participant that
establishes the terms, conditions, restrictions and/or limitations applicable to an Award, in
addition to those established by the Plan and by the Committee. With respect to any Award,
the date of the grant or award specified by the Committee in a resolution or other writing,
duly adopted, and as set forth in the Award Agreement, shall be the “Award Date,” provided
that such Award Date will not be earlier than the date of the Committee action.
	 
	1.4.	 	“Board” shall mean the Board of Directors of the Company.
	 
	1.5.	 	“Cash Award” shall mean a grant by the Committee to a Participant of an award of cash as
described in Section 11 below.
	 
	1.6.	 	“Cause” shall have the meaning set forth in any employment, consulting, or other written
agreement between the Participant and the Company, a Group Company or Affiliate. If there is
no employment, consulting, or other written agreement between the Participant and the Company,
a Group Company or Affiliate, or if such agreement does not define “Cause,” then “Cause” shall
have the meaning specified in the Award Agreement; provided, that if the Award Agreement does
not so specify, “Cause” shall mean, as determined by the Committee in its sole discretion, the
Participant: (i) engages in conduct that cause financial or reputational injury to the
Company a Group Company or Affiliate; (ii) engages in any act of dishonesty or misconduct that
results in damage to the Company, a Group Company or Affiliate, or their business or
reputation or that the Committee determines to adversely affect the value, reliability or
performance of the Participant to the Company, a Group Company or Affiliate; (iii) refuses or
fails to




 









 






	 	 	substantially comply with the human resources rules, policies, directions and/or restrictions relating to
harassment and/or discrimination, or with compliance or risk management rules, policies, directions and/or
restrictions of the Company, a Group Company or Affiliate; (iv) fails to cooperate with the Company, a
Group Company or Affiliate in any internal investigation or administrative, regulatory or judicial
proceeding; or (v) continuously fails to perform his or her duties to the Company, a Group Company or
Affiliate (which may include any sustained and unexcused absence of the Participant from the performance of
such duties, which absence has not been certified in writing as due to physical or mental illness or
Disability), after a written demand for performance has been delivered to the Participant identifying the
manner in which the Participant has failed to substantially perform his or her duties. If any part of the
definition of Cause set forth in clauses (i) through (v) above is deemed applicable to a Participant, this
shall not preclude or prevent the reliance by the Company or the Committee on any other part of the
preceding sentence that also may be applicable. Unless otherwise defined in the Participant’s employment
or other agreement, an act or omission is “willful” for this purpose if it was knowingly done, or knowingly
omitted to be done, by the Participant not in good faith and without reasonable belief that the act or
omission was in the best interest of the Company. In addition, the Participant’s Service will be deemed to
have terminated for Cause if, based on facts and circumstances discovered after the Participant’s
employment has terminated, the Board determines in reasonable good faith, within one year after the
Participant’s employment terminated, that the Participant committed an act that would have justified a
termination for Cause.
	 
	1.7.	 	“Change in Control” shall mean the occurrence of any one or more of the following:






	 	(a)	 	Any “person” (as such term is defined in Section 3(a)(9) of the Exchange Act
and as used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act), including a “group”
(as defined in Section 13(d)(3) of the Exchange Act), other than (i) the Company, (ii)
any wholly-owned subsidiary of the Company, or (iii) any employee benefit plan (or
related trust) sponsored or maintained by the Company or any Affiliate, becomes a
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company having fifty percent (50%) or more of the
combined voting power of the then-outstanding securities of the Company that may be
cast for the election of directors of the Company (other than as a result of an
issuance of securities initiated by the Company in the ordinary course of business)
(the “Company Voting Securities”); provided, however, that the event described in this
paragraph (a) shall not be deemed to be a Change in Control by virtue of any
underwriter temporarily holding securities pursuant to an offering of such securities;
	 
	 	(b)	 	During any period of two consecutive years, individuals who at the beginning of
any such period constitute the Board (the “Incumbent Directors”) cease for any reason
to constitute at least a majority of the Board, unless the election, or the nomination
for election by the stockholders of the Company, of each new director of the Company
during such period was approved by a vote of at least two-thirds of the Incumbent
Directors then still in office;






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	 	(c)	 	As the result of, or in connection with, any cash tender or exchange offer,
merger or other business combination, sale of all or substantially all of the assets or
contested election, or any combination of the foregoing transactions, less than a
majority of the combined voting power of the then-outstanding securities of the Company
or any successor corporation or entity entitled to vote generally in the election of
the directors of the Company or such other corporation or entity after such transaction
is held in the aggregate by the holders of the securities of the Company entitled to
vote generally in the election of directors of the Company immediately prior to such
transaction; or
	 
	 	(d)	 	The shareholders of the Company approve a plan of complete liquidation of the
Company.







	 	 	Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely
because any person acquires beneficial ownership of more than fifty percent (50%) of the
Company Voting Securities as a result of the acquisition of Company Voting Securities by the
Company which reduces the number of Company Voting Securities outstanding; provided,
however, that if after such acquisition by the Company such person becomes the beneficial
owner of additional Company Voting Securities that increases the percentage of outstanding
Company Voting Securities beneficially owned by such person, a Change in Control transaction
shall then occur.
	 
	1.8.	 	“Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
	 
	1.9.	 	“Committee” shall mean (i) the Board or (ii) a committee or subcommittee of the Board
appointed by the Board from among its members. The Committee may be the Board’s Compensation
Committee. Unless the Board determines otherwise, the Committee shall be comprised solely of
not less than two members who each shall qualify as:






	 	(a)	 	a “Non-Employee Director” within the meaning of Rule 16b-3(b)(3) (or any
successor rule) under the Exchange Act, and
	 
	 	(b)	 	an “outside director” within the meaning of Code Section 162(m) and the
Treasury Regulations thereunder.






	1.10.	 	“Common Stock” shall mean the voting, common stock, $0.0001 par value per share, of the
Company.
	 
	1.11.	 	“Company” shall mean IPG Photonics Corporation USA, a Delaware corporation.
	 
	1.12.	 	“Disability” means the total and permanent disability of a Participant (incurred while in
the active service of the Company, an Affiliate or a Group Company) based on proof
satisfactory to the Committee. Total and permanent disability shall be as defined in the
Company’s long-term disability plan, if any, or as otherwise provided by the Company.
Notwithstanding the foregoing, for purposes of determining the period of time after
termination of Service during which a Participant may exercise an ISO, “Disability” will have
the meaning set forth in Code Section 22(e)(3), which is, generally, that the Participant is
unable to engage in any substantial gainful activity by reason of a medically determinable
physical or mental impairment that can be expected to result in death or that has lasted or
can be expected to last for a continuous period of at least twelve months.




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	1.13.	 	“Dividend Equivalent Right” shall mean the right to receive an amount equal to the amount of
any dividend paid with respect to a share of Common Stock multiplied by the number of shares
of Common Stock underlying or with respect to a Stock Option, a SAR, a Stock Unit or a
Performance Unit, and which shall be payable in cash, in Common Stock, in the form of Stock
Units or Performance Units, or a combination of any or all of the foregoing.
	 
	1.14.	 	“Effective Date” shall mean the date on which the Board adopts the Plan.
	 
	1.15.	 	“Employee” shall mean an employee of the Company or any Affiliate, as described in Treasury
Regulation Section 1.421-1(h).
	 
	1.16.	 	“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time,
including applicable regulations thereunder.
	 
	1.17.	 	“Exercise Price” shall mean the price at which each share of Common Stock covered by a Stock
Option may be purchased.
	 
	1.18.	 	“Fair Market Value” shall mean:






	 	(a)	 	if the Common Stock is readily tradable on a national securities exchange or
other market system, the closing price of the Common Stock on the date of calculation
(or on the last preceding trading date if Common Stock was not traded on such date), or
	 
	 	(b)	 	if the Common Stock is not readily tradable on a national securities exchange
or other market system, the value as determined by the reasonable and consistent
application of a reasonable valuation method, in good faith by the Board, in accordance
with Code Section 409A and Treasury Regulation Section 1.409A-1(b)(5)(iv) (or any
similar or successor provision), thereunder, as the Board or the Committee will in its
discretion select and apply at the time of the Award Date, time of exercise, or other
date of calculation.






	1.19.	 	“Group Company” shall mean any business entity deemed by the Board to be a member of the IPG
Group, including, but not limited to, any business entity that has a significant financial
interest in the Company and any business entity in which the Company has a significant
financial interest, such entities to be referred to collectively as the “Group Companies”.
	 
	1.20.	 	“Group Employee” shall mean any employee of a Group Company who is not an Employee.
	 
	1.21.	 	“Independent Contractor” shall mean a person (other than a person who is an Employee, Group
Employee or a Nonemployee Director) or an entity that renders services to the Company, an
Affiliate or a Group Company.
	 
	1.22.	 	“IPO” shall mean the first date that the Common Stock is registered under the Securities Act
of 1934 and offered for sale to the public.




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	1.23.	 	“ISO” shall mean a right to purchase a specified number of shares of Common Stock at a
specified price, which is intended to comply with the terms and conditions as an “incentive
stock option” as set forth in Code Section 422, as such section may be in effect from time to
time.
	 
	1.24.	 	“Leave of Absence” means any leave of absence approved by the Company.
	 
	1.25.	 	“Nonemployee Director” shall mean a member of the Board who is not an Employee.
	 
	1.26.	 	“Nonqualified Stock Option” shall mean a Stock Option to purchase a specified number of
shares of Common Stock at a specified price, which does not qualify as an ISO.
	 
	1.27.	 	“Nonvoting Stock” shall mean the capital stock of any class or classes having no voting
power to elect the directors of a corporation.
	 
	1.28.	 	“Parent” shall mean a corporation or any other business entity that directly or indirectly
has an ownership interest of 50 percent or more of the Voting Stock of the Company.
	 
	1.29.	 	“Participant” shall mean any Employee, Group Employee, Nonemployee Director or Independent
Contractor to whom an Award has been granted by the Committee under the Plan.
	 
	1.30.	 	“Performance-Based Award” shall mean an Award subject to the achievement of certain
performance goals as described in Section 12 below.
	 
	1.31.	 	“Performance Share” shall mean the grant by the Committee to a Participant of an Award of
shares of Common Stock subject to restrictions on transferability, a risk of forfeiture, and
certain other terms and conditions under the Plan or specified by the Committee, as described
in Section 10.1 below.
	 
	1.32.	 	“Performance Unit” shall mean the grant by the Committee to a Participant of an Award of a
hypothetical share of the value of the Company, represented by a notional account that shall
be established and maintained (or caused to be established or maintained) by the Company for
such Participant, as described in Section 10.2 below.
	 
	1.33.	 	“Plan” shall mean the IPG Photonics 2006 Incentive Compensation Plan.
	 
	1.34.	 	“Prior Plan” shall mean the IPG Photonics 2000 Incentive Compensation Plan.
	 
	1.35.	 	“Recapitalization” shall mean any stock split, stock dividend, recapitalization, combination
of shares, exchange of shares or other change affecting the Company’s outstanding shares of
capital stock as a class without the Company’s receipt of consideration.
	 
	1.36.	 	“Reorganization” shall mean any of the following: (a) a merger or consolidation in which
the Company is not the surviving entity; (b) a sale, transfer or other disposition of all or
substantially all of the Company’s assets; (c) a reverse merger in which the Company is the
surviving entity but in which the Company’s outstanding voting securities are transferred in
whole or in part to a person or persons different from the persons holding those securities
immediately prior to the merger; or (d) any transaction




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	 	 	effected primarily to change the state in which the Company is incorporated or to create a
holding company structure.
	 
	1.37.	 	“Restricted Stock Award” shall mean a grant by the Committee to a Participant of an Award of
shares of Common Stock subject to restrictions on transferability, a risk of forfeiture, and
certain other terms and conditions under the Plan or specified by the Committee, as described
in Section 9.1 below.
	 
	1.38.	 	“Retirement” means retirement from active employment or other Service with the Company
pursuant to the normal or early retirement policy and procedures of the Company.
	 
	1.39.	 	“Stock Appreciation Right” or “SAR” shall mean a grant by the Committee to a Participant of
a the contingent right to receive Common Stock or cash, as specified in the Award Agreement,
in the future, based on the value, or the appreciation in the value, of Common Stock, as
described in Section 8 below.
	 
	1.40.	 	“Service” means the provision of services to the Company, an Affiliate or a Group Company in
the capacity of (i) an Employee, (ii) a Group Employee, (iii) a Nonemployee Director, or (iv)
an Independent Contractor.
	 
	1.41.	 	“Stock Option” shall mean a grant by the Committee to a Participant of an option or right to
purchase a specified number of shares of Common Stock at a specified price, as described in
Section 7 below.
	 
	1.42.	 	“Stock Unit” shall mean a grant by the Committee to a Participant of an Award of a
hypothetical share of Common Stock represented by a notional account established and
maintained (or caused to be established or maintained) by the Company for such Participant, as
described in Section 9.2 below.
	 
	1.43.	 	“Subsidiary” shall mean a corporation of which the Company directly or indirectly owns 50
percent or more of the Voting Stock or any other business entity in which the Company directly
or indirectly has an ownership interest of 50 percent or more.
	 
	1.44.	 	“Treasury Regulations” shall mean the regulations promulgated under the Code by the United
States Department of the Treasury, as amended from time to time.
	 
	1.45.	 	“Vest” shall mean:






	 	(a)	 	with respect to Stock Options and SARs, when the Stock Option or SAR (or a
portion of such Stock Option or SAR) first becomes exercisable and remains exercisable
subject to the terms and conditions of such Stock Option or SAR; or
	 
	 	(b)	 	with respect to Awards other than Stock Options and SARs, when the Participant
has:






	 	(i)	 	an unrestricted right, title and interest to receive the
compensation (whether payable in Common Stock, cash or a combination of both)
attributable to an Award (or a portion of such Award) or to otherwise enjoy the
benefits underlying such Award; and




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	 	(ii)	 	a right to transfer an Award subject to no Company-imposed
restrictions or limitations other than restrictions and/or limitations imposed
by Section 14 below.






	1.46.	 	“Vesting Date” shall mean the date or dates on which an Award Vests, at which time the Award
shall be deemed “Vested.”
	 
	1.47.	 	“Voting Stock” shall mean the capital stock of any class or classes having general voting
power under ordinary circumstances, in the absence of contingencies, to elect the directors of
a corporation.






	2.	 	PURPOSE AND TERM OF PLAN






	2.1.	 	Purpose. The purpose of the Plan is to motivate certain Employees, Group Employees,
Nonemployee Directors and Independent Contractors to put forth maximum efforts toward the
growth, profitability, and success of the Company, Affiliates and Group Companies by providing
incentives to such Employees, Group Employees, Nonemployee Directors and Independent
Contractors through cash payments and/or through the ownership and performance of the Common
Stock. In addition, the Plan is intended to provide incentives that will attract and retain
highly qualified individuals as Employees, Group Employees and Nonemployee Directors and to
assist in aligning the interests of such Employees, Group Employees and Nonemployee Directors
with those of the Company’s shareholders.
	 
	2.2.	 	Term. The Plan shall be effective as of the Effective Date; provided, however, that the Plan
shall be approved by the shareholders of the Company at an annual meeting or any special
meeting of shareholders of the Company within 12 months before or after the Effective Date.
The Committee may not award ISOs before the date the Company’s shareholders approve the Plan.
The Plan shall terminate on the 10th anniversary of the Effective Date, unless sooner
terminated by the Board under Section 16.1 below.






	3.	 	ELIGIBILITY AND PARTICIPATION






	3.1.	 	Eligibility. All Employees, Group Employees, Nonemployee Directors and Independent
Contractors shall be eligible to participate in the Plan and to receive Awards.
	 
	3.2.	 	Participation. Participants shall consist of such Employees, Group Employees, Nonemployee
Directors and Independent Contractors as the Committee in its sole discretion designates to
receive Awards under the Plan. Awards under the Plan shall be made on a one time basis for
Participants and designation of a Participant in any year shall not require the Committee to
designate such person or entity to receive an Award in any other year or, once designated, to
receive the same type or amount of Award 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 Awards.




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	4.	 	ADMINISTRATION






	4.1.	 	Responsibility. The Committee will administer the Plan. The Committee shall have the
responsibility, in its sole discretion, to control, operate, manage and administer the Plan in
accordance with its terms.
	 
	4.2.	 	Award Agreement. Each Award granted under the Plan shall be evidenced by an Award Agreement;
provided, however, that in the event of any conflict between a provision of the Plan and any
provision of an Award Agreement, the provision of the Plan shall prevail.
	 
	4.3.	 	Authority of the Committee. The Committee shall have all the discretionary authority that
may be necessary or desirable to enable it to discharge its responsibilities with respect to
the Plan, including but not limited to the following:






	 	(a)	 	to determine eligibility for participation in the Plan;
	 
	 	(b)	 	to determine eligibility for and the type and size of an Award granted under
the Plan;
	 
	 	(c)	 	to supply any omission, correct any defect, interpret any provision or
reconcile any inconsistency in the Plan in such manner and to such extent as it shall
deem appropriate in its sole discretion to carry the same into effect;
	 
	 	(d)	 	to issue administrative guidelines as an aid to administer the Plan and make
changes in such guidelines as it, from time to time, deems proper;
	 
	 	(e)	 	to make rules for carrying out and administering the Plan and make changes in
such rules as it, from time to time, deems proper;
	 
	 	(f)	 	to the extent permitted under the Plan, grant waivers of Plan terms,
conditions, restrictions, and limitations;
	 
	 	(g)	 	to accelerate the Vesting of any Award when such action or actions would be in
the best interest of the Company; and
	 
	 	(h)	 	to take any and all other actions it deems necessary or desirable for the
proper operation or administration of the Plan.






	4.4.	 	Action by the Committee. The Committee may act only by a majority of its members. A
determination of the Committee may be made, without a meeting, by a writing signed by all
members of the Committee. In addition, the Committee may authorize any one or more of its
members to execute and deliver documents on behalf of the Committee. Meetings of the
Committee may be held telephonically or via videoconference, and participation via telephone
or videoconference shall have the same force and effect as physical presence at any Committee
meeting.
	 
	4.5.	 	Delegation of Authority. 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; provided, however, that
any such delegation shall be in writing. In addition, the Committee, or any




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	 	 	person to whom it has delegated duties under this Section 4.5, 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 Affiliate or Group Company whose employees have benefited from
the Plan, as determined by the Committee.
	 
	 	 	The Board may delegate authority to the Company’s Chief Executive Officer to grant specified
numbers of Options (as determined by the Board from time to time and during such time
periods determined by the Board) to existing or prospective Employees (other than those
individuals who are subject to Section 16(a) of the Exchange Act at the time of the grant)
as the Chief Executive Officer determines appropriate without further action of the Board,
but subject to rules and guidelines established by the Board or the Committee .
	 
	4.6.	 	Determinations and Interpretations by the Committee. All determinations and interpretations
made by the Committee shall be binding and conclusive on all Participants and their heirs,
successors, and legal representatives.
	 
	4.7.	 	Liability. No member of the Board, no member of the Committee and no Employee or Group
Employee 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 the Plan have been delegated.
	 
	4.8.	 	Indemnification. Each person who is or has been a member of the Committee or the Board, and
any individual or individuals to whom the Committee has delegated authority under this Section
4, will be indemnified and held harmless by the Company, Group Company and Affiliates from and
against any loss, cost, liability, or expense that may be imposed upon or reasonably incurred
by him or her in connection with or as a result of any claim, action, suit or proceeding to
which he or she may be a party or in which he or she may be involved by reason of any action
taken, or failure to act, under the Plan, except in circumstances involving such person’s bad
faith, gross negligence or willful misconduct. Each such person will also be indemnified and
held harmless by the Company Group Company and Affiliates from and against any and all amounts
paid by him or her in a settlement approved by the Company, or paid by him or her in
satisfaction of any judgment, of or in a claim, action, suit or proceeding against him or her
and described in the previous sentence, so long as he or she gives the Company an opportunity,
at its own expense, to handle and defend the claim, action, suit or proceeding before he or
she undertakes to handle and defend it. The foregoing right of indemnification will not be
exclusive of any other rights of indemnification to which a person who is or has been a member
of the Committee or the Board may be entitled under the Articles of Incorporation or By-Laws
of the Company, Group Company or Affiliate, as a matter of law, agreement or otherwise, or any
power that the Company may have to indemnify him or her or hold him or her harmless.






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	5.	 	SHARES SUBJECT TO PLAN






	5.1.	 	Available Shares. The aggregate number of shares of Common Stock that shall be available
under the Plan during its term shall be 10,000,000 shares, subject to any adjustments made in
accordance with Section 5.2 below. Such shares of Common Stock may be either authorized but
unissued shares, shares of issued stock held in the Company’s treasury, or a combination of
both, at the discretion of the Company. Any shares of Common Stock underlying an Award under
the Plan or the Prior Plan which expires without being exercised, or is forfeited or otherwise
terminated without a distribution of Common Stock to the Participant shall again be available
under the Plan. If a share of Common Stock subject to an Award is not delivered because it is
used to satisfy a tax withholding obligation or pay the Exercise Price of a Stock Option, then
that share of Common Stock will not thereafter be deemed available for Award. Awards that are
payable only in cash are not subject to this Section 5.1.






	 	(a)	 	In addition to the maximum shares of Common Stock available for Awards under
the Plan described above, the remaining shares of Common Stock shall be reduced by 1.60
for each share of Common Stock awarded pursuant to Restricted Stock, Performance
Shares, Performance Units, Stock Units, or other Awards with value denominated in full shares of Common Stock for purposes of determining any individual or aggregate award
limitations under the Plan and for purposes of calculating the aggregate amount of
Common Stock available for Awards under the Plan. Each SAR that is settled in shares
of Common Stock shall reduce the remaining shares of Common Stock available under this
Section by one (1.0), notwithstanding the fact that the net number of shares of Common
Stock delivered on exercise may be less than the number of SARs granted. Except as
contemplated by the provisions of Section 5.2 hereof, the Committee shall not increase
the number of shares of Common Stock available for issuance in connection with Awards
under the Plan or to any one individual as set forth above. In no event shall Awards
be outstanding at any one time that have resulted or could result in the issuance of a
number of shares of Common Stock in excess of the number then remaining reserved and
available for issuance under the Plan.






	 	(b)	 	The maximum number of shares of Common Stock that may be issued to Participants
in the aggregate under the Plan as ISOs is 833,333.






	 	(c)	 	Notwithstanding the foregoing, Awards granted through the assumption of, or in
substitution or exchange for, similar awards in connection with the acquisition of
another corporation or business entity shall not be counted for purposes of applying
the above limitations on numbers of shares available for Awards generally or any
particular kind of Award under the Plan.






	5.2.	 	Adjustment to Shares. If there is any change in the Common Stock of the Company, through
merger, consolidation, Reorganization, recapitalization, stock dividend, stock split, reverse
stock split, split-up, split-off, spin-off, combination of shares, exchange of shares,
dividend in kind or other like change in capital structure or distribution (other than normal
cash dividends) to shareholders of the Company, an adjustment shall be made to each
outstanding Award so that each such Award shall thereafter be with respect




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	 	 	to or exercisable for such securities, cash and/or other property as would have been
received in respect of the Common Stock subject to such Award had such Award been paid,
distributed or exercised in full immediately prior to such change or distribution. Such
adjustment shall be made successively each time any such change or distribution shall occur.
In addition, in the event of any such change or distribution, in order to prevent dilution
or enlargement of Participants’ rights under the Plan, the Committee shall have the
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 Awards, the
Exercise Price applicable to outstanding Stock Options, and the Fair Market Value of the
Common Stock and other value determinations applicable to outstanding Awards. Appropriate
adjustments may also be made by the Committee in the terms of any Awards granted under the
Plan to reflect such changes or distributions and to modify any other terms of outstanding
Awards on an equitable basis, including modifications of performance goals and changes in
the length of performance periods; provided, however, that any such modifications and/or
changes to Performance-Based Awards does not disqualify compensation attributable to such
Awards as “performance-based compensation” under Code Section 162(m). In addition, the
Committee is authorized to make adjustments to the terms and conditions of, and the criteria
included in, Awards 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. Notwithstanding anything contained in the Plan, any
adjustment with respect to an ISO due to a change or distribution described in this Section
5.2 shall comply with the rules of Code Section 424(a), and in no event shall any adjustment
be made which would render any ISO granted hereunder to be disqualified as an incentive
stock option for purposes of Code Section 422.






	6.	 	MAXIMUM INDIVIDUAL AWARDS






	6.1.	 	Maximum Aggregate Number of Shares Underlying Stock-Based Awards Granted Under the Plan to
Any Single Participant in Any Calendar Year. The maximum aggregate number of shares of Common
Stock underlying all Awards measured in shares of Common Stock (whether payable in Common
Stock, cash or a combination of both) that may be granted to any single Participant in any
calendar year shall be 1,666,667 shares, subject to adjustment as provided in Section 5.2
above. For purposes of the preceding sentence, such Awards that are forfeited due to vesting
or other restrictions shall continue to be counted in determining such maximum aggregate
number of shares of Common Stock that may be granted to any single Participant in any calendar
year. The maximum aggregate number of shares of Common Stock underlying Awards that may be
granted to any single Participant in any calendar year as ISOs shall be 133,333.






	7.	 	STOCK OPTIONS






	7.1.	 	In General. The Committee may, in its sole discretion, grant Stock Options to Employees,
Group Employees, Nonemployee Directors and/or Independent Contractors on or after the
Effective Date. The Committee shall, in its sole discretion, determine the Employees, Group
Employees, Nonemployee Directors and Independent Contractors who will receive Stock Options
and the number of shares of Common Stock underlying each Stock Option. With respect to
Employees who become Participants, the Committee




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	 	 	may grant such Participants ISOs or Nonqualified Stock Options or a combination of both.
With respect to Group Employees, Nonemployee Directors and Independent Contractors who
become Participants, the Committee may grant such Participants only Nonqualified Stock
Options. Each Stock Option shall be subject to such terms and conditions consistent with
the Plan as the Committee may impose from time to time and set forth in the Award Agreement.
In addition, each Stock Option shall be subject to the terms and conditions set forth in
Sections 7.2 through 7.8 below.






	7.2.	 	Exercise Price. The Committee shall specify the Exercise Price of each Stock Option in the
Award Agreement; provided, however, that (i) the Exercise Price of an ISO shall not be less
than 100 percent of the Fair Market Value of the Common Stock on the date of grant, and (ii)
the Exercise Price of a Nonqualified Stock Option shall not be less than 100 percent of the
Fair Market Value of the Common Stock on the date of grant.
	 
	7.3.	 	Term of Stock Option. The Committee shall specify the term of each Stock Option in the Award
Agreement; provided, however, that (i) no ISO shall be exercisable after the 10th anniversary
of the date of grant of such ISO and (ii) no Nonqualified Stock Option shall be exercisable
after the 10th anniversary of the date of grant of such Nonqualified Stock Option. Each Stock
Option shall terminate at such earlier times and upon such conditions or circumstances as the
Committee shall, in its sole discretion, set forth in the Award Agreement on the date of
grant.
	 
	7.4.	 	Vesting Date. The Committee shall specify in the Award Agreement the Vesting Date for each
Stock Option. The Committee may grant Stock Options that are Vested, either in whole or in
part, on the date of grant. If the Committee fails to specify a Vesting Date in the Award
Agreement, twenty-five percent (25%) of such Stock Option shall become exercisable on each of
the first four (4) one-year anniversaries of the date of grant and shall remain exercisable
following such anniversary date until the Stock Option expires in accordance with its terms
under the Award Agreement or under the terms of the Plan. The Vesting of a Stock Option may
be subject to such other terms and conditions as shall be determined by the Committee and set
forth in the Award Agreement, including, without limitation, accelerating the Vesting if
certain performance goals are achieved, or a Change in Control of the Company occurs and a
Participant’s Service is terminated.
	 
	7.5.	 	Exercise of Stock Options. The Stock Option Exercise Price may be paid in cash or, in the
sole discretion of the Committee, by delivery to the Company of shares of Common Stock then
owned by the Participant, or by the Company’s withholding a portion of the shares of Common
Stock for which the Stock Option is exercisable, or by a combination of these methods. If the
Common Stock is readily tradable on a national securities exchange or other market system,
payment may also be made by delivering a properly executed exercise notice to the Company and
delivering a copy of irrevocable instructions to a broker directing the broker to promptly
deliver 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 delivery to the Company of shares of
Common Stock then owned by the Participant, providing the Company with a notarized




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	 	 	statement attesting to the number of shares owned by the Participant, 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; provided, however,
that with respect to ISOs, all such discretionary determinations shall be made by the
Committee at the time of grant and specified in the Award Agreement.






	7.6.	 	Restrictions Relating to ISOs. In addition to being subject to the terms and conditions of
this Section 7, ISOs shall comply with all other requirements under Code Section 422.
Accordingly, ISOs may be granted only to Participants who are employees (as described in
Treasury Regulation Section 1.421-1(h)) of the Company or of any “Parent Corporation” (as
defined in Code Section 424(e)) or of any “Subsidiary Corporation” (as defined in Code Section
424(f)) on the date of grant. The aggregate market value (determined as of the time the ISO
is granted) of the Common Stock with respect to which ISOs (under all option plans of the
Company and of any Parent Corporation and of any Subsidiary Corporation) are exercisable for
the first time by a Participant during any calendar year shall not exceed $100,000. For
purposes of the preceding sentence, (i) ISOs shall be taken into account in the order in which
they are granted and (ii) ISOs granted before 1987 shall not be taken into account. ISOs
shall not be transferable by the Participant other than by will or the laws of descent and
distribution and shall be exercisable, during the Participant’s lifetime, only by such
Participant. The Committee shall not grant ISOs to any Employee who, at the time the ISO is
granted, owns stock possessing (after the application of the attribution rules of Code Section
424(d)) more than 10 percent of the total combined voting power of all classes of stock of the
Company or of any Parent Corporation or of any Subsidiary Corporation unless the Exercise
Price of the ISO is fixed at not less than 110 percent of the Fair Market Value of the Common
Stock on the date of grant and the exercise of such ISO is prohibited by its terms after the
5th anniversary of the ISO’s date of grant.






	7.7.	 	Conversion Stock Options. The Committee may, in its sole discretion, grant a Stock Option to
any holder of an option (hereinafter referred to as an “Original Option”) to purchase shares
of stock of any corporation:






	 	(a)	 	the stock or assets of which were acquired, directly or indirectly, by the
Company, an Affiliate or Group Company, or






	 	(b)	 	which was merged with and into the Company, an Affiliate or Group Company,






	 	 	so that the Original Option is converted into a Stock Option (hereinafter referred to as a
“Conversion Stock Option”); provided, however, that such Conversion Stock Option as of the
date of its grant (the “Conversion Stock Option Grant Date”) shall have the same economic
value as the Original Option as of the Conversion Stock Option Grant Date. In addition,
unless the Committee, in its sole discretion determines otherwise, a Conversion Stock
Option that is converting an Original Option intended to qualify as an ISO shall have the
same terms and conditions as applicable to the Original Option in accordance with Code
Section 424 and the Treasury Regulations thereunder so that the conversion (x) is treated
as the issuance or assumption of a stock option under Code




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	 	 	Section 424(a) and (y) is not treated as a modification, extension or renewal of a stock
option under Code Section 424(h).






	7.8.	 	Right to Call Stock Options or Common Stock. Notwithstanding any other provision of this
Plan and without regard to the completion of an IPO, any Stock Option granted under this Plan
shall be subject to a right of call by the Committee in the event of termination of the Plan
due to merger or acquisition of the Company. Prior to an IPO, any Stock held by a Participant
as a result of an Award under this Plan shall be subject to a right of call by the Committee
in the event of termination of the Plan due to merger or acquisition of the Company or upon
the occurrence of Change in Control of the Company, whether or not the Plan is terminated. If
the Committee exercises the right to call the Common Stock, the Participant must return the shares of Common Stock to the Company within seven (7) days of the call notice.






	 	(a)	 	Upon the call of Common Stock, the owner of the Common Stock shall, unless
otherwise determined by the Committee pursuant to subsection (b) below, be entitled to
receive from the Company an amount equal to the Fair Market Value of the returned
Common Stock.






	 	(b)	 	Upon the call of a Stock Option, the Committee shall pay the optionee an amount
equal to the excess of (i) the Fair Market Value the number of shares of Common Stock
subject to the Option, over (y) the Exercise Price of such shares of Common Stock.






	 	(c)	 	The Company shall have the right to defer payment of the proceeds under this
Section 7.9, and make such payment in the form of single lump sum or in installments
over such periods as the Committee may determine in its discretion, subject to Code
Section 409A.






	8.	 	SARS






	8.1.	 	In General. The Committee may, in its sole discretion, grant SARs to Employees, Group
Employees, Nonemployee Directors, and/or Independent Contractors. A SAR is a right to receive
a payment in cash, Common Stock or a combination of both, in an amount equal to the excess of
(x) the Fair Market Value of a specified number of shares of Common Stock on the date the SAR
is exercised over (y) the Fair Market Value of such shares of Common Stock on the date the SAR
is granted, all as determined and set forth in the Award Agreement by the Committee; provided,
however, that if a SAR is granted retroactively in tandem with or in substitution for a Stock
Option, the designated Fair Market Value of the Common Stock in the Award Agreement may be the
Fair Market Value of the Common Stock on the date such Stock Option was granted. Each SAR
shall be subject to the terms of the Plan and to such terms and conditions, including, but not
limited to, the Vesting Date, an expiration date and a provision that automatically converts a
SAR into a Stock Option on a conversion date specified at the time of grant, as the Committee
shall impose from time to time in its sole discretion and set forth in the Award Agreement.




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	9.	 	RESTRICTED STOCK AWARDS AND STOCK UNITS
	 
	9.1.	 	Restricted Stock Awards. The Committee may, in its sole discretion, grant Restricted Stock
Awards to Employees, Group Employees, Nonemployee Directors, and/or Independent Contractors as
additional compensation or in lieu of other compensation for services to the Company, an
Affiliate or a Group Company. A Restricted Stock Award shall consist of shares of Common
Stock that are subject to such terms and conditions as the Committee in its sole discretion
determines appropriate and sets forth in the Award Agreement including, without limitation,
restrictions on the sale or other disposition of such shares, the Vesting Date with respect to
such shares, and the right of the Company to reacquire such shares for no consideration upon
termination of the Participant’s Service within specified periods. The Committee may require
the Participant to deliver a duly signed stock power, endorsed in blank, relating to the
Common Stock covered by such Restricted Stock Award and/or that the stock certificates
evidencing such shares be held in custody or bear restrictive legends until the restrictions
thereon shall have lapsed. With respect to shares of Common Stock subject to a Restricted
Stock Award, the Participant shall have all of the rights of a holder of shares of Common
Stock, including the right to receive dividends and to vote the shares, unless the Committee
determines otherwise on the date of grant.
	 
	9.2.	 	Stock Units. The Committee may, in its sole discretion, grant Stock Units to Employees,
Group Employees, Nonemployee Directors, and Independent Contractors as additional compensation
or in lieu of other compensation for services to the Company, an Affiliate or a Group Company.
A Stock Unit is a hypothetical share of Common Stock represented by a notional account
established and maintained (or caused to be established or maintained) by the Company for such
Participant who receives a grant of Stock Units. Stock Units shall be subject to such terms
and conditions as the Committee, in its sole discretion, determines appropriate and sets forth
in the Award Agreement including, without limitation, determinations of the Vesting Date with
respect to such Stock Units and the criteria for the Vesting of such Stock Units. Subject to
Section 9.3, a Stock Unit granted by the Committee shall provide for payment in shares of
Common Stock at such time or times as the Award Agreement shall specify. The Committee shall
determine whether a Participant who has been granted a Stock Unit shall also be entitled to a
Dividend Equivalent Right.
	 
	9.3.	 	Payout of Stock Units. Subject to a Participant’s election to defer in accordance with
Section 17.4 below, upon the Vesting Date of a Stock Unit, the shares of Common Stock
representing the Stock Unit shall be distributed to the Participant, unless the Committee, in
its sole discretion, provides for the payment of the Stock Unit 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.
	 
	10.	 	PERFORMANCE SHARES AND PERFORMANCE UNITS
	 
	10.1.	 	Performance Shares. The Committee may, in its sole discretion, grant Performance Shares to
Employees, Group Employees, Nonemployee Directors, and/or Independent Contractors as
additional compensation or in lieu of other compensation for services to the Company, an
Affiliate or a Group Company. A Performance Share shall consist of a




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	 	 	share or shares of Common Stock that are subject to such terms and conditions as the
Committee, in its sole discretion, determines appropriate and sets forth in the Award
Agreement including, without limitation, determining the performance goal or goals that,
depending on the extent to which such goals are met, will determine the number and/or value
of the Performance Shares that will be paid out or distributed to the Participant and any
other Vesting Date criteria. Performance goals may be based on, without limitation,
Company-wide, divisional and/or individual performance, as the Committee, in its sole
discretion, may determine, and may be based on the performance measures listed in Section
12.3 below.






	10.2.	 	Performance Units. The Committee may, in its sole discretion, grant Performance Units to
Employees, Group Employees, Nonemployee Directors, and/or Independent Contractors as
additional compensation or in lieu of other compensation for services to the Company, an
Affiliate or Group Company. A Performance Unit is a hypothetical share of the value of the
Company, represented by a notional account that the Company shall establish and maintain (or
caused to be established or maintained) for such Participant who receives a grant of
Performance Units. Performance Units shall be subject to such terms and conditions as the
Committee, in its sole discretion, determines appropriate and sets forth in the Award
Agreement including, without limitation, determining the performance goal or goals that,
depending on the extent to which such goals are met, will determine the number and/or value of
the Performance Units that will accrue to the Participant and any other Vesting Date criteria.
Performance goals may be based on, without limitation, Company-wide, divisional and/or
individual performance, as the Committee, in its sole discretion, may determine, and may be
based on the performance measures listed in Section 12.3 below.
	 
	10.3.	 	Adjustment of Performance Goals. With respect to any Performance Shares or Performance
Units that are not intended to qualify as Performance-Based Awards (as described in Section 12
below), the Committee shall have the authority at any time to adjust, as it deems necessary or
desirable, the performance goals for any outstanding Performance Shares or Performance Units
unless, at the time of establishment of such performance goals, the Committee precludes its
authority to make such adjustments. Notwithstanding the foregoing, with respect to Awards
intended to qualify as Performance-Based Awards (as defined below), the Committee shall not
adjust such goals in a manner that would cause the Awards to no longer qualify as
Performance-Based Awards.
	 
	10.4.	 	Payout of Performance Shares or Performance Units. Subject to a Participant’s election to
defer distribution in accordance with Section 17.4 below, upon the Vesting of a Performance
Share or a Performance Unit, the shares of Common Stock representing the Performance Share or
the cash value of the Performance Unit shall be distributed to the Participant, unless the
Committee, in its sole discretion, determines to make the payment for the Performance Share in
cash, or the Performance Unit in shares of Common Stock (or partly in cash and partly in shares of Common Stock) equal to the value of the shares of Common Stock or cash that would
otherwise be distributed to the Participant.




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	11.	 	CASH AWARDS
	 
	11.1.	 	In General. The Committee may, in its sole discretion, grant Cash Awards to Employees,
Group Employees, Nonemployee Directors, and/or Independent Contractors as additional
compensation or in lieu of other compensation for services to the Company, an Affiliate or
Group Company. A Cash Award shall be subject to such terms and conditions as the Committee,
in its sole discretion, determines appropriate and sets forth in the Award Agreement
including, without limitation, determining the Vesting Date with respect to such Cash Award,
the criteria for the Vesting of such Cash Award, and the right of the Company to require the
Participant to repay the Cash Award (with or without interest) upon termination of the
Participant’s Service within specified periods.
	 
	12.	 	PERFORMANCE-BASED AWARDS
	 
	12.1.	 	In General. The Committee, in its sole discretion, may designate Awards granted under the
Plan as Performance-Based Awards (as defined below). An Award granted under the Plan may be
granted in such a manner that the compensation attributable to such Award is intended by the
Committee to qualify as “performance-based compensation” (as such term is used in Code Section
162(m) and the Treasury Regulations thereunder) and thus be exempt from the deduction
limitation imposed by Code Section 162(m) (“Performance-Based Awards”).
	 
	12.2.	 	Qualification of Performance-Based Awards. Awards shall qualify as Performance-Based Awards
under the Plan only if:






	 	(a)	 	at the time of grant the Committee is comprised solely of two or more “outside
directors” (as such term is used in Code Section 162(m) and the Treasury Regulations
thereunder);






	 	(b)	 	with respect to either the granting or Vesting of an Award (other than (i) a
Nonqualified Stock Option or (ii) a SAR, which are granted with an Exercise Price at or
above the Fair Market Value of the Common Stock on the date of grant), such Award is
subject to the achievement of a performance goal or goals based on one or more of the
performance measures specified in Section 12.3 below;






	 	(c)	 	the Committee establishes in writing (i) the objective performance-based goals
applicable to a given performance period, and (ii) the individual employees or class of
employees to which such performance-based goals apply no later than 90 days after the
commencement of such performance period (but in no event after 25 percent of such
performance period has elapsed);






	 	(d)	 	no compensation attributable to a Performance-Based Award will be paid to or
otherwise received by a Participant until the Committee certifies in writing that the
performance goal or goals (and any other material terms) applicable to such performance
period have been satisfied; and






	 	(e)	 	after the establishment of a performance goal, the Committee shall not revise
such performance goal (unless such revision will not disqualify compensation




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	 	 	 	attributable to the Award as “performance-based compensation” under Code Section
162(m)) or increase the amount of compensation payable with respect to such Award
upon the attainment of such performance goal.






	12.3.	 	Performance Measures. The Committee may use the following performance measures (either
individually or in any combination) to set performance goals with respect to Awards intended
to qualify as Performance-Based Awards: net sales; pretax income before allocation of
corporate overhead and bonus; budget; cash flow; earnings per share; net income; division,
group or corporate financial goals; return on shareholders’ 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; economic value-added models; comparisons with various stock
market indices; increase in number of customers; revenue backlog; margins realized on
delivered goods or services; and/or reductions in costs.
	 
	12.4.	 	Shareholder Reapproval. As required by Treasury Regulation Section 1.162-27(e)(vi), the
material terms of performance goals as described in this Section 12 shall be disclosed to and
reapproved by the Company’s shareholders no later than the first shareholder meeting that
occurs in the 5th year following the year in which the Company’s shareholders
previously approved such performance goals.
	 
	13.	 	CHANGE IN CONTROL
	 
	13.1.	 	Accelerated Vesting Upon Termination of Service. Notwithstanding any other provision of
this Plan to the contrary, unless the terms of an Award Agreement expressly provide otherwise,
if there is a Change in Control of the Company, and, within two years following the Change in
Control, the Company terminates a Participant’s Service other than for Cause or the
Participant terminates Service for Good Reason, any outstanding Awards held by the Participant
shall Vest. For this purpose, Good Reason will have the meaning set forth in any employment,
consulting, severance, or other written agreement between the Participant and the Company or
an Affiliate. If there is no employment, consulting, or other written agreement between the
Company or an Affiliate and the Participant or if such agreement does not define “Good
Reason,” then “Good Reason “ will have the meaning specified in the Award Agreement; provided,
that if the Award Agreement does not so specify, “Good Reason “ will mean, as determined by
the Committee in its sole discretion and solely with respect to this Plan and any Award made
hereunder, the Participant’s “Good Reason” means the occurrence of any of the following events
without the Participant’s express written consent:






	 	(a)	 	The material reduction of the Participant’s authorities, duties, and position
with the Company;






	 	(b)	 	A reduction by the Company of the Participant’s base compensation by more than
fifteen percent (15%), other than a reduction approved by the Board that similarly
applies to all executive officers of the Company; or




- 18 -









 












	 	(c)	 	A change in the offices of the Participant to a place that is more than
thirty-five (35) miles in distance farther from the Participant’s home than the current
executive offices of the Company in Oxford, MA.






	 	 	The Participant must provide notice to the Company of the existence of one or more of the
foregoing conditions within ninety (90) days of the initial existence of the condition, upon
the notice of which the Company will have thirty (30) days during which it may remedy the
condition and not be required to Vest the Awards. For a Participant’s termination of
Service to be on account of “Good Reason,” it must occur within one hundred eighty (180)
days following the initial existence of the applicable condition.






	13.2.	 	Cashout. The Committee, in its sole discretion, may determine that, upon the occurrence of
a Change in Control of the Company, all or a portion of certain outstanding Awards shall
terminate within a specified number of days after notice to the holders, and each such holder
shall receive an amount equal to the value of such Award on the date of the Change in Control,
and with respect to each share of Common Stock subject to a Stock Option or SAR, 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 of the Company over the Exercise Price per share
of such Stock Option or SAR. Such amount shall 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 sole discretion, shall determine.
	 
	13.3.	 	Assumption or Substitution of Awards. Notwithstanding anything contained in the Plan to the
contrary, the Committee may, in its sole discretion, provide that an Award may be assumed by
any entity which acquires control of the Company or may be substituted by a similar award
under such entity’s compensation plans.
	 
	14.	 	TERMINATION OF SERVICE
	 
	14.1.	 	Termination of Service Due to Death or Disability. Subject to any written agreement between
the Company, an Affiliate or a Group Company and a Participant, if a Participant’s Service is
terminated due to death or Disability:






	 	(a)	 	all non-Vested portions of Awards held by the Participant on the date of the
Participant’s death or Disability shall immediately Vest; and






	 	(b)	 	all Vested portions of Stock Options and SARs held by the Participant on the
date of the Participant’s death or Disability shall remain exercisable until the
earlier of:






	 	(i)	 	the end of the 12-month period following the date of the
Participant’s death or Disability, or






	 	(ii)	 	the date the Stock Option or SAR would otherwise expire.






	14.2.	 	Termination of Service for Cause. Subject to any written agreement between the Company, an
Affiliate or Group Company and a Participant, if a Participant’s Service is terminated by the
Company, the Affiliate or the Group Company, as the case may be, for Cause, all Awards held by
the Participant on the date of the termination of Service, whether Vested or non-Vested, shall
immediately be forfeited by the Participant as of




- 19 -









 












	 	 	such date, and, in the event a Participant’s Service is terminated by the Company, an
Affiliate or Group Company for Cause prior to an IPO, the Company shall have the right to
call any shares of Common Stock received by the Participant as a result of the exercise of
Stock Options under the Plan and the Participant shall be entitled to receive from the
Company an amount equal to the Exercise Price paid for such shares. A Participant’s Service
shall be deemed to have terminated for Cause if, after the Participant’s Service has
terminated, facts and circumstances are discovered that would have justified a termination
for Cause.






	14.3.	 	Other Terminations of Service. Subject to any written agreement between the Company, an
Affiliate or Group Company and a Participant, if a Participant’s Service is terminated for any
reason other than for Cause or other than due to death or Disability:






	 	(a)	 	all non-Vested portions of Awards held by the Participant on the date of the
termination of his or her Service shall immediately be forfeited by such Participant as
of such date; and






	 	(b)	 	all Vested portions of Stock Options and/or SARs held by the Participant on the
date of the termination of his or her Service shall remain exercisable until the
earlier of (i) the end of the 90-day period following the date of the termination of
the Participant’s Service or (ii) the date the Stock Option or SAR would otherwise
expire.






	 	 	Notwithstanding the foregoing, the Vesting, expiration and forfeiture of any Stock Options
and/or SARs Awarded to a Independent Contractor shall be governed by the terms of the
written Award Agreement.






	14.4.	 	ISOs. Notwithstanding anything contained in the Plan to the contrary, (i) the provisions
contained in this Section 14 shall be applied to an ISO only if the application of such
provision maintains the treatment of such ISO as an ISO.
	 
	14.5.	 	Leave of Absence. A Participant shall not cease to be an Employee for purposes of this Plan
solely on account of a Leave of Absence. For purposes of ISOs, no such leave may exceed
ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute
or contract. If reemployment upon expiration of a leave of absence approved by the Company is
not so guaranteed, on the one hundred eighty-first (181st) day of such leave any ISO held by
the Participant shall cease to be treated as an ISO and shall be treated for tax purposes as a
Nonqualified Stock Option. Notwithstanding anything in the Plan to the contrary, the
Committee, in its sole discretion, reserves the right to designate a Participant’s leave of
absence as “Personal Leave;” provided that military leaves and approved family or medical
leaves shall not be considered Personal Leave. No Awards shall be made to a Participant
during Personal Leave. A Participant’s un-Vested Awards shall remain un-Vested during such
Personal Leave and the time spent on such Personal Leave shall not count towards the vesting
of such Awards. A Participant’s Vested Stock Options that may be exercised shall remain
exercisable upon commencement of Personal Leave until the earlier of (i) a period of one year
from the date of commencement of such Personal Leave; or (ii) the remaining exercise period of
such Stock Options. Notwithstanding the foregoing, if a Participant returns to the






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	 	 	Company from a Personal Leave of less than one year and the Participant’s Stock Options have
not lapsed, the Stock Options shall remain exercisable for the remaining exercise period as
provided at the time of grant and subject to the conditions contained herein.
	 
	15.	 	TAXES
	 
	15.1.	 	Withholding Taxes. With respect to Employees and Group Employees, the Company, or the
applicable Affiliate or Group Company, may require a Participant who has Vested in his or her
Restricted Stock Award, Stock Unit, Performance Share or Performance Unit granted hereunder,
or who exercises a Stock Option or SAR granted hereunder, to reimburse the corporation that
employs such Employee or Group Employee for any taxes required by any governmental regulatory
authority to be withheld or otherwise deducted and paid by such corporation or entity in
respect of the issuance or disposition of such shares or the payment of any amounts. In lieu
thereof, the corporation that employs such Employee or Group Employee 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 Employee or Group Employee upon such terms and conditions as the Committee
shall prescribe. The corporation that employs the Employee or Group Employee may, in its
discretion, hold the stock certificate to which such Employee or Group Employee is entitled
upon the vesting of a Restricted Stock Award, Stock Unit, Performance Share or Performance
Unit or the exercise of a Stock Option or SAR as security for the payment of such withholding
tax liability, until cash sufficient to pay that liability has been accumulated.
	 
	15.2.	 	Use of Common Stock to Satisfy Withholding Obligation. With respect to Employees and Group
Employees, at any time that the Company or an Affiliate or Group Company that employs such
Employee or Group Employee becomes subject to a withholding obligation under applicable law
with respect to the vesting of a Restricted Stock Award, Stock Unit, Performance Share or
Performance Unit or the exercise of a Nonqualified Stock Option (the “Tax Date”), except as
set forth below, a holder of such Award may elect to satisfy, in whole or in part, the
holder’s related personal tax liabilities (an “Election”) by (i) directing the Company, the
Affiliate or the Group Company that employs such Employee or Group Employee to withhold from
shares issuable in the related vesting or exercise either a specified number of shares, or
shares of Common Stock having a specified value in each case equal to the related minimum
statutory personal withholding tax liabilities with respect to the applicable taxing
jurisdiction, (ii) tendering shares of Common Stock previously issued pursuant to the exercise
of a Stock Option or other shares of the Common Stock owned by the holder, or (iii) combining
any or all of the foregoing Elections in any fashion. An Election shall be irrevocable. The
withheld shares and other shares of Common Stock tendered in payment shall be valued at their
Fair Market Value of the Common Stock on the Tax Date. The Committee may disapprove any
Election, suspend or terminate the right to make Elections or provide that the right to make
Elections shall not apply to particular shares or exercises. The Committee may impose any
additional conditions or restrictions on the right to make an Election as it shall deem
appropriate, including conditions or restrictions with respect to Section 16 of the Exchange
Act.
	 
	15.3.	 	No Guarantee of Tax Consequences. No person connected with the Plan in any capacity,
including, but not limited to, the Company, an Affiliate or a Group Company




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	 	 	and their directors, officers, agents and employees makes any representation, commitment, or
guarantee that any tax treatment, including, but not limited to, federal, state and local
income, estate and gift tax treatment, will be applicable with respect to amounts deferred
under the Plan, or paid to or for the benefit of a Participant under the Plan, or that such
tax treatment will apply to or be available to a Participant on account of participation in
the Plan.
	 
	16.	 	AMENDMENT AND TERMINATION
	 
	16.1.	 	Termination of Plan. The Board may suspend or terminate the Plan at any time with or
without prior notice; provided, however, that no action authorized by this Section 16.1 shall
reduce the amount of any outstanding Award or change the terms and conditions thereof without
the Participants’ consent, except as expressly provided herein.
	 
	16.2.	 	Amendment of Plan. The Board may amend the Plan at any time with or without prior notice;
provided, however, that no action authorized by this Section 16.2 shall reduce the amount of
any outstanding Award or change the terms and conditions thereof without the Participants’
consent, except as expressly provided herein. No amendment of the Plan shall, without the
approval of the shareholders of the Company:






	 	(a)	 	increase the total number of shares of Common Stock that may be issued under
the Plan;
	 
	 	(b)	 	increase the maximum number of shares with respect to all Awards measured in
Common Stock that may be granted to any individual under the Plan;
	 
	 	(c)	 	increase the maximum dollar amount that may be paid with respect to all Awards
measured in cash; or
	 
	 	(d)	 	modify the requirements as to eligibility for Awards under the Plan.






	 	 	In addition, the Plan shall not be amended without the approval of such amendment by the
Company’s shareholders if such amendment (i) is required under the rules and regulations of
the stock exchange or national market system on which the Common Stock is listed or (ii)
will disqualify any ISO granted hereunder.
	 
	16.3.	 	Amendment or Cancellation of Award Agreements. The Committee may amend or modify any Award
Agreement at any time by mutual agreement between the Committee and the Participant or such
other persons as may then have an interest therein; provided, that (i) no such amendment,
modification, extension, cancellation, renewal, exchange, substitution or replacement will be
to the detriment of a Participant with respect to any Award previously granted without the
affected Participant’s written consent, and (ii), any such amendment, modification, extension,
cancellation, renewal exchange, substitution, or replacement must satisfy the requirements for
exemption under Section 409A, and (iii) in no event will the Committee be permitted to (A)
reduce the Exercise Price of any outstanding Stock Option, or (B) exchange or replace an
outstanding Stock Option with a new Stock Option with a lower Exercise Price, except pursuant
to Section 5.2. In addition, by mutual agreement between the Committee and a Participant or
such other persons as may then have an interest therein, Awards may be granted to an Employee,




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	 	 	Group Employee, Nonemployee Director or Independent Contractor in substitution and exchange
for, and in cancellation of, any Awards previously granted to such Employee, Group Employee,
Nonemployee Director or Independent Contractor under the Plan, or any award previously
granted to such Employee, Group Employee, Nonemployee Director or Independent Contractor
under any other present or future plan of the Company or any present or future plan of an
entity which (i) is purchased by the Company, (ii) purchases the Company, or (iii) merges
into or with the Company.
	 
	17.	 	MISCELLANEOUS
	 
	17.1.	 	Other Provisions. Awards granted under the Plan may also be subject to such other
provisions (whether or not applicable to an Award granted to any other Participant) as the
Committee determines on the date of grant to be appropriate, including, without limitation,
for the installment purchase of Common Stock under Stock Options, to assist the Participant in
financing the acquisition of Common Stock, for the forfeiture of, or restrictions on resale or
other disposition of, Common Stock acquired under any Stock Option, for the acceleration of
Vesting of Awards in the event of a Change in Control of the Company, for the payment of the
value of Awards to Participants in the event of a Change in Control of the Company, or to
comply with federal and state securities laws, or understandings or conditions as to the
Participant’s Service in addition to those specifically provided for under the Plan.
	 
	17.2.	 	Restrictive Covenants and Other Terms and Conditions. The Committee may provide, by way of
the Award Agreement or otherwise, that, notwithstanding any other provision of this Plan to
the contrary, if the Participant breaches the non-compete, non-solicitation, non-disclosure or
other terms, conditions, restrictions and/or limitations of the Award Agreement, whether
during or after termination of Service, in addition to any other penalties or restrictions
that may apply under any employment agreement, state law, or otherwise, the Participant will
forfeit:






	 	(a)	 	any and all Awards granted to him or her under the Plan, including Awards that
have become Vested and exercisable; and/or
	 
	 	(b)	 	forfeit the profit the Participant has realized on the exercise of any Stock
Options, which is the difference between the Stock Options’ Exercise Price and the Fair
Market Value of any Stock Option the Participant exercised after terminating Service
and within the six month period immediately preceding the Participant’s termination of
Service (the Participant may be required to repay such difference to the Company).






	17.3.	 	Transferability. Each Award granted under the Plan to a Participant shall not be
transferable otherwise than by will or the laws of descent and distribution, and Stock Options
and SARs 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 SAR theretofore granted to him
or her shall be exercisable during such period after his or her death as the Committee shall,
in its sole discretion, set forth in the Award Agreement on 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 SAR shall pass by
will or the laws of descent and distribution.




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	 	 	Notwithstanding the foregoing, the Committee, in its sole discretion, may permit the
transferability of a Stock Option (other than an ISO) by a Participant solely to members of
the Participant’s immediate family or trusts or family partnerships or other similar
entities for the benefit of such persons, and subject to such terms, conditions,
restrictions and/or limitations, if any, as the Committee may establish and include in the
Award Agreement.
	 
	17.4.	 	Election to Defer Compensation Attributable to Award. The Committee may, in its sole
discretion and subject to Code Section 409A, allow a Participant to elect to defer the receipt
of any compensation attributable to an Award under guidelines and procedures to be established
by the Committee after taking into account the advice of the Company’s tax counsel.
	 
	17.5.	 	Listing of Shares and Related Matters. If at any time the Committee shall determine that
the listing, registration or qualification of the shares of Common Stock subject to an Award
on any securities exchange or under any applicable law, or the consent or approval of any
governmental regulatory authority, is necessary or desirable as a condition of, or in
connection with, the granting of an Award or the issuance of shares of Common Stock
thereunder, such Award may not be exercised, distributed or paid out, as the case may be, in
whole or in part, unless such listing, registration, qualification, consent or approval shall
have been effected or obtained free of any conditions not acceptable to the Committee.
	 
	17.6.	 	No Right, Title, or Interest in Company Assets. 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, 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.
	 
	17.7.	 	No Right to Continued Employment or Service or to Grants. A Participant’s rights, if any,
to continue to serve the Company, an Affiliate or a Group Company as a director, officer,
employee, independent contractor or otherwise, shall not be enlarged or otherwise affected by
his or her designation as a Participant under the Plan, and the Company, the Affiliate and the
Group Company reserve the right to terminate the employment or Service of any Employee or
Group Employee or the services of any Independent Contractor or director at any time. The
adoption of the Plan shall not be deemed to give any Employee, Group Employee, Nonemployee
Director, Independent Contractor or any other individual any right to be selected as a
Participant or to be granted an Award.
	 
	17.8.	 	Awards Subject to Foreign Laws. The Committee may grant Awards to individual Participants
who are subject to the tax laws of nations other than the United States, and




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	 	 	such Awards may have terms and conditions as determined by the Committee as necessary to
comply with applicable foreign laws. The Committee may take any action that it deems
advisable to obtain approval of such Awards by the appropriate foreign governmental entity;
provided, however, that no such Awards may be granted pursuant to this Section and no action
may be taken which would result in a violation of the Exchange Act or any other applicable
law.
	 
	17.9.	 	Governing Law. The Plan, all Awards granted hereunder, and all actions taken in connection
herewith shall be governed by and construed in accordance with the laws of the State of
Delaware without reference to principles of conflict of laws, except as superseded by
applicable federal law. Participants, the Company, a Group Company and Affiliate each submit
and consent to the jurisdiction of the courts in the Commonwealth of Massachusetts, County of
Worster, including the Federal Courts located therein, should Federal jurisdiction
requirements exist in any action brought to enforce (or otherwise relating to) this Plan or an
Award Agreement.
	 
	17.10.	 	Other Benefits. No Award granted under the Plan shall be considered compensation for
purposes of computing benefits under any retirement plan of the Company, an Affiliate or a
Group Company nor affect any benefits or compensation under any other benefit or compensation
plan of the Company, and Affiliate or a Group Company, now or subsequently in effect.
	 
	17.11.	 	No Fractional Shares. No fractional shares of Common Stock shall be issued or delivered
pursuant to the Plan or any Award. The Committee shall determine whether cash, Common Stock,
Stock Options, 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.
	 
	17.12.	 	Compliance With Code Section 409A. Any provision of the Plan that becomes subject to Code
Section 409A, will be interpreted and applied consistent with that Section and the applicable
Treasury Regulations. With respect to any Award that is or becomes subject to Code Section
409A, a Change in Control would only be deemed to have occurred only upon a change in control
event described in Code Section 409A and Treasury Regulations §1.409A-3(i)(5).
	 
	17.13.	 	Compensation Recovery Policy. Notwithstanding any provision in the Plan or in any Award
Agreement to the contrary, Awards granted or paid under the Plan will be subject to any
Compensation Recovery Policy established by the Company and amended from time to time.






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