Form of Stock Option Agreement



 Exhibit 10.1 
 STOCK OPTION GRANT NOTICE AND STOCK OPTION AGREEMENT 
 TransDigm Group Incorporated, a Delaware
corporation (the “Company”), pursuant to its 2006 Stock Incentive Plan (the “Plan”), hereby grants to the holder listed below (“Participant”), an option to purchase the number
of shares of the Company’s common stock, par value $0.01 (“Stock”), set forth below (the “Option”). This Option is subject to all of the terms and conditions set forth herein and in the Stock
Option Agreement attached hereto as Exhibit A (the “Stock Option Agreement”) and the Plan, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the Plan shall have the same
defined meanings in this Grant Notice and the Stock Option Agreement. 
  

			
	Participant:	  	  

		
	Grant Date:	  	  

		
	Exercise Price per Share:	  	 $

		
	Total Number of Shares Subject to the Option:	  	 shares

		
	Expiration Date:	  	  


  

			
	Type of Option:	  	 ̈    Incentive Stock Option             ̈    Non-Qualified Stock Option
		
	Vesting Schedule:	  	Subject to the terms of the Stock Option Agreement (including without limitation all exhibits thereto), the Option shall be eligible to become exercisable upon the achievement of performance
objectives over the period set forth in Exhibit B hereto (provided that the Participant is an Eligible Person (as defined in the Plan) at all times during the period beginning on the Grant Date and ending on the applicable vesting
date):

 By his or her signature, the Participant agrees to be bound by the terms and conditions of the
Plan, the Stock Option Agreement and this Grant Notice. The Participant has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant
Notice and fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan. The Participant agrees that as a condition to receiving the Option, the Participant shall comply with the Stock Retention Guidelines set forth
on Exhibit C. The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or relating to the Option. 
  

							
	TRANSDIGM GROUP INCORPORATED	 	PARTICIPANT
				
	By:	 	  
	 	By:	 	  

	Print Name:	 	  
	 	Print Name:	 	  

	Title:	 	  
	 		 	
	Address:	 	  
	 	Address:	 	  









 EXHIBIT A 
 TO STOCK OPTION GRANT NOTICE 
 STOCK OPTION AGREEMENT 
 Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option Agreement (this
“Agreement”) is attached, TransDigm Group Incorporated, a Delaware corporation (the “Company”), has granted to the Participant an option (the “Option”)1 under the Company’s 2006 Stock Incentive Plan (the “Plan”) to purchase the number of shares of Stock indicated in the Grant
Notice. 
 ARTICLE I. 
 GENERAL 
 1.1 Defined Terms. Wherever the following terms are used in this Agreement they shall have the meanings
specified below, unless the context clearly indicates otherwise. Capitalized terms not specifically defined herein shall have the meanings specified in the Plan and the Grant Notice. 
 (a) “Administrator” shall mean the Board or the Compensation Committee or other committee of the Board responsible for conducting
the general administration of the Plan in accordance with Section 3 of the Plan; provided that if the Participant is an Independent Director, “Administrator” shall mean the Board. 
 (b) “Consultant” shall mean an individual who renders services to the Company as a consultant and has been so
designated by the Committee. 
 (c) “Credit Agreement” shall mean that certain credit agreement dated as of
June 23, 2006 among TransDigm, Inc., TransDigm Group Incorporated and the lenders party thereto, as in effect as of the Grant Date and without reference to any amendment to the Credit Agreement made following the Grant Date. 
 (d) “Diluted Shares” as of a given date shall mean the total diluted weighted-average of common shares of the
Company outstanding as of such date. 
 (e) “EBITDA” for a given fiscal year of the Company shall mean Consolidated
EBITDA (as defined in the Credit Agreement) of the Company for such fiscal year on a pro forma basis adjusted for acquisitions or divestitures. 
 (f) “Independent Director” shall mean a non-employee director of the Company. 
 (g)
“Net Debt” shall mean, as of the last day of a given fiscal year of the Company, the excess of (a) Consolidated Total Indebtedness (as defined in the Credit Agreement) of the Company over (b) the amount of cash and
cash equivalents set forth on the Company’s balance sheet. 
 (h) “Termination of Consultancy” shall mean the
time when the engagement of the Participant as a Consultant to the Company or a Subsidiary is terminated for any reason, with or without 
  

	1	For the avoidance of doubt, the term “Option” as used herein only describes options granted pursuant to the Stock Option Grant Notice to which this Agreement is an
Exhibit. 








 cause, including, but not by way of limitation, by resignation, discharge, death or retirement, but excluding:
(i) terminations where there is a simultaneous employment or continuing employment of the Participant by the Company or any Subsidiary, and (ii) terminations where there is a simultaneous re-establishment of a consulting relationship or
continuing consulting relationship between the Participant and the Company or any Subsidiary. The Administrator, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Consultancy, including,
but not by way of limitation, the question of whether a particular leave of absence constitutes a Termination of Consultancy. Notwithstanding any other provision of the Plan, the Company or any Subsidiary has an absolute and unrestricted right to
terminate a Consultant’s service at any time for any reason whatsoever, with or without cause, except to the extent expressly provided otherwise in writing. 
 (i) “Termination of Directorship” shall mean the time when the Participant, if he or she is or becomes an Independent Director, ceases to be a Director for any reason, including, but not by way
of limitation, a termination by resignation, failure to be elected, death or retirement. The Board, in its sole and absolute discretion, shall determine the effect of all matters and questions relating to Termination of Directorship with respect to
Independent Directors. 
 (j) “Termination of Employment” shall mean the time when the employee-employer relationship
between the Participant and the Company or any Subsidiary is terminated for any reason, with or without Cause, including, but not by way of limitation, a termination by resignation, discharge, death, disability or retirement; but excluding:
(i) terminations where there is a simultaneous reemployment or continuing employment of the Participant by the Company or any Subsidiary, and (ii) terminations where there is a simultaneous establishment of a consulting relationship or
continuing consulting relationship between the Participant and the Company or any Subsidiary. The Administrator, in its absolute discretion, shall determine the effect of all matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a particular leave of absence constitutes a Termination of Employment; provided, however, that, if this Option is an Incentive Stock Option, unless otherwise determined by the Administrator in
its discretion, a leave of absence, change in status from an employee to an independent contractor or other change in the employee-employer relationship shall constitute a Termination of Employment if, and to the extent that, such leave of absence,
change in status or other change interrupts employment for the purposes of Section 422(a)(2) of the Code and the then applicable regulations and revenue rulings under said Section. 
 (k) “Termination of Services” shall mean the time when (i) every relationship between the Participant and the Company has
been terminated by a Termination of Consultancy, Termination of Directorship and/or Termination of Employment, as applicable, and (ii) the Participant is no longer an Eligible Person under the Plan. 
 1.2 Incorporation of Terms of Plan. The Option is subject to the terms and conditions of the Plan which are incorporated herein by reference. In
the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control. 
 ARTICLE II. 
 GRANT OF OPTION 
 2.1 Grant of
Option. In consideration of the Participant’s past and/or continued employment with or service to the Company or a Subsidiary and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the
“Grant Date”), the Company irrevocably grants to the Participant the Option to purchase any part or all of an aggregate of the number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set forth
in the Plan and this Agreement. Unless 
 designated as a Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive Stock Option to the
maximum extent permitted by law. 







 2.2 Exercise Price. The exercise price of the shares of Stock subject to the Option shall be as
set forth in the Grant Notice, without commission or other charge; provided, however, that the price per share of the shares of Stock subject to the Option shall not be less than 100% of the Fair Market Value of a share of Stock on the
Grant Date. Notwithstanding the foregoing, if this Option is designated as an Incentive Stock Option and the Participant owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of
stock of the Company or any “subsidiary corporation” of the Company or any “parent corporation” of the Company (each within the meaning of Section 424 of the Code), the price per share of the shares of Stock subject to the
Option shall not be less than 110% of the Fair Market Value of a share of Stock on the Grant Date. 
 2.3 Consideration to the
Company. In consideration of the grant of the Option by the Company, the Participant agrees to render faithful and efficient services to the Company or any Subsidiary. Nothing in the Plan or this Agreement shall confer upon the Participant any
right to continue in the employ or service of the Company or any Subsidiary or shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the
services of the Participant at any time for any reason whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and the Participant. 
 ARTICLE III. 
 PERIOD OF
EXERCISABILITY 
 3.1 Commencement of Exercisability. 
 (a) Subject to Sections 3.1(b), 3.1(c) and 3.3, the Option shall become vested and exercisable in such amounts and at such times as are set forth in the
Grant Notice. 
 (b) No portion of the Option which has not become vested and exercisable at the date of the Participant’s Termination
of Services shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and the Participant. 
 (c) Notwithstanding Section 3.1(a) of this Agreement and Section 8 of the Plan (but subject to Section 3.1(b) of this Agreement), in the
event of a Change in Control: Options shall become fully vested and exercisable if the applicable target related to Stockholder Return (as defined below) is attained: (i) if such Change in Control occurs on or prior to September 30, 2009
and the Stockholder Return (as defined below) is at least 50%; (ii) if such Change in Control occurs on or following October 1, 2009 and on or prior to September 30, 2010 and the Stockholder Return is at least 40%; (iii) if such
Change in Control occurs on or following October 1, 2010 and on or prior to September 30, 2011 and the Stockholder Return is at least 30%; or (iv) if such Change in Control occurs on or following October 1, 2011 and on or prior
to September 30, 2013 and the Stockholder Return is at least 20%; provided, however that in no case shall the Options become fully vested unless the Fair Market Value per share on the effective date of a Change in Control is $52.50. For
purposes of this Section 3.1, “Stockholder Return” shall mean the annual compounded pre-tax internal rate of return determined with respect to the period beginning on the Grant Date and ending on the effective date of a
Change in Control (and based upon an assumed fair market value of $35.00 per share on the Grant Date and on the Fair Market Value on the effective date of a Change in Control). For purposes of determining Stockholder Return in 








 
connection with any Change in Control, the following proceeds received by the Company’s stockholder during the period beginning on the Grant Date and
ending on the date of such Change in Control shall be considered: (i) dividends and distributions received by the stockholders from the Company or any of its subsidiaries plus (ii) the Fair Market Value of the consideration received by the
stockholders in connection with a Change in Control or in connection with any other sale of common stock or other equity interests in the Company or any Subsidiary, after taking into account all post-closing adjustments relating to a Change in
Control, and assuming the exercise of all vested options and warrants outstanding as of the effective date of such Change in Control (after giving effect to any dilution of securities or instruments arising in connection with such Change in
Control); provided however, that if the stockholders retain any portion of the common stock following such Change in Control or other sale, the Fair Market Value of such portion of the retained common stock immediately following such Change
in Control or other sale shall be deemed “consideration received” for purposes of calculating the proceeds and provided further that the Fair Market Value of any non-cash consideration (including stock) received in connection with a
Change in Control shall be determined as of the date of such Change in Control. 
 [(d) INCLUDE ONLY FOR THOSE PARTICIPANTS RECEIVING A
280G GROSS UP: Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and it is determined that any payment or distribution by the Company to or for the benefit of Participant, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or otherwise, including the acceleration of Options hereunder (a “Payment”), would constitute an “excess parachute payment” within the meaning of
Section 280G of the Code, the Company shall pay to the Participant an additional amount (the “Gross-Up Payment”) equal to the amount of any excise tax imposed under Section 4999 of the Code, times a gross-up factor
equal to 1 divided by (1 minus the Total Tax Rate) (but limited in amount to the excise tax that would have been imposed under the Code as in effect on the date hereof), where the “Total Tax Rate” includes any applicable
federal, state and local income tax, employment tax and excise tax for the Participant. For purposes of determining the amount of the Gross-Up Payment, unless the Participant specifies that other rates apply, the Participant shall be deemed to pay
federal income tax and employment taxes at the highest marginal rate of federal income and employment taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of
taxation in the state and locality of the Participant’s residence on the Payment date, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. All determinations to be made
under this paragraph shall be made by the Company’s independent public accountants immediately prior to the Change of Control. Any such determination by the Company’s independent public accountants shall be binding upon the Company and the
Participant. The Company shall pay the Gross-Up Payment to the Participant within ten days after the independent public accountant’s determination of the amount thereof. In any event, the Gross-Up Payment shall be made no later than three and
one-half months following the taxable year in which the Payment occurs. All of the fees and expenses of the independent public accountants in performing the determinations referred to in this paragraph shall be borne solely by the Company. In the
event there is a material change in the Code that negatively impacts the amount of excise tax that would be payable in the event of a Change in Control, the Administrator will revisit the issue of providing a Gross-Up Payment and consider whether
the limitation on the amount of the Gross-Up Payment based on the Code as in effect on the date hereof should be removed or modified.] 
 3.2
Duration of Exercisability. The installments provided for in the vesting schedule set forth in the Grant Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant
Notice shall remain vested and exercisable until it becomes unexercisable under Section 3.3. 
 3.3 Expiration of Option. The
Option may not be exercised to any extent by anyone after the first to occur of the following events: 
 (a) The expiration of ten years from
the Grant Date; 







 (b) If this Option is designated as an Incentive Stock Option and the Participant owned (within the
meaning of Section 424(d) of the Code), at the time the Option was granted, more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent
corporation” of the Company (each within the meaning of Section 424 of the Code), the expiration of five years from the Grant Date; 
 (c) The opening of business on the day of the Participant’s Termination of Employment by reason of a termination by the Company for Cause; 
 (d) The expiration of six months from the date of the Participant’s Termination of Services, unless such termination occurs by reason of the Participant’s death, Disability or retirement (pursuant to
Section 3.3(e)) or is a termination by the Company for Cause (as defined in Participant’s employment agreement), provided, however, that any portion of this Option that is an Incentive Stock Option shall cease to be an Incentive
Stock Option on the expiration of three months from the Participant’s Termination of Services (and shall thereafter be a Non-Qualified Stock Option), provided, further, that to the extent that the Participant is prohibited from selling
shares of Stock pursuant to the Company’s insider trading policy at all times during such six-month period, with the exception of an open trading window of less than seven days, the Option shall expire on the later of (i) the seventh day
following the opening of the first open trading window thereafter or (ii) the first anniversary of the Participant’s Termination of Services; or 
 (e) The expiration of one year from the date of the Participant’s Termination of Services by reason of (i) the Participant’s death or Disability; or (ii) the retirement, after a minimum of ten
years of service, of a Participant who is at least 55 years old, provided, however, that to the extent that the Participant is prohibited from selling shares of Stock pursuant to the Company’s insider trading policy at all times during
such one-year period, with the exception of an open trading window of less than seven days, the Option shall expire on the seventh day following the opening of the first open trading window thereafter. 
 3.4 Special Tax Consequences. The Participant acknowledges that, to the extent that the aggregate Fair Market Value (determined as of the time the
Option is granted) of all shares of Stock with respect to which Incentive Stock Options, including the Option, are exercisable for the first time by the Participant in any calendar year exceeds $100,000, the Option and such other options shall be
Non-Qualified Stock Options to the extent necessary to comply with the limitations imposed by Section 422(d) of the Code. The Participant further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the
Option and other “incentive stock options” into account in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulations thereunder. The Participant acknowledges that an Incentive
Stock Option exercised more than three months after the Participant’s Termination of Employment, other than by reason of death or Disability, will be taxed as a Non-Qualified Stock Option. 
 ARTICLE IV. 
 EXERCISE OF OPTION

 4.1 Person Eligible to Exercise. Except as provided in Sections 5.2(b), during the lifetime of the Participant, only the
Participant may exercise the Option or any portion thereof. After the death of the Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by the
Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution. 







 4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if then wholly
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 3.3. 
 4.3 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 3.3: 
 (a) An Exercise Notice in a form specified by the Administrator, stating that the Option or portion thereof is thereby exercised, such notice complying with all applicable rules established by the Administrator; 
 (b) The receipt by the Company of full payment for the shares of Stock with respect to which the Option or portion thereof is exercised, including
payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4; 
 (c)
Any other written representations as may be required in the Administrator’s reasonable discretion to evidence compliance with the Securities Act or any other applicable law, rule, or regulation; and 
 (d) In the event the Option or portion thereof shall be exercised pursuant to Section 4.1 by any person or persons other than the Participant,
appropriate proof of the right of such person or persons to exercise the Option. 
 Notwithstanding any of the foregoing, the Company 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. 
 4.4 Method of Payment. Payment of the exercise price, and any applicable withholding tax, shall be by any of the following, or a combination thereof, at the election of the Participant: 
 (a) Cash; 
 (b) Check; 
 (c) Broker-Assisted Cash-less Exercise. With the consent of the Administrator, delivery of a notice that the Participant has placed a market sell
order with a broker with respect to shares of Stock then issuable upon exercise of the Option, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate exercise
price; provided, that payment of such proceeds is then made to the Company upon settlement of such sale; 
 (d) Share
Surrender. With the consent of the Administrator, surrender of other shares of Stock which (i) in the case of shares of Stock acquired from the Company, have been owned by the Participant for more than six (6) months on the date of
surrender (or such other minimum length of time as the Administrator determines from time to time to be necessary to avoid adverse accounting consequences or violation of any applicable law, rule or regulation), and (ii) have a Fair Market
Value on the date of surrender equal to the aggregate exercise price of the shares of Stock with respect to which the Option or portion thereof is being exercised; or 







 (e) Net Exercise. With the consent of the Administrator, surrendered shares of Stock issuable upon
the exercise of the Option having a Fair Market Value on the date of exercise equal to the aggregate exercise price of the shares of Stock with respect to which the Option or portion thereof is being exercised. 
 4.5 Conditions to Issuance of Stock Certificates. The shares of Stock deliverable upon the exercise of the Option, or any portion thereof, may be
either previously authorized but unissued shares of Stock or issued shares of Stock which have then been reacquired by the Company. Such shares of Stock shall be fully paid and nonassessable. The Company shall not be required to issue or deliver any
shares of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: 
 (a)
The admission of such shares of Stock to listing on all stock exchanges on which such Stock is then listed; 
 (b) The completion of any
registration or other qualification of such shares of Stock under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any other governmental regulatory body, which the Administrator shall, in its
absolute discretion, deem necessary or advisable; 
 (c) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its absolute discretion, determine to be necessary or advisable; 
 (d) The receipt by
the Company of full payment for such shares of Stock, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4; and 
 (e) The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of
administrative convenience. 
 4.6 Rights as Stockholder. The holder of the Option shall not be, nor have any of the rights or
privileges of, a stockholder of the Company in respect of any shares of Stock purchasable upon the exercise of any part of the Option unless and until such shares of Stock shall have been issued by the Company to such holder (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment will be made for a dividend or other right for which the record date is prior to the date the shares of Stock are issued, except as
provided in Section 8 of the Plan. 
 ARTICLE V. 
 OTHER PROVISIONS 
 5.1 Administration. The Administrator shall have the power to interpret the
Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all interpretations and
determinations made by the Administrator in good faith shall be final and binding upon Participant, the Company and all other interested persons. No member of the Committee or the Board shall be personally liable for any action, determination or
interpretation made in good faith with respect to the Plan, this Agreement or the Option. 







 5.2 Option Transferability. 
 (a) Except as otherwise set forth in Section 5.2(b), (i) the Option may not be sold, pledged, assigned or transferred in any manner other than
by will or the laws of descent and distribution, unless and until the shares of Stock underlying the Option have been issued, and all restrictions applicable to such shares of Stock have lapsed. Neither the Option nor any interest or right therein
shall be liable for the debts, contracts or engagements of Participant or his or her 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; and (ii) during the lifetime of Participant, only Participant may exercise the Option or any portion thereof. After the death of Participant, any
exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any person empowered to do so under the deceased
Participant’s will or under the then applicable laws of descent and distribution. 
 (b) Notwithstanding the foregoing, with respect to
Participants who are corporate officers or operating presidents, the Administrator may permit any portion of the Option that is not an Incentive Stock Option to be transferred to, exercised by and paid to certain persons or entities related to such
Participant, including but not limited to members of such Participant’s family, charitable institutions or trusts or other entities whose beneficiaries or beneficial owners are members of such Participant’s family and/or charitable
institutions, or to such other persons or entities as may be expressly approved by the Administrator, pursuant to such conditions and procedures as the Administrator may establish. Any permitted transfer shall be subject to the condition that the
Administrator receive evidence satisfactory to it that the transfer is being made for estate and/or tax planning purposes (or to a “blind trust” in connection with such Participant’s termination of employment or service with the
Company or a Subsidiary to assume a position with a governmental, charitable, educational or similar non-profit institution) and on a basis consistent with the Company’s lawful issue of securities. 
 5.3 Adjustments. The Participant acknowledges that the Option is subject to modification and termination in certain events as provided in this
Agreement and Section 8 of the Plan. 
 5.4 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 address given beneath the signature of the Company’s authorized officer on the Grant Notice, and any notice to be given to Participant shall be addressed to
Participant at the address given beneath Participant’s signature on the Grant Notice. By a notice given pursuant to this Section 5.4, 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 Participant shall, if Participant is then deceased, be given to the person entitled to exercise his or her Option pursuant to Section 4.1 by written notice under this Section 5.4. 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. 
 5.5 Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.








 5.6 Governing Law; Severability. The laws of the State of Delaware shall govern the
interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless of the law that might be applied under principles of conflicts of laws. 
 5.7 Conformity to Securities Laws. The Participant acknowledges 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. 
 5.8 Amendments, Suspension and Termination. To the
extent permitted by the Plan, this Agreement may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Committee or the Board, provided, that, except as may otherwise be provided
by the Plan, no amendment, modification, suspension or termination of this Agreement shall adversely affect the Option in any material way without the prior written consent of the Participant. 
 5.9 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 in Section 5.2, this Agreement shall be binding upon Participant and his or her heirs, executors, administrators,
successors and assigns. 
 5.10 Notification of Disposition. If this Option is designated as an Incentive Stock Option, Participant
shall give prompt notice to the Company of any disposition or other transfer of any shares of Stock acquired under this Agreement if such disposition or transfer is made (a) within two years from the Grant Date with respect to such shares of
Stock or (b) within one year after the transfer of such shares of Stock to him. Such notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other
consideration, by Participant in such disposition or other transfer. 
 5.11 Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of the Plan or this Agreement, if Participant is 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. 
 5.12 Not a Contract of Employment. Nothing in
this Agreement or in the Plan shall confer upon the Participant any right to continue to serve as an employee or other service provider of the Company or any of its Subsidiaries. 
 5.13 Entire Agreement. The Plan, the Grant Notice and this Agreement (including all Exhibits thereto) constitute the entire agreement of the
parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. 
 5.14 Section 409A. Notwithstanding any other provision of the Plan, this Agreement or the Grant Notice, the Plan, this Agreement and the Grant Notice shall be interpreted in accordance with, and 








 
incorporate the terms and conditions required by, Section 409A of the U.S. Internal Revenue Code of 1986, as amended (together with any Department of
Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the date hereof, “Section 409A”). The Committee reserves the
right (without the obligation to do so or to indemnify the Participant for the failure to do so) to adopt such amendments to the Plan, this Agreement or the Grant Notice or adopt other policies and procedures (including amendments, policies and
procedures with retroactive effect), or take any other actions, as the Committee determines are necessary or appropriate to exempt the Option from Section 409A or to comply with the requirements of Section 409A and thereby avoid the
penalty taxes under Section 409A. 







 EXHIBIT B 
 VESTING 
 Annual Operational Performance per
Diluted Share1 
  

														
	 	 	Minimum Vesting
(12.5% Growth)	 	 	Maximum Vesting
(20% Growth)
	 Fiscal Year
(A)
	 	% of Shares
Vesting
(B)	 	 	YE Operating
Performance
(per Diluted Share)
(C)	 	 	% of Shares
Vesting
(D)	 	 	YE Operating
Performance
(per Diluted Share)
(E)
	2009	 	3.75	%	 	$	41.77	2	 	15	%	 	$	44.56
	2010	 	3.75	%	 	$	46.99	 	 	15	%	 	$	53.47
	2011	 	3.75	%	 	$	52.87	 	 	15	%	 	$	64.16
	2012	 	3.75	%	 	$	59.48	 	 	15	%	 	$	76.99
	2013	 	3.75	%	 	$	66.91	 	 	15	%	 	$	92.39

 1. Annual Operational Performance Vesting. Effective as of the last day of each of the Company’s
fiscal years 2009-2013 there shall become vested the percentage of shares covered by the Option which is equal to the Annual Amount (as described below). The Options shall become vested and exercisable as of the date that the Administrator verifies
the AOP (as defined below); provided, however, the vesting hereunder will be effective as to Participant as of the end of the fiscal year to which such Annual Amount relates (notwithstanding any termination of Participant’s employment during
the period between the end of such fiscal year and the verification of the AOP and, in such case, notwithstanding the provisions of Section 3.1(b)). For each such fiscal year, the Administrator shall verify the AOP, and shall notify the
Company’s Chief Executive Officer of its determination with respect thereto, within ten business days after the Administrator receives the Company’s audited financial statements for that fiscal year. 
 X. For each year (the “performance year”), the Annual Amount is zero if the Annual Operational Performance per Diluted Share (“AOP”)
with respect to such year is less than the amount 
  
  

	 1
	 As of a given date, the Company’s “Annual Operational Performance per Diluted Share” shall mean the ratio
of (1) the excess of (a) the product of (i) EBITDA and (ii) the Fixed Market Multiple (as defined below) over (b) Net Debt to (2) the Company’s number of Diluted Shares as of such date, where “EBITDA,”
“Net Debt” and “Diluted Shares” have the meanings set forth in the Stock Option Agreement set forth on Exhibit A. For purposes of this Exhibit C, the Fixed Market Multiple shall mean the ratio of (1) the sum of
(a) the product of (i) the average of the closing prices per share of Stock prevailing on each trading day during the last six months of the Company’s 2008 fiscal year and (ii) the Company’s number of Diluted Shares as of
September 30, 2008 and (b) Net Debt as of such date to (2) the Company’s EBITDA as of such date. 



	 2
	 Calculated at the end of the Company’s 2008 fiscal year, based on the Annual Operational Performance per Diluted
Share as of September 30, 2008, increased by 12.5% per year for purposes of column (C) and by 20% per year for purposes of Column (E). The fiscal 2008 Annual Operational Performance per Diluted Share is $37.13. May be
recalculated for future grants based on future year’s Annual Operational Performance per Diluted Share. 









 indicated for such year in column (C) and otherwise shall be equal to the amount indicated for such year in column
(B) plus the product of (a) the excess of (1) the amount indicated for such year in column (D) over (2) the amount indicated for such year in column (B) and (b) the ratio of (1) the excess of (x) the AOP
with respect to the year (but not more than the amount indicated in Column (E) for such year) over (y) the amount indicated for such year in column (C) to (2) the excess of (x) the amount indicated for such year in column
(E) over (y) the amount indicated for such year in column (C). 
 Y. In calculating the AOP in Section X. above for any performance
year there shall also be taken into account any AOP in any of the two prior performance years (starting in fiscal year 2009) which was in excess of the amount indicated in Column (E) for such prior year and has not previously been taken into
account hereunder but only if doing so would increase the Annual Amount in such performance year. 
 Z. If the Annual Amount in any
performance year is less than the amount indicated in column (D) for such year then an amount equal to the excess of (1) the amount indicated in column (D) for such year over (2) the actual Annual Amount for such year may vest in
one or more of the next two following years by treating as AOP in the performance year under Section X. above any excess of AOP in one of such following years over the amount indicated in column (E) for the applicable following year. The
portion of any excess AOP amount which is so used may not be used more than once. 
 2. Cumulative Operational Performance Vesting. 
 Effective on the last day of the Company’s fiscal year 2013, there shall become vested the percentage of shares covered by the Option which is equal
to the Cumulative Operational Amount (as defined below). The Options shall become vested and exercisable as of the date that the Administrator verifies the Cumulative Operational Amount; provided, however, the vesting hereunder will be effective as
to Participant as of the end of the fiscal year to which such cumulative amount relates (notwithstanding any termination of Participant’s employment during the period between the end of such fiscal year and the verification of the Cumulative
Operational Amount and, in such case, notwithstanding the provisions of Section 3.1(b)). For each such fiscal year, the Administrator shall verify the Cumulative Operational Amount, and shall notify the Company’s Chief Executive
Officer of its determination with respect thereto, within ten business days after the Administrator receives the Company’s audited financial statements for that fiscal year. 
 The Cumulative Operational Amount shall mean the percentage of shares of Stock covered by the Option equal to3: 
 (a) Zero if the Cumulative Operational Performance per Diluted Share is
less than $268.02. 
 (b) Six and one-quarter percent (6.25%) if the Cumulative Operational Performance per Diluted Share is $268.02.

 (c) Twenty-five percent (25%) if the Cumulative Operational Performance per Diluted Share is at least $331.57. 
 If the Cumulative Operational Performance per Diluted Share is between $268.02 and $331.57, the Cumulative Operational Amount shall be determined by
means of linear interpolation. 
  

	3	Amounts equal the sum of the minimum and maximum columns in the Annual Operational Performance per Diluted Share table. May be recalculated for future grants based on future
year’s Annual Operational Performance per Diluted Share. 








 3. Adjustments of Operational Performance Objectives. The Operational Performance targets specified in this
Exhibit B are based upon certain revenue and expense assumptions about the future business of the Company as of the date the Option is granted. Accordingly, in the event that, after such date, the Administrator determines, in its sole
discretion, that any acquisition or disposition of any business by the Company or any dividend or other distribution (whether in the form of cash, Stock, other securities or other property), recapitalization, reclassification, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Stock or other securities of the Company, issuance of warrants or other rights to purchase Stock or other securities of the Company, any
unusual or nonrecurring transactions or events affecting the Company, or the financial statements of the Company, or change in applicable laws, regulations, or accounting principles occurs such that an adjustment is determined by the Administrator
to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to the Option, then the Administrator may, in good faith and in such manner as it may
deem equitable, adjust the amounts set forth on this Exhibit B (and/or adjust the definitions of EBITDA and Net Debt) to reflect the projected effect of such transaction(s) or event(s) on Operational Performance. 







 EXHIBIT C 
 STOCK RETENTION GUIDELINES 
 As a condition to receiving the Option grant, Participant acknowledges
and agrees to hold a number of shares and/or options with such value and for such period of time as set forth below: 
 (a) At all times
during Participant’s continued employment by the Company, Participant shall hold an aggregate amount of Company equity with a value equal to or greater than $             (the
“Retention Limit”). 
 For purposes of this Exhibit C, Company equity shall be calculated in accordance with this
paragraph. Vested options then held by Participant that were originally granted to Participant and his Permitted Transferees pursuant to the Company’s 2003 Stock Option Plan (the “2003 Options”) shall be deemed to have a value
equal to the value of the options (assuming, for such purpose, that the value of the Stock upon exercise is equal to the Deemed Value (as hereinafter defined)) over the exercise price. From time to time, Participant may be required to convert
options into shares of Stock for tax planning, because of their pending expiration or for other reasons. In that case, the shares of Stock then owned by Participant and his Permitted Transferees (other than shares described in (b) below), shall
have a “Deemed Value” of $35.26 per share and the portion of the Retention Limit not covered by the value of the 2003 Options shall be reduced and calculated on a “tax effected basis” (at a 40% aggregate tax rate)4 in accordance with the example set forth on Attachment 1.  
 (b) At all times during Participant’s continued employment by the Company, Participant and his Permitted Transferees shall hold that number of shares of Stock acquired upon exercise of New Options and vested New
Options (treating each share of Stock covered by a New Option as an individual New Option) equal to 30% of the total of the New Options that have vested since the date of grant. For this purpose, “New Options” are options granted to
Participant pursuant to the Company’s 2006 Stock Incentive Plan. 
 (c) Participant’s failure to hold that number of shares and/or
vested options set forth in Sections (a) and (b) of this Exhibit C shall result in Participant’s forfeiture of all unvested New Options unless otherwise determined by the Administrator, in its sole discretion. 
 In order to effectuate the foregoing, Participant agrees to comply with the Company’s Stock Retention Guidelines, if any, as in effect from time to
time (which Stock Retention Guidelines shall not be materially inconsistent with this Exhibit C). 
  

	4	Amount may be changed in the future at the discretion of the Administrator based on significant changes in the Internal Revenue Code.