Document:

10.36 - Management Equity Plan

Exhibit 10.36

MPM HOLDINGS INC. 
MANAGEMENT EQUITY PLAN 
		
	Section 1.
	Purpose

The Plan authorizes the Committee to provide persons or entities that are providing, or have agreed to provide, services to the Company or its Affiliates, who are in a position to contribute to the long-term success of the Company or its Affiliates, with grants of Awards.  The Company believes that this incentive program will cause those persons to increase their interest in the welfare of the Company and its Affiliates, and aid in attracting, retaining and motivating persons of outstanding ability.
		
	Section 2.
	Definitions

Capitalized terms used herein shall have the meanings set forth in this Section.
(a)“Affiliate” means, with respect to any specified Person, any other Person that directly or indirectly, through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person, provided that, in any event, any business in which the Company has any direct or indirect ownership interest shall be treated as an Affiliate of the Company.

(b)“Award” means, individually or collectively, any Option, Restricted Stock, RSU or Other Stock-Based Award granted under the Plan.

(c)“Board” means the Board of Directors of the Company. 

(d)“Cause,” with respect to each Grantee, has the meaning set forth in the then current employment (or similar) agreement entered into by and between such Grantee and the Company or any of its Affiliates that is in effect as of the date of the Grantee’s termination of employment, if applicable; and in the absence of any such employment (or similar) agreement, “Cause” means, unless the applicable Grant Certificate states otherwise, a finding by the Committee of:  (A) the Grantee’s gross negligence or willful misconduct, or willful failure to attempt in good faith to substantially perform his or her duties (other than due to physical or mental illness or incapacity), (B) the Grantee’s conviction of, or plea of guilty or nolo contendere to, or confession to, (1) a misdemeanor involving moral turpitude or (2) a felony (or the equivalent of a misdemeanor involving moral turpitude or felony in a jurisdiction other than the United States), (C) the Grantee’s knowingly willful violation of the Company’s or any Affiliate’s written policies that the Board determines is detrimental to the best interests of the Company and its Affiliates, (D) the Grantee’s fraud or misappropriation, embezzlement or material misuse of funds or property belonging to the Company or any of its Affiliates, (E) the Grantee’s use of alcohol or drugs that materially interferes with the performance of his or her duties, or (F) willful or reckless misconduct in respect of the Grantee’s obligations to the Company or its Affiliates or other acts of misconduct by the Grantee occurring during the course of the Grantee’s employment, which in either case results in or could reasonably be expected to result in material damage to the property, business or reputation of the Company or its Affiliates; provided, however, that the Grantee shall be provided a single 10-day period to cure any of
the events or occurrences described in the immediately preceding clauses (A), (C), (E) or (F) hereof, to the extent curable.

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(e) “Code” means the Internal Revenue Code of 1986, as amended, and any successor thereto.  Reference in the Plan to any section of the Code shall be deemed to include any regulations or other interpretative guidance under such section, and any amendments or successor provisions to such section, regulations or guidance.

(f)“Committee” means the Compensation Committee of the Board, or such other committee as may be appointed by the Compensation Committee or the Board.

(g)“Company” means MPM Holdings Inc., a Delaware corporation.

(h)“Control” (including, with correlative meanings, the terms “Controlled by” and “under common Control with”), as used with respect to any Person, means the direct or indirect possession of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by contract or otherwise.

(i)“Disability,” with respect to each Grantee, has the meaning set forth in the then current employment (or similar) agreement entered into by and between such Grantee and the Company or any of its Affiliates that is in effect as of the date of the Grantee’s termination of employment, if applicable, which defines “Disability” or words of like import; and in the absence of any such employment (or similar) agreement, “Disability” means, unless the applicable Grant Certificate states otherwise, a finding by the Committee of the Grantee’s incapacitation through any illness, injury, accident or condition of either a physical or psychological nature which has resulted in his or her inability to perform the essential functions of his or her position, even with reasonable accommodations, for one hundred and eighty (180) calendar days during any period of three hundred and sixty-five (365) consecutive calendar days, and such incapacity is expected to continue.

(j)“Effective Date” means March 12, 2015. 

(k)“Employee” means any Person that is providing, or has agreed to provide, services to the Company or an Affiliate of the Company, whether as an employee, director or independent contractor.

(l)“Exchange Act” means the Securities Exchange Act of 1934, as amended

(m)“Exercise Price” means, with respect to any Option (or portion thereof), the price at which the Grantee shall be entitled to purchase the Shares subject to such Option (or portion thereof) upon the exercise of all or any portion of such Option. 

(n)“Fair Market Value” of a Share on any given date means:

(i)if the Shares are listed on one or more National Securities Exchanges (within the meaning of the Exchange Act), each Share shall be valued at the closing price of a Share on the principal exchange on which such Shares are then trading, or, if no sales of Shares were made on such exchange on that date, the closing price of a Share for the next preceding day on which sales of Shares were made on the exchange;

(ii)if the Shares are not traded on a National Securities Exchange but are quoted on NASDAQ or a successor quotation system and the Shares are listed as a National Market Issue under the NASD National Market System, each Share shall be valued at the last sales 

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price per Share on such date as reported by NASDAQ or such successor quotation system, or, if no sales of Shares were reported by NASDAQ or such successor quotation system on that date, the last price of a Share as reported by NASDAQ or such successor quotation system for the next preceding day on which sales of Shares were reported by NASDAQ or such successor quotation system; or

(iii)if the Shares are not publicly traded on a National Securities Exchange and are not quoted on NASDAQ or a successor quotation system, the fair market value of the Shares shall be determined in good faith by the Committee based on its good faith determination of the fair market value of the Company and its subsidiaries as a whole, taking into account any discounts (whether for lack of control, illiquidity or otherwise) that the Committee determines to be appropriate.

(o)“Fiscal Year” means the fiscal year of the Company, which on the date the Plan is adopted, is the period beginning on or about January 1 and ending on or about December 31.

(p)“Good Reason,” with respect to each Grantee, has the meaning set forth in the then current employment (or similar) agreement entered into by and between such Grantee and the Company or any of its Affiliates that is in effect as of the date of the Grantee’s termination of employment, if applicable; and in the absence of any such employment (or similar) agreement, “Good Reason” shall not exist.

(q)“Governmental Entity” means any national, state, county, local, municipal or other government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality.

(r)“Grant Certificate” means a certificate accepted by the Grantee, or other written agreement between the Company and the Grantee, evidencing the grant of an Award hereunder and containing such terms and conditions, not inconsistent with the express provisions of the Plan, as the Committee shall approve.

(s)“Grantee” means an Employee granted an Award under the Plan.

(t) “IPO” means an initial public offering of the Shares or other event that results in the Shares being listed for trading on a national securities exchange.

(u)“ISO” shall mean any Option or portion thereof that meets the requirements of an incentive stock option under Section 422 of the Code, and that is designated by the Committee to be an ISO in the applicable Grant Certificate.

(v)“Nonqualified Option” shall mean any Option or portion thereof that is not an ISO.

(w)“Options” shall refer to options to acquire Shares that are granted under and subject to the Plan.

(x)“Other Stock-Based Award” means an Award granted under Section 6.

(y)“Permitted Transferee” has the meaning set forth in Section 9(f)(ii).

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(z)“Person” means any individual, firm, corporation, partnership, limited liability company, trust, joint venture, association, Governmental Entity, unincorporated entity or other entity.

(aa)“Plan” means this MPM Holdings Inc. Management Equity Plan as set forth herein and as amended from time to time.

(bb)     “Proportionate Percentage” means with respect to any Company stockholder and each Grantee in respect of Shares held, a fraction (expressed as a percentage) the numerator of which is the number of Shares held by such stockholder or Grantee, as the case may be, and the denominator of which is: (i) if the Proportionate Percentage is being calculated with respect to all stockholders of the Company, the total number of Shares then outstanding, or (ii) if the Proportionate Percentage is being calculated with respect to a particular group of stockholders of the Company, the total number of Shares then held by the members of such group of stockholders.

(cc)      “Restricted Period” means the period of time determined by the Committee during which an Award or a portion thereof is subject to restrictions or, as applicable, the period of time within which performance is measured for purposes of determining whether an Award has been earned.

(dd)    “Restricted Stock” means Shares, subject to certain specified restrictions (including, without limitation, a requirement that the Employee remain continuously employed or provide continuous services for a specified period of time), granted under Section 5(c).

(ee)    “Restricted Stock Unit” (or “RSU”) means an unfunded and unsecured promise to deliver Shares, cash, other securities or other property, subject to certain restrictions (including, without limitation, a requirement that the Employee remain continuously employed or provide continuous services for a specified period of time), granted under Section 5(c).

(ff)     “Sale” means a transaction (or integrated series of transactions, including a systematic plan to sell all of the Company’s operations or assets) which includes:  (A) a sale to a Person (or group of Persons acting in concert) of 100% ownership of the Company’s capital stock or (B) a sale or other disposition of all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis to a Person (but excluding (1) a mere IPO or recapitalization of the Company or (2) a merger or other acquisition, reorganization or combination transaction after which the Company stockholders as of the Effective Date retain control or shared control of the Company, or have otherwise not sold or disposed of 100% of its investment in the Company as of the Effective Date). 

(gg)    “Securities Act” means the Securities Act of 1933, as amended.

(hh)     “Securities Laws” means the Exchange Act, the Securities Act and state securities and “blue sky” laws, all as now enacted or as the same may from time to time be amended, and the applicable rules and regulations promulgated thereunder.

(ii)    “Share” means a share of common stock of the Company, par value $0.01 per share.

(jj)    “Transfer” means, with respect to any Share, any direct or indirect transfer, assignment, sale, gift, pledge, hypothecation, encumbrance or other disposition, or any interest therein whatsoever, or any other transfer of beneficial ownership, whether voluntary or involuntary.

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Section 3.Shares Available under the Plan

Subject to the provisions of Section 7, the total number of Shares with respect to which Awards may be granted under the Plan shall not exceed 3,818,182.  No more than 3,818,182 Shares may be delivered in respect of ISOs.  If, prior to exercise, settlement or payment, any Awards are forfeited, lapse or terminate for any reason, or are repurchased for any reason, the Shares covered thereby may again be available for grants under the Plan.
		
	Section 4.
	Administration of the Plan

(a)Authority of the Committee.  The Plan shall be administered by the Committee.  The Committee shall have full and final authority to take the following actions, in each case subject to and consistent with the provisions of the Plan:

(A)to select the Employees to whom Awards may be granted;

(B)to determine the number of Shares subject to each such Award;

(C)to determine the terms and conditions of any Award granted under the Plan, including, without limitation, the Exercise Price, vesting schedules, Restricted Period, conditions relating to exercise, and termination of the right to exercise;

(D)to determine the restrictions or conditions related to the delivery, holding and disposition of Shares acquired upon exercise of an Award;

(E)to determine and/or increase the vested portion of any Award;

(F)to prescribe the form of each Grant Certificate;

(G)to determine whether any Option shall be an ISO or a Nonqualified Option;

(H)to adopt, amend, suspend, waive and rescind such rules and regulations and appoint such agents as the Committee may deem necessary or advisable to administer the Plan;

(I)to correct any defect or supply any omission or reconcile any inconsistency in the Plan and to construe and interpret the Plan and any Award, Grant Certificate or other instrument hereunder; and

(J)to make all other decisions and determinations as may be required under the terms of the Plan or as the Committee may deem necessary or advisable for the administration of the Plan.

(b)Committee Authority.  Any action of the Committee with respect to the Plan shall be final, conclusive and binding on all Persons, including, without limitation, the Company, its Affiliates, Grantees, and any Person claiming any rights under the Plan from or through any Grantee, except to the extent the Committee may subsequently modify, or take further action not consistent with, its prior action, or as expressly provided in any Grant Certificate.  If not specified in the Plan, the time at which the Committee must or may make any determination shall be determined by the Committee, and any such determination may thereafter be modified by the Committee (subject to 

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Section 10).  The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee.  The Committee may delegate to officers or managers of the Company or any Affiliate of the Company the authority, subject to such terms as the Committee shall determine, to perform such functions as the Committee may determine, to the extent permitted under applicable law.

(c)Limitation of Liability.  Each member of the Committee shall be entitled to, in good faith, rely or act upon any report or other information furnished to him by any officer or other employee of the Company or any of its Affiliates, the Company’s independent certified public accountants or any executive compensation consultant, legal counsel or other professional retained by the Company to assist in the administration of the Plan.  To the fullest extent permitted by applicable law, no member of the Committee, nor any officer or employee of the Company acting on behalf of the Committee, shall be personally liable for any action, determination or interpretation taken or made in good faith with respect to the Plan, and all members of the Committee and any officer or employee of the Company acting on its behalf shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action, determination or interpretation.

(d)Actions by the Board.  The Board may at any time and from time to time, grant Awards and administer the Plan with respect to such Awards.  In any such case, the Board shall have all the authority granted to the Committee under the Plan.

Section 5.Award Terms.

(a)Option Terms.  Unless otherwise determined by the Committee and set forth in a Grant Certificate, Options granted under the Plan shall contain the following terms and conditions:

(i)Exercise Price.  The Exercise Price per Share subject to an Option granted to a Grantee shall be not less than the Fair Market Value per Share as of the date the Option is granted.

(ii)Termination.  Options shall terminate on the earliest of:

(A)the 30th day following the date that the Grantee is no longer employed or engaged by the Company and any Affiliate; provided, however, that the Option shall not terminate until (x) the 90th day following the date the Grantee’s employment is terminated by the Company or its Affiliate without Cause, or if applicable, by the Grantee for Good Reason; or (y) the 365th day following the date the Grantee is no longer employed or engaged by the Company and any Affiliate by reason of death or Disability (as determined by the Committee in its sole discretion); provided, further, that (1) in all cases, unless otherwise set forth in the Grant Certificate, the portion of any Option that is not vested on the date of termination of employment or engagement for any reason shall terminate immediately upon such termination, and (2) if such termination is for Cause, the vested portion shall terminate as well;

(B)the tenth anniversary of the date of grant; and

(C)cancellation, termination or expiration of the Options pursuant to action taken by the Committee in accordance with Section 7.

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(iii)Tax Status.  

(A)Each Option granted under the Plan is a Nonqualified Option and is not intended to qualify as an ISO under Section 422 of the Code.

(B)A Grantee shall notify the Company of any disposition of Shares acquired upon exercise of an ISO if such disposition occurs within one year of the date of such exercise or within two years of the date of grant of such ISO.  The Company may impose such procedures as it determines may be necessary to ensure that such notification is made. 

(b)Conditions to Exercise of Options.

(i)Only the vested portion of any Option may be exercised.  Except as otherwise provided in this Section 5(b)(i) or in the applicable Grant Certificate, a Grantee shall exercise an Option by delivery of written notice to the Company setting forth the number of Shares with respect to which the Option is to be exercised, together with a certified check or bank draft payable to the order of the Company for an amount equal to the sum of the Exercise Price for such Shares and any income taxes (subject to Section 5(b)(ii)) and employment taxes required to be withheld.  The Committee may, in its sole discretion, at the time the Option is granted or at a later date, permit other forms of payment in a Grant Certificate or otherwise, including notes, Shares or other contractual obligations of a Grantee to make payment on a deferred basis.  Following an IPO, except as otherwise provided in the applicable Grant Certificate, a Grantee may exercise an Option by means of (A), if and only to the extent permitted by the Committee in its sole discretion, a “net exercise” procedure effected by withholding the minimum number of Shares otherwise deliverable in respect of an Option that are needed to pay for the Exercise Price for such Shares and all applicable required withholding taxes, provided, however, that the number of Shares so withheld shall not have an aggregate Fair Market Value on the date of such withholding in excess of the minimum required withholding obligation with respect to the Grantee, or (B) a broker-assisted “cashless

exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell the Shares otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the Exercise Price for such Shares and all applicable required withholding taxes.  Any fractional Shares shall be settled in cash. 

(ii)Before the Company issues any Shares to the Grantee pursuant to the exercise of an Option, the Company shall have the right to require that the Grantee make such provision, or furnish the Company such authorization, necessary or desirable so that the Company may satisfy its obligation under applicable tax laws to withhold for income or other taxes due upon or incident to such exercise.  The Committee, may, in its sole discretion, at the time the Option is granted or at a later date, permit such withholding obligation to be satisfied through the withholding of Shares that would otherwise be delivered upon exercise of the Option, provided, however, that the number of Shares so withheld shall not have an aggregate Fair Market Value on the date of such withholding in excess of the minimum required withholding obligation with respect to the Grantee.

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(iii)As a condition to the grant of an Option or delivery of any Shares upon exercise of an Option, the Company shall have the right to require that the Grantee become party to any stockholders’ agreement among the Company’s stockholders or management stockholders that may be in effect at the relevant time.

(c)Restricted Stock and Restricted Stock Units.

(i)Generally.  Each grant of Restricted Stock and Restricted Stock Units shall be evidenced by a Grant Certificate.  Each Restricted Stock and Restricted Stock Unit grant shall be subject to the conditions set forth in this Section 5(c), and to such other conditions not inconsistent with the Plan as determined by the Committee and may be reflected in the applicable Grant Certificate.  The Committee shall establish restrictions applicable to such Restricted Stock and Restricted Stock Units, including the Restricted Period, and the time or times at which Restricted Stock or Restricted Stock Units shall be granted or become vested.  The Committee may in its sole discretion accelerate the vesting and/or the lapse of any or all of the restrictions on the Restricted Stock and Restricted Stock Units which acceleration shall not affect any other terms and conditions of such Awards.

(ii)Stock Certificates; Escrow or Similar Arrangement.  Upon the grant of Restricted Stock, the Committee shall cause Share(s) to be registered in the name of the Grantee in book-entry form subject to the Company’s directions and, if the Committee determines that the Restricted Stock shall be held by the Company or in escrow rather than delivered to the Grantee pending vesting and the release of the applicable restrictions, the Committee may require the Grantee to additionally execute and deliver to the Company (i) an escrow agreement satisfactory to the Committee, if applicable, and (ii) the appropriate stock power (endorsed in blank) with respect to the Restricted Stock covered by such agreement.  If a Grantee shall fail to execute and deliver (in a manner permitted under Section 9(a) or as otherwise determined by the Committee) a Grant Certificate and, if applicable, an escrow agreement and blank stock power within the amount of time specified by the Committee, the
 Award shall be null and void.  Subject to the restrictions set forth in this Section 5(c) and the applicable Grant Certificate, the Grantee generally shall have the rights and privileges of a stockholder as to such Restricted Stock, including without limitation the right to vote such Restricted Stock (provided that any dividends payable on Restricted Stock shall be held by the Company and delivered (without interest) to the Grantee within 15 days following the date on which the restrictions on such Restricted Stock lapse (and the right to any such accumulated dividends shall be forfeited upon the forfeiture of the Restricted Stock to which such dividends relate)). The Committee shall also be permitted to cause a stock certificate registered in the name of the Grantee to be issued. To the extent Restricted Stock is forfeited, any stock certificates issued to the Grantee evidencing such Shares shall be returned to the Company, and all rights of the Grantee to such Shares and as a stockholder with respect thereto shall terminate without further obligation or action on the part of the Company.

(iii)Restricted Stock Units.  No Shares shall be issued at the time an Award of Restricted Stock Units is made, and the Company will not be required to set aside a fund for the payment of any such Award.  At the discretion of the Committee, each Restricted Stock Unit (representing one Share) awarded to a Grantee may be credited with dividends paid in respect of one Share (“Dividend Equivalents”).  At the discretion of the Committee, Dividend Equivalents may be either currently paid to the Grantee or withheld by the Company for the 

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Grantee’s account, and interest may, if so determined by the Committee, be credited on the amount of cash Dividend Equivalents withheld at a rate and subject to such terms as determined by the Committee.  Dividend Equivalents credited to a Grantee’s account and attributable to any particular Restricted Stock Unit (and earnings thereon, if applicable) shall be distributed to the Grantee upon settlement of such Restricted Stock Unit and, if such Restricted Stock Unit is forfeited, the Grantee shall have no right to such Dividend Equivalents.

(iv)Restrictions; Forfeiture.  Restricted Stock and Restricted Stock Units awarded to a Grantee shall be subject to forfeiture until the expiration of the Restricted Period and the attainment of any other vesting criteria established by the Committee, and to such other terms and conditions, in each case to the extent set forth in the applicable Grant Certificate.

(v)Notwithstanding anything to the contrary in the Plan, except as otherwise provided in the applicable Grant Certificate or any applicable employment, consulting, change-in-control, severance or other agreement between a Grantee and the Company or an Affiliate, the unvested portion of Restricted Stock and Restricted Stock Units shall terminate and be forfeited upon termination of employment or service of the Grantee granted the applicable Award. The Committee shall have the authority to remove any or all of the restrictions on the Restricted Stock and Restricted Stock Units whenever it may determine that, by reason of changes in applicable laws or other changes in circumstances arising after the date of the Restricted Stock Award or Restricted Stock Unit Award, such action is appropriate.

(vi)Delivery of Restricted Stock and Settlement of Restricted Stock Units.  Upon the expiration of the Restricted Period with respect to any Shares of Restricted Stock and the attainment of any other vesting criteria established by the Committee, the restrictions set forth in the applicable Grant Certificate shall be of no further force or effect with respect to such Shares, except as set forth in the applicable Grant Certificate.  If an escrow arrangement is used, upon such expiration, the Company shall deliver to the Grantee, or his or her beneficiary, without charge a notice evidencing a book entry notation (or, if applicable, the stock certificate) evidencing the Shares of Restricted Stock which have not then been forfeited and with respect to which the Restricted Period has expired (rounded down to the nearest full Share).  Dividends, if any, that may have been withheld by the Committee and attributable to any particular Share of Restricted Stock shall be distributed to the Employee in cash or, at the sole discretion of the Committee, in Shares having a Fair Market Value (on the date of distribution) equal to the amount of such dividends, upon the release of restrictions on such Share and, if such Share is forfeited, the Grantee shall have no right to such dividends.

(vii)Unless otherwise provided by the Committee in a Grant Certificate or any applicable employment, consulting, change-in-control, severance or other agreement between a Grantee and the Company or an Affiliate, upon the expiration of the Restricted Period and the attainment of any other vesting criteria established by the Committee, with respect to any outstanding Restricted Stock Units, the Company shall deliver to the Grantee, or his or her beneficiary, without charge, one Share (or other securities or other property, as applicable) for each such outstanding Restricted Stock Unit which has not then been forfeited and with respect to which the Restricted Period has expired and any other such vesting criteria are attained (“Released Unit”); provided, however, that the Committee may, in its sole discretion, elect to (i) pay cash or part cash and part Shares in lieu of delivering only Shares in respect of 

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such Released Units or (ii) defer the delivery of Shares (or cash or part Shares and part cash, as the case may be) beyond the expiration of the Restricted Period if requested by the Grantee and such extension would not cause adverse tax consequences under Section 409A of the Code.  If a cash payment is made in lieu of delivering Shares, the amount of such payment shall be equal to the Fair Market Value of the Shares as of the date on which the Restricted Period lapsed with respect to such Restricted Stock Units.  To the extent provided in a Grant Certificate, the holder of outstanding Released Units shall be entitled to be credited with Dividend Equivalents (upon the payment by the Company of dividends on Shares) either in cash or, at the sole discretion of the Committee, in Shares having a Fair Market Value equal to the amount of such dividends (and interest may, at the sole discretion of the Committee, be credited on the amount of cash Dividend Equivalents at a rate and subject to such terms as determined by the Committee), which accumulated Dividend Equivalents (and interest thereon, if applicable) shall be payable at the same time as the underlying Restricted Stock Units are settled following the release of restrictions on such Restricted Stock Units, and, if such Restricted Stock Units are forfeited, the Grantee shall have no right to such Dividend Equivalents.

(viii)Legends on Restricted Stock.  Each certificate representing Restricted Stock awarded under the Plan, if any, shall bear a legend substantially in the form of the following in
addition to any other information the Company deems appropriate until the lapse of all restrictions with respect to such Shares:

“TRANSFER OF THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY IS RESTRICTED PURSUANT TO THE TERMS OF THE MPM  HOLDINGS INC. MANAGEMENT EQUITY PLAN AND A GRANT CERTIFICATE, DATED AS OF _____________, BETWEEN MPM HOLDINGS INC. AND __________________.  A COPY OF SUCH PLAN AND GRANT CERTIFICATE IS ON FILE AT THE PRINCIPAL EXECUTIVE OFFICES OF MPM HOLDINGS INC.”
Section 6.Other Stock-Based Awards.  The Committee may issue unrestricted Shares, rights to receive grants of Awards at a future date, other Awards denominated in Shares (including, without limitation, performance shares or performance units), or Awards that provide for cash payments based in whole or in part on the value or future value of Shares under the Plan to Grantees, alone or in tandem with other Awards, in such amounts as the Committee shall from time to time in its sole discretion determine.  Each Other Stock-Based Award granted under the Plan shall be evidenced by a Grant Certificate.  Each Other Stock-Based Award so granted shall be subject to such conditions not inconsistent with the Plan as may be reflected in the applicable Grant Certificate including, without limitation, the payment by the Grantee of the Fair Market Value of such Shares on the date of grant.

Section 7.Adjustment upon Changes in Capitalization

In the event any recapitalization, forward or reverse split, reorganization, merger, consolidation, spin-off, combination, repurchase, or exchange of Shares or other securities, any stock dividend or other special and nonrecurring dividend or distribution (whether in the form of cash, securities or other property), liquidation, dissolution, or other similar transactions or events (including a Sale), affects the Shares such that an adjustment is appropriate in order to prevent dilution or enlargement of the rights of Grantees under the Plan, then the Committee shall make an equitable or substitution adjustment in (i) the number and kind of Shares deemed to be available thereafter for grants of Awards 

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under Section 3, (ii) the number and kind of Shares that may be delivered or deliverable in respect of outstanding Awards, and/or (iii) the Exercise Price of outstanding Options; provided, however, that the manner of any such equitable adjustment shall be determined in the sole discretion of the Committee.  In addition, the Committee shall have discretion to make the foregoing types of adjustments, as well as any adjustments to any performance goals, targets or measures with respect to any Award, and as to all other matters it deems relevant, as it may determine appropriate and equitable in other types of events, including, without limitation, in the event of an acquisition or disposition of any of the businesses of the Company occurring after the date of grant of any Award.  For the avoidance of doubt, no adjustment shall be required to reflect dilution resulting from any additional investments in the Company by existing stockholders or any other Person.  In addition, except as otherwise specifically provided in a Grant Certificate, the Committee is authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards (including, without limitation, cancellation of vested Awards in exchange for a payment in cash, Shares or other equity interests, securities or property, or any combination thereof equal to the Fair Market Value of the Shares subject to such cancelled Awards (less the amount of the Exercise Price in the case of Options), cancellation of unvested and/or out-of-the-money Options for no
consideration, substitution of Awards using securities of a successor or other entity, acceleration of the time that Awards vest or expire, or adjustment of performance targets) in recognition of unusual or nonrecurring events (including, without limitation, a Sale, or an event described in the preceding sentence) affecting the Company or any Affiliate of the Company or the financial statements of the Company or any Affiliate of the Company, or in response to changes in applicable laws, regulations or accounting principles.  Any adjustments made pursuant to this Section 7 shall be determined in a manner consistent with Section 409A of the Code to the extent so required.
		
	Section 8.
	Restrictions on Issuing Shares

The obligation of the Company to make payment of Awards in Shares or otherwise shall be subject to all applicable laws, rules and regulations, and to such approvals by governmental agencies as may be required.  Notwithstanding any terms or conditions of any Award to the contrary, the Company shall be under no obligation to offer to sell or to sell any Shares pursuant to an Award unless such Shares have been properly registered for sale pursuant to the Securities Laws or unless such Shares may be offered or sold without such registration pursuant to an available exemption therefrom and the terms and conditions of such exemption have been fully complied with.  The Company may, but shall be under no obligation to, register for sale under the Securities Laws any of the Shares to be offered or sold under the Plan.  If the Shares offered for sale or sold under the Plan are offered or sold pursuant to an exemption from registration under the Securities Laws, the Company may restrict the Transfer of such Shares and may legend the certificates representing such Shares in such manner as it deems advisable to ensure the availability of any such exemption.  The Committee shall have the right to condition the grant of an Award or the exercise of any Option on the Grantee’s undertaking in writing to comply with such restrictions on any subsequent disposition of the Shares issued or Transferred thereunder as the Committee shall deem necessary or advisable as a result of any applicable law, regulation, official interpretation thereof, or any underwriting agreement.
		
	Section 9.
	General Provisions

(a)Grant Certificate; No Uniformity of Treatment.  Each Award shall be evidenced by a Grant Certificate.  The terms and provisions of such certificates may vary among Grantees and among different Awards granted to the same Grantee.  There is no obligation for uniformity of treatment of Grantee and any other holders or beneficiaries of Awards, and the terms and conditions of Awards, 

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and the determinations and interpretations of the Committee with respect to Awards need not be the same with respect to Grantee and such other grantees (whether or not they are similarly situated).  Unless otherwise stated in the Grant Certificate, in the event of a conflict between the terms of the Grant Certificate and the Plan, the terms of the Plan shall govern.

(b)Company Repurchase Right.  A Grant Certificate may provide for the Company’s ability to repurchase outstanding Awards (or Shares acquired in respect of Awards) on such terms as set forth in the Grant Certificate.

(c)Rights as Stockholders.  The holder of an Option or other Award shall not be deemed for any purpose, nor have any of the rights or privileges of, a stockholder of the Company in respect 
of any Shares purchasable upon the exercise of any part of an Option or deliverable in respect of such other Award unless, until and to the extent that (i) in the case of an Option, such Option shall have been exercised pursuant to its terms, (ii) the Company shall have issued and delivered such Shares to such holder and (iii) the holder’s name shall have been entered as a stockholder of record with respect to such Shares on the books of the Company.

(d)No Right to Continued Employment.  The grant of an Award in any year shall not give the Grantee any right to similar grants in future years, any right to continue such Grantee’s employment or service relationship with the Company or its Affiliates, or, until Shares are issued, any rights as a stockholder of the Company.  All Grantees shall remain subject to discharge to the same extent as if the Plan were not in effect.  For all purposes herein, a Person who transfers from employment or service with the Company to employment or service with an Affiliate or vice versa (or from an employee to an independent contractor or vice versa) shall not be deemed to have terminated employment or service with the Company or an Affiliate.  For purposes of the Plan, a sale of any Affiliate of the Company that employs or engages a Grantee shall be treated as the termination of such Grantee’s employment or engagement.

(e)No Right to Company Assets.  No Grantee, and no beneficiary or other Persons claiming under or through the Grantee, shall have any right, title or interest by reason of any Award to any particular assets of the Company or Affiliates of the Company, or any Shares allocated or reserved for the purposes of the Plan or subject to any Award except as set forth herein.  The Company shall not be required to establish any fund or make any other segregation of assets to assure satisfaction of the Company’s obligations under the Plan.

(f)Nontransferability.

(i)Except as otherwise provided by the Committee or expressly provided in the Plan or applicable Grant Certificate, no Award or any Shares received upon exercise, settlement or payment thereof may be Transferred, except by will or the laws of descent and distribution, or pursuant to a qualified domestic relations order, and an Award shall be exercisable during the Grantee’s lifetime only by the Grantee.  Upon a Grantee’s death, the estate or other beneficiary of such deceased Grantee shall be subject to all the terms and conditions of the Plan and Grant Certificate, including, without limitation, the provisions relating to the termination of the right to exercise the Award.

(ii)Notwithstanding the foregoing, the Committee may permit Awards or any Shares received upon exercise, settlement or payment thereof to be Transferred by a Grantee, without consideration, subject to such rules as the Committee may adopt, to (A) a spouse and/

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or lineal descendants (whether by blood relationship or adoption), and any other Person as to which such natural Person is a lineal descendant (whether by blood relationship or adoption); (B) any trust or other entity solely for the benefit of any Person described in clause (A) or combinations of such Persons; or (C) any other transferee as may be approved either (I) by the Committee, or (II) as provided in the applicable Grant Certificate; (each transferee described in clauses (A), (B) and (C) above is hereinafter referred to as a “Permitted Transferee”); provided that the Grantee gives the Committee advance written notice describing the terms and conditions of the proposed Transfer and the Committee notifies the Grantee in writing that
such a Transfer would comply with the requirements of the Plan.

(iii)The terms of any Award or any Shares received upon exercise, settlement or payment thereof which are Transferred in accordance with Section 9(f)(ii) shall apply to the Permitted Transferee and any reference in the Plan, or in any applicable Grant Certificate, to a Grantee shall be deemed to refer to the Permitted Transferee, except that (A) Permitted Transferees shall not be entitled to Transfer any Award or any Shares received upon exercise, settlement or payment thereof, other than by will or the laws of descent and distribution; (B) Permitted Transferees shall not be entitled to exercise any transferred Award unless there shall be in effect a registration statement on an appropriate form covering the shares of Common Stock to be acquired pursuant to the exercise of such Award if the Committee determines, consistent with any applicable Grant Certificate, that such a registration statement is necessary or appropriate; (C) the Committee or the Company shall not be required to provide any notice to a Permitted Transferee, whether or not such notice is or would otherwise have been required to be given to the Grantee under the Plan or otherwise; and (D) the consequences of the termination of the Grantee’s employment by, or services to, the Company or an Affiliate under the terms of the Plan and the applicable Grant Certificate shall continue to be applied with respect to the Permitted Transferee, including, without limitation, that an Award shall be exercisable by the Permitted Transferee only to the extent, and for the periods, specified in the Plan and the applicable Grant Certificate.

(iv)Without limiting the generality of the foregoing, nothing herein shall preclude the Committee from (A) adopting a stock ownership policy or equity hold policy, in either case applicable prospectively or retroactively with respect to any Grantee, any Award, or any Shares received upon exercise, settlement or payment of any Award, or (B) imposing a “lock up period” restricting any Grantee during such period from (1) Transferring, directly or indirectly, any Shares received upon exercise, settlement or payment of any Award, or any other securities convertible into or exercisable or exchangeable for such Shares, or (2) entering into any swap or other arrangement that Transfers to another, in whole or in part, any of the economic consequences of ownership of Shares received upon exercise, settlement or payment of any Award.

(g)Drag Along.  

(i)If, at any time prior to the consummation of an IPO, a Sale occurs, then, in connection therewith, each Grantee shall be required to Transfer 100% of his or her Shares (whether acquired pursuant to the exercise, settlement or payment of any other Award).  

(ii)Each Grantee and the Company shall consent to and raise no objections to the Sale, and if the Sale is lawful and is structured as: (A) a merger or consolidation of the Company or any of its Subsidiaries, or a sale of all or substantially all of the assets of the 

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Company and its Subsidiaries taken as a whole, each Grantee shall, and hereby does (1) irrevocably and unconditionally, waive (and agrees to cause to be waived and to prevent the
exercise of) any dissenter’s rights, appraisal rights or similar rights in connection with such transaction, (2) instruct the Board to vote in favor of such Sale and to submit such Sale, if required by law, to a vote of the stockholders of the Company or request a written consent thereto as promptly as possible, and (3) agree to vote in favor of such Sale at any annual or special meeting of the stockholders of the Company or to execute a written consent approving such Sale (or to cause each of its Affiliates to vote or act by written consent to approve such Sale, as the case may be), or (B) a sale of Shares, each Grantee shall, and hereby does agree to, sell such number of his or her Shares as is contemplated by Section 9(g)(i) on the terms and conditions approved by the Company; provided, in the case of each of the foregoing clauses (A) and (B), that the terms and conditions upon which each Grantee’s Shares are sold are the same terms and conditions in all material respects that apply to the Company’s stockholders generally.

(iii)Subject to Section 9(g)(vii), all Grantees shall cooperate in and take all actions that the Company deems reasonably necessary or desirable in connection with the consummation of the Sale, including, without limitation, the execution of such agreements and instruments and other actions reasonably necessary to: (A) make or provide the same representations, warranties, indemnities, covenants, conditions, escrow agreements and other provisions and agreements relating to such Sale that the Company stockholders (other than Grantees) have agreed to make or provide (except that in the case of representations and warranties pertaining specifically to any Company stockholder, a Grantee shall make the comparable representations and warranties pertaining specifically to itself), and (B) allocate and distribute the aggregate consideration payable upon the consummation of the Sale.  At the closing of any Sale pursuant to this Section 9(g), each Grantee shall deliver at such closing, against payment of the purchase price therefor, certificates representing his or her Shares to be sold, duly endorsed for Transfer or accompanied by duly endorsed stock powers, evidence of good title to the Shares to be sold and absence of liens, encumbrances and adverse claims with respect thereto, and such other documents as are deemed reasonably necessary by the Company for the proper Transfer of such Shares on the books of the Company.

(iv)The Company shall deliver any notice to the Grantees of any Sale at least fifteen (15) days prior to the consummation of the Sale.

(v)If any Grantee is given an option as to the form and amount of consideration to be received for his or her Shares in a Sale, all Grantees shall be given the same option.

(vi)No Grantee shall be obligated to pay more than his or her respective Proportionate Percentage of the fees and expenses incurred in connection with a consummated Sale to the extent such expenses are incurred for the benefit of all Grantees and are not otherwise paid by the Company or the acquiring party.

(vii)No Grantee shall be required to make any representations, warranties, covenants or indemnities that are joint or joint and several or that pertain to matters other than: (A) title to the Shares held by such Grantee, (B) such Grantee’s capacity, authority or power to consummate the Sale, (C) conflicts with laws, conflicts with contracts,
organizational documents and orders applicable to such Grantee, or (D) broker and similar fees payable by such Grantee.

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(viii)Any indemnification obligations for breaches of representations, warranties, covenants or agreements made by the Company and its Affiliates (other than those made by or on behalf of any Company stockholder or Grantee individually) shall be shared pro rata among the Company stockholder and Grantee based on the aggregate consideration (including, without limitation, any holdbacks, earn-outs or amounts in escrow) payable to each Company stockholder or Grantee, as the case may be, for their Shares Transferred in an Sale; provided, however, that in no event shall any individual Grantee be required to incur indemnification or contribution obligations with respect to such breaches that are joint or joint and several or exceed the aggregate consideration (including, without limitation, any holdbacks, earn-outs or amounts in escrow) payable to such Grantee for his or her Shares Transferred in the Sale.

(ix)By accepting any Award granted hereunder, a Grantee grants an irrevocable proxy and power of attorney which, it is agreed, is given as a condition to this Agreement and coupled with an interest, to any nominee of the Company or a selling stockholders, as applicable (the “Seller Nominee”) to take all necessary actions and execute and deliver all documents deemed necessary and appropriate by such Seller Nominee to consummate any Sale.  To the extent a Grantee fails to comply with the provisions of this Section 9(g), such Grantee hereby, to the fullest extent permitted by law, indemnifies, defends and holds the Seller Nominee, its officers, directors, employees, counsel, representatives, agents and partners harmless severally (and not jointly or jointly and severally), in accordance with the respective pro rata share of the aggregate consideration (including, without limitation, any holdbacks, earn-outs or amounts in escrow) payable to such Grantee in any such Sale, against all claims, liability, loss or damage (or actions in respect thereof), together with all reasonable costs and expenses (including, without limitation, reasonable legal fees and expenses, costs of investigation, and expenses incurred in settlement of any litigation commenced or threatened), relating to or arising from its exercise of such proxy and power of attorney granted hereby.

(h)Misconduct of Grantee.  Notwithstanding anything to the contrary in the Plan, the Committee, in its sole discretion, may establish procedures, in the applicable Grant Certificate providing for the forfeiture or cancellation of any Award (whether vested or unvested), or the disgorgement of gains from the exercise, vesting or settlement of the Award, in each case to be applied if the Grantee engages in conduct detrimental to the Company.  For purposes of the Plan, conduct detrimental to the Company shall include Grantee’s breaches of any restrictive covenants on competition, solicitation of employees or clients, or confidential information, and may include conduct that the Committee in its sole discretion determines (i) to be injurious or prejudicial to any interest of the Company or any Affiliate, or (ii) to otherwise violate a policy, procedure or rule applicable to the Grantee with respect to the Company or any of its Affiliates, or if the Grantee’s employment with the Company and its Affiliates is terminated for Cause.  Notwithstanding any of the foregoing to the contrary, the Company shall retain the right to bring an action at equity or law to enjoin Grantee’s misconduct and recover damages resulting from such misconduct.

(i)Governing Law.  The Plan and Award grants hereunder shall be governed by the laws of the State of New York.

(j)Severability.  If any provision of the Plan or any Grant Certificate is or becomes or is deemed to be invalid, illegal, or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such 

15

provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.

(k)Successors.  The obligations of the Company under the Plan shall be binding upon any successor corporation or organization resulting from the merger, consolidation or other reorganization of the Company, or upon any successor corporation or organization succeeding to substantially all of the assets and business of the Company.

(l)Section 409A.  Notwithstanding any provision of the Plan to the contrary, it is intended that the provisions of the Plan comply with or be exempt from Section 409A of the Code, and all provisions of the Plan shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes or penalties under Section 409A of the Code.  Each Grantee is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on or for the account of such Grantee in connection with the Plan (including, without limitation, any taxes and penalties under Section 409A of the Code), and neither the Company nor any Affiliate shall have any obligation to indemnify or otherwise hold such Grantee (or any beneficiary) harmless from any or all of such taxes or penalties.  Notwithstanding any provision of the Plan to the contrary, in the event that the Committee determines that any Shares issued or amounts payable hereunder will be subject to additional tax under Section 409A of the Code, prior to delivery to such Grantee of such Shares or payment to such Grantee of such amount, the Company may (i) adopt such amendments to the Plan and Awards and appropriate policies and procedures, including, without limitation, amendments and policies with retroactive effect, that the Committee determines necessary or appropriate to preserve the intended tax treatment of the benefits provided by the Plan and Awards hereunder and/or (ii) take such other actions as the Committee determines necessary or appropriate to avoid or limit the imposition of such additional tax under Section 409A of the Code.  In the event that it is reasonably determined by the Committee that, as a result of Section 409A of the Code, payments in respect of any Awards under the Plan may not be made at the time contemplated by the terms of the Plan or the relevant Grant Certificate, as the case may be, without causing the Grantee holding such Award to be subject to taxation under Section 409A of the Code, the Company will make such payment on the first day that would not result in the Grantee incurring any tax liability under Section 409A of the Code.

Section 10.Amendment or Termination

The Committee may, at any time, alter, amend, suspend, discontinue or terminate this Plan; provided, however, that, except as provided in Section 7, no such action shall materially adversely affect the rights of any Grantee with respect to Awards previously granted hereunder without such Grantee’s consent.

1610.37 - Form of Stock Option Grant

Exhibit 10.37

MPM HOLDINGS INC.
NONQUALIFIED STOCK OPTION 
GRANT CERTIFICATE

THIS NONQUALIFIED STOCK OPTION GRANT CERTIFICATE (this “Agreement”), dated as of [_______], 2015 (the “Date of Grant”), is made by and between MPM Holdings Inc., a Delaware corporation (the “Company”), and [_______] (the “Grantee”).
WHEREAS, the Company has adopted the MPM Holdings Inc. Management Equity Plan (as may be amended from time to time, the “Plan”); 
WHEREAS, the Company wishes to afford the Grantee the opportunity to purchase shares of its common stock, par value $0.01 per share (“Shares”); and
WHEREAS, the Committee has determined that it is in the best interests of the Company and its stockholders to grant the nonqualified Option provided for herein to the Grantee, subject to the terms set forth herein.
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants of the parties contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, for themselves, their successors and assigns, hereby agree as follows:
		
	1.
	Grant of Option.

(a)Grant.  The Company hereby grants to the Grantee an Option (the “Option”) to purchase a total of [_______] Shares (the “Option Shares”), on the terms and conditions set forth in this Agreement and as otherwise provided in the Plan.  The Option is not intended to qualify as an incentive stock option under Section 422 of the Code.  

(b)Tranches.  The Option is divided into two equal tranches:  the Tranche A Option and the Tranche B Option.  The Exercise Price shall be $20.33 per Option Share for each tranche.  Set forth below are the number of Option Shares covered by each such tranche: 

(i)Tranche A Option:   Number of Option Shares:  [____].

(ii)Tranche B Option:   Number of Option Shares:  [____].

(c)Incorporation by Reference, Etc.  The provisions of the Plan are hereby incorporated herein by reference. Except as otherwise expressly set forth herein, this Agreement shall be construed in accordance with the provisions of the Plan and any interpretations, amendments, rules and regulations promulgated by the Committee from time to time pursuant to the Plan.  Any capitalized terms not otherwise defined in this Agreement shall have the definitions set forth in the Plan.  The Committee shall have final authority to interpret and construe the Plan and this Agreement and to make any and all determinations under them, and its decision shall be binding and conclusive upon the Grantee and his or her legal representative in respect of any questions arising under the Plan or this Agreement.  The Grantee acknowledges that the Grantee has received a copy of the Plan and has had an opportunity to review the Plan and agrees to be bound by all the terms and provisions of the Plan.  Without limiting the foregoing, the Grantee acknowledges that the Option and the Option Shares are 

1

subject to provisions of the Plan under which (a) in certain circumstances an adjustment may be made to the number of Option Shares and/or the applicable Exercise Price of the Option; and (b) the Grantee may be required to sell his Option Shares or otherwise participate in a transaction where other stockholders of the Company are selling (a “drag-along”).

		
	2.
	Vesting; Exercisability; Forfeiture.  

(a)Tranche A Option.

(i)If a Sale occurs prior to an IPO, the Tranche A Option shall become fully vested and exercisable if the consideration received by selling stockholders in such Sale, determined as of the closing of such Sale, equals or exceeds $30.50 per Share (calculated net of (x) any payment of debt or negative working capital adjustment, (y) any escrow or earn out payments and (z) all transactional fees and expenses incurred relating to the Sale and paid on or about the closing date of the Sale, except that any fees relating to the calculation and payment of any tax benefit paid to such selling shareholders shall be included) (the “Tranche A Performance Threshold”).
 
(ii)For the avoidance of doubt, if a Sale occurs prior to an IPO but the Tranche A Performance Threshold was not achieved in connection with such Sale, then the Tranche A Option shall remain outstanding and eligible to vest (x) on any subsequent Sale which results in achievement of the Tranche A Performance Threshold or (y) pursuant to Section 2(a)(iii) below, in each case subject to earlier termination or adjustment pursuant to Section 7 of the Plan or Section 4 hereof, or as otherwise may be agreed between the Grantee and the acquirer of the Company in connection with the Sale.  

(iii)If an IPO occurs, then as of any determination date following the IPO, the Tranche A Option shall become fully vested and exercisable if the Common Stock achieves an average closing stock price of at least $30.50 per Share over 10 consecutive trading days on the New York Stock Exchange or such other primary stock exchange with which the Common Stock is listed and traded (or quoted in the Nasdaq) (an “Exchange”), ending with such determination date.

(b)Tranche B Option.

(i)If a Sale occurs prior to an IPO, the Tranche B Option shall become fully vested and exercisable if the consideration received by selling stockholders in such Sale, determined as of the closing of such Sale, shall equal or exceed $40.66 per Share (calculated net of (x) any payment of debt or negative working capital adjustment, (y) any escrow or earn out payments and (z) all transactional fees and expenses incurred relating to the Sale and paid on or about the closing date of the Sale, except that any fees relating to the calculation and payment of any tax benefit paid to such selling shareholders shall be included) (the “Tranche B Performance Threshold”). 

(ii)For the avoidance of doubt, if a Sale occurs prior to an IPO but the Tranche B Performance Threshold was not achieved in connection with such Sale, then the Tranche B Option shall remain outstanding and eligible to vest (x) on any subsequent Sale which results in achievement of the Tranche B Performance Threshold or (y) pursuant to Section 2(b)(iii) below, in each case subject to earlier termination or adjustment pursuant to Section 7 of the Plan or Section 4 hereof, or as otherwise may be agreed between the Grantee and the acquirer of the Company in connection with the Sale.  

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(iii)If an IPO occurs, then as of any determination date following the IPO, the Tranche B Option shall become fully vested and exercisable if the Common Stock achieves an average closing stock price of at least $40.66 per Share over 10 consecutive trading days on an Exchange, ending with such determination date.
  
		
	3.
	Method of Exercise; Tax Withholding. 

(a)The Grantee may exercise the vested and exercisable portion of the Option, in whole or in part, by notifying the Company in writing of the number of Option Shares to be purchased thereunder and delivering with such notice an amount equal to the aggregate Exercise Price for such number of Shares (calculated based on the number of Shares acquired that are covered by the Tranche A Option or Tranche B Option, as applicable) in cash (certified check, wire transfer or bank draft) or, if permitted by the Company in its sole discretion, in whole Shares already owned by the Grantee.  Following an IPO, the Grantee may exercise the Option by means of (i), if and only to the extent permitted by the Committee in its sole discretion, a “net exercise” procedure effected by withholding the minimum number of Shares otherwise deliverable in respect of an Option that are needed to pay for the aggregate Exercise Price for such Shares and all applicable required withholding taxes, provided that the number of Shares so withheld to satisfy applicable withholding and employment taxes shall not have an aggregate Fair Market Value on the date of such withholding in excess of the applicable minimum required withholding obligation, or (ii) a broker-assisted “cashless exercise” pursuant to which the Company is delivered a copy of irrevocable instructions to a stockbroker to sell the Shares otherwise deliverable upon the exercise of the Option and to deliver promptly to the Company an amount equal to the aggregate Exercise Price for such Shares and all applicable required withholding taxes.  If, by the final vesting date of the Option, neither an IPO nor a sale of the Company (whether by stock, substantially all of the assets, merger or otherwise) has occurred, then the Committee will consider alternative means by which the Grantee may exercise the Option and satisfy the applicable required withholding taxes, in whole or in part, including, without limitation:  (A) payment in other property having a Fair Market Value equal to the aggregate Exercise Price and/or such withholding liability; (B) a “net exercise” procedure effected by withholding the minimum number of Shares otherwise deliverable in respect of an Option that are needed to pay for the aggregate Exercise Price and/or such withholding liability; (C) a loan or payment by the Company to fund all such withholding liability; or (D) such other means to reasonably address the Grantee’s liability to satisfy all applicable required withholding taxes incurred in connection with such exercise.  

(b)Except as expressly provided in Section 3(a), the Company shall be entitled to require, as a condition to the exercise of the Option, that the Grantee remit an amount in cash or, in the discretion of the Company, Shares or other property sufficient to satisfy all Federal, state and local or other applicable withholding and employment taxes relating thereto.  In addition, the Company shall have the right and is hereby authorized to withhold from the Shares otherwise deliverable upon exercise of the Option, or from any compensation or other amount owing to the Grantee, the amount (in cash or, in the discretion of the Company, Shares or other property) of any applicable withholding and employment taxes in respect of the exercise of the Option and to take such other action as may be necessary in the discretion of the Company to satisfy all obligations for the payment of such taxes.  

4.Expiration.  In no event shall all or any portion of the Option be exercisable after the tenth annual anniversary of the Date of Grant (the “Option Period”).  The Option is subject to earlier cancellation, termination or expiration of the Options pursuant to (i) Section 7 of the Plan, (ii) Sections 7(i) or 10 hereof, (iii) expiration of the post-termination exercise period set forth in Section 5 hereof, as 

3

applicable, or (iv) the exercise of the Repurchase Right pursuant to Section 6 hereof with respect to all or the portion of the Option repurchased. 

		
	5.
	Termination of Employment.

(a)Termination of Employment without Cause or due to Death or Disability.  If, on or prior to an applicable Vesting Date, the Grantee’s employment with the Company and its Affiliates is terminated (1) by the Company or one of its Affiliates without Cause or due to the Grantee’s Disability or (2) due to the Grantee’s death, then: 

(i)the unvested portion of the Option (whether with respect to the Tranche A Option or Tranche B Option) shall be cancelled immediately and the Grantee shall immediately forfeit any rights to the Option Shares subject to such unvested portion; and 

(ii)the vested portion of the Option shall expire on the earlier of (x) the last day of the Option Period or (y) the 90th day following the date of such termination or, in the case of any termination by the Company due to the Grantee’s Disability or due to the Grantee’s death, the 365th day following the date of such termination.  For the avoidance of doubt, the vested portion of the Option shall remain exercisable by the Grantee until its expiration only to the extent the Option was exercisable at the time of such termination.

(b)Termination of Employment for Cause. If, prior to the final Vesting Date, the Grantee’s employment with the Company and its Affiliates is terminated by the Company or one of its Affiliates for Cause, the unvested and vested portion of the Option shall be cancelled immediately and the Grantee shall immediately forfeit any rights to the Option Shares subject to the Option.

(c)Other Termination of Employment.  If, prior to the final Vesting Date, the Grantee’s employment with the Company and its Affiliates terminates for any reason other than as set forth in Sections 5(a) or (b) above (including any termination of employment by the Grantee), then:

(i)the unvested portion of the Option (whether with respect to the Tranche A Option or Tranche B Option) shall be cancelled immediately and the Grantee shall immediately forfeit any rights to the Option Shares subject to such unvested portion; and 

(ii)the vested portion of the Option shall expire on the earlier of the last day of the Option Period or the 30th day following the date of such termination.  For the avoidance of doubt, the vested portion of the Option shall remain exercisable by the Grantee until its expiration only to the extent the Option was exercisable at the time of such termination.

6.Repurchase Right.  In the event of the termination of the Grantee’s employment with the Company and its Affiliates for any reason, the Option and any Option Shares acquired upon exercise of the Option shall be subject to repurchase by the Company as set forth in this Section 6.  

(a)Repurchase Right, Generally. 
 
(i)From and after any termination of the Grantee’s employment for any reason (the “Repurchase Event”), the Company shall have the right, but not the obligation, to repurchase all or any portion of the vested Option and/or Option Shares held by the Grantee (the “Repurchase Right”).  The Company may exercise the Repurchase Right by written notice (a “Repurchase Notice”) delivered to the Grantee within six (6) months after the Repurchase Event.  Any repurchase described in the immediately preceding sentence shall be (i) with respect to Option 

4

Shares, for Fair Market Value, and (ii) with respect to the vested Option, for the excess, if any, of the Fair Market Value for the Option Shares in respect of the vested Option over the applicable Exercise Price for the repurchased Tranche A Option and/or Tranche B Option, as applicable, in each case except as set forth in Section 6(b) below.  The determination date for purposes of determining the Fair Market Value in the preceding sentence shall be the closing date of the purchase of the subject vested Option and/or Option Shares (the “Repurchase Date”).  

(ii)Except as provided in subsection (iii) below, the Repurchase Date with respect to any sale and repurchase of the vested Option and/or Option Shares pursuant to the exercise of the Repurchase Right shall take place on the later of (x) the date specified by the Company, which shall in no event be later than thirty (30) days following the date of the Repurchase Notice, and (y) ten (10) days following the receipt by the Company of all necessary governmental and other approvals.

(iii)Notwithstanding anything to the contrary herein, if the Board, in its good faith judgment, reasonably determines that a Financing Restriction (as defined below)

 exists, then the Company may elect (x) to suspend its repurchase of the Option Shares and/or vested Option (as the case may be) until the Financing Restriction has ceased to exist, in accordance with subsection (iv) below, (y) to cause its assignee or designee to repurchase the Option Shares or vested Option, as the case may be, while any Financing Restrictions continue to exist, or (z) to pay all or any portion of the purchase price due in respect of the repurchase by way of a promissory note.  In such event, the Company shall furnish written notification to the Grantee specifying the Company’s election and the nature of the Financing Restriction.  A “Financing Restriction” exists if: (A) such repurchase would render the Company or its Affiliates unable to meet their obligations in the ordinary course of business at any time during the one (1) year period commencing on the date on which such repurchase would be required, taking into account any pending or proposed transactions, capital expenditures or other budgeted cash outlays by the Company or any of its Affiliates which are reasonably likely to be consummated or paid, as the case may be, within such one (1) year period, including, without limitation, any corporate reorganization or proposed acquisition of any other Person by the Company or any of its Affiliates which is reasonably likely to be consummated within such one (1) year period; (B) the Company is prohibited from such repurchase by applicable law restricting the purchase by a corporation of its own shares; or (C) such repurchase would (with or without notice or lapse of time) constitute a breach of, default or event of default under, or is otherwise prohibited by, the terms of any loan agreement or other agreement or instrument representing indebtedness to which the Company or any of its Affiliates is a party, or the Company or its applicable Affiliates is not able to obtain the requisite consent of any of its senior lenders for such repurchase.

(iv)If, in the event of a Financing Restriction, the Company elects to suspend its repurchase of the Option Shares and/or vested Option (as the case may be) until the Financing Restriction has ceased to exist, then (A) the Company shall repurchase the Option Shares or vested Option (as the case may be) as soon as reasonably practicable after all Financing Restrictions cease to exist; provided, however, that if some, but not all of the Option Shares or vested Option can be so repurchased without creating a Financing Restriction, then the Company may consummate such repurchase to the fullest extent it is able without causing a Financing Restriction, in accordance with the terms of this Agreement and applicable law, (B) the Company shall provide written notice to the Grantee as soon as practicable after all Financing Restrictions cease to exist (the “Reinstatement Notice”), (C) the applicable purchase 

5

price shall be determined in accordance with Section 6(a)(i), except that “Fair Market Value” shall be equal to the greater of the Fair Market Value as of the date of the Repurchase Notice and the Fair Market Value calculated as of the date of the Reinstatement Notice, and (D) such repurchase shall occur on a date specified by the Company within ten (10) days following the determination of the Fair Market Value as provided in clause (C) above.

(b)Company’s Repurchase Right upon Certain Terminations.  Notwithstanding anything contained herein to the contrary, in the event the Grantee’s employment relationship with the Company or any of its Affiliates is terminated by the Company or any of its Affiliates for Cause, then the Company may exercise the Repurchase Right by delivering a Repurchase Notice to the Grantee within the time periods set forth in Section 6(a) above at a price equal to: (i) for each Option Share, the lesser
of (x) the Exercise Price paid to acquire such Option Share (whether with respect to the Tranche A Option or Tranche B Option), subject to adjustment by the Company to reflect any stock split, recapitalization or similar adjustment to the Shares, and (y) the Fair Market Value of such Option Share on the Repurchase Date, or (ii) for any vested Option, zero, so that any portion of the Option outstanding as of the date of such termination (whether vested or unvested) shall be cancelled effective as of the date of termination without payment therefor.

(c)Closing.  The Repurchase Date shall take place on a date designated by the Company in accordance with Section 6(a); provided, however, that the Repurchase Date may be deferred to a date designated by the Company or, to the extent required to avoid liability under applicable securities laws, by the Grantee, until such time as the Grantee has held the vested Option and/or Option Shares, as applicable, for a period of at least six (6) months and one (1) day.  The purchase price shall be paid at the closing in the form of a check, wire transfer of immediately available funds or by cancellation of money purchase indebtedness of the Grantee, as determined in the sole discretion of the Company; provided, that all or any portion of the purchase price may be paid by way of a promissory note if a Financing Restriction exists, as set forth in Section 6(a)(iii).  The Company may effect repurchase of the vested Option and/or Option Shares and the Company shall record such Transfer on its books whether or not the Grantee attends such closing or delivers certificates representing the vested Option and/or Option Shares to the Company.  The Grantee hereby grants an irrevocable proxy and power of attorney which, it is agreed, is coupled with an interest to any nominee of the Company to take all necessary actions and execute and deliver all documents deemed necessary and appropriate by such nominee to effect the sale and purchase of the vested Option and/or Option Shares.  If the Grantee fails to take all necessary actions and execute and deliver all documents necessary and appropriate to fulfill his or her obligations under this Section 6, the Grantee shall, to the fullest extent permitted by law, indemnify, defend and hold harmless such nominee, its officers, directors, employees, counsel, representatives, agents and partners against all claims, liability, loss or damage (or actions in respect thereof), together with all reasonable costs and expenses (including, without limitation, reasonable legal fees and expenses, and expenses incurred in settlement of any litigation commenced or threatened), relating to or arising from such nominee’s exercise of the proxy and power of attorney granted hereby.  

		
	7.
	Restrictive Covenants.

(a)Confidentiality of this Agreement.  The Grantee hereby agrees that (i) except as required by law, the Grantee will not disclose to any Person other than the Grantee’s spouse and legal, financial and other advisors (if any) the grant of the Option or any of the terms or provisions hereof without the prior approval of the Committee, and (ii) in the discretion of the Committee, the Option shall terminate and any unexercised portion of such Option (whether or not vested) shall be forfeited if the Grantee violates the non-disclosure provisions of this Section 7(a).

6

(b)Non-Competition.  During the term of the Grantee’s employment with the Company or any of its Affiliates and for a period of two (2) years thereafter (the “Non-Compete Period”), the Grantee shall not (without the prior written consent of the Company), directly or indirectly, (i) engage
in any Competitive Business, (ii) render any services to any Competitive Business in a manner that enhances the capacity of such Competitive Business to engage in the production, sale, provision or distribution of products or services similar to those produced, sold, distributed or provided by the Company or any of its Affiliates, or (iii) acquire a financial interest in any Competitive Business.  For purposes of this Section 7(b): (A) the phrase “directly or indirectly engage in” shall include any direct or indirect ownership or profit participation interest in such enterprise, whether as an owner, stockholder, member, partner, joint venturer of or otherwise, and shall include any direct or indirect participation in such enterprise as an employee, consultant, director, officer, licensor of technology or otherwise (provided that licensers of technology shall only be covered if the Grantee is personally working on technology for a Competitive Business and such technology is not technology that is generally available to a broad group of customers), and (B) the term “Competitive Business” shall mean a business that engages in the production, sale, provision or distribution of products or services similar to those produced, sold, distributed or provided by the Company or any of its Affiliates during the three-year period ending on the date of the Grantee’s termination of employment.  Notwithstanding the foregoing, nothing herein shall prohibit the Grantee from being a passive owner of not more than 2% of the outstanding equity securities of any class of a corporation or other entity that is publicly traded, or not more than 2% of any non-voting equity securities or debt securities of any corporation or other entity, so long as the Grantee has no active participation in the business of such corporation or other entity (including, without limitation, serving as a member of the board of directors or as a consultant).  The obligations of the Grantee under this Section 7(b) shall apply to (x) any geographic area or territory in which the Company or any of its Affiliates is engaged in business as of the date of his or her termination of employment, and (y) any prospective geographic area or territory that within the six months preceding the date of termination of the Grantee's employment, has been the subject of serious consideration by the Company or any of its Affiliates as a business location and which the Grantee is or has been made aware of.     

(c)Non-Solicitation; Non-Hire.  During the Non-Compete Period, the Grantee shall not (without the prior written consent of the Company) directly or indirectly: (i) solicit, induce or attempt to solicit or induce any officer, director or employee of the Company or any of its Affiliates to terminate their relationship with or leave the employ of the Company or any such Affiliate, or in any way interfere with the relationship between the Company or any such Affiliate, on the one hand, and any officer, director or employee thereof, on the other hand, (ii) hire (or other similar arrangement) any Person (in any capacity whether as an officer, director, employee or consultant) who is or at any time was an officer, director or employee of the Company or any of its Affiliates until six (6) months after such individual’s relationship (whether as an officer, director or employee) with the Company or such Affiliate has ended, or (iii) induce or attempt to induce any customer, supplier, prospect licensee or other business relation of the Company or any of its Affiliates to cease doing business with the Company or such Affiliate, or in any way interfere with the relationship between any such customer, supplier, prospect licensee or business relation, on the one hand, and the Company or any such Affiliate, on the other hand; provided, that none of (A) the Grantee’s acting as a reference for employees, (B) any generic, nontargeted advertising affiliated directly or indirectly with the Grantee or (C) the Grantee’s good faith and proper performance of his or her duties and responsibilities for the Company and its Affiliates during employment shall be deemed a breach of this Section 7(c).  

(d)Non-Disparagement.  During the term of the Grantee’s employment with the Company or any of its Affiliates and thereafter in perpetuity, the Grantee shall not, directly or indirectly, 

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knowingly disparage, criticize, or otherwise make derogatory statements regarding the Company or any of its Affiliates, successors, directors or officers.  The foregoing shall not be violated by the Grantee’s truthful responses to legal process or inquiry by a governmental authority.  

(e)Non-Disclosure of Confidential Information; Return of Property.  During the term of the Grantee’s employment with the Company or any of its Affiliates and thereafter in perpetuity, the Grantee shall maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for the Grantee’s benefit or the benefit of any Person, any confidential or proprietary information or trade secrets of or relating to the Company or any of its Affiliates, including, without limitation, information with respect to the Company’s or any of its Affiliates’ operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, compensation paid to employees or other terms of employment, or deliver to any Person any document, record, notebook, computer program or similar repository of or containing any such confidential or proprietary information or trade secrets; provided, that the Grantee’s good faith performance of his or her duties and responsibilities for the Company and its Affiliates during employment shall not be deemed a breach of this Section 7(e).  Upon the Grantee’s termination of employment for any reason, the Grantee shall promptly deliver to the Company all correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any other documents concerning the Company’s or any of its Affiliates’ customers, business plans, marketing strategies, products or processes.  The Grantee may nonetheless retain copies of documents relating to the Grantee’s compensation; the Grantee’s personal entitlements and obligations; the Grantee’s rolodex (and electronic equivalents); and the Grantee’s cell phone number.  The Grantee may respond to a lawful and valid subpoena or other legal process but shall give the Company the earliest possible notice thereof, shall, as much in advance of the return date as possible, make available to the Company and its counsel the documents and other information sought and, if requested by the Company, shall reasonably assist such counsel in resisting or otherwise responding to such process.  

(f)Intellectual Property Rights.  

(i)    The Grantee agrees that the results and proceeds of the Grantee’s services for the Company or its subsidiaries or Affiliates (including, without limitation, any trade secrets, products, services, processes, know-how, designs, developments, innovations, analyses, drawings, reports, techniques, formulas, methods, developmental or experimental work, improvements, discoveries, inventions, ideas, source and object codes, programs, matters of a literary, musical, dramatic or otherwise creative nature, writings and other works of authorship) resulting from services performed while an employee of the Company and any works in progress, whether or not patentable or registrable under copyright or similar statutes, that were made, developed, conceived or reduced to practice or learned by the Grantee, either alone or

 jointly with others (collectively, “Inventions”), shall be works-made-for-hire and the Company (or, if applicable or as directed by the Company, any of its subsidiaries or Affiliates) shall be deemed the sole owner throughout the universe of any and all trade secret, patent, copyright and other intellectual property rights (collectively, “Proprietary Rights”) of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, with the right to use the same in perpetuity in any manner the Company determines in its sole discretion, without any further payment to the Grantee whatsoever.  If, for any reason, any of such results and proceeds shall not legally be a work-made-for-hire and/or there are any Proprietary Rights which do not accrue to the Company (or, as the case may be, any of its 

8

subsidiaries or Affiliates) under the immediately preceding sentence, then the Grantee hereby irrevocably assigns and agrees to assign any and all of the Grantee’s right, title and interest thereto, including, without limitation, any and all Proprietary Rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed, to the Company (or, if applicable or as directed by the Company, any of its subsidiaries or Affiliates), and the Company or such subsidiaries or Affiliates shall have the right to use the same in perpetuity throughout the universe in any manner determined by the Company or such subsidiaries or Affiliates without any further payment to the Grantee whatsoever.  As to any Invention that the Grantee is required to assign, the Grantee shall promptly and fully disclose to the Company all information known to the Grantee concerning such Invention.  The Grantee hereby waives and quitclaims to the Company any and all claims, of any nature whatsoever, that the Grantee now or may hereafter have for infringement of any Proprietary Rights assigned hereunder to the Company.

(ii)    The Grantee agrees that, from time to time, as may be requested by the Company and at the Company’s sole cost and expense, the Grantee shall do any and all things that the Company may reasonably deem useful or desirable to establish or document the Company’s exclusive ownership throughout the United States of America or any other country of any and all Proprietary Rights in any such Inventions, including, without limitation, the execution of appropriate copyright and/or patent applications or assignments.  To the extent the Grantee has any Proprietary Rights in the Inventions that cannot be assigned in the manner described above, the Grantee unconditionally and irrevocably waives the enforcement of such Proprietary Rights.  This Section 7(f) is subject to and shall not be deemed to limit, restrict or constitute any waiver by the Company of any Proprietary Rights of ownership to which the Company may be entitled by operation of law by virtue of the Company’s being the Grantee’s employer (or Affiliate of the Grantee’s employer, as applicable).  The Grantee further agrees that, from time to time, as may be requested by the Company and at the Company’s sole cost and expense, the Grantee shall assist the Company in every proper and lawful way to obtain and from time to time enforce Proprietary Rights relating to Inventions in any and all countries.  To this end, the Grantee shall execute, verify and deliver such documents and perform such other acts (including appearances as a witness) as the Company may reasonably request for use in applying for, obtaining, perfecting, evidencing, sustaining, and enforcing such Proprietary Rights and the assignment thereof.  In addition, the Grantee shall execute, verify, and deliver assignments of such Proprietary Rights to the Company or its designees.  The Grantee’s obligation to assist the

Company with respect to Proprietary Rights relating to such Inventions in any and all countries shall continue beyond the termination of the Grantee’s employment with the Company.

(g)Grantee Acknowledgements.  The Grantee understands that this Section 7 may limit his or her ability to earn a livelihood in a business competitive to the business of the Company and its Affiliates.  The Grantee expressly acknowledges and agrees that this Section 7 is reasonable and necessary for the protection of the legitimate business interests of the Company and is reasonable in scope.  

(h)Notification of Subsequent Employer. The Grantee hereby agrees that prior to accepting employment with, or agreeing to provide services to, any other Person during any period during which the Grantee remains subject to any of the covenants set forth in Section 7, the Grantee shall provide such prospective employer with written notice of the provisions of this Section 7 (to the extent any such provisions are applicable and in effect at the time of such notice), with a copy of such notice delivered to the Company not later than three (3) business days prior to the date on which the Grantee 

9

commences such employment or provision of services.  For the avoidance of doubt, the Company shall in any event be permitted to provide any such prospective employer with written notice of the provisions of this Section 7.

(i)Forfeiture; Other Relief.  In the event of a material breach by the Grantee of the restrictive covenants set forth in this Section 7, then in addition to any other remedy which may be available at law or in equity, the Option shall be automatically forfeited effective as of the date on which such violation first occurs, and, in the event that the Grantee has previously exercised all or any portion of the Option within the three (3) year period immediately preceding such breach, the Grantee shall forfeit such Option Shares without consideration and be required to promptly repay to the Company, upon 10 days prior written demand by the Committee, any proceeds received by the Grantee upon disposition of the Option Shares.  The foregoing rights and remedies are in addition to any other rights and remedies that may be available to the Company and shall not prevent (and the Grantee shall not assert that they shall prevent) the Company from bringing one or more actions in any applicable jurisdiction to recover damages as a result of the Grantee’s breach of such restrictive covenants to the full extent of law and equity.  The Grantee acknowledges and agrees that irreparable injury will result to the Company and its goodwill if the Grantee breaches any of the terms of the covenants set forth in this Section 7, the exact amount of which will be difficult or impossible to ascertain, and that remedies at law would be an inadequate remedy for any breach.  Accordingly, the Grantee hereby agrees that, in the event of a breach of any of the covenants contained in this Section 7, in addition to any other remedy which may be available at law or in equity, the Company shall be entitled to specific performance and injunctive relief.

(j)Severability; Blue Pencil.  The invalidity or nonenforceability of any provision of this Section 7 in any respect shall not affect the validity or enforceability of the other provisions of this Section 7 in any other respect, or of any other provision of this Agreement.  In the event that any provision of this Section 7 shall be held invalid, illegal or unenforceable (whether in whole or in part) by a court of competent jurisdiction, such provision shall be deemed modified to the extent, but only to the extent, of such invalidity, illegality or unenforceability, and the remaining provisions (and part of such provision, as the case may be) shall not be affected thereby; provided, however, that if any
provision of this Section 7 is finally held to be invalid, illegal or unenforceable because it exceeds the maximum scope determined to be acceptable to permit such provision to be enforceable, such provision shall be deemed to be modified to the minimum extent necessary to modify such scope in order to make such provision enforceable hereunder. 

8.Rights as a Stockholder.  The Grantee shall not be deemed for any purpose, nor have any of the rights or privileges of, a stockholder of the Company in respect of any Shares subject to this Option unless, until and to the extent that (i) such Option shall have been exercised pursuant to its terms, (ii) the Company shall have issued and delivered such Shares to the Grantee and (iii) the Grantee’s name shall have been entered as a stockholder of record with respect to such Option Shares on the books of the Company.  The Company shall cause the actions described in clauses (ii) and (iii) of the preceding sentence to occur promptly following exercise as contemplated by this Agreement, subject to compliance with applicable laws.

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9.Compliance with Legal Requirements.   The granting and exercising of the Option, and any other obligations of the Company under this Agreement, shall be subject to all applicable federal, provincial, state, local and foreign laws, rules and regulations and to such approvals by any regulatory or governmental agency as may be required.  The Committee shall have the right to impose such restrictions on the Option as it deems reasonably necessary or advisable under applicable federal securities laws, the rules and regulations of any stock exchange or market upon which Shares are then listed or traded, and/or any blue sky or state securities laws applicable to such Shares.  In the event of the exercise of the Option at a time when there is not in effect a registration statement under the Securities Act relating to the Shares, the Grantee hereby represents and warrants, and by virtue of such exercise shall be deemed to represent and warrant to the Company that the Shares are being acquired for investment only and not with a view to the distribution thereof, and the Grantee shall provide the Company with such further representations and warranties as the Company may reasonably require in order to ensure compliance with applicable federal and state securities, “blue sky” and other laws.  In no event shall the Company be obligated to register Shares under state or Federal securities laws, to comply with the requirements of any exemption from registration requirements or to take any other action that may be required in order to permit, or to remove any prohibition or limitation on, the issuance of Shares pursuant to the exercise of the Option which may be imposed by any applicable law, rule or regulation.  It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Grantee.  The Grantee agrees to take all steps the Committee or the Company determines are reasonably necessary to comply with all applicable provisions of federal and state securities law in exercising his or her rights under this Agreement.  

10.Clawback.  The Option and/or the Option Shares shall be subject (including on a retroactive basis) to clawback, forfeiture or similar requirements (and such requirements shall be deemed incorporated by reference into this Agreement) to the extent required by applicable law (including, without limitation, Section 304 of the Sarbanes-Oxley Act and Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act) and/or the rules and regulations of any applicable

securities exchange or inter-dealer quotation system on which the Shares may be listed or quoted or if so required pursuant to a written policy adopted by the Company.

11.Litigation Cooperation.  The Grantee agrees that during and after his or her employment by the Company and its Affiliates, the Grantee will assist the Company and its Affiliates in the defense of any claims, or potential claims that may be made or threatened to be made against the Company or any of its Affiliates in any action, suit or proceeding, whether civil, criminal, administrative, investigative or otherwise, which are not adverse to the Grantee (an “Action”), and will assist the Company and its Affiliates in the prosecution of any claims that may be made by the Company or any of its Affiliates in any Action, to the extent that such claims may relate to the Grantee’s employment or the period of the Grantee’s employment by the Company and its Affiliates.  The Grantee agrees, unless precluded by law, to promptly inform the Company if the Grantee is asked to participate (or otherwise become involved) in any Action involving such claims or potential claims.  The Grantee also agrees, unless precluded by law, to promptly inform the Company if the Grantee is asked to assist in any investigation (whether governmental or otherwise) of the Company or any of its Affiliates (or their actions) to the extent that such investigation may relate to the Grantee’s employment or the period of the Grantee’s employment by the Company, regardless of whether a lawsuit has then been filed against the Company or any of its Affiliates with respect to such investigation.  The Company or one of its Affiliates shall reimburse the Grantee for all of the Grantee’s reasonable out-of-pocket expenses associated with such 

11

assistance.  Any reimbursement that is taxable income to the Grantee shall be subject to applicable withholding and employment taxes.  

		
	12.
	Miscellaneous.

(a)Transferability. The Option may not be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered (a “Transfer”) by the Grantee other than by will or by the laws of descent and distribution, pursuant to a qualified domestic relations order or as otherwise permitted under Section 9(f) or 9(g) of the Plan.  Any attempted Transfer of the Option contrary to the provisions hereof, and the levy of any execution, attachment or similar process upon the Option, shall be null and void and without effect.  In the event of the Grantee’s death, the Option shall thereafter be exercisable (to the extent otherwise exercisable hereunder) only by the Grantee’s executors or administrators.

(b)Amendment.  The Committee at any time, and from time to time, may amend the terms of this Agreement, provided, however, that the rights of the Grantee shall not be materially adversely affected without the Grantee’s written consent. 

(c)Waiver. Any right of the Company contained in this Agreement may be waived in writing by the Committee. No waiver of any right hereunder by any party shall operate as a waiver of any other right, or as a waiver of the same right with respect to any subsequent occasion for its exercise, or as a waiver of any right to damages.  No waiver by any party of any breach of this Agreement shall be held to constitute a waiver of any other breach or a waiver of the continuation of the same breach. 

(d)Section 280G.  

(i)In the event that the Grantee becomes entitled to payments or benefits under this Agreement, the Plan and/or any other payments or benefits by reason of a “change of control” as defined in Section 280G of the Code and regulations thereunder (collectively, the “Payments”), and any such Payment would constitute an “excess parachute payment” within the meaning of Section 280G(b)(1) of the Code, or would otherwise be subject to the excise tax imposed under Section 4999 of the Code, or any similar federal or state law (an “Excise Tax”), as determined by an independent certified public accounting firm selected by the Company (the “Accounting Firm”), the amount of the Grantee’s Payments shall be limited to the largest amount payable, if any, that would not result in the imposition of any Excise Tax to the Grantee, but only if, notwithstanding such limitation, the total Payments, net of all taxes imposed on the Grantee with respect thereto, would be greater if no Excise Tax were imposed.  

(ii)If a reduction in the Payments is necessary, reduction shall occur in the following order: first, a reduction of cash payments not attributable to equity awards which vest on an accelerated basis; second, the cancellation of accelerated vesting of stock awards; third, the reduction of employee benefits; and fourth, a reduction in any other “parachute payments” (as defined in Section 280G of the Code).  If acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of the Grantee’s stock awards, and the acceleration of the vesting of full shares shall be cancelled before the acceleration of the vesting of options.  

(iii)All determinations required to be made under this Section 12(d) will be made by the Accounting Firm.  Any determination by the Accounting Firm will be binding upon the Company and the Grantee.  The fees and expenses of the Accounting Firm for its services in 

12

connection with the determinations and calculations contemplated by this Section 12 shall be borne by the Company.

(e)Section 409A.  The Option is not intended to be subject to Section 409A of the Code and shall be interpreted accordingly.  Notwithstanding the foregoing or any provision of the Plan or this Agreement, if any provision of the Plan or this Agreement contravenes Section 409A of the Code or could cause the Grantee to incur any tax, interest or penalties under Section 409A of the Code, the Committee may, in its sole reasonable discretion and with the Grantee’s consent, modify such provision to (i) comply with, or avoid being subject to, Section 409A of the Code, or to avoid the incurrence of taxes, interest and penalties under Section 409A of the Code, and (ii) maintain, to the maximum extent practicable, the original intent and economic benefit to the Grantee of the applicable provision without materially increasing the cost to the Company or contravening the provisions of Section 409A of the Code.  This Section 12(e) does not create an obligation on the part of the Company to modify the Plan or this Agreement and does not guarantee that the Option or the Option Shares will not be subject to interest and penalties under Section 409A.

(f)Notices.  All notices, requests, consents and other communications to be given hereunder to any party shall be deemed to be sufficient if contained in a written instrument and shall be deemed to have been duly given when delivered in person, by telecopy, by nationally-recognized overnight courier, or by first class registered or certified mail, postage prepaid, addressed to such party at the address set forth below or such other address as may hereafter be designated in writing by the addressee to the addresser:

(i)if to the Company, to:

MPM Holdings Inc.
260 Hudson River Road
Waterford, NY 12188
Facsimile:  (518) 233-2319
Attention:  General Counsel

and

Paul, Weiss, Rifkind, Wharton & Garrison LLP 
1285 Avenue of the Americas 
New York, New York 10019
Fax: (212) 492-0237
Attention: Lawrence I. Witdorchic, Esq.

(ii)if to the Grantee, to the Grantee’s home address on file with the Company.

All such notices, requests, consents and other communications shall be deemed to have been delivered in the case of personal delivery or delivery by telecopy, on the date of such delivery, in the case of nationally-recognized overnight courier, on the next business day, and in the case of mailing, on the third business day following such mailing if sent by certified mail, return receipt requested.
(g)Severability.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law. 

13

(h)No Rights to Employment.  Nothing contained in this Agreement shall be construed as giving the Grantee any right to be retained, in any position, as an employee, consultant or director of the Company or its Affiliates or shall interfere with or restrict in any way the rights of the Company or its Affiliates, which are hereby expressly reserved, to remove, terminate or discharge the Grantee at any time for any reason whatsoever. 

(i)Fractional Shares.  In lieu of issuing a fraction of a Share resulting from any exercise of the Option, resulting from an adjustment of the Option pursuant to Section 7 of the Plan or otherwise, the Company shall be entitled to pay to the Grantee an amount equal to the Fair Market Value of such fractional share. 

(j)Beneficiary.  The Grantee may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation.  If no designated beneficiary survives the Grantee, the Grantee’s estate shall be deemed to be the Grantee’s beneficiary. 

(k)Successors.  The terms of this Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, and of the Grantee and the beneficiaries, executors, administrators, heirs and successors of the Grantee. 

(l)Entire Agreement.  This Agreement and the Plan contain the entire agreement and understanding of the parties hereto with respect to the subject matter contained herein and supersede all prior communications, representations and negotiations in respect thereto. 

(m)Governing Law.  This Agreement shall be construed and interpreted in accordance with the laws of the State of New York without regard to principles of conflicts of law thereof, or principles of conflicts of laws of any other jurisdiction which could cause the application of the laws of any jurisdiction other than the State of New York.

(n)Consent to Jurisdiction; Waiver of Jury Trial.  The Grantee and the Company (on behalf of itself and its Affiliates) each consents to jurisdiction in the United States District Court for the Southern District of New York, or if that court is unable to exercise jurisdiction for any reason, the Supreme Court of the State of New York, New York County, and each waives any other requirement (whether imposed by statute, rule of court or otherwise) with respect to personal jurisdiction or service of process and waives any objection to jurisdiction based on improper venue or improper jurisdiction.  EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY, IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THE PLAN OR THIS AGREEMENT.

(o)Headings. The headings of the Sections hereof are provided for convenience only and are not to serve as a basis for interpretation or construction, and shall not constitute a part, of this Agreement. 

(p)Counterparts.  This Agreement may be executed in one or more counterparts (including via facsimile and electronic image scan (pdf)), each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

[Signature Page to Follow]

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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the parties hereto as of the date first written above.

MPM HOLDINGS INC.

By: _________________________________    
Name:  
Title:

_____________________________________
[Grantee Name]

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