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                                                                    EXHIBIT 4.11

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                                     FORM OF
                    PREFERRED SECURITIES GUARANTEE AGREEMENT
                 AMERICAN EQUITY INVESTMENT LIFE HOLDING COMPANY

                                Dated as of [   ]

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                                TABLE OF CONTENTS

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                                    ARTICLE 1
                        DEFINITIONS AND INTERPRETATION
   SECTION 1.01   Definitions and Interpretation.....................................1
                                    ARTICLE 2
                               TRUST INDENTURE ACT
   SECTION 2.01   Trust Indenture Act; Application...................................5
   SECTION 2.02   Lists of Holders of Securities.....................................5
   SECTION 2.03   Reports by the Preferred Guarantee Trustee.........................5
   SECTION 2.04   Periodic Reports to Preferred Guarantee Trustee....................5
   SECTION 2.05   Evidence of Compliance with Conditions Precedent...................6
   SECTION 2.06   Events of Default; Waiver..........................................6
   SECTION 2.07   Event of Default; Notice...........................................6
   SECTION 2.08   Conflicting Interests..............................................6
                                    ARTICLE 3
               POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE
   SECTION 3.01   Powers and Duties of the Preferred Guarantee Trustee...............7
   SECTION 3.02   Certain Rights of Preferred Guarantee Trustee......................9
   SECTION 3.03   Not Responsible for Recitals or Issuance of Guarantee.............11
                                    ARTICLE 4
                            PREFERRED GUARANTEE TRUSTEE
   SECTION 4.01   Preferred Guarantee Trustee; Eligibility..........................11
   SECTION 4.02   Appointment, Removal and Resignation of Preferred Guarantee
                  Trustee...........................................................12
                                    ARTICLE 5
                                    GUARANTEE
   SECTION 5.01   Guarantee.........................................................12
   SECTION 5.02   Subordination.....................................................13
   SECTION 5.03   Waiver of Notice and Demand.......................................13
   SECTION 5.04   Obligations Not Affected..........................................13
   SECTION 5.05   Rights of Holders.................................................14
   SECTION 5.06   Guarantee of Payment..............................................14
   SECTION 5.07   Subrogation.......................................................14
   SECTION 5.08   Independent Obligations...........................................15
                                    ARTICLE 6
                    LIMITATION OF TRANSACTIONS; SUBORDINATION
   SECTION 6.01   Limitation of Transactions........................................15
   SECTION 6.02   Ranking...........................................................16
                                    ARTICLE 7
                                   TERMINATION
   SECTION 7.01   Termination.......................................................16
                                    ARTICLE 8
                                 INDEMNIFICATION
   SECTION 8.01   Exculpation.......................................................16
   SECTION 8.02   Indemnification...................................................17
                                    ARTICLE 9
                                  MISCELLANEOUS
   SECTION 9.01   Successors and Assigns............................................17
   SECTION 9.02   Amendments........................................................17
   SECTION 9.03   Notices...........................................................17
   SECTION 9.04   Benefit...........................................................18
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   SECTION 9.05   Governing Law.....................................................18
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                    PREFERRED SECURITIES GUARANTEE AGREEMENT

          This PREFERRED SECURITIES GUARANTEE AGREEMENT ("PREFERRED SECURITIES
GUARANTEE"), dated as of [DATE], is executed and delivered by American Equity
Investment Life Holding Company, an Iowa corporation (the "GUARANTOR"), and U.S.
Bank National Association, a nationally chartered banking association, as
trustee (the "PREFERRED GUARANTEE TRUSTEE"), for the benefit of the Holders (as
defined herein) from time to time of the Preferred Securities (as defined
herein) of [American Equity Capital Trust], a Delaware statutory trust (the
"ISSUER").

          WHEREAS, pursuant to an Amended and Restated Declaration of Trust (the
"DECLARATION"), dated as of [DATE], among the trustees of the Issuer named
therein, the Guarantor, as Sponsor, and the holders from time to time of
undivided beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof [ ] Preferred Securities, having an aggregate stated
liquidation preference of [ ], designated the [ ]% Preferred Securities (the
"PREFERRED SECURITIES");

          WHEREAS, as incentive for the Holders to purchase the Preferred
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Preferred Securities Guarantee, to pay to the
Holders of the Preferred Securities the Guarantee Payments (as defined herein)
and to make certain other payments on the terms and conditions set forth herein;
and

          WHEREAS, the Guarantor is also executing and delivering a guarantee
agreement (the "COMMON SECURITIES GUARANTEE") in substantially identical terms
to this Preferred Securities Guarantee for the benefit of the holders of the
Common Securities (as defined herein) except that if an Indenture Event of
Default (as defined herein), has occurred and is continuing, the rights of
holders of the Common Securities to receive Guarantee Payments under the Common
Securities Guarantee are subordinated to the rights of Holders of Preferred
Securities to receive Guarantee Payments under this Preferred Securities
Guarantee.

          NOW, THEREFORE, in consideration of the purchase by each Holder of
Preferred Securities, which purchase the Guarantor hereby agrees shall benefit
the Guarantor, the Guarantor executes and delivers this Preferred Securities
Guarantee for the benefit of the Holders.

                                    ARTICLE 1

                         DEFINITIONS AND INTERPRETATION

          SECTION 1.01    DEFINITIONS AND INTERPRETATION.

          In this Preferred Securities Guarantee, unless the context otherwise
requires:

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               (a)  Capitalized terms used in this Preferred Securities
Guarantee but not defined in the preamble above have the respective meanings
assigned to them in this Section 1.01;

               (b)  a term defined anywhere in this Preferred Securities
Guarantee has the same meaning throughout;

               (c)  all references to "the Preferred Securities Guarantee" or
"this Guarantee" are to this Preferred Securities Guarantee as modified,
supplemented or amended from time to time;

               (d)  all references in this Preferred Securities Guarantee to
Articles and Sections are to Articles and Sections of this Preferred Securities
Guarantee unless otherwise specified;

               (e)  a term defined in the Trust Indenture Act has the same
meaning when used in this Preferred Securities Guarantee unless otherwise
defined in this Preferred Securities Guarantee or unless the context otherwise
requires;

               (f)  a reference to the singular includes the plural and vice
versa;

               (g)  a reference to any Person shall include its successors and
assigns;

               (h)  a reference to any agreement or instrument shall mean such
agreement or instrument, as supplemented, modified, or amended and restated, and
in effect from time to time; and

               (i)  a reference to any statute, law, rule or regulation shall
include any amendments thereto applicable to the relevant Person, and any
successor statute, law, rule or regulation.

          "AFFILIATE" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.

          "COMMON SECURITIES" means the common securities representing common
undivided beneficial interests in the assets of the Issuer.

          "COMMON STOCK" means the common stock, par value $1.00 per share, of
the Guarantor.

          "COVERED PERSON" means any Holder or beneficial owner of Preferred
Securities.

          "DEBENTURE ISSUER" means the Guarantor in its capacity as the issuer
of the Debentures.

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          "DEBENTURES" means the series of debentures of the Guarantor
designated [ ] held by the Property Trustee of the Issuer.

          "EVENT OF DEFAULT" means a default by the Guarantor on any of its
payment or other obligations under this Preferred Securities Guarantee.

          "GUARANTEE PAYMENTS" means the following payments or distributions,
without duplication, with respect to the Preferred Securities, to the extent not
paid or made by the Issuer: (i) any accrued and unpaid Distributions (as defined
in the Declaration) that are required to be paid on such Preferred Securities to
the extent the Issuer shall have funds available therefor, (ii) the amount
payable upon redemption to the extent the Issuer has funds available therefor,
with respect to any Preferred Securities called for redemption by the Issuer,
and (iii) upon a voluntary or involuntary dissolution, winding-up or termination
of the Issuer (other than in connection with the distribution of Debentures to
the Holders in exchange for Preferred Securities as provided in the
Declaration), the lesser of (a) the aggregate of the liquidation preference and
all accrued and unpaid Distributions on the Preferred Securities to the date of
payment, to the extent the Issuer shall have funds available therefor, and (b)
the amount of assets of the Issuer remaining available for distribution to
Holders upon liquidation of the Issuer (in either case, the "Liquidation
Distribution"). If an event of default under the Indenture has occurred and is
continuing, the rights of holders of the Common Securities to receive payments
under the Common Securities Guarantee are subordinated to the rights of Holders
of Preferred Securities to receive Guarantee Payments.

          "HOLDER" means any holder, as registered on the books and records of
the Issuer of any Preferred Securities; provided, however, that, in determining
whether the holders of the requisite percentage of Preferred Securities have
given any request, notice, consent or waiver hereunder, "Holder" shall not
include the Guarantor or any Affiliate of the Guarantor.

          "INDEMNIFIED PERSON" means the Preferred Guarantee Trustee, any
Affiliate of the Preferred Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Guarantee Trustee.

          "INDENTURE" means either the Senior Indenture dated as of [Date],
between the Debenture Issuer and U.S. Bank National Association, as trustee, and
any indenture supplemental thereto pursuant to which the Debentures are to be
issued (the "Senior Indenture"), or the Subordinated Indenture, dated as of
[Date], between the Debenture Issuer and U.S. Bank National Association, as
trustee, and any indenture supplemental thereto pursuant to which the Debentures
are to be issued (the "Subordinated Indenture").

          "MAJORITY IN LIQUIDATION PREFERENCE OF THE PREFERRED SECURITIES"
means, except as provided by the Trust Indenture Act, Holder(s) of Preferred
Securities, voting separately as a class, representing more than 50% of the
stated liquidation preference (including the stated amount that would be paid on
redemption, liquidation or otherwise,

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plus accrued and unpaid Distributions to the date upon which the voting
percentages are determined) of all Preferred Securities then outstanding.

          "OFFICERS' CERTIFICATE" means, with respect to any Person, a
certificate signed by two duly authorized officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Preferred Securities Guarantee shall include:

               (a)  a statement that each officer signing the Certificate has
read the covenant or condition and the definition relating thereto;

               (b)  a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Certificate;

               (c)  a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and

               (d)  a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.

          "PERSON" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.

          "PREFERRED GUARANTEE TRUSTEE" means U.S. Bank National Association
until a Successor Preferred Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred Securities
Guarantee and thereafter means each such Successor Preferred Guarantee Trustee.

          "RESPONSIBLE OFFICER" means, with respect to the Preferred Guarantee
Trustee, the chairman of the board of directors, the president, any
vice-president, any assistant vice-president, the secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Preferred Guarantee Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.

          "SUCCESSOR PREFERRED GUARANTEE TRUSTEE" means a successor Preferred
Guarantee Trustee possessing the qualifications to act as Preferred Guarantee
Trustee under Section 4.1.

          "TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as
amended.

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                                    ARTICLE 2

                               TRUST INDENTURE ACT

          SECTION 2.01    TRUST INDENTURE ACT; APPLICATION.

               (a)  This Preferred Securities Guarantee is subject to the
provisions of the Trust Indenture Act that are required to be part of this
Preferred Securities Guarantee, which are incorporated by reference hereto, and
shall, to the extent applicable, be governed by such provisions; and

               (b)  if and to the extent that any provision of this Preferred
Securities Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.

          SECTION 2.02    LISTS OF HOLDERS OF SECURITIES.

               (a)  The Guarantor shall provide the Preferred Guarantee Trustee
(i) within 15 days after each record date for payment of Distributions, a list,
in such form as the Preferred Guarantee Trustee may reasonably require, of the
names and addresses of the Holders of the Preferred Securities ("List of
Holders") as of such record date, provided that the Guarantor shall not be
obligated to provide such List of Holders at any time the List of Holders does
not differ from the most recent List of Holders given to the Preferred Guarantee
Trustee by the Guarantor, and (ii) at any other time, within 30 days of receipt
by the Guarantor of a written request for a List of Holders as of a date no more
than 15 days before such List of Holders is given to the Preferred Guarantee
Trustee. The Preferred Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.

               (b)  The Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.

          SECTION 2.03    REPORTS BY THE PREFERRED GUARANTEE TRUSTEE.

          Within 60 days after May 15 of each year, commencing [ ], the
Preferred Guarantee Trustee shall provide to the Holders of the Preferred
Securities such reports, if any, as are required by Section 313 of the Trust
Indenture Act in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Preferred Guarantee Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.

          SECTION 2.04    PERIODIC REPORTS TO PREFERRED GUARANTEE TRUSTEE.

          The Guarantor shall provide to the Preferred Guarantee Trustee such
documents, reports and information (if any) as required by Section 314 of the
Trust Indenture Act and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the manner and at the times required by
Section 314 of the Trust Indenture Act.

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          SECTION 2.05    EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.

          The Guarantor shall provide to the Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Preferred Securities Guarantee which relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) of the Trust
Indenture Act may be given in the form of an Officers' Certificate.

          SECTION 2.06    EVENTS OF DEFAULT; WAIVER.

          The Holders of a Majority in liquidation preference of the Preferred
Securities may, by vote, on behalf of the Holders of all of the Preferred
Securities, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Preferred Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any right consequent
thereon.

          SECTION 2.07    EVENT OF DEFAULT; NOTICE.

               (a)  The Preferred Guarantee Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Preferred Securities, notices of all Events of
Default known to the Preferred Guarantee Trustee, unless such defaults have been
cured before the giving of such notice, provided, that, except in the case of a
default in the payment of a Guarantee Payment, the Preferred Guarantee Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee, or a trust committee of directors and/or
Responsible Officers of the Preferred Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders of the
Preferred Securities.

               (b)  The Preferred Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default except any Event of Default as to which the
Preferred Guarantee Trustee shall have received written notice or a Responsible
Officer charged with the administration of the Declaration shall have obtained
actual knowledge.

          SECTION 2.08    CONFLICTING INTERESTS.

          The Declaration shall be deemed to be specifically described in this
Preferred Securities Guarantee for the purposes of clause (i) of the first
proviso contained in Section 310(b) of the Trust Indenture Act.

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                                    ARTICLE 3

            POWERS, DUTIES AND RIGHTS OF PREFERRED GUARANTEE TRUSTEE

          SECTION 3.01    POWERS AND DUTIES OF THE PREFERRED GUARANTEE TRUSTEE.

               (a)  This Preferred Securities Guarantee shall be held by the
Preferred Guarantee Trustee for the benefit of the Holders of the Preferred
Securities, and the Preferred Guarantee Trustee shall not transfer this
Preferred Securities Guarantee to any Person except a Holder of Preferred
Securities exercising his or her rights pursuant to Section 5.05(b) or to a
Successor Preferred Guarantee Trustee on acceptance by such Successor Preferred
Guarantee Trustee of its appointment to act as Successor Preferred Guarantee
Trustee. The right, title and interest of the Preferred Guarantee Trustee shall
automatically vest in any Successor Preferred Guarantee Trustee, and such
vesting and cessation of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Preferred Guarantee Trustee.

               (b)  If an Event of Default has occurred and is continuing, the
Preferred Guarantee Trustee shall enforce this Preferred Securities Guarantee
for the benefit of the Holders of the Preferred Securities.

               (c)  The Preferred Guarantee Trustee, before the occurrence of
any Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the Preferred Guarantee
Trustee. In case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.06), the Preferred Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Preferred Securities
Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.

               (d)  No provision of this Preferred Securities Guarantee shall be
construed to relieve the Preferred Guarantee Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:

                      (i)     prior to the occurrence of any Event of Default
     and after the curing or waiving of all such Events of Default that may have
     occurred:

                                   (A) the duties and obligations of the
          Preferred Guarantee Trustee shall be determined solely by the express
          provisions of this Preferred Securities Guarantee, and the Preferred
          Guarantee Trustee shall not be liable except for the performance of
          such duties and

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          obligations as are specifically set forth in this Preferred Securities
          Guarantee, and no implied covenants or obligations shall be read into
          this Preferred Securities Guarantee against the Preferred Guarantee
          Trustee; and

                                   (B) in the absence of bad faith on the part
          of the Preferred Guarantee Trustee, the Preferred Guarantee Trustee
          may conclusively rely, as to the truth of the statements and the
          correctness of the opinions expressed therein, upon any certificates
          or opinions furnished to the Preferred Guarantee Trustee and
          conforming to the requirements of this Preferred Securities Guarantee;
          but in the case of any such certificates or opinions that by any
          provision hereof are specifically required to be furnished to the
          Preferred Guarantee Trustee, the Preferred Guarantee Trustee shall be
          under a duty to examine the same to determine whether or not they
          conform to the requirements of this Preferred Securities Guarantee
          (but need not confirm or investigate the accuracy of mathematical
          calculations or other facts stated therein, unless specifically
          required by this Preferred Securities Guarantee);

                      (ii)    the Preferred Guarantee Trustee shall not be
     liable for any error of judgment made in good faith by a Responsible
     Officer of the Preferred Guarantee Trustee, unless it shall be proved that
     the Preferred Guarantee Trustee was negligent in ascertaining the pertinent
     facts;

                      (iii)   the Preferred Guarantee Trustee shall not be
     liable with respect to any action taken or omitted to be taken by it in
     good faith in accordance with the direction of the Holders of not less than
     a Majority in liquidation preference of the Preferred Securities, relating
     to the time, method and place of conducting any proceeding for any remedy
     available to the Preferred Guarantee Trustee, or exercising any trust or
     power conferred upon the Preferred Guarantee Trustee under this Preferred
     Securities Guarantee; and

                      (iv)    no provision of this Preferred Securities
     Guarantee shall require the Preferred Guarantee Trustee to expend or risk
     its own funds or otherwise incur personal financial liability in the
     performance of any of its duties or in the exercise of any of its rights or
     powers, if the Preferred Guarantee Trustee shall have reasonable grounds
     for believing that the repayment of such funds or liability is not
     reasonably assured to it under the terms of this Preferred Securities
     Guarantee or adequate indemnity reasonably satisfactory to the Preferred
     Guarantee Trustee against such risk or liability is not reasonably assured
     to it.

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          SECTION 3.02    CERTAIN RIGHTS OF PREFERRED GUARANTEE TRUSTEE.

               (a)  Subject to the provisions of Section 3.01:

                      (i)     the Preferred Guarantee Trustee may in absence of
     bad faith conclusively rely, as to the truth of the statements and the
     correctness of the opinions expressed therein, and shall be fully protected
     in acting or refraining from acting upon any resolution, certificate,
     statement, instrument, opinion, report, notice, request, direction,
     consent, order, bond, debenture, note, other evidence of indebtedness or
     other paper or document believed by it to be genuine and to have been
     signed, sent or presented by the proper party or parties;

                      (ii)    any direction or act of the Preferred Securities
     Guarantor contemplated by this Preferred Securities Guarantee shall be
     sufficiently evidenced by an Officers' Certificate;

                      (iii)   whenever, in the administration of this Preferred
     Securities Guarantee, the Preferred Guarantee Trustee shall deem it
     desirable that a matter be proved or established before taking, suffering
     or omitting any action hereunder, the Preferred Guarantee Trustee (unless
     other evidence is herein specifically prescribed) may, in the absence of
     bad faith on its part, request and conclusively rely, as to the truth of
     the statements and the correctness of the opinions expressed therein, upon
     an Officers' Certificate which, upon receipt of such request, shall be
     promptly delivered by the Guarantor;

                      (iv)    the Preferred Guarantee Trustee shall have no duty
     to see to any recording, filing or registration of any instrument
     (including any financing or continuation statement or any filing under tax
     or securities laws) or any rerecording, refiling or registration thereof;

                      (v)     the Preferred Guarantee Trustee may consult with
     counsel of its selection, and the written advice or opinion of such counsel
     with respect to legal matters shall be full and complete authorization and
     protection in respect of any action taken, suffered or omitted by it
     hereunder in good faith and in accordance with such advice or opinion. Such
     counsel may be counsel to the Guarantor or any of its Affiliates and may
     include any of the Guarantor's employees. The Preferred Guarantee Trustee
     shall have the right at any time to seek instructions concerning the
     administration of this Preferred Securities Guarantee from any court of
     competent jurisdiction;

                      (vi)    the Preferred Guarantee Trustee shall be under no
     obligation to exercise any of the rights or powers vested in it by this
     Preferred Securities Guarantee at the request or direction of any Holder,
     unless such Holder shall have provided to the Preferred Guarantee

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     Trustee such adequate security and indemnity, reasonably satisfactory to
     the Preferred Guarantee Trustee, against the costs, expenses (including
     reasonable attorneys' fees and expenses) and liabilities that might be
     incurred by it in complying with such request or direction, including such
     reasonable advances as may be requested by the Preferred Guarantee Trustee;
     provided that nothing contained in this Section 3.02(a)(vi) shall be taken
     to relieve the Preferred Guarantee Trustee, upon the occurrence of an Event
     of Default, of its obligation to exercise the rights and powers vested in
     it by this Preferred Securities Guarantee;

                      (vii)   the Preferred Guarantee Trustee shall not be bound
     to make any investigation into the facts or matters stated in any
     resolution, certificate, statement, instrument, opinion, report, notice,
     request, direction, consent, order, security, bond, debenture, note, other
     evidence of indebtedness or other paper or document, but the Preferred
     Guarantee Trustee, in its discretion, may make such further inquiry or
     investigation into such facts or matters as it may see fit;

                      (viii)  the Preferred Guarantee Trustee may execute any of
     the trusts or powers hereunder or perform any duties hereunder either
     directly or by or through agents or attorneys, and the Preferred Guarantee
     Trustee shall not be responsible for any misconduct or negligence on the
     part of any agent or attorney appointed with due care by it hereunder;

                      (ix)    any action taken by the Preferred Guarantee
     Trustee or its agents hereunder shall bind the Holders of the Preferred
     Securities, and the signature of the Preferred Guarantee Trustee or its
     agents alone shall be sufficient and effective to perform any such action.
     No third party shall be required to inquire as to the authority of the
     Preferred Guarantee Trustee to so act or as to its compliance with any of
     the terms and provisions of this Preferred Securities Guarantee, both of
     which shall be conclusively evidenced by the Preferred Guarantee Trustee's
     or its agent's taking such action; and

                      (x)     whenever in the administration of this Preferred
     Securities Guarantee the Preferred Guarantee Trustee shall deem it
     desirable to receive instructions with respect to enforcing any remedy or
     right or taking any other action hereunder, the Preferred Guarantee Trustee
     (i) may request instructions from the Holders of the Preferred Securities,
     which instructions may only be given by the Holders of the same proportion
     in liquidation preference of the Preferred Securities as would be entitled
     to direct the Preferred Guarantee Trustee under the terms of this Preferred
     Securities Guarantee in respect of such remedy, right or action, or the
     Guarantor, (ii) may refrain from enforcing such remedy or right or taking
     such other action until such instructions are received, and (iii) shall be
     protected in acting in accordance with such instructions.

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               (b)  No provision of this Preferred Securities Guarantee shall be
deemed to impose any duty or obligation on the Preferred Guarantee Trustee to
perform any act or acts or exercise any right, power, duty or obligation
conferred or imposed on it, in any jurisdiction in which it shall be illegal, or
in which the Preferred Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Preferred Guarantee Trustee shall be construed to be a duty.

          SECTION 3.03    NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF GUARANTEE.

          The recitals contained in this Preferred Securities Guarantee shall be
taken as the statements of the Guarantor, and the Preferred Guarantee Trustee
does not assume any responsibility for their correctness. The Preferred
Guarantee Trustee makes no representations as to the validity or sufficiency of
this Preferred Securities Guarantee.

                                    ARTICLE 4

                           PREFERRED GUARANTEE TRUSTEE

          SECTION 4.01    PREFERRED GUARANTEE TRUSTEE; ELIGIBILITY.

               (a)  There shall at all times be a Preferred Guarantee Trustee
which shall:

                      (i)     not be an Affiliate of the Guarantor; and

                      (ii)    be a corporation organized and doing business
     under the laws of the United States of America or any State or Territory
     thereof or of the District of Columbia, or a corporation or Person
     permitted by the Securities and Exchange Commission to act as an
     institutional trustee under the Trust Indenture Act, authorized under such
     laws to exercise corporate trust powers, having a combined capital and
     surplus of at least 50 million U.S. dollars ($50,000,000), and subject to
     supervision or examination by Federal, State, Territorial or District of
     Columbia authority. If such corporation publishes reports of condition at
     least annually, pursuant to law or to the requirements of the supervising
     or examining authority referred to above, then, for the purposes of this
     Section 4.01(a)(ii), the combined capital and surplus of such corporation
     shall be deemed to be its combined capital and surplus as set forth in its
     most recent report of condition so published.

               (b)  If at any time the Preferred Guarantee Trustee shall cease
to be eligible to so act under Section 4.01(a), the Preferred Guarantee Trustee
shall immediately resign in the manner and with the effect set out in Section
4.02(c).

                                       11
<Page>

               (c)  If the Preferred Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Preferred Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.

          SECTION 4.02    APPOINTMENT, REMOVAL AND RESIGNATION OF PREFERRED
GUARANTEE TRUSTEE.

               (a)  Subject to Section 4.02(b), the Preferred Guarantee Trustee
may be appointed or removed without cause at any time by the Guarantor.

               (b)  The Preferred Guarantee Trustee shall not be removed in
accordance with Section 4.02(a) until a Successor Preferred Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Guarantee Trustee and delivered to the
Guarantor.

               (c)  The Preferred Guarantee Trustee appointed to office shall
hold office until a Successor Preferred Guarantee Trustee shall have been
appointed or until its removal or resignation. The Preferred Guarantee Trustee
may resign from office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Preferred Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a Successor
Preferred Guarantee Trustee has been appointed and has accepted such appointment
by instrument in writing executed by such Successor Preferred Guarantee Trustee
and delivered to the Guarantor and the resigning Preferred Guarantee Trustee.

               (d)  If no Successor Preferred Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 60
days after delivery to the Guarantor of an instrument of resignation, the
resigning Preferred Guarantee Trustee may petition any court of competent
jurisdiction for appointment of a Successor Preferred Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Guarantee Trustee.

                                    ARTICLE 5

                                    GUARANTEE

          SECTION 5.01    GUARANTEE.

          The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.

                                       12
<Page>

          SECTION 5.02    SUBORDINATION.

          If an event of default under the Indenture has occurred and is
continuing, the rights of Holders of the Common Securities to receive Guarantee
Payments under the Common Securities Guarantee are subordinated to the rights of
Holders of Preferred Securities to receive Guarantee Payments under this
Preferred Securities Guarantee.

          SECTION 5.03    WAIVER OF NOTICE AND DEMAND.

          The Guarantor hereby waives notice of acceptance of this Preferred
Securities Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Issuer or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.

          SECTION 5.04    OBLIGATIONS NOT AFFECTED.

          The obligations, covenants, agreements and duties of the Guarantor
under this Preferred Securities Guarantee shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:

               (a)  the release or waiver, by operation of law or otherwise, of
the performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Preferred Securities to be performed
or observed by the Issuer;

               (b)  the extension of time for the payment by the Issuer of all
or any portion of the Distributions, the amount payable upon redemption,
Liquidation Distribution or any other sums payable under the terms of the
Preferred Securities or the extension of time for the performance of any other
obligation under, arising out of, or in connection with, the Preferred
Securities (other than an extension of time for payment of Distributions, the
amount payable upon redemption, Liquidation Distribution or other sum payable
that results from the extension of any interest payment period on the Debentures
or any extension of the maturity date of the Debentures permitted by the
Indenture);

               (c)  any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right, privilege, power
or remedy conferred on the Holders pursuant to the terms of the Preferred
Securities, or any action on the part of the Issuer granting indulgence or
extension of any kind;

               (d)  the voluntary or involuntary liquidation, dissolution, sale
of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;

               (e)  any invalidity of, or defect or deficiency in the Preferred
Securities;

                                       13
<Page>

               (f)  the settlement or compromise of any obligation guaranteed
hereby or hereby incurred; or

               (g)  any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.04 that the obligations of the Guarantor hereunder
shall be absolute and unconditional under any and all circumstances.

          There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.

          SECTION 5.05    RIGHTS OF HOLDERS.

               (a)  The Holders of a Majority in liquidation preference of the
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Preferred Guarantee
Trustee in respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Guarantee Trustee under this
Preferred Securities Guarantee.

               (b)  If the Preferred Guarantee Trustee fails to enforce this
Preferred Securities Guarantee, any Holder of Preferred Securities may, after
such Holder makes a written request to the Preferred Guarantee Trustee to
enforce this Preferred Securities Guarantee, institute a legal proceeding
directly against the Guarantor to enforce the obligations of the Guarantor under
this Preferred Securities Guarantee, without first instituting a legal
proceeding against the Issuer, the Preferred Guarantee Trustee or any other
Person.

          SECTION 5.06    GUARANTEE OF PAYMENT.

          This Preferred Securities Guarantee creates a guarantee of payment and
not of collection.

          SECTION 5.07    SUBROGATION.

          The Guarantor shall be subrogated to all (if any) rights of the
Holders of Preferred Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Preferred Securities Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation or any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Preferred Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.

                                       14
<Page>

          SECTION 5.08    INDEPENDENT OBLIGATIONS.

          The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Preferred
Securities Guarantee notwithstanding the occurrence of any event referred to in
subsections (a) through (g), inclusive, of Section 5.04.

                                    ARTICLE 6

                    LIMITATION OF TRANSACTIONS; SUBORDINATION

          SECTION 6.01    LIMITATION OF TRANSACTIONS.

          So long as any Trust Preferred Securities remain outstanding, if (i)
the Guarantor has exercised its option to defer interest payments on the
Debentures by extending the interest payment period and such extension shall be
continuing, (ii) the Guarantor shall be in default with respect to its payment
or other obligations under the Guarantee or (iii) there shall have occurred and
be continuing any event that, with the giving of notice or the lapse of time or
both, would constitute an event of default under the Indenture, then the
Guarantor shall not (a) declare or pay dividends on, or make a distribution with
respect to, or redeem or purchase or acquire, or make a liquidation payment with
respect to, any of its capital stock (other than (1) purchases or acquisitions
of shares of Common Stock (or Common Stock equivalents) in connection with the
satisfaction by the Guarantor of its obligations under any employee benefit or
agent plans or the satisfaction by the Guarantor of its obligations pursuant to
any contract or security requiring the Guarantor to purchase shares of Common
Stock (or Common Stock equivalents), (2) purchases of shares of Common Stock (or
Common Stock equivalents) from officers or employees of the Guarantor or its
subsidiaries upon termination of employment or retirement not pursuant to any
obligation under any contract or security requiring the Guarantor to purchase
shares of Common Stock (or Common Stock equivalents), (3) as a result of a
reclassification of the Guarantor's capital stock or the exchange or conversion
of one class or series of the Guarantor's capital stock for another class or
series of the Guarantor's capital stock, (4) dividends or distributions of
shares of Common Stock on Common Stock or (5) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged), (b) make any payment of principal of (premium, if any) or interest
on or repay, repurchase or redeem any debt securities (including guarantees)
issued by the Guarantor that rank PARI PASSU with or junior to the Debentures
(except by conversion into or exchange for shares of Common Stock) and (c) make
any guarantee payments with respect to any of the foregoing (other than pursuant
to the Preferred Securities Guarantee).

                                       15
<Page>

          SECTION 6.02    RANKING.

          This Preferred Securities Guarantee will constitute an unsecured
obligation of the Guarantor and will rank (i) subordinate and junior in right of
payment to all other liabilities of the Guarantor, except any liabilities that
may be made pari passu expressly by their terms, (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by the Guarantor
and with any guarantee now or hereafter entered into by the Guarantor in respect
of any preferred or preference stock of any Affiliate of the Guarantor, and
(iii) senior to the Common Stock.

                                    ARTICLE 7

                                   TERMINATION

          SECTION 7.01    TERMINATION.

          This Preferred Securities Guarantee shall terminate as to each Holder
of Trust Preferred Securities upon (i) full payment of the amount payable upon
redemption of all Preferred Securities, (ii) the distribution of the Debentures
held by the Issuer to the Holders of all of the Preferred Securities or (iii)
full payment of the amounts payable in accordance with the Declaration upon
liquidation of the Issuer. Notwithstanding the foregoing, this Preferred
Securities Guarantee will continue to be effective or will be reinstated, as the
case may be, if at any time any Holder of Preferred Securities must restore
payment of any sums paid under the Preferred Securities or under this Preferred
Securities Guarantee.

                                    ARTICLE 8

                                 INDEMNIFICATION

          SECTION 8.01    EXCULPATION.

               (a)  No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith in accordance with this
Preferred Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority conferred on such
Indemnified Person by this Preferred Securities Guarantee or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.

               (b)  An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and

                                       16
<Page>

amount of the assets, liabilities, profits, losses, or any other facts pertinent
to the existence and amount of assets from which Distributions to Holders of
Preferred Securities might properly be paid.

          SECTION 8.02    INDEMNIFICATION.

               (a)  To the fullest extent permitted by applicable law, the
Guarantor shall indemnify and hold harmless each Indemnified Person from and
against any loss, damage or claim incurred by such Indemnified Person by reason
of any act or omission performed or omitted by such Indemnified Person in good
faith in accordance with this Preferred Securities Guarantee and in a manner
such Indemnified Person reasonably believed to be within the scope of authority
conferred on such Indemnified Person in accordance with this Preferred
Securities Guarantee, except that no Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such Indemnified
Person by reason of negligence or willful misconduct with respect to such acts
or omissions.

                                    ARTICLE 9

                                  MISCELLANEOUS

          SECTION 9.01    SUCCESSORS AND ASSIGNS.

          All guarantees and agreements contained in this Preferred Securities
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Preferred Securities then outstanding. Except in connection with any
merger or consolidation of the Guarantor with or into another entity or any
sale, transfer or lease of the Guarantor's assets to another entity, each as
permitted by the Indenture, the Guarantor may not assign its rights or delegate
its obligations under the Preferred Securities Guarantee without the prior
approval of the Holders of at least a Majority in liquidation preference of the
Preferred Securities.

          SECTION 9.02    AMENDMENTS.

          Except with respect to any changes that do not adversely affect the
rights of Holders (in which case no consent of Holders will be required), this
Preferred Securities Guarantee may only be amended with the prior approval of
the Holders a Majority in liquidation preference of the Preferred Securities.
The provisions of Section 12.02 of the Declaration with respect to meetings of
Holders of the Securities apply to the giving of such approval.

          SECTION 9.03    NOTICES.

          All notices provided for in this Preferred Securities Guarantee shall
be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied or mailed by registered or certified mail, as follows:

                                       17
<Page>

               (a)  If given to the Preferred Guarantee Trustee, at the
Preferred Guarantee Trustee's mailing address set forth below (or such other
address as the Preferred Guarantee Trustee may give notice of to the Holders of
the Preferred Securities):

          U.S. Bank National Association
          60 Livingston Avenue
          St. Paul, MN 55107-2292
          Facsimile: 651-495-8097
          Attention: Frank Leslie

               (b)  If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders of the Preferred Securities):

          American Equity Investment Life Holding Company
          5000 Westown Parkway, Suite 440
          West Des Moines, Iowa 50266
          Attention: General Counsel

               (c)  If given to any Holder of Preferred Securities, at the
address set forth on the books and records of the Issuer.

          All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.

          SECTION 9.04    BENEFIT.

          This Preferred Securities Guarantee is solely for the benefit of the
Holders of the Preferred Securities and, subject to Section 3.01(a), is not
separately transferable from the Preferred Securities.

          SECTION 9.05    GOVERNING LAW.

          THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICT OF LAWS.

                                       18
<Page>

          THIS PREFERRED SECURITIES GUARANTEE is executed as of the day and year
first above written.

                                   AMERICAN EQUITY INVESTMENT
                                   LIFE HOLDING COMPANY,
                                   as Guarantor

                                   By:
                                        ----------------------------------------
                                        Name:  [       ]
                                        Title: [       ]

                                   U.S. BANK NATIONAL ASSOCIATION,
                                   as Preferred Guarantee Trustee

                                   By:
                                        ----------------------------------------
                                        Name:  [       ]
                                        Title: [       ]

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Exhibit 10.5    
    

 
 

FORM OF    
    
    TNS, INC.    
    
    2004 LONG-TERM INCENTIVE PLAN    
    

 
 

ARTICLE I
  GENERAL    
    

        1.1    Purpose.    The 2004 Long-Term Incentive Plan (the  "Plan") has been established by
TNS, Inc., a Delaware corporation (the "Company"), to attract and
retain qualified employees, consultants and non-employee directors and to motivate them to achieve long-term goals, to provide incentive compensation opportunities that are
competitive with those of similar companies and to further align Participants' interests with those of the Company's other stockholders through compensation alternatives based on the Company's common
stock, thereby promoting the long-term financial interests of the Company and enhancing long-term stockholder return. 

        1.2    Term.    The Plan shall be effective as of the date on which it is approved by the
Company's stockholders (the "Effective Date"), and unless the Plan is sooner terminated by the Board, no Award shall be granted under the plan after the
tenth anniversary of the Effective Date. 

        1.3    Defined Terms.    Capitalized terms used herein shall have the respective meanings
ascribed to them in Section 5.1(a) below. 

 
 

ARTICLE II
  ADMINISTRATION AND OPERATION    
    

        2.1    The Committee.    

        (a)    Constitution.    The Plan will be administered by the compensation committee of the
Board (the "Committee"). 

        (b)    Authority.    

        (1)   The
Committee shall have complete and absolute authority to construe and interpret the Plan and Awards granted hereunder, to establish and amend rules for Plan
administration and to make all other determinations that it deems necessary or advisable for the effective administration of the Plan. 

        (2)   Subject
to the provisions of the Plan, the Committee shall have complete and absolute authority to select Award recipients, to determine the types of Awards, to
establish the terms, conditions, performance criteria, restrictions and other provisions of Awards and to amend, modify or suspend Awards. In making Award determinations, the Committee may take into
account the nature of services rendered by the recipient, his or her present and potential contribution to the Company's success and such other factors as the Committee deems relevant. 

        (3)   In
all matters relating to the Plan, the Committee shall act in a manner that is consistent with the Company's certificate of incorporation and bylaws and all applicable
laws. The decisions and determinations of the Committee shall be made in accordance with its judgment as to the best interests of the Company and its stockholders and in accordance with the purposes
of the Plan. All decisions relating to the Plan and any Award shall be final and binding on all persons. No member of the Committee shall be personally liable for any action or determination relating
to the Plan or any Award that was taken or made in good faith. 

        (c)    Delegation.    The Committee may delegate any or all of its authority and
responsibilities with respect to the Plan and Awards, on such terms and conditions as it considers appropriate, to 

 

the
Chief Executive Officer or the President of the Company or to such other members of the Company's management as it may determine; provided, however, that determinations and decisions regarding
Awards or other benefits under the Plan to the Executive Officers may not be delegated and shall be made by the Committee. All references to "Committee" herein shall include those persons to whom the
Committee has properly delegated authority and responsibility pursuant to this subsection. 

        2.2    Eligibility.    

        (a)   The
Eligible Recipients shall consist of (1) all employees of the Company and its Subsidiaries, (2) all Non-Employee Directors and
(3) any consultants, independent contractors or advisors to the Company or its Subsidiaries whom the Committee identifies as having a direct and significant effect on the performance of the
Company or any of its Subsidiaries. No Eligible Recipient shall be entitled to receive any Award under the Plan unless and until such Eligible Recipient has been designated by the Committee to be a
Participant and such Eligible Recipient has actually received such Award. The designation of an Eligible Recipient to receive any Award under the Plan shall not require the Committee to designate that
person to receive any other Award under the Plan. In selecting Eligible Recipients to be Participants and in determining the type and amount of their respective Awards, the Committee shall consider
any and all factors that it deems relevant or appropriate. 

        (b)   The
Plan does not constitute a contract of employment with any Eligible Recipient or Participant, and selection as a Participant will not give any Eligible Recipient the
right to be retained in the employ of the Company or any Subsidiary or to continue to provide services to the Company or any Subsidiary. 

        2.3    Withholding of Taxes.    All distributions under the Plan (including the grant of
Awards and the issuance of Stock, cash or other consideration pursuant to an Award) are subject to withholding of all applicable taxes, and the Committee may condition the delivery of any Award, or
the issuance of any Stock, cash or other consideration pursuant to an Award, on the satisfaction of applicable withholding obligations. The Committee, subject to such requirements as it may impose,
may permit such withholding obligations to be satisfied through cash payment by the Participant, through the surrender of shares of Stock that the Participant already owns or through the surrender of
shares of Stock to which the Participant is otherwise entitled under the Plan. 

 
 

ARTICLE III
  SHARES AVAILABLE FOR AWARDS    
    

        3.1    Authorized Shares.    The number of Authorized Shares shall be equal to the number of
shares of Stock that, at the Effective Date, remain available for issuance under the Company's 2001 Founders Stock Option Plan (the "2001 Plan") plus
1,584,403 additional shares of Stock. In addition, any shares of Stock underlying outstanding awards under the 2001 Plan or this Plan that expire without being exercised or would otherwise again be
available for issuance under the 2001 Plan or this Plan shall constitute Authorized Shares hereunder. 

        3.2    Available Shares.    At any time, the number of shares that may then be issued pursuant
to Awards under the Plan (the "Available Shares") shall be equal to the difference between (a) the number of Authorized Shares at such time and
(b) the sum of (1) the number of shares of Stock subject to issuance upon exercise or settlement of then outstanding Awards and (2) the number of shares of Stock that have been
previously issued upon exercise or settlement of outstanding Awards. 

        3.3    Restoration of Shares.    If Stock subject to any Award is not issued or ceases to be
issuable for any reason, including because the Award is forfeited, terminated, expires unexercised, is settled in cash in lieu of Stock or is exchanged for other Awards, the shares of Stock that were
subject to that Award 

2

 

shall
no longer be charged against the number of Authorized Shares in calculating the number of Available Shares under Section 3.2 and shall again be included in Available Shares. In addition,
any shares of Stock that are issued by the Company in connection with, through the assumption of or in substitution for outstanding awards previously granted by an entity acquired by the Company shall
not be charged against the number of Authorized Shares in calculating the number of Available Shares under Section 3.2. 

        3.4    Adjustments to Number of Authorized Shares and Available Shares.    In the event of any
change in the number of outstanding shares of Stock by reason of a stock dividend, split, spin-off, recapitalization, merger, consolidation, combination, extraordinary dividend, exchange
of shares or other similar change, the number of Authorized Shares and the number of Available Shares, as well as the exercise price, the number of shares and other appropriate terms of any
outstanding Award, may be equitably adjusted by the Committee in its sole discretion. 

        3.5    Source of Stock.    Shares of Stock issued under the Plan may consist in whole or in
part of authorized and unissued shares or treasury shares. 

        3.6    No Fractional Shares.    No fractional shares shall be issued under the Plan or upon
exercise or settlement of any Award. The Committee may determine to pay cash in lieu of any fractional share that would otherwise be issuable or may determine to cancel such fractional share with no
payment of consideration. 

        3.7    Limitation on Certain Awards.    

        (a)   The
maximum number of Authorized Shares that may be issued pursuant to Restricted Awards (as defined below) shall be equal to 1,110,469 shares; provided, however, that
this limitation shall not apply with respect to shares of Stock issued in connection with the exercise or settlement of an Award other than a Restricted Award, whether or not such shares of Stock are
subject to a substantial risk of forfeiture when issued. The term "Restricted Award" means a Stock Award or a Stock Option with an exercise price that
is less than 100% of the Fair Market Value per share of the Stock on the date of grant (provided, however, that a Stock Option shall not be considered to be a Restricted Award if the Participant pays
or otherwise foregoes value to the Company in an amount at least equal to the difference between the Fair Market Value per share of Stock on the date of grant and the exercise price). 

        (b)   Except
for Restricted Awards relating to shares in the Unrestricted Pool (as defined below), all Restricted Awards shall either be subject to a vesting period of three
years or more or be subject to vesting (over a period of at least one year) that is contingent upon specified performance standards. A Restricted Award that relates to shares in the Unrestricted Pool
may be subject to whatever vesting restriction the Committee specifies, if any. The term "Unrestricted Pool" shall mean, for each fiscal year of the
Company, a number of shares of Stock that is equal to 20% of the total number of shares of Stock underlying Awards made under the Plan during such fiscal year. 

        (c)   No
Participant shall receive in any fiscal year (1) Stock Options to which more than 100,000 shares of Stock are subject or (2) Awards (other than Stock
Options) to which more than 75,000 shares of Stock are subject. 

        (d)   No
Participant shall receive in any fiscal year cash in payment for or settlement of a Performance Unit in excess of $500,000. 

3

 

 
 

ARTICLE IV    
    AWARDS    
    

        4.1    General.    Subject to the provisions of the Plan, the Committee shall determine the
type of Award to grant to a Participant. Awards may be granted singly or in combination with other Awards. Awards also may be made in combination with, in replacement of, as alternatives to or as the
payment form for grants or rights under any other compensation plan, contract or agreement of the Company. 

        4.2    Award Terms.    

        (a)   Subject
to the provisions of the Plan, the Committee shall have complete and absolute authority to determine and establish the terms and provisions of each Award,
including (as applicable) (1) the number of shares of Stock subject to the Award, (2) the exercise price or base price per share, (3) the vesting and exercisability schedule
(including provisions regarding acceleration of vesting and exercisability), (4) the conditions under which the Award is cancelled or forfeited, (5) whether the Award is transferable
and, if so, the circumstances under which such Award may be transferred and (6) the termination and expiration of the Awards. It shall be expressly within the discretion of the Committee to
include in any Award terms that provide for the acceleration of vesting and lapse of restrictions, as applicable, upon or following a Participant's death, Permanent Disability or Normal Retirement or
upon the occurrence of a Change in Control. 

        (b)   Notwithstanding
the provisions of subsection (a) of this Section, the following limitations shall apply to the Committee's exercise of its discretion (in addition
to any other limitations that may be contained in other provisions of the Plan): 

        (1)   The
exercise price per share for an Incentive Stock Option shall be not less than 100% of Fair Market Value of the Stock on the date of grant, except that the exercise
price of any Incentive Stock Option granted to a Ten Percent Shareholder shall be not less than 110% of Fair Market Value of the Stock on the date of grant. 

        (2)   The
exercise price per share for a Non-Qualified Option shall not be less than 85% of the Fair Market Value of the Stock on the date of grant unless the
Stock Option is granted retroactively in tandem with or as a substitution for a Stock Appreciation Right, in which case the exercise price per share shall not be less than 100% of the Fair Market
Value of the Stock on the date the Stock Appreciation Right was granted (as set forth in the applicable Award Agreement); provided,
however, that this limitation shall not apply if the Participant pays or otherwise foregoes value to the Company in an amount at least equal to the difference between the Fair Market Value per share
of Stock on the date of grant and the exercise price. 

        (3)   The
base price for a Stock Appreciation Right shall not be less than 100% of the Fair Market Value of the Stock on the date of grant unless the Stock Appreciation Right
is granted retroactively in tandem with or in substitution for a Stock Option, in which case the base price shall not be less than the exercise price of such tandem or replaced Stock Option. 

        (4)   No
Award (or any portion thereof) may expire more than ten years after the date of grant, except (i) that in the case of an Incentive Stock Option granted to a
Ten Percent Shareholder, the exercise period shall not exceed five years from the date of grant of such Incentive Stock Option and (ii) that the Committee may extend the expiration of an Award
to no more than fifteen years after the date of grant if necessary, appropriate or desirable under laws, rules or regulations applicable in any foreign jurisdiction. 

        (5)   The
aggregate Fair Market Value (determined at the time the Stock Option is granted) of the Stock with respect to which Incentive Stock Options are exercisable for the
first time by the Participant during any calendar year (under all the plans of the Company, its 

4

 

Parent
and its Subsidiaries) shall not exceed $100,000. To the extent that the Fair Market Value of Stock with respect to which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year exceeds $100,000, the Stock Options for the amount in excess of $100,000 shall be treated as not being Incentive Stock Options and shall be treated as
Non-Qualified Options. The foregoing shall be applied by taking Stock Options into account in the order in which they were granted. If the Code or the regulations promulgated thereunder
are amended after the effective date of the Plan to provide for a different limit on the Fair Market Value of Stock permitted to be subject to Incentive Stock Options, such different limit shall be
incorporated herein and shall apply to any Incentive Stock Options granted after the effective date of such amendment. 

        (6)   Except
as provided in subsection (7) of this Section, Incentive Stock Options granted under the Plan shall terminate and may not be exercised if the Participant
ceases to be employed by, or provide services to, the Company or any Subsidiary of the Company. A Participant shall be considered to be employed by the Company for all purposes under this subsection
if the Participant is an officer or full-time employee of the Company or any Subsidiary of the Company or if the Committee determines that the Participant is rendering substantial services
as a part-time employee, consultant, contractor or advisor to the Company or any Subsidiary of the Company. The Committee shall have discretion to determine whether a Participant has
ceased to be employed by the Company or any Subsidiary of the Company and the effective date on which such employment terminated (the "Termination Date"). If a Participant ceases to be employed by the
Company and all Subsidiaries of the Company for any reason except death or permanent and total
disability of the Participant within the meaning of Section 22(e)(3) of the Code, the Incentive Stock Options which are then exercisable (and only to the extent exercisable) (the "Vested
Incentive Stock Options") by the Participant on the Termination Date, may be exercised by the Participant, but only within three months after the Termination Date or such shorter period of time as
provided in the Award, but in no event less than thirty days; provided that Stock Options may not be exercised in any event after the expiration of such Award; and provided, further, that if the
association of the Participant with the Company shall terminate for "cause" (as determined by the Committee), all Stock Options theretofore granted to such Participant shall, to the extent not
theretofore exercised, terminate forthwith. 

        (7)   If
a Participant's employment with the Company and all Subsidiaries of the Company is terminated because of the death of the Participant or the permanent and total
disability of the Participant within the meaning of Section 22(e)(3) of the Code, the Vested Incentive Stock Options, as determined on the Termination Date, may be exercised by the Participant
(or the Participant's legal representative), but only within twelve months after the Termination Date; and provided further that Stock Options may not be exercised in any event later than the
expiration of such Award. If a Participant's employment with the Company and all Subsidiaries of the Company is terminated because of a disability of the Participant which is not permanent and total
within the meaning of Section 22(e)(3) of the Code, the Vested Incentive Stock Options, as determined on the Termination Date, may be exercised by the Participant or the Participant's legal
representative, but only within three months after the Termination Date; and provided further that Stock Options may not be exercised in any event later than the expiration of such Award. 

        4.3    Award Agreements.    Each Award will be evidenced by a written Agreement issued by the
Company and setting forth the terms, provisions and conditions of such Award (an "Award Agreement"). Each Award Agreement shall be in such form as may
be specified by the Committee and may be evidenced by an electronic transmission (including an e-mail or reference to a website or other URL) sent to the recipient through the Company's
normal process for communicating electronically with its employees. As a condition to receiving an Award, the Committee may require the proposed Eligible Recipient to affirmatively accept the Award
and agree to the terms, provisions and conditions set forth in the Award Agreement by physically or electronically executing the Award Agreement or by otherwise physically or electronically
acknowledging such acceptance and agreement. With or without such affirmative acceptance and agreement, however, the Committee may prescribe conditions (including the exercise or attempted exercise of
any benefit conferred by the Award) under which the proposed Eligible Recipient may be deemed to have accepted the Award and agreed to the terms, provisions and conditions set forth in the Award
Agreement. 

5

  

        4.4    Performance Based Compensation.    The Committee may designate any Award
as
"performance-based compensation" for purposes of Section 162(m) of the Code. Any Awards designated as "performance-based compensation" shall be conditioned on the achievement of one or more
Performance Measures, and the measurement may be stated in absolute terms or relative to comparable companies. Notwithstanding any other provision of the Plan, the Committee may grant an Award that is
not contingent on performance goals or is contingent on performance goals other than the Performance Measures, so long as the Committee has determined that such Award is not required to satisfy the
requirements for "qualified performance-based compensation" within the meaning of Section 162(m) of the Code. 

        4.5    Transferability of Awards.    Incentive Stock Options granted under the Plan, and any
interest therein, shall not be transferable or assignable by the Participant and may not be made subject to execution, attachment or similar process, other than by will or by the laws of descent and
distribution following the Participant's death and shall be exercisable during the lifetime of the Participant only by the Participant. To the extent provided in any individual Award other than an
Incentive Stock Option, the Award shall be transferable by gift to members of the Participant's Immediate Family, by instrument to an inter vivos or testamentary trust under which the Award is to be
passed to beneficiaries upon the death of the Participant, by will, and by the laws of descent and distribution. 

        4.6    Prohibition on Repricing.    Notwithstanding any other provision of the Plan, the
Committee shall not "reprice" any Stock Option granted under the Plan if the effect of such repricing would be to decrease the exercise price per share applicable to such Stock Option. For this
purpose, a "repricing" would include a tandem cancellation and regrant or any other amendment or action that would have substantially the same effect as decreasing the exercise price of outstanding
Stock Options. 

        4.7    Prohibition on Loans to Participants.    The Company shall not loan funds to any
Participant for the purpose of paying the exercise or base price associated with any Award or for the purpose of paying any taxes associated with the exercise or vesting of an Award. 

        4.8    Dividends and Dividend Equivalents.    A Stock Award may provide the Participant with
the right to receive dividend payments or dividend equivalent payments with respect to Stock subject to the Award (both before and after such Stock is earned or vested), which payments may be either
made currently or credited to an account for the Participant and may be settled in cash or Stock, as determined by the Committee. Any such settlements, and any such crediting of dividends or dividend
equivalents or reinvestment in shares of Stock, may be subject to such conditions, restrictions and contingencies as the Committee shall establish, including the reinvestment of such credited amounts
in Stock equivalents. 

        4.9    Settlement of Awards.    The obligation to make payments and distributions with respect
to Awards may be satisfied through cash payments, the delivery of shares of Stock, the granting of replacement Awards or any combination thereof, as the Committee shall determine. Satisfaction of any
such obligations under an Award may be subject to such conditions, restrictions and contingencies as the Committee shall determine. The Committee may permit or require the deferral of any Award
payment, subject to such rules and procedures as it may establish, which may include provisions for the payment or crediting of interest or dividend equivalents and may include converting such credits
into deferred Stock equivalents. 

        4.10    Awards to Non-Employee Directors.    Non-Employee Directors
shall not be eligible to receive any Awards under the Plan other than the Awards specified in this Section. 

        (a)    Discretionary Awards.    The Committee may, in its discretion, grant a
Non-Qualified Option or Restricted Stock to any Non-Employee Director; provided, however, that (1) no Non-Employee Director may receive Awards (not including
Awards granted in lieu of Annual Cash Retainer pursuant to subsection (b) of this Section) covering more than 30,000 shares of Stock in 

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any
Service Year (or, in the case of a newly-elected Non-Employee Director, covering more than two times the annual limit in the Service Year in which such Non-Employee
Director is first elected or appointed to the Board) and (2) the aggregate number of shares of Stock awarded as Restricted Stock to a Non-Employee Director during any Service Year
(not including Awards granted in lieu of Annual Cash Retainer pursuant to subsection (b) of this Section) may not exceed 70% of the total number of shares of Stock subject to all Awards granted
to such Non-Employee Director during such Service Year. Awards under this Section are discretionary, and until the Committee grants an Award to a Non-Employee Director, such
Non-employee Director shall not have any right or claim to any Award. The receipt of an Award under the Plan shall not give any Non-Employee Director any right or claim to
receive any other Award under the Plan, and the Committee or the Board may determine that any or all Non-Employee Directors are not eligible to receive Awards under the Plan for an
indefinite period or for specified Service Years. 

        (b)    Awards in Lieu of Annual Cash Retainer.    In addition to any Awards granted pursuant
to subsection (a) of this Section, the Committee, in its discretion, may permit a Non-Employee Director to elect to receive a Non-Qualified Option or Restricted Stock in
lieu of all or a portion of his or her Annual Cash Retainer for any Service Year. If the Committee permits any such election, it, in its discretion, shall determine the appropriate terms of such Award
(including the appropriate number of shares of Stock subject to the Award and, in the case of a Non-Qualified Option, the appropriate exercise price per share). Any such election, if
permitted by the Committee, shall be made in accordance with such procedures as are adopted from time to time by the Committee. 

        (c)    Terms of Non-Employee Director Awards.    In connection with the grant of
an Award under this Section, the Committee, in its discretion pursuant to Section 4.2, shall establish the terms and provisions of such Award, subject to the following limitations (in addition
to any other applicable limitations that may be contained in other provisions of the Plan): 

        (1)   The
exercise price per share of any Stock Option granted pursuant to this Section shall not be less than 100% of the Fair Market Value of the Stock on the date of grant; 

        (2)   No
Stock Option (or any portion thereof) granted pursuant to this Section may be exercisable earlier than six months from the date of grant; and 

        (3)   No
Restricted Stock (or any portion thereof) granted pursuant to this Section may be transferable earlier than six months from the date of grant. 

 
 

ARTICLE V    
    GENERAL PROVISIONS    
    

        5.1    Use of Terms.    

        (a)    Defined Terms.    As used herein, the following terms shall have the respective
meanings indicated below: 

        "Annual Cash Retainer" means the annual cash retainer fee, in such amount as is established from time to time by resolution of the Board,
payable to a Non-Employee Director for his or her services as a director of the Company. 

        "Authorized Shares" means the aggregate number of shares of Stock that may be issued pursuant to Awards under the Plan, as specified in
Section 3.1. 

        "Available Shares" has the meaning specified in Section 3.2. 

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        "Award" means an award granted under the Plan. An Award may be in the form of Stock Options, Stock Appreciation Rights, Stock Bonuses,
Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares. 

        "Award Agreement" has the meaning specified in Section 4.3. 

        "Board" means the Board of Directors of the Company. 

        "Change in Control" shall mean any transaction or series of transactions which occur after the Plan has been adopted by the Company's
stockholders as a consequence of which any person or group of persons in the aggregate acquires: (i) capital stock of the Company possessing the voting power to elect a majority of the Board
(whether by merger, consolidation, reorganization, combination, sale or transfer of the Company's capital stock, shareholder or voting agreement, proxy, power of attorney or otherwise) or
(ii) all or substantially all of the Company's assets determined on a consolidated basis; provided, that, a Change in Control shall not include an initial public offering and sale of equity
securities of the Company. 

        "Code" means the Internal Revenue Code of 1986, as amended. 

        "Committee" has the meaning specified in Section 2.1(a). 

        "Company" has the meaning specified in Section 1.1. 

        "Effective Date" has the meaning specified in Section 1.2. 

        "Eligible Recipient" means any person who is eligible to receive an Award under the Plan, as specified in Section 2.2(a). 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "Executive Officer" means an Executive Officer of the Company, as defined in Securities Exchange Act Rule 16a-1(f), as
such rule may be amended form time to time. 

        "Fair Market Value" of a share of Stock on a particular date shall be equal to the average of the high and low sales prices of the Stock
reported on the New York Stock Exchange composite tape on that date, or if no prices are reported on that date, on the last preceding date on which such prices of the Stock are so reported. If the
Stock is traded over the counter at the time a determination of Fair Market Value is required to be made hereunder, the Fair Market Value shall be deemed to be equal to the average between the
reported high and low or closing bid and asked prices of Stock on the most recent date on which Stock was publicly traded. In the event Stock is not publicly traded at the time a determination of Fair
Market Value is required to be made hereunder, the determination of Fair Market Value shall be made by the Committee in such manner as it deems appropriate. Notwithstanding the foregoing, the
Committee may use any other definition of Fair Market Value consistent with applicable tax, accounting and other rules. 

        "Immediate Family" shall mean an individual who is a member of the Participant's "immediate family" as that term is defined under
Securities Exchange Act Rule 16a-1(e), as amended from time to time. 

        "Incentive Stock Option" means a Stock Option that is intended to satisfy the requirement applicable to an "incentive stock option" as
that term is described in Section 422(b) of the Code. 

        "Non-Employee Director" means a member of the Board who is not an employee of the Company or any of its Subsidiaries. 

        "Non-Qualified Option" means a Stock Option that is not intended to satisfy the requirement applicable to an "incentive stock
option" as that term is described in Section 422(b) of the Code. 

        "Normal Retirement" has the meaning specified from time to time by the Committee. 

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        "Parent" shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company if, at the time
of granting an Incentive Stock Option, each of the corporations other than the Company owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain. 

        "Participant" means any person who receives an Award under the Plan. 

        "Performance Measures" mean (1) total stockholder return (Stock price appreciation plus dividends), (2) net income,
(3) earnings per share, (4) return on sales, (5) return on equity, (6) return on assets, (7) return on invested capital, (8) increase in the market price of
Stock or other securities, (9) revenues (10) operating income, (11) operating margin (operating income divided by revenues), (12) the performance of the Company or any
Subsidiary or division thereof in any of the items mentioned in clause (1) through (11) in comparison to the average performance of the companies used in a self-constructed
peer group established before the beginning of the period for measuring performance under an Award and (13) the performance of the Company or any Subsidiary or division thereof in any of the
items mentioned in clause (1) through (11) in comparison to a budget or target established before the beginning of the period for measuring performance under an Award; and any other
performance objective approved by the committee and stockholders of the Company in accordance with Section 162(m) of the Code. 

        "Performance Share" is a grant of Stock subject to the satisfaction of specified conditions or the achievement of specified performance
goals. 

        "Performance Unit" is a right to receive a cash payment subject to the satisfaction of specified conditions or the achievement of
specified performance goals. 

        "Permanent Disability" means a participant's inability to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months. 

        "Plan" has the meaning specified in Section 1.1. 

        "Restricted Award" has the meaning specified in Section 3.7(a). 

        "Restricted Stock" is Stock that is subject to a risk of forfeiture or other restrictions that will lapse upon the satisfaction of
specified conditions or the achievement of specified performance goals. 

        "Restricted Stock Unit" is a right to receive Stock in the future, with the right to future delivery of such Stock being subject to a risk
of forfeiture or other restrictions that will lapse upon the satisfaction of specified conditions or the achievement of specified performance goals. 

        "Securities Act" means the Securities Act of 1933. 

        "Service Year" means the approximately annual period commencing at an annual meeting of the Company's stockholders and ending at the next
annual meeting of the Company's stockholders. 

        "Stock" means the common stock, $0.001 par value per share, of the Company. 

        "Stock Appreciation Right" is a right to receive an amount, payable in cash or shares of Stock, equal to the excess of the Fair Market
Value of a specified number of shares of Stock on the date of exercise over a base price for such number of shares of Stock set forth in the applicable Award Agreement. 

        "Stock Award" is an Award consisting of Restricted Stock, Restricted Stock Units, Performance Shares or a Stock Bonus. 

9

 

        "Stock Bonus" is a grant of Stock that is not subject to a substantial risk of forfeiture or other conditions. 

        "Stock Option" is a right to purchase a specified number of shares of Stock at a specified price. A Stock Option may be an Incentive Stock
Option or a Non-Qualified Option. A Stock Option designated an Incentive Stock Option can, prior to its exercise, be changed to a Non-Qualified Option with the consent of the
Participant. 

        "Subsidiary" means any entity of which 50% or more of the total combined voting power of all classes of securities entitled to vote is
owned, directly or indirectly, by the Company. Notwithstanding the foregoing, the Committee may use any other definition of "Subsidiary" it deems necessary or desirable in accordance with its judgment
as to the best interests of the Company and its stockholders and in accordance with the purposes of the Plan. 

        "Ten Percent Shareholder" shall mean a Participant who, at the time an Incentive Stock Option is granted, owns directly or indirectly
(within the meaning of section 425(d) of the Code) stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company, its Parent or a
Subsidiary. 

        "2001 Plan" has the meaning specified in Section 3.1. 

        "Unrestricted Pool" has the meaning specified in Section 3.7(b). 

        (b)    Other Definitional Provisions.    

        (1)   Words
of any gender (whether masculine, feminine or neuter) shall be deemed to include all other genders. Words of the singular number shall be deemed to include the
plural number, and vice versa, where applicable. 

        (2)   When
used herein, the word "including" means "including, without limitation." 

        (3)   Unless
otherwise specified, references herein to Articles or Sections shall be deemed to be references to Articles or Sections, as applicable, of the Plan. When used
herein, the words "hereof," "herein" and "hereunder" and words of similar import shall refer to the Plan as a whole and not to any particular provision of the Plan. 

        5.2    Amendment and Termination.    The Board or the Committee may at any time and in any way
amend, suspend or terminate the Plan or any Award granted under the Plan; provided, however, that no such amendment, suspension or termination may materially impair any Award then outstanding without
the consent of the holder of such Award; and provided further, however, that without the requisite vote of the Company's stockholders, no amendment to the Plan may increase the number of shares
available for issuance under the Plan or modify any of the limitations described in Section 3.7, 4.2(b), 4.6 or 4.7 in such a manner as to materially reduce such limitation. 

        5.3    Liability of the Company.    By accepting any benefits under the Plan, each Participant
and each person claiming under or through such Participant shall be conclusively deemed to have indicated acceptance and ratification of, and consented to, any action taken or made under the Plan by
the Company, the Board, the Committee or any other committee appointed by the Board. No Participant or any person claiming under or through a Participant shall have any right or interest, whether
vested or otherwise, in the Plan or in any Award hereunder, contingent or otherwise, unless and until such Participant shall have complied with all of the terms, conditions and provisions of the Plan
and the Award Agreement relating thereto. Neither the Company, its directors, officers or employees, nor any Subsidiary, shall be liable to any Participant or other person if it is determined for any
reason by the Internal Revenue Service or any court having jurisdiction that any Incentive Stock Option granted hereunder does not qualify for tax treatment as an incentive stock option under
Section 422 of the 

10

 

Code.
Neither the Company, the Board nor the Committee shall be required to give any security or bond for the performance of any obligation which may be created by the Plan. 

        5.4    Unfunded Plan.    Insofar as it provides for Awards, the Plan shall be unfunded.
Although bookkeeping accounts may be established with respect to Participants who are granted Awards, any such accounts will be used merely as an administrative convenience. Except for the holding of
Restricted Stock in escrow, the Company shall not be required to segregate any assets that may at any time be represented by Awards, nor shall the Plan be construed as providing for such segregation,
nor shall the Company, the Board or the Committee be deemed to be a trustee of Stock or cash to be awarded under the Plan. Any liability of the Company to any Participant with respect to an Award
shall be based solely upon any contractual obligations that may be created by the Plan; no such obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any
property of the Company. 

        5.5    Rights as Stockholder.    No Award under the Plan shall confer upon a Participant any
right as a stockholder of the Company prior to the date on which he or she fulfills all service requirements and other conditions for receipt of shares of Stock. If the transfer of Stock is
restricted, certificates representing such Stock may bear a legend referring to such restrictions. 

        5.6    Compliance With Applicable Laws.    Notwithstanding any other provision of the Plan or
any Award Agreement, the Company shall have no obligation to issue any shares of Stock under the Plan or pursuant to any Award unless such issuance would comply with all applicable laws and the
applicable requirements of any securities exchange or similar entity. Prior to the issuance of any shares of Stock under the Plan or pursuant to an Award, the Company may require a written statement
that the recipient is acquiring the shares for investment and not for the purpose or with the intention of distributing the shares. The certificates representing the shares of Stock issued pursuant to
an Award under the Plan may bear such legend or legends as the Committee deems appropriate in order to assure compliance with applicable securities laws and regulations. 

        5.7    Governing Law and Venue.    The Plan and Awards granted hereunder (including Award
Agreements evidencing such Awards) will be governed by and construed in accordance with the laws of the State of
Delaware, other than with respect to choice of laws, rules and principles. Venue for any and all disputes arising out of or in connection with the Plan, any Award hereunder or any Award Agreement
shall exclusively be in the City of Alexandria and Fairfax County, Virginia, and the federal court sitting in Alexandria, Virginia and county court sitting in Fairfax County, Virginia shall have
exclusive jurisdiction to adjudicate such disputes. 

        5.8    Foreign Jurisdictions.    To the extent that the Committee determines that the material
terms set by the Committee or imposed by the Plan preclude the achievement of the material purposes of the Plan in jurisdictions outside the United States, the Committee will have the authority and
discretion to modify those terms and provide for such additional terms and conditions as the Committee determines to be necessary, appropriate or desirable to accommodate differences in local law,
policy or custom or to facilitate administration of the Plan. The Committee may adopt or approve sub-plans, appendices or supplements to, or amendments, restatements or alternative
versions of, the Plan as it may consider necessary, appropriate or desirable, without thereby affecting the terms of the Plan as in effect for any other purpose. The special terms and any appendices,
supplements, amendments, restatements or alternative versions, however, shall not include any provisions that are inconsistent with the terms of the Plan as then in effect, unless the Plan could have
been amended to eliminate such inconsistency without further approval by the stockholders. 

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QuickLinks

Exhibit 10.5

FORM OF TNS, INC. 2004 LONG-TERM INCENTIVE PLAN

ARTICLE I GENERAL

ARTICLE II ADMINISTRATION AND OPERATION

ARTICLE III SHARES AVAILABLE FOR AWARDS

ARTICLE IV AWARDS

ARTICLE V GENERAL PROVISIONS

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