Document:

exv10w3

Exhibit 10.3

ACME PACKET, INC.

RESTRICTED STOCK UNIT AGREEMENT

     This RESTRICTED STOCK UNIT AGREEMENT, dated as of September 6, 2011 (this
“Agreement”), is between ACME PACKET, INC., a Delaware corporation (the “Company”),
and Marianne Budnik (the “Grantee”). Capitalized terms used herein without definition
shall have the meaning ascribed to such terms in the Company’s 2006 Equity Incentive Plan, a copy
of which is attached hereto as Exhibit A (the “Plan”).

     1. Grant of Restricted Stock Unit Award.
Pursuant to the Plan, the Company grants to the Grantee a total of twenty thousand (20,000)
Restricted Stock Units (the “Units”), subject to adjustment pursuant to Section 8 of the
Plan. Subject to, and in accordance with, the provisions of Section 2 below, each Unit entitles
Grantee to receive from the Company one (1) share of Common Stock in accordance with the terms of
this Agreement and the Plan. This Award is granted as of September 6, 2011 (the “Grant
Date”). As used herein, the term “Vesting Start Date” shall mean September 1, 2011.

     2. Settlement of Units.

     (a) Settlement. On the fifth business day after the day on which any Units are no
longer subject to risk of forfeiture pursuant to, and in accordance with, Section 3 below, the
Company shall deliver or cause to be delivered to Grantee a stock certificate registered in the
name of Grantee in respect of the shares of Common Stock subject to such Units.

     (b) Other Lapse or Termination of Risk of Forfeiture. With respect to any Units that
remain subject to risk of forfeiture under Section 3 on the fifth business day after the day on
which such risk of forfeiture shall have lapsed or terminated pursuant to, and in accordance with,
the provisions of Section 4 below, the Company shall deliver or cause to be delivered to Grantee a
stock certificate registered in the name of Grantee in respect of the shares of Common Stock
subject to those Units in respect of which such risk of forfeiture shall have so lapsed or
terminated.

     (c) Effect of Settlement. Upon delivery of a stock certificate to the Grantee
pursuant to the provisions of this Section 2, the corresponding portion of the Units being settled
shall be satisfied in full and Grantee shall have no further rights with respect thereto.

     3. Forfeiture; Lapse of Risk of Forfeiture.
Subject to the other provisions of this Section 3 and to the provisions of Section 4 below, the
Units shall be forfeited (without any settlement thereof pursuant to Section 2(a) above) if the
Grantee’s association with the Company or any of its Affiliates as an employee, director or

 

 

consultant ends for any reason or no reason, regardless of whether the end of such association is
effected by the Company, any such Affiliate or the Grantee (whether voluntarily or involuntarily,
including because an entity with which the Grantee has any such association ceases to be an
Affiliate of the Company), and immediately following the end of any such association, the Grantee
is not associated with the Company or any of its Affiliates as an employee, director or consultant,
or if the Grantee dies; provided, however, that military or sick leave or other
bona fide leave shall not be deemed a termination of employment, if it does not exceed the longer
of ninety (90) days or the period during which the absent original grantee’s reemployment rights,
if any, are guaranteed by statute or by contract. Notwithstanding the foregoing provisions of this
Section 3 to the contrary, (i) 100% of the Units shall be forfeited if the employment of the
Grantee with the Company terminates for any reason at any time prior to the one year anniversary of
the Vesting Start Date (the date of such first anniversary, the “First Vesting
Date”), (ii) 25% of the Units shall no longer be subject to forfeiture if the Grantee
continues to be employed by the Company on the first day of the first calendar quarter after the
First Vesting Date, (iii) of the remaining 75% of the Units, for each of the twelve (12) calendar
quarters subsequent to the First Vesting Date, 6.25% of the applicable Units shall no longer be
subject to forfeiture per each applicable calendar quarter that the Grantee remains an employee of
the Company, with the first such lapse in the risk of forfeiture lapsing on the first day of the
first calendar quarter after the First Vesting Date, and an additional of such lapses in the risk
of forfeiture lapsing on the first day of each calendar quarter thereafter (other than the last of
such lapses in the risk of forfeiture which shall lapse on the three-year anniversary of the First
Vesting Date), such that the risk of forfeiture will have lapsed with respect to 100% of the
applicable Units on the three-year anniversary of the First Vesting Date, with each such lapse in
the risk of forfeiture being as nearly equal as practicable (as determined by the Corporation in
its reasonable discretion); provided, however, that the foregoing provisions of
this sentence shall only operate to release Units from risk of forfeiture under this Section 3
until and including the date that the Grantee has no association with the Company or any of its
Affiliates as an employee, director or consultant.

     4. Acceleration or Other Termination of Risk
of Forfeiture.

     (a) Upon Election by the Board or the Compensation Committee. Notwithstanding anything
in Section 3 above to the contrary, the Board or the Compensation Committee may, at any time and in
its discretion in accordance with the provisions of Section 7.3(a) of the Plan, cause any or all
Units that remain subject to a risk of forfeiture under Section 3 hereof to cease to be subject to
such risk of forfeiture.

     (b) Upon Termination of Employment Following a Change of Control. Notwithstanding
anything in Section 3 above to the contrary but subject to the provisions of Section 4(c) below, in
the event that (i) a Change of Control occurs prior to the time that all of the Units shall no
longer be subject to any risk of forfeiture under Section 3, (ii) the Grantee is an employee of the
Company or any of its Affiliates immediately prior to such Change of Control, and (iii) either
(A) the Grantee voluntarily terminates his employment with the Company and all of its Affiliates
following (x) any material

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adverse change (without Grantee’s written consent) in the authorities, duties or responsibilities
of Grantee’s employment with the Company or any of its Affiliates that occurs as a result of, or
after, such Change of Control or (y) any relocation of the Grantee (without his written consent) by
the Company or any of its Affiliates after such Change of Control to a location that increases
Grantee’s commute prior to such relocation by more than fifty (50) miles or (B) the Company or any
of its Affiliates terminates the Grantee’s employment with the Company and all of its Affiliates
for any reason or no reason (other than Cause, as such term is defined in Section 4(d) below), in
the case of any of the foregoing clauses (A) or (B) if the applicable termination of employment
occurs at any time within 365 days after the occurrence of such Change of Control, then one hundred
percent (100%) of such Units that are, immediately prior to any such termination of employment by
Grantee or by the Company or any of its Affiliates, still subject to risk of forfeiture under
Section 3 shall, immediately following any such termination of employment by Grantee or by the
Company or any of its Affiliates, no longer be subject to any risk of forfeiture under Section 3
above, as applicable. In the case of those Units that are, immediately prior to any such
termination of employment by Grantee or by the Company or any of its Affiliates, still subject to
risk of forfeiture under Section 3, the foregoing provisions of this Section 4(b) shall be
implemented ratably across all of such Units regardless of the date when each of such Units would
have otherwise no longer been subject to risk of forfeiture under Section 3 above.

     (c) Continuation of Employment by Successor. If the Grantee is an employee of the
Company or any of its Affiliates immediately prior to a Change of Control, then employment of the
Grantee following such Change of Control by any person or entity that is the successor or acquiror
of the Company as a result of such Change of Control or that is the parent company or affiliate of
such successor or acquiror (in either case, the “Successor Employer”) shall be
treated under this Agreement as if the Grantee continued to be employed by the Company, and in such
context any reference in this Agreement to the Company shall be deemed to be a reference to the
Successor Employer.

     (d) Definition of Cause. For purposes of this Agreement, the term “Cause” shall mean
(i) if the Grantee is convicted of, or pleads guilty or no contest to, a felony or any crime
involving moral turpitude, deceit, dishonesty or fraud; (ii) any act of embezzlement, theft, sexual
harassment, discrimination, fraud or other acts of a criminal nature by the Grantee in his dealings
with the Company, any of its Affiliates or any of their respective employees or representatives, as
determined by the Board of Directors of the Company; (iii) the breach by the Grantee of any
material term of an agreement with the Company or any of its Affiliates, including covenants not to
compete and provisions relating to confidential information and intellectual property rights; or
(iv) any failure by the Grantee to comply with a specific directive given by the Company’s
executive officers or Board of Directors which failure has not been cured within 30 days after
written notice from the Company.

     5. Dividends. Grantee shall not be entitled to receive payments equivalent to any
dividends declared with respect to Common Stock underlying the Units.

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     6. Transfer of Units. Other than as expressly permitted by the
provisions of Section 7.3(e) of the Plan, the Units may not be transferred except by will or the
laws of descent and distribution and, during the lifetime of the Grantee, may be exercised only by
the Grantee.

     7. Tax Withholding. Pursuant to Section 9.7 of the Plan, the Company has the
right to require the Grantee to remit to the Company an amount sufficient to satisfy federal,
state, local or other withholding tax requirements if, when, and to the extent required by law
(whether so required to secure for the Company an otherwise available tax deduction or otherwise)
prior to the delivery of any certificate or certificates for such shares issuable upon settlement
of the Units. The obligations of the Company under this Agreement and the Plan shall be conditional
on satisfaction of all such withholding obligations and the Company shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the
recipient of an Award. However, in such cases Grantee may elect, subject to the approval of the
Committee, acting in its sole discretion, to satisfy any applicable withholding requirement, in
whole or in part, by having the Company withhold shares to satisfy their tax obligations. Grantee
may only elect to have shares of Common Stock withheld having a Market Value on the date the tax is
to be determined equal to the minimum statutory total tax which could be imposed on the
transaction. All elections shall be irrevocable, made in writing, signed by the Grantee, and shall
be subject to any restrictions or limitations that the Committee deems appropriate.

     8. Incorporation of Plan Terms. The Units are granted subject
to all of the applicable terms and provisions of the Plan, including, but not limited to, the
limitations on the Company’s obligation to deliver shares of Common Stock upon termination of the
restrictions set forth in Section 9.1 (Violation of Law), Section 9.2 (Corporate Restrictions on
Rights in Stock), and Section 9.3 (Investment Representations).

     9. Miscellaneous. This Agreement shall be construed and enforced in accordance with
the internal, substantive laws of The Commonwealth of Massachusetts and shall be binding upon and
inure to the benefit of any successor or assign of the Company and any executor, administrator,
trustee, guardian, or other legal representative of the Grantee.

[The remainder of this page is intentionally left blank.]

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     IN WITNESS WHEREOF, the parties have executed this Restricted Stock Unit Agreement as a sealed
instrument as of the date first above written.

	 	 	 	 	 

	ACME PACKET, INC.	 	GRANTEE
	 
	 	 	 	 
	By:

	 	/s/ Peter J. Minihane
	 	/s/ Marianne Budnik
	 

	 	 
	 	 
	 

	 	Name: Peter J. Minihane
	 	Name: Marianne Budnik
	 

	 	Title: Chief Financial Officer
	 	Title: Chief Marketing Officer
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

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Exhibit A

2006 Equity Incentive Plan

 

 

ACME PACKET, INC.

2006 EQUITY INCENTIVE PLAN

1. PURPOSE

     This Plan is intended to encourage ownership of Common Stock by employees,
consultants and directors of the Company and its Affiliates and to provide additional incentive for
them to promote the success of the Company’s business through the grant of Awards of shares of the
Company’s Common Stock. The Plan is intended to be an incentive stock option plan within the
meaning of Section 422 of the Code but not all Awards granted hereunder are required to be
Incentive Options.

2. DEFINITIONS

     As used in the Plan the following terms shall have the respective meanings set out below,
unless the context clearly requires otherwise:

     2.1. “ACCELERATE”, “ACCELERATED”, and “ACCELERATION”, when used with respect to an Option,
means that as of the time of reference such Option will become exercisable with respect to some or
all of the shares of Common Stock for which it was not then otherwise exercisable by its terms,
and, when used with respect to Restricted Stock or Restricted Stock Units, as the case may be,
means that the Risk of Forfeiture otherwise applicable to such Restricted Stock or Restricted Stock
Units, as the case may be, shall expire with respect to some or all of the shares of Restricted
Stock or some or all of the Restricted Stock Units, as the case may be, then still otherwise
subject to the Risk of Forfeiture.

     2.2. “ACQUIRING PERSON” means, with respect to any Transaction or any acquisition described in
clause (ii) of the definition of Change of Control, the surviving or acquiring person or entity in
connection with such Transaction or acquisition, as the case may be, provided that if such
surviving or acquiring person or entity is controlled, directly or indirectly, by any other person
or entity (an “Ultimate Parent Entity”) that is not itself controlled by any entity or person that
is not a natural person, the term “Acquiring Person” shall mean such Ultimate Parent Entity.

     2.3. “AFFILIATE” means, with respect to any person or entity, any other person or entity
controlling, controlled by or under common control with the first person or entity.

     2.4. “APPLICABLE VOTING CONTROL PERCENTAGE” means twenty percent (20%).

     2.5. “AWARD” means any grant or sale pursuant to the Plan of Options, Restricted Stock,
Restricted Stock Units or Stock Grants.

     2.6. “AWARD AGREEMENT” means an agreement between the Company and the recipient of an Award,
setting forth the terms and conditions of the Award.

 

 

     2.7. “BENEFICIAL OWNERSHIP” has the meaning ascribed to such term in Rule 13d-3, or any
successor rule thereto, promulgated by the Securities and Exchange Commission pursuant to the
Exchange Act.

     2.8. “BOARD” means the Company’s board of directors.

     2.9. “CHANGE OF CONTROL” means (i) the closing of any Sale of the Company Transaction or (ii)
the direct or indirect acquisition, in a single transaction or a series of related transactions, by
any person or Group (other than the Company or a Controlled Affiliate of the Company) of Beneficial
Ownership of previously outstanding shares of capital stock of the Company if (A) immediately after
such acquisition, such person or Group, together with their respective Affiliates, shall own or
hold shares of capital stock of the Company possessing at least the Applicable Voting Control
Percentage of the total voting power of the outstanding capital stock of the Company and (B)
immediately prior to such acquisition, such person or Group, together with their respective
Affiliates, did not own or hold shares of capital stock of the Company possessing at least the
Applicable Voting Control Percentage of the total voting power of the outstanding capital stock of
the Company. Notwithstanding anything expressed or implied in the foregoing provisions of this
definition to the contrary, any direct or indirect acquisition referred to in clause (ii) above in
this definition shall not be treated as a Change of Control if, at any time prior to or after such
direct or indirect acquisition, a majority of the members of the Board of Directors of the Company
as constituted immediately prior to such direct or indirect acquisition consent in writing to
exclude such direct or indirect acquisition from the scope of this definition.

     2.10. “CODE” means the Internal Revenue Code of 1986, as amended from time to time, or any
successor statute thereto, and any regulations issued from time to time thereunder.

     2.11. “CONTROLLED AFFILIATE” means, with respect to any person or entity, any other person or
entity that is controlled by such person or entity.

     2.12. “COMMITTEE” means any committee of the Board delegated responsibility by the Board for
the administration of the Plan, as provided in Section 5 of the Plan. For any period during which
no such committee is in existence, the term “COMMITTEE” shall mean the Board and all authority and
responsibility assigned the Committee under the Plan shall be exercised, if at all, by the Board.

     2.13. “COMMON STOCK” means common stock, par value $0.001 per share, of the Company.

     2.14. “COMPANY” means Acme Packet, Inc., a corporation organized under the laws of the State
of Delaware.

     2.15. “EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended.

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     2.16. “GRANT DATE” means the date as of which an Option is granted, as determined under
Section 7.1(a).

     2.17. “GROUP” has the meaning ascribed to such term in Section 13(d)(3) of the Exchange Act or
any successor section thereto.

     2.18. “INCENTIVE OPTION” means an Option which by its terms is to be treated as an “incentive
stock option” within the meaning of Section 422 of the Code.

     2.19. “MARKET VALUE” means the value of a share of Common Stock on a particular date
determined by such methods or procedures as may be established by the Committee. Unless otherwise
determined by the Committee, the Market Value of Common Stock as of any date is the closing price
for the Common Stock as reported on the NASDAQ Global Market (or on any other national securities
exchange on which the Common Stock is then listed) for that date or, if no closing price is
reported for that date, the closing price on the next preceding date for which a closing price was
reported.

     2.20. “NONSTATUTORY OPTION” means any Option that is not an Incentive Option.

     2.21. “OPTION” means an option granted under the Plan to purchase shares of Common Stock.

     2.22. “OPTIONEE” means an employee, consultant or director of the Company to whom an Option
shall have been initially granted under the Plan.

     2.23. “PARTICIPANT” means any holder of an outstanding Award under the Plan.

     2.24. “PLAN” means this 2006 Equity Incentive Plan of the Company, as amended and in effect
from time to time.

     2.25. “RESTRICTED STOCK” means a grant or sale pursuant to the Plan of shares of Common Stock
to an employee, consultant or director of the Company subject to a Risk of Forfeiture.

     2.26. “RESTRICTED STOCK UNITS” means rights granted pursuant to the Plan to receive shares of
Common Stock at the close of a Restriction Period, subject to a Risk of Forfeiture.

     2.27. “RESTRICTION PERIOD” means the period of time, established by the Committee in
connection with an Award of Restricted Stock or Restricted Stock Units, during which the shares of
Restricted Stock or the Restricted Stock Units are subject to a Risk of Forfeiture described in the
applicable Award Agreement.

     2.28. “RISK OF FORFEITURE” means a limitation on the right of a Participant to retain an Award
of Restricted Stock or Restricted Stock Units, including a right in the Company to reacquire such
Restricted Stock at less than its then Market Value and/or the

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forfeiture of Restricted Stock Units held by a Participant, arising because of the occurrence
or non-occurrence of specified events or conditions.

     2.29. “SALE OF THE COMPANY TRANSACTION” means any Transaction in which the stockholders of the
Company immediately prior to such Transaction, together with any and all of such stockholders’
Affiliates, do not own or hold, immediately after consummation of such Transaction, shares of capital stock of the Acquiring Person in
connection with such Transaction possessing at least a majority of the total voting power of the
outstanding capital stock of such Acquiring Person.

     2.30. “SECURITIES ACT” means the Securities Act of 1933, as amended.

     2.31. “STOCK GRANT” means the grant pursuant to the Plan of shares of Common Stock not subject
to restrictions or other forfeiture conditions.

     2.32. “TEN PERCENT OWNER” means a person who owns, or is deemed within the meaning of Section
422(b)(6) of the Code to own, stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company (or any parent or subsidiary corporations of the Company, as
defined in Section 424(e) and (f), respectively, of the Code). Whether a person is a Ten Percent
Owner shall be determined with respect to each Option based on the facts existing immediately prior
to the Grant Date of such Option.

     2.33. “TRANSACTION” means any merger or consolidation of the Company with or into another
person or entity or the sale or transfer of all or substantially all of the assets of the Company,
in each case in a single transaction or in a series of related transactions.

3. TERM OF THE PLAN

     Unless the Plan shall have been earlier terminated by the Board, Awards may be granted under
this Plan at any time in the period commencing upon the effectiveness of the Plan in accordance
with the provisions of Section 17 hereof and ending immediately prior to the tenth anniversary of
the adoption of the Plan by the Board. Awards granted pursuant to the Plan within such period shall
not expire solely by reason of the termination of the Plan. Awards of Incentive Options granted
prior to stockholder approval of the Plan are hereby expressly conditioned upon such approval, but
in the event of the failure of the stockholders to approve the Plan shall thereafter and for all
purposes be deemed to constitute Nonstatutory Options.

4. STOCK SUBJECT TO THE PLAN

     Subject to the provisions of Section 8 of the Plan, at no time shall the number of shares of
Common Stock issued pursuant to or subject to outstanding Awards granted under the Plan (including,
without limitation, pursuant to Incentive Options) exceed the sum of (a) 3,000,000 shares of Common
Stock plus (b) an annual increase to be added, automatically and without further action, on January
1 of each calendar year equal to the lesser of (i) 3,000,000 shares of Common Stock or (ii) five
percent (5%) of the

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Company’s outstanding equity on a fully diluted basis (calculated by treating all outstanding
warrants, stock options and convertible securities of the Company, whether or not then vested or
exercisable, as if they had been exercised for or converted into the full number of shares of
capital stock of the Company subject to such outstanding warrants, stock options and convertible
securties), on the December 31 that immediately precedes such January 1; PROVIDED, HOWEVER, that
the Board may, at any time and on any one or more occasions, take action to waive the annual increase set forth in clause (b), in whole or in part.
For purposes of applying the foregoing limitation, (x) if any Option expires, terminates, or is
cancelled for any reason without having been exercised in full, or if any Award of Restricted Stock
or Restricted Stock Units is forfeited, the shares not purchased by the Participant or forfeited by
the Participant shall again be available for Awards thereafter to be granted under the Plan, and
(y) if any Option is exercised by delivering previously owned shares in payment of the exercise
price therefor, only the net number of shares, that is, the number of shares issued minus the
number received by the Company in payment of the exercise price, shall be considered to have been
issued pursuant to an Award granted under the Plan. Shares of Common Stock issued pursuant to the
Plan may be either authorized but unissued shares or shares held by the Company in its treasury.

5. ADMINISTRATION

     The Plan shall be administered by the Committee; PROVIDED, HOWEVER, that at any time and on
any one or more occasions the Board may itself exercise any of the powers and responsibilities
assigned the Committee under the Plan and when so acting shall have the benefit of all of the
provisions of the Plan pertaining to the Committee’s exercise of its authorities hereunder; AND
PROVIDED FURTHER that the Committee may delegate to an executive officer or officers the authority
to grant Awards hereunder to employees who are not officers, and to consultants, in accordance with
such guidelines as the Committee shall set forth at any time or from time to time. Subject to the
provisions of the Plan, the Committee shall have complete authority, in its discretion, to make or
to select the manner of making all determinations with respect to each Award to be granted by the
Company under the Plan in addition to any other determination allowed the Committee under the Plan
including, without limitation: (a) the employee, consultant or director to receive the Award; (b)
the form of Award; (c) whether an Option (if granted to an employee) will be an Incentive Option or
a Nonstatutory Option; (d) the time of granting an Award; (e) the number of shares subject to an
Award; (f) the exercise price of an Option or purchase price, if any, for shares of Restricted
Stock or for a Stock Grant and the method of payment of such exercise price or such purchase price;
(g) the term of an Option; (h) the vesting period of shares of Restricted Stock or of Restricted
Stock Units and any acceleration thereof; (i) the exercise date or dates of an Option and any
acceleration thereof; and (j) the effect of termination of any employment, consulting or Board
member relationship with the Company or any of its Affiliates on the subsequent exercisability of
an Option or on the Risk of Forfeiture of Restricted Stock or Restricted Stock Units. In making
such determinations, the Committee may take into account the nature of the services rendered by the
respective employees, consultants and directors, their present and potential contributions to the
success of the Company and its Affiliates,

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and such other factors as the Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine the terms and
provisions of the respective Award Agreements (which need not be identical), and to make all other
determinations necessary or advisable for the administration of the Plan. The Committee’s
determinations made in good faith on matters referred to in this Plan shall be final, binding and conclusive on all persons having or claiming any interest under
the Plan or an Award made pursuant hereto.

6. AUTHORIZATION AND ELIGIBILITY

     The Committee may grant from time to time and at any time prior to the termination of the Plan
one or more Awards, either alone or in combination with any other Awards, to any employee of or
consultant to one or more of the Company and its Affiliates or to any non-employee member of the
Board or of any board of directors (or similar governing authority) of any Affiliate. However, only
employees of the Company or of any parent or subsidiary corporations of the Company, as defined in
Sections 424(e) and (f), respectively, of the Code, shall be eligible for the grant of an Incentive
Option. Further, in no event shall the number of shares of Common Stock covered by Options or other
Awards granted to any one person in any one calendar year (or portion of a year) exceed 3,000,000
shares of Common Stock.

     Each grant of an Award shall be subject to all applicable terms and conditions of the Plan
(including but not limited to any specific terms and conditions applicable to that type of Award
set out in Section 7 below), and such other terms and conditions, not inconsistent with the terms
of the Plan, as the Committee may prescribe. No prospective Participant shall have any rights with
respect to an Award, unless and until such Participant has executed an agreement evidencing the
Award, delivered a fully executed copy thereof to the Company, and otherwise complied with the
applicable terms and conditions of such Award.

7. SPECIFIC TERMS OF AWARDS

     7.1. OPTIONS.

          (a) DATE OF GRANT. The granting of an Option shall take place at the time specified in the
Award Agreement. Only if expressly so provided in the applicable Award Agreement shall the Grant
Date be the date on which the Award Agreement shall have been duly executed and delivered by the
Company and the Optionee.

          (b) EXERCISE PRICE. The price at which shares of Common Stock may be acquired under each
Incentive Option shall be not less than 100% of the Market Value of Common Stock on the Grant Date,
or not less than 110% of the Market Value of Common Stock on the Grant Date if the Optionee is a
Ten Percent Owner. The price at which shares may be acquired under each Nonstatutory Option shall
not be so limited solely by reason of this Section.

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          (c) OPTION PERIOD. No Incentive Option may be exercised on or after the tenth anniversary of
the Grant Date, or on or after the fifth anniversary of the Grant Date if the Optionee is a Ten
Percent Owner. The Option period under each Nonstatutory Option shall not be so limited solely by
reason of this Section.

          (d) EXERCISABILITY. An Option may be immediately exercisable or become exercisable in such
installments, cumulative or non-cumulative, as the Committee may determine. In the case of an Option not otherwise immediately exercisable in full,
the Committee may Accelerate such Option in whole or in part at any time; PROVIDED, HOWEVER, that
in the case of an Incentive Option, any such Acceleration of such Incentive Option would not cause
such Incentive Option to fail to comply with the provisions of Section 422 of the Code or the
Optionee consents to such Acceleration.

          (e) EFFECT OF TERMINATION OF EMPLOYMENT, CONSULTING OR BOARD MEMBER RELATIONSHIP. Unless the
Committee shall provide otherwise with respect to any Option, if the applicable Optionee’s
association with the Company or any of its Affiliates as an employee, director or consultant ends
for any reason or no reason, regardless of whether the end of such association is effected by the
Company, any such Affiliate or such Optionee (whether voluntarily or involuntarily, including
because an entity with which such Optionee has any such association ceases to be an Affiliate of
the Company), and immediately following the end of any such association, such Optionee is not
associated with the Company or any of its Affiliates as an employee, director or consultant, or if
such Optionee dies, then any outstanding Option initially granted to such Optionee, whether then
held by such Optionee or any other Participant, shall cease to be exercisable in any respect not
later than ninety (90) days following the end of such association or such death and, for the period
it remains exercisable following the end of such association or such death, shall be exercisable
only to the extent exercisable on the date of the end of such association or such death. Military
or sick leave or other bona fide leave shall not be deemed a termination of employment, PROVIDED
that it does not exceed the longer of ninety (90) days or the period during which the absent
Optionee’s reemployment rights, if any, are guaranteed by statute or by contract.

          (f) TRANSFERABILITY. Except as otherwise provided in this subsection (f), Options shall not be
transferable, and no Option or interest therein may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution
(subject always to the provisions of subsection (e) above). Except as otherwise provided in this
subsection (f), all of a Participant’s rights in any Option may be exercised during the life of
such Participant only by such Participant or such Participant’s legal representative. However, the
applicable Award Agreement or the Committee (at or after the grant of a Nonstatutory Option) may
provide that a Nonstatutory Option may be transferred by the applicable Participant to a family
member; PROVIDED, HOWEVER, that any such transfer is without payment of any consideration
whatsoever and that no transfer of a Nonstatutory Option shall be valid unless first approved by
the Committee, acting in its sole discretion, unless such transfer is permitted under the
applicable Award Agreement. For this purpose, “family member” means any child, stepchild,
grandchild, parent, stepparent, spouse, former spouse, sibling,

7

 

niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law, including adoptive relationships, any person sharing the applicable Participant’s
household (other than a tenant or employee), a trust in which the foregoing persons and/or the
applicable Participant have more than fifty percent (50%) of the beneficial interests, a foundation
in which the foregoing persons and/or the applicable Participant control the management of assets,
and any other entity in which these persons and/or the applicable Participant own more than fifty percent (50%) of the voting interests. The
Committee may at any time or from time to time delegate to one or more officers of the Company the
authority to permit transfers of Nonstatutory Options to third parties pursuant to this subsection
(f), which authorization shall be exercised by such officer or officers in accordance with
guidelines established by the Committee at any time and from time to time. The restrictions on
transferability set forth in this subsection (f) shall in no way preclude any Participant from
effecting “cashless” exercises of an Option pursuant to the terms of the Plan.

          (g) METHOD OF EXERCISE. An Option may be exercised by a Participant giving written notice, in
the manner provided in Section 15, specifying the number of shares of Common Stock with respect to
which the Option is then being exercised. The notice shall be accompanied by payment in the form of
cash or check payable to the order of the Company in an amount equal to the exercise price of the
shares of Common Stock to be purchased or, subject in each instance to the Committee’s approval,
acting in its sole discretion and subject to such conditions, if any, as the Committee may deem
necessary to comply with applicable laws, rules and regulations or to avoid adverse accounting
effects to the Company, by delivery to the Company of (i) shares of Common Stock having a Market
Value equal to the exercise price of the shares to be purchased, or (ii) the Participant’s executed
promissory note in the principal amount equal to the exercise price of the shares to be purchased
and otherwise in such form as the Committee shall have approved. If the Common Stock is traded on
an established market, payment of any exercise price may also be made through and under the terms
and conditions of any formal cashless exercise program authorized by the Company entailing the sale
of the Common Stock subject to any Option in a brokered transaction (other than to the Company).
Receipt by the Company of such notice and payment in any authorized or combination of authorized
means shall constitute the exercise of the Option. Within thirty (30) days thereafter but subject
to the remaining provisions of the Plan, the Company shall deliver or cause to be delivered to the
Participant or his agent a certificate or certificates for the number of shares then being
purchased. Such shares shall be fully paid and nonassessable. Notwithstanding any of the foregoing
provisions in this subsection (g) to the contrary, (A) no Option shall be considered to have been
exercised unless and until all of the provisions governing such exercise specified in the Plan and
in the relevant Award Agreement shall have been duly complied with; and (B) the obligation of the
Company to issue any shares upon exercise of an Option is subject to the provisions of Section 9.1
hereof and to compliance by the Optionee and the Participant with all of the provisions of the Plan
and the relevant Award Agreement.

          (h) LIMIT ON INCENTIVE OPTION CHARACTERIZATION. An Incentive Option shall be considered to be
an Incentive Option only to the extent that the number of shares

8

 

of Common Stock for which the Option first becomes exercisable in a calendar year do not have
an aggregate Market Value (as of the date of the grant of the Option) in excess of the “current
limit”. The current limit for any Optionee for any calendar year shall be $100,000 MINUS the
aggregate Market Value at the date of grant of the number of shares of Common Stock available for
purchase for the first time in the same year under each other Incentive Option previously granted to the Optionee under the Plan, and under each other incentive stock option previously granted to
the Optionee under any other incentive stock option plan of the Company and its Affiliates, after
December 31, 1986. Any shares of Common Stock which would cause the foregoing limit to be violated
shall be deemed to have been granted under a separate Nonstatutory Option, otherwise identical in
its terms to those of the Incentive Option.

          (i) NOTIFICATION OF DISPOSITION. Each person exercising any Incentive Option granted under the
Plan shall be deemed to have covenanted with the Company to report to the Company any disposition
of such shares prior to the expiration of the holding periods specified by Section 422(a)(1) of the
Code and, if and to the extent that the realization of income in such a disposition imposes upon
the Company federal, state, local or other withholding tax requirements, or any such withholding is
required to secure for the Company an otherwise available tax deduction, to remit to the Company an
amount in cash sufficient to satisfy those requirements.

          (j) RIGHTS PENDING EXERCISE. No person holding an Option shall be deemed for any purpose to be
a stockholder of the Company with respect to any of the shares of Common Stock issuable pursuant to
such Option, except to the extent that such Option shall have been exercised with respect thereto
and, in addition, a certificate shall have been issued therefor and delivered to such person or his
agent.

     7.2. RESTRICTED STOCK.

          (a) PURCHASE PRICE. Shares of Restricted Stock shall be issued under the Plan for such
consideration, in cash, other property or services, or any combination thereof, as is determined by
the Committee.

          (b) ISSUANCE OF CERTIFICATES. Subject to subsection (c) below, each Participant receiving an
Award of Restricted Stock shall be issued a stock certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered in the name of such Participant, and, if
applicable, shall bear an appropriate legend referring to the terms, conditions, and restrictions
applicable to such Award substantially in the following form:

The transferability of this certificate and the shares represented
by this certificate are subject to the terms and conditions of the Acme Packet, Inc. 2006 Equity Incentive Plan and an
Award Agreement entered into by the registered owner and Acme Packet, Inc. Copies of such

9

 

Plan and Agreement are on file in the offices of Acme Packet, Inc.

          (c) ESCROW OF SHARES. The Committee may require that the stock certificates evidencing shares
of Restricted Stock be held in custody by a designated escrow agent (which may but need not be the
Company) until the restrictions thereon shall have lapsed, and that the Participant deliver a stock
power, endorsed in blank, relating to the Common Stock covered by such Award.

          (d) RESTRICTIONS AND RESTRICTION PERIOD. During the Restriction Period applicable to shares of
Restricted Stock, such shares shall be subject to limitations on transferability and a Risk of
Forfeiture arising on the basis of such conditions related to the performance of services, Company
or Affiliate performance or otherwise as the Committee may determine and provide for in the
applicable Award Agreement. Any such Risk of Forfeiture may be waived or terminated, or the
Restriction Period shortened, at any time by the Committee on such basis as it deems appropriate.

          (e) RIGHTS PENDING LAPSE OF RISK OF FORFEITURE OR FORFEITURE OF AWARD. Except as otherwise
provided in the Plan or the applicable Award Agreement, at all times prior to lapse of any Risk of
Forfeiture applicable to, or forfeiture of, an Award of Restricted Stock, the Participant shall
have all of the rights of a stockholder of the Company, including the right to vote the shares of
Restricted Stock.

          (f) EFFECT OF TERMINATION OF EMPLOYMENT, CONSULTING OR BOARD MEMBER RELATIONSHIP. Unless
otherwise determined by the Committee at or after grant and subject to the applicable provisions of
the Award Agreement, if the applicable original grantee’s association with the Company or any of
its Affiliates as an employee, director or consultant ends for any reason or no reason during the
Restriction Period, regardless of whether the end of such association is effected by the Company,
any such Affiliate or such original grantee (whether voluntarily or involuntarily, including
because an entity with which such original grantee has any such association ceases to be an
Affiliate of the Company), and immediately following the end of any such association, such original
grantee is not associated with the Company or any of its Affiliates as an employee, director or
consultant, or if such original grantee dies, then all outstanding shares of Restricted Stock
initially granted to such original grantee that are still subject to Risk of Forfeiture, whether
then held by such original grantee or any other Participant, shall be forfeited or otherwise
subject to return to or repurchase by the Company if and to the extent so provided by, and subject
to and in accordance with, the terms of the applicable Award Agreement; PROVIDED, HOWEVER, that
military or sick leave or other bona fide leave shall not be deemed a termination of employment, if
it does not exceed the longer of ninety (90) days or the period during which the absent original
grantee’s reemployment rights, if any, are guaranteed by statute or by contract.

          (g) LAPSE OF RESTRICTIONS. If and when the Restriction Period expires without a prior
forfeiture of the Restricted Stock, the certificates for such shares shall be delivered to the
Participant promptly if not theretofore so delivered.

10

 

          (h) TRANSFERABILITY. Except as otherwise provided in this subsection (h), shares of Restricted
Stock shall not be transferable, and no share of Restricted Stock or interest therein may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by
the laws of descent and distribution (subject always to the provisions of subsection (f) above).
The applicable Award Agreement or the Committee (at or after the grant of a share of Restricted
Stock) may provide that such share of Restricted Stock may be transferred by the applicable
Participant to a family member; PROVIDED, HOWEVER, that any such transfer is without payment of any consideration whatsoever and
that no transfer of a share of Restricted Stock shall be valid unless first approved by the
Committee, acting in its sole discretion, unless such transfer is permitted under the applicable
Award Agreement. For this purpose, “family member” means any child, stepchild, grandchild, parent,
stepparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships,
any person sharing the applicable Participant’s household (other than a tenant or employee), a
trust in which the foregoing persons and/or the applicable Participant have more than fifty percent
(50%) of the beneficial interests, a foundation in which the foregoing persons and/or the
applicable Participant control the management of assets, and any other entity in which these
persons and/or the applicable Participant own more than fifty percent (50%) of the voting
interests. The Committee may at any time or from time to time delegate to one or more officers of
the Company the authority to permit transfers of shares of Restricted Stock to third parties
pursuant to this subsection (h), which authorization shall be exercised by such officer or officers
in accordance with guidelines established by the Committee at any time and from time to time.

     7.3. RESTRICTED STOCK UNITS.

          (a) CHARACTER. Each Restricted Stock Unit shall entitle the recipient to a share of Common
Stock at a close of such Restriction Period as the Committee may establish and subject to a Risk of
Forfeiture arising on the basis of such conditions relating to the performance of services, Company
or Affiliate performance or otherwise as the Committee may determine and provide for in the
applicable Award Agreement. Any such Risk of Forfeiture may be waived or terminated, or the
Restriction Period shortened, at any time by the Committee on such basis as it deems appropriate.

          (b) ISSUANCE OF CERTIFICATES. Unless otherwise determined by the Committee at or after grant
and subject to the applicable provisions of the Award Agreement, at the close of the Restriction
Period applicable to any Restricted Stock Units (including, without limitation, the close of the
applicable Restriction Period as a result of (i) any Acceleration of Restricted Stock Units in
accordance with the terms of this Plan or any applicable Award Agreement, (ii) any waiver, lapse or
termination of the Risk of Forfeiture applicable to Restricted Stock Units in accordance with the
terms of this Plan or any applicable Award Agreement or (iii) any shortening of the Restriction
Period applicable to any Restricted Stock Units in accordance with the terms of this Plan or any
applicable Award Agreement), the Company shall deliver or cause to be delivered to the Participant
that is the holder of such Restricted Stock Units a stock certificate in respect

11

 

of the shares of Common Stock subject to such Restricted Stock Units. Such certificate shall
be registered in the name of such Participant, and, if applicable, shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such shares of Common Stock
substantially in the following form:

The transferability of this certificate and the shares represented by
this certificate are subject to the terms and conditions of the Acme Packet, Inc. 2006 Equity Incentive Plan and an
Award Agreement entered into by the registered owner and Acme Packet, Inc. Copies of such Plan and
Agreement are on file in the offices of Acme Packet, Inc.

          (c) DIVIDENDS. At the discretion of the Committee, Participants may be entitled to receive
payments equivalent to any dividends declared with respect to Common Stock referenced in grants of
Restricted Stock Units but only following the close of the applicable Restriction Period and then
only if the underlying Common Stock shall have been earned. Unless the Committee shall provide
otherwise, any such dividend equivalents shall be paid, if at all, without interest or other
earnings.

          (d) EFFECT OF TERMINATION OF EMPLOYMENT, CONSULTING OR BOARD MEMBER RELATIONSHIP. Unless
otherwise determined by the Committee at or after grant and subject to the applicable provisions of
the Award Agreement, if the applicable original grantee’s association with the Company or any of
its Affiliates as an employee, director or consultant ends for any reason or no reason during the
Restriction Period, regardless of whether the end of such association is effected by the Company,
any such Affiliate or such original grantee (whether voluntarily or involuntarily, including
because an entity with which such original grantee has any such association ceases to be an
Affiliate of the Company), and immediately following the end of any such association, such original
grantee is not associated with the Company or any of its Affiliates as an employee, director or
consultant, or if such original grantee dies, then all outstanding Restricted Stock Units initially
granted to such original grantee that are still subject to Risk of Forfeiture, whether then held by
such original grantee or any other Participant, shall be forfeited or otherwise subject to return
to the Company in accordance with the terms of the applicable Award Agreement; PROVIDED, HOWEVER,
that military or sick leave or other bona fide leave shall not be deemed a termination of
employment, if it does not exceed the longer of ninety (90) days or the period during which the
absent original grantee’s reemployment rights, if any, are guaranteed by statute or by contract.

          (e) TRANSFERABILITY. Except as otherwise provided in this subsection (e), Restricted Stock
Units shall not be transferable, and no Restricted Stock Unit or interest therein may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated. The applicable Award
Agreement or the Committee (at or after the grant of a Restricted Stock Unit) may provide that such
Restricted Stock Unit may be transferred by the applicable Participant to a family member;
PROVIDED, HOWEVER, that any such transfer is without payment of any consideration whatsoever and
that no transfer of

12

 

a Restricted Stock Unit shall be valid unless first approved by the Committee, acting in its
sole discretion, unless such transfer is permitted under the applicable Award Agreement. For this
purpose, “family member” means any child, stepchild, grandchild, parent, stepparent, spouse, former
spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any person sharing the
applicable Participant’s household (other than a tenant or employee), a trust in which the
foregoing persons and/or the applicable Participant have more than fifty percent (50%) of the beneficial interests, a foundation in which
the foregoing persons and/or the applicable Participant control the management of assets, and any
other entity in which these persons and/or the applicable Participant own more than fifty percent
(50%) of the voting interests. The Committee may at any time or from time to time delegate to one
or more officers of the Company the authority to permit transfers of Restricted Stock Units to
third parties pursuant to this subsection (e), which authorization shall be exercised by such
officer or officers in accordance with guidelines established by the Committee at any time and from
time to time.

          (f) RIGHTS PENDING CLOSE OF APPLICABLE RESTRICTION PERIOD. No person holding Restricted Stock
Units shall be deemed for any purpose to be a stockholder of the Company with respect to any of the
shares of Common Stock subject to such Restricted Stock Units, except to the extent that the
Restricted Period with respect to such Restricted Stock Units shall have closed and, in addition, a
certificate shall have been issued for such shares of Common Stock and delivered to such person or
his agent. Shares of Common Stock subject to Restricted Stock Units shall be issued and outstanding
only if and to the extent that a stock certificate representing such shares has been issued and
delivered in accordance with the provisions of this Section 7.3.

     7.4. STOCK GRANTS.

          (a) IN GENERAL. Stock Grants shall be issued for such consideration, in cash, other property
or services, or any combination thereof, as is determined by the Committee. Without limiting the
generality of the foregoing, Stock Grants may be awarded in such circumstances as the Committee
deems appropriate, including without limitation in recognition of significant contributions to the
success of the Company or its Affiliates or in lieu of compensation otherwise already due. Stock
Grants shall be made without forfeiture conditions of any kind.

          (b) ISSUANCE OF CERTIFICATES. Each Participant receiving a Stock Grant shall be issued a stock
certificate in respect of such Stock Grant. Such certificate shall be registered in the name of
such Participant, and, if applicable, shall bear an appropriate legend referring to the terms,
conditions, and restrictions applicable to such Award substantially in the following form:

The transferability of this certificate and the shares represented by this certificate are
subject to the terms and conditions of the Acme Packet, Inc. 2006 Equity Incentive

13

 

Plan. A copy of such Plan is on file in the offices of Acme Packet, Inc.

          7.5. AWARDS TO PARTICIPANTS OUTSIDE THE UNITED STATES. The Committee may modify the terms of
any Award under the Plan granted to a Participant who is, at the time of grant or during the term
of the Award, resident or primarily employed outside of the United States in any manner deemed by
the Committee to be necessary or appropriate in order that such Award shall conform to laws,
regulations, and customs of the country in which the Participant is then resident or primarily
employed, or so that the value and other benefits of the Award to the Participant, as affected by foreign tax laws and other restrictions applicable as a
result of the Participant’s residence or employment abroad, shall be comparable to the value of
such an Award to a Participant who is resident or primarily employed in the United States. An Award
may be modified under this Section 7.5 in a manner that is inconsistent with the express terms of
the Plan, so long as such modifications will not contravene any applicable law or regulation. The
Committee may establish supplements to, or amendments, restatements, or alternative versions of the
Plan for the purpose of granting and administrating any such modified Award. No such modification,
supplement, amendment, restatement or alternative version may increase the share limit of Section
4.

8. ADJUSTMENT PROVISIONS

     8.1. ADJUSTMENT FOR CORPORATE ACTIONS. All of the share numbers set forth in the Plan reflect
the capital structure of the Company immediately after the closing of the initial public offering
of the Company’s Common Stock. Subject to the provisions of Section 8.2, if subsequent to such date
the outstanding shares of Common Stock (or any other securities covered by the Plan by reason of
the prior application of this Section) are increased, decreased, or exchanged for a different
number or kind of shares or other securities, or if additional shares or new or different shares or
other securities are distributed with respect to such shares of Common Stock or other securities,
through merger, consolidation, sale of all or substantially all the property of the Company,
reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock
split, or other distribution with respect to such shares of Common Stock, or other securities, an
appropriate and proportionate adjustment will be made in (i) the maximum numbers and kinds of
shares provided in Section 4, (ii) the numbers and kinds of shares or other securities subject to
the then outstanding Awards, (iii) the exercise price for each share or other unit of any other
securities subject to then outstanding Options (without change in the aggregate purchase price as
to which such Options remain exercisable), and (iv) the repurchase price of each share of
Restricted Stock then subject to a Risk of Forfeiture in the form of a Company repurchase right.

     8.2. CHANGE OF CONTROL. Subject to the applicable provisions of the Award Agreement, in the
event of a Change of Control, the Committee shall have the discretion, exercisable in advance of,
at the time of, or (except to the extent otherwise provided below) at any time after, the Change of
Control, to provide for any or all of the following (subject to and upon such terms as the
Committee may deem appropriate): (A) the

14

 

Acceleration, in whole or in part, of any or all outstanding Options (including Options that
are assumed or replaced pursuant to clause (D) below) that are not exercisable in full at the time
the Change of Control, such Acceleration to become effective at the time of the Change of Control,
or at such time following the Change of Control that the employment, consulting or Board member
relationship of the applicable Optionee or Optionees with the Company and its Affiliates
terminates, or at such other time or times as the Committee shall determine; (B) the lapse or
termination of the Risk of Forfeiture (including, without limitation, any or all of the Company’s
repurchase rights) with respect to outstanding Awards of Restricted Stock, such lapse or
termination to become effective at the time of the Change of Control, or at such time following the Change of Control
that the employment, consulting or Board member relationship with the Company and its Affiliates of
the Participant or Participants that hold such Awards of Restricted Stock (or the person to whom
such Awards of Restricted Stock were initially granted) terminates, or at such other time or times
as the Committee shall determine; (C) the lapse or termination of the Risk of Forfeiture with
respect to any or all outstanding Awards of Restricted Stock Units (including Restricted Stock
Units that are assumed or replaced pursuant to clause (D) below), such lapse or termination to
become effective at the time of the Change of Control, or at such time following the Change of
Control that the employment, consulting or Board member relationship with the Company and its
Affiliates of the Participant or Participants that hold such Awards of Restricted Stock Units (or
the person to whom such Awards of Restricted Stock Units were initially granted) terminates, or at
such other time or times as the Committee shall determine; (D) the assumption of outstanding
Options or Restricted Stock Units, or the substitution of outstanding Options or Restricted Stock
Units with equivalent options or equivalent restricted stock units, as the case may be, by the
acquiring or succeeding corporation or entity (or an affiliate thereof); (E) the termination of all
Options (other than Options that are assumed or substituted pursuant to clause (D) above) that
remain

15

 

outstanding at the time of the consummation of the Change of Control, PROVIDED THAT, the
Committee shall have made the determination to effect such termination prior to the consummation of
the Change of Control and the Committee shall have given, or caused to be given, to all
Participants written notice of such potential termination at least five business days prior to the
consummation of the Change of Control, and PROVIDED, FURTHER, THAT, if the Committee shall have
determined in its sole and absolute discretion that the Corporation make payment or provide
consideration to the holders of such terminated Options on account of such termination, which
payment or consideration shall be on such terms and conditions as the Committee shall have
determined (and which could consist of, in the Committee’s sole and absolute discretion, payment to
the applicable Optionee or Optionees of an amount of cash equal to the difference between the
Market Value of the shares of Common Stock for which the Option is then exercisable and the
aggregate exercise price for such shares under the Option), then the Corporation shall be required
to make such payment or provide such consideration in accordance with the terms and conditions so
determined by the Committee, otherwise the Corporation shall not be required to make any payment or
provide any consideration in connection with, or as a result of, the termination of Options
pursuant to the foregoing provisions of this clause (E); or (F) the termination of all Restricted
Stock Units (other than Restricted Stock Units that are assumed or substituted pursuant to clause
(D) above) that remain outstanding at the time of the consummation of the Change of Control,
PROVIDED THAT, if the Committee shall have determined in its sole and absolute discretion that the
Corporation make payment or provide consideration to the holders of such terminated Restricted
Stock Units on account of such termination, which payment or consideration shall be on such terms
and conditions as the Committee shall have determined (and which could consist of, in the
Committee’s sole and absolute discretion, payment to the applicable Participant or Participants of
an amount of cash equal to the Market Value of the shares of Common Stock subject to the terminated
Restricted Stock Units), then the Corporation shall be required to make such payment or provide
such consideration in accordance with the terms and conditions so determined by the Committee, otherwise
the Corporation shall not be required to make any payment or provide any consideration in
connection with, or as a result of, the termination of Restricted Stock Units pursuant to the
foregoing provisions of this clause (F). The provisions of this Section 8.2 shall not be construed
as to limit or restrict in any way the Committee’s general authority under Sections 7.1(d) or
7.2(d) hereof to Accelerate Options in whole or in part at any time or to waive or terminate at any
time any Risk of Forfeiture applicable to shares of Restricted Stock or Restricted Stock Units.
Each outstanding Option or Restricted Stock Unit that is assumed in connection with a Change of
Control, or is otherwise to continue in effect subsequent to a Change of Control, will be
appropriately adjusted, immediately after the Change of Control, as to the number and class of
securities and the price at which it may be exercised in accordance with Section 8.1.

     8.3. DISSOLUTION OR LIQUIDATION. Upon dissolution or liquidation of the Company, each
outstanding Option shall terminate, but the Optionee (if at the time he or she has an employment,
consulting or Board member relationship with the Company or any of its Affiliates) shall have the
right, immediately prior to such dissolution or liquidation, to exercise the Option to the extent
exercisable on the date of such dissolution or liquidation.

     8.4. RELATED MATTERS. Any adjustment in Awards made pursuant to this Section 8 shall be
determined and made, if at all, by the Committee and shall include any correlative modification of
terms, including exercise prices, rates of vesting or exercisability, Risks of Forfeiture and
applicable repurchase prices, which the Committee may deem necessary or appropriate so as to ensure
that the rights of the Participants in their respective Awards are not substantially diminished nor
enlarged as a result of the adjustment and corporate action other than as expressly contemplated in
this Section 8. No fraction of a share shall be purchasable or deliverable upon exercise, but in
the event any adjustment hereunder of the number of shares covered by an Award shall cause such
number to include a fraction of a share, such number of shares shall be adjusted to the nearest
smaller whole number of shares. No adjustment of an Option exercise price per share pursuant to
this Section 8 shall result in an exercise price which is less than the par value of the Common
Stock.

16

 

9. SETTLEMENT OF AWARDS

     9.1. VIOLATION OF LAW. Notwithstanding any other provision of the Plan or the relevant Award
Agreement, if, at any time, in the reasonable opinion of the Company, the issuance of shares of
Common Stock covered by an Award may constitute a violation of law, then the Company may delay such
issuance and the delivery of a certificate for such shares until (i) approval shall have been
obtained from such governmental agencies, other than the Securities and Exchange Commission, as may
be required under any applicable law, rule, or regulation and (ii) in the case where such issuance
would constitute a violation of a law administered by or a regulation of the Securities and
Exchange Commission, one of the following conditions shall have been satisfied:

          (a) the shares are at the time of the issue of such shares effectively registered under the Securities Act; or

          (b) the Company shall have determined, on such basis as it deems appropriate (including an
opinion of counsel in form and substance satisfactory to the Company) that the sale, transfer,
assignment, pledge, encumbrance or other disposition of such shares or such beneficial interest, as
the case may be, does not require registration under the Securities Act or any applicable state
securities laws.

     9.2. CORPORATE RESTRICTIONS ON RIGHTS IN STOCK. Any Common Stock to be issued pursuant to
Awards granted under the Plan shall be subject to all restrictions upon the transfer thereof which
may be now or hereafter imposed by the Certificate of Incorporation and the By-laws of the Company,
each as amended and in effect from time to time. Whenever Common Stock is to be issued pursuant to
an Award, if the Committee so directs at the time of grant (or, if such Award is an Option, at any
time prior to the exercise thereof), the Company shall be under no obligation, notwithstanding any
other provision of the Plan or the relevant Award Agreement to the contrary, to issue such shares
until such time, if ever, as the recipient of the Award (and any person who exercises any Option,
in whole or in part), shall have become a party to and bound by any agreement that the Committee
shall require in its sole discretion. In addition, any Common Stock to be issued pursuant to Awards
granted under the Plan shall be subject to all stop-transfer orders and other restrictions as the
Committee may deem advisable under the rules, regulations and other requirements of any stock
exchange upon which the Common Stock is then listed, and any applicable federal or state securities
laws, and the Committee may cause a legend or legends to be put on any such certificates to make
appropriate reference to such restrictions.

     9.3. INVESTMENT REPRESENTATIONS. The Company shall be under no obligation to issue any shares
covered by an Award unless the shares to be issued pursuant to Awards granted under the Plan have
been effectively registered under the Securities Act or the Participant shall have made such
written representations to the Company (upon which the Company believes it may reasonably rely) as
the Company may deem necessary or appropriate for purposes of confirming that the issuance of such
shares will be exempt from the registration requirements of that Act and any applicable state
securities laws and

17

 

otherwise in compliance with all applicable laws, rules and regulations, including but not
limited to that the Participant is acquiring shares for his or her own account for the purpose of
investment and not with a view to, or for sale in connection with, the distribution of any such
shares.

     9.4. REGISTRATION. If the Company shall deem it necessary or desirable to register under the
Securities Act or other applicable statutes any shares of Common Stock issued or to be issued
pursuant to Awards granted under the Plan, or to qualify any such shares of Common Stock for
exemption from the Securities Act or other applicable statutes, then the Company shall take such
action at its own expense. The Company may require from each recipient of an Award, or each holder
of shares of Common Stock acquired pursuant to the Plan, such information in writing for use in any
registration statement, prospectus, preliminary prospectus or offering circular as is reasonably
necessary for such purpose and may require reasonable indemnity to the Company and its officers and
directors from such holder against all losses, claims, damage and liabilities arising from such use of the
information so furnished and caused by any untrue statement of any material fact therein or caused
by the omission to state a material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances under which they were made.

     9.5. LOCK-UP. Without the prior written consent of the Company or the managing underwriter in
any public offering of shares of Common Stock, no Participant shall sell, make any short sale of,
loan, grant any option for the purchase of, pledge or otherwise encumber, or otherwise dispose of,
any shares of Common Stock during the one hundred-eighty (180) day period commencing on the
effective date of the registration statement relating to any underwritten public offering of
securities of the Company. The foregoing restrictions are intended and shall be construed so as to
preclude any Participant from engaging in any hedging or other transaction that is designed to or
reasonably could be expected to lead to or result in, a sale or disposition of any shares of Common
Stock during such period even if such shares of Common Stock are or would be disposed of by someone
other than such Participant. Such prohibited hedging or other transactions would include, without
limitation, any short sale (whether or not against the box) or any purchase, sale or grant of any
right (including without limitation any put or call option) with respect to any shares of Common
Stock or with respect to any security that includes, relates to, or derives any significant part of
its value from any shares of Common Stock. Without limiting the generality and applicability of the
foregoing provisions of this Section 9.5, if, in connection with any underwritten public offering
of securities of the Company, the managing underwriter of such offering requires that the Company’s
directors and officers enter into a lock-up agreement, then (a) each Participant (regardless of
whether or not such Participant has complied or complies with the provisions of clause (b) below)
shall be bound by, and shall be deemed to have agreed to, the same lock-up terms as those to which
the Company’s directors and officers are required to adhere; and (b) at the request of the Company
or such managing underwriter, each Participant shall execute and deliver a lock-up agreement in
form and substance equivalent to that which is required to be executed by the Company’s directors
and officers.

18

 

     9.6. PLACEMENT OF LEGENDS; STOP ORDERS; ETC. Each share of Common Stock to be issued pursuant
to Awards granted under the Plan may bear a reference to the investment representations made in
accordance with Section 9.3 in addition to any other applicable restrictions under the Plan, the
terms of the Award and, if applicable, under any agreement between the Company and any Optionee
and/or Participant, and to the fact that no registration statement has been filed with the
Securities and Exchange Commission in respect to such shares of Common Stock. All certificates for
shares of Common Stock or other securities delivered under the Plan shall be subject to such stock
transfer orders and other restrictions as the Committee may deem advisable under the rules,
regulations, and other requirements of any stock exchange upon which the Common Stock is then
listed, and any applicable federal or state securities law, and the Committee may cause a legend or
legends to be placed on any such certificates to make appropriate reference to such restrictions.

     9.7. TAX WITHHOLDING. Whenever shares of Common Stock are issued or to be issued pursuant to
Awards granted under the Plan, the Company shall have the right to require the recipient to remit to the Company an amount sufficient to satisfy federal,
state, local or other withholding tax requirements if, when, and to the extent required by law
(whether so required to secure for the Company an otherwise available tax deduction or otherwise)
prior to the delivery of any certificate or certificates for such shares. The obligations of the
Company under the Plan shall be conditional on satisfaction of all such withholding obligations and
the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any
payment of any kind otherwise due to the recipient of an Award. However, in such cases Participants
may elect, subject to the approval of the Committee, acting in its sole discretion, to satisfy an
applicable withholding requirement, in whole or in part, by having the Company withhold shares to
satisfy their tax obligations. Participants may only elect to have shares of Common Stock withheld
having a Market Value on the date the tax is to be determined equal to the minimum statutory total
tax which could be imposed on the transaction. All elections shall be irrevocable, made in writing,
signed by the Participant, and shall be subject to any restrictions or limitations that the
Committee deems appropriate.

10. RESERVATION OF STOCK

     The Company shall at all times during the term of the Plan and any outstanding Options granted
hereunder reserve or otherwise keep available such number of shares of Common Stock as will be
sufficient to satisfy the requirements of the Plan (if then in effect) and such Options and shall
pay all fees and expenses necessarily incurred by the Company in connection therewith.

11. NO SPECIAL SERVICE RIGHTS

     Nothing contained in the Plan or in any Award Agreement shall confer upon any recipient of an
Award any right with respect to the continuation of his or her employment, consulting or Board
member relationship or other association with the Company (or any Affiliate), or interfere in any
way with the right of the Company (or

19

 

any Affiliate), subject to the terms of any separate employment, consulting or Board member
agreement or provision of law or corporate articles or by-laws to the contrary, at any time to
terminate such employment, consulting or Board member agreement or to increase or decrease, or
otherwise adjust, the other terms and conditions of the recipient’s employment, consulting or Board
member relationship or other association with the Company and its Affiliates.

12. NONEXCLUSIVITY OF THE PLAN

     Neither the adoption of the Plan by the Board nor the submission of the Plan to the
stockholders of the Company shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable, including without
limitation, the granting of stock options, restricted stock and restricted stock units other than
under the Plan, and such arrangements may be either applicable generally or only in specific cases.

13. TERMINATION AND AMENDMENT OF THE PLAN

     The Board may at any time terminate the Plan or make such amendments or modifications of the
Plan as it shall deem advisable. In the event of the termination of the Plan, the terms of the Plan
shall survive any such termination with respect to any Award that is outstanding on the date of
such termination, unless the holder of such Award agrees in writing to terminate such Award or to
terminate all or any of the provisions of the Plan that apply to such Award. Unless the Board
otherwise expressly provides, any amendment or modification of the Plan shall affect the terms of
any Award outstanding on the date of such amendment or modification as well as the terms of any
Award made from and after the date of such amendment or modification; PROVIDED, HOWEVER, that,
except to the extent otherwise provided in the last sentence of this paragraph, (i) no amendment or
modification of the Plan shall apply to any Award that is outstanding on the date of such amendment
or modification if such amendment or modification would reduce the number of shares subject to such
Award, increase the purchase price applicable to shares subject to such Award or materially
adversely affect the provisions applicable to such Award that relate to the vesting or
exercisability of such Award or of the shares subject to such Award, (ii) no amendment or
modification of the Plan shall apply to any Incentive Option that is outstanding on the date of
such amendment or modification if such amendment or modification would result in such Incentive
Option no longer being treated as an “incentive stock option” within the meaning of Section 422 of
the Code and (iii) no amendment or modification of the Plan shall apply to any Award that is
outstanding on the date of such amendment or modification unless such amendment or modification of
the Plan shall also apply to all other Awards outstanding on the date of such amendment or
modification. In the event of any amendment or modification of the Plan that is described in clause
(i), (ii) or (iii) of the foregoing proviso, such amendment or modification of the Plan shall apply
to any Award outstanding on the date of such amendment or modification only if the recipient of
such Award consents in writing thereto.

20

 

     The Committee may amend or modify, prospectively or retroactively, the terms of any
outstanding Award without amending or modifying the terms of the Plan itself, PROVIDED THAT as
amended or modified such Award is consistent with the terms of the Plan as in effect at the time of
the amendment or modification of such Award, but no such amendment or modification of such Award
shall, without the written consent of the recipient of such Award, reduce the number of shares
subject to such Award, increase the purchase price applicable to shares subject to such Award,
adversely affect the provisions applicable to such Award that relate to the vesting or
exercisability of such Award or of the shares subject to such Award, or otherwise materially
adversely affect the terms of such Award (except for amendments or modifications to the terms of
such Award or of the stock subject to such Award that are expressly permitted by the terms of the
Plan or that result from any amendment or modification of the Plan in accordance with the
provisions of the first paragraph of this Section 13), or, if such Award is an Incentive Option,
result in such Incentive Option no longer being treated as an “incentive stock option” within the
meaning of Section 422 of the Code. Notwithstanding any of the foregoing provisions of this
paragraph to the contrary, the Committee is expressly authorized to amend any or all outstanding
Options to effect a repricing thereof by lowering the purchase price applicable to the shares of
Common Stock subject to such Option or Options without the approval of the stockholders of the
Company or the holder or holders of such Option or Options, and, in connection with such repricing, to amend or modify any of the
other terms of the Option or Options so repriced, including, without limitation, for purposes of
reducing the number of shares subject to such Option or Options or for purposes of adversely
affecting the provisions applicable to such Option or Options that relate to the vesting or
exercisability thereof, in each case without the approval of stockholders of the Company or the
holder or holders of such Option or Options.

     In addition, notwithstanding anything express or implied in any of the foregoing provisions of
this Section 13 to the contrary, the Committee may amend or modify, prospectively or retroactively,
the terms of any outstanding Award to the extent the Committee reasonably determines necessary or
appropriate to conform such Award to the requirements of Section 409A of the Code (concerning
non-qualified deferred compensation), if applicable.

14. INTERPRETATION OF THE PLAN

     In the event of any conflict between the provisions of this Plan and the provisions of any
applicable Award Agreement, the provisions of this Plan shall control, except if and to the extent
that the conflicting provision in such Award Agreement was authorized and approved by the Committee
at the time of the grant of the Award evidenced by such Award Agreement or is ratified by the
Committee at any time subsequent to the grant of such Award, in which case the conflicting
provision in such Award Agreement shall control. Without limiting the generality of the foregoing
provisions of this Section 14, insofar as possible the provisions of the Plan and such Award
Agreement shall be construed so as to give full force and effect to all such provisions. In the
event of any conflict between the provisions of this Plan and the provisions of any other agreement

21

 

between the Company and the Optionee and/or Participant, the provisions of such agreement
shall control except as required to fulfill the intention that this Plan constitute an incentive
stock option plan within the meaning of Section 422 of the Code, but insofar as possible the
provisions of the Plan and any such agreement shall be construed so as to give full force and
effect to all such provisions.

15. NOTICES AND OTHER COMMUNICATIONS

     Any notice, demand, request or other communication hereunder to any party shall be deemed to
be sufficient if contained in a written instrument delivered in person or duly sent by first class
registered, certified or overnight mail, postage prepaid, or telecopied with a confirmation copy by
regular, certified or overnight mail, addressed or telecopied, as the case may be, (i) if to the
recipient of an Award, at his or her residence address last filed with the Company and (ii) if to
the Company, at its principal place of business, addressed to the attention of its Chief Executive
Officer, or to such other address or telecopier number, as the case may be, as the addressee may
have designated by notice to the addressor. All such notices, requests, demands and other
communications shall be deemed to have been received: (i) in the case of personal delivery, on the
date of such delivery; (ii) in the case of mailing, when received by the addressee; and (iii) in
the case of facsimile transmission, when confirmed by facsimile machine report.

16. GOVERNING LAW

     The Plan and all Award Agreements and actions taken thereunder shall be governed, interpreted
and enforced in accordance with the laws of The Commonwealth of Massachusetts, without regard to
the conflict of laws principles thereof.

17. EFFECTIVENESS OF PLAN

     This 2006 Equity Incentive Plan was approved on September 19, 2006 by the Board and September
19, 2006 by the stockholders of the Company, and shall take effect only upon the consummation of
the Company’s initial public offering of its Common Stock.

22Exhibit 10.1

Exhibit 10.1

EXECUTIVE SEVERANCE PLAN OF NEWMONT

Effective October 26, 2011

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	ARTICLE I

	 
	 	 	 	 
	DEFINITIONS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE II

ELIGIBILITY

	 
	 	 	 	 
	Section 2.01. General Eligibility Requirements
	 	 	3	 
	 
	 	 	 	 
	ARTICLE III

BENEFITS

	 
	 	 	 	 
	Section 3.01. Basic Severance Benefits
	 	 	4	 
	Section 3.02. Coordination With Certain Change in Control Programs
	 	 	4	 
	Section 3.03. Payment of Severance Benefits
	 	 	4	 
	Section 3.04. Other Benefits
	 	 	5	 
	Section 3.05. Return of Benefits in the Event of Cause
	 	 	5	 
	 
	 	 	 	 
	ARTICLE IV

	 
	 	 	 	 
	CONTINUATION OF HEALTH CARE COVERAGE
	 	 	6	 
	 
	 	 	 	 
	ARTICLE V

	 
	 	 	 	 
	PROTECTION OF MEDICAL PRIVACY
	 	 	6	 
	 
	 	 	 	 
	ARTICLE VI

ADMINISTRATION COMMITTEE AND CLAIMS FOR BENEFITS

	 
	 	 	 	 
	Section 6.01. Appointment of the Administration Committee
	 	 	6	 
	Section 6.02. Responsibilities of the Administration Committee
	 	 	6	 
	Section 6.03. Organization of the Administration Committee
	 	 	6	 
	Section 6.04. Indemnification of Administration Committee Members
	 	 	7	 
	Section 6.05. Benefits Claims and Appeals
	 	 	7	 
	 
	 	 	 	 
	ARTICLE VII

MISCELLANEOUS

	 
	 	 	 	 
	Section 7.01. Plan Documentation
	 	 	7	 
	Section 7.02. Funding of Severance Benefits
	 	 	7	 
	Section 7.03. Amount Payable Upon Death of Eligible Participant
	 	 	7	 
	Section 7.04. Confidential Information
	 	 	8	 
	Section 7.05. Release
	 	 	8	 

Executive Severance Plan of Newmont

Effective October 26, 2011

 

i

 

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	Section 7.06. Employment Status
	 	 	8	 
	Section 7.07. Validity and Severability
	 	 	8	 
	Section 7.08. Governing Law
	 	 	8	 
	Section 7.09. Right of Offset
	 	 	8	 
	Section 7.10. Conformance With Applicable Laws
	 	 	9	 
	Section 7.11. Payments Due Minors or Incapacitated Persons
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VIII

DURATION, AMENDMENT AND TERMINATION

	 
	 	 	 	 
	Section 8.01. Duration
	 	 	9	 
	Section 8.02. Amendment or Termination
	 	 	9	 

Executive Severance Plan of Newmont

Effective October 26, 2011

 

ii

 

EXECUTIVE SEVERANCE PLAN OF NEWMONT

INTRODUCTION

Newmont USA Limited, and certain related entities (“Newmont”), hereby establishes this
Executive Severance Plan of Newmont (the “Plan”) effective October 26, 2011 for the purpose of
providing certain Executive Employees as defined below with severance benefits.

This Plan is intended to constitute a health and welfare benefit plan under the Employee
Retirement Income Security Act of 1974 and not subject to the provisions of Internal Revenue Code
Section 409A. Notwithstanding any provision herein to the contrary, Newmont explicitly reserves
the right to amend or modify the Plan in any manner necessary to comply with any laws or
regulations that may be determined by Newmont as applicable to the Plan.

ARTICLE I

DEFINITIONS

The following definitions shall apply to the Plan.

“Administration Committee” means the committee appointed by the Board or its delegate in
writing which serves in accordance with Article VI.

“Affiliated Entity” means any corporation or other entity, now or hereafter formed, that is or
shall become affiliated with the Employer, either directly or indirectly, through stock ownership
or control, and which is (a) included in the controlled group of corporations (within the meaning
of Code Section 1563(a) without regard to Code Section 1563(a)(4) and Code Section 1563(e)(3)(C))
in which the Employer is also included or (b) included in the group of entities (whether or not
incorporated) under common control (within the meaning of Code Section 414(c)) in which the
Employer is also included.

“Board” means the Board of Directors of Newmont USA Limited.

“Cause” means: a) engagement in illegal conduct or gross negligence or willful misconduct,
provided that if the Executive Employee acted in accordance with an authorized written opinion of
Employer’s, or an affiliated entity’s, legal counsel, such action will not constitute “Cause;” b)
any dishonest or fraudulent activity by the Executive Employee or the reasonable belief by the
Employer of the Executive Employee’s breach of any contract, agreement or representation with the
Employer or an affiliated entity, or c) violation of Newmont Mining Corporation’s Code of Business
Ethics and Conduct.

“Code” means the Internal Revenue Code of 1986, as amended.

“Date of Termination” means the date on which a Executive Employee ceases to be an Employee of
the Employer or its Affiliated Entities.

 

 

 

“Disability” means a condition that causes the Employee to terminate employment with the
Employer and/or all participating Employers and the Employee has immediately begun receiving
benefits from a disability plan of Newmont following termination of employment.

“Employee” means an employee of an Employer who is not (a) an individual who performs services
for the Employer under an agreement, contract or arrangement (which may be written, oral or
evidenced by the Employer’s payroll practice) between the Employer and the individual or with any
other organization that provides the services of the individual to the Employer pursuant to which
the individual is initially classified or treated as an independent contractor or whose
remuneration for services has not been treated initially as subject to the withholding of federal
income tax pursuant to Code Section 3401, or who is otherwise treated as an employee of an entity
other than the Employer, irrespective of whether he or she is treated as an employee of the
Employer under common-law employment principles or pursuant to the provisions of Code Section
414(m), 414(n) or 414(o), even if the individual is subsequently reclassified as a common-law
employee as a result of a final decree of a court of competent jurisdiction, the settlement of an
administrative or judicial proceeding or a determination by the Internal Revenue Service, the
Department of the Treasury or the Department of Labor, (b) an individual who is a leased employee,
(c) a temporary employee, or (d) an individual covered by a collective bargaining agreement.

“Employer” means Newmont USA Limited and any Affiliated Entities.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Executive Employee” means an Employee with the classification or title of Chief Executive
Officer (“CEO”), Executive Vice President (“E2-E3”), Senior Vice President (“E4”), Vice President
(“E5”), Group Executive (“E6”) or Director (“109”) and is on the Newmont’s United States payroll.

“Involuntary Termination” means any involuntary termination of employment of an Executive
Employee by the Employer for any reason other than: (a) Cause, as determined in the sole discretion
of Employer, (or if after termination it is determined the Executive Employee could have been
terminated for Cause), (b) termination of employment due to disability under a disability plan of
Newmont (as determined by the Administration Committee or its delegate in its sole discretion), (c)
retirement as of Normal or Early Retirement pursuant to the Pension Plan of Newmont as those terms
are defined therein, and (d) death of the Executive Employee prior to termination of employment.
An Involuntary Termination shall not be deemed to have occurred if the Executive Employee accepts
any position with Employer, or the Employer offers the Executive Employee employment within a 75
mile radius of the Executive Employee’s prior position, at Executive Employee’s same or higher
annual base salary and within one compensation grade level of Executive Employee’s prior position.

“Plan” means this Executive Severance Plan of Newmont.

“Salary” means the Executive Employee’s annual base salary as of termination of employment.
Salary shall not include any extra pay for foreign service or foreign assignment, hardship pay,
moving allowances, the cost of goods and services, danger pay, the value of any
stock/equity based compensation (including but not limited to stock options, deferred stock,
restricted stock, restricted stock units, common stock or performance stock units).

 

2

 

“Service” means continuous service with the Employer or an Affiliated Entity commencing on the
Executive Employee’s date of hire and each successive 12-month period.

“Target Annual Bonus” means the Annual Incentive Compensation Payroll Practice or other annual
bonus payroll practice amount that the Executive Employee would have received for the year in which
his Date of Termination occurs if the target goals had been achieved. “Annual Bonus” shall not
include any extra pay for foreign service or foreign assignment, hardship pay, moving allowances,
the cost of goods and services, danger pay, the value of any stock/equity based compensation
(including but not limited to stock options, deferred stock, restricted stock, restricted stock
units, common stock or performance stock units).

ARTICLE II

ELIGIBILITY

Section 2.01. General Eligibility Requirements. The benefits provided under this Plan will be
available to any Executive Employee employed by Newmont or any of its U.S. based affiliates in
salary grades 109 to E-1 at the time of termination of employment provided the following
requirements are met:

(a) The Executive Employee leaves employment with the Employer due to Involuntary
Termination; and

(b) The Executive Employee delivers to the Administration Committee or its delegate,
within the timeframe prescribed by the Administration Committee or its delegate, an executed
Agreement and Release that conforms to Section 7.05 and is acceptable to the Administration
Committee or its delegate and the Agreement and Release is not subsequently revoked.

Subject to the coordination provisions of Section 3.02 pertaining to change in control plans,
if an Executive Employee is eligible for benefits under this Plan, the Executive Employee shall not
be entitled to severance benefits under any other severance plan of Newmont, including but not
limited to the Severance Plan of Newmont.

 

3

 

ARTICLE III

BENEFITS

Section 3.01. Basic Severance Benefits. Severance benefits shall consist of a portion of
Salary and Target Annual Bonus calculated as follows:

(a) Salary Schedule by Grade

	 	 	 	 	 	 	 
	Salary Grade	 	 	 	 	 	Benefit
	CEO

	 	 	E1	 	 	24 months of Salary
	 
	 	 	 	 	 	 
	EVP

	 	 	E2

E3	 	 	15 months of Salary + 1 month of Salary for
every year of Service up to a maximum total of 18 months of Salary
	 
	 	 	 	 	 	 
	SVP

	 	 	E4	 	 	12 months of Salary + 1 month of Salary for
every year of Service up to a maximum total of
15 months of Salary
	 
	 	 	 	 	 	 
	VP

	 	 	E5	 	 	12 months of Salary
	 
	 	 	 	 	 	 
	Group Executive

	 	 	E6	 	 	9 months of Salary + 1 month of Salary for
every year of Service up to a maximum total of
12 months of Salary
	 
	 	 	 	 	 	 
	Senior Director

	 	 	109	 	 	6 months of Salary + 1 month of Salary for
every year of Service up to a maximum total of
9 months of Salary

Monthly Salary is determined in one-twelfth increments based on regular annual Salary
at the time of termination of employment.

(b) The Executive Employee’s Target Annual Bonus pro-rated for the percentage of the
calendar year of termination for which the Employee was employed by Employer. In the event
that an Employee experiences an Involuntary Termination at the beginning of a calendar year
before the Annual Incentive Compensation Payroll Practice or other annual bonus payroll
practice amount is paid for the prior calendar year, the Employee shall receive (i) the
Target Annual Bonus pro-rated for the percentage of the calendar year of termination for
which the Employee was employed by Employer and (ii) the actual Annual Incentive
Compensation Payroll Practice or other annual bonus payroll practice amount for the prior
calendar year when such payment is made in the normal course of events.

Section 3.02. Coordination With Certain Change in Control Programs. If an Executive Employee
who is eligible for benefits and payments under this Plan is also eligible to receive benefits and
payments under a change of control plan of Newmont, the Executive Employee shall only be entitled
to receive payments and benefits under this Plan or under the applicable change of control plan,
but not both, and shall be entitled to receive the greater of the benefits and payments otherwise
payable under this Plan or the benefits and payments otherwise payable under the applicable change
of control plan.

Section 3.03. Payment of Severance Benefits. The amount of severance benefits payable to an
Executive Employee under this Article III shall be paid in a single cash lump sum as soon as
administratively possible following the date of the Executive Employee’s termination of employment
and the Executive Employee’s execution of a release described in Section 7.05 and the expiration of
the applicable revocation period. Such amount shall be paid no later than the fifteenth day of the
third month following the year in which the Executive Employee met the requirements to receive
benefits under this Plan.

 

4

 

Section 3.04. Other Benefits.

(a) Medical, Vision, Prescription Drug and Dental Coverage. An Executive Employee who
is eligible to receive severance benefits under this Plan will be entitled to Employer paid
Consolidated Omnibus Budget Reconciliation Act (“COBRA”) coverage for medical, vision,
prescription drug and dental plan (if and as such plans then exist) for a period of months
equal to the number of months of Salary that the Executive Employee receives as a severance
benefit as determined under Article III, if the Executive Employee elects COBRA coverage.
However, in no event shall the Employer paid COBRA coverage extend beyond the period of time
that the Executive Employee would otherwise be entitled to continue coverage under the
provisions of COBRA. The COBRA period will run concurrent with medical coverage provided
for under this Section. In the event the number of months of salary paid as a severance
benefit is less than the Employee’s COBRA period, COBRA coverage shall continue at the
Employee’s expense for the remaining COBRA period.

(b) Life Insurance Plan. An Executive Employee will continue to be covered under the
basic group term life insurance portion of the Employer’s life insurance and accidental
death and dismemberment insurance plan (the “Life Insurance Plan”) (if and as such plan then
exists) to the extent such benefits are paid by the Employer insuring the lives of the
Executive Employee and his spouse for a period of months equal to the number of months of
Salary that the Executive Employee receives as a severance benefit, but such coverage under
the Life Insurance Plan shall not exceed six months from the date of the Executive
Employee’s termination of employment. Coverage under the Life Insurance Plan will cease at
the end of such period without any notification by the Employer to the Executive Employee.
Any supplemental life insurance coverage and accidental death and dismemberment coverage
under the Life Insurance Plan will terminate on the Executive Employee’s termination of
employment.

(c) Outplacement Services. An Executive Employee who is eligible to receive severance
benefits under this Plan will be entitled to outplacement services with a vendor of
Employer’s choice for the period of months of Salary payable under this Plan, not to exceed
12 months beginning with the month immediately following termination of employment.

(d) Controlling Plan Provisions. Benefits provided pursuant to this Section 3.04 shall
be governed by the respective benefit plans including rules pertaining to HIPAA, COBRA and
claims for benefits.

Section 3.05. Return of Benefits in the Event of Cause. In the event the Employer determines
that Cause existed for the termination of an Executive Employee’s employment after the Executive
Employee has been offered or received benefits pursuant to this Plan, the Employer shall be
entitled to recover such amounts from the Executive Employee or offset any other amounts owed by
the Employer to the Executive Employee.

 

5

 

ARTICLE IV

CONTINUATION OF HEALTH CARE COVERAGE

Continuation of coverage under the Plan shall be permitted only with respect to health
coverage described in Section 3.04(a) in accordance with the applicable health plan and Section
3.04(a) of this Plan. No continuation of coverage is otherwise permitted under this Plan.

ARTICLE V

PROTECTION OF MEDICAL PRIVACY

The Plan is generally not subject to HIPAA. HIPAA shall apply only with respect to medical
benefits described in Section 3.04(a) in accordance with the applicable health plan.

ARTICLE VI

ADMINISTRATION
COMMITTEE AND

CLAIMS FOR BENEFITS

Section 6.01. Appointment of the Administration Committee. The Board or its delegate shall
appoint the members of the Administration Committee who may be, but need not be, officers,
directors or Employees of Newmont. The members of the Administration Committee shall hold office
at the pleasure of the Board and shall serve without compensation.

Section 6.02. Responsibilities of the Administration Committee. The Administration Committee
shall be responsible for the administration, operation and interpretation of the Plan. The
Administration Committee shall establish rules from time to time for the transaction of its
business. The Administration Committee shall have the exclusive right to interpret the Plan’s
provisions and to exercise discretion where necessary or appropriate in the interpretation and
administration of the Plan and to decide any and all matters arising thereunder or in connection
with the administration of the Plan. Such decisions, actions and records of the Administration
Committee shall be conclusive and binding upon all persons having or claiming to have any right or
interest in or under the Plan. Any decisions by the Administration Committee in respect of
eligibility for benefits under the Plan shall be subject to de novo review.

The Administration Committee may delegate some or all of its authority under the Plan to any
person, persons or entities. The Administration Committee may remove any duly appointed delegate
at any time at its sole discretion.

Section 6.03. Organization of the Administration Committee. The Administration Committee
shall adopt such rules as it deems desirable for the conduct of its affairs and for the
administration of its duties under the Plan. The Administration Committee may appoint agents (who
need not be members of the Administration Committee) to whom it may delegate such powers as it
deems appropriate. The Administration Committee may make its determinations with or without
meetings, and it may authorize one or more of its members or agents to sign instructions, notices
and determinations on its behalf. Any action taken by the Administration Committee shall be taken
by a majority of the members attending a meeting of the
Administration Committee (provided at least a majority of the Administration Committee members
are at such meeting) or by a majority of the members of the Administration Committee executing a
written instrument setting forth the action taken.

 

6

 

Section 6.04. Indemnification of Administration Committee Members. Newmont shall indemnify
the members of the Administration Committee against any and all claims, loss, damages, expense
(including attorney fees) and liability arising from any action or failure to act, except when the
same is judicially determined to be due to the gross negligence or willful misconduct of such
member. Such indemnification shall include the Administration Committee members or any individuals
delegated authority by the Administration Committee if such individuals are employed by Newmont or
an Affiliated Entity. Newmont does not hereby indemnify any entity or person that is not an
Employee of Newmont or an Affiliated Entity. The indemnification provided hereunder shall continue
as to a person who has ceased acting as a director, officer, member, agent or Employee of the
Employer, and such person’s rights shall inure to the benefit of his heirs and representatives.

Section 6.05. Benefits Claims and Appeals. The intention of Newmont is that the Plan be
construed as a “welfare plan,” as defined in Section 3(1) of ERISA, and this Section 6.05 shall
apply. The Administration Committee shall establish a claims and appeals procedure applicable to
persons eligible to participate in the Plan. Unless otherwise required by applicable law, such
procedures will provide that any such person has not less than 60 days following receipt of any
adverse benefit determination within which to appeal the determination in writing with the
Administration Committee, and that the Administration Committee must respond in writing within 60
days of receiving the appeal, specifically identifying those Plan provisions on which the benefit
denial was based and indicating what, if any, information such person must supply in order to
perfect a claim for benefits. The claims procedures of this Section must be exhausted prior to an
individual bringing a legal claim or action for benefits under the Plan.

ARTICLE VII

MISCELLANEOUS

Section 7.01. Plan Documentation. This Plan shall constitute the “plan document” for purposes
of ERISA and other laws that may apply. In the event the provisions of this Plan are inconsistent
with other documents or communications, the provisions of this Plan shall control.

Section 7.02. Funding of Severance Benefits. All severance benefit payments under this Plan
will be made by the Employer from its general funds and no Executive Employee shall have any right
with respect to any specific assets of the Employer and shall be a general creditor of the Employer
with respect to any amounts payable hereunder.

Section 7.03. Amount Payable Upon Death of Eligible Participant. If an Executive Employee
dies after an Involuntary Termination of employment under the provisions of this Plan but before
receiving payment of the amount due hereunder, such amount shall be paid, in a cash lump sum, to
the beneficiary or beneficiaries designated by the Executive Employee to receive life insurance
proceeds under the Employer’s Life Insurance Plan. In the absence of an effective
beneficiary designation, any amount payable hereunder following the death of an Executive
Employee shall be paid to the Executive Employee’s estate.

 

7

 

Section 7.04. Confidential Information. Each Executive Employee shall hold in a fiduciary
capacity for the benefit of the Employer all secret or confidential information, knowledge or data
relating to the Employer or any of its Affiliated Entities, and their respective businesses, which
shall have been obtained by the Executive Employee during the Executive Employee’s employment by
the Employer or any of its Affiliated Entities and which shall not be or become public knowledge
(other than by acts by the Executive Employee or representatives of the Executive Employee in
violation of this Plan). As a condition of participation in this Plan, after termination of an
Executive Employee’s employment with the Employer, the Executive Employee shall not, without the
prior written consent of the Employer or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone other than the Employer
and those designated by it.

Section 7.05. Release. As a condition to receipt of any benefits under this Plan, an
Executive Employee eligible to receive benefits under this Plan shall execute an Agreement and
Release, under which the Executive Employee: (a) releases the Employer and Affiliated Entities and
any director, officer, Employee, agent or representative from any cause of action arising out of
the Executive Employee’s employment with and termination from an Employer; (b) agrees to
non-disparagement of Employer and Affiliated Entities, and; (c) agrees to a non-solicitation clause
of Employer’s and Affiliated Entities’ Employees. Such release shall include, but shall not be
limited to, a waiver by the Executive Employee of pursuit of any action based on wrongful
termination, state or federal nondiscrimination in employment laws or state and federal
compensation and benefits laws (including ERISA).

Section 7.06. Employment Status. This Plan does not constitute a contract of employment or
impose on the Employee or the Employer any obligation for the Employee to remain an Employee or
change the status of the Executive Employee’s employment or the policies of the Employer regarding
termination of employment.

Section 7.07. Validity and Severability. The invalidity or unenforceability of any provision
of the Plan shall not affect the validity or enforceability of any other provision of the Plan,
which shall remain in full force and effect, and any prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 7.08. Governing Law. The validity, interpretation, construction and performance of
the Plan shall in all respects be governed by the laws of Colorado, without reference to principles
of conflict of law, except to the extent preempted by federal law.

Section 7.09. Right of Offset. To the extent permitted by applicable law, the Employer may,
in its sole discretion, apply any payments otherwise due and payable under this Plan against
Employee or terminated Employee loans outstanding to the Employer or other debts of the Employee or
terminated Employee to the Employer. By accepting payments under this Plan, the Executive Employee
shall consent to the reduction of any compensation paid to the Executive Employee by the Employer
to the extent the Executive Employee receives an overpayment from the Plan. Notwithstanding the
foregoing, however, the Employer shall not offset any benefits
payable pursuant to this Plan to the extent such offset would result in the imposition of
taxes or penalties pursuant to Code Section 409A and the Treasury Regulations issued thereunder.

 

8

 

Section 7.10. Conformance With Applicable Laws. Notwithstanding anything contained herein to
the contrary, this Plan shall be administered and operated in accordance with any applicable laws
and regulations, including, but not limited to, laws affecting the timing of payments to Employees.
The Board or its delegate reserves the right to amend this Plan at any time in order for this Plan
to comply with any such laws and regulations.

Section 7.11. Payments Due Minors or Incapacitated Persons. If any person entitled to a
payment under this Plan is a minor, or if the Administration Committee or its delegate determines
that any such person is incapacitated by reason of physical or mental disability, whether or not
legally adjudicated as an incompetent, the Administration Committee or its delegate shall have the
power to cause the payment becoming due to such person to be made to another for his benefit,
without responsibility of the Administration Committee or its delegate, the Employer or any other
person or entity to see to the application of such payment. Payments made pursuant to such power
shall operate as a complete discharge of the Administration Committee, this Plan and the Employer.

ARTICLE VIII 

DURATION, AMENDMENT AND TERMINATION

Section 8.01. Duration. Unless terminated by the Board, the Plan shall remain effective
hereafter.

Section 8.02. Amendment or Termination. The Board may amend or terminate this Plan, at its
sole discretion.

*The remainder of this page is intentionally left blank.

 

9

 

The Plan Sponsor, by its duly authorized officer, has executed the Plan on the date written
below.

	 	 	 	 	 
	 	NEWMONT USA LIMITED, Plan Sponsor

 	 
	Dated: October 26, 2011 	By:  	/s/ Stephen P. Gottesfeld
 	 
	 	 	Name:  	Stephen P. Gottesfeld 	 
	 	 	Title:  	Vice President, General Counsel and Secretary 	 

 

10

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