Document:

2001 Equity Participation Plan

 Exhibit No (10)m 
  
 KIMBERLY-CLARK CORPORATION 
 2001 EQUITY PARTICIPATION PLAN 
 (as amended effective July 18, 2005) 
  

	1.	PURPOSE 

  
 This 2001 Equity Participation Plan (the “Plan”) of Kimberly-Clark Corporation (the “Corporation”) is intended to aid in attracting and retaining highly qualified personnel and to encourage those
employees who materially contribute, by managerial, scientific or other innovative means to the success of the Corporation or of an Affiliate, to acquire an ownership interest in the Corporation, thereby increasing their motivation for and interest
in the Corporation’s or Affiliate’s long-term success. 
  

	2.	EFFECTIVE DATE 

  
 The Plan is amended effective as of January 1, 2004 upon (a) approval of the Board and (b) approval by the stockholders of the Corporation
at the 2004 Annual Meeting of Stockholders. 
  

	3.	DEFINITIONS 

  
 “Affiliate” means any company in which the Corporation owns 20% or more of the equity interest (collectively, the “Affiliates”). 
  
 “Award” has the meaning set forth in Section 6 of this Plan. 
  
 “Award Agreement” means an agreement entered into between
the Corporation and a Participant setting forth the terms and conditions applicable to the Award granted to the Participant. 
  
 “Board” means the Board of Directors of the Corporation. 
  
 “Cause” means any of the following: (i) the commission by the Participant of a felony; (ii) the
Participant’s dishonesty, habitual neglect or incompetence in the management of the affairs of the Corporation; or (iii) the refusal or failure by the Participant to act in accordance with any lawful directive or order of the Corporation,
or an act or failure to act by the Participant which is in bad faith and which is detrimental to the Corporation. 
  
 “Change of Control” means an event deemed to have taken place if: (i) a third person, including a “group” as defined in
section 13(d)(3) of the Securities Exchange Act of 1934, acquires shares of the Corporation having 20% or more of the total number of votes that may be cast for the election of directors of the Corporation; or (ii) as the result of any cash
tender or exchange offer, merger or other business combination, sale of assets or contested election, or any combination of the foregoing transactions (a “Transaction”), the persons who were directors of the Corporation before the
Transaction shall cease to constitute a majority of the Board of the Corporation or any successor to the Corporation. 
  
 “Code” means the Internal Revenue Code of 1986 and the regulations thereunder, as amended from time to time. 

 “Committee” means the Compensation Committee of the Board, provided that if the
requisite number of members of the Compensation Committee are not Disinterested Persons, the Plan shall be administered by a committee, all of whom are Disinterested Persons, appointed by the Board and consisting of two or more directors with full
authority to act in the matter. The term “Committee” shall mean the Compensation Committee or the committee appointed by the Board, as the case may be. Furthermore, the term “Committee” shall include any delegate to the extent
authority is delegated pursuant to Section 4 hereunder. 
  
 “Committee Rules” means the interpretative guidelines approved by the Committee providing the foundation for administration of this Plan. 
  
 “Common Stock” means the common stock, par value $1.25 per share, of the Corporation and shall include both
treasury shares and authorized but unissued shares and shall also include any security of the Corporation issued in substitution, in exchange for, or in lieu of the Common Stock. 
  
 “Disinterested Person” means a person who is a “Non-Employee Director” for purposes of rule 16b-3
under the Exchange Act, or any successor provision, and who is also an “outside director” for purposes of section 162(m) of the Code or any successor section. 
  
 “Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations thereunder, as
amended from time to time. 
  
 “Fair Market
Value” means the reported closing price of the Common Stock, on the relevant date as reported on the composite list used by The Wall Street Journal for reporting stock prices, or if no such sale shall have been made on that day, on
the last preceding day on which there was such a sale. 
  
 “Incentive Stock Option” means an Option which is so defined for purposes of section 422 of the Code or any successor section. 
  
 “Nonqualified Stock Option” means any Option which is not an Incentive Stock Option. 
  
 “Option” means a right to purchase a specified number of
shares of Common Stock at a fixed option price equal to no less than 100% of the Fair Market Value of the Common Stock on the date the Award is granted. 
  
 “Option Price” has the meaning set forth in subsection 7(b) of this Plan. 
  
 “Participant” means an employee who the Committee selects to participate in and receive Awards under the
Plan (collectively, the “Participants”). 
  
 “Performance Goal” means the specific performance objectives as established by the Committee, which, if achieved, will result in the amount of payment, or the early payment, of the Award. The Performance Goal may consist of
one or more or any combination of the following criteria: return on invested capital, stock price, market share, sales revenue, cash flow, earnings per share, return on equity, total shareholder return, gross margin, and/or costs. The performance
goals may be described in terms that are related to the individual Participant, to the Company as a whole, or to a subsidiary, division, department, region, function or business unit of the Company in which the Participant is employed. The
Committee, in its discretion, may change or modify these criteria; however, at all times the criteria must meet the requirements of Section 162(m) of the Code, or any successor section, to the extent applicable. 
  

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 “Qualified Termination of Employment” means the termination of a Participant’s
employment with the Corporation and/or its Affiliates within the two (2) year period following a Change of Control of the Corporation for any reason (whether voluntary or involuntary) unless such termination is by reason of death or disability
or unless such termination is (i) by the Corporation for Cause or (ii) by the Participant without Good Reason. Subject to the definition of “Termination by the Participant for Good Reason,” transfers of employment for
administrative purposes among the Corporation and its Affiliates shall not be deemed a Qualified Termination of Employment. 
  
 “Restricted Period” shall mean the period of time during which the Transferability Restrictions applicable to Awards will be in force.

  
 “Restricted Share” shall mean a share of
Common Stock which may not be traded or sold, until the date the Transferability Restrictions expire. 
  
 “Restricted Share Unit” means the right, as described in Section 9, to receive an amount, payable in either cash or shares of Common
Stock, equal to the value of a specified number of shares of Common Stock. No certificates shall be issued with respect to such Restricted Share Unit, except as provided in subsection 9(d), and the Corporation shall maintain a bookkeeping account in
the name of the Participant to which the Restricted Share Unit shall relate. 
  
 “Retirement” and “Retires” for Awards granted after December 31, 2003 means the termination of employment on or after the date the Participant has attained age 55. For Awards
granted prior to January 1, 2004 “Retirement” and “Retires” means the termination of employment on or after the date the Participant is entitled to receive immediate payments under a qualified retirement plan
of the Corporation or an Affiliate; provided, however, if the Participant is not eligible to participate under a qualified retirement plan of the Corporation or its Affiliates then such Participant shall be deemed to have retired if his termination
of employment is on or after the date such Participant has attained age 55. 
  
 “Stock Appreciation Right (SAR)” has the meaning set forth in subsection 7(i)(i) of this Plan. 
  
 “Termination by the Participant for Good Reason” shall mean the occurrence (without the Participant’s express written consent) of
any one of the following acts by the Corporation, or failures by the Corporation to act, unless, in the case of any act or failure to act described below, such act or failure to act is corrected prior to the Participant’s termination date:

  
 (a) the assignment to the Participant of any
duties inconsistent with the Participant’s status with the Corporation or a substantial adverse alteration in the nature or status of the Participant’s responsibilities from those in effect immediately prior to the Change of Control other
than such alteration primarily attributable to the fact that the Corporation may no longer be a public company; 
  
 (b) a reduction by the Corporation of the Participant’s annual base salary by five percent or more as in effect immediately prior to
the Change of Control, except for across-the-board salary reductions similarly affecting all similarly situated employees of the Corporation; 
  
 (c) the Corporation requiring the Participant to be based at a location more than 50 miles from the location of the Participant’s
office as of the date of the Change of Control except for required travel on the Corporation’s business to an extent substantially consistent with the Participant’s business travel obligations as of the date of the Change of Control;

  

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 (d) the failure of the Corporation to pay as soon as administratively feasible, after
notice from the Participant, any portion of the Participant’s current compensation; 
  
 (e) the failure of the Corporation to continue in effect any compensation plan in which the Participant participates immediately prior to
the Change of Control which is material to the Participant’s total compensation, including but not limited to the Corporation’s stock option, incentive compensation, and bonus plans, or any substitute plans adopted prior to the Change of
Control, unless an equitable arrangement (which is embodied in an ongoing substitute or alternative plan but which need not provide the Participant with equity-based incentives) has been made with respect to such plan, or the failure by the
Corporation to continue the Participant’s participation therein (or in such substitute or alternative plan) on a basis not materially less favorable than the benefits provided to other participants; or 
  
 (f) the failure by the Corporation to continue to provide
the Participant with benefits substantially similar to those enjoyed by the Participant under any of the Corporation’s pension, life insurance, medical, health and accident, or disability plans in which the Participant was participating at the
time of the Change of Control, the taking of any action by the Corporation which would directly or indirectly materially reduce any of such benefits or deprive the Participant of any material fringe benefit enjoyed by the Participant at the time of
the Change of Control, or the failure by the Corporation to provide the Participant with the number of paid vacation days to which the Participant is entitled on the basis of years of service with the Corporation in accordance with the
Corporation’s normal vacation policy in effect at the time of the Change of Control. 
  
 The Participant’s right to terminate the Participant’s employment for Good Reason shall not be affected by the Participant’s incapacity due to physical or mental illness. The Participant’s
continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. 
  
 “Total and Permanent Disability” means Totally and Permanently Disabled as defined in the Kimberly-Clark Corporation Pension Plan.

  
 “Transferability Restrictions” means the
restrictions on transferability imposed on Awards of Restricted Shares or Restricted Share Units. 
  

	4.	ADMINISTRATION 

  
 The Plan and all Awards granted pursuant thereto shall be administered by the Committee. The Committee, in its absolute discretion, shall have the power
to interpret and construe the Plan and any Award Agreements; provided, however, that no such action or determination may increase the amount of compensation payable that would otherwise be due in a manner that would result in the disallowance of a
deduction to the Corporation under section 162(m) of the Code or any successor section. Any interpretation or construction of any provisions of this Plan or the Award Agreements by the Committee shall be final and conclusive upon all persons. No
member of the Board or the Committee shall be liable for any action or determination made in good faith. 
  
 Within 60 days following the close of each calendar year that the Plan is in operation, the Committee shall make a report to the Board. The report shall
specify the employees who received Awards under the Plan during the prior year, the form and size of the Awards to the individual employees, and the status of prior Awards. 
  

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 The Committee shall have the power to promulgate Committee Rules and other guidelines in connection with
the performance of its obligations, powers and duties under the Plan, including its duty to administer and construe the Plan and the Award Agreements. 
  
 The Committee may authorize persons other than its members to carry out its policies and directives subject to the limitations and guidelines set by the
Committee, and may delegate its authority under the Plan, provided, however, the delegation of authority to grant Awards shall be limited to grants by the Chief Executive Officer to newly hired employees, or to respond to special recognition or
retention needs, and any such grants shall be limited to eligible Participants who are not subject to section 16 of the Exchange Act. The delegation of authority shall be limited as follows: (a) with respect to persons who are subject to
section 16 of the Exchange Act, the authority to grant Awards, the selection for participation, decisions concerning the timing, pricing and amount of a grant or Award and authority to administer Awards shall not be delegated by the Committee;
(b) the maximum number of shares of Common Stock covered by Awards which may be granted by the Chief Executive Officer within any calendar year period shall not exceed 200,000; (c) any delegation shall satisfy all applicable requirements
of rule 16b-3 of the Exchange Act, or any successor provision; and (d) no such delegation shall result in the disallowance of a deduction to the Corporation under section 162(m) of the Code or any successor section. Any person to whom such
authority is granted shall continue to be eligible to receive Awards under the Plan. 
  

	5.	ELIGIBILITY 

  
 The Committee shall from time to time select the Participants from those employees whom the Committee determines either to be in a position to contribute materially to the success of the Corporation or Affiliate or to
have in the past so contributed. Only employees (including officers and directors who are employees) of the Corporation and its Affiliates are eligible to participate in the Plan. 
  

	6.	FORM OF GRANTS 

  
 All Awards under the Plan shall be made in the form of Options, Restricted Shares or Restricted Share Units, or any combination thereof. Notwithstanding
anything in this Plan to the contrary, any Awards shall contain the restriction on assignability in subsection 16(g) of this Plan to the extent required under rule 16b-3 of the Exchange Act. 
  

	7.	STOCK OPTIONS 

  
 The Committee or its delegate shall determine and designate from time to time those Participants to whom Options are to be granted and the number of
shares of Common Stock to be optioned to each and the periods the Option shall be exercisable. Such Options may be in the form of Incentive Stock Options or in the form of Nonqualified Stock Options. The Committee in its discretion at the time of
grant may establish performance goals that may affect the grant, exercise and/or settlement of an Option. After granting an Option to a Participant, the Committee shall cause to be delivered to the Participant an Award Agreement evidencing the
granting of the Option. The Award Agreement shall be in such form as the Committee shall from time to time approve. The terms and conditions of all Options granted under the Plan need not be the same, but all Options must meet the applicable terms
and conditions specified in subsections 7(a) through 7(h). 
  
 (a) Period of Option. The Period of each Option shall be no more than 10 years from the date it is granted. 
  

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 (b) Option Price. The Option price shall be determined by the Committee, but shall not in
any instance be less than the Fair Market Value of the Common Stock at the time that the Option is granted (the “Option Price”). 
  
 (c) Limitations on Exercise. The Option shall not be exercisable until at least one year has expired after the granting of the Option,
during which time the Participant shall have been in the continuous employ of the Corporation or an Affiliate; provided, however, that the Option shall become exercisable immediately in the event of a Qualified Termination of Employment of a
Participant, without regard to the limitations set forth below in this subsection 7(c). Unless otherwise determined by the Committee or its delegate at the time of grant, at any time during the period of the Option after the end of the first year,
the Participant may purchase up to 30 percent of the shares covered by the Option; after the end of the second year, an additional 30 percent; and after the end of the third year, the remaining 40 percent of the total number of shares covered by the
Option; provided, however, that if the Participant’s employment is terminated for any reason other than death, Retirement or Total and Permanent Disability, the Option shall be exercisable only for three months following such termination and
only for the number of shares of Common Stock which were exercisable on the date of such termination. In no event, however, may an Option be exercised more than 10 years after the date of its grant. 
  
 (d) Exercise after Death, Retirement, or Disability. Unless
otherwise determined by the Committee or its delegate at the time of grant, if a Participant dies, becomes Totally and Permanently Disabled, or Retires without having exercised the Option in full, the remaining portion of such Option may be
exercised, without regard to the limitations in subsection 7(c), as follows. If a Participant dies or becomes Totally and Permanently Disabled the remaining portion of such Option may be exercised within (i) three years from the date of any
such event or (ii) the remaining period of the Option, whichever is earlier. Upon a Participant’s death, the Option may be exercised by the person or persons to whom such Participant’s rights under the Option shall pass by will or by
applicable law or, if no such person has such rights, by his executor or administrator. If a Participant Retires the remaining portion of such Option may be exercised within (i) five years from the date of any such event or (ii) the
remaining period of the Option, whichever is earlier. 
  
 (e) Non-transferability. During the Participant’s lifetime, Options shall be exercisable only by such Participant. Options shall not be transferable other than by will or the laws of descent and distribution upon the Participant’s
death. Notwithstanding anything in this subsection 7(e) to the contrary, the Committee may grant to designated Participants the right to transfer Nonqualified Stock Options, to the extent allowed under rule 16b-3 of the Exchange Act, subject to the
terms and conditions of the Committee Rules. 
  
 (f) Exercise; Notice Thereof. Options shall be exercised by delivering to the Corporation, or an agent designated by the Corporation, written notice of the number of shares with respect to which Option rights are being exercised and by
paying in full the Option Price of the shares at the time being acquired. As determined by the Committee, payment may be made in cash, a check payable to the Corporation or in shares of Common Stock transferable to the Corporation and having a fair
market value on the transfer date equal to the amount payable to the Corporation. A Participant shall have none of the rights of a stockholder with respect to shares covered by such Option until the Participant becomes the record holder of such
shares. 
  
 (g) Purchase for Investment. It is
contemplated that the Corporation will register shares sold to Participants pursuant to the Plan under the Securities Act of 1933. In the absence of an effective registration, however, a Participant exercising an Option hereunder may be required to
give a representation that he/she is acquiring such shares as an investment and not with a view to distribution thereof. 
  

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 (h) Limitations on Incentive Stock Option Grants. 
  
 (i) An Incentive Stock Option shall be granted only to an
individual who, at the time the Option is granted, does not own stock possessing more than 10 percent of the total combined voting power of all classes of stock of the Corporation or Affiliates. 
  
 (ii) The aggregate Fair Market Value of all shares with
respect to which Incentive Stock Options are exercisable by a Participant for the first time during any year shall not exceed $100,000. The aggregate Fair Market Value of such shares shall be determined at the time the Option is granted. 

 
 (i) Election to Receive Cash Rather than Stock.

  
 (i) At the same time as Nonqualified Stock
Options are granted the Committee may also grant to designated Participants the right to convert a specified number of shares of Common Stock covered by such Nonqualified Stock Options to cash, subject to the terms and conditions of this subsection
7(i). For each such Option so converted, the Participant shall be entitled to receive cash equal to the difference between the Participant’s Option Price and the Fair Market Value of the Common Stock on the date of conversion. Such a right
shall be referred to herein as a Stock Appreciation Right (“SAR”). Participants to whom an SAR has been granted shall be notified of such grant and of the Options to which such SAR pertains. An SAR may be revoked by the Committee, in its
sole discretion, at any time, provided, however, that no such revocation may be taken hereunder if such action would result in the disallowance of a deduction to the Corporation under section 162(m) of the Code or any successor section. 

 
 (ii) A person who has been granted an SAR may exercise
such SAR during such periods as provided for in the rules promulgated under section 16 of the Exchange Act. The SAR shall expire when the period of the subject Option expires. 
  
 (iii) At the time a Participant converts one or more shares of Common Stock covered by an Option to cash
pursuant to an SAR, such Participant must exercise one or more Nonqualified Stock Options, which were granted at the same time as the Option subject to such SAR, for an equal number of shares of Common Stock. In the event that the number of shares
and the Option Price per share of all shares of Common Stock subject to outstanding Options is adjusted as provided in the Plan, the above SARs shall automatically be adjusted in the same ratio which reflects the adjustment to the number of shares
and the Option Price per share of all shares of Common Stock subject to outstanding Options. 
  

	8.	RESTRICTED SHARES 

  
 The Committee or its delegate may from time to time designate those Participants who shall receive Restricted Share Awards. Each grant of Restricted
Shares under the Plan shall be evidenced by an agreement which shall be executed by the Corporation and the Participant. The agreement shall contain such terms and conditions, not inconsistent with the Plan, as shall be determined by the Committee
and shall indicate the number of Restricted Shares awarded and the following terms and conditions of the award. 
  

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 (a) Grant of Restricted Shares. The Committee shall determine the number of Restricted
Shares to be included in the grant and the period or periods during which the Transferability Restrictions applicable to the Restricted Shares will be in force (the “Restricted Period”). Unless otherwise determined by the Committee at the
time of grant, the Restricted Period shall be for a minimum of three years and shall not exceed ten years from the date of grant, as determined by the Committee at the time of grant. The Restricted Period may be the same for all Restricted Shares
granted at a particular time to any one Participant or may be different with respect to different Participants or with respect to various of the Restricted Shares granted to the same Participant, all as determined by the Committee at the time of
grant. 
  
 (b) Transferability Restrictions.
During the Restricted Period, Restricted Shares may not be sold, assigned, transferred or otherwise disposed of, or mortgaged, pledged or otherwise encumbered. Furthermore, a Participant’s right, if any, to receive Common Stock upon termination
of the Restricted Period may not be assigned or transferred except by will or by the laws of descent and distribution. In order to enforce the limitations imposed upon the Restricted Shares the Committee may (i) cause a legend or legends to be
placed on any such certificates, and/or (ii) issue “stop transfer” instructions as it deems necessary or appropriate. Holders of Restricted Shares limited as to sale under this subsection 8(b) shall have rights as a shareholder with
respect to such shares to receive dividends in cash or other property or other distribution or rights in respect of such shares, and to vote such shares as the record owner thereof. With respect to each grant of Restricted Shares, the Committee
shall determine the Transferability Restrictions which will apply to the Restricted Shares for all or part of the Restricted Period. By way of illustration but not by way of limitation, the Committee may provide (i) that the Participant will
not be entitled to receive any shares of Common Stock unless he or she is still employed by the Corporation or its Affiliates at the end of the Restricted Period, (ii) that the Participant will become vested in Restricted Shares according to a
schedule determined by the Committee, or under other terms and conditions determined by the Committee, and (iii) how any Transferability Restrictions will be applied, modified or accelerated in the case of the Participant’s death or Total
and Permanent Disability. 
  
 (c) Manner of
Holding and Delivering Restricted Shares. Each certificate issued for Restricted Shares shall be registered in the name of the Participant and deposited with the Corporation or its designee. These certificates shall remain in the possession of the
Corporation or its designee until the end of the applicable Restricted Period or, if the Committee has provided for earlier termination of the Transferability Restrictions following a Participant’s death, Total and Permanent Disability or
earlier vesting of the shares of Common Stock, such earlier termination of the Transferability Restrictions. At whichever time is applicable, certificates representing the number of shares to which the Participant is then entitled shall be delivered
to the Participant free and clear of the Transferability Restrictions; provided that in the case of a Participant who is not entitled to receive the full number of Shares evidenced by the certificates then being released from escrow because of the
application of the Transferability Restrictions, those certificates shall be returned to the Corporation and canceled and a new certificate representing the shares of Common Stock, if any, to which the Participant is entitled pursuant to the
Transferability Restrictions shall be issued and delivered to the Participant, free and clear of the Transferability Restrictions. 
  

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	9.	RESTRICTED SHARE UNITS 

  
 The Committee or its delegate shall from time to time designate those Participants who shall receive Restricted Share Unit Awards. The Committee shall
advise such Participants of their Awards by a letter indicating the number of Restricted Share Units awarded and the following terms and conditions of the award. 
  
 (a) Restricted Share Units may be granted to Participants as of the first day of a Restricted Period. The
number of Restricted Share Units to be granted to each Participant and the Restricted Period shall be determined by the Committee in its sole discretion. 
  
 (b) Transferability Restrictions. During the Restricted Period, Restricted Share Units may not be sold, assigned, transferred or otherwise
disposed of, or mortgaged, pledged or otherwise encumbered. Furthermore, a Participant’s right, if any, to receive cash or Common Stock upon termination of the Restricted Period may not be assigned or transferred except by will or by the laws
of descent and distribution. With respect to each grant of Restricted Share Units, the Committee shall determine the Transferability Restrictions which will apply to the Restricted Share Units for all or part of the Restricted Period. By way of
illustration but not by way of limitation, the Committee may provide (i) that the Participant will forfeit any Restricted Share Units unless he or she is still employed by the Corporation or its Subsidiaries at the end of the Restricted Period,
(ii) that the Participant will forfeit any or all Restricted Share Units unless he or she has met the Performance Goals according to the schedule determined by the Committee, (iii) that the Participant will become vested in Restricted
Share Units according to a schedule determined by the Committee, or under other terms and conditions determined by the Committee, and (iv) how any Transferability Restrictions will be applied, modified or accelerated in the case of the
Participant’s death or Total and Permanent Disability. 
  
 (c) Unless otherwise determined by the Committee, during the Restricted Period, Participants will be credited with dividends, equivalent in value to those declared and paid on shares of Common Stock, on all Restricted
Share Units granted to them, and these dividends will be regarded as having been reinvested in Restricted Share Units on the date of the Common Stock dividend payments based on the then Fair Market Value of the Common Stock thereby increasing the
number of Restricted Share Units held by a Participant. Holders of Restricted Share Units under this subsection 9(c) shall have none of the rights of a shareholder with respect to such shares. Holders of Restricted Share Units are not entitled to
receive distribution of rights in respect of such shares, nor to vote such shares as the record owner thereof. 
  
 (d) Payment of Restricted Share Units. The payment of Restricted Share Units shall be made in cash or shares of Common Stock, or a
combination of both, as determined by the Committee at the time of grant. The payment of Restricted Share Units shall be made within 90 days following the end of the Restricted Period. 
  

	10.	GOVERNMENT SERVICE, LEAVES OF ABSENCE AND OTHER TERMINATIONS 

  
 (a) In the event the Participant’s employment with the Corporation or an Affiliate is terminated by reason of a shutdown or
divestiture of all or a portion of the Corporation’s or its Affiliate’s business, a proportion of the Restricted Shares or Restricted Share Unit Award shall be considered to vest as of the Participant’s termination of employment. The
number of shares that shall vest shall be prorated for the number of full years of employment during the Restricted Period prior to the Participant’s termination of employment. In the event the number of Restricted Shares or Restricted Share
Units was to be determined by the attainment of Performance Goals according to a schedule determined by the Committee the number of shares that are considered to vest shall be determined at the end of the Restricted Period, prorated for 

  

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the number of full years of employment during the Restricted Period prior to the Participant’s termination of employment, and shall be paid within 90
days following the end of the Restricted Period. 
  
 (b) In the event of a Qualified Termination of Employment of a Participant, all of the Options, Restricted Shares or Restricted Share Unit Awards shall be considered to vest immediately. In the event the number of Restricted Shares or
Restricted Share Units was to be determined by the attainment of Performance Goals according to a schedule determined by the Committee, the number of shares that shall be considered to vest shall be the greater of the target level established or the
number of shares which would have vested based on the attainment of the Performance Goal as of the end of the prior calendar year. 
  
 (c) An authorized leave of absence, or qualified military leave in accordance with section 414(u) of the Code, shall not be deemed to be a
termination of employment for purposes of the Plan. A termination of employment with the Corporation or an Affiliate to accept immediate reemployment with the Corporation or an Affiliate likewise shall not be deemed to be a termination of employment
for purposes of the Plan. A Participant who is classified as an intermittent employee shall be deemed to have a termination of employment for purposes of the Plan. 
  

	11.	SHARES SUBJECT TO THE PLAN 

  
 The number of shares of Common Stock available with respect to all Awards granted under this Plan shall not exceed 50,000,000 in the aggregate, of which
not more than 50,000,000 shall be available for option and sale, and of which not more than 18,000,000 shall be available for grant as Restricted Shares and Restricted Share Units, subject to the adjustment provision set forth in Section 13
hereof. The shares of Common Stock subject to the Plan may consist in whole or in part of authorized but unissued shares or of treasury shares, as the Board may from time to time determine. Shares subject to Options which become ineligible for
purchase, Restricted Share Units which are retired through forfeiture or maturity, other than those Restricted Share Units which are retired through the payment of Common Stock, and Restricted Shares which are forfeited during the Restricted Period
due to any applicable Transferability Restrictions will be available for Awards under the Plan to the extent permitted by section 16 of the Exchange Act (or the rules and regulations promulgated thereunder) and to the extent determined to be
appropriate by the Committee. 
  

	12.	INDIVIDUAL LIMITS 

  
 The maximum number of shares of Common Stock covered by Awards which may be granted to any Participant within any two consecutive calendar year period
shall not exceed 1,500,000 in the aggregate. If an Option which had been granted to a Participant is canceled, the shares of Common Stock which had been subject to such canceled Option shall continue to be counted against the maximum number of
shares for which Options may be granted to the Participant. In the event that the number of Options which may be granted is adjusted as provided in the Plan, the above limits shall automatically be adjusted in the same ratio which reflects the
adjustment to the number of Options available under the Plan. 
  

	13.	CHANGES IN CAPITALIZATION 

  
 In the event there are any changes in the Common Stock or the capitalization of the Corporation through a corporate transaction, such as any merger, any
acquisition through the issuance of capital stock of the Corporation, any consolidation, any separation of the Corporation (including a spin-off or 

  

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other distribution of stock of the Corporation), any reorganization of the Corporation (whether or not such reorganization comes within the definition of
such term in section 368 of the Code), or any partial or complete liquidation by the Corporation, recapitalization, stock dividend, stock split or other change in the corporate structure, appropriate adjustments and changes shall be made by the
Committee, to the extent necessary to preserve the benefit to the Participant contemplated hereby, to reflect such changes in (a) the aggregate number of shares subject to the Plan, (b) the maximum number of shares subject to the Plan,
(c) the maximum number of shares for which Awards may be granted to any Participant, (d) the number of shares and the Option Price per share of all shares of Common Stock subject to outstanding Options, (e) the maximum number of
shares of Common Stock covered by Awards which may be granted by the Chief Executive Officer within any calendar year period, (f) the maximum number of shares of Common Stock available for option and sale and available for grant as Restricted
Shares and Restricted Share Units, (g) the number of Restricted Shares and Restricted Share Units awarded to Participants, and (h) such other provisions of the Plan as may be necessary and equitable to carry out the foregoing purposes,
provided, however that no such adjustment or change may be made to the extent that such adjustment or change will result in the disallowance of a deduction to the Corporation under section 162(m) of the Code or any successor section. 
  

	14.	EFFECT ON OTHER PLANS 

  
 All payments and benefits under the Plan shall constitute special compensation and shall not affect the level of benefits provided to or received by any
Participant (or the Participant’s estate or beneficiaries) as part of any employee benefit plan of the Corporation or an Affiliate. The Plan shall not be construed to affect in any way a Participant’s rights and obligations under any other
plan maintained by the Corporation or an Affiliate on behalf of employees. 
  

	15.	TERM OF THE PLAN 

  
 The term of the Plan shall be ten years, beginning April 26, 2001, and ending April 25, 2011, unless the Plan is terminated prior thereto by the
Committee. No Award may be granted or awarded after the termination date of the Plan, but Awards theretofore granted or awarded shall continue in force beyond that date pursuant to their terms. 
  

	16.	GENERAL PROVISIONS 

  
 (a) Designated Beneficiary. Each Participant who shall be granted Restricted Shares and/or Restricted Share Units under the Plan may
designate a beneficiary or beneficiaries with the Committee; provided that no such designation shall be effective unless so filed prior to the death of such Participant. 
  
 (b) No Right of Continued Employment. Neither the establishment of the Plan nor the payment of any benefits
hereunder nor any action of the Corporation, its Affiliates, the Board of Directors of the Corporation or its Affiliates, or the Committee shall be held or construed to confer upon any person any legal right to be continued in the employ of the
Corporation or its Affiliates, and the Corporation and its Affiliates expressly reserve the right to discharge any Participant without liability to the Corporation, its Affiliates, the Board of Directors of the Corporation or its Affiliates or the
Committee, except as to any rights which may be expressly conferred upon a Participant under the Plan. 
  
 (c) Binding Effect. Any decision made or action taken by the Corporation, the Board or by the Committee arising out of or in connection
with the construction, administration, interpretation and effect of the Plan shall be conclusive and binding upon all persons. 

  

 11 

 
Notwithstanding anything in section 3 to the contrary, the Committee may determine in its sole discretion whether a termination of employment for purposes of
this Plan is caused by disability, retirement or for other reasons. 
  
 (d) Modification of Awards. The Committee may in its sole and absolute discretion, by written notice to a Participant, (i) limit the period in which an Option may be exercised to a period ending at least three
months following the date of such notice, (ii) limit or eliminate the number of shares subject to Option after a period ending at least three months following the date of such notice, and/or (iii) accelerate the Restricted Period with
respect to the Restricted Share and Restricted Share Unit Awards granted under this Plan. Notwithstanding anything in this subsection 16(d) to the contrary, the Committee may not take any action to the extent that such action would result in the
disallowance of a deduction to the Corporation under section 162(m) of the Code or any successor section. 
  
 (e) Nonresident Aliens. In the case of any Award granted to a Participant who is not a resident of the United States or who is employed by
an Affiliate other than an Affiliate that is incorporated, or whose place of business is, in a State of the United States, the Committee may (i) waive or alter the terms and conditions of any Awards to the extent that such action is necessary
to conform such Award to applicable foreign law, (ii) determine which Participants, countries and Affiliates are eligible to participate in the Plan, (iii) modify the terms and conditions of any Awards granted to Participants who are
employed outside the United States, (iv) establish subplans, each of which shall be attached as an appendix hereto, modify Option exercise procedures and other terms and procedures to the extent such actions may be necessary or advisable, and
(v) take any action, either before or after the Award is made, which is deemed advisable to obtain approval of such Award by an appropriate governmental entity; provided, however, that no action may be taken hereunder if such action would
(i) materially increase any benefits accruing to any Participants under the Plan, (ii) increase the number of securities which may be issued under the Plan, (iii) modify the requirements for eligibility to participate in the Plan,
(iv) result in a failure to comply with applicable provisions of the Securities Act of 1933, the Exchange Act or the Code or (v) result in the disallowance of a deduction to the Corporation under section 162(m) of the Code or any successor
section. 
  
 (f) No Segregation of Cash or Stock.
The Restricted Share Unit accounts established for Participants are merely a bookkeeping convenience and neither the Corporation nor its Affiliates shall be required to segregate any cash or stock which may at any time be represented by Awards. Nor
shall anything provided herein be construed as providing for such segregation. Neither the Corporation, its Affiliates, the Board nor the Committee shall, by any provisions of the Plan, be deemed to be a trustee of any property, and the liability of
the Corporation or its Affiliates to any Participant pursuant to the Plan shall be those of a debtor pursuant to such contract obligations as are created by the Plan, and no such obligation of the Corporation or its Affiliates shall be deemed to be
secured by any pledge or other encumbrance on any property of the Corporation or its Affiliates. 
  
 (g) Inalienability of Benefits and Interest. Except as otherwise provided in this Plan, no benefit payable under or interest in the Plan
shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any such attempted action shall be void and no such benefit or interest shall be in any manner liable for or subject to debts,
contracts, liabilities, engagements, or torts of any Participant or beneficiary. 
  

 12 

 (h) Delaware Law to Govern. All questions pertaining to the construction, interpretation,
regulation, validity and effect of the provisions of the Plan shall be determined in accordance with the laws of the State of Delaware. 
  
 (i) Purchase of Common Stock. The Corporation and its Affiliates may purchase from time to time shares of Common Stock in such amounts as
they may determine for purposes of the Plan. The Corporation and its Affiliates shall have no obligation to retain, and shall have the unlimited right to sell or otherwise deal with for their own account, any shares of Common Stock purchased
pursuant to this paragraph. 
  
 (j) Use of
Proceeds. The proceeds received by the Corporation from the sale of Common Stock pursuant to the exercise of Options shall be used for general corporate purposes. 
  
 (k) Deferral of Award Payment. The Committee may establish one or more programs under the Plan to permit
selected Participants the opportunity to elect to defer receipt of consideration upon exercise of an Award or other event that absent the election would entitle the Participant to payment or receipt of Common Stock or other consideration under an
Award. The Committee may establish the election procedures, the timing of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if any, on amounts so deferred, and such other terms, conditions, rules and
procedures that the Committee deems advisable for the administration of any such deferral program. 
  
 (l) Withholding. The Committee shall require the withholding of all taxes as required by law. In the case of exercise of an Option or
payments of Awards whether in cash or in shares of Common Stock or other securities, withholding shall be as required by law and in the Committee Rules. 
  
 (m) Amendments. The Committee may at any time amend, suspend, or discontinue the Plan or alter or amend any or all Awards and Award
Agreements under the Plan to the extent (1) permitted by law, (2) permitted by the rules of any stock exchange on which the Common Stock or any other security of the Corporation is listed, (3) permitted under applicable provisions of
the Securities Act of 1933, as amended, the Exchange Act (including rule 16b-3 thereof) and (4) that such action would not result in the disallowance of a deduction to the Corporation under section 162(m) of the Code or any successor section
(including the rules and regulations promulgated thereunder); and (5) that no Option may be re-priced, replaced, re-granted though cancellation, or modified without shareholder approval (except in connection with a change in the Common Stock or
the capitalization of the Corporation as provided in Section 13 hereof) if the effect would be to reduce the exercise price for the shares underlying such Option; provided, however, that if any of the foregoing requires the approval by
stockholders of any such amendment, suspension or discontinuance, then the Committee may take such action subject to the approval of the stockholders. Except as provided in subsections 16(d) and 16(e) no such amendment, suspension, or termination of
the Plan shall, without the consent of the Participant, adversely alter or change any of the rights or obligations under any Awards or other rights previously granted the Participant. 
  

 13Change in Control Severance Agreement

 Exhibit 10.1 
 CHANGE IN CONTROL SEVERANCE AGREEMENT 
 THIS AGREEMENT, dated [Date], is made by and between Mercury
Computer Systems, Inc., a Massachusetts corporation with its principal offices at 199 Riverneck Road, Chelmsford, Massachusetts 01824 (the “Company”), and [Name of Executive] (the “Executive”) residing in [City, State, Zip].

 WHEREAS, the Company considers the establishment and maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its shareholders; and 
 WHEREAS, the Executive has made and is expected to make, due to the
Executive’s intimate knowledge of the business and affairs of the Company, its policies, methods, personnel, and problems, a significant contribution to the profitability, growth, and financial strength of the Company; and 
 WHEREAS, the Company, as a publicly-held corporation, recognizes that the possibility of a Change in Control may exist, and that such possibility and the
uncertainty and questions which it may raise among management may result in the departure or distraction of the Executive in the performance of the Executive’s duties, to the detriment of the Company and its shareholders; and 
 WHEREAS, it is in the best interests of the Company and its shareholders to reinforce and encourage the continued attention and dedication of management
personnel, including the Executive, to their assigned duties without distraction and to ensure the continued availability to the Company of the Executive in the event of a Change in Control; 
 NOW, THEREFORE, in consideration of the foregoing and other respective covenants and agreements of the parties herein contained, the parties hereto agree
as follows: 
 1. Defined Terms. The definitions of capitalized terms used in this Agreement are provided in Section 18.

 2. Term of Agreement. The term of this Agreement (the “Term”) shall commence on the date hereof and shall continue in
effect through June 30, 2009; provided, however, that commencing on July 1, 2009 and each July 1 thereafter, the Term shall automatically be extended for one additional year unless, not later than September 30 of
the preceding year, the Company or the Executive shall have given notice not to extend the Term; and further provided, however, that if a Change in Control shall have occurred during the Term, the Term shall expire on the last day of
the twelfth (12th) month following the month in which such Change in Control occurred. 
 3. Company’s Covenants Summarized. In order to induce the Executive to remain in the employ of the Company and in consideration of the
Executive’s covenants in Section 4, the Company, under the conditions described herein, shall pay the Executive the Severance Payments and the other payments and benefits described herein. Except as provided in Section 9.1, no
Severance Payments shall be payable under this Agreement unless there shall have been a 

  

 1 

 
Terminating Event following a Change in Control (or during a Potential Change in Control Period) and during the Term. This Agreement shall not be construed
as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company. 
 4. The Executive’s Covenants. Subject to the terms and conditions of this Agreement, in the event of a Potential Change in Control, the
Executive shall remain in the employ of the Company until the earliest of (i) a date which is six (6) months from the date of the first occurrence of a Potential Change in Control, (ii) the date of a Change in Control, (iii) the
date of termination by the Executive of the Executive’s employment for Good Reason or by reason of death, Disability or Retirement, or (iv) the termination by the Company of the Executive’s employment for any reason. 
 5. Termination Following a Change in Control for Disability; Other Reasons. 
     5.1 If the Executive fails to perform the Executive’s full-time duties with the Company following a Change in Control as a
result of incapacity due to physical or mental illness, during any period when the Executive so fails to perform the Company shall pay the Base Salary to the Executive, together with all compensation and benefits payable to the Executive under the
terms of any compensation or benefit plan, program or arrangement (other than the Company’s short- or long-term disability plan, as applicable, but including any bonus or incentive plan) maintained by the Company during such period, until the
Executive resumes the full time performance of such duties or the Executive’s employment is terminated by the Company for Disability. 
     5.2 If the Executive’s employment shall be terminated for any reason following a Change in Control, the Company shall pay the Base Salary to the Executive through the Date of Termination, together with all
compensation and benefits payable to the Executive through the Date of Termination under the terms of the Company’s compensation and benefit plans, programs or arrangements as in effect immediately prior to the Date of Termination or, if more
favorable to the Executive, as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason. 
     5.3 Except as expressly provided herein, if the Executive’s employment shall be terminated for any reason following a Change in Control, the Company shall pay to the Executive the Executive’s normal
post-termination compensation and benefits as such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, the Company’s retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason.

 6. Vesting of Stock Awards; Severance Payments and Benefits. Provided the Executive is then employed by the Company or one of its
subsidiaries, upon the occurrence of a Change in Control, anything contained in any applicable option agreement or stock-based award agreement to the contrary notwithstanding, vesting of all stock options and other stock-based awards granted to the
Executive by the Company and outstanding immediately prior to such 

  

 2 

 
Change in Control shall immediately accelerate and all such awards shall become exercisable or non-forfeitable as of the effective date of such Change in
Control. Further, subject to the Executive’s execution of and the effectiveness of a General Release in a form identical to or substantially the same as the release attached as Exhibit A hereto, the Company shall provide the following
compensation and benefits: 
     6.1 If a Terminating Event occurs within twelve (12) months following a Change in
Control (or during a Potential Change in Control Period) and during the Term, then the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6.1 (“Severance Payments”), in
addition to any payments and benefits to which the Executive is entitled under Section 5. Except as described above or in Section 9.1, the Executive shall not be entitled to benefits pursuant to this Section 6.1 unless a Change in
Control shall have occurred during the Term. 
             (A) The Company shall
pay to the Executive a lump sum severance payment, in cash, equal to one (1) times the sum of (i) the Base Salary, and (ii) the target annual bonus available to the Executive pursuant to the Company’s annual executive bonus plan
or any successor plan (including, without limitation, the cash component of any target award under the Company’s Long Term Incentive Plan) in respect of the fiscal year in which the Date of Termination occurs (without giving effect to any event
or circumstance constituting Good Reason), assuming for this purpose attainment of 100% of any applicable target; provided, however, that if the applicable target bonus would have been pro-rated for a partial fiscal year, such target bonus shall be
recalculated for purposes of this Section 6.1(A) to equal the amount that for which the Executive would have been eligible for the entire fiscal year. 
             (B) For the eighteen (18) month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and
his dependents health and dental insurance benefits on the same terms and conditions as though the Executive had remained an active employee. The cost of providing the benefits set forth in this Section 6.1(B) shall be in addition to (and shall
not reduce) the Severance Payments. Benefits otherwise receivable by the Executive pursuant to this Section 6.1(B) shall be reduced to the extent the Executive becomes eligible to receive comparable benefits from a new employer or pursuant to a
government-sponsored health insurance or health care program. 
             (C)
The Company shall pay the cost of providing the Executive with outplacement services up to a maximum of $30,000, provided that (i) the Executive begins to utilize such services within six months following the Date of Termination and
(ii) such services are provided by an outplacement provider approved by the Company (which approval shall not be unreasonably withheld, delayed or conditioned). Such payment shall be made by the Company directly to the service provider promptly
following the provision of such services and the presentation to the Company of documentation of the provision of such services. 
 6.2
Best Net Benefit Limitation. 
             (A) Anything contained in this
Agreement to the contrary notwithstanding, if any of the payments or benefits received or to be received by the Executive (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person 

  

 3 

 
affiliated with the Company or such Person) (all such payments and benefits being hereinafter referred to as the “Total Payments”) will be subject
to the Excise Tax, the following provisions shall apply: 
 (i) If the Total Payments, reduced by the sum of (a) the
Excise Tax and (b) the total of the Federal, state, and local income and employment taxes payable by the Executive on the amount of the Total Payments which are in excess of the Threshold Amount, are greater than or equal to the Threshold
Amount, the Executive shall be entitled to the full benefits payable under this Agreement. 
 (ii) If the Threshold Amount is
less than (a) the Total Payments, but greater than (b) the Total Payments reduced by the sum of (1) the Excise Tax and (2) the total of the Federal, state and local income and employment taxes on the amount of the Total Payments
which are in excess of the Threshold Amount, then the benefits payable under this Agreement shall be reduced (but not below zero) to the extent necessary so that the maximum Total Payments shall not exceed the Threshold Amount. To the extent that
there is more than one method of reducing the payments or benefits to bring them within the Threshold Amount, the Executive shall determine which method shall be followed; provided that if the Executive fails to make such determination within
fifteen (15) days after the Company has sent the Executive written notice of the need for such reduction, the Company may determine the amount of such reduction in its sole discretion. 
             (B) The determination as to which of the alternative provisions of subsection
(A) above shall apply to the Executive shall be made by a nationally recognized accounting firm selected by the Company (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and the
Executive within fifteen (15) business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or the Executive. For purposes of determining which of the alternative provisions of
subsection (A) above shall apply, the Executive shall be deemed to pay Federal income taxes at the highest marginal rate of Federal income taxation applicable to individuals for the calendar year in which the determination is to be made, and
state and local income taxes at the highest marginal rates of individual taxation in the state and locality of the Executive’s residence on the Date of Termination, net of the maximum reduction in Federal income taxes which could be obtained
from deduction of such state and local taxes. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. 
 6.3 The payments provided in subsection (A) of Section 6.1 shall be made not later than the fifth day following the Date of Termination. If the Executive is considered a “specified employee,” within the meaning of
Section 409A of the Code on his Date of Termination and severance payable hereunder is considered deferred compensation subject to Section 409A of the Code, no severance payments will be paid during the six-month period following the
Executive’s termination of employment. Any severance amount that would have been paid during such six-month period but for the provisions of the preceding sentence shall be paid in a lump sum within the first five (5) days of the seventh
month following the Executive’s termination of employment. 
  

 4 

 7. Termination Procedures and Compensation During Dispute. 
     7.1 Notice of Termination. After a Change in Control, any purported termination of the Executive’s employment (other
than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 10. For purposes of this Agreement, a “Notice of Termination” shall mean a
notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail any facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the
provision so indicated. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than two-thirds (2/3) of the entire membership of the Board at a meeting of the
Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive’s counsel, to be heard before the Board) finding that,
in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i), (ii) or (iii) of the definition of Cause herein, and specifying the particulars thereof in detail. 
     7.2 Date of Termination. “Date of Termination,” with respect to any purported termination of the
Executive’s employment after a Change in Control, shall mean (i) if the Executive’s employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have
returned to the full-time performance of the Executive’s duties during such thirty (30) day period), and (ii) if the Executive’s employment is terminated for any other reason, the date specified in the Notice of Termination
(which, in the case of a termination by the Company, shall not be less than fifteen (15) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days,
respectively, from the date such Notice of Termination is given). Notwithstanding the foregoing, if the Executive gives a Notice of Termination to the Company, the Company may unilaterally accelerate the Date of Termination and such acceleration
shall not result in a “Termination by the Company” for purposes of this Agreement. 
     7.3 Dispute
Concerning Termination. If within ten (10) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section 7.3), the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the earlier of (i) the date on which the Term ends or (ii) the date on which the dispute is finally resolved, either
by mutual written agreement of the parties or by a final judgment, order or decree of an arbitrator or a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has
been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with
reasonable diligence. 
     7.4 Compensation During Dispute. If the Date of Termination is extended in accordance
with Section 7.3, the Company shall continue to pay the Executive the full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, the Base Salary) and continue the Executive as a participant
in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise 

  

 5 

 
to the dispute was given, until the Date of Termination, as determined in accordance with Section 7.3. Amounts paid under this Section 7.4 are in
addition to all other amounts due under this Agreement (other than those due under Section 5.2) and shall not be offset against or reduce any other amounts due under this Agreement. 
     7.5 Legal Fees and Expenses. The Company shall pay to the Executive all legal fees and expenses incurred by the Executive
in disputing in good faith any issue hereunder relating to the termination of the Executive’s employment, in seeking in good faith to obtain or enforce any benefit or right provided by this Agreement or in connection with any tax audit or
proceeding to the extent attributable to the application of section 4999 of the Code to any payment or benefit provided hereunder. Such payments shall be made within five (5) business days after delivery of the Executive’s written requests
for payment accompanied with such evidence of fees and expenses incurred as the Company reasonably may require. 
 8. No Mitigation.
If the Executive’s employment with the Company terminates following a Change in Control, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to
Section 6 or Section 7.4. Except as set forth in Section 6.1(B), the amount of any payment or benefit provided for in this Agreement shall not be reduced by any compensation earned by the Executive as the result of employment by
another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise. 
 9. Successors; Binding Agreement. 
     9.1 In addition to any obligations imposed by law upon any
successor to the Company, the Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any
such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive were to terminate the
Executive’s employment for Good Reason after a Change in Control and during the Term, except that, for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination.

     9.2 This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate
upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s beneficiary designated in writing to
the Company prior to his death (or to the executors, personal representatives or administrators of the Executive’s estate, if the Executive fails to make such designation). 
  

 6 

 10. Notices. For the purpose of this Agreement, notices and all other communications provided for
in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested, postage prepaid, addressed to the last known residence address of the
Executive or in the case of the Company, to its principal office to the attention of the Chief Executive Officer of the Company with a copy to its Secretary, or to such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective only upon receipt. 
 11. Effect on Other Plans. An
election by the Executive to resign after a Change in Control under the provisions of this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the provisions of any of the
Company’s benefit plans, programs or policies. Nothing in this Agreement shall be construed to limit the rights of the Executive under the Company’s benefit plans, programs or policies except as otherwise provided in Section 6.2
hereof, and except that the Executive shall have no rights to any severance benefits under any Company severance pay plan or arrangement (other than this Agreement) in connection with the occurrence of a Terminating Event within twelve
(12) months following a Change in Control (or during a Potential Change in Control Period) and during the Term. If the Executive is party to an employment agreement with the Company providing for change in control payments or benefits (whether
or not related to a Change in Control), the Executive must elect to receive either the benefits payable under such other agreement or the benefits payable under this Agreement, but not both. The Executive shall make such an election in the event of
a Change in Control. 
 12. No Offset. The Company’s obligation to make the payments provided for in this Agreement and otherwise
perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company or any of its affiliates may have against the Executive or
others whether by reason of the Executive’s breach of this Agreement, subsequent employment of the Executive, or otherwise. 
 13.
Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the
Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have
been made by either party; provided, however, that this Agreement shall not supersede any agreement setting forth the terms and conditions of the Executive’s employment with the Company or any subsidiary of the Company, except as
expressly agreed to by the Executive and the Company in writing. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts. All references to sections of the
Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any 

  

 7 

 
additional withholding to which the Executive has agreed. The obligations of the Company under this Agreement which by their nature may require either
partial or total performance after the expiration of the Term (including, without limitation, those under Sections 6 and 7) shall survive such expiration. 
 14. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and
effect. 
 15. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original
but all of which together will constitute one and the same instrument. 
 16. Settlement of Disputes; Arbitration. 
     16.1 All claims by the Executive for payments and benefits under this Agreement shall be directed to and determined by the Board
and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied
upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) days after notification
by the Board that the Executive’s claim has been denied. 
     16.2 Any further dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively by arbitration in Boston, Massachusetts in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the
evidentiary standards set forth in this Agreement shall apply. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. Notwithstanding any provision of this Agreement to the contrary, the Executive shall be entitled
to seek specific performance of the Executive’s right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 
 17. Litigation and Regulatory Cooperation. During and after the Executive’s employment, the Executive shall cooperate fully with the Company
in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was employed by the Company.
The Executive’s full cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial, to act as a witness on behalf of the Company, and if called
to testify, to testify truthfully and in good faith about events that happened during the Executive’s employment. During and after the Executive’s employment, the Executive also shall cooperate fully with the Company in connection with any
investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the Executive was employed by the Company. The Company shall make reasonable
efforts to schedule any cooperation required pursuant to this Section 17 at such times that will not unreasonably interfere with the Executive’s search for other employment or performance of other employment services. The Company shall
reimburse the Executive for 

  

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reasonable expenses incurred in connection with the Executive’s performance of obligations pursuant to this Section 17 based on the standards and
procedures applicable to expense reimbursement for the Company’s employees. 
 18. Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated below: 
     18.1 “Base Salary” shall mean the
annual base salary in effect for the Executive immediately prior to a Change in Control, as such salary may be increased from time to time during the Term (in which case such increased amount shall be the Base Salary for purposes hereof), but
without giving effect to any reduction thereto. 
     18.2 “Board” shall mean the Board of Directors of the
Company. 
     18.3 “Cause” for termination by the Company of the Executive’s employment shall mean
(i) the willful and continued failure by the Executive (other than any such failure resulting from (A) the Executive’s incapacity due to physical or mental illness, (B) any such actual or anticipated failure after the issuance of
a Notice of Termination by the Executive for Good Reason or (C) the Company’s active or passive obstruction of the performance of the Executive’s duties and responsibilities) to perform substantially the duties and responsibilities of
the Executive’s position with the Company after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not
substantially performed such duties or responsibilities; (ii) the conviction of the Executive by a court of competent jurisdiction for felony criminal conduct or a plea of nolo contendere to a felony; or (iii) the willful engaging
by the Executive in fraud, dishonesty or other misconduct which is demonstrably and materially injurious to the Company or its reputation, monetarily or otherwise. No act, or failure to act, on the Executive’s part shall be deemed
“willful” unless committed, or omitted by the Executive in bad faith and without reasonable belief that the Executive’s act or failure to act was in, or not opposed to, the best interest of the Company. 
     18.4 A “Change in Control” shall be deemed to have occurred if any of the events set forth in any one of the following
paragraphs shall have occurred: 
             (A) any Person, together with all
“affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Exchange Act) of such Person, shall become the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities having the right to vote in an election of the Company’s Board
(“Voting Securities”) (in such case other than as a result of an acquisition of securities directly from the Company or an acquisition of securities involving a Corporate Transaction of the type described in the exclusion set forth in
subsection (C) below); or 
             (B) persons who, as of the date
hereof, constitute the Board (the “Incumbent Directors”) cease for any reason, including, without limitation, as a result of a tender offer, proxy contest, merger or similar transaction, to constitute at least a majority of the Board,
provided that any person becoming a director of the Company subsequent to the date hereof shall 

  

 9 

 
be considered an Incumbent Director if such person’s election was approved by or such person was nominated for election by either (i) a vote of at
least a majority of the Incumbent Directors or (ii) a vote of at least a majority of the Incumbent Directors who are members of a nominating committee comprised, in the majority, of Incumbent Directors; but provided further, that any such
person whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of members of the Board or other actual or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board, including by reason of agreement intended to avoid or settle any such actual or threatened contest or solicitation, shall not be considered an Incumbent Director; or 
             (C) the consummation of a consolidation, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a “Corporate Transaction”); excluding, however, a Corporate Transaction in which the stockholders of the Company immediately prior to the Corporate Transaction, would,
immediately after the Corporate Transaction, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing in the aggregate more than fifty percent (50%) of the voting shares of the
corporation issuing cash or securities in the Corporate Transaction (or of its ultimate parent corporation, if any). 
 Notwithstanding the foregoing, a
“Change in Control” of the Company shall not be deemed to have occurred for purposes of the foregoing subsection (A) solely as the result of an acquisition of securities by the Company that, by reducing the number of shares of Voting
Securities outstanding, increases the proportionate number of shares of Voting Securities beneficially owned by any Person to fifty percent (50%) or more of the combined voting power of all then outstanding Voting Securities; provided, however,
that if any Person referred to in this sentence shall thereafter become the beneficial owner of any additional shares of Voting Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition
of securities directly from the Company) and immediately thereafter beneficially owns fifty percent (50%) or more of the combined voting power of all then outstanding Voting Securities, then a Change in Control of the Company shall be deemed to
have occurred for purposes of the foregoing subsection (A). 
 Anything contained in this Agreement to the contrary notwithstanding, no Change in Control
shall be deemed to have occurred for purposes of this Agreement by virtue of any transaction which results in the Executive, or a “group” (as such term is used in Section 13(d)(3) of the Exchange Act) which includes the Executive,
becoming the “beneficial owner” (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the
Company’s then outstanding securities. 
             18.5 “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time. 
             18.6
“Company” shall mean Mercury Computer Systems, Inc. and, except in determining under Section 18.4 whether or not any Change in Control of the Company has occurred, shall include any successor to its business and/or assets which
assumes and agrees to perform this Agreement by operation of law, or otherwise. 
  

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     18.7 “Date of Termination” shall have the meaning set forth in
Section 7.2. 
     18.8 “Disability” shall be deemed the reason for the termination by the Company of the
Executive’s employment, if, as a result of the Executive’s incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive’s duties with the Company for a period of
one hundred eighty (180) calendar days in the aggregate in any twelve (12) month period, the Company shall have given the Executive a Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termination
is given, the Executive shall not have returned to the full-time performance of the Executive’s duties. Any question as to the existence of the Executive’s Disability upon which the Executive and the Company cannot agree shall be
determined by a qualified independent physician selected by the Executive (or, if the Executive is unable to make such selection, it shall be made by any adult member of the Executive’s immediate family), and approved by the Company. The
determination of such physician made in writing to the Company and to the Executive shall be final and conclusive for all purposes of this Agreement, absent fraud. 
     18.9 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time. 
     18.10 “Excise Tax” shall mean any excise tax imposed under section 4999 of the Code, and any interest or penalties incurred by the Executive with respect to such excise tax.

     18.11 “Executive” shall mean the individual named in the first paragraph of this Agreement. 

    18.12 “Good Reason” for termination by the Executive of the Executive’s employment shall mean the occurrence
(without the Executive’s express written consent) after any Change in Control, or during a Potential Change in Control Period (treating all references in subsections (A) through (F) below to a “Change in Control” as
references to a “Potential Change in Control”), of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in subsection (A), (B), (C), (D) or
(E) below, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof: 
             (A) an adverse change in the Executive’s status or position with the Company as in effect immediately prior to the Change in Control,
including, without limitation, any adverse change in the Executive’s status or position as a result of a diminution of the Executive’s duties or responsibilities or the assignment to the Executive of any duties or responsibilities which
are inconsistent with such status or position(s), or any removal of the Executive from, or any failure to reappoint or reelect the Executive to, such position(s); 
             (B) a reduction in the Executive’s Base Salary; 
             (C) the failure of the Company to maintain the Executive’s participation in a bonus or incentive plan that provides for an annual target
bonus not lower than the Executive’s target bonus (at a payout factor of one) for the fiscal year in which the Change in Control occurs; 
  

 11 

             (D) the failure by the Company to
maintain the Executive’s participation in any thrift, pension, profit sharing, medical, health, disability, accident, life insurance and vacation plan or policy on terms not less favorable than those provided by the Company to other peer
executives of the Company; 
             (E) the Company requiring the Executive
to be based at an office that is greater than 50 miles from where the Executive’s office is located immediately prior to the Change in Control except for required travel on the Company’s business to an extent substantially consistent with
the business travel obligations which the Executive undertook on behalf of the Company prior to the Change in Control; 
             (F) any purported termination of the Executive’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements of
Section 7.1; for purposes of this Agreement, no such purported termination shall be effective. 
 The Executive’s right to
terminate the Executive’s employment for Good Reason shall not be affected by the Executive’s incapacity due to physical or mental illness. The Executive’s continued employment shall not constitute consent to, or a waiver of rights
with respect to, any act or failure to act constituting Good Reason hereunder. 
 For purposes of any determination regarding the existence
of Good Reason, any claim by the Executive that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board by clear and convincing evidence that Good Reason does not exist. 
     18.13 “Notice of Termination” shall have the meaning set forth in Section 7.1. 
     18.14 “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in
Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, or (ii) any trustee, fiduciary or other person or entity holding securities under any employee benefit plan or trustee of
the Company or any of its subsidiaries. 
     18.15 “Potential Change in Control” shall be deemed to have
occurred if the event set forth in any one of the following subsections shall have occurred: 
             (A) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; 
             (B) the Company or any Person publicly announces an intention to take or to
consider taking actions which, if consummated, would constitute a Change in Control; 
             (C) any Person becomes the beneficial owner (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company
representing 15% or more of the combined voting power of the Company’s then outstanding securities; or 
  

 12 

             (D) the Board adopts a resolution
to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. 
     18.16
“Potential Change in Control Period” shall commence upon the occurrence of a Potential Change in Control and shall lapse upon the occurrence of a Change in Control or, if earlier (i) with respect to a Potential Change in Control
occurring pursuant to Section 18.15(A), immediately upon the abandonment or termination of the applicable agreement, (ii) with respect to a Potential Change in Control occurring pursuant to Section 18.15(B), immediately upon a public
announcement by the applicable party that such party has abandoned its intention to take or consider taking actions which if consummated would result in a Change in Control or (iii) with respect to a Potential Change in Control occurring
pursuant to Section 18.15(C) or (D), upon the one year anniversary of the occurrence of a Potential Change in Control (or such earlier date as may be determined by the Board). 
     18.17 “Retirement” shall be deemed the reason for the termination by the Executive of the Executive’s employment
if such employment is terminated because of the Executive’s retirement on or after attaining the minimum age, completing the minimum number of years of service and satisfying all other conditions specified for retirement status under the
Company’s Retirement Policy Statement. 
     18.18 “Severance Payments” shall have the meaning set forth
in Section 6.1. 
     18.19 “Term” shall mean the period of time described in Section 2 (including
any extension, continuation or termination described therein). 
     18.20 “Terminating Event” shall mean
termination of the Executive’s employment with the Company, other than (a) by the Company for Cause, (b) by reason of death or Disability, or (c) by the Executive without Good Reason. 
     18.21 “Threshold Amount” shall mean three times the Executive’s “base amount” within the meaning of
Section 280G(b)(3) of the Code and the regulations promulgated thereunder, less one dollar ($1.00). 
     18.22
“Total Payments” shall mean those payments so described in Section 6.2. 
 [Signature Page Follows] 
  

 13 

 IN WITNESS WHEREOF, the undersigned officer, on behalf of Mercury Computer Systems, Inc., and the
Executive have hereunto set their hands as an agreement under seal, all as of the date first above written. 
  

			
	MERCURY COMPUTER SYSTEMS, INC.
		
	By:	 	  
		 	 Name:
 Title:

	
	 EXECUTIVE:

	
	  
	Name:

  

 14 

 Exhibit A 
 General Release of Claims 
 In exchange for and as a condition to Mercury Computer Systems, Inc.’s
(“the Company”) promises to me contained in the Change in Control Severance Agreement between the Company and me (the “Agreement), I agree as follows: 
 I hereby irrevocably and unconditionally release, acquit and forever discharge the Company, its predecessors, successors, affiliates, other related entities and assigns, and the directors, officers, employees,
shareholders, and representatives of any of the foregoing, and any persons acting on behalf or through any of the foregoing (any and all of whom or which are hereinafter referred to as the “Company”), from any and all charges, complaints,
claims, liabilities, obligations, promises, agreements, controversies, damages, actions, causes of action, suits, rights, demands, costs, losses, debts and expenses (including attorney’s fees and costs actually incurred), of any nature
whatsoever, known or unknown (collectively, “Claims”), that I now have, own, or hold, or claim to have, own, or hold, or that I at any time had, owned, or held, or claimed to have had, owned or held against the Company. This general
release of Claims includes, without implication of limitation, the complete release of all Claims of breach of express or implied contract, including, without limitation, all Claims arising from any employment offer letter from the Company; all
Claims of wrongful termination of employment whether in contract or tort; all Claims based on actions or omissions leading to this General Release of Claims; all Claims of intentional, reckless, or negligent infliction of emotional distress; all
Claims of breach of any express or implied covenant of employment, including the covenant of good faith and fair dealing; all Claims of interference with contractual or advantageous relations, whether those relations are prospective or existing; all
Claims of deceit or misrepresentation; all Claims of discrimination under state or federal law, including, without implication of limitation, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq., as amended, the Age
Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq., as amended, and Chapter 151B of the Massachusetts General Laws; all Claims of defamation or damage to reputation; all Claims for reinstatement; all Claims for
punitive or emotional distress damages; all Claims for wages, bonuses, severance, back or front pay or other forms of compensation; and all Claims for attorney’s fees and costs. This General Release of Claims shall not be construed to include a
release of Claims that arise from the Company’s obligations under the Agreement. 
 I acknowledge that I have been advised to consult with an attorney
before signing this General Release. 
 I further understand that I have been given an adequate opportunity, if I so desired, to consider this General
Release for up to twenty-one (21) days before deciding whether to sign it. If I signed this General Release before the expiration of that twenty-one (21) day period, I acknowledge that such decision was entirely voluntary. I understand
that for a period of seven (7) days after I execute this General Release I have the right to revoke it by a written notice to be received by the Director, Human Resources of the Company by the end of that period. I also understand that this
General Release shall not be effective or enforceable until the expiration of that period. 
  

 1 

 Notwithstanding the foregoing, I agree that nothing in this General Release of Claims is intended to affect any of my
obligations that continue after the termination of my employment contained in the Agreement or in any written agreement entered into between the Company and myself with respect to confidentiality, ownership of inventions, non-competition and/or
non-solicitation. 
 I represent and agree that I have carefully read and fully understand all of the provisions of this General Release and that I am
voluntarily agreeing to such provisions. 
  

			
	
	  
	
	  
	Date

  

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