Document:

ex99-1.htm

    
      

    

    Exhibit 4.1

     

    
       

      INCREASE
IN COMMITMENT

       

       

      Dated as
of June 9, 2008

       

      Reference
is hereby made to the Revolving Credit Agreement, dated as of September 27, 2007
(as amended and in effect from time to time, the “Credit Agreement”),
by and among (a) Waste Connections, Inc., a Delaware corporation (the “Parent”), each
Subsidiary of the Parent party thereto (the “Subsidiaries” and,
together with the Parent, the “Borrowers”), (b) each
of the banks and other lending institutions from time to time party thereto
(each a “Lender” and,
collectively, the “Lenders”), (c) Bank
of America, N.A., as administrative agent (the “Administrative
Agent”) for the Lenders, and (d) J.P. Morgan Securities, Inc. and
Deutsche Bank Securities, Inc., as Co-Syndication Agents for the Lenders.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Credit Agreement.

       

      Pursuant
to § 2.11 of the Credit Agreement, the Borrowers, the Administrative Agent and
each of the Lenders set forth on Exhibit A hereto
(each, an “Increasing
Lender”) hereby agree as follows:

       

      1.           Subject
to the terms and conditions of this Increase in Commitment (this “Increase Agreement”),
each Increasing Lender hereby agrees to assume, without recourse to the other
Lenders or the Administrative Agent, on the Effective Date (as defined below),
the increase in its Commitment set forth opposite such Increasing Lender on
Exhibit A
hereto in accordance with the terms and conditions set forth in the Credit
Agreement. Upon such assumptions, the Total Revolving Credit Commitment shall be
automatically increased by the aggregate amount of such assumptions. Each Increasing Lender
hereby agrees to continue to be bound by, and hereby requests the agreement of
the Borrowers and the Administrative Agent that such Increasing Lender shall
continue to be entitled to the benefits of all of the terms, conditions and
provisions of the Credit Agreement.

       

      2.           Each
Increasing Lender (a) represents and warrants that (i) it is duly and legally
authorized to enter into this Increase Agreement, (ii) the execution, delivery
and performance of this Increase Agreement does not conflict with any provision
of law or of the charter, by-laws, or other similar constitutive documents of
such Increasing Lender, or of any agreement binding on such Increasing Lender,
(iii) all acts, conditions and things required to be done and performed and to
have occurred prior to the execution, delivery and performance of this Increase
Agreement, and to render the same the legal, valid and binding obligation of
such Increasing Lender, enforceable against it in accordance with its terms,
have been done and performed and have occurred in due and strict compliance with
all applicable laws; (b) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to §§ 5.4 and 6.4 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Increase Agreement; (c) agrees that it will,
independently and without reliance upon the other Lenders or the Administrative
Agent and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Credit Agreement; (d) agrees that it will continue to perform
in accordance with their terms all of the obligations under the Credit Agreement
that are required to be performed by it as a Lender; and (e) acknowledges that
it has made arrangements with the Administrative Agent satisfactory to such
Increasing Lender with respect to its pro rata share of Letter of Credit Fees in
respect of outstanding Letters of Credit.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      3.           Each
Increasing Lender hereby requests that the Borrowers issue a new Revolving
Credit Note payable to the order of such Increasing Lender in the principal
amount of its total Commitment set forth on Schedule 1 annexed
hereto. To the extent applicable, such Increasing Lender agrees to deliver to
the Borrowers, as soon as reasonably practicable after the Effective Date (as
defined below), the prior Revolving Credit Note held by it prior to the issuance
of the new Revolving Credit Note, marked “Cancelled”.

       

      4.           The
effective date for this Increase Agreement shall be June 9, 2008 (the “Effective Date”).
Following the execution of this Increase Agreement by the Borrowers and each
Increasing Lender, it will be delivered to the Administrative Agent for
acceptance.  Upon acceptance by the Administrative Agent, Schedule 1 to the
Credit Agreement shall thereupon be replaced as of the Effective Date by the
Schedule 1
annexed hereto. The Administrative Agent shall thereafter notify the other
Lenders of the revised Schedule
1.

       

      5.           Upon
such acceptance, from and after the Effective Date, the Borrowers shall make all
payments in respect of the Commitment of each Increasing Lender (including
payments of principal, interest, fees and other amounts) to the Administrative
Agent for the account of such Increasing Lender.

       

      6.           THIS INCREASE AGREEMENT SHALL FOR ALL
PURPOSES BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE
OF NEW YORK (WITHOUT REFERENCE TO CONFLICTS OF LAW).

       

      7.           This
Increase Agreement may be executed in any number of counterparts which shall
together constitute but one and the same agreement.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      IN WITNESS WHEREOF, intending
to be legally bound, each of the undersigned has caused this Increase Agreement
to be executed on its behalf by its officer thereunto duly authorized, to take
effect as of the date first above written.

       

      
        	 
      	BANK OF AMERICA,
      N.A.,	 
      
	 
      	as
      Increasing Lender	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	 
      	 
      
	 
      	 
      	
                Name:

              	 
      
	 
      	 
      	
                Title:

              	 
      
	 	 	 	 
	 	 	 	 
	 
      	JPMORGAN CHASE BANK,
      N.A.,	 
      
	 
      	as
      Increasing Lender	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
                By:

              	 
      	 
      
	 
      	 
      	
                Name:

              	 
      
	 
      	 
      	
                Title:

              	 
      

      

       

      [Signatures
continue on following page]

       

       

       

       

      
        
          Signature
Page to Increase Agreement

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

       

      
        	
                BANK
      OF AMERICA, N.A.,

              	 
      
	
                as
      Administrative Agent

              	 
      
	 	 	 
	 	 	 
	
                By:

              	 	 
      
	
                Name:

              	 	 
      
	
                Title:

              	 	 
      

      

       

       

      [Signatures
continue on following page]

       

      
        
          Signature
Page to Increase Agreement

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

       

      THE
BORROWERS:

       

      WASTE
CONNECTIONS, INC.ADVANCED SYSTEMS PORTABLE RESTROOMS, INC.

      AMERICAN
DISPOSAL COMPANY, INC.

      AMERICAN
SANITARY SERVICE, INC.AMERICAN WEST LEASING, INC.

      BITUMINOUS
RESOURCES, INC.

      BROADACRE
LANDFILL, INC.

      BUTLER
COUNTY LANDFILL, INC.

      CAMINO
REAL ENVIRONMENTAL CENTER, INC.

      COLD
CANYON LAND FILL, INC.

      COMMUNITY
REFUSE DISPOSAL INC.

      CONTRACTORS
WASTE SERVICES, INC.

      CORRAL
DE PIEDRA LAND COMPANY

      CURRY
TRANSFER & RECYCLING, INC.

      D.
M. DISPOSAL CO., INC.

      DENVER
REGIONAL LANDFILL, INC.

      ELKO
SANITATION COMPANY

      EMPIRE
DISPOSAL, INC.

      EVERGREEN
DISPOSAL, INC.

      ENVIRONMENTAL
TRUST COMPANY

      FINNEY
COUNTY LANDFILL, INC.

      FRANK’S
SERVICE, INC.

      G
& P DEVELOPMENT, INC.

      HIGH
DESERT SOLID WASTE FACILITY, INC.

      (F/K/A RHINO SOLID WASTE,
INC.)

      ISLAND
DISPOSAL, INC.

      J
BAR J LAND, INC.

      KELLY’S
HAUL AWAY, INC.

      LAKESHORE
DISPOSAL, INC.

      LEALCO,
INC.

      LES’
COUNTY SANITARY, INC.

      MADERA
DISPOSAL SYSTEMS, INC.

      MAMMOTH
DISPOSAL COMPANY

      

      

      
        	
                By:

              	 
      	 
      
	 
      	
                Name:  Worthing
      F. Jackman

              	 
      
	 
      	
                Title:    Chief
      Financial Officer

              	 
      

      

       

      
        
          Signature
Page to Increase Agreement

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      THE BORROWERS:

       

      MANAGEMENT
ENVIRONMENTAL NATIONAL, INC.

      MASON
COUNTY GARBAGE CO., INC.

      MDSI
OF LA, INC.

      MILLENNIUM
WASTE INCORPORATED

      MISSION
COUNTRY DISPOSAL

      MORRO
BAY GARBAGE SERVICE

      MURREY’S
DISPOSAL COMPANY, INC.

      NEBRASKA
ECOLOGY SYSTEMS, INC.

      NOBLES
COUNTY LANDFILL, INC.

      NORTHERN
PLAINS DISPOSAL, INC.

      NORTHWEST
CONTAINER SERVICES, INC.

      OKLAHOMA
CITY WASTE DISPOSAL, INC.

      OKLAHOMA
LANDFILL HOLDINGS, INC.

      OSAGE
LANDFILL, INC.

      PSI
ENVIRONMENTAL SERVICES, INC.

      PSI
ENVIRONMENTAL SYSTEMS, INC.PUEBLO SANITATION, INC.

      R.A.
BROWNRIGG INVESTMENTS, INC.

      RED
CARPET LANDFILL, INC.

      RH
FINANCIAL CORPORATION

      RURAL
WASTE MANAGEMENT, INC.

      SAN
LUIS GARBAGE COMPANY

      SCOTT
SOLID WASTE DISPOSAL COMPANY

      SEDALIA
LAND COMPANY

      SOUTH
COUNTY SANITARY SERVICE, INC.

      SOUTHERN
PLAINS DISPOSAL, INC.

      TACOMA
RECYCLING COMPANY, INC.

      TENNESSEE
WASTE MOVERS, INC.

      WASCO
COUNTY LANDFILL, INC.

      WASTE
CONNECTIONS MANAGEMENT SERVICES, INC.

      WASTE
CONNECTIONS OF ALABAMA, INC.

      WASTE
CONNECTIONS OF ARIZONA, INC.

      WASTE
CONNECTIONS OF ARKANSAS, INC.

      WASTE
CONNECTIONS OF CALIFORNIA, INC.

      (F/K/A
AMADOR DISPOSAL SERVICE, INC.)

      WASTE
CONNECTIONS OF COLORADO, INC.

      WASTE
CONNECTIONS OF GEORGIA, INC. (F/K/A WCI OF GEORGIA, INC.)

       

      
 

      
        	
                By:

              	 
      	 
      
	 
      	
                Name:  Worthing
      F. Jackman

              	 
      
	 
      	
                Title:    Chief
      Financial Officer

              	 
      

      

       

      
        
          Signature
Page to Increase Agreement

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      THE BORROWERS:

       

      WASTE
CONNECTIONS OF IDAHO, INC.

      (F/K/A
MOUNTAIN JACK ENVIRONMENTAL SERVICES, INC.)

      WASTE
CONNECTIONS OF ILLINOIS, INC.

      WASTE
CONNECTIONS OF IOWA, INC.

      (F/K/A
WHALEY WASTE SYSTEMS INC.)

      WASTE
CONNECTIONS OF KANSAS, INC.

      WASTE
CONNECTIONS OF KENTUCKY, INC.

      WASTE
CONNECTIONS OF MINNESOTA, INC.

      (F/K/A
RITTER’S SANITARY SERVICE, INC.)

      WASTE
CONNECTIONS OF MISSISSIPPI, INC.

      (F/K/A
LIBERTY WASTE SERVICES OF MISSISSIPPI HOLDINGS, INC.)

      WASTE
CONNECTIONS OF MISSOURI, INC.

      WASTE
CONNECTIONS OF MONTANA, INC.

      WASTE
CONNECTIONS OF NEBRASKA, INC.

      WASTE
CONNECTIONS OF NEW MEXICO, INC.

      WASTE CONNECTIONS OF OKLAHOMA,
INC.

      (F/K/A B & B SANITATION,
INC.)

      WASTE
CONNECTIONS OF OREGON, INC.

      (SUCCESSOR
BY MERGER TO ENVIRONMENTAL WASTE SYSTEMS, INC.AND F/K/A SWEET HOME SANITATION
SERVICE, INC.)

      WASTE
CONNECTIONS OF SOUTH DAKOTA, INC.

      (F/K/A
NOVAK ENTERPRISES, INC.)

      WASTE
CONNECTIONS OF TENNESSEE, INC.

      (F/K/A
LIBERTY WASTE SERVICES OF TENNESSEE HOLDINGS, INC.)

      WASTE
CONNECTIONS OF THE CENTRAL VALLEY, INC.

      (F/K/A/
KINGSBURG DISPOSAL SERVICE, INC.)

      WASTE
CONNECTIONS OF UTAH, INC.

      WASTE
CONNECTIONS OF WASHINGTON, INC.

      WASTE
CONNECTIONS OF WYOMING, INC.

      WASTE
CONNECTIONS TRANSPORTATION COMPANY, INC.

      WASTE
SERVICES OF N.E. MISSISSIPPI, INC.

      WEST
BANK ENVIRONMENTAL SERVICES, INC.

      WEST
COAST RECYCLING AND TRANSFER, INC.

      WYOMING
ENVIRONMENTAL SERVICES, INC.

      WYOMING
ENVIRONMENTAL SYSTEMS, INC.

      

      

      
        	
                By:

              	 
      	 
      
	 
      	
                Name:  Worthing
      F. Jackman

              	 
      
	 
      	
                Title:    Chief
      Financial Officer

              	 
      

      

       

      
        
          Signature
Page to Increase Agreement

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

       

      COLUMBIA
RESOURCE CO., L.P.

      FINLEY-BUTTES
LIMITED PARTNERSHIP

       

      
        	
                By:

              	
                Management
      Environmental National, Inc.,

              	 
      
	 
      	
                its
      General Partner

              	 
      
	 	 	 	 
	 	 	 	 
	 
      	
                By:

              	 
      	 
      
	 
      	
                Name:

              	
                
                  Worthing
      F. Jackman

                

              	 
      
	 	
                Title:

              	
                Chief
      Financial Officer

              	 

      

       

       

       

      
        
          Signature
Page to Increase Agreement

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
THE BORROWERS:

       

      EL
PASO DISPOSAL, LP

       

      
        	
                By:

              	
                Waste
      Connections of Texas, LLC,

              	 
      
	 
      	
                its
      General Partner

              	 
      
	 	 	 	 	 
	 	 	 	 	 
	 
      	
                By:

              	
                Waste
      Connections Management Services, Inc.,

              	 
      
	 
      	 
      	
                its
      Manager

              	 
      
	 	 	 	 	 
	 	 	 	 	 
	 
      	 	
                By:

              	 
      	 
      
	 
      	 	
                Name:

              	
                
                  Worthing
      F. Jackman

                

              	 
      
	 	 	
                Title:

              	
                Chief
      Financial Officer

              	 

      

      

      

      GLACIER
DISPOSAL, L.L.C.

      LAUREL
RIDGE LANDFILL, L.L.C.

      SUNRISE
SANITATION, LLC

      WASTE
CONNECTIONS OF MISSISSIPPI DISPOSAL SERVICES, LLC

      (F/K/A SANTEK ENVIRONMENTAL OF MISSISSIPPI,
L.L.C.)

      WASTE
CONNECTIONS OF LEFLORE, LLC

      (F/K/A WASTE SERVICES OF MISSISSIPPI,
LLC)

      

      
        	
                By:

              	
                Waste
      Connections, Inc.,

              	 
      
	 
      	
                its
      Managing Member

              	 
      
	 	 	 	 
	 	 	 	 
	 
      	
                By:

              	 
      	 
      
	 
      	
                Name:

              	
                Worthing
      F. Jackman  

              	 
	 	
                Title:

              	
                Chief
      Financial Officer

              	 

      

      

      WASTE
CONNECTIONS OF TEXAS, LLC

       

      
        	
                By:

              	
                Waste
      Connections Management Services, Inc.,

              	 
      
	 
      	
                its
      Manager

              	 
      
	 	 	 	 
	 	 	 	 
	 
      	
                By:

              	
                 

              	 
      
	 
      	
                Name:

              	
                Worthing
      F. Jackman

              	
                 

              
	 	
                Title:

              	
                Chief
      Financial Officer

              	 

      

      

      
        
          Signature
Page to Increase Agreement

          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      

      THE BORROWERS:

       

      HORIZON
PROPERTY MANAGEMENT, LLC

      RAILROAD
AVENUE DISPOSAL, LLC

      SCOTT
WASTE SERVICES, LLC

      THE
TRASH COMPANY, LLC

      WASTE
SOLUTIONS GROUP OF SAN BENITO, LLC

      VOORHEES
SANITATION, L.L.C.

      
 

      
        	
                By:

              	
                Waste
      Connections, Inc.

              	 
      
	 
      	
                its
      Manager

              	 
      
	 	 	 	 
	 	 	 	 
	 
      	
                By:

              	
                 

              	 
      
	 
      	
                Name:

              	
                Worthing
      F. Jackman

              	
                 
    

              
	 	
                Title:

              	
                Chief
      Financial Officer

              	 

      

       

       

      Signature Page to Increase
Agreement2008 Stock Plan

 Exhibit 10.4 
 SOLARWINDS, INC. 
 2008 EQUITY INCENTIVE PLAN 
 1. Purposes of the Plan. The purposes of this Plan are: 
  

	 	•	 	 to attract and retain the best available personnel for positions of substantial responsibility, 

  

	 	•	 	 to provide additional incentive to Employees, Directors and Consultants, and 

  

	 	•	 	 to promote the success of the Company’s business. 

 The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units and Performance Shares. 
 2. Definitions. As used herein, the following definitions will apply: 
 (a) “Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the
Plan. 
 (b) “Affiliate” means any corporation or any other entity (including, but not limited to, partnerships and joint
ventures) controlling, controlled by, or under common control with the Company. 
 (c) “Applicable Laws” means the
requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan. 
 (d) “Award”
means, individually or collectively, a grant under the Plan of Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares. 
 (e) “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted
under the Plan. The Award Agreement is subject to the terms and conditions of the Plan. 
 (f) “Board” means the Board of
Directors of the Company. 
 (g) “Cause” means, in the absence of any employment agreement between a Participant and the
Company (or the Affiliate employing Participant) otherwise defining Cause, (i) acts of personal dishonesty, gross negligence or willful misconduct on the part of a Participant 

 
in the course of his or her employment or services, (ii) a Participant’s engagement in conduct that results, or could reasonably be expected to
result, in material injury to the reputation or business of the Company or its Affiliates, (iii) misappropriation by a Participant of the assets or business opportunities of the Company or its Affiliates; (iv) embezzlement or fraud
committed by a Participant, at his or her direction, or with his or her personal knowledge; (v) a Participant’s conviction by a court of competent jurisdiction of, or pleading “guilty” or “no contest” to, (x) a
felony, or (y) any other criminal charge (other than minor traffic violations) that has, or could be reasonably expected to have, an adverse impact on the performance of the Participant’s duties to the Company or its Affiliates; or
(vi) failure by a Participant to follow the lawful directions of a superior officer or the Board. In the event there is an employment agreement between a Participant and the Company or Affiliate employing Participant defining Cause,
“Cause” will have the meaning provided in such agreement. 
 (h) “Change in Control” means the occurrence of any
of the following events: 
 (i) A change in the ownership of the Company which occurs on the date that any one person, or more than one
person acting as a group (“Person”), acquires ownership of the stock of the Company that, together with the stock held by such Person, constitutes more than 50% of the total voting power of the stock of the Company; provided,
however, that for purposes of this subsection (i), the acquisition of additional stock by any one Person, who is considered to own more than 50% of the total voting power of the stock of the Company will not be considered a Change in Control; or

 (ii) A change in the effective control of the Company which occurs on the date that a majority of members of the Board is replaced during
any twelve (12) month period by Directors whose appointment or election is not endorsed by a majority of the members of the Board prior to the date of the appointment or election. For purposes of this clause (ii), if any Person is considered to
be in effective control of the Company, the acquisition of additional control of the Company by the same Person will not be considered a Change in Control; or 
 (iii) A change in the ownership of a substantial portion of the Company’s assets which occurs on the date that any Person acquires (or has acquired during the twelve (12) month period ending on the date of
the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 50% of the total gross fair market value of all of the assets of the Company immediately prior to such
acquisition or acquisitions; provided, however, that for purposes of this subsection (iii), the following will not constitute a change in the ownership of a substantial portion of the Company’s assets: (A) a transfer to an entity that is
controlled by the Company’s stockholders immediately after the transfer, or (B) a transfer of assets by the Company to: (1) a stockholder of the Company (immediately before the asset transfer) in exchange for or with respect to the
Company’s stock, (2) an entity, 50% or more of the total value or voting power of which is owned, directly or indirectly, by the Company, (3) a Person, that owns, directly or indirectly, 50% or more of the total value or voting power
of all the outstanding stock of the Company, or (4) an entity, at least 50% of the total value or voting power of which is owned, directly or indirectly, by a Person described in this subsection (iii)(B)(3). For purposes of this subsection
(iii), gross fair market value means the value of the assets of the Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets. 
  

 -2- 

 For purposes of this definition, persons will be considered to be acting as a group if they are owners
of a corporation that enters into a merger, consolidation, purchase or acquisition of stock, or similar business transaction with the Company. 
 (i) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will be a reference to any successor or amended section of the Code. 
 (j) “Committee” means a committee of Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance
with Section 4 hereof. 
 (k) “Common Stock” means the common stock of the Company. 
 (l) “Company” means SolarWinds, Inc., a Delaware corporation, or any successor thereto. 
 (m) “Consultant” means any person, including an advisor, engaged by the Company or its Affiliates to render services to such entity.

 (n) “Director” means a member of the Board. 
 (o) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code, provided that in the case of
Awards other than Incentive Stock Options, the Administrator in its discretion may determine whether a permanent and total disability exists in accordance with uniform and non-discriminatory standards adopted by the Administrator from time to time.

 (p) “Employee” means any person, including Officers and Directors, employed by the Company or its Affiliates. Neither
service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company. 
 (q) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 (r) “Exchange
Program” means a program under which (i) outstanding Awards are surrendered or cancelled in exchange for Awards of the same type (which may have higher or lower exercise prices and different terms), Awards of a different type, and/or
cash, (ii) Participants would have the opportunity to transfer any outstanding Awards to a financial institution or other person or entity selected by the Administrator, and/or (iii) the exercise price of an outstanding Award is reduced.
The Administrator will determine the terms and conditions of any Exchange Program in its sole discretion. 
 (s) “Fair Market
Value” means, as of any date, the value of Common Stock determined as follows: 
 (i) If the Common Stock is listed on any
established stock exchange or a national market system, including, without limitation, the New York Stock Exchange, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales 

  

 -3- 

 
were reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; 
 (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not
reported, the Fair Market Value of a Share will be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems
reliable; 
 (iii) For purposes of any Awards granted on the Registration Date, the Fair Market Value will be the initial price to the
public as set forth in the final prospectus included within the registration statement in Form S-1 filed with the Securities and Exchange Commission for the initial public offering of the Company’s Common Stock; or 
 (iv) In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator.

 (t) “Family Member” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse,
sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive relationships) of the Employee, any person sharing the Employee’s household (other than a tenant or
employee), a trust in which these persons (or the Employee) have more than 50% of the beneficial interest, a foundation in which these persons (or the Employee) control the management of assets, and any other entity in which these persons (or the
Employee) own more than 50% of the voting interests. 
 (u) “Fiscal Year” means the fiscal year of the Company. 

(v) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422
of the Code and the regulations promulgated thereunder. 
 (w) “Inside Director” means a Director who is an Employee.

 (x) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to qualify as an
Incentive Stock Option. 
 (y) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
 (z) “Option” means a stock
option granted pursuant to the Plan. 
 (aa) “Outside Director” means a Director who is not an Employee. 
 (bb) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.

 (cc) “Participant” means the holder of an outstanding Award. 
  

 -4- 

 (dd) “Performance Share” means an Award denominated in Shares which may be earned in
whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine pursuant to Section 10. 
 (ee) “Performance Unit” means an Award which may be earned in whole or in part upon attainment of performance goals or other vesting criteria as the Administrator may determine and which may be settled for cash, Shares or
other securities or a combination of the foregoing pursuant to Section 10. 
 (ff) “Period of Restriction” means the
period during which the transfer of Shares of Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of target
levels of performance, or the occurrence of other events as determined by the Administrator. 
 (gg) “Plan” means this 2008
Equity Incentive Plan. 
 (hh) “Registration Date” means the effective date of the first registration statement that is
filed by the Company and declared effective pursuant to Section 12 of the Exchange Act, with respect to any class of the Company’s securities. 
 (ii) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under Section 7 of the Plan, or issued pursuant to the early exercise of an Option. 
 (jj) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share, granted
pursuant to Section 8. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company. 
 (kk) “Rule
16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 
 (ll) “Section 16(b)” means Section 16(b) of the Exchange Act. 
 (mm)
“Service Provider” means an Employee, Director or Consultant. 
 (nn) “Share” means a share of the Common
Stock, as adjusted in accordance with Section 15 of the Plan. 
 (oo) “Stock Appreciation Right” means an Award,
granted alone or in connection with an Option, that pursuant to Section 9 is designated as a Stock Appreciation Right. 
 (pp)
“Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code. 
 3. Stock Subject to the Plan. 
  

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 (a) Stock Subject to the Plan. Subject to the provisions of Section 15 of
the Plan, the maximum aggregate number of Shares that may be issued under the Plan is 3,500,000 Shares, plus (i) any Shares that, as of the Registration Date, have been reserved but not issued pursuant to any awards granted under the
SolarWinds, Inc. Stock Incentive Plan (the “Existing Plan”) and are not subject to any awards granted thereunder, and (ii) any Shares subject to stock options or similar awards granted under the Existing Plan that expire or
otherwise terminate without having been exercised in full and Shares issued pursuant to awards granted under the Existing Plan that are forfeited to or repurchased by the Company, up to a maximum of 11,265,818 Shares. The Shares may be authorized,
but unissued, or reacquired Common Stock. 
 (b) Automatic Share Reserve Increase. The number of Shares available for issuance under
the Plan will be increased on the first day of each Fiscal Year beginning with the 2009 Fiscal Year, in an amount equal to the lesser of (i) 6,000,000 Shares, (ii) four and three quarters percent (4.75%) of the number of Shares
outstanding on the last day of the immediately preceding Fiscal Year and (ii) such lesser number of Shares as may be determined by the Board. 
 (c) Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an Exchange Program, or, with respect to Restricted Stock, Restricted Stock Units, Performance Units or
Performance Shares, is forfeited to or repurchased by the Company due to failure to vest, the unpurchased Shares (or for Awards other than Options or Stock Appreciation Rights the forfeited or repurchased Shares) which were subject thereto will
become available for future grant or sale under the Plan (unless the Plan has terminated). With respect to Stock Appreciation Rights, only Shares actually issued (i.e., the net Shares issued) pursuant to a Stock Appreciation Right will cease to be
available under the Plan; all remaining Shares under Stock Appreciation Rights will remain available for future grant or sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan under any Award will
not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Awards of Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units are
repurchased by the Company or are forfeited to the Company, such Shares will become available for future grant under the Plan. Shares used to pay the exercise price of an Award or to satisfy the tax withholding obligations related to an Award will
become available for future grant or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than Shares, such cash payment will not result in reducing the number of Shares available for issuance under the Plan.
Notwithstanding the foregoing and, subject to adjustment as provided in Section 15, the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options will equal the aggregate Share number stated in Section 3(a),
plus, to the extent allowable under Section 422 of the Code and the Treasury Regulations promulgated thereunder, any Shares that become available for issuance under the Plan pursuant to Sections 3(b) and 3(c). 
 (d) Share Reserve. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as will be
sufficient to satisfy the requirements of the Plan. 
  

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 4. Administration of the Plan. 
 (a) Procedure. 
 (i) Multiple
Administrative Bodies. Different Committees with respect to different groups of Service Providers may administer the Plan. 
 (ii)
Section 162(m). To the extent that the Administrator determines it to be desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan will be
administered by a Committee of two (2) or more “outside directors” within the meaning of Section 162(m) of the Code. 
 (iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3.

 (iv) Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a
Committee, which committee will be constituted to satisfy Applicable Laws. 
 (b) Powers of the Administrator. Subject to the
provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion: 
 (i) to determine the Fair Market Value; 
 (ii) to select the Service Providers to whom Awards may be granted hereunder; 
 (iii) to determine the number of Shares to be
covered by each Award granted hereunder; 
 (iv) to approve forms of Award Agreements for use under the Plan; 
 (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator will determine; 
 (vi) to
determine the terms and conditions of any, and to institute any Exchange Program; 
 (vii) to construe and interpret the terms of the Plan
and Awards granted pursuant to the Plan; 
  

 -7- 

 (viii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and
regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws; 
 (ix) to modify or amend each Award
(subject to Section 20(c) of the Plan), including but not limited to the discretionary authority to extend the post-termination exercisability period of Awards and to extend the maximum term of an Option (subject to Section 6(b) regarding
Incentive Stock Options); 
 (x) to allow Participants to satisfy withholding tax obligations in such manner as prescribed in
Section 16; 
 (xi) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award
previously granted by the Administrator; 
 (xii) to allow a Participant to defer the receipt of the payment of cash or the delivery of
Shares that would otherwise be due to such Participant under an Award; and 
 (xiii) to make all other determinations deemed necessary or
advisable for administering the Plan. 
 (c) Effect of Administrator’s Decision. The Administrator’s decisions,
determinations and interpretations will be final and binding on all Participants and any other holders of Awards. 
 (d) No Liability.
Under no circumstances shall the Company, its Affiliates, the Administrator, or the Board incur liability for any indirect, incidental, consequential or special damages (including lost profits) of any form incurred by any person, whether or not
foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan or the Company’s, its Affiliates’, the Administrator’s or the Board’s roles in connection with the Plan. 

5. Eligibility. Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units, Performance Units, and Performance Shares may be granted
to Service Providers. Incentive Stock Options may be granted only to employees of the Company or any Parent or Subsidiary of the Company. 
 6. Stock Options. 
 (a) Limitations. Each Option will be designated in the Award Agreement as either an Incentive
Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the
Participant during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options will be taken into account in the order in which they were granted. The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted. 
  

 -8- 

 (b) Term of Option. The term of each Option will be stated in the Award Agreement. In the case of
an Incentive Stock Option, the term will be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the
Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five
(5) years from the date of grant or such shorter term as may be provided in the Award Agreement. 
 (c) Option Exercise Price and
Consideration. 
 (i) The per Share exercise price for the Shares to be issued pursuant to the exercise of an Option will be determined
by the Administrator, but will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. In addition, in the case of an Incentive Stock Option granted to an employee of the Company or any Parent or
Subsidiary of the Company who owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than one hundred ten percent
(110%) of the Fair Market Value per Share on the date of grant. Notwithstanding the foregoing provisions of this Section 6(c)(i), Options may be granted with a per Share exercise price of less than one hundred percent (100%) of the
Fair Market Value per Share on the date of grant pursuant to a transaction described in, and in a manner consistent with, Code Section 424(a). 
 (ii) Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied
before the Option may be exercised. 
 (iii) Form of Consideration. The Administrator will determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely
of: (1) cash; (2) check; (3) promissory note, to the extent permitted by Applicable Laws, (4) other Shares, provided that such Shares have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option will be exercised and provided further that accepting such Shares will not result in any adverse accounting consequences to the Company, as the Administrator determines in its sole discretion; (5) consideration
received by the Company under cashless exercise program (whether through a broker or otherwise) implemented by the Company in connection with the Plan; (6) by net exercise; (7) such other consideration and method of payment for the
issuance of Shares to the extent permitted by Applicable Laws; or (8) any combination of the foregoing methods of payment. 
 (d)
Exercise of Option. 
 (i) Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable
according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share. 
  

 -9- 

 An Option will be deemed exercised when the Company receives: (i) notice of exercise (in such form
as the Administrator may specify from time to time) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with applicable withholding taxes). Full payment
may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if requested by the
Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive
dividends or any other rights as a stockholder will exist with respect to the Shares subject to an Option, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is exercised.
No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 15 of the Plan. 
 Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option,
by the number of Shares as to which the Option is exercised. 
 (ii) Termination of Relationship as a Service Provider. If a
Participant ceases to be a Service Provider, other than upon the Participant’s termination as the result of the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in
the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award
Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If after termination the Participant does not exercise his or her Option within the time specified by the Administrator, the Option will terminate, and the
Shares covered by such Option will revert to the Plan. 
 (iii) Disability of Participant. If a Participant ceases to be a Service
Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no
event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following the
Participant’s termination. Unless otherwise provided by the Administrator, if on the date of termination the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the
Plan. If after termination the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to the Plan. 
 (iv) Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised following the Participant’s death
within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but 

  

 -10- 

 
in no event may the option be exercised later than the expiration of the term of such Option as set forth in the Award Agreement), by the Participant’s
designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the Participant, then such Option may be exercised by
the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the laws of descent and distribution. In the absence of a specified time
in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death. Unless otherwise provided by the Administrator, if at the time of death Participant is not vested as to his or her entire
Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to
the Plan. 
 (v) Termination for Cause. If a Participant’s status as a Service Provider is terminated for Cause, then the Option
will immediately terminate, and the Shares covered by such Option will revert to and again become available for issuance under the Plan. 
 7. Restricted Stock. 
 (a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion, will determine. 
 (b) Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of
Restriction, the number of Shares granted, and such other terms and conditions as the Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, the Company as escrow agent will hold Shares of Restricted
Stock until the restrictions on such Shares have lapsed. 
 (c) Transferability. Except as provided in this Section 7, Shares of
Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the applicable Period of Restriction. 
 (d) Other Restrictions. The Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate. 
 (e) Removal of Restrictions. Except as otherwise provided in this Section 7, Shares of Restricted Stock covered by each Restricted Stock
grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction or at such other time as the Administrator may determine. The Administrator, in its discretion, may accelerate the time at
which any restrictions will lapse or be removed. 
 (f) Voting Rights. During the Period of Restriction, Service Providers holding
Shares of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise. 
 (g) Dividends and Other Distributions. During the Period of Restriction, Service Providers holding Shares of Restricted Stock will be entitled to receive all dividends and 

  

 -11- 

 
other distributions paid with respect to such Shares, unless the Administrator provides otherwise. If any such dividends or distributions are paid in Shares,
the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were paid. 
 (h) Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Restricted Stock for which restrictions have not lapsed will revert to the Company and again will become available
for grant under the Plan. 
 8. Restricted Stock Units. 
 (a) Grant. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. After the Administrator determines that it will grant Restricted Stock Units under the
Plan, it will advise the Participant in an Award Agreement of the terms, conditions, and restrictions related to the grant, including the number of Restricted Stock Units. 
 (b) Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the
criteria are met, will determine the number of Restricted Stock Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but
not limited to, continued employment), or any other basis determined by the Administrator in its discretion. 
 (c) Earning Restricted
Stock Units. Upon meeting the applicable vesting criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout. 
 (d) Form and
Timing of Payment. Payment of earned Restricted Stock Units will be made as soon as practicable after the date(s) determined by the Administrator and set forth in the Award Agreement. The Administrator, in its sole discretion, may only settle
earned Restricted Stock Units in cash, Shares, or a combination of both. 
 (e) Cancellation. On the date set forth in the Award
Agreement, all unearned Restricted Stock Units will be forfeited to the Company. 
 9. Stock Appreciation Rights. 
 (a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the Plan, a Stock Appreciation Right may be granted to Service
Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion. 
 (b) Number of
Shares. The Administrator will have complete discretion to determine the number of Stock Appreciation Rights granted to any Service Provider. 
  

 -12- 

 (c) Exercise Price and Other Terms. The per share exercise price for the Shares to be issued
pursuant to exercise of a Stock Appreciation Right will be determined by the Administrator and will be no less than one hundred percent (100%) of the Fair Market Value per Share on the date of grant. Otherwise, the Administrator, subject to the
provisions of the Plan, will have complete discretion to determine the terms and conditions of Stock Appreciation Rights granted under the Plan. 
 (d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the Stock Appreciation Right, the conditions of exercise, and such
other terms and conditions as the Administrator, in its sole discretion, will determine. 
 (e) Expiration of Stock Appreciation
Rights. A Stock Appreciation Right granted under the Plan will expire upon the date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6(b)
relating to the maximum term and Section 6(d) relating to exercise also will apply to Stock Appreciation Rights. 
 (f) Payment of
Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation Right, a Participant will be entitled to receive payment from the Company in an amount determined by multiplying: 
 (i) The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times 
 (ii) The number of Shares with respect to which the Stock Appreciation Right is exercised. 
 At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may be in cash, in Shares of equivalent value, or in some
combination thereof. 
 10. Performance Units and Performance Shares. 
 (a) Grant of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers at any time and from time to
time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Performance Units and Performance Shares granted to each Participant. 
 (b) Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or before the
date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant. 
 (c)
Performance Objectives and Other Terms. The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to
which they are met, will determine the number or value of Performance Units/Shares that will be paid out to the 

  

 -13- 

 
Service Providers. The time period during which the performance objectives or other vesting provisions must be met will be called the “Performance
Period.” Each Award of Performance Units/Shares will be evidenced by an Award Agreement that will specify the Performance Period, and such other terms and conditions as the Administrator, in its sole discretion, will determine. The
Administrator may set performance objectives based upon the achievement of Company-wide, divisional, or individual goals, applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion. 

(d) Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be
entitled to receive a payout of the number of Performance Units/Shares earned by the Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions
have been achieved. After the grant of a Performance Unit/Share, the Administrator, in its sole discretion, may reduce or waive any performance objectives or other vesting provisions for such Performance Unit/Share. 
 (e) Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance Units/Shares will be made as soon as practicable after
the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned
Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof. 
 (f) Cancellation of
Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available for grant under the Plan. 
 11. Formula Awards to Outside Directors. 
 (a) General. Outside Directors will be entitled to receive all types of Awards (except Incentive Stock Options) under this Plan, including discretionary Awards not covered under this Section 11. All grants of Awards to Outside
Directors pursuant to this Section will be automatic and nondiscretionary, except as otherwise provided herein, and will be made in accordance with the following provisions: 
 (b) Type of Option. If Options are granted pursuant to this Section they will be Nonstatutory Stock Options and, except as otherwise provided
herein, will be subject to the other terms and conditions of the Plan. 
 (c) No Discretion. No person will have any discretion to
select which Outside Directors will be granted Awards under this Section or to determine the number of Shares to be covered by such Awards (except as provided in Sections 11 and 14). 
 (d) Initial Award. Each person who first becomes an Outside Director following the Registration Date will be automatically granted an Option to
purchase 30,000 Shares (the “Initial Award”) on or about the date on which such person first becomes an Outside Director, whether through election by the stockholders of the Company or appointment by the 

  

 -14- 

 
Board to fill a vacancy; provided, however, that an Inside Director who ceases to be an Inside Director, but who remains a Director, will not receive an
Initial Award. 
 (e) Annual Award. Each Outside Director will be automatically granted (an “Annual Award”) on each date of
the annual meeting of the stockholders of the Company beginning in 2008, if as of such date, he or she will have served on the Board for at least the preceding six (6) months (i) an Option to purchase a number of Shares determined by
dividing (A) $75,000, by (B) the value of an Option to purchase one Share with the same terms set forth below for an Option granted pursuant to the Annual Award determined using the Black-Scholes valuation model or such other valuation
method as the Administrator determines in its discretion, with the number of Shares rounded up to the nearest whole Share, and (ii) a number of Shares of Restricted Stock determined by dividing (A) $25,000 by (B) the Fair Market Value
of a Share on the date of grant, with the number of Shares rounded up to the nearest whole Share. 
 (f) Terms. The terms of each
Award granted pursuant to this Section will be as follows: 
 (i) The term of an Option granted under this Section 11 will be
ten (10) years. 
 (ii) The exercise price for Shares subject to Options granted under this Section 11 will be one
hundred percent (100%) of the Fair Market Value on the grant date. 
 (iii) Subject to Section 15, the Initial Award will vest and
become exercisable over a three (3) year period with one-third (1/3) of the Shares subject to the Initial Award vesting on the first anniversary of the vesting commencement date, and 1/36 of the Shares subject to the Initial Award vesting
on the last day of each full calendar month thereafter, provided that the Participant continues to serve as a Director through such dates. 
 (iv) Subject to Section 15, the Options granted under an Annual Award will vest and become exercisable as to one hundred percent (100%) of the Shares subject to such Option on the earlier of (i) the date of the next
annual meeting following the date of grant or (ii) the December 31 of the calendar year following the calendar year in which the grant occurs, provided that the Participant continues to serve as a Director through such date. 
 (v) The Restricted Stock awarded under the Annual Award will be issued for no cash consideration and will be forfeited and automatically transferred to
and reacquired by the Company at no cost to the Company upon the date the Director ceases to provide services as a member of the Board (the “Forfeiture Provision”). The Forfeiture Provision will lapse on the earlier of
(i) the date of the next annual meeting following the date of grant of the award or (ii) the December 31 of the calendar year following the calendar year in which the award is granted, provided that the Participant continues
to serve as a Director through such date. 
 (g) Adjustments. The Administrator in its discretion may change and otherwise revise the
terms of Awards granted under this Section 11, including, without limitation, the number of Shares and exercise prices thereof, for Awards granted on or after the date the Administrator determines to make any such change or revision.

  

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 12. Compliance With Code Section 409A. Awards will be designed and operated in such a manner
that they are either exempt from the application of, or comply with, the requirements of Code Section 409A such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code
Section 409A, except as otherwise determined in the sole discretion of the Administrator. The Plan and each Award Agreement under the Plan is intended to meet the requirements of Code Section 409A and will be construed and interpreted
in accordance with such intent, except as otherwise determined in the sole discretion of the Administrator. To the extent that an Award or payment, or the settlement or deferral thereof, is subject to Code Section 409A the Award will be
granted, paid, settled or deferred in a manner that will meet the requirements of Code Section 409A, such that the grant, payment, settlement or deferral will not be subject to the additional tax or interest applicable under Code
Section 409A. 
 13. Leaves of Absence/Transfer Between Locations. Unless
the Administrator provides otherwise, vesting of Awards granted hereunder will be suspended during any unpaid leave of absence. A Participant will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or
(ii) transfers between locations of the Company or between the Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is
guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then six (6) months following the first (1st) day of such leave, any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a
Nonstatutory Stock Option. 
 14. Transferability of Awards. Unless determined otherwise by the Administrator, an Award may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator
makes an Award transferable, including, without limitation, by instrument to an inter vivos or testamentary trust in which the Awards are to be passed to beneficiaries upon the death of the trustor (settlor) or by gift to Family Members, such Award
will contain such additional terms and conditions as the Administrator deems appropriate. 
 15. Adjustments; Dissolution or Liquidation;
Merger or Change in Control. 
 (a) Adjustments. In the event that any dividend or other distribution (whether in the form of
cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or
other change in the corporate structure of the Company affecting the Shares occurs, the Administrator, in order to prevent diminution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will adjust the
number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, the numerical Share limits in Section 3 of the Plan, and the number of Shares issuable pursuant to
Awards to be granted under Section 11 of the Plan. 
  

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 (b) Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the
Company, the Administrator will notify each Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the
consummation of such proposed action. 
 (c) Change in Control. In the event of a merger or Change in Control, each outstanding Award
will be treated as the Administrator determines without a Participant’s consent, including, without limitation, that (i) Awards will be assumed, or substantially equivalent Awards will be substituted, by the acquiring or succeeding
corporation (or an affiliate thereof) with appropriate adjustments as to the number and kind of shares and prices; (ii) upon written notice to a Participant, that the Participant’s Awards will terminate immediately prior to the
consummation of such merger or Change in Control; (iii) outstanding Awards will vest and become exercisable, realizable, or payable, or restrictions applicable to an Award will lapse, in whole or in part prior to or upon consummation of such
merger or Change in Control, and, to the extent the Administrator determines, terminate upon the effectiveness of such merger of Change in Control; (iv) (A) the termination of an Award in exchange for an amount of cash and/or property, if
any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights as of the date of the occurrence of the transaction (and, for the avoidance of doubt, if as of the date of the
occurrence of the transaction the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company
without payment), or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion; or (v) any combination of the foregoing. In taking any of the actions permitted under this
subsection 15(c), the Administrator will not be obligated to treat all Awards, all Awards held by a Participant, or all Awards of the same type, similarly. 
 In the event that the successor corporation does not assume or substitute for the Award, the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation
Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Awards with performance-based vesting, all performance
goals or other vesting criteria will be deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right is not assumed or substituted in the event of a
Change in Control, the Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be exercisable for a period of time determined by the Administrator in its sole discretion, and the Option
or Stock Appreciation Right will terminate upon the expiration of such period. 
 For the purposes of this subsection (c), an Award will be
considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities
or property) received in the Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of 

  

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a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted
Stock Unit, Performance Unit or Performance Share, for each Share subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common
Stock in the Change in Control. 
 Notwithstanding anything in this Section 15(c) to the contrary, an Award that vests, is earned or
paid-out upon the satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such
performance goals only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption. 
 (d) Outside Director Awards. With respect to Awards granted to an Outside Director that are assumed or substituted for, if on the date of or
following such assumption or substitution the Participant’s status as a Director or a director of the successor corporation, as applicable, is terminated other than upon a voluntary resignation by the Participant (unless such resignation is at
the request of the acquirer), then the Participant will fully vest in and have the right to exercise Options and/or Stock Appreciation Rights as to all of the Shares underlying such Award, including those Shares which would not otherwise be vested
or exercisable, all restrictions on Restricted Stock and Restricted Stock Units will lapse, and, with respect to Performance Units and Performance Shares, all performance goals or other vesting criteria will be deemed achieved at one hundred percent
(100%) of target levels and all other terms and conditions met. 
 16. Tax Withholding. 
 (a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or exercise thereof), the Company will have the
power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, local, foreign or other taxes (including the Participant’s FICA obligation) required to be withheld
with respect to such Award (or exercise thereof). 
 (b) Withholding Arrangements. The Administrator, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (without limitation) (a) paying cash, (b) electing to have the Company withhold
otherwise deliverable cash or Shares having a Fair Market Value equal to the minimum statutory amount required to be withheld, or (c) delivering to the Company already-owned Shares having a Fair Market Value equal to the minimum statutory
amount required to be withheld. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the date that the taxes are required to be withheld. 
 17. No Effect on Employment or Service. Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the
Participant’s relationship as a 

  

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Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s right to terminate such
relationship at any time, with or without cause, to the extent permitted by Applicable Laws. 
 18. Date of Grant. The date of grant
of an Award will be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant
within a reasonable time after the date of such grant. 
 19. Term of Plan. Subject to Section 23 of the Plan, the Plan will
become effective upon its adoption by the Board. It will continue in effect for a term of ten (10) years from the date adopted by the Board, unless terminated earlier under Section 20 of the Plan. 
 20. Amendment and Termination of the Plan. 
 (a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan. 
 (b) Stockholder
Approval. The Company will obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. 
 (c) Effect of Amendment or Termination. No amendment, alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and
the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan will not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination. 
 21. Conditions Upon Issuance of Shares. 
 (a) Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and
delivery of such Shares will comply with Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance. 
 (b) Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are
being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 
 22. Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which authority
is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority
will not have been obtained. 
  

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 23. Stockholder Approval. The Plan will be subject to approval by the stockholders of the Company
within twelve (12) months after the date the Plan is adopted by the Board. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws. 
  

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