Document:

exv10w3

Exhibit 10.3

ATHENAHEALTH, INC.

2007 STOCK OPTION AND INCENTIVE PLAN

As Amended and Restated as of May 27, 2011

	SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS

     The name of the plan is the athenahealth, Inc. 2007 Stock Option and Incentive Plan (the
“Plan”). The purpose of the Plan is to encourage and enable the officers, employees, directors and
other key persons (including consultants and prospective employees) of athenahealth, Inc. (the
“Company”) and its Subsidiaries upon whose judgment, initiative and efforts the Company largely
depends for the successful conduct of its business to acquire a proprietary interest in the
Company. It is anticipated that providing such persons with a direct stake in the Company’s
welfare will assure a closer identification of their interests with those of the Company and its
stockholders, thereby stimulating their efforts on the Company’s behalf and strengthening their
desire to remain with the Company.

     The following terms shall be defined as set forth below:

     “Act” means the Securities Act of 1933, as amended, and the rules and regulations thereunder.

     “Administrator” means either the Board or the Compensation Committee of the Board or a similar
committee performing the functions of the compensation committee and which is comprised of not less
than two Non-Employee Directors.

     “Award” or “Awards,” except where referring to a particular category of grant under the Plan,
shall include Incentive Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
Deferred Stock Awards, Restricted Stock Awards, Unrestricted Stock Awards, Cash-based Awards,
Performance Shares and Dividend Equivalent Rights.

     “Award Agreement” means a written or electronic agreement setting forth the terms and
provisions applicable to an Award granted under the Plan. Each Award Agreement is subject to the
terms and conditions of the Plan.

     “Board” means the Board of Directors of the Company.

     “Cash-based Award” means an Award entitling the recipient to receive a cash-denominated
payment.

     “Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and
related rules, regulations and interpretations.

     “Committee” means a committee of the Board.

     “Covered Employee” means an employee who is a “Covered Employee” within the meaning of Section
162(m) of the Code.

 

 

     “Deferred Stock Award” means an Award of phantom stock units to a grantee, subject to
restrictions and conditions as the Administrator may determine at the time of grant.

     “Dividend Equivalent Right” means an Award entitling the grantee to receive credits based on
cash dividends that would have been paid on the shares of Stock specified in the Dividend
Equivalent Right (or other award to which it relates) if such shares had been issued to and held by
the grantee.

     “Effective Date” means the date on which the Plan is approved by stockholders as set forth in
Section 20.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder.

     “Fair Market Value” of the Stock on any given date means the fair market value of the Stock
determined in good faith by the Administrator; provided, however, that if the Stock is admitted to
quotation on a national securities exchange, the determination shall be made by reference to market
quotations. If there are no market quotations for such date, the determination shall be made by
reference to the last date preceding such date for which there are market quotations.

     “Incentive Stock Option” means any Stock Option designated and qualified as an “incentive
stock option” as defined in Section 422 of the Code.

     “Non-Employee Director” means a member of the Board who is not also an employee of the Company
or any Subsidiary.

     “Non-Qualified Stock Option” means any Stock Option that is not an Incentive Stock Option.

     “Option” or “Stock Option” means any option to purchase shares of Stock granted pursuant to
Section 5.

     “Performance-based Award” means any Restricted Stock Award, Deferred Stock Award, Performance
Share Award or Cash-based Award granted to a Covered Employee that is intended to qualify as
“performance-based compensation” under Section 162(m) of the Code and the regulations promulgated
thereunder.

     “Performance Criteria” means the criteria that the Administrator selects for purposes of
establishing the Performance Goal or Performance Goals for an individual for a Performance Cycle.
The Performance Criteria (which shall be applicable to an individual or to the organizational level
specified by the Administrator, including, but not limited to, the Company or a unit, division,
group, or Subsidiary of the Company) that will be used to establish Performance Goals are limited
to the following: earnings before interest, taxes, depreciation and amortization, net income (loss)
(either before or after interest, taxes, depreciation and/or amortization), changes in the market
price of the Stock, economic value-added, funds from operations or similar measure, sales or
revenue, acquisitions or strategic transactions, operating income (loss), cash flow (including, but
not limited to, operating cash flow and free cash flow), return on

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capital, assets, equity, or investment, stockholder returns, return on sales, gross or net
profit levels, productivity, expense, margins, operating efficiency, voluntary turnover, employee
engagement, client days-in-accounts-receivable, lost patient care revenue, client work rate,
provider time per relative value unit, provider documentation time per appointment, client
satisfaction, sales bookings, working capital, earnings (loss) per share of Stock, sales or market
shares and number of customers, any of which may be measured either in absolute terms or as
compared to any incremental increase or as compared to results of a peer group.

     “Performance Cycle” means one or more periods of time, which may be of varying and overlapping
durations, as the Administrator may select, over which the attainment of one or more Performance
Criteria will be measured for the purpose of determining a grantee’s right to and the payment of a
Restricted Stock Award, Deferred Stock Award or Cash-based Award. Each such period shall not be
less than 12 months.

     “Performance Goals” means, for a Performance Cycle, the specific goals established in writing
by the Administrator for a Performance Cycle based upon the Performance Criteria.

     “Performance Share Award” means an Award entitling the recipient to acquire shares of Stock
upon the attainment of specified Performance Goals.

     “Restricted Stock Award” means an Award entitling the recipient to acquire, at such purchase
price (which may be zero) as determined by the Administrator, shares of Stock subject to such
restrictions and conditions as the Administrator may determine at the time of grant.

     “Sale Event” shall mean (i) the dissolution or liquidation of the Company, (ii) the sale of
all or substantially all of the assets of the Company on a consolidated basis to an unrelated
person or entity, (iii) a merger, reorganization or consolidation in which the outstanding shares
of Stock are converted into or exchanged for securities of the successor entity and the holders of
the Company’s outstanding voting power immediately prior to such transaction do not own a majority
of the outstanding voting power of the successor entity (or its ultimate parent, if applicable)
immediately upon completion of such transaction, or (iv) the sale of all of the Stock of the
Company to an unrelated person or entity.

     “Sale Price” means the value as determined by the Administrator of the consideration payable,
or otherwise to be received by stockholders, per share of Stock pursuant to a Sale Event.

     “Section 409A” means Section 409A of the Code and the regulations and other guidance
promulgated thereunder.

     “Stock” means the Common Stock, par value $0.001 per share, of the Company, subject to
adjustments pursuant to Section 3.

     “Stock Appreciation Right” means an Award entitling the recipient to receive shares of Stock
having a value equal to the excess of the Fair Market Value of the Stock on the date of exercise
over the exercise price of the Stock Appreciation Right multiplied by the number of shares of Stock
with respect to which the Stock Appreciation Right shall have been exercised.

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     “Subsidiary” means any corporation or other entity (other than the Company) in which the
Company has at least a 50 percent interest, either directly or indirectly.

     “Ten Percent Owner” means an employee who owns or is deemed to own (by reason of the
attribution rules of Section 424(d) of the Code) more than 10 percent of the combined voting power
of all classes of stock of the Company or any parent or subsidiary corporation.

     “Unrestricted Stock Award” means an Award of shares of Stock free of any restrictions.

			
	SECTION 2.	 ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO SELECT GRANTEES AND DETERMINE AWARDS

     (a) Administrator. The Plan shall be administered by the Administrator.

     (b) Powers of Administrator. The Administrator shall have the power and authority to
grant Awards consistent with the terms of the Plan, including the power and authority:

          (i) to select the individuals to whom Awards may from time to time be granted;

          (ii) to determine the time or times of grant, and the extent, if any, of Incentive Stock
Options, Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock Awards, Deferred
Stock Awards, Unrestricted Stock Awards, Cash-based Awards, Performance Share Awards and Dividend
Equivalent Rights, or any combination of the foregoing, granted to any one or more grantees;

          (iii) to determine the number of shares of Stock to be covered by any Award;

          (iv) to determine and modify from time to time the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award, which terms and conditions
may differ among individual Awards and grantees, and to approve the form of written instruments
evidencing the Awards;

          (v) to accelerate at any time the exercisability or vesting of all or any portion of any
Award, provided that the Administrator generally shall not exercise such discretion to accelerate
Awards subject to Sections 7 and 8 except in the event of the grantee’s death, disability or
retirement or a Sale Event;

          (vi) subject to the provisions of Section 5(c)(ii), to extend at any time the period in which
Stock Options may be exercised; and

          (vii) at any time to adopt, alter and repeal such rules, guidelines and practices for
administration of the Plan and for its own acts and proceedings as it shall deem advisable; to
interpret the terms and provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the administration of the Plan; to
decide all disputes arising in connection with the Plan; and to otherwise supervise the
administration of the Plan.

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     All decisions and interpretations of the Administrator shall be binding on all persons,
including the Company and Plan grantees.

     (c) Delegation of Authority to Grant Options and Deferred Stock Awards. Subject to
applicable law, the Administrator, in its discretion, may delegate to an officer of the Company all
or part of the Administrator’s authority and duties with respect to the granting of Options and
Deferred Stock Awards, to individuals who are (i) not subject to the reporting and other provisions
of Section 16 of the Exchange Act and (ii) not Covered Employees. Any such delegation by the
Administrator shall include a limitation as to the amount of Options and Deferred Stock Awards that
may be granted during the period of the delegation and shall contain guidelines as to the
determination of the exercise price, if applicable, and the vesting criteria. The Administrator
may revoke or amend the terms of a delegation at any time but such action shall not invalidate any
prior actions of the Administrator’s delegate or delegates that were consistent with the terms of
the Plan.

     (d) Award Agreement. Awards under the Plan shall be evidenced by Award Agreements
that set forth the terms, conditions and limitations for each Award which may include, without
limitation, the term of an Award, the provisions applicable in the event employment or service
terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend,
cancel or rescind an Award.

     (e) Indemnification. Neither the Board nor the Administrator, nor any member of
either or any delegate thereof, shall be liable for any act, omission, interpretation, construction
or determination made in good faith in connection with the Plan, and the members of the Board and
the Administrator (and any delegate thereof) shall be entitled in all cases to indemnification and
reimbursement by the Company in respect of any claim, loss, damage or expense (including, without
limitation, reasonable attorneys’ fees) arising or resulting therefrom to the fullest extent
permitted by law and/or under the Company’s articles or bylaws or any directors’ and officers’
liability insurance coverage which may be in effect from time to time and/or any indemnification
agreement between such individual and the Company.

     (f) Foreign Award Recipients. Notwithstanding any provision of the Plan to the
contrary, in order to comply with the laws in other countries in which the Company and its
Subsidiaries operate or have employees or other individuals eligible for Awards, the Administrator,
in its sole discretion, shall have the power and authority to: (i) determine which Subsidiaries
shall be covered by the Plan; (ii) determine which individuals outside the United States are
eligible to participate in the Plan; (iii) modify the terms and conditions of any Award granted to
individuals outside the United States to comply with applicable foreign laws; (iv) establish
subplans and modify exercise procedures and other terms and procedures, to the extent the
Administrator determines such actions to be necessary or advisable (and such subplans and/or
modifications shall be attached to this Plan as appendices); provided, however, that no such
subplans and/or modifications shall increase the share limitations contained in Section 3(a)
hereof; and (v) take any action, before or after an Award is made, that the Administrator
determines to be necessary or advisable to obtain approval or comply with any local governmental
regulatory exemptions or approvals. Notwithstanding the foregoing, the Administrator may not take
any actions hereunder, and no Awards shall be granted, that would

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violate the Exchange Act or any other applicable United States securities law, the Code, or
any other applicable United States governing statute or law.

	SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION

     (a) Stock Issuable. The maximum number of shares of Stock reserved and available for
issuance under the Plan (subject to adjustment as provided in Section 3(c)) shall be the sum of (i)
5,829,781 shares, plus (ii) the number of Shares under the Company’s 1997 Stock Plan and 2000 Stock
Option and Incentive Plan (together, the “Prior Plans”) which are not needed to fulfill the
Company’s obligations for awards issued under the Prior Plans as a result of forfeiture,
expiration, cancellation, termination or net issuances of awards thereunder. Without limiting the
generality of the foregoing, not more than 20,000,000 shares shall be issued in the form of
Incentive Stock Options under the Plan. For purposes of this limitation, the shares of Stock
underlying any Awards under the Plan that are forfeited, canceled or otherwise terminated (other
than by exercise) shall be added back to the shares of Stock available for issuance under the Plan.
Notwithstanding the foregoing, the following shares shall not be added to the shares authorized
for grant under the Plan: (i) shares tendered or held back upon exercise of an Option or settlement
of an Award to cover the exercise price or tax withholding, and (ii) shares subject to a Stock
Appreciation Right that are not issued in connection with the stock settlement of the Stock
Appreciation Right upon exercise thereof. In the event the Company repurchases shares of Stock on
the open market, such shares shall not be added to the shares of Stock available for issuance under
the Plan. Subject to such overall limitations, shares of Stock may be issued up to such maximum
number pursuant to any type or types of Award; provided, however, that Stock Options or Stock
Appreciation Rights with respect to no more than 2,000,000 shares of Stock may be granted to any
one individual grantee during any one calendar year period. The shares available for issuance
under the Plan may be authorized but unissued shares of Stock or shares of Stock reacquired by the
Company.

     (b) Effect of Awards. Effective for Awards granted on or after May 27, 2011, for
purposes of determining the number of shares of Stock available for issuance under Section 3(a),
the grant of any Option or Stock Appreciation Right shall be deemed an Award for one share of Stock
for each share of Stock actually subject to that Award, and the grant of any full value Award
(i.e., an Award other than an Option or a Stock Appreciation Right) shall be deemed an Award of 1.3
shares of Stock for each share of Stock actually subject to that Award. Any forfeiture,
cancellation, or other termination (other than by exercise) of an Award shall result in the return
of the shares subject to that Award to the reserved pool of shares of Stock under the Plan in the
same ratios.

     (c) Changes in Stock. Subject to Section 3(d) hereof, if, as a result of any
reorganization, recapitalization, reclassification, stock dividend, stock split, reverse stock
split or other similar change in the Company’s capital stock, the outstanding shares of Stock are
increased or decreased or are exchanged for a different number or kind of shares or other
securities of the Company, or additional shares or new or different shares or other securities of
the Company or other non-cash assets are distributed with respect to such shares of Stock or other
securities, or, if, as a result of any merger or consolidation, sale of all or substantially all of
the assets of the Company, the outstanding shares of Stock are converted into or exchanged for
securities of the Company or any successor entity (or a parent or subsidiary thereof), the

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Administrator shall make an appropriate or proportionate adjustment in (i) the maximum number
of shares reserved for issuance under the Plan, including the maximum number of shares that may be
issued in the form of Incentive Stock Options, (ii) the number of Stock Options or Stock
Appreciation Rights that can be granted to any one individual grantee and the maximum number of
shares that may be granted under a Performance-based Award, (iii) the number and kind of shares or
other securities subject to any then outstanding Awards under the Plan, (iv) the repurchase price,
if any, per share subject to each outstanding Restricted Stock Award, and (v) the price for each
share subject to any then outstanding Stock Options and Stock Appreciation Rights under the Plan,
without changing the aggregate exercise price (i.e., the exercise price multiplied by the number of
Stock Options and Stock Appreciation Rights) as to which such Stock Options and Stock Appreciation
Rights remain exercisable. The Administrator shall also make equitable or proportionate
adjustments in the number of shares subject to outstanding Awards and the exercise price and the
terms of outstanding Awards to take into consideration cash dividends paid other than in the
ordinary course or any other extraordinary corporate event. Notwithstanding the foregoing, no such
adjustment shall be made if the Administrator determines that such action could cause any Award to
fail to satisfy the conditions of any applicable exception from the requirements of Section 409A or
otherwise could subject the grantee to the additional tax imposed under Section 409A in respect of
an outstanding Award or constitute a modification, extension or renewal of an Incentive Stock
Option within the meaning of Section 424(h) of the Code. The adjustment by the Administrator shall
be final, binding and conclusive. No fractional shares of Stock shall be issued under the Plan
resulting from any such adjustment, but the Administrator in its discretion may make a cash payment
in lieu of fractional shares.

     (d) Mergers and Other Transactions. Except as the Administrator may otherwise specify
with respect to a particular Award in the relevant Award Agreement, in the case of and subject to
the consummation of a Sale Event, all Options and Stock Appreciation Rights that are not
exercisable immediately prior to the effective time of the Sale Event shall become fully
exercisable as of the effective time of the Sale Event, all other Awards with time-based vesting,
conditions or restrictions shall become fully vested and nonforfeitable as of the effective time of
the Sale Event, and all other Awards with conditions and restrictions relating to the attainment of
performance goals may become vested and nonforfeitable in connection with a Sale Event in the
Administrator’s discretion unless in any case, the parties to the Sale Event agree that Awards will
be assumed or continued by the successor entity. Upon the effective time of the Sale Event, the
Plan and all outstanding Awards granted hereunder shall terminate, unless provision is made in
connection with the Sale Event in the sole discretion of the parties thereto for the assumption or
continuation of Awards theretofore granted by the successor entity, or the substitution of such
Awards with new Awards of the successor entity or parent thereof, with appropriate adjustment as to
the number and kind of shares and, if appropriate, the per share exercise prices, as such parties
shall agree (after taking into account any acceleration hereunder). In the event of such
termination, (i) the Company shall have the right, but not the obligation, to make or provide for a
cash payment to the grantees holding Options and Stock Appreciation Rights, in exchange for the
cancellation thereof, in an amount equal to the difference between (A) the Sale Price times the
number of shares of Stock subject to outstanding Options and Stock Appreciation Rights (to the
extent then exercisable at prices not in excess of the Sale Price) and (B) the aggregate exercise
price of all such outstanding Options and Stock Appreciation Rights, or (ii) each grantee shall be
permitted, within a specified period of time prior to the consummation of the Sale Event

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as determined by the Administrator, to exercise all outstanding Options and Stock Appreciation
Rights held by such grantee, including those that will become exercisable upon the consummation of
the Sale Event; provided, however, that the exercise of Options and Stock Appreciation Rights not
exercisable prior to the Sale Event shall be subject to the consummation of the Sale Event.

     (e) Substitute Awards. The Administrator may grant Awards under the Plan in
substitution for stock and stock based awards held by employees, directors or other key persons of
another corporation in connection with the merger or consolidation of the employing corporation
with the Company or a Subsidiary or the acquisition by the Company or a Subsidiary of property or
stock of the employing corporation. The Administrator may direct that the substitute awards be
granted on such terms and conditions as the Administrator considers appropriate in the
circumstances. Any substitute Awards granted under the Plan shall not count against the share
limitation set forth in Section 3(a).

SECTION 4. ELIGIBILITY

     Grantees under the Plan will be such full or part-time officers and other employees, directors
and key persons (including consultants and prospective employees) of the Company and its
Subsidiaries as are selected from time to time by the Administrator in its sole discretion.

	SECTION 5. STOCK OPTIONS

     (a) Any Stock Option granted under the Plan shall be in such form as the Administrator may
from time to time approve.

     (b) Stock Options granted under the Plan may be either Incentive Stock Options or
Non-Qualified Stock Options. Incentive Stock Options may be granted only to employees of the
Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f)
of the Code. To the extent that any Option does not qualify as an Incentive Stock Option, it shall
be deemed a Non-Qualified Stock Option.

     (c) Stock Options granted pursuant to this Section 5(a) shall be subject to the following
terms and conditions and shall contain such additional terms and conditions, not inconsistent with
the terms of the Plan, as the Administrator shall deem desirable. If the Administrator so
determines, Stock Options may be granted in lieu of cash compensation at the optionee’s election,
subject to such terms and conditions as the Administrator may establish.

          (i) Exercise Price. The exercise price per share for the Stock covered by a Stock
Option granted pursuant to this Section 5(a) shall be determined by the Administrator at the time
of grant but shall not be less than one hundred percent (100%) of the Fair Market Value on the date
of grant. In the case of an Incentive Stock Option that is granted to a Ten Percent Owner, the
option price of such Incentive Stock Option shall be not less than one hundred ten percent (110%)
of the Fair Market Value on the grant date.

          (ii) Option Term. The term of each Stock Option shall be fixed by the Administrator,
but no Stock Option shall be exercisable more than ten years after the date the

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Stock Option is granted. In the case of an Incentive Stock Option that is granted to a Ten
Percent Owner, the term of such Stock Option shall be no more than five years from the date of
grant.

          (iii) Exercisability; Rights of a Stockholder. Stock Options shall become exercisable
at such time or times, whether or not in installments, as shall be determined by the Administrator
at or after the grant date. The Administrator may at any time accelerate the exercisability of all
or any portion of any Stock Option. An optionee shall have the rights of a stockholder only as to
shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options.

          (iv) Method of Exercise. Stock Options may be exercised in whole or in part, by
giving written notice of exercise to the Company, specifying the number of shares to be purchased.
Payment of the purchase price may be made by one or more of the following methods to the extent
provided in the Option Award Agreement:

          (A) In cash, by certified or bank check or other instrument acceptable to the
Administrator;

          (B) Through the delivery (or attestation to the ownership) of shares of Stock that have
been purchased by the optionee on the open market or that are beneficially owned by the
optionee and are not then subject to restrictions under any Company plan. Such surrendered
            shares shall be valued at Fair Market Value on the exercise date. To the extent required to
avoid variable accounting treatment under FAS 123R or other applicable accounting rules,
such surrendered shares shall have been owned by the optionee for at least six months; or

          (C) By the optionee delivering to the Company a properly executed exercise notice
together with irrevocable instructions to a broker to promptly deliver to the Company cash
or a check payable and acceptable to the Company for the purchase price; provided that in
the event the optionee chooses to pay the purchase price as so provided, the optionee and
the broker shall comply with such procedures and enter into such agreements of indemnity and
other agreements as the Administrator shall prescribe as a condition of such payment
procedure.

          (D) With respect to Stock Options that are not Incentive Stock Options, by a “net
exercise” arrangement pursuant to which the Company will reduce the number of shares of
Stock issuable upon exercise by the largest whole number of shares with a Fair Market Value
that does not exceed the aggregate exercise price.

Payment instruments will be received subject to collection. The transfer to the optionee on the
records of the Company or of the transfer agent of the shares of Stock to be purchased pursuant to
the exercise of a Stock Option will be contingent upon receipt from the optionee (or a purchaser
acting in his stead in accordance with the provisions of the Stock Option) by the Company of the
full purchase price for such shares and the fulfillment of any other requirements contained in the
Option Award Agreement or applicable provisions of laws (including the satisfaction of any
withholding taxes that the Company is obligated to withhold with respect to the optionee). In the
event an optionee chooses to pay the purchase price by previously-owned

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shares of Stock through the attestation method, the number of shares of Stock transferred to the
optionee upon the exercise of the Stock Option shall be net of the number of attested shares. In
the event that the Company establishes, for itself or using the services of a third party, an
automated system for the exercise of Stock Options, such as a system using an internet website or
interactive voice response, then the paperless exercise of Stock Options may be permitted through
the use of such an automated system.

          (v) Annual Limit on Incentive Stock Options. To the extent required for “incentive
stock option” treatment under Section 422 of the Code, the aggregate Fair Market Value (determined
as of the time of grant) of the shares of Stock with respect to which Incentive Stock Options
granted under this Plan and any other plan of the Company or its parent and subsidiary corporations
become exercisable for the first time by an optionee during any calendar year shall not exceed
$100,000. To the extent that any Stock Option exceeds this limit, it shall constitute a
Non-Qualified Stock Option.

SECTION 6. STOCK APPRECIATION RIGHTS

     (a) Exercise Price of Stock Appreciation Rights. The exercise price of a Stock
Appreciation Right shall not be less than 100 percent of the Fair Market Value of the Stock on the
date of grant (or more than the Stock Option exercise price per share, if the Stock Appreciation
Right was granted in tandem with a Stock Option).

     (b) Grant and Exercise of Stock Appreciation Rights. Stock Appreciation Rights may be
granted by the Administrator in tandem with, or independently of, any Stock Option granted pursuant
to Section 5 of the Plan. In the case of a Stock Appreciation Right granted in tandem with a
Non-Qualified Stock Option, such Stock Appreciation Right may be granted either at or after the
time of the grant of such Option. In the case of a Stock Appreciation Right granted in tandem with
an Incentive Stock Option, such Stock Appreciation Right may be granted only at the time of the
grant of the Option.

     A Stock Appreciation Right or applicable portion thereof granted in tandem with a Stock Option
shall terminate and no longer be exercisable upon the termination or exercise of the related
Option.

     (c) Terms and Conditions of Stock Appreciation Rights. Stock Appreciation Rights
shall be subject to such terms and conditions as shall be determined from time to time by the
Administrator, subject to the following:

          (i) Stock Appreciation Rights granted in tandem with Options shall be exercisable at such time
or times and to the extent that the related Stock Options shall be exercisable.

          (ii) Upon exercise of a Stock Appreciation Right, the applicable portion of any related Option
shall be surrendered.

          (iii) The term of a Stock Appreciation Right may not exceed ten years.

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SECTION 7. RESTRICTED STOCK AWARDS

     (a) Nature of Restricted Stock Awards. The Administrator shall determine the
restrictions and conditions applicable to each Restricted Stock Award at the time of grant.
Conditions may be based on continuing employment (or other service relationship) and/or achievement
of pre-established performance goals and objectives. The terms and conditions of each such Award
Agreement shall be determined by the Administrator, and such terms and conditions may differ among
individual Awards and grantees.

     (b) Rights as a Stockholder. Upon the grant of the Restricted Stock Award and payment
of any applicable purchase price, a grantee shall have the rights of a stockholder with respect to
the voting of the Restricted Stock, subject to such conditions contained in the Restricted Stock
Award Agreement. Unless the Administrator shall otherwise determine, (i) uncertificated Restricted
Stock shall be accompanied by a notation on the records of the Company or the transfer agent to the
effect that they are subject to forfeiture until such Restricted Stock are vested as provided in
Section 7(d) below, and (ii) certificated Restricted Stock shall remain in the possession of the
Company until such Restricted Stock is vested as provided in Section 7(d) below, and the grantee
shall be required, as a condition of the grant, to deliver to the Company such instruments of
transfer as the Administrator may prescribe.

     (c) Restrictions. Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered or disposed of except as specifically provided herein or in the Restricted
Stock Award Agreement. Except as may otherwise be provided by the Administrator either in the
Award Agreement or, subject to Section 18 below, in writing after the Award Agreement is issued, if
any, if a grantee’s employment (or other service relationship) with the Company and its
Subsidiaries terminates for any reason, any Restricted Stock that has not vested at the time of
termination shall automatically and without any requirement of notice to such grantee from or other
action by or on behalf of, the Company be deemed to have been reacquired by the Company at its
original purchase price from such grantee or such grantee’s legal representative simultaneously
with such termination of employment (or other service relationship), and thereafter shall cease to
represent any ownership of the Company by the grantee or rights of the grantee as a stockholder.
Following such deemed reacquisition of unvested Restricted Stock that are represented by physical
certificates, a grantee shall surrender such certificates to the Company upon request without
consideration.

     (d) Vesting of Restricted Stock. The Administrator at the time of grant shall specify
the date or dates and/or the attainment of pre-established performance goals, objectives and other
conditions on which the non-transferability of the Restricted Stock and the Company’s right of
repurchase or forfeiture shall lapse. Notwithstanding the foregoing, in the event that any such
Restricted Stock granted to employees shall have a performance-based goal, the restriction period
with respect to such shares shall not be less than one year, and in the event any such Restricted
Stock granted to employees shall have a time-based restriction, the total restriction period with
respect to such shares shall not be less than three years; provided, however, that Restricted Stock
with a time-based restriction may become vested incrementally over such three-year period.
Subsequent to such date or dates and/or the attainment of such pre-established performance goals,
objectives and other conditions, the shares on which all restrictions have lapsed shall no longer
be Restricted Stock and shall be deemed “vested.” Except as may

11

 

otherwise be provided by the Administrator either in the Award Agreement or, subject to
Section 18 below, in writing after the Award Agreement is issued, a grantee’s rights in any shares
of Restricted Stock that have not vested shall automatically terminate upon the grantee’s
termination of employment (or other service relationship) with the Company and its Subsidiaries and
such shares shall be subject to the provisions of Section 7(c) above.

SECTION 8. DEFERRED STOCK AWARDS

     (a) Nature of Deferred Stock Awards. The Administrator shall determine the
restrictions and conditions applicable to each Deferred Stock Award at the time of grant.
Conditions may be based on continuing employment (or other service relationship) and/or achievement
of pre-established performance goals and objectives. The terms and conditions of each such Award
Agreement shall be determined by the Administrator, and such terms and conditions may differ among
individual Awards and grantees. Notwithstanding the foregoing, in the event that any such Deferred
Stock Award granted to employees shall have a performance-based goal, the restriction period with
respect to such Award shall not be less than one year, and in the event any such Deferred Stock
Award granted to employees shall have a time-based restriction, the total restriction period with
respect to such Award shall not be less than three years; provided, however, that any Deferred
Stock Award with a time-based restriction may become vested incrementally over such three-year
period. At the end of the deferral period, the Deferred Stock Award, to the extent vested, shall
be settled in the form of shares of Stock.

     (b) Election to Receive Deferred Stock Awards in Lieu of Compensation. The
Administrator may, in its sole discretion, permit a grantee to elect to receive a portion of future
cash compensation otherwise due to such grantee in the form of a Deferred Stock Award. Any such
election shall be made in writing and shall be delivered to the Company no later than the date
specified by the Administrator and in accordance with Section 409A and such other rules and
procedures established by the Administrator. The Administrator shall have the sole right to
determine whether and under what circumstances to permit such elections and to impose such
limitations and other terms and conditions thereon as the Administrator deems appropriate. Any
such future cash compensation that the grantee elects to deter shall be converted to a fixed number
of phantom stock units based on the Fair Market Value of Stock on the date the compensation would
otherwise have been paid to the grantee but for the deferral.

     (c) Rights as a Stockholder. A grantee shall have the rights as a stockholder only as
to shares of Stock acquired by the grantee upon settlement of a Deferred Stock Award; provided,
however, that the grantee may be credited with Dividend Equivalent Rights with respect to the
phantom stock units underlying his Deferred Stock Award, subject to such terms and conditions as
the Administrator may determine.

     (d) Termination. Except as may otherwise be provided by the Administrator either in
the Award Agreement or, subject to Section 18 below, in writing after the Award Agreement is
issued, a grantee’s right in all Deferred Stock Awards that have not vested shall automatically
terminate upon the grantee’s termination of employment (or cessation of service relationship) with
the Company and its Subsidiaries for any reason.

12

 

SECTION 9. UNRESTRICTED STOCK AWARDS

     (a) Grant or Sale of Unrestricted Stock. The Administrator may, in its sole
discretion, grant (or sell at par value or such higher purchase price as determined by the
Administrator), an Unrestricted Stock Award under the Plan. Unrestricted Stock Awards may be
granted in respect of past services or other valid consideration, or in lieu of cash compensation
due to such grantee.

SECTION 10. CASH-BASED AWARDS

     (a) Grant of Cash-based Awards. The Administrator may, in its sole discretion, grant
Cash-based Awards to any grantee in such number or amount and upon such terms, and subject to such
conditions, as the Administrator shall determine at the time of grant. The Administrator shall
determine the maximum duration of the Cash-based Award, the amount of cash to which the Cash-based
Award pertains, the conditions upon which the Cash-based Award shall become vested or payable, and
such other provisions as the Administrator shall determine. Each Cash-based Award shall specify a
cash-denominated payment amount, formula or payment ranges as determined by the Administrator.
Payment, if any, with respect to a Cash-based Award shall be made in accordance with the terms of
the Award and may be made in cash or in shares of Stock, as the Administrator determines.

SECTION 11. PERFORMANCE SHARE AWARDS

     (a) Nature of Performance Share Awards. The Administrator may, in its sole
discretion, grant Performance Share Awards independent of, or in connection with, the granting of
any other Award under the Plan. The Administrator shall determine whether and to whom Performance
Share Awards shall be granted, the Performance Goals, the periods during which performance is to be
measured, which may not be less than one year, and such other limitations and conditions as the
Administrator shall determine.

     (b) Rights as a Stockholder. A grantee receiving a Performance Share Award shall have
the rights of a stockholder only as to shares actually received by the grantee under the Plan and
not with respect to shares subject to the Award but not actually received by the grantee. A
grantee shall be entitled to receive shares of Stock under a Performance Share Award only upon
satisfaction of all conditions specified in the Performance Share Award agreement (or in a
performance plan adopted by the Administrator).

     (c) Termination. Except as may otherwise be provided by the Administrator either in
the Award agreement or, subject to Section 18 below, in writing after the Award agreement is
issued, a grantee’s rights in all Performance Share Awards shall automatically terminate upon the
grantee’s termination of employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.

SECTION 12. PERFORMANCE-BASED AWARDS TO COVERED EMPLOYEES

     (a) Performance-based Awards. Any employee or other key person providing services to
the Company and who is selected by the Administrator may be granted one or more Performance-based
Awards in the form of a Restricted Stock Award, Deferred Stock Award,

13

 

Performance Share Award or Cash-based Award payable upon the attainment of Performance Goals
that are established by the Administrator and relate to one or more of the Performance Criteria, in
each case on a specified date or dates or over any period or periods determined by the
Administrator. The Administrator shall define in an objective fashion the manner of calculating
the Performance Criteria it selects to use for any Performance Period. Depending on the
Performance Criteria used to establish such Performance Goals, the Performance Goals may be
expressed in terms of overall Company performance or the performance of a division, business unit,
or an individual. The Administrator, in its discretion, may adjust or modify the calculation of
Performance Goals for such Performance Period in order to prevent the dilution or enlargement of
the rights of an individual (i) in the event of, or in anticipation of, any unusual or
extraordinary corporate item, transaction, event or development, or (ii) in recognition of, or in
anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial
statements of the Company, or (iii) in response to, or in anticipation of, changes in applicable
laws, regulations, accounting principles, or business conditions provided however, that the
Administrator may not exercise such discretion in a manner that would increase the
Performance-based Award granted to a Covered Employee. Each Performance-based Award shall comply
with the provisions set forth below.

     (b) Grant of Performance-based Awards. With respect to each Performance-based Award
granted to a Covered Employee, the Administrator shall select, within the first 90 days of a
Performance Cycle (or, if shorter, within the maximum period allowed under Section 162(m) of the
Code) the Performance Criteria for such grant, and the Performance Goals with respect to each
Performance Criterion (including a threshold level of performance below which no amount will become
payable with respect to such Award). Each Performance-based Award will specify the amount payable,
or the formula for determining the amount payable, upon achievement of the various applicable
performance targets. The Performance Criteria established by the Administrator may be (but need
not be) different for each Performance Cycle and different Performance Goals may be applicable to
Performance-based Awards to different Covered Employees.

     (c) Payment of Performance-based Awards. Following the completion of a Performance
Cycle, the Administrator shall meet to review and certify in writing whether, and to what extent,
the Performance Goals for the Performance Cycle have been achieved and, if so, to also calculate
and certify in writing the amount of the Performance-based Awards earned for the Performance Cycle.
The Administrator shall then determine the actual size of each Covered Employee’s
Performance-based Award, and, in doing so, may reduce or eliminate the amount of the
Performance-based Award for a Covered Employee if, in its sole judgment, such reduction or
elimination is appropriate.

     (d) Maximum Award Payable. The maximum Performance-based Award payable to any one
Covered Employee under the Plan for a Performance Cycle is 300,000 shares of Stock (subject to
adjustment as provided in Section 3(c) hereof) or $1,000,000 in the case of a Performance-Based
Award that is a Cash-Based Award.

14

 

SECTION 13. DIVIDEND EQUIVALENT RIGHTS

     (a) Dividend Equivalent Rights. A Dividend Equivalent Right may be granted hereunder
to any grantee as a component of another Award or as a freestanding award. The terms and
conditions of Dividend Equivalent Rights shall be specified in the Award Agreement. Dividend
equivalents credited to the holder of a Dividend Equivalent Right may be paid currently or may be
deemed to be reinvested in additional shares of Stock, which may thereafter accrue additional
equivalents. Any such reinvestment shall be at Fair Market Value on the date of reinvestment or
such other price as may then apply under a dividend reinvestment plan sponsored by the Company, if
any. Dividend Equivalent Rights may be settled in cash or shares of Stock or a combination
thereof, in a single installment or installments. A Dividend Equivalent Right granted as a
component of another Award may provide that such Dividend Equivalent Right shall be settled upon
exercise, settlement, or payment of, or lapse of restrictions on, such other Award, and that such
Dividend Equivalent Right shall expire or be forfeited or annulled under the same conditions as
such other Award. A Dividend Equivalent Right granted as a component of another Award may also
contain terms and conditions different from such other Award.

     (b) Interest Equivalents. Any Award under this Plan that is settled in whole or in
part in cash on a deferred basis may provide in the grant for interest equivalents to be credited
with respect to such cash payment. Interest equivalents may be compounded and shall be paid upon
such terms and conditions as may be specified by the grant.

     (c) Termination. Except as may otherwise be provided by the Administrator either in
the Award Agreement or, subject to Section 18 below, in writing after the Award Agreement is
issued, a grantee’s rights in all Dividend Equivalent Rights or interest equivalents granted as a
component of another Award that has not vested shall automatically terminate upon the grantee’s
termination of employment (or cessation of service relationship) with the Company and its
Subsidiaries for any reason.

SECTION 14. TRANSFERABILITY OF AWARDS

     (a) Transferability. Except as provided in Section 14(b) below, during a grantee’s
lifetime, his or her Awards shall be exercisable only by the grantee, or by the grantee’s legal
representative or guardian in the event of the grantee’s incapacity. No Awards shall be sold,
assigned, transferred or otherwise encumbered or disposed of by a grantee other than by will or by
the laws of descent and distribution. No Awards shall be subject, in whole or in part, to
attachment, execution, or levy of any kind, and any purported transfer in violation hereof shall be
null and void.

     (b) Administrator Action. Notwithstanding Section 14(a), the Administrator, in its
discretion, may provide either in the Award Agreement regarding a given Award or by subsequent
written approval that the grantee (who is an employee or director) may transfer his or her Awards
(other than any Incentive Stock Options) to his or her immediate family members, to trusts for the
benefit of such family members, or to partnerships in which such family members are the only
partners, provided that the transferee agrees in writing with the Company to be bound by all of the
terms and conditions of this Plan and the applicable Award.

15

 

     (c) Family Member. For purposes of Section 14(b), “family member” shall mean a
grantee’s 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, any person sharing the grantee’s household
(other than a tenant of the grantee), a trust in which these persons (or the grantee) have more
than 50 percent of the beneficial interest, a foundation in which these persons (or the grantee)
control the management of assets, and any other entity in which these persons (or the grantee) own
more than 50 percent of the voting interests.

     (d) Designation of Beneficiary. Each grantee to whom an Award has been made under the
Plan may designate a beneficiary or beneficiaries to exercise any Award or receive any payment
under any Award payable on or after the grantee’s death. Any such designation shall be on a form
provided for that purpose by the Administrator and shall not be effective until received by the
Administrator. If no beneficiary has been designated by a deceased grantee, or if the designated
beneficiaries have predeceased the grantee, the beneficiary shall be the grantee’s estate.

SECTION 15. TAX WITHHOLDING

     (a) Payment by Grantee. Each grantee shall, no later than the date as of which the
value of an Award or of any Stock or other amounts received thereunder first becomes includable in
the gross income of the grantee for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Administrator regarding payment of, any Federal, state, or local
taxes of any kind required by law to be withheld by the Company with respect to such income. The
Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to the grantee. The Company’s obligation to
deliver evidence of book entry (or stock certificates) to any grantee is subject to and conditioned
on tax withholding obligations being satisfied by the grantee.

     (b) Payment in Stock. Subject to approval by the Administrator, a grantee may elect
to have the Company’s minimum required tax withholding obligation satisfied, in whole or in part,
by authorizing the Company to withhold from shares of Stock to be issued pursuant to any Award a
number of shares with an aggregate Fair Market Value (as of the date the withholding is effected)
that would satisfy the withholding amount due.

			
	SECTION 16.	 ADDITIONAL CONDITIONS APPLICABLE TO NONQUALIFIED DEFERRED COMPENSATION UNDER SECTION 409A.

     In the event any Stock Option or Stock Appreciation Right under the Plan is materially
modified and deemed a new grant at a time when the Fair Market Value exceeds the exercise price, or
any other Award is otherwise determined to constitute “nonqualified deferred compensation” within
the meaning of Section 409A (a “409A Award”), the following additional conditions shall apply and
shall supersede any contrary provisions of this Plan or the terms of any agreement relating to such
409A Award.

16

 

     (a) Exercise and Distribution. Except as provided in Section 16(b) hereof, no 409A
Award shall be exercisable or distributable earlier than upon one of the following:

          (i) Specified Time. A specified time or a fixed schedule set forth in the written
instrument evidencing the 409A Award.

          (ii) Separation from Service. Separation from service (within the meaning of Section
409A) by the 409A Award grantee; provided, however, that if the 409A Award grantee is a “key
employee” (as defined in Section 416(i) of the Code without regard to paragraph (5) thereof) and
any of the Company’s Stock is publicly traded on an established securities market or otherwise,
exercise or distribution under this Section 16(a)(ii) may not be made before the date that is six
months after the date of separation from service.

          (iii) Death. The date of death of the 409A Award grantee.

          (iv) Disability. The date the 409A Award grantee becomes disabled (within the meaning
of Section 16(c)(ii) hereof).

          (v) Unforeseeable Emergency. The occurrence of an unforeseeable emergency (within the
meaning of Section 16(c)(iii) hereof), but only if the net value (after payment of the exercise
price) of the number of shares of Stock that become issuable does not exceed the amounts necessary
to satisfy such emergency plus amounts necessary to pay taxes reasonably anticipated as a result of
the exercise, after taking into account the extent to which the emergency is or may be relieved
through reimbursement or compensation by insurance or otherwise or by liquidation of the grantee’s
other assets (to the extent such liquidation would not itself cause severe financial hardship).

          (vi) Change in Control Event. The occurrence of a Change in Control Event (within the
meaning of Section 16(c)(i) hereof), including the Company’s discretionary exercise of the right to
accelerate vesting of such grant upon a Change in Control Event or to terminate the Plan or any
409A Award granted hereunder within 12 months of the Change in Control Event.

     (b) No Acceleration. A 409A Award may not be accelerated or exercised prior to the
time specified in Section 16(a) hereof, except in the case of one of the following events:

          (i) Domestic Relations Order. The 409A Award may permit the acceleration of the
exercise or distribution time or schedule to an individual other than the grantee as may be
necessary to comply with the terms of a domestic relations order (as defined in Section
414(p)(1)(B) of the Code).

          (ii) Conflicts of Interest. The 409A Award may permit the acceleration of the
exercise or distribution time or schedule as may be necessary to comply with the terms of a
certificate of divestiture (as defined in Section 1043(b)(2) of the Code).

          (iii) Change in Control Event. The Administrator may exercise the discretionary right
to accelerate the vesting of such 409A Award upon a Change in Control

17

 

Event or to terminate the Plan or any 409A Award granted thereunder within 12 months of the
Change in Control Event and cancel the 409A Award for compensation.

     (c) Definitions. Solely for purposes of this Section 16 and not for other purposes of
the Plan, the following terms shall be defined as set forth below:

          (i) “Change in Control Event” means the occurrence of a change in the ownership of the
Company, a change in effective control of the Company, or a change in the ownership of a
substantial portion of the assets of the Company (as defined in Section 1.409A-3(g) of the proposed
regulations promulgated under Section 409A by the Department of the Treasury on September 29, 2005
or any subsequent guidance).

          (ii) “Disabled” means a grantee who (i) is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not less than 12 months,
or (ii) is, by reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period of not less than 12
months, receiving income replacement benefits for a period of not less than three months under an
accident and health plan covering employees of the Company or its Subsidiaries.

          (iii) “Unforeseeable Emergency” means a severe financial hardship to the grantee resulting
from an illness or accident of the grantee, the grantee’s spouse, or a dependent (as defined in
Section 152(a) of the Code) of the grantee, loss of the grantee’s property due to casualty, or
similar extraordinary and unforeseeable circumstances arising as a result of events beyond the
control of the grantee.

SECTION 17. TRANSFER, LEAVE OF ABSENCE, ETC.

     For purposes of the Plan, the following events shall not be deemed a termination of
employment:

     (a) a transfer to the employment of the Company from a Subsidiary or from the Company to a
Subsidiary, or from one Subsidiary to another; or

     (b) an approved leave of absence for military service or sickness, or for any other purpose
approved by the Company, if the employee’s right to re-employment is guaranteed either by a statute
or by contract or under the policy pursuant to which the leave of absence was granted or if the
Administrator otherwise so provides in writing.

SECTION 18. AMENDMENTS AND TERMINATION

     The Board may, at any time, amend or discontinue the Plan and the Administrator may, at any
time, amend or cancel any outstanding Award for the purpose of satisfying changes in law or for any
other lawful purpose, but no such action shall adversely affect rights under any outstanding Award
without the holder’s consent. Except as provided in Section 3(c) or 3(d), without prior
stockholder approval in no event may the Administrator exercise its discretion to reduce the
exercise price of outstanding Stock Options or Stock Appreciation Rights or effect repricing
through cancellation and re-grants or cancellation of Stock Options or Stock

18

 

Appreciation Rights in exchange for cash. Any material Plan amendments (other than amendments
that curtail the scope of the Plan), including any Plan amendments that (i) increase the number of
shares reserved for issuance under the Plan, (ii) expand the type of Awards available under,
materially expand the eligibility to participate in, or materially extend the term of, the Plan, or
(iii) materially change the method of determining Fair Market Value, shall be subject to approval
by the Company stockholders entitled to vote at a meeting of stockholders. In addition, to the
extent determined by the Administrator to be required by the Code to ensure that Incentive Stock
Options granted under the Plan are qualified under Section 422 of the Code or to ensure that
compensation earned under Awards qualifies as performance-based compensation under Section 162(m)
of the Code, Plan amendments shall be subject to approval by the Company stockholders entitled to
vote at a meeting of stockholders. Nothing in this Section 18 shall limit the Administrator’s
authority to take any action permitted pursuant to Section 3(d).

SECTION 19. STATUS OF PLAN

     With respect to the portion of any Award that has not been exercised and any payments in cash,
Stock or other consideration not received by a grantee, a grantee shall have no rights greater than
those of a general creditor of the Company unless the Administrator shall otherwise expressly
determine in connection with any Award or Awards. In its sole discretion, the Administrator may
authorize the creation of trusts or other arrangements to meet the Company’s obligations to deliver
Stock or make payments with respect to Awards hereunder, provided that the existence of such trusts
or other arrangements is consistent with the foregoing sentence.

SECTION 20. GENERAL PROVISIONS

     (a) No Distribution. The Administrator may require each person acquiring Stock
pursuant to an Award to represent to and agree with the Company in writing that such person is
acquiring the shares without a view to distribution thereof.

     (b) Delivery of Stock Certificates. Stock certificates to grantees under this Plan
shall be deemed delivered for all purposes when the Company or a stock transfer agent of the
Company shall have mailed such certificates in the United States mail, addressed to the grantee, at
the grantee’s last known address on file with the Company. Uncertificated Stock shall be deemed
delivered for all purposes when the Company or a Stock transfer agent of the Company shall have
given to the grantee by electronic mail (with proof of receipt) or by United States mail, addressed
to the grantee, at the grantee’s last known address on file with the Company, notice of issuance
and recorded the issuance in its records (which may include electronic “book entry” records).
Notwithstanding anything herein to the contrary, the Company shall not be required to issue or
deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award, unless
and until the Board has determined, with advice of counsel (to the extent the Board deems such
advice necessary or advisable), that the issuance and delivery of such certificates is in
compliance with all applicable laws, regulations of governmental authorities and, if applicable,
the requirements of any exchange on which the shares of Stock are listed, quoted or traded. All
Stock certificates delivered pursuant to the Plan shall be subject to any stop-transfer orders and
other restrictions as the Administrator deems necessary or advisable to comply with federal, state
or foreign jurisdiction, securities or other laws, rules and quotation

19

 

system on which the Stock is listed, quoted or traded. The Administrator may place legends on
any Stock certificate to reference restrictions applicable to the Stock. In addition to the terms
and conditions provided herein, the Board may require that an individual make such reasonable
covenants, agreements, and representations as the Board, in its discretion, deems necessary or
advisable in order to comply with any such laws, regulations, or requirements. The Administrator
shall have the right to require any individual to comply with any timing or other restrictions with
respect to the settlement or exercise of any Award, including a window-period limitation, as may be
imposed in the discretion of the Administrator.

     (c) Stockholder Rights. Until Stock is deemed delivered in accordance with Section
20(b), no right to vote or receive dividends or any other rights of a stockholder will exist with
respect to shares of Stock to be issued in connection with an Award, notwithstanding the exercise
of a Stock Option or any other action by the grantee with respect to an Award.

     (d) Other Compensation Arrangements; No Employment Rights. Nothing contained in this
Plan shall prevent the Board from adopting other or additional compensation arrangements, including
trusts, and such arrangements may be either generally applicable or applicable only in specific
cases. The adoption of this Plan and the grant of Awards do not confer upon any employee any right
to continued employment with the Company or any Subsidiary.

     (e) Trading Policy Restrictions. Option exercises and other Awards under the Plan
shall be subject to the Company’s insider trading policy and procedures, as in effect from time to
time.

     (f) Forfeiture of Awards under Sarbanes-Oxley Act. If the Company is required to
prepare an accounting restatement due to the material noncompliance of the Company, as a result of
misconduct, with any financial reporting requirement under the securities laws, then any grantee
who is one of the individuals subject to automatic forfeiture under Section 304 of the
Sarbanes-Oxley Act of 2002 shall reimburse the Company for the amount of any Award received by such
individual under the Plan during the 12-month period following the first public issuance or filing
with the United States Securities and Exchange Commission, as the case may be, of the financial
document embodying such financial reporting requirement.

SECTION 21. EFFECTIVE DATE OF PLAN

     This Plan shall become effective upon approval by the holders of a majority of the votes cast
at a meeting of stockholders at which a quorum is present. No grants of Stock Options and other
Awards may be made hereunder after the tenth (10th) anniversary of the Effective Date
and no grants of Incentive Stock Options may be made hereunder after the tenth (10th)
anniversary of the date the Plan is approved by the Board.

20

 

SECTION 22. GOVERNING LAW

     This Plan and all Awards and actions taken thereunder shall be governed by, and construed in
accordance with, the laws of the State of Delaware, applied without regard to conflict of law
principles.

DATE OF BOARD APPROVAL: July 26, 2007

DATE OF STOCKHOLDER APPROVAL: September 4, 2007

DATE OF BOARD APPROVAL OF AMENDED PLAN: May 27, 2011

DATE OF STOCKHOLDER APPROVAL OF AMENDED PLAN: June 9, 2011

21

 

ATHENAHEALTH, INC.

INCENTIVE STOCK OPTION AGREEMENT

UNDER THE AMENDED AND RESTATED

ATHENAHEALTH, INC.

2007 STOCK OPTION AND INCENTIVE PLAN

Name of Optionee:                                                                                

No. of Option Shares:                                                                            

Option Exercise Price per Share: $                                                                   
                   

                                                        [FMV on Grant Date (110% of FMV if a 10% owner)]

Grant Date:                                         

Expiration Date:                                                                                 
                                        [up to 10 years (5 if a 10% owner)]

     Pursuant to the athenahealth, Inc. 2007 Stock Option and Incentive Plan, as amended through
the date hereof (the “Plan”), athenahealth, Inc. (the “Company”) hereby grants to the Optionee
named above an option (the “Stock Option”) to purchase on or prior to the Expiration Date specified
above all or part of the number of shares of Common Stock, par value $0.01 per share (the “Stock”),
of the Company specified above at the Option Exercise Price per Share specified above subject to
the terms and conditions set forth herein and in the Plan.

     1. Exercisability Schedule. No portion of this Stock Option may be exercised until
such portion shall have become exercisable. Except as set forth below, and subject to the
discretion of the Administrator (as defined in Section 1 of the Plan) to accelerate the
exercisability schedule hereunder, this Stock Option shall be exercisable with respect to the
following number of Option Shares on the dates indicated:

	 	 	 	 	 	 
	Incremental Number of	 	 	 
	Option Shares Exercisable*	 	Exercisability Date	 
	                    
	 	(     %)
	 	                    
	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 

 

			
	*	 	Max. of $100,000 per yr.

     Once exercisable, this Stock Option shall continue to be exercisable at any time or times
prior to the close of business on the Expiration Date, subject to the provisions hereof and of the
Plan.

 

 

     2. Manner of Exercise.

          (a) The Optionee may exercise this Stock Option only in the following manner: from time to
time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice
to the Administrator of his or her election to purchase some or all of the Option Shares
purchasable at the time of such notice. This notice shall specify the number of Option Shares to
be purchased.

     Payment of the purchase price for the Option Shares may be made by one or more of the
following methods: (i) in cash, by certified or bank check or other instrument acceptable to the
Administrator; (ii) through the delivery (or attestation to the ownership) of shares of Stock that
have been purchased by the Optionee on the open market or that are beneficially owned by the
Optionee and are not then subject to any restrictions under any Company plan and that otherwise
satisfy any holding periods as may be required by the Administrator; (iii) by the Optionee
delivering to the Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the option purchase price, provided that in the event the Optionee chooses to
pay the option purchase price as so provided, the Optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and other agreements as the Administrator
shall prescribe as a condition of such payment procedure; or (iv) a combination of (i), (ii) and
(iii) above. Payment instruments will be received subject to collection.

     The transfer to the Optionee on the records of the Company or of the transfer agent of the
Option Shares will be contingent upon the Company’s receipt from the Optionee of full payment for
the Option Shares, as set forth above and any agreement, statement or other evidence that the
Company may require to satisfy itself that the issuance of Stock to be purchased pursuant to the
exercise of Stock Options under the Plan and any subsequent resale of the shares of Stock will be
in compliance with applicable laws and regulations. In the event the Optionee chooses to pay the
purchase price by previously-owned shares of Stock through the attestation method, the number of
shares of Stock transferred to the Optionee upon the exercise of the Stock Option shall be net of
the shares attested to.

          (b) The shares of Stock purchased upon exercise of this Stock Option shall be transferred to
the Optionee on the records of the Company or of the transfer agent upon compliance to the
satisfaction of the Administrator with all requirements under applicable laws or regulations in
connection with such issuance and with the requirements hereof and of the Plan. The determination
of the Administrator as to such compliance shall be final and binding on the Optionee. The
Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option
shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall
have transferred the shares to the Optionee, and the Optionee’s name shall have been entered as the
stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such shares of Stock.

          (c) The minimum number of shares with respect to which this Stock Option may be exercised at
any one time shall be 100 shares, unless the number of shares with respect to

2

 

which this Stock Option is being exercised is the total number of shares subject to exercise
under this Stock Option at the time.

          (d) Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option
shall be exercisable after the Expiration Date hereof.

     3. Termination of Employment; Employment Status Change. If the Optionee’s employment
by the Company or a Subsidiary (as defined in the Plan) is terminated, the period within which to
exercise the Stock Option may be subject to earlier termination as set forth below.

          (a) Termination Due to Death. If the Optionee’s employment terminates by reason of
the Optionee’s death, any portion of this Stock Option outstanding on such date may thereafter be
exercised, to the extent exercisable on such date, by the Optionee’s legal representative or
legatee for a period of 180 days from the date of death or until the Expiration Date, if earlier.

          (b) Termination Due to Disability. If the Optionee’s employment terminates by reason
of the Optionee’s disability (as determined by the Administrator), any portion of this Stock Option
outstanding on such date may thereafter be exercised, to the extent exercisable on the date of
termination, by the Optionee for a period of 180 days from the date of termination or until the
Expiration Date, if earlier. The death of the Optionee during the 180-day period provided in this
Section 3(b) shall extend such period for another 180-days from the date of death or until the
Expiration Date, if earlier.

          (c) Termination for Cause. If the Optionee’s employment terminates for Cause, any
portion of this Stock Option outstanding on such date shall terminate immediately and be of no
further force and effect. For purposes hereof, “Cause” means any of the following: (i) dishonesty,
embezzlement, misappropriation of assets or property of the Company; (ii) gross negligence,
misconduct, neglect of duties, theft, fraud, or breach of fiduciary duty to the Company; (iii)
violation of federal or state securities laws; (iv) breach of an employment, consulting or other
agreement with the Company; or (v) the conviction of a felony, or any crime involving moral
turpitude, including a plea of guilty or nolo contendre.

          (d) Other Termination. If the Optionee’s employment terminates for any reason other
than the Optionee’s death, the Optionee’s disability, or Cause, and unless otherwise determined by
the Administrator, any portion of this Stock Option outstanding on such date may be exercised, to
the extent exercisable on the date of termination, for a period of three months from the date of
termination or until the Expiration Date, if earlier. Any portion of this Stock Option that is not
exercisable on the date of termination shall terminate immediately and be of no further force or
effect.

          (e) Employment Status Change. The exercisability of this Stock Option reflects the
Company’s policy that stock option awards accrue over time, and that such accruals are in
consideration for providing continued service to the Company during substantially all of each work
week. Therefore, this Stock Option will continue to vest under the above Exercisability Schedule
only if the Optionee devotes at least eighty percent (80%) of the

3

 

Optionee’s work schedule to service to the Company. If at any time the Optionee’s employment
status is changed to less than 80% time, then any portion of this Stock Option outstanding on such
date may be exercised, to the extent exercisable on the date of change in employment status, for a
period of three months from the date of change in employment status or until the Expiration Date,
if earlier. Any portion of this Stock Option that is not exercisable on the date of change in
employment status shall terminate immediately and be of no further force or effect.

     The Administrator’s determination of the reason for termination of the Optionee’s employment
shall be conclusive and binding on the Optionee and his or her representatives or legatees.

     4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this Stock
Option shall be subject to and governed by all the terms and conditions of the Plan, including the
powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms in this
Agreement shall have the meaning specified in the Plan, unless a different meaning is specified
herein.

     5. Transferability. This Agreement is personal to the Optionee, is non-assignable and
is not transferable in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution. This Stock Option is exercisable, during the Optionee’s lifetime,
only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

     6. Status of the Stock Option. This Stock Option is intended to qualify as an
“incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”), but the Company does not represent or warrant that this Stock Option qualifies as such.
The Optionee should consult with his or her own tax advisors regarding the tax effects of this
Stock Option and the requirements necessary to obtain favorable income tax treatment under Section
422 of the Code, including, but not limited to, holding period requirements. To the extent any
portion of this Stock Option does not so qualify as an “incentive stock option,” such portion shall
be deemed to be a non-qualified stock option. If the Optionee intends to dispose or does dispose
(whether by sale, gift, transfer or otherwise) of any Option Shares within the one-year period
beginning on the date after the transfer of such shares to him or her, or within the two-year
period beginning on the day after the grant of this Stock Option, he or she will so notify the
Company within 30 days after such disposition.

     7. Tax Withholding. The Optionee shall, not later than the date as of which the
exercise of this Stock Option becomes a taxable event for Federal income tax purposes, pay to the
Company or make arrangements satisfactory to the Administrator for payment of any Federal, state,
and local taxes required by law to be withheld on account of such taxable event. The Optionee may
elect to have the minimum required tax withholding obligation satisfied, in whole or in part, by
authorizing the Company to withhold from shares of Stock to be issued.

     8. No Obligation to Continue Employment. Neither the Company nor any Subsidiary is
obligated by or as a result of the Plan or this Agreement to continue the Optionee in employment
and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or
any Subsidiary to terminate the employment of the Optionee at any time.

4

 

     9. Notices. Notices hereunder shall be mailed or delivered to the Company at its
principal place of business and shall be mailed or delivered to the Optionee at the address on file
with the Company or, in either case, at such other address as one party may subsequently furnish to
the other party in writing.

     10. Acceptance. The foregoing Agreement shall be deemed accepted and the terms and
conditions thereof hereby agreed to by the Optionee upon notice to the Optionee.

5

 

ATHENAHEALTH, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

FOR COMPANY EMPLOYEES

UNDER THE AMENDED AND RESTATED

ATHENAHEALTH, INC.

2007 STOCK OPTION AND INCENTIVE PLAN

Name of Optionee:                                                                   

No. of Option Shares:                                                             

Option Exercise Price per Share: $                                             

                                                            [FMV on Grant Date]

Grant Date:                                                             

Expiration Date:                                                             

     Pursuant to the athenahealth, Inc. 2007 Stock Option and Incentive Plan, as amended through
the date hereof (the “Plan”), athenahealth, Inc. (the “Company”) hereby grants to the Optionee
named above an option (the “Stock Option”) to purchase on or prior to the Expiration Date specified
above all or part of the number of shares of Common Stock, par value $0.01 per share (the “Stock”)
of the Company specified above at the Option Exercise Price per Share specified above subject to
the terms and conditions set forth herein and in the Plan. This Stock Option is not intended to be
an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986, as amended.

     1. Exercisability Schedule. No portion of this Stock Option may be exercised until
such portion shall have become exercisable. Except as set forth below, and subject to the
discretion of the Administrator (as defined in Section 1 of the Plan) to accelerate the
exercisability schedule hereunder, this Stock Option shall be exercisable with respect to the
following number of Option Shares on the dates indicated:

	 	 	 	 	 	 
	Incremental Number of	 	 	 
	Option Shares Exercisable	 	Exercisability Date	 
	                    
	 	(     %)
	 	                    
	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 

     Once exercisable, this Stock Option shall continue to be exercisable at any time or times
prior to the close of business on the Expiration Date, subject to the provisions hereof and of the
Plan.

 

 

     2. Manner of Exercise.

          (a) The Optionee may exercise this Stock Option only in the following manner: from time to
time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice
to the Administrator of his or her election to purchase some or all of the Option Shares
purchasable at the time of such notice. This notice shall specify the number of Option Shares to
be purchased.

     Payment of the purchase price for the Option Shares may be made by one or more of the
following methods: (i) in cash, by certified or bank check or other instrument acceptable to the
Administrator; (ii) through the delivery (or attestation to the ownership) of shares of Stock that
have been purchased by the Optionee on the open market or that are beneficially owned by the
Optionee and are not then subject to any restrictions under any Company plan and that otherwise
satisfy any holding periods as may be required by the Administrator; (iii) by the Optionee
delivering to the Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the option purchase price, provided that in the event the Optionee chooses to
pay the option purchase price as so provided, the Optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and other agreements as the Administrator
shall prescribe as a condition of such payment procedure; or (iv) a combination of (i), (ii) and
(iii) above. Payment instruments will be received subject to collection.

     The transfer to the Optionee on the records of the Company or of the transfer agent of the
Option Shares will be contingent upon the Company’s receipt from the Optionee of full payment for
the Option Shares, as set forth above and any agreement, statement or other evidence that the
Company may require to satisfy itself that the issuance of Stock to be purchased pursuant to the
exercise of Stock Options under the Plan and any subsequent resale of the shares of Stock will be
in compliance with applicable laws and regulations. In the event the Optionee chooses to pay the
purchase price by previously-owned shares of Stock through the attestation method, the number of
shares of Stock transferred to the Optionee upon the exercise of the Stock Option shall be net of
the Shares attested to.

          (b) The shares of Stock purchased upon exercise of this Stock Option shall be transferred to
the Optionee on the records of the Company or of the transfer agent upon compliance to the
satisfaction of the Administrator with all requirements under applicable laws or regulations in
connection with such issuance and with the requirements hereof and of the Plan. The determination
of the Administrator as to such compliance shall be final and binding on the Optionee. The
Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option
shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall
have transferred the shares to the Optionee, and the Optionee’s name shall have been entered as the
stockholder of record on the books of the Company. Thereupon, the Optionee shall have full voting,
dividend and other ownership rights with respect to such shares of Stock.

          (c) The minimum number of shares with respect to which this Stock Option may be exercised at
any one time shall be 100 shares, unless the number of shares with respect to

2

 

which this Stock Option is being exercised is the total number of shares subject to exercise
under this Stock Option at the time.

          (d) Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option
shall be exercisable after the Expiration Date hereof.

     3. Termination of Employment; Employment Status Change. If the Optionee’s employment
by the Company or a Subsidiary (as defined in the Plan) is terminated, the period within which to
exercise the Stock Option may be subject to earlier termination as set forth below.

          (a) Termination Due to Death. If the Optionee’s employment terminates by reason of
the Optionee’s death, any portion of this Stock Option outstanding on such date may thereafter be
exercised, to the extent exercisable on such date, by the Optionee’s legal representative or
legatee for a period of 180 days from the date of death or until the Expiration Date, if earlier.

          (b) Termination Due to Disability. If the Optionee’s employment terminates by reason
of the Optionee’s disability (as determined by the Administrator), any portion of this Stock Option
outstanding on such date may thereafter be exercised, to the extent exercisable on the date of
termination, by the Optionee for a period of 180 days from the date of termination or until the
Expiration Date, if earlier. The death of the Optionee during the 180-day period provided in this
Section 3(b) shall extend such period for another 180 days from the date of death or until the
Expiration Date, if earlier.

          (c) Termination for Cause. If the Optionee’s employment terminates for Cause, any
portion of this Stock Option outstanding on such date shall terminate immediately and be of no
further force and effect. For purposes hereof, “Cause” means any of the following: (i) dishonesty,
embezzlement, misappropriation of assets or property of the Company; (ii) gross negligence,
misconduct, neglect of duties, theft, fraud, or breach of fiduciary duty to the Company; (iii)
violation of federal or state securities laws; (iv) breach of an employment, consulting or other
agreement with the Company; or (v) the conviction of a felony, or any crime involving moral
turpitude, including a plea of guilty or nolo contendre.

          (d) Other Termination. If the Optionee’s employment terminates for any reason other
than the Optionee’s death, the Optionee’s disability or Cause, and unless otherwise determined by
the Administrator, any portion of this Stock Option outstanding on such date may be exercised, to
the extent exercisable on the date of termination, for a period of three months from the date of
termination or until the Expiration Date, if earlier. Any portion of this Stock Option that is not
exercisable on the date of termination shall terminate immediately and be of no further force or
effect.

          (e) Employment Status Change. The exercisability of this Stock Option reflects the
Company’s policy that stock option awards accrue over time, and that such accruals are in
consideration for providing continued service to the Company during substantially all of each work
week. Therefore, this Stock Option will continue to vest under the above Exercisability Schedule
only if the Optionee devotes at least eighty percent (80%) of the

3

 

Optionee’s work schedule to service to the Company. If at any time the Optionee’s employment
status is changed to less than 80% time, then any portion of this Stock Option outstanding on such
date may be exercised, to the extent exercisable on the date of change in employment status, for a
period of three months from the date of change in employment status or until the Expiration Date,
if earlier. Any portion of this Stock Option that is not exercisable on the date of change in
employment status shall terminate immediately and be of no further force or effect.

     The Administrator’s determination of the reason for termination of the Optionee’s employment
shall be conclusive and binding on the Optionee and his or her representatives or legatees.

     4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this Stock
Option shall be subject to and governed by all the terms and conditions of the Plan, including the
powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms in this
Agreement shall have the meaning specified in the Plan, unless a different meaning is specified
herein.

     5. Transferability. This Agreement is personal to the Optionee, is non-assignable and
is not transferable in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution. This Stock Option is exercisable, during the Optionee’s lifetime,
only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

     6. Tax Withholding. The Optionee shall, not later than the date as of which the
exercise of this Stock Option becomes a taxable event for Federal income tax purposes, pay to the
Company or make arrangements satisfactory to the Administrator for payment of any Federal, state,
and local taxes required by law to be withheld on account of such taxable event. The Optionee may
elect to have the minimum required tax withholding obligation satisfied, in whole or in part, by
authorizing the Company to withhold from shares of Stock to be issued.

     7. No Obligation to Continue Employment. Neither the Company nor any Subsidiary is
obligated by or as a result of the Plan or this Agreement to continue the Optionee in employment
and neither the Plan nor this Agreement shall interfere in any way with the right of the Company or
any Subsidiary to terminate the employment of the Optionee at any time.

     8. Notices. Notices hereunder shall be mailed or delivered to the Company at its
principal place of business and shall be mailed or delivered to the Optionee at the address on file
with the Company or, in either case, at such other address as one party may subsequently furnish to
the other party in writing.

     9. Acceptance. The foregoing Agreement shall be deemed accepted and the terms and
conditions thereof hereby agreed to by the Optionee upon notice to the Optionee.

4

 

ATHENAHEALTH, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

FOR NON-EMPLOYEE DIRECTORS

UNDER THE AMENDED AND RESTATED

ATHENAHEALTH, INC.

2007 STOCK OPTION AND INCENTIVE PLAN

Name of Optionee:                                                             

No. of Option Shares:                     

Option Exercise Price per Share: $                                        

                                                            [FMV on Grant Date]

Grant Date:                                                             

Expiration Date:                                         

     [No more than 10 years]

     Pursuant to the athenahealth, Inc. 2007 Stock Option and Incentive Plan, as amended through
the date hereof (the “Plan”), athenahealth, Inc. (the “Company”) hereby grants to the Optionee
named above, who is a Director of the Company but is not an employee of the Company, an option (the
“Stock Option”) to purchase on or prior to the Expiration Date specified above all or part of the
number of shares of Common Stock, par value $0.01 per share (the “Stock”), of the Company specified
above at the Option Exercise Price per Share specified above subject to the terms and conditions
set forth herein and in the Plan. This Stock Option is not intended to be an “incentive stock
option” under Section 422 of the Internal Revenue Code of 1986, as amended.

     1. Exercisability Schedule. No portion of this Stock Option may be exercised until
such portion shall have become exercisable. Except as set forth below, and subject to the
discretion of the Administrator (as defined in Section 1 of the Plan) to accelerate the
exercisability schedule hereunder, this Stock Option shall be exercisable with respect to the
following number of Option Shares on the dates indicated:

	 	 	 	 	 	 
	Incremental Number of	 	 	 
	Option Shares Exercisable	 	Exercisability Date	 
	                    
	 	(     %)
	 	                    
	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 

 

 

     Once exercisable, this Stock Option shall continue to be exercisable at any time or times
prior to the close of business on the Expiration Date, subject to the provisions hereof and of the
Plan.

     2. Manner of Exercise.

          (a) The Optionee may exercise this Stock Option only in the following manner: from time to
time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice
to the Administrator of his or her election to purchase some or all of the Option Shares
purchasable at the time of such notice. This notice shall specify the number of Option Shares to
be purchased.

     Payment of the purchase price for the Option Shares may be made by one or more of the
following methods: (i) in cash, by certified or bank check or other instrument acceptable to the
Administrator; (ii) through the delivery (or attestation to the ownership) of shares of Stock that
have been purchased by the Optionee on the open market or that are beneficially owned by the
Optionee and are not then subject to any restrictions under any Company plan and that otherwise
satisfy any holding periods as may be required by the Administrator; (iii) by the Optionee
delivering to the Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the option purchase price, provided that in the event the Optionee chooses to
pay the option purchase price as so provided, the Optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and other agreements as the Administrator
shall prescribe as a condition of such payment procedure; or (iv) a combination of (i), (ii) and
(iii) above. Payment instruments will be received subject to collection.

     The transfer to the Optionee on the records of the Company or of the transfer agent of the
Option Shares will be contingent upon the Company’s receipt from the Optionee of full payment for
the Option Shares, as set forth above and any agreement, statement or other evidence that the
Company may require to satisfy itself that the issuance of Stock to be purchased pursuant to the
exercise of Stock Options under the Plan and any subsequent resale of the shares of Stock will be
in compliance with applicable laws and regulations. In the event the Optionee chooses to pay the
purchase price by previously-owned shares of Stock through the attestation method, the number of
shares of Stock transferred to the Optionee upon the exercise of the Stock Option shall be net of
the Shares attested to.

          (b) The shares of Stock purchased upon exercise of this Stock Option shall be transferred to
the Optionee on the records of the Company or of the transfer agent upon compliance to the
satisfaction of the Administrator with all requirements under applicable laws or regulations in
connection with such transfer and with the requirements hereof and of the Plan. The determination
of the Administrator as to such compliance shall be final and binding on the Optionee. The
Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option
shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall
have transferred the shares to the Optionee, and the Optionee’s name shall have been

2

 

entered as the stockholder of record on the books of the Company. Thereupon, the Optionee
shall have full voting, dividend and other ownership rights with respect to such shares of Stock.

          (c) The minimum number of shares with respect to which this Stock Option may be exercised at
any one time shall be 100 shares, unless the number of shares with respect to which this Stock
Option is being exercised is the total number of shares subject to exercise under this Stock Option
at the time.

          (d) Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option
shall be exercisable after the Expiration Date hereof.

     3. Termination as Director. If the Optionee ceases to be a Director of the Company,
the period within which to exercise the Stock Option may be subject to earlier termination as set
forth below.

          (a) Termination by Reason of Death. If the Optionee ceases to be a Director by reason
of the Optionee’s death, any portion of this Stock Option outstanding on such date may be
exercised, to the extent exercisable on such date, by his or her legal representative or legatee
for a period of 180 days from the date of death or until the Expiration Date, if earlier.

          (b) Other Termination. If the Optionee ceases to be a Director for any reason other
than the Optionee’s death, any portion of this Stock Option outstanding on such date may be
exercised, to the extent exercisable on such date, for a period of 180 days from the date of
termination or until the Expiration Date, if earlier.

     4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this Stock
Option shall be subject to and governed by all the terms and conditions of the Plan, including the
powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms in this
Agreement shall have the meaning specified in the Plan, unless a different meaning is specified
herein.

     5. Transferability. This Agreement is personal to the Optionee, is non-assignable and
is not transferable in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution. This Stock Option is exercisable, during the Optionee’s lifetime,
only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

     6. No Obligation to Continue as a Director. Neither the Plan nor this Stock Option
confers upon the Optionee any rights with respect to continuance as a Director.

     7. Notices. Notices hereunder shall be mailed or delivered to the Company at its
principal place of business and shall be mailed or delivered to the Optionee at the address on file
with the Company or, in either case, at such other address as one party may subsequently furnish to
the other party in writing.

     8. Amendment. Pursuant to Section 18 of the Plan, the Administrator may at any time
amend or cancel any outstanding portion of this Stock Option, but no such action may be

3

 

taken that adversely affects the Optionee’s rights under this Agreement without the Optionee’s
consent.

     9. Acceptance. The foregoing Agreement shall be deemed accepted and the terms and
conditions thereof hereby agreed to by the Optionee upon notice to the Optionee.

4

 

ATHENAHEALTH, INC.

NON-QUALIFIED STOCK OPTION AGREEMENT

FOR NON-EMPLOYEE CONSULTANTS

UNDER THE ATHENAHEALTH, INC.

2007 STOCK OPTION AND INCENTIVE PLAN

Name of Optionee:                                                             

No. of Option Shares:                     

Option Exercise Price per Share: $                                        

                                                            [FMV on Grant Date]

Grant Date:                                                                                 

Expiration Date:                                         

                                        [No more than 10 years]

     Pursuant to the athenahealth, Inc. 2007 Stock Option and Incentive Plan, as amended through
the date hereof (the “Plan”), athenahealth, Inc. (the “Company”) hereby grants to the Optionee
named above, who is a consultant or other service provider to the Company but is not an employee of
the Company, an option (the “Stock Option”) to purchase on or prior to the Expiration Date
specified above all or part of the number of shares of Common Stock, par value $0.01 per share (the
“Stock”), of the Company specified above at the Option Exercise Price per Share specified above
subject to the terms and conditions set forth herein and in the Plan. This Stock Option is not
intended to be an “incentive stock option” under Section 422 of the Internal Revenue Code of 1986,
as amended.

     1. Exercisability Schedule. No portion of this Stock Option may be exercised until
such portion shall have become exercisable. Except as set forth below, and subject to the
discretion of the Administrator (as defined in Section 1 of the Plan) to accelerate the
exercisability schedule hereunder, this Stock Option shall be exercisable with respect to the
following number of Option Shares on the dates indicated:

	 	 	 	 	 	 
	Incremental Number of	 	 	 
	Option Shares Exercisable	 	Exercisability Date	 
	                    
	 	(     %)
	 	                    
	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 

 

 

     Once exercisable, this Stock Option shall continue to be exercisable at any time or times
prior to the close of business on the Expiration Date, subject to the provisions hereof and of the
Plan.

     2. Manner of Exercise.

          (a) The Optionee may exercise this Stock Option only in the following manner: from time to
time on or prior to the Expiration Date of this Stock Option, the Optionee may give written notice
to the Administrator of his or her election to purchase some or all of the Option Shares
purchasable at the time of such notice. This notice shall specify the number of Option Shares to
be purchased.

     Payment of the purchase price for the Option Shares may be made by one or more of the
following methods: (i) in cash, by certified or bank check or other instrument acceptable to the
Administrator; (ii) through the delivery (or attestation to the ownership) of shares of Stock that
have been purchased by the Optionee on the open market or that are beneficially owned by the
Optionee and are not then subject to any restrictions under any Company plan and that otherwise
satisfy any holding periods as may be required by the Administrator; (iii) by the Optionee
delivering to the Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check payable and acceptable
to the Company to pay the option purchase price, provided that in the event the Optionee chooses to
pay the option purchase price as so provided, the Optionee and the broker shall comply with such
procedures and enter into such agreements of indemnity and other agreements as the Administrator
shall prescribe as a condition of such payment procedure; or (iv) a combination of (i), (ii) and
(iii) above. Payment instruments will be received subject to collection.

     The transfer to the Optionee on the records of the Company or of the transfer agent of the
Option Shares will be contingent upon the Company’s receipt from the Optionee of full payment for
the Option Shares, as set forth above and any agreement, statement or other evidence that the
Company may require to satisfy itself that the issuance of Stock to be purchased pursuant to the
exercise of Stock Options under the Plan and any subsequent resale of the shares of Stock will be
in compliance with applicable laws and regulations. In the event the Optionee chooses to pay the
purchase price by previously-owned shares of Stock through the attestation method, the number of
shares of Stock transferred to the Optionee upon the exercise of the Stock Option shall be net of
the Shares attested to.

          (b) The shares of Stock purchased upon exercise of this Stock Option shall be transferred to
the Optionee on the records of the Company or of the transfer agent upon compliance to the
satisfaction of the Administrator with all requirements under applicable laws or regulations in
connection with such transfer and with the requirements hereof and of the Plan. The determination
of the Administrator as to such compliance shall be final and binding on the Optionee. The
Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with
respect to, any shares of Stock subject to this Stock Option unless and until this Stock Option
shall have been exercised pursuant to the terms hereof, the Company or the transfer agent shall
have transferred the shares to the Optionee, and the Optionee’s name shall have been

2

 

entered as the stockholder of record on the books of the Company. Thereupon, the Optionee
shall have full voting, dividend and other ownership rights with respect to such shares of Stock.

          (c) The minimum number of shares with respect to which this Stock Option may be exercised at
any one time shall be 100 shares, unless the number of shares with respect to which this Stock
Option is being exercised is the total number of shares subject to exercise under this Stock Option
at the time.

          (d) Notwithstanding any other provision hereof or of the Plan, no portion of this Stock Option
shall be exercisable after the Expiration Date hereof.

     3. Termination as Consultant. If the Optionee ceases to be a consultant or other
service provider to the Company for any reason including death or disability, any portion of this
Stock Option outstanding on such date may be exercised (to the extent exercisable on such date) for
a period of three (3) months from the date of the cessation of the Optionee’s consulting or service
relationship with Company or until the Expiration Date, if earlier. No further portion of this
Option shall become exercisable after the Optionee ceases to be a consultant or other service
provider to the Company.

     4. Incorporation of Plan. Notwithstanding anything herein to the contrary, this Stock
Option shall be subject to and governed by all the terms and conditions of the Plan, including the
powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms in this
Agreement shall have the meaning specified in the Plan, unless a different meaning is specified
herein.

     5. Transferability. This Agreement is personal to the Optionee, is non-assignable and
is not transferable in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution. This Stock Option is exercisable, during the Optionee’s lifetime,
only by the Optionee, and thereafter, only by the Optionee’s legal representative or legatee.

     6. No Obligation to Continue as a Consultant or Service Provider. Neither the Plan
nor this Stock Option confers upon the Optionee any rights with respect to continuance as a
consultant or other service provider to the Company.

     7. Notices. Notices hereunder shall be mailed or delivered to the Company at its
principal place of business and shall be mailed or delivered to the Optionee at the address on file
with the Company or, in either case, at such other address as one party may subsequently furnish to
the other party in writing.

3

 

     8. Amendment. Pursuant to Section 18 of the Plan, the Administrator may at any time
amend or cancel any outstanding portion of this Stock Option, but no such action may be taken that
adversely affects the Optionee’s rights under this Agreement without the Optionee’s consent.

	 	 	 	 	 
	 	ATHENAHEALTH, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by
the undersigned.

	 	 	 	 	 

	Dated:                                         
	 	 	 	 
	 

	 	 	 	 
	 

	 	Optionee’s Signature
	 	 
	 
	 	 	 	 
	 

	 	Optionee’s name and address:	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

4

 

ATHENAHEALTH, INC,

RESTRICTED STOCK AWARD AGREEMENT

UNDER THE ATHENAHEALTH, INC.

2007 STOCK OPTION AND INCENTIVE PLAN

Name of Grantee:                                         

No. of Shares:                                         

Grant Date:                                         

Final Acceptance Date:                                         

Purchase Price per Share:                                          (if any)

     Pursuant to the athenahealth, Inc. 2007 Stock Option and Incentive Plan (the “Plan”) as
amended through the date hereof, athenahealth, Inc. (the “Company”) hereby grants a Restricted
Stock Award (an “Award”) to the Grantee named above. Upon acceptance of this Award, the Grantee
shall receive the number of shares of Common Stock, par value $0.01 per share (the “Stock”) of the
Company specified above, subject to the restrictions and conditions set forth herein and in the
Plan.

     1. Acceptance of Award. The Grantee shall have no rights with respect to this Award
unless he or she shall have accepted this Award prior to the close of business on the Final
Acceptance Date specified above by signing and delivering to the Company a copy of this Award
Agreement and paying the applicable purchase price (if any). Upon acceptance of this Award by the
Grantee, the shares of Restricted Stock so accepted shall be issued and held by the Company’s
transfer agent in book entry form, and the Grantee’s name shall be entered as the stockholder of
record on the books of the Company. Thereupon, the Grantee shall have all the rights of a
shareholder with respect to such shares, including voting and dividend rights, subject, however, to
the restrictions and conditions specified in Paragraph 2 below.

     2. Restrictions and Conditions.

          (a) Any book entries for the shares of Restricted Stock granted herein shall bear an
appropriate legend, as determined by the Administrator in its sole discretion, to the effect that
such shares are subject to restrictions as set forth herein and in the Plan.

          (b) Shares of Restricted Stock granted herein may not be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of by the Grantee prior to vesting.

          (c) If the Grantee’s employment with the Company and its Subsidiaries is voluntarily or
involuntarily terminated for any reason (including death) prior to vesting of shares of Restricted
Stock granted herein, all shares of Restricted Stock shall immediately and automatically be
forfeited and returned to the Company.

     3. Vesting of Restricted Stock. The restrictions and conditions in Paragraph 2 of
this Agreement shall lapse on the Vesting Date or Dates specified in the following schedule so long

 

 

as the Grantee remains an employee of the Company or a Subsidiary on such Dates. If a series
of Vesting Dates is specified, then the restrictions and conditions in Paragraph 2 shall lapse only
with respect to the number of shares of Restricted Stock specified as vested on such date.

	 	 	 	 	 	 
	Number of	 	 	 
	Shares Vested	 	Vesting Date	 
	                    
	 	(     %)
	 	                    
	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 
	                    
	 	(     %)
	 	                    	 

     Subsequent to such Vesting Date or Dates, the shares of Stock on which all restrictions and
conditions have lapsed shall no longer be deemed Restricted Stock. The Administrator may at any
time accelerate the vesting schedule specified in this Paragraph 3.

     4. Dividends. Dividends on Shares of Restricted Stock shall be paid currently to the
Grantee.

     5. Incorporation of Plan. Notwithstanding anything herein to the contrary, this
Agreement shall be subject to and governed by all the terms and conditions of the Plan, including
the powers of the Administrator set forth in Section 2(b) of the Plan. Capitalized terms in this
Agreement shall have the meaning specified in the Plan, unless a different meaning is specified
herein.

     6. Transferability. This Agreement is personal to the Grantee, is non-assignable and
is not transferable in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution.

     7. Tax Withholding. The Grantee shall, not later than the date as of which the
receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company
or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local
taxes required by law to be withheld on account of such taxable event. The Grantee may elect to
have the required minimum tax withholding obligation satisfied, in whole or in part, by authorizing
the Company to withhold from shares of Stock to be issued.

     8. Election Under Section 83(b). The Grantee and the Company hereby agree that the
Grantee may, within 30 days following the acceptance of this Award as provided in Paragraph 1
hereof, file with the Internal Revenue Service and the Company an election under Section 83(b) of
the Internal Revenue Code. In the event the Grantee makes such an election, he or she agrees to
provide a copy of the election to the Company.

2

 

     9. No Obligation to Continue Employment. Neither the Company nor any Subsidiary is
obligated by or as a result of the Plan or this Agreement to continue the Grantee in employment and
neither the Plan nor this Agreement shall interfere in any way with the right of the Company or any
Subsidiary to terminate the employment of the Grantee at any time.

     10. Notices. Notices hereunder shall be mailed or delivered to the Company at its
principal place of business and shall be mailed or delivered to the Grantee at the address on file
with the Company or, in either case, at such other address as one party may subsequently furnish to
the other party in writing.

	 	 	 	 	 
	 	ATHENAHEALTH, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

The foregoing Agreement is hereby accepted and the terms and conditions thereof hereby agreed to by
the undersigned.

	 	 	 	 	 

	Dated:                                         
	 	 	 	 
	 

	 	 	 	 
	 

	 	Grantee’s Signature
	 	 
	 
	 	 	 	 
	 

	 	Grantee’s name and address:	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

3

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

UNDER THE AMENDED AND RESTATED

ATHENAHEALTH, INC.

2007 STOCK OPTION AND INCENTIVE PLAN

Name of Grantee:                                         

No. of Restricted Stock Units:                                         

Grant Date:                                         

     athenahealth, Inc. (the “Company”) has selected you to receive an award of Restricted Stock
Units identified above, subject to the terms set forth on Appendix A and the provisions of
the Amended and Restated athenahealth, Inc. 2007 Stock Option and Incentive Plan (the “Plan”) and
the attached Statement of Terms and Conditions.

Appendix A

Vesting Schedule

	 	 	 
	Percentage of Units Vested	 	Vesting Date
	____%

	 	First Anniversary of Grant Date
	____%

	 	Second Anniversary of Grant Date
	____%

	 	Third Anniversary of Grant Date
	____%

	 	Fourth Anniversary of Grant Date

The Administrator may at any time accelerate the vesting schedule set forth above.

1

 

STATEMENT OF TERMS AND CONDITIONS

     1. Preamble. This Statement contains the terms and conditions of an award (“Award”)
of Restricted Stock Units (“Restricted Stock Units”) made to the Grantee identified in the
Restricted Stock Unit Award Agreement attached hereto pursuant to the Plan. Each Restricted Stock
Unit represents the right to receive one share of common stock of the Company (“Stock”) on the
vesting date of that unit.

     2. Restrictions and Conditions.

          (a) This Award may not be sold, assigned, transferred, pledged or otherwise encumbered or
disposed of by the Grantee prior to vesting.

          (b) If the Grantee’s employment with or service as a director of the Company and its
Subsidiaries is voluntarily or involuntarily terminated for any reason (including death) prior to
vesting of Restricted Stock Units granted herein, all unvested Restricted Stock Units shall
immediately and automatically be forfeited and returned to the Company.

          (c) The Grantee shall not have any stockholder rights, including voting or dividend rights,
with respect to the shares of Stock subject to the Award until the Grantee becomes a record holder
of those shares of Stock following their actual issuance pursuant to Section 5 of this Agreement

     3. Vesting of Restricted Stock Units.

     The term “vest” as used in this Statement means the lapsing of the restrictions that are
described in this Statement with respect to the Restricted Stock Units. The Restricted Stock Units
shall vest in accordance with the schedule set forth in Appendix A to this Agreement so long as the
Grantee remains at least eighty percent of a full-time equivalent employee or director of the
Company or a Subsidiary on each vesting date. If at any time the Grantee’s employment status is
changed to less than an eighty percent full-time equivalent, then any unvested Restricted Stock
Units shall be forfeited and returned to the Company on such date.

     4. Dividend Equivalents.

          (a) If on any date the Company shall pay any dividend on shares of Stock of the Company, the
number of Restricted Stock Units credited to the Grantee shall, as of such date, be increased by an
amount determined by the following formula:

W = (X multiplied by Y) divided by Z, where:

W = the number of additional Restricted Stock Units to be credited to the Grantee on
such dividend payment date;

X = the aggregate number of Restricted Stock Units credited to the Grantee as of the
record date of the dividend;

Y = the cash dividend per share amount; and

2

 

Z = the Fair Market Value per share of Stock (as determined under the Plan) on the
dividend payment date.

          (b) In the case of a dividend paid on Stock in the form of Stock, including without limitation
a distribution of Stock by reason of a stock dividend, stock split or otherwise, the number of
Restricted Stock Units credited to the Grantee shall be increased by a number equal to the product
of (i) the aggregate number of Restricted Stock Units that have been awarded to the Grantee through
the related dividend record date, and (ii) the number of shares of Stock (including any fraction
thereof) payable as dividend on one share of Stock. Any additional Restricted Stock Units shall be
subject to the vesting and restrictions of this Agreement in the same manner and for so long as the
Restricted Stock Units granted pursuant to this Agreement to which they relate remain subject to
such vesting and restrictions, and shall be promptly forfeited to the Company if and when such
Restricted Stock Units are so forfeited.

     5. Receipt of Shares of Stock.

          (a) The Restricted Stock Units in which the Grantee vests in accordance with the vesting
schedule set forth in Appendix A will be issuable in the form of shares of Stock immediately upon
vesting, subject to the collection of the minimum withholding taxes in accordance with the share
withholding provision of Section 7 of this Agreement.

          (b) Once a stock certificate (or electronic transfer) has been delivered to the Grantee in
respect of the Restricted Stock Units, the Grantee will be free to sell the shares of Stock
evidenced by such certificate (or electronic transfer), subject to applicable requirements of
federal and state securities law and the Company’s insider trading policy.

     6. Incorporation of Plan. Notwithstanding anything herein to the contrary, this
Award shall be subject to and governed by all the terms and conditions of the Plan. Capitalized
terms in this Award shall have the meaning specified in the Plan, unless a different meaning is
specified herein.

     7. Tax Withholding. The Grantee shall, not later than the date as of which the
receipt of this Award becomes a taxable event for Federal income tax purposes, pay to the Company
or make arrangements satisfactory to the Administrator for payment of any Federal, state, and local
taxes required by law to be withheld on account of such taxable event. The Grantee may elect to
have the required minimum tax withholding obligation satisfied, in whole or in part, by authorizing
the Company to withhold shares of Stock to be issued to the Grantee pursuant to this Agreement with
an aggregate Fair Market Value that would satisfy the withholding amount due.

     8. No Obligation to Continue Employment. Neither the Company nor any Subsidiary is
obligated by or as a result of the Plan or this Award to continue the Grantee in employment and
neither the Plan nor this Award shall interfere in any way with the right of the Company or any
Subsidiary to terminate the employment of the Grantee at any time.

     9. Notices. Notices hereunder shall be mailed or delivered to the Company at its
principal place of business and shall be mailed or delivered to the Grantee at the address on file

3

 

with the Company or, in either case, at such other address as one party may subsequently
furnish to the other party in writing.

     10. Acceptance. This Agreement shall be deemed accepted and the terms and conditions
thereof hereby agreed to by the Grantee upon notice to the Grantee.

4Exhibit 10.1

Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS AGREEMENT dated October 18, 2011 is entered into by Newpark Resources, Inc. (the
“Company ”), a Delaware corporation, and Gregg Steven Piontek (the “Executive ”) and is intended
to incorporate and accurately reflect all prior negotiations, discussions, or agreements between
the parties.

WHEREAS, the Company desires: a) to retain the services of the Executive as Vice President
and Chief Financial Officer of the Company (referred to as “CFO”); b) for the Executive to assume
greater responsibilities; and , c) for the Executive to enter into certain Non-Compete Agreements.
All, in order to enhance shareholder value and grow the Company’s business to its maximum
potential, and as Executive has represented himself as qualified to achieve these objectives, and
as the parties mutually desire and agree to enter into an employment relationship by means of this
Employment Agreement.

NOW, THEREFORE in consideration of the promises and mutual covenants herein contained, and
other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
it is mutually covenanted and agreed by and between the parties as follows:

1. Employment of Executive

1.1 Employment Term. The Company hereby offers to employ Executive, and Executive hereby
agrees to serve as the CFO reporting to the President and Chief Executive Officer of the Company on
the terms and conditions set forth in this Agreement. The period during which Executive is employed
hereunder shall be referred to as the “Employment Term.” The Executive’s Employment Term under this
Agreement shall commence on November 1, 2011, and shall continue for a period of three (3) years
(“Initial Term”) subject to the provisions of Section 2 “Termination of Employment”, and shall
automatically be renewed for successive one (1) year periods thereafter unless Executive’s
employment is terminated by either party giving written notice to the other party at least sixty
(60) days in advance of the expiration of the initial or any successive Employment Term.
Termination by sixty (60) days written notice pursuant to this Section 1.1 shall be treated as a
termination by Executive under Section 2.2 if given by Executive or as a termination without Cause
under Section 2.3 if given by the Company.

1.2 Compensation and Benefits.

(a) Base Salary. During the Employment Term, the Company will pay Executive a base
monthly salary at an annualized rate of at least Three Hundred Thousand Dollars ($300,000) per year
(“Base Salary”). The Company will review annually Executive’s Base Salary and, at its reasonable
discretion, may increase such Base Salary as it deems appropriate, provided Executive’s Base Salary
for any subsequent twelve month year shall not be less than the preceding twelve month year except
with Executive’s prior written agreement. Adjustments in Base Salary shall be automatically
incorporated herein by reference and be contractual obligations of Company. Such Base Salary shall
be paid in accordance with the Company’s standard payroll practice for its senior staff.

(b) Incentive Compensation. In addition to the Base Salary, during the Employment
Term Executive shall be eligible for participation in the 2003 Long Term Incentive Plan and the
2006 Equity Incentive Plan (the two plans referred to collectively as the “LTIP”), and the 2010
Annual Cash Incentive Plan (“ACIP”) subject to any amendments made at Board’s discretion as
provided herein. Performance measures and goals will be set by the Compensation Committee of the
Board. The Target Award under the ACIP is equal to fifty-five (55%) percent of Executive’s actual Base
Salary paid for that calendar year. Payout under the ACIP for a particular year will be made in
cash by March 31 of the next year, e.g. payout for 2011 will occur prior to March 31, 2012, except
to the extent payments associated with achievement beyond the “over-achievement” level are
deferred, as provided for in the ACIP. The bonus awarded to Executive for 2011 shall be calculated
using a Target Award of 46.67%, (equivalent to pro-rating 45% for the first 10 months of 2011, and
55% for the last 2 months of 2011). Actual awards, in accordance with the Board approved plan
and any amendments, are at the discretion of the Compensation Committee,
provided the Company represents and warrants to the Executive that the terms of the ACIP and
LTIP will not be amended, modified, changed, or interpreted or applied to make them less generous
than they were on October 18, 2011, without prior written notice.

Employment
Agreement—Gregg Piontek

 

 

 

(c) Stock Options and Share Awards. In addition, Executive shall receive such
number of stock options and performance restricted share awards as are granted by the Compensation
Committee in accordance with the Board approved plans (all such plans being referred to as the
“Plans”). Vesting shall be as provided in these existing plans, and subject to any amendments.
When used in this Agreement “stock” and “shares” mean the Company’s publicly traded common stock,
$.01 par value. Further, throughout this Agreement, the words “stock options, awards, and grants”
are used separately or in various combinations to describe awards of shares or the right to acquire
shares of Company stock under various benefit plans or this Agreement, or both.

(d) Benefit Plans and Vacation. Subject to the terms of such Plans, throughout his
employment under this Agreement, Executive shall be entitled to participate in any and all employee
benefits plans or programs of the Company to the extent that he is otherwise eligible to
participate under the terms of those plans, including participation in any welfare benefit programs
provided by the Company (including, without limitation, medical, prescription, dental, disability,
employee life, group life, accidental death and travel accident insurance programs), and fringe
benefits and perquisites available generally to Executive Officers of the Company , including the
provision of a car allowance. The Company shall not be obligated to institute, maintain, or refrain
from changing, amending, or discontinuing any benefit plan, or perquisite, so long as such changes
are similarly applicable to other Executive Officers of the Company. During the Employment Term,
Executive shall be entitled to life insurance equal to three (3) times his Base Salary. The
Executive shall also be entitled to a car allowance in the amount of One Thousand Three Hundred
Dollars ($1,300.00) per month in accordance with the Company’s Vehicle Policy.

During the Employment Term, but beginning on January 1, 2011 Executive shall be entitled to
four (4) weeks paid vacation each calendar year in accordance with the Company’s policies in effect
from time to time, provided the four (4) of weeks of vacation provided in this paragraph shall not
be reduced under such policies.

(e) Expense Reimbursement. The Company will reimburse Executive in full for all
reasonable and necessary business, entertainment and travel expenses incurred or expended by
Executive in the performance of the duties hereunder in accordance with the Company’s customary
practices applicable to its senior staff.

(f) Location. Executive will be located at the Company’s offices in The Woodlands, Texas.

1.3 Extent of Services; Conflicts of Interest.

(a) Executive shall devote substantially all of his working time, attention and
energies to the business of the Company, and its affiliated entities. Executive may be involved in
charitable and professional activities, trade and industry associations and the like providing
these do not interfere with the requirements of employment with the Company.

(b) During the term of his employment under this Agreement, Executive shall not,
directly or indirectly, without the prior consent of the Chief Executive Officer of Company, render
any services to any other person or entity or acquire any interests of any type in any other
entity, that might be deemed in competition with the Company or any of its subsidiaries or
affiliates or in conflict with his position, provided, however, that the foregoing shall not be
deemed to prohibit Executive from (a) acquiring, solely as an investment, any securities of a
partnership, trust, limited liability company, corporation or other entity (i) so long as he
remains a passive investor in such entity, (ii) so long as he does not become part of any control
group thereof, and (iii) so long as such entity is not, directly or indirectly, in competition with
the
Company or any of its subsidiaries or affiliates, or (b) serving as a consultant, advisor or
director of any corporation which has a class of outstanding equity securities registered under
Sections 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
and which is not in competition with the Company or any of its subsidiaries or affiliates.

Employment
Agreement—Gregg Piontek

 

Page 2 of 22

 

(c) Executive shall execute simultaneously with this Agreement, the two Unfair
Competition, Confidentiality and Non-Competition Agreements attached as Appendix A and Appendix B.

(d) Executive shall execute simultaneously with this Agreement an Indemnification Agreement,
in the form of the attached Appendix C, and that agreement is incorporated by reference.

1.4 Change of Control. Executive and Company have executed a Change of Control Agreement
dated January 7, 2008, as amended, which shall remain in effect in accordance with its own terms.

2. Termination of Employment.

2.1 Termination. Executive’s employment by the Company shall be terminated (1)
automatically, upon the death or disability (as defined below), of Executive, or (2) at the
election of Executive upon 30 days written notice to the Company by Executive for Good Reason (as
defined below) or his voluntary resignation at his election and without Good Reason, (3) by the
Company for Cause (as defined below), (4) by the Company without Cause, or (5) at the end of the
Employment Term as defined in Section 1.1.

2.2 Early Termination. If Executive’s employment is terminated by Executive at any time
before the end of the Employment Term for any reason other than for Good Reason, Executive shall be
entitled to receive only (i) his Base Salary and other earned compensation through the date of
termination and (ii) such stock options, share awards, and grants as shall have fully vested before
the date of termination.

2.3 Termination by Executive for Good Reason or by Company without Cause. If Executive’s
employment is terminated by Executive for Good Reason or by the Company without Cause, then
Executive shall be entitled to receive: (i) in a lump sum payment within thirty (30) days of the
date of termination, an amount equal to the greater of (A) Executive’s current annual Base Salary
as provided herein plus Target Award incentive (55%) for the remaining period of the Initial Term
or (B) Executive’s current annual Base Salary as provided herein plus Target Award incentive (55%)
for one year; (ii) full vesting of all time related Options and restricted stock awarded at the
commencement of employment, provided however, there shall be no vesting of annual stock awards in
the post-employment exercise period in accordance with the Plans; (iii) the Company will pay the
COBRA premium to continue the same coverage under the Company’s group medical insurance program
period for the greater of the remaining period of the Employment Term or twelve (12) months
subject to an overall maximum of eighteen (18) months and; (iv) direct payment by the Company for
the costs of outplacement services obtained by the Executive within the one (1) year period after
termination, not to exceed $20,000.

2.4 Termination for Cause. If Executive’s employment is terminated at any time during the
Employment Term for Cause (as defined herein), then Executive shall be entitled to receive only (i)
his Base Salary through the date of termination and (ii) such stock options, restricted stock
awards, and grants as shall have fully vested before the date of termination. In any such event,
Executive shall be ineligible for and shall forfeit all rights with respect to options and grants
that have not vested as of the time of termination for Cause.

2.5 Termination as a Result of Death. If Executive dies during the Employment Term, the
Company shall pay to Executive’s surviving spouse or such other person or estate as the Executive
may from time to time designate by written notice to the Company, or such other person as may be
required by law, the Company will pay the following amounts: (i) any unpaid Base Salary or other
compensation for services rendered to the date of death, and any unpaid expenses required to be
reimbursed under this Agreement, and any earned but unpaid bonuses for any prior period; (ii) as of
the date of termination by
reason of Executive’s death, stock options previously awarded to Executive that have vested as of
the date of death in keeping with the governing Plans. No awards or grants contemplated by this
Agreement, but not yet awarded to Executive as of the time of his death shall be granted

Employment
Agreement—Gregg Piontek

 

Page 3 of 22

 

2.6 Termination as a Result of Disability. The Company may terminate Executive’s employment
hereunder upon Executive becoming “Totally Disabled.” For purposes of this Agreement, Executive
shall be considered “Totally Disabled” if Executive has been physically or mentally incapacitated
so as to render Executive incapable of performing the essential functions of Executive’s position
with or without reasonable accommodation. Executive’s receipt of disability benefits for total
disability under the Company’s long-term disability plan or receipt of Social Security total
disability benefits shall be deemed conclusive evidence of Total Disability for purposes of this
Agreement. However, in the absence of Executive’s receipt of such long-term disability benefits or
Social Security benefits, the Chief Executive Officer in good faith may determine that the
Executive is disabled due to the needs of the business and the unacceptable unavailability of
Executive which is expected to last for a continuous period of not less than six (6) months. In
the event of such disability, Executive will continue to receive his Base Salary for six (6) months
or until benefits become payable to the Executive under the terms of the Company’s disability
policy, whichever first occurs.

2.7 No Setoff. The Company’s obligation to make payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right, or action which Company may have against the Executive
or others. In no event shall the Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable, or benefits to be provided to the Executive
under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not
the Executive obtains or seeks to obtain other employment.

2.8. Coordination of Benefits. In the event that the Employee is entitled to benefits
following Termination under any Change in Control Agreement with the Company, the Employee shall
have the right to elect whether to receive such benefits under any such Change in Control Agreement
or this Employment Agreement, but not both.

3. Miscellaneous Matters.

3.1 Exclusive Dispute Resolution Procedure. In the event either party contends the other has
not complied with a provision of this Agreement or asserts any claims under ERISA, other than the
Non-Compete Agreements (which are specifically excluded from this procedure), prior to seeking
arbitration as provided for below, the party claiming a violation of this Agreement, shall advise
the other party, in writing, of the specifics of the claim, including the specific provision
alleged to have been violated, as well as provide the other party with any supporting documentation
the party desires to produce at that time. If the Company is disputing amounts that Executive
contends are due to him, the Company shall provide a complete statement of the amount it is
disputing, the reason it is disputing it, and supporting documentation upon request by Executive.
The parties will thereafter meet and attempt to resolve their differences in a period not to exceed
thirty (30) days, unless the parties agree in writing to mutually extend the time for one
additional thirty (30) day period. Following such attempts to resolve any such dispute, either
party may require arbitration of the other. In order to do so, the request must be timely made, in
writing, and delivered to the other party (Executive or the Chief Executive Officer) within thirty
(30) days following the end of the resolution period (or any valid extension thereof) referenced
herein above. The parties hereto agree that any controversy or claim arising out of or relating to
this Agreement, or any dispute arising out of the interpretation or application of this Agreement,
which the parties hereto are unable to resolve as provided for above, shall be finally resolved and
settled exclusively by arbitration in the city where the Company’s headquarters are then located or
such other location as the parties may agree, by a single arbitrator in accordance with the
substantive laws of the State of Texas to the extent not preempted by the Employee Retirement
Income Security Act, which shall govern all applicable benefits issues, in keeping with the above
required procedure. If the parties cannot agree upon an arbitrator, then each party shall choose
its own independent representative, and those independent representatives shall choose the single
arbitrator within thirty (30) days of the date of the selection of the first independent
representative. The legal expenses of each party shall be borne by them respectively. However,
the cost and expenses of the arbitrator in any such action shall be borne equally by the parties.
The arbitrator’s decision, judgment and award shall be final, binding and conclusive upon the
parties and may be entered in the highest court, state or federal, having jurisdiction. The
arbitrator to which any such dispute shall be submitted in accordance with the provision of this
Article shall only have jurisdiction and authority to interpret, apply or determine compliance with
the provisions of this Agreement, but shall not have jurisdiction or authority to add to, subtract
from, or alter in any way the provisions of this Agreement.

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3.2 Headings. Section and other headings contained in this Agreement are for reference only
and shall not affect in any way the meaning or interpretation of this Agreement.

3.3 Notices. Any notice, communication, request, reply or advice (here severally and
collectively called “Notice”) required or permitted to be given under this Agreement must be in
writing and is effectively given by deposit in the same in the United States mail, postage pre-paid
and registered or certified with return receipt requested, by national commercial courier for next
day delivery, or by delivering in person the same to the address of the person or entity to be
notified. Notice deposited in the mail in the manner herein above described shall be effective 48
hours after such deposit, Notice sent by national commercial courier for next day delivery shall be
effective on the date delivered, and Notice delivered in person shall be effective at the time of
delivery. For purposes of Notice, the address of the parties shall, until changed as hereinafter
provided, be as follows:

	 	(a)	 	If to the Company :
	 
	 	 	 	Newpark Resources, Inc.

2700 Research Forest Dr.

The Woodlands, Texas 77381

Attention: Chief Executive Officer

or at such address as the Company may have advised Executive in writing; and

	 	(b)	 	If to Executive:
	 
	 	 	 	Gregg Steven Piontek

67 S. Taylor Point Drive

The Woodlands, TX 77382

or at such other address as Executive may have advised the Company in writing.

3.4 Waiver. The failure by any party to enforce any of its rights under this Agreement shall
not be deemed to be a waiver of such rights, unless such waiver is an express written waiver which
has been signed by the waiving party. Waiver of any one breach shall not be deemed to be a waiver
of and other breach of the same or any other provision of this Agreement.

3.5 Choice of Law. The validity of the Agreement, the construction of its terms and the
determination of the rights and duties of the parties hereto shall be governed by and construed in
accordance with the laws of the State of Texas without regard to choice of law principles.

3.6 Invalidity of Provisions. If any provision of this Agreement is adjudicated to be
invalid, illegal or unenforceable under applicable law, the validity or enforceability of the
remaining provisions shall be unaffected. To the extent that any provision of this Agreement is
adjudicated to be invalid, illegal or
unenforceable because it is overbroad, that provision shall not be void but rather shall be limited
only to the extent required by applicable law and enforced as so limited.

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3.7 Entire Agreement; Written Modifications. This Agreement, the Non-Compete Agreements, and
the specific documents referred to and incorporated herein by reference (whether or not copies
thereof are attached to this Agreement) together contain the entire agreement between the parties
and supersedes all prior or contemporaneous representations, promises, understandings and
agreements between Executive and the Company.

3.8 No Assignments; Assumption by Successor. This Agreement is personal to the Company and
the Executive and may not be assigned by either party without the prior written consent of the
other. The Company will 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 Company to
(i) expressly assume and agree to perform this Agreement in the same manner and the same extent the
Company would be required to perform it as if no such succession had taken place; and (ii) notify
the Executive of the assumption of this Agreement within ten days of such assumption. Failure of
the Company to obtain such assumption and agreement prior to the effectiveness of any such
succession shall be considered a Good Reason for the Executive to resign from the Company. As
used in this Agreement, Company shall mean Newpark Resources, Inc., and any successor to its
business and/or assets as aforesaid which assumes and agrees to perform this agreement by operation
of law or otherwise. However, this Agreement shall inure to the benefit of and be enforceable by
the Executive’s personal or legal representatives, executors, administrators’ successors, heirs,
and distributes, devisees, and legatees.

3.9 Attorney’s Fees. The prevailing party in any action brought to enforce this Agreement
shall be entitled, in addition to such other relief that may be granted, to a reasonable sum for
attorney’s fees and costs incurred by such party in enforcing or defending against an action to
enforce this Agreement.

3.10 Definitions. In this Agreement:

(a) “Cause” when used with reference to termination of the employment of Executive by the
Company for “Cause”, shall mean:

	 	(1)	 	Executive’s conviction by a court of competent jurisdiction of, or
entry of a plea of guilty or nolo contendere for an act on the
Executive’s part constituting a felony; or
	 
	 	(2)	 	dishonesty; willful misconduct or gross neglect by Executive of his
obligations under this Agreement that results in material injury to
the Company;
	 
	 	(3)	 	appropriation (or an overt act attempting appropriation) by Executive
of a material business opportunity of the Company;
	 
	 	(4)	 	theft, embezzlement or other similar misappropriation of funds or
property of the Company by Executive; or
	 
	 	(5)	 	the failure of Executive to follow the reasonable and lawful written
instructions or policy of the Company with respect to the services to
be rendered and the manner of rendering such services by Executive
provided Executive has been given reasonable and specific written
notice of such failure and opportunity to cure and no cure has been
effected or initiated within a reasonable time, but not less than 90
days, after such notice.

(b) “Good Reason” means any of the following:

	 	(1)	 	the Company adversely changes Executive’s title or changes in any material
respect the responsibilities, authority or status of Executive without
prior notice and acceptance;
	 
	 	(2)	 	the substantial or material failure of the Company to comply with its
obligations under this Agreement or any other agreement that may be in
effect that is not remedied within a reasonable time after specific written
notice thereof by Executive to the Company;

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	 	(3)	 	the diminution of the Executive’s salary and or a material diminution of
the Executive’s benefits without prior notice and acceptance;
	 
	 	(4)	 	the failure of the Company to obtain the assumption of this Agreement by
any successor or assignee of the Company
	 
	 	(5)	 	Requiring Executive to relocate more than 50 miles from The Woodlands, Texas
	 
	 	(6)	 	provided that in any of the above situations, Executive has given
reasonable and specific written notice to the Chief Executive Officer of
such failure and the Company has been given a reasonable opportunity to
cure and no cure has been effected or initiated within a reasonable time
after such notice.

3.11 Section 409A.

(a) If Executive is a “key employee,” as defined in Section 416(i) of the Code
(without regard to paragraph 5 thereof), except to the extent permitted under Section 409A of the
Code, no benefit or payment that is subject to Section 409A of the Code (after taking into account
all applicable exceptions to Section 409A of the Code, including but not limited to the exceptions
for short-term deferrals and for “separation pay only upon an involuntary separation from service”)
shall be made under this Agreement on account of the Executive’s “separation from service” as
defined in Section 409A of the Code, with the Company until the later of the date prescribed for
payment in this Agreement and the first day of the seventh calendar month that begins after the
date of the Executive’s separation from service (or, if earlier, the date of death of the
Executive).

(b) For purposes of Section 409A of the Code (including, but not limited to,
application of the exceptions for short-term deferrals and for “separation pay only upon
involuntary separation from service”), each payment provided for under this Agreement is hereby
designated as a separate payment, rather than a part of a larger single payment or one of a series
of payments.

(c) Any amount that Executive is entitled to be reimbursed under this Agreement will be
reimbursed to Executive as promptly as practicable and in any event not later than the last day of
the calendar year after the calendar year in which the expenses to be reimbursed are incurred, and
the amount of the expenses eligible for reimbursement during any calendar year. In addition, any
such reimbursement payments described in this Section shall not be subject to liquidation or
exchange for any other payment or benefit.

(d) In the event that Executive is required to execute a release to receive any payments from
the Company that constitute nonqualified deferred compensation under Section 409A of the Code,
payment of such amounts shall not commence until the sixtieth (60th) day following
Executive’s separation from service with the Company. Any installment payments suspended during
such sixty (60) day period shall be paid as a single lump sum payment on the first payroll date
following the end of such suspension period.

[Remainder of page to be left blank]

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Executed as of the date first written above.

	 	 	 	 	 	 	 	 	 	 	 
	Signed:

	 	/s/ Gregg S. Piontek	 	 	 	Signed:	 	/s/ Paul L. Howes	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Gregg Steven Piontek (Executive)
	 	 	 	 	 	Paul L. Howes 

President & CEO Newpark Resources, Inc	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Witness:

	 	/s/
Vicki D. Phillips	 	 	 	Witness:	 	/s/
Vicki D. Phillips	 	 
	 

	 	 

Name:
	 	 	 	 	 	 

Name:
	 	 

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APPENDIX A

ANCILLARY LOUISIANA UNFAIR COMPETITION, CONFIDENTIALITY AND

NON-COMPETITION AGREEMENT 

THIS LOUISIANA UNFAIR COMPETITION, CONFIDENTIALITY AND NON-COMPETITION AGREEMENT (this
“Ancillary Agreement”) dated and effective as of October 18, 2011 is made by Gregg Steven
Piontek (“Executive”) and Newpark Resources, Inc. (the “Company”).

RECITALS:

WHEREAS , Executive and the Company have entered into an Agreement dated this date (the
“Employment Agreement”), to which this Agreement is ancillary and incorporated by
reference, pursuant to which, among other things, the Company agrees to make certain payments to
Executive; and

WHEREAS , pursuant to the Employment Agreement, the Company and Executive have agreed to enter
into this Ancillary Agreement; and

NOW, THEREFORE , in consideration of Executive’s Employment Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Executive and
the Company hereby covenant and agree as follows:

1. Definitions. Each capitalized term not defined herein shall have the meaning
assigned to that term in the Employment Agreement.

2. Confidentiality. Executive acknowledges that in the course of his relationship
with the Company and its related entities Newpark Drilling Fluids, Newpark Mats and Integrated
Services, Newpark Environmental Services, and Newpark Canada, (the “Related Entities” or
referred to collectively with Newpark Resources as the “Company”) he will in the future
receive certain trade secrets, programs, lists of customers and other confidential or proprietary
information and knowledge concerning the business of the Company and its Related Entities
(hereinafter collective referred to as “Confidential Information”) which the Company
desires to protect. Executive understands that the information is confidential and he agrees not
to reveal the Confidential Information to anyone outside the Company so long as the confidential or
secret nature of the Confidential Information shall continue, other than such disclosure as
authorized by the Company or is made to a person transacting business with the Company who has
reasonable need for such Confidential Information. Executive further agrees that he will at no
time use the Confidential Information for or on behalf of any person other than the Company for any
purpose. Executive further agrees to comply with the confidentiality and other provisions set
forth in this Agreement, the terms of which are supplemental to any statutory or fiduciary or other
obligations relating to these matters. On the termination of employment or his Employment
Agreement, Executive shall surrender to the Company all papers, documents, writings and other
property produced by him or coming into his possession by or through his relationship with the
Company or relating to the Confidential Information and Executive agrees that all such materials
will at all times remain the property of the Company.

3. Specific Covenants.

(a) This Agreement. The terms of this Agreement constitute Confidential Information,
which Executive shall not disclose to anyone other than his spouse, attorney, accountant, or as may
be required by the Company or by law.

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(b) Company Property. All written materials, customer or other lists or data bases,
records, data, and other documents prepared or possessed by Executive during Executive’s employment
with the Company are the Company’s property. All information, ideas, concepts, improvements,
discoveries, and inventions that are conceived, made, developed, or acquired by Executive
individually or in conjunction with others during Executive’s employment (whether during business
hours and whether on the Company’s premises or otherwise) which relate to the Company’s business,
products, or services are the Company’s sole and exclusive property. All memoranda, notes,
records, files, correspondence, drawings, manuals, models, specifications, computer programs, maps,
and all other documents, data, or materials of any type embodying such information, ideas,
concepts, recipes, inventory, prices, improvements, discoveries, and inventions are the Company’s
property. At the termination of Executive’s employment with the Company for any reason, Executive
shall return all of the Company’s documents, data, or other Company Property to the Company.
Included in the above are all such data that Executive had access to, over, or possessed. The
Company desires by this Agreement to protect its economic investment in its current and future
operations and business.

(c) Confidential Information; Non-Disclosure. Executive acknowledges and stipulates
that the business of the Company is highly competitive, cost and price sensitive, and that he in
connection with his work and job have had access to Confidential Information relating to the
Company’s businesses and their methods and operations. For purposes of this Agreement, “Confidential Information” means and includes the Company’s confidential and/or proprietary
information and/or trade secrets that have been developed or used and/or will be developed and that
cannot be obtained readily by third parties from outside sources. Confidential Information
includes, by way of example and without limitation, the following information regarding customers,
employees, contractors, its operations and its markets and the industry not generally known to the
public; strategies, methods, books, records, and documents; recipes, technical information
concerning products, equipment, services, and processes; procurement procedures and pricing
techniques; the names of and other information concerning customers and those being solicited to be
customers, investors, and business relations (such as contact name, service provided, pricing for
that customer, type and amount of product used, credit and financial data, and/or other information
relating to the Company’s relationship with that customer); pricing strategies and price curves;
positions, plans, and strategies for expansion or acquisitions; budgets; customer lists; research;
financial and sales data; raw materials purchasing or trading methodologies and terms; evaluations,
opinions, and interpretations of information and data; marketing and merchandising techniques;
prospective customers’ names and locations; grids and maps; electronic databases; models;
specifications; computer programs; internal business records; contracts benefiting or obligating
the Company; bids or proposals submitted to any third party; technologies and methods; training
methods and training processes; organizational structure; personnel information, including salaries
of personnel; labor or employee relations or agreements; payment amounts or rates paid to
consultants or other service providers; and other such confidential or proprietary information.
Information need not qualify as a trade secret to be protected as Confidential Information under
this Agreement, and the authorized and controlled disclosure of Confidential Information to
authorized parties by Company in the pursuit of its business will not cause the information to lose
its protected status under this Agreement. Executive acknowledges and stipulates that this
Confidential Information constitutes a valuable, special, and unique asset used by the Company in
its businesses to obtain a competitive advantage over its competitors. Executive further
acknowledges that protection of such Confidential Information against unauthorized disclosure and
use is of critical importance to the Company in maintaining its competitive position and economic
investment, as well as work for its employees.

(d) Unfair Competition Restrictions. Executive agrees that for a period of twenty-
four (24) months following the date of his termination (“Restricted Term”), he will not,
directly or indirectly, for himself or for others, anywhere in those areas where the Company
currently (including the City of New Orleans and its surrounding parishes, and in those cities or
parishes listed in Attachment “A-1” attached hereto) (the “Restricted Area”) conducts or
is seeking to conduct business of the same nature as the Company, including the Related Entities,
do any of the following, unless expressly authorized by the Chief Executive Officer of the Company:
Engage in, or assist any person, entity, or business engaged in, the selling or providing of
products or services that would displace the products or services that (i) the
Company is currently in the business of providing and was in the business of providing, or is
planning to be in the business of providing, at the time of the execution of this Agreement, or
(ii) that Executive had involvement in, access to, or received Confidential Information about in
the course of employment. The foregoing is expressly understood to include, without limitation,
the business of the manufacturing, selling and/or providing products or services of the same type
offered and/or sold by the Company.

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4. Prohibition on Circumvention. It is further agreed that during the Restricted
Term, Executive cannot circumvent these covenants by alternative means or engage in any of the
enumerated prohibited activities in the Restricted Area by means of telephone, telecommunications,
satellite communications, correspondence, or other contact from outside the Restricted Area.
Executive further understands that the foregoing restrictions may limit his ability to engage in
certain businesses during the Restricted Term, but acknowledge that these restrictions are
necessary to protect the Confidential Information and business interests of the Company.

5. Proviso. It is agreed that these covenants do not prevent Executive from using
and offering the general management or other skills that he possessed prior to receiving access to
Confidential Information and knowledge from the Company. This Agreement creates an advance
approval process, and nothing herein is intended, or will be construed as, a general restriction
against Executive’s pursuit of lawful employment in violation of any controlling state or federal
laws. Executive is permitted to engage in activities that would otherwise be prohibited by this
covenant if such activities are determined in the sole discretion of the Chief Executive Officer of
the Company, and authorized in writing, to be of no material threat to the legitimate business
interests of the Company.

6. Non-Solicitation of Customers. For a period of twenty-four (24) months following
Executive’s termination of employment or employment agreement, Executive agrees not to call on,
service, or solicit competing business from customers of the Company, in the Restricted Area, whom
he, within the previous twenty-four (24) months, (i) had or made contact with, or (ii) induce or
encourage any such customer or other source of ongoing business to stop doing business with the
Company. This provision does not prohibit Executive from managing or providing other services or
products that are not a product or services currently offered by the Company.

7. Non-Solicitation of Employees. For a period of twenty-four (24) months following
the date of Executive’s termination of employment or employment agreement, Executive will not,
either directly or indirectly, call on, solicit, encourage, or induce any other employee or officer
of the Company, whom he had contact with, knowledge of, or association within the course of
employment with the Company to discontinue his or her employment, and will not assist any other
person or entity in such a solicitation.

8. Non-Disparagement. Executive covenants and agrees he will not engage in any
pattern of conduct that involves the making or publishing of written or oral statements or remarks
(including, without limitation, the repetition or distribution of derogatory rumors, allegations,
negative reports or comments) which are disparaging, deleterious or damaging to the integrity,
reputation or good will of the Company or its respective management or products and services.

9. Separability of Covenants. The covenants contained in Section 3 herein
constitute a series of separate but ancillary covenants, one for each applicable parish in the
State of Louisiana set forth in this Agreement or Attachment “A-1” hereto. If in any judicial
proceeding, a court shall hold that any of the covenants set forth in Section 3 exceed the time,
geographic, or occupational limitations permitted by applicable law, Executive and the Company
agree that such provisions shall and are hereby reformed to the maximum time, geographic, or
occupational limitations permitted by such laws, Further, in the event a court shall hold
unenforceable any of the separate covenants deemed included herein, then such unenforceable
covenant or covenants shall be deemed eliminated from the provisions of this Agreement for the
purpose of such proceeding to the extent necessary to permit the remaining separate covenants to be
enforced in such proceeding. Executive and the Company further agree that the covenants in Section
3 shall each be construed as a separate agreement independent of any other provisions of this
Agreement, and
the existence of any claim or cause of action by Executive against the Company, whether predicated
on this Agreement, his Employment Agreement or otherwise, shall not constitute a defense to the
enforcement by the Company of any of the covenants of Section 3.

Appendix
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10. Consideration. Executive acknowledges and agrees that no other consideration for
Executive’s covenants in this Agreement, other than that specifically referred to in Section 1 of
the Employment Agreement, has or will be paid or furnished to him by the Company or the Related
Entities.

11. Return of Items. Upon termination and/or retirement, Executive will return any
computer related hardware or software, cell phone, keys, or other data or company property in his
possession or control, including all customer list(s), pricing documents, etc., to the Company,
except as may be specifically provided for to the contrary in the Employment Agreement.

12. Meaning of Certain Terms. All non-capitalized terms in Sections 3 and 4 are
intended to and shall have the same meanings that those terms (to the extent they appear therein)
have in La. R. S. 23:921.C. Subject to and only to the extent not consistent with the foregoing
sentence, the parties understand the following phrases to have the following meanings:

(a) The phrase “carrying on or engaging in a business similar to the business of
the Company” includes engaging, as principal, executive, employee, agent, trustee, advisor,
consultant or through the agency of any corporation, partnership, association or agent or agency,
in any business which conducts business in competition with the Company (including its Related
Entities) or being the owner of more than 1% of the outstanding capital stock of any corporation,
or an officer, director, or employee of any corporation or other entity, (other than the Company or
a corporation or other entity, affiliated with the Company) or a member or employee or any
partnership, or an owner or employee of any other business, which conducts a business or provides a
service in the Restricted Area in competition with the Company or any affiliated corporation or
other entity. Moreover, the term also includes (i) directly or indirectly inducing any current
customers of the Company, or any affiliated corporation or other entity, to patronize any product
or service business in competition with the Company or any affiliated corporation or other entity,
(ii) canvassing, soliciting, or accepting any product or service business of the type conducted by
the Company or any affiliated corporation or other entity (iii) directly or indirectly requesting
or advising any current customers of the Company or any affiliated corporation or other entity, to
withdraw, curtail or cancel such customer’s business with the Company or any affiliated corporation
or other entity; or (iv) directly or indirectly disclosing to any other person, firm, corporation
or entity, the names or addresses of any of the current customers of the Company or any affiliated
corporation or other entity or the rates or other terms on which the Company provides services to
its customers. In addition, the term includes directly or indirectly, through any person, firm,
association, corporation or other entity with which Executive is now or may hereafter become
associated, causing or inducing any present employee of the Company or any affiliated corporation
or other entity to leave the employ of the Company or any affiliated corporation or other entity to
accept employment with Executive or with such person, firm, association, corporation, or other
entity.

(b) The phrase “a business similar to the business of the Company” means
environmental services to the exploration, production and maritime industries, mat sales and
rentals, drilling fluids, and water treatment and related technology; and, heavy oil and air
treatment.

(c) The phrase “carries on a like business” includes, without limitation,
actions taken by or through a wholly-owned subsidiary or other affiliated corporation or entity.

(d) All references to the Company shall also be deemed to refer to and include the
Related Entities.

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13. Reasonable Restrictions. Executive represents to the Company that the
enforcement of the restrictions contained in this Agreement would not be unduly burdensome to
Executive and
acknowledges that Executive is willing and able, subject to the Restricted Area as defined herein,
to compete in other geographical areas not prohibited by this Agreement. The parties to this
Agreement hereby agree that the covenants contained in this Agreement are reasonable.

14. Entire Agreement. Except with respect to the Employment Agreement executed
concurrently herewith, and with respect to certain matters included in a separate Agreement being
entered into between Executive and the Company on the date of this Agreement (“Appendix B and B-1”), this Agreement constitutes the entire agreement between the parties hereto with respect to the
subject matter of this Agreement and supersedes and is in full substitution for any and all prior
agreements and understandings whether written or oral between said parties relating to the subject
matter of this Agreement. This Agreement shall not supersede or substitute for, nor be superseded
or substituted by, the Employment Agreement, but shall have full force and effect concurrently
therewith.

15. Amendment. This Agreement may not be amended or modified in any respect except
by an agreement in writing executed by the parties in the same manner as this Agreement except as
provided in Section 18 of this Agreement.

16. Assignment. This Agreement (including, without limitation, Executive’s
obligations under Sections 3 and 4) may not be assigned by the Company in a manner inconsistent
with 3.8 of Executive’s Employment Agreement without the consent of Executive in connection with
the sale, transfer or other assignment of all or substantially all of the capital stock or assets
of, or the merger of, the Company, provided that the party acquiring such capital stock or assets
or into which the company merges assumes in writing the obligations of the Company hereunder and
provided further that no such assignment shall release the Company from its obligations hereunder.
This Agreement (including, without limitation, Executive’s obligations under Sections 3 and 4) may
not be assigned or encumbered in any way by Executive without the written consent of the Company.

17. Successors. This Agreement (including, without limitation, Executive’s
obligations under Sections 3 and 4) shall be binding upon and shall inure to the benefit of and be
enforceable by each of the parties and their respective successors and assigns.

18. Unenforceable Provisions. If, and to the extent that, any section, paragraph,
part, term and/or provision of this Agreement would otherwise be found null, void, or unenforceable
under applicable law by any court of competent jurisdiction, that section, paragraph, part, term
and/or provision shall automatically not constitute part of this Agreement. Each section,
paragraph, part, term and/or provision of this Agreement is intended to be and is severable from
the remainder of this Agreement. If, for any reason, any section, paragraph, part, term and/or
provision herein is determined not to constitute part of this Agreement or to be null, void, or
unenforceable under applicable law by any court of competent jurisdiction, the operation of the
other sections, paragraphs, parts, terms and/or provisions of this Agreement as may remain
otherwise intelligible shall not be impaired or otherwise affected and shall continue to have full
force and effect and bind the parties hereto.

19. Remedies.

(a) Executive agrees that a breach or violation of Section 3 or 4 of this Agreement
by Executive shall entitle the Company as a matter of right, to an injunction, without necessity of
posting bond, issued by any court of competent jurisdiction, restraining any further or continued
breach or violation of such provisions. Such right to an injunction shall be cumulative and in
addition, and not in lieu of, any other remedies to which the Company may show themselves justly
entitled, including, but not limited to, specific performance and damages. The parties
specifically agree that the remedy of damages alone is inadequate.

(b) In the event that Executive knowingly and intentionally fails in any material
respect to perform any of his material obligations under this Agreement, the Company may elect (i)
to
cease any payments under the Employment Agreement and recover all payments made to Executive under
the Employment Agreement on or subsequent to the date of the failure, (ii) obtain an injunction
and/or (iii) exercise any and all other remedies available by law.

Appendix
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(c) Notwithstanding the foregoing subsection (b), Executive will have no liability
or responsibility for: (i) inadvertent disclosure or use of the Information if (x) he uses the same
degree of care in safeguarding the Information that the Company uses to safeguard information of
like importance and (y) upon discovery of such inadvertent disclosure or use of such material,
Executive immediately uses his best efforts, including the commencement of litigation, if
necessary, to prevent any use thereof by the person or persons to whom it has been disclosed and to
prevent any further incidental disclosure thereof; and (ii) , disclosure of Information (x) that is
required by law, (y) that is made pursuant to a proper subpoena from a court or administrative
agency of competent jurisdiction from a court or administrative agency of competent jurisdiction or
(z) that is made upon written demand of an official involved in regulating Executive if before
disclosure is made, Executive immediately notifies the Company of the requested disclosure by the
most immediate means of communication available and confirms in writing such notification within
one business day thereafter.

20. Notice. All notices, consents, requests, approvals or other communications in
connection with this Agreement and all legal process in regard hereto shall be in writing and shall
be deemed validly delivered, if delivered personally or sent by certified mail, postage prepaid.
Unless changed by written notice pursuant hereto, the address of each party for the purposes hereof
is as follows:

	 	 	 
	If to Executive :

	 	If to the Company :
	Gregg Steven Piontek

	 	2700 Research Forest , Suite 100
	67 S. Taylor Point Drive

	 	The Woodlands, Texas 77381
	The Woodlands, TX 77382

	 	Attn: Chief Executive Officer

Notice given by mail as set out above shall be deemed delivered only when actually received.

21. Descriptive Headings. The descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

22. Governing Law. This Agreement shall be governed by and construed and enforced
in accordance with the laws of the State of Louisiana without regard to conflicts of law
principles.

IN WITNESS WHEREOF , the parties have duly executed this Louisiana Unfair Competition,
Confidentiality and Non-competition Agreement as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	Signed:

	 	/s/ Gregg S. Piontek 
 

	 	 	 	Signed:
	 	/s/ Paul L. Howes 
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Gregg Steven Piontek
	 	 	 	 	 	Paul L. Howes 

President & CEO 

Newpark Resources, Inc	 	 

Appendix
A—Gregg Piontek

 

Page 14 of 22

 

ATTACHMENT A-1 (Restricted Areas)

States and areas in which Newpark Resources, Inc. currently does business:

	 	 	 	 	 	 	 	 	 
	1.

	 	Louisiana
	 	 	9.	 	 	New York
	2.

	 	Texas
	 	 	10.	 	 	West Virginia
	3.

	 	Oklahoma
	 	 	11.	 	 	Montana
	4.

	 	Arkansas
	 	 	12.	 	 	North Dakota
	5.

	 	Colorado
	 	 	13.	 	 	Pennsylvania
	6.

	 	Wyoming
	 	 	14.	 	 	Ohio
	7.

	 	Utah
	 	 	15.	 	 	New Mexico
	8.

	 	Nevada	 	 	 	 	 	 

Other areas:

	9.	 	The Gulf of Mexico, off what is commonly the “Gulf
Coast. ”
	 
	10.	 	Western Canada

Louisiana Parishes in which Newpark Resources, Inc currently does business:

	 	 	 	 	 	 	 	 	 
	1.

	 	Acadia
	 	 	17.	 	 	Lafayette
	2.

	 	Allen
	 	 	18.	 	 	Lafourche
	3.

	 	Assumption
	 	 	19.	 	 	Livingston
	4.

	 	Avoyelles
	 	 	20.	 	 	Plaquemine
	5.

	 	Beauregard
	 	 	21.	 	 	Pointe Coupee
	6.

	 	Bossier
	 	 	22.	 	 	Rapides
	7.

	 	Calcasieu
	 	 	23.	 	 	Richland
	8.

	 	Cameron
	 	 	24.	 	 	St. Charles
	9.

	 	East Ascension
	 	 	25.	 	 	St. James
	10.

	 	East Baton Rouge
	 	 	26.	 	 	St. Landry
	11.

	 	Evangeline
	 	 	27.	 	 	St. Martin
	12.

	 	Grant
	 	 	28.	 	 	St. Mary
	13.

	 	Iberia
	 	 	29.	 	 	St. Tammany
	14.

	 	Iberville
	 	 	30.	 	 	Terrebonne
	15.

	 	Jeff Davis
	 	 	31.	 	 	Vermilion
	16.

	 	Jefferson
	 	 	32.	 	 	Washington

Appendix
A—Gregg Piontek

 

Page 15 of 22

 

APPENDIX B

TEXAS AND NON-LOUISIANA UNFAIR COMPETITION, CONFIDENTIALITY AND

NON-COMPETITION AGREEMENT 

THIS UNFAIR COMPETITION, CONFIDENTIALITY AND NONCOMPETITION AGREEMENT (this “Ancillary
Agreement”) dated and effective as of October 18, 2011 is made by Gregg Steven Piontek (“Executive”) and Newpark Resources, Inc. (the “Company”).

RECITALS:

WHEREAS , Executive and the Company have entered into an Agreement dated this date (the “
Employment Agreement”), to which this Agreement is ancillary and incorporated by
reference, pursuant to which, among other things, the Company agrees to make certain payments to
Executive; and

WHEREAS , pursuant to the Employment and Settlement Agreement, the Company and Executive have
agreed to enter into this Ancillary Agreement; and

NOW, THEREFORE, in consideration of Executive’s Employment Agreement and other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Executive and
the Company hereby covenant and agree as follows:

1. Definitions. Each capitalized term not defined herein shall have the
meaning assigned to that term in the Employment Agreement.

2. Confidentiality. Executive acknowledges that in the course of his
relationship with the Company and its related entities Newpark Drilling Fluids, Newpark Mats and
Integrated Services, Newpark Environmental Services, and Newpark Canada, (the “Related
Entities” or referred to collectively with Newpark Resources as the “Company”) he
will in the future receive certain trade secrets, programs, lists of customers and other
confidential or proprietary information and knowledge concerning the business of the Company and
its Related Entities (hereinafter collective referred to as “Confidential Information”)
which the Company desires to protect. Executive understands that the information is confidential
and he agrees not to reveal the Confidential Information to anyone outside the Company so long as
the confidential or secret nature of the Confidential Information shall continue, other than such
disclosure as authorized by the Company or is made to a person transacting business with the
Company who has reasonable need for such Confidential Information. Executive further agrees that
he will at no time use the Confidential Information for or on behalf of any person other than the
Company for any purpose. Executive further agrees to comply with the confidentiality and other
provisions set forth in this Agreement, the terms of which are supplemental to any statutory or
fiduciary or other obligations relating to these matters. On the termination of employment or his
Employment Agreement, Executive shall surrender to the Company all papers, documents, writings and
other property produced by him or coming into his possession by or through his relationship with
the Company or relating to the Confidential Information and Executive agrees that all such
materials will at all times remain the property of the Company.

3. Specific Covenants.

(a) This Agreement. The terms of this Agreement constitute Confidential
Information, which Executive shall not disclose to anyone other than his spouse, attorney,
accountant, or as may be required by the Company or by law.

Appendix
B—Gregg Piontek

 

Page 16 of 22

 

(b) Company Property. All written materials, customer or other lists or data
bases, records, data, and other documents prepared or possessed by Executive during Executive’s
employment with the Company are the Company’s property. All information, ideas, concepts,
improvements, discoveries, and inventions that are conceived, made, developed, or acquired by
Executive individually or in conjunction with others during Executive’s employment (whether during
business hours and whether on the Company’s premises or otherwise) which relate to the Company’s
business, products, or services are the Company’s sole and exclusive property. All memoranda,
notes, records, files, correspondence, drawings, manuals, models, specifications, computer
programs, maps, and all other documents, data, or materials of any type embodying such information,
ideas, concepts, recipes, inventory, prices, improvements, discoveries, and inventions are the
Company’s property. At the termination of Executive’s employment with the Company for any reason,
Executive shall return all of the Company’s documents, data, or other Company Property to the
Company. Included in the above are all such data that Executive had access to, over, or possessed.
The Company desires by this Agreement to protect its economic investment in its current and future
operations and business.

(c) Confidential Information; Non-Disclosure. Executive acknowledges and
stipulates that the business of the Company is highly competitive, cost and price sensitive, and
that he in connection with his work and job have had access to Confidential Information relating to
the Company Resource’s businesses and their methods and operations. For purposes of this
Agreement, “Confidential Information” means and includes the Company’s confidential
and/or proprietary information and/or trade secrets that have been developed or used and/or will be
developed and that cannot be obtained readily by third parties from outside sources. Confidential
Information includes, by way of example and without limitation, the following information regarding
customers, employees, contractors, its operations and its markets and the industry not generally
known to the public; strategies, methods, books, records, and documents; recipes, technical
information concerning products, equipment, services, and processes; procurement procedures and
pricing techniques; the names of and other information concerning customers and those being
solicited to be customers, investors, and business relations (such as contact name, service
provided, pricing for that customer, type and amount of product used, credit and financial data,
and/or other information relating to the Company’s relationship with that customer); pricing
strategies and price curves; positions, plans, and strategies for expansion or acquisitions;
budgets; customer lists; research; financial and sales data; raw materials purchasing or trading
methodologies and terms; evaluations, opinions, and interpretations of information and data;
marketing and merchandising techniques; prospective customers’ names and locations; grids and maps;
electronic databases; models; specifications; computer programs; internal business records;
contracts benefiting or obligating the Company; bids or proposals submitted to any third party;
technologies and methods; training methods and training processes; organizational structure;
personnel information, including salaries of personnel; labor or employee relations or agreements;
payment amounts or rates paid to consultants or other service providers; and other such
confidential or proprietary information. Information need not qualify as a trade secret to be
protected as Confidential Information under this Agreement, and the authorized and controlled
disclosure of Confidential Information to authorized parties by Company in the pursuit of its
business will not cause the information to lose its protected status under this Agreement.
Executive acknowledges and stipulates that this Confidential Information constitutes a valuable,
special, and unique asset used by the Company in its businesses to obtain a competitive advantage
over its competitors. Executive further acknowledges that protection of such Confidential
Information against unauthorized disclosure and use is of critical importance to the Company in
maintaining its competitive position and economic investment, as well as work for its employees.

(d) Unfair Competition Restrictions. Executive agrees that for a period of
twenty-four (24) months following the date of his termination or such lesser period of time as is
the maximum amount permitted by law (“Restricted Term”), he will not, directly or
indirectly, for himself or for others, anywhere in those areas where the Company currently
(including the City of Houston and its surrounding counties, and in those cities or counties or
states listed in Attachment “B-1” attached hereto) (the “Restricted Area”) conducts or is
seeking to conduct business of the same nature as Newpark Resources and its Related Entities, do
any of the following, unless expressly authorized by the Chief Executive Officer of the Company:
Engage in, or assist any person, entity, or business engaged in, the
selling or providing of products or services that would displace the products or services that (i)
the Company is currently in the business of providing and was in the business of providing, or is
planning to be in the business of providing, at the time of the execution of this Agreement, or
(ii) that Executive had involvement in, access to, or received Confidential Information about in
the course of employment. The foregoing is expressly understood to include, without limitation,
the business of the manufacturing, selling and/or providing products or services of the same type
offered and/or sold by the Company.

Appendix
B—Gregg Piontek

 

Page 17 of 22

 

4. Prohibition on Circumvention. It is further agreed that during the Restricted
Term, Executive cannot circumvent these covenants by alternative means or engage in any of the
enumerated prohibited activities in the Restricted Area by means of telephone, telecommunications,
satellite communications, correspondence, or other contact from outside the Restricted Area.
Executive further understands that the foregoing restrictions may limit his ability to engage in
certain businesses during the Restricted Term, but acknowledge that these restrictions are
necessary to protect the Confidential Information and business interests of the Company.

5. Proviso. It is agreed that these covenants do not prevent Executive from using
and offering the general management or other skills that he possessed prior to receiving access to
Confidential Information and knowledge from the Company. This Agreement creates an advance
approval process, and nothing herein is intended, or will be construed as, a general restriction
against Executive’s pursuit of lawful employment in violation of any controlling state or federal
laws. Executive is permitted to engage in activities that would otherwise be prohibited by this
covenant if such activities are determined in the sole discretion of the Board of the Company, and
authorized in writing, to be of no material threat to the legitimate business interests of the
Company.

6. Non-Solicitation of Customers. For a period of twenty-four (24) months following
Executive’s termination of employment or employment agreement, Executive agrees not to call on,
service, or solicit competing business from customers of the Company, in the Restricted Area, whom
he, within the previous twenty-four (24) months, (i) had or made contact with, or (ii) induce or
encourage any such customer or other source of ongoing business to stop doing business with the
Company. This provision does not prohibit Executive from managing or providing other services or
products that are not a product or services currently offered by the Company.

7. Non-Solicitation of Employees. For a period of twenty-four (24) months following
the date of Executive’s termination of employment or employment agreement, Executive will not,
either directly or indirectly, call on, solicit, encourage, or induce any other employee or officer
of the Company, whom he had contact with, knowledge of, or association within the course of
employment with the Company to discontinue his or her employment, and will not assist any other
person or entity in such a solicitation.

8. Non-Disparagement. Executive covenants and agrees he will not engage in any
pattern of conduct that involves the making or publishing of written or oral statements or remarks
(including, without limitation, the repetition or distribution of derogatory rumors, allegations,
negative reports or comments) which are disparaging, deleterious or damaging to the integrity,
reputation or good will of the Company or its respective management or products and services.

9. Separability of Covenants. The covenants contained in Section 3 herein
constitute a series of separate but ancillary covenants, one for each applicable county in the
State of Texas and/or each area of operation in each state, county, and area as set forth in this
Agreement or Attachment “B- 1” hereto. If in any judicial proceeding, a court shall hold that any
of the covenants set forth in Section 3 exceed the time, geographic, or occupational limitations
permitted by applicable law, Executive and the Company agree that such provisions shall and are
hereby reformed to the maximum time, geographic, or occupational limitations permitted by such
laws. Further, in the event a court shall hold unenforceable any of the separate covenants deemed
included herein, then such unenforceable covenant or covenants shall be deemed eliminated from the
provisions of this Agreement for the purpose of such proceeding to the extent necessary to permit
the remaining separate covenants to be enforced in such proceeding. Executive and the
Company further agree that the covenants in Section 3 shall each be construed as a separate
agreement independent of any other provisions of this Agreement, and the existence of any claim or
cause of action by Executive against the Company, whether predicated on this Agreement or
Employment Agreement or otherwise, shall not constitute a defense to the enforcement by the Company
of any of the covenants of Section 3.

Appendix
B—Gregg Piontek

 

Page 18 of 22

 

10. Consideration. Executive acknowledges and agrees that no other consideration for
Executive’s covenants in this Agreement, other than that specifically referred to in Section 1 of
the Employment Agreement, has or will be paid or furnished to him by the Company or the Related
Entities.

11. Return of Items. Upon termination and/or retirement, Executive will return any
computer related hardware or software, cell phone, keys, or other data or company property in his
possession or control, including all customer list(s), pricing documents, etc., to the Company,
except as may be specifically provided for to the contrary in Executive’s Employment Agreement.

12. Meaning of Certain Terms. The parties understand the following phrases to have
the following meanings:

(a) The phrase “carrying on or engaging in a business similar to the business of
the Company” includes engaging, as principal, executive, employee, agent, trustee, advisor,
consultant or through the agency of any corporation, partnership, association or agent or agency,
in any business which conducts business in competition with the Company (including its Related
Entities) or being the owner of more than 1% of the outstanding capital stock of any corporation,
or an officer, director, or employee of any corporation or other entity, (other than the Company or
a corporation or other entity, affiliated with the Company) or a member or employee or any
partnership, or an owner or employee of any other business, which conducts a business or provides a
service in the Restricted Area in competition with the Company or any affiliated corporation or
other entity. Moreover, the term also includes (i) directly or indirectly inducing any current
customers of the Company, or any affiliated corporation or other entity, to patronize any product
or service business in competition with the Company or any affiliated corporation or other entity,
(ii) canvassing, soliciting, or accepting any product or service business of the type conducted by
the Company or any affiliated corporation or other entity (iii) directly or indirectly requesting
or advising any current customers of the Company or any affiliated corporation or other entity, to
withdraw, curtail or cancel such customer’s business with the Company or any affiliated corporation
or other entity; or (iv) directly or indirectly disclosing to any other person, firm, corporation
or entity, the names or addresses of any of the current customers of the Company or any affiliated
corporation or other entity or the rates or other terms on which the Company provides services to
its customers. In addition, the term includes directly or indirectly, through any person, firm,
association, corporation or other entity with which Executive is now or may hereafter become
associated, causing or inducing any present employee of the Company or any affiliated corporation
or other entity to leave the employ of the Company or any affiliated corporation or other entity to
accept employment with Executive or with such person, firm, association, corporation, or other
entity.

(b) The phrase “a business similar to the business of the Company” means
environmental services to the exploration, production and maritime industries, mat sales and
rentals, drilling fluids, and water treatment and related technology; and, heavy oil and air
treatment.

(c) The phrase “carries on a like business” includes, without limitation,
actions taken by or through a wholly-owned subsidiary or other affiliated corporation or entity.

(d) All references to the Company shall also be deemed to refer to and include the
Related Entities

Appendix
B—Gregg Piontek

 

Page 19 of 22

 

13. Reasonable Restrictions. Executive represents to the Company that the
enforcement of the restrictions contained in this Agreement would not be unduly burdensome to
Executive and
acknowledges that Executive is willing and able, subject to the Restricted Area as defined herein,
to compete in other geographical areas not prohibited by this Agreement. The parties to this
Agreement hereby agree that the covenants contained in this Agreement are reasonable.

14. Entire Agreement. Except with respect to the Employment Agreement executed
concurrently herewith, and with respect to certain matters included in a separate Agreement being
entered into between Executive and the Company on the date of this Agreement (“Appendix A and A-1”), this Agreement constitutes the entire agreement between the parties hereto with respect to the
subject matter of this Agreement and supersedes and is in full substitution for any and all prior
agreements and understandings whether written or oral between said parties relating to the subject
matter of this Agreement. This Agreement shall not supersede or substitute for, nor be superseded
or substituted by, the Employment Agreement, but shall have full force and effect concurrently
therewith.

15. Amendment. This Agreement may not be amended or modified in any respect except
by an agreement in writing executed by the parties in the same manner as this Agreement except as
provided in Section 18 of this Agreement.

16. Assignment. This Agreement (including, without limitation, Executive’s
obligations under Sections 3 and 4) may not be assigned by the Company in a manner inconsistent
with 3.8 of Executive’s Employment Agreement without the consent of Executive in connection with
the sale, transfer or other assignment of all or substantially all of the capital stock or assets
of, or the merger of, the Company provided that the party acquiring such capital stock or assets or
into which the company merges assumes in writing the obligations of the Company hereunder and
provided further that no such assignment shall release the Company from its obligations hereunder.
This Agreement (including, without limitation, Executive’s obligations under Sections 3 and 4) may
not be assigned or encumbered in any way by Executive without the written consent of the Company.

17. Successors. This Agreement (including, without limitation, Executive’s
obligations under Sections 3 and 4) shall be binding upon and shall inure to the benefit of and be
enforceable by each of the parties and their respective successors and assigns.

18. Unenforceable Provisions. If, and to the extent that, any section, paragraph,
part, term and/or provision of this Agreement would otherwise be found null, void, or unenforceable
under applicable law by any court of competent jurisdiction, that section, paragraph, part, term
and/or provision shall automatically not constitute part of this Agreement. Each section,
paragraph, part, term and/or provision of this Agreement is intended to be and is severable from
the remainder of this Agreement. If, for any reason, any section, paragraph, part, term and/or
provision herein is determined not to constitute part of this Agreement or to be null, void, or
unenforceable under applicable law by any court of competent jurisdiction, the operation of the
other sections, paragraphs, parts, terms and/or provisions of this Agreement as may remain
otherwise intelligible shall not be impaired or otherwise affected and shall continue to have full
force and effect and bind the parties hereto.

19. Remedies.

(a) Executive agrees that a breach or violation of Section 3 or 4 of this Agreement
by Executive shall entitle the Company as a matter of right, to an injunction, without necessity of
posting bond, issued by any court of competent jurisdiction, restraining any further or continued
breach or violation of such provisions. Such right to an injunction shall be cumulative and in
addition, and not in lieu of, any other remedies to which the Company may show themselves justly
entitled, including, but not limited to, specific performance and damages. The parties
specifically agree that the remedy of damages alone is inadequate.

Appendix
B—Gregg Piontek

 

Page 20 of 22

 

(b) In the event that Executive knowingly and intentionally fails in any material
respect to perform any of his material obligations under this Agreement, the Company may elect (i)
to cease any payments due under the Employment Agreement and recover all payments made to Executive
under the Employment Agreement on or subsequent to the date of the failure, (ii) obtain an
injunction and/or (iii) exercise any and all other remedies available by law.

Notwithstanding the foregoing subsection (b), Executive will have no liability or responsibility
for: (i) inadvertent disclosure or use of the Information if (x) he uses the same degree of care in
safeguarding the Information that the Company uses to safeguard information of like importance and
(y) upon discovery of such inadvertent disclosure or use of such material, Executive immediately
uses his best efforts, including the commencement of litigation, if necessary, to prevent any use
thereof by the person or persons to whom it has been disclosed and to prevent any further
incidental disclosure thereof; and (ii) , disclosure of Information (x) that is required by law,
(y) that is made pursuant to a proper subpoena from a court or administrative agency of competent
jurisdiction from a court or administrative agency of competent jurisdiction or (z) that is made
upon written demand of an official involved in regulating Executive if before disclosure is made,
Executive immediately notifies the Company of the requested disclosure by the most immediate means
of communication available and confirms in writing such notification within one business day
thereafter.

20. Notice. All notices, consents, requests, approvals or other communications in
connection with this Agreement and all legal process in regard hereto shall be in writing and shall
be deemed validly delivered, if delivered personally or sent by certified mail, postage prepaid.
Unless changed by written notice pursuant hereto, the address of each party for the purposes hereof
is as follows:

	 	 	 
	If to Executive :

	 	If to the Company :
	Gregg Steven Piontek

	 	2700 Research Forest Drive, Suite 100
	67 S. Taylor Point Drive,

	 	The Woodlands, Texas 77381
	The Woodlands, TX 77382

	 	Attn: Chief Executive Officer

Notice given by mail as set out above shall be deemed delivered only when actually received.

21. Descriptive Headings. The descriptive headings of the several sections of this
Agreement are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.

22. Governing Law. This Appendix B shall be governed by and construed and enforced
in accordance with the laws of the State of Texas (other than the choice of law principles
thereof).

IN WITNESS WHEREOF , the parties have duly executed this Unfair Competition, Confidentiality
and Non-competition Agreement as of the date first above written.

	 	 	 	 	 	 	 	 	 	 	 
	Signed:

	 	/s/ Gregg S. Piontek
 

	 	 	 	Signed:
	 	/s/ Paul L. Howes
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	Gregg Steve Piontek (Executive)
	 	 	 	 	 	Paul L. Howes 

President & CEO 

Newpark Resources, Inc	 	 

Appendix
B—Gregg Piontek

 

Page 21 of 22

 

ATTACHMENT B-1 (Restricted Areas)

Areas in which Newpark Resources, Inc. currently does business:

	 	 	 	 	 	 	 	 	 
	1.

	 	Louisiana
	 	 	9.	 	 	New York
	2.

	 	Texas
	 	 	10.	 	 	West Virginia
	3.

	 	Oklahoma
	 	 	11.	 	 	Montana
	4.

	 	Arkansas
	 	 	12.	 	 	North Dakota
	5.

	 	Colorado
	 	 	13.	 	 	Pennsylvania
	6.

	 	Wyoming
	 	 	14.	 	 	Ohio
	7.

	 	Utah
	 	 	15.	 	 	New Mexico
	8.

	 	Nevada	 	 	 	 	 	 

Other states or areas in which Newpark Resources, Inc currently does business:

	9.	 	Western Canada
	 
	10.	 	Gulf of Mexico (off the “Gulf Coast”)

Texas Counties in which Newpark Resources, Inc currently does business:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	1.

	 	Andrews
	 	 	21.	 	 	Ector
	 	 	41.	 	 	Karnes
	 	 	61.	 	 	Pecos
	 	 	81.	 	 	Val Verde
	2.

	 	Aransas
	 	 	22.	 	 	Fayette
	 	 	42.	 	 	Kenedy
	 	 	62.	 	 	Polk
	 	 	82.	 	 	Victoria
	3.

	 	Austin
	 	 	23.	 	 	Fort Bend
	 	 	43.	 	 	Kleberg
	 	 	63.	 	 	Reagan
	 	 	83.	 	 	Waller
	4.

	 	Bee
	 	 	24.	 	 	Freestone
	 	 	44.	 	 	Lavaca
	 	 	64.	 	 	Reeves
	 	 	84.	 	 	Washington
	5.

	 	Bienville
	 	 	25.	 	 	Gaines
	 	 	45.	 	 	Leon
	 	 	65.	 	 	Robertson
	 	 	85.	 	 	Webb
	6.

	 	Borden
	 	 	26.	 	 	Galveston
	 	 	46.	 	 	Liberty
	 	 	66.	 	 	Roosevelt
	 	 	86.	 	 	Wharton
	7.

	 	Brazoria
	 	 	27.	 	 	Glasscock
	 	 	47.	 	 	Limestone
	 	 	67.	 	 	Rusk
	 	 	87.	 	 	Winkler
	8.

	 	Brazos
	 	 	28.	 	 	Goliad
	 	 	48.	 	 	Live Oak
	 	 	68.	 	 	San Patricio
	 	 	88.	 	 	Yoakum
	9.

	 	Brooks
	 	 	29.	 	 	Gregg
	 	 	49.	 	 	Loving
	 	 	69.	 	 	Schleicher
	 	 	89.	 	 	Zapata
	10.

	 	Burleson
	 	 	30.	 	 	Hardin
	 	 	50.	 	 	Lubbock
	 	 	70.	 	 	Scurry	 	 	 	 	 	 
	11.

	 	Calhoun
	 	 	31.	 	 	Harris
	 	 	51.	 	 	Marion
	 	 	71.	 	 	Shelby	 	 	 	 	 	 
	12.

	 	Cameron
	 	 	32.	 	 	Harrison
	 	 	52.	 	 	Matagorda
	 	 	72.	 	 	Snyder	 	 	 	 	 	 
	13.

	 	Chambers
	 	 	33.	 	 	Hidalgo
	 	 	53.	 	 	McMullen
	 	 	73.	 	 	Starr	 	 	 	 	 	 
	14.

	 	Cochran
	 	 	34.	 	 	Hockley
	 	 	54.	 	 	Motley
	 	 	74.	 	 	Sterling	 	 	 	 	 	 
	15.

	 	Colorado
	 	 	35.	 	 	Houston
	 	 	55.	 	 	Nacogdoches
	 	 	75.	 	 	Terrell	 	 	 	 	 	 
	16.

	 	Crane
	 	 	36.	 	 	Howard
	 	 	56.	 	 	Navarro
	 	 	76.	 	 	Terry	 	 	 	 	 	 
	17.

	 	Crockett
	 	 	37.	 	 	Jackson
	 	 	57.	 	 	Newton
	 	 	77.	 	 	Titus	 	 	 	 	 	 
	18.

	 	Culberson
	 	 	38.	 	 	Jefferson
	 	 	58.	 	 	Nueces
	 	 	78.	 	 	Tom Green	 	 	 	 	 	 
	19.

	 	Dewitt
	 	 	39.	 	 	Jim Hogg
	 	 	59.	 	 	Orange
	 	 	79.	 	 	Upshur	 	 	 	 	 	 
	20.

	 	Duval
	 	 	40.	 	 	Jim Wells
	 	 	60.	 	 	Panola
	 	 	80.	 	 	Upton	 	 	 	 	 	 

Appendix
B—Gregg Piontek

 

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