Document:

EX-4.2

Exhibit 4.2 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS
REGISTERED IN THE NAME OF THE DEPOSITORY OR A NOMINEE OF THE DEPOSITORY. THIS NOTE IS EXCHANGEABLE
FOR NOTES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY
THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR
ANOTHER NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITORY OR A NOMINEE OF SUCH A SUCCESSOR DEPOSITORY. UNLESS THIS NOTE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY
PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.

			
	 	 	 
	No. 1	 	 
	CUSIP: 053332 AK8
	 	$500,000,000

AUTOZONE, INC.

5.750% Senior Note due 2015

Original Issue Date: July 2, 2009

Interest Payment Dates: January 15 and July 15

Maturity Date: January 15, 2015

Interest Rate: 5.750%

     AUTOZONE, INC., a Nevada corporation (hereinafter called the “Company”, which term includes
any successor corporation under the Indenture hereinafter referred to), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the principal sum of five hundred million
dollars (the “Principal Amount”) on the Maturity Date shown above, except as provided below, and to
pay interest thereon at the rate per annum shown above. (Capitalized terms used herein have the
meanings assigned to them in the Indenture referred to below unless otherwise indicated.) The
Company will pay interest semiannually on the Interest Payment Dates, commencing on January 15,
2010. Interest on this Note will accrue from the most recent Interest Payment Date to which
interest has been paid or duly provided for or, if no interest has been paid or duly provided for,
from the Original Issue Date shown above. The interest so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the
person in whose name this Note (or one or more predecessor Securities) is registered at the close
of business on the regular record date for such interest, which shall be

 

 

the January 1 or the July 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date.

     Payment of the principal of and interest on this Note will be made at the Corporate Trust
Office of the Trustee in New York, New York, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts.

     If the Company defaults in a payment of interest on this Note, it shall pay the defaulted
interest, plus, to the extent permitted by law, any interest payable on the defaulted interest, to
the persons who are Securityholders of this Note on a subsequent special record date. The Company
shall fix that record date and payment date. At least ten (10) days before that record date, the
Company shall mail to the Trustee and to each Securityholder a notice that states that record date,
the payment date and the amount of interest and any interest thereon to be paid. The Company may
pay defaulted interest and any interest thereon in any other lawful manner.

     This Note is one of a duly authorized issue of securities of the Company (the “Securities”),
of the Series hereinafter specified, all issued under and pursuant to an indenture, dated as of
August 8, 2003, together with the Officers’ Certificate dated July 2, 2009 (the “Officers’
Certificate”), establishing the terms of the Notes (the “Indenture”), between the Company and The
Bank of New York Mellon Trust Company, N.A. (as successor in interest to Bank One Trust Company,
N.A.), as Trustee (the “Trustee”), to which Indenture and all indentures supplemental thereto
reference is hereby made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and Holders of the Securities. The
aggregate principal amount of Securities that may be authenticated and delivered under the
Indenture is unlimited. The Securities may be issued in one or more Series, which different Series
may be issued in various aggregate principal amounts, may mature at different times, may bear
interest, if any, at different rates, may be subject to different redemption provisions, if any,
may be subject to different sinking, purchase or analogous funds, if any, may be subject to
different covenants and Events of Default and may otherwise vary as in the Indenture provided.
This Note is one of a Series designated as the “5.750% Senior Notes due 2015” of the Company
(herein referred to as the “Notes”), initially issued in an aggregate principal amount of five
hundred million dollars ($500,000,000). The Company may from time to time, without notice to or
the consent of the holders of the Notes, create and issue additional Notes ranking equally and
ratably with the Notes and otherwise identical in all respects, except for the issue price, the
issue date, the payment of interest accruing prior to the issue date of such additional Notes and,
in some cases, the first payment of interest following the issue date of such additional Notes and
the initial interest accrual date thereof, so that such further Notes shall be consolidated and
form a single Series with the Notes.

     The Notes constitute senior unsecured debt obligations of the Company and rank equally in
right of payment among themselves and with all other existing and future senior, unsecured and
unsubordinated debt obligations of the Company.

     In accordance with and subject to the provisions of the Officers’ Certificate, the Interest
Rate set forth above may be increased or decreased as a result of changes in the rating of the
Notes and the Holders of the Notes may require that the Company repurchase the Notes if a Change of
Control Triggering Event has occurred.

 

 

     The Notes will be redeemable, in whole at any time or in part from time to time, at the option
of the Company, at a redemption price equal to accrued and unpaid interest on the principal amount
being redeemed to the redemption date plus the greater of (i) 100% of the principal amount of such
Notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of
principal and interest on such Notes being redeemed (not including any portion of such payments of
interest accrued to the date of redemption) discounted to the date of redemption on a semi-annual
basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate,
plus 50 basis points, as determined in good faith by the Company.

     “Adjusted Treasury Rate” means, with respect to any date of redemption, the rate per annum
equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, assuming a
price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal
to the Comparable Treasury Price for such date of redemption.

     “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Notes to be redeemed
that would be used, at the time of selection and under customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the remaining term of such Notes.

     “Comparable Treasury Price” means, with respect to any date of redemption, the average of the
Reference Treasury Dealer Quotations for such date of redemption, after excluding the highest and
lowest Reference Treasury Dealer Quotations, or if the Quotation Agent obtains fewer than four
Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations.

     “Quotation Agent” means one of the Reference Treasury Dealer appointed by the Company.

     “Reference Treasury Dealer” means each of J.P. Morgan Securities Inc. and a primary treasury
dealer selected by Wachovia Capital Markets, LLC and their respective successors and any other
primary U.S. government securities dealers in New York City the Company selects (each, a “Primary
Treasury Dealer”). If any of the foregoing ceases to be a Primary Treasury Dealer, the Company must
substitute another Primary Treasury Dealer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer
and any date of redemption, the average, as determined by the Quotation Agent, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Quotation Agent by the Reference Treasury Dealer at 5:00 p.m., New
York City time, on the third Business Day before the date of redemption.

     Notice of any redemption will be mailed at least 30 days but not more than 60 days before the
redemption date to each holder of the Notes to be redeemed. Notwithstanding anything to the
contrary in Section 4.4 of the Indenture, such notice of redemption need not set forth the
redemption price but only the manner of calculation thereof. The Company shall give

 

 

the Trustee notice of the amount of the redemption price promptly after the calculation
thereof and the Trustee shall have no responsibility for such calculation.

     Unless the Company defaults in payment of the redemption price, on and after the date of
redemption, interest will cease to accrue on the Notes or portions of the Notes called for
redemption.

     The Notes will not be subject to, or have the benefit of, any sinking fund.

     In case an Event of Default (as defined in the Indenture) with respect to the Notes shall have
occurred and be continuing, the principal hereof may be declared, or shall become, due and payable,
in the manner, with the effect and subject to certain conditions set forth in the Indenture. The
Indenture provides that, subject to certain conditions therein set forth, any such declaration of
acceleration and its consequences may be waived by the Holders of a majority in principal amount of
the outstanding Notes.

     The Indenture contains provisions permitting the Company and the Trustee, with the consent of
the Holders of at least a majority in principal amount of the outstanding Notes to be affected
thereby, as provided in the Indenture, to enter into supplemental indentures adding any provisions
to or changing in any manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the Holders of the Notes; and the
Indenture also contains provisions allowing the Holders of at least a majority in principal amount
of the outstanding Notes to waive compliance with any provision of the Indenture or this Note;
provided, however, that no such supplemental indenture or amendment or waiver may, without the
consent of each Holder of Notes to be affected (a) reduce the amount of Notes whose Holders must
consent to an amendment, supplement or waiver; (b) reduce the rate of, change the method of
determination of or extend the time for payment of interest (including default interest) on any
Note; (c) reduce the principal or change the Stated Maturity of any Note; (d) make any change in
the provisions concerning waivers of Events of Default by Holders or the rights of Holders to
recover the principal of or interest on any Note; (e) waive a Default or Event of Default in the
payment of the principal of or interest on any Note (except a rescission of acceleration of the
Notes by the Holders of at least a majority in principal amount of the outstanding Notes and a
waiver of the payment default that resulted from such acceleration); (f) make the principal of or
interest on any Note payable in any currency other than that stated in the Note; (g) make any
change in Sections 7.8, 7.13, or 10.3 of the Indenture; or (h) waive a redemption payment with
respect to any Note. The Indenture also provides that the Holders of not less than a majority in
principal amount of the outstanding Notes may on behalf of the Holders of all the Notes waive any
past Default under the Indenture with respect to the Notes and its consequences, except a Default
(i) in the payment of the principal of or interest on any Note (provided, however, that the Holders
of a majority in principal amount of the outstanding Notes may rescind an acceleration and its
consequences, including any related payment default that resulted from such acceleration) or (ii)
in respect of a covenant or provision hereof which cannot be modified or amended without the
consent of the Holder of each outstanding Notes affected. Upon any such waiver, such Default shall
cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default
or impair any right consequent thereon. Any such waiver by the Holders of the Notes shall be
conclusive and binding upon the Holder of

 

 

this Note and upon all future Holders and owners of this Note and of any Note issued upon the
transfer hereof or in exchange or substitution hereof.

     No reference herein to the Indenture and no provision of this Note or of the Indenture shall
alter or impair the obligation of the Company, which is absolute and unconditional, to pay the
principal of and interest on this Note at the time, place and rate, and in the coin or currency,
herein and in the Indenture prescribed.

     As provided in the Indenture and subject to certain limitations therein set forth, the
transfer of this Note is registrable by the Holder hereof on the register of the Company, upon due
presentment of this Note for registration of transfer at the office of the Registrar, or at the
office of any co-registrar duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to, the Company and the Registrar or any such co-registrar duly executed by, the
Holder hereof or his attorney duly authorized in writing, and thereupon one or more new Notes of
authorized denominations and for an equal principal amount will be issued to the designated
transferee or transferees.

     No service charge shall be made for any such registration of transfer or exchange, but the
Company may require payment of a sum sufficient to cover any transfer tax or similar governmental
charge payable in connection therewith.

     The Notes are issuable only as registered Notes without coupons in denominations equal to
$2,000 or an integral multiple of $1,000 in excess thereof. As provided in the Indenture and
subject to certain limitations therein set forth, Notes are exchangeable for new Notes of any
authorized denominations of an equal principal amount as requested by the Holder surrendering the
same.

     Notwithstanding the other provisions of the Indenture, payment of the principal of and
interest, if any, on any Note represented by a Global Security shall be made to the Holder thereof.
The Company and the Trustee understand that interest on any such Global Security will be disbursed
or credited by the Depository to the persons having beneficial ownership thereof pursuant to a
book-entry or other system maintained by the Depository.

     Except as provided in the foregoing paragraph, the Company, the Trustee and any Agent shall
treat a person as the Holder of such principal amount of outstanding Notes represented by a Global
Security as shall be specified in a written statement of the Depository with respect to such Global
Security, for purposes of obtaining any consents, declarations, waivers or directions required to
be given by the Holders pursuant to this Indenture.

     The Holder of this Note shall not have recourse for the payment of principal of or interest on
this Note or for any claim based on this Note or the Indenture against any director, officer,
employee or stockholder, as such, of the Company. By acceptance of this Note, the Holder waives
and releases all such liability.

     THE INDENTURE AND THIS NOTE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK WITHOUT
REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

 

 

     All terms used but not defined in this Note which are defined in the Indenture shall have the
meanings assigned to them in the Indenture.

     Unless the certificate of authentication has been executed by manual signature of the Trustee,
this Note shall not be valid.

 

 

     IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed manually or in
facsimile.

Dated: July 2, 2009

	 	 	 	 	 
	 	AUTOZONE, INC.

 	 
	 	
 	 
	 	By:  	William T. Giles 	 
	 	Title:  	Executive Vice President and Chief
Financial Officer 	 
	 
	 	 	 
	 	
 	 
	 	By:  	Harry L. Goldsmith 	 
	 	Title:  	Executive Vice President, General Counsel
and Secretary 	 
	 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Securities of the

Series designated therein, referred to

in the within-mentioned Indenture.

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A. (AS SUCCESSOR IN INTEREST TO BANK ONE TRUST
COMPANY, N.A.), as Trustee

	 	 	 	 	 
	 	 	 
	By:  	 	 	 
	 	Authorized SignatoryEX-10.1

Exhibit 10.1

Vuzix Corporation

Amended and Restated Stock Option Plan

1. Purpose

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

2. Definitions

As used in this Plan the following terms shall have the following meanings:

2.1. Act means the Securities Act of 1933, as amended.

2.2. Affiliate means a parent or subsidiary corporation of the Company, as defined in
Sections 424(e) and (f), respectively, of the Code.

2.3. Board means the Company’s Board of Directors.

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

2.5. Committee means a committee appointed by the Board, responsible for the administration
of the Plan, as provided in Section 5 of the Plan. For any period during which no such committee is
in existence all authority and responsibility assigned the Committee under the Plan shall be
exercised, if at all, by the Board.

2.6. Company means Vuzix Corporation (f/k/a Kaotech Corporation, Interactive Imaging
Systems, Inc. and Icuiti Corporation), a corporation organized under the laws of the State of
Delaware.

2.7. Employment Agreement means an agreement, if any, between the Company and an Optionee,
setting forth, inter alia, conditions and restrictions upon the transfer of shares of
Stock.

2.8. Fair Market Value means the value of a share of Stock on any date as determined by the
Committee.

2.9. Grant Date means the date as of which an Option is granted, as determined under
Section 7.

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

2.11. Nonstatutory Option means any Option that is not an Incentive Option.

2.12. Option means an Option to purchase shares of Stock granted under the Plan including
an Incentive Option and a Nonstatutory Option.

2.13. Option Agreement means a written agreement between the Company and an Optionee,
setting forth the terms and conditions of an Option.

2.14. Option Price means the price paid by an Optionee for a share of Stock upon exercise
of an Option.

2.15. Optionee means a person eligible to receive an Option, as provided in Section 6, to
whom an Option shall have been granted under the Plan.

2.16. Plan means this Icuiti Corporation Amended and Restated Stock Option Plan, as amended
from time to time, which amends and restates the 1997 Stock Option Plan of the Company, as amended,
in its entirety.

2.17. Stock means common stock, par value $.001 per share, of the Company.

2.18. Stock Restriction Agreement means an agreement between the Company and the Optionee
in such form as the Committee may prescribe in connection with the grant of any Option, setting
forth certain restrictions upon the transfer of shares of Stock.

2.19. Ten Percent Owner means a person who owns, or is deemed within the meaning of Section
422(b)(6) of the Code to own, stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company (or any Affiliate). Whether a person is a Ten Percent Owner
shall be determined with respect to each Option based on the facts existing immediately prior to
the Grant Date of such Option.

3. Term of the Plan

Commencing upon the approval of the Plan by the Board, Options may be granted hereunder at any time
until the Plan is terminated by the Board. Options granted prior to shareholder approval of the
Plan are hereby expressly conditioned upon such approval, and shall be void ab initio in
the event the shareholders of the Company shall fail to approve the Plan within twelve (12) months
of the Board’s approval of the Plan. No Incentive Options may be granted under the Plan after ten
(10) years from the date the Plan is adopted by the Board or approved by the Company’s
shareholders, whichever is earlier.

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4. Stock Subject to the Plan

At no time shall the number of shares of Stock then outstanding which are attributable to the
exercise of Options granted under the Plan, plus the number of shares then issuable upon exercise
of outstanding Options granted under the Plan, exceed 40,000,000 shares, subject, however,
to the provisions of Section 17 of the Plan. Shares to be issued upon the exercise of Options
granted under the Plan may be either authorized but unissued shares or shares held by the Company
in its treasury. If any Option expires, terminates, or is canceled for any reason without having
been exercised in full, the shares not purchased thereunder shall again be available for Options
thereafter to be granted.

5. Administration

The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the
Committee shall have complete authority, in its discretion, to make or to select the manner of
making the following determinations with respect to each Option to be granted by the Company in
addition to any other determinations allowed the Committee under the Plan: (a) the employee or
consultant to receive the Option; (b) whether the Option (if granted to an employee) will be an
Incentive Option or Nonstatutory Option; (c) the time of granting the Option; (d) the number of
shares subject to the Option; (e) the Option Price; (f) the Option period; (g) the Option exercise
date or dates; and (h) the effect of termination of employment or other association with the
Company and its Affiliates on the subsequent exercisability of the Option (subject to the Incentive
Option requirements of Section 422 of the Code). In making such determinations, the Committee may
take into account the nature of the services rendered by the respective employees and consultants,
their present and potential contributions to the success of the Company and its subsidiaries, and
such other factors as the Committee in its discretion shall deem relevant. Subject to the
provisions of the Plan, the Committee shall also have complete authority to interpret the Plan, to
prescribe, amend and rescind rules and regulations relating to it, to determine the terms and
provisions of the respective Option Agreements (which need not be identical), and to make all other
determinations necessary or advisable for the administration of the Plan. The Committee’s
determinations made in good faith on matters referred to in this Plan shall be conclusive.

6. Eligibility

Options shall be granted only to full or part-time officers, employees, directors, consultants and
other key persons (including prospective employees) of the Company and its Affiliates who are
responsible for, or contribute to, the management, growth or profitability of the Company and its
Affiliates as are selected from time to time by the Committee in its sole discretion.

3

 

7. Time of Granting Options

The granting of an Option shall take place only when an Option Agreement is duly executed and
delivered by the Company to the Optionee. The granting of an Option shall take place at the time
specified in the Option Agreement. Only if expressly so provided in the Option Agreement shall the
Grant Date be the date on which an Option Agreement shall have been duly executed and delivered by
the Company to the Optionee.

8. Option Price

The Option Price under each Incentive Option shall be not less than 100% of the Fair Market Value
of Stock on the Grant Date, or not less than 110% of the Fair Market Value of Stock on the Grant
Date if the Optionee is a Ten Percent Owner. The Option Price under each Nonstatutory Option shall
not be so limited solely by reason of this Section 8. However, in the event that the Committee
determines to grant a Nonstatutory Option with an Option Price per share of Stock that is less than
the Fair Market Value per share of Stock at such time the Nonstatutory Option is granted, the
Committee shall incorporate into the related Option Agreement such terms and conditions as it
determines necessary to ensure that the Nonstatutory Option satisfies the conditions of paragraphs
(2), (3), and (4) of Section 409A(a) of the Code.

9. Option Period

No Incentive Option may be exercised on or after the tenth anniversary of the Grant Date, or on or
after the fifth anniversary of the Grant Date, if the Optionee is a Ten Percent Owner. The Option
period under each Nonstatutory Option shall not be so limited solely by reason of this Section 9.
An Option may be immediately exercisable or become exercisable in such installments, cumulative or
noncumulative, as the Committee may determine. In the case of an Option not otherwise immediately
exercisable in full the Committee may accelerate the exercisability of such Option in whole or in
part at any time, provided the acceleration of the exercisability of any Incentive Option would not
cause the Option to fail to comply with the provisions of Section 422 of the Code.

10. Limit on Incentive Option Characterization

An Incentive Option shall be considered to be an Incentive Option only to the extent that the
number of shares of Stock for which the Option first becomes exercisable in a calendar year do not
have an aggregate Fair Market Value (as of the date of the grant of the Option) in excess of the
“current limit.” The current limit for any Optionee for any calendar year shall be $100,000 minus
the aggregate Fair Market Value at the date of grant of the number of shares of Stock available for
purchase for the first time in the same year under each other Incentive Option previously granted
to the Optionee under the Plan, and under each other incentive stock option previously granted to
the Optionee under any other incentive stock option plan of the Company and its Affiliates, after
December 31, 1986. Any shares of Stock which would cause the foregoing limit to be

4

 

violated shall
be deemed to have been granted under a separate Nonstatutory Option, otherwise identical in its terms
to those of the Incentive Option.

11. Exercise of Option

An Option may be exercised by the Optionee giving written notice, in the manner provided in Section
23, specifying the number of shares with respect to which the Option is then being exercised. The
notice shall be accompanied by payment in the form of cash, or certified or bank check payable to
the order of the Company in an amount equal to the Option Price of the shares to be purchased or,
if the Committee had so authorized on the grant of any particular Option hereunder (and subject
such conditions, if any, as the Committee may deem necessary to avoid adverse accounting effects to
the Company) by delivery of that number of shares of Stock having a fair market value equal to the
Option Price of the shares to be purchased. Receipt by the Company of such notice and payment shall
constitute the exercise of the Option. Within 30 days thereafter, but subject to the remaining
provisions of the Plan, the Company shall deliver or cause to be delivered to the Optionee or his
agent a certificate or certificates for the number of shares then being purchased. Such shares
shall be fully paid and nonassessable. Nothing herein shall be construed to preclude the Company
from participating in a so-called “cashless exercise,” provided the Optionee or other person
exercising the Option and each other party involved in any such exercise shall comply with such
procedures, and enter into such agreements, of indemnity or otherwise, as the Company shall
specify.

12. Restrictions on Issue of Shares

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

(a) the shares with respect to which such Option has been exercised are at the time of the issue of
such shares effectively registered under the Act; or

(b) the Company shall have received an opinion, in form and substance satisfactory to the Company,
from the Company’s legal counsel to the effect that the sale, transfer, assignment, pledge,
encumbrance or other disposition of such Shares or such beneficial interest, as the case may be
does not require registration under the Act or any applicable State securities laws.

The Company shall make all reasonable efforts to bring about the occurrence of said events.

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12.2. Execution of Stock Restriction Agreement: Interpretation. Whenever shares are to be
issued pursuant to an Option, the Company shall be under no obligation to issue such shares until
such time, if ever, as the person who exercises such Option, in whole or in part, shall have
executed and delivered to the Company the Stock Restriction Agreement specified by the Committee in
connection with the grant of such Option, if any. In the event of any conflict between the
provisions of this Plan and provisions of a Stock Restriction Agreement or Employment Agreement,
the provisions of the Stock Restriction Agreement or Employment Agreement shall control, but
insofar as possible the provisions of the Plan and any such Agreement shall be construed so as to
give full force and effect to all such provisions.

12.3. Placement of Legends. Each certificate representing shares issued upon the exercise
of an Option will bear restrictive legends which may refer to applicable restrictions under the
Stock Restriction Agreement and Employment Agreement, if any.

13. Purchase for Investment; Subsequent Registration

13.1. Investment Representations. Unless the shares to be issued upon exercise of an Option
granted under the Plan have been effectively registered under the Act, the Company shall be under
no obligation to issue any shares covered by any Option unless the person who exercises such
Option, in whole or in part, shall give a written representation to the Company which is
satisfactory in form and substance to its counsel and upon which the Company may reasonably rely,
that he or she is acquiring the shares issued pursuant to such exercise of the Option of his or her
own account for the purpose of investment and not with a view to, or for sale in connection with
the distribution of any such shares.

13.2. Registration. If the Company shall deem it necessary or desirable to register under
the Act or other applicable statutes any shares with respect to which an Option shall have been
granted, or to qualify any such shares for exemption from the Act or other applicable statutes,
then the Company shall take such action at its own expense. The Company may require from each
Option holder or each holder of shares of Stock acquired pursuant to the Plan, such information in
writing for use in any registration statement, prospectus, preliminary prospectus or offering
circular as is reasonably necessary for such purpose and may require reasonable indemnity to the
Company and its officers and directors from such holder against all losses, claims, damage and
liabilities arising from such use of the information so furnished and caused by any untrue
statement of any material fact therein or caused by the omission to state a material fact required
to be stated therein or necessary to make the statements therein not misleading in the light of the
circumstances under which they were made. In addition, the Company may require of any such person
that he or she agree that, without the prior written consent of the Company or such managing
underwriter, he or she will not sell, make any short sale of, loan, grant any option for the
purchase of, pledge or otherwise encumber, or otherwise dispose of, any shares of Stock during the
180 day period commencing on the effective

6

 

date of the registration statement relating to such
underwritten public offering of securities.

13.3. Placement of Legends: Stop Orders: etc. Each share of Stock issued pursuant to any
Option granted under this Plan may bear a reference to the investment representation made in
accordance with Section 13.1 in addition to any other applicable restriction under the Plan and the
terms of the Option and to the fact that no registration statement has been filed with the
Securities and Exchange Commission in respect to said Stock. All certificates for shares of Stock
or other securities delivered under the Plan shall be subject to such stock-transfer orders and
other restrictions as the Committee may deem advisable under the rules, regulations, and other
requirements of any stock exchange upon which the Stock is then listed, and any applicable Federal
or state securities law, and the Committee may cause a legend or legends to be put on any such
certificates to make appropriate reference to such restrictions.

14. Withholding; Notice of Disposition of Stock Prior to Expiration of Specified Holding Period

14.1. Tax Withholding. Whenever shares are to be issued in satisfaction of an Option
granted hereunder, the Company shall have the right to require the Optionee to remit to the Company
an amount sufficient to satisfy federal, state, local or other withholding tax requirements if and
to the extent required by law (whether so required to secure for the Company an otherwise available
tax deduction or otherwise) prior to the delivery of any certificate or certificates for such
shares.

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

15. Termination of Association with the Company

Unless the Committee shall provide otherwise in the grant of a particular Option under the Plan, if
the Optionee’s employment or other association with the Company is terminated, whether voluntarily
or otherwise, the Option shall cease to be exercisable in any respect on the 30th day following
such termination. Military or sick leave shall not be deemed a termination of employment or other
association, provided that it does not exceed the longer of ninety (90) days or the period
during which the absent Optionee’s reemployment rights, if any, are guaranteed by statute or by
contract.

16. Transferability of Options

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Options shall not be transferable, other than by will or the laws of descent and distribution, and
may be exercised during the life of the Optionee only by the Optionee.

17. Adjustments for Corporate Transactions

17.1. Stock Dividends, Etc. In the event of any stock dividend payable in Stock or any
split-up or contra on in the number of shares of Stock after the date of the Option Agreement and
prior to the exercise in full of the Option, the number of shares subject to such Option Agreement
and the price to be paid for each share subject to the Option shall be proportionately adjusted.

17.2. Stock Reclassification. In the event of any reclassification or change of outstanding
shares of Stock, shares of stock or other securities equivalent in kind and value to those shares
an Optionee would have received if he or she had held the full number of shares of Stock subject to
the Option immediately prior to such reclassification or change and had continued to hold those
shares (together with all other shares, stock and securities thereafter issued in respect thereof)
to the time of the exercise of the Option shall thereupon be subject to the Option.

17.3. Consolidation or Merger. Subject to the remainder of this Section 17.3, in the event
of any consolidation or merger of the Company with or into another company or in case of any sale
or conveyance to another company or entity of the property of the Company as a whole or
substantially as a whole, shares of stock or other securities equivalent in kind and value to those
shares and other securities an Optionee would have received if he or she had held the full number
of shares of Stock remaining subject to the Option immediately prior to such consolidation, merger,
sale or conveyance and had continued to hold those shares (together with all other shares, stock
and securities thereafter issued in respect thereof) to the time of the exercise of the Option
shall thereupon be subject to the Option. However, unless any Option Agreement shall provide
different or additional terms, in any such transaction the Committee, in its discretion, may
provide instead that any outstanding Option shall terminate, to the extent not exercised by the
Optionee prior to termination, either (a) at the close of a period of not less than ten (10) days
specified by the Committee and commencing on the Committee’s delivery of written notice to the
Optionee of its decision to terminate such Option without payment of consideration as provided in
the following clause or (b) as of the date of the transaction, in consideration of the Company’s
payment to the Optionee of an amount of cash equal to the difference between the aggregate Fair
Market Value of the shares of Stock for which the Option is then exercisable and the aggregate
exercise price for such shares under the Option.

17.4. Dissolution or Liquidation. Upon dissolution or liquidation of the Company, the
Option shall terminate, but the Optionee (if at the time in the employ of or otherwise associated
with the Company or any of its Affiliates) shall have the right, immediately
prior to such dissolution or liquidation, to exercise the Option to the extent exercisable on the
date of such dissolution or liquidation.

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17.5. Related Matters. Any adjustment required by this Section 17 shall be determined and
made by the Committee. No fraction of a share shall be purchasable or deliverable upon exercise,
but in the event any adjustment hereunder of the number of shares covered by the Option shall cause
such number to include a fraction of a share, such number of shares shall be adjusted to the
nearest smaller whole number of shares. In the event of changes in the outstanding Stock by reason
of any stock dividend, split-up, contraction, reclassification, or change of outstanding shares of
Stock of the nature contemplated by this Section 17, the number of shares of Stock available for
the purposes of the Plan as stated in Section 4 shall be correspondingly adjusted.

18. Reservation of Stock

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

19. Limitation of Rights in Stock; No Special Employment or Other Rights

The Optionee shall not be deemed for any purpose to be a stockholder of the Company with respect to
any of the shares of Stock covered by an Option, except to the extent that the Option shall have
been exercised with respect thereto and, in addition, a certificate shall have been issued therefor
and delivered to the Optionee or his agent. Any Stock issued pursuant to the Option shall be
subject to all restrictions upon the transfer thereof which may be now or hereafter imposed by the
Certificate of Incorporation, the By-laws of the Company, the Stock Restriction Agreement and the
Employment Agreement. Nothing contained in the Plan or in any Option shall confer upon any Optionee
any right with respect to the continuation of his or her employment or other association with the
Company (or any Affiliate), or interfere in any way with the right of the Company (or any
Affiliate), subject to the terms of any separate employment or consulting agreement or provision of
law or corporate articles or by-laws to the contrary, at any time to terminate such employment or
consulting agreement or to increase or decrease the compensation of the Optionee from the rate in
existence at the time of the grant of an Option.

20. Nonexclusivity of the Plan

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

21. Terminations and Amendment of the Plan

9

 

The Board may at any time terminate the Plan or make such modifications of the Plan as it shall
deem advisable. No termination or amendment of the Plan may, without the consent of the Optionee to
whom any Option shall therefore have been granted, adversely affect the rights of such Optionee
under such Option.

22. Notices and Other Communications

Any notice, demand, request or other communication hereunder to any party shall be deemed to be
sufficient if contained in a written instrument delivered in person or sent by first class
registered, certified or overnight mail, postage prepaid, or faxed with a confirmation copy by
regular certified or overnight mail, addressed or faxed, as the case may be, (i) if to the
Optionee, at his or her residence address last filed with the Company and (ii) if to the Company,
at 75 Town Centre Drive, Rochester, NY 14623, Attn: Paul J. Travers, President and CEO, Fax
Number: (585) 359-4172, or to such other address or fax number, as the case may be, as the
addressee may have designated by notice to the addresser. All such notices, requests, demands and
other communications shall be deemed to have been received: (i) in the case of personal delivery,
on the date of such delivery; (ii) in the case of mailing, when received by the addressee; and
(iii) in the case of facsimile transmission, when communicated by facsimile machine report.

23. Governing Law

The Plan and all Options and actions taken thereunder shall be governed, interpreted and enforced
in accordance with the laws of the State of Delaware, without regard to the conflict of laws
principles thereof. The following does not form part of this Plan but is included solely for
information purposes:

* * * * * * *

Date of Board Approval: June 15, 2007

Date of Shareholder Approval: June 15, 2007

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