Document:

Exhibit

Exhibit 10.1
SEPARATION AGREEMENT
AND GENERAL RELEASE OF ALL CLAIMS
This Separation Agreement and General Release of All Claims (the “Agreement”) is entered into and effective as of January 7, 2019, subject to the terms and conditions set forth herein, by and between Thomas M. Conophy (“Executive”) and AutoNation, Inc. (“AutoNation” or “Company”) relating to Executive’s employment with and separation from the Company.  When used herein, the term “Company” includes each and every officer, director, employee, agent, parent corporation(s), subsidiary corporation(s), wholly owned companies, affiliate(s) and division(s), their successors, assigns, beneficiaries, servants, legal representatives, insurers and heirs.
		
	1.
	Separation Date and Terms.  As of January 7, 2019, Executive resigned from his position as Executive Vice President and Chief Technology Officer (the “Separation Date”), at which time Executive’s employment with the Company and in any and all other positions with the Company that Executive held terminated (including, but not limited to, as an officer or director of any subsidiary of the Company, and being a member on any committees).  On the next regularly scheduled payroll date following the Separation Date, the Company will pay to Executive: (a) all wages earned through the Separation Date and (b) any accrued and unused vacation as of the Separation Date paid in accordance with the applicable Company policy.  Except as set forth herein, Executive acknowledges that the Company owes no other bonuses, commissions, wages, vacation pay, sick pay, or benefits to Executive as of the Separation Date.

		
	2.
	Company Consideration.  For and in consideration of the promises made by Executive in this Agreement, subject to Executive executing this Agreement as provided in Section 14 below and not revoking this Agreement prior to the expiration of the seven (7)-day revocation period provided in this Agreement (the date of such expiration being hereinafter referred to as the “Effective Date”) and subject to Executive’s compliance with Executive’s restrictive covenant obligations in this Agreement and in any other existing agreements with the Company, AutoNation agrees as follows:

		
	(a)
	Severance Payment.  To pay Executive severance pay in the total gross amount of $1,974,510.36, less applicable taxes and other withholdings and authorized or required deductions. The severance pay will be disbursed in an initial installment of $437,426.04 (less withholdings and deductions) and 35 installments of $43,916.70 (less withholdings and deductions) in accordance with the Company’s normal payroll schedule.  The first installment will be disbursed on the Company’s first payroll date following the Effective Date.  The remaining installments will be disbursed on a consecutive semi-monthly basis following payment of the first installment.

		
	(b)
	2018 Bonus Severance Payment.  To pay Executive an additional severance payment equal to the annual bonus that Executive would have been entitled to receive in respect of the 2018 fiscal year, which amount, determined based on the Company’s actual performance for such year relative to the performance goals applicable to Executive and shall be payable in a lump sum at the same time bonuses are paid to other executives of the Company, but in no event later than March 15, 2019 (less withholdings and deductions).  The performance pay-out  percentage applied to Executive’s target bonus shall be the same as that applied to other Executive Officers of the Company.  Notwithstanding the terms of the Company’s Executive Severance Plan, Executive shall not be eligible for a bonus in respect of the 2019 fiscal year.

		
	(c)
	COBRA Severance Payment.  To pay to Executive an additional severance payment equal to the cost of health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA), grossed up for taxes, based on current health, dental and vision elections for an eighteen (18) month period.  This additional severance payment will be disbursed to Executive in one lump-sum no later than the Company’s first payroll administratively feasible following the Effective Date.  This additional severance payment will be subject to applicable taxes and withholdings.

		
	(d)
	Outplacement Services.  The Company shall provide Executive with outplacement services, at the sole cost of the Company not to exceed $20,000, with a firm to be mutually agreed upon by the parties, which may include Lee Hecht Harrison, for a period of up to twelve (12) months.

		
	(e)
	No Entitlement.  The payments and benefits provided in this Section 2 are in accordance with the Company’s Executive Severance Plan and AutoNation shall not be obligated to provide any additional consideration other than the consideration discussed in this Section 2.  The benefits provided to Executive by AutoNation pursuant to this Section 2 represent benefits that Executive would not be entitled to absent this Agreement and the Company’s Executive Severance Plan (other than COBRA at Executive’s own expense).

		
	3.
	Other Benefits.  Executive’s participation in the Company’s group medical and dental programs will cease on January 31, 2019.  As of this date, Executive will be responsible for paying Executive’s entire monthly COBRA premiums.  Executive must elect to receive COBRA if Executive wants continuation coverage under the Company’s group health benefits programs.  Executive’s right to COBRA and the time for electing COBRA and making the required COBRA payments will be explained in a separate  COBRA  notice  package, which will be provided to Executive within the timeframe required by applicable law.  As of the Separation Date, other than the benefits set forth in Section 2(c) and 4 of this Agreement, Executive is no longer eligible to participate in any other benefit programs offered by the Company, including, but not limited to, vacation and the 401(k) plan.  If Executive participated in the AutoNation Deferred Compensation Plan, Executive will be entitled to a payout of Executive’s account balances in such plan in accordance with Executive’s election and the terms of the plan.  The Company shall provide Executive with any and all reasonably available documents relative to Executive’s accrued benefits upon written request by Executive.  Additionally, the Company (or an authorized representative thereof) shall execute any and all necessary documents to effectuate, or enable the Executive to effectuate, any “roll over” or transfer of accrued benefits in accordance with applicable law.

		
	4.
	Stock Options, Restricted Stock and Restricted Stock Units.  Executive will receive no further equity awards after the Separation Date.  Executive’s equity awards, including stock options, restricted stock and restricted stock units, will cease vesting as of the Separation Date, and all of Executive’s unvested equity awards, including stock options, restricted stock and restricted stock units, will terminate as of the Separation Date.  As provided for in and subject to the applicable stock option plans, Executive will have sixty (60) calendar days immediately following the Separation Date to exercise any of Executive’s vested and unexercised stock options, at which time any such stock options that have not been exercised will terminate.  Executive should refer to the applicable equity award agreements and plans for additional information.

		
	5.
	Cooperation.  Executive agrees to make himself available to the Company and its officers, if necessary, for consultation on a reasonable basis from time to time as to any matters on which Executive worked while an employee of the Company.  The Company acknowledges that Executive may have other full-time employment and the Company agrees that it will use its reasonable efforts to minimize the amount of time that any such consultation shall require of Executive.  Executive further agrees not to testify for, appear on behalf of, or otherwise assist in any way any individual, company, or agency in any claim against the Company by private third parties, unless and only pursuant to a lawful subpoena issued to Executive.  Except as provided in Section 12, Executive also agrees to promptly notify the Company upon receipt of any notice or contact (including whether written or oral, and including any subpoena or deposition notice) requesting or compelling information or Executive’s testimony or requesting documents related to matters which Executive worked on while an employee of the Company, and Executive agrees to coordinate with the Company in any response thereto.

		
	6.
	Confidential Information.  Executive agrees that the records, information, files, lists, operations data, and other materials of the Company that Executive created, used, or had access to during his employment with the Company belong exclusively to the Company and are confidential.  Executive further agrees that information or records relating to his employment with the Company, including any circumstances surrounding his separation, any interactions with any Company employees or directors, and, except as otherwise provided in this Agreement, any claims Executive may have had against the Company, are confidential.  Executive further agrees that information about the Company’s customers or other organizations with which it does business is the exclusive property of the Company and is also confidential.  Executive shall not use or disclose any such confidential information, for the benefit of himself or another, and shall treat such information as confidential, unless Executive has specific prior written authorization from the Company to use or disclose it.

		
	7.
	Compliance with Other Agreements.  Executive acknowledges and agrees that he has complied and shall continue to comply with the terms of all other agreements between Executive and the Company, as modified or amended, including, but not limited to, any confidentiality agreement, non-compete agreement and/or restrictive covenants agreement.

		
	8.
	Return of Company Property.  Executive agrees to return all property belonging to the Company in his possession or under his control (including, without limitation, company identification card, laptop computer or tablet, executive demonstrator vehicle, confidential information, etc.) no later than the Separation Date.  Executive also understands and agrees that, effective on the Separation Date, Executive is no longer authorized to incur any expenses or obligations or liabilities on behalf of the Company.

		
	9.
	No  Right  to  Give  Interviews.  Without the prior written consent of the Company, Executive shall not (a) give any interviews or public speeches concerning the Company, any matter that Executive participated in while an employee of the Company, or any past or present employee of the Company, or in relation to any matter concerning the Company occurring after the Separation Date or (b) directly or indirectly, prepare or assist any person or entity in the preparation of any books, articles, television or motion picture productions, or other creations concerning the Company or concerning any person whom any member of the public might associate with the Company.

		
	10.
	Non-Disparagement.  Executive agrees not to undertake any disparaging conduct directed at the Company and to refrain from making any negative or derogatory statements concerning the Company.  Executive waives any privilege or qualified privilege that may apply to any such communication.

		
	11.
	Non-Solicitation/No-Hire/Non-Competition.  

		
	(a)
	Except where such agreement is prohibited by applicable law, Executive agrees that, for a period of twelve (12) months immediately following the Separation Date, Executive shall not, directly or indirectly: (i) employ, or knowingly permit any company or business directly or indirectly controlled by him/her to employ, any person who was employed by the Company or any subsidiary or affiliate of the Company within the six-month period prior to and including the Separation Date, or in any manner seek to induce any such person to leave his/her employment; (ii) knowingly solicit or induce, through the use of confidential information, any customers of the Company who/which were customers at any time during Executive’s relationship with the Company to patronize any business directly or indirectly in competition with the businesses conducted by the Company or any subsidiary or affiliate of the Company; (iii) request or advise any person who is a customer or vendor of the Company or any subsidiary or affiliate of the Company or its successors to withdraw, curtail or cancel any such customer’s or vendor’s business with any such entity; and/or (iv) violate any non-competition covenant with the Company, as if such covenants had remained in effect through such period.

		
	(b)
	Without limiting the generality of this Agreement, the severance pay and severance benefits set forth in Section 2 of this Agreement shall immediately cease (provided that Executive shall be entitled to receive and retain at least one thousand dollars ($1,000) of severance payments and benefits) and not be resumed in the event that Executive (i) is in material breach of the restrictive covenants set forth in this Agreement or in any other restrictive covenant agreement with the Company (collectively, the “Restrictive Covenants”) or (ii) would be in material breach of the Restrictive Covenants had such Restrictive Covenants been in effect through the eighteen (18)-month period following the Separation Date. 

		
	12.
	Permitted Disclosures.  Pursuant to 18 U.S.C. § 1833(b), Executive will not be held criminally or civilly liable under any Federal or State trade secret law for the disclosure of a trade secret of the Company that (a) is made (i) in confidence to a Federal, State, or local government official, either directly or indirectly, or to Executive’s attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.  If Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding, if Executive (I) files any document containing the trade secret under seal, and (II) does not disclose the trade secret, except pursuant to court order.  Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section.  Further, nothing in any agreement Executive has with the Company shall prohibit or restrict Executive from making any voluntary disclosure of information or documents related to any violation of law to any governmental agency or legislative body, or any self-regulatory organization, in each case, without advance notice to the Company.

		
	13.
	Full General Release of Claims.  Except as provided in this Section 13, Executive, for himself and for his heirs, successors, assigns, and all other persons claiming through Executive, irrevocably and unconditionally releases and forever discharges the Company, together with each of its past present and future owners, parents, subsidiaries and affiliates, and all of their predecessors, successors, assigns, officers, directors, and employees and each of their respective subsidiaries, affiliates, estates, predecessors, successors and assigns, from any and all claims, complaints, liabilities, obligations, promises, agreements, damages, causes of action, costs, losses, debts and expenses of every kind, in law or in equity, whether known or unknown, foreseen or unforeseen, from the beginning of time to the date Executive executes this Agreement, as applicable, including any and all claims in connection with Executive’s employment with the Company, including without limitation, those claims arising from or relating to Executive’s separation from the Company.  Except as provided in this Section 13, this general release is a full and final bar to any claims Executive may have against the Company, including, without limitation, any claims arising from or relating to:

		
	(a)
	Executive’s pay, bonuses, vacation, or any other employee benefits, and other terms and conditions of employment or employment practices of the Company;

		
	(b)
	stock options, restricted stock, restricted stock units or other equity or equity-based awards, whether pursuant to a stock option plan, agreement or otherwise (except as expressly provided in Section 4 above with respect to unvested stock options, or with respect to outstanding vested equity awards as of the date hereof);

		
	(c)
	any claims for punitive, compensatory, and/or retaliatory discharge damages; back and/or front pay claims and fringe benefits; or payment of any attorneys’ fees for Executive;

		
	(d)
	the Civil Rights Acts of 1866, 1871, and 1991; Title VII of the Civil Right Act of 1964; 42 U.S.C. §1981; the Worker Adjustment and Retraining Notification Act; the Employee Retirement Income Security Act; the Rehabilitation Act; the Americans with Disabilities Act; the Fair Labor Standards Act; the Equal Pay Act; the Age Discrimination in Employment Act; the Older Worker Benefits Protection Act; the Occupational Safety and Health Act; the Family and Medical Leave Act; the Florida Civil Rights Act (as any of these laws may have been amended); or any other federal, state, or local labor, employment, or anti-discrimination laws; and/or

		
	(e)
	to the extent permitted by applicable law, based on any contract, tort, federal, state, or local “whistleblower” or retaliation claims, personal injury, or wrongful discharge theory; provided, however, that nothing in this Section 13 shall be deemed to release or impair (i) any rights under the terms of this Agreement, (ii) any vested rights under Company benefit plans and any rights under COBRA, (iii) any rights to outstanding vested equity awards as provided in Section 4 above, under applicable equity plans and equity award agreements, (iv) any and all rights to indemnification, advancement or reimbursement of expenses, and insurance coverage available to Executive as an officer, director or employee of the Company or any Company subsidiary (including the Company’s director and officer insurance coverage), including without limitation under the Company’s or any Company subsidiary’s charter and by-laws and under applicable corporate law (including without limitation to the maximum extent permitted under the Delaware General Corporation Law), or (v) any rights that cannot be waived under applicable law, such as the right to make a claim for unemployment or workers’ compensation benefits.

		
	14.
	Time to Consider/Revocation Period.  Notwithstanding anything in this Agreement to the contrary, Executive must execute this Agreement on or within forty-five (45) calendar days following the Separation Date in order to be entitled to the payments and benefits in Sections 2, 4 and 11 of this Agreement (other than COBRA at Executive’s own expense).  Executive will have the right to revoke Executive’s execution of this Agreement within seven (7) calendar days following the date Executive executes this Agreement.  If Executive does not advise the Company in writing within the revocation period of Executive’s intent to revoke Executive’s execution of this Agreement, Executive’s execution of this Agreement will become effective and enforceable upon the expiration of the seven (7) days.  If Executive does not execute this Agreement on or within forty-five (45) calendar days following the Separation Date, or Executive revokes Executive’s execution, the Company shall have no obligation to provide Executive with the payments and benefits set forth in Sections 2, 4 and 11 above (other than COBRA at Executive’s own expense). 

		
	15.
	Voluntary Action.  Executive acknowledges that he has read each section of this Agreement and understands his rights and obligations, and that the Company has advised Executive to consult with an attorney of Executive’s choosing prior to executing this Agreement.  Executive further acknowledges and agrees that: (a) this Agreement is written in a manner understandable to Executive; (b) this Agreement is granted in exchange for consideration which is in addition to anything of value to which Executive is otherwise entitled; (c) Executive has been given a reasonable opportunity to consider and review this Agreement; (d) Executive has had an opportunity to review this Agreement and, and, specifically, the release in Section 13 of this Agreement, with an attorney of Executive’s choosing prior to executing this Agreement; (e) Executive may challenge the validity of Executive’s waiver in this Agreement of Executive’s rights under the Age Discrimination in Employment Act and the Older Worker Benefits Protection Act; and (f) Executive’s signature on this Agreement is knowing and voluntary.

		
	16.
	Miscellaneous. 

		
	(a)
	Entire Agreement. Except as otherwise provided in this Section 16(a), this Agreement contains the entire agreement between Executive and the Company relating to the subject matter hereof, and all prior agreements, negotiations and representations are replaced by this Agreement.  Notwithstanding the foregoing, nothing in this Agreement shall limit or modify the rights of the Company or the obligations of Executive contained in any other confidentiality agreement, non-compete agreement and/or restrictive covenants previously signed by Executive, as amended, modified and/or supplemented, as such provisions shall survive the execution of this Agreement and Executive’s separation from the Company.  This Agreement may only be changed by a written amendment signed by Executive and the Chief Executive Officer, the General Counsel, the Vice President of Human Resources, or other duly authorized officer of the Company.

		
	(b)
	No Admission. The Company and Executive agree that the payments to Executive, and the terms and conditions of said payments by the Company, are not to be construed as an admission of liability by the Company.  Executive specifically agrees that the Company’s payments are not intended to be, and will not be offered in evidence or 

argued in any proceeding as, an admission of liability.  The Company specifically disclaims any liability to Executive or to any other person or entity.
		
	(c)
	Severability.  The invalidity, illegality, or unenforceability of any provision of this Agreement will not affect any other provision of this Agreement, which shall remain in full force and effect.  Nor will the invalidity, illegality or unenforceability of a portion of any provision of this Agreement affect the balance of such provision.  In the event that any one or more of the provisions contained in this Agreement, or any portion thereof, is held to be invalid, illegal, or unenforceable in any respect, this Agreement shall be reformed, construed, and enforced as if such invalid, illegal, or unenforceable provision had never been contained herein.

		
	(d)
	Effect of Waiver.  The failure of the Company at any time to require performance of any provision of this Agreement will in no manner affect the right to enforce the same.

		
	(e)
	Binding Nature.  This Agreement will be binding upon the Company and Executive and will inure to the benefit of any successor or successors of the Company.  This Agreement is not assignable by Executive, except in the case of death or permanent and total disability where Executive’s estate or guardian shall be entitled to receive the consideration to be paid under this Agreement.

		
	(f)
	Exclusive Venue and Jurisdiction.  Subject to Section 16(m), any suit, action, or proceeding relating to this Agreement shall be brought in the state courts of Broward County, Florida or in the United States District Court for the Southern District of Florida.  The Company and Executive hereby accept the exclusive jurisdiction of those courts for the purpose of any such suit, action, or proceeding.

		
	(g)
	Counterparts.  This Agreement may be executed in one or more counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument.

		
	(h)
	Headings.  The section headings contained in this Agreement are for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

		
	(i)
	Construction.  The Company and Executive have jointly participated in the negotiation of this Agreement.  In the event that an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if it was drafted jointly by the Company and Executive and no presumptions or burdens of proof shall arise favoring any party by virtue of authorship of this Agreement.

		
	(j)
	Notice.  Any notice, request, statement, information or other document to be given to either party by the other must be in writing and delivered as follows:

	
		
	If to the Company:
Vice President
Human Resources
AutoNation, Inc.
200 S.W. 1st Avenue - 14th Floor
Fort Lauderdale, FL 33301

With Copy to:
General Counsel
AutoNation, Inc.
200 S.W. 1st Avenue - 16th Floor
Fort Lauderdale, FL 33301
	If to Executive:
[address noted on Exhibit A]

Any party may change the address to which notices hereunder are to be sent to it by giving written notice of a change of address.
		
	(k)
	Liability for Breach.  In the event that either party breaches any of the terms of this Agreement, the non-breaching party may pursue any and all remedies allowable under state and/or federal law.  Depending on the interpretation of applicable law, these remedies may include monetary damages, equitable relief, and, in the case of Executive’s breach, recoupment of the benefits described in Section 2 of this Agreement.  In the event of Executive’s breach of Section 5 (“Cooperation” provision), Section 6 (“Confidential Information” provision), Section 7 (“Compliance with Other Agreements” provision), Section 8 (“Return of Company Property” provision), Section 9 (“No Right to Give Interviews” provision), Section 10 (“Non-Disparagement” provision) and/or Section 11 (“Non-Solicitation/No-Hire/Non-Competition” provision), the Company will provide written notice of such 

breach to Executive and Executive agrees that he will relinquish the benefits set forth in Section 2 of this Agreement, unless if such breach is curable, Executive cures such breach within 30 days’ written notice to Executive from the Company.  The non-breaching party shall be entitled to an award of its reasonable attorney’s fees and costs in any litigation arising out of a breach of the terms of this Agreement.
		
	(l)
	Section 409A.  The Company and Executive each hereby affirm that it is their mutual view that the provision of payments and benefits described or referenced herein are exempt from or in compliance with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended, and the Treasury regulations relating thereto (“Section 409A”) and that each party’s tax reporting shall be completed in a manner consistent with such view.  The Company and Executive each agree that upon the Separation Date, Executive will experience a “separation from service” for purposes of Section 409A.  Any payments that qualify for the “short-term deferral” exception or another exception under Section 409A shall be paid under the applicable exception.  For purposes of the limitations on nonqualified deferred compensation under Section 409A, each payment of compensation under this Agreement shall be treated as a separate payment of compensation.  Notwithstanding anything contained herein to the contrary, to the extent required in order to avoid accelerated taxation and/or tax penalties under Section 409A, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the six-month period immediately following the Separation Date separation from service shall instead be paid on the first business day after the date that is six months following the Separation Date (or death, if earlier).  Notwithstanding anything to the contrary in this Agreement, all reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A, including, where applicable, the requirement that (x) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year; (y) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred; and (z) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.  Neither the Company nor its affiliates shall be liable in any manner for any federal, state or local income or excise taxes (including without limitation any taxes under Section 409A), or penalties or interest with respect thereto, as a result of the payment of any compensation or benefits hereunder or the inclusion of any such compensation or benefits or the value thereof in Executive’s income.  Executive acknowledges and agrees that the Company shall not be responsible for any additional taxes or penalties resulting from the application of Section 409A.

		
	(m)
	Applicable Law.  This Agreement shall be construed and enforced in accordance with the laws of the State of Florida, without regard to its choice of law rules.  Notwithstanding any other provision of this Agreement, any dispute hereunder shall be resolved pursuant to arbitration in accordance with the most recent arbitration agreement in effect between Executive and the Company, except that the Company or Executive may pursue equitable relief in a court of law.

[Remainder of Page Intentionally Blank]

IN WITNESS WHEREOF, the Company and Executive have executed this Separation Agreement and General Release of All Claims as of  January 7, 2019.
- I HEREBY ACCEPT AND AGREE TO ABIDE BY THIS AGREEMENT -

	
		
	AutoNation, Inc.
	 

	 
	 

	/s/ Coleman Edmunds
	/s/ Thomas M. Conophy

	Coleman Edmunds
	Thomas M. Conophy

	Executive Vice President 
	 

	and General Counsel
	 

	 
	 

	Date: January 17, 2019
	Date: January 16, 2019a2018stockincentiveplana

                        MERCURY SYSTEMS, INC.                         AMENDED AND RESTATED                      2018 STOCK INCENTIVE PLAN  SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS        The name of the plan is the Mercury Systems, Inc. 2018 Stock Incentive Plan (the “Plan”). The purpose of the Plan is to encourage and enable the officers, employees, Non-Employee Directors and other key persons (including consultants and qualified individuals who have received offers of employment) of Mercury Systems, 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 and to induce qualified individuals who have received offers of employment to enter and remain in the employ of 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 shareholders, 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” is defined in Section 2(a).        “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 and Restricted Stock Awards.        “Board” means the Board of Directors of the Company.        “Code” means the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.        “Committee” means 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 who are independent, or the Board as a whole acting as the compensation committee.        “Deferred Stock Award” means Awards granted pursuant to Section 8.        “Effective Date” means the date on which the Plan is approved by shareholders as set forth in Section 18.        “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.                                        1 

 

      “Fair Market Value” of the Stock on any given date means if the shares of Stock are listed on any national securities exchange, or traded on the National Association of Securities Dealers Automated Quotation System (“Nasdaq”) Global Market or another national securities exchange, the closing price reported on Nasdaq or such other exchange on such date. If the market is closed on such date, the determination shall be made by reference to the last date preceding such date for which the market is open. If the fair market value cannot be determined under the preceding two sentences, it shall be determined in good faith by the Administrator.        “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 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 or Deferred Stock Award.        “Restricted Stock Award” means Awards granted pursuant to Section 7.        “Section 409A” means Section 409A of the Code and the regulations and other guidance promulgated thereunder.        “Stock” means the Common Stock, par value $0.01 per share, of the Company, subject to adjustments pursuant to Section 3.        “Stock Appreciation Right” means any Award granted pursuant to Section 6.        “Subsidiary” means any corporation or other entity (other than the Company) in which the Company has a controlling 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 (10%) of the combined voting power of all classes of stock of the Company or any parent or subsidiary corporation.  SECTION 2. ADMINISTRATION OF PLAN; ADMINISTRATOR AUTHORITY TO             SELECT GRANTEES AND DETERMINE AWARDS        (a) Committee. The Plan shall be administered by the Committee (the “Administrator”).                                         2 

 

      (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 and Deferred Stock Awards, 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)   Subject to the provisions of Sections 7(d) and 8(a), to accelerate at any time                   the exercisability or vesting of all or any portion of any Award;              (vi)  Subject to the provisions of Section 5(c), to extend at any time the period in                   which Stock Options and Stock Appreciation Rights 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.        All decisions and interpretations of the Administrator shall be binding on all persons, including the Company and Plan grantees.        Notwithstanding the foregoing, the Administrator’s power and authority to make grants under the Plan shall be subject to the right of the Board, upon its request, to ratify Awards granted to the Chairman and other individuals specified by the Board, and in such event, the date of grant shall be the date of Board ratification.        (c) Delegation of Authority to Grant Awards. The Administrator, in its discretion, may delegate to the Company’s Chief Executive Officer, Chief Financial Officer, General Counsel, or Chief Human Resources Officer, or any person designated by the Board as an “executive officer” as defined in Rule 3b-7 under the Exchange Act all or part of the Administrator’s authority and duties with respect to the granting of Awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act. Any such delegation by the Administrator                                        3 

 

shall include a limitation as to the amount of Awards that may be granted during the period of the delegation and shall contain guidelines as to the determination of the exercise price of any Stock Option or Stock Appreciation Right, the conversion ratio or price of other Awards 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) Detrimental Activity. Unless the award agreement specifies otherwise, the Administrator may cancel, rescind, suspend, withhold or otherwise limit or restrict any Award (whether vested or unvested, exercised or unexercised) at any time if the recipient is not in compliance with all applicable provisions of the award agreement and the Plan, or if the recipient engages in any “Detrimental Activity.” For purposes of this Section 2, “Detrimental Activity” shall include: (i) the rendering of services for any organization or engaging directly or indirectly in any business which is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company; (ii) the disclosure to anyone outside the Company, or the use in other than the Company’s business, without prior written authorization from the Company, of any confidential information or material, as defined in the Company’s employee confidentiality agreement or such other agreement regarding confidential information and intellectual property that the recipient and the Company may enter into (collectively, the “Confidentiality Agreement”), relating to the business of the Company, acquired by the recipient either during or after employment with the Company; (iii) the failure or refusal to disclose promptly and to assign to the Company, pursuant to the Confidentiality Agreement or otherwise, all right, title and interest in any invention or idea, patentable or not, made or conceived by the recipient during employment by the Company, relating in any manner to the actual or anticipated business, research or development work of the Company or the failure or refusal to do anything reasonably necessary to enable the Company to secure a patent where appropriate in the United States and in other countries; (iv) activity that results in termination of the recipient’s employment for cause; (v) a material violation of any rules, policies, procedures or guidelines of the Company; (vi) any attempt directly or indirectly to induce any employee of the Company to be employed or perform services elsewhere or any attempt directly or indirectly to solicit the trade or business of any current or prospective customer, supplier or partner of the Company; or (vii) the recipient being convicted of, or entering a guilty plea with respect to, a crime, whether or not connected with the Company.        (e) Indemnification. Neither the Board nor the Committee, 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 Committee (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 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.  SECTION 3. STOCK ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION                                         4 

 

      (a) Stock Issuable. The maximum number of shares of Stock reserved and available for issuance under the Plan shall be 2,862,000, plus the number of shares of Stock reserved and available for issuance under the Mercury Systems, Inc. Amended and Restated 2005 Stock Incentive Plan (the “2005 Stock Incentive Plan”) as of the date of shareholder approval of this Plan, subject to adjustment as provided in Section 3(c). For purposes of this limitation, the shares of Stock underlying any Awards that are forfeited, are canceled, expire or are terminated (other than by exercise) under (i) this Plan or (ii) from and after shareholder approval of this Plan, the 2005 Stock Incentive Plan shall be added to the shares of Stock available for issuance under this Plan. Shares tendered or held back upon exercise of an Option or settlement of an Award to cover the exercise price or tax withholding shall not be available for future issuance under the Plan. In addition, upon exercise of Stock Appreciation Rights, the gross number of shares exercised shall be deducted from the total number of shares remaining available for issuance under the Plan. Also, shares purchased in the open market using proceeds received upon the exercise of an Option shall not be available for future issuance under the Plan. Subject to such overall limitations and Section 3(c), 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 500,000 shares of Stock may be granted to any one individual grantee during any one calendar year period and provided, further, that in no event may Incentive Stock Options granted under the Plan exceed 2,862,000 shares of Stock. 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. The grant of any full value Award (i.e., an Award other than an Option or a Stock Appreciation Right) shall be deemed, for purposes of determining the number of shares available for issuance under Section 3(a), as an Award of two (2) shares of Stock for each such share actually subject to the Award. The grant of an Option or a Stock Appreciation Right shall be deemed, for purposes of determining the number of shares available for issuance under Section 3(a), as an Award of one (1) share of Stock for each such share actually subject to the Award.        (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 a different number or kind of securities of the Company or any successor entity (or a parent or subsidiary thereof), the 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,                                         5 

 

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. 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. In the case of and subject to the consummation of (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 a different kind of 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 immediately upon completion of such transaction, or (iv) the sale of all of the Stock of the Company to an unrelated person or entity (in each case, a “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, each grantee shall be permitted, within a specified period of time prior to the consummation of the Sale Event as determined by the Administrator, to exercise all outstanding vested and exercisable Options and Stock Appreciation Rights held by such grantee.        Notwithstanding anything to the contrary in this Section 3(d), in the event of a Sale Event pursuant to which holders of the Stock of the Company will receive upon consummation thereof a cash payment for each share surrendered in the Sale Event, the Company shall have the right, but not the obligation, to make or provide for a cash payment to the grantees holding vested and exercisable Options and Stock Appreciation Rights, in exchange for the cancellation thereof, in an amount equal to the difference between (A) the value as determined by the Administrator of the consideration payable per share of Stock pursuant to the Sale Event (the “Sale Price”) times the number of shares of Stock subject to such 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.        (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).                                        6 

 

SECTION 4. ELIGIBILITY        Grantees under the Plan will be such full- or part-time officers and other employees, Non-Employee Directors and key persons (including consultants and qualified individuals who have received offers of employment) 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) Grant of Stock Options. Any Stock Option granted under the Plan shall be in such form as the Administrator may from time to time approve.        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.        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. 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. No dividends or dividend equivalents shall be paid on Options.        (b) 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 100 percent (100%) of the Fair Market Value on the date of grant.        (c) Option Term. The term of each Stock Option shall be fixed by the Administrator, but no Stock Option shall be exercisable more than seven (7) years after the date the Stock Option is granted.        (d) Exercisability; Rights of a Shareholder. 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 shareholder only as to shares acquired upon the exercise of a Stock Option and not as to unexercised Stock Options.        (e) 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; provided, however, that no Stock Option may be partially exercised with respect to fewer than 50 (fifty) shares. 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:              (i)   In cash, by certified or bank check or other instrument acceptable to the                   Administrator;                                        7 

 

            (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 restrictions                   under any Company plan. Such surrendered shares shall be valued at Fair                   Market Value on the exercise date;              (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 for                   the purchase price; or              (iv)  By the optionee delivering to the Company a properly executed net exercise                   notice. Such shares withheld by the Company in the net exercise shall be                   valued at Fair Market Value on the exercise date.        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 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 shares attested to.        (f) 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 one hundred thousand dollars ($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) Nature of Stock Appreciation Rights. A Stock Appreciation Right is 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, which price shall not be less than 100 percent of the Fair Market Value of the Stock on the date of grant (or more than the option exercise price per share, if the Stock Appreciation Right was granted in tandem with a Stock Option) multiplied by the number of shares of Stock with respect to which the Stock Appreciation Right shall have been exercised. No dividends or dividend equivalents shall be paid on Stock Appreciation Rights.                                         8 

 

      (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; provided, however, that no Stock                   Appreciation Right may be partially exercised with respect to fewer than                   fifty (50) shares.              (ii)  Upon exercise of a Stock Appreciation Right granted in tandem with an                   Option, the applicable portion of any related Option shall be surrendered.              (iii) The term of a Stock Appreciation Right may not exceed seven (7) years.  SECTION 7. RESTRICTED STOCK AWARDS        (a) Nature of Restricted Stock Awards. A Restricted Stock Award is 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 (“Restricted Stock”). Conditions may be based on continuing employment (or other service relationship) and/or achievement of pre-established performance goals and objectives. The grant of a Restricted Stock Award is contingent on the grantee executing the Restricted Stock Award agreement. The terms and conditions of each such agreement shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees.        (b) Rights as a Shareholder. Upon execution of a written instrument setting forth the Restricted Stock Award and payment of any applicable purchase price, a grantee shall have the rights of a shareholder with respect to the voting of the Restricted Stock, subject to such conditions contained in the written instrument evidencing the Restricted Stock Award. 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                                        9 

 

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. Cash dividends and stock dividends, if any, with respect to the Restricted Stock shall be withheld by the Company for the grantee’s account, and shall be subject to forfeiture to the same degree as the shares of Restricted Stock to which such dividends relate. Except as otherwise determined by the Committee, no interest will accrue or be paid on the amount of any cash dividends withheld.        (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 15 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 shareholder. 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 risk of forfeiture shall lapse. 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 (1) year, and in the event that 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 granted to employees with a time-based restriction may become vested incrementally over such three-year period. No portion of any Restricted Stock granted to employees may vest prior to the first anniversary of the grant date. 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 otherwise be provided by the Administrator either in the Award agreement or, subject to Section 15 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.        Notwithstanding the foregoing, the Administrator may accelerate the vesting of Restricted Stock granted to an employee in the case of retirement, death or disability.  SECTION 8. DEFERRED STOCK AWARDS                                         10 

 

      (a) Nature of Deferred Stock Awards. A Deferred Stock Award is an Award of phantom stock units to a grantee, subject to restrictions and conditions as the Administrator may determine 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 grant of a Deferred Stock Award is contingent on the grantee executing the Deferred Stock Award agreement. The terms and conditions of each such agreement shall be determined by the Administrator, and such terms and conditions may differ among individual Awards and grantees. 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 (1) year, and in the event any such Deferred Stock Award shall have a time-based restriction, the total restriction period with respect to such award shall not be less than three (3) years; provided, however, that any Deferred Stock Award with a time-based restriction may become vested incrementally over such three (3) year period. No portion of any Deferred Stock Award granted to employees may vest prior to the first anniversary of the grant date. At the end of the deferral period, the Deferred Stock Award, to the extent vested, shall be paid to the grantee in the form of shares of Stock.        Notwithstanding the foregoing, the Administrator may accelerate the vesting of a Deferred Stock Award granted to an employee in the case of retirement, death or disability.        (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 deferred compensation 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 but for the deferral.        (c) Rights as a Shareholder. During the deferral period, a grantee shall have no rights as a shareholder; 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, but shall not be entitled to dividends, if any, or dividend equivalents prior to settlement.        (d) Termination. Except as may otherwise be provided by the Administrator either in the Award agreement or, subject to Section 15 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.  SECTION 9. PERFORMANCE-BASED AWARDS                                         11 

 

      (a) Performance Criteria. The performance criteria used in performance goals governing Performance-based Awards may include any or all of the following criteria at the Company, Subsidiary, business unit or business segment level as appropriate: (i) the Company’s return on equity, assets, capital or investment: (ii) pre-tax or after-tax profit levels or EBITDA or adjusted EBITDA; (iii) bookings or revenue growth; (iv) bookings or revenues; (v) operating income as a percentage of sales; (vi) total shareholder return; (vii) changes in the market price of the Stock; (viii) sales or market share; (ix) earnings per share; (x) improvements in operating margins; (xi) operating cash flow or free cash flow; (xii) working capital improvements; (xiii) design wins or entering into contracts with key customers; and (xiv) any combination of such performance metrics, comparisons of such performance metrics to corresponding metrics used by other companies or comparison of such performance metrics to industry data.        (b) Grant of Performance-based Awards. With respect to each Performance-based Award, the Committee shall select, within the first ninety (90) days of a Performance Cycle the performance criteria for such grant, and the achievement targets 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 Committee may be (but need not be) different for each Performance Cycle and different goals may be applicable to Performance-based Awards to different grantees.        (c) Payment of Performance-based Awards. Following the completion of a Performance Cycle, the Committee shall meet to review and certify in writing whether, and to what extent, the performance criteria 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 Committee shall then determine the actual size of each grantee’s Performance-based Award.  SECTION 10. TRANSFERABILITY OF AWARDS        (a) Transferability. Except as provided in Section 10(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 or pursuant to a domestic relations order. 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) Committee Action. Notwithstanding Section 10(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.                                         12 

 

      (c) Family Member. For purposes of Section 10(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 fifty percent (50%) 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 fifty percent (50%) 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 11. 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 or permitted 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, depending on the withholding method, a grantee may elect to have such grantee’s tax withholding obligation satisfied at the minimum or other applicable withholding rate in the grantee’s applicable jurisdiction, including maximum applicable rates that may be utilized without creating adverse accounting treatment under Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor pronouncement thereto) and permitted under applicable withholding rules promulgated by the Internal Revenue Service or another applicable governmental entity, in whole or in part, by (i) 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 such withholding amount, or (ii) transferring to the Company shares of Stock owned by the grantee with an aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy such withholding amount.  SECTION 12. CHANGE OF CONTROL        (a) Occurrence of Change of Control. If within six months following the consummation of a Change of Control of the Company, as defined in Section 12(b)(i), the employment of a                                         13 

 

grantee with a minimum of six months of service with the Company or any of its Subsidiaries as of the effective date of such Change of Control (the “Effective Date”) is involuntarily terminated, then (i) if such Change in Control does not constitute a Sale Event, 50% of the unvested Awards of such grantee will automatically be fully vested, (ii) if such Change in Control constitutes a Sale Event and provision is made for the assumption or continuation of Awards hereunder, or the substitution of such Awards with new Awards of the successor entity or parent thereof, 50% of the unvested assumed, continued or substituted Awards will automatically be fully vested, and (iii) if such Change in Control constitutes a Sale Event and provision is not made for the assumption, continuation or substitution of Awards hereunder, such that all of the unvested Awards of such grantee terminated upon consummation of the Sale Event without any payment with respect thereto, the grantee will be entitled to receive a cash payment equal to the difference between (x) the Sale Price multiplied by the number of shares of Stock subject to 50% of such grantee’s unvested Awards as of the consummation of the Sale Event and (y) the aggregate exercise price of such unvested Awards. Notwithstanding the foregoing, in the event that the fair market value (less any exercise price) of the Awards subject to automatic vesting or any cash payment to which the grantee may become entitled in accordance with the preceding sentence exceeds $25,000 as of the date of termination of employment, then such vesting or payment shall be conditioned upon the grantee executing and failing to revoke during any applicable revocation period a general release of all claims against the Company and its Subsidiaries and affiliates in a form acceptable to the Company or its successor within 60 days of such termination. For purposes hereof, a grantee’s employment with the Company or any Subsidiary is considered “involuntarily terminated” if the Company or any Subsidiary terminates such grantee’s employment with the Company or such Subsidiary without Cause, as defined in Section 12(b)(ii), or such grantee resigns his or her employment with the Company or such Subsidiary for Good Reason, as defined in Section 12(b)(iii). Notwithstanding the foregoing, in the event the Change of Control of the Company is not approved by the Board of Directors, all of the outstanding Awards will automatically become fully vested upon the consummation of the Change of Control of the Company. Further, all of the outstanding Awards held by Non-Employee Directors will automatically become fully vested upon the consummation of a Change of Control of the Company.        (b) Definitions. For purposes of the Plan:              (i)   A “ Change of Control of the Company ” shall be deemed to have occurred                   upon the occurrence of any of the following events:                   (A)   Any “Person,” as such term is used in Sections 13(d) and 14(d) of                         the Exchange Act (other than the Company, any of its subsidiaries,                         or any trustee, fiduciary or other person or entity holding securities                         under any employee benefit plan or trust of the Company or any of                         its subsidiaries), together with all “affiliates” and “associates” (as                         such terms are defined in Rule 12b-2 under the Exchange Act) of                         such person, shall become the “beneficial owner” (as such term is                         defined in Rule 13d-3 under the Exchange Act), directly or                         indirectly, of securities of the Company representing fifty percent                         (50%) or more of the combined voting power of the Company’s                         then outstanding securities having the right to vote in an election of                         the Company’s Board of Directors (“Voting Securities”) (in such                         case other than as a result of an acquisition of securities directly                         from the Company or an acquisition of securities involving a                                        14 

 

      Corporate Transaction of the type described in the exclusion set       forth in clause (C) below); or  (B)   Persons who, as of the date hereof, constitute the Company’s Board       of Directors (the “Incumbent Directors”) cease for any reason,       including, without limitation, as a result of a tender offer, proxy       contest, merger or similar transaction, to constitute at least a       majority of the Board, provided that any person becoming a director       of the Company subsequent to the date hereof shall be considered an       Incumbent Director if such person’s election was approved by or       such person was nominated for election by either (x) a vote of at       least a majority of the Incumbent Directors or (y) a vote of at least a       majority of the Incumbent Directors who are members of a       nominating committee comprised, in the majority, of Incumbent       Directors; but provided further, that any such person whose initial       assumption of office is in connection with an actual or threatened       election contest relating to the election of members of the Board of       Directors or other actual or threatened solicitation of proxies or       consents by or on behalf of a Person other than the Board, including       by reason of agreement intended to avoid or settle any such actual or       threatened contest or solicitation, shall not be considered an       Incumbent Director; or  (C)   The consummation of a consolidation, merger or consolidation or       sale or other disposition of all or substantially all of the assets of the       Company (a “Corporate Transaction”); excluding, however, a       Corporate Transaction in which the shareholders of the Company       immediately prior to the Corporate Transaction, would,       immediately after the Corporate Transaction, beneficially own (as       such term is defined in Rule 13d-3 under the Exchange Act),       directly or indirectly, shares representing in the aggregate more than       fifty percent (50%) of the voting shares of the corporation issuing       cash or securities in the Corporate Transaction (or of its ultimate       parent corporation, if any).  Notwithstanding the foregoing, a “ Change of Control of the Company ” shall not be deemed to have occurred for purposes of the foregoing clause (A) solely as the result of an acquisition of securities by the Company that, by reducing the number of shares of Voting Securities outstanding, increases the proportionate number of shares of Voting Securities beneficially owned by any person to fifty percent (50%) or more of the combined voting power of all then outstanding Voting Securities; provided, however, that if any person referred to in this sentence shall thereafter become the beneficial owner of any additional shares of Voting Securities (other than pursuant to a stock split, stock dividend, or similar transaction or as a result of an acquisition of securities directly from the Company) and immediately thereafter beneficially owns fifty percent (50%) or more of the combined voting power of all then outstanding Voting Securities, then a                       15 

 

                  “Change of Control of the Company” shall be deemed to have occurred for                   purposes of the foregoing clause (A).              (ii)  “Cause” shall mean (A) conduct by the grantee constituting a material act of                   willful misconduct in connection with the performance of his or her duties,                   including, without limitation, misappropriation of funds or property of the                   Company or any of its Subsidiaries other than the occasional, customary                   and de minimis use of the Company or its Subsidiaries’ property for                   personal purposes; (B) the commission by the grantee of any felony or a                   misdemeanor involving moral turpitude, deceit, dishonesty or fraud, or any                   conduct by the grantee that would reasonably be expected to result in                   material injury to the Company or any of its Subsidiaries; (C) the grantee’s                   willful and continued failure to perform his or her duties with the Company                   and its Subsidiaries (other than any failure resulting from incapacity due to                   physical or mental illness), which continues thirty (30) days after a written                   demand of performance is delivered to the grantee by any Senior Vice                   President or Vice President of the Company, which identifies the manner in                   which such person believes that the grantee has not performed his or her                   duties; (D) a violation by the grantee of the employment policies of the                   Company and its Subsidiaries which has continued following written notice                   of such violation from any Senior Vice President or Vice President of the                   Company; or (E) the grantee’s willful failure to cooperate with a bona fide                   internal investigation or an investigation by regulatory or law enforcement                   authorities, after being instructed by the Company or any of its Subsidiaries                   to cooperate, or the willful destruction or failure to preserve documents or                   other materials known to be relevant to such investigation or the willful                   inducement of others to fail to cooperate or to produce documents or other                   materials.             (iii) “Good Reason ” shall mean (A) a reduction in the grantee’s annual cash                   base salary as in effect on the Effective Date, except for across-the-board                   reductions similarly affecting all or substantially all Company employees;                   or (B) a relocation whereby the Company or any Subsidiary requires the                   grantee to be principally based at any office or location that is more than                   fifty (50) miles from the grantee’s office on the Effective Date; provided                   that the reasons set forth above will not constitute “Good Reason” unless,                   within thirty (30) days after the first occurrence of such Good Reason event,                   the grantee shall have given written notice to the Company specifically                   identifying the event that the grantee believes constitutes Good Reason and                   the Company, or, if applicable, its Subsidiary, has not remedied such event                   within a reasonable cure period of not less than thirty (30) days after the                   Company’s receipt of such notice.  SECTION 13. Additional Conditions Applicable to Nonqualified Deferred Compensation Under             Section 409A.        In the event any Stock Option or Stock Appreciation Right under the Plan is granted with an exercise price of less than one hundred percent (100%) of the Fair Market Value on the date of grant (regardless of whether or not such exercise price is intentionally or unintentionally priced at less than Fair Market Value), or such grant 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                                        16 

 

409A of the Code (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.        (a) Exercise and Distribution. Except as provided in Section 13(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 13(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 13(c)(ii) hereof).              (v)   Unforeseeable Emergency. The occurrence of an unforeseeable emergency                   (within the meaning of Section 13(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 of Control Event. The occurrence of a Change of Control Event                   (within the meaning of Section 13(c)(i) hereof), including the Company’s                   discretionary exercise of the right to accelerate vesting of such grant upon a                   Change of Control Event or to terminate the Plan or any 409A Award                   granted hereunder within twelve (12) months of the Change of Control                   Event.        (b) No Acceleration. A 409A Award may not be accelerated or exercised prior to the time specified in Section 13(a) hereof, except in the case of one (1) 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                                         17 

 

                  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 of Control Event. The Administrator may exercise the discretionary                   right to accelerate the vesting of such 409A Award upon a Change of                   Control Event or to terminate the Plan or any 409A Award granted                   thereunder within twelve (12) months of the Change of Control Event and                   cancel the 409A Award for compensation.        (c) Definitions. Solely for purposes of this Section 13 and not for other purposes of the Plan, the following terms shall be defined as set forth below:              (i)   “Change of 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 regulations promulgated under Section 409A).              (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 (twelve) 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 twelve (12) (twelve) months, receiving income                   replacement benefits for a period of not less than three (3) 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 14. 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                                        18 

 

      (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 15. AMENDMENTS AND TERMINATION        (a) Amendments in General. 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), in no event may the Administrator          exercise its discretion to reduce the exercise price of outstanding Stock Options or          Stock Appreciation Rights, effect repricing through cancellation and re-grants, or          repurchase out-of-the-money Stock Options or Stock Appreciation Rights for cash,          unless the Administrator proposes for shareholder vote, and shareholders approve, such          reduction, cancellation and re-grant, repricing, or repurchase. 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          shareholders entitled to vote at a meeting of shareholders. 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 shareholders entitled to vote at a meeting of shareholders.          Nothing in this Section 15 shall limit the Administrator’s authority to take any action          permitted pursuant to Section 3(c) or 3(d).        (b) No Repricing of Awards Without Stockholder Approval. Notwithstanding any other          provision of the Plan, the repricing of Awards shall not be permitted without          stockholder approval. For this purpose, a “repricing” means any of the following (or          any other action that has the same effect as any of the following): (1) changing the          terms of an Award to lower its exercise or base price (other than on account of capital          adjustments resulting from share splits, etc., as described herein, (2) any other action          that is treated as a repricing under GAAP, and (3) repurchasing for cash or canceling an          Award in exchange for another Award at a time when its exercise or base price is          greater than the Fair Market Value of the underlying share of Stock, unless the          cancellation and exchange occurs in connection with an event set forth in Section 3          hereof.        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                                         19 

 

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 16. GENERAL PROVISIONS        (a) No Distribution; Compliance with Legal Requirements. 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.        No shares of Stock shall be issued pursuant to an Award until all applicable securities law and other legal and stock exchange or similar requirements have been satisfied. The Administrator may require the placing of such stop-orders and restrictive legends on certificates for Stock and Awards as it deems appropriate.        (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). Stock Certificates or uncertified Stock for any Restricted Stock Award shall be delivered to the Secretary of the Company to be held in escrow until the Award becomes vested.        (c) 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.        (d) Trading Policy Restrictions. Option exercises and other Awards under the Plan shall be subject to such Company’s applicable insider trading policy and procedures, as in effect from time to time.        (e) Grantees Outside of the United States. The Committee may modify the terms of any Award under the Plan made to or held by a grantee who is then a resident, or is primarily employed or providing services, outside of the United States in any manner deemed by the Committee to be necessary or appropriate in order that such Award shall conform to laws, regulations, and customs of the country in which the grantee is then a resident or primarily employed or providing services, or so that the value and other benefits of the Award to the grantee, as affected by non–U.S. tax laws and other restrictions applicable as a result of the grantee’s residence, employment, or providing services abroad, shall be comparable to the value of such Award to a grantee who is a resident, or is primarily employed or providing services, in the United States. An Award may be modified under                                        20 

 

this Section 17(e) in a manner that is inconsistent with the express terms of the Plan, so long as such modifications will not contravene any applicable law or regulation or result in actual liability under Section 16(b) of the Exchange Act for the grantee whose Award is modified. Additionally, the Committee may adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Eligible Persons who are non–U.S. nationals or are primarily employed or providing services outside the United States.        (f) Data Privacy. As a condition of receipt of any Award, each grantee explicitly and unambiguously consents to the collection, use, and transfer, in electronic or other form, of personal data as described in this Section 17(f) by and among, as applicable, the Company and its Affiliates for the exclusive purpose of implementing, administering, and managing the Plan and Awards and the grantee’s participation in the Plan. In furtherance of such implementation, administration, and management, the Company and its Affiliates may hold certain personal information about a grantee, including, but not limited to, the grantee’s name, home address, telephone number, date of birth, social security or insurance number or other identification number, salary, nationality, job title(s), information regarding any securities of the Company or any of its Affiliates, and details of all Awards (the “Data”). In addition to transferring the Data amongst themselves as necessary for the purpose of implementation, administration, and management of the Plan and Awards and the grantee’s participation in the Plan, the Company and its Affiliates may each transfer the Data to any third parties assisting the Company in the implementation, administration, and management of the Plan and Awards and the grantee’s participation in the Plan. Recipients of the Data may be located in the grantee’s country or elsewhere, and the grantee’s country and any given recipient’s country may have different data privacy laws and protections. By accepting an Award, each grantee authorizes such recipients to receive, possess, use, retain, and transfer the Data, in electronic or other form, for the purposes of assisting the Company in the implementation, administration, and management of the Plan and Awards and the grantee’s participation in the Plan, including any requisite transfer of such Data as may be required to a broker or other third party with whom the Company or the grantee may elect to deposit any shares of Stock. The Data related to a grantee will be held only as long as is necessary to implement, administer, and manage the Plan and Awards and the grantee’s participation in the Plan. A grantee may, at any time, view the Data held by the Company with respect to such grantee, request additional information about the storage and processing of the Data with respect to such grantee, recommend any necessary corrections to the Data with respect to the grantee, or refuse or withdraw the consents herein in writing, in any case without cost, by contacting his or her local human resources representative. The Company may cancel the grantee’s eligibility to participate in the Plan, and in the Committee’s discretion, the grantee may forfeit any outstanding Awards if the grantee refuses or withdraws the consents described herein. For more information on the consequences of refusal to consent or withdrawal of consent, grantees may contact their local human resources representative.  SECTION 17. 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 shareholders at which a quorum is present. Subject to such approval by the shareholders and to the requirement that no Stock may be issued hereunder prior to such approval, Stock Options and other Awards may be granted hereunder on and after adoption of this Plan by                                         21 

 

the Board. No grants of Stock Options and other Awards may be made hereunder after July 23, 2028 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.  SECTION 18. GOVERNING LAW        This Plan and all Awards and actions taken thereunder shall be governed by, and construed in accordance with, the laws of the Commonwealth of Massachusetts, applied without regard to conflict of law principles.  DATE INITIALLY APPROVED BY BOARD OF DIRECTORS: July 23, 2018  DATE INITIALLY APPROVED BY SHAREHOLDERS: October 24, 2018  DATE RESTATEMENT APPROVED BY BOARD OF DIRECTORS: January 22, 2019                                         22

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00291-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00291-of-00352.parquet"}]]