Document:

exv10w1

Exhibit 10.1

SEPARATION AGREEMENT AND RELEASE

     THIS SEPARATION AND RELEASE AGREEMENT (this “Agreement”) is made as of the 31st day
of March, 2010, between Progress Software Corporation, a Massachusetts corporation (the “Company”),
and Jeffrey Stamen (the “Executive”).

R E C I T A L S

     A. The Executive previously served as an executive officer of the Company.

     B. The Company and the Executive have agreed that the employment of the Executive with the
Company shall terminate as of March 31, 2010.

     C. The Company has agreed to provide the Executive with certain severance benefits in
connection with the Executive’s termination of employment, as described herein.

     D. The Executive accepts the terms of the Agreement.

     In consideration of the mutual covenants herein contained and in consideration of the
continuing employment of the Executive by the Company, the parties agree as follows.

     1. Termination Date. The employment of the Executive with the Company shall terminate
on March 31, 2010 (the “Termination Date”).

     2. Accrued Salary. The Company will issue a payment to the Executive on the
Termination Date equal to the total amount of the Executive’s outstanding wages and unused vacation
and floating holidays accrued through such date, less applicable deductions and withholdings, in
accordance with the Company’s regular payroll practices.

     3. Medical and Dental Benefits: Prior to the Termination Date, as a result of the
Executive’s change to part-time status, the Executive elected to continue medical and dental
coverage by electing COBRA, with the Company paying the COBRA premiums (less the amount the
Executive would have otherwise been required to contribute if he had continued on the Company’s
medical and dental plans as an employee with his current coverage elections).

     4. FY10 Bonus. The Executive shall remain eligible to receive a pro-rata portion
(based on the number of days employed with the Company during FY10) of the Executive’s bonus for
the fiscal year ended November 30, 2010 pursuant to the Company’s Executive and Key Contributor
Bonus Program (together, the “Program”), such payment, if any, to be made in accordance with the
terms of, and at the time provided in, the Program.

     5. Expense Reimbursement: The Company will reimburse the Executive for all actual
reasonable and customary business expenses incurred by the Executive (in the furtherance of Company
business) on or prior to the Termination Date in accordance with the

 

 

Company’s regular expense reimbursement policies. In order to qualify for reimbursement,
reimbursement requests for all such expenses must be submitted by April 15, 2010.

     6. Severance Benefits. Upon the Termination Date, the Executive will be entitled to
the following, subject to the other terms and conditions of this Agreement:

          (a) Salary Continuation. For a period of twelve (12) months after the Termination
Date, the Company will continue to pay the Executive’s Target Compensation as in effect as of
December 10, 2009 in accordance with the Company’s normal payroll practices and procedures and
subject to all applicable deductions and withholdings. Such payment shall commence on the first
payroll date after the Termination Date. Solely for purposes of Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”), each installment payment is considered a separate
payment. For purposes of this Paragraph 6(a)(i), the term “Target Compensation” shall mean the
total of all fixed (which for this purpose shall mean $250,000) and variable (which for this
purpose shall mean $180,000) cash compensation due the Executive based upon one hundred percent
(100%) attainment of performance levels.

          (b) Medical and Dental Benefits. The Company will continue to pay the COBRA premiums
in effect as of the Termination Date (less the amount Executive would have otherwise been required
to contribute for health benefits if Executive had continued on the Company’s medical and dental
plans as an employee with Executive’s current coverage elections (the “Employee COBRA Payment”)
until the earlier of (i) twelve (12) months after the Termination Date, or (ii) the date when
Executive become eligible for substantially equivalent health insurance coverage in connection with
new employment or self-employment (the “COBRA Premium Payment Period”). If Executive continues to
be eligible (under Federal law) and chooses to continue COBRA continuation coverage after the COBRA
Premium Payment Period ends, Executive will be required to pay the full monthly COBRA Premium in a
timely fashion. Although Executive’s eligibility for COBRA (as described in the Benefits
Information Attachment) is not contingent on Executive’s execution of this Agreement, the Company’s
obligation to pay the COBRA premiums in accordance with this paragraph is contingent upon
Executive’s execution of this Agreement. Note that all cost allocations and calculations required
by this paragraph will be made in accordance with the American Recovery and Reinvestment Act of
2009.

          (c) Stock Options. All unvested stock options held by the Executive which were
granted prior to the Termination Date under the Company’s stock option plans which would otherwise
vest and become fully exercisable during the one year period following the Termination Date shall
instead accelerate and become fully exercisable as of the Termination Date. The vesting of all
other outstanding stock options shall cease immediately as of the Termination Date. Unvested
options will be cancelled on the Termination Date. Vested options must be exercised on or before
December 31, 2010. Vested but unexercised options will be cancelled on January 1, 2011.

          (d) Restricted Stock Units. All shares of restricted equity held by the Executive
which were granted prior to the Termination Date under the Company’s stock option plans which would
otherwise become nonforfeitable and not subject to any restrictions

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during the one year period following the Termination Date shall instead become nonforfeitable
and not subject to any restrictions as of the Termination Date

          (e) Outplacement. Executive is entitled to outplacement services, at the Company’s
expense, as further described in the Keystone materials to be provided you on the Termination Date.
The Keystone program for which the Executive qualifies is entitled “Career Transition.”

          (f) Other Benefits: Except as otherwise expressly stated in this Agreement or the
Benefits Information Attachment to be provided you on the Termination Date, all of Executive’s
benefits as an employee of the Company will terminate as of the Termination Date.

     7. Covenants of the Executive. In consideration for, among other things, the
severance and other payments provided in this Agreement, Executive agrees to the following
covenants.

          (a) Return and Protection of Company Property. Executive agrees to return to the
Company all Company documents and property (except as set forth above) no later than five (5) days
after the Termination Date and to abide by the terms of his Employee Proprietary Information and
Confidentiality Agreement signed as of September 8, 2004 (the “Proprietary Information Agreement”).

          (b) Cooperation. Executive agrees to make himself available to the Company after the
Termination Date either by telephone or in person upon reasonable notice and with reasonable
accommodation to the Executive’s personal and business affairs, to assist the Company in connection
with any matter relating to services performed by Executive on behalf of the Company prior to the
Termination Date. The Executive, also upon reasonable notice and with reasonable accommodation to
his personal and business affairs, further agrees to cooperate with the Company in the defense or
prosecution of any claims or actions now in existence or which may be brought or threatened in the
future against or on behalf of the Company, its directors, shareholders, officers, or employees and
which relates to the aforesaid services, including without limitation, by meeting with the
Company’s counsel and appearing to testify truthfully in any proceeding without the necessity of a
subpoena. The Company shall reimburse the Executive for his reasonable documented travel expenses
incurred in connection with such cooperation. Notwithstanding the aforesaid, the Executive’s
obligations set forth above shall not apply to any matter in which the Executive’s interests are
materially adverse to those of the Company. Reimbursements of expenses shall be paid within thirty
(30) days of the Company’s receipt of an invoice from the Executive or his designee for the same.
Any reimbursement in one calendar year shall not affect the amount that may be reimbursed in any
other calendar year and a reimbursement (or right thereto) may not be exchanged or liquidated for
another benefit or payment. Any business expense reimbursements subject to Section 409A of the
Code shall be made no later than the end of the calendar year following the calendar year in which
such business expense is incurred by Executive. The Executive shall submit any such expense
requests in a sufficiently timely manner so as to permit the Company to comply with the previous
sentence.

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          (c) Non-Competition.

               (i) Executive recognizes the highly competitive nature of the Company’s business and that
Executive’s position with the Company and access to and use of the Company’s confidential records
and proprietary information renders the Executive special and unique. Executive hereby agrees that
for a period of one (1) year from the Termination Date (the “Restricted Period”), he shall not,
directly or indirectly, own, manage, operate, join, control, participate in, invest in or otherwise
be connected or associated with, in any manner, including as an officer, director, employee,
independent contractor, stockholder, member, partner, consultant, advisor, agent, proprietor,
trustee or investor, any Competing Business (as defined below); provided, however, that (i)
ownership of two percent (2%) or less of the stock or other securities of a publicly traded
corporation and (ii) passive ownership of less than a five percent (5%) interest as a limited
partner of a venture capital fund, private equity fund or similar investment vehicle or ownership
of shares in a mutual fund shall not constitute a breach of this Section, in each case under this
clause (ii), with respect to which the Executive has no role in the review, selection or management
of any investments. For purposes hereof, the term, “Competing Business,” shall mean IBM/WebSphere
Unit, Tibco, Informatica, Software AG and Oracle and, in each case, their respective subsidiaries.

               (ii) Notwithstanding the foregoing, if the Executive seeks employment with any subsidiary,
division, affiliate or unit of a Competing Business (a “Related Unit”) and if that Related Unit
does not compete with the Company or any subsidiary or other affiliate (a “Noncompeting Related
Unit”), the Executive may request a waiver of this Section 7(c) with respect to employment with
such Noncompeting Related Unit. The Company shall not unreasonably withhold its agreement to such
a waiver; provided that in no event may the Executive, engage in or assist in the activities of any
Related Unit that competes with the Company or any subsidiary or other affiliate at any time during
the Restricted Period.

               (iii) Executive acknowledges that the business of the Company is worldwide in scope and
therefore understands and agrees that there is no geographic limitation on the scope of this
Section 7(c). Executive further agrees that the nature of the Company’s confidential information
and the goodwill relationship that were developed for the Company during the Executive’s employment
support the continuation of the restrictions pursuant to this Section for one (1) year.
Notwithstanding the foregoing, if a court determines that the geographic scope of this Section or
the length of the Restricted Period is excessive, the parties agree that this Section should be
enforced to the maximum extent that the court determines to be permissible.

               (iv) The parties agree that, throughout his employment with the Company, the Executive has
been obligated to render personal services of a special, unique, unusual, extraordinary and
intellectual character, thereby giving this Agreement special value, and, in the event of a breach
or threatened breach of the covenants of the Executive in this Section 7, the injury or imminent
injury to the value and the goodwill of the Company’s business could not be reasonably or
adequately compensated in damages in an action at law. Accordingly, the Executive acknowledges
that, in addition to any other remedies that may be

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awarded, the Company shall be entitled to specific performance, injunctive relief or any other
equitable remedy against the Executive, without the posting of a bond, in the event of any breach
or threatened breach of any provision of this Agreement by the Executive. In addition, in the
event the Executive breaches or threatens to breach this Section 7 of this Agreement, such breach
or threatened breach will entitle the Company, without posting of a bond, to an injunction
prohibiting the Executive from violating the terms of this Section 7.

          (d) Non-Disparagement. Executive agrees that during the Restricted Period, except as
required by law or to enforce the terms of this Agreement, Executive shall not make any disparaging
statements about the Company (including for these purposes any subsidiary or affiliate), its
officers, directors, employees, products or services. For purposes of this Agreement, statements
in the course of testimony in a legal or regulatory proceeding or in response to an inquiry by a
governmental or other regulatory entity shall be considered to be “required by law.”

          (e) Release.

               (i) In consideration of the severance and other benefits provided hereunder, Executive, on
behalf of himself and his heirs, administrators, executors, successors and assigns, hereby
voluntarily releases and forever discharges the Company, its past, present and future subsidiaries
and affiliates, and its and their respective past, present and future directors, officers, agents,
shareholders, attorneys and employees and all of their respective heirs, successors, predecessors,
and assigns, (collectively the “Releasees”) of and from any and all claims, suits, liabilities,
demands, debts, damages, costs, obligations, agreements and causes of action of any kind
whatsoever, at law, in equity or otherwise known or unknown, or on any other basis which Executive
has or may have, either now or at any time before now, against the Company, including but not
limited to any claims based on Executive’s employment with the Company or the termination of
Executive’s employment with the Company or any other relation with the Company, any claims of
wrongful discharge, any claims of intentional or negligent misrepresentation, any claims of
discrimination, any claims under the Worker Adjustment and Retraining Notification Act (WARN) of
1988, the Equal Pay Act, the Fair Labor Standards Act, the Employee Retirement Income Security Act
of 1974, federal Family and Medical Leave Act; the federal Sarbanes-Oxley Act; and any claims under
the common law or any statute including, without implication of limitation, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Americans with Disabilities Act, the
Rehabilitation Act of 1973, the Massachusetts Fair Employment Practices Act, Mass. Gen. Laws ch.
151B, § 1 et seq., the Massachusetts Civil Rights Act, Mass. Gen. Laws ch.12, § 11H et seq., the
Massachusetts Equal Rights Act, Mass. Gen. Laws ch. 93, § 102 and Mass. Gen. Laws ch. 214, § 1C,
the Massachusetts Labor and Industries Act, Mass. Gen. Laws ch. 149, § 1 et seq., the Massachusetts
Privacy Act, Mass. Gen. Laws ch. 214, § 1B et seq., and the Massachusetts Family and Medical Leave
Act, Mass. Gen. Laws ch. 149, § 52D et seq., as these statutes have been from time to time amended,
and any and all other federal, state, county or local ordinances, statutes or regulations, all as
may be amended, and any other claim relating to or arising out of Executive’s employment with or
separation from the Company. Executive also hereby waives any claim for attorneys’ fees or costs
and any claim for reinstatement. Further, except for benefits under any Company benefit plans
that have

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vested or will vest according to the terms of those plans, the Company does not have, and
shall not have, any obligation to provide Executive with any payments, benefits, or consideration
other than the payments set forth in this Agreement. This release, however, does not apply to
Executive’s right to seek enforcement of the terms of this Agreement.

               (ii) Notwithstanding the generality of the preceding paragraph, the above release and waiver
of claims applies only to the extent permitted by law and, in the event any charge or claim is
permitted by law, Executive expressly waives his right to recover any relief, damages, and/or
monetary benefit as a result of any such charge or claim.

               (iii) Nothing in this Agreement shall prohibit or restrict Executive from (a) providing
information to, or otherwise assisting in, an investigation by the Massachusetts Commission Against
Discrimination (“MCAD”), the United States Congress, the Securities and Exchange Commission
(“SEC”), the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board
(“NLRB”) or any other federal regulatory or law enforcement agency or self-regulatory organization
(“SRO”) and/or (b) testifying, participating, or otherwise assisting in a proceeding relating to an
alleged violation of any federal law relating to fraud or any rule or regulation of the MCAD, SEC,
EEOC, NLRB or any SRO.

               (iv) Executive represents and warrants that he has received all leave (paid or unpaid),
compensation, wages, bonuses, commissions, and/or benefits to which he may be entitled and that no
other leave (paid or unpaid), compensation, wages, bonuses, commissions, and/or benefits are due to
Executive, except as provided in this Agreement. Executive furthermore affirms that he has no
known workplace injuries or occupational diseases and have not been denied any leave requested
under the Family and Medical Leave Act.

               (v) Executive hereby acknowledges that he has been given a reasonable time to consider this
Agreement before executing it. If this Agreement is not signed by Executive and returned to the
Company so that the Company receives it no later than the close of business on April 21, 2010, then
the severance benefits provided in this Agreement will not be provided to Executive by the Company.
In the event that Executive executes and returns this Agreement by April 21, 2010, acknowledges
that such decision was entirely voluntary and that he had the opportunity to consider the terms and
conditions set forth in this Agreement for the entire period, then the severance benefits provided
in this Agreement will be provided to Executive by the Company.

               (vi) Except as expressly set forth in this Agreement, no representations of any kind or
character have been made to Executive by the Company, or by any of their respective directors,
officers, employees, representatives, or attorneys, to induce the execution of this release.
Executive further acknowledges that the only representations made to Executive in order to obtain
my consent to this Agreement are set forth in this Agreement, and that Executive is signing this
Agreement voluntarily and without coercion, intimidation or threat of retaliation. Executive
further acknowledges that he has been advised to consult with an attorney before signing this
Agreement and that he has had

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an opportunity to seek the advice of legal counsel and that the terms of this release have
been completely read by Executive and that those terms are fully understood by Executive.

     8. Successors

          (a) Company’s Successors. Any successor to the Company (whether direct or indirect
and whether by purchase, lease, merger, consolidation, liquidation or otherwise) or to all or
substantially all of the Company’s business and/or assets shall assume the obligations under this
Agreement and agree expressly to perform the obligations under this Agreement in the same manner
and to the same extent as the Company would be required to perform such obligations in the absence
of a succession. For all purposes under this Agreement, the term “Company” shall include any
successor to the Company’s business and/or assets which executes and delivers the assumption
agreement described in this subsection (a) which becomes bound by the terms of this Agreement by
operation of law.

          (b) Executive’s Successors. The terms of this Agreement and all rights of the
Executive’s hereunder shall inure to the benefit of, and be enforceable by, the Executive’s
personal or legal representatives, executors, administrators, successors, heirs, distributes,
devisees and legatees.

     9. Notice. Notices and all other communications contemplated by this Agreement shall
be in writing and shall be deemed to have been duly given when personally delivered or when mailed
by U.S. registered or certified mail, return receipt requested and postage prepaid. In the case of
the Executive, mailed notices shall be addressed to him or her at the home address which he or she
most recently communicated to the Company in writing. In the case of the Company, mailed notices
shall be addressed to its corporate headquarters, and all notices shall be directed to the
attention of its General Counsel.

     10. Miscellaneous Provisions

          (a) No Duty to Mitigate. The Executive shall not be required to mitigate the amount
of any payment contemplated by this Agreement (whether by seeking new employment or in any other
manner), nor shall any such payment be reduced by any earnings that the Executive may receive from
any other source.

          (b) Waiver. No provision of this Agreement shall be modified, waived or discharged
unless the modification, waiver or discharge is agreed in writing and signed by the Executive and
by an authorized officer of the Company (other than the Executive). No waiver by either party of
any breach of, or compliance with, any condition or provision of this Agreement by the other party
shall be considered a waiver of any other condition or provision of the same condition or provision
at another time.

          (c) Entire Agreement. Except with respect to the terms of any written employment
agreement, if any, by and between the Company and the Executive that is signed on behalf of the
Company, no agreements, representations or understandings (whether oral or

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written and whether express or implied) which are not expressly set forth in this Agreement
have been made or entered into by either party with respect to the subject matter hereof.

          (d) Choice of Law. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the Commonwealth of Massachusetts.

          (e) Severability. The invalidity or enforceability of any provisions or provisions of
this Agreement shall not affect the validity or enforceability of any other provision hereof, which
shall remain in full force and effect.

          (f) Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by final and binding arbitration in Massachusetts, in
accordance with the rules of the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator’s award in any court having jurisdiction. In the event the Executive
prevails in an action or proceeding brought to enforce the terms of this Agreement or to enforce
and collect on any non-de minimis judgment entered pursuant to this Agreement, the Executive shall
be entitled to recover all costs and reasonable attorney’s fees.

          (g) No Assignment of Benefits. The rights of any person to payments or benefits under
this Agreement shall not be made subject to option or assignment, either by voluntary or
involuntary assignment or by operation of law, including (without limitation) bankruptcy,
garnishment, attachment or other creditor’s process, and any action in violation of this subsection
(g) shall be void.

          (h) Employment Taxes. All payments made pursuant to this Agreement will be subject to
withholding of applicable income and employment taxes.

          (i) Assignment by Company. The Company may assign its rights under this Agreement to
an affiliate and an affiliate may assign its rights under this Agreement to another affiliate of
the Company or to the Company; provided, however, that no assignment shall be made if the net worth
of the assignee is less than the net worth of the Company at the time of the assignment. In the
case of any such assignment, the term “Company” when used in a section of the Agreement shall mean
the corporation that actually employs the Executive.

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

[SIGNATURE PAGE TO FOLLOW]

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     IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the
Company by its duly authorized officer, as of the date first above written.

	 	 	 	 	 
	PROGRESS SOFTWARE CORPORATION	 	 
	 
	 	 	 	 
	By:

	 	/s/Richard D. Reidy
 

Richard D. Reidy
	 	 
	 

	 	President and Chief Executive Officer	 	 
	 
	 	 	 	 
	JEFFREY STAMEN	 	 
	 
	 	 	 	 
	 

	 	/s/Jeffrey Stamen	 	 
	 

	 	 	 	 

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Exhibit 10.2

PROGRESS SOFTWARE CORPORATION

2002 NONQUALIFIED STOCK PLAN

(Reflecting amendments thru March 18, 2010)

SECTION 1. General Purpose of the Plan; Definitions

     The name of the plan is the Progress Software Corporation 2002 Nonqualified Stock Plan (the
“Plan”). The purpose of the Plan is to encourage and enable employees of Progress Software
Corporation, a Massachusetts corporation (the “Company”), and its Subsidiaries to acquire a
proprietary interest in the Company. It is anticipated that providing employees with a direct
stake in the Company’s welfare will assure a closer identification of their interests with those of
the Company and its stockholders, thereby stimulating their efforts on the Company’s behalf and
strengthening their desire to remain with the Company. The Company intends that this purpose will
be effected by the granting of Awards (as defined below) under the Plan.

     The following terms shall be defined as set forth below:

     “Affiliate” means any company in an “affiliated group,” as such term is defined in Section
1504(a) of the Code, which includes the Company.

     “Award” or “Awards,” except where referring to a particular category of grant under the Plan,
shall include Non-Statutory Stock Options, Restricted Stock Awards, Unrestricted Stock Awards and
Performance Share Awards.

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

     “Cause” means (i) any material breach by the participant of any agreement to which the
participant and the Company are both parties, (ii) any act or omission to act by the participant
which may have a material and adverse effect on the Company’s business or on the participant’s
ability to perform services for the Company, including, without limitation, the commission of any
crime (other than ordinary traffic violations), or (iii) any material misconduct or material
neglect of duties by the participant in connection with the business or affairs of the Company or
any affiliate of the Company.

     “Change of Control” shall have the meaning set forth in Section 15.

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

     “Committee” shall mean the Board or, if appointed by the Board, a committee of not less than
two (2) directors. It is the intention of the Company that the Plan shall be administered by
“non-employee directors” within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934, as amended, but the authority and validity of any act taken or not taken by the

 

Committee shall not be affected if any director administering the Plan is not a non-employee
director.

     “Disability” means disability as set forth in Section 22(e)(3) of the Code.

     “Effective Date” means the date on which the Plan is adopted by the Board as set forth in
Section 17.

     “Eligible Person” shall have the meaning set forth in Section 4.

     “Fair Market Value” on any given date means the closing price per share of the Stock on such
date as reported by a nationally recognized stock exchange, or, if the Stock is not listed on such
an exchange, as reported by the Nasdaq Stock Market, or, if the Stock is not quoted by the Nasdaq
Stock Market, the fair market value of the Stock as determined by the Committee.

     “Non-Statutory Stock Option” means any stock option that is not an incentive stock option as
defined in Section 422 of the Code.

     “Normal Retirement” means retirement from active employment with the Company and its
Subsidiaries in accordance with the retirement policies of the Company and its Subsidiaries then in
effect.

     “Officer” means an officer as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934,
as amended.

     “Performance Share Award” means an Award granted pursuant to Section 8.

     “Restricted Stock” shall have the meaning set forth in Section 6.

     “Restricted Stock Award” means an Award granted pursuant to Section 6.

     “Stock” means the common stock, $0.01 par value per share, of the Company, subject to
adjustments pursuant to Section 3.

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

     “Subsidiary” means a subsidiary as defined in Section 424 of the Code.

     “Unrestricted Stock Award” means an award granted pursuant to Section 7.

			
	SECTION 2.	 	Administration of Plan; Committee Authority to Select Participants and Determine Awards

     (a) Committee. The Plan shall be administered by the Committee. The Committee shall select
one of its members as its chairman and shall hold its meetings at such times and places as it shall
deem advisable. A majority of its members shall constitute a quorum, and all actions of the
Committee shall require the affirmative vote of a majority of its members. Any action may be taken
by a written instrument signed by all of the members, and any action so

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taken shall be as fully effective as if it had been taken by a vote of a majority of the members at
a meeting duly called and held. Except as specifically reserved to the Board under the terms of
the Plan, the Committee shall have full and final authority to operate, manage and administer the
Plan on behalf of the Company. Action by the Committee shall require the affirmative vote of a
majority of all members thereof.

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

     (i) to select the persons 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 Non-Statutory
Stock Options, Restricted Stock, Unrestricted Stock and Performance Shares, or any combination
of the foregoing, granted to any one or more participants;

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

     (iv) to determine and modify 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 participants, and to approve the form of written instruments
evidencing the Awards; provided, however, that no such action shall adversely affect rights
under any outstanding Award without the participant’s consent;

     (v) to accelerate the exercisability or vesting of all or any portion of any Award;

     (vi) subject to the provisions of Section 5(b), to extend the period in which any
outstanding Stock Option may be exercised;

     (vii) to determine whether, to what extent, and under what circumstances Stock and other
amounts payable with respect to an Award shall be deferred either automatically or at the
election of the participant and whether and to what extent the Company shall pay or credit
amounts equal to interest (at rates determined by the Committee) or dividends or deemed
dividends on such deferrals;

     (viii) to delegate to other persons the responsibility for performing ministerial actions
in furtherance of the Plan’s purpose; and

     (ix) 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 Committee shall be binding on all persons, including
the Company and Plan participants.

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SECTION 3. Shares Issuable under the Plan; Mergers; Substitution

     (a) Shares Issuable. The maximum number of shares of Stock with respect to which Awards may
be granted under the Plan, subject to adjustment upon changes in capitalization of the Company as
provided in this Section 3, shall be six million five hundred thousand (6,500,000) shares of Stock.
For purposes of this limitation, if any shares of Stock covered by an Award granted under the
Plan, or to which such an Award relates, are repurchased or forfeited, or if an Award has expired,
terminated or been canceled for any reason whatsoever (other than by reason of exercise or
vesting), then such shares of Stock or the shares of Stock covered by such Award, as the case may
be, shall be added back to the shares of Stock with respect to which Awards may be granted under
the Plan. Subject to such overall limitation, any type or types of Award may be granted with
respect to shares of Stock. Shares of Stock issued under the Plan may be authorized but unissued
shares or shares reacquired by the Company.

     (b) Stock Dividends, Mergers, etc. In the event that the Company effects a stock dividend,
stock split or similar change in capitalization affecting the Stock, the Committee shall make
appropriate adjustments in (i) the number and kind of shares of stock or securities with respect to
which Awards may thereafter be granted (including without limitation the limitations set forth in
Section 3(a) above), (ii) the number and kind of shares remaining subject to outstanding Awards,
and (iii) the option or purchase price in respect of such shares. In the event of the merger,
consolidation, dissolution or liquidation of the Company, the Committee in its sole discretion may,
as to any outstanding Awards, make such substitution or adjustment in the aggregate number of
shares reserved for issuance under the Plan and in the number and purchase price (if any) of shares
subject to such Awards as it may determine and as may be permitted by the terms of such
transaction, or accelerate, amend or terminate such Awards upon such terms and conditions as it
shall provide (which, in the case of the termination of the vested portion of any Award, shall
require payment or other consideration which the Committee deems equitable in the circumstances).

     (c) Substitute Awards. The Committee may grant Awards under the Plan by assumption of or in
substitution for stock and stock-based awards granted or issued by another company to its
directors, officers, employees, consultants and other service providers if such persons become
Eligible Persons in connection with an acquisition of that company or any division thereof by the
Company, whether by merger, consolidation, purchase of stock, purchase of assets or otherwise. The
Committee may direct that the substitute awards be granted on such terms and conditions as the
Committee considers appropriate in the circumstances. Shares which may be delivered under such
substitute awards may be in addition to the maximum number of shares provided for in Section 3(a).

     (d) Effect of Awards. From and after March 18, 2010, the grant of any full value Award (i.e.,
an Award other than a Stock Option) shall be deemed, for purposes of determining the number of
shares of Stock available for issuance under Section 3(a), as an Award of 2.25 shares of Stock for
each such share of Stock actually subject to the Award. The grant of a Stock Option shall be
deemed, for purposes of determining the number of shares of Stock available for issuance under
Section 3(a), as an Award for one share of Stock for each such share of Stock actually subject to
the Award.

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SECTION 4. Eligibility

     Awards may be granted to employees of the Company or its Subsidiaries, and to consultants or
other persons who render services to the Company, regardless of whether they are also employees
(“Eligible Persons”), provided, however, that members of the Board and Officers are not eligible to
receive Awards under the Plan.

SECTION 5. Stock Options

     The Committee may grant Stock Options to Eligible Persons pursuant to the Plan. Any Stock
Option granted under the Plan shall be in writing and in such form as the Committee may from time
to time approve. Stock Options granted under the Plan shall be Non-Statutory Stock Options.

     The Committee in its discretion may determine the effective date of Stock Options. Stock
Options granted pursuant to this Section 5 shall be subject to the following terms and conditions
and the terms and conditions of Section 9 and shall contain such additional terms and conditions,
not inconsistent with the terms of the Plan, as the Committee shall deem desirable:

     (a) Exercise Price. The exercise price per share for the Stock covered by a Stock Option
granted pursuant to this Section 5 shall be determined by the Committee at the time of grant;
provided, however, that the exercise price shall not be less than Fair Market Value on the date of
grant.

     (b) Option Term. The term of each Stock Option shall be fixed by the Committee, but no Stock
Option shall be exercisable more than ten (10) years after the date the Stock Option is granted,
except that no Stock Option granted after March 18, 2010 shall be exercisable more than seven (7)
years after the date the Stock Option is granted.

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

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

     (i) in cash, by certified or bank check or other instrument acceptable to the
Committee;

     (ii) with the consent of the Committee, in the form of shares of Stock owned by the
optionee for a period of at least six (6) months and not then subject to restrictions. Such
surrendered shares shall be valued at Fair Market Value on the exercise date;

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     (iii) with the consent of the Committee, by the optionee delivering to the Company a
properly executed exercise notice together with irrevocable instructions to a broker to
promptly deliver to the Company cash or a check payable and acceptable to the Company to pay
the purchase price; provided that in the event the optionee chooses to pay the purchase
price as so provided, the optionee and the broker shall comply with such procedures and
enter into such agreements of indemnity and other agreements as the Committee shall
prescribe as a condition of such payment procedure. The Company need not act upon such
exercise notice until the Company receives full payment of the exercise price; or

     (iv) by any other means (including, without limitation, by delivery of a promissory
note of the optionee payable on such terms as are specified by the Committee; provided,
however, that the interest rate borne by such note shall not be less than the lowest
applicable federal rate, as defined in Section 1247(d) of the Code) which the Committee
determines are consistent with the purpose of the Plan and with applicable laws and
regulations.

     The delivery of certificates representing 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 Stock
Option or imposed by applicable laws and regulations, as determined by the Committee in its sole
discretion.

     (e) Transferability of Options. No Stock Option shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution, and all Stock Options shall be
exercisable, during the optionee’s lifetime, only by the optionee or his or her legal
representative; provided, however, that the Committee may, in the manner established by the
Committee, permit the transfer, without payment of consideration, of a Non-Statutory Stock Option
by an optionee to a member of the optionee’s immediate family or to a trust or partnership whose
beneficiaries are members of the optionee’s immediate family; and such transferee shall remain
subject to all the terms and conditions applicable to the option prior to the transfer. For
purposes of this provision, an optionee’s “immediate family” shall mean the holder’s spouse,
children and grandchildren.

     (f) Form of Settlement. Shares of Stock issued upon exercise of a Stock Option shall be free
of all restrictions under the Plan, except as otherwise provided in this Plan or in the terms of
such Stock Option.

SECTION 6. Restricted Stock Awards

     (a) Nature of Restricted Stock Award. The Committee in its discretion may grant Restricted
Stock Awards to any Eligible Person, entitling the recipient to acquire, for a purchase price
determined by the Committee (but not less than Fair Market Value on the date of grant), shares of
Stock subject to such restrictions and conditions as the Committee may determine at the time of
grant (“Restricted Stock”), including continued employment and/or achievement of pre-established
performance goals and objectives.

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     (b) Acceptance of Award. A participant who is granted a Restricted Stock Award shall have no
rights with respect to such Award unless the participant shall have accepted the Award within ten
(10) days (or such shorter date as the Committee may specify) following the delivery of written
notice to the participant of the Award by making payment to the Company of the specified purchase
price of the shares covered by the Award and by executing and delivering to the Company a written
instrument that sets forth the terms and conditions applicable to the Restricted Stock in such form
as the Committee shall determine.

     (c) Rights as a Stockholder. Upon complying with Section 6(b) above, a participant shall have
all the rights of a stockholder with respect to the Restricted Stock, including voting and dividend
rights, subject to non-transferability restrictions and Company repurchase rights described in this
Section 6 and subject to such other conditions contained in the written instrument evidencing the
Restricted Stock Award. Unless the Committee shall otherwise determine, certificates evidencing
shares of Restricted Stock shall remain in the possession of the Company until such shares are
vested as provided in Section 6(e) below.

     (d) Restrictions. Shares of Restricted Stock may not be sold, assigned, transferred, pledged
or otherwise encumbered or disposed of except as specifically provided herein. In the event of
termination of employment with or services to the Company and its Subsidiaries for any reason
(including death, Disability, Normal Retirement, and voluntary termination by the participant), the
Company shall have the right, at the discretion of the Committee, to repurchase shares of
Restricted Stock with respect to which conditions have not lapsed at their purchase price from the
participant or the participant’s legal representative. The Company must exercise such right of
repurchase within sixty (60) days following such termination of employment (unless otherwise
specified in the written instrument evidencing the Restricted Stock Award).

     (e) Vesting of Restricted Stock. The Committee 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
shall lapse. 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.” Subject to Section 12,
the Committee at any time may accelerate such date or dates and otherwise waive or amend any
conditions of the Award.

     (f) Waiver, Deferral and Reinvestment of Dividends. The written instrument evidencing the
Restricted Stock Award may require or permit the immediate payment, waiver, deferral or investment
of dividends paid on the Restricted Stock.

SECTION 7. Unrestricted Stock Awards

     (a) Grant or Sale of Unrestricted Stock. The Committee in its discretion may grant or sell to
any Eligible Person shares of Stock free of any restrictions under the Plan (“Unrestricted Stock”)
at a purchase price determined by the Committee. Shares of Unrestricted Stock may be granted or
sold as described in the preceding sentence in respect of past services or other valid
consideration.

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     (b) Restrictions on Transfers. The right to receive Unrestricted Stock may not be sold,
assigned, transferred, pledged or otherwise encumbered, other than by will or the laws of descent
and distribution.

SECTION 8. Performance Share Awards

     A Performance Share Award is an award entitling the recipient to acquire shares of Stock upon
the attainment of specified performance goals. The Committee may make Performance Share Awards
independent of or in connection with the granting of any other Award under the Plan. Performance
Share Awards may be granted under the Plan to any Eligible Person. The Committee in its discretion
shall determine whether and to whom Performance Share Awards shall be made, the performance goals
applicable under each such Award, the periods during which performance is to be measured, the
conditions under which such Award shall terminate, and all other limitations and conditions
applicable to the awarded Performance Shares.

SECTION 9. Termination of Stock Options

     (a) Standard Termination Provisions. Stock Options shall terminate and no portion
will be exercisable on the earliest to occur of the following:

     (i) Expiration Date. The expiration date of such Stock Option as specified in
the option grant certificate.

     (ii) Termination by Death. If the participant ceases to be an employee of the
Company or its Subsidiaries on account of death, 24 months from the employment termination
date, or 10 days after the end of the blackout period in effect during such post-termination
period, if later, if such participant’s estate or beneficiary is subject to such blackout.

     (iii) Termination by Reason of Disability. If the participant ceases to be an
employee of the Company or a Subsidiary on account of Disability, 12 months from the
employment termination date, or 10 days after the end of the blackout period in effect
during such post-termination period, if later, if such participant is subject to such
blackout.

     (iv) Termination for Cause. If the participant’s employment with the Company
or a Subsidiary is terminated for Cause, the employment termination date.

     (v) Other Termination. If the participant’s employment is terminated in all
other circumstances, 90 days after the employment termination date or 10 days after the end
of the blackout period in effect during such post-termination period, if later, if such
participant is subject to such blackout.

     (b) Post-Termination Exercise Period. During the post-termination exercise period,
the participant may exercise only the portion of Stock Options exercisable on the employment
termination date, and the portion of Stock Options that is not exercisable on the employment
termination date shall be automatically forfeited on the employment termination date. If the
participant’s employment terminates on account of death or Disability, Stock Options shall

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become immediately and fully vested and exercisable.

     (c) Committee Discretion. Notwithstanding the foregoing, the Committee may grant
Stock Options under the Plan which contain such terms and conditions with respect to termination as
the Committee, in its discretion, may from time to time determine.

SECTION 10. Tax Withholding

     (a) Payment by Participant. Each participant 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 participant for Federal income tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding the payment of, any Federal, state, local or
other taxes of any kind required by law to be withheld 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 participant.

     (b) Payment in Shares. A participant may elect, with the consent of the Committee, to have
such tax withholding obligation satisfied, in whole or in part, by (i) authorizing the Company to
withhold from shares of Stock to be issued pursuant to an Award a number of shares with an
aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the
minimum withholding amount due with respect to such Award, or (ii) transferring to the Company
shares of Stock owned by the participant for a period of at least six (6) months and with an
aggregate Fair Market Value (as of the date the withholding is effected) that would satisfy the
minimum withholding amount due with respect to such Award.

SECTION 11. Transfer, Leave of Absence, Etc.

     For purposes of the Plan, a transfer to the employment of the Company from a Subsidiary or
from the Company to a Subsidiary, or from one Subsidiary to another, shall not be deemed a
termination of employment. Whether authorized leave of absence, or absence on military or
government service, shall constitute termination of the employment relationship between the Company
and the participant shall be determined by the Committee at the time thereof.

SECTION 12. Amendments and Termination

     The Board may at any time amend or discontinue the Plan in any manner allowed by law and the
Committee may at any time, subject to Section 2, amend or cancel any outstanding Award (or provide
substitute Awards) 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.

SECTION 13. Status of Plan

     With respect to the portion of any Award that has not been exercised, a participant shall have
no rights greater than those of a general creditor of the Company unless the Committee shall
otherwise expressly determine in connection with any Award or Awards. In its sole discretion, the
Committee 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,

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provided that the existence of such trusts or other arrangements is consistent with the provision
of the foregoing sentence.

SECTION 14. Lockup Agreement

     The acceptance of any Award under this Plan by the participant or any subsequent holder shall
constitute the agreement of such person that, upon the request of the Company or the underwriters
managing any underwritten offering of the Company’s securities, such person will not, for a period
of time (not to exceed one hundred eighty (180) days) following the effective date of any
registration statement filed by the Company under the Securities Act of 1933, as amended, sell,
make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any
shares of Stock received pursuant to such Award, without the prior written consent of the Company
or such underwriters, as the case may be, and that such person will execute and deliver to the
Company or such underwriters a written agreement to that effect, in such form as the Company or
such underwriters shall designate.

SECTION 15. Change in Control

	(a)	 	Upon the occurrence of a Change of Control as defined in this Section 15:

     (i) subject to the provisions of clause (iii) below, after the effective date of such
Change of Control, each holder of an outstanding Stock Option, Conditional Stock Award,
Performance Share Award or Stock Appreciation Right shall be entitled, upon exercise of such
Award, to receive, in lieu of shares of Stock (or consideration based upon the Fair Market
Value of Stock), shares of such stock or other securities, cash or property (or
consideration based upon shares of such stock or other securities, cash or property) as the
holders of shares of Stock received in connection with the Change of Control;

     (ii) the Committee may accelerate the time for exercise of, and waive all conditions
and restrictions on, each unexercised and unexpired Stock Option, Conditional Stock Award,
Performance Share Award and Stock Appreciation Right, effective upon a date prior or
subsequent to the effective date of such Change of Control, specified by the Committee; or

     (iii) each outstanding Stock Option, Conditional Stock Award, Performance Share Award
and Stock Appreciation Right may be cancelled by the Committee as of the effective date of
any such Change of Control provided that (x) notice of such cancellation shall be given to
each holder of such an Award and (y) each holder of such an Award shall have the right to
exercise such Award to the extent that the same is then exercisable or, if the Committee
shall have accelerated the time for exercise of all such unexercised and unexpired Awards,
in full during the 30-day period preceding the effective date of such Change of Control.

     (b) “Change of Control” shall mean the occurrence of any one of the following events:

 - 10 - 

 

     (i) any “person” (as such term is used in Sections 13(d) and 14(d)(2) of the Act)
becomes a “beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the
Act) (other than the Company, any trustee or other fiduciary holding securities under an
employee benefit plan of the Company, or any corporation owned, directly or indirectly, by
the shareholders of the Company in substantially the same proportions as their ownership of
stock of the Company), directly or indirectly, of securities of the Company representing
thirty-five percent (35%) or more of the combined voting power of the Company’s then
outstanding securities; or

     (ii) persons who, as of January 1, 1997, constituted the Company’s Board (the
“Incumbent Board”) 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 January 1, 1997 whose election was approved by, or who was nominated with the
approval of, at least a majority of the directors then comprising the Incumbent Board shall,
for purposes of this Plan, be considered a member of the Incumbent Board; or

     (iii) the shareholders of the Company approve a merger or consolidation of the Company
with any other corporation or other entity, other than (a) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 65% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after such merger
or consolidation or (b) a merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no “person” (as hereinabove defined)
acquires more than 50% of the combined voting power of the Company’s then outstanding
securities; or

     (iv) the shareholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or substantially
all of the Company’s assets.

SECTION 16. General Provisions

     (a) No Distribution; Compliance with Legal Requirements. The Committee may require each
person acquiring shares 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, in such form as
the Committee shall in its sole discretion deem advisable.

     No shares of Stock shall be issued pursuant to an Award until, in the opinion of the
Committee, all applicable securities laws and other legal and stock exchange requirements have been
satisfied. The Committee 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. Delivery of stock certificates to participants under this
Plan shall be deemed effected for all purposes when the Company or a stock transfer agent

 - 11 - 

 

of the Company shall have delivered such certificates in the United States mail, addressed to the
participant, at the participant’s last known address on file with the Company.

     (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, subject to stockholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases. The adoption of the Plan or any
Award under the Plan does not confer upon any employee any right to continued employment with the
Company or any Subsidiary.

SECTION 17. Effective Date of Plan

     The Plan shall become effective upon its adoption by the Board.

SECTION 18. Governing Law

     This Plan and each Award under the Plan shall be governed by, and construed and enforced in
accordance with, the substantive laws of the Commonwealth of Massachusetts without regard to its
principles of conflicts of laws.

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