Document:

Exhibit 10.07

 

AMENDED
AND RESTATED

EMPLOYMENT
AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”),
dated as of this 29 day of September, 2008 (the “Effective Date”) by and
between SCOTT PIPER, an individual (the “Executive”), and NEW FRONTIER MEDIA,
INC., a Colorado corporation with offices at 7007 Winchester Circle, Suite 200,
Boulder, CO 80301, as well as its affiliates and subsidiaries whether now in
existence or formed in the future. (“NFM”), recites and provides as follows:

 

WHEREAS,
Executive is and has been previously employed by NFM pursuant to one or more
employment agreements that are superseded and replaced by this Agreement in
their entirety;

 

WHEREAS,
NFM desires to retain the services of Executive, and Executive desires to be
employed by NFM, all on the terms and subject to the conditions set forth
herein;

 

NOW,
THEREFORE, in consideration of the foregoing premises and the mutual covenants
herein contained, NFM and Executive agree as follows:

1.             TERM. 
The Term of this Agreement shall begin
as of the Effective Date and shall continue until midnight on April 30,
2010, or such date as the Agreement is terminated
by either party as hereinafter provided (the “Term”).

 

2.             TERMS OF EMPLOYMENT.

 

A.            POSITION AND DUTIES.

 

(i)            During the Term, Executive shall have
the title of Chief Information Officer and shall perform such executive duties
as are commensurate with such title.

 

(ii)           Executive’s services shall be
performed at NFM’s headquarters in Boulder, Colorado.  However, Executive may also be required by
his job responsibilities to travel on NFM business, and Executive agrees to do
so.

 

(iii)          During the Term, Executive agrees to
devote his full-time and attention to the business and affairs of NFM.  Executive’s employment under this Agreement
shall be Executive’s exclusive employment during the Term of this Agreement.  Service on any other company’s board of
directors by Executive requires the written consent of the Compensation
Committee of the Board of Directors of NFM (“Compensation Committee”).

 

B.            COMPENSATION.

 

(i)            Base Salary.  During the Term, Executive shall receive a
base salary (“Base Salary”), which shall be paid in equal installments on a bi-weekly
basis, at the rate of Two Hundred Twenty-Five Thousand Dollars ($225,000.00)  per annum, which Base Salary may be reviewed and adjusted,
but in no event decreased, annually.  The
term “Base Salary” as used throughout this Agreement shall mean the base salary

paid to Executive
as so increased during the Term.  Any
increase in Base Salary shall not serve to limit or reduce any other obligation
to the Executive under this Agreement.  The Executive’s Base Salary shall be subject to all
applicable federal, state and local withholding taxes and required withholdings under any NFM benefits
plans Executive participates in.

 

(ii)           Discretionary Bonus.
 In addition to Executive’s Base Salary, the
Compensation Committee may, at its sole discretion award to Executive annual
bonus(es) which shall be awarded based upon factors and individual and/or
company performance criteria established at the sole discretion of NFM.

 

 (iii)         All
bonuses payable to Executive pursuant to subsections (ii), above, shall be paid
within two and one-half (2 1/2) months of the end of the fiscal year for which
it is awarded.  No discretionary bonus
shall be payable to Executive in connection with a fiscal year if Executive’s
employment is terminated for “Cause” (as defined in Section 3(C), below)
prior to the end of the applicable fiscal year. 
Discretionary bonuses following termination prior to the end of the
applicable fiscal year for reasons other than Cause may be paid depending upon
the exercise of Compensation Committee discretion.  The foregoing shall not apply to bonuses
payable as a result of a “Change in Control Termination” (as defined below), which
shall be paid pursuant to Section 3(F).

 

(iv)          Stock Options.  Executive shall be eligible to receive stock
options under the terms and conditions of any applicable Stock Option Plan
approved by shareholders of NFM, on the terms and conditions set forth in such
a plan.  Stock Options shall be granted
at the discretion of the Board of Directors based upon the recommendations of
the Compensation Committee.

 

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(v)           Expenses.  During the Term, Executive shall be entitled
to receive reimbursement for all employment-related expenses incurred by
Executive in accordance with the policies, practices and procedures of NFM as
in effect generally from time to time after the Effective Date with respect to
other employees at Executive’s level within NFM.

 

(vi)          Vacation.  Executive acknowledges that NFM has no policy
concerning vacation time or sick leave applicable to its executive level
employees and, by executing this Agreement, Executive acknowledges and agrees
that he shall not accrue any such vacation or sick leave benefits during the
Term.  Executive is authorized to take
paid time off provided he meets his professional and productivity obligations
to NFM as determined by the Chief Operating Officer of NFM.  Executive is to coordinate time off with the
Chief Operating Officer or his designee.

 

(vii)         Car Allowance.  During the Term, the Executive shall be
entitled to an $850 a month car allowance in accordance with NFM’s car allowance
policy, in lieu of expenses associated with the operation of his automobile.

 

(viii)        Other Benefits.  During the Term, Executive shall be entitled
to such health insurance and other benefits, in accordance with the policies,
programs and practices of NFM which are in effect from time to time after the
Effective Date with respect to other employees at Executive’s level within NFM.

 

(ix)           Relationship Subsequent
to this Agreement.  On or before the
end of the Term, NFM and Executive shall address the subject of a new or
extended employment agreement to take effect upon the expiration of this
Agreement.  If the parties do not execute
a new written agreement upon the expiration of this Agreement, but the parties
are negotiating a new agreement in good-faith, Executive shall continue to be
paid the Base Salary then in effect in regular bi-weekly installments until a
new agreement is executed.

 

3.             TERMINATION OF EMPLOYMENT.

 

A.            DEATH. 
If the Executive dies while employed by NFM,
the Executive’s employment shall terminate on the date of death and NFM shall
pay to the Executive’s executor, legal representative, administrator or
designated beneficiary, as applicable, any amounts earned, accrued and owing but not yet paid under Section 2
above and any benefits accrued and due
under any applicable benefit plans and programs of NFM, which amounts shall be
paid within the time frames specified by Colorado state wage law.  Otherwise, NFM shall have no further
liability or obligation under this Agreement to the Executive’s executors,
legal representatives, administrators, 

heirs or assigns or any other person claiming under or through the
Executive.

 

B.            DISABILITY.  If the
Executive incurs a Disability (as defined below) during the Term, the Executive’s
employment shall terminate on the date of Disability.  If the Executive’s employment terminates on
account of his Disability, the Executive shall be entitled to receive any
amounts earned, accrued and owing but
not yet paid under Section 2 above and any benefits accrued and due under any applicable benefit plans and
programs of NFM, which amounts shall be paid within the time frames specified
by Colorado state wage law.  For purposes
of this Agreement, the term “Disability” shall have the same meaning as under NFM
long-term disability plan, or if there is no such plan, if the Executive by
virtue of ill health or other disability is unable to perform substantially and
continuously the duties assigned to him (as determined by the Board at its sole
discretion) for more than 90 consecutive or non-consecutive days out of any 6
consecutive month period.

 

C.            CAUSE.  NFM may
terminate the Executive’s employment at any time for Cause (as defined below)
upon written notice to the Executive (subject to the Executive’s opportunity to
cure described below), in which event all payments under this Agreement shall
cease, except for any amounts earned,
accrued and owing but not yet paid under Section 2 above and any benefits accrued and due under any applicable
benefit plans and programs of NFM, which amounts shall be paid within the time
frames specified by Colorado state wage law. 
For purposes of this Agreement, “Cause” shall mean any of the grounds
for termination of the Executive’s employment listed below:

 

(i)            The
Executive’s conviction of, or plea of guilty or nolo contendere to, (a) a
felony, (b) a crime involving moral turpitude, or (c) a criminal act which adversely affects the
business or reputation of NFM or its subsidiaries;

 

(ii)           The Executive’s engagement
in willful misconduct or willful or gross neglect in the performance of his
duties hereunder, or commission of an act of fraud, embezzlement, theft, dishonesty,
breach of trust or misappropriation of funds against NFM or its subsidiaries;

 

(iii)          Material breach of this Agreement by
the Executive;

 

(iv)          Material violation by Executive of the
“Prohibition of Harassment and Discrimination” set forth in the Employee
Handbook (Rev 6/25/2008); or

 

(v)           The Executive’s persistent and
continuing failure to perform the Executive’s reasonable duties hereunder.

 

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If
there is an event or condition under Section 3(C)(iii), (iv) or (v) above,
the Executive shall have ten (10) days from the date NFM provides notice
to the Executive of the event or condition constituting Cause to cure such
event or condition (to the extent the event or condition is curable), and if
the Executive does so fully cure such event or condition, such event or
condition shall not constitute Cause hereunder.

 

D.            WITHOUT CAUSE. In the event that NFM at any time
prior to the occurrence of a Change in Control: terminates Executive’s employment without Cause; or materially
breaches this Agreement; or materially diminishes
Executive’s title, position
or responsibilities; or reduces Executive’s Base Salary,  this Section 3(D) shall apply:

 

(i)            Executive shall be under no obligation to render any additional services
to NFM and shall be allowed to seek other employment, subject to the
Restrictive Covenants set forth herein.

 

(ii)           Unless the
Executive complies with the provisions of Section 3(D)(iii) below,
upon termination pursuant to this Section 3(D), Executive shall be
entitled to receive only any amounts earned,
accrued and owing but not yet paid under Section 2 above and any benefits accrued and due under any applicable
benefit plans and programs of NFM, which amounts shall be paid within the time
frames specified by Colorado state wage law. 
No other payments or benefits shall be due under this Agreement to the
Executive.

 

(iii)          Notwithstanding
the provisions of Section 3(D)(ii), upon termination pursuant to Section 3(D),
if the Executive executes and does not revoke a written release, in a form
reasonably acceptable to both parties,  of any and all
claims against NFM and all related parties with respect to all matters arising
out of the Employee Retirement Income Security Act of 1974, the Family
and Medical Leave Act of 1993, the WARN Act, or claims of discrimination under
the Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act of 1967, as amended and the Americans with
Disabilities Act of 1990 (other than claims for
any entitlements under the terms of this Agreement or under any plans or
programs of the Company under which the Executive has accrued and is due a
benefit and to all indemnification and similar rights under the Company’s Articles
of Incorporation, Bylaws or otherwise) (the “Release”), the Executive shall be entitled to receive the
following:

 

(a)           The immediate and full payment of all amounts earned, accrued and owing but not yet paid under Section 2, above,
and any benefits accrued and due under
any applicable benefit plans and programs of NFM, and

 

(b)           An amount equal to Executive’s then
current Base 

Salary for the remaining duration of the Term  or to
an amount equivalent to the then current annual Base Salary multiplied by 11⁄2,  whichever is greater, which shall be payable in
accordance with NFM’s normal payroll practices in regular bi-weekly
installments, and

 

(c)           Any applicable bonus payments
pursuant to Section 2(B);

 

(d)           The immediate vesting of all
outstanding options awarded to Executive prior to the Date of Termination; and

 

(e)           Payment of premiums on behalf of
Executive and his dependents to allow Executive and his dependents to receive
COBRA coverage for health, dental and vision benefits then being provided for
Executive and his dependents at the time Executive’s employment is terminated, for
eighteen (18) months, which benefit shall be provided subject to the applicable
terms and conditions governing such COBRA coverage; provided, however that if Executive commences employment with
another employer and is eligible to receive medical or other welfare benefits
under another employer-provider plan, the medical and other welfare benefits to
be provided by NFM as described herein shall terminate.

 

E.             CHANGE IN CONTROL.  For purposes of this Agreement, a “Change in
Control” of NFM shall be deemed to have occurred as of the first day that any
one or more of the following conditions shall have occurred:

 

(i)            Any
“person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Act”)), becomes the “beneficial
owner” (as defined in Rule 13-d under the Act) directly or indirectly, of
securities representing more than fifty percent (50%) of the (a) total
outstanding shares of common stock of NFM, or (b) the total combined
voting power represented by NFM’s then outstanding voting securities other than
by virtue of a merger, consolidation, or similar transaction.  However, if any one person, or more than one
person acting as a group, owns 50% or more of the total fair market value or
total voting power represented by NFM’s then outstanding voting securities, the
increase in beneficial ownership by such person or group or persons will not be
considered a Change in Control.

 

(ii)           A
change in the composition of the Board of Directors of NFM (“Board”), as a
result of which less than a majority of the directors are Incumbent Directors.  “Incumbent Directors” shall mean directors
who either (a) are directors of New Frontier as of the date hereof, or (b) are
elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such election or
nomination (but shall not include an individual whose election or nomination is
in connection with an actual or 

 

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threatened proxy contest relating to the election of directors of NFM).

 

(iii)          NFM
is a party to a merger, consolidation or consummates a similar transaction with
any other business entity after which at least 50% of the total voting power of
the resulting entity is not held by the shareholders of NFM prior to the
merger, or NFM adopts, and the stockholders approve, if necessary, a plan of
complete liquidation or dissolution of NFM, a complete dissolution or
liquidation of NFM occurs or NFM sells or disposes of substantially all of its
assets to an unrelated party (as contemplated by Section 1.409A-3(i)(5)(vii)(3) of
the Treasury Regulations promulgated under the Code (as defined below)).

 

F.             CHANGE OF CONDITIONS OF EMPLOYMENT.  At any time
following the occurrence of a Change in Control, if NFM terminates Executive’s employment without Cause or
Executive terminates his employment due to NFM: materially breaching this
Agreement; or materially diminishing Executive’s title, position or responsibilities; or reducing
Executive’s Base Salary; or relocating NFM’s executive offices outside
of the Boulder, Colorado area, Executive
shall receive the following within thirty (30) days of the Date of Termination
(the aforementioned shall collectively be referred to as a “Change in Control
Termination”):

 

(i)            Payment of all amounts earned,
accrued and owing but not yet paid under Section 2, above, and any benefits accrued and due under any applicable
benefit plans and programs of NFM, and

 

(ii)           A one time, lump sum payment of
Executive’s then current Base Salary for the remaining duration of the Term
or to an amount equivalent to the then current Base Salary multiplied by 11⁄2,  whichever is greater, and

 

(iii)          A one time, lump sum payment of an
amount equivalent to one year’s bonus as measured by the average bonuses
awarded to Executive during the immediately preceding two (2) full bonus
years; and;

 

(iv)          The immediate vesting of all
outstanding options awarded to Executive prior to the Date of Termination; and

 

(v)           Payment of
premiums on behalf of Executive and his dependents to allow Executive and his
dependents to receive COBRA coverage for health, dental and vision benefits
then being provided for Executive and his dependents at the time Executive’s
employment is terminated, for eighteen (18) months, which benefit shall be
provided subject to the applicable terms and conditions governing such COBRA
coverage.

 

G.            RESIGNATION (NOT A CHANGE
IN CONTROL TERMINATION).  At any time during the 

 

Term, Executive may voluntarily terminate his employment for any
reason.  In such event, after the
effective date of such termination, no payments shall be due under this
Agreement, except that Executive shall be entitled to any amounts earned, accrued and owing but not yet paid under Section 2
above and any benefits accrued and due
under any applicable benefit plans and programs of the Company, which amounts
shall be paid within the time frames specified by Colorado state wage law.

 

H.            NOTICE OF TERMINATION. Any termination under
this Agreement shall be communicated by a written notice to the other party,
and may be sent via first class mail, facsimile transmission, email or personal
delivery (the “Notice of Termination”).

 

I.              DATE OF TERMINATION. “Date of
Termination” shall mean: (i) the date of transmission of the Notice of
Termination by facsimile, email or personal delivery, or (ii) three
calendar days after the date of mailing by first class mail, or (iii) date
of death or disability (if applicable).

 

J.             EXCESS PARACHUTE PAYMENTS.  In the event of a Change in Control
Termination, unless otherwise agreed by both parties acting reasonably, a
nationally recognized accounting firm (“Accounting Firm”) suitable to both
parties shall be timely engaged to render an opinion on whether the Executive
is expected to pay an excise tax on “excess parachute payments” (as defined in Section 280G(b) of
the Internal Revenue Code of 1986, as amended), as a result of payments due
under section 5(B) of this Agreement. 
Within 10 days following Company’s receipt of a written opinion of the
Accounting Firm, the Company shall, based solely upon the Accounting Firm’s
determination of which option shall result in a higher net total net
consideration to the Executive, either: (i) reduce the amounts and or
benefits payable to the Executive under Section 3(D)(iii)(a)(b)(c)(d) and
(e) to an amount that is $1 less than the amount that would constitute an
excess parachute payment and pay such reduced amount to Executive, or (ii) pay
the full amount due under Section 3(D)(iii)(a)(b)(c)(d) and (e) to
the Executive.  Payments by the Company
to the Executive pursuant to this paragraph shall be made without setoff,
counterclaim or other withholding.  The
parties agree that the written opinion of the Accounting Firm shall be final in
all respects.  The fees and expenses of
the Accounting Firm shall be paid by the Company.

 

K.            APPLICATION OF SECTION 409A OF THE INTERNAL REVENUE
CODE.  Notwithstanding
anything contained herein (including in Sections 3(D) or 3(F)) to the
contrary, if Executive is a “specified employee” within the meaning of Section 1.409A-l(i) of
the Treasury Regulations promulgated under the Internal Revenue Code of 1986,
as amended (the “Code”), as of the Date of Termination, then payments to
Executive hereunder shall not be made before the date that is six 

 

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months after the Date of
Termination (or if earlier, the date of death of Executive); provided, however,
that during such six-month period, NFM shall make any and all payments
contemplated hereunder to the extent such payments do not exceed two times the
lesser of (i) Executive’s annualized compensation, based upon the annual
rate of compensation for the calendar year preceding the year in which the Date
of Termination occurs, or (ii) the maximum amount that may be taken into
account under a qualified plan pursuant to Section 401(a)(l7) of the Code
for the year in which the Date of Termination occurs; and provided further that
any amounts deferred hereunder shall be paid in a lump-sum amount at the
expiration of such six-month period.

 

4.             RESTRICTIVE COVENANTS

 

For good and valuable
consideration, including but not limited to the increase in Base Salary
effectuated by this Agreement, and the continued employment of Executive by NFM,
Executive agrees to be bound to the following restrictive covenants:

 

A.            COVENANT AGAINST COMPETITION. Executive
agrees that he holds an executive level position with NFM, and Executive
further agrees that by virtue of his position he has had access and will
continue to have access to NFM’s Confidential Information and Trade Secrets (as
those terms are defined below), and Executive further agrees that NFM has a
legitimate business interest in preventing Executive from putting to a
competitive use the information and relationships which pertain to NFM that
Executive acquired in the course of his employment, and in protecting its
customer base.  Accordingly, Executive
agrees to the following:

 

(i)            The Executive acknowledges and
agrees that the principal business of NFM is the sale, promotion and
electronic distribution of adult themed programming and events, whether such
adult themed programming and events are sold, promoted, or electronically
distributed by means now known or hereafter discovered including but not
limited to the Internet, satellite systems, cable systems, hotels, IPTV, mobile
and/or stand alone systems (the “Business”).

 

(ii)           In addition, the Executive
acknowledges and agrees that: NFM is one of the limited number of companies who
have developed the Business; the Executive’s work for NFM has given and will
continue to give him access to the Confidential Information and Trade Secrets of
the Company; the value of all goodwill resulting from the operation of the
Business of NFM and its subsidiaries and other affiliates should properly
belong to NFM; the covenants and agreements of the Executive in this Section
are necessary to preserve the value of such goodwill for the benefit of NFM; the
proprietary technologies developed by NFM and its 

predecessors offer
NFM a distinct competitive advantage, and NFM would not have entered into this
Agreement but for the covenants and agreements set forth in this Section.  Accordingly, the Executive covenants and
agrees that:

 

(a)           By and in consideration of the salary
and benefits to be provided by NFM hereunder, including the severance
arrangements set forth herein, and in consideration of the Executive’s executive
position and exposure to the Confidential Information and Trade Secrets of NFM,
the Executive covenants and agrees that, during the period commencing on the
date hereof and ending one (1) year following the date upon which the
Executive shall cease to be paid any compensation by NFM (the
“Restricted Period”), he shall not
anywhere in the Restricted Territory, directly or indirectly: engage in any
element of the Business or otherwise compete with NFM; render any services to
any person, corporation, partnership or other entity (other than NFM or its
affiliates) primarily engaged in any element of the Business; or become
interested in any such person, corporation, partnership or other entity (other
than NFM or its affiliates) as a partner, shareholder, principal, agent,
employee, consultant or in any other relationship or capacity; provided,
however, that, notwithstanding the foregoing, the Executive may invest in
securities of any entity, solely for investment purposes and without
participating in the business thereof, if (A) such securities are traded
on any national securities exchange or the National Association of Securities
Dealers, Inc. Automated Quotation System, (B) the Executive is not a
controlling person of, or a member of a group which controls, such entity and (C) the
Executive does not, directly or indirectly, own five percent (5%) or more of
any class of securities of such entity.

 

For
purposes of this Agreement, “Restricted
Territory” means any state, county, or locality in the United States in
which NFM conducts Business and any other country, jurisdiction or territory in
which NFM has generated material revenue during the last six (6) months of
Executive’s employment.

 

For purposes of this
Agreement, “Trade Secret” means all non-public information whether tangible or
intangible related to the products, services or business of NFM that (A) derives
economic value, actual or potential, from not being generally known to or
readily ascertainable by other persons who can obtain economic value from its
disclosure or use; or (B) is the subject of efforts by NFM that are
reasonable under the circumstances to maintain its secrecy, which might include:
(i) marking any information reduced to tangible form clearly and
conspicuously with a legend identifying its confidential or trade secret
nature; (ii) identifying any oral communication as confidential or secret
immediately before, during, or after such oral communication; or (iii) otherwise
treating such information as confidential or secret.  Assuming the criteria in clauses (A) or (B) of
this paragraph are met, 

 

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Trade Secrets includes
information, without regard to form, including, but not limited to, technical
and nontechnical data, formulas, patterns, designs, compilations, computer
programs and software, devices, inventions, methods, techniques, drawings,
processes, financial data, financial plans, product plans, lists of actual or
potential customers and suppliers which are not commonly known by or available
to the public, research, development, and existing and future products.

 

(b)           Notwithstanding anything to
the contrary in Section 4(A)(ii)(a) above, in the event of a Change in Control Termination, such Restricted Period
shall terminate and Executive shall therefore be free to seek employment
elsewhere without regard to whether any prospective employer is a competitor of
NFM.

 

B.            NON-SOLICITATION.  During
the Restricted Period, Executive shall not, directly or indirectly, (i) solicit
or encourage to leave the employment or other service of NFM any employee or
independent contractor thereof; or (ii) hire (on behalf of Executive or
any other person or entity) any employee or
independent contractor who has left the employment or other service of NFM
within the one-year period which follows the termination of such employer’s or
independent contractor’s employment or other service with NFM.  For purposes of the preceding sentence, the
term “independent contractor” shall refer to independent contractors of NFM
whose services relate directly to the conduct of the Business.  During the Restricted Period, the Executive
will not, whether for his own account or for the account of any other person,
firm, corporation or other business organization, intentionally interfere with NFM’
relationship with, or endeavor to entice away from NFM any person who during
the Term is or was a customer, client, supplier, licensee or other business
relation of NFM.

 

C.            CONFIDENTIALITY OBLIGATIONS

 

(i)            CONFIDENTIAL INFORMATION.  As used in this Agreement, “Confidential
Information” includes, without limitation, design information, manufacturing
information, business, financial, and technical information, sales and
processing information, product information, customer lists, vendor information,
vendor lists, pricing information, corporation and personal business
opportunities, software, computer disks or files, or any other electronic
information of any kind, Rolodex cards or other lists of names, addresses or
telephone numbers, financial information, current projects, projects in
development and future projects, forecasts, plans, contracts, releases, and
other documents, materials, writings or information, including those which are
prepared, developed or created by Executive, or which come into the possession
of Executive by any means or manner, and which relate directly or indirectly to
NFM (all of the above collectively referred to 

as “Confidential
Information”).  Confidential Information
includes information developed by Executive in the course of Executive’s
services for NFM, as well as other Confidential Information to which Executive
may have access in connection with Executive’s services.  Confidential Information also includes the
confidential information of other individuals or entities with which NFM has a
business relationship.  Confidential
Information shall not include any information (a) which is in the public
domain or which enters the public domain through no act of omission of
Executive or (b) which was in the possession of Executive prior to the
commencement of his employment with NFM.

 

(ii)           DUTY OF CONFIDENTIALITY.  At all times during his employment and
thereafter, Executive will maintain in strictest confidence and will not,
directly or indirectly, disclose or use (or allow others working with or
related to Executive to disclose or use) any Confidential Information belonging
to NFM, whether in oral, written, electronic or permanent form, except solely
to the extent necessary to perform services on behalf of NFM.  Upon termination of this Agreement, or at the
request of NFM prior to its termination, Executive shall deliver forthwith to NFM
all Confidential Information (and all copies thereof) in Executive’s possession
or control belonging to NFM and all tangible items embodying or containing
Confidential Information.

 

(iii)         DOCUMENTS, RECORDS, ETC.  All documents, records, data, equipment and
other physical property, whether or not pertaining to Confidential Information,
which are furnished to Executive by NFM or are produced by Executive in
connection with Executive’s services will be and remain the sole property of NFM.  Executive will return to NFM forthwith all
such materials and property upon the termination of this Agreement or sooner if
requested by NFM.

 

D.            ASSIGNMENT OF RIGHTS.  Executive shall make full and prompt
disclosure to NFM of any and all designs, intellectual property, software,
inventions, discoveries, or improvements (individually and collectively, “Inventions”)
made by Executive as a result or product of his employment relationship with NFM.  Executive hereby assigns to NFM without
additional compensation the entire worldwide right, title and interest in and
to such Inventions, and related intellectual property rights and without
limitation all copyrights, copyright renewals or reversions, trademarks, trade
names, trade dress rights, industrial design, industrial model, inventions,
priority rights, patent rights, patent applications, patents, design patents
and any other rights or protections in connection therewith or related thereto,
for exploitation in any form or medium, of any kind or nature whatsoever,
whether now known or hereafter devised. 
To the extent that any work created by Executive can be a work for hire
pursuant to U.S. Copyright Law, the parties deem such 

 

 

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work a work for hire and
Executive should be considered the author thereof.  Executive shall, at the request of NFM,
without additional compensation from time to time execute, acknowledge and
deliver to NFM such instruments and documents as NFM may require to perfect,
transfer and vest in NFM the entire right, title and interest in and to such
inventions.  In the event that Executive
does not timely perform such obligations, Executive hereby makes NFM and its
officers his attorney in fact and gives them the power of attorney to perform
such obligations and to execute such documents on Executive’s behalf.  Executive shall cooperate with NFM upon NFM’s
request and at NFM’s cost but without additional compensation in the
preparation and prosecution of patent, trademark, industrial design and model,
and copyright applications worldwide for protection of rights to any
Inventions.

 

E.             LEGAL AND EQUITABLE REMEDIES.  Because the
Executive’s services are personal and unique and the Executive has had and will
continue to have access to and has become and will continue to become
acquainted with the Confidential Information and Trade Secrets of NFM, and because any breach by the Executive of any of the
confidentiality covenants and restrictive covenants contained in Section 4
would result in irreparable injury and damage for which money damages would not
provide an adequate remedy, NFM shall have the right to enforce the restrictions
set forth in Section 4 by injunction, specific performance or other
equitable relief, without bond and without prejudice to any other rights and
remedies that NFM may have for a breach, or threatened breach, of the obligations
described in Section 4.  The
Executive agrees that in any action in which NFM seeks injunction, specific
performance or other equitable relief, the Executive will not assert or contend
that any of the provisions of Section 4 are unreasonable or otherwise
unenforceable.

 

F.             SCOPE/BLUE PENCIL PROVISIONS.  Executive agrees that the duration, scope and
geographic area of the restrictions stated in this Section are reasonable
and necessary given the nature of NFM’s Business.  However, in the event that a court or
arbitrator of competent jurisdiction shall hold that the duration, scope,
geographic area or other restrictions stated herein are unreasonable and
unenforceable under circumstances then existing, the parties agree that the
maximum duration, scope, area or other restrictions reasonable under such
circumstances shall be substituted for the stated duration, scope, area or
other restrictions.

 

G.            INDEPENDENT AGREEMENT.  The covenants made in this Section 4
shall be construed as an agreement 

independent of any
other provisions of this Agreement, and shall survive the termination of this
Agreement.  Moreover, the existence of
any claim or cause of action of Executive against NFM, whether or not
predicated upon the terms of this Agreement, shall not constitute a defense to
the enforcement of these covenants. 
Notwithstanding anything to the contrary in this paragraph, Executive
shall be released from his obligations under Section 4(A) of this
Agreement if NFM is in material breach of its obligations set forth in Section 2(B) of
this Agreement, provided such material breach remains uncured for more than
thirty (30) days after written notice of said breach from Executive to NFM.

 

5.             ARBITRATION.  To the maximum extent permitted by law, all
disputes, controversies, claims, or demands of any kind or nature arising
between the parties in connection with this Agreement, whether at law or in
equity or based upon common law or any federal or state statute, rule, or
regulation, that cannot be resolved between the parties through NFM’s internal
complaint resolution procedures, shall be submitted to binding arbitration by
the American Arbitration Association; provided, however, that this arbitration
requirement shall not apply to any action by either party to obtain injunctive
relief to prevent any violation by the other party of the terms of this
Agreement, which injunctive action may be brought in any court of competent
jurisdiction. The filing of a claim for injunctive relief shall not allow
either party to raise any other claim outside arbitration.

 

Any arbitration commenced
hereunder shall be initiated in Boulder, Colorado and shall be governed by the
AAA National Rules for the Resolution of Employment Disputes.  The arbitration shall occur before a single
arbitrator that shall be mutually agreed upon by the parties hereto.  If the parties cannot agree on a single
arbitrator, then an arbitrator shall be selected in accordance with the rules of
AAA.  The arbitration must be filed
within six months of the act or omission which gives rise to the claim.  Each party shall be entitled to take any
discovery as is permitted by the applicable rules and the arbitrator. In
determining the extent of discovery, the arbitrator shall exercise discretion,
but shall consider the expense of the desired discovery and the importance of
the discovery to a just adjudication.

 

The findings,
conclusions, and award rendered in any arbitration shall be binding upon the
parties and shall finally determine all questions of fact relating to the
dispute. Judgment upon the arbitration award may be entered in the appropriate
court, state or federal, having jurisdiction, and each party expressly waives
any right to appeal any such judgment rendered by the court.   Any 

 

7

party may apply to a
court of competent jurisdiction for entry of judgment on the arbitration award.

 

The costs of the
arbitration shall be advanced equally by the parties, however the prevailing party
in any arbitration or other legal action brought to enforce or defend the terms
of this Agreement shall be entitled, in addition to any other remedies
available to such party, to an award of reasonable attorney’s fees and costs.  Any party may apply to a court of competent
jurisdiction for entry of judgment on the arbitration award.

 

The parties agree that
failure to comply with the provisions of this paragraph shall constitute
grounds for the dismissal of any suit, action, or proceeding instituted in any
federal, state, or local court or before any administrative tribunal with
respect to any dispute which arises during the period of this Agreement and
which is subject to this arbitration agreement. The arbitration provisions of
this Agreement are specifically enforceable by each party to the Agreement and
shall survive the termination or expiration of the Agreement.

 

THE EXECUTIVE UNDERSTANDS THAT
THIS AGREEMENT TO ARBITRATE ALL ARBITRABLE DISPUTES MEANS THE EXECUTIVE IS
AGREEING TO WAIVE TO THE MAXIMUM EXTENT PERMITTED BY LAW ANY RIGHT THE
EXECUTIVE MAY HAVE TO ASK FOR A JURY OR COURT TRIAL IN ANY DISPUTE WITH
THE COMPANY.

 

6.             NO CONFLICTING OBLIGATIONS OF EXECUTIVE.  Executive represents and
warrants that he is not subject to any duties or restrictions under any prior
agreement with any previous employer or other person or entity, and that he has
no rights or obligations which may conflict with the interests of NFM or with
the performance of Executive’s duties and obligations under this
Agreement.  Executive agrees to notify NFM
immediately if any such conflicts occur in the future.

 

7.             SUCCESSORS.

 

A.            This Agreement is personal to
Executive and shall not be assignable by Executive.

 

B.            This Agreement shall inure to the
benefit of NFM and its successors and assigns. 
Upon written notice to Executive, NFM may assign this Agreement to any
successor or affiliated entity, subsidiary, sibling, or parent company.

 

8.             LAW CHANGES.  To the extent that any payment under this
Agreement is deemed to be deferred compensation subject to the requirements of
section 409A of the Code, this 

Agreement shall be administered so that such payments will be made in
accordance with the requirements of section 409A of the Code.

 

9.             INDEMNIFICATION.  NFM
agrees to defend and indemnify Executive against all criminal and civil claims
for acts within the scope of his duties to the maximum extent allowed by law,
but excluding acts of gross negligence and willful misconduct.  Additionally, NFM shall pay all attorneys’
fees and costs related to any actual or threatened legal action against
Executive as such fees and costs arise.  NFM
agrees to maintain D&O insurance that covers Executive for all acts within
the scope of his duties, but excluding acts of gross negligence and willful
misconduct.

 

10.          MISCELLANEOUS

 

A.            Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Colorado, without
reference to the principles of conflict of laws.

 

B.            Captions/Headings.  The captions and headings of this Agreement
are not part of the provisions hereof and shall have no force or effect.

 

C.            Entire Agreement.  This Agreement contains the full and complete
understanding between the parties hereto and supersedes all prior
understandings, whether written or oral pertaining to the subject matter
hereof.

 

D.            Modifications of Agreement.  This Agreement may not be amended or modified
otherwise than by written agreement executed by Executive and by the designated
representative of the Board. 
Notwithstanding anything to the contrary, NFM hereby reserves the right
to unilaterally amend this Agreement as necessary to avoid the imposition of
liability under or as a consequence of the application of the provisions of Section 409A
of the Code.

 

E.             Notices.  All notices and other communications
hereunder shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, or by facsimile, or by email, or by hand delivery to such address as
either party shall have furnished to the other in writing in accordance
herewith:

 

New Frontier Media, Inc.

7007 Winchester Circle, Suite 200

 

Boulder, CO 80301

Attn:  General Counsel

 

8

Executive:

Scott Piper

 

F.             Severability.  If any
provision of this Agreement or application thereof to anyone or under any
circumstances is adjudicated to be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect any other provision
or application of this Agreement which can be given effect without the invalid
or unenforceable provision or application and shall not invalidate or render
unenforceable such provision or application in any other jurisdiction.  If any provision is held void, invalid or
unenforceable with respect to particular circumstances, it shall nevertheless
remain in full force and effect in all other circumstances.

 

G.            Withholdings.  NFM shall withhold from any amounts payable
under this Agreement such amounts as are required to be withheld pursuant to
any applicable law or regulation, including without limitation amounts required
to 

be withheld for
Federal, State and local taxes, as well as garnishments and other required
withholdings.

 

H.            Remedies Cumulative; No
Waiver.  No remedy conferred upon a party by this
Agreement is intended to be exclusive of any other remedy, and each and every
such remedy shall be cumulative and shall be in addition to any other remedy
given under this Agreement or now or hereafter existing at law or in
equity.  The failure of either
party to insist upon strict compliance with any provision of this Agreement, or
the failure to assert any right either party may have hereunder, shall not be
deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.

 

I.              Counterparts.  This
Agreement may be executed in any number of counterparts (including facsimile
counterparts), each of which shall be an original, but all of which together
shall constitute one instrument.

 

IN WITNESS WHEREOF,
Executive has hereunto set Executive’s hand, and NFM has caused these presents
to be executed in its name on its behalf, all as of the day and year first
above written.

 

 

	
  NEW FRONTIER MEDIA,
  INC.

  	
   

  	
  EXECUTIVE

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael Weiner

  	
   

  	
  By:

  	
  /s/ Scott Piper

  
	
  Name: Michael Weiner

  	
   

  	
  Name: Scott Piper

  
	
  Title: Chief Executive
  Officer

  	
   

  	
   

  
					

 

9EXHIBIT 4.1

 

AMERICAN SCIENCE AND ENGINEERING, INC.

 

AMENDED AND RESTATED

 

2005 EQUITY AND INCENTIVE PLAN

 

1.                                      Purposes of the Plan

 

The purposes of the American Science and Engineering, Inc.
Amended and Restated 2005 Equity and Incentive Plan (the “Plan”) are (i) to
provide long-term incentives and rewards to those employees, officers,
directors, and consultants of American Science and Engineering, Inc. (the “Company”)
and its Affiliates (as defined below) who are in a position to contribute to
the long-term success and growth of the Company and its Affiliates, (ii) to
assist the Company and its Affiliates in attracting and retaining persons with
the requisite experience and ability, and (iii) to more closely align the
interests of such employees, officers, directors, and consultants with the
interests of the Company’s stockholders.

 

2.                                      Definitions

 

“Affiliate” means any business entity in which the
Company holds, directly or indirectly, an equity, profits, or voting interest
of 30% or more, and includes any Subsidiary.

 

“Applicable Law” means the applicable requirements
relating to the administration of equity compensation plans under Massachusetts
state corporate law, federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or quoted,
employment laws, and the applicable laws of any foreign jurisdiction where
Awards are or will be granted.

 

“Award” means any Option, Stock Appreciation Right,
Restricted Stock, Restricted Stock Unit, Cash Award, or Foreign National Award
granted under the Plan.  Awards may be granted for services to be rendered
or for past services already rendered to the Company or any Affiliate.

 

“Cash Award” means an Award granted to a Participant
pursuant to Section 10(d) of the Plan that is payable in cash, and
that may be subject to certain terms, conditions, and restrictions.

 

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

 

“Code” means the Internal Revenue Code of 1986, as
amended from time to time, or any successor law.

 

“Committee” means one or more committees each
comprised of not less than two members of the Board appointed by the Board to
administer the Plan or a specified portion thereof.  To the extent that
the Board determines its desirable to qualify Awards granted to Covered
Employees under the Plan as “performance-based compensation” within the meaning
of Section 162(m) of the Code, then each member of the Committee
shall be an “outside director” within the meaning of Section 162(m) of
the Code.  To the extent that the Board determines it desirable to qualify
Awards granted by the Committee to a Reporting Person under the Plan as exempt
under Rule 16b-3(d)(1) of the Exchange Act, then each member of the
Committee shall be a “non-employee director” within the meaning of Rule 16b-3.

 

 

“Common Stock” or “Stock” means the common stock of
the Company.

 

“Company” means American Science and Engineering, Inc.,
or any successor corporation.

 

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

 

“Designated Beneficiary” means the beneficiary
designated by a Participant, in a manner determined by the Committee, to
receive amounts due or exercise rights of the Participant in the event of the
Participant’s death.  In the absence of an effective designation by a
Participant, “Designated Beneficiary” means the Participant’s estate.

 

“Disability” means a total and permanent disability
as provided in the long-term disability plan or policy maintained by the
Company or if applicable, most recently maintained, by the Company or if
applicable, an Affiliate, for the Participant, whether or not such Participant
actually receives disability benefits under such plan or policy.  If no
long-term disability plan or policy was ever maintained on behalf of the
Participant or if the determination of disability relates to an Incentive Stock
Option or SAR issued in tandem with an Incentive Stock Option, Disability means
permanent and total disability as defined in Section 22(e)(3) of the
Code.  In the event of a dispute, the determination whether a Participant
is disabled will be made by the Committee and may be supported by the advice of
a physician competent in the area to which such disability relates.

 

“Exchange Act” means the Securities Exchange Act of
1934, as amended from time to time, or any successor law.

 

“Fair Market Value” means, with respect to Common
Stock or any other property, the fair market value of such property as
determined by the Committee in good faith or in the manner established by the
Committee from time to time.

 

“Foreign National Award” means an Award granted
pursuant to Section 10(f) to a Participant who is a foreign national
or employed or performing services outside of the United States.

 

“Grant Date” means the first date on which all
necessary corporate action has been taken to approve the grant of the Award as
provided in the Plan, or such later date as is determined and specified as part
of that authorization process.  Notice of the grant shall be provided to
the Participant within a reasonable time after the grant.

 

“Grant Agreement” means the documentation evidencing
an Award as provided in Section 10(b).

 

“Incentive Stock Option” means an Option intended to
qualify as an incentive stock option and which meets the requirements of Section 422
of the Code.

 

“Nonstatutory Stock Option” means an Option that is
not an Incentive Stock Option.

 

“Option” means a right to acquire shares of Company
Stock upon the payment of an exercise price that is granted in accordance with Section 6
of the Plan.  An Option may be either an Incentive Stock Option or a
Nonstatutory Stock Option.

 

“Participant” means a person selected by the
Committee to receive an Award under the Plan.

 

 

“Performance Goals” means with respect to any
Performance Period, one or more performance goals based on one or more of the
following objective criteria established by the Committee prior to the
beginning of such Performance Period or within such period after the beginning
of the Performance Period as shall meet the requirements to be considered “pre-established
objective performance goals” for purposes of the regulations issued under Section 162(m) of
the Code: (i) increases in the price of the Common Stock, (ii) market
share, (iii) sales, (iv) revenue, (v) return on equity, assets,
or capital, (vi) economic profit (economic value added), (vii) total
shareholder return, (viii) costs, (ix) expenses, (x) margins,
(xi) earnings (including EBITDA) or earnings per share, (xii) cash flow
(including adjusted operating cash flow), (xiii) customer satisfaction, (xiv)
operating profit, (xv) net income, (xvi) research and development, (xvii)
product releases, (xviii) manufacturing, or (xix) any combination of the
foregoing, including without limitation, goals based on any of such measures
relative to appropriate peer groups or market indices.  Such Performance
Goals may be particular to a Participant or may be based, in whole or in part,
on the performance of the division, department, line of business, subsidiary,
or other business unit, whether or not legally constituted, in which the
Participant works or on the performance of the Company generally.

 

“Performance Period” means the period of service
designated by the Committee applicable to an Award subject to Section 10(l) during
which the Performance Goals will be measured.

 

“Reporting Person” means a person subject to Section 16
of the Exchange Act.

 

“Restricted Stock” means shares of Common Stock
granted to a Participant pursuant to Section 8 of the Plan that may be
subject to certain terms, conditions, and restrictions.

 

“Restricted Stock Unit” means the right granted to a
Participant pursuant to  Section 9 of the Plan to receive shares of
Common Stock (or the equivalent value in cash or other property if the
Committee so provides) in the future that may be subject to certain terms,
conditions, and restrictions.

 

“Service Provider” means an employee, officer,
director or consultant of the Company or any of its Affiliates.

 

“Stock Appreciation Right” or “SAR” means a right to
acquire cash or shares of Common Stock granted in accordance with Section 7
of the Plan having a value equal to the difference between the Fair Market
Value on the date of exercise over the exercise price set forth in the Grant
Agreement multiplied by the number of shares of Common Stock with respect to
which the SAR is being exercised.

 

“Subsidiary” means any subsidiary corporation as
defined in Section 424(f) of the Code.

 

“Termination Date” means (i) in the case of an
employee, the date that the Committee determines that the employee-employer
relationship between the Company or Affiliate and such person ceased for any
reason, (ii) in the case of a consultant or non-employee officer, the date
that the Committee determines that the service relationship between the Company
or Affiliate and such person ceased for any reason, and (iii) in the case
of a director, the date that the Committee determines that such person’s
service on the Board ceased for any reason.

 

3.                                      Administration

 

The Plan shall be administered by the
Committee.  Subject to and consistent with the provisions of the Plan, the
Committee shall have the authority and discretion to: (i) determine which
eligible employees, officers, directors, and consultants will receive Awards, (ii) determine
the number of 

 

 

shares of Common Stock, cash, or other consideration
to be covered by each Award, (iii) determine the terms and conditions of
any Award (including Fair Market Value, the exercise price, the vesting
schedule, the term of the Award, and the period following termination from
employment or service during which an Award may be exercised), (iv) approve
forms of Award agreements and other documentation for use under the Plan, (v) adopt,
alter, and repeal administrative rules, guidelines, and practices governing the
operation of the Plan and the Committee, (vi) interpret the provisions of
the Plan and any Award documentation and remedy any ambiguities, omissions, or
inconsistencies therein, (vii) to modify or amend Awards, or grant waivers
of Plan or Award conditions, and (viii) make all other determinations
necessary or advisable for the administration of the Plan.  A majority of
the members of the Committee shall constitute a quorum.  The Committee’s
decisions, determinations, and interpretations shall be final and binding on
all persons having an interest in any Award.  To the extent permitted by
Applicable Law, the Committee may delegate to one or more executive officers of
the Company the power to make Awards to Participants who are not Reporting Persons
and all determinations under the Plan with respect thereto, provided that the
Committee shall fix the maximum amount of such Awards for all such Participants
and a maximum for any one Participant, and such other features of the Awards as
required by Applicable Law.

 

4.             Eligibility

 

Incentive Stock Options may be granted only to
employees (including officers and directors who are also employees) of the
Company or a Subsidiary.  All other Awards may be granted to employees,
officers, directors, and consultants of the Company or any Affiliate.

 

5.             Stock Available for Awards

 

(a)           Amount.  Subject to
adjustment under Section 5(c), the aggregate number of shares of Common
Stock that may be issued pursuant to Awards granted under the Plan shall be
1,000,000 shares.  Subject to adjustment under Section 5(c), up to
1,000,000 shares of Common Stock may be issued upon exercise of Incentive Stock
Options granted under the Plan.  Shares issued under the Plan may consist
in whole or in part of authorized but unissued shares, or treasury shares, or
shares purchased on the open market.  At all times the Company will
reserve and keep available a sufficient number of shares to satisfy the number
of shares available for issuance under the Plan.

 

(b)           Share Counting.  If an Award granted
under the Plan is canceled, terminates, expires, is forfeited, lapses, or is
settled in cash, then the shares subject to such Award (to the extent of such
cancellation, termination, expiration, forfeiture, lapse, or settlement) shall
again be available for issuance pursuant to Awards granted under the
Plan.  For purposes of Section 5(a), any shares granted as Options or
Stock Appreciation Rights under the Plan shall be counted against this limit as
one share for every share subject to the Award.  Any shares granted as
Awards other than Options or Stock Appreciation Rights shall be counted against
the limit set forth in Section 5(a) as 1.5 shares for every one share
subject to the Award.  Any shares tendered in payment of an Option’s
exercise price (whether by attestation or actual delivery), any shares tendered
or withheld to satisfy a tax withholding on an Award, and any shares
repurchased by the Company using Option proceeds shall not be added back,
replenish, or increase the aggregate Plan share limit set forth in Section 5(a).

 

(c)           Adjustment.  In the event that
the Committee determines that any stock dividend, extraordinary cash dividend,
recapitalization, reorganization, merger, consolidation, split-up, spin-off,
combination, exchange of shares, or other transaction affects the Common Stock
such that an adjustment is required in order to preserve the benefits intended
to be provided by the Plan, then the Committee (subject in the case of
Incentive Stock Options to any limitation required under the Code) shall
equitably adjust any or all of (i) the number and class of shares that may
be issued in 

 

 

respect of Awards under the
Plan, (ii) the number and class of shares subject to outstanding Awards, (iii) the
number and class of shares subject to the limit on individual grants under Section 5(d) of
the Plan, and (iv) the exercise price with respect to any of the
foregoing, and if considered appropriate, the Committee may make provision for
a cash payment with respect to an outstanding Award, provided that the number
of shares subject to any Award shall always be a whole number.

 

(d)           Limit on Individual Grants.  The maximum number
of shares of Common Stock subject to all Awards that may be granted under this
Plan to any Participant in the aggregate in any fiscal year of the Company
shall not exceed 250,000 shares, subject to adjustment under Section 5(b). 
Notwithstanding the foregoing, during the fiscal year in which a Participant
first becomes an employee of the Company or an Affiliate, the Participant may
be granted Awards covering an additional 250,000 shares of Common Stock,
subject to adjustment under Section 5(b).  With respect to any Award
settled in cash that is intended to satisfy the requirements for “performance-based
compensation” (within the meaning of Section 162(m)(4)(C) of the
Code), no more than $2,500,000 may be paid to any one individual with respect
to each year of a Performance Period.

 

6.             Stock Options

 

(a)           Grant of Options.  Subject to the
provisions of the Plan, the Committee may grant Incentive Stock Options or
Nonstatutory Stock Options to a Participant.

 

(b)           Terms and Conditions. The Committee shall
determine the number of shares of Common Stock subject to each Option and the
exercise price therefor, which shall not be less than 100% of the Fair Market
Value of the Common Stock on the Grant Date.  Each Option shall be
exercisable at such times and subject to such terms and conditions as the
Committee may specify in the Grant Agreement or thereafter; provided that (i) no
Option shall be exercisable after the expiration of ten years from the Option’s
Grant Date, and (ii) no Option may be granted with a reload feature which
provides for an automatic grant of additional or replacement options upon the
exercise of an Option.

 

A Participant may exercise an Option by following
such procedures as the Committee or its designees may specify from time to
time. The Committee may impose such conditions with respect to the exercise of
Options, including conditions relating to Applicable Laws, as it considers
necessary or advisable.

 

(c)           Payment.  No shares shall be
delivered pursuant to any exercise of an Option until payment in full of the
exercise price therefor is received by the Company.  Except as otherwise
provided by the Committee, such payment may be made in whole or in part in or
pursuant to any of the following methods:  (i) cash, (ii) by
actual delivery or attestation of ownership of shares of Common Stock owned by
the Participant, including vested Restricted Stock, (iii) by retaining shares
of Common Stock otherwise issuable pursuant to the Option, (iv) for
consideration received by the Company under a broker-assisted cashless exercise
program acceptable to the Company, or (v) for such other lawful
consideration as the Committee may determine.

 

(d)           Exercise Period.  When a Participant’s
status as a Service Provider terminates, the Participant’s Option may be
exercised within the period of time specified in the Grant Agreement to the
extent that the Option is vested on the Participant’s Termination Date. 
In the absence of a specific period of time set forth in the Grant Agreement,
an Option shall remain exercisable for three (3) months following the date
the Participant ceases to be a Service Provider, but in no event shall the
Option be exercisable after the expiration of the term of such Option.  If
a Participant’s status as a Service Provider terminates from death or
Disability or the Participant dies within three (3) months after his
Termination Date, then (unless provided otherwise in the Grant Agreement) the 

 

 

Option shall remain
exercisable for twelve (12) months following the date the Participant ceases to
be a Service Provider, but in no event shall the Option be exercisable after
the expiration of the term of such Option.  In no event may the Committee
provide in a Grant Agreement that the period of time for exercising an Option
following a Participant’s Termination Date shall exceed three (3) years.

 

(e)           Incentive Stock Option Rules.  In
addition to the limitations and conditions that apply generally to Options, the
following provisions shall apply to any Incentive Stock Option.  The
Committee may grant Incentive Stock Options only to persons who are employees
of the Company or a Subsidiary as of the Grant Date.  The aggregate Fair
Market Value (determined as of the Grant Date) of all shares with respect to
which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year (under the Plan or any other incentive
stock option plan of the Company or any Subsidiary) shall not exceed
$100,000.  If the Fair Market Value of shares on the Grant Date with
respect to which Incentive Stock Options are exercisable for the first time by
a Participant during any calendar year exceeds $100,000, the Options for the
first $100,000 worth of shares to become exercisable in that calendar year will
be Incentive Stock Options, and the Options for the shares with a Fair Market
Value in excess of $100,000 that become exercisable in that calendar year will
be Nonstatutory Stock Options.  No Incentive Stock Option shall be granted
to any individual who, at the Grant Date, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Subsidiary unless the exercise price per share of such Option is
at least 110% of the Fair Market Value per share at the Grant Date and the
Option expires no later than five (5) years after the Grant Date.  If
a Participant sells or otherwise disposes of any shares acquired pursuant to
the exercise of an Incentive Stock Option on or before the later of (i) the
date two (2) years after the Grant Date, and (ii) the date one year
after the exercise of the Incentive Stock Option, the Company may require the
Participant to immediately notify the Company in writing of such disposition.

 

7.             Stock Appreciation Rights

 

(a)           Grant of SARs.  Subject to the
provisions of the Plan, the Committee may grant SARs to a Participant in tandem
with an Option (at or after the award of the Option), or alone and unrelated to
an Option.  SARs granted in tandem with an Option shall terminate to the
extent that the related Option is exercised, and the related Option shall
terminate to the extent that the tandem SARs are exercised.

 

(b)           Terms and Conditions.  The Committee shall
determine the number of shares of Common Stock subject to each SAR and the
exercise price therefore.  A SAR granted in tandem with an Option shall
have an exercise price not less than the exercise price of the related Option. 
A SAR granted alone and unrelated to an Option may not have an exercise price
less than 100% of the Fair Market Value of the Common Stock on of the Grant
Date.  Each SAR shall be exercisable at such times and subject to such
terms and conditions as the Committee may specify in the Grant Agreement or
thereafter; provided that no SAR shall be exercisable after the expiration of
ten years from the SAR’s Grant Date.  A Participant may exercise a SAR by
following such procedures as the Committee or its designees may specify from
time to time.  The Committee may impose such conditions with respect to
the exercise of SARs, including conditions relating to Applicable Laws, as it
considers necessary or advisable.

 

(c)           Exercise Period.  When a Participant’s
status as a Service Provider terminates, the Participant’s SAR may be exercised
within the period of time specified in the Grant Agreement to the extent that
the SAR is vested on the Participant’s Termination Date.  In the absence
of a specific period of time set forth in the Grant Agreement, a SAR shall
remain exercisable for three 

 

 

(3) months following
the date the Participant ceases to be a Service Provider, but in no event shall
the SAR be exercisable after the expiration of the term of such SAR.  If a
Participant’s status as a Service Provider terminates from death or Disability
or the Participant dies within three (3) months after his Termination
Date, then (unless provided otherwise in the Grant Agreement) the SAR shall
remain exercisable for twelve (12) months following the date the Participant
ceases to be a Service Provider, but in no event shall the SAR be exercisable
after the expiration of the term of such SAR.  In no event may the
Committee provide in the Grant Agreement that the period of time for exercising
a SAR following a Participant’s Termination Date shall exceed three (3) years.

 

8.             Restricted Stock

 

(a)           Grant of Restricted Stock.  Subject to the
provisions of the Plan, the Committee may grant Restricted Stock to a
Participant.

 

(b)           Terms and Conditions.  The Committee shall
determine the number of shares of Common Stock subject to each Restricted Stock
Award and the purchase price (if any) for each share.  Shares of
Restricted Stock may be issued for no cash consideration, or such minimum consideration
as may be required by Applicable Law.  The Committee may grant shares of
Common Stock subject to such other terms, conditions, and restrictions
(including forfeiture provisions and conditions relating to Applicable Laws) as
it considers necessary or advisable.

 

(c)           Restrictions.  Shares
of Restricted Stock may not be sold, assigned, transferred, pledged or
otherwise encumbered, except as permitted by the Committee, during the
restricted period.  Shares of Restricted Stock shall be evidenced in such
manner as the Committee may determine, including book-entry registration. 
Any physical certificates issued in respect of shares of Restricted Stock shall
be registered in the name of the Participant bearing an appropriate legend
referring to the terms, conditions, and restrictions applicable to such
Restricted Stock and unless otherwise determined by the Committee, deposited by
the Participant, together with a stock power endorsed in blank, with the
Company or a designated custodian or escrow agent.  At the expiration of
the restricted period, the Company shall deliver any such certificates to the
Participant or if the Participant has died, to the Participant’s Designated
Beneficiary.

 

9.             Restricted Stock Units

 

(a)           Restricted Stock Units.  Subject to the provisions
of the Plan, the Committee may grant Restricted Stock Units to a Participant.

 

(b)           Terms and Conditions.  The Committee shall
determine the number of shares of Common Stock subject to each Restricted Stock
Unit Award and the purchase price (if any) for each unit.  Restricted
Stock Units may be issued for no cash consideration, or such minimum
consideration as may be required by Applicable Law.  The Committee may
grant Restricted Stock Units subject to such other terms, conditions, and restrictions
(including forfeiture provisions and conditions relating to Applicable Laws) as
it considers necessary or advisable.

 

(c)           Unfunded Obligation.  A Restricted Stock
Unit Award shall constitute an unfunded and unsecured obligation of the
Company, and shall be settled in shares of Common Stock or cash, as determined
by the Committee at the time of grant or thereafter.  Each unit shall
represent the equivalent of one share of Common Stock.

 

 

10.          General Provisions Applicable to Awards

 

(a)           Transferability.  Except as otherwise
provided in this Section 10(a), an Award (i) shall not be
transferable other than as designated by the Participant by will or by the laws
of descent and distribution, and (ii) may be exercised during the
Participant’s lifetime only by the Participant or by the Participant’s guardian
or legal representative.  In the discretion of the Committee, any Award
may be transferable upon such terms and conditions and to such extent as the
Committee determines at or after grant, provided that Incentive Stock Options
may be transferable only to the extent permitted by the Code.

 

(b)           Grant Agreement.  Each Award under the
Plan shall be evidenced by a written or electronic grant agreement delivered to
the Participant specifying the terms and conditions thereof and containing such
other terms and conditions not inconsistent with the provisions of the Plan or
Applicable Laws as the Committee considers necessary or advisable to achieve
the purposes of the Plan.

 

(c)           Committee Discretion.  Each type of Award may
be made alone, in addition to or in relation to any other Award.  The
terms of each type of Award need not be identical, and the Committee need not
treat Participants uniformly.  In addition to the authority granted to the
Committee in Section 10(l) to make Awards to Covered Employees which
qualify as “performance-based compensation” for purposes of Section 162(m) of
the Code, the Company may grant Awards subject to such performance conditions
(including performance-based vesting) as it shall determine in its
discretion.  Except as otherwise provided by the Plan or a particular
Award, any determination with respect to an Award may be made by the Committee
at the time of grant or at any time thereafter.

 

(d)           Dividends and Cash Awards.  In the discretion of
the Committee, any Award under the Plan may provide the Participant with
dividends or dividend equivalents payable currently or deferred, with or
without interest.  The Committee may also make cash payments under the
Plan in lieu of or in addition to an Award.  Such Cash Awards may be made
subject to such terms, conditions, and restrictions as the Committee considers
necessary or advisable.

 

(e)           Termination of Employment or Service.  Whether
military service, government service, or other leave of absence shall
constitute a termination of employment or service, and whether the vesting of
an Award shall cease, be suspended, or continue during such  leave of
absence, shall be determined in each case by the Committee in its
direction.  Except as otherwise provided by the Committee, a Participant’s
employment or service shall not be deemed to terminate upon the transfer of
employment or service between the Company and an Affiliate.  Except as
otherwise provided by the Committee, a Participant’s employment or service
shall be deemed to terminate, and further vesting of any Award shall cease, in
the case of any sale, spin-off, or other disposition of the Participant’s
employer or substantially all of its assets.  To the extent that this Section 10(e) or
action by the Committee results in an Incentive Stock Option being exercised
beyond the date that a Participant is deemed to be an employee of the Company
or a Subsidiary for purposes of Section 424 of the Code, the Option shall
be deemed to be a Nonstatutory Stock Option.

 

(f)            Change in Control.  In order to preserve
a Participant’s rights under an Award in the event of a change in control of
the Company as defined by the Committee (a “Change in Control”), the Committee
in its discretion may, at the time an Award is made or at any time thereafter,
take one or more of the following actions: (i) provide for the
acceleration of any time period relating to the exercise or payment of the
Award, (ii) provide for payment to the Participant of cash or other
property with a Fair Market Value equal to the amount that would have been
received upon the exercise or payment of the Award had the Award been exercised
or paid upon the Change in Control, (iii) adjust the terms of the Award in
a manner determined by the Committee to reflect the 

 

 

Change in Control, (iv) cause
the Award to be assumed, or new rights substituted therefor, by another entity,
or (v) make such other provision as the Committee may consider equitable
to Participants and in the best interests of the Company.

 

(g)           Loans.  The Committee may
not authorize the making of loans to Participants in connection with the grant
or exercise of any Award under the Plan.

 

(h)           Withholding Taxes.  A Participant shall
pay to the Company, or make provision satisfactory to the Committee for payment
of, any taxes required by law to be withheld in respect of Awards under the
Plan no later than the date of the event creating the tax liability.  In
the Committee’s discretion, such tax obligations may be paid in whole or in
part in shares of Common Stock, including shares retained from the Award
creating the tax obligation, valued at their Fair Market Value on the date of
delivery.  The Company and its Affiliates may, to the extent permitted by
Applicable Law, deduct any such tax obligations from any payment of any kind
otherwise due to the Participant.

 

(i)            Foreign National Awards.  Notwithstanding
anything to the contrary contained in this Plan, Foreign National Awards may be
made to Participants on such terms and conditions different from those
specified in the Plan as the Committee considers necessary or advisable to
achieve the purposes of the Plan or to comply with Applicable Law.

 

(j)            Amendment of Award.  Except as provided
in Section 10(k), the Committee may amend, modify, or terminate any
outstanding Award, including substituting therefor another Award of the same or
a different type, changing the date of exercise or realization and converting
an Incentive Stock Option to a Nonstatutory Stock Option, provided that the
Participant’s consent to such action shall be required unless (i) the
Committee determines that the action, taking into account any related action,
would not materially and adversely affect the Participant, or (ii) the
action is permitted by the terms of the Plan.

 

(k)           No Repricing of Options.  Notwithstanding
anything to the contrary in the Plan, the Company shall not engage in any
repricing of Options or SARs granted under this Plan without further
stockholder approval.  For this purpose, the term “repricing” shall mean
any of the following or other action that has the same effect:  (i) lowering
the exercise price of an Option or a SAR after it is granted, (ii) any
other action that is treated as a repricing under generally accepted accounting
principles, or (iii) canceling an Option or a SAR at a time when its
exercise price exceeds the fair market value of the underlying stock in
exchange for another Option, SAR, Restricted Stock, or other equity of the
Company, unless the cancellation and exchange occurs in connection with a
merger, acquisition, spin-off, or similar corporate transaction (including any
adjustment described in Section 5(c)).

 

(l)            Code Section 162(m) Provisions.  If the
Committee determines at the time an Award is granted to a Participant that such
Participant is, or may be as of the end of the tax year for which the Company
would claim a tax deduction in connection with such Award, a Covered Employee,
then the Committee may provide that the Participant’s right to receive cash,
shares, or other property pursuant to such Award shall be subject to the
satisfaction of Performance Goals during a Performance Period.  Prior to
the payment of any Award subject to this Section 10(l), the Committee
shall certify in writing that the Performance Goals and other material terms
applicable to such Award were satisfied.  Notwithstanding the attainment
of Performance Goals by a Covered Employee, the Committee shall have the right
to reduce (but not to increase) the amount payable at a given level of
performance to take into account additional factors that the Committee may deem
relevant.  The Committee shall have the power to impose such other
restrictions on Awards subject 

 

 

to this Section 10(l) as
it may deem necessary or appropriate to ensure that such Awards satisfy all
requirements for “performance-based compensation” within the meaning of Section 162(m) of
the Code.

 

(m)          Minimum Vesting Requirements.  Each Award granted
under the Plan shall vest in accordance with a schedule that does not
permit such Award to vest in full prior to the third anniversary of the Grant
Date of the Award.  This minimum vesting requirements shall not, however,
preclude the Committee from exercising its discretion to (i) accelerate
the vesting of any Award upon retirement, termination of employment by the
Company, death or Disability, (ii) accelerate the vesting of any Award in
accordance with Section 10(f), (iii) establish a shorter vesting
schedule for any Award granted to a consultant, director, or newly-hired
employee, (iv) establish a shorter vesting schedule for any Award
that is granted in exchange for or in lieu of the right to receive the payment
of an equivalent amount of salary, bonus, or other cash compensation, (v) establish
a shorter performance-based vesting schedule in accordance with Section 10(c) or
Section 10(l) (but in each case of not less than one year), or (vi) vest
up to 1,000 shares per year for each Participant.

 

(n)           Limitation Following a Hardship Distribution.  To the
extent required to comply with Treasury Regulation Section 1.401(k)-1(d)(2)(iv)(B)(4),
or any amendment or successor thereto, a Participant’s “elective and employee
contributions” (within the meaning of such Treasury Regulation) under the Plan
shall be suspended for a period of twelve months following such Participant’s
receipt of a hardship distribution made in reliance on such Treasury Regulation
from any plan containing a cash or deferred arrangement under Section 401(k) of
the Code maintained by the Company or a related party within the provisions of Section 414
of the Code.

 

11.          Miscellaneous

 

(a)           No Right To Employment.  No person shall have
any claim or right to be granted an Award.  Neither the Plan nor any Award
hereunder shall be deemed to give any employee the right to continued
employment or service or to limit the right of the Company to discharge any
Participant at any time.

 

(b)           No Rights As Stockholder.  Subject to the
provisions of the applicable Award, no Participant or Designated Beneficiary
shall have any rights as a stockholder with respect to any shares of Common
Stock to be distributed under the Plan until he or she becomes the holder
thereof.  A Participant to whom Common Stock is awarded shall be
considered the holder of the Stock at the time of the Award except as otherwise
provided in the Grant Agreement.

 

(c)           Effective Date.  Subject to the
approval of the stockholders of the Company, the Plan shall be effective on September 11,
2008.

 

(d)           Amendment and Term of Plan.  The Board may amend,
suspend, or terminate the Plan or any portion thereof at any time, subject to
such stockholder approval as the Board determines to be necessary or advisable
to comply with any tax or regulatory requirement, provided, however, that the
Board may not without stockholder approval materially amend the Plan (within
the meaning of applicable exchange listing requirements) to materially increase
the number of shares of Common Stock that may be issued under the Plan,
materially increase benefits to Participants, materially expand the class of
Participants eligible to participate in the Plan, or expand the types of Awards
provided under the Plan.  Unless terminated earlier by the Board, or
extended by subsequent approval of the Company’s stockholders, the term of the
Plan shall expire on September 15, 2015, 

 

 

and no further Awards shall
be made thereafter.  The termination of the Plan on such date shall not
affect the validity of any Award outstanding on the date of termination.

 

(e)           Governing Law.  The provisions of
the Plan shall be governed by and interpreted in accordance with the laws of
Massachusetts.

 

(f)            Indemnification.  Neither the Board
nor the Committee, nor any members of either, nor any employees or officers of
the Company or any Affiliate, shall be liable for any act, omission,
interpretation, construction, or determination made in good faith in connection
with their responsibilities under the Plan, and the Company hereby agrees to
indemnify the members of the Board, the members of the Committee, and the
employees and officers of the Company or any Affiliate administering the Plan,
in respect of any claim, loss, damage, or expense (including reasonable fees of
legal counsel) arising from any such act, omission, interpretation,
construction, or determination to the fullest extent permitted by Applicable
Law.

 

This
Amended and Restated 2005 Equity Incentive Plan was approved by the Company’s
Board of Directors on July 24, 2008 and by the Company’s stockholders on September 11,
2008.

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