Document:

exv10w16

Exhibit 10.16

 

AURORA DIAGNOSTICS, INC.

2010 INCENTIVE PLAN

 

 

 

AURORA DIAGNOSTICS, INC.

2010 INCENTIVE PLAN

	 	 	 	 	 	 	 

	ARTICLE 1 PURPOSE	 	1
	 
	 	 	 	 	 	 
	 
	 	1.1	 	General	 	1
	 
	 	 	 	 	 	 
	ARTICLE 2 DEFINITIONS	 	1
	 
	 	 	 	 	 	 
	 
	 	2.1	 	Definitions	 	1
	 
	 	 	 	 	 	 
	ARTICLE 3 TERM OF PLAN	 	7
	 
	 	 	 	 	 	 
	 
	 	3.1	 	Effective Date	 	7
	 
	 	 	 	 	 	 
	 
	 	3.2	 	Termination of Plan	 	7
	 
	 	 	 	 	 	 
	ARTICLE 4 ADMINISTRATION	 	7
	 
	 	 	 	 	 	 
	 
	 	4.1	 	Committee	 	7
	 
	 	 	 	 	 	 
	 
	 	4.2	 	Actions and Interpretations by the Committee	 	8
	 
	 	 	 	 	 	 
	 
	 	4.3	 	Authority of Committee	 	8
	 
	 	 	 	 	 	 
	 
	 	4.4	 	Delegation	 	9
	 
	 	 	 	 	 	 
	 
	 	4.5	 	Indemnification	 	9
	 
	 	 	 	 	 	 
	ARTICLE 5 SHARES SUBJECT TO THE PLAN	 	10
	 
	 	 	 	 	 	 
	 
	 	5.1	 	Number of Shares	 	10
	 
	 	 	 	 	 	 
	 
	 	5.2	 	Share Counting	 	10
	 
	 	 	 	 	 	 
	 
	 	5.3	 	Stock Distributed	 	11
	 
	 	 	 	 	 	 
	ARTICLE 6 ELIGIBILITY	 	11
	 
	 	 	 	 	 	 
	 
	 	6.1	 	General	 	11
	 
	 	 	 	 	 	 
	ARTICLE 7 STOCK OPTIONS	 	11
	 
	 	 	 	 	 	 
	 
	 	7.1	 	General	 	11
	 
	 	 	 	 	 	 
	 
	 	7.2	 	Incentive Stock Options	 	12
	 
	 	 	 	 	 	 
	ARTICLE 8 STOCK APPRECIATION RIGHTS	 	12
	 
	 	 	 	 	 	 
	 
	 	8.1	 	Grant of Stock Appreciation Rights	 	12
	 
	 	 	 	 	 	 
	ARTICLE 9 RESTRICTED STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS	 	13
	 
	 	 	 	 	 	 
	 
	 	9.1	 	Grant of Restricted Stock, Restricted Stock Units and Deferred Stock Units	 	13
	 
	 	 	 	 	 	 
	 
	 	9.2	 	Issuance and Restrictions	 	13
	 
	 	 	 	 	 	 
	 
	 	9.3	 	Dividends on Restricted Stock	 	14
	 
	 	 	 	 	 	 
	 
	 	9.4	 	Forfeiture	 	14

 

 

	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 
	 	9.5	 	Delivery of Restricted Stock	 	14
	 
	 	 	 	 	 	 
	ARTICLE 10 PERFORMANCE AWARDS	 	14
	 
	 	 	 	 	 	 
	 
	 	10.1	 	Grant of Performance Awards	 	14
	 
	 	 	 	 	 	 
	 
	 	10.2	 	Performance Goals	 	15
	 
	 	 	 	 	 	 
	ARTICLE 11 DIVIDEND EQUIVALENTS	 	15
	 
	 	 	 	 	 	 
	 
	 	11.1	 	Grant of Dividend Equivalents	 	15
	 
	 	 	 	 	 	 
	ARTICLE 12 STOCK OR OTHER STOCK-BASED AWARDS	 	15
	 
	 	 	 	 	 	 
	 
	 	12.1	 	Grant of Stock or Other Stock-Based Awards	 	15
	 
	 	 	 	 	 	 
	ARTICLE 13 PROVISIONS APPLICABLE TO AWARDS	 	16
	 
	 	 	 	 	 	 
	 
	 	13.1	 	Award Certificates	 	16
	 
	 	 	 	 	 	 
	 
	 	13.2	 	Form of Payment of Awards	 	16
	 
	 	 	 	 	 	 
	 
	 	13.3	 	Limits on Transfer	 	16
	 
	 	 	 	 	 	 
	 
	 	13.4	 	Beneficiaries	 	16
	 
	 	 	 	 	 	 
	 
	 	13.5	 	Stock Trading Restrictions	 	16
	 
	 	 	 	 	 	 
	 
	 	13.6	 	Effect of a Change in Control	 	17
	 
	 	 	 	 	 	 
	 
	 	13.7	 	Acceleration for Any Other Reason	 	18
	 
	 	 	 	 	 	 
	 
	 	13.8	 	Forfeiture Events	 	18
	 
	 	 	 	 	 	 
	 
	 	13.9	 	Substitute Awards	 	18
	 
	 	 	 	 	 	 
	ARTICLE 14 CHANGES IN CAPITAL STRUCTURE	 	18
	 
	 	 	 	 	 	 
	 
	 	14.1	 	Mandatory Adjustments	 	18
	 
	 	 	 	 	 	 
	 
	 	14.2	 	Discretionary Adjustments	 	19
	 
	 	 	 	 	 	 
	 
	 	14.3	 	General	 	19
	 
	 	 	 	 	 	 
	ARTICLE 15 AMENDMENT, MODIFICATION AND TERMINATION	 	19
	 
	 	 	 	 	 	 
	 
	 	15.1	 	Amendment, Modification and Termination	 	19
	 
	 	 	 	 	 	 
	 
	 	15.2	 	Awards Previously Granted	 	20
	 
	 	 	 	 	 	 
	 
	 	15.3	 	Compliance Amendments	 	20
	 
	 	 	 	 	 	 
	ARTICLE 16 GENERAL PROVISIONS	 	20
	 
	 	 	 	 	 	 
	 
	 	16.1	 	Rights of Participants	 	20
	 
	 	 	 	 	 	 
	 
	 	16.2	 	Withholding	 	21
	 
	 	 	 	 	 	 
	 
	 	16.3	 	Special Provisions Related to Section 409A of the Code	 	21
	 
	 	 	 	 	 	 
	 
	 	16.4	 	Unfunded Status of Awards	 	23
	 
	 	 	 	 	 	 
	 
	 	16.5	 	Relationship to Other Benefits	 	23

 

 

	 	 	 	 	 	 	 

	 
	 	 	 	 	 	 
	 
	 	16.6	 	Expenses	 	23
	 
	 	 	 	 	 	 
	 
	 	16.7	 	Titles and Headings	 	23
	 
	 	 	 	 	 	 
	 
	 	16.8	 	Gender and Number	 	23
	 
	 	 	 	 	 	 
	 
	 	16.9	 	Fractional Shares	 	23
	 
	 	 	 	 	 	 
	 
	 	16.10	 	Government and Other Regulations	 	23
	 
	 	 	 	 	 	 
	 
	 	16.11	 	Governing Law	 	24
	 
	 	 	 	 	 	 
	 
	 	16.12	 	Severability	 	24
	 
	 	 	 	 	 	 
	 
	 	16.13	 	No Limitations on Rights of Company	 	24

 

 

AURORA DIAGNOSTICS, INC.

2010 INCENTIVE PLAN

ARTICLE 1

PURPOSE

     1.1. GENERAL. The purpose of the Aurora Diagnostics, Inc. 2010 Incentive Plan (the
“Plan”) is to promote the success, and enhance the value, of Aurora Diagnostics, Inc. (the
“Company”), by linking the personal interests of employees, officers, directors and consultants of
the Company or any Affiliate (as defined below) to those of Company shareholders and by providing
such persons with an incentive for outstanding performance. The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract, and retain the services of
employees, officers, directors and consultants upon whose judgment, interest, and special effort
the successful conduct of the Company’s operation is largely dependent. Accordingly, the Plan
permits the grant of incentive awards from time to time to selected employees, officers, directors
and consultants of the Company and its Affiliates.

ARTICLE 2

DEFINITIONS

     2.1. DEFINITIONS. When a word or phrase appears in this Plan with the initial letter
capitalized, and the word or phrase does not commence a sentence, the word or phrase shall
generally be given the meaning ascribed to it in this Section or in Section 1.1 unless a clearly
different meaning is required by the context. The following words and phrases shall have the
following meanings:

     (a) “Affiliate” means (i) any Subsidiary or Parent, or (ii) an entity that
directly or through one or more intermediaries controls, is controlled by or is under
common control with, the Company, as determined by the Committee.

     (b) “Award” means an award of Options, Stock Appreciation Rights, Restricted
Stock, Restricted Stock Units, Deferred Stock Units, Performance Awards, Dividend
Equivalents, Other Stock-Based Awards, or any other right or interest relating to Stock or
cash, granted to a Participant under the Plan.

     (c) “Award Certificate” means a written document, in such form as the
Committee prescribes from time to time, setting forth the terms and conditions of an Award.
Award Certificates may be in the form of individual award agreements or certificates or a
program document describing the terms and provisions of an Award or series of Awards under
the Plan. The Committee may provide for the use of electronic, internet or other non-paper
Award Certificates, and the use of electronic, internet or other non-paper means for the
acceptance thereof and actions thereunder by a Participant.

     (d) “Beneficial Owner” shall have the meaning given such term in Rule 13d-3 of
the General Rules and Regulations under the 1934 Act.

     (e) “Board” means the Board of Directors of the Company.

1

 

     (f) “Cause” as a reason for a Participant’s termination of employment shall
have the meaning assigned such term in the employment, severance or similar agreement, if
any, between such Participant and the Company or an Affiliate, provided,
however, that if there is no such employment, severance or similar agreement in
which such term is defined, and unless otherwise defined in the applicable Award
Certificate, “Cause” shall mean any of the following acts by the Participant, as determined
by the Committee: gross neglect of duty, prolonged absence from duty without the consent of
the Company, material breach by the Participant of any published Company code of conduct or
code of ethics; or willful misconduct, misfeasance or malfeasance of duty which is
reasonably determined to be detrimental to the Company. With respect to a Participant’s
termination of directorship, “Cause” means an act or failure to act that constitutes cause
for removal of a director under applicable Delaware law. The determination of the
Committee as to the existence of “Cause” shall be conclusive on the Participant and the
Company.

     (g) “Change in Control” means and includes the occurrence of any one of the
following events but shall specifically exclude a Public Offering:

     (i) during any consecutive 12-month period, individuals who, at the beginning
of such period, constitute the Board (the “Incumbent Directors”) cease for any
reason to constitute at least a majority of such Board, provided that any person
becoming a director after the beginning of such 12-month period and whose election
or nomination for election was approved by a vote of at least a majority of the
Incumbent Directors then on the Board shall be an Incumbent Director;
provided, however, that no individual initially elected or
nominated as a director of the Company as a result of an actual or threatened
election contest with respect to the election or removal of directors (“Election
Contest”) or other actual or threatened solicitation of proxies or consents by or
on behalf of any Person other than the Board (“Proxy Contest”), including by reason
of any agreement intended to avoid or settle any Election Contest or Proxy Contest,
shall be deemed an Incumbent Director; or

     (ii) any person becomes a Beneficial Owner, directly or indirectly, of either
(A) 35% or more of the then-outstanding shares of common stock of the Company
(“Company Common Stock”) or (B) securities of the Company representing 35% or more
of the combined voting power of the Company’s then outstanding securities eligible
to vote for the election of directors (the “Company Voting Securities”);
provided, however, that for purposes of this subsection (ii), the
following acquisitions of Company Common Stock or Company Voting Securities shall
not constitute a Change in Control: (w) an acquisition directly from the Company,
(x) an acquisition by the Company or a Subsidiary, (y) an acquisition by any
employee benefit plan (or related trust) sponsored or maintained by the Company or
any Subsidiary, or (z) an acquisition pursuant to a Non-Qualifying Transaction (as
defined in subsection (iii) below); or

     (iii) the consummation of a reorganization, merger, consolidation,

2

 

statutory share exchange or similar form of corporate transaction involving the
Company or a Subsidiary (a “Reorganization”), or the sale or other disposition of
all or substantially all of the Company’s assets (a “Sale”) or the acquisition of
assets or stock of another corporation or other entity (an “Acquisition”), unless
immediately following such Reorganization, Sale or Acquisition: (A) all or
substantially all of the individuals and entities who were the Beneficial Owners,
respectively, of the outstanding Company Common Stock and outstanding Company
Voting Securities immediately prior to such Reorganization, Sale or Acquisition
beneficially own, directly or indirectly, more than 35% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Reorganization,
Sale or Acquisition (including, without limitation, an entity which as a result of
such transaction owns the Company or all or substantially all of the Company’s
assets or stock either directly or through one or more subsidiaries, the “Surviving
Entity”) in substantially the same proportions as their ownership, immediately
prior to such Reorganization, Sale or Acquisition, of the outstanding Company
Common Stock and the outstanding Company Voting Securities, as the case may be, and
(B) no person (other than (x) the Company or any Subsidiary, (y) the Surviving
Entity or its ultimate parent entity, or (z) any employee benefit plan (or related
trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner,
directly or indirectly, of 35% or more of the total common stock or 35% or more of
the total voting power of the outstanding voting securities eligible to elect
directors of the Surviving Entity, and (C) at least a majority of the members of
the board of directors of the Surviving Entity were Incumbent Directors at the time
of the Board’s approval of the execution of the initial agreement providing for
such Reorganization, Sale or Acquisition (any Reorganization, Sale or Acquisition
which satisfies all of the criteria specified in (A), (B) and (C) above shall be
deemed to be a “Non-Qualifying Transaction”).

     (h) “Code” means the Internal Revenue Code of 1986, as amended from time to
time. For purposes of this Plan, references to sections of the Code shall be deemed to
include references to any applicable regulations thereunder and any successor or similar
provision.

     (i) “Committee” means the committee of the Board described in Article 4.

     (j) “Company” means Aurora Diagnostics, Inc., a Delaware corporation, or any
successor corporation.

     (k) “Continuous Service” means the absence of any interruption or termination
of service as an employee, officer, consultant or director of the Company or any Affiliate,
as applicable; provided, however, that for purposes of an Incentive Stock
Option “Continuous Service” means the absence of any interruption or termination of service
as an employee of the Company or any Parent or Subsidiary, as applicable, pursuant to
applicable tax regulations. Continuous Service shall not be

3

 

considered interrupted in the following cases: (i) a Participant transfers employment
between the Company and an Affiliate or between Affiliates, or (ii) in the discretion of
the Committee as specified at or prior to such occurrence, in the case of a spin-off, sale
or disposition of the Participant’s employer from the Company or any Affiliate, or (iii)
any leave of absence authorized in writing by the Company prior to its commencement;
provided, however, that for purposes of Incentive Stock Options, no such
leave may exceed 90 days, unless reemployment upon expiration of such leave is guaranteed
by statute or contract. If reemployment upon expiration of a leave of absence approved by
the Company is not so guaranteed, on the 91st day of such leave any Incentive Stock Option
held by the Participant shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option. Whether military, government or
other service or other leave of absence shall constitute a termination of Continuous
Service shall be determined in each case by the Committee at its discretion, and any
determination by the Committee shall be final and conclusive; provided,
however, that for purposes of any Award that is subject to Code Section 409A, the
determination of a leave of absence must comply with the requirements of a “bona fide leave
of absence” as provided in Treas. Reg. Section 1.409A-1(h).

     (l) “Deferred Stock Unit” means a right granted to a Participant under Article
9 to receive Shares (or the equivalent value in cash or other property if the Committee so
provides) at a future time as determined by the Committee, or as determined by the
Participant within guidelines established by the Committee in the case of voluntary
deferral elections.

     (m) “Disability” of a Participant means that the Participant (i) is unable to
engage in any substantial gainful activity by reason of any medically determinable physical
or mental impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can
be expected to last for a continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than three months under an accident and
health plan covering employees of the Participant’s employer. If the determination of
Disability relates to 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 of 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.

     (n) “Dividend Equivalent” means a right granted to a Participant under Article
11.

     (o) “Effective Date” has the meaning assigned such term in Section 3.1.

     (p) “Eligible Participant” means an employee (including a leased employee),
officer, consultant or director of the Company or any Affiliate.

     (q) “Exchange” means any national securities exchange on which the Stock may
from time to time be listed or traded.

4

 

     (r) “Fair Market Value,” on any date, means (i) if the Stock is listed on a
securities exchange, the closing sales price on the principal such exchange on such date
or, in the absence of reported sales on such date, the closing sales price on the
immediately preceding date on which sales were reported, or (ii) if the Stock is not listed
on a securities exchange, the mean between the bid and offered prices as quoted by the
applicable interdealer quotation system for such date, provided that if the Stock is not
quoted on an interdealer quotation system or it is determined that the fair market value is
not properly reflected by such quotations, Fair Market Value will be determined by such
other method as the Committee determines in good faith to be reasonable and in compliance
with Code Section 409A.

     (s) “Full-Value Award” means an Award other than in the form of an Option or
SAR, and which is settled by the issuance of Stock (or at the discretion of the Committee,
settled in cash valued by reference to Stock value).

     (t) “Good Reason” (or a similar term denoting constructive termination) has
the meaning, if any, assigned such term in the employment, consulting, severance or similar
agreement, if any, between a Participant and the Company or an Affiliate; provided,
however, that if there is no such employment, consulting, severance or similar
agreement in which such term is defined, “Good Reason” shall have the meaning, if any,
given such term in the applicable Award Certificate. If not defined in either such
document, the term “Good Reason” as used herein shall not apply to a particular Award.

     (u) “Grant Date” of an Award 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 a provided to the grantee within a reasonable time after the
Grant Date.

     (v) “Incentive Stock Option” means an Option that is intended to be an
incentive stock option and meets the requirements of Section 422 of the Code or any
successor provision thereto.

     (w) “Independent Directors” means those members of the Board who qualify at
any given time as (a) an “independent” director under the applicable rules of each Exchange
on which the Shares are listed, and (b) a “non-employee” director under Rule 16b-3 of the
1934 Act.

     (x) “Non-Employee Director” means a director of the Company who is not a
common law employee of the Company or an Affiliate.

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

     (z) “Option” means a right granted to a Participant under Article 7 of the
Plan to purchase Stock at a specified price during specified time periods. An Option may
be either an Incentive Stock Option or a Nonstatutory Stock Option.

5

 

     (aa) “Other Stock-Based Award” means a right, granted to a Participant under
Article 12, that relates to or is valued by reference to Stock or other Awards relating to
Stock.

     (bb) “Parent” means a corporation, limited liability company, partnership or
other entity which owns or beneficially owns a majority of the outstanding voting stock or
voting power of the Company. Notwithstanding the above, with respect to an Incentive Stock
Option, Parent shall have the meaning set forth in Section 424(e) of the Code.

     (cc) “Participant” means an Eligible Participant who has been granted an Award
under the Plan; provided that in the case of the death of a Participant, the term
“Participant” refers to a beneficiary designated pursuant to Section 13.4 or the legal
guardian or other legal representative acting in a fiduciary capacity on behalf of the
Participant under applicable state law and court supervision.

     (dd) “Performance Award” means any award granted under the Plan pursuant to
Article 10.

     (ee) “Person” means any individual, entity or group, within the meaning of
Section 3(a)(9) of the 1934 Act and as used in Section 13(d)(3) or 14(d)(2) of the 1934
Act.

     (ff) “Plan” means the Aurora Diagnostics, Inc. 2010 Incentive Plan, as amended
from time to time.

     (gg) “Public Offering” means a public offering of any class or series of the
Company’s equity securities pursuant to a registration statement filed by the Company under
the 1933 Act.

     (hh) “Restricted Stock” means Stock granted to a Participant under Article 9
that is subject to certain restrictions and to risk of forfeiture.

     (ii) “Restricted Stock Unit” means the right granted to a Participant under
Article 9 to receive shares of Stock (or the equivalent value in cash or other property if
the Committee so provides) in the future, which right is subject to certain restrictions
and to risk of forfeiture.

     (jj) “Shares” means shares of the Company’s Stock. If there has been an
adjustment or substitution pursuant to Article 14, the term “Shares” shall also include any shares of stock or other securities that are substituted for Shares or into which Shares
are adjusted pursuant to Article 14.

     (kk) “Stock” means the $0.01 par value common stock of the Company and such
other securities of the Company as may be substituted for Stock pursuant to Article 14.

     (ll) “Stock Appreciation Right” or “SAR” means a right granted to a

6

 

Participant under Article 8 to receive a payment equal to the difference between the
Fair Market Value of a Share as of the date of exercise of the SAR over the base price of
the SAR, all as determined pursuant to Article 8.

     (mm) “Subsidiary” means any corporation, limited liability company,
partnership or other entity of which a majority of the outstanding voting stock or voting
power is beneficially owned directly or indirectly by the Company. Notwithstanding the
above, with respect to an Incentive Stock Option, Subsidiary shall have the meaning set
forth in Section 424(f) of the Code.

     (nn) “1933 Act” means the Securities Act of 1933, as amended from time to
time.

     (oo) “1934 Act” means the Securities Exchange Act of 1934, as amended from
time to time.

ARTICLE 3

TERM OF PLAN

     3.1. EFFECTIVE DATE. Subject to the approval of the Plan by the Company’s
shareholders within 12 months after the Plan’s adoption by the Board, the Plan will become
effective on the date that it is adopted by the Board (the “Effective Date”).

     3.2. TERMINATION OF PLAN. Unless earlier terminated as provided herein, the Plan
shall continue in effect until the tenth anniversary of the Effective Date or, if the shareholders
approve an amendment to the Plan that increases the number of Shares subject to the Plan, the tenth
anniversary of the date of such approval. The termination of the Plan on such date shall not
affect the validity of any Award outstanding on the date of termination, which shall continue to be
governed by the applicable terms and conditions of the Plan.

ARTICLE 4

ADMINISTRATION

     4.1. COMMITTEE. The Plan shall be administered by a Committee appointed by the Board
(which Committee shall consist of at least two directors) or, at the discretion of the Board from
time to time, the Plan may be administered by the Board. It is intended that at least two of the
directors appointed to serve on the Committee shall be Independent Directors and that any such
members of the Committee who do not so qualify shall abstain from participating in any decision to
make or administer Awards that are made to Eligible Participants who at the time of consideration
for such Award are persons subject to the short-swing profit rules of Section 16 of the 1934 Act.
However, the mere fact that a Committee member shall fail to qualify as an Independent Director or
shall fail to abstain from such action shall not invalidate any Award made by the Committee which
Award is otherwise validly made under the Plan. The members of the Committee shall be appointed
by, and may be changed at any time and from time to time in the discretion of, the Board. Unless
and until changed by the Board, the Compensation Committee of the Board is designated as the
Committee to administer the Plan. The Board may reserve to itself any or all of the authority and responsibility of the Committee under the
Plan or may act as administrator of the Plan for any and all purposes. To the extent the Board has reserved any authority and responsibility

7

 

or during any time that the Board is acting as
administrator of the Plan, it shall have all the powers and protections of the Committee hereunder,
and any reference herein to the Committee (other than in this Section 4.1) shall include the Board.
To the extent any action of the Board under the Plan conflicts with actions taken by the
Committee, the actions of the Board shall control.

     4.2. ACTION AND INTERPRETATIONS BY THE COMMITTEE. For purposes of administering the
Plan, the Committee may from time to time adopt rules, regulations, guidelines and procedures for
carrying out the provisions and purposes of the Plan and make such other determinations, not
inconsistent with the Plan, as the Committee may deem appropriate. The Committee may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in any Award in the
manner and to the extent it deems necessary to carry out the intent of the Plan. The Committee’s
interpretation of the Plan, any Awards granted under the Plan, any Award Certificate and all
decisions and determinations by the Committee with respect to the Plan are final, binding, and
conclusive on all parties. Each member of the Committee is entitled to, in good faith, rely or act
upon any report or other information furnished to that member by any officer or other employee of
the Company or any Affiliate, the Company’s or an Affiliate’s independent certified public
accountants, Company counsel or any executive compensation consultant or other professional
retained by the Company to assist in the administration of the Plan. No member of the Committee
will be liable for any good faith determination, act or omission in connection with the Plan or any
Award.

     4.3. AUTHORITY OF COMMITTEE. Except as provided in Section 4.1 hereof, the Committee
has the exclusive power, authority and discretion to:

     (a) Grant Awards;

     (b) Designate Participants;

     (c) Determine the type or types of Awards to be granted to each Participant;

     (d) Determine the number of Awards to be granted and the number of Shares or dollar
amount to which an Award will relate;

     (e) Determine the terms and conditions of any Award granted under the Plan;

     (f) Prescribe the form of each Award Certificate, which need not be identical for each
Participant;

     (g) Decide all other matters that must be determined in connection with an Award;

     (h) Establish, adopt or revise any rules, regulations, guidelines or procedures as it
may deem necessary or advisable to administer the Plan;

     (i) Make all other decisions and determinations that may be required

8

 

under the Plan or as the Committee deems necessary or advisable to administer the Plan;

     (j) Amend the Plan or any Award Certificate as provided herein; and

     (k) Adopt such modifications, procedures, and subplans as may be necessary or
desirable to comply with provisions of the laws of the United States or any non-U.S.
jurisdictions in which the Company or any Affiliate may operate, in order to assure the
viability of the benefits of Awards granted to participants located in the United States or
such other jurisdictions and to further the objectives of the Plan.

     Notwithstanding the foregoing, grants of Awards to Non-Employee Directors hereunder shall be
made only in accordance with the terms, conditions and parameters of a plan, program or policy for
the compensation of Non-Employee Directors as in effect from time to time, and the Committee may
not make discretionary grants hereunder to Non-Employee Directors.

     4.4. DELEGATION. The Board may, by resolution, expressly delegate to a special
committee, consisting of one or more directors who may but need not be officers of the Company, the
authority, within specified parameters as to the number and terms of Awards, to (i) designate
employees of the Company or any of its Affiliates to be recipients of Awards under the Plan, and
(ii) to determine the number of such Awards to be received by any such Participants;
provided, however, that such delegation of duties and responsibilities to an
officer of the Company may not be made with respect to the grant of Awards to eligible participants
who are subject to Section 16(a) of the 1934 Act at the Grant Date. The acts of such delegates
shall be treated hereunder as acts of the Board and such delegates shall report regularly to the
Board and the Compensation Committee regarding the delegated duties and responsibilities and any
Awards so granted.

     4.5. INDEMNIFICATION. Each person who is or shall have been a member of the
Committee, or of the Board, or an officer of the Company to whom authority was delegated in
accordance with this Article 4 shall be indemnified and held harmless by the Company against and
from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him
or her in connection with or resulting from any claim, action, suit, or proceeding to which he or
she may be a party or in which he or she may be involved by reason of any action taken or failure
to act under the Plan and against and from any and all amounts paid by him or her in settlement
thereof, with the Company’s approval, or paid by him or her in satisfaction of any judgment in any
such action, suit, or proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she undertakes to
handle and defend it on his or her own behalf, unless such loss, cost, liability, or expense is a
result of his or her own willful misconduct or except as expressly provided by statute. The
foregoing right of indemnification shall not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company’s charter or bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

9

 

ARTICLE 5

SHARES SUBJECT TO THE PLAN

     5.1. NUMBER OF SHARES. Subject to adjustment as provided in Sections 5.2 and Section
14.1, the aggregate number of Shares reserved and available for issuance pursuant to Awards granted
under the Plan shall be 2,000,000. The maximum number of Shares that may be issued upon exercise
of Incentive Stock Options granted under the Plan shall be 2,000,000.

     5.2. SHARE COUNTING. Shares covered by an Award shall be subtracted from the Plan
share reserve as of the Grant Date, but shall be added back to the Plan share reserve in accordance
with this Section 5.2.

     (a) To the extent that an Award is canceled, terminates, expires, is forfeited or
lapses for any reason, any unissued or forfeited Shares originally subject to the Award
will be added back to the Plan share reserve and again be available for issuance pursuant
to Awards granted under the Plan.

     (b) Shares subject to Awards settled in cash will be added back to the Plan share
reserve and again be available for issuance pursuant to Awards granted under the Plan.

     (c) Shares withheld to satisfy minimum tax withholding requirements will count against
the number of Shares remaining available for issuance pursuant to Awards granted under the
Plan, and Shares repurchased from an Award or delivered by a Participant to satisfy minimum
tax withholding requirements will not be added back to the Plan share reserve and will not
be again available for issuance pursuant to Awards granted under the Plan.

     (d) The full number of Shares subject to an Option will count against the number of Shares remaining available for issuance pursuant to Awards granted under the Plan, even if
the exercise price of an Option is satisfied in whole or in part through net-settlement or
by delivering Shares to the Company (by either actual delivery or attestation).

     (e) Upon exercise of Stock Appreciation Rights that are settled in Shares, the full
number of Stock Appreciation Rights (rather than the net number of Shares actually
delivered upon exercise) shall count against the number of Shares remaining available for
issuance pursuant to Awards granted under the Plan.

     (f) To the extent that the full number of Shares subject to an Award other than an
Option or SAR is not issued for any reason, including by reason of failure to achieve
maximum performance goals, the full number of Shares subject to such Award will count
against the number of Shares remaining available for issuance pursuant to Awards granted
under the Plan.

     (g) Substitute Awards granted pursuant to Section 13.9 of the Plan shall not count
against the Shares otherwise available for issuance under the Plan under Section 5.1.

10

 

     (h) Subject to applicable Exchange requirements, shares available under a
stockholder-approved plan of a company acquired by the Company (as appropriately adjusted
to Shares to reflect the transaction) may be issued under the Plan pursuant to Awards
granted to individuals who were not employees of the Company or its Affiliates immediately
before such transaction and will not count against the maximum share limitation specified
in Section 5.1.

     5.3. STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in
whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open
market.

ARTICLE 6

ELIGIBILITY

     6.1. GENERAL. Awards may be granted only to Eligible Participants. Incentive Stock
Options may be granted only to Eligible Participants who are employees of the Company or a Parent
or Subsidiary as defined in Section 424(e) and (f) of the Code. Eligible Participants who are
service providers to an Affiliate may be granted Options or SARs under this Plan only if the
Affiliate qualifies as an “eligible issuer of service recipient stock” within the meaning of Treas.
Reg. Section 1.409A-1(b)(5)(iii)(E).

ARTICLE 7

STOCK OPTIONS

     7.1. GENERAL. The Committee is authorized to grant Options to Participants on the
following terms and conditions:

     (a) EXERCISE PRICE. The exercise price per Share under an Option shall be
determined by the Committee, provided that the exercise price for any Option (other than an
Option issued as a substitute Award pursuant to Section 13.9) shall not be less than the
Fair Market Value as of the Grant Date.

     (b) PROHIBITION ON REPRICING. Except as otherwise provided in Section 14.1,
the exercise price of an Option may not be reduced, directly or indirectly by cancellation
and regrant or otherwise, without the prior approval of the shareholders of the Company.

     (c) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the time
or times at which an Option may be exercised in whole or in part, subject to Section
7.1(e), including a provision that an Option that is otherwise exercisable and has an
exercise price that is less than the Fair Market Value of the Stock on the last day of its
term will be automatically exercised on such final date of the term by means of a “net
exercise,” thus entitling the optionee to Shares equal to the intrinsic value of the Option
on such exercise date, less the number of Shares required for tax withholding. The
Committee shall also determine the performance or other conditions, if any, that must be satisfied before all or part of an Option may
be exercised or vested.

11

 

     (d) PAYMENT. The Committee shall determine the methods by which the exercise
price of an Option may be paid, the form of payment, and the methods by which Shares shall
be delivered or deemed to be delivered to Participants. As determined by the Committee at
or after the Grant Date, payment of the exercise price of an Option may be made, in whole
or in part, in the form of (i) cash or cash equivalents, (ii) delivery (by either actual
delivery or attestation) of previously-acquired Shares based on the Fair Market Value of
the Shares on the date the Option is exercised, (iii) withholding of Shares from the Option
based on the Fair Market Value of the Shares on the date the Option is exercised, (iv)
broker-assisted market sales, or (v) any other “cashless exercise” arrangement.

     (e) EXERCISE TERM. Except for Nonstatutory Options granted to Participants
outside the United States, no Option granted under the Plan shall be exercisable for more
than ten years from the Grant Date.

     (f) NO DEFERRAL FEATURE. No Option shall provide for any feature for the
deferral of compensation other than the deferral of recognition of income until the
exercise or disposition of the Option.

     (g) NO DIVIDEND EQUIVALENTS. No Option shall provide for Dividend
Equivalents.

     7.2. INCENTIVE STOCK OPTIONS. The terms of any Incentive Stock Options granted under
the Plan must comply with the requirements of Section 422 of the Code. Without limiting the
foregoing, any Incentive Stock Option granted to a Participant who at the Grant Date owns more than
10% of the voting power of all classes of shares of the Company must have an exercise price per
Share of not less than 110% of the Fair Market Value per Share on the Grant Date and an Option term
of not more than five years. If all of the requirements of Section 422 of the Code (including the
above) are not met, the Option shall automatically become a Nonstatutory Stock Option.

ARTICLE 8

STOCK APPRECIATION RIGHTS

     8.1. GRANT OF STOCK APPRECIATION RIGHTS. The Committee is authorized to grant Stock
Appreciation Rights to Participants on the following terms and conditions:

     (a) RIGHT TO PAYMENT. Upon the exercise of a SAR, the Participant has the
right to receive, for each Share with respect to which the SAR is being exercised, the
excess, if any, of:

     (1) The Fair Market Value of one Share on the date of exercise; over

     (2) The base price of the SAR as determined by the Committee and set forth in
the Award Certificate, which shall not be less than the Fair Market Value of one
Share on the Grant Date.

12

 

     (b) PROHIBITION ON REPRICING. Except as otherwise provided in Section 14.1,
the base price of a SAR may not be reduced, directly or indirectly by cancellation and
regrant or otherwise, without the prior approval of the shareholders of the Company.

     (c) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the time
or times at which a SAR may be exercised in whole or in part, including a provision that a
SAR that is otherwise exercisable and has a base price that is less than the Fair Market
Value of the Stock on the last day of its term will be automatically exercised on such
final date of the term, thus entitling the holder to cash or Shares equal to the intrinsic
value of the SAR on such exercise date, less the cash or number of Shares required for tax
withholding. Except for SARs granted to Participants outside the United States, no SAR
shall be exercisable for more than ten years from the Grant Date.

     (d) NO DEFERRAL FEATURE. No SAR shall provide for any feature for the
deferral of compensation other than the deferral of recognition of income until the
exercise or disposition of the SAR.

     (e) NO DIVIDEND EQUIVALENTS. No SAR shall provide for Dividend Equivalents.

     (f) OTHER TERMS. All SARs shall be evidenced by an Award Certificate.
Subject to the limitations of this Article 8, the terms, methods of exercise, methods of
settlement, form of consideration payable in settlement (e.g., cash, Shares or other
property), and any other terms and conditions of the SAR shall be determined by the
Committee at the time of the grant and shall be reflected in the Award Certificate.

ARTICLE 9

RESTRICTED STOCK, RESTRICTED STOCK UNITS

AND DEFERRED STOCK UNITS

     9.1. GRANT OF RESTRICTED STOCK, RESTRICTED STOCK UNITS AND DEFERRED STOCK UNITS. The
Committee is authorized to make Awards of Restricted Stock, Restricted Stock Units or Deferred
Stock Units to Participants in such amounts and subject to such terms and conditions as may be
selected by the Committee. An Award of Restricted Stock, Restricted Stock Units or Deferred Stock
Units shall be evidenced by an Award Certificate setting forth the terms, conditions, and
restrictions applicable to the Award.

     9.2. ISSUANCE AND RESTRICTIONS. Restricted Stock, Restricted Stock Units or Deferred
Stock Units shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including,
for example, limitations on the right to vote Restricted Stock or the right to receive dividends on
the Restricted Stock). These restrictions may lapse separately or in combination at such times,
under such circumstances, in such installments, upon the satisfaction of performance goals or
otherwise, as the Committee determines at the time of the grant of the Award or thereafter. Except
as otherwise provided in an Award Certificate or any special Plan document governing an

13

 

Award, a Participant shall have none of the rights of a stockholder with respect to Restricted Stock Units
or Deferred Stock Units until such time as Shares of Stock are paid in settlement of such Awards.

     9.3. DIVIDENDS ON RESTRICTED STOCK. In the case of Restricted Stock, the Committee
may provide that ordinary cash dividends declared on the Shares before they are vested (i) will be
forfeited, (ii) will be deemed to have been reinvested in additional Shares or otherwise reinvested
(subject to Share availability under Section 5.1 hereof), or (iii) in the case of Restricted Stock
that is not subject to performance-based vesting, will be paid or distributed to the Participant as
accrued (in which case, such dividends must be paid or distributed no later than the
15th day of the 3rd month following the later of (A) the calendar year in
which the corresponding dividends were paid to shareholders, or (B) the first calendar year in
which the Participant’s right to such dividends is no longer subject to a substantial risk of
forfeiture). Unless otherwise provided by the Committee, dividends accrued on Shares of Restricted
Stock before they are vested shall, as provided in the Award Certificate, either (i) be reinvested
in the form of additional Shares, which shall be subject to the same vesting provisions as provided
for the host Award, or (ii) be credited by the Company to an account for the Participant and
accumulated without interest until the date upon which the host Award becomes vested, and any
dividends accrued with respect to forfeited Restricted Stock will be reconveyed to the Company
without further consideration or any act or action by the Participant.

     9.4. FORFEITURE. Subject to the terms of the Award Certificate and except as
otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon
termination of Continuous Service during the applicable restriction period or upon failure to
satisfy a performance goal during the applicable restriction period, Restricted Stock or Restricted
Stock Units that are at that time subject to restrictions shall be forfeited.

     9.5. DELIVERY OF RESTRICTED STOCK. Shares of Restricted Stock shall be delivered to
the Participant at the Grant Date either by book-entry registration or by delivering to the
Participant, or a custodian or escrow agent (including, without limitation, the Company or one or
more of its employees) designated by the Committee, a stock certificate or certificates registered
in the name of the Participant. If physical certificates representing shares of Restricted Stock
are registered in the name of the Participant, such certificates must bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to such Restricted Stock.

ARTICLE 10

PERFORMANCE AWARDS

     10.1. GRANT OF PERFORMANCE AWARDS. The Committee is authorized to grant any Award
under this Plan, including cash-based Awards, with performance-based vesting criteria, on such
terms and conditions as may be selected by the Committee. Any such Awards with performance-based
vesting criteria are referred to herein as Performance Awards. The Committee shall have the
complete discretion to determine the number of Performance Awards granted to each Participant and
to designate the provisions of such Performance Awards as provided in Section 4.3. All Performance
Awards shall be evidenced by an Award Certificate or a written program established by the
Committee, pursuant to which Performance Awards are awarded under the Plan under uniform terms,
conditions and

14

 

restrictions set forth in such written program.

     10.2. PERFORMANCE GOALS. The Committee may establish performance goals for
Performance Awards which may be based on any criteria selected by the Committee. Such performance
goals may be described in terms of Company-wide objectives or in terms of objectives that relate to
the performance of the Participant, an Affiliate or a division, region, department or function
within the Company or an Affiliate. If the Committee determines that a change in the business,
operations, corporate structure or capital structure of the Company or the manner in which the
Company or an Affiliate conducts its business, or other events or circumstances render performance
goals to be unsuitable, the Committee may modify such performance goals in whole or in part, as the
Committee deems appropriate. If a Participant is promoted, demoted or transferred to a different
business unit or function during a performance period, the Committee may determine that the
performance goals or performance period are no longer appropriate and may (i) adjust, change or
eliminate the performance goals or the applicable performance period as it deems appropriate to
make such goals and period comparable to the initial goals and period, or (ii) make a cash payment
to the participant in an amount determined by the Committee.

ARTICLE 11

DIVIDEND EQUIVALENTS

     11.1. GRANT OF DIVIDEND EQUIVALENTS. The Committee is authorized to grant Dividend
Equivalents with respect to Full-Value Awards granted hereunder, subject to such terms and
conditions as may be selected by the Committee. Dividend Equivalents shall entitle the Participant
to receive payments equal to ordinary cash dividends or distributions with respect to all or a
portion of the number of Shares subject to a Full-Value Award, as determined by the Committee. The
Committee may provide that Dividend Equivalents (i) will be deemed to have been reinvested in
additional Shares or otherwise reinvested, or (ii) except in the case of Performance Awards, will
be paid or distributed to the Participant as accrued (in which case, such Dividend Equivalents must
be paid or distributed no later than the 15th day of the 3rd month following
the later of (A) the calendar year in which the corresponding dividends were paid to shareholders,
or (B) the first calendar year in which the Participant’s right to such Dividends Equivalents is no
longer subject to a substantial risk of forfeiture). Unless otherwise provided by the Committee,
Dividend Equivalents accruing on unvested Full-Value Awards shall, as provided in the Award
Certificate, either (i) be reinvested in the form of additional Shares, which shall be subject to
the same vesting provisions as provided for the host Award, or (ii) be credited by the Company to
an account for the Participant and accumulated without interest until the date upon which the host
Award becomes vested, and any Dividend Equivalents accrued with respect to forfeited Awards will be reconveyed to the
Company without further consideration or any act or action by the Participant.

ARTICLE 12

STOCK OR OTHER STOCK-BASED AWARDS

     12.1. GRANT OF STOCK OR OTHER STOCK-BASED AWARDS. The Committee is authorized,
subject to limitations under applicable law, to grant to Participants such other Awards that are
payable in, valued in whole or in part by reference to, or otherwise based on or related to Shares,
as deemed by the Committee to be consistent with

15

 

the purposes of the Plan, including without
limitation Shares awarded purely as a “bonus” and not subject to any restrictions or conditions,
convertible or exchangeable debt securities, other rights convertible or exchangeable into Shares,
and Awards valued by reference to book value of Shares or the value of securities of or the
performance of specified Parents or Subsidiaries. The Committee shall determine the terms and
conditions of such Awards.

ARTICLE 13

PROVISIONS APPLICABLE TO AWARDS

     13.1. AWARD CERTIFICATES. Each Award shall be evidenced by an Award Certificate.
Each Award Certificate shall include such provisions, not inconsistent with the Plan, as may be
specified by the Committee.

     13.2. FORM OF PAYMENT FOR AWARDS. At the discretion of the Committee, payment of
Awards may be made in cash, Stock, a combination of cash and Stock, or any other form of property
as the Committee shall determine. In addition, payment of Awards may include such terms,
conditions, restrictions and/or limitations, if any, as the Committee deems appropriate, including,
in the case of Awards paid in the form of Stock, restrictions on transfer and forfeiture
provisions. Further, payment of Awards may be made in the form of a lump sum, or in installments,
as determined by the Committee.

     13.3. LIMITS ON TRANSFER. No right or interest of a Participant in any unexercised or
restricted Award may be pledged, encumbered, or hypothecated to or in favor of any party other than
the Company or an Affiliate, or shall be subject to any lien, obligation, or liability of such
Participant to any other party other than the Company or an Affiliate. No unexercised or
restricted Award shall be assignable or transferable by a Participant other than by will or the
laws of descent and distribution; provided, however, that the Committee may (but
need not) permit other transfers (other than transfers for value) where the Committee concludes
that such transferability (i) does not result in accelerated taxation, (ii) does not cause any
Option intended to be an Incentive Stock Option to fail to be described in Code Section 422(b), and
(iii) is otherwise appropriate and desirable, taking into account any factors deemed relevant,
including without limitation, state or federal tax or securities laws applicable to transferable
Awards.

     13.4. BENEFICIARIES. Notwithstanding Section 13.3, a Participant may, in the manner
determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect
to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative, or
other person claiming any rights under the Plan is subject to all terms and conditions of the Plan
and any Award Certificate applicable to the Participant, except to the extent the Plan and Award
Certificate otherwise provide, and to any additional restrictions deemed necessary or appropriate
by the Committee. If no beneficiary has been designated or survives the Participant, any payment
due to the Participant shall be made to the Participant’s estate. Subject to the foregoing, a
beneficiary designation may be changed or revoked by a Participant, in the manner provided by the
Company, at any time provided the change or revocation is filed with the Committee.

     13.5. STOCK TRADING RESTRICTIONS. All Stock issuable under the Plan is subject to any
stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply
with federal or state securities laws, rules and regulations and the

16

 

rules of any national
securities exchange or automated quotation system on which the Stock is listed, quoted, or traded.
The Committee may place legends on any Stock certificate or issue instructions to the transfer
agent to reference restrictions applicable to the Stock.

     13.6. EFFECT OF A CHANGE IN CONTROL. The provisions of this Section 13.6 shall apply
in the case of a Change in Control, unless otherwise provided in the Award Certificate or any
special Plan document or separate agreement with a Participant governing an Award.

     (a) Awards not Assumed or Substituted by Surviving Entity. Upon the
occurrence of a Change in Control, and except with respect to any Awards assumed by the
Surviving Entity or otherwise equitably converted or substituted in connection with the
Change in Control in a manner approved by the Committee or the Board: (i) outstanding
Options, SARs, and other Awards in the nature of rights that may be exercised shall become
fully exercisable, (ii) time-based vesting restrictions on outstanding Awards shall lapse,
and (iii) the payout levels under outstanding performance-based Awards shall be determined
and deemed to have been earned as of the effective date of the Change in Control based upon
an assumed achievement of all relevant performance goals at the “target” level, and,
subject to Section 16.3, there shall be a prorata payout to Participants within sixty (60)
days following the Change in Control (unless a later date is required by Section 16.3
hereof), based upon the length of time within the performance period that has elapsed prior
to the Change in Control. Any Awards shall thereafter continue or lapse in accordance with
the other provisions of the Plan and the Award Certificate. To the extent that this
provision causes Incentive Stock Options to exceed the dollar limitation set forth in Code
Section 422(d), the excess Options shall be deemed to be Nonstatutory Stock Options.

     (b) Awards Assumed or Substituted by Surviving Entity. With respect to Awards
assumed by the Surviving Entity or otherwise equitably converted or substituted in
connection with a Change in Control: if within one year after the effective date of the
Change in Control, a Participant’s employment is terminated without Cause or the
Participant resigns for Good Reason, then (i) all of that Participant’s outstanding
Options, SARs and other Awards in the nature of rights that may be exercised shall become fully exercisable, (ii) all time-based vesting
restrictions on the his or her outstanding Awards shall lapse, and (iii) the payout level
under all of that Participant’s performance-based Awards that were outstanding immediately
prior to effective time of the Change in Control shall be determined and deemed to have
been earned as of the date of termination based upon an assumed achievement of all relevant
performance goals at the “target” level, and there shall be a prorata payout to such
Participant within sixty (60) days following the date of termination of employment (unless
a later date is required by Section 16.3 hereof), based upon the length of time within the
performance period that has elapsed prior to the date of termination of employment. With
regard to each Award, a Participant shall not be considered to have resigned for Good
Reason unless either (i) the Award Certificate includes such provision or (ii) the
Participant is party to an employment, severance or similar agreement with the Company or
an Affiliate that includes provisions in which the Participant is permitted to resign for
Good Reason. Any Awards shall thereafter continue or lapse in accordance with the other
provisions of

17

 

the Plan and the Award Certificate. To the extent that this provision causes
Incentive Stock Options to exceed the dollar limitation set forth in Code Section 422(d),
the excess Options shall be deemed to be Nonstatutory Stock Options.

     13.7. ACCELERATION FOR ANY REASON. Regardless of whether an event has occurred as
described in Section 13.6 above, the Committee may in its sole discretion at any time determine
that all or a portion of a Participant’s Options, SARs, and other Awards in the nature of rights
that may be exercised shall become fully or partially exercisable, that all or a part of the
time-based vesting restrictions on all or a portion of the outstanding Awards shall lapse, and/or
that any performance-based criteria with respect to any Awards shall be deemed to be wholly or
partially satisfied, in each case, as of such date as the Committee may, in its sole discretion,
declare. The Committee may discriminate among Participants and among Awards granted to a
Participant in exercising its discretion pursuant to this Section 13.7. Notwithstanding anything
in the Plan, including this Section 13.7, the Committee may not accelerate the payment of any Award
if such acceleration would violate Section 409A(a)(3) of the Code.

     13.8. FORFEITURE EVENTS. The Committee may specify in an Award Certificate that the
Participant’s rights, payments and benefits with respect to an Award shall be subject to reduction,
cancellation, forfeiture or recoupment upon the occurrence of certain specified events, in addition
to any otherwise applicable vesting or performance conditions of an Award. Such events may include,
but shall not be limited to, (i) termination of employment for cause, (ii) violation of material
Company or Affiliate policies, (iii) breach of noncompetition, confidentiality or other restrictive
covenants that may apply to the Participant, (iv) other conduct by the Participant that is
detrimental to the business or reputation of the Company or any Affiliate, or (v) a later
determination that the vesting of, or amount realized from, a Performance Award was based on
materially inaccurate financial statements or any other materially inaccurate performance metric
criteria, whether or not the Participant caused or contributed to such material inaccuracy.

     13.9. SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock-based awards held by employees of another entity who become
employees of the Company or an Affiliate as a result of a merger or consolidation of the former employing entity with the
Company or an Affiliate or the acquisition by the Company or an Affiliate of property or stock of
the former employing corporation. The Committee may direct that the substitute awards be granted
on such terms and conditions as the Committee considers appropriate in the circumstances.

ARTICLE 14

CHANGES IN CAPITAL STRUCTURE

     14.1. MANDATORY ADJUSTMENTS. In the event of a nonreciprocal transaction between the
Company and its stockholders that causes the per-share value of the Stock to change (including,
without limitation, any stock dividend, stock split, spin-off, rights offering, or large
nonrecurring cash dividend), the authorization limits under Section 5.1 shall be adjusted
proportionately, and the Committee shall make such adjustments to the Plan and Awards as it deems
necessary, in its sole discretion, to prevent dilution or enlargement of rights immediately
resulting from such transaction. Action by the Committee may include: (i) adjustment of the number
and kind of shares that may be delivered under the Plan; (ii)

18

 

adjustment of the number and kind of shares subject to outstanding Awards; (iii) adjustment of the exercise price of outstanding Awards
or the measure to be used to determine the amount of the benefit payable on an Award; and (iv) any
other adjustments that the Committee determines to be equitable. Notwithstanding the foregoing,
the Committee shall not make any adjustments to outstanding Options or SARs that would constitute a
modification or substitution of the stock right under Treas. Reg. Sections 1.409A-1(b)(5)(v) that
would be treated as the grant of a new stock right or change in the form of payment for purposes of
Code Section 409A. Without limiting the foregoing, in the event of a subdivision of the
outstanding Stock (stock-split), a declaration of a dividend payable in Shares, or a combination or
consolidation of the outstanding Stock into a lesser number of Shares, the authorization limits
under Section 5.1 shall automatically be adjusted proportionately, and the Shares then subject to
each Award shall automatically, without the necessity for any additional action by the Committee,
be adjusted proportionately without any change in the aggregate purchase price therefor.

     14.2. DISCRETIONARY ADJUSTMENTS. Upon the occurrence or in anticipation of any
corporate event or transaction involving the Company (including, without limitation, any merger,
reorganization, recapitalization, combination or exchange of shares, or any transaction described
in Section 14.1), the Committee may, in its sole discretion, provide (i) that Awards will be
settled in cash rather than Stock, (ii) that Awards will become immediately vested and
non-forfeitable and exercisable (in whole or in part) and will expire after a designated period of
time to the extent not then exercised, (iii) that Awards will be assumed by another party to a
transaction or otherwise be equitably converted or substituted in connection with such transaction,
(iv) that outstanding Awards may be settled by payment in cash or cash equivalents equal to the
excess of the Fair Market Value of the underlying Stock, as of a specified date associated with the
transaction, over the exercise or base price of the Award, (v) that performance targets and
performance periods for Performance Awards will be modified, or (vi) any combination of the
foregoing. The Committee’s determination need not be uniform and may be different for different
Participants whether or not such Participants are similarly situated.

     14.3. GENERAL. Any discretionary adjustments made pursuant to this Article 14 shall
be subject to the provisions of Section 15.2. To the extent that any adjustments made pursuant to
this Article 14 cause Incentive Stock Options to cease to qualify as Incentive Stock Options, such
Options shall be deemed to be Nonstatutory Stock Options.

ARTICLE 15

AMENDMENT, MODIFICATION AND TERMINATION

     15.1. AMENDMENT, MODIFICATION AND TERMINATION. The Board or the Committee may, at any
time and from time to time, amend, modify or terminate the Plan without stockholder approval;
provided, however, that if an amendment to the Plan would, in the reasonable
opinion of the Board or the Committee, either (i) increase the number of Shares available under the
Plan, (ii) expand the types of awards under the Plan, (iii) materially expand the class of
participants eligible to participate in the Plan, (iv) materially extend the term of the Plan, or
(v) otherwise constitute a material change requiring stockholder approval under applicable laws,
policies or regulations or the applicable listing or other requirements of an Exchange, then such
amendment shall be subject to stockholder approval; and provided, further, that the
Board or Committee may condition any other amendment or modification on

19

 

the approval of
stockholders of the Company for any reason, including by reason of such approval being necessary or
deemed advisable (i) to comply with the listing or other requirements of an Exchange, or (ii) to
satisfy any other tax, securities or other applicable laws, policies or regulations.

     15.2. AWARDS PREVIOUSLY GRANTED. At any time and from time to time, the Committee may
amend, modify or terminate any outstanding Award without approval of the Participant;
provided, however:

     (a) Subject to the terms of the applicable Award Certificate, such amendment,
modification or termination shall not, without the Participant’s consent, reduce or
diminish the value of such Award determined as if the Award had been exercised, vested,
cashed in or otherwise settled on the date of such amendment or termination (with the
per-share value of an Option or SAR for this purpose being calculated as the excess, if
any, of the Fair Market Value as of the date of such amendment or termination over the
exercise or base price of such Award);

     (b) The original term of an Option or SAR may not be extended without the prior
approval of the stockholders of the Company;

     (c) Except as otherwise provided in Section 14.1, the exercise price of an Option or
base price of a SAR may not be reduced, directly or indirectly, without the prior approval
of the stockholders of the Company; and

     (d) No termination, amendment, or modification of the Plan shall adversely affect any
Award previously granted under the Plan, without the written consent of the Participant
affected thereby. An outstanding Award shall not be deemed to be “adversely affected” by a Plan amendment if such amendment would not
reduce or diminish the value of such Award determined as if the Award had been exercised,
vested, cashed in or otherwise settled on the date of such amendment (with the per-share
value of an Option or SAR for this purpose being calculated as the excess, if any, of the
Fair Market Value as of the date of such amendment over the exercise or base price of such
Award).

     15.3. COMPLIANCE AMENDMENTS. Notwithstanding anything in the Plan or in any Award
Certificate to the contrary, the Board may amend the Plan or an Award Certificate, to take effect
retroactively or otherwise, as deemed necessary or advisable for the purpose of conforming the Plan
or Award Certificate to any present or future law relating to plans of this or similar nature
(including, but not limited to, Section 409A of the Code), and to the administrative regulations
and rulings promulgated thereunder. By accepting an Award under this Plan, a Participant agrees to
any amendment made pursuant to this Section 15.3 to any Award granted under the Plan without
further consideration or action.

ARTICLE 16

GENERAL PROVISIONS

     16.1. RIGHTS OF PARTICIPANTS.

     (a) No Participant or any Eligible Participant shall have any claim to be

20

 

granted any Award under the Plan. Neither the Company, its Affiliates nor the Committee is obligated
to treat Participants or Eligible Participants uniformly, and determinations made under the
Plan may be made by the Committee selectively among Eligible Participants who receive, or
are eligible to receive, Awards (whether or not such Eligible Participants are similarly
situated).

     (b) Nothing in the Plan, any Award Certificate or any other document or statement made
with respect to the Plan, shall interfere with or limit in any way the right of the Company
or any Affiliate to terminate any Participant’s employment or status as an officer, or any
Participant’s service as a director, at any time, nor confer upon any Participant any right
to continue as an employee, officer, or director of the Company or any Affiliate, whether
for the duration of a Participant’s Award or otherwise.

     (c) Neither an Award nor any benefits arising under this Plan shall constitute an
employment contract with the Company or any Affiliate and, accordingly, subject to Article
15, this Plan and the benefits hereunder may be terminated at any time in the sole and
exclusive discretion of the Committee without giving rise to any liability on the part of
the Company or an of its Affiliates.

     (d) No Award gives a Participant any of the rights of a shareholder of the Company
unless and until Shares are in fact issued to such person in connection with such Award.

     16.2. WITHHOLDING. The Company or any Affiliate shall have the authority and the right to deduct or withhold, or require a
Participant to remit to the Company or such Affiliate, an amount sufficient to satisfy federal,
state, and local taxes (including the Participant’s FICA obligation) required by law to be withheld
with respect to any exercise, lapse of restriction or other taxable event arising as a result of
the Plan. The obligations of the Company under the Plan will be conditioned on such payment or
arrangements and the Company or such Affiliate will, 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. Unless
otherwise determined by the Committee at the time the Award is granted or thereafter, any such
withholding requirement may be satisfied, in whole or in part, by withholding from the Award Shares
having a Fair Market Value on the date of withholding equal to the minimum amount (and not any
greater amount) required to be withheld for tax purposes, all in accordance with such procedures as
the Committee establishes. All such elections shall be subject to any restrictions or limitations
that the Committee, in its sole discretion, deems appropriate.

     16.3. SPECIAL PROVISIONS RELATED TO SECTION 409A OF THE CODE.

     (a) General. It is intended that the payments and benefits provided under the Plan and
any Award shall either be exempt from the application of, or comply with, the requirements of
Section 409A of the Code. The Plan and all Award Certificates shall be construed in a manner that
effects such intent. Nevertheless, the tax treatment of the benefits provided under the Plan or
any Award is not warranted or guaranteed. Neither the Company, its Affiliates nor their respective
directors, officers, employees or advisers (other than in his or her capacity as a Participant)
shall be held liable for any taxes, interest, penalties or other

21

 

monetary amounts owed by any Participant or other taxpayer as a result of the Plan or any Award.

     (b) Definitional Restrictions. Notwithstanding anything in the Plan or in any Award
Certificate to the contrary, to the extent that any amount or benefit that would constitute
non-exempt “deferred compensation” for purposes of Section 409A of the Code would otherwise be
payable or distributable, or a different form of payment (e.g., lump sum or installment) would be
effected, under the Plan or any Award Certificate by reason of the occurrence of a Change in
Control, or the Participant’s Disability or separation from service, such amount or benefit will
not be payable or distributable to the Participant, and/or such different form of payment will not
be effected, by reason of such circumstance unless the circumstances giving rise to such Change in
Control, Disability or separation from service meet any description or definition of “change in
control event”, “disability” or “separation from service”, as the case may be, in Section 409A of
the Code and applicable regulations (without giving effect to any elective provisions that may be
available under such definition). This provision does not prohibit the vesting of any Award upon a
Change in Control, Disability or separation from service, however defined. If this provision
prevents the payment or distribution of any amount or benefit, or the application of a different
form of payment of any amount or benefit, such payment or distribution shall be made at the time
and in the form that would have applied absent the Change in Control, Disability or separation from
service, as applicable, as applicable.

     (c) Allocation among Possible Exemptions. If any one or more Awards granted under the
Plan to a Participant could qualify for any separation pay exemption described in Treas. Reg. Section 1.409A-1(b)(9), but such Awards in the aggregate exceed the dollar limit
permitted for the separation pay exemptions, the Company (acting through the Committee or the Head
of Human Resources) shall determine which Awards or portions thereof will be subject to such
exemptions.

     (d) Six-Month Delay in Certain Circumstances. Notwithstanding anything in the Plan or
in any Award Certificate to the contrary, if any amount or benefit that would constitute non-exempt
“deferred compensation” for purposes of Section 409A of the Code would otherwise be payable or
distributable under this Plan or any Award Certificate by reason of a Participant’s separation from
service during a period in which the Participant is a Specified Employee (as defined below), then,
subject to any permissible acceleration of payment by the Committee under Treas. Reg. Section
1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi)
(payment of employment taxes):

          (i) the amount of such non-exempt deferred compensation that would otherwise be payable during
the six-month period immediately following the Participant’s separation from service will be
accumulated through and paid or provided on the first day of the seventh month following the
Participant’s separation from service (or, if the Participant dies during such period, within 30
days after the Participant’s death) (in either case, the “Required Delay Period”); and

          (ii) the normal payment or distribution schedule for any remaining payments or distributions
will resume at the end of the Required Delay Period.

22

 

     For purposes of this Plan, the term “Specified Employee” has the meaning given such term in
Code Section 409A and the final regulations thereunder, provided, however, that, as
permitted in such final regulations, the Company’s Specified Employees and its application of the
six-month delay rule of Code Section 409A(a)(2)(B)(i) shall be determined in accordance with rules
adopted by the Board or any committee of the Board, which shall be applied consistently with
respect to all nonqualified deferred compensation arrangements of the Company, including this Plan.

     (e) Installment Payments. If, pursuant to an Award, a Participant is entitled to a
series of installment payments, such Participant’s right to the series of installment payments
shall be treated as a right to a series of separate payments and not to a single payment. For
purposes of the preceding sentence, the term “series of installment payments” has the meaning
provided in Treas. Reg. Section 1.409A-2(b)(2)(iii) (or any successor thereto).

     16.4. UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan for
incentive and deferred compensation. With respect to any payments not yet made to a Participant
pursuant to an Award, nothing contained in the Plan or any Award Certificate shall give the
Participant any rights that are greater than those of a general creditor of the Company or any
Affiliate. In its sole discretion, the Committee may authorize the creation of grantor trusts or
other arrangements to meet the obligations created under the Plan to deliver Shares or payments in
lieu of Shares or with respect to Awards. This Plan is not intended to be subject to ERISA.

     16.5. RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be taken into
account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or
benefit plan of the Company or any Affiliate unless provided otherwise in such other plan. Nothing
contained in the Plan will prevent the Company from adopting other or additional compensation
arrangements, subject to shareholder approval if such approval is required; and such arrangements
may be either generally applicable or applicable only in specific cases.

     16.6. EXPENSES. The expenses of administering the Plan shall be borne by the Company
and its Affiliates.

     16.7. TITLES AND HEADINGS. The titles and headings of the Sections in the Plan are
for convenience of reference only, and in the event of any conflict, the text of the Plan, rather
than such titles or headings, shall control.

     16.8. GENDER AND NUMBER. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall include the singular
and the singular shall include the plural.

     16.9. FRACTIONAL SHARES. No fractional Shares shall be issued and the Committee shall
determine, in its discretion, whether cash shall be given in lieu of fractional Shares or whether
such fractional Shares shall be eliminated by rounding up or down.

     16.10. GOVERNMENT AND OTHER REGULATIONS.

     (a) Notwithstanding any other provision of the Plan, no Participant who

23

 

acquires Shares pursuant to the Plan may, during any period of time that such Participant is an
affiliate of the Company (within the meaning of the rules and regulations of the Securities
and Exchange Commission under the 1933 Act), sell such Shares, unless such offer and sale
is made (i) pursuant to an effective registration statement under the 1933 Act, which is
current and includes the Shares to be sold, or (ii) pursuant to an appropriate exemption
from the registration requirement of the 1933 Act, such as that set forth in Rule 144
promulgated under the 1933 Act.

     (b) Notwithstanding any other provision of the Plan, if at any time the Committee
shall determine that the registration, listing or qualification of the Shares covered by an
Award upon any Exchange or under any foreign, federal, state or local law or practice, or
the consent or approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the granting of such Award or the purchase or receipt
of Shares thereunder, no Shares may be purchased, delivered or received pursuant to such
Award unless and until such registration, listing, qualification, consent or approval shall
have been effected or obtained free of any condition not acceptable to the Committee. Any
Participant receiving or purchasing Shares pursuant to an Award shall make such
representations and agreements and furnish such information as the Committee may request to
assure compliance with the foregoing or any other applicable legal requirements. The
Company shall not be required to issue or deliver any certificate or certificates for Shares under the Plan prior to the Committee’s determination that all related requirements have been fulfilled. The Company shall in no event be obligated to
register any securities pursuant to the 1933 Act or applicable state or foreign law or to
take any other action in order to cause the issuance and delivery of such certificates to
comply with any such law, regulation or requirement.

     16.11. GOVERNING LAW. To the extent not governed by federal law, the Plan and all
Award Certificates shall be construed in accordance with and governed by the laws of the State of
Florida.

     16.12. SEVERABILITY. In the event that any provision of this Plan is found to be
invalid or otherwise unenforceable under any applicable law, such invalidity or unenforceability
will not be construed as rendering any other provisions contained herein as invalid or
unenforceable, and all such other provisions will be given full force and effect to the same extent
as though the invalid or unenforceable provision was not contained herein.

     16.13. NO LIMITATIONS ON RIGHTS OF COMPANY. The grant of any Award shall not in any
way affect the right or power of the Company to make adjustments, reclassification or changes in
its capital or business structure or to merge, consolidate, dissolve, liquidate, sell or transfer
all or any part of its business or assets. The Plan shall not restrict the authority of the
Company, for proper corporate purposes, to draft or assume awards, other than under the Plan, to or
with respect to any person. If the Committee so directs, the Company may issue or transfer Shares
to an Affiliate, for such lawful consideration as the Committee may specify, upon the condition or
understanding that the Affiliate will transfer such Shares to a Participant in accordance with the
terms of an Award granted to such Participant and specified by the Committee pursuant to the
provisions of the Plan.

24

 

     The foregoing is hereby acknowledged as being the Aurora Diagnostics, Inc. 2010 Incentive Plan
as adopted by the Board on August 25, 2010 and by the shareholders on [_______], 2010.

	 	 	 	 	 
	 	AURORA DIAGNOSTICS, INC.

 	 
	 	By:  	 	 
	 	 	 	 
	 	Its: 	 	 
	 

25exv10w17

Exhibit 10.17

AURORA DIAGNOSTICS, INC.

NONSTATUTORY STOCK OPTION AWARD CERTIFICATE

Non-transferable

G R A N T   T O

 

(“Optionee”)

the right to purchase from Aurora Diagnostics, Inc. (the “Company”)

                     shares of its common stock, $0.01 par value, at the price of $      per share (the “Option”)

pursuant to and subject to the provisions of the Aurora Diagnostics, Inc. 2010 Incentive Plan (the
“Plan”) and to the terms and conditions set forth on the following pages (the “Terms and
Conditions”). By accepting the Option, Optionee shall be deemed to have agreed to the Terms and
Conditions set forth in this Award Certificate and the Plan. Capitalized terms used herein and not
otherwise defined shall have the meanings assigned to such terms in the Plan.

Unless vesting is accelerated as provided in Section 1 of the Terms and Conditions, the Option
shall vest (become exercisable) in accordance with the following schedule, provided that Optionee
remains in Continuous Service on each applicable vesting date:

	 	 	 	 	 
	Continuous Service	 	 	 
	after Grant Date	 	Percent of Option Shares Vested	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 

IN WITNESS WHEREOF, Aurora Diagnostics, Inc., acting by and through its duly authorized officers,
has caused this Award Certificate to be duly executed.

	 	 	 	 	 	 	 	 	 	 	 

	AURORA DIAGNOSTICS, INC.	 	 	 	Grant Date:	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	*SAMPLE DOCUMENT*	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	Its:

	 	Authorized Officer	 	 	 	 	 	 	 	 

 

 

2010 Stock Option Grant – Employees

TERMS AND CONDITIONS

1. Vesting of Option. The Option shall vest (become exercisable) in accordance with the
schedule shown on the cover page of this Award Certificate. Notwithstanding the foregoing vesting
schedule, the Option shall become fully vested and exercisable (i) upon a Change in Control if the
Option is not assumed by the Surviving Entity or otherwise equitably converted or substituted in
connection with the Change in Control in a manner approved by the Committee or the Board, or (ii)
if the Option is assumed by the Surviving Entity or otherwise equitably converted or substituted in
connection with the Change in Control, upon the termination of Optionee’s employment by the Company
without Cause (or Optionee’s resignation for Good Reason as provided in any employment, severance
or similar agreement, if applicable) within one year after the Change in Control.

2. Term of Option and Limitations on Right to Exercise. The term of the Option will be
for a period of ten years, expiring at 5:00 p.m., Eastern Time, on the tenth anniversary of the
Grant Date (the “Expiration Date”). To the extent not previously exercised, the vested Option will
lapse prior to the Expiration Date upon the earliest to occur of the following circumstances:

     (a) Three (3) months after the date of termination of Optionee’s Continuous Service for any
reason other than (i) for Cause, or (ii) by reason of Optionee’s death or Disability.

     (b) Twelve (12) months after the date of termination of Optionee’s Continuous Service by
reason of Optionee’s Disability.

     (c) Twelve (12) months after the date of Optionee’s death, if Optionee dies while employed, or
during the three-month period described in subsection (a) above or during the twelve-month period
described in subsection (b) above and before the Option otherwise expires.

     (d) Immediately upon the date of termination of Optionee’s Continuous Service by the Company
for Cause.

If Optionee or his or her beneficiary exercises an Option after termination of his or her
Continuous Service, the Option may be exercised only with respect to the Shares that were otherwise
vested on the date of Optionee’s termination of Continuous Service, including Option Shares vested
by acceleration under Section 1.

3. Exercise of Option. The Option shall be exercised by (a) written notice directed to
the Secretary of the Company or his or her designee at the address and in the form specified by the
Secretary from time to time and (b) payment to the Company in full for the Shares subject to such
exercise (unless the exercise is a broker-assisted cashless exercise, as described below). If the
person exercising an Option is not Optionee, such person shall also deliver with the notice of
exercise appropriate proof of his or her right to exercise the Option. Payment for such Shares
shall be (a) in cash, (b) by delivery (actual or by attestation) of Shares previously acquired by
the purchaser, (c) by withholding of Shares from the Option, or (d) any combination thereof, for
the number of Shares specified in such written notice. The value of Shares surrendered or withheld
for this purpose shall be the Fair Market Value as of the last trading day immediately prior to the
exercise date. To the extent permitted under Regulation T of the Federal Reserve Board, and
subject to applicable securities laws and any limitations as may be applied from time to time by
the Committee (which need not be uniform), the Option may be exercised through a broker in a
so-called “cashless exercise” whereby the broker sells the Option Shares on behalf of Optionee and
delivers cash sales proceeds to the Company in payment of the exercise price.

4. Withholding. The Company or any employer Affiliate has the authority and the right to
deduct or withhold, or require Optionee to remit to the employer, an amount sufficient to satisfy
federal, state, and local taxes (including Optionee’s FICA obligation) required by law to be
withheld with respect to any taxable event arising as a result of the exercise of the Option. The
withholding requirement may be satisfied, in whole or in part, at the election of the Company, by
withholding from the Option Shares having a Fair Market Value on the date of withholding equal to
the minimum amount (and not any greater amount) required to be withheld for tax purposes, all in
accordance with such procedures as the Company establishes. The obligations of the Company under
this Award Certificate will be conditional on such payment or arrangements, and the Company, and,
where applicable, its Affiliates will, to the extent permitted by law, have the right to deduct any
such taxes from any payment of any kind otherwise due to Optionee.

- 1 -

 

2010 Stock Option Grant — Employees

5. Limitation of Rights. The Option does not confer to Optionee or Optionee’s beneficiary
designated pursuant to the Plan any rights of a shareholder of the Company unless and until Shares
are in fact issued to such person in connection with the exercise of the Option. Nothing in this
Award Certificate shall interfere with or limit in any way the right of the Company or any
Affiliate to terminate Optionee’s service at any time, nor confer upon Optionee any right to
continue in the service of the Company or any Affiliate.

6. Restrictions on Transfer and Pledge. No right or interest of Optionee in the Option
may be pledged, encumbered, or hypothecated to or in favor of any party other than the Company or
an Affiliate, or shall be subject to any lien, obligation, or liability of Optionee to any other
party other than the Company or an Affiliate. The Option is not assignable or transferable by
Optionee other than by will or the laws of descent and distribution; provided, however, that the
Committee may (but need not) permit other transfers. The Option may be exercised during the
lifetime of Optionee only by Optionee or any permitted transferee.

7. Restrictions on Issuance of Shares. If at any time the Committee or the Board shall
determine in its discretion, that registration, listing or qualification of the Shares covered by
the Option upon any Exchange or under any foreign, federal, or local law or practice, or the
consent or approval of any governmental regulatory body, is necessary or desirable as a condition
to the exercise of the Option, the Option may not be exercised in whole or in part unless and until
such registration, listing, qualification, consent or approval shall have been effected or obtained
free of any conditions not acceptable to the Committee or the Board.

8. Plan Controls. The terms contained in the Plan are incorporated into and made a part
of this Award Certificate and this Award Certificate shall be governed by and construed in
accordance with the Plan. In the event of any actual or alleged conflict between the provisions of
the Plan and the provisions of this Award Certificate, the provisions of the Plan shall be
controlling and determinative.

9. Successors. This Award Certificate shall be binding upon any successor of the Company,
in accordance with the terms of this Award Certificate and the Plan.

10. Notice. Notices hereunder must be in writing, delivered personally or sent by
registered or certified U.S. mail, return receipt requested, postage prepaid. Notices to the
Company must be addressed to Aurora Diagnostics, Inc., 11025 RCA Center Drive, Suite 300, Palm
Beach Gardens, FL 33410; Attn: Secretary, or any other address designated by the Company in a
written notice to Optionee. Notices to Optionee will be directed to the address of Optionee then
currently on file with the Company, or at any other address given by Optionee in a written notice
to the Company.

11. Compensation Recoupment Policy. The Option shall be subject to the terms and
conditions of any compensation recoupment policy adopted from time to time by the Board or any
committee of the Board, to the extent such policy is applicable.

- 2 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00179-of-00352.parquet"}]]