Document:

exv4w8

 

Exhibit 4.8

FOURTH AMENDMENT TO LOAN AGREEMENT DATED AS OF APRIL 23, 2002 AS AMENDED
JUNE 18, 2004 (THE “FIRST
AMENDMENT”), SEPTEMBER 30, 2005 (THE “SECOND
AMENDMENT”) AND MARCH 21, 2006 (THE “THIRD AMENDMENT”)
(AS AMENDED, THE
 “LOAN AGREEMENT”) BY AND AMONG PHI, INC., FORMERLY KNOWN AS PETROLEUM

HELICOPTERS, INC. (“PHI”), AIR EVAC SERVICES, INC., PHI TECH SERVICES, INC., 
FORMERLY KNOWN AS
EVANGELINE AIRMOTIVE, INC., INTERNATIONAL HELICOPTER
TRANSPORT, INC. (“SUBSIDIARY GUARANTORS”),
AND WHITNEY NATIONAL BANK 
(“WHITNEY”)

     WHEREAS, use of the credit facility provided for in the Loan Agreement has been made and
therefore PHI desires to amend and extend the credit facility.

     WHEREAS, the current agreement is not effective after July 31, 2007.

     NOW THEREFORE, for good and adequate consideration, the receipt of which is hereby
acknowledged, PHI, the Subsidiary Guarantors and Whitney do hereby amend the Loan Agreement to
extend the maturity and make certain other modifications as follows:

I. Effective as of the date hereof, the First Amendment, and in turn, the Loan Agreement, are
hereby modified as follows:

A. In Paragraph 2 of the First Amendment, Funded Debt/Net Worth shall be decreased from
3.50/1.00 to 1.50/1.00.

II. Effective as of the date hereof, the Second Amendment, and in turn, the Loan Agreement, are
hereby modified as follows:

A. In Paragraph 1 of the Second Amendment, the date of July 31, 2007 is changed to September
1, 2008 and the sublimit for issuance of letters of credit is increased from $8,000,000.00
to $10,000,000.00.

B. In Paragraph 2 of the Second Amendment, “Consolidated Net Worth” is amended to read,
“from and after September 30, 2005, PHI shall not at any time, permit its consolidated net
worth to be less than THREE HUNDRED FIFTY MILLION ($350,000,000.00) DOLLARS.”

C. In Paragraph 3 of the Second Amendment, the rate of interest is reduced and amended so
that the first paragraph is restated as follows:

“RATE OF INTEREST AND APPLICABLE FEES. Borrowing made pursuant to the Note shall accrue
interest at JPMorganChase Prime and may be advanced or repaid at any time upon one day’s
notice, and interest shall be payable quarterly; or in the alternative, LIBOR borrowings
may be arrange for fixed periods of 30, 60 or 90 days with interest payable at the
respective maturity at the LIBOR rate as quoted on the business day prior to borrowing
plus an applicable margin of 125 points

As used in this Agreement, the term “JPMorganChase Prime” shall mean the rate of
interest as recorded by JPMorganChase from time to time as its prime lending rate with
the rate of interest to change when and as such prime lending rate changes.”

III. In connection with the foregoing and only in connection with the foregoing, the Loan
Agreement is hereby amended, but in all other respects all of the terms and conditions of the Loan
Agreement remain unaffected and in full force and effect as originally written.

     IN WITNESS WHEREOF, this Fourth Amendment to Loan Agreement is dated as of September 30, 2006.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	PHI, INC., formerly known as	 	 	 	WHITNEY NATIONAL BANK
	Petroleum Helicopters, Inc.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Michael J. McCann	 	 	 	By:	 	/s/ Harry C. Stahel
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Michael J. McCann
	 	 	 	 	 	Name:
	 	Harry C. Stahel
	 

	 	Title:
	 	Chief Financial Officer
	 	 	 	 	 	Title:
	 	Senior Vice President
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	AIR EVAC SERVICES, INC.	 	 	 	PHI TECH SERVICES,
INC., formerly known 
	 	 	 	 	 	 	 	 	as Evangeline Airmotive, Inc.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Michael J. McCann	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Name:	 	Michael J. McCann	 	 	 	By:	 	/s/ Michael J. McCann
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	Chief Financial Officer
	 	 	 	 	 	Name:
	 	Michael J. McCann
	 

	 	 	 	 	 	 	 	 	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	INTERNATIONAL HELICOPTER	 	 	 	 	 	 	 	 
	TRANSPORT, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Michael J. McCann	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Michael J. McCann	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	Chief Financial Officerexv4w9

 

Exhibit 4.9

FIFTH
AMENDMENT TO LOAN AGREEMENT DATED AS OF APRIL 23, 2002 AS AMENDED
JUNE 18, 2004 (THE “FIRST
AMENDMENT”), SEPTEMBER 30, 2005 (THE “SECOND
AMENDMENT”), MARCH 21, 2006 (THE “THIRD AMENDMENT”)
AND SEPTEMBER 30, 2006
(THE “FOURTH AMENDMENT”) (AS AMENDED, THE “LOAN AGREEMENT”) BY AND
AMONG
PHI, INC., FORMERLY KNOWN AS PETROLEUM HELICOPTERS, INC. (“PHI”), AIR
EVAC SERVICES, INC., PHI TECH
SERVICES, INC., FORMERLY KNOWN AS EVANGELINE
AIRMOTIVE, INC., INTERNATIONAL HELICOPTER TRANSPORT,
INC. (“SUBSIDIARY
GUARANTORS”), AND WHITNEY NATIONAL BANK (“WHITNEY”)

     WHEREAS, use of the credit facility provided for in the Loan Agreement has been made and
therefore PHI desires to extend the credit facility.

     WHEREAS, the current agreement is not effective after September 1, 2008.

     NOW THEREFORE, for good and adequate consideration, the receipt of which is hereby
acknowledged, PHI, the Subsidiary Guarantors and Whitney do hereby amend the Loan Agreement to
extend the maturity as follows:

I. Effective as of the date hereof, the Fourth Amendment, and in turn, the Loan Agreement, are
hereby modified as follows:

A. In Paragraph II of the Fourth Amendment, the date of September 1, 2008 is changed to
September 1, 2009.

II. In connection with the foregoing and only in connection with the foregoing, the Loan
Agreement is hereby amended, but in all other respects all of the terms and conditions of the Loan
Agreement remain unaffected and in full force and effect as originally written.

     IN WITNESS WHEREOF, this Fifth Amendment to Loan Agreement is dated as of August 1, 2007.

	 	 	 	 	 	 	 	 	 	 	 	 	 
	PHI, INC., formerly known as	 	 	 	WHITNEY NATIONAL BANK
	Petroleum Helicopters, Inc.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Michael J. McCann	 	 	 	By:	 	/s/ Harry C. Stahel
	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Michael J. McCann
	 	 	 	 	 	Name:
	 	Harry C. Stahel
	 

	 	Title:
	 	Chief Financial Officer
	 	 	 	 	 	Title:
	 	Senior Vice President
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	AIR EVAC SERVICES, INC.	 	 	 	PHI TECH SERVICES,
INC., formerly known
	 	 	 	 	 	 	 	 	 as Evangeline Airmotive, Inc.
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Michael J. McCann	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	Name:	 	Michael J. McCann	 	 	 	By:	 	/s/ Michael J. McCann
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	Chief Financial Officer
	 	 	 	 	 	Name:
	 	Michael J. McCann
	 

	 	 	 	 	 	 	 	 	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	INTERNATIONAL HELICOPTER	 	 	 	 	 	 	 	 
	TRANSPORT, INC.	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 
	By:	 	/s/ Michael J. McCann	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	Michael J. McCann	 	 	 	 	 	 	 	 
	 

	 	Title:
	 	Chief Financial Officerexv4w1

 

Exhibit 4.1

 

 

	The Company will furnish without charge to each stockholder who so requests a statement of the
number of shares constituting each class or series of stock and the designation thereof, and a copy
of the powers, designations, preferences and relative, participating or optional or other special
rights of each class of stock or series thereof and the qualifications, limitations or restrictions
of such preferences and/or rights. KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN OR
DESTROYED THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A
REPLACEMENT CERTIFICATE. The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full according to
applicable laws or regulations: TEN COM — as tenants in common UNIF GIFT MIN ACT custodian (Cust)~
(Minor) . TEN ENT — as tenants by the entireties under Uniform Gifts to Minors JTTEN — as joint
tenants with right of survivorship Act and not as tenants in common (State) Additional
abbreviations may also be used though not in the above list. For value received, hereby sell,
assign and transfer unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS. INCLUDING ZIP CODE, OF ASSIGNEE)
Shares of the capital stock represented by the within Certificate, and do hereby irrevocably
constitute and appoint Attorney to transfer the said stock on the books of the within named
Company with full power of substitution in the premises. Dated NOTICE- THE SIGNATURE TO THIS
ASSIGNMENT MUST COARESPONDt NAME AS UPON THE FACE (THE CERTIFICATE IN EVERY PARTICUlAR, WITHOUT
AlTERATION OR ENLARGEMENT OB y CHANGE WHATEVE Signature(s) Guaranteed:. THE SIGNATURE(S) SHOULD
BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN
ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION
PROGRAM), PURSUANT TO SEC. RULE 17Ad-15.exv4w8

 

Exhibit 4.8

K12 INC.

2007 EQUITY INCENTIVE AWARD PLAN

ARTICLE 1

PURPOSE

     The purpose of the K12 Inc. 2007 Equity Incentive Award Plan (the “Plan”) is to
promote the success and enhance the value of K12 Inc. (the “Company”) by linking the
personal interests of the members of the Board, Employees, and Consultants to those of Company
stockholders and by providing such individuals with an incentive for outstanding performance to
generate superior returns to Company stockholders. The Plan is further intended to provide
flexibility to the Company in its ability to motivate, attract, and retain the services of members
of the Board, Employees, and Consultants upon whose judgment, interest, and special effort the
successful conduct of the Company’s operation is largely dependent.

ARTICLE 2

DEFINITIONS AND CONSTRUCTION

     Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.

     2.1 “Administrator” means the entity or person that conducts the general
administration of the Plan as provided herein. With reference to the administration of the Plan
with respect to Awards granted to Independent Directors, the term “Administrator” shall refer to
the Board. With reference to the administration of the Plan with respect to any other Award, the
term “Administrator” shall refer to the Committee unless the Board has assumed the authority for
administration of the Plan generally as provided in Section 12.1. With reference to the duties of
the Committee under the Plan which have been delegated to one or more persons pursuant to Section
12.5 of the Plan, the term “Administrator” shall refer to such person(s) unless the Committee or
the Board has revoked such delegation.

     2.2 “Award” means an Option, a Restricted Stock award, a Stock Appreciation Right
award, a Dividend Equivalents award, a Stock Payment award, a Restricted Stock Unit award, an Other
Stock-Based Award, or a Performance Bonus Award granted to a Participant pursuant to the Plan.

     2.3 “Award Agreement” means any written agreement, contract, or other instrument or
document evidencing an Award, including through electronic medium.

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

     2.5 “Change in Control” means and includes each of the following:

          (a) A transaction or series of transactions (other than an offering of Stock to the general
public through a registration statement filed with the Securities and Exchange

 

 

Commission) whereby any “person” or related “group” of “persons” (as such terms are used in
Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its subsidiaries,
an employee benefit plan maintained by the Company or any of its subsidiaries or a “person” that,
prior to such transaction, directly or indirectly controls, is controlled by, or is under common
control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning
of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than 50% of the
total combined voting power of the Company’s securities outstanding immediately after such
acquisition; or

     (b) During any period of two consecutive years, individuals who, at the beginning of such
period, constitute the Board together with any new director(s) (other than a director designated by
a person who shall have entered into an agreement with the Company to effect a transaction
described in Section 2.5(a) or Section 2.5(c)) whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the two year period or
whose election or nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or

     (c) The consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets in any single transaction or series of related transactions or (z) the
acquisition of assets or stock of another entity, in each case other than a transaction:

     (i) Which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted into
voting securities of the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of
the Company’s assets or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a majority of the
combined voting power of the Successor Entity’s outstanding voting securities immediately after the
transaction, and

     (ii) After which no person or group beneficially owns voting securities representing 50% or
more of the combined voting power of the Successor Entity; provided, however, that no person or
group shall be treated for purposes of this Section 2.5(c)(ii) as beneficially owning 50% or more
of combined voting power of the Successor Entity solely as a result of the voting power held in the
Company prior to the consummation of the transaction.

     The Administrator shall have full and final authority, which shall be exercised in its
discretion, to determine conclusively whether a Change in Control of the Company has occurred
pursuant to the above definition, and the date of the occurrence of such Change in Control and any
incidental matters relating thereto.

     2.6 “Code” means the Internal Revenue Code of 1986, as amended.

2

 

     2.7 “Committee” means the committee of the Board described in Article 12.

     2.8 “Consultant” means any consultant or adviser if:

          (a) The consultant or adviser renders bona fide services to the Company or any Parent or
Subsidiary;

          (b) The services rendered by the consultant or adviser are not in connection with the offer or
sale of securities in a capital-raising transaction and do not directly or indirectly promote or
maintain a market for the securities of the Company or of any Parent or Subsidiary; and

          (c) The consultant or adviser is a natural person.

     2.9 “Covered Employee” means an Employee who is, or could be, a “covered employee”
within the meaning of Section 162(m) of the Code.

     2.10 “Director” means a member of the Board, or as applicable a member of the board of
directors of a Subsidiary.

     2.11 “Disability” means “disability,” as such term is defined in Section 22(e)(3) of
the Code.

     2.12 “Dividend Equivalents” means a right granted to a Participant pursuant to Section
8.1 to receive the equivalent value (in cash or Stock) of dividends paid on Stock.

     2.13 “Effective Date” has the meaning set forth in Section 13.1.

     2.14 “Eligible Individual” means any person who is an Employee, a Consultant or a
Director, as determined by the Administrator.

     2.15 “Employee” means any officer or other employee (as defined in accordance with
Section 3401(c) of the Code) of the Company or of any Parent or Subsidiary.

     2.16 “Equity Restructuring” shall mean a nonreciprocal transaction between the company
and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or
recapitalization through a large, nonrecurring cash dividend, that affects the shares of Stock (or
other securities of the Company) or the share price of Stock (or other securities) and causes a
change in the per share value of the Stock underlying outstanding Awards.

     2.17 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     2.18 “Expiration Date” has the meaning set forth in Section 13.2.

     2.19 “Fair Market Value” means, as of any given date, the fair market value of a share
of Stock on the date determined by such methods or procedures as may be established from time to
time by the Administrator. Unless otherwise determined by the Administrator, the Fair Market Value
of a share of Stock as of any given date shall be (a) if Stock is traded on any

3

 

established stock exchange, the closing price of a share of Stock as reported in the Wall
Street Journal (or such other source as the Administrator may deem reliable for such purposes) for
such date, or if no sale occurred on such date, the first trading date immediately prior to such
date during which a sale occurred; or (b) if Stock is not traded on an exchange but is quoted on a
national market or other quotation system, the last sales price on such date, or if no sales
occurred on such date, then on the date immediately prior to such date on which sales price are
reported.

     2.20 “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.

     2.21 “Independent Director” means a Director of the Company who is not an Employee.

     2.22 “Misconduct” means the occurrence of any of, but not limited to, the following:
(i) the Participant is charged with any felony or any crime involving fraud or dishonesty; (ii) the
Participant’s participation (whether by affirmative act or omission) in a fraud, act or dishonesty
or other act of misconduct against the Company and/or any Parent or Subsidiary; (iii) conduct by
the Participant which, based upon a good faith and reasonable factual investigation by the Company
(or, if the Participant is an executive officer, by the Board), demonstrates the Participant’s
unfitness to serve; (iv) the Participant’s violation of any statutory or fiduciary duty, or duty of
loyalty owed to the Company and/or any Parent or Subsidiary; (v) the Participant’s violation of
state or federal law in connection with the Participant’s performance of his or her job which has
an adverse effect on the Company and/or any Parent or Subsidiary; and (vi) the Participant’s
violation of Company policy which has a material adverse effect on the Company and/or any Parent or
Subsidiary. Notwithstanding the foregoing, the Participant’s Disability shall not constitute
Misconduct as set forth herein. The determination that a termination is for Misconduct shall be by
the Administrator it its sole and exclusive judgment and discretion.

     2.23 “Non-Employee Director” means a Director of the Company who qualifies as a
“Non-Employee Director” as defined in Rule 16b-3(b)(3) of the Exchange Act, or any successor
definition.

     2.24 “Non-Qualified Stock Option” means an Option that is not intended to be or
otherwise does not qualify as an Incentive Stock Option.

     2.25 “Option” means a right granted to a Participant pursuant to Article 5 of the Plan
to purchase a specified number of shares of Stock at a specified price during specified time
periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.

     2.26 “Other Stock-Based Award” means an Award granted or denominated in Stock or units
of Stock pursuant to Section 8.4 of the Plan.

     2.27 “Parent” means any “parent corporation, as defined in Section 424(e) of the Code
and any applicable regulations promulgated thereunder, of the Company or any other entity which
beneficially owns, directly or indirectly, a majority of the outstanding voting stock or voting
power of the Company.

4

 

     2.28 “Participant” means any Eligible Individual who, as a member of the Board,
Consultant or Employee, has been granted an Award pursuant to the Plan.

     2.29 “Performance-Based Award” means an Award granted to selected Covered Employees
pursuant to Articles 6 and 8, but which is subject to the terms and conditions set forth in Article
9.

     2.30 “Performance Bonus Award” has the meaning set forth in Section 8.5.

     2.31 “Performance Criteria” means the criteria that the Administrator selects for
purposes of establishing the Performance Goal or Performance Goals for a Participant for a
Performance Period. The Performance Criteria that will be used to establish Performance Goals are
limited to the following: net earnings (either before or after interest, taxes, depreciation and
amortization), sales or revenue, net income (either before or after taxes), operating earnings,
cash flow (including, but not limited to, operating cash flow and free cash flow), return on net
assets, return on stockholders’ equity, return on assets, return on capital, return on sales, gross
or net profit margin, working capital, earnings per share of Stock, and price per share of Stock,
any of which may be measured either in absolute terms or as compared to any incremental increase or
as compared to results of a peer group, number of new states entered, number of new countries
entered, number of new schools, number of students/new students, student retention percentage,
number of new courses, number of classrooms using our curriculum, academic performance, and
contract renewals. To the extent an Award is intended to be Qualified Performance-Based
Compensation, the Administrator shall, within the time prescribed by Section 162(m) of the Code,
define in an objective fashion the manner of calculating the Performance Criteria it selects to use
for such Performance Period for such Participant.

     2.32 “Performance Goals” means, for a Performance Period, the goals established in
writing by the Administrator for the Performance Period based upon the Performance Criteria.
Depending on the Performance Criteria used to establish such Performance Goals, the Performance
Goals may be expressed in terms of overall Company performance or the performance of a Subsidiary,
division or other operational unit, or an individual. To the extent an Award is intended to be
Qualified Performance-Based Compensation, the Administrator, in its discretion, may, within the
time prescribed by Section 162(m) of the Code, adjust or modify the calculation of Performance
Goals for such Performance Period in order to prevent the dilution or enlargement of the rights of
Participants (a) in the event of, or in anticipation of, any unusual or extraordinary corporate
item, transaction, event, or development, or (b) in recognition of, or in anticipation of, any
other unusual or nonrecurring events affecting the Company, or the financial statements of the
Company, or in response to, or in anticipation of, changes in applicable laws, regulations,
accounting principles, or business conditions.

     2.33 “Performance Period” means the one or more periods of time, which may be of
varying and overlapping durations, as the Administrator may select, over which the attainment of
one or more Performance Goals will be measured for the purpose of determining a Participant’s right
to, and the payment of, a Performance-Based Award.

     2.34 “Plan” means this K12 Inc. 2007 Equity Incentive Award Plan, as it may be amended
from time to time.

5

 

     2.35 “Public Trading Date” means the first date upon which the Company is subject to
the reporting requirements of Section 13 or 15(d)(2) of the Exchange Act.

     2.36 “Qualified Performance-Based Compensation” means any compensation that is
intended to qualify as “qualified performance-based compensation” as described in Section
162(m)(4)(C) of the Code.

     2.37 “Restricted Stock” means Stock awarded to a Participant pursuant to Article 6
that is subject to certain restrictions and may be subject to risk of forfeiture or repurchase.

     2.38 “Restricted Stock Unit” means a right to receive a share of Stock during
specified time periods granted pursuant to Section 8.3.

     2.39 “Securities Act” means the Securities Act of 1933, as amended.

     2.40 “Stock” means the common stock of the Company, par value $0.0001 per share, and
such other securities of the Company that may be substituted for Stock pursuant to Article 11.

     2.41 “Stock Appreciation Right” means a right granted pursuant to Article 7 to receive
a payment equal to the excess of the Fair Market Value of a specified number of shares of Stock on
the date the Stock Appreciation Right is exercised over the Fair Market Value of such number of
shares of Stock on the date the Stock Appreciation Right was granted as set forth in the applicable
Award Agreement.

     2.42 “Stock Payment” means (a) a payment in the form of shares of Stock, or (b) an
option or other right to purchase shares of Stock, as part of any bonus, deferred compensation or
other arrangement, made in lieu of all or any portion of the compensation, granted pursuant to
Section 8.2.

     2.43 “Subsidiary” means any “subsidiary corporation” as defined in Section 424(f) of
the Code and any applicable regulations promulgated thereunder of the Company or any other entity
of which a majority of the outstanding voting stock or voting power is beneficially owned directly
or indirectly by the Company.

     2.44 “Successor Entity” has the meaning set forth in Section 2.5.

     2.46 “Termination of Consultancy” means the time when the engagement of a Participant
as a Consultant to the Company or to a Parent or Subsidiary is terminated for any reason, with or
without cause, including, but not by way of limitation, by resignation, discharge, death or
retirement, but excluding: (a) terminations where there is a simultaneous employment or continuing
employment of the Participant by the Company or any Parent or Subsidiary, and (b) terminations
where there is a simultaneous reestablishment of a consulting relationship or continuing consulting
relationship between the Participant and the Company or any Parent or Subsidiary. The
Administrator, in its absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Consultancy, including, but not by way of limitation, the question of
whether a particular leave of absence constitutes a Termination of Consultancy. Notwithstanding
any other provision of the Plan, the Company or any Parent or Subsidiary has

6

 

an absolute and unrestricted right to terminate a Consultant’s service at any time for any reason
whatsoever, with or without cause, except to the extent expressly provided otherwise in writing.

     2.47 “Termination of Directorship” means the time when a Participant, if he or she is
or becomes an Independent Director, ceases to be a Director for any reason, including, but not by
way of limitation, a termination by resignation, failure to be elected, death or retirement. The
Board, in its sole and absolute discretion, shall determine the effect of all matters and questions
relating to Termination of Directorship with respect to Independent Directors.

     2.48 “Termination of Employment” means the time when the employee-employer
relationship between a Participant and the Company or any Parent or Subsidiary is terminated for
any reason, with or without cause, including, but not by way of limitation, a termination by
resignation, discharge, death, Disability or retirement; but excluding: (a) terminations where
there is a simultaneous reemployment or continuing employment of the Participant by the Company or
any Parent or Subsidiary, and (b) terminations where there is a simultaneous establishment of a
consulting relationship or continuing consulting relationship between the Participant and the
Company or any Parent or Subsidiary. The Administrator, in its absolute discretion, shall
determine the effect of all matters and questions relating to Termination of Employment, including,
but not by way of limitation, the question of whether a particular leave of absence constitutes a
Termination of Employment.

     2.49 “Termination of Service” shall mean the last to occur of a Participant’s
Termination of Consultancy, Termination of Directorship or Termination of Employment, as
applicable. A Participant shall not be deemed to have a Termination of Service merely because of a
change in the capacity in which the Participant renders service to the Company or any Parent or
Subsidiary (i.e., a Participant who is an Employee becomes a Consultant) or a change in the entity
for which the Participant renders such service (i.e., an Employee of the Company becomes an
Employee of a Subsidiary), unless following such change in capacity or service the Participant is
no longer serving as an Employee, Independent Director or Consultant of the Company or any Parent
or Subsidiary.

ARTICLE 3

SHARES SUBJECT TO THE PLAN

     3.1 Number of Shares.

          (a) Subject to Article 11 and Section 3.1(b), the aggregate number of shares of Stock which
may be issued or transferred pursuant to Awards under the Plan shall
be the sum of: (i) 784,313
shares of Stock; plus (ii) with respect to awards granted under the K12 Inc. Amended and Restated
Stock Option Plan (the “Existing Plan”) on or before the Effective Date that expire or are
canceled without having been exercised in full or shares of Stock that are forfeited or repurchased
pursuant to the terms of awards granted under the Existing Plan, the number of shares of Stock
subject to each such award as to which such award was not exercised prior to its expiration or
cancellation or which are forfeited or repurchased by the Company. The aggregate number of shares
of Stock subject to outstanding awards under the Existing Plan was
3,429,608 shares of Stock. In
addition, subject to Article 11, commencing on July 1,

7

 

2008, and on each July 1 thereafter during the term of the Plan, the number of shares of Stock
which shall be made available for sale under the Plan shall be increased by that number of shares
of Stock equal to the least of: (i) 4% of the Company’s outstanding shares of Stock on the
applicable July 1; (ii) 2,745,098 shares; and (iii) a lesser number of shares of Stock as
determined by the Board (the “Evergreen”). Accordingly, the number of shares of Stock
which shall be available for sale under the Plan shall be subject to increase under the preceding
sentence only on July 1, 2008 and on each subsequent July 1 through and including July 1, 2017.
Notwithstanding anything in this Section 3.1(a) to the contrary, the number of shares of Stock that
may be issued or transferred pursuant to Awards under the Plan shall not exceed an aggregate of
4,213,921 shares of Stock, plus the increases in the shares of Stock pursuant to the Evergreen,
subject to Article 11. In order that the applicable regulations under the Code relating to
Incentive Stock Options be satisfied, the maximum number of shares of Stock that may be delivered
upon exercise of Incentive Stock Options shall be the number specified in the preceding sentence,
and, if necessary to satisfy such regulations, such maximum limit shall apply to the number of
shares of Stock that may be delivered in connection with each other type of Award under the Plan
(applicable separately to each type of Award).

          (b) To the extent that an Award terminates, expires, or lapses for any reason, any shares of
Stock subject to the Award shall again be available for the grant of an Award pursuant to the Plan.
Additionally, any shares of Stock tendered or withheld to satisfy the grant or exercise price or
tax withholding obligation pursuant to any Award shall again be available for the grant of an Award
pursuant to the Plan. If any shares of Restricted Stock are forfeited by a Participant or
repurchased by the Company pursuant to Article 6 hereof, such shares shall again be available for
the grant of an Award pursuant to the Plan. To the extent permitted by applicable law or any
exchange rule, shares of Stock issued in assumption of, or in substitution for, any outstanding
awards of any entity acquired in any form of combination by the Company or any Parent or Subsidiary
shall not be counted against shares of Stock available for grant pursuant to the Plan. The payment
of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted
against the shares of Stock available for issuance under the Plan.

          (c) Notwithstanding the provisions of Section 3.1(b), no shares of Stock may again be
optioned, granted or awarded if such action would cause an Incentive Stock Option to fail to
qualify as an incentive stock option under Section 422 of the Code.

     3.2 Stock Distributed. Any shares of 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.

     3.3 Limitation on Number of Shares and Values Subject to Awards. Notwithstanding any
provision in the Plan to the contrary, and subject to Article 11, the maximum number of shares of
Stock with respect to one or more Awards that may be granted to any one Participant during any
calendar year shall be 392,156 and the maximum amount that may be paid in cash during any
calendar year with respect to any Performance-Based Award (including, without limitation, any
Performance Bonus Award) shall be $1,000,000; provided, however, that the foregoing limitations
shall not apply prior to the Public Trading Date and, following the Public Trading Date, the
foregoing limitations shall not apply until the earliest of: (a) the first material

8

 

modification of the Plan (including any increase in the number of shares of Stock reserved for
issuance under the Plan in accordance with Section 3.1); (b) the issuance of all of the shares of
Stock reserved for issuance under the Plan; (c) the expiration of the Plan; (d) the first meeting
of stockholders at which members of the Board are to be elected that occurs after the close of the
third calendar year following the calendar year in which occurred the first registration of an
equity security of the Company under Section 12 of the Exchange Act; or (e) such other date
required by Section 162(m) of the Code and the rules and regulations promulgated thereunder.

ARTICLE 4

ELIGIBILITY AND PARTICIPATION

     4.1 Eligibility. Each Eligible Individual shall be eligible to be granted one or more
Awards pursuant to the Plan.

     4.2 Participation. Subject to the provisions of the Plan, the Administrator may, from
time to time, select from among all Eligible Individuals, those to whom Awards shall be granted and
shall determine the nature and amount of each Award. No Eligible Individual shall have any right
to be granted an Award pursuant to this Plan.

     4.3 Foreign Participants. In order to assure the viability of Awards granted to
Participants employed in foreign countries, the Administrator may provide for such special terms as
it may consider necessary or appropriate to accommodate differences in local law, tax policy, or
custom. Moreover, the Administrator may approve such supplements to, or amendments, restatements,
or alternative versions of, the Plan as it may consider necessary or appropriate for such purposes
without thereby affecting the terms of the Plan as in effect for any other purpose; provided,
however, that no such supplements, amendments, restatements, or alternative versions shall increase
the limitations on the number of shares of Stock (a) issued or transferred pursuant to Awards under
the Plan, as detailed in Section 3.1, and (b) issued or transferred pursuant to Awards granted to
any one Participant during any calendar year, as detailed in Section 3.3 of the Plan.

ARTICLE 5

STOCK OPTIONS

     5.1 General. The Administrator is authorized to grant Options to Eligible Individuals
on the following terms and conditions:

          (a) Exercise Price. The exercise price per share of Stock subject to an Option shall
be determined by the Administrator and set forth in the Award Agreement; provided that, subject to
Section 5.2(d), the exercise price for any Option shall not be less than par value of a share of
Stock on the date of grant.

          (b) Time and Conditions of Exercise. The Administrator shall determine the time or
times at which an Option may be exercised in whole or in part. The Administrator shall also
determine the performance or other conditions, if any, that must be satisfied before all or part of
an Option may be exercised.

9

 

          (c) Payment. The Administrator shall determine the methods, terms and conditions by
which the exercise price of an Option may be paid, and the form and manner of payment, including,
without limitation, payment in the form of: (i) cash, (ii) promissory note bearing interest at no
less than such rate as shall then preclude the imputation of interest under the Code, (iii) shares
of Stock held for such period of time as may be required by the Administrator in order to avoid
adverse accounting consequences and having a Fair Market Value on the date of delivery equal to the
aggregate exercise price of the Option or exercised portion thereof, or (iv) other property
acceptable to the Administrator (including through the delivery of a notice that the Participant
has placed a market sell order with a broker with respect to shares of Stock then issuable upon
exercise of the Option, and that the broker has been directed to pay a sufficient portion of the
net proceeds of the sale to the Company in satisfaction of the Option exercise price; provided that
payment of such proceeds is then made to the Company upon settlement of such sale). The
Administrator shall also determine the methods by which shares of Stock shall be delivered or
deemed to be delivered to Participants. Notwithstanding any other provision of the Plan to the
contrary, no Participant who is a Director or an “executive officer” of the Company within the
meaning of Section 13(k) of the Exchange Act shall be permitted to pay the exercise price of an
Option in any method which would violate Section 13(k) of the Exchange Act.

          (d) Evidence of Grant. All Options shall be evidenced by an Award Agreement between
the Company and the Participant. The Award Agreement shall include such additional provisions as
may be specified by the Administrator.

     5.2 Incentive Stock Options. The terms of any Incentive Stock Options granted
pursuant to the Plan must comply with the conditions and limitations contained in Section 13.2 and
this Section 5.2.

          (a) Eligibility. Incentive Stock Options may be granted only to employees (as defined
in accordance with Section 3401(c) of the Code) of the Company or a Subsidiary which constitutes a
“subsidiary corporation” of the Company within the meaning of Section 424(f) of the Code or a
Parent which constitutes a “parent corporation” of the Company within the meaning of Section 424(e)
of the Code.

          (b) Exercise Price. The exercise price per share of Stock shall be set by the
Administrator; provided that subject to Section 5.2(e) the exercise price for any Incentive Stock
Option shall not be less than 100% of the Fair Market Value on the date of grant.

          (c) Expiration. Subject to Section 5.2(e), an Incentive Stock Option may not be
exercised to any extent by anyone after the tenth anniversary of the date it is granted, unless an
earlier time is set in the Award Agreement.

          (d) Individual Dollar Limitation. The aggregate Fair Market Value (determined as of
the time the Option is granted) of all shares of Stock with respect to which Incentive Stock
Options are first exercisable by a Participant in any calendar year may not exceed $100,000 or such
other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the
extent that Incentive Stock Options are first exercisable by a Participant in excess of such
limitation, the excess shall be considered Non-Qualified Stock

10

 

Options.

          (e) Ten Percent Owners. An Incentive Stock Option shall be granted to any individual
who, at the date of grant, owns stock possessing more than ten percent of the total combined voting
power of all classes of Stock of the Company or any “subsidiary corporation” of the Company or
“parent corporation” of the Company (each within the meaning of Section 424 of the Code) only if
such Option is granted at an exercise price per share that is not less than 110% of the Fair Market
Value per share of the Stock on the date of grant and the Option is exercisable for no more than
five years from the date of grant.

          (f) Notice of Disposition. The Participant shall give the Company prompt notice of
any disposition of shares of Stock acquired by exercise of an Incentive Stock Option within (i) two
years from the date of grant of such Incentive Stock Option or (ii) one year after the transfer of
such shares of Stock to the Participant.

          (g) Transferability; Right to Exercise. An Incentive Stock Option shall not be
transferable by the Participant other than by will or by the laws of descent or distribution.
During a Participant’s lifetime, an Incentive Stock Option may be exercised only by the
Participant.

          (h) Failure to Meet Requirements. Any Option (or portion thereof) purported to be an
Incentive Stock Option, which, for any reason, fails to meet the requirements of Section 422 of the
Code shall be considered a Non-Qualified Stock Option.

     5.3 Substitution of Stock Appreciation Rights. The Administrator may provide in the
Award Agreement evidencing the grant of an Option that the Administrator, in its sole discretion,
shall have the right to substitute a Stock Appreciation Right for such Option at any time prior to
or upon exercise of such Option, subject to the provisions of Section 7.2 hereof; provided that
such Stock Appreciation Right shall be exercisable with respect to the same number of shares of
Stock for which such substituted Option would have been exercisable.

ARTICLE 6

RESTRICTED STOCK AWARDS

     6.1 Grant of Restricted Stock. The Administrator is authorized to make Awards of
Restricted Stock to any Eligible Individual selected by the Administrator in such amounts and
subject to such terms and conditions as determined by the Administrator. All Awards of Restricted
Stock shall be evidenced by an Award Agreement.

     6.2 Issuance and Restrictions. Restricted Stock shall be subject to such repurchase
restrictions, forfeiture restrictions, restrictions on transferability and other restrictions as
the Administrator may impose (including, without limitation, 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, pursuant to such circumstances, in such
installments, or otherwise, as the Administrator determines at the time of the grant of the Award
or thereafter.

11

 

     6.3 Repurchase or Forfeiture. Except as otherwise determined by the Administrator at
the time of the grant of the Award or thereafter, upon Termination of Service during the applicable
restriction period, Restricted Stock that is at that time subject to restrictions shall be
forfeited or subject to repurchase by the Company (or its assignee) under such terms as the
Administrator shall determine; provided, however, that the Administrator may (a) provide in any
Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be
waived in whole or in part in the event of a Participant’s Termination of Service under certain
circumstances, and (b) in other cases waive in whole or in part restrictions or forfeiture
conditions relating to Restricted Stock.

     6.4 Certificates for Restricted Stock. Restricted Stock granted pursuant to the Plan
may be evidenced in such manner as the Administrator shall determine. If certificates representing
shares of Restricted Stock are registered in the name of the Participant, certificates must bear an
appropriate legend referring to the terms, conditions, and restrictions applicable to such
Restricted Stock, and the Company may, at its discretion, retain physical possession of the
certificate until such time as all applicable restrictions lapse or the Award Agreement may provide
that the shares shall be held in escrow by an escrow agent designated by the Company.

ARTICLE 7

STOCK APPRECIATION RIGHTS

     7.1 Grant of Stock Appreciation Rights. A Stock Appreciation Right may be granted to
any Eligible Individual selected by the Administrator. A Stock Appreciation Right shall be subject
to such terms and conditions not inconsistent with the Plan as the Administrator shall impose and
shall be evidenced by an Award Agreement.

     7.2 Stock Appreciation Rights.

          (a) A Stock Appreciation Right shall have a term set by the Administrator. A Stock
Appreciation Right shall be exercisable in such installments as the Administrator may determine. A
Stock Appreciation Right shall cover such number of shares of Stock as the Administrator may
determine. The exercise price per share of Stock subject to each Stock Appreciation Right shall be
set by the Administrator; provided, however, that the Administrator in its sole and absolute
discretion may provide that the Stock Appreciation Right may be exercised subsequent to a
Termination of Service or following a Change in Control of the Company, or because of the
Participant’s retirement, death or Disability, or otherwise.

          (b) A Stock Appreciation Right shall entitle the Participant (or other person entitled to
exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion
of the Stock Appreciation Right (to the extent then exercisable pursuant to its terms) and to
receive from the Company an amount determined by multiplying (i) the amount (if any) by which the
Fair Market Value of a share of Stock on the date of exercise of the Stock Appreciation Right
exceeds the exercise price per share of the Stock Appreciation Right, by (ii) the number of shares
of Stock with respect to which the Stock Appreciation Right shall have been exercised, subject to
any limitations the Administrator may impose.

12

 

     7.3 Payment and Limitations on Exercise.

          (a) Payment of the amounts determined under Section 7.2(b) above shall be in cash, in Stock
(based on its Fair Market Value as of the date the Stock Appreciation Right is exercised) or a
combination of both, as determined by the Administrator.

          (b) To the extent any payment under Section 7.2(b) is effected in Stock it shall be made
subject to satisfaction of all provisions of Article 5 above pertaining to Options.

ARTICLE 8

OTHER TYPES OF AWARDS

     8.1 Dividend Equivalents.

          (a) Any Eligible Individual selected by the Administrator may be granted Dividend Equivalents
based on the dividends on the shares of Stock that are subject to any Award, to be credited as of
dividend payment dates, during the period between the date the Award is granted and the date the
Award is exercised, vests or expires, as determined by the Administrator. Such Dividend
Equivalents shall be converted to cash or additional shares of Stock by such formula and at such
time and subject to such limitations as may be determined by the Administrator.

          (b) Dividend Equivalents granted with respect to Options or Stock Appreciation Rights that are
intended to be Qualified Performance-Based Compensation shall be payable, with respect to
pre-exercise periods, regardless of whether such Option or Stock Appreciation Right is subsequently
exercised.

     8.2 Stock Payments. Any Eligible Individual selected by the Administrator may receive
Stock Payments in the manner determined from time to time by the Administrator. The number of
shares of Stock or the number of options or other rights to purchase shares of Stock subject to a
Stock Payment shall be determined by the Administrator and may be based upon the Performance
Criteria or other specific performance goals determined appropriate by the Administrator.

     8.3 Restricted Stock Units. The Administrator is authorized to make Awards of
Restricted Stock Units to any Eligible Individual selected by the Administrator in such amounts and
subject to such terms and conditions as determined by the Administrator. At the time of grant, the
Administrator shall specify the date or dates on which the Restricted Stock Units shall become
fully vested and nonforfeitable, and may specify such conditions to vesting as it deems
appropriate. At the time of grant, the Administrator shall specify the maturity date applicable to
each grant of Restricted Stock Units which shall be no earlier than the vesting date or dates of
the Award and may be determined at the election of the Eligible Individual to whom the Award is
granted. On the maturity date, the Company shall, subject to Section 10.5(b), transfer to the
Participant one unrestricted, fully transferable share of Stock for each Restricted Stock Unit that
is vested and scheduled to be distributed on such date and not previously forfeited. The

13

 

Administrator shall specify the purchase price, if any, to be paid by the Participant to the
Company for such shares of Stock.

     8.4 Other Stock-Based Awards. Any Eligible Individual selected by the Administrator
may be granted one or more Awards that provide Participants with shares of Stock or the right to
purchase shares of Stock or that have a value derived from the value of, or an exercise or
conversion privilege at a price related to, or that are otherwise payable in shares of Stock and
which may be linked to any one or more of the Performance Criteria or other specific performance
criteria determined appropriate by the Administrator, in each case on a specified date or dates or
over any period or periods determined by the Administrator. In making such determinations, the
Administrator shall consider (among such other factors as it deems relevant in light of the
specific type of Award) the contributions, responsibilities and other compensation of the
particular Participant.

     8.5 Performance Bonus Awards. Any Eligible Individual selected by the Administrator
may be granted one or more Performance-Based Awards in the form of a cash bonus (a “Performance
Bonus Award”) payable upon the attainment of Performance Goals that are established by the
Administrator and relate to one or more of the Performance Criteria, in each case on a specified
date or dates or over any period or periods determined by the Administrator. Any such Performance
Bonus Award paid to a Covered Employee shall be based upon objectively determinable bonus formulas
established in accordance with Article 9.

     8.6 Term. Except as otherwise provided herein, the term of any Award of Dividend
Equivalents, Stock Payments, Restricted Stock Units or Other Stock-Based Award shall be set by the
Administrator in its discretion.

     8.7 Exercise or Purchase Price. The Administrator may establish the exercise or
purchase price, if any, of any Award of any Stock Payments, Restricted Stock Units or Other
Stock-Based Awards; provided, however, that such price shall not be less than the par value of a
share of Stock on the date of grant, unless otherwise permitted by applicable state law.

     8.8 Form of Payment. Payments with respect to any Awards granted under this Article 8
shall be made in cash, in Stock or a combination of both, as determined by the Administrator.

     8.9 Award Agreement. All Awards under this Article 8 shall be subject to such
additional terms and conditions as determined by the Administrator and shall be evidenced by a
written Award Agreement.

ARTICLE 9

PERFORMANCE-BASED AWARDS

     9.1 Purpose. The purpose of this Article 9 is to provide the Administrator the
ability to qualify Awards other than Options and Stock Appreciation Rights and that are granted
pursuant to Articles 6 and 8 as Qualified Performance-Based Compensation. If the Administrator, in
its discretion, decides to grant a Performance-Based Award to a Covered Employee, the provisions of
this Article 9 shall control over any contrary provision contained in

14

 

Articles 6 or 8; provided, however, that the Administrator may in its discretion grant Awards
to Covered Employees that are based on Performance Criteria or Performance Goals but that do not
satisfy the requirements of this Article 9.

     9.2 Applicability. This Article 9 shall apply only to those Covered Employees
selected by the Administrator to receive Performance-Based Awards. The designation of a Covered
Employee as a Participant for a Performance Period shall not in any manner entitle the Participant
to receive an Award for the period. Moreover, designation of a Covered Employee as a Participant
for a particular Performance Period shall not require designation of such Covered Employee as a
Participant in any subsequent Performance Period and designation of one Covered Employee as a
Participant shall not require designation of any other Covered Employees as a Participant in such
period or in any other period.

     9.3 Procedures with Respect to Performance-Based Awards. To the extent necessary to
comply with the Qualified Performance-Based Compensation requirements of Section 162(m)(4)(C) of
the Code, with respect to any Award granted under Articles 6 and 8 which may be granted to one or
more Covered Employees, no later than ninety (90) days following the commencement of any fiscal
year in question or any other designated fiscal period or period of service (or such other time as
may be required or permitted by Section 162(m) of the Code), the Administrator shall, in writing,
(a) designate one or more Covered Employees, (b) select the Performance Criteria applicable to the
Performance Period, (c) establish the Performance Goals, and amounts of such Awards, as applicable,
which may be earned for such Performance Period, and (d) specify the relationship between
Performance Criteria and the Performance Goals and the amounts of such Awards, as applicable, to be
earned by each Covered Employee for such Performance Period. Following the completion of each
Performance Period, the Administrator shall certify in writing whether the applicable Performance
Goals have been achieved for such Performance Period. In determining the amount earned by a
Covered Employee, the Administrator shall have the right to reduce or eliminate (but not to
increase) the amount payable at a given level of performance to take into account additional
factors that the Administrator may deem relevant to the assessment of individual or corporate
performance for the Performance Period.

     9.4 Payment of Performance-Based Awards. Unless otherwise provided in the applicable
Award Agreement, a Participant must be employed by the Company or a Parent or Subsidiary on the day
a Performance-Based Award for such Performance Period is paid to the Participant. Furthermore, a
Participant shall be eligible to receive payment pursuant to a Performance-Based Award for a
Performance Period only if the Performance Goals for such period are achieved.

     9.5 Additional Limitations. Notwithstanding any other provision of the Plan, any
Award which is granted to a Covered Employee and is intended to constitute Qualified
Performance-Based Compensation shall be subject to any additional limitations set forth in Section
162(m) of the Code (including any amendment to Section 162(m) of the Code) or any regulations or
rulings issued thereunder that are requirements for qualification as qualified performance-based
compensation as described in Section 162(m)(4)(C) of the Code, and the Plan shall be deemed amended
to the extent necessary to conform to such requirements.

15

 

ARTICLE 10

PROVISIONS APPLICABLE TO AWARDS

     10.1 Stand-Alone and Tandem Awards. Awards granted pursuant to the Plan may, in the
discretion of the Administrator, be granted either alone, in addition to, or in tandem with, any
other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other
Awards may be granted either at the same time as or at a different time from the grant of such
other Awards.

     10.2 Award Agreement. Awards under the Plan shall be evidenced by Award Agreements
that set forth the terms, conditions and limitations for each Award which may include the term of
an Award, the provisions applicable in the event the Participant’s employment or service
terminates, and the Company’s authority to unilaterally or bilaterally amend, modify, suspend,
cancel or rescind an Award.

     10.3 Limits on Transfer. No right or interest of a Participant in any Award may be
pledged, encumbered, or hypothecated to or in favor of any party other than the Company, a Parent,
or a Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to
any other party other than the Company, a Parent, or a Subsidiary. Except as otherwise provided by
the Administrator, no Award shall be assigned, transferred, or otherwise disposed of by a
Participant other than by will or the laws of descent and distribution. The Administrator by
express provision in the Award or an amendment thereto may permit an Award (other than an Incentive
Stock Option) to be transferred to, exercised by and paid to certain persons or entities related to
the Participant, including but not limited to members of the Participant’s family, charitable
institutions, or trusts or other entities whose beneficiaries or beneficial owners are members of
the Participant’s family and/or charitable institutions, or to such other persons or entities as
may be expressly approved by the Administrator, pursuant to such conditions and procedures as the
Administrator may establish. Any permitted transfer shall be subject to the condition that the
Administrator receive evidence satisfactory to it that the transfer is being made for estate and/or
tax planning purposes (or to a “blind trust” in connection with the Participant’s Termination of
Service with the Company, a Parent, or a Subsidiary to assume a position with a governmental,
charitable, educational or similar non-profit institution) and on a basis consistent with the
Company’s lawful issue of securities.

     10.4 Beneficiaries. Notwithstanding Section 10.3, a Participant may, in the manner
determined by the Administrator, 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 pursuant to
the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to
the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any
additional restrictions deemed necessary or appropriate by the Administrator. If the Participant
is married and resides in a community property state, a designation of a person other than the
Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s
interest in the Award shall not be effective without the prior written consent of the Participant’s
spouse. If no beneficiary has been designated or survives the Participant, payment shall be made
to the person entitled thereto pursuant to the Participant’s will or the laws of

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descent and distribution. Subject to the foregoing, a beneficiary designation may be changed
or revoked by a Participant at any time provided the change or revocation is filed with the
Administrator.

     10.5 Stock Certificates; Book Entry Procedures.

          (a) Notwithstanding anything herein to the contrary, the Company shall not be required to
issue or deliver any certificates evidencing shares of Stock pursuant to the exercise of any Award,
unless and until the Board has determined, with advice of counsel, that the issuance and delivery
of such certificates is in compliance with all applicable laws, regulations of governmental
authorities and, if applicable, the requirements of any exchange on which the shares of Stock are
listed or traded. All Stock certificates delivered pursuant to the Plan are subject to any
stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to
comply with federal, state, or foreign jurisdiction, securities or other laws, rules and
regulations and the rules of any national securities exchange or automated quotation system on
which the Stock is listed, quoted, or traded. The Administrator may place legends on any Stock
certificate to reference restrictions applicable to the Stock. In addition to the terms and
conditions provided herein, the Board may require that a Participant make such reasonable
covenants, agreements, and representations as the Board, in its discretion, deems advisable in
order to comply with any such laws, regulations, or requirements. The Administrator shall have the
right to require any Participant to comply with any timing or other restrictions with respect to
the settlement or exercise of any Award, including a window-period limitation, as may be imposed in
the discretion of the Administrator.

          (b) Notwithstanding any other provision of the Plan, unless otherwise determined by the
Administrator or required by any applicable law, rule or regulation, the Company shall not deliver
to any Participant certificates evidencing shares of Stock issued in connection with any Award and
instead such shares of Stock shall be recorded in the books of the Company (or, as applicable, its
transfer agent or stock plan administrator).

     10.6 Paperless Administration. In the event that the Company establishes for itself
or using the services of a third party, an automated system for the documentation, granting or
exercise of Awards, such as a system using an internet website or interactive voice response, then
the paperless documentation, granting or exercise of Awards by a Participant may be permitted
through the use of such an automated system.

ARTICLE 11

CHANGES IN CAPITAL STRUCTURE

     11.1 Adjustments.

          (a) In the event of any stock dividend, stock split, combination or exchange of shares,
merger, consolidation, distribution of Company assets to stockholders (other than normal cash
dividends), or any other corporate event affecting the Stock or the share price of the Stock other
than an Equity Restructuring, the Administrator may make such proportionate adjustments, if any, as
the Administrator in its discretion may deem appropriate to reflect such changes with

17

 

respect to (i) the aggregate number and type of shares that may be issued under the
Plan (including, but not limited to, adjustments of the limitations in Sections 3.1 and 3.3); (ii)
the terms and conditions of any outstanding Awards (including, without limitation, any applicable
performance targets or criteria with respect thereto); and (iii) the grant or exercise price per
share for any outstanding Awards under the Plan. Any adjustment affecting an Award intended as
Qualified Performance-Based Compensation shall be made consistent with the requirements of Section
162(m) of the Code.

          (b) In the event of any transaction or event described in Section 11.1(a) or any unusual or
nonrecurring transactions or events affecting the Company, any affiliate of the Company, or the
financial statements of the Company or any affiliate (including without limitation any Change in
Control), or of changes in applicable laws, regulations or accounting principles, the
Administrator, in its sole discretion and on such terms and conditions as it deems appropriate,
either by amendment of the terms of any outstanding Awards or by action taken prior to the
occurrence of such transaction or event, is hereby authorized to take any one or more of the
following actions whenever the Administrator determines that action is appropriate in order to
prevent the dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan or with respect to any Award under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or principles:

               (i) To provide for either (A) termination of any such Award in exchange for an amount of cash
and/or other property, if any, equal to the amount that would have been received upon the exercise
of such Award or realization of the Participant’s rights (and, for the avoidance of doubt, if as of
the date of the occurrence of the transaction or event described in this Section 11.1(b) the
Administrator determines in good faith that no amount would have been attained upon the exercise of
such Award or realization of the Participant’s rights, then such Award may be terminated by the
Company without payment) or (B) the replacement of such Award with other rights or property
selected by the Administrator in its sole discretion;

               (ii) To provide that such Award be assumed by the successor or survivor corporation, or a
parent or subsidiary thereof, or shall be substituted for by similar options, rights or awards
covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and prices; and

               (iii) To make adjustments in the number and type of shares of Stock (or other securities or
property) subject to outstanding Awards, and in the number and kind of outstanding Restricted Stock
or Restricted Stock Unit Awards and/or in the terms and conditions of (including the grant or
exercise price), and the criteria included in, outstanding options, rights and awards and options,
rights and awards which may be granted in the future;

               (iv) To provide that such Award shall be exercisable or payable or fully vested with respect
to all shares covered thereby, notwithstanding anything to the contrary in the Plan or the
applicable Award Agreement; and

18

 

               (v) To provide that the Award cannot vest, be exercised or become payable after such event.

          (c) In connection with the occurrence of any Equity Restructuring, and notwithstanding
anything to the contrary in Sections 11.1(a) and 11.1(b):

               (i) The number and type of securities subject to each outstanding Award and the exercise
price or grant price thereof, if applicable, will be proportionately adjusted. The adjustments
provided under this Section 11.1(c)(i) shall be nondiscretionary and shall be final and binding on
the affected Holder and the Company.

               (ii) The Administrator shall make such proportionate adjustments, if any, as the Administrator
in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the
aggregate number and kind of shares that may be issued under the Plan (including, but not limited
to, adjustments of the limitations in Section 3.1 and the Award Limit).

     11.2 Acceleration Upon a Change in Control. Notwithstanding Section 11.1, and except
as may otherwise be provided in any applicable Award Agreement or other written agreement entered
into between the Company, a Parent, a Subsidiary, or other Company affiliate and a Participant, if
a Change in Control occurs and a Participant’s Awards are not continued, converted, assumed, or
replaced by (i) the Company or a Parent or Subsidiary of the Company, or (ii) a Successor Entity,
then immediately prior to the Change in Control such Awards shall become fully exercisable and/or
payable, as applicable, and all forfeiture, repurchase and other restrictions on such Awards shall
lapse. Upon, or in anticipation of, a Change in Control, the Administrator may cause any and all
Awards outstanding hereunder to terminate at a specific time in the future, including but not
limited to the date of such Change in Control, and shall give each Participant the right to
exercise such Awards during a period of time as the Administrator, in its sole and absolute
discretion, shall determine.

     11.3 No Other Rights. Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend, any increase or decrease in the number of shares of stock of any class or
any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan,
no issuance by the Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award.

     11.4 Restrictions on Exercise. In the event of any pending stock dividend, stock
split, combination or exchange of shares, merger, consolidation or other distribution (other than
normal cash dividends) of Company assets to stockholders, or any other change affecting the shares
of Stock or the share price of the Stock including any Equity Restructuring, for reasons of
administrative convenience, the Company in its sole discretion may refuse to permit the exercise of
any Award during a period of 30 days prior to the consummation of any such transaction.

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ARTICLE 12

ADMINISTRATION

     12.1 Administrator. Unless and until the Board delegates administration of the Plan
to a Committee as set forth below, the Plan shall be administered by the full Board. The term
“Administrator” as used in this Plan shall apply to any person or persons who at the time have the
authority to administer the Plan. If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers theretofore possessed by
the Board, including the power to delegate to a subcommittee any of the administrative powers the
Committee is authorized to exercise, subject, however, to such resolutions, not inconsistent with
the provisions of the Plan, as may be adopted from time to time by the Board. Notwithstanding the
foregoing, however, from and after the Public Trading Date, a Committee of the Board shall
administer the Plan and such committee shall consist solely of two or more members of the Board
each of whom is a Non-Employee Director, and with respect to awards that are intended to be
Performance-Based Awards, an “outside director” within the meaning of Section 162(m) of the Code;
provided that any action taken by the Committee shall be valid and effective, whether or not
members of the Committee at the time of such action are later determined not to have satisfied the
requirements for membership set forth in this Section 12.1 or otherwise provided in any charter of
the Committee. Notwithstanding the foregoing: (a) the full Board, acting by a majority of its
members in office, shall conduct the general administration of the Plan with respect to all Awards
granted to Independent Directors and for purposes of such Awards the term “Administrator” as used
in this Plan shall be deemed to refer to the Board and (b) the Board or the Committee may delegate
its authority hereunder to the extent permitted by Section 12.5. In addition, in its sole
discretion, the Board may at any time and from time to time exercise any and all rights and duties
of the Committee under the Plan except with respect to matters which, following the Public Trading
Date, are required to be determined in the sole discretion of the Committee under Rule 16b-3 of the
Exchange Act or Section 162(m) of the Code, or any regulations or rules issued thereunder. Except
as may otherwise be provided in any charter of the Committee, appointment of Committee members
shall be effective upon acceptance of appointment; Committee members may resign at any time by
delivering written notice to the Board; and vacancies in the Committee may only be filled by the
Board.

     12.2 Action by the Administrator. Unless otherwise established by the Board or in any
charter of the Company or the Committee, a majority of the Administrator shall constitute a quorum
and the acts of a majority of the members present at any meeting at which a quorum is present, and
acts approved in writing by a majority of the Administrator in lieu of a meeting, shall be deemed
the acts of the Administrator. Each member of the Administrator 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 of any Parent or Subsidiary, the Company’s independent certified public
accountants, or any executive compensation consultant or other professional retained by the Company
or any Parent or Subsidiary to assist in the administration of the Plan.

     12.3 Authority of Administrator. Subject to any specific designation in the Plan, the
Administrator has the exclusive power, authority and discretion to:

20

 

          (a) Designate Participants to receive Awards;

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

          (c) Determine the number of Awards to be granted and the number of shares of Stock to which an
Award will relate;

          (d) Determine the terms and conditions of any Award granted pursuant to the Plan, including,
but not limited to, the exercise price, grant price, or purchase price, any reload provision, any
restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or
restrictions on the exercisability of an Award, and accelerations or waivers thereof, any
provisions related to non-competition and recapture of gain on an Award, based in each case on such
considerations as the Committee in its sole discretion determines;

          (e) Determine whether, to what extent, and pursuant to what circumstances an Award may be
settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other
property, or an Award may be canceled, forfeited, or surrendered;

          (f) Prescribe the form of each Award Agreement, 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 and regulations as it may deem necessary or
advisable to administer the Plan;

          (i) Interpret the terms of, and any matter arising pursuant to, the Plan or any Award
Agreement; and

          (j) Make all other decisions and determinations that may be required pursuant to the Plan or
as the Committee deems necessary or advisable to administer the Plan.

     12.4 Decisions Binding. The Administrator’s interpretation of the Plan, any Awards
granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the
Committee with respect to the Plan are final, binding, and conclusive on all parties.

     12.5 Delegation of Authority. To the extent permitted by applicable law, the Board or
the Committee may from time to time delegate to a committee of one or more members of the Board or
one or more officers of the Company the authority to grant or amend Awards to Participants other
than (a) Employees who are subject to Section 16 of the Exchange Act, (b) Covered Employees, or (c)
officers of the Company (or Directors) to whom authority to grant or amend Awards has been
delegated hereunder. Any delegation hereunder shall be subject to the restrictions and limits that
the Board or the Committee specifies at the time of such delegation, and the Board or the Committee
may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the
delegatee appointed under this Section 12.5 shall serve in such capacity at the pleasure of the
Board or the Committee.

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     12.6 Amendment or Exchange of Awards. The Administrator may (i) amend any Award to
reduce the per share exercise price of such an Award below the per share exercise price as of the
date the Award is granted and (ii) grant an Award in exchange for, or in connection with, the
cancellation or surrender of an Award having a higher per share exercise price.

ARTICLE 13

EFFECTIVE AND EXPIRATION DATE

     13.1 Effective Date. The Plan is effective as of the day prior to the Public Trading
Date (the “Effective Date”).

     13.2 Expiration Date. The Plan will expire on, and no Award may be granted pursuant
to the Plan after, the tenth anniversary of the date this Plan is approved by the Board (the
“Expiration Date”). Any Awards that are outstanding on the Expiration Date shall remain in
force according to the terms of the Plan and the applicable Award Agreement.

     13.3 Approval of Plan by Stockholders. The Plan will be submitted for the approval of
the Company’s stockholders within twelve (12) months after the date of the Board’s initial approval
of the Plan. Awards may be granted or awarded prior to such stockholder approval; provided that
such Awards shall not be exercisable nor shall such Awards vest prior to the time when the Plan is
approved by the stockholders; and, provided further, that if such approval has not been obtained at
the end of said twelve-month period, all Awards previously granted or awarded under the Plan shall
thereupon be canceled and become null and void. In addition, if the Board determines that Awards
other than Options and Stock Appreciation Rights which may be granted to Covered Employees should
continue to be eligible to qualify as performance-based compensation under Section 162(m)(4)(C) of
the Code, the Performance Criteria must be disclosed to and approved by the Company’s stockholders
no later than the first stockholder meeting that occurs in the fifth year following the year in
which the Company’s stockholders previously approved by the Plan.

ARTICLE 14

AMENDMENT, MODIFICATION, AND TERMINATION

     14.1 Amendment, Modification, And Termination. With the approval of the Board, at any
time and from time to time, the Board may terminate, amend or modify the Plan; provided, however,
that (a) to the extent necessary and desirable to comply with any applicable law, regulation, or
stock exchange rule, the Company shall obtain stockholder approval of any Plan amendment in such a
manner and to such a degree as required, and (b) stockholder approval shall be required for any
amendment to the Plan that increases the number of shares of Stock available under the Plan.

     14.2 Awards Previously Granted. No termination, amendment, or modification of the
Plan shall adversely affect in any material way any Award previously granted pursuant to the Plan
without the prior written consent of the Participant.

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ARTICLE 15

GENERAL PROVISIONS

     15.1 No Rights to Awards. No Eligible Individual or other person shall have any claim
to be granted any Award pursuant to the Plan, and neither the Company nor the Administrator is
obligated to treat Eligible Individuals, Participants or any other persons uniformly.

     15.2 No Stockholders Rights. Except as otherwise provided herein, a Participant shall
have none of the rights of a stockholder with respect to shares of Stock covered by any Award until
the Participant becomes the record owner of such shares of Stock.

     15.3 Withholding. The Company or any Parent or Subsidiary shall have the authority
and the right to deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, local and foreign taxes (including the Participant’s
employment tax obligations) required by law to be withheld with respect to any taxable event
concerning a Participant arising as a result of this Plan. The Administrator may in its discretion
and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company
or any Parent or Subsidiary, as applicable, withhold shares of Stock otherwise issuable under an
Award (or allow the return of shares of Stock) having a Fair Market Value equal to the sums
required to be withheld. Notwithstanding any other provision of the Plan, the number of shares of
Stock which may be withheld with respect to the issuance, vesting, exercise or payment of any Award
(or which may be repurchased from the Participant of such Award within six months (or such other
period as may be determined by the Administrator) after such shares of Stock were acquired by the
Participant from the Company) in order to satisfy the Participant’s federal, state, local and
foreign income and payroll tax liabilities with respect to the issuance, vesting, exercise or
payment of the Award shall be limited to the number of shares of Stock which have a Fair Market
Value on the date of withholding or repurchase equal to the aggregate amount of such liabilities
based on the minimum statutory withholding rates for federal, state, local and foreign income tax
and payroll tax purposes that are applicable to such supplemental taxable income.

     15.4 No Right to Employment or Services. Nothing in the Plan or any Award Agreement
shall interfere with or limit in any way the right of the Company or any Parent or Subsidiary to
terminate any Participant’s employment or services at any time, nor confer upon any Participant any
right to continue in the employ or service of the Company or any Parent or Subsidiary.

     15.5 Unfunded Status of Awards. The Plan is intended to be an “unfunded” plan for
incentive compensation. With respect to any payments not yet made to a Participant pursuant to an
Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights
that are greater than those of a general creditor of the Company or any Parent or Subsidiary.

     15.6 Indemnification. To the extent allowable pursuant to applicable law, each member
of the Administrator or of the Board shall be indemnified and held harmless by the Company from any
loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in
connection with or resulting from any claim, action, suit, or

23

 

proceeding to which he or she may be a party or in which he or she may be involved by reason
of any action or failure to act pursuant to the Plan and against and from any and all amounts paid
by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her;
provided he or she gives 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. The foregoing
right of indemnification shall not be exclusive of any other rights of indemnification to which
such persons may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them
harmless.

     15.7 Relationship to other Benefits. No payment pursuant to the Plan shall be taken
into account in determining any benefits pursuant to any pension, retirement, savings, profit
sharing, group insurance, welfare or other benefit plan of the Company or any Parent or Subsidiary
except to the extent otherwise expressly provided in writing in such other plan or an agreement
thereunder.

     15.8 Expenses. The expenses of administering the Plan shall be borne by the Company
and its Subsidiaries.

     15.9 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.

     15.10 Fractional Shares. No fractional shares of Stock shall be issued and the
Administrator shall determine, in its discretion, whether cash shall be given in lieu of fractional
shares of Stock or whether such fractional shares of Stock shall be eliminated by rounding up or
down as appropriate.

     15.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other
provision of the Plan, the Plan, and any Award granted or awarded to any Participant who is then
subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth
in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to
Rule 16b-3 of the Exchange Act) that are requirements for the application of such exemptive rule.
To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall
be deemed amended to the extent necessary to conform to such applicable exemptive rule.

     15.12 Government and Other Regulations. The obligation of the Company to make payment
of awards in Stock or otherwise shall be subject to all applicable laws, rules, and regulations,
and to such approvals by government agencies as may be required. The Company shall be under no
obligation to register pursuant to the Securities Act any of the shares of Stock paid pursuant to
the Plan. If the shares of Stock paid pursuant to the Plan may in certain circumstances be exempt
from registration pursuant to the Securities Act, the Company may restrict the transfer of such
shares of Stock in such manner as it deems advisable to ensure the availability of any such
exemption.

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     15.13 Section 409A. To the extent that the Administrator determines that any Award
granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such
Award shall incorporate the terms and conditions required by Section 409A of the Code. To the
extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section
409A of the Code and Department of Treasury regulations and other interpretive guidance issued
thereunder, including without limitation any such regulations or other guidance that may be issued
after the adoption of the Plan. Notwithstanding any provision of the Plan to the contrary, in the
event that following the adoption of the Plan the Administrator determines that any Award may be
subject to Section 409A of the Code and related Department of Treasury guidance (including such
Department of Treasury guidance as may be issued after the adoption of the Plan), the Administrator
may adopt such amendments to the Plan and the applicable Award Agreement or adopt other policies
and procedures (including amendments, policies and procedures with retroactive effect), or take any
other actions, that the Administrator determines are necessary or appropriate to (a) exempt the
Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits
provided with respect to the Award, or (b) comply with the requirements of Section 409A of the Code
and related Department of Treasury guidance.

     15.14 Governing Law. The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of Delaware, without regard to the conflicts
of law principles thereof.

25

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