Document:

EX-10.1

Exhibit 10.1

EXECUTIVE OFFICER FY2006 VARIABLE COMPENSATION PLAN

	1.	 	Proposed corporate goals for FY06 – officer performance based compensation will be based on
the following Company-wide revenues (in millions of dollars):

	 	 	 	 	 	 	 	 	 	 	 
	
 
	 	Q1
	 	Q2
	 	Q3
	 	Q4
	 	FY
	 
	 	 	 	 	 	 	 	 	 	 
	Revenue targets

	 	*
	 	*
	 	*
	 	*
	 	*

	2.	 	The decision to award variable compensation is subject to evaluation each quarter by the
Compensation Committee, which will consider recommendations by the CEO, and is based on both
company performance (as specified above) and each executive officer’s individual performance.

	3.	 	Assigned target bonus amounts will be paid in cash on a quarterly basis starting at
achievement by the Company of *% of the consolidated revenue target and continuing on a linear
basis to 100% achievement. Should the Company exceed the consolidated revenue target,
executive officers will receive additional bonus compensation calculated by extending the line
starting at *% at the same slope; e.g., the bonus will be double the target bonus in a
particular quarter if revenues are *% of corporate targets. Target bonus amounts are
established by the Compensation Committee in consultation with the Chief Executive Officer.

There is no obligation to exceed corporate revenue targets unless it is deemed in the
interest of the Company as a whole.

	4.	 	The Compensation Committee recognizes that the Q3 and Q4 targets are preliminary, and it is
likely that the CEO will ask for these numbers to be reviewed later in the fiscal year.

	5.	 	The compensation committee delegates to the CEO the power to award Company-wide bonuses to
executive officers provided that the method used to determine these bonuses is comparable to
that used to determine the bonuses for non- executive officers.

	6.	 	The participants in this plan shall be those persons designated from time to time by the
board of directors as the executive officers of the Company.

(* Certain information on this page has been omitted and filed separately with the Commission.
Confidential treatment has been requested with respect to the omitted portions.)EX-10.2

Exhibit 10.2

CATAPULT COMMUNICATIONS CORPORATION

1998 STOCK PLAN

(As Amended and Restated November 1, 2005, and further amended January 24, 2006)

1. Purposes of the Plan. The purposes of this Plan are:

	 	•	 	to attract and retain the best available personnel for positions of
substantial responsibility,

	 	•	 	to provide additional incentive to Employees, Directors and Consultants, and

	 	•	 	to promote the success of the Company’s business.

The Plan permits the grant of Incentive Stock Options, Nonstatutory Stock Options, Stock
Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance
Shares and other stock awards as determined by the Administrator.

2. Definitions. As used herein, the following definitions shall apply:

(a) “Administrator” means the Board or any of its Committees as shall be administering
the Plan, in accordance with Section 4 of the Plan.

(b) “Applicable Laws” means the requirements relating to the administration of
equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan.

(c) “Award” means, individually or collectively, a grant under the Plan of Options,
Stock Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Units, Performance
Shares and other stock awards as the Administrator may determine.

(d) “Award Agreement” means the written or electronic agreement setting forth the
terms and provisions applicable to each Award granted under the Plan, including an Option
Agreement. The Award Agreement is subject to the terms and conditions of the Plan.

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

(f) “Cash Position” means as to any Performance Period, the Company’s level of cash
and cash equivalents, including, without limitation, amounts classified for financial reporting
purposes as short-term investments and restricted investments.

(g) “Change in Control” means the occurrence of any of the following events:

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other
than (A) a trustee or other fiduciary holding securities under an employee benefit plan of the
Company acting in such capacity, (B) a corporation owned directly or indirectly by the shareholders
of the Company in substantially the same proportions as their ownership of stock of the Company or
(C) Richard A. or Nancy H. Karp, becomes the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then outstanding voting
securities; or

(ii) The consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets; or

(iii) The consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or consolidation.

(h) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a
section of the Code herein shall be a reference to any successor or amended section of the Code.

(i) “Committee” means a committee of Directors or of other individuals satisfying
Applicable Laws appointed by the Board in accordance with Section 4 of the Plan.

(j) “Common Stock” means the common stock of the Company.

(k) “Company” means Catapult Communications Corporation, a Nevada corporation.

(l) “Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services to such entity.

(m) “Determination Date” means the latest possible date that shall not jeopardize the
qualification of an Award granted under the Plan as “performance-based compensation” under Section
162(m) of the Code.

(n) “Director” means a member of the Board.

(o) “Disability” means total and permanent disability as defined in Section 22(e)(3)
of the Code.

(p) “Earnings Per Share” means as to any Performance Period, the Company’s or a
business unit’s Net Income, divided by a weighted average number of Shares outstanding and dilutive
equivalent Shares deemed outstanding, determined in accordance with U.S. GAAP; provided, however,
that if Net Income as to any such Performance Period is a negative amount, then Earnings Per Share
means the Company’s or business unit’s Net Income, divided by a weighted average number of Shares
outstanding, determined in accordance with the U.S. GAAP.

(q) “Employee” means any person, including Officers and Directors, employed by the
Company or any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an
Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between
locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. For
purposes of Incentive Stock Options, no such leave may exceed ninety (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 181st 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.
Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to
constitute “employment” by the Company.

(r) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(s) “Excluded Items” includes, without limitation: (i) incentive compensation, (ii)
in-process research and development expenses, (iii) acquisition costs, (iv) compensation expense
from equity compensation, (v) operating expenses from acquired businesses, (vi) amortization of
acquired intangible assets, and (vii) such other unusual or one-time items as may be identified by
the Administrator.

(t) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

(i) If the Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of
The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange or system for the last
market trading day prior to the time of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable;

(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between
the high bid and low asked prices for the Common Stock on the last market trading day prior to the
day of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

(iii) In the absence of an established market for the Common Stock, the Fair Market Value
shall be determined in good faith by the Administrator.

(u) “Fiscal Year” means the fiscal year of the Company.

(v) “Incentive Stock Option” means an Option that by its terms does qualify and is
intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder.

(w) “Net Income” means as to any Performance Period, the Company’s or a business
unit’s income after taxes determined in accordance with U.S. GAAP, adjusted for any Excluded Items
approved for exclusion by the Administrator.

(x) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or
is not intended to qualify as an Incentive Stock Option.

(y) “Notice of Grant” means a written or electronic notice evidencing certain terms
and conditions of an individual Award. The Notice of Grant is part of the Award Agreement.

(z) “Officer” means a person who is an officer of the Company within the meaning of
Section 16 of the Exchange Act and the rules and regulations promulgated thereunder.

(aa) “Operating Cash Flow” means as to any Performance Period, the Company’s or a
business unit’s cash flow generated from operating activities, as reported in the Company’s cash
flow statements and calculated in accordance with U.S. GAAP, adjusted for any Excluded Items
approved for exclusion by the Administrator.

(bb) “Operating Income” means as to any Performance Period, the Company’s or a
business unit’s income from operations determined in accordance with U.S. GAAP, adjusted for any
Excluded Items approved for exclusion by the Administrator.

(cc) “Option” means a stock option granted pursuant to the Plan.

(dd) “Option Agreement” means an agreement between the Company and a Participant
evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject
to the terms and conditions of the Plan.

(ee) “Optioned Stock” means the Common Stock subject to an Award.

(ff) “Optionee” means the holder of an outstanding Option or Stock Purchase Right
granted under the Plan.

(gg) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

(hh) “Participant” means the holder of an outstanding Award, including an Optionee.

(ii) “Performance Goals” means the goal(s) (or combined goal(s)) determined by the
Administrator (in its discretion) to be applicable to a Participant with respect to an Award
granted under the Plan. As determined by the Administrator, the Performance Goals applicable to an
Award may provide for a targeted level or levels of achievement using one or more of the following
measures: (i) Cash Position, (ii) Earnings Per Share, (iii) Net Income, (iv) Operating Cash Flow,
(v) Operating Income, (vi) Return on Assets, (vii) Return on Equity, (viii) Return on Sales, (ix)
Revenue, and (x) Total Shareholder Return. The Performance Goals may differ from Participant to
Participant and from Award to Award. Prior to the Determination Date, the Administrator shall
determine whether any significant element(s) shall be included in or excluded from the calculation
of any Performance Goal with respect to any Participant.

(jj) “Performance Period” means any Fiscal Year of the Company or such other period as
determined by the Administrator in its sole discretion.

(kk) “Performance Share” means an Award denominated in Shares which may be earned in
whole or in part upon attainment of Performance Goals or other vesting criteria as the
Administrator may determine pursuant to Section 10.

(ll) “Performance Unit” means a bookkeeping entry representing an amount equal to the
Fair Market Value of one Share that may be earned in whole or in part upon attainment of
Performance Goals or other vesting criteria as the Administrator may determine and which may be
settled for cash, Shares or other securities or a combination of the foregoing pursuant to Section
10.

(mm) “Period of Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are subject to a substantial
risk of forfeiture. Such restrictions may be based on the passage of time, the achievement of
target levels of performance, or the occurrence of other events as determined by the Administrator.

(nn) “Plan” means this 1998 Stock Plan.

(oo) “Restricted Stock” means Shares issued pursuant to a Restricted Stock award under
Section 8 of the Plan, or issued pursuant to the early exercise of an Option.

(pp) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to
the Fair Market Value of one Share, granted pursuant to Section 9. Each Restricted Stock Unit
represents an unfunded and unsecured obligation of the Company.

(qq) “Return on Assets” means as to any Performance Period, the percentage equal to
the Company’s or a business unit’s Operating Income divided by average net Company or business unit
as applicable, assets, determined in accordance with U.S. GAAP.

(rr) “Return on Equity” means as to any Performance Period, the percentage equal to
the Company’s Net Income divided by average shareholder’s equity, determined in accordance with
U.S. GAAP.

(ss) “Return on Sales” means as to any Performance Period, the percentage equal to the
Company’s or a business unit’s Operating Income divided by the Company’s or the business unit’s, as
applicable, Revenue.

(tt) “Revenue” means as to any Performance Period, the Company’s or business unit’s
net sales, determined in accordance with U.S. GAAP.

(uu) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan.

(vv) “Section 16(b)” means Section 16(b) of the Exchange Act.

(ww) “Service Provider” means an Employee, Director or
Consultant.

(xx) “Share” means a share of the Common Stock, as adjusted in accordance with Section
13 of the Plan.

(yy) “Stock Appreciation Right” means an Award, granted alone or in connection with an
Option, that pursuant to Section 7 is designated as a Stock Appreciation Right.

(zz) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Section 424(f) of the Code.

(aaa) “Total Shareholder Return” means as to any Performance Period, the total return
(change in share price plus reinvestment of any dividends) of a Share.

(bbb) “U.S. GAAP” means generally accepted accounting principles in the United States.

3. Stock Subject to the Plan.

(a) Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan,
the maximum aggregate number of Shares that may be awarded and sold under the Plan is 3,800,000
Shares. The Shares may be authorized, but unissued, or reacquired Common Stock.

(b) Full Value Awards. Any Shares subject to Options or Stock Appreciation Rights
shall be counted against the numerical limits of this Section 3 as one Share for every Share
subject thereto. Any Shares subject to Awards of Restricted Stock, Restricted Stock Units,
Performance Shares, or Performance Units with a per share or unit purchase price lower than 100% of
Fair Market Value on the date of grant shall be counted against the numerical limits of this
Section 3 as two Shares for every one Share subject thereto. To the extent that a Share that was
subject to an Award that counted as two Shares against the Plan reserve pursuant to the preceding
sentence is recycled back into the Plan under the next paragraph of this Section 3, the Plan shall
be credited with two Shares.

(c) Lapsed Awards. If an Award expires or becomes unexercisable without having been
exercised in full, or, with respect to Restricted Stock, Restricted Stock Units, Performance Shares
or Performance Units, is forfeited to or repurchased by the Company, the unpurchased Shares (or for
Awards other than Options and Stock Appreciation Rights, the forfeited or repurchased Shares) which
were subject thereto shall become available for future grant or sale under the Plan (unless the
Plan has terminated). With respect to Stock Appreciation Rights, Shares actually issued pursuant
to a Stock Appreciation Right as well as the Shares that represent payment of the exercise price
shall cease to be available under the Plan Shares that have actually been issued under the Plan
under any Award shall not be returned to the Plan and shall not become available for future
distribution under the Plan; provided, however, that if unvested Shares of Restricted Stock,
Restricted Stock Units, Performance Shares or Performance Units are repurchased by the Company or
are forfeited to the Company, such Shares shall become available for future grant under the Plan.
Shares used to pay the tax and exercise price of an Award shall become available for future grant
or sale under the Plan. To the extent an Award under the Plan is paid out in cash rather than
Shares, such cash payment shall not result in reducing the number of Shares available for issuance
under the Plan. Notwithstanding the foregoing, and subject to adjustment provided in Section 13,
the maximum number of Shares that may be issued upon the exercise of Incentive Stock Options shall
equal the aggregate Share number stated in Section 3, plus, to the extent allowable under Section
422 of the Code, any Shares that become available for issuance under the Plan under this Section 3.

4. Administration of the Plan.

(a) Procedure.

(i) Multiple Administrative Bodies. The Plan may be administered by different
Committees with respect to different groups of Service Providers.

(ii) Section 162(m). To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation” within the
meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more
“outside directors” within the meaning of Section 162(m) of the Code.

(iii) Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt
under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the
requirements for exemption under Rule 16b-3.

(iv) Other Administration. Other than as provided above, the Plan shall be
administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy
Applicable Laws.

(b) Powers of the Administrator. Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to such Committee, the
Administrator shall have the authority, in its discretion:

(i) to determine the Fair Market Value;

(ii) to select the Service Providers to whom Awards may be granted hereunder;

(iii) to determine the number of shares of Common Stock to be covered by each Award granted
hereunder;

(iv) to approve forms of agreement for use under the Plan;

(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any
Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise
price, the time or times when Awards may be exercised (which may be based on performance criteria),
any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the shares of Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;

(vi) to construe and interpret the terms of the Plan and awards granted pursuant to the Plan;

(vii) to prescribe, amend and rescind rules and regulations relating to the Plan, including
rules and regulations relating to sub-plans established for the purpose of satisfying applicable
foreign laws;

(viii) to modify or amend each Award (subject to Section 17(c) of the Plan), including the
discretionary authority to extend the post-termination exercisability period of Options longer than
is otherwise provided for in the Plan; provided, however, that no modification or amendment may
reduce the exercise price of an Award after it has been granted (except for adjustments made
pursuant to Section 13), unless approved by the Company’s shareholders;

(ix) to authorize any person to execute on behalf of the Company any instrument required to
effect the grant of an Award previously granted by the Administrator;

(x) to grant in addition to the incentives described in Sections 6, 7, 8, 9 and 10 below,
other incentives payable in cash or Shares under the Plan as determined by the Administrator to be
in the best interests of the Company and subject to any terms and conditions the Administrator
deems advisable; and

(xi) to make all other determinations deemed necessary or advisable for administering the
Plan.

(c) Effect of Administrator’s Decision. The Administrator’s decisions, determinations
and interpretations shall be final and binding on all Participants and any other holders of Awards.

5. Eligibility. Nonstatutory Stock Options, Restricted Stock, Restricted Stock Units,
Stock Appreciation Rights, Performance Units, Performance Shares and such stock awards as the
Administrator determines may be granted to Service Providers. Incentive Stock Options may be
granted only to Employees.

6. Options.

(a) Limitations.

(i) Each Option shall be designated in the Award Agreement as either an Incentive Stock Option
or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the
aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Participant during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 6(a)(i), Incentive Stock Options shall be
taken into account in the order in which they were granted. The Fair Market Value of the Shares
shall be determined as of the time the Option with respect to such Shares is granted.

(ii) The following limitations shall apply to grants of Options:

(1) No Service Provider shall be granted, in any Fiscal Year of the Company, Options to
purchase more than 225,000 Shares.

(2) In connection with his or her initial service, a Service Provider may be granted Options
to purchase up to an additional 225,000 Shares which shall not count against the limit set forth in
subsection (1) above.

(3) The foregoing limitations shall be adjusted proportionately in connection with any change
in the Company’s capitalization as described in Section 13.

(4) If an Option is cancelled in the same Fiscal Year of the Company in which it was granted
(other than in connection with a transaction described in Section 13), the cancelled Option shall
be counted against the limits set forth in subsections (1) and (2) above. For this purpose, if the
exercise price of an Option is reduced, the transaction shall be treated as a cancellation of the
Option and the grant of a new Option.

(b) Term of Option. The term of each Option shall be stated in the Award Agreement.
In the case of an Incentive Stock Option, the term shall be ten (10) years from the date of grant
or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an
Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock
Option shall be five (5) years from the date of grant or such shorter term as may be provided in
the Award Agreement.

(c) Option Exercise Price and Consideration.

(i) Exercise Price. The per share exercise price for the Shares to be issued pursuant
to exercise of an Option shall be determined by the Administrator, subject to the following:

(1) In the case of an Incentive Stock Option

(A) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of stock of the Company
or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.

(B) granted to any Employee other than an Employee described in paragraph (A) immediately
above, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share
on the date of grant.

(2) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be no less
than 100% of the Fair Market Value per Share on the date of grant.

(3) Notwithstanding the foregoing, Options may be granted with a per Share exercise price of
less than 100% of the Fair Market Value per Share on the date of grant pursuant to a transaction
described in Section 424(a) of the Code and the regulations promulgated thereunder.

(ii) Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and shall determine any
conditions that must be satisfied before the Option may be exercised.

(iii) Form of Consideration. The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an
Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at
the time of grant. Such consideration may consist entirely of:

(1) cash;

(2) check;

(3) other Shares which, in the case of Shares acquired directly or indirectly from the
Company, (A) have been owned by the Participant and have not been subject to a substantial risk of
forfeiture for more than six (6) months on the date of surrender, and (B) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;

(4) consideration received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan;

(5) a reduction in the amount of any Company liability to the Participant, including any
liability attributable to the Participant’s participation in any Company-sponsored deferred
compensation program or arrangement;

(6) any combination of the foregoing methods of payment; or

(7) such other consideration and method of payment for the issuance of Shares to the extent
permitted by Applicable Laws.

(d) Exercise of Option.

(i) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder
shall be exercisable according to the terms of the Plan and at such times and under such conditions
as determined by the Administrator and set forth in the Award Agreement. Unless the Administrator
provides otherwise, vesting of Options granted to Officers and Directors hereunder shall be tolled
during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share.

An Option shall be deemed exercised when the Company receives: (i) written or electronic
notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise
the Option, and (ii) full payment for the Shares with respect to which the Option is exercised
together with any applicable withholding taxes. Full payment may consist of any consideration and
method of payment authorized by the Administrator and permitted by the Award Agreement and the
Plan. Shares issued upon exercise of an Option shall be issued in the name of the Participant or,
if requested by the Participant, in the name of the Participant and his or her spouse. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends or any other
rights as a shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after
the Option is exercised. No adjustment shall be made for a dividend or other right for which the
record date is prior to the date the Shares are issued, except as provided in Section 13 of the
Plan.

Exercising an Option in any manner shall decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of Shares as to which
the Option is exercised.

(ii) Termination of Relationship as a Service Provider. If a Participant ceases to be
a Service Provider, other than upon the Participant’s death or Disability, the Participant may
exercise his or her Option within such period of time as is specified in the Award Agreement to the
extent that the Option is vested on the date of termination (but in no event later than the
expiration of the term of such Option as set forth in the Award Agreement). In the absence of a
specified time in the Award Agreement, the Option shall remain exercisable for thirty (30) days
following the Participant’s termination. If, on the date of termination, the Participant is not
vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
shall revert to the Plan. If, after termination, the Participant does not exercise his or her
Option within the time specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

(iii) Disability of Participant. If a Participant ceases to be a Service Provider as
a result of the Participant’s Disability, the Participant may exercise his or her Option within
such period of time as is specified in the Award Agreement to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term of such Option as
set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option shall remain exercisable for twelve (12) months following the Participant’s termination.
If, on the date of termination, the Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the Plan. If, after
termination, the Participant does not exercise his or her Option within the time specified herein,
the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

(iv) Death of Participant. If a Participant dies while a Service Provider, the Option
may be exercised within such period of time as is specified in the Award Agreement (but in no event
later than the expiration of the term of such Option as set forth in the Notice of Grant), by the
Participant’s estate or by a person who acquires the right to exercise the Option by bequest or
inheritance, but only to the extent that the Option is vested on the date of death. In the absence
of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12)
months following the Participant’s termination. If, at the time of death, the Participant is not
vested as to his or her entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. The Option may be exercised by the executor or administrator
of the Participant’s estate or, if none, by the person(s) entitled to exercise the Option under the
Participant’s will or in accordance with the laws of descent and distribution. If the Option is
not so exercised within the time specified herein, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

(v) Buyout Provisions. The Administrator may at any time, in connection with a Change
in Control, offer to buy out for a payment in cash or Shares an Award previously granted based on
such terms and conditions as the Administrator shall establish and communicate to the Participant
at the time that such offer is made.

7. Stock Appreciation Rights.

(a) Grant of Stock Appreciation Rights. Subject to the terms and conditions of the
Plan, a Stock Appreciation Right may be granted to Service Providers at any time and from time to
time as shall be determined by the Administrator, in its sole discretion.

(b) Number of Shares. The Administrator shall have complete discretion to determine
the number of Stock Appreciation Rights granted to any Participant, provided that during any Fiscal
Year, no Participant shall be granted Stock Appreciation Rights covering more than 225,000 Shares.
Notwithstanding the foregoing limitation, in connection with a Participant’s initial service as an
Employee, an Employee may be granted Stock Appreciation Rights covering up to an additional 225,000
Shares.

(c) Exercise Price and Other Terms. The Administrator, subject to the provisions of
the Plan, shall have complete discretion to determine the terms and conditions of Stock
Appreciation Rights granted under the Plan. In the case of a freestanding Stock Appreciation
Right, the exercise price shall be not less than 100% of the Fair Market Value of a Share on the
date of grant. The exercise price of a tandem or affiliated Stock Appreciation Rights shall equal
the exercise price of the related Option.

(d) Stock Appreciation Right Agreement. Each Stock Appreciation Right grant shall be
evidenced by an Award Agreement that shall specify the exercise price, the term of the Stock
Appreciation Right, the conditions of exercise, and such other terms and conditions as the
Administrator, in its sole discretion, shall determine.

(e) Expiration of Stock Appreciation Rights. A Stock Appreciation Right granted under
the Plan shall expire upon the date determined by the Administrator, in its sole discretion, and
set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 6 also shall
apply to Stock Appreciation Rights.

(f) Payment of Stock Appreciation Right Amount. Upon exercise of a Stock Appreciation
Right, a Participant shall be entitled to receive payment from the Company in an amount determined
by multiplying:

(i) The difference between the Fair Market Value of a Share on the date of exercise over the
exercise price; times

(ii) The number of Shares with respect to which the Stock Appreciation Right is exercised.

At the discretion of the Administrator, the payment upon Stock Appreciation Right exercise may
be in cash, in Shares of equivalent value, or in some combination thereof.

8. Restricted Stock.

(a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the
Administrator, at any time and from time to time, may grant Awards of Restricted Stock to Service
Providers in such amounts as the Administrator, in its sole discretion, shall determine.

(b) Restricted Stock Agreement. Each Award of Restricted Stock shall be evidenced by
an Award Agreement that shall specify the Period of Restriction, the number of Shares granted, and
such other terms and conditions as the Administrator, in its sole discretion, shall determine.
Notwithstanding the foregoing, during any Fiscal Year no Participant shall receive more than an
aggregate of 75,000 Shares of Restricted Stock; provided, however, that in connection with a
Participant’s initial service as an Employee, an Employee may be granted an aggregate of up to an
additional 75,000 Shares of Restricted Stock. Unless the Administrator determines otherwise,
Shares of Restricted Stock shall be held by the Company as escrow agent until the restrictions on
such Shares have lapsed.

(c) Transferability. Except as provided in this Section 8, Shares of Restricted Stock
may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.

(d) Other Restrictions. The Administrator, in its sole discretion, may impose such
other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate.

(e) Removal of Restrictions. Except as otherwise provided in this Section 8, Shares
of Restricted Stock covered by each Restricted Stock grant made under the Plan shall be released
from escrow as soon as practicable after the last day of the Period of Restriction. The
restrictions shall lapse at a rate determined by the Administrator. After the grant of Restricted
Stock, the Administrator, in its sole discretion, may reduce or waive any restrictions for such
Restricted Stock.

(f) Voting Rights. During the Period of Restriction, Service Providers holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with respect to those Shares,
unless the Administrator determines otherwise.

(g) Dividends and Other Distributions. During the Period of Restriction, Service
Providers holding Shares of Restricted Stock shall be entitled to receive all dividends and other
distributions paid with respect to such Shares unless the Administrator determines otherwise. If
any such dividends or distributions are paid in Shares, the Shares shall be subject to the same
restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect
to which they were paid.

(h) Return of Restricted Stock to Company. On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed shall revert to the Company
and again shall become available for grant under the Plan.

(i) Section 162(m) Performance Restrictions. For purposes of qualifying grants of
Restricted Stock as “performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based upon the achievement of Performance
Goals. The Performance Goals shall be set by the Administrator on or before the Determination
Date. In granting Restricted Stock which is intended to qualify under Section 162(m) of the Code,
the Administrator shall follow any procedures determined by it from time to time to be necessary or
appropriate to ensure qualification of the Award under Section 162(m) of the Code (e.g., in
determining the Performance Goals).

9. Restricted Stock Units.

(a) Grant of Restricted Stock Units. Subject to the terms and provisions of the Plan,
the Administrator, at any time and from time to time, may grant Awards of Restricted Stock Units to
Service Providers in such amounts as the Administrator, in its sole discretion, shall determine.

(b) Restricted Stock Unit Agreement. Each Award of Restricted Stock Units shall be
evidenced by an Award Agreement that shall specify the number of Restricted Stock Units granted and
such other terms and conditions as the Administrator, in its sole discretion, shall determine.
Notwithstanding the foregoing, during any Fiscal Year no Participant shall receive more than an
aggregate of 75,000 Restricted Stock Units; provided, however, that in connection with a
Participant’s initial service as an Employee, an Employee may be granted an aggregate of up to an
additional 75,000 Restricted Stock Units.

(c) Other Restrictions. The Administrator, in its sole discretion, may impose such
other restrictions on Restricted Stock Units as it may deem advisable or appropriate.

(d) Vesting Criteria and Other Terms. The Administrator shall set vesting criteria in
its discretion, which, depending on the extent to which the criteria are met, shall determine the
number of Restricted Stock Units that shall be paid out to the Participant. The Administrator may
set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals
(including, but not limited to, continued employment), or any other basis determined by the
Administrator in its discretion.

(e) Earning Restricted Stock Units. Upon meeting the applicable vesting criteria, the
Participant shall be entitled to receive a payout as specified in the Award Agreement.
Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to
receive a payout.

(f) Form and Timing of Payment. Payment of earned Restricted Stock Units shall be
made as soon as practicable after the date(s) set forth in the Award Agreement. The Administrator,
in its sole discretion, may pay earned Restricted Stock Units in cash, Shares, or a combination
thereof. Shares represented by Restricted Stock Units that are fully paid in cash again shall be
available for grant under the Plan.

(g) Cancellation. On the date set forth in the Award Agreement, all unearned
Restricted Stock Units shall be forfeited to the Company.

(h) Section 162(m) Performance Restrictions. For purposes of qualifying grants of
Restricted Stock Units as “performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may set restrictions based upon the achievement of Performance
Goals. The Performance Goals shall be set by the Administrator on or before the Determination
Date. In granting Restricted Stock Units which are intended to qualify under Section 162(m) of the
Code, the Administrator shall follow any procedures determined by it from time to time to be
necessary or appropriate to ensure qualification of the Award under Section 162(m) of the Code
(e.g. in determining the Performance Goals).

10. Performance Units and Performance Shares.

(a) Grant of Performance Units/Shares. Performance Units and Performance Shares may
be granted to Service Providers at any time and from time to time, as shall be determined by the
Administrator, in its sole discretion. The Administrator shall have complete discretion in
determining the number of Performance Units/Shares granted to each Participant provided that during
any Fiscal Year no Participant shall receive more than 75,000 Performance Units or Performance
Shares. Notwithstanding the foregoing limitation, in connection with a Participant’s initial
service as an Employee, an Employee may be granted up to an additional 75,000 Performance Units or
Performance Shares.

(b) Value of Performance Units/Shares. Each Performance Unit shall have an initial
value that is established by the Administrator on or before the date of grant. Each Performance
Share shall have an initial value equal to the Fair Market Value of a Share on the date of grant.

(c) Performance Objectives and Other Terms. The Administrator shall set performance
objectives or other vesting provisions. The Administrator may set vesting criteria based upon the
achievement of Company-wide, business unit, or individual goals (including, but not limited to,
continued employment), or any other basis determined by the Administrator in its discretion.

(d) Section 162(m) Performance Objectives. For purposes of qualifying grants of
Performance Units/Shares as “performance-based compensation” under Section 162(m) of the Code, the
Administrator, in its discretion, may determine that the performance objectives applicable to
Performance Units/Shares shall be based on the achievement of Performance Goals. The Administrator
shall set the Performance Goals on or before the Determination Date. In granting Performance
Units/Shares which are intended to qualify under Section 162(m) of the Code, the Administrator
shall follow any procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the Performance Units/Shares under Section 162(m) of the Code (e.g., in
determining the Performance Goals).

(e) Earning of Performance Units/Shares. After the applicable Performance Period has
ended, the holder of Performance Unit/Shares shall be entitled to receive a payout of the number of
Performance Units/Shares earned by the Participant over the Performance Period, to be determined as
a function of the extent to which the corresponding performance objectives or other vesting
provisions have been achieved. After the grant of a Performance Unit/Share, the Administrator, in
its sole discretion, may reduce or waive any performance objectives or other vesting provisions for
such Performance Unit/Share.

(f) Form and Timing of Payment of Performance Units/Shares. Payment of earned
Performance Units/Shares shall be made as soon as practicable after the expiration of the
applicable Performance Period. The Administrator, in its sole discretion, may pay earned
Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair Market Value
equal to the value of the earned Performance Units/Shares at the close of the applicable
Performance Period) or in a combination thereof.

(g) Cancellation of Performance Units/Shares. On the date set forth in the Award
Agreement, all unearned or unvested Performance Units/Shares shall be forfeited to the Company, and
again shall be available for grant under the Plan.

11. Other Stock Awards. In addition to the incentives described in Sections 6, 7, 8,
9 and 10 above, the Administrator may grant other incentives payable in Shares under the Plan as it
determines to be in the best interests of the Company and subject to such other terms and
conditions as it deems appropriate.

12. Transferability of Awards. Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be exercised, during the
lifetime of the Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award shall contain such additional terms and conditions as the Administrator
deems appropriate.

13. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.

(a) Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the number of shares of Common Stock that have been authorized for issuance under the
Plan but as to which no Awards have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Award, and the number of shares of Common Stock as well as the
price per share of Common Stock covered by each such outstanding Award, shall be proportionately
adjusted for any change in or increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination or reclassification
of the Common Stock, or any other change or increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided, however, that
conversion of any convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the Board, whose determination
in that respect shall be final, binding and conclusive. Except as expressly provided herein, 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 or price of shares of Common Stock subject to an Award.

(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as soon as practicable
prior to the effective date of such proposed transaction. The Administrator in its discretion may
provide for a Participant to have the right to exercise his or her Award until ten (10) days prior
to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which
the Award would not otherwise be exercisable. In addition, the Administrator may provide that any
Company repurchase option shall lapse, provided the proposed dissolution or liquidation takes place
at the time and in the manner contemplated. To the extent it has not been previously exercised, an
Award shall terminate immediately prior to the consummation of such proposed action.

(c) Merger or Asset Sale. In the event of a merger of the Company with or into
another corporation, or the sale of substantially all of the assets of the Company, each
outstanding Award shall be assumed or an equivalent option or right substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the Award, the Participant shall fully
vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation
Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all
restrictions on Restricted Stock shall lapse, and, with respect to Performance Shares and
Performance Units, all Performance Goals or other vesting criteria shall be deemed achieved at
target levels and all other terms and conditions met. In addition, if an Award is not assumed or
substituted for in the event of a merger or sale of assets, the Administrator shall notify the
Participant in writing or electronically that the Award shall be fully vested and exercisable for a
period of time determined by the Administrator, and the Award shall terminate upon the expiration
of such period.

(d) For the purposes of subsection (c), an Award shall be considered assumed if, following the
merger or sale of assets, the Award confers the right to purchase or receive, for each Share
subject to the Award immediately prior to the merger or sale of assets, the consideration (whether
stock, cash, or other securities or property) or, in the case of a Stock Appreciation Right upon
the exercise of which the Administrator determines to pay cash or a Performance Share or
Performance Unit which the Administrator can determine to pay in cash, the fair market value of the
consideration received in the merger or sale of assets by holders of Common Stock for each Share
held on the effective date of the transaction (and if holders were offered a choice of
consideration, the type of consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the merger or sale of assets is
not solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received upon the
exercise of an Option or Stock Appreciation Right or upon the payout of a Performance Unit or
Performance Share, for each Share subject to the Award (or in the case of Performance Units, the
number of implied shares determined by dividing the value of the Performance Units by the per share
consideration received by holders of Common Stock in the merger), to be solely common stock of the
successor corporation or its Parent equal in fair market value to the per share consideration
received by holders of Common Stock in the merger or sale of assets.

Notwithstanding anything in this Section 13(d) to the contrary, an Award that vests, is earned
or is paid-out upon the satisfaction of one or more Performance Goals shall not be considered
assumed if the Company or its successor modifies any of such Performance Goals without the
Participant’s consent; provided, however, a modification to such Performance Goals only to reflect
the successor corporation’s post-Change in Control corporate structure shall not be deemed to
invalidate an otherwise valid Award assumption.

(e) Additional Vesting for Certain Directors Upon Change in Control. In the event of
a Change in Control each outstanding Award granted to a Director who is not an Employee shall
become fully vested and exercisable. The Administrator shall notify the Director in writing or
electronically not less than fifteen (15) days prior to the Change in Control that the vesting of
the Award shall accelerate and the Director shall be entitled to exercise the Award as to the
additional Shares concurrently with the Change in Control.

14. No Effect on Employment or Service. Neither the Plan nor any Award shall confer
upon a Participant any right with respect to continuing the Participant’s relationship as a Service
Provider with the Company, nor shall they interfere in any way with the Participant’s right or the
Company’s right to terminate such relationship at any time, with or without cause, to the extent
permitted by Applicable Laws.

15. Tax Withholding

(a) Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to
an Award (or exercise thereof), the Company will have the power and the right to deduct or
withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy
federal, state, local, foreign or other taxes (including the Participant’s FICA obligation)
required to be withheld with respect to such Award (or exercise thereof).

(b) Withholding Arrangements. The Administrator, in its sole discretion and pursuant
to such procedures as it may specify from time to time, may permit a Participant to satisfy such
tax withholding obligation, in whole or in part (without limitation) by (i) paying cash, (ii)
electing to have the Company withhold otherwise deliverable cash or Shares having a Fair Market
Value equal to the amount required to be withheld, (iii) delivering to the Company already-owned
Shares having a Fair Market Value equal to the amount required to be withheld, or (iv) selling a
sufficient number of Shares otherwise deliverable to the Participant through such means as the
Administrator may determine in its sole discretion (whether through a broker or otherwise) equal to
the amount required to be withheld. The amount of the withholding requirement will be deemed to
include any amount which the Administrator agrees may be withheld at the time the election is made,
not to exceed the amount determined by using the maximum federal, state or local marginal income
tax rates applicable to the Participant with respect to the Award on the date that the amount of
tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or
delivered will be determined as of the date that the taxes are required to be withheld

16. Date of Grant. The date of grant of an Award shall be, for all purposes, the date
on which the Administrator makes the determination granting such Award, or such other later date as
is determined by the Administrator. Notice of the determination shall be provided to each
Participant within a reasonable time after the date of such grant.

17. Amendment and Termination of the Plan.

(a) Amendment and Termination. The Board may at any time amend, alter, suspend or
terminate the Plan.

(b) Shareholder Approval. The Company shall obtain shareholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable Laws.

(c) Effect of Amendment or Termination. No amendment, alteration, suspension or
termination of the Plan shall (i) impair the rights of any Participant, unless mutually agreed
otherwise between the Participant and the Administrator, which agreement must be in writing and
signed by the Participant and the Company, or (ii) permit the reduction of the exercise price of an
Award after it has been granted (except for adjustments made pursuant to Section 13), unless
approved by the Company’s shareholders. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards
granted under the Plan prior to the date of such termination.

18. Term of Plan. Subject to shareholder approval as set forth in Section 17(b) of
the Plan, the amendment and restatement of the Plan shall become effective upon its adoption by the
Board on November 1, 2005, and the Plan, as amended, shall continue in effect for a term of ten
(10) years until November 1, 2015, unless terminated earlier under Section 17 of the Plan.

19. Conditions Upon Issuance of Shares.

(a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Award
unless the exercise of such Award and the issuance and delivery of such Shares shall comply with
Applicable Laws and shall be further subject to the approval of counsel for the Company with
respect to such compliance.

(b) Investment Representations. As a condition to the exercise of an Award, the
Company may require the person exercising such Award to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required.

20. Inability to Obtain Authority. The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to
be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of
any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained.

21. Reservation of Shares. The Company, during the term of this Plan, shall at all
times reserve and keep available such number of Shares as shall be sufficient to satisfy the
requirements of the Plan.

22. Shareholder Approval. The Plan shall be subject to approval by the shareholders
of the Company within twelve (12) months after the date the Plan is adopted. Such shareholder
approval shall be obtained in the manner and to the degree required under Applicable Laws.

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