Document:

Class A(2011-1) Terms Document

 Exhibit 4.1 

 
  
 DISCOVER CARD EXECUTION NOTE TRUST 
 Issuer 

and 
 U.S. BANK
NATIONAL ASSOCIATION 
 Indenture Trustee 
 CLASS A(2011-1) TERMS DOCUMENT 
 Dated as of March 8, 2011 

to 
 AMENDED AND
RESTATED INDENTURE SUPPLEMENT 
 Dated as of June 4, 2010 

for the DiscoverSeries Notes 
 to 
 INDENTURE 

Dated as of July 26, 2007 
  

 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
	
	ARTICLE I	  
	
	Definitions and Other Provisions of General Application	  
			
	 Section 1.01
	 	 Definitions
	  	 	1	  
	 Section 1.02
	 	 Representations and Warranties of Issuer
	  	 	7	  
	 Section 1.03
	 	 Representations and Warranties of Indenture Trustee
	  	 	8	  
	 Section 1.04
	 	 Limitations on Liability
	  	 	8	  
	 Section 1.05
	 	 Governing Law
	  	 	9	  
	 Section 1.06
	 	 Counterparts
	  	 	9	  
	 Section 1.07
	 	 Ratification of Indenture and Indenture Supplement
	  	 	9	  
	
	ARTICLE II	  
	
	The Class A(2011-1) Notes	  
			
	 Section 2.01
	 	 Creation and Designation
	  	 	9	  
	 Section 2.02
	 	 Adjustments to Required Subordinated Percentages and Amount
	  	 	9	  
	 Section 2.03
	 	 Interest Payment
	  	 	10	  
	 Section 2.04
	 	 Notification of LIBOR
	  	 	10	  
	 Section 2.05
	 	 Payments of Interest and Principal
	  	 	10	  
	 Section 2.06
	 	 Form of Delivery of Class A(2011-1) Notes; Depository; Denominations
	  	 	10	  
	 Section 2.07
	 	 Delivery and Payment for the Class A(2011-1) Notes
	  	 	11	  
	 Section 2.08
	 	 Targeted Deposits to the Accumulation Reserve Account
	  	 	11	  
	 Section 2.09
	 	 Additional Issuances of Notes
	  	 	11	  
	 Section 2.10
	 	 Designation of Additional Amounts to be included in the Excess Spread Amount for the DiscoverSeries Notes
	  	 	12	  
	 Section 2.11
	 	 Variable Accumulation Period
	  	 	12	  

 Exhibit 

 

					
	                    Exhibit A	  	Form of Class A Note          	  	

 THIS CLASS A(2011-1) TERMS DOCUMENT (this “Terms
Document”), by and between DISCOVER CARD EXECUTION NOTE TRUST, a statutory trust created under the laws of the State of Delaware (the “Issuer”), and U.S. BANK NATIONAL ASSOCIATION, a national banking association organized
and existing under the laws of the United States of America, as Indenture Trustee (the “Indenture Trustee”), is made and entered into as of March 8, 2011. 

Pursuant to this Terms Document, the Issuer shall create a new Tranche of Class A Notes of the DiscoverSeries and
shall specify the principal terms thereof. 
 ARTICLE I 
 Definitions and Other Provisions of General Application 
 Section
1.01 Definitions. For all purposes of this Terms Document, except as otherwise expressly provided or unless the context otherwise requires: 
 (1) the terms defined in this Article have the meanings assigned to them in this Article, and include the plural as well as the singular; 

(2) all other terms used herein which are defined in the Indenture Supplement or the Indenture, either directly or by
reference therein, have the meanings assigned to them therein; 
 (3) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with generally accepted accounting principles and, except as otherwise herein expressly provided, the term “generally accepted accounting principles” with respect to any computation
required or permitted hereunder means such accounting principles as are generally accepted in the United States of America at the date of such computation; 
 (4) all references in this Terms Document to designated “Articles,” “Sections” and other subdivisions are to the designated Articles, Sections and other subdivisions of this Terms
Document; the words “herein,” “hereof” and “hereunder” and other words of similar import refer to this Terms Document as a whole and not to any particular Article, Section or other subdivision; 

(5) in the event that any term or provision contained herein shall conflict with or be inconsistent with any term or
provision contained in the Indenture Supplement or the Indenture, the terms and provisions of this Terms Document shall be controlling, but solely with respect to the Class A(2011-1) Notes; 

(6) each capitalized term defined herein shall relate only to the Class A(2011-1) Notes and no other Tranche of Notes
issued by the Issuer; 
 (7) “including” and words of similar import will be deemed to be followed by
“without limitation”; and 
 (8) for purposes of determining any amount or making any calculation
hereunder, such amount or calculation, (x) if specified to be as of the first day of any Due Period, shall (a) 

 
include any Notes issued during such Due Period as if such Notes had been outstanding on the first day of such Due Period and (b) give effect to any payments, deposits or other allocations
made on the Distribution Date related to the prior Due Period, and (y) if specified to be as of the close of business on the last day of any Due Period shall give effect to any payments, deposits or other allocations made on the related
Distribution Date. 
 “Accumulation Amount” means $83,333,333.34; provided,
however, if the commencement of the Accumulation Period is delayed in accordance with Section 2.11 hereof, the Accumulation Amount shall be determined in accordance with the definition of “Accumulation Amount” in the Indenture
Supplement. 
 “Accumulation Commencement Date” means February 1, 2013, or such later date
as the Calculation Agent on behalf of the Issuer determines in accordance with Section 2.11 hereof. 

“Accumulation Period” has the meaning set forth in the Indenture Supplement. 

“Accumulation Period Length” means 12 months; provided, however, if the commencement of
the Accumulation Period is delayed in accordance with Section 2.11 hereof, the Accumulation Period Length shall be determined in accordance with the definition of “Accumulation Period Length” in the Indenture Supplement. 

“Accumulation Reserve Funding Period” shall not apply if the Calculation Agent on behalf of the Issuer
notifies the Indenture Trustee that it expects the Accumulation Period Length to be adjusted to one (1) month, and otherwise shall mean a period commencing on the first Distribution Date on which a condition in the right column of the following
table was in effect on the immediately preceding Distribution Date, if the Distribution Date is a Distribution Date described in the corresponding left column of the following table, and ending on the Distribution Date immediately preceding the
earlier to occur of: 
 (x) the Expected Maturity Date for the Class A(2011-1) Notes and 

(y) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the Class A(2011-1) Notes is paid in
full. 
  

			
	 Distribution Date:
	 	 Condition:

		
	 (a) The Distribution Date occurring three (3) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in
accordance with Section 2.11 hereof) and any following Distribution Date
	 	 No condition.

		
	 (b) The Distribution Date occurring four (4)calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in accordance
with Section 2.11 hereof) and any following Distribution Date
	 	 The three-month rolling average Excess Spread Percentage is less than 4%.

  
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	 (c) The Distribution Date occurring six (6) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in
accordance with Section 2.11 hereof) and any following Distribution Date
	 	 The three-month rolling average Excess Spread Percentage is less than 3%.

		
	 (D) The Distribution Date occurring twelve (12) calendar months prior to the first scheduled Distribution Date of the Accumulation Period (as adjusted in
accordance with Section 2.11 hereof) and any following Distribution Date
	 	 The three-month rolling average Excess Spread Percentage is less than 2%.

provided, however, if at any point the Accumulation Reserve Funding Period has not commenced because no condition requiring
funding has occurred or the Calculation Agent has determined that the Accumulation Period Length will be shortened to one (1) month, and subsequently a condition requiring funding occurs and the Calculation Agent determines that the
Accumulation Period Length will not be so shortened, the Accumulation Reserve Funding Period shall commence on the following Distribution Date. 
 “Class A(2011-1) Adverse Event” means the occurrence of any of the following: (a) an Early Redemption Event with respect to the Class A(2011-1) Notes or (b) an Event of Default
and acceleration of the Class A(2011-1) Notes; provided, however, that if the only such event to have occurred is an Excess Spread Early Redemption Event for which an Excess Spread Early Redemption Cure has occurred, a Class A(2011-1)
Adverse Event shall not be treated as continuing from and after the date of such cure. 
 “Class
A(2011-1) Note” means any Note, in the form set forth in Exhibit A hereto, designated therein as a Class A(2011-1) Note and duly executed and authenticated in accordance with the Indenture. 

“Class A(2011-1) Noteholder” means a Person in whose name a Class A(2011-1) Note is registered in the
Note Register. 
 “Class A(2011-1) Termination Date” means the earliest to occur of
(a) the Principal Payment Date on which the Outstanding Dollar Principal Amount of the Class A(2011-1) Notes is paid in full, (b) the Legal Maturity Date and (c) the date on which the Indenture is discharged and satisfied pursuant to
Article VI thereof. 
 “Class Expected Final Payment Date” with respect to Series 2009-SD of
the Master Trust has the meaning set forth in the Series 2009-SD Supplement. 
 “Excess Spread
Percentage” for any Distribution Date means a fraction, the numerator of which is the Excess Spread Amount for such Distribution Date multiplied by 12 and the denominator of which is the sum of the Nominal Liquidation Amounts of all
Tranches of DiscoverSeries Notes as of the first day of the related Due Period. 

  
 3 

 “Expected Maturity Date” means February 18, 2014.

 “Indenture” means the Indenture dated as of July 26, 2007 between the Issuer and
Indenture Trustee, as amended by the First Amendment to Indenture, dated as of June 4, 2010, as such agreement may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Indenture Supplement” means the Amended and Restated Indenture Supplement dated as of June 4,
2010, for the DiscoverSeries Notes, by and between the Issuer and the Indenture Trustee, as the same may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Initial Dollar Principal Amount” means $1,000,000,000, or such higher amount as is specified in any
Notice of Additional Issuance under Section 2.09 hereof. 
 “Interest Accrual Period”
means, with respect to any Interest Payment Date, the period from and including the previous Interest Payment Date (or, in the case of the first Interest Payment Date for any Class A(2011-1) Note, from and including the applicable Issuance Date) to
but excluding such Interest Payment Date. 
 “Interest Payment Date” means the fifteenth day of
each month commencing in April 2011, or if such fifteenth day is not a Business Day, the next succeeding Business Day. 
 “Issuance Date” means March 8, 2011 with respect to all Class A(2011-1) Notes issued on the date hereof and, with respect to any additional Class A(2011-1) Notes issued pursuant to
Section 2.09 hereof, any Issuance Date specified in the Notice of Additional Issuance delivered thereunder. 
 “Legal Maturity Date” means August 15, 2016. 

“LIBOR” means, with respect to any LIBOR Determination Date, the rate for deposits in United States
dollars with a duration comparable to the relevant Interest Accrual Period which appears on Reuters Screen LIBOR01 as of 11:00 a.m., London time, on such day. If such rate does not appear on Reuters Screen LIBOR01, the rate will be determined by the
Indenture Trustee on the basis of the rates at which deposits in United States dollars are offered by major banks in the London interbank market, selected by the Indenture Trustee, at approximately 11:00 a.m., London time, on such day to prime banks
in the London interbank market with a duration comparable to the relevant Interest Accrual Period commencing on that day. The Indenture Trustee will request the principal London office of at least four banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate will be the arithmetic mean of the quotations. If fewer than two quotations are provided as requested, the rate for that day will be the arithmetic mean of the rates quoted by four major banks in New
York City, selected by the Trustee, at approximately 11:00 a.m., New York City time, on that day for loans in United States dollars to leading European banks with a duration comparable to the relevant Interest Accrual Period commencing on that day.
If LIBOR with respect to a LIBOR Determination Date is not determined pursuant to the foregoing, LIBOR with respect to such LIBOR Determination Date will be LIBOR with respect to the immediately prior LIBOR Determination Date. 

  
 4 

 “LIBOR Business Day,” if applicable, shall mean a day other
than a Saturday or a Sunday on which banking institutions in both the City of London, England and in New York, New York are not required or authorized by law to be closed. 

“LIBOR Determination Date” means the second LIBOR Business Day immediately preceding the commencement of
an Interest Accrual Period. 
 “Note Interest Rate” means LIBOR + 0.35% per annum,
calculated on the basis of the actual number of days elapsed and a 360-day year. 
 “Notice of
Additional Issuance” has the meaning set forth in Section 2.09 hereof. 
 “Required Daily
Deposit Target Finance Charge Amount” means, for any day in a Due Period, an amount equal to the Class A Tranche Interest Allocation for the related Distribution Date; provided, however, that for purposes of determining the
Required Daily Deposit Target Finance Charge Amount on any day on which the Class A Tranche Interest Allocation cannot be determined because the LIBOR Determination Date for the applicable Interest Accrual Period has not yet occurred, the
Required Daily Deposit Target Finance Charge Amount shall be the Class A Tranche Interest Allocation determined based on a pro forma calculation made on the assumption that LIBOR will be LIBOR for the applicable period determined on the first
day of such calendar month, multiplied by 1.25. 
 “Required Daily Deposit Target Principal
Amount” means, for any day in a Due Period, (i) if such Due Period is in the Accumulation Period for the Class A(2011-1) Notes, the Accumulation Amount, (ii) if such day is on or after the occurrence and during the continuance of
a Class A(2011-1) Adverse Event, the Nominal Liquidation Amount of the Class A(2011-1) Notes, and (iii) in all other circumstances, zero. 
 “Required Subordinated Amount of Class B Notes” means, for the Class A(2011-1) Notes for any date of determination, an amount equal to the product of 

(a) the Required Subordinated Percentage of Class B Notes for such Class A(2011-1) Notes on such date of determination
and 
 (b) the Nominal Liquidation Amount of such Class A(2011-1) Notes on such date of determination;

 provided however, that for any date of determination on or after the occurrence and during the continuation of a Class
A(2011-1) Adverse Event, the Required Subordinated Amount of Class B Notes for the Class A(2011-1) Notes will be the greater of 
 (x) the amount determined above for such date of determination and 

(y) the amount determined above for the date immediately prior to the date on which such Class A(2011-1) Adverse Event
shall have occurred. 
 “Required Subordinated Amount of Class C Notes” means, for the Class
A(2011-1) Notes for any date of determination, an amount equal to the product of 

  
 5 

 (a) the Required Subordinated Percentage of Class C Notes for such Class
A(2011-1) Notes on such date of determination and 
 (b) the Nominal Liquidation Amount of such Class A(2011-1)
Notes on such date of determination; 
 provided, however, that for any date of determination on or after the
occurrence and during the continuation of a Class A(2011-1) Adverse Event, the Required Subordinated Amount of Class C Notes for the Class A(2011-1) Notes will be the greater of 

(x) the amount determined above for such date of determination and 

(y) the amount determined above for the date immediately prior to the date on which such Class A(2011-1) Adverse Event
shall have occurred. 
 “Required Subordinated Amount of Class D Notes” means, for the Class
A(2011-1) Notes for any date of determination, an amount equal to the product of 
 (a) the Required
Subordinated Percentage of Class D Notes for such Class A(2011-1) Notes on such date of determination and 
 (b)
the Nominal Liquidation Amount of such Class A(2011-1) Notes on such date of determination; 
 provided, however, that
for any date of determination on or after the occurrence and during the continuation of a Class A(2011-1) Adverse Event, the Required Subordinated Amount of Class D Notes for the Class A(2011-1) Notes will be the greater of 

 

	 	(x)	 the amount determined above for such date of determination and 

 

	 	(y)	 the amount determined above for the date immediately prior to the date on which the Class A(2011-1) Adverse Event shall have occurred.

 “Required Subordinated Percentage of Class B Notes” means, for the Class
A(2011-1) Notes, 7.284768%, subject to adjustment in accordance with Section 2.02; provided, however, that prior to the Class Expected Final Payment Date for Series 2009-SD, the Required Subordinated Percentage of Class B Notes for the
Class A(2011-1) Notes will be 7.142857%, subject to adjustment in accordance with Section 2.02. 

“Required Subordinated Percentage of Class C Notes” means, for the Class A(2011-1) Notes, 9.271523%,
subject to adjustment in accordance with Section 2.02; provided, however, that prior to the Class Expected Final Payment Date for Series 2009-SD, the Required Subordinated Percentage of Class C Notes for the Class A(2011-1) Notes will be
9.090909%, subject to adjustment in accordance with Section 2.02. 
 “Required Subordinated
Percentage of Class D Notes” means, for the Class A(2011-1) Notes, 15.894040%, subject to adjustment in accordance with Section 2.02; provided, however, that prior to the Class Expected Final Payment Date for Series 2009-SD, the
Required 

  
 6 

 
Subordinated Percentage of Class D Notes for the Class A(2011-1) Notes will be 13.636364%, subject to adjustment in accordance with Section 2.02. 

“Reuters Screen LIBOR01” means the display page currently so designated on the Reuters Screen (or such
other page as may replace that page on that service for the purpose of displaying comparable rates or prices). 

“Series 2009-SD Supplement” means the Series 2009-SD Series Supplement to the Pooling and Servicing
Agreement dated as of September 23, 2009, by and between Discover Bank as Master Servicer, Servicer and Seller and U.S. Bank National Association as Trustee, as amended by that certain Amendment to Specified Series Supplements, dated as of
June 4, 2010, and as such agreement may be further amended, supplemented, restated, amended and restated, replaced or otherwise modified from time to time. 

“Specified Rating” means, for the Class A(2011-1) Notes, Aaa(sf) with respect to Moody’s and AAAsf
with respect to Fitch. 
 “Stated Principal Amount” means $1,000,000,000 or such higher amount
as is specified in any Notice of Additional Issuance under Section 2.09. 
 “Targeted Accumulation
Reserve Subaccount Deposit” means, with respect to any Distribution Date during the Accumulation Reserve Funding Period, an amount equal to (i) 0.5% of the Outstanding Dollar Principal Amount of the Class A(2011-1) Notes as of the
close of business on the last day of the related Due Period or (ii) any other amount designated by the Calculation Agent on behalf of the Issuer. 
 Section 1.02 Representations and Warranties of Issuer. The Issuer represents and warrants that: 
 (a) the Issuer has been duly formed and is validly existing as a statutory trust in good standing under the laws of the State of Delaware, and has full power and authority to execute and deliver this
Terms Document and to perform the terms and provisions hereof; 
 (b) the execution, delivery and performance of
this Terms Document by the Issuer have been duly authorized by all necessary corporate and statutory trust proceedings of any Beneficiary and the Owner Trustee, do not require any approval or consent of any governmental agency or authority, and do
not and will not conflict with any material provision of the Certificate of Trust or the Trust Agreement of the Issuer; 
 (c) this Terms Document is the valid, binding and enforceable obligation of the Issuer, except as the same may be limited by receivership, insolvency, reorganization, moratorium or other laws relating to
the enforcement of creditors’ rights generally or by general equity principles; 
 (d) to the best of the
Issuer’s knowledge, this Terms Document will not conflict with any law or governmental regulation or court decree applicable to it; 
 (e) the Issuer is not required to be registered under the Investment Company Act; 

  
 7 

 (f) all information heretofore furnished by the Issuer in writing to the
Indenture Trustee for purposes of or in connection with this Terms Document or any transaction contemplated hereby is, and all such information hereafter furnished by the Issuer in writing to the Indenture Trustee will be, true and accurate in every
material respect or based on reasonable estimates on the date as of which such information is stated or certified; and 
 (g) to the best knowledge of the Issuer, there are no proceedings or investigations pending against the Issuer before any court, regulatory body, administrative agency, or other tribunal or governmental
instrumentality having jurisdiction over the Issuer (A) asserting the invalidity of this Terms Document, (B) seeking to prevent the consummation of any of the transactions contemplated by this Terms Document or (C) seeking any
determination or ruling which in the Issuer’s judgment would materially and adversely affect the performance by the Issuer of its obligations under this Terms Document or the validity or enforceability of this Terms Document. 

Section 1.03 Representations and Warranties of Indenture Trustee. The Indenture Trustee represents and warrants
and any successor trustee shall represent and warrant that: 
 (a) The Indenture Trustee is organized, existing
and in good standing under the laws of the United States of America; 
 (b) The Indenture Trustee has full
power, authority and right to execute, deliver and perform this Terms Document, and has taken all necessary action to authorize the execution, delivery and performance by it of this Terms Document; and 

(c) This Terms Document has been duly executed and delivered by the Indenture Trustee. 

Section 1.04 Limitations on Liability. 

(a) It is expressly understood and agreed by the parties hereto that (i) this Terms Document is executed and
delivered by the Owner Trustee not individually or personally but solely as Owner Trustee under the Trust Agreement, in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and
agreements herein made on the part of the Issuer is made and intended not as a personal representation, undertaking or agreement by the Owner Trustee but is made and intended for the purpose of binding only the Issuer, (iii) nothing herein
contained will be construed as creating any liability on the Owner Trustee individually or personally, to perform any covenant of the Issuer either expressed or implied herein, all such liability, if any, being expressly waived by the parties to
this Terms Document and by any Person claiming by, through or under them and (iv) under no circumstances will the Owner Trustee be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Terms Document or any related documents. 
 (b) None of the Indenture Trustee, the Owner Trustee, the Calculation Agent, any Beneficiary, the Depositor, any Master Servicer or any Servicer or any of their respective officers, directors, employees,
incorporators or agents will have any liability with respect to this 

  
 8 

 
Terms Document, and recourse may be had solely to the Collateral pledged to secure these Class A(2011-1) Notes under the Indenture, the Indenture Supplement and this Terms Document. 

Section 1.05 Governing Law. THIS TERMS DOCUMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF
THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE. 

Section 1.06 Counterparts. This Terms Document may be executed in any number of counterparts, each of which when
so executed will be deemed to be an original, but all such counterparts will together constitute but one and the same instrument. 
 Section 1.07 Ratification of Indenture and Indenture Supplement. As supplemented by this Terms Document, each of the Indenture and the Indenture Supplement is in all respects ratified and confirmed
and the Indenture as supplemented by the Indenture Supplement and this Terms Document shall be read, taken and construed as one and the same instrument. 
 ARTICLE II 
 The Class A(2011-1) Notes 

Section 2.01 Creation and Designation. There is hereby created a Tranche of Class A Notes to be issued
pursuant to this Terms Document, the Indenture and the Indenture Supplement to be known as the “DiscoverSeries Class A(2011-1) Notes.” 
 Section 2.02 Adjustments to Required Subordinated Percentages and Amount. 
 (a) On any date, the Issuer may, at the direction of the Beneficiary, change the Required Subordinated Percentage of Class B Notes, the Required Subordinated Percentage of Class C Notes or the Required
Subordinated Percentage of Class D Notes, in each case for the Class A(2011-1) Notes, without the consent of any Noteholders; provided that the Issuer has received written confirmation from each applicable Note Rating Agency that the change
in such percentage will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes. 

(b) On any date, the Issuer may, at the direction of the Beneficiary, replace all or a portion of the Required
Subordinated Amount of Class B Notes, the Required Subordinated Amount of Class C Notes or the Required Subordinated Amount of Class D Notes, in each case for the Class A(2011-1) Notes with a different form of credit enhancement (including, without
limitation, a cash collateral account, a letter of credit, a reserve account, a surety bond, an insurance policy or a collateral interest, or any combination thereof) and may add such definitions and other terms and make such additional amendments
to this Terms Document as shall be necessary for such replacement without the consent of any Noteholders, provided that the Issuer has received written confirmation from each applicable Note Rating Agency that such

  
 9 

 
replacement and such other amendments will not result in a Ratings Effect for any Tranche of Outstanding DiscoverSeries Notes. 

Section 2.03 Interest Payment. For each Interest Payment Date, the amount of interest due with respect to the
Class A(2011-1) Notes shall be an amount equal to 
  

	 	(i)	 (A) a fraction, the numerator of which is the actual number of days in the related Interest Accrual Period and the denominator of which is 360,
times 

 (B) the Note Interest Rate in effect with respect to such related Interest
Accrual Period, times 
  

	 	(ii)	 the Outstanding Dollar Principal Amount of the Class A(2011-1) Notes determined as of the first date of such related Interest Accrual Period,
plus 

 any Class A Tranche Interest Allocation Shortfall for such Class A(2011-1) Notes for the
immediately preceding Distribution Date, together with interest thereon at the Note Interest Rate in effect with respect to such related Interest Accrual Period, calculated on the basis of the actual number of days in the related Interest Accrual
Period and a 360-day year. 
 Section 2.04 Notification of LIBOR. On each LIBOR Determination Date, the
Indenture Trustee shall send to the Issuer, the Beneficiary, each applicable Master Servicer and any stock exchange on which the Class A(2011-1) Notes are then listed (if the rules of such exchange so require), by facsimile transmission or
electronic transmission, notification of LIBOR for the following Interest Accrual Period. 
 Section 2.05
Payments of Interest and Principal. 
 (a) The Issuer will cause interest to be paid on each Interest
Payment Date and principal to be paid on the Expected Maturity Date; provided, however, that it shall not be an Event of Default if principal is not paid in full on such Expected Maturity Date unless funds for such payment have been
allocated in accordance with Section 3.01 of the Indenture Supplement; and provided, further, that if a Class A(2011-1) Adverse Event has occurred and is continuing, principal will instead be payable in monthly installments on each
Principal Payment Date for the Class A(2011-1) Notes in accordance with Sections 3.01 and 3.05 of the Indenture Supplement. All payments of interest and principal on the Class A(2011-1) Notes shall be made as set forth in Section 1101 of the
Indenture. 
 (b) The right of the Class A(2011-1) Noteholders to receive payments from the Issuer will
terminate on the Class A(2011-1) Termination Date. 
 (c) All payments of principal, interest or other amounts
to the Class A(2011-1) Noteholders will be made pro rata based on the Stated Principal Amount of their Class A(2011-1) Notes. 
 Section 2.06 Form of Delivery of Class A(2011-1) Notes; Depository; Denominations. 
 . 

  
 10 

 (a) The Class A(2011-1) Notes shall be delivered in the form of a Global
Note which shall be a Registered Note as provided in Section 204 of the Indenture. The form of the Class A(2011-1) Notes is attached hereto as Exhibit A. 
 (b) The Depository for the Class A(2011-1) Notes shall be The Depository Trust Company, and the Class A(2011-1) Notes shall initially be registered in the name of Cede & Co., its nominee.

 (c) The Class A(2011-1) Notes will be issued in minimum denominations of $100,000 and integral multiples of
$1,000 in excess of that amount. 
 Section 2.07 Delivery and Payment for the Class A(2011-1) Notes. The
Issuer shall execute and deliver the Class A(2011-1) Notes to the Indenture Trustee for authentication, and the Indenture Trustee shall deliver the Class A(2011-1) Notes when authenticated, each in accordance with Sections 203 and 303 of the
Indenture. 
 Section 2.08 Targeted Deposits to the Accumulation Reserve Account. The deposit targeted to
be made to the Accumulation Reserve Subaccount for the Class A(2011-1) Notes for any Due Period during the Accumulation Reserve Funding Period will be an amount equal to the Targeted Accumulation Reserve Subaccount Deposit minus any amount on
deposit in the Accumulation Reserve Subaccount for the Class A(2011-1) Notes. 
 Section 2.09 Additional
Issuances of Notes. Subject to clauses (ii), (iii), (iv) and (v) of Sections 2.02 and Section 2.03 of the Indenture Supplement, the Issuer may issue additional Class A(2011-1) Notes, so long as the following conditions precedent
are satisfied: 
 (a) the Issuer shall have given the Indenture Trustee written notice of such issuance of
additional Class A(2011-1) Notes (the “Notice of Additional Issuance”) at least one (1) Business Day in advance of the Issuance Date thereof, which notice shall include: 

 

	 	(i)	 the Issuance Date of such additional Class A(2011-1) Notes; 

 

	 	(ii)	 the amount of such additional Class A(2011-1) Notes being offered and the resulting Initial Dollar Principal Amount and Stated Principal Amount of
Class A(2011-1) Notes; 

  

	 	(iii)	 the date from which interest on such additional Class A(2011-1) Notes will accrue (which may be a date prior to the date of issuance thereof);

  

	 	(iv)	 the first Interest Payment Date on which interest will be paid on such additional Class A(2011-1) Notes; and 

 

	 	(v)	 any other terms that the Issuer set forth in such notice of issuance of additional Class A(2011-1) Notes to clarify the rights of Holders of such
additional Class A(2011-1) Notes or the effect of such issuance of additional Class A(2011-1) Notes on any calculations 

  
 11 

	 	 
to be made with respect to the Class A(2011-1) Notes, Class A, or the Issuer. 

 All such terms shall be incorporated into and form a part of this Terms Document on and after the effective date of such Class A(2011-1) Notes; 

(b) no Class A(2011-1) Adverse Event has occurred and is continuing; and 

(c) either (i) the issuance of such additional Class A(2011-1) Notes would be treated as part of the same issue as
the outstanding Class A(2011-1) Notes under Treasury Regulation Sections 1.1275-1(f)(1) or 1.1275-2(k), or (ii) such additional Class A(2011-1) Notes are not issued with “original issue discount” for purposes of Section 1273 of
the Code. 
 The Issuer shall not have to satisfy the conditions set forth in Section 310 of the Indenture
in connection with an issuance of additional Class A(2011-1) Notes so long as such conditions were satisfied or waived in connection with the initial issuance of Class A(2011-1) Notes; provided, however, that the Issuer shall have to deliver
to the Indenture Trustee a Master Trust Tax Opinion and an Issuer Tax Opinion with respect to such issuance. 

Section 2.10 Designation of Additional Amounts to be included in the Excess Spread Amount for the DiscoverSeries
Notes. At any time that any outstanding Series of certificates issued by the Master Trust provides that the Series Principal Collections allocated to such Series will be deposited into the Group Finance Charge Collections Reallocation Account
for the Master Trust to the extent necessary for application to cover shortfalls for other Series issued by the Master Trust, an amount equal to (x) all Series Principal Collections allocated to such Series, multiplied by (y) a
fraction, the numerator of which is the sum of the Nominal Liquidation Amounts for each outstanding Tranche of the DiscoverSeries Notes (including the Class A(2011-1) Notes and the denominator of which is (i) the Aggregate Investor Interest for
the Master Trust minus (ii) the sum of the Series Investor Interests for all such Series that provide that the Series Principal Collections allocated to such Series will be so deposited (including Series 2009-SD), is hereby designated to
be included in the Excess Spread Amount and shall be treated as Series Finance Charge Amounts for the DiscoverSeries. 
 Section 2.11 Variable Accumulation Period. Notwithstanding anything to the contrary in Section 4.02 of the Indenture Supplement, the Calculation Agent on behalf of the Issuer shall, by
written notice to the Indenture Trustee, delay the commencement of the Accumulation Period for the Class A(2011-1) Notes and determine a new Accumulation Commencement Date, subject to the conditions set forth in this Section 2.11;
provided, however, that the Accumulation Period shall commence no later than the first day of the Due Period related to the Expected Maturity Date for the Class A(2011-1) Notes. Any such delay by the Calculation Agent on behalf of the
Issuer shall be made no later than the first day of the scheduled Due Period immediately preceding the first Due Period in the Accumulation Period (after giving effect to any prior delay in the commencement of the Accumulation Period pursuant to
this Section 2.11). 
 The Calculation Agent on behalf of the Issuer shall cause such delay if the
Calculation Agent determines in good faith that each of the following conditions will be satisfied: (i) the Calculation Agent on behalf of the Issuer delivers to the Indenture Trustee a certificate to the

  
 12 

 
effect that the Calculation Agent on behalf of the Issuer reasonably believes that, based on the payment rate and the anticipated availability of Series Principal Amounts and Reallocated
Principal Amounts, the delay in the commencement of the Accumulation Period for the Class A(2011-1) Notes will not result in any Tranche of Notes not being paid in full on the relevant Expected Maturity Date; (ii) such delay is permitted under
the Series 2007-CC Series Supplement or any other applicable agreement relating to any Additional Collateral Certificate; and (iii) the Accumulation Amount, the Accumulation Commencement Date and the Accumulation Period Length shall have been
adjusted. The Calculation Agent on behalf of the Issuer shall not be required to obtain confirmation from the applicable Note Rating Agencies that such delay in the commencement of the Accumulation Period will not result in a Ratings Effect for any
Tranche of Outstanding DiscoverSeries Notes, unless at the time of such delay there is a Tranche of Outstanding DiscoverSeries Notes, which were issued prior to January 1, 2009 and for which the commencement of the Accumulation Period for such
Tranche of Notes has already been delayed pursuant to Section 4.02 of the Indenture Supplement. If such confirmation from the applicable Note Rating Agency is not required, the Calculation Agent on behalf of the Issuer shall provide written
notice to each applicable Note Rating Agency in the event that the commencement of the Accumulation Period for the Class A(2011-1) Notes is delayed pursuant to this Section 2.11. 

[Remainder of page intentionally blank; signature page follows] 

  
 13 

 IN WITNESS WHEREOF, the parties hereto have caused this Terms Document to be
duly executed, all as of the day and year first above written. 
  

					
	 DISCOVER CARD EXECUTION NOTE TRUST,
   as Issuer

		
	By:	 	Wilmington Trust Company,
		 	not in its individual capacity but solely as Owner Trustee
		
	By:	 	  

		 	Name:	 	Jennifer A. Luce
		 	Title:	 	Assistant Vice President
	
	 U.S. BANK NATIONAL ASSOCIATION,
   as Indenture Trustee

		
	By:	 	  

		 	 Name:
	 	 Patricia M. Child

		 	 Title:
	 	 Vice President

[Signature Page to Class A(2011-1) Terms Document] 

 FORM OF DISCOVERSERIES CLASS A(2011-1) NOTE 

UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
(“DTC”), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR TO SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 THE HOLDER OF THIS NOTE, BY ITS ACCEPTANCE HEREOF,
AGREES THAT IT WILL NOT AT ANY TIME INSTITUTE AGAINST THE ISSUER, ANY MASTER TRUST OR ANY SPECIAL PURPOSE ENTITY THAT ACTS AS A DEPOSITOR WITH RESPECT TO ANY MASTER TRUST OR THE ISSUER, OR JOIN IN ANY INSTITUTION AGAINST THE ISSUER, ANY MASTER TRUST
OR ANY SPECIAL PURPOSE ENTITY THAT ACTS AS A DEPOSITOR WITH RESPECT TO ANY MASTER TRUST OR THE ISSUER, ANY RECEIVERSHIP, INSOLVENCY, BANKRUPTCY OR SIMILAR PROCEEDINGS, OR OTHER PROCEEDINGS UNDER ANY UNITED STATES FEDERAL OR STATE BANKRUPTCY OR
SIMILAR LAW IN CONNECTION WITH ANY OBLIGATIONS RELATING TO THE NOTES, THE INDENTURE, ANY DERIVATIVE AGREEMENT, ANY SUPPLEMENTAL CREDIT ENHANCEMENT AGREEMENT AND ANY SUPPLEMENTAL LIQUIDITY AGREEMENT. 

THE HOLDER OF THIS NOTE, BY ACCEPTANCE OF THIS NOTE, AND EACH HOLDER OF A BENEFICIAL INTEREST IN THIS NOTE, BY THE
ACQUISITION OF A BENEFICIAL INTEREST THEREIN, AGREE TO TREAT THE NOTES AS INDEBTEDNESS FOR APPLICABLE FEDERAL, STATE, AND LOCAL INCOME AND FRANCHISE TAX LAW AND FOR PURPOSES OF ANY OTHER TAX IMPOSED ON OR MEASURED BY INCOME. 

			
	 REGISTERED
	  	$[—] *
	 No. 1
	  	CUSIP NO. 254683AP0

 DISCOVER
CARD EXECUTION NOTE TRUST 
 Floating Rate 
 DISCOVERSERIES CLASS A(2011-1) NOTE 
 DISCOVER CARD EXECUTION NOTE
TRUST, a statutory trust created under the laws of the State of Delaware (herein referred to as the “Issuer” or the “Note Issuance Trust”), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, subject to the following provisions, a principal sum of $[—] ([—] dollars) payable on the February 18, 2014 Payment Date
(the “Expected Maturity Date”), except as otherwise provided below or in the Indenture or the Indenture Supplement (as defined on the reverse hereof); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the August 15, 2016 Payment Date (the “Legal Maturity Date”). Interest will accrue on this Note at the rate of one-month LIBOR + 0.35% per annum, as more specifically set forth in the
Class A(2011-1) Terms Document dated as of March 8, 2011 (the “Terms Document”), between the Issuer and U.S. Bank National Association, as Indenture Trustee (the “Indenture Trustee”, which term includes any
successor Indenture Trustee under the Indenture), and shall be due and payable on each Interest Payment Date from and including the previous Interest Payment Date (or, in the case of the first Interest Payment Date for any Class A(2011-1) Notes,
from and including the applicable Issuance Date) to but excluding such Interest Payment Date. Interest will be computed on the basis of the actual number of days elapsed and a 360-day year. Such principal of and interest on this Note shall be paid
in the manner specified on the reverse hereof. 
 The principal and interest may be payable monthly, and may be
payable earlier or later than the Expected Maturity Date, following an Event of Default or while an Early Redemption Event has occurred and is continuing. No principal or interest will be distributed on the Note following the distribution of
proceeds of a Receivables Sale. 
 The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 
 The Initial Dollar Principal Amount of the Class A(2011-1) Notes is $1,000,000,000. 
 Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note. 

Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by
manual signature, this Note shall not be entitled to any benefit under the Indenture, Indenture Supplement or the Terms Document referred to on the reverse hereof, or be valid or obligatory for any purpose. 

 

	*	 Denominations of $100,000 and in integral multiples of $1,000 in excess thereof. 

 

  
 2 

 IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer. 
  

			
	DISCOVER CARD EXECUTION NOTE TRUST,
		 	as Issuer
		
	By:	 	WILMINGTON TRUST COMPANY, not in its individual capacity, but solely as Owner Trustee
		
	By:	 	 
		 	Name:
		 	Title:
		
		 	Date:

  
 3 

 INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION 

This is one of the Notes designated above and referred to in the within-mentioned Indenture. 

 

			
	 US BANK NATIONAL ASSOCIATION, not in its individual capacity but solely as Indenture Trustee

		
	By:	 	 
		 	Name:
		 	Title:
		
		 	Date:

  
 4 

 REVERSE OF NOTE 

This Note is one of the Notes of a duly authorized issue of Notes of the Issuer, designated as its Class A(2011-1)
DiscoverSeries Notes (herein called the “Class A(2011-1) Notes”), all issued under an Indenture dated as of July 26, 2007, as amended by the First Amendment to Indenture, dated as of June 4, 2010 (such Indenture, as may be
further amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time, is herein called the “Indenture”), as supplemented by an Amended and Restated Indenture Supplement for the
DiscoverSeries Notes, dated as of June 4, 2010 (such Indenture Supplement, as may be further amended, restated, amended and restated, supplemented, replaced or otherwise modified from time to time, is herein called the “Indenture
Supplement”), between the Issuer and Indenture Trustee, to which Indenture and Indenture Supplement reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the
Holders of the Notes. The Class A(2011-1) Notes are subject to all terms of the Indenture, the Indenture Supplement and the Terms Document. All terms used in this Class A(2011-1) Note that are defined in the Indenture, the Indenture Supplement and
the Terms Document shall have the meanings assigned to them in or pursuant to the Indenture, the Indenture Supplement and the Terms Document. 
 The Class B Notes, the Class C Notes and the Class D Notes of the DiscoverSeries and other tranches of Class A Notes of the DiscoverSeries will also be issued under the Indenture and the Indenture
Supplement. 
 The Class A(2011-1) Notes are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture and the Indenture Supplement. 
 Principal of the Class
A(2011-1) Notes will be payable on the Expected Maturity Date in an amount described on the face hereof except as otherwise provided in the Indenture or the Indenture Supplement. 

As described above, the entire unpaid principal amount of this Class A(2011-1) Note shall be due and payable on the Legal
Maturity Date. Notwithstanding the foregoing, the entire unpaid principal amount of the Class A(2011-1) Notes shall be due and payable on the date on which an Event of Default relating to the Class A(2011-1) Notes shall have occurred and be
continuing and, except in the event of an insolvency related default, the Indenture Trustee or the Majority Holders of the applicable Series, Class or Tranche of Outstanding Dollar Principal Amount of the Outstanding Notes have declared the Class
A(2011-1) Notes to be immediately due and payable in the manner provided in Section 702 of the Indenture; provided, however, that such acceleration of the entire unpaid principal amount of the Notes may be rescinded by the
Majority Holders of such applicable Series, Class or Tranche of Notes. 
 On any day occurring on or after the
date on which the aggregate Nominal Liquidation Amount of any Tranche of Notes is reduced to less than 5% of its highest Outstanding Dollar Principal Amount, the Depositor or any Affiliate thereof has the right, but not the obligation, to redeem
such Tranche of Notes in whole but not in part, pursuant to Section 1202 of the Indenture. The redemption price will be an amount equal to the Outstanding Dollar Principal Amount of such Tranche, plus accrued, unpaid and additional
interest or principal accreted and unpaid on such Tranche to but excluding the date of redemption. 

  
 5 

 Subject to the terms and conditions of the Indenture, the Beneficiary, on
behalf of the Note Issuance Trust, may from time to time issue, or direct the Owner Trustee, on behalf of the Note Issuance Trust, to issue, one or more Series, Classes or Tranches of Notes. 

On each Payment Date, the Paying Agent shall distribute to each Holder of Class A(2011-1) Notes of record on the related
Record Date (except for the final distribution with respect to this Class A(2011-1) Note) such Holder’s pro rata share of the amounts held by the Paying Agent that are allocated and available on such Payment Date to pay interest and principal
on the Class A Notes. 
 Payments of interest on this Class A(2011-1) Note due and payable on each Payment
Date, together with any installment of principal, if any, to the extent not in full payment of this Class A(2011-1) Note, shall be made by check mailed to the Person whose name appears as the Registered Holder of this Class A(2011-1) Note on the
Note Register as of the close of business on each Record Date, except that with respect to Class A(2011-1) Notes registered on the Record Date in the name of the nominee of the clearing agency (initially, such nominee to be CEDE & CO.),
payments will be made by wire transfer in immediately available funds to the account designated by such nominee. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the
applicable Record Date without requiring that this Class A(2011-1) Note be submitted for notation of payment. Any reduction in the principal amount of this Class A(2011-1) Note (or any one or more Predecessor Notes) effected by any payments made on
any Payment Date shall be binding upon all future Holders of this Class A(2011-1) Note and of any Class A(2011-1) Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Class A(2011-1) Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Holder hereof as of the Record Date preceding such Payment Date by notice mailed within five days of such Payment Date and the amount then due and payable shall be payable only upon presentation and surrender
of this Class A(2011-1) Note at the Indenture Trustee’s principal Corporate Trust Office or at the office of the Indenture Trustee’s agent appointed for such purposes located in the City of New York. On any payment of interest or principal
being made, details of such payment shall be entered by the Indenture Trustee on behalf of the Issuer in Schedule A hereto. 
 As provided in the Indenture and subject to certain limitations set forth therein and as set forth in the first legend on the face hereof, the transfer of this Class A(2011-1) Note may be registered on
the Note Register upon surrender of this Class A(2011-1) Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Indenture Trustee duly executed by, the Holder hereof or his attorney duly authorized in writing, with such signature guaranteed by a commercial bank or trust company located, or having a correspondent located, in the City of New
York or the city in which the Corporate Trust Office is located, or a member firm of a national securities exchange, and such other documents as the Indenture Trustee may require, and thereupon one or more new Class A(2011-1) Notes of authorized
denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Class A(2011-1) Note, but the transferor may
be required to pay a sum 

  
 6 

 
sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange. 

To the fullest extent permitted by applicable law, each Noteholder or Note Owner, by acceptance of a Class A(2011-1) Note
or, in the case of a Note Owner, a beneficial interest in a Class A(2011-1) Note, covenants and agrees that by accepting the benefits of the Indenture it will not at any time institute against the Issuer, any Master Trust or any special purpose
entity that acts as a depositor with respect to any Master Trust or the Issuer, or join in any institution against the Issuer, any Master Trust or any special purpose entity that acts as a depositor with respect to any Master Trust or the Issuer of,
any receivership, insolvency, bankruptcy or other similar proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture, any Derivative
Agreement, any Supplemental Credit Enhancement Agreement and any Supplemental Liquidity Agreement. 
 Prior to
the due presentment for registration of transfer of this Class A(2011-1) Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Class A(2011-1) Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Class A(2011-1) Note be overdue, and neither the Issuer, the Indenture Trustee nor any such agent
shall be affected by notice to the contrary. 
 The Indenture permits, with certain exceptions as therein
provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Holders of the Notes under the Indenture at any time by the Issuer with the consent of the Holders of Notes representing not less
than 66 2/3% of the Outstanding Dollar Principal Amount of each adversely affected Series, Class or Tranche of Notes. The Indenture also contains provisions permitting the Holders of Notes representing specified percentages of the Outstanding Dollar
Principal Amount of the Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by
the Holder of this Class A(2011-1) Note shall be conclusive and binding upon such Holder and upon all future Holders of this Class A(2011-1) Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof
whether or not notation of such consent or waiver is made upon this Class A(2011-1) Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Holders of
the Notes issued thereunder. 
 The term “Issuer” as used in this Class A(2011-1) Note includes
any successor to the Issuer under the Indenture. 
 The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture Trustee and the Holders of Notes under the Indenture. 
 The Class A(2011-1) Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth. 

  
 7 

 THIS CLASS A(2011-1) NOTE AND THE INDENTURE WILL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE GENERAL OBLIGATION LAW, WITHOUT REFERENCE TO ANY CONFLICT OF LAW PROVISIONS THAT WOULD RESULT IN THE APPLICATION OF THE LAWS OF ANY OTHER STATE. 

No reference herein to the Indenture and no provision of this Class A(2011-1) Note or of the Indenture shall alter or
impair the obligation of the Issuer, which is absolute and unconditional, to pay the principal of and interest on this Class A(2011-1) Note at the times, place, and rate, and in the coin or currency herein prescribed. 

No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer on the Notes or under the
Indenture or any certificate or other writing delivered in connection therewith, against (i) the Owner Trustee in its individual capacity, (ii) any owner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director or employee of the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer or any successor or assign of the Owner Trustee in its individual capacity, except as any such Person may have
expressly agreed (it being understood that the Owner Trustee has no such obligations in its individual capacity). The Holder of this Class A(2011-1) Note by the acceptance hereof agrees that, except as expressly provided in the Indenture and the
Indenture Supplement in the case of an Event of Default under the Indenture, the Holder shall have no claim against any of the foregoing for any deficiency, loss or claim therefrom; provided, however, that nothing contained herein
shall be taken to prevent recourse to, and enforcement against, the assets of the Issuer for any and all liabilities, obligations and undertakings contained in the Indenture or in this Class A(2011-1) Note. 

  
 8 

 ASSIGNMENT 
 Social Security or taxpayer I.D. or other identifying number of assignee 
 FOR
VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto 
 (name and address of assignee) 

the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises. 
  

											
	 Dated:
	 	 	 		 		 	 	 	*
		 		 		 		 	Signature Guaranteed:	 	

  

	*	 NOTE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatsoever. 

  

  
 9 

 SCHEDULE A 
 PART I 
 INTEREST PAYMENTS 

 

																	
	 Interest Payment Date
	  	Date of
Payment	 	  	Total Amount
of Interest
Payable	 	  	Amount of
Interest Paid	 	  	Confirmation of
payment by or
on
behalf of the Note Issuance
Trust	 
	 1.
	  				  				  				  			
	 2.
	  				  				  				  			
	 3.
	  				  				  				  			
	 4.
	  				  				  				  			
	 5.
	  				  				  				  			
	 6.
	  				  				  				  			
	 7.
	  				  				  				  			
	 8.
	  				  				  				  			
	 9.
	  				  				  				  			
	 10.
	  				  				  				  			
	 11.
	  				  				  				  			
	 12.
	  				  				  				  			
	 13.
	  				  				  				  			
	 14.
	  				  				  				  			
	 15.
	  				  				  				  			
	 16
	  				  				  				  			
	 17.
	  				  				  				  			
	 18.
	  				  				  				  			
	 19.
	  				  				  				  			
	 20.
	  				  				  				  			
	 21.
	  				  				  				  			
	 22.
	  				  				  				  			
	 23.
	  				  				  				  			
	 24.
	  				  				  				  			
	 25.
	  				  				  				  			
	 26.
	  				  				  				  			
	 27.
	  				  				  				  			
	 28.
	  				  				  				  			
	 29.
	  				  				  				  			
	 30.
	  				  				  				  			
	 31.
	  				  				  				  			
	 32.
	  				  				  				  			
	 33.
	  				  				  				  			
	 34.
	  				  				  				  			
	 35.
	  				  				  				  			
	 36.
	  				  				  				  			
	 37.
	  				  				  				  			

  
 10 

 PART II 
 PRINCIPAL PAYMENTS 
  

																	
	 Principal Payment Date
	  	Date of
Payment	 	  	Total Amount
of Principal
Payable	 	  	Total Amount
Paid	 	  	Confirmation of
payment by or
on
behalf of the Note Issuance
Trust	 
	 1.
	  				  				  				  			
	 2.
	  				  				  				  			
	 3.
	  				  				  				  			
	 4.
	  				  				  				  			
	 5.
	  				  				  				  			
	 6.
	  				  				  				  			
	 7.
	  				  				  				  			
	 8.
	  				  				  				  			
	 9.
	  				  				  				  			
	 10.
	  				  				  				  			
	 11.
	  				  				  				  			
	 12.
	  				  				  				  			

  
 11Form of Stock Option Grant Notice and Stock Option Agreement

 Exhibit 10.1 
 STOCK OPTION GRANT NOTICE AND STOCK OPTION AGREEMENT 
 TransDigm Group
Incorporated, a Delaware corporation (the “Company”), pursuant to its 2006 Stock Incentive Plan (the “Plan”), hereby grants to the holder listed below (“Participant”), an option
to purchase the number of shares of the Company’s common stock, par value $0.01 (“Stock”), set forth below (the “Option”). This Option is subject to all of the terms and conditions set forth
herein and in the Stock Option Agreement attached hereto as Exhibit A (the “Stock Option Agreement”) and the Plan, which are incorporated herein by reference. Unless otherwise defined herein, the terms defined in the
Plan shall have the same defined meanings in this Grant Notice and the Stock Option Agreement. 
  

			
	Participant:	 	  

		
	Grant Date:	 	  

		
	Exercise Price per Share:	 	 $

		
	Total Number of Shares Subject to the Option:	 	 shares

		
	Expiration Date:	 	  

 

			
	Type of Option:	 	 ̈    Incentive Stock Option            X     Non-Qualified Stock Option
		
	Vesting Schedule:	 	Subject to the terms of the Stock Option Agreement (including without limitation all exhibits thereto), the Option shall be eligible to become exercisable upon the achievement of
performance objectives over the period set forth in Exhibit B hereto (provided that the Participant is an Eligible Person (as defined in the Plan) at all times during the period beginning on the Grant Date and ending on the applicable vesting
date):

 By his or her signature, the Participant agrees to be bound by the terms and conditions of the Plan, the
Stock Option Agreement and this Grant Notice. The Participant has reviewed the Stock Option Agreement, the Plan and this Grant Notice in their entirety, has had an opportunity to obtain the advice of counsel prior to executing this Grant Notice and
fully understands all provisions of this Grant Notice, the Stock Option Agreement and the Plan. The Participant agrees that as a condition to receiving the Option, the Participant shall comply with the Stock Retention Guidelines set forth on
Exhibit C. The Participant hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or relating to the Option. 

 

							
	 TRANSDIGM GROUP INCORPORATED
	 	PARTICIPANT
				
	By:	  	  
	 	By:	 	  

	Print Name:	  	  
	 	Print Name:	 	  

	Title:	  	  
	 		 	
	Address:	  	  
	 	Address:	 	  

 EXHIBIT A 
 TO STOCK OPTION GRANT NOTICE 
 STOCK OPTION AGREEMENT 

Pursuant to the Stock Option Grant Notice (the “Grant Notice”) to which this Stock Option
Agreement (this “Agreement”) is attached, TransDigm Group Incorporated, a Delaware corporation (the “Company”), has granted to the Participant an option (the “Option”)1 under the Company’s 2006 Stock Incentive Plan (the
“Plan”) to purchase the number of shares of Stock indicated in the Grant Notice. 
 ARTICLE I.

 GENERAL 
 1.1 Defined Terms. Wherever the following terms are used in this Agreement they shall have the meanings specified below, unless the context clearly indicates otherwise. Capitalized terms not
specifically defined herein shall have the meanings specified in the Plan and the Grant Notice. 
 (a)
“Administrator” shall mean the Board or the Compensation Committee or other committee of the Board responsible for conducting the general administration of the Plan in accordance with Section 3 of the Plan; provided that
if the Participant is an Independent Director, “Administrator” shall mean the Board. 
 (b)
“Consultant” shall mean an individual who renders services to the Company as a consultant and has been so designated by the Committee. 
 (c) “Credit Agreement” shall mean that certain credit agreement dated as of June 23, 2006 among TransDigm, Inc., TransDigm Group Incorporated and the lenders party thereto, as
in effect as of the Grant Date and without reference to any amendment to the Credit Agreement made following the Grant Date. 

(d) “Diluted Shares” as of a given date shall mean the total diluted weighted-average of common
shares of the Company outstanding as of such date. 
 (e) “EBITDA” for a given fiscal year of the
Company shall mean Consolidated EBITDA (as defined in the Credit Agreement) of the Company for such fiscal year on a pro forma basis adjusted for acquisitions or divestitures. 
 (f) “Independent Director” shall mean a non-employee director of the Company. 
 (g) “Net Debt” shall mean, as of the last day of a given fiscal year of the Company, the excess of (a) Consolidated Total Indebtedness (as defined in the Credit Agreement) of
the Company over (b) the amount of cash and cash equivalents set forth on the Company’s balance sheet. 
 (h)
“Termination of Consultancy” shall mean the time when the engagement of the Participant as a Consultant to the Company or a 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: (i) terminations where there is a simultaneous employment or continuing employment of the Participant by the Company or any Subsidiary, and (ii) terminations where
there is a simultaneous re-establishment of a consulting relationship or continuing consulting relationship between the Participant and the Company or any 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 Subsidiary has 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. 

 

	1	 For the avoidance of doubt, the term “Option” as used herein only describes options granted pursuant to the Stock Option Grant Notice to
which this Agreement is an Exhibit. 

  
 2 

 (i) “Termination of Directorship” shall mean the time when the
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. 
 (j) “Termination of Employment” shall mean the time when the employee-employer relationship between the Participant and the Company or any 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: (i) terminations where there is a simultaneous reemployment or continuing employment of the
Participant by the Company or any Subsidiary, and (ii) terminations where there is a simultaneous establishment of a consulting relationship or continuing consulting relationship between the Participant and the Company or any 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; provided, however, that, if this Option is an Incentive Stock Option, unless otherwise determined by the Administrator in its discretion, a leave of absence, change in status from an employee to an independent contractor
or other change in the employee-employer relationship shall constitute a Termination of Employment if, and to the extent that, such leave of absence, change in status or other change interrupts employment for the purposes of Section 422(a)(2)
of the Code and the then applicable regulations and revenue rulings under said Section. 
 (k) “Termination of
Services” shall mean the time when (i) every relationship between the Participant and the Company has been terminated by a Termination of Consultancy, Termination of Directorship and/or Termination of Employment, as applicable, and
(ii) the Participant is no longer an Eligible Person under the Plan. 
 1.2 Incorporation of Terms of Plan. The
Option is subject to the terms and conditions of the Plan which are incorporated herein by reference. In the event of any inconsistency between the Plan and this Agreement, the terms of the Plan shall control. 

ARTICLE II. 
 GRANT OF OPTION 
 2.1 Grant of Option. In consideration of the
Participant’s past and/or continued employment with or service to the Company or a Subsidiary and for other good and valuable consideration, effective as of the Grant Date set forth in the Grant Notice (the “Grant
Date”), the Company irrevocably grants to the Participant the Option to purchase any part or all of an aggregate of the number of shares of Stock set forth in the Grant Notice, upon the terms and conditions set forth in the Plan and
this Agreement. Unless designated as a Non-Qualified Stock Option in the Grant Notice, the Option shall be an Incentive Stock Option to the maximum extent permitted by law. 
 2.2 Exercise Price. The exercise price of the shares of Stock subject to the Option shall be as set forth in the Grant Notice, without commission or other charge; provided, however,
that the price per share of the shares of Stock subject to the Option shall not be less than 100% of the Fair Market Value of a share of Stock on the Grant Date. Notwithstanding the foregoing, if this Option is designated as an Incentive Stock
Option and the Participant owns (within the meaning of Section 424(d) of the Code) more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any
“parent corporation” of the Company (each within the meaning of Section 424 of the Code), the price per share of the shares of Stock subject to the Option shall not be less than 110% of the Fair Market Value of a share of Stock on the
Grant Date. 
 2.3 Consideration to the Company. In consideration of the grant of the Option by the Company, the
Participant agrees to render faithful and efficient services to the Company or any Subsidiary. Nothing in the Plan or this Agreement shall confer upon the Participant any right to continue in the employ or service of the Company or any Subsidiary or
shall interfere with or restrict in any way the rights of the Company and its Subsidiaries, which rights are hereby expressly reserved, to discharge or terminate the services of the Participant at any time for any reason

  
 3 

 
whatsoever, with or without Cause, except to the extent expressly provided otherwise in a written agreement between the Company or a Subsidiary and the Participant. 

ARTICLE III. 
 PERIOD OF EXERCISABILITY 
 3.1 Commencement of Exercisability.

 (a) Subject to Sections 3.1(b), 3.1(c) and 3.3, the Option shall become vested and exercisable in such amounts and at such
times as are set forth in the Grant Notice. 
 (b) No portion of the Option which has not become vested and exercisable at the
date of the Participant’s Termination of Services shall thereafter become vested and exercisable, except as may be otherwise provided by the Administrator or as set forth in a written agreement between the Company and the Participant.

 (c) Notwithstanding Section 3.1(a) of this Agreement and Section 8 of the Plan (but subject to Section 3.1(b)
of this Agreement), in the event of a Change in Control: Options shall become fully vested and exercisable if the Fair Market Value per share on the effective date of a Change in Control is: (i) $56.87, if such Change in Control occurs on
September 30, 2011; (ii) $65.23, if such Change in Control occurs on September 30, 2012, and (iii) $71.23, if such Change in Control occurs on or after September 30, 2013, it being understood that if a Change in Control
occurs between October 1 and September 30 (through September 30, 2013) in any year, the required Fair Market Value per share on the effective date of a Change in Control for purposes of this Section shall be determined by means of
linear interpolation. Notwithstanding the foregoing, the Administrator may, in good faith and in such manner as it may deem equitable, in its sole discretion, adjust the foregoing Fair Market Value requirements in the event of a dividend or other
distribution (whether in the form of cash, Stock, other securities or property), recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of
Stock or other securities of the Company, issuance of warrants or other rights to purchase Stock or other securities of the Company, or any unusual or nonrecurring transactions or events affecting the Company or the financial statements of the
Company if the adjustment is determined by the Administrator to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to the Option. For purposes
of this Section 3.1, shall take into account the consideration received by the stockholders in connection with a Change in Control or in connection with any other sale of common stock or other equity interests in the Company or any Subsidiary,
after taking into account all post-closing adjustments relating to a Change in Control, and assuming the exercise of all vested options and warrants outstanding as of the effective date of such Change in Control (after giving effect to any dilution
of securities or instruments arising in connection with such Change in Control); provided however, that if the stockholders retain any portion of the common stock following such Change in Control or other sale, the Fair Market Value of such
portion of the retained common stock immediately following such Change in Control or other sale shall be deemed “consideration received” for purposes of calculating the proceeds and provided further that the Fair Market Value of any
non-cash consideration (including stock) received in connection with a Change in Control shall be determined as of the date of such Change in Control. 
 Notwithstanding Section 3.1(a) of this Agreement and Section 8 of the Plan (but subject to Section 3.1(b) of this Agreement, after March 1, 2013, in the event the closing price of the
Company’s common stock on the New York Stock Exchange exceeds $160 per share on any 60 trading days during any consecutive 12-month period, then all Options granted hereunder will become fully vested and exercisable. 

(d) Anything in this Agreement to the contrary notwithstanding, if a Change of Control occurs and it is determined that any payment or
distribution by the Company to or for the benefit of Participant, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, including the acceleration of Options hereunder (a
“Payment”), would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, the Company shall pay to the Participant an additional amount (the “Gross-Up
Payment”) equal to the amount of any excise tax imposed under Section 4999 of the Code, times a gross-up factor equal to 1 divided by (1 minus the Total Tax Rate) (but limited in amount to the excise tax that would have been
imposed under the Code as in effect on the date hereof), where the “Total Tax Rate” includes any applicable federal, state and local income tax, employment tax and excise tax for the Participant. For purposes of determining

  
 4 

 
the amount of the Gross-Up Payment, unless the Participant specifies that other rates apply, the Participant shall be deemed to pay federal income tax and employment taxes at the highest marginal
rate of federal income and employment taxation in the calendar year in which the Gross-Up Payment is to be made, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Participant’s residence
on the Payment date, net of the maximum reduction in federal income taxes that may be obtained from the deduction of such state and local taxes. All determinations to be made under this paragraph shall be made by the Company’s independent
public accountants immediately prior to the Change of Control. Any such determination by the Company’s independent public accountants shall be binding upon the Company and the Participant. The Company shall pay the Gross-Up Payment to the
Participant within ten days after the independent public accountant’s determination of the amount thereof. In any event, the Gross-Up Payment shall be made no later than three and one-half months following the taxable year in which the Payment
occurs. All of the fees and expenses of the independent public accountants in performing the determinations referred to in this paragraph shall be borne solely by the Company. In the event there is a material change in the Code that negatively
impacts the amount of excise tax that would be payable in the event of a Change in Control, the Administrator will revisit the issue of providing a Gross-Up Payment and consider whether the limitation on the amount of the Gross-Up Payment based on
the Code as in effect on the date hereof should be removed or modified. 
 3.2 Duration of Exercisability. The
installments provided for in the vesting schedule set forth in the Grant Notice are cumulative. Each such installment which becomes vested and exercisable pursuant to the vesting schedule set forth in the Grant Notice shall remain vested and
exercisable until it becomes unexercisable under Section 3.3. 
 3.3 Expiration of Option. The Option may not be
exercised to any extent by anyone after the first to occur of the following events: 
 (a) The expiration of ten years from the
Grant Date; 
 (b) If this Option is designated as an Incentive Stock Option and the Participant owned (within the meaning of
Section 424(d) of the Code), at the time the Option was granted, more than 10% of the total combined voting power of all classes of stock of the Company or any “subsidiary corporation” of the Company or any “parent
corporation” of the Company (each within the meaning of Section 424 of the Code), the expiration of five years from the Grant Date; 
 (c) The opening of business on the day of the Participant’s Termination of Services by reason of the Participant’s Termination of Employment by reason of a termination by the Company for Cause
(as defined in the Participant’s employment agreement, if applicable), unless the Committee, in its discretion, determines that a longer period is appropriate; 
 (d) The expiration of six months from the date of the Participant’s Termination of Services, unless such termination occurs by reason of (i) the Participant’s death, (ii) the
Participant’s Disability, (iii) the Participant’s retirement (pursuant to Section 3.3(e)), (iv) the Participant’s termination for Cause (as defined in the Participant’s employment agreement, if applicable) or
(iv) if the Participant has an employment agreement that defines a termination for “Cause” and/or “Good Reason,” a termination by the Company without Cause (as defined in the Participant’s employment agreement) or a
termination by the Participant for Good Reason (as defined in Participant’s employment agreement), provided, however, that any portion of this Option that is an Incentive Stock Option shall cease to be an Incentive Stock Option on the
expiration of three months from the Participant’s Termination of Services (and shall thereafter be a Non-Qualified Stock Option), provided, further, that to the extent that the Participant is prohibited from selling shares of Stock
pursuant to the Company’s insider trading policy at all times during such six-month period, with the exception of an open trading window of less than seven days, the Option shall expire on the seventh day following the opening of the first open
trading window thereafter; or 
 (e) The expiration of one year from the date of the Participant’s Termination of Services
by reason of the retirement, after a minimum of ten years of service, of a Participant who is at least 55 years old, provided, however, that to the extent that the Participant is prohibited from selling shares of Stock pursuant to the
Company’s insider trading policy at all times during such 

  
 5 

 
one-year period, with the exception of an open trading window of less than seven days, the Option shall expire on the seventh day following the opening of the first open trading window
thereafter; or 
 (f) The expiration date set forth in clause (a), (i) if the Participant has an employment agreement that
defines a termination for “Cause” and/or “Good Reason,” and upon a Participant’s Termination of Services by the Company without Cause (as defined in Participant’s employment agreement) or a Termination of Services by
the Participant for Good Reason (as defined in Participant’s employment agreement) or (ii) upon the Participant’s death or Disability. 
 3.4 Special Tax Consequences. The Participant acknowledges that, to the extent that 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, including the Option, are exercisable for the first time by the Participant in any calendar year exceeds $100,000, the Option and such other options shall be Non-Qualified Stock Options to the extent
necessary to comply with the limitations imposed by Section 422(d) of the Code. The Participant further acknowledges that the rule set forth in the preceding sentence shall be applied by taking the Option and other “incentive stock
options” into account in the order in which they were granted, as determined under Section 422(d) of the Code and the Treasury Regulations thereunder. The Participant acknowledges that an Incentive Stock Option exercised more than three
months after the Participant’s Termination of Employment, other than by reason of death or Disability, will be taxed as a Non-Qualified Stock Option. 
 ARTICLE IV. 
 EXERCISE OF OPTION 

4.1 Person Eligible to Exercise. Except as provided in Sections 5.2(b), during the lifetime of the Participant, only the
Participant may exercise the Option or any portion thereof. After the death of the Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by the
Participant’s personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution. 

4.2 Partial Exercise. Any exercisable portion of the Option or the entire Option, if then wholly exercisable, may be exercised in
whole or in part at any time prior to the time when the Option or portion thereof becomes unexercisable under Section 3.3. 

4.3 Manner of Exercise. The Option, or any exercisable portion thereof, may be exercised solely by delivery to the Secretary of
the Company (or any third party administrator or other person or entity designated by the Company) of all of the following prior to the time when the Option or such portion thereof becomes unexercisable under Section 3.3: 

(a) An Exercise Notice in a form specified by the Administrator, stating that the Option or portion thereof is thereby exercised, such
notice complying with all applicable rules established by the Administrator; 
 (b) The receipt by the Company of full payment
for the shares of Stock with respect to which the Option or portion thereof is exercised, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4; 

(c) Any other written representations as may be required in the Administrator’s reasonable discretion to evidence compliance with
the Securities Act or any other applicable law, rule, or regulation; and 
 (d) In the event the Option or portion thereof shall
be exercised pursuant to Section 4.1 by any person or persons other than the Participant, appropriate proof of the right of such person or persons to exercise the Option. 
 Notwithstanding any of the foregoing, the Company shall have the right to specify all conditions of the manner of exercise, which conditions may vary by country and which may be subject to change from
time to time. 
 4.4 Method of Payment. Payment of the exercise price, and any applicable withholding tax, shall be by
any of the following, or a combination thereof, at the election of the Participant: 

  
 6 

 (a) Cash; 
 (b) Check; 
 (c) Broker-Assisted Cash-less Exercise. With the consent of
the Administrator, 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 aggregate exercise price; provided, that payment of such proceeds is then made to the Company upon settlement of such sale; 

(d) Share Surrender. With the consent of the Administrator, surrender of other shares of Stock which (i) in the case of
shares of Stock acquired from the Company, have been owned by the Participant for more than six (6) months on the date of surrender (or such other minimum length of time as the Administrator determines from time to time to be necessary to avoid
adverse accounting consequences or violation of any applicable law, rule or regulation), and (ii) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the shares of Stock with respect to which the Option or
portion thereof is being exercised; or 
 (e) Net Exercise. With the consent of the Administrator, surrendered shares of
Stock issuable upon the exercise of the Option having a Fair Market Value on the date of exercise equal to the aggregate exercise price of the shares of Stock with respect to which the Option or portion thereof is being exercised. 

4.5 Conditions to Issuance of Stock Certificates. The shares of Stock deliverable upon the exercise of the Option, or any portion
thereof, may be either previously authorized but unissued shares of Stock or issued shares of Stock which have then been reacquired by the Company. Such shares of Stock shall be fully paid and nonassessable. The Company shall not be required to
issue or deliver any shares of Stock purchased upon the exercise of the Option or portion thereof prior to fulfillment of all of the following conditions: 
 (a) The admission of such shares of Stock to listing on all stock exchanges on which such Stock is then listed; 
 (b) The completion of any registration or other qualification of such shares of Stock under any state or federal law or under rulings or regulations of the Securities and Exchange Commission or of any
other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem necessary or advisable; 

(c) The obtaining of any approval or other clearance from any state or federal governmental agency which the Administrator shall, in its
absolute discretion, determine to be necessary or advisable; 
 (d) The receipt by the Company of full payment for such shares
of Stock, including payment of any applicable withholding tax, which may be in one or more of the forms of consideration permitted under Section 4.4; and 
 (e) The lapse of such reasonable period of time following the exercise of the Option as the Administrator may from time to time establish for reasons of administrative convenience. 

4.6 Rights as Stockholder. The holder of the Option shall not be, nor have any of the rights or privileges of, a stockholder of
the Company in respect of any shares of Stock purchasable upon the exercise of any part of the Option unless and until such shares of Stock shall have been issued by the Company to such holder (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). No adjustment will be made for a dividend or other right for which the record date is prior to the date the shares of Stock are issued, except as provided in Section 8 of the
Plan. 
 ARTICLE V. 
 OTHER PROVISIONS 
 5.1 Administration. The Administrator shall have
the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret, amend or revoke any such rules. All actions taken and all
interpretations and determinations made by the 

  
 7 

 
Administrator in good faith shall be final and binding upon Participant, the Company and all other interested persons. No member of the Committee or the Board shall be personally liable for any
action, determination or interpretation made in good faith with respect to the Plan, this Agreement or the Option. 
 5.2
Option Transferability. 
 (a) Except as otherwise set forth in Section 5.2(b), (i) the Option may not be sold,
pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution, unless and until the shares of Stock underlying the Option have been issued, and all restrictions applicable to such shares of Stock have
lapsed. Neither the Option nor any interest or right therein shall be liable for the debts, contracts or engagements of Participant or his or her successors in interest or shall be subject to disposition by transfer, alienation, anticipation,
pledge, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy), and any
attempted disposition thereof shall be null and void and of no effect, except to the extent that such disposition is permitted by the preceding sentence; and (ii) during the lifetime of Participant, only Participant may exercise the Option or
any portion thereof. After the death of Participant, any exercisable portion of the Option may, prior to the time when the Option becomes unexercisable under Section 3.3, be exercised by Participant’s personal representative or by any
person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution. 
 (b) Notwithstanding the foregoing, with respect to Participants who are corporate officers or operating presidents, the Administrator may permit any portion of the Option that is not an Incentive Stock
Option to be transferred to, exercised by and paid to certain persons or entities related to such Participant, including but not limited to members of such Participant’s family, charitable institutions or trusts or other entities whose
beneficiaries or beneficial owners are members of such 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 such Participant’s termination of employment or service with the Company 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. 
 5.3 Adjustments. The Participant acknowledges that the
Option is subject to modification and termination in certain events as provided in this Agreement and Section 8 of the Plan. 
 5.4 Notices. Any notice to be given under the terms of this Agreement to the Company shall be addressed to the Company in care of the Secretary of the Company at the address given beneath the
signature of the Company’s authorized officer on the Grant Notice, and any notice to be given to Participant shall be addressed to Participant at the address given beneath Participant’s signature on the Grant Notice. By a notice given
pursuant to this Section 5.4, either party may hereafter designate a different address for notices to be given to that party. Any notice which is required to be given to Participant shall, if Participant is then deceased, be given to the person
entitled to exercise his or her Option pursuant to Section 4.1 by written notice under this Section 5.4. Any notice shall be deemed duly given when sent via email or when sent by certified mail (return receipt requested) and deposited
(with postage prepaid) in a post office or branch post office regularly maintained by the United States Postal Service. 
 5.5
Titles. Titles are provided herein for convenience only and are not to serve as a basis for interpretation or construction of this Agreement. 
 5.6 Governing Law; Severability. The laws of the State of Delaware shall govern the interpretation, validity, administration, enforcement and performance of the terms of this Agreement regardless
of the law that might be applied under principles of conflicts of laws. 
 5.7 Conformity to Securities Laws. The
Participant acknowledges that the Plan and this Agreement are intended to conform to the extent necessary with all provisions of the Securities Act and the Exchange Act and any and all regulations and rules promulgated by the Securities and Exchange
Commission thereunder, and state securities laws and regulations. Notwithstanding anything herein to the contrary, the Plan shall be administered, and the Option is granted and may be exercised, only in such a manner as to conform to such laws,
rules and regulations. 

  
 8 

 
To the extent permitted by applicable law, the Plan and this Agreement shall be deemed amended to the extent necessary to conform to such laws, rules and regulations. 

5.8 Amendments, Suspension and Termination. To the extent permitted by the Plan, this Agreement may be wholly or partially amended
or otherwise modified, suspended or terminated at any time or from time to time by the Committee or the Board, provided, that, except as may otherwise be provided by the Plan, no amendment, modification, suspension or termination of this
Agreement shall adversely affect the Option in any material way without the prior written consent of the Participant. 
 5.9
Successors and Assigns. The Company may assign any of its rights under this Agreement to single or multiple assignees, and this Agreement shall inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on
transfer herein set forth in Section 5.2, this Agreement shall be binding upon Participant and his or her heirs, executors, administrators, successors and assigns. 
 5.10 Notification of Disposition. If this Option is designated as an Incentive Stock Option, Participant shall give prompt notice to the Company of any disposition or other transfer of any shares
of Stock acquired under this Agreement if such disposition or transfer is made (a) within two years from the Grant Date with respect to such shares of Stock or (b) within one year after the transfer of such shares of Stock to him. Such
notice shall specify the date of such disposition or other transfer and the amount realized, in cash, other property, assumption of indebtedness or other consideration, by Participant in such disposition or other transfer. 

5.11 Limitations Applicable to Section 16 Persons. Notwithstanding any other provision of the Plan or this Agreement, if
Participant is subject to Section 16 of the Exchange Act, the Plan, the Option and this Agreement 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, this Agreement shall be deemed amended to the extent necessary to conform to such applicable
exemptive rule. 
 5.12 Not a Contract of Employment. Nothing in this Agreement or in the Plan shall confer upon the
Participant any right to continue to serve as an employee or other service provider of the Company or any of its Subsidiaries. 

5.13 Entire Agreement. The Plan, the Grant Notice and this Agreement (including all Exhibits thereto) constitute the entire
agreement of the parties and supersede in their entirety all prior undertakings and agreements of the Company and Participant with respect to the subject matter hereof. 
 5.14 Section 409A. Notwithstanding any other provision of the Plan, this Agreement or the Grant Notice, the Plan, this Agreement and the Grant Notice shall be interpreted in accordance with,
and incorporate the terms and conditions required by, Section 409A of the U.S. Internal Revenue Code of 1986, as amended (together with any 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 date hereof, “Section 409A”). The Committee reserves the right (without the obligation to do so or to indemnify the Participant for the failure to
do so) to adopt such amendments to the Plan, this Agreement or the Grant Notice or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, as the Committee determines
are necessary or appropriate to exempt the Option from Section 409A or to comply with the requirements of Section 409A and thereby avoid the penalty taxes under Section 409A. 

  
 9 

 EXHIBIT B 
 VESTING 
 Annual Operational Performance per Diluted
Share1 

 

																	
	 	  	Minimum Vesting
(10%
Growth)	 	  	Maximum Vesting
(17.5%
Growth)	 
	 Fiscal Year (A)
	  	% of 
Shares
Vesting
(B)	 	 	YE 
Operating
Performance
(per Diluted 
Share)
(C)	 	  	% of 
Shares
Vesting
(D)	 	 	YE 
Operating
Performance
(per Diluted 
Share)
(E)	 
	 2014
	  	 	12.5	% 	 	$	56.22	  	  	 	50	% 	 	$	84.44	  
	 2015
	  	 	12.5	% 	 	$	61.84	  	  	 	50	% 	 	$	99.22	  

 1. Annual Operational Performance
Vesting. Effective as of the last day of each of the Company’s fiscal years 2014-2015 there shall become vested the percentage of shares covered by the Option which is equal to the Annual Amount (as described below). The Options shall
become vested and exercisable as of the date that the Administrator verifies the AOP (as defined below); provided, however, the vesting hereunder will be effective as to Participant as of the end of the fiscal year to which such Annual Amount
relates (notwithstanding any termination of Participant’s employment during the period between the end of such fiscal year and the verification of the AOP and, in such case, notwithstanding the provisions of Section 3.1(b)). For each
such fiscal year, the Administrator shall verify the AOP, and shall notify the Company’s Chief Executive Officer of its determination with respect thereto, within ten business days after the Administrator receives the Company’s audited
financial statements for that fiscal year. 
 X. For each year (the “performance year”), the Annual Amount is zero if the Annual
Operational Performance per Diluted Share (“AOP”) with respect to such year is less than the amount indicated for such year in column (C) and otherwise shall be equal to the amount indicated for such year in column (B) plus the
product of (a) the excess of (1) the amount indicated for such year in column (D) over (2) the amount indicated for such year in column (B) and (b) the ratio of (1) the excess of (x) the AOP with respect to
the year (but not more than the amount indicated in Column (E) for such year) over (y) the amount indicated for such year in column (C) to (2) the excess of (x) the amount indicated for such year in column (E) over
(y) the amount indicated for such year in column (C). 
 Y. In calculating the AOP in Section X. above for any performance year there shall
also be taken into account any AOP in any of the two prior performance years (starting in fiscal year 2012) which was in excess of the amount indicated in Column (E) or set forth in the following sentence for such prior year and has not
previously been taken into account hereunder or under any other option agreement to which the Participant is a party but only if doing so would increase the Annual Amount in such performance year. For purposes of determining whether AOP has been
exceeded and the amount of any excess, the YE Operating Performance per Diluted Share applicable to 2012 shall be $61.16 and to 2013 shall be $71.86. 
 Z. If the Annual Amount in 2014 is less than the amount indicated in column (D) for such year then an amount equal to the excess of (1) the amount indicated in column (D) for 2014 over
(2) the actual Annual Amount for 2014 may vest in 2015 by treating as AOP in the performance year under Section X. above any excess of AOP in 2015 over the amount indicated in column (E) for 2015. The portion of any excess AOP amount which
is so used may not be used more than once. 
  

	1	 As of a given date, the Company’s “Annual Operational Performance per Diluted Share” shall mean the ratio of (1) the excess of
(a) the product of (i) EBITDA and (ii) the Fixed Market Multiple (as defined below) over (b) Net Debt to (2) the Company’s number of Diluted Shares as of such date, where “EBITDA,” “Net Debt” and
“Diluted Shares” have the meanings set forth in the Stock Option Agreement set forth on Exhibit A. For purposes of this Exhibit C, the Fixed Market Multiple shall mean the ratio of (1) the sum of (a) the product of
(i) the average of the closing prices per share of Stock prevailing on each trading day during the last six months of the Company’s 2008 fiscal year and (ii) the Company’s number of Diluted Shares as of September 30, 2008
and (b) Net Debt as of such date to (2) the Company’s EBITDA as of such date. 

  
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 2. Adjustments of Operational Performance Objectives. The Operational Performance targets specified
in this Exhibit B are based upon certain revenue and expense assumptions about the future business of the Company as of the date the Option is granted. Accordingly, in the event that, after such date, the Administrator determines, in its sole
discretion, that any acquisition or disposition of any business by the Company or any dividend or other distribution (whether in the form of cash, Stock, other securities or other property), recapitalization, reclassification, stock split, reverse
stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Stock or other securities of the Company, issuance of warrants or other rights to purchase Stock or other securities of the Company, any
unusual or nonrecurring transactions or events affecting the Company, or the financial statements of the Company, or change in applicable laws, regulations, or accounting principles occurs such that an adjustment is determined by the Administrator
to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to the Option, then the Administrator may, in good faith and in such manner as it may
deem equitable, adjust the amounts set forth on this Exhibit B (and/or adjust the definitions of EBITDA and Net Debt) to reflect the projected effect of such transaction(s) or event(s) on Operational Performance. 

  
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 EXHIBIT C 
 STOCK RETENTION GUIDELINES 
 As a condition to receiving the Option grant,
Participant acknowledges and agrees to hold a number of shares and/or options with such value and for such period of time as set forth below: 
 (a) At all times during Participant’s continued employment by the Company, Participant shall hold an aggregate amount of Company equity with a value equal to or greater than
$             (the “Retention Limit”). This Retention Limit will supersede any Retention Limit in any prior dated option agreement between the Company and
Participant pursuant to the Plan. 
 For purposes of this Exhibit C, Company equity shall be equal to (i) the Fair
Market Value of any Common Stock held by the Participant plus (ii) the value of vested options then held by Participant, whether granted pursuant to the Plan, the Company’s 2003 Stock Option Plan or otherwise, which will be equal to the
Fair Market Value of the Common Stock underlying the options over the exercise price.  
 (b) If at any time after the
date hereof the aggregate amount of Company equity held by Participant falls below the Retention Limit because of a decline in the Fair Market Value of the Common Stock, Participant will have three years to reach the Retention Limit before the
Administrator may exercise any remedies under paragraph (c). 
 (c) Participant’s failure to hold that number of shares
and/or vested options set forth in this Exhibit C shall result in Participant’s forfeiture of all unvested Options unless otherwise determined by the Administrator, in its sole discretion. 

  
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