Document:

exv10w14

 

EXHIBIT 10.14

DATED:      March 10, 2004

BETWEEN:

STANDARD AERO LIMITED,

OF THE FIRST PART,

- and-

EDWARD RICHMOND,

OF THE SECOND PART.

AMENDING AGREEMENT

 

 

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DATED:      March 10,2004

BETWEEN:

STANDARD AERO LIMITED,

OF THE FIRST PART,

- and -

EDWARD RICHMOND,

OF THE SECOND PART.

AMENDING AGREEMENT

WHEREAS the parties entered into an Employment Agreement dated June 17, 2002 (“the Employment
Agreement”);

AND WHEREAS the
parties have agreed to amend the Employment Agreement.

NOW THEREFORE THIS AGREEMENT WITNESSETH THAT, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:

1. The Employment Agreement is amended effective as of March 10, 2004
(the “Commencement Date”) by deleting paragraph 6, and replacing it with the following:

	 	“6.   	 The Executive shall be employed for an initial period of three years
from the date hereof (the “Commencement Date”) and thereafter until the expiry
of not less than eighteen months’ written notice of termination given by either
party to the other so as to expire at the end of the said period or any time
thereafter. In the event the Corporation terminates the employment of the
Executive within the initial period of three years, for other than just

 

 

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	 	   	cause, it shall at that time pay to the Executive an amount
equal to three
years’ salary and the value to the Executive of employment benefits for
three years including pension, life insurance benefits, motor car, medical
and health insurance. In the event the Corporation terminates the
employment of the Executive after the initial period of three years, for
other than just cause, the Corporation reserves the right to pay to the
Executive, at that time in lieu of notice, an amount equal to eighteen
months’ salary and the value to the Executive of employment benefits for
eighteen months including pension, life insurance benefits, motor cat’,
medical and health insurance,”

     IN WITNESS WHEREOF this document has been duly executed and delivered as a deed the day and
year first before written.

	 	 	 	 	 	 	 	 	 
	Executed as a Deed by

	 	 	)	 	 	 
	 	 
	Standard Aero Limited

	 	 	)	 	 	 	 	 
	acting by.

	 	 	)	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	/s/
David Shaw
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Director
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Executed as a Deed by

	 	 	)	 	/s/ Edward Richmond	 	 	 
	Edward Richmond

	 	 	)	 	 	 	 	 
	in the presence of:

	 	 	)	 	 	 	 	 
	 
	/s/
Bruce Clark
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Witness’s name and signature
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	[Illegible]
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	Witness’s addressexv10w15

 

Exhibit 10.15

STOCK OPTION and PURCHASE PLAN

 OF 

STANDARD AERO ACQUISITION HOLDINGS, INC.

     Standard Aero Acquisition Holdings, Inc. (the “Company”), a Delaware corporation, hereby
adopts this Stock Option and Purchase Plan of Standard Aero Acquisition Holdings, Inc (the “Plan”).
The purposes of this Plan are as follows:

(1) To further the growth, development and financial success of the Company and its
Subsidiaries (as defined herein), by providing additional incentives to employees,
consultants and directors of the Company and its Subsidiaries who have been or will be given
responsibility for the management or administration of the Company’s (or one of its
Subsidiaries’) business affairs, by assisting them to become owners of Common Stock, thereby
benefiting directly from the growth, development and financial success of the Company and
its Subsidiaries.

(2) To enable the Company (and its Subsidiaries) to obtain and retain the services of the
type of professional, technical and managerial employees, consultants and directors
considered essential to the long-range success of the Company (and its Subsidiaries) by
providing and offering them an opportunity to become owners of Common Stock under Options,
including, in the case of employees, Options that are intended to qualify as “incentive
stock options” under Section 422 of the Code (as defined herein).

ARTICLE I.

DEFINITIONS

     Whenever the following terms are used in this Plan, they shall have the meaning specified
below unless the context clearly indicates to the contrary. The singular pronoun shall include the
plural where the context so indicates.

     Section 1.1 Affiliate

     “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly
controlling, controlled by, or under common control with, such Person where “control” shall have
the meaning given such term under Rule 405 of the Securities Act. For the purpose of this Plan,
Affiliates of Carlyle Partners III, L.P., a Delaware limited partnership (“CP III”) shall include
all Persons directly or indirectly controlled by TC Group, LLC, a Delaware limited liability.

     Section 1.2 Board

     “Board” shall mean the Board of Directors of the Company.

     Section 1.3 CEO

     “CEO” shall mean Chief Executive Officer of the Company.

     Section 1.4 Code

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

 

 

     Section 1.5 Committee

     “Committee” shall mean the Committee appointed as provided in Section 6.1.

     Section 1.6 Common Stock

     “Common Stock” shall mean the common stock, par value $0.01 per share, of the Company or any
of its Subsidiaries.

     Section 1.7 Company

     “Company” shall mean Standard Aero Acquisition Holdings, Inc. In addition, “Company” shall
mean any corporation assuming, or issuing new employee stock options in substitution for, Incentive
Stock Options outstanding under the Plan in a transaction to which Section 424(a) of the Code
applies.

     Section 1.8 Consultant

     “Consultant” shall mean any Person who is a consultant or adviser if: (i) the consultant or
adviser renders bona fide services to the Company; (ii) the services rendered by the consultant or
adviser are not in connection with the offer or sale of securities in a capital raising transaction
and do not directly or indirectly promote or maintain a market for the Company’s securities; (iii)
the consultant or adviser is a natural person who has contracted directly with the Company to
render such services and (iv) the consultant or adviser is not established, resident or domiciled
in The Netherlands or Canada.

     Section 1.9 Corporate Event

     “Corporate Event” shall mean, as determined by the Committee (or by the Board, in the case of
Options granted to Independent Directors) in its sole discretion, any transaction or event
described in Section 7.1(a) or any unusual or nonrecurring transaction or event affecting the
Company, any Subsidiary of the Company, or the financial statements of the Company or any
Subsidiary, or changes in applicable laws, regulations, or accounting principles.

     Section 1.10 CP III

     “CP III” means Carlyle Partners III, L.P., a Delaware limited partnership.

     Section 1.11 Director

     “Director” shall mean a member of the Board.

     Section 1.12 Eligible Representative

     “Eligible Representative” for an Optionee shall mean such Optionee’s personal representative
or such other person as is empowered under the deceased Optionee’s will or the then applicable laws
of descent and distribution to represent the Optionee hereunder.

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     Section 1.13 Employee

     “Employee” shall mean any employee (as defined in accordance with the regulations and revenue
rulings then applicable under Section 3401(c) of the Code) of the Company or one of its
Subsidiaries, whether such employee is so employed at the time this Plan is adopted or becomes so
employed subsequent to the adoption of this Plan.

     Section 1.14 Exchange Act

     “Exchange Act” shall mean the United States Securities Exchange Act of 1934, as amended.

     Section 1.15 Fair Market Value

     “Fair Market Value” shall have the meaning set forth of Section 4.3(b).

     Section 1.16 Incentive Stock Option

     “Incentive Stock Option” shall mean an Option which qualifies under Section 422 of the Code
and is designated as an Incentive Stock Option by the Committee.

     Section 1.17 Independent Director

     “Independent Director” shall mean a member of the Board who is not an Employee of the Company
or any of its Subsidiaries.

     Section 1.18 Liquidity Event

     “Liquidity Event” shall mean either (a) the consummation of the sale, transfer, conveyance or
other disposition in one or a series of related transactions, of the equity securities of the
Company or its successor held, directly or indirectly, by all of the Principal Stockholders in
exchange for currency, such that immediately following such transaction (or series of related
transactions), the total number of all equity securities held, directly or indirectly, by all of
the Principal Stockholders is, in the aggregate, less than 20% of the total number of equity
securities (as adjusted for the occurrence of a “Corporate Event” as defined in the Plan) held,
directly or indirectly, by all of the Principal Stockholders as of August 24, 2004; or (b) the
consummation of the sale, lease, transfer, conveyance or other disposition (other than by way of
merger or consolidation), in one or a series of related transactions, of all or substantially all
of the assets of the Company, or the Company and its Subsidiaries taken as a whole, to any “person”
(as such term is defined in Section 13(d)(3) of the Exchange Act) other than to any Principal
Stockholder(s) or an Affiliate of any Principal Stockholder(s).

     Section 1.19 Management Stockholder

     “Management Stockholder” shall mean an Employee, Consultant or Independent Director who is
granted or purchases Common Stock under the Plan.

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     Section 1.20 Non-Qualified Stock Option

     “Non-Qualified Stock Option” shall mean an Option which is not an “incentive stock option”
under Section 422 of the Code and shall include an Option which is designated as a Non-Qualified
Stock Option by the Committee.

     Section 1.21 Officer

     “Officer” shall mean an officer of the Company, as defined in Rule 16a-l(f) under the Exchange
Act, as such Rule may be amended in the future.

     Section 1.22 Option

     “Option” shall mean an option granted under the Plan to purchase Common Stock. “Options”
includes both Incentive Stock Options and Non-Qualified Stock Options.

     Section 1.23 Option Price

     “Option Price” shall have the meaning set forth in Section 4.3(a).

     Section 1.24 Participant

     “Participant” shall mean any Optionee and/or Management Stockholder.

     Section 1.25 Optionee

     “Optionee” shall mean an Employee, Consultant or Independent Director to whom an Option is
granted under the Plan.

     Section 1.26 Person

     “Person” shall mean an individual, partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association, joint venture, governmental
authority or other entity of whatever nature.

     Section 1.27 Plan 

     “Plan” shall mean this Stock Option and Purchase Plan of Standard Aero Acquisition Holdings,
Inc.

     Section 1.28 Principal Stockholder(s)

     “Principal Stockholder(s)” shall mean (i) CP III and (ii) any of its Affiliates to which (a)
CP III or any other Person transfers Common Stock or (b) the Company issues Common Stock.

     Section 1.29 Secretary

     “Secretary” shall mean the Secretary of the Company.

     Section 1.30 Securities Act

     “Securities Act” shall mean the United States Securities Act of 1933, as amended.

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     Section 1.31 Stockholders Agreement

     “Stockholders Agreement” shall mean that certain agreement by and between each Management
Stockholder, Optionee, the Principal Stockholder, the Company and other parties thereto, which
contains certain restrictions and limitations applicable to the shares of Common Stock acquired
upon Option exercise or otherwise held by a Management Stockholder or an Optionee, as applicable.
The Board, in its discretion, shall determine the terms of the Stockholders Agreement and may amend
the terms thereof from time to time. If the Optionee is not a party to a Stockholders Agreement at
the time of exercise of the Option (or any portion thereof), the exercise of the Option shall be
subject to the condition that the Optionee enter a Stockholders Agreement with the Company.

     Section 1.32 Stock Option Agreement

     “Stock Option Agreement” shall have the meaning set forth in Section 4.1.

     Section 1.33 Subsidiary

     “Subsidiary” of any entity shall mean any corporation in an unbroken chain of corporations
beginning with such entity if each of the corporations other than the last corporation in the
unbroken chain then owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

     Section 1.34 Termination of Consultancy

     “Termination of Consultancy” shall mean the time when the engagement of a 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 terminations where there is simultaneous commencement of employment with the Company or a
Subsidiary. The Committee, 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 Termination of Consultancy resulted from discharge for good cause, and all
questions 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, with or without
cause, except to the extent expressly provided otherwise in writing.

     Section 1.35 Termination of Directorship

     “Termination of Directorship” shall mean the time when a Participant who is 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 or appointed, death or retirement. The Board, in
its sole discretion, shall determine the effect of all matters and questions relating to
Termination of Directorship.

     Section 1.36 Termination of Employment

     “Termination of Employment” shall mean the time when the employee-employer relationship
between a Participant and the Company (or one of its Subsidiaries) is terminated for any reason,
with or without cause, including, but not by way of limitation, a termination by

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resignation, discharge, death or retirement, but excluding (a) a termination where there is a
simultaneous reemployment by the Company (or one of its Subsidiaries), (b) at the discretion of the
Committee, terminations which result in a temporary severance of the employee-employer
relationship, and (c) at the discretion of the Committee, terminations which are followed by the
simultaneous establishment of a consulting relationship by the Company or a Subsidiary with the
former employee. The Committee 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
Termination of Employment resulted from a discharge for good cause, and all questions of whether a
particular leave of absence constitutes a Termination of Employment; provided, however, that, with
respect to Incentive Stock Options, unless otherwise determined by the Committee in its discretion,
a leave of absence shall constitute a Termination of Employment if, and to the extent that, such
leave of absence interrupts employment for the purposes of Section 422(a)(2) of the Code and the
then applicable regulations and revenue rulings under Section 442(a)(2) of the Code. In addition,
where a Participant’s employment with the Company or its Subsidiaries has been terminated without
Cause, the date of a Participant’s Termination of Employment shall be the last day of a
Participant’s actual and active employment, whether such day is selected by agreement with the
Optionee or unilaterally by the Company or its Subsidiary and whether with or without advance
notice. For the avoidance of doubt, no period of notice that is given or that ought to have been
given under applicable law in respect of such Termination of Employment will be utilized in
determining entitlement under the Plan, Stockholder Agreement or any Stock Option Agreement. Any
action by the Company or its Subsidiary taken in accordance with the terms of the Plan, Stockholder
Agreement and any Stock Option Agreement as set out aforesaid shall be deemed to fully and
completely satisfy any liability or obligation of the Company or its Subsidiary to the Participant
in respect of the Plan or the Stock Option Agreement arising from or in connection with such
Termination of Employment, including in respect of any period of notice given or that ought to have
been given under applicable law in respect of such Termination of Employment.

ARTICLE II.

SHARES SUBJECT TO PLAN

     Section 2.1 Shares Subject to Plan

     Subject to Section 7.1, the aggregate number of such shares which may be issued under this
Plan (whether directly or pursuant to the grant of Options) is 425,000.

     Section 2.2 Unexercised Options

     If any Option (or portion thereof) expires or is canceled without having been fully exercised,
the number of shares of stock subject to such Option (or portion thereof) but as to which such
Option was not exercised prior to its expiration or cancellation may again be optioned hereunder,
subject to the limitations of Section 2.1. Furthermore, any shares of stock subject to Options
which are adjusted pursuant to Section 7.1 and become exercisable with respect to shares of stock
of another corporation shall be considered cancelled and may again be optioned, granted or awarded
hereunder, subject to the limitations of Section 2.1. Shares of Common Stock which are delivered
by the Optionee or withheld by the Company upon exercise of an Option under the Plan, in payment of
the exercise price thereof or tax withholding thereon, may again be optioned, granted or awarded
hereunder, subject to the limitations of Section 2.1.

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ARTICLE III.

GRANTING OF OPTIONS AND SALE OF STOCK

     Section 3.1 Eligibility

     Any Employee, any Independent Director and any Consultant shall be eligible to be granted
Options, except as provided in Section 3.2. Any Employee and any Consultant shall be eligible to
be granted the opportunity to purchase shares of Common Stock as provided in Section 3.5.

     Section 3.2 Qualification of Incentive Stock Options

     No Incentive Stock Option shall be granted to any person who is not an Employee. No Employee
may be granted an Incentive Stock Option under the Plan if such Employee, at the time the Incentive
Stock Option is granted, owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or any then existing Subsidiary or “parent corporation” (within
the meaning of Section 424 of the Code) unless such Incentive Stock Option conforms to the
applicable provisions of Section 422 of the Code.

     Section 3.3 Granting of Options to Employees or Consultants

(a) The Committee shall from time to time:

(i) Select from among the Employees or Consultants (including those to whom
Options have been previously granted under the Plan) such of them as in its
opinion should be granted Options;

(ii) Determine the number of shares to be subject to such Options granted to
such Employees or Consultants, and determine whether such Options are to be
Incentive Stock Options or Non-Qualified Stock Options; and

(iii) Determine the terms and conditions of such Options, consistent with
the Plan.

(b) Upon the selection of an Employee or Consultant to be granted an Option pursuant
to Section 3.3(a), the Committee shall instruct the Secretary or another authorized
Officer of the Company to issue such Option and may impose such conditions on the
grant of such Option as it deems appropriate including, without limitation,
obtaining a representation from any Participant who is resident or domiciled in
Canada that the Participant’s participation in the Plan is voluntary. Any Incentive
Stock Option granted under the Plan may be modified by the Committee, with the
consent of the Optionee, to disqualify such Option and may impose such conditions on
the grant of the Option as it deems appropriate.

(c) Notwithstanding any of the foregoing, no Options shall be granted to any
Employee who is established, domiciled or resident in Canada or The Netherlands
unless (i) at least a majority of the equity ownership and the voting rights of the
Subsidiary that employs the Employee is, at such relevant time(s), held, directly or
indirectly, by the Company.

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     Section 3.4 Granting of Options to Independent Directors

(a) The Board shall from time to time:

(i) Select from among the Independent Directors (including those to whom
Options have previously been granted under the Plan) such of them as in its
opinion should be granted Options;

(ii) Determine the number of shares to be subject to such Options granted to
such selected Independent Directors; and

(iii) Determine the terms and conditions of such Options, consistent with
the Plan; provided, however, that all Options granted to Independent
Directors shall be Non-Qualified Stock Options.

(b) Upon the selection of an Independent Director to be granted an Option pursuant to
Section 3.4(a), the Board shall instruct the Secretary or another authorized Officer
of the Company to issue such Option and may impose such conditions on the grant of
such Option as it deems appropriate.

(c) Notwithstanding any of the foregoing, no Options shall be granted to any
Independent Director who is (i) established, domiciled or resident in The
Netherlands unless at least a majority of the equity ownership and the voting rights
of the Subsidiary of which the Independent Director is an Independent Director is,
at such relevant time(s), held, directly or indirectly, by the Company or (ii)
established, domiciled or resident in Canada.

     Section 3.5 Sale of Common Stock to Employees or Consultants

     The Committee, acting in its sole discretion, may from time to time designate one or more
Employees or Consultants to whom an offer to sell shares of Common Stock shall be made and the
terms and conditions thereof, provided, however, that the price per share of Common Stock shall not
be less than the fair market value (as determined in accordance with Section 4.3(b) hereof) thereof
on the date any such offer is accepted. Each share of Common Stock sold to an Employee or
Consultant under this Section 3.5 shall be evidenced by a written stock subscription in a form
approved by an authorized Officer of the Company, which shall contain terms consistent with the
terms hereof. Any Common Stock sold under this Section 3.5 shall be subject to the same
limitations, restrictions and administration hereunder as would apply to any Common Stock issued
pursuant to the exercise of an Option under this Plan including, but not limited to, conditions and
restrictions set forth in Section 5.4 hereunder. Shares acquired pursuant to this Section 3.5
shall also be subject to the terms and conditions of a Stockholders Agreement.

ARTICLE IV.

TERMS OF OPTIONS

     Section 4.1 Stock Option Agreement

(a) Each Option shall be evidenced by a written Stock Option Agreement (a “Stock
Option Agreement”), which shall be executed by the Optionee and an authorized
Officer of the Company and which shall contain such terms and

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conditions as the Committee (or the Board, in the case of Options granted to
Independent Directors) shall determine, consistent with the Plan. Stock Option
Agreements evidencing Incentive Stock Options shall contain such terms and
conditions as may be necessary to qualify such Options as “incentive stock options”
under Section 422 of the Code.

(b) The Committee (or the Board, in the case of Options granted to Independent
Directors) at any time, and from time to time, may amend the terms of any one or
more existing Stock Option Agreements, provided, however, that the rights of an
Optionee under a Stock Option Agreement shall not be adversely impaired without the
Optionee’s written consent. The Company shall provide an Optionee with notice of
any amendment made to such Optionee’s existing Stock Option Agreement.

     Section 4.2 Exercisability of Options

(a) Each Option shall become exercisable according to the terms of the applicable
Stock Option Agreement; provided, however, that by a resolution adopted after an
Option is granted the Committee (or the Board, in the case of Options granted to
Independent Directors) may, on such terms and conditions as it may determine to be
appropriate, accelerate the time at which such Option or any portion thereof may be
exercised.

(b) Except as otherwise provided in the applicable Stock Option Agreement, no
portion of an Option which is unexercisable at Termination of Employment,
Termination of Directorship or Termination of Consultancy, as applicable, shall
thereafter become exercisable.

(c) To the extent that the aggregate fair market value of stock with respect to
which “incentive stock options” (within the meaning of Section 422 of the Code, but
without regard to Section 422(d) of the Code) are exercisable for the first time by
an Optionee during any calendar year (under the Plan and all other incentive stock
option plans of the Company or any Subsidiary thereof) exceeds $100,000, such
options shall be treated and taxable as Non-Qualified Stock Options. The rule set
forth in the preceding sentence shall be applied by taking options into account in
the order in which they were granted, and the stock issued upon exercise of options
shall designate whether such stock was acquired upon exercise of an Incentive Stock
Option. For purposes of these rules, the fair market value of stock shall be
determined as of the date of grant of the Option granted with respect to such stock.

     Section 4.3 Option Price

(a) The per share purchase price of the shares subject to each Option (the “Option
Price”) shall be set by the Committee (or the Board, in the case of Options granted
to Independent Directors); provided, however, that in the case of an Incentive Stock
Option, or of any Option granted to any Participant who is domiciled or resident in
Canada, the Option Price shall be not less than 100% of the Fair Market Value of
such shares on the date such Option is granted; and that in the case of an Incentive
Stock Option being granted to an individual then owning

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(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, the Option Price shall
not be less than 110% of the Fair Market Value of such shares on the date such
Incentive Stock Option is granted.

(b) For purposes of the Plan, the Fair Market Value of a share of Common Stock as of
a given date shall be:

(i) if the Common Stock is listed on one or more National Securities
Exchanges (within the meaning of the Exchange Act), each share of Common
Stock shall be valued at the average closing price of a share of such class
of Common Stock on the principal exchange on which such shares are then
trading, on the twenty trading days immediately preceding such date;

(ii) if the Common Stock is not traded on a National Securities Exchange but
is quoted on NASDAQ or a successor quotation system and the Common Stock is
listed as a National Market Issue under the NASD National Market System,
each share of Common Stock shall be valued at the average of the last sales
price on each of the twenty trading days immediately preceding such date as
reported by NASDAQ or such successor quotation system; or

(iii) if the Common Stock is not publicly traded on a National Securities
Exchange and is not quoted on NASDAQ or a successor quotation system, the
Fair Market Value of the Common Stock shall be determined in good faith by
the Committee.

     Notwithstanding the foregoing, if the Common Stock that is being valued is held by a
Participant who is domiciled or resident in Canada, the Committee may, in its discretion, determine
the Fair Market Value in accordance with the administrative policy of Revenue Canada regarding such
a determination.

     Section 4.4 Expiration of Options

     No Option may be exercised to any extent by anyone after the first to occur of the following
events:

(a) The expiration of ten years from the date the Option was granted; or

(b) With respect to an Incentive Stock Option granted to an Optionee owning (within
the meaning of Section 424(d) of the Code), at the time the Incentive Stock Option
was granted, more than 10% of the total combined voting power of all classes of
stock of the Company or any subsidiary corporation, the expiration of five years
from the date the Incentive Stock Option was granted .

(c) Except as limited by the requirements of Section 422 of the Code, the
Committee (or the Board, in the case of Options granted to Independent Directors)
may extend the term of any outstanding Option in connection with any Termination of
Employment, Termination of Consultancy or Termination of

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Directorship, or amend any other term or condition of such Option relating to such
termination.

ARTICLE V.

EXERCISE OF OPTIONS

     Section 5.1 Person Eligible to Exercise

     During the lifetime of the Optionee, only he or she may exercise an Option (or any portion
thereof granted to him or her; provided, however, that the Optionee’s Eligible Representative may
exercise his or her Option during the period of the Optionee’s disability (as defined in Section
22(e)(3) of the Code) notwithstanding that an Option so exercised may not qualify as an Incentive
Stock Option. After the death of the Optionee, any exercisable portion of an Option may, prior to
the time when such portion becomes unexercisable under the Plan or the applicable Stock Option
Agreement, be exercised by his or her Eligible Representative.

     Section 5.2 Partial Exercise

     At any time and from time to time prior to the time when the Option becomes unexercisable
under the Plan or the applicable Stock Option Agreement, the exercisable portion of an Option may
be exercised in whole or in part; provided, however, that the Company shall not be required to
issue fractional shares and the Committee (or the Board, in the case of Options granted to
Independent Directors) may, by the terms of the Option, require any partial exercise to exceed a
specified minimum number of shares.

     Section 5.3 Manner of Exercise

     An exercisable Option, or any exercisable portion thereof, may be exercised solely by delivery
to the Secretary of all of the following prior to the time when such Option or such portion becomes
unexercisable under the Plan or the applicable Stock Option Agreement:

(a) Notice in writing signed by the Optionee or his or her Eligible Representative,
stating that such Option or portion is exercised, and specifically stating the
number of shares with respect to which the Option is being exercised;

(b) A copy of the Stockholders Agreement signed by the Optionee or Eligible
Representative, as applicable;

(c) Full payment (in cash or by personal, certified, or bank cashier check) for the shares with respect to which such Option or portion is thereby exercised; or,

(i) with the consent of the Committee (or the Board, in the case of Options
to Independent Directors), (A) except for Participants who are resident or
domiciled in Canada, shares of Common Stock owned by the Optionee for at
least a six month period duly endorsed for transfer to the Company; or (B)
except with respect to Incentive Stock Options, shares of the Common Stock
issuable to the Optionee upon exercise of the Option, with a Fair Market
Value on the date of Option exercise equal to the aggregate Option Price of
the shares with respect to which such Option or portion is thereby
exercised; or

11

 

(ii) With the consent of the Committee (or the Board, in the case of Options
granted to Independent Directors), any combination of the consideration
listed in this subsection (c);

(d) The payment to the Company (in cash or by personal, certified or bank cashier or
by any other means of payment approved by the Committee) of all minimum amounts
necessary to satisfy any and all tax, social security premiums, and other national
insurance withholding requirements arising in connection with the exercise of the
Option;

(e) Such representations and documents as the Committee (or the Board, in the case
of Options granted to Independent Directors) deems necessary or advisable to effect
compliance with all applicable provisions of the Securities Act and any other
federal, state, local, national, provincial or applicable securities laws or
regulations. The Committee (or the Board, in the case of Options granted to
Independent Directors) may, in its sole discretion, also take whatever additional
actions it deems appropriate to effect such compliance including, without
limitation, placing legends on share certificates and issuing stop-transfer orders
to transfer agents and registrars; and

(f) In the event that the Option or portion thereof shall be exercised as permitted
under Section 5.1 by any person or persons other than the Optionee, appropriate
proof of the right of such person or persons to exercise the Option or portion
thereof.

     Section 5.4 Conditions to Issuance of Stock Certificates

     The shares of stock issuable and deliverable upon the exercise of an Option, or any portion
thereof, may be either previously authorized but unissued shares or issued shares which have then
been reacquired by the Company. A certificate of shares will be delivered to the Optionee at the
Company’s principal place of business within thirty days of receipt by the Company of the written
notice and payment, unless an earlier date is agreed upon. Notwithstanding the above, the Company
shall not be required to issue or deliver any certificate or certificates for shares of stock
purchased upon the exercise of any Option or portion thereof prior to fulfillment of all of the
following conditions:

(a) The admission of such shares to listing on any and all stock exchanges on which
such class of stock is then listed;

(b) The completion of any registration or other qualification of such shares under
any provincial, national, state, local or federal law or under the rulings or
regulations of the Securities and Exchange Commission or any other governmental
regulatory body, which the Committee (or the Board, in the case of Options granted
to Independent Directors) shall, in its sole discretion, deem necessary or
advisable;

(c) The obtaining of any approval or other clearance from any provincial, state,
local, national or federal governmental agency which the Committee (or the Board, in
the case of Options granted to Independent Directors) shall, in its sole discretion,
determine to be necessary or advisable; and

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(d) The payment to the Company (or its Subsidiary, as applicable) of all amounts
which it is required to withhold under applicable law in connection with the
exercise of the Option.

     Section 5.5 Rights as Stockholders

     The holder of an Option shall not be, nor have any of the rights or privileges of, a
stockholder of the Company in respect of any shares purchasable upon the exercise of any part of an
Option unless and until such holder has signed a Stockholders Agreement and certificates
representing such shares have been issued by the Company to such holder.

     Section 5.6 Transfer Restrictions

     Shares acquired upon exercise of an Option shall be subject to the terms and conditions of a
Stockholders Agreement. In addition, the Committee (or the Board, in the case of Options granted
to Independent Directors), in its sole discretion, may impose further restrictions on the
transferability of the shares purchasable upon the exercise of an Option as it deems appropriate.
Any such restriction shall be set forth in the respective Stock Option Agreement and may be
referred to on the certificates evidencing such shares. The Committee may require the Employee to
give the Company prompt notice of any disposition of shares of stock, acquired by exercise of an
Incentive Stock Option, within two years from the date of granting such Option or one year after
the transfer of such shares to such Employee. The Committee may direct that the certificates
evidencing shares acquired by exercise of an Incentive Stock Option refer to such requirement.

ARTICLE VI.

ADMINISTRATION

     Section 6.1 Committee

     The Committee shall be the Compensation Committee of the Board. Any action required or
permitted to be taken by the Committee hereunder or under a Stockholders Agreement or any Stock
Option Agreement may be taken by the Board.

     Section 6.2 Delegation by Committee

     Except as otherwise determined by the Committee, all rights, powers and duties of the
Committee under the Plan (except those granted pursuant to Sections 3.3, 4.3, 5.3(c), 5.3(e), 5.6,
6.4 and Article VII) may be exercised by the CEO, subject to the approval of the Committee.

     Section 6.3 Duties and Powers of CEO and the Committee

     It shall be the duty of the CEO, subject to the approval of the Committee, to conduct the
general administration of the Plan in accordance with its provisions. The approval of the
Committee shall have the power to interpret the Plan and the Options 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. Notwithstanding the foregoing, the full Board, acting
by a majority of its members in office, shall conduct the general administration of the Plan with
respect to Options granted to Independent Directors. Any such interpretations and rules in regard
to Incentive Stock Options shall be consistent with the terms and conditions applicable to
“incentive stock options” within the meaning of Section 422 of the Code. All determinations and

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decisions made by the CEO and approved by the Committee under any provision of the Plan or of
any Option granted thereunder shall be final, conclusive and binding on all persons.

     Section 6.4 Compensation, Professional Assistance, Good Faith Actions

     The members of the Committee shall receive such compensation for their services hereunder as
may be determined by the Board. All expenses and liabilities incurred by the members of the
Committee or the Board in connection with the administration of the Plan shall be borne by the
Company. The Committee or the Board may employ attorneys, consultants, accountants, appraisers,
brokers or other persons. The Committee, the Company and its Officers and Directors shall be
entitled to rely upon the advice, opinions or valuations of any such persons. All actions taken
and all interpretations and determinations made by the CEO, the Committee and the Board, in good
faith shall be final and binding upon all Participants, the Company and all other interested
persons. No member of the Board or the CEO shall be personally liable for any action,
determination or interpretation made in good faith with respect to the Plan or the Options, and all
members of the Board shall be fully protected by the Company in respect to any such action,
determination or interpretation.

ARTICLE VII.

OTHER PROVISIONS

     Section 7.1 Changes in Common Stock; Disposition of Assets and Corporate Events.

(a) Subject to Section 7.1(d), in the event that the Committee (or the Board, in the
case of Options granted to Independent Directors) determines that any dividend or
other distribution (whether in the form of cash, Common Stock, other securities, or
other property), recapitalization, reclassification, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, liquidation, dissolution, or sale, transfer, exchange or other
disposition of all or substantially all of the capital stock or assets of the
Company (including, but not limited to, a Liquidity Event), exchange of Common Stock
or other securities of the Company, issuance of warrants or other rights to purchase
Common Stock or other securities of the Company, the acquisition or disposition of
any material assets or business or other similar corporate transaction or event, in
the Committee’s sole discretion (or in the case of Options granted to Independent
Directors, the Board’s sole discretion), affects the Common Stock such that an
adjustment is determined by the Committee (or the Board, in the case of Options
granted to Independent Directors) 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 an Option, then the Committee (or the Board, in
the case of Options granted to Independent Directors) may, in such manner as it may
deem equitable, adjust any or all of:

(i) The number and kind of shares of Common Stock (or other securities or
property) with respect to which Options or the opportunity to purchase such shares may be granted under the Plan (including, but not limited to,
adjustments of the limitations in Section 2.1 on the maximum number and kind
of shares which may be issued);

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(ii) The number and kind of shares of Common Stock (or other securities or
property) subject to outstanding Options;

(iii) The Option Price with respect to any Option may be reduced; provided,
however, that in no event may the Option Price of any Option held by a
Participant who is domiciled or resident in Canada solely due to the sale,
transfer, exchange or other disposition of all or substantially all of the
assets of the Company without the consent of such Participant; and

(iv) The financial or other “performance targets” specified in each Stock
Option Agreement for determining the exercisability of Options.

(b) Subject to Section 7.1(d) and the terms of outstanding Options, upon the
occurrence of a Corporate Event, the Committee (or the Board, in the case of options
granted to Independent Directors), in its sole discretion, is hereby authorized to
take any one or more of the following actions whenever the Committee (or the Board,
in the case of Options granted to Independent Directors) determines that such action
is 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
any Option under this Plan, to facilitate such Corporate Event or to give effect to
such changes in laws, regulations or principles:

(i) In its sole discretion, and on such terms and conditions as it deems
appropriate, the Committee (or the Board, in the case of Options granted to
Independent Directors) may provide, either by the terms of the applicable
Stock Option Agreement or by action taken prior to the occurrence of such
Corporate Event and either automatically or upon the Optionee’s request, for
either the purchase of any such Option for an amount of cash, securities, or
other property equal to the amount that could have been attained upon the
exercise of the vested portion of such Option (and such additional portion
of the Option as the Board or Committee may determine) immediately prior to
the occurrence of such transaction or event, or the replacement of such
vested (and other) portion of such Option with other rights or property
selected by the Committee (or the Board, in the case of Options granted to
Independent Directors) in its sole discretion;

(ii) In its sole discretion, the Committee (or the Board, in the case of
Options granted to Independent Directors) may provide, either by the terms
of the applicable Stock Option Agreement or by action taken prior to the
occurrence of such Corporate Event, that the Option (or any portion thereof)
will terminate upon the occurrence of such event and cannot be exercised
after such event;

(iii) In its sole discretion, and on such terms and conditions as it deems
appropriate, the Committee (or the Board, in the case of Options granted to
Independent Directors) may provide, either by the terms of the applicable
Stock Option Agreement or by action taken prior to the occurrence of such
Corporate Event, that for a specified period of time

15

 

prior to such Corporate Event, such Option shall be exercisable as to all shares covered thereby or a specified portion of such shares,
notwithstanding anything to the contrary in (A) Section 4.2; or (B) the
provisions of the applicable Stock Option Agreement;

(iv) In its sole discretion, and on such terms and conditions as it deems
appropriate, the Committee (or the Board, in the case of Options granted to
Independent Directors) may provide, either by the terms of the applicable
Stock Option Agreement or by action taken prior to the occurrence of such
Corporate Event, that upon such event, such Option (or any portion thereof)
be assumed by the successor or survivor corporation, or a parent or
subsidiary thereof, or shall be substituted for by similar options, rights
or awards covering the stock of the successor or survivor corporation, or a
parent or subsidiary thereof, with appropriate adjustments as to the number
and kind of shares and prices; and

(v) In its sole discretion, and on such terms and conditions as it deems
appropriate, the Committee (or the Board, in the case of Options granted to
Independent Directors) may make adjustments in the number and type of shares
of Common Stock (or other securities or property) subject to outstanding
Options (or any portion thereof) and/or in the terms and conditions of
(including the exercise price), and the criteria included in, outstanding
Options and Options which may be granted in the future.

(c) Subject to Section 7.1(d), the Committee (or the Board, in the case of Options
granted to Independent Directors) may, in its sole discretion, include such further
provisions and limitations in any Stock Option Agreement or Stockholders Agreement
as it may deem equitable and in the best interests of the Company and its
Subsidiaries.

(d) With respect to Incentive Stock Options, no adjustment or action described in
this Section 7.1 or in any other provision of the Plan shall be authorized to the
extent that such adjustment or action would cause the Plan to violate Section 422(b)
of the Code or any successor provisions thereto, unless the Committee determines
that the Plan and/or the Options are not to comply with Section 422(b) of the Code.
The number of shares of Common Stock subject to any Option shall always be rounded
up to the next higher whole number.

     Section 7.2 Options Not Transferable

     No Option or interest or right therein or part thereof shall be liable for the debts,
contracts or engagements of the Optionee 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; provided, however,
that nothing in this Section 7.2 shall prevent transfers by will or by the applicable laws of
descent and distribution.

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     Section 7.3 Amendment, Suspension or Termination of the Plan

     (a) The Plan may be wholly or partially amended or otherwise modified, suspended or terminated
at any time or from time to time by the Board or the Committee. However, without stockholder
approval within 12 months before or after such action no action of the Board or the Committee may,
except as provided in Section 7.1, increase any limit imposed in Section 2.1 on the maximum number
of shares which may be issued under the Plan, reduce the minimum Option Price requirements of
Section 4.3(a), or extend the limit imposed in Section 7.3(b) on the period during which Options
may be granted.

     (b) Except as provided by Section 7.1, neither the amendment, suspension nor termination of
the Plan shall, without the consent of the holder of the Option, alter or impair any rights or
obligations under any Option theretofore granted. No Option may be granted during any period of
suspension nor after termination of the Plan, and in no event may any Option be granted under this
Plan after the expiration of ten years from the date the Plan is adopted by the Board.

     Section 7.4 Effect of Plan Upon Other Option and Compensation Plans

     The adoption of this Plan shall not affect any other compensation or incentive plans in effect
for the Company or any Subsidiary. Nothing in this Plan shall be construed to limit the right of
the Company or any Subsidiary (a) to establish any other forms of incentives or compensation for
Independent Directors, Consultants or Employees or (b) to grant or assume options otherwise than
under this Plan in connection with any proper corporate purpose, including, but not by way of
limitation, the grant or assumption of options in connection with the acquisition by purchase,
lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation,
firm or association.

     Section 7.5 Not a Contract of Employment; Not Compensation

     Nothing in the Plan, Stockholders Agreement or any Stock Option Agreement hereunder shall
confer upon the Optionee any right to continue in the employ of or as Consultant for, the Company
or any Subsidiary, or as a director of the Company, or shall interfere with or restrict in any way
the rights of the Company and any Subsidiary, which are hereby expressly reserved, to discharge any
Optionee at any time for any reason whatsoever, with or without cause, except to the extent
expressly provided otherwise in a written employment agreement between the Optionee and the Company
or a Subsidiary. Any grant of any Option or opportunity to purchase Common Stock made under the
Plan constitutes a voluntary, discretionary remuneration being made on a one-time basis and does
not constitute a commitment by the Company to make any future grants. No grant under this Plan
will be considered salary or other compensation for purposes of any severance pay or similar
allowance, except as otherwise required by applicable law.

     Section 7.6 Stockholder Approval

     This Plan will be submitted for the approval of the Company’s stockholders within twelve
months after the date of the Board’s initial adoption of this Plan. No Option may be exercised to
any extent by anyone unless and until the Plan is so approved by the stockholders, and if such
approval has not been obtained by the end of said twelve-month period, the Plan and all Options
theretofore granted shall thereupon be canceled and become null and void.

17

 

     Section 7.7 Titles

     Titles are provided herein for convenience only and are not to serve as a basis for
interpretation or construction of the Plan.

     Section 7.8 Withholding Requirements 

     The Company or its applicable Subsidiaries shall, upon the relevant date any Option becomes
subject to tax, social security premiums, and/or other national insurance withholdings under the
laws of the jurisdiction of the Company or the Subsidiary, as applicable, at which the Optionee is
employed, which may upon the grant, vesting, assignment, and/or exercise of any portion of the
Option, as applicable.

     Section 7.9 Conformity to Securities Laws

     The Plan is intended to conform to the extent necessary with all provisions of the Securities
Act, the Exchange Act and any and other national, federal, state, local or provincial securities
laws, and all regulations and rules promulgated under any of the foregoing, to the extent the
Company, any of its Subsidiaries or any Optionee is subject to the provisions thereof.
Notwithstanding anything herein to the contrary, the Plan shall be administered, and Options shall
be granted and may be exercised, only in such a manner as to conform to such laws, rules and
regulations. To the extent permitted by applicable law, the Plan and Options granted hereunder
shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

     Section 7.10 Governing Law

     To the extent not preempted by federal, national, provincial or state law, the Plan shall be
construed in accordance with and governed by the laws of the State of Delaware.

     Section 7.11 Severability

     In the event any portion of the Plan or any action taken pursuant thereto shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining
parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provisions had not been included, and the illegal or invalid action shall be null and void.

18

 

     I hereby certify that the foregoing Plan was duly adopted by the Board on December 17, 2004

     Executed on this ___day of December, 2004

	 	 	 	 	 	 	 
	 	 	/s/ David Shaw	 	 
	 	 	 
	 

	 	Name:
	 	David Shaw	 	 
	

	 	Title:
	 	President and Chief Executive Officer	 	 

19

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