Document:

Exhibit 4.1

 

	
  COMMON STOCK PAR VALUE OF $0.01

  

  	
   

  	
  

  	
   

  	
  COMMON STOCK PAR VALUE OF $0.01

  

  

 

 

	
  

  	
   

  	
  TransDigm
  Group Incorporated

   

  INCORPORATED
  UNDER THE LAWS OF THE STATE OF DELAWARE

  	
  CUSIP
  893641 10 0

  
	
   

  	
   

  	
   

  	
   

  
	
  THIS
  CERTIFIES THAT

  	
   

  	
   

  	
  SEE REVERSE

  
	
   

  	
   

  	
   

  	
  FOR CERTAIN

  
	
   

  	
   

  	
   

  	
  DEFINITIONS

  
					

 

 

is the
owner of

 

FULLY
PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK OF TRANSDIGM GROUP INCORPORATED

 

transferable on the books of the
Corporation by the holder hereof in person or by duly authorized attorney upon
surrender of this certificate properly endorsed.

This certificate is not valid
until countersigned and registered by the Transfer Agent and Registrar.

Witness the facsimile seal of the
Corporation and the facsimile signatures of its duly authorized officers.

Dated:

 

	
  

  EXECUTIVE
  VICE PRESIDENT,

  CHIEF FINANCIAL OFFICER AND SECRETARY

  	
   

  	
  

  	
   

  	
  

   

  CHIEF
  EXECUTIVE OFFICER AND

  CHAIRMAN OF THE BOARD

  

 

COUNTERSIGNED AND REGISTERED:

NATIONAL
CITY BANK

(Cleveland, Ohio)

TRANSFER AGENT AND REGISTRAR

BY

 

 

AUTHORIZED SIGNATURE

 

 

 

TransDigm Group Incorporated

 

The Corporation will furnish
without charge to each stockholder who so requests a statement of the powers,
designations, preferences and  relative, participating, optional or other special rights of each class
of stock or series thereof and the qualifications, limitations or restrictions
of such preferences and/or
rights.

 

The following abbreviations,
when used in the inscription on the face of this certificate, shall be
construed as though they were written out in full according to applicable laws
or regulations:

 

	
  TEN COM

  	
  —

  	
  as tenants in common

  	
   

  	
  UNIF GIFT MIN ACT —                Custodian                 

  
	
  TEN ENT

  	
  —

  	
  as tenants by the
  entireties

  	
   

  	
   

  	
  (Cust)

  	
  (Minor)

  
	
  JT TEN

  	
  —

  	
  as joint tenants with right
  of

  	
   

  	
   

  	
  under Uniform Gifts to
  Minors

  
	
   

  	
   

  	
  survivorship and not as
  tenants

  	
   

  	
   

  	
  Act                                           

  
	
   

  	
   

  	
  in common

  	
   

  	
   

  	
  (State)

  
								

 

Additional
abbreviations may also be used though not in the above list.

 

For value received,                                                                                                              hereby
sell, assign and transfer unto

 

	
  PLEASE
  INSERT SOCIAL SECURITY OR OTHER

  	
   

  
	
  IDENTIFYING
  NUMBER OF ASSIGNEE

  	
   

  
	
   

  	
   

  
	
   

  
	
   

  	
   

  

 

	
   

  
	
  (PLEASE
  PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  	
  shares

  
	
   

  
	
  of the capital stock
  represented by the within Certificate, and do hereby irrevocably constitute
  and appoint

  
	
   

  
	
   

  	
  Attorney

  
	
   

  
	
  to transfer the said stock on
  the books of the within named Corporation with full power of substitution in
  the premises.

  
	
   

  
	
  Dated

  	
   

  	
   

  
					

 

 

	
   

  	
  Signature(s)

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST
  CORRESPOND WITH THE NAME(S) AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN
  EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Signature(s)
  Guaranteed:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE
  GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND
  CREDIT UNIONS) WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION
  PROGRAM, PURSUANT TO S.E.C. RULE 17Ad-15.EXHIBIT
10.16

 

TRANSDIGM GROUP INCORPORATED

2006 STOCK INCENTIVE PLAN

 

1.             Purpose.

 

The
purpose of the Plan is to assist the Company in attracting, retaining,
motivating and rewarding certain key employees, officers, directors and
consultants of the Company and its Affiliates, and promoting the creation of
long-term value for stockholders of the Company by closely aligning the
interests of such individuals with those of such stockholders. The Plan
authorizes the award of Stock-based incentives to Eligible Persons to encourage
such persons to expend their maximum efforts in the creation of stockholder
value.

 

2.             Definitions.

 

For
purposes of the Plan, the following terms shall be defined as set forth below:

 

(a)           “Affiliate” means, with respect to any
entity, any other entity that, directly or indirectly through one or more
intermediaries, controls, is controlled by or is under common control with,
such entity.

 

(b)           “Award” means any Option, Restricted Stock
or other Stock-based award granted under the Plan.

 

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

 

(d)           “Cause” means, in the absence of any
employment agreement between a Participant and the Employer otherwise defining
Cause, (i) acts of personal dishonesty, gross negligence or willful misconduct on
the part of a Participant in the course of his or her employment or services;
(ii) a Participant’s engagement in conduct that results, or could be reasonably
expected to result, in material injury to the reputation or business of the
Company or its Affiliates; (iii) misappropriation by a Participant of the
assets or business opportunities of the Company or its Affiliates; (iv)
embezzlement or fraud committed by a Participant, at his or her direction, or
with his or her personal knowledge; (v) a Participant’s conviction by a court
of competent jurisdiction of, or pleading “guilty” or “no contest” to, (x) a
felony, or (y) any other criminal charge (other than minor traffic violations)
that has, or could be reasonably expected to have, an adverse impact on the
performance of the Participant’s duties to the Company or its Affiliates; or
(vi) failure by a Participant to follow the lawful directions of a superior
officer or the Board. In the event there is an employment agreement between a
Participant and the Employer defining Cause, “Cause” shall have the meaning
provided in such agreement.

 

(e)           “Change in Control” means:

 

(i)            A change in ownership or control of
the Company effected through a transaction or series of transactions (other
than an offering of Stock to the general public through a registration
statement filed with the Securities and Exchange Commission) whereby any “person”
or related “group” of “persons” (as such terms are used in Sections 13(d) and
14(d)(2) of the Exchange Act) (other than the Company or any of its

 

 

Affiliates, or an employee benefit plan maintained by
the Company or any of its Affiliates) directly or indirectly acquires
beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act)
of securities of the Company possessing more than fifty percent (50%) of the
total combined voting power of the Company’s securities outstanding immediately
after such acquisition;

 

(ii)           Following an IPO, individuals who, as
of the IPO Date, constitute the Board (the “Incumbent Board”), cease for
any reason to constitute at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to the date hereof whose
election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
person other than the Board; or

 

(iii)          the sale or disposition, in one or a
series of related transactions, of all or substantially all of the assets of
the Company to any “person” or “group” (as such terms are defined in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) other than the Company’s
Affiliates.

 

(f)            “Code” means the Internal Revenue Code of
1986, as amended from time to time, including regulations thereunder and
successor provisions and regulations thereto.

 

(g)           “Committee” means the Board or such other
committee appointed by the Board consisting of two or more individuals.

 

(h)           “Company” means TransDigm Group
Incorporated, a Delaware corporation.

 

(i)            “Disability” means, in the absence of any
employment agreement between a Participant and the Employer otherwise defining
Disability, the permanent and total disability of a person within the meaning
of Section 22(e)(3) of the Code. In the event there is an employment
agreement between a Participant and the Employer defining Disability, “Disability”
shall have the meaning provided in such agreement.

 

(j)            “Disqualifying Disposition” means any
disposition (including any sale) of Stock acquired by exercise of an Incentive
Stock Option made within the period which is (i) two years after the date the
Participant was granted the Incentive Stock Option or (ii) one year after the
date the Participant acquired Stock by exercising the Incentive Stock Option.

 

(k)           “Effective Date” shall mean the closing date
of the IPO.

 

(l)            “Eligible Person” means (i) each employee
of the Company or of any of its Affiliates, including each such person who may
also be a director of the Company and/or its Affiliates; (ii) each non-employee
director of the Company and/or its Affiliates; (iii) each other person who
provides substantial services to the Company and/or its Affiliates and who is
designated as eligible by the Committee; and (iv) any person who has been
offered employment

 

2

 

by the Company or its
Affiliates; provided, that such prospective employee may not receive any
payment or exercise any right relating to an Award until such person has
commenced employment with the Company or its Affiliates. An employee on an
approved leave of absence may be considered as still in the employ of the
Company or its Affiliates for purposes of eligibility for participation in the
Plan.

 

(m)          “Employer” means either the Company or an
Affiliate of the Company that the Participant (determined without regard to any
transfer of an Award) is principally employed by or provides services to, as
applicable.

 

(n)           “Exchange Act” means the Securities Exchange
Act of 1934, as amended from time to time, including rules thereunder and
successor provisions and rules thereto.

 

(o)           “Expiration Date” means the date upon which
the term of an Option expires, as determined under Section 5(b) hereof.

 

(p)           “Fair
Market Value” means (i) prior to an IPO, the fair market value per
share of Stock, as determined by the Board in good faith, (ii) at the time of
an IPO, the per share price offered to the public in such IPO, and (iii) after
an IPO, on any date (A) if the Stock is listed on a national securities
exchange, the mean between the highest and lowest sale prices reported as
having occurred on the primary exchange with which the Stock is listed and
traded on the date prior to such date, or, if there is no such sale on that
date, then on the last preceding date on which such a sale was reported, or (B)
if the Stock is not listed on any national securities exchange but is listed on
the Nasdaq National Market System, the average between the high bid price and
low ask price reported on the date prior to such date, or, if there is no such
sale on that date then on the last preceding date on which such a sale was
reported. If, after an IPO, the Stock is not listed on a national securities
exchange or the Nasdaq National Market System, the Fair Market Value shall mean
the amount determined by the Board in good faith to be the fair market value
per share of Stock, on a fully diluted basis.

 

(q)           “Incentive Stock Option” means an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code and the regulations promulgated thereunder.

 

(r)            “IPO” means an initial public offering of
the Stock registered under the Securities Act pursuant to an effective registration
statement.

 

(s)           “IPO Date” means the effective date of the
registration statement for the IPO.

 

(t)            “Nonqualified Stock Option” means an Option not intended
to qualify as an Incentive Stock Option.

 

(u)           “Option” means a conditional right, granted
to a Participant under Section 5 hereof, to purchase Stock at a specified price
during specified time periods. Certain Options under the Plan are intended to
qualify as “incentive stock options” meeting the requirements of Section 422 of
the Code.

 

3

 

(v)           “Option Agreement” means a written agreement
between the Company and a Participant evidencing the terms and conditions of an
individual Option grant.

 

(w)          “Participant” means an Eligible Person who
has been granted an Award under the Plan, or if applicable, such other person
or entity who holds an Award.

 

(x)            “Plan” means this TransDigm Group
Incorporated 2006 Stock Incentive Plan.

 

(y)           “Qualified Member” means a member of the
Committee who is a “Non-Employee Director” within the meaning of Rule 16b-3 and
an “outside director” within the meaning of Regulation 1.162-27(c) under Code
Section 162(m).

 

(z)            “Restricted Stock” means Stock granted to a
Participant under Section 6 hereof that is subject to certain restrictions and
to a risk of forfeiture.

 

(aa)         “Restricted Stock Agreement” means a written
agreement between the Company and a Participant evidencing the terms and
conditions of an individual Restricted Stock grant.

 

(bb)         “Securities Act” means the Securities Act of
1933, as amended from time to time, including rules thereunder and successor
provisions and rules thereto.

 

(cc)         “Stock” means the Company’s common stock,
$0.01 par value, and such other securities as may be substituted for Stock
pursuant to Section 8 hereof.

 

3.             Administration.

 

(a)           Authority of the Committee. Except as
otherwise provided below, the Plan shall be administered by the Committee. The
Committee shall have full and final authority, in each case subject to and
consistent with the provisions of the Plan, to (i) select Eligible Persons to
become Participants; (ii) grant Awards; (iii) determine the type, number of
shares of Stock subject to, and other terms and conditions of, and all other
matters relating to, Awards; (iv) prescribe Award agreements (which need not be
identical for each Participant) and rules and regulations for the
administration of the Plan; (v) construe and interpret the Plan and Award
agreements and correct defects, supply omissions, or reconcile inconsistencies
therein; and (vi) make all other decisions and determinations as the Committee
may deem necessary or advisable for the administration of the Plan. The
foregoing notwithstanding, the Board shall perform the functions of the
Committee for purposes of granting Awards under the Plan to non-employee
directors. In any case in which the Board is performing a function of the
Committee under the Plan, each reference to the Committee herein shall be
deemed to refer to the Board, except where the context otherwise requires. Any
action of the Committee shall be final, conclusive and binding on all persons,
including, without limitation, the Company, its Affiliates, Eligible Persons,
Participants and beneficiaries of Participants.

 

(b)           Manner of Exercise of Committee Authority. At any time that a member of the Committee is not a
Qualified Member, (i) any action of the Committee relating to an Award intended
by the Committee to qualify as “performance-based compensation” within the

 

4

 

meaning of Section 162(m)
of the Code and regulations thereunder may be taken by a subcommittee,
designated by the Committee or the Board, composed solely of two or more
Qualified Members; and (ii) any action relating to an Award granted or to be granted
to a Participant who is then subject to Section 16 of the Exchange Act in
respect of the Company may be taken either by such a subcommittee or by the
Committee but with each such member who is not a Qualified Member abstaining or
recusing himself or herself from such action; provided, that upon such
abstention or recusal, the Committee remains composed of two or more Qualified
Members. Such action, authorized by such a subcommittee or by the Committee
upon the abstention or recusal of such non-Qualified Member(s), shall be the
action of the Committee for purposes of the Plan. The express grant of any
specific power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the Committee.

 

(c)           Delegation. The Committee may delegate to
officers or employees of the Company or any of its Affiliates, or committees
thereof, the authority, subject to such terms as the Committee shall determine,
to perform such functions, including but not limited to administrative
functions, as the Committee may determine appropriate. The Committee may
appoint agents to assist it in administering the Plan. Notwithstanding the
foregoing or any other provision of the Plan to the contrary, any Award granted
under the Plan to any person or entity who is not an employee of the Company or
any of its Affiliates shall be expressly approved by the Committee.

 

(d)           Section 409A. The Committee shall take into account
compliance with Section 409A of the Code in connection with any grant of an
Award under the Plan, to the extent applicable.

 

4.             Shares Available Under the Plan.

 

(a)           Number of Shares Available for Delivery. Subject
to adjustment as provided in Section 8 hereof, the total number of shares
of Stock reserved and available for delivery in connection with Awards under
the Plan shall be 2,619,668. Shares of Stock delivered under the Plan shall
consist of authorized and unissued shares or previously issued shares of Stock
reacquired by the Company on the open market or by private purchase.

 

(b)           Share Counting Rules. The Committee may
adopt reasonable counting procedures to ensure appropriate counting, avoid
double counting (as, for example, in the case of tandem or substitute awards)
and make adjustments if the number of shares of Stock actually delivered
differs from the number of shares previously counted in connection with an
Award. To the extent that an Award expires or is canceled, forfeited, settled
in cash or otherwise terminated without a delivery to the Participant of the
full number of shares to which the Award related, the undelivered shares will
again be available for grant. Shares withheld in payment of the exercise price
or taxes relating to an Award and shares equal to the number surrendered in
payment of any exercise price or taxes relating to an Award shall be deemed to
constitute shares not delivered to the Participant and shall be deemed to again
be available for Awards under the Plan; provided, however, that, where shares
are withheld or surrendered more than ten years after the date of the most
recent stockholder approval of the Plan or any other transaction occurs that
would result in shares becoming available under this Section 4(b), such shares
shall not become

 

5

 

available if and to the
extent that it would constitute a material revision of the Plan subject to
stockholder approval under then applicable rules of the national securities
exchange on which the Stock is listed or the Nasdaq National Market System, as
applicable.

 

(c)           162(m) Limitation. Subject to the provisions
of Section 8, no Employee shall be eligible to be granted Options or stock
appreciation rights covering more than 1,309,834 shares of Stock during any
calendar year. This subsection (c) shall not apply until the earliest date
required by Section 162(m) of the Code and the rules and regulations
promulgated thereunder.

 

5.             Options.

 

(a)           General. Options may be granted to Eligible
Persons in such form and having such terms and conditions as the Committee
shall deem appropriate; provided, however, that Incentive Stock Options may
only be granted to Eligible Persons who are employed by the Employer. The
provisions of separate Options shall be set forth in an Option Agreement, which
agreements need not be identical.

 

(b)           Term. The term of each Option shall be set
by the Committee at the time of grant; provided, however, that no Option
granted hereunder shall be exercisable after the expiration of ten (10) years
from the date it was granted.

 

(c)           Exercise Price. The exercise price per share
of Stock for each Option shall be set by the Committee at the time of grant but
shall not be less than the Fair Market Value of a share of Stock on the date of
grant.

 

(d)           Payment for Stock. Payment for shares of
Stock acquired pursuant to Options granted hereunder shall be made in full,
upon exercise of the Options: (i) in immediately available funds in United
States dollars, or by certified or bank cashier’s check; (ii) by surrender to
the Company of shares of Stock which (A) have been
held by the Participant for at least six-months, or (B) were acquired from a
person other than the Company; (iii) by a combination of (i) and (ii); or (iv)
by any other means approved by the Committee. Anything herein to the contrary
notwithstanding, the Company shall not directly or indirectly extend or
maintain credit, or arrange for the extension of credit, in the form of a
personal loan to or for any director or executive officer of the Company
through the Plan in violation of Section 402 of the Sarbanes-Oxley Act of 2002
(“Section 402 of SOX”), and to the extent that any form of payment
would, in the opinion of the Company’s counsel, result in a violation of
Section 402 of SOX, such form of payment shall not be available.

 

(e)           Vesting. Options shall vest and become
exercisable in such manner, on such date or dates, or upon the achievement of
performance or other conditions, in each case, as may be determined by the
Committee and set forth in the Option Agreement; provided, however, that
notwithstanding any such vesting dates, the Committee may in its sole
discretion accelerate the vesting of any Option, which acceleration shall not
affect the terms and conditions of any such Option other than with respect to
vesting. Unless otherwise specifically determined by the Committee, the vesting
of an Option shall occur only while the Participant is employed or rendering
services to the Employer, and all vesting shall cease upon a Participant’s
termination

 

6

 

of employment or services
with the Employer for any reason. If an Option is exercisable in installments,
such installments or portions thereof which become exercisable shall remain
exercisable until the Option expires.

 

(f)            Transferability of Options. An Option shall
not be transferable except by will or by the laws of descent and distribution
and shall be exercisable during the lifetime of the Participant only by the
Participant. Notwithstanding the foregoing, Options shall be transferable to
the extent provided in the Option Agreement or otherwise determined by the
Committee.

 

(g)           Termination of Employment or Service. Except
as may otherwise be provided by the Committee in the Option Agreement:

 

(i)            If prior to the Expiration Date, a
Participant’s employment or service, as applicable, with the Employer
terminates for any reason other than (A) by the Employer for Cause, or (B) by
reason of the Participant’s death or Disability, (1) all vesting with respect
to the Options shall cease, (2) any unvested Options shall expire as of the
date of such termination, and (3) any vested Options shall remain exercisable
until the earlier of the Expiration Date or the date that is ninety (90) days
after the date of such termination.

 

(ii)           If prior to the Expiration Date, a
Participant’s employment or service, as applicable, with the Employer
terminates by reason of such Participant’s death or Disability, (A) all vesting
with respect to the Options shall cease, (B) any unvested Options shall expire
as of the date of such termination, and (C) any vested Options shall expire on
the earlier of the Expiration Date or the date that is twelve (12) months after
the date of such termination due to death or Disability of the Participant. In
the event of a Participant’s death, the Options shall remain exercisable by the
person or persons to whom a Participant’s rights under the Options pass by will
or the applicable laws of descent and distribution until its expiration, but
only to the extent the Options were vested by such Participant at the time of
such termination due to death.

 

(iii)          If prior to the Expiration Date, a
Participant’s employment or service, as applicable, with the Employer is
terminated by the Employer for Cause, all Options (whether or not vested) shall
immediately expire as of the date of such termination.

 

(h)           Special Provisions Applicable to Incentive Stock
Options.

 

(i)            No Incentive Stock Option may be
granted to any Participant who, at the time the option is granted, owns
directly, or indirectly within the meaning of Section 424(d) of the Code, stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of any parent or subsidiary thereof,
unless such Option (A) has an exercise price of at least one hundred ten
percent (110%) of the Fair Market Value on the date of the grant of such
Option; and (B) cannot be exercised more than five (5) years after the date it
is granted.

 

(ii)           To the extent the aggregate Fair
Market Value (determined as of the date of grant) of Stock for which Incentive
Stock Options are exercisable for the first

 

7

 

time by any Participant during any calendar year
(under all plans of the Company and its Affiliates) exceeds $100,000, such
excess Incentive Stock Options shall be treated as Nonqualified Stock Options.

 

(iii)          Each Participant who receives an
Incentive Stock Option must agree to notify the Company in writing immediately
after the Participant makes a Disqualifying Disposition of any Stock acquired
pursuant to the exercise of an Incentive Stock Option.

 

6.             Restricted
Stock.

 

(a)           General. Restricted Stock granted hereunder
shall be in such form and shall contain such terms and conditions as the
Committee shall deem appropriate. The terms and conditions of each Restricted
Stock grant shall be evidenced by a Restricted Stock Agreement, which
agreements need not be identical. Subject to the restrictions set forth in
Section 6(b), except as otherwise set forth in the applicable Restricted Stock
Agreement, the Participant shall generally have the rights and privileges of a
stockholder as to such Restricted Stock, including the right to vote such
Restricted Stock. At the discretion of the Committee, cash dividends and stock
dividends, if any, with respect to the Restricted Stock may be either currently
paid to the Participant or withheld by the Company for the Participant’s
account. A Participant’s Restricted Stock Agreement may provide that cash
dividends or stock dividends so withheld shall be subject to forfeiture to the
same degree as the shares of Restricted Stock to which they relate. Except as
otherwise determined by the Committee, no interest will accrue or be paid on
the amount of any cash dividends withheld.

 

(b)           Restrictions on Transfer. In addition to any
other restrictions set forth in a Participant’s Restricted Stock Agreement,
until such time that the Restricted Stock has vested pursuant to the terms of
the Restricted Stock Agreement, which vesting the Committee may in its sole
discretion accelerate at any time, the Participant shall not be permitted to
sell, transfer, pledge, or otherwise encumber the Restricted Stock. Notwithstanding
anything contained herein to the contrary, the Committee shall have the authority
to remove any or all of the restrictions on the Restricted Stock whenever it
may determine that, by reason of changes in applicable laws or other changes in
circumstances arising after the date of the Restricted Stock Award, such action
is appropriate.

 

(c)           Certificates. Restricted Stock granted under
the Plan may be evidenced in such manner as the Committee shall determine. If
certificates representing Restricted Stock are registered in the name of the
Participant, the Committee may require that such certificates bear an
appropriate legend referring to the terms, conditions and restrictions
applicable to such Restricted Stock, that the Company retain physical
possession of the certificates, and that the Participant deliver a stock power
to the Company, endorsed in blank, relating to the Restricted Stock. Notwithstanding
the foregoing, the Committee may determine, in its sole discretion, that the
Restricted Stock shall be held in book entry form rather than delivered to the
Participant pending the release of the applicable restrictions.

 

(d)           Termination of Employment or Service. Except
as may otherwise be provided by the Committee in the Restricted Stock
Agreement, if, prior to the time that the

 

8

 

Restricted Stock has
vested, a Participant’s employment or service, as applicable, terminates for
any reason, (i) all vesting with respect to the Restricted Stock shall cease,
and (ii) as soon as practicable following such termination, the Company shall
repurchase from the Participant, and the Participant shall sell, any unvested
shares of Restricted Stock at a purchase price equal to the original purchase
price paid for the Restricted Stock, or if the original purchase price is equal
to $0, such unvested shares of Restricted Stock shall be forfeited by the
Participant to the Company for no consideration as of the date of such
termination.

 

7.             Other
Stock-Based Awards.

 

The Committee is authorized, subject to limitations
under applicable law, to grant to Participants such other Awards that may be
denominated or payable in, valued in whole or in part by reference to, or
otherwise based on, or related to, Stock, as deemed by the Committee to be
consistent with the purposes of the Plan.

 

8.             Adjustment
for Recapitalization, Merger, etc.

 

(a)           Capitalization Adjustments. The aggregate
number of shares of Stock which may be granted or purchased pursuant to Awards
granted hereunder, the number of shares which may be granted or purchased
pursuant to Options or stock appreciation rights in any calendar year, the
number of shares of Stock covered by each outstanding Award, and the price per
share thereof in each such Award shall be equitably and proportionally adjusted
or substituted, as determined by the Committee, as to the number, price or kind
of a share of Stock or other consideration subject to such Awards (i) in the
event of changes in the outstanding Stock or in the capital structure of the
Company by reason of stock dividends, stock splits, reverse stock splits,
recapitalizations, reorganizations, mergers, consolidations, combinations,
exchanges, or other relevant changes in capitalization occurring after the date
of grant of any such Award; or (ii) in the event of any change in
applicable laws or any change in circumstances which results in or would result
in any substantial dilution or enlargement of the rights granted to, or
available for, Participants in the Plan.

 

(b)           Corporate Events. Notwithstanding the
foregoing, except as may otherwise be provided in an Award agreement, in the
event of (i) a merger or consolidation involving the Company in which the
Company is not the surviving corporation; (ii) a merger or consolidation
involving the Company in which the Company is the surviving corporation but the
holders of shares of Stock receive securities of another corporation and/or
other property, including cash; (iii) a Change in Control; or (iv) the
reorganization or liquidation of the Company (each, a “Corporate Event”),
in lieu of providing the adjustment set forth in subsection (a) above, the
Committee may, in its discretion, “cash-out” vested and/or unvested Awards by
providing that such vested and/or unvested Awards shall be cancelled as of the
consummation of such Corporate Event, and that holders of Awards will receive a
payment in respect of cancellation of their Awards based on the amount of the
per share consideration being paid for the Stock in connection with such
Corporate Event, less, in the case of Options and other Awards subject to
exercise, the applicable exercise price; provided, however, that holders of “performance
vested” Awards shall only be entitled to consideration in respect of
cancellation of such Awards to the extent that applicable performance criteria
are achieved prior to or as a result of such Corporate Event, and shall not
otherwise be entitled to payment in consideration of

 

9

 

cancelled unvested Awards.
Payments to holders pursuant to the preceding sentence shall be made in cash,
or, in the sole discretion of the Committee, in such other consideration
necessary for a holder of an Award to receive property, cash or securities as
such holder would have been entitled to receive upon the occurrence of the
transaction if the holder had been, immediately prior to such transaction, the
holder of the number of shares of Stock covered by the Award at such time.

 

(c)           Fractional Shares. Any such adjustment may
provide for the elimination of any fractional share which might otherwise
become subject to an Award.

 

9.             Use
of Proceeds.

 

The
proceeds received from the sale of Stock pursuant to the Plan shall be used for
general corporate purposes.

 

10.          Rights
and Privileges as a Stockholder.

 

Except
as otherwise specifically provided in the Plan, no person shall be entitled to
the rights and privileges of stock ownership in respect of shares of Stock
which are subject to Awards hereunder until such shares have been issued to
that person.

 

11.          Employment
or Service Rights.

 

No
individual shall have any claim or right to be granted an Award under the Plan
or, having been selected for the grant of an Award, to be selected for a grant
of any other Award. Neither the Plan nor any action taken hereunder shall be
construed as giving any individual any right to be retained in the employ or
service of the Company or an Affiliate of the Company.

 

12.          Compliance
With Laws.

 

The
obligation of the Company to deliver Stock upon vesting and/or exercise of any
Award shall be subject to all applicable laws, rules, and regulations, and to
such approvals by governmental agencies as may be required. Notwithstanding any
terms or conditions of any Award to the contrary, the Company shall be under no
obligation to offer to sell or to sell and shall be prohibited from offering to
sell or selling any shares of Stock pursuant to an Award unless such shares
have been properly registered for sale pursuant to the Securities Act with the
Securities and Exchange Commission or unless the Company has received an
opinion of counsel, satisfactory to the Company, that such shares may be
offered or sold without such registration pursuant to an available exemption
therefrom and the terms and conditions of such exemption have been fully
complied with. The Company shall be under no obligation to register for sale or
resale under the Securities Act any of the shares of Stock to be offered or
sold under the Plan or any shares of Stock issued upon exercise or settlement
of Awards. If the shares of Stock offered for sale or sold under the Plan are
offered or sold pursuant to an exemption from registration under the Securities
Act, the Company may restrict the transfer of such shares and may legend the
Stock certificates representing such shares in such manner as it deems
advisable to ensure the availability of any such exemption.

 

10

 

13.          Withholding
Obligations.

 

As a
condition to the vesting and/or exercise of any Award, the Committee may
require that a Participant satisfy, through deduction or withholding from any
payment of any kind otherwise due to the Participant, or through such other
arrangements as are satisfactory to the Committee, the minimum amount of all
Federal, state and local income and other taxes of any kind required or
permitted to be withheld in connection with such vesting and/or exercise. The
Committee, in its discretion, may permit shares of Stock to be used to satisfy
tax withholding requirements and such shares shall be valued at their Fair
Market Value as of the settlement date of the Award; provided, however,
that the aggregate Fair Market Value of the number of shares of Stock that may
be used to satisfy tax withholding requirements may not exceed the minimum
statutory required withholding amount with respect to such Award.

 

14.          Amendment
of the Plan or Awards.

 

(a)           Amendment
of Plan. The Board at
any time, and from time to time, may amend the Plan; provided, however, that
without stockholder approval, the Board shall not make any amendment to the
Plan which would increase the maximum number of shares of Stock which may be
issued pursuant to Awards under the Plan, except as contemplated by Section 8
hereof, or, following the IPO Date, which would otherwise violate the
stockholder approval requirements of the national securities exchange on which
the Stock is listed or the Nasdaq National Market System, as applicable.

 

(b)           Amendment
of Awards. The Committee, at any time, and from
time to time, may amend the terms of any one or more Awards; provided, however,
that the rights under any Award shall not be impaired by any such amendment
unless the Participant consents in writing.

 

15.          Termination
or Suspension of the Plan.

 

The
Board may suspend or terminate the Plan at any time. Unless sooner terminated,
the Plan shall terminate on the day before the tenth (10th)
anniversary of the date the Plan is adopted by the Board. No Awards may be
granted under the Plan while the Plan is suspended or after it is terminated.

 

16.          Effective
Date of the Plan.

 

The
Plan is effective as of the Effective Date.

 

17.          Miscellaneous.

 

(a)           Participants Outside of the United States. The
Committee may modify the terms of any Award under the Plan made to or held by a
Participant who is then a resident or primarily employed outside of the United
States in any manner deemed by the Committee to be necessary or appropriate in
order that such Award shall conform to laws, regulations and customs of the
country in which the Participant is then a resident or primarily employed, or
so that the value and other benefits of the Award to the Participant, as
affected by foreign tax laws and other restrictions applicable as a result of
the Participant’s residence or employment abroad, shall be comparable to the
value of such Award to a Participant who is a resident or primarily employed in
the United States. An Award may be modified under this Section 17(a) in a
manner

 

11

 

that is inconsistent with
the express terms of the Plan, so long as such modifications will not
contravene any applicable law or regulation or result in actual liability under
Section 16(b) of the Exchange Act for the Participant whose Award is modified.

 

(b)           No
Liability of Committee Members. No member of the Committee shall be
personally liable by reason of any contract or other instrument executed by
such member or on his or her behalf in his or her capacity as a member of the
Committee nor for any mistake of judgment made in good faith, and the Company
shall indemnify and hold harmless each member of the Committee and each other
employee, officer or director of the Company to whom any duty or power relating
to the administration or interpretation of the Plan may be allocated or
delegated, against any cost or expense (including counsel fees) or liability
(including any sum paid in settlement of a claim) arising out of any act or
omission to act in connection with the Plan unless arising out of such person’s
own fraud or willful bad faith; provided, however, that approval
of the Board shall be required for the payment of any amount in settlement of a
claim against any such person. The foregoing right of indemnification shall not
be exclusive of any other rights of indemnification to which such persons may
be entitled under the Company’s certificate or articles of incorporation or by-laws,
each as may be amended from time to time, as a matter of law, or otherwise, or
any power that the Company may have to indemnify them or hold them harmless.

 

(c)           Payments Following Accidents or Illness. If
the Committee shall find that any person to whom any amount is payable under
the Plan is unable to care for his or her affairs because of illness or
accident, or is a minor, or has died, then any payment due to such person or
his or her estate (unless a prior claim therefor has been made by a duly appointed
legal representative) may, if the Committee so directs the Company, be paid to
his or her spouse, child, relative, an institution maintaining or having
custody of such person, or any other person deemed by the Committee to be a
proper recipient on behalf of such person otherwise entitled to payment. Any
such payment shall be a complete discharge of the liability of the Committee
and the Company therefor.

 

(d)           Governing Law. The Plan shall be governed by
and construed in accordance with the internal laws of the State of Delaware
without reference to the principles of conflicts of laws thereof.

 

(e)           Funding.
No provision of the Plan shall require the Company, for the purpose of
satisfying any obligations under the Plan, to purchase assets or place any assets
in a trust or other entity to which contributions are made or otherwise to
segregate any assets, nor shall the Company maintain separate bank accounts,
books, records or other evidence of the existence of a segregated or separately
maintained or administered fund for such purposes. Participants shall have no
rights under the Plan other than as unsecured general creditors of the Company,
except that insofar as they may have become entitled to payment of additional
compensation by performance of services, they shall have the same rights as
other employees under general law.

 

(f)            Reliance
on Reports. Each member of the Committee and each member of the
Board shall be fully justified in relying, acting or failing to act, and shall
not be liable for having so relied, acted or failed to act in good faith, upon
any report made by the independent

 

12

 

public accountant of the
Company and its Affiliates and upon any other information furnished in
connection with the Plan by any person or persons other than such member.

 

(g)           Titles and Headings. The titles and headings
of the sections in the Plan are for convenience of reference only, and in the
event of any conflict, the text of the Plan, rather than such titles or headings,
shall control.

 

13

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