ORACLE CORP (Form: S-8, Received: 03/18/2016 16:57:30)

As filed with the Securities and Exchange Commission on March 18, 2016

Registration No.            

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM S-8

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

ORACLE CORPORATION

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   54-2185193

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

500 Oracle Parkway

Redwood City, California 94065

(Address of Principal Executive Offices, Including Zip Code)

AddThis, Inc. (formerly Clearspring Technologies, Inc.) 2005 Equity Incentive Plan, as Amended

AddThis, Inc. 2015 Equity Incentive Plan

Ravello Systems Ltd. US Share Incentive Plan, 2012

Ravello Systems Ltd. Employee Share Incentive Plan, 2011

(Full title of the plan)

Dorian Daley

Executive Vice President, General Counsel & Secretary

Oracle Corporation

500 Oracle Parkway

Redwood City, California 94065

(Name and address of agent for service)

(650) 506-7000

(Telephone number, including area code, of agent for service)

 

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 

Large accelerated filer   x    Accelerated filer   ¨
Non-accelerated filer   ¨   (Do not check if a smaller reporting company)    Smaller reporting company   ¨

 

 

CALCULATION OF REGISTRATION FEE

 

 

Title of securities

to be registered (1)

 

Amount

to be

registered (2)

 

Proposed

maximum

offering price

per share

 

Proposed

maximum

aggregate

offering price

  Amount of
registration fee

Common Stock, par value $0.001 per share, under the AddThis plans

  54,517   $23.71(3)   $1,292,598   $130.16

Common Stock, par value NIS 0.01 per share, under the Ravello Systems plans

  352,011   $2.21(4)   $777,944   $78.34

TOTAL

  406,528       $2,070,542   $208.50

 

 

(1) This Registration Statement (the “Registration Statement”) registers the issuance of the common stock of Oracle Corporation (the “Registrant”), par value $0.01 (the “Common Stock”) issuable pursuant to equity awards assumed by the Registrant as a result of (a) the consummation on January 27, 2016, of the transaction contemplated by the Agreement and Plan of Merger, dated as of December 24, 2015, by and among the Registrant, OC Acquisition LLC and Astro Acquisition Corporation, each a subsidiary of the Registrant, AddThis, Inc. and certain other parties thereto; and (b) the consummation on March 11, 2016, of the transaction contemplated by the Share Purchase Agreement, dated as of February 12, 2016, by and among the Registrant and OC Acquisition LLC, a subsidiary of the Registrant, Ravello Systems Ltd. and certain other parties thereto.
(2) Pursuant to Rule 416 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), this Registration Statement also covers an indeterminate number of additional shares that may be offered or issued as a result of stock splits, stock dividends or similar transactions.
(3) The proposed maximum offering price per share is based on $23.71, the weighted average exercise price per share of the outstanding options to purchase 54,517 shares of Common Stock in accordance with Rule 457(h)(1) promulgated under the Securities Act.
(4) The proposed maximum offering price per share is based on $2.21, the weighted average exercise price per share of the outstanding options to purchase 352,011 shares of Common Stock in accordance with Rule 457(h)(1) promulgated under the Securities Act.

 

 

 


PART I

INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS

 

Item 1. Plan Information.

The documents containing the information specified in this Item 1 will be sent or given to participants as specified by Rule 428(b)(1) under the Securities Act. In accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “Commission”) and the instructions to Form S-8, such documents are not being filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act.

 

Item 2. Registrant Information and Employee Plan Annual Information.

The documents containing the information specified in this Item 2 will be sent or given to participants as specified by Rule 428(b)(1) under the Securities Act. In accordance with the rules and regulations of the Commission and the instructions to Form S-8, such documents are not being filed with the Commission either as part of this Registration Statement or as prospectuses or prospectus supplements pursuant to Rule 424 under the Securities Act.

PART II

INFORMATION REQUIRED IN THE REGISTRATION STATEMENT

 

Item 3. Incorporation of Documents by Reference.

The following documents filed with the Commission are incorporated herein by reference:

1. The Registrant’s Annual Report on Form 10-K for the fiscal year ended May 31, 2015 filed with the Commission on June 25, 2015 pursuant to Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

2. The Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended August 31, 2015 filed with the Commission on September 18, 2015 pursuant to Section 13 of the Exchange Act; the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended November 30, 2015 filed with the Commission on December 18, 2015 pursuant to Section 13 of the Exchange Act; and the Registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended February 29, 2016 filed with the Commission on March 18, 2016 pursuant to Section 13 of the Exchange Act.

3. Each of the Registrant’s Current Reports on Form 8-K filed with the Commission pursuant to Section 13 of the Exchange Act on June 17, 2015, September 16, 2015, November 20, 2015, December 16, 2015 and March 15, 2016, only to the extent filed and not furnished.

4. The description of the Registrant’s Common Stock included in the Registrant’s registration statement on page 6 of Form S-3 (Reg. No. 333-210282), filed with the Commission on March 18, 2016, including any amendments or reports filed for the purpose of updating such descriptions.

All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Registration Statement, and prior to the filing of a post-effective amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained in this Registration Statement, or in any other subsequently filed document which also is or is deemed to be incorporated by reference in this Registration Statement, modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Registration Statement.

 

Item 4. Description of Securities.

Not applicable.


Item 5. Interests of Named Experts and Counsel.

Brian S. Higgins, who is issuing the opinion of the Registrant’s Legal Department on the legality of the Registrant’s Common Stock offered hereby, is Vice President, Associate General Counsel and Assistant Secretary of the Registrant. Mr. Higgins holds restricted stock units and employee stock options to purchase Common Stock of the Registrant.

 

Item 6. Indemnification of Directors and Officers.

As permitted by Section 102(b)(7) of the Delaware General Corporation Law, the Registrant’s Amended and Restated Certificate of Incorporation includes a provision that eliminates the personal liability of each of its directors for monetary damages for breach of such director’s fiduciary duty as a director, except for liability: (a) for any breach of the director’s duty of loyalty to the Registrant or its stockholders; (b) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law; (c) under Section 174 of the Delaware General Corporation Law; or (d) for any transaction from which the director derived an improper personal benefit. The directors’ liability will be further limited to the extent permitted by any future amendments to the Delaware General Corporation Law authorizing the further limitation or elimination of the liability of directors. In addition, as permitted by Section 145 of the Delaware General Corporation Law, the Bylaws of the Registrant provide that: (i) the Registrant is required to indemnify its directors and officers to the fullest extent permitted by Delaware law, including those circumstances in which indemnification would otherwise be discretionary; (ii) the Registrant is required to advance expenses, as incurred, to such directors and officers in connection with defending a proceeding (except that it is not required to advance expenses to a person against whom the Registrant brings a claim for breach of the duty of loyalty, failure to act in good faith, intentional misconduct, knowing violation of the law or deriving an improper personal benefit); (iii) the rights conferred in the Bylaws are not exclusive and the Registrant is authorized to enter into indemnification agreements with such directors, officers and employees; (iv) the Registrant is required to maintain director and officer liability insurance to the extent it determines that such insurance is reasonably available; and (v) the Registrant may not retroactively amend the Bylaw provisions in a way that is adverse to such directors and officers.

The Registrant has entered into indemnification agreements with its directors and a number of its officers containing provisions which provide for the indemnification of such directors or officers, as applicable, to the fullest extent permitted by Delaware law.

The indemnification provisions in the Bylaws, and any indemnification agreements entered into between the Registrant and its directors or officers, may be sufficiently broad to permit indemnification of the Registrant’s directors and officers for liabilities arising under the Securities Act.

 

Item 7. Exemption From Registration Claimed.

Not applicable.


Item 8. Exhibits.

 

Exhibit

No.

  

Description of Exhibit

  5.1    Opinion of Counsel
23.1    Consent of Counsel (included in Exhibit 5.1)
23.2    Consent of Independent Registered Public Accounting Firm
24.1    Power of Attorney (included on Signature Page)
99.1    AddThis, Inc. (formerly Clearspring Technologies, Inc.) 2005 Equity Incentive Plan, as Amended
99.2    AddThis, Inc. 2015 Equity Incentive Plan
99.3    Ravello Systems Ltd. US Share Incentive Plan, 2012
99.4    Ravello Systems Ltd. Employee Share Incentive Plan, 2011


Item 9. Undertakings.

 

a. The undersigned Registrant hereby undertakes:

 

  1. To file, during any period in which offers or sales are being made pursuant to this Registration Statement, a post-effective amendment to this Registration Statement:

 

  (i) To include any prospectus required by Section 10(a)(3) of the Securities Act;

 

  (ii) To reflect in the prospectus any facts or events arising after the effective date of this Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this Registration Statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which is registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in “Calculation of Registration Fee” table in the effective Registration Statement;

 

  (iii) To include any material information with respect to the plan of distribution not previously disclosed in this Registration Statement or any material change to such information in this Registration Statement;

provided, however, that paragraphs (i) and (ii) above do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act that are incorporated by reference in this Registration Statement.

 

  2. That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

  3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

 

b. The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

c. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the provisions described under “Item 6—Indemnification of Directors and Officers”, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.


SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Redwood City, State of California, on this 18 th day of March, 2016.

 

O RACLE C ORPORATION
By:  

/s/ DORIAN DALEY

Name:   Dorian Daley
Title:   Executive Vice President, General Counsel and Secretary

POWER OF ATTORNEY

Each person whose signature appears below constitutes and appoints Safra A. Catz and Dorian Daley, and each of them, his or her true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him or her and in his or her name, place, and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) and additions to this Registration Statement, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or their substitute or substitutes may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature

  

Title

 

Date

/s/ SAFRA A. CATZ

Safra A. Catz

  

Chief Executive Officer and Director

(Principal Executive and Financial Officer)

  March 18, 2016

/s/ MARK V. HURD

Mark V. Hurd

  

Chief Executive Officer and Director

(Principal Executive Officer)

  March 18, 2016

/s/ WILLIAM COREY WEST

William Corey West

   Executive Vice President, Corporate Controller and Chief Accounting Officer (Principal Accounting Officer)   March 18, 2016

/s/ LAWRENCE J. ELLISON

Lawrence J. Ellison

  

Chairman of the Board of Directors,

Chief Technology Officer and Director

  March 18, 2016

/s/ JEFFREY O. HENLEY

Jeffrey O. Henley

   Vice Chairman of the Board of Directors and Director   March 18, 2016

/s/ JEFFREY S. BERG

Jeffrey S. Berg

   Director   March 18, 2016

/s/ H. RAYMOND BINGHAM

H. Raymond Bingham

   Director   March 18, 2016

/s/ MICHAEL J. BOSKIN

Michael J. Boskin

   Director   March 18, 2016


/s/ BRUCE R. CHIZEN

Bruce R. Chizen

   Director   March 18, 2016

/s/ GEORGE H. CONRADES

George H. Conrades

   Director   March 18, 2016

/s/ HECTOR GARCIA-MOLINA

Hector Garcia-Molina

   Director   March 18, 2016

/s/ RENÉE J. JAMES

Renée J. James

   Director   March 18, 2016

/s/ LEON E. PANETTA

Leon E. Panetta

   Director   March 18, 2016

/s/ NAOMI O. SELIGMAN

Naomi O. Seligman

   Director   March 18, 2016


EXHIBIT INDEX

 

Exhibit
No.

  

Description of Exhibit

  5.1    Opinion of Counsel
23.1    Consent of Counsel (included in Exhibit 5.1)
23.2    Consent of Independent Registered Public Accounting Firm
24.1    Power of Attorney (included on Signature Page)
99.1    AddThis, Inc. (formerly Clearspring Technologies, Inc.) 2005 Equity Incentive Plan, as Amended
99.2    AddThis, Inc. 2015 Equity Incentive Plan
99.3    Ravello Systems Ltd. US Share Incentive Plan, 2012
99.4    Ravello Systems Ltd. Employee Share Incentive Plan, 2011

Exhibit 5.1

[ORACLE LETTERHEAD]

March 18, 2016

Oracle Corporation

500 Oracle Parkway

Redwood City, California 94065

Ladies and Gentlemen:

I am Vice President, Associate General Counsel and Assistant Secretary of Oracle Corporation (the “Company”), and I offer this opinion in connection with the Registration Statement on Form S-8 (the “Registration Statement”) to be filed with the Securities and Exchange Commission on or about March 18, 2016, in connection with the registration under the Securities Act of 1933, as amended, of 406,528 shares of the Common Stock of the Company, par value $0.01 (the “Shares”), of which 54,517 are issuable pursuant to equity awards assumed by the Company pursuant to the terms of the Agreement and Plan of Merger, dated as of December 24, 2015 (the “AddThis Merger Agreement”), by and among the Company, OC Acquisition LLC and Astro Acquisition Corporation, each a subsidiary of the Company, AddThis, Inc. (“AddThis”) and certain other parties thereto; and of which 352,011 are issuable pursuant to equity awards assumed by the Company pursuant to the terms of the Share Purchase Agreement, dated as of February 12, 2016 (together with the AddThis Merger Agreement, the “Merger Agreements”), by and among the Company and OC Acquisition LLC, a subsidiary of the Company, Ravello Systems Ltd. (“Ravello”) and certain other parties thereto. Pursuant to the Merger Agreements, the Company assumed outstanding equity awards of AddThis under the AddThis, Inc. (formerly Clearspring Technologies, Inc.) 2005 Equity Incentive Plan, as Amended and the AddThis, Inc. 2015 Equity Incentive Plan (together, the “AddThis Plans”) and outstanding equity awards of Ravello under the Ravello Systems Ltd. US Share Incentive Plan, 2012 and the Ravello Systems Ltd. Employee Share Incentive Plan, 2011 (each, together with the AddThis Plans, a “Plan”).

I have examined such documents and such matters of fact and law as I have deemed necessary to examine relating to the issuance of the Shares. It is my opinion that the Shares, when delivered pursuant to the terms of the applicable Plan, will be validly issued, fully paid and nonassessable.

I consent to the use of this opinion as an exhibit to the Registration Statement and further consent to all references to myself in the Registration Statement and any amendments thereto.

 

Sincerely,

/s/ BRIAN S. HIGGINS

Brian S. Higgins
Vice President, Associate General Counsel and Assistant Secretary

Exhibit 23.2

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the AddThis, Inc. (formerly Clearspring Technologies, Inc.) 2005 Equity Incentive Plan, as Amended, the AddThis, Inc. 2015 Equity Incentive Plan, the Ravello Systems Ltd. US Share Incentive Plan, 2012 and the Ravello Systems Ltd. Employee Share Incentive Plan, 2011, of our reports dated June 25, 2015, with respect to the consolidated financial statements and schedule of Oracle Corporation and the effectiveness of internal control over financial reporting of Oracle Corporation included in its Annual Report (Form 10-K) for the year ended May 31, 2015, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

San Jose, California

March 18, 2016

Exhibit 99.1

CLEARSPRING TECHNOLOGIES, INC.

Amended and Restated

2005 Equity Incentive Plan

 

1. Purpose of the Plan.

The purpose of the Clearspring Technologies, Inc. 2005 Equity Incentive Plan (the “ Plan ”) is to promote the interests of Clearspring Technologies, Inc. and its subsidiaries (hereinafter referred to, either individually or collectively, as the “ Company ”) and its stockholders by (i) attracting and retaining employees, officers, directors, consultants and advisors of outstanding ability, (ii) motivating such persons, by means of performance-related incentives, to achieve long-range performance goals, and (iii) enabling such persons to participate in the long-term growth and financial success of the Company. The effective date of the Plan is May 29, 2005. For purposes of this Plan, “ subsidiary ” shall mean any company (whether a corporation, partnership, joint venture or other form of entity) in which the Company, or a corporation in which the Company owns a majority of the shares of capital stock, directly or indirectly, owns an equity interest of more than fifty percent (50%), except that, solely with respect to determining whether options issued to employees of a subsidiary may be Incentive Stock Options (as defined in Section 3), the term “ subsidiary ” shall have the same meaning as the term “ subsidiary corporation ” as defined in Section 424(f) of the Internal Revenue Code of 1986, as amended (the “ Code ”).

 

2. Administration.

(a) Subject to the following paragraph, the Plan shall be administered by the Company’s Board of Directors (the “ Board ”) or by a Compensation Committee (the “ Compensation Committee ”) of the Board. If the Board appoints a Compensation Committee, such Compensation Committee shall be deemed to have been delegated the authority to administer the Plan (unless the Board determined otherwise), and shall be empowered to take all actions reserved to the Board under the Plan. The Board is authorized to interpret the Plan, to prescribe, amend and rescind rules and regulations to further the purposes of the Plan, and to make all other determinations necessary for the administration of the Plan. All such actions by the Board shall be conclusive, final and binding on all recipients of awards hereunder (“ participants ”).

(b) To the extent required by applicable laws, regulations or the listing standards of any securities exchange or stock market on which the Company’s shares of common stock, par value $.001 per share (“ Common Stock ”), are listed or traded, the Compensation Committee shall consist solely of Board members who qualify as (i) “ Non-Employee Directors ” as defined under Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “ Exchange Act ”) and (ii) “ independent directors ” within the meaning of such laws, regulations or listing standards. In addition, the Compensation Committee shall consist solely of “ outside directors ” as defined under Section 162(m) or any successor provision of the Code and applicable Treasury regulations thereunder, if and to the extent such qualification is necessary so that awards made under the Plan or the exercise of rights thereunder will qualify for any tax or other material benefit to participants or the Company and its subsidiaries under applicable law.


3. Awards.

Awards under the Plan may be in the form of options which qualify as “incentive stock options” within the meaning of Code Section 422 or any successor provision (“ Incentive Stock Options ”), options which do not so qualify (“ Nonqualified Options ” and, collectively with Incentive Stock Options, “ Options ”), stock which is subject to certain forfeiture risks and restrictions on transferability (“ Restricted Stock ”), or stock delivered upon vesting of units (“ Restricted Stock Units ”). Options, Restricted Stock, and Restricted Stock Units are collectively referred to as “ Awards .” Incentive Stock Options may be granted only to employees of the Company or its subsidiaries. Each grant of an Option shall be designated in the applicable “Grant Agreement” (as defined in Section 5) as an Incentive Stock Option or a Nonqualified Option, as appropriate. If, notwithstanding its designation as an Incentive Stock Option, all or a portion of any Option does not qualify under the Code as an Incentive Stock Option, the portion which does not so qualify shall be treated for all purposes hereunder as a Nonqualified Option. The persons to whom Options are granted under the Plan are hereinafter referred to as “ Optionees .” The persons to whom Restricted Stock or Restricted Stock Units are granted under the Plan are hereinafter referred as to “ Grantees .”

 

4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 1,568,014, shares after giving effect to the stock split consummated on or about April 18, 2006. The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan. At any time following registration by the Company of its Common Stock under Section 12 of the Exchange Act, no participant shall receive Awards in respect of more than 100,000 shares of Common Stock in any calendar year (subject to adjustment as provided in Section 9).

 

5. Participants.

The Board shall determine and designate from time to time those employees, officers, directors, consultants and advisors of the Company or its subsidiaries who shall receive Awards under the Plan and the number of shares of Common Stock to be covered by each such Award; provided , that any consultants or advisors who receive Awards under the Plan render bona fide services to the Company and its subsidiaries that are not in connection with the offer or sale of securities in a capital-raising transaction. In making its determinations, the Board shall take into account the present and potential contributions of the respective individuals to the success of the Company and such other factors as the Board shall deem relevant in furtherance of the purposes of the Plan. Each Award shall be evidenced by a written agreement or grant form (“ Grant Agreement ”) as the Board shall approve from time to time.


6. Fair Market Value.

For all purposes under the Plan, the term “ Fair Market Value ” shall mean, as of any applicable date, (i) if the principal securities market on which the Common Stock is traded is a national securities exchange or The Nasdaq National Market (“ NNM ”), the closing price of the Common Stock on such exchange or NNM, as the case may be, or if no sale of the Common Stock shall have occurred on such date, on the next preceding date on which there was a reported sale; (ii) if the Common Stock is not traded on a national securities exchange or NNM, the closing price on such date as reported by The Nasdaq SmallCap Market, or if no sale of the Common Stock shall have occurred on such date, on the next preceding date on which there was a reported sale; (iii) if the principal securities market on which the Common Stock is traded is not a national securities exchange, NNM or The Nasdaq SmallCap Market, the average of the bid and asked prices reported by the National Quotation Bureau, Inc.; or (iv) if the price of the Common Stock is not so reported, the Fair Market Value of the Common Stock as determined in good faith by the Board.

 

7. Grants of Options.

(a) Exercise Price of Options . Incentive Stock Options shall be granted at an exercise price of not less than 100% of the Fair Market Value on the date of grant; provided , however , that Incentive Stock Options granted to a participant who at the time of such grant owns (within the meaning of Code Section 424(d)) more than 10% of the voting power of all classes of stock of the Company (a “ 10% Holder ”) shall be granted at an exercise price of not less than 110% of the Fair Market Value on the date of grant. Nonqualified Options shall be granted at an exercise price as determined in each case by the Board (provided, that if and to the extent required in order to avoid classification of such grants as deferred compensation subject to Code Section 409A, Nonqualified Options shall be granted at an exercise price of not less than 100% of the Fair Market Value on the date of grant).

(b) Term and Termination of Options .

(1) The Board shall determine the term within which each Option may be exercised, in whole or in part, provided , that (i) such term shall not exceed 10 years from the date of grant, (ii) the term of an Incentive Stock Option granted to a 10% Holder shall not exceed 5 years from the date of grant, and (iii) the aggregate Fair Market Value (determined on the date of grant) of Common Stock with respect to which Incentive Stock Options granted to a participant under the Plan or any other plan of the Company and its subsidiaries become exercisable for the first time in any single calendar year shall not exceed $100,000.

(2) Unless otherwise determined by the Board, all rights to exercise Options shall terminate on the first to occur of (i) the scheduled expiration date as set forth in the applicable Grant Agreement, (ii) 90 days following the date of termination of employment for any reason other than the participant’s death or permanent disability (as defined in Code Section 22(e)(3)),


(iii) 1 year following the date of termination of employment or provision of services by reason of the participant’s death or permanent disability (as defined in Code Section 22(e)(3)), or (iv) as may be otherwise provided in Section 13; provided , however , that in the event that a participant ceases to be employed by or to provide services to the Company and its subsidiaries due to a termination for “Cause” (as defined in Section 7(b)(3)), all rights to exercise Options held by such participant shall terminate immediately as of the date such participant ceases to be employed by or to provide services to the Company and its subsidiaries. Unless otherwise determined by the Board, vesting of Options ceases immediately upon termination of employment or services for any reason, and any portion of an Option that has not vested on or before the date of such termination is forfeited on such date.

(3) As used in this Plan, the term “ Cause ” shall mean a finding by the Board that the participant has engaged in conduct that is fraudulent, disloyal, criminal or injurious to the Company or its subsidiaries, including, without limitation, embezzlement, theft, commission of a felony or dishonesty in the course of his or her employment or service, the disclosure of trade secrets or confidential information of the Company or its subsidiaries to persons not entitled to receive such information, or any other act constituting willful misconduct in the course of his or her employment or service.

(c) Payment for Shares . Full payment for shares purchased upon exercise of Options granted under the Plan shall be made at the time the Options are exercised in whole or in part. Payment of the purchase price shall be made in cash or in such other form as the Board may approve at the time of exercise, which may include, at the Board’s discretion, (i) by the participant’s delivery to the Company of a promissory note containing such terms as the Board may determine, (ii) by the participant’s delivery to the Company of shares of Common Stock that have been held by the participant for at least six months prior to exercise of the Options, valued at the Fair Market Value of such shares on the date of exercise, or (iii) if the Common Stock is publicly traded, pursuant to a cashless exercise arrangement with a broker on such terms as the Board may determine; provided , however , that if payment is made pursuant to clause (i), the then par value of the purchased shares shall be paid in cash if required by applicable law or otherwise deemed appropriate by the Board. No shares of Common Stock shall be issued to the participant until such payment has been made, and a participant shall have none of the rights of a stockholder with respect to Options held by such participant.

(d) Other Terms and Conditions . The Board shall have the discretion to determine terms and conditions, consistent with the Plan that will be applicable to Options, including, without limitation, the date on which Options shall become exercisable and performance-based criteria for acceleration of the date on which certain Options shall become exercisable. Options granted to the same or different participants, or at the same or different times, need not contain similar provisions.

(e) Substitution of Options . Options may be granted under the Plan from time to time in substitution for stock options of another entity (“ Acquired Company ”) in connection with the merger or consolidation of the Acquired Company with the Company or its subsidiaries, the acquisition by the Company or its subsidiaries of all or a portion of the assets of the Acquired Company, or the acquisition of stock of the Acquired Company such that the Acquired Company becomes a subsidiary of the Company.


8. Grants of Restricted Stock and Restricted Stock Units.

The Board may award shares of Common Stock to participants under an Award of Restricted Stock and/or Restricted Stock Units, upon such terms as the Board deems applicable, including the provisions set forth below:

(a) General Requirements . Shares of Common Stock issued or transferred pursuant to an Award of Restricted Stock and/or Restricted Stock Units may be issued or transferred for consideration or for no consideration, and subject to restrictions or no restrictions, as determined by the Board. The Board may establish conditions under which restrictions on shares of Restricted Stock and/or Restricted Stock Units shall lapse over a period of time or according to such other criteria (including performance-based criteria) as the Board deems appropriate. The period of time during which shares of Restricted Stock and/or Restricted Stock Units remain subject to restrictions will be designated in the Grant Agreement as the “ Restricted Period .”

(b) Number of Shares . The Board shall determine the number of shares of Common Stock to be issued pursuant to an Award of Restricted Stock and/or Restricted Stock Units and the restrictions applicable to the shares subject to such Award.

(c) Restrictions on Transfer and Legend on Stock Certificate . During the Restricted Period, subject to such exceptions as the Board may deem appropriate, a Grantee may not sell, assign, transfer, donate, pledge or otherwise dispose of the shares of Restricted Stock or Restricted Stock Units. Each certificate for a share or shares of Restricted Stock shall contain a legend giving appropriate notice of the applicable restrictions. The Grantee shall be entitled to have the legend removed from the stock certificate covering the shares of Restricted Stock subject to restrictions when all restrictions on such shares lapse. The Board may determine that the Company will not issue certificates for shares of Restricted Stock until all restrictions on such shares lapse, or that the Company will retain possession of certificates for shares of Restricted Stock until all restrictions on such shares lapse.

(d) Right to Vote and to Receive Dividends . During the Restricted Period, except as otherwise set forth in the applicable Grant Agreement, the Grantee shall have the right to vote shares of Restricted Stock and to receive any dividends or other distributions paid on such shares of Restricted Stock, subject to any restrictions deemed appropriate by the Board. The Board may determine in its discretion with respect to any Award of Restricted Stock Units that, in the event that dividends are paid on shares of Common Stock, an amount equal to the dividend paid on each such share shall be credited to the shares subject to Award of Restricted Stock Units (“ Dividend Credits ”). Any Dividend Credits shall be paid to the Grantee if and when the restrictions with respect to such Restricted Stock Units lapse as set forth in Section 9(e).

(e) Lapse of Restrictions . All restrictions imposed on Restricted Stock and/or Restricted Stock Units shall lapse upon the expiration of the applicable Restricted Period and the satisfaction of all conditions imposed by the Board (the date on which restrictions lapse as to any shares of Restricted Stock or Restricted Stock Units, the “ Vesting Date ”). The Board may determine, as to any grant of Restricted Stock and/or Restricted Stock Units, that the restrictions shall lapse without regard to any Restricted Period. Upon the lapse of restrictions with respect to any Restricted Stock Units, the value of such Restricted Stock Units shall be paid to the Grantee


in shares of Common Stock. For purposes of the preceding sentence, each Restricted Stock Unit as to which restrictions have lapsed shall have a value equal to the Fair Market Value as of the date on which restrictions with respect to such Restricted Stock Units lapse.

 

9. Adjustments to Reflect Capital Changes.

The number and kind of shares subject to outstanding Awards, the exercise price applicable to Options previously granted, and the number and kind of shares subsequently available to be granted under the Plan shall be appropriately adjusted to reflect any stock dividend, stock split, combination or exchange of shares or other change in capitalization with a similar substantive effect upon the Plan or grants under the Plan. The Board shall have the power and sole discretion to determine the nature and amount of the adjustment to be made in each case. Any adjustment made pursuant to this Section 9 shall be final and binding on all participants.

 

10. Right of First Refusal; Right to Repurchase.

(a) At any time prior to registration by the Company of its Common Stock under Section 12 of the Exchange Act, the Company shall have a right of first refusal with respect to any proposed sale or other disposition by participants (and their successors in interest by purchase, gift or other mode of transfer) of any shares of Common Stock issued to them under the Plan which are transferable. This right of first refusal shall be exercisable by the Company in accordance with the terms and conditions established by the Board.

(b) At any time prior to registration by the Company of its Common Stock under Section 12 of the Exchange Act, in the case of any participant whose employment or service is terminated for Cause, or where the participant has, in the Board’s reasonable determination, taken any action prior to or following his termination of employment or service which would have constituted grounds for a termination for cause, the Company shall have the right, exercisable at any time and from time to time thereafter, to repurchase from the participant (or any successor in interest by purchase, gift or other mode of transfer) any shares of Common Stock issued to such participant under the Plan for the purchase price paid by the participant for such shares of Common Stock (or the Fair Market Value of such Common Stock at the time of repurchase, if lower). If such shares of Common Stock were issued to such participant without payment of any purchase price, the Company shall have the right, exercisable at any time and from time to time thereafter, to demand that the participant (or any successor in interest by purchase, gift or other mode of transfer) surrender such shares to the Company without payment.

 

11. Definition of Change of Control.

For purposes of this Plan, a “ Change of Control ” shall mean the occurrence of any of the following events:

(a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act), other than the Company or any subsidiary, affiliate (within the meaning of Rule 144 promulgated under the Securities Act of 1933, as amended) or employee benefit plan of the Company, of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of the combined


voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the “ Voting Securities ”) (other than an acquisition pursuant to a bona fide equity financing of the Company for capital raising purposes); or

(b) a reorganization, merger, consolidation or recapitalization of the Company (a “ Business Combination ”), other than a Business Combination in which more than 50% of the combined voting power of the outstanding voting securities of the surviving or resulting entity immediately following the Business Combination is held by the persons who, immediately prior to the Business Combination, were the holders of the Voting Securities; or

(c) a complete liquidation or dissolution of the Company, or a sale of all or substantially all of the assets of the Company.

 

12. Consequences of a Change of Control.

(a) Unless otherwise determined in its discretion by the Board, upon a Change of Control, any Options shall be assumed (on substantially the same vesting or other terms) by the Acquiring Corporation (as defined below) or parent thereof or replaced with a comparable option with respect to shares of the capital stock, or equity equivalent instrument, of the Acquiring Corporation or parent thereof, or other comparable rights (such assumed and comparable options and rights, together, the “ Replacement Rights ”), and each share of Restricted Stock and each Restricted Stock Unit shall be converted to a comparable restricted grant of capital stock or stock units, or equity equivalent instrument, of the Acquiring Corporation or parent thereof or other comparable restricted property or rights. The term “ Acquiring Corporation ” means the surviving, continuing, successor or purchasing corporation, as the case may be.

(b) The Board may determine, in its discretion, that in lieu of, or in addition to, the issuance of Replacement Rights, as contemplated in (a) above, any or all of the following may occur upon a Change of Control with respect to any or all of the then-outstanding Awards: (i) all or a specified percentage of the outstanding Options which have been granted under the Plan and which are not exercisable as of the effective date of the Change of Control shall automatically accelerate and become exercisable immediately prior to the effective date of the Change of Control, and all restrictions and conditions on any Restricted Stock or Restricted Stock Units shall lapse upon the effective date of the Change of Control; (ii) in lieu of the issuance of Replacement Rights, holders of outstanding Options which are exercisable immediately prior to a Change of Control (including any that become exercisable under this Section 12(b)) may be required to surrender them in exchange for a payment by the Company, in cash or Common Stock as determined by the Board, of an amount equal to the amount (if any) by which the then Fair Market Value of Common Stock subject to unexercised Options exceeds the exercise price thereof, with such payment to take place as of the date of the Change of Control or such other date as the Board may prescribe; (iii) Options which are not exercised prior to the date specified in a notice to Participants in advance of the Change of Control shall terminate; or (iv) such other action as the Board may deem appropriate. The Board’s determination shall be set forth in the applicable Grant Agreements or in a resolution duly adopted by the Board, the terms of which shall be incorporated by reference into each applicable Grant Agreement and made a part thereof.


(c) Any Options that are not assumed or replaced by Replacement Rights, exercised, or cashed out prior to or concurrent with a Change of Control (including, without limitation, any Options that are not exercisable as of the effective date of the Change of Control) will terminate effective upon the Change of Control or at such other time as the Board deems appropriate, unless otherwise expressly provided in any applicable Grant Agreement.

 

13. Transferability of Awards.

Unless otherwise determined by the Board, Awards granted under the Plan shall not be transferable other than by will or the laws of descent and distribution and are exercisable during a participant’s lifetime only by the participant.

 

14. Withholding.

The Company shall have the right to withhold from any (a) Award, (b) payment due or transfer made under any Award or under the Plan or (c) compensation or other amount owing to a participant, the amount (in cash, shares or other property) of any applicable withholding or other taxes in respect of an Award, its exercise, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Board to satisfy all obligations for the payment of such taxes. A participant, with the approval of the Board, may satisfy the obligation set forth in this Section 14, in whole or in part, by (x) directing the Company to withhold such number of shares of Common Stock otherwise issuable in respect of an Award having an aggregate Fair Market Value on the date on which withholding is required equal to the amount of tax required to be withheld, or (y) delivering shares of Common Stock of the Company having an aggregate Fair Market Value equal to the amount required to be withheld on any date. The Board may, in its sole discretion, require payment by the participant in cash of any such withholding obligation and may disapprove any election or delivery or may suspend or terminate the right to make elections or deliveries under this Section 14.

 

15. Construction of the Plan.

The validity, construction, interpretation, administration and effect of the Plan and of its rules and regulations, and rights relating to the Plan, shall be determined solely by the Board. Any determination by the Board shall be final and binding on all participants. The Plan shall be governed in accordance with the laws of the jurisdiction of the Company’s organization, without regard to the conflict of law provisions of such laws.

 

16. No Right to Award; No Right to Employment.

No person shall have any claim of right to be granted an Award under the Plan. Neither the Plan nor any action taken hereunder shall be construed as giving any employee any right to be retained in the employ of the Company or as giving any consultant, advisor or director of the Company any right to continue to serve in such capacity.

 

17. Grants Not Includable for Benefit Purposes.

Income recognized by a participant pursuant to the provisions of the Plan shall not be included in the determination of benefits under any employee pension benefit plan (as such term


is defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended) or group insurance or other benefit plans applicable to the participant which are maintained by the Company or any of its subsidiaries, except as may be provided under the terms of such plans or determined by resolution of the Board.

 

18. No Strict Construction.

No rule of strict construction shall be implied against the Company, the Board or any other person in the interpretation of any of the terms of the Plan, any Award made under the Plan or any rule or procedure established by the Board.

 

19. Captions.

All Section headings used in the Plan are for convenience only, do not constitute a part of the Plan, and shall not be deemed to limit, characterize or affect in any way any provisions of the Plan, and all provisions of the Plan shall be construed as if no captions had been used in the Plan.

 

20. Sever ability.

Whenever possible, each provision in the Plan and every grant under the Plan shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Plan or any grant under the Plan shall be held to be prohibited by or invalid under applicable law, then such provision shall be deemed amended to accomplish the objectives of the provision as originally written to the fullest extent permitted by law, and all other provisions of the Plan and every other grant under the Plan shall remain in full force and effect.

 

21. Legends.

All certificates for Common Stock delivered under the Plan shall be subject to such transfer and other restrictions as the Board may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange or quotation system upon which the Common Stock is then listed or quoted and any applicable federal or state securities laws, and the Board may cause a legend or legends to be put on any such certificates to make appropriate references to such restrictions.

 

22. Amendment.

The Board may, by resolution, amend or revise the Plan, except that such action shall not be effective without stockholder approval if stockholder approval is required to maintain the compliance of the Plan and/or grants made to directors, executive officers or other persons with Rule 16b-3 promulgated under the Exchange Act or any successor rule, or the rules and regulations of any securities exchange or stock market on which the Company’s securities are traded. The Board may not modify any Awards previously granted under the Plan in a manner adverse to the holders thereof without the consent of such holders, except in accordance with the provisions of Sections 9, 12, 23 or 24.


23. Modification for Awards Outside the U.S.

The Board may, without amending the Plan, determine the terms and conditions applicable to Awards to participants who are foreign nationals or employed outside the United States in a manner otherwise inconsistent with the Plan if the Board deems such terms and conditions necessary in order to recognize differences in local law or regulations, tax policies or customs.

 

24. Compliance With Code Section 409A.

To the extent applicable, it is intended that Awards under this Plan comply with the provisions of Section 409A of the Code. This Plan and all Awards hereunder shall be administered in a manner consistent with this intent, and any provision that would cause the Plan or any Award to fail to satisfy Section 409A of the Code shall have no force and effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Board without the consent of the participant).

 

25. Market Standoff Requirement.

In connection with any underwritten public offering of its Common Stock (“ Offering ”), participants shall not be permitted to sell, make any short sale of, loan, grant any option for the purchase of, or otherwise directly or indirectly dispose of any Common Stock delivered under the Plan without the prior written consent of the Company or such underwriters, as the case may be, for such period of time (of at least 180 days) from the effective date of the registration statement with respect to such Offering as may be requested by the Company or such managing underwriters and to execute an agreement reflecting the foregoing as may be requested by the underwriters in connection with such Offering.

 

26. Termination of Plan.

The Plan shall terminate on May 29, 2015 unless it is earlier terminated by the Board. Termination of the Plan shall not affect previous Awards under the Plan.


F IRST A MENDMENT TO

C LEARSPRING T ECHNOLOGIES , I NC .

2005 E QUITY I NCENTIVE P LAN

W HEREAS , C LEARSPRING T ECHNOLOGIES , I NC . , a corporation organized under the laws of the State of Delaware (the “ Company ) established the Company’s 2005 Equity Incentive Plan (the “ Plan ) by an original instrument adopted by the Company on May 29, 2005; and

W HEREAS , the Plan currently provides for 1,568,014 shares of Common Stock to be reserved for issuance under the Plan; and

W HEREAS , the Company now wishes to amend the Plan to increase by 300,000 the number of shares of Common Stock reserved for issuance under the Plan.

N OW T HEREFORE , effective immediately, the Plan is amended as follows:

 

  1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  “4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 1,868,014 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan.”

In all other respects the Plan remains the same.

*****


I N W ITNESS W HEREOF , the Company has caused this Amendment to the Plan to be executed this 12th day of October, 2006.

 

C LEARSPRING T ECHNOLOGIES , I NC .
By:  

/s/ Christopher Marentis

  Christopher Marentis
  Chief Executive Officer

 

[Signature page to First Amendment to

Clearspring Technologies, Inc. 2005 Equity Incentive Plan]


S ECOND A MENDMENT TO

C LEARSPRING T ECHNOLOGIES , I NC .

2005 E QUITY I NCENTIVE P LAN

W HEREAS , C LEARSPRING T ECHNOLOGIES , I NC . , a corporation organized under the laws of the State of Delaware (the “ Company ”) established the Company’s 2005 Equity Incentive Plan (the “ Plan ) by an original instrument adopted by the Company on May 29, 2005; and

W HEREAS , the Plan currently provides for 1,868,014 shares of Common Stock to be reserved for issuance under the Plan; and

W HEREAS , the Company now wishes to amend the Plan to increase by 476,656 the number of shares of Common Stock reserved for issuance under the Plan.

N OW T HEREFORE , effective immediately, the Plan is amended as follows:

 

  1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  “4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 2,344,670 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable’ in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan.”

In all other respects the Plan remains the same.

*****


I N W ITNESS W HEREOF , the Company has caused this Second Amendment to the Plan to be executed this 7th day of May, 2007.

 

C LEARSPRING T ECHNOLOGIES , I NC .
By:  

/s/ Christopher Marentis

  Christopher Marentis
  Chief Executive officer


S ECOND [ SIC ]A MENDMENT TO

C LEARSPRING T ECHNOLOGIES , I NC .

2005 E QUITY I NCENTIVE P LAN

W HEREAS , C LEARSPRING T ECHNOLOGIES , I NC . , a corporation organized under the laws of the State of Delaware (the “ Company ”) established the Company’s 2005 Equity Incentive Plan (the “ Plan ”) by an original instrument adopted by the Company on May 29, 2005; and

W HEREAS , the Plan currently provides for 2,344,670 shares of Common Stock to be reserved for issuance under the Plan; and

W HEREAS , the Company now wishes to amend the Plan to increase by 500,000 the number of shares of Common Stock reserved for issuance under the Plan.

N OW T HEREFORE , effective immediately, the Plan is amended as follows:

1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  “4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 2,844,670 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan.”

In all other respects the Plan remains the same.

*****


I N W ITNESS W HEREOF , the Company has caused this Second Amendment to the Plan to be executed this 14th day of September, 2007.

 

C LEARSPRING T ECHNOLOGIES , I NC .
By:  

/s/ Jay Rappaport

  Jay Rappaport
  President


S ECOND [ SIC ] A MENDMENT TO

C LEARSPRING T ECHNOLOGIES , I NC .

2005 E QUITY I NCENTIVE P LAN

W HEREAS , C LEARSPRING T ECHNOLOGIES , I NC . , a corporation organized under the laws of the State of Delaware (the “ Company ”) established the Company’s 2005 Equity Incentive Plan (the “ Plan ”) by an original instrument adopted by the Company on May 29, 2005; and

W HEREAS , the Plan currently provides for 2,844,670 shares of Common Stock to be reserved for issuance under the Plan; and

W HEREAS , the Company now wishes to amend the Plan to increase by 500,000 the number of shares of Common Stock reserved for issuance under the Plan.

N OW T HEREFORE , effective immediately, the Plan is amended as follows:

1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  “4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 3,344,670 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan.”

In all other respects the Plan remains the same.

*****


I N W ITNESS W HEREOF , the Company has caused this Second Amendment to the Plan to be executed this 31st day of January, 2008.

 

C LEARSPRING T ECHNOLOGIES , I NC .
By:  

/s/ Jay Rappaport

  Jay Rappaport
  President


A MENDMENT TO

C LEARSPRING T ECHNOLOGIES , I NC .

2005 E QUITY I NCENTIVE P LAN

W HEREAS , C LEARSPRING T ECHNOLOGIES , I NC ., a corporation organized under the laws of the State of Delaware (the “ Company ”) established the Company’s 2005 Equity Incentive Plan (the “ Plan ”) by an original instrument adopted by the Company on May 29, 2005;

W HEREAS , the Plan currently provides for 4,438,827 shares of Common Stock to be reserved for issuance under the Plan;

W HEREAS , the Company now wishes to amend the Plan to increase by 2,468,619 the number of shares of Common Stock reserved for issuance under the Plan; and

W HEREAS , the Company now wishes to amend the Plan to include certain restrictions on the voting of shares issued pursuant to the exercise of options granted after the date hereof under the Plan;

R ESOLVED , effective immediately, the Plan is amended as follows:

 

  1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  “4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 6,907,446 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan.”

 

  2. Section 26 of the Plan is hereby renumbered as Section 27 of the Plan and a new Section 26 is hereby inserted to read as follows:

 

  “26. Drag Along Requirement.

In connection with either (i) the sale, conveyance, exchange, license or other transfer of all or substantially all of the intellectual property or assets of the Company, (ii) any acquisition of the Company by means of a consolidation, stock exchange, merger or other form of corporate reorganization of the Company with any other corporation in which the Company’s stockholders prior to the consolidation or merger own less than a majority of the voting securities of the surviving entity or (iii) any transaction or series of related


transactions following which the Company’s stockholders prior to such transaction or series of related transactions own less than a majority of the voting securities of the Company (excluding the issuance of equity securities solely for capital raising purposes that is approved by the holders of (a) not less than a majority of the Company’s Series A-1 Convertible Preferred Stock then outstanding, voting as a separate class, (b) not less than a majority of the Company’s Series B Convertible Preferred Stock and Series B-1 Convertible Preferred Stock then outstanding, voting together as a single class on an as-converted basis, and (c) not less than a majority of the Company’s Series C Convertible Preferred Stock and Series C-1 Convertible Preferred Stock then outstanding, voting together as a single class on an as-converted basis) (collectively, an “ Exit Transaction ”), if requested by the Company, each participant shall: (1) vote any and all shares of Common Stock that were exercised from Options panted under the Plan in favor of the consummation of the Exit Transaction at any meeting of stockholders of the Company at which such transactions are considered, or in any written consent of stockholders of the Company relating thereto, (2) if applicable, tender any arid all shares of Common Stock that were exercised from Options granted under the Plan that are the subject of such proposed Exit Transaction in accordance with the terms of the proposed Exit Transaction, (3) if applicable, waive any dissenters’ rights, preemptive rights, appraisal rights or similar rights (including claims for breach of fiduciary duty), as the case may be, associated with any and all shares of Common Stock that were exercised from Options granted under the Plan and (4) take all other actions, including entering into appropriate agreements and consents and providing appropriate certificates and documents, required in order to effectuate fully the Exit Transaction, including, without limitation, in each case, with respect to any and all shares of Common Stock that were exercised from Options granted under the Plan”

 

  3. Other than as set forth herein, all other terms and conditions of the Plan shall continue in full force and effect.

[S IGNATURE P AGE F OLLOWS ]


I hereby certify that the foregoing amendment to the Plan was duly adopted by the Board of Directors of the Company as of May 16, 2008.

 

/s/ Jay Rappaport

Jay Rappaport
Secretary

I hereby certify that the foregoing amendment to the Plan was duly approved by the Stockholders of the Company as of May 16, 2008.

 

/s/ Jay Rappaport

Jay Rappaport
Secretary


A MENDMENT TO

C LEARSPRING T ECHNOLOGIES , I NC .

2005 E QUITY I NCENTIVE P LAN

W HEREAS , C LEARSPRING T ECHNOLOGIES , I NC . , a corporation organized under the laws of the State of Delaware (the “ Company ”) established the Company’s 2005 Equity Incentive Plan (the “ Plan ”) by an original instrument adopted by the Company on May 29, 2005;

W HEREAS , the Plan currently provides for 6,907,446 shares of Common Stock to be reserved for issuance under the Plan;

W HEREAS , the Company now wishes to amend the Plan to increase by 2,175,000 the number of shares of Common Stock reserved for issuance under the Plan; and

W HEREAS , the Company now wishes to amend the Plan to include certain restrictions on the voting of shares issued pursuant to the exercise of options granted after the date hereof under the Plan;

R ESOLVED , effective immediately, the Plan is amended as follows:

 

  1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  “4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 9,082,446 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan will be authorized and unissued Common Stock, or issued Common Stock which will have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby will again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option will be counted against the number of shares remaining available for grant under the Plan.”

 

  2. Other than as set forth herein, all other terms and conditions of the Plan will continue in full force and effect.

[S IGNATURE P AGE F OLLOWS ]


I hereby certify that the foregoing amendment to the Plan was duly adopted by the Board of Directors of the Company as of June 7, 2010.

 

        /s/ Hooman Radfar

Hooman Radfar
Chief Executive Officer

* * * *

I hereby certify that the foregoing amendment to the Plan was duly approved by the Stockholders of the Company as of June 7, 2010.

 

        /s/ Hooman Radfar

Hooman Radfar
Chief Executive Officer


A MENDMENT TO

C LEARSPRING T ECHNOLOGIES , I NC .

2005 E QUITY I NCENTIVE P LAN

W HEREAS , C LEARSPRING T ECHNOLOGIES , I NC . , a corporation organized under the laws of the State of Delaware (the “ Company ”) established the Company’s 2005 Equity Incentive Plan (the “ Plan ”) by an original instrument adopted by the Company on May 29, 2005;

W HEREAS , the Plan as amended currently provides for 9,082,446 shares of Common Stock to be reserved for issuance under the Plan;

W HEREAS , the Company now wishes to amend the Plan to increase by 750,000 the number of shares of Common Stock reserved for issuance under the Plan; and

W HEREAS , the Company now wishes to amend the Plan to include certain restrictions on the voting of shares issued pursuant to the exercise of options granted after the date of this Amendment under the Plan;

R ESOLVED , effective immediately, the Plan is amended as follows:

 

1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  “4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 9,832,446 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan.”

 

2. Other than as set forth in this Amendment, all other terms and conditions of the Plan will continue in full force and effect.

[S IGNATURE P AGE F OLLOWS ]


I hereby certify that the foregoing amendment to the Plan was duly adopted by the Board of Directors of the Company as of January 20, 2011.

 

/s/ Robert Van Niman

Robert Van Niman
Secretary

****

I hereby certify that the foregoing amendment to the Plan was duly approved by the Stockholders of the Company as of January 20, 2011.

 

/s/ Robert Van Niman

Robert Van Niman
Secretary


A MENDMENT TO

C LEARSPRING T ECHNOLOGIES , I NC .

2005 E QUITY I NCENTIVE P LAN

W HEREAS , C LEARSPRING T ECHNOLOGIES , I NC . , a corporation organized under the laws of the State of Delaware (the “ Company ”) established the Company’s 2005 Equity Incentive Plan (the “ Plan ”) by an original instrument adopted by the Company on May 29, 2005;

W HEREAS , the Plan as amended currently provides for 9,832,446 shares of Common Stock to be reserved for issuance under the Plan;

W HEREAS , the Company now wishes to amend the Plan to increase by 3,099,041 the number of shares of Common Stock reserved for issuance under the Plan; and

W HEREAS , the Company now wishes to amend the Plan to include certain restrictions on the voting of shares issued pursuant to the exercise of options granted after the date hereof under the Plan;

R ESOLVED , effective immediately, the Plan is amended as follows:

 

  1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  “4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 12,931,487 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan.”

 

  2. Other than as set forth herein, all other terms and conditions of the Plan shall continue in full force and effect.

[S IGNATURE P AGE F OLLOWS ]


I hereby certify that the foregoing amendment to the Plan was duly adopted by the Board of Directors of the Company as of May 5, 2011.

 

/s/ Robert Van Niman

Robert Van Niman
Secretary

*****

I hereby certify that the foregoing amendment to the Plan was duly approved by the Stockholders of the Company as of May 5, 2011.

 

/s/ Robert Van Niman

Robert Van Niman
Secretary


A MENDMENT TO

C LEARSPRING T ECHNOLOGIES , I NC .

A MENDED AND R ESTATED 2005 E QUITY I NCENTIVE P LAN

A. C LEARSPRING T ECHNOLOGIES , I NC . , a corporation organized under the laws of the State of Delaware (the “ Company ”) established the Company’s Amended and Restated 2005 Equity Incentive Plan (the “ Plan ”) by an original instrument adopted by the Company on May 29, 2005;

B . The Plan currently provides for 12,931,487 shares of Common Stock to be reserved for issuance under the Plan;

C. The Company now wishes to amend the Plan to increase by 695,154 the number of shares of Common Stock reserved for issuance under the Plan; and

D. The Company now wishes to amend the Plan to include certain restrictions on the voting of shares issued pursuant to the exercise of options granted after the date of this amendment under the Plan

R ESOLVED , effective immediately, the Plan is amended as follows:

 

  1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 13,626,641 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan.”

 

  2. Other than as set forth in this amendment, all other terms and conditions of the Plan will continue in full force and effect.

[S IGNATURE P AGE F OLLOWS ]


I hereby certify that the foregoing amendment to the Plan was duly adopted by the Board of Directors of the Company as of October 13, 2011.

 

            /s/ Michael McGowan

Michael McGowan
Secretary

* * * *

I hereby certify that the foregoing amendment to the Plan was duly approved by the Stockholders of the Company as of October 28, 2011.

 

            /s/ Michael McGowan

Michael McGowan
Secretary


A MENDMENT TO

C LEARSPRING T ECHNOLOGIES , I NC .

A MENDED AND R ESTATED 2005 E QUITY I NCENTIVE P LAN

A. C LEARSPRING T ECHNOLOGIES , I NC . , a corporation organized under the laws of the State of Delaware (the “ Company ”) established the Company’s Amended and Restated 2005 Equity Incentive Plan (the “ Plan ”) by an original instrument adopted by the Company on May 29, 2005;

B. The Plan currently provides for 13,626,641 shares of Common Stock to be reserved for issuance under the Plan;

C. The Company now wishes to amend the Plan to increase by 1,500,000 the number of shares of Common Stock reserved for issuance under the Plan; and

D. The Company now wishes to amend the Plan to include certain restrictions on the voting of shares issued pursuant to the exercise of options granted after the date of this amendment under the Plan

R ESOLVED , effective immediately, the Plan is amended as follows:

 

  1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 15,126,641 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan.”

 

  2. Other than as set forth in this amendment, all other terms and conditions of the Plan will continue in full force and effect.

[S IGNATURE P AGE F OLLOWS ]


I hereby certify that the foregoing amendment to the Plan was duly adopted by the Board of Directors of the Company as of December 1, 2011.

 

            /s/ Michael McGowan

Michael McGowan
Secretary

* * * *

I hereby certify that the foregoing amendment to the Plan was duly approved by the Stockholders of the Company as of December 1, 2011.

 

            /s/ Michael McGowan

Michael McGowan
Secretary

 

2


A MENDMENT TO

A DD T HIS , I NC . (F ORMERLY C LEARSPRING T ECHNOLOGIES , I NC .)

A MENDED AND R ESTATED 2005 E QUITY I NCENTIVE P LAN

A. A DD T HIS , I NC . ( FORMERLY C LEARSPRING T ECHNOLOGIES , I NC .) , a corporation organized under the laws of the State of Delaware (the “ Company ”) established the Company’s Amended and Restated 2005 equity Incentive Plan (the “ Plan ”) by an original instrument adopted by the Company on May 29, 2005;

B. The Plan currently provides for 15,126,641 shares of Common Stock to be reserved for issuance under the Plan;

C. The Company now wishes to amend the Plan to increase by 3,400,000 the number of shares of Common Stock reserved for issuance under the Plan; and

D. The Company now wishes to amend the Plan to include certain restrictions on the voting of shares issued pursuant to the exercise of options granted after the date of this amendment under the Plan

R ESOLVED , effective immediately, the Plan is amended as follows:

 

  1. Section 4 of the Plan is hereby amended and restated to read in its entirety as follows:

 

  4. Shares Subject to the Plan.

Subject to adjustment as provided in Section 9, the maximum number of shares of Common Stock that are available for Awards under the Plan is 18,526,641 shares (after giving effect to the stock split consummated on or about April 18, 2006). The Common Stock to be offered under the Plan shall be authorized and unissued Common Stock, or issued Common Stock which shall have been reacquired by the Company and held in its treasury. If any unexercised Options lapse, are forfeited or terminate for any reason, or any Awards of Restricted Stock or Restricted Stock Units are forfeited for any reason, the Common Stock covered thereby shall again be available for Awards under the Plan. In the event the purchase price of an Option is paid in whole or in part through the delivery of Common Stock, only the net number of shares of Common Stock issuable in connection with the exercise of the Option shall be counted against the number of shares remaining available for grant under the Plan,”

 

  2. Other than as set forth in this amendment, all other terms and conditions of the Plan will continue in full force and effect,

[S IGNATURE P AGE F OLLOWS ]


I hereby certify that the foregoing amendment to the Plan was duly adopted by the Board of Directors of the Company as of February 11, 2013.

 

        /s/ Michael McGowan

Michael McGowan
Secretary

* * * *

I hereby certify that the foregoing amendment to the Plan was duly approved by the Stockholders of the Company as of February 11, 2013.

 

        /s/ Michael McGowan

Michael McGowan
Secretary

 

2

Exhibit 99.2

 

LOGO

A DD T HIS , I NC .

2015 E QUITY I NCENTIVE P LAN

A DOPTED BY THE B OARD OF D IRECTORS : M AY  21, 2015

A PPROVED BY THE S TOCKHOLDERS : J UNE  10, 2015

E FFECTIVE D ATE : M AY  29, 2015

T ERMINATION D ATE : M AY  28, 2025

 

1. G ENERAL .

(a) Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are Employees, Directors and Consultants.

(b) Available Stock Awards. The Plan provides for the grant of the following Stock Awards: (i) Incentive Stock Options, (ii) Nonstatutory Stock Options, (iii) Restricted Stock Awards, (iv) Restricted Stock Unit Awards, and (v) Stock Appreciation Rights.

(c) Purpose. The Company, by means of the Plan, seeks to secure and retain the services of the group of persons eligible to receive Stock Awards as set forth in Section 1(a), to provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate, and to provide a means by which such eligible recipients may be given an opportunity to benefit from increases in value of the Common Stock through the granting of Stock Awards.

 

2. A DMINISTRATION .

(a) Administration by Board. The Board will administer the Plan unless and until the Board delegates administration of the Plan to a Committee, as provided in Section 2(c).

(b) Powers of Board. The Board will have the power, subject to, and within the limitations of, the express provisions of the Plan:

(i) To determine from time to time (A) which of the persons eligible under the Plan will be granted Stock Awards; (B) when and how each Stock Award will be granted; (C) what type or combination of types of Stock Award will be granted; (D) the provisions of each Stock Award granted (which need not be identical), including the time or times when a person will be permitted to receive cash or Common Stock pursuant to a Stock Award; (E) the number of shares of Common Stock with respect to which a Stock Award will be granted to each such person; and (F) the Fair Market Value applicable to a Stock Award.

(ii) To construe and interpret the Plan and Stock Awards granted under it, and to establish, amend and revoke rules and regulations for administration of the Plan. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award Agreement, in a manner and to the extent it will deem necessary or expedient to make the Plan or Stock Award fully effective.

 

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(iii) To settle all controversies regarding the Plan and Stock Awards granted under it.

(iv) To accelerate the time at which a Stock Award may first be exercised or the time during which a Stock Award or any part thereof will vest in accordance with the Plan, notwithstanding the provisions in the Stock Award stating the time at which it may first be exercised or the time during which it will vest.

(v) To suspend or terminate the Plan at any time. Suspension or termination of the Plan will not impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the affected Participant.

(vi) To amend the Plan in any respect the Board deems necessary or advisable, including, without limitation, relating to Incentive Stock Options and certain nonqualified deferred compensation under Section 409A of the Code and/or to bring the Plan or Stock Awards granted under the Plan into compliance therewith, subject to the limitations, if any, of applicable law. However, except as provided in Section 9(a) relating to Capitalization Adjustments, to the extent required by applicable law, stockholder approval will be required for any amendment of the Plan that either (i) materially increases the number of shares of Common Stock available for issuance under the Plan, (ii) materially expands the class of individuals eligible to receive Stock Awards under the Plan, (iii) materially increases the benefits accruing to Participants under the Plan or materially reduces the price at which shares of Common Stock may be issued or purchased under the Plan, (iv) materially extends the term of the Plan, or (v) expands the types of Stock Awards available for issuance under the Plan. Except as provided above, rights under any Stock Award granted before amendment of the Plan will not be impaired by any amendment of the Plan unless (i) the Company requests the consent of the affected Participant, and (ii) such Participant consents in writing.

(vii) To submit any amendment to the Plan for stockholder approval, including, but not limited to, amendments to the Plan intended to satisfy the requirements of Section 422 of the Code regarding Incentive Stock Options.

(viii) To approve forms of Stock Award Agreements for use under the Plan and to amend the terms of any one or more Stock Awards, including, but not limited to, amendments to provide terms more favorable than previously provided in the Stock Award Agreement, subject to any specified limits in the Plan that are not subject to Board discretion; provided however , that, the rights under any Stock Award will not be impaired by any such amendment unless (i) the Company requests the consent of the affected Participant, and (ii) such Participant consents in writing. Notwithstanding the foregoing, subject to the limitations of applicable law, if any, and without the affected Participant’s consent, the Board may amend the terms of any one or more Stock Awards if necessary to maintain the qualified status of the Stock Award as an Incentive Stock Option or to bring the Stock Award into compliance with Section 409A of the Code and the related guidance thereunder.

(ix) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the Plan or Stock Awards.

 

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(x) To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Directors or Consultants who are foreign nationals or employed outside the United States.

(xi) To effect, at any time and from time to time, with the consent of any adversely affected Optionholder, (1) the reduction of the exercise price of any outstanding Option under the Plan, (2) the cancellation of any outstanding Option under the Plan and the grant in substitution therefor of (A) a new Option under the Plan or another equity plan of the Company covering the same or a different number of shares of Common Stock, (B) a Restricted Stock Award, (C) a Stock Appreciation Right, (D) Restricted Stock Unit, (E) cash and/or (F) other valuable consideration (as determined by the Board, in its sole discretion), or (3) any other action that is treated as a repricing under generally accepted accounting principles; provided, however , that no such reduction or cancellation may be effected if it is determined, in the Company’s sole discretion, that such reduction or cancellation would result in any such outstanding Option becoming subject to the requirements of Section 409A of the Code.

(c) Delegation to Committee. The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration of the Plan is delegated to a Committee, the Committee will have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee of the Committee any of the administrative powers the Committee is authorized to exercise (and references in this Plan to the Board will thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated.

(d) Delegation to an Officer. The Board may delegate to one or more Officers of the Company the authority to do one or both of the following: (i) designate Officers and Employees of the Company or any of its Subsidiaries to be recipients of Options (and, to the extent permitted by applicable law, other Stock Awards) and the terms thereof, and (ii) determine the number of shares of Common Stock to be subject to such Stock Awards granted to such Officers and Employees; provided, however , that the Board resolutions regarding such delegation will specify the total number of shares of Common Stock that may be subject to the Stock Awards granted by such Officer and that such Officer may not grant a Stock Award to himself or herself. Notwithstanding the foregoing, the Board may not delegate authority to an Officer to determine the Fair Market Value of the Common Stock pursuant to Section 13(t) below.

(e) Effect of Board’s Decision. All determinations, interpretations and constructions made by the Board in good faith will not be subject to review by any person and will be final, binding and conclusive on all persons.

 

3. S HARES S UBJECT TO THE P LAN .

(a) Share Reserve. Subject to the provisions of Section 9(a) relating to Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued pursuant to Stock Awards beginning on the Effective Date shall not exceed 18,526,641

 

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shares (the “ Share Reserve ”), which number is the sum of (i) the number of shares subject to the Prior Plan’s Available Reserve 3,074,795 shares and (ii) an additional number of shares which consists of the Returning Shares, if any, as such shares become available from time to time, in an aggregate amount not to exceed 15,451,846 shares. Furthermore, if a Stock Award (i) expires or otherwise terminates without having been exercised in full or (ii) is settled in cash ( i.e ., the holder of the Stock Award receives cash rather than stock), such expiration, termination or settlement shall not reduce (or otherwise offset) the number of shares of Common Stock that may be issued pursuant to the Plan. For clarity, the limitation in this Section 3(a) is a limitation in the number of shares of Common Stock that may be issued pursuant to the Plan. Accordingly, this Section 3(a) does not limit the granting of Stock Awards except as provided in Section 7(a).

(b) Incentive Stock Option Limit. Notwithstanding anything to the contrary in this Section 3(c), subject to the provisions of Section 9(a) relating to Capitalization Adjustments, the aggregate maximum number of shares of Common Stock that may be issued pursuant to the exercise of Incentive Stock Options will be 18,526,641 shares of Common Stock.

(c) Source of Shares. The stock issuable under the Plan will be shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market.

 

4. E LIGIBILITY .

(a) Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to employees of the Company or a “parent corporation” or “subsidiary corporation” thereof (as such terms are defined in Sections 424(e) and (f) of the Code). Stock Awards other than Incentive Stock Options may be granted to Employees, Directors and Consultants.

(b) Ten Percent Stockholders. A Ten Percent Stockholder will not be granted an Incentive Stock Option unless the exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value of the Common Stock on the date of grant and the Option is not exercisable after the expiration of five (5) years from the date of grant.

(c) Consultants. A Consultant will not be eligible for the grant of a Stock Award if, at the time of grant, either the offer or the sale of the Company’s securities to such Consultant is not exempt under Rule 701 of the Securities Act (“ Rule 701 ”) because of the nature of the services that the Consultant is providing to the Company, because the Consultant is not a natural person, or because of any other provision of Rule 701, unless the Company determines that such grant need not comply with the requirements of Rule 701 and will satisfy another exemption under the Securities Act as well as comply with the securities laws of all other relevant jurisdictions.

 

5. O PTION P ROVISIONS .

Each Option will be in such form and will contain such terms and conditions as the Board will deem appropriate. All Options will be separately designated Incentive Stock Options or Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate certificate or certificates will be issued for shares of Common Stock purchased on exercise of each type of Option. If an Option is not specifically designated as an Incentive Stock Option,

 

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then the Option will be a Nonstatutory Stock Option. The provisions of separate Options need not be identical; provided, however , that each Option Agreement will include (through incorporation of provisions hereof by reference in the Option Agreement or otherwise) the substance of each of the following provisions:

(a) Term. Subject to the provisions of Section 4(b) regarding Ten Percent Stockholders, no Option will be exercisable after the expiration of ten (10) years from the date of its grant or such shorter period specified in the Option Agreement.

(b) Exercise Price. Subject to the provisions of Section 4(b) regarding Incentive Stock Options granted to Ten Percent Stockholders, the exercise price of each Option will be not less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. Notwithstanding the foregoing, an Option may be granted with an exercise price lower than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option if such Option is granted pursuant to an assumption or substitution for another option in a manner consistent with the provisions of Section 424(a) of the Code (whether or not such options are Incentive Stock Options).

(c) Consideration. The purchase price of Common Stock acquired pursuant to the exercise of an Option will be paid, to the extent permitted by applicable law and as determined by the Board in its sole discretion, by any combination of the methods of payment set forth below. The Board will have the authority to grant Options that do not permit all of the following methods of payment (or otherwise restrict the ability to use certain methods) and to grant Options that require the consent of the Company to utilize a particular method of payment. The permitted methods of payment are as follows:

(i) by cash, check, bank draft or money order payable to the Company;

(ii) pursuant to a program developed under Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of the stock subject to the Option, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to the Company from the sales proceeds;

(iii) by delivery to the Company (either by actual delivery or attestation) of shares of Common Stock;

(iv) by a “net exercise” arrangement pursuant to which the Company will reduce the number of shares of Common Stock issued upon exercise by the largest whole number of shares with a Fair Market Value that does not exceed the aggregate exercise price; provided, however , that the Company will accept a cash or other payment from the Participant to the extent of any remaining balance of the aggregate exercise price not satisfied by such reduction in the number of whole shares to be issued; provided, further , that shares of Common Stock will no longer be outstanding under an Option and will not be exercisable thereafter to the extent that (A) shares are used to pay the exercise price pursuant to the “net exercise,” (B) shares are delivered to the Participant as a result of such exercise, and (C) shares are withheld to satisfy tax withholding obligations;

 

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(v) according to a deferred payment or similar arrangement with the Optionholder; provided, however , that interest will compound at least annually and will be charged at the minimum rate of interest necessary to avoid (A) the imputation of interest income to the Company and compensation income to the Optionholder under any applicable provisions of the Code, and (B) the classification of the Option as a liability for financial accounting purposes; or

(vi) in any other form of legal consideration that may be acceptable to the Board.

(d) Transferability of Options. The Board may, in its sole discretion, impose such limitations on the transferability of Options as the Board will determine. In the absence of such a determination by the Board to the contrary, the following restrictions on the transferability of Options will apply:

(i) Restrictions on Transfer. An Option will not be transferable except by will or by the laws of descent and distribution and will be exercisable during the lifetime of the Optionholder only by the Optionholder; provided, however , that the Board may, in its sole discretion, permit transfer of the Option to such extent as permitted by Rule 701 of the Securities Act at the time of the grant of the Option and in a manner consistent with applicable tax and securities laws upon the Optionholder’s request.

(ii) Domestic Relations Orders. Notwithstanding the foregoing, an Option may be transferred pursuant to a domestic relations order, provided, however , that an Incentive Stock Option may be deemed to be a Nonstatutory Stock Option as a result of such transfer.

(iii) Beneficiary Designation. Notwithstanding the foregoing, the Optionholder may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the Company, designate a third party who, in the event of the death of the Optionholder, will thereafter be the beneficiary of an Option with the right to exercise the Option and receive the Common Stock or other consideration resulting from the Option exercise.

(e) Vesting of Options Generally. The total number of shares of Common Stock subject to an Option may vest and therefore become exercisable in periodic installments that may or may not be equal. The Option may be subject to such other terms and conditions on the time or times when it may or may not be exercised (which may be based on the satisfaction of performance goals or other criteria) as the Board may deem appropriate. The vesting provisions of individual Options may vary. The provisions of this Section 5(e) are subject to any Option provisions governing the minimum number of shares of Common Stock as to which an Option may be exercised.

(f) Termination of Continuous Service. Except as otherwise provided in the applicable Option Agreement or other agreement between the Optionholder and the Company, in the event that an Optionholder’s Continuous Service terminates (other than for Cause or upon the Optionholder’s death or Disability), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination of Continuous Service) but only within such period of time ending on the earlier of (i) the date three

 

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(3) months following the termination of the Optionholder’s Continuous Service (or such longer or shorter period specified in the Option Agreement, which period will not be less than thirty (30) days unless such termination is for Cause), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder does not exercise his or her Option within the time specified in this Plan or in the Option Agreement (as applicable), the Option will terminate.

(g) Extension of Termination Date. Except as otherwise provided in the applicable Option Agreement or other agreement between the Optionholder and the Company, if the exercise of the Option following the termination of the Optionholder’s Continuous Service (other than for Cause or upon the Optionholder’s death or Disability) would be prohibited at any time solely because the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option will terminate on the earlier of (i) the expiration of a period of three (3) months after the termination of the Optionholder’s Continuous Service during which the exercise of the Option would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option as set forth in the Option Agreement.

(h) Disability of Optionholder. Except as otherwise provided in the applicable Option Agreement or other agreement between the Optionholder and the Company, in the event that an Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination of Continuous Service (or such longer or shorter period specified in the Option Agreement, which period will not be less than six (6) months), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder does not exercise his or her Option within the time specified in this Plan or in the Option Agreement (as applicable), the Option will terminate.

(i) Death of Optionholder. Except as otherwise provided in the applicable Option Agreement or other agreement between the Optionholder and the Company, in the event that (i) an Optionholder’s Continuous Service terminates as a result of the Optionholder’s death, or (ii) the Optionholder dies within the period (if any) specified in the Option Agreement after the termination of the Optionholder’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated as the beneficiary of the Option upon the Optionholder’s death, but only within the period ending on the earlier of (i) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Option Agreement, which period will not be less than six (6) months), or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, after the Optionholder’s death, the Option is not exercised within the time specified in this Plan or in the Option Agreement (as applicable), the Option will terminate. If the Optionholder designates a third party beneficiary of the Option in accordance with Section 5(d)(iii), then upon the death of the Optionholder such designated beneficiary will have the sole right to exercise the Option and receive the Common Stock or other consideration resulting from the Option exercise.

 

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(j) Termination for Cause. Except as explicitly provided otherwise in an Optionholder’s Option Agreement, in the event that an Optionholder’s Continuous Service is terminated for Cause, the Option will terminate upon the termination date of such Optionholder’s Continuous Service, and the Optionholder will be prohibited from exercising his or her Option from and after the time of such termination of Continuous Service.

(k) Non-Exempt Employees. No Option granted to an Employee that is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, will be first exercisable for any shares of Common Stock until at least six months following the date of grant of the Option. The foregoing provision is intended to operate so that any income derived by a non¬exempt employee in connection with the exercise or vesting of an Option will be exempt from his or her regular rate of pay.

(l) Early Exercise. The Option may, but need not, include a provision whereby the Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Subject to the “Repurchase Limitation” in Section 8(l), any unvested shares of Common Stock so purchased may be subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate. Provided that the “Repurchase Limitation” in Section 8(l) is not violated, the Company will not be required to exercise its repurchase option until at least six (6) months (or such longer or shorter period of time required to avoid classification of the Option as a liability for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option Agreement.

(m) Right of Repurchase. Subject to the “Repurchase Limitation” in Section 8(l), the Option may include a provision whereby the Company may elect to repurchase all or any part of the vested shares of Common Stock acquired by the Optionholder pursuant to the exercise of the Option.

(n) Right of First Refusal. The Option may include a provision whereby the Company may elect to exercise a right of first refusal following receipt of notice from the Optionholder of the intent to transfer all or any part of the shares of Common Stock received upon the exercise of the Option. Such right of first refusal will be subject to the “Repurchase Limitation” in Section 8(l). Except as expressly provided in this Section 5(n) or in the Option Agreement, such right of first refusal will otherwise comply with any applicable provisions of the Bylaws of the Company.

 

6. P ROVISIONS OF S TOCK A WARDS OTHER THAN O PTIONS .

(a) Restricted Stock Awards. Each Restricted Stock Award Agreement will be in such form and will contain such terms and conditions as the Board will deem appropriate. To the extent consistent with the Company’s Bylaws, at the Board’s election, shares of Common Stock may be (x) held in book entry form subject to the Company’s instructions until any restrictions relating to the Restricted Stock Award lapse; or (y) evidenced by a certificate, which certificate will be held in such form and manner as determined by the Board. The terms and conditions of Restricted Stock Award Agreements may change from time to time, and the terms and conditions

 

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of separate Restricted Stock Award Agreements need not be identical; provided, however , that each Restricted Stock Award Agreement will include (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

(i) Consideration. A Restricted Stock Award may be awarded in consideration for (A) past or future services actually or to be rendered to the Company or an Affiliate, or (B) any other form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law.

(ii) Vesting. Subject to the “Repurchase Limitation” in Section 8(l), shares of Common Stock awarded under the Restricted Stock Award Agreement may be subject to forfeiture to the Company in accordance with a vesting schedule to be determined by the Board.

(iii) Termination of Participant’s Continuous Service. In the event a Participant’s Continuous Service terminates, the Company may receive via a forfeiture condition, any or all of the shares of Common Stock held by the Participant which have not vested as of the date of termination of Continuous Service under the terms of the Restricted Stock Award Agreement.

(iv) Transferability. Rights to acquire shares of Common Stock under the Restricted Stock Award Agreement will be transferable by the Participant only upon such terms and conditions as are set forth in the Restricted Stock Award Agreement, as the Board will determine in its sole discretion, so long as Common Stock awarded under the Restricted Stock Award Agreement remains subject to the terms of the Restricted Stock Award Agreement.

(b) Restricted Stock Unit Awards. Each Restricted Stock Unit Award Agreement will be in such form and will contain such terms and conditions as the Board will deem appropriate. The terms and conditions of Restricted Stock Unit Award Agreements may change from time to time, and the terms and conditions of separate Restricted Stock Unit Award Agreements need not be identical, provided, however , that each Restricted Stock Unit Award Agreement will include (through incorporation of the provisions hereof by reference in the Agreement or otherwise) the substance of each of the following provisions:

(i) Consideration. At the time of grant of a Restricted Stock Unit Award, the Board will determine the consideration, if any, to be paid by the Participant upon delivery of each share of Common Stock subject to the Restricted Stock Unit Award. The consideration to be paid (if any) by the Participant for each share of Common Stock subject to a Restricted Stock Unit Award may be paid in any form of legal consideration that may be acceptable to the Board in its sole discretion and permissible under applicable law.

(ii) Vesting. At the time of the grant of a Restricted Stock Unit Award, the Board may impose such restrictions or conditions to the vesting of the Restricted Stock Unit Award as it, in its sole discretion, deems appropriate.

(iii) Payment. A Restricted Stock Unit Award may be settled by the delivery of shares of Common Stock, their cash equivalent, any combination thereof or in any other form of consideration, as determined by the Board and contained in the Restricted Stock Unit Award Agreement.

 

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(iv) Additional Restrictions. At the time of the grant of a Restricted Stock Unit Award, the Board, as it deems appropriate, may impose such restrictions or conditions that delay the delivery of the shares of Common Stock (or their cash equivalent) subject to a Restricted Stock Unit Award to a time after the vesting of such Restricted Stock Unit Award.

(v) Dividend Equivalents. Dividend equivalents may be credited in respect of shares of Common Stock covered by a Restricted Stock Unit Award, as determined by the Board and contained in the Restricted Stock Unit Award Agreement. At the sole discretion of the Board, such dividend equivalents may be converted into additional shares of Common Stock covered by the Restricted Stock Unit Award in such manner as determined by the Board. Any additional shares covered by the Restricted Stock Unit Award credited by reason of such dividend equivalents will be subject to all the terms and conditions of the underlying Restricted Stock Unit Award Agreement to which they relate.

(vi) Termination of Participant’s Continuous Service. Except as otherwise provided in the applicable Restricted Stock Unit Award Agreement, such portion of the Restricted Stock Unit Award that has not vested will be forfeited upon the Participant’s termination of Continuous Service.

(vii) Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set forth in this Plan, any Restricted Stock Unit Award granted under the Plan that is not exempt from the requirements of Section 409A of the Code will contain such provisions so that such Restricted Stock Unit Award will comply with the requirements of Section 409A of the Code. Such restrictions, if any, will be determined by the Board and contained in the Restricted Stock Unit Award Agreement evidencing such Restricted Stock Unit Award. For example, such restrictions may include, without limitation, a requirement that any Common Stock that is to be issued in a year following the year in which the Restricted Stock Unit Award vests must be issued in accordance with a fixed pre-determined schedule.

(c) Stock Appreciation Rights. Each Stock Appreciation Right Agreement will be in such form and will contain such terms and conditions as the Board will deem appropriate. Stock Appreciation Rights may be granted as stand-alone Stock Awards or in tandem with other Stock Awards. The terms and conditions of Stock Appreciation Right Agreements may change from time to time, and the terms and conditions of separate Stock Appreciation Right Agreements need not be identical; provided, however , that each Stock Appreciation Right Agreement will include (through incorporation of the provisions hereof by reference in the agreement or otherwise) the substance of each of the following provisions:

(i) Term. No Stock Appreciation Right will be exercisable after the expiration of ten (10) years from the date of grant or such shorter period specified in the Stock Appreciation Right Agreement.

(ii) Strike Price. Each Stock Appreciation Right will be denominated in shares of Common Stock equivalents. The strike price of each Stock Appreciation Right granted

 

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as a stand-alone or tandem Stock Award will not be less than one hundred percent (100%) of the Fair Market Value of the Common Stock equivalents subject to the Stock Appreciation Right on the date of grant.

(iii) Calculation of Appreciation. The appreciation distribution payable on the exercise of a Stock Appreciation Right will be not greater than an amount equal to the excess of (A) the aggregate Fair Market Value (on the date of the exercise of the Stock Appreciation Right) of a number of shares of Common Stock equal to the number of shares of Common Stock equivalents in which the Participant is vested under such Stock Appreciation Right, and with respect to which the Participant is exercising the Stock Appreciation Right on such date, over (B) the strike price that will be determined by the Board on the date of grant.

(iv) Vesting. At the time of the grant of a Stock Appreciation Right, the Board may impose such restrictions or conditions to the vesting of such Stock Appreciation Right as it, in its sole discretion, deems appropriate.

(v) Exercise. To exercise any outstanding Stock Appreciation Right, the Participant must provide written notice of exercise to the Company in compliance with the provisions of the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right.

(vi) Non-Exempt Employees. No Stock Appreciation Right granted to an Employee that is a non-exempt employee for purposes of the Fair Labor Standards Act of 1938, as amended, will be first exercisable for any shares of Common Stock until at least six months following the date of grant of the Stock Appreciation Right. The foregoing provision is intended to operate so that any income derived by a non-exempt employee in connection with the exercise of a Stock Appreciation Right will be exempt from his or her regular rate of pay.

(vii) Payment. The appreciation distribution in respect to a Stock Appreciation Right may be paid in Common Stock, in cash, in any combination of the two or in any other form of consideration, as determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right.

(viii) Termination of Continuous Service. Except as otherwise provided in the applicable Stock Appreciation Right Agreement or other agreement between the Participant and the Company, in the event that a Participant’s Continuous Service terminates (other than for Cause or upon the Participant’s death or Disability), the Participant may exercise his or her Stock Appreciation Right (to the extent that the Participant was entitled to exercise such Stock Appreciation Right as of the date of termination of Continuous Service) but only within such period of time ending on the earlier of (A) the date three (3) months following the termination of the Participant’s Continuous Service (or such longer or shorter period specified in the Stock Appreciation Right Agreement, which period will not be less than thirty (30) days unless such termination is for Cause), or (B) the expiration of the term of the Stock Appreciation Right as set forth in the Stock Appreciation Right Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Stock Appreciation Right within the time specified in this Plan or in the Stock Appreciation Right Agreement (as applicable), the Stock Appreciation Right will terminate.

 

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(ix) Disability of Participant. Except as otherwise provided in the applicable Stock Appreciation Right Agreement or other agreement between the Participant and the Company, in the event that a Participant’s Continuous Service terminates as a result of the Participant’s Disability, the Participant may exercise his or her Stock Appreciation Right (to the extent that the Participant was entitled to exercise such Stock Appreciation Right as of the date of termination of Continuous Service), but only within such period of time ending on the earlier of (A) the date twelve (12) months following such termination of Continuous Service (or such longer or shorter period specified in the Stock Appreciation Right Agreement, which period will not be less than six (6) months), or (B) the expiration of the term of the Stock Appreciation Right as set forth in the Stock Appreciation Right Agreement. If, after termination of Continuous Service, the Participant does not exercise his or her Stock Appreciation Right within the time specified in this Plan or in the Stock Appreciation Right Agreement (as applicable), the Stock Appreciation Right will terminate.

(x) Death of Participant. Except as otherwise provided in the applicable Stock Appreciation Right Agreement or other agreement between the Participant and the Company, in the event that (i) a Participant’s Continuous Service terminates as a result of the Participant’s death, or (ii) the Participant dies within the period (if any) specified in the Stock Appreciation Right Agreement after the termination of the Participant’s Continuous Service for a reason other than death, then the Stock Appreciation Right may be exercised (to the extent the Participant was entitled to exercise such Stock Appreciation Right as of the date of death) by the Participant’s estate, by a person who acquired the right to exercise the Stock Appreciation Right by bequest or inheritance or by a person designated as the beneficiary of the Stock Appreciation Right upon the Participant’s death, but only within the period ending on the earlier of (i) the date eighteen (18) months following the date of death (or such longer or shorter period specified in the Stock Appreciation Right Agreement, which period will not be less than six (6) months), or (ii) the expiration of the term of such Stock Appreciation Right as set forth in the Stock Appreciation Right Agreement. If, after the Participant’s death, the Stock Appreciation Right is not exercised within the time specified in this Plan or in the Stock Appreciation Right Agreement (as applicable), the Stock Appreciation Right will terminate.

(xi) Termination for Cause. Except as explicitly provided otherwise in an Participant’s Stock Appreciation Right Agreement, in the event that a Participant’s Continuous Service is terminated for Cause, the Stock Appreciation Right will terminate upon the termination date of such Participant’s Continuous Service, and the Participant will be prohibited from exercising his or her Stock Appreciation Right from and after the time of such termination of Continuous Service.

(xii) Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set forth in this Plan, any Stock Appreciation Rights granted under the Plan that are not exempt from the requirements of Section 409A of the Code will contain such provisions so that such Stock Appreciation Rights will comply with the requirements of Section 409A of the Code. Such restrictions, if any, will be determined by the Board and contained in the Stock Appreciation Right Agreement evidencing such Stock Appreciation Right. For example, such restrictions may include, without limitation, a requirement that a Stock Appreciation Right that is to be paid wholly or partly in cash must be exercised and paid in accordance with a fixed pre-determined schedule.

 

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7. C OVENANTS OF THE C OMPANY .

(a) Availability of Shares. During the terms of the Stock Awards, the Company will keep available at all times the number of shares of Common Stock reasonably required to satisfy such Stock Awards.

(b) Securities Law Compliance. The Company will seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority as may be required to grant Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards; provided, however , that this undertaking will not require the Company to register under the Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company will be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and until such authority is obtained.

(c) No Obligation to Notify. The Company will have no duty or obligation to any holder of a Stock Award to advise such holder as to the time or manner of exercising such Stock Award. Furthermore, the Company will have no duty or obligation to warn or otherwise advise such holder of a pending termination or expiration of a Stock Award or a possible period in which the Stock Award may not be exercised. The Company has no duty or obligation to minimize the tax consequences of a Stock Award to the holder of such Stock Award.

 

8. M ISCELLANEOUS .

(a) Use of Proceeds from Sales of Common Stock. Proceeds from the sale of shares of Common Stock pursuant to Stock Awards will constitute general funds of the Company.

(b) Corporate Action Constituting Grant of Stock Awards. Corporate action constituting a grant by the Company of a Stock Award to any Participant will be deemed completed as of the date of such corporate action, unless otherwise determined by the Board, regardless of when the instrument, certificate, or letter evidencing the Stock Award is communicated to, or actually received or accepted by, the Participant.

(c) Stockholder Rights. No Participant will be deemed to be the holder of, or to have any of the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award unless and until such Participant has satisfied all requirements for exercise of the Stock Award pursuant to its terms and the Participant will not be deemed to be a stockholder of record until the issuance of the Common Stock pursuant to such exercise has been entered into the books and records of the Company. Upon request by the Company, each Participant will execute any voting agreement, stockholder agreement, right of first refusal and co-sale agreement or similar agreement among the stockholders of the Company.

(d) No Employment or Other Service Rights. Nothing in the Plan, any Stock Award Agreement or any other instrument executed thereunder or in connection with any Stock Award granted pursuant to the Plan will confer upon any Participant any right to continue to

 

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serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted or will affect the right of the Company or an Affiliate to terminate (i) the employment of an Employee with or without notice and with or without cause, (ii) the service of a Consultant pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate, or (iii) the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be.

(e) Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock Options are exercisable for the first time by any Optionholder during any calendar year (under all plans of the Company and any Affiliates) exceeds one hundred thousand dollars ($100,000), the Options or portions thereof that exceed such limit (according to the order in which they were granted) will be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of the applicable Option Agreement(s).

(f) Investment Assurances. The Company may require a Participant, as a condition of exercising or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the Company as to the Participant’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Stock Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The foregoing requirements, and any assurances given pursuant to such requirements, will be inoperative if (x) the issuance of the shares upon the exercise or acquisition of Common Stock under the Stock Award has been registered under a then currently effective registration statement under the Securities Act, or (y) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the transfer of the Common Stock.

(g) Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement, the Company may, in its sole discretion, satisfy any federal, state or local tax withholding obligation relating to a Stock Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) causing the Participant to tender a cash payment; (ii) withholding shares of Common Stock from the shares of Common Stock issued or otherwise issuable to the Participant in connection with the Stock Award; provided , however , that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid classification of the Stock Award as a liability for financial accounting purposes); (iii) withholding payment from any amounts otherwise payable to the Participant; (iv) withholding cash from a Stock Award settled in cash; or (v) by such other method as may be set forth in the Stock Award Agreement.

 

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(h) Electronic Delivery. Any reference in this Plan to a “written” agreement or document will include any agreement or document delivered electronically or posted on the Company’s intranet.

(i) Deferrals. To the extent permitted by applicable law, the Board, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or settlement of all or a portion of any Stock Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code. Consistent with Section 409A of the Code, the Board may provide for distributions while a Participant is still an employee. The Board is authorized to make deferrals of Stock Awards and determine when, and in what annual percentages, Participants may receive payments, including lump sum payments, following the Participant’s termination of employment or retirement, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with applicable law.

(j) Compliance with Section 409A. To the extent that the Board determines that any Stock Award granted hereunder is subject to Section 409A of the Code, the Stock Award Agreement evidencing such Stock Award will incorporate the terms and conditions necessary to avoid the consequences specified in Section 409A(a)(1) of the Code. To the extent applicable, the Plan and Stock Award Agreements will be interpreted in accordance with Section 409A of the Code and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued or amended after the Effective Date. Notwithstanding any provision of the Plan to the contrary, in the event that following the Effective Date the Board determines that any Stock Award may be subject to Section 409A of the Code and related Department of Treasury guidance (including such Department of Treasury guidance as may be issued after the Effective Date), the Board may adopt such amendments to the Plan and the applicable Stock Award Agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Board determines are necessary or appropriate to (1) exempt the Stock Award from Section 409A of the Code and/or preserve the intended tax treatment of the benefits provided with respect to the Stock Award, or (2) comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.

(k) Compliance with Exemption Provided by Rule 12h-1(f). If: (i) the aggregate of the number of Optionholders and the number of holders of all other outstanding compensatory employee stock options to purchase shares of Common Stock equals or exceeds five hundred (500), and (ii) the assets of the Company at the end of the Company’s most recently completed fiscal year exceed $10 million, then the following restrictions will apply during any period during which the Company does not have a class of its securities registered under Section 12 of the Exchange Act and is not required to file reports under Section 15(d) of the Exchange Act: (A) the Options and, prior to exercise, the shares of Common Stock acquired upon exercise of the Options may not be transferred until the Company is no longer relying on the exemption provided by Rule 12h-1(f) promulgated under the Exchange Act (“ Rule 12h-1(f) ”), except: (1) as permitted by Rule 701(c) promulgated under the Securities Act, (2) to a guardian upon the disability of the Optionholder, or (3) to an executor upon the death of the Optionholder

 

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(collectively, the “ Permitted Transferees ”); provided, however , the following transfers are permitted: (i) transfers by the Optionholder to the Company, and (ii) transfers in connection with a change of control or other acquisition involving the Company, if following such transaction, the Options no longer remain outstanding and the Company is no longer relying on the exemption provided by Rule 12h-1(f); provided further , that any Permitted Transferees may not further transfer the Options; (B) except as otherwise provided in (A) above, the Options and shares of Common Stock acquired upon exercise of the Options are restricted as to any pledge, hypothecation, or other transfer, including any short position, any “put equivalent position” as defined by Rule 16a-1(h) promulgated under the Exchange Act, or any “call equivalent position” as defined by Rule 16a-1(b) promulgated under the Exchange Act by the Optionholder prior to exercise of an Option until the Company is no longer relying on the exemption provided by Rule 12h-1(f); and (C) at any time that the Company is relying on the exemption provided by Rule 12h-1(f), the Company will deliver to Optionholders (whether by physical or electronic delivery or written notice of the availability of the information on an internet site) the information required by Rule 701(e)(3), (4), and (5) promulgated under the Securities Act every six (6) months, including financial statements that are not more than one hundred eighty (180) days old; provided, however , that the Company may condition the delivery of such information upon the Optionholder’s agreement to maintain its confidentiality.

(l) Repurchase Limitation. The terms of any repurchase option will be specified in the Stock Award Agreement. The repurchase price for vested shares of Common Stock will be the Fair Market Value of the shares of Common Stock on the date of repurchase. The repurchase price for unvested shares of Common Stock will be the lower of (i) the Fair Market Value of the shares of Common Stock on the date of repurchase or (ii) their original purchase price. However, the Company will not exercise its repurchase option until at least six (6) months (or such longer or shorter period of time necessary to avoid classification of the Stock Award as a liability for financial accounting purposes) have elapsed following delivery of shares of Common Stock subject to the Stock Award, unless otherwise specifically provided by the Board.

 

9. A DJUSTMENTS UPON C HANGES IN C OMMON S TOCK ; O THER C ORPORATE E VENTS .

(a) Capitalization Adjustments. In the event of a Capitalization Adjustment, the Board will proportionately and appropriately adjust: (i) the class(es) and maximum number of securities subject to the Plan pursuant to Section 3(a), (ii) the class(es) and maximum number of securities that may be issued pursuant to the exercise of Incentive Stock Options pursuant to Section 3(c), and (iii) the class(es) and number of securities and price per share of stock subject to outstanding Stock Awards. The Board will make such adjustments, and its determination will be final, binding and conclusive.

(b) Dissolution or Liquidation. Except as otherwise provided in the Stock Award Agreement, in the event of a dissolution or liquidation of the Company, all outstanding Stock Awards (other than Stock Awards consisting of vested and outstanding shares of Common Stock not subject to the Company’s right of repurchase) will terminate immediately prior to the completion of such dissolution or liquidation, and the shares of Common Stock subject to the Company’s repurchase option may be repurchased by the Company notwithstanding the fact that the holder of such Stock Award is providing Continuous Service, provided, however , that the Board may, in its sole discretion, cause some or all Stock Awards to become fully vested,

 

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exercisable and/or no longer subject to repurchase or forfeiture (to the extent such Stock Awards have not previously expired or terminated) before the dissolution or liquidation is completed but contingent on its completion.

(c) Corporate Transaction. The following provisions will apply to Stock Awards in the event of a Corporate Transaction unless otherwise provided in the instrument evidencing the Stock Award or any other written agreement between the Company or any Affiliate and the holder of the Stock Award or unless otherwise expressly provided by the Board at the time of grant of a Stock Award. Except as otherwise stated in the Stock Award Agreement, in the event of a Corporate Transaction, then, notwithstanding any other provision of the Plan, the Board will take one or more of the following actions with respect to Stock Awards, contingent upon the closing or completion of the Corporate Transaction:

(i) arrange for the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) to assume or continue the Stock Award or to substitute a similar stock award for the Stock Award (including, but not limited to, an award to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction);

(ii) arrange for the assignment of any reacquisition or repurchase rights held by the Company in respect of Common Stock issued pursuant to the Stock Award to the surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company);

(iii) accelerate the vesting of the Stock Award (and, if applicable, the time at which the Stock Award may be exercised) to a date prior to the effective time of such Corporate Transaction as the Board will determine (or, if the Board will not determine such a date, to the date that is five (5) days prior to the effective date of the Corporate Transaction), with such Stock Award terminating if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction;

(iv) arrange for the lapse of any reacquisition or repurchase rights held by the Company with respect to the Stock Award;

(v) terminate or cancel, or arrange for the termination or cancellation, of the Stock Award, to the extent not vested or not exercised prior to the effective time of the Corporate Transaction; and

(vi) make a payment, in such form as may be determined by the Board equal to the excess, if any, of (A) the value of the property the holder of the Stock Award would have received upon the exercise of the Stock Award, over (B) any exercise price payable by such holder in connection with such exercise.

The Board need not take the same action with respect to all Stock Awards or with respect to all Participants.

(d) Change in Control. A Stock Award may be subject to additional acceleration of vesting and exercisability upon or after a Change in Control as may be provided in the Stock

 

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Award Agreement for such Stock Award or as may be provided in any other written agreement between the Company or any Affiliate and the Participant, but in the absence of such provision, no such acceleration will occur.

 

10. T ERMINATION OR S USPENSION OF THE P LAN ; S HAREHOLDERS A GREEMENT .

(a) Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner terminated by the Board pursuant to Section 2, the Plan will automatically terminate on the day before the tenth (10th) anniversary of the earlier of (i) the date the Plan is adopted by the Board, or (ii) the date the Plan is approved by the stockholders of the Company. No Stock Awards may be granted under the Plan while the Plan is suspended or after it is terminated.

(b) No Impairment of Rights. Suspension or termination of the Plan will not impair rights and obligations under any Stock Award granted while the Plan is in effect except with the written consent of the affected Participant.

(c) Shareholders Agreement. As a condition to the exercise of any Stock Award, the Participant will be required to execute and become a party to the Company’s Shareholders Agreement. To the extent any provision of this Plan may be deemed inconsistent or in contravention of any provision in such Shareholders Agreement, then the Shareholders Agreement will take precedence and will govern and all shares of Common Stock underlying Stock Awards will be deemed governed by the Shareholders Agreement.

 

11. E FFECTIVE D ATE OF P LAN .

This Plan will become effective on the Effective Date.

 

12. C HOICE OF L AW .

The law of the State of Delaware will govern all questions concerning the construction, validity and interpretation of this Plan, without regard to that state’s conflict of laws rules.

13. D EFINITIONS . As used in the Plan, the following definitions will apply to the capitalized terms indicated below:

(a) Affiliate ” means, at the time of determination, any “parent” or “majority-owned subsidiary” of the Company, as such terms are defined in Rule 405 of the Securities Act. The Board will have the authority to determine the time or times at which “parent” or “majority-owned subsidiary” status is determined within the foregoing definition.

(b) Board ” means the Board of Directors of the Company.

(c) Capitalization Adjustment ” means any change that is made in, or other events that occur with respect to, the Common Stock subject to the Plan or subject to any Stock Award after the Effective Date without the receipt of consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or other transaction not involving the receipt of

 

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consideration by the Company). Notwithstanding the foregoing, the conversion of any convertible securities of the Company will not be treated as a transaction “without the receipt of consideration” by the Company.

(d) Cause ” means with respect to a Participant, the occurrence of any of the following events: (i) such Participant’s commission of any felony or any crime involving fraud, dishonesty or moral turpitude under the laws of the United States or any state thereof; (ii) such Participant’s attempted commission of, or participation in, a fraud or act of dishonesty against the Company; (iii) such Participant’s intentional, material violation of any contract or agreement between the Participant and the Company or of any statutory duty owed to the Company; (iv) such Participant’s unauthorized use or disclosure of the Company’s confidential information or trade secrets; or (v) such Participant’s gross misconduct. The determination that a termination of the Participant’s Continuous Service is either for Cause or without Cause will be made by the Company in its sole discretion. Any determination by the Company that the Continuous Service of a Participant was terminated by reason of dismissal without Cause for the purposes of outstanding Stock Awards held by such Participant will have no effect upon any determination of the rights or obligations of the Company or such Participant for any other purpose.

(e) Change in Control ” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control will not be deemed to occur (A) on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person that acquires the Company’s securities in a transaction or series of related transactions the primary purpose of which is to obtain financing for the Company through the issuance of equity securities or (B) solely because the level of Ownership held by any Exchange Act Person (the “ Subject Person ”) exceeds the designated percentage threshold of the outstanding voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control will be deemed to occur;

(ii) there is consummated a merger, consolidation or similar transaction involving (directly or indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such transaction;

 

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(iii) there is consummated a sale, lease, exclusive license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such sale, lease, license or other disposition; or

(iv) individuals who, on the date this Plan is adopted by the Board, are members of the Board (the “ Incumbent Board ”) cease for any reason to constitute at least a majority of the members of the Board; provided, however , that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member will, for purposes of this Plan, be considered as a member of the Incumbent Board.

Notwithstanding the foregoing definition or any other provision of this Plan, (A) the term Change in Control will not include a sale of assets, merger or other transaction effected exclusively for the purpose of changing the domicile of the Company, and (B) the definition of Change in Control (or any analogous term) in an individual written agreement between the Company or any Affiliate and the Participant will supersede the foregoing definition with respect to Stock Awards subject to such agreement; provided, however , that if no definition of Change in Control or any analogous term is set forth in such an individual written agreement, the foregoing definition will apply.

(f) Code ” means the Internal Revenue Code of 1986, as amended.

(g) Committee ” means a committee of one (1) or more Directors to whom authority has been delegated by the Board in accordance with Section 2(c).

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

(i) Company ” means AddThis, Inc., a Delaware corporation.

(j) Consultant ” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the board of directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, will not cause a Director to be considered a “Consultant” for purposes of the Plan.

(k) Continuous Service ” means that the Participant’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company or an Affiliate as an Employee, Director, or Consultant or a change in the Entity for which the Participant renders such service, provided that there is no interruption or termination of the Participant’s service with the Company or an Affiliate, will not terminate a Participant’s Continuous Service;

 

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provided, however , if the Entity for which a Participant is rendering service ceases to qualify as an Affiliate, as determined by the Board in its sole discretion, such Participant’s Continuous Service will be considered to have terminated on the date such Entity ceases to qualify as an Affiliate. For example, a change in status from an employee of the Company to a consultant of an Affiliate or to a Director will not constitute an interruption of Continuous Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service will be considered interrupted in the case of any leave of absence approved by that party, including sick leave, military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in a Stock Award only to such extent as may be provided in the Company’s leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law.

(l) Corporate Transaction ” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events:

(i) the consummation of a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries;

(ii) the consummation of a sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company;

(iii) the consummation of a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or

(iv) the consummation of a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise.

(m) Director ” means a member of the Board.

(n) Disability ” means the inability of a Participant to engage in any substantially gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than twelve (12) months, and will be determined by the Board on the basis of such medical evidence as the Board deems warranted under the circumstances.

(o) Effective Date ” means the effective date of this Plan set forth on the first page of this Plan and, if no such date is set forth on the first page of the Plan, then the effective date shall be the earlier of (i) the date that this Plan is first approved by the Company’s stockholders, or (ii) the date this Plan is adopted by the Board.

(p) Employee means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, will not cause a Director to be considered an “Employee” for purposes of the Plan.

 

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(q) Entity ” means a corporation, partnership, limited liability company or other entity.

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

(s) Exchange Act Person ” means any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” will not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the Effective Date of the Plan as set forth in Section 11, is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%) of the combined voting power of the Company’s then outstanding securities.

(t) Fair Market Value ” means, as of any date, the value of the Common Stock determined by the Board in compliance with Section 409A of the Code or, in the case of an Incentive Stock Option, in compliance with Section 422 of the Code.

(u) Incentive Stock Option ” means an Option that qualifies as an “incentive stock option” within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

(v) Nonstatutory Stock Option ” means an Option that does not qualify as an Incentive Stock Option.

(w) Officer ” means any person designated by the Company as an officer.

(x) Option ” means an Incentive Stock Option or a Nonstatutory Stock Option to purchase shares of Common Stock granted pursuant to the Plan.

(y) Option Agreement ” means a written agreement between the Company and an Optionholder evidencing the terms and conditions of an Option grant. Each Option Agreement will be subject to the terms and conditions of the Plan.

(z) Optionholder ” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Option.

(aa) Own ,” “ Owned ,” “ Owner ,” “ Ownership ” A person or Entity will be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting, with respect to such securities.

 

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(bb) Participant ” means a person to whom a Stock Award is granted pursuant to the Plan or, if applicable, such other person who holds an outstanding Stock Award.

(cc) Plan ” means this AddThis, Inc. 2015 Equity Incentive Plan.

(dd) Restricted Stock Award ” means an award of shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(a).

(ee) Restricted Stock Award Agreement ” means a written agreement between the Company and a holder of a Restricted Stock Award evidencing the terms and conditions of a Restricted Stock Award. Each Restricted Stock Award Agreement will be subject to the terms and conditions of the Plan.

(ff) Restricted Stock Unit Award ” means a right to receive shares of Common Stock which is granted pursuant to the terms and conditions of Section 6(b).

(gg) Restricted Stock Unit Award Agreement ” means a written agreement between the Company and a holder of a Restricted Stock Unit Award evidencing the terms and conditions of a Restricted Stock Unit Award grant. Each Restricted Stock Unit Award Agreement will be subject to the terms and conditions of the Plan.

(hh) Securities Act ” means the Securities Act of 1933, as amended.

(ii) Stock Appreciation Right ” means a right to receive the appreciation on Common Stock that is granted pursuant to the terms and conditions of Section 6(c).

(jj) Stock Appreciation Right Agreement ” means a written agreement between the Company and a holder of a Stock Appreciation Right evidencing the terms and conditions of a Stock Appreciation Right grant. Each Stock Appreciation Right Agreement will be subject to the terms and conditions of the Plan.

(kk) Stock Award ” means any right to receive Common Stock granted under the Plan, including an Incentive Stock Option, a Nonstatutory Stock Option, a Restricted Stock Award, a Restricted Stock Unit Award, or a Stock Appreciation Right.

(ll) Stock Award Agreement ” means a written agreement between the Company and a Participant evidencing the terms and conditions of a Stock Award grant. Each Stock Award Agreement will be subject to the terms and conditions of the Plan.

(mm) Subsidiary ” means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation will have or might have voting power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership, limited liability company or other entity in which the Company has a direct or indirect interest (whether in the form of voting or participation in profits or capital contribution) of more than fifty percent (50%) .

 

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(nn) Ten Percent Stockholder ” means a person who Owns (or is deemed to Own pursuant to 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 any Affiliate.

 

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Exhibit 99.3

R AVELLO S YSTEMS L TD .

US S HARE I NCENTIVE P LAN , 2012

 

 

I. Name, Purpose and Definitions

 

1. Name

This plan, as amended from time to time, shall be known as the Ravello Systems Ltd. US Share Incentive Plan, 2012 or the US Plan, and shall be administered by the Board and, to the extent permitted by applicable law, the Board may delegate any or all of its powers under the US Plan to one or more committees or subcommittees of the Board.

 

2. Purpose

The purpose and intent of the US Plan is to provide incentives to persons who make (or are expected to make) important contributions to Ravello Systems Ltd. and/or its Subsidiaries (as defined below), by giving them the opportunity to purchase Ordinary Shares (as defined below) of Ravello Systems Ltd., pursuant to an incentive plan approved by the board of directors of Ravello Systems Ltd.

 

3. Definitions

As used in this US Plan, the following terms shall have the meanings assigned to them in this Section 3.

Award ” shall mean the grant of an Option, Restricted Stock or unrestricted Ordinary Shares under the US Plan.

Act ” shall mean the Securities Exchange Act of 1933, as amended.

Board ” shall mean the board of directors of the Company.

Code ” shall mean the Internal Revenue Code of 1986, as amended, and any successor Code, and related rules, regulations and interpretations.

Company ” shall mean Ravello Systems Ltd.

Date of Grant ” shall have the meaning set forth in Section 5.2 or 7.1, as applicable.

Disability” shall mean disability as set forth in Section 22(e)(3) of the Code.

Eligible Person” shall mean officers, or other employees of the Company or of a Subsidiary (including a person to whom an offer of employment has been made) and members of the Board or of the board of directors of any Subsidiary, advisors and consultants or other persons who render services to the Company or a Subsidiary, regardless of their status as an employee of the Company or a Subsidiary; however, with respect to Awards intended to qualify as Incentive Stock Options, only employees of the Company or a Subsidiary shall be Eligible Persons.


Exercise Price ” shall mean the price required to be paid by a Grantee in connection with the exercise of an Option.

Fair Market Value ” shall mean, as of any date, the value of an Ordinary Share, which shall be determined as follows: (i) if the Ordinary Shares are listed or quoted on any established stock exchange or a national market system, including without limitation the NASDAQ National Market system, or the NASDAQ SmallCap Market of the NASDAQ Stock Market, the Fair Market Value shall be the closing sales price for such Ordinary Shares (or the closing bid, if no sales were reported), as quoted on such exchange or system for the last market trading day prior to time of determination, as reported in the Wall Street Journal, or such other source as the Board deems reliable; or (ii) in the absence of an established market for the Ordinary Shares, the fair market value thereof as determined in good faith by the Board.

Grantee ” an Eligible Person to whom an Award is granted under this US Plan.

Incentive Stock Option ” shall mean any Option designated and qualified as an “incentive stock option” as defined in Section 422 of the Code.

Israeli Plan ” shall mean the Ravello Systems Ltd. Employee Share Incentive Plan, 2012, as amended from time to time.

M&A Transaction” means (a) any merger or consolidation of the Company with or into another entity in which the Company is not the surviving entity, (b) any sale or exchange of all or substantially all of the Ordinary Shares of the Company for cash, securities or other property, or (c) any sale of all or substantially all of the assets of the Company.

Non-Statutory Stock Option ” shall mean an Option that is not an Incentive Stock Option.

Notice of Grant ” shall have the meaning set forth in Section 5.3 or 7.2, as applicable.

Option ” shall mean an Option to purchase one (1) Ordinary Share of the Company.

Ordinary Share ” shall mean an Ordinary Share of the Company, NIS 0.01 par value.

Restricted Stock ” shall mean shares of the Company granted subject to restrictions pursuant to Section 5.

Section 162(m) ” shall mean Section 162(m) of the Code.

Successor Corporation ” shall mean the surviving entity in an M&A Transaction.

Subsidiary ” shall mean a subsidiary of the Company as set forth in Section 424 of the Code.

 

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II. General Terms and Conditions of the US Plan

 

4. Administration

 

  4.1. The US Plan will be administered by the Board. The Board shall have the full authority in its sole and absolute discretion, from time to time and at any time, to determine:

(a) the identity of the Grantees;

(b) the type and amount of the Award(s) to be granted to each Grantee;

(c) the time or times at which the same shall be granted;

(d) the Exercise Price (subject to Section 10 below) of Options, and the vesting schedule, expiration date, and other terms and conditions relating to each Award granted;

(e) any other matter that, in the Board’s sole and absolute discretion, is necessary or desirable for, or incidental to, the administration of the US Plan. Without derogating from the above, in determining the amount of an Award to be granted to each Grantee, the Board may consider, among other things, the Grantee’s salary or other consideration, the duration of the Grantee’s employment or engagement by the Company or a Subsidiary, and the Grantee’s contribution to the Company or to a Subsidiary.

 

  4.2. The Board may, from time to time, adopt such rules and regulations for carrying out the US Plan as it may deem necessary. No member of the Board shall be liable for any act or determination made in good faith with respect to the US Plan or any Award granted hereunder.

 

  4.3. The Board shall be entitled to delegate any or all of its powers hereunder to a committee of the Board, subject to applicable law.

 

  4.4. The interpretation and construction by the Board of any provision of the US Plan or of any Award granted hereunder shall be final and conclusive unless otherwise determined by the Board.

 

  4.5. To the extent of any conflict between the terms of the US Plan and a Notice of Grant, the terms of the US Plan shall control.

 

5. Grant of Shares; Restricted Stock

 

  5.1. The Board shall be entitled to grant to certain Eligible Persons shares of the Company instead of Options, including shares of Restricted Stock, as it may deem desirable. The relevant provisions of the US Plan shall apply to such grant of shares mutatis mutandis.

 

  5.2. The Date of Grant of Restricted Stock shall be the date specified by the Board in its determination relating to the award of such Restricted Stock.

 

  5.3. The Board shall remit to each Grantee of Restricted Stock a Notice of Grant, which shall include the number of shares of Restricted Stock granted to such Grantee, the vesting schedule, the restrictions applicable to such shares, and such other terms and conditions as the Board, at its discretion, may prescribe.

 

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  5.4. Unless otherwise specified in the Notice of Grant, the vesting schedule of any quantity of Restricted Stock granted under the US Plan shall be such that twenty-five percent (25%) of such shares of Restricted shall vest (and all restrictions applicable to such Restricted Stock shall lapse) on the first anniversary of the Date of Grant, and an additional two point zero eight three (2.083%) of such shares of Restricted Stock shall vest on the end of each month thereafter ( i.e ., the entire quantity of Restricted Stock shall vest four (4) years after the Date of Grant).

 

  5.5. In the event that a Grantee ceases to be employed by, or to serve as a Director of, the Company or a Subsidiary for any reason, or ceases to perform services as an advisor, consultant or other type of service provider to the Company or a Subsidiary, as applicable, all shares of Restricted Stock not previously vested shall be forfeited to the Company for no consideration.

 

6. Grant of Options

The Board, at its discretion, may grant Options to any Eligible Person. The grant of an Option to a Grantee hereunder, shall neither entitle such Grantee to participate, nor disqualify him from participating, in or receiving any other Award pursuant to this US Plan or any other share options incentive plan of the Company, or any parent or subsidiary company of the Company.

 

7. Option Details

 

  7.1. The Date of Grant of an Option shall be the date specified by the Board in its determination relating to the award of such Option.

 

  7.2. The Board shall remit to each Grantee a Notice of Grant, which shall include the number of Options granted to such Grantee, the vesting schedule, the terms of exercise, exercise price and duration of such Options and such other terms and conditions as the Board, at its discretion, may prescribe.

 

  7.3.

An Option that the Board intends to be an Incentive Stock Option shall only be granted to employees of the Company or a Subsidiary and shall be subject to and shall be construed consistently with the requirements of Section 422 of the Code. The Company and its Subsidiaries shall have no liability to a Grantee, or to any other party, if an Option (or any part thereof) which is intended to be an Incentive Stock Option fails to qualify as an Incentive Stock Option. An Option which is not intended to be or which fails to qualify as an Incentive Stock Option shall be designated a Non-Statutory Stock Option. If reemployment upon expiration of a leave of absence approved by the Company or a Subsidiary is not guaranteed by law, on the first day immediately following three (3) months of such leave, any Inventive Stock Option held by the Grantee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Non-Statutory Stock Option, to the extent not previously terminated or expired. Any

 

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  Incentive Stock Option held by a Grantee whose employment with the Company terminates due to disability shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Non-Statutory Stock Option on the one year anniversary of the Grantee’s termination, to the extent not previously terminated or expired.

 

  7.4. With respect to Incentive Stock Options, the aggregate Fair Market Value (determined as of the time of grant) of the Ordinary Shares with respect to which Incentive Stock Options granted under this US Plan and any other plan of the Company become exercisable for the first time by a Grantee during any calendar year shall not exceed $100,000. The excess Options, to the extent the Fair Market Value of the Shares covered thereby exceeds the foregoing limitation, shall be treated as Non-Statutory Stock Options.

 

8. Dividends and Voting Rights; Rights as Shareholders

 

  8.1. All Ordinary Shares issued upon the exercise of Options granted under the US Plan (and any Ordinary Shares issued directly under the US Plan) shall entitle the Grantee to all the rights attached to the Ordinary Shares of the Company, including the right to receive dividends with respect thereto and to vote the same at any meeting of the shareholders of the Company, subject however to the provisions of Sections 8.2 and 8.3. Except as otherwise provided in the Notice of Grant, a Grantee of Restricted Stock shall not be considered a shareholder of the Company and shall not be entitled to the rights attached to Ordinary Shares, including dividend and voting rights, until the restrictions applicable to such shares of Restricted Stock lapse.

 

  8.2. Until the closing of an initial public offering of equity securities of the Company, Ordinary Shares issued upon the exercise of Options granted under the US Plan, or issued directly to an Eligible Person under the US Plan (including shares of Restricted Stock), shall be voted by an irrevocable proxy and power of attorney to the Chairman of the Board or any other person designated by the Chairman of the Board. On each and every issue brought before the shareholders of the Company for their resolution, the Chairman of the Board (or any other person designated by the Chairman) shall vote the shares in accordance with the resolution that would have been adopted by all shareholders of the Company actually voting on such issue other than the shareholders represented by such proxy. Upon the exercise of the Options and as condition to such exercise (or upon a direct issuance of shares under this US Plan, including shares of Restricted Stock) each Grantee shall sign a proxy with respect to his or her Ordinary Shares.

 

  8.3.

For the avoidance of any doubt, the Grantees of Options shall not be deemed for any purpose whatsoever to be shareholders of the Company before the exercise of the Options granted to them and shall have no rights or privileges as shareholders of the Company, nor shall they be deemed to be a class of shareholders, or creditors, of the Company. In the event Ordinary Shares are issued directly to a Grantee under the US Plan, the Company may require that any stock certificates issued in

 

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  respect of such Ordinary Shares shall be deposited in escrow by the Grantee, together with a stock power endorsed in blank, with the Company (or its designee) until the expiration of any applicable restrictions placed on such Ordinary Shares by the Board at the time they are granted to the Grantee.

 

  8.4. The certificate representing Ordinary Shares issued upon the exercise of any Options, or issued directly to Grantees under this US Plan, shall bear legends substantially in the following form (in addition to, or in combination with, any legend required by applicable federal and state securities laws and agreements relating to the transfer of the Company’s capital stock):

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A PROXY, A COPY OF WHICH IS AVAILABLE AT THE CORPORATION’S PRINCIPAL OFFICE.”

 

9. Term of Options; Vesting

 

  9.1. Each Option shall be exercisable at such times and subject to such terms and conditions as the Board may specify in the applicable Notice of Grant, subject to the provisions of Section 9.2 below.

 

  9.2. Each Option and all rights thereunder shall expire on the date specified in the applicable Notice of Grant, provided that such date shall not be later than 10 years after the date on which the Option is granted (or 5 years in the case of an Incentive Stock Option granted to an individual who, at the time the Option is awarded, owns shares of the Company possessing more than 10% of the total combined voting power of all shares of the Company or any parent or Subsidiary of the Company), and in either case, shall be subject to earlier termination as provided in the US Plan.

 

  9.3. Without derogating from the rights and powers of the Board under Section 4.1 hereof, unless otherwise specified in the Notice of Grant, the vesting schedule of any quantity of Options granted under the US Plan shall be such that twenty-five percent (25%) of such Options shall vest on the first anniversary of the Date of Grant, and an additional two point zero eight three (2.083%) of such Options shall vest on the end of each month thereafter ( i.e. , the entire quantity of Options shall vest four (4) years after the Date of Grant).

 

  9.4. The Board at its discretion may grant Options which can be exercised into unvested shares prior to the vesting of the Options. Such unvested shares shall be subject to same vesting schedule applicable to the Options that were exercised prior to vesting, and shall be further subject the Company’s right to repurchase such unvested shares for no consideration in the event that Grantee’s employment is terminated for any reason prior to the actual vesting of the shares. The terms upon which such repurchase right shall be exercisable shall be established by the Board and set forth in a share repurchase agreement to be entered into between Grantee and the Company.

 

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  9.5. Unless the Board provides otherwise, vesting of Options shall be suspended during any unpaid leave of absence, other than, in the case of any (a) leave of absence which was pre-approved by the Company for purpose of continuing the vesting of Options, or (b) transfers between locations of the Company or between the Company, any affiliate, or any respective successor thereof.

 

10. Shares Available for Awards

 

  10.1. Number of Shares . Subject to adjustment under Section 14 below, the aggregate number of Ordinary Shares issuable under the US Plan and the Israeli Plan shall not exceed 2,161,578 Ordinary Shares. The maximum number of Ordinary Shares issuable through Incentive Stock Options under the US Plan shall be 673,000. If any Options expire or are terminated, surrendered or canceled without having been fully exercised, are forfeited in whole or in part (including as the result Ordinary Shares subject to such Options being repurchased by the Company at the original issuance price pursuant to a contractual repurchase right), or results in any Ordinary Shares not being issued, the unused Ordinary Shares covered by such Options shall again be available for the grant of Options under the US Plan and the Israeli Plan. However, in the case of Incentive Stock Options the foregoing provisions shall be subject to any limitations under the Code. At no time while there is any Option outstanding and held by a Grantee who was a resident of the State of California on the date of grant of such Option, shall the total number of Ordinary Shares issuable upon exercise of all outstanding options and the total number of Ordinary Shares provided for under any stock bonus or similar plan or agreement of the Company exceed the applicable percentage as calculated in accordance with the conditions and exclusions of Section 260.140.45 of the California Code of Regulations (the “California Regulations”), based on the Ordinary Shares of the Company which are outstanding at the time the calculation is made.

 

  10.2. Per-Participant Limit . Subject to adjustment under Section 14 below, for awards granted under the US Plan after the Ordinary Shares are registered under the Act, the maximum Fair Market Value of Ordinary Shares with respect to which awards may be granted to any Eligible Person under the US Plan shall be US$1,000,000 per fiscal year. The per-Eligible Person limit described in this Section 10.2 shall be construed and applied consistently with Section 162(m).  

 

11. Exercise Price

The Board shall establish the Exercise Price or determine the method by which the Exercise Price is established at the time each Option is granted and specify it in the applicable Notice of Grant, provided, however, that the Exercise Price shall not be less than the greater of (i) the par value of the underlying Ordinary Share at the time of exercise, or (ii) 100% of the Fair Market Value of such Ordinary Share subject to the Option, as determined by the Board, at the time of grant of such Option; provided however , no Incentive Stock Option shall have an Exercise Price of less than 110% of such Fair Market Value in the

 

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case of any Incentive Stock Option granted to an individual who, at the time the Option is awarded, owns shares of the Company possessing more than 10% of the total combined voting power of all classes of shares of the Company or any parent or Subsidiary of the Company.

 

12. Exercise of Options

 

  12.1. Options shall, upon vesting, become exercisable pursuant to the terms under which they were awarded and subject to the terms and conditions of the US Plan.

 

  12.2. The exercise of an Option shall be made by a written notice of exercise delivered by the Grantee to the Company at its principal executive office. Such written notice of exercise shall specify the number of Options to be exercised and shall be accompanied by the payment for the Exercise Price therefor, and shall contain such other terms and conditions as the Board shall prescribe from time to time. In addition, the Grantee shall deliver a signed proxy as detailed in Section 8.2 above to the Company with respect to the exercised shares.

 

  12.3. Anything herein to the contrary notwithstanding, but without derogating from the provisions of Section 13, if any Option has not been exercised prior to its expiration pursuant to Section 9, such Option shall terminate, and all interests and rights of the Grantee in and to the same shall ipso facto expire.

 

  12.4. Each payment for Ordinary Shares shall be in respect of a whole number of Ordinary Shares, and shall be effected in cash or by a cashier’s check payable to the order of the Company, or such other method of payment acceptable to the Company. The Company shall not be required to issue fractional shares upon the exercise of an Option or the vesting of any other Award.

 

  12.5. The Company will not be obligated to deliver any certificates representing Ordinary Shares pursuant to the US Plan or to remove restrictions from Ordinary Shares (including shares of Restricted Stock) previously delivered under the US Plan until (i) all conditions of the Option or with respect to the Ordinary Shares, as the case may be, have been met or removed to the satisfaction of the Company, (ii) in the opinion of the Company’s counsel, all other legal matters in connection with the issuance and delivery of such Ordinary Shares have been satisfied, including any applicable securities laws and any applicable stock exchange or stock market rules and regulations, and (iii) the Grantee has executed and delivered to the Company such representations or agreements as the Company may consider appropriate to satisfy the requirements of any applicable laws, rules or regulations.

 

13. Effect of Termination of Employment or Services on Options

In the event that a Grantee ceases to be employed by, or to serve as a Director of, the Company or a Subsidiary for any reason, or ceases to perform services as an advisor, consultant or other type of service provider to the Company or

 

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a Subsidiary, as applicable, all Options previously granted to such Grantee shall terminate as follows:

 

  13.1. If the Grantee’s termination is due to such Grantee’s death or Disability, such Options (to the extent exercisable at the time of the Grantee’s termination of employment or services) shall be exercisable by the Grantee’s legal representative, estate manager or any other person to whom the Grantee’s rights are transferred by will or by laws of descent or distribution, or the Grantee, as the case might be, for a period of six (6) months following such termination (but in no event after the expiration date of such Options), and shall thereafter terminate.

 

  13.2. If the Grantee’s termination is due to, or connected with, one of the following instances, the Options shall terminate, all interests and rights of the Grantee in and to the same shall ipso facto expire, and the Grantee shall not be entitled to exercise any of the Options, even if such Options had already vested at that time. The said instances are as follows:

 

  (f) The Grantee acts dishonestly or breaches his/her fiduciary duties or duty of loyalty towards the Company and/or its affiliates; or

 

  (g) The Grantee breaches intentionally in a material way the terms of his/her employment agreement, or other agreement with the Company and/or its affiliates.

 

  13.3. If the Grantee’s termination is for any reason other than those described in sub-sections 13.1 and 13.3 above, such Options (to the extent exercisable at the time of the Grantee’s termination) shall be exercisable for a period of three (3) months following such termination (but in no event after the expiration date of such Options), and shall thereafter terminate.

 

  13.4. Options that have not vested at the time of the Grantee’s termination shall expire immediately upon such termination, for any reason.

 

  13.5. Notwithstanding the foregoing provisions of this Section 13, the Board may provide, either at the time an Option is granted or thereafter, that such Option may be exercised after the periods provided for in Section 13, but in no event beyond the expiration date of the Option.

 

  13.6. For the purpose of this Section 13, the transfer of an Employee from the employ of the Company to the employ of an affiliate or between affiliates shall not be deemed to be a termination of employment.

 

14. Adjustment Upon Changes in Capitalization, M&A Transaction or Restructuring

 

  14.1.

Subject to any required action by the shareholders of the Company, the number of outstanding Options, as well as the Exercise Price of each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued Ordinary Shares resulting from a split, reverse split, bonus issue, any other securities dividend, combination of the Ordinary Shares or any other increase or decrease in

 

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  the number of issued Ordinary Shares effected without receipt of any consideration by the Company, provided, however, that the conversion of any convertible securities of the Company and/or the issuance of shares in connection with anti-dilution rights shall not be deemed to have been “effected without receipt of consideration”. Provided further, that any adjustment to the number of Incentive Stock Options and the Exercise Price thereof shall be made proportionately, on a pro rata basis in compliance with the applicable requirements of Section 424 of the Code and the Treasury Regulations promulgated thereunder. Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of outstanding Options and Exercise Price thereof; provided, however, that the Board of Directors shall in any event make such adjustments as may be required by Section 25102(o) of the California Corporations Code.

 

  14.2. In the event of an M&A Transaction, then upon the consummation of such M&A Transaction, each outstanding Option shall be substituted by the right to purchase an equivalent security of the Successor Corporation, and each Grantee shall be entitled to purchase, subject to the conditions herein stated, such Successor Corporation’s replacement securities, as were exchangeable for the number of Ordinary Shares, which such Grantee would have been entitled to purchase except for such M&A Transaction, and the appropriate adjustments in the Exercise Price of such Options shall be made in order to reflect such exchange. Any substitution with respect to an Incentive Stock Option under this Section 14.2 shall comply with the requirements of Treasury Regulation 1.424-1(a).

 

  14.3. In addition, subject to any applicable law, the Board shall have full power and authority to determine that, in connection with a proposed M&A Transaction or the sale of all or substantially all of the Company’s assets, the vesting of all or a portion of the Options outstanding and unvested and all or a portion of the unvested Restricted Stock at that time shall be accelerated so that any unvested Awards or any portion thereof shall be vested immediately prior to closing of the M&A Transaction or the sale of assets.

 

  14.4. Without derogating from the generality of the above, and subject to any applicable law, the Board shall have full power and authority to determine that, in connection with an M&A Transaction, if the Successor Corporation does not agree to assume or substitute the Options, any vested (including pursuant to Section 14.3 above) and unexercised Option shall be automatically exercised by way of a Net Exercise immediately prior to the closing of the M&A Transaction.

 

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For the purpose of this Section 14.4 the term “ Net Exercise ” shall mean the exercise of an Option for a number of Ordinary Shares that shall be computed using the following formula:

 

X   =    A – B   
       A   

Where X = the number of Ordinary Shares to be issued to the Grantee.

A = the Fair Market Value of one Ordinary Share.

B = the Exercise Price.

No fractional Ordinary Shares shall be issued in connection with a Net Exercise hereunder, but in lieu of such fractional shares, the Company shall make cash payment therefor upon the basis of the Fair Market Value of such Ordinary Shares.

 

  14.5. If the Company is liquidated or dissolved while unexercised vested Options remain outstanding under the Plan, then all such outstanding vested Options may be exercised in full by the Grantees as of the effective date of any such liquidation or dissolution of the Company, by a Grantee giving notice in writing to the Company of an intention to exercise, paying the Exercise Price of the Options being exercised, and complying with the other conditions of exercise of such vested Options. The Company will notify the Grantees of Options that are not yet exercised of such event no later than ten (10) days prior thereto. However, if the Company fails to notify any Grantee, it will only be liable to make provisions so that the rights of such Grantee in respect of unexercised vested Option are not impaired. All unvested Options, and vested Options that remain unexercised at the end of such ten-day period, shall immediately expire. All unvested shares of Restricted Stock shall vest upon such a liquidation or dissolution.

 

  14.6. In the event of a restructuring of the Company’s capital that is not regulated under this Section 14, then upon the consummation of such restructuring, each Grantee of Options shall be entitled to purchase, subject to the conditions herein stated, such number of the Company’s replacement securities, as were exchangeable for, or have come in the stead of, the number of Ordinary Shares, which such Grantee would have been entitled to purchase except for such restructuring, and the appropriate adjustments shall be made to reflect such action, provided that, with respect to Incentive Stock Options, any such adjustments shall comply with all applicable provisions of applicable requirements of Section 424 of the Code and the Treasury Regulations promulgated thereunder.

 

15. Non-Transferability.

 

  15.1. No Option or grant of Restricted Stock shall be assignable or transferable by the Grantee to whom it was granted other than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of the Grantee only by such Grantee or by such Grantee’s guardian or legal representative. The terms of such Option or Restricted Stock grant shall be binding upon the beneficiaries, executors, administrators, heirs and successors of such Grantee.

 

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  15.2. No Ordinary Share issued upon the exercise of an Option granted to the Grantee, or directly issued to the Grantee under the US Plan (including shares of Restricted Stock), shall be transferable, other than by will or the laws of descent and distribution, until the earlier of (i) the closing of an M&A Transaction; or (ii) the closing of an initial public offering of equity securities of the Company (subject to Section 16 below); or (iii) the elapse of ten (10) years from the date of exercise of such Option (or from the date of direct issuance of such Ordinary Share (including Restricted Stock) under the US Plan, as applicable). Thereafter, transfer by a Grantee to any third party of any Ordinary Shares issued upon the exercise of Options granted to the Grantee, or directly issued to the Grantee under the US Plan, shall be subject to all conditions and terms set out in the Articles of Association of the Company, as amended from time to time, subject to all conditions and terms set out in this US Plan, and subject to all other conditions and terms by which each Grantee is otherwise bound.

 

16. Lock-Up

After the Company’s initial public offering in any stock exchange, all shares held by the Grantee shall be subject to any legal restrictions on the sale of shares of the Company and/or to any restrictions on the sale of shares of the Company required by the underwriters in such public offering, and the Grantee shall be required to cooperate with the Company and sign any document that may be required by the underwriters.

 

17. Amendment of the US Plan

The Board may, at any time and from time to time, terminate or amend the US Plan in any respect, provided that to the extent required by Section 162(a) of the Act, no award granted to an Eligible Person that is intended to comply with Section 162(m) after the date of such amendment shall become exercisable, realizable or vested, as applicable to such award, unless and until such amendment shall have been approved by the Company’s shareholders as required by Section 162(m) (including the vote required under Section 162(m)). Further provided, that, no Options intended to qualify as Incentive Stock Options shall be granted after the date of an amendment to the number of shares available for issuance as Incentive Stock Options under Section 10.1 unless and until such amendment is approved by the Company’s shareholders as required by Treasury Regulation 1.422-2(b). The Board shall obtain shareholders approval of any US Plan amendment to the extent necessary and desirable to comply with applicable law or the Articles of Association of the Company. Subject to Sections 14 and 26, in no event shall an action of the Company alter or impair the rights of a Grantee, without his consent, under any Award previously granted to him.

 

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18. Tax Consequences

All tax consequences arising from the grant of an Award, exercise of any Option, from the payment for, or the subsequent disposition of, Ordinary Shares covered thereby, or from any other event or act (of the Company, a Subsidiary or the Grantee) hereunder, shall be borne solely by the Grantee, and the Grantee shall indemnify the Company and any Subsidiary, and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon. The Company may decide to satisfy the withholding obligations through additional withholding on salary or wages. If the Company elects not to or cannot withhold from other compensation, the Grantee must pay the Company the full amount, if any, required for withholding or have a broker tender to the Company cash equal to the withholding obligations.

 

19. Continuance of Employment or Services

Neither this US Plan nor the grant of an Award hereunder shall impose any obligation on the Company or a Subsidiary to continue the employment or the directorship of any Grantee, or to use services of any Grantee, and nothing in the US Plan or in any Award granted pursuant hereto shall confer upon any Grantee any right to continue in the employ of, or the provision of services to, the Company or a Subsidiary, or restrict the right of the Company or a Subsidiary to terminate such employment or provision of services or directorship at any time.

 

20. Governing Law

The US Plan and all instruments issued thereunder or connection therewith, shall be governed by, and interpreted in accordance with the laws of the State of Israel; provided, however, that in the case of application of a Non-Statutory Stock Option or an Incentive Stock Option, the US Plan shall also be governed by, and interpreted in accordance with, applicable federal laws of the United States of America, and in the case of any conflict between the laws of the State of Israel and applicable federal laws of the United States of America, the federal laws of the United States of America shall govern to the extent necessary to ensure favorable tax treatment under the Code with respect to any such Non-Statutory Stock Option or an Incentive Stock Option.

 

21. Application of Funds

The proceeds received by the Company from the issuance of Ordinary Shares pursuant to Options granted under the US Plan will be used for general corporate purposes of the Company, or as otherwise determined by the Board.

 

22. Multiple Agreements

The terms of each Award may differ from other Awards granted under the US Plan at the same time, or at any other time. The Board may also grant more than one Award to a given Grantee during the term of the US Plan, either in addition to, or in substitution for, one or more Awards previously granted to that Grantee. The grant of multiple Awards may be evidenced by a single Notice of Grant or multiple Notices of Grant, as determined by the Board.

 

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23. Non-Exclusivity of the US Plan

Unless otherwise agreed to in writing by the Grantee, or otherwise specifically stated in the Notice of Grant, the adoption of the US Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable.

 

24. No Effect on Retirement and Other Benefit Plans

Except as specifically provided in a retirement or other benefit plan of the Company or a Subsidiary, Awards granted under the US Plan shall not be deemed compensation for purposes of computing benefits or contributions under any retirement plan of the Company or a Subsidiary, and shall not affect any benefits under any other benefit plan of any kind or any benefit plan subsequently instituted under which the availability or amount of benefits is related to level of compensation. The US Plan is not a “Retirement Plan” or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.

 

25. Effective Date and Term of US Plan

The US Plan shall become effective on the date on which it is adopted by the Board, but no Award granted to an Eligible Person that is intended to comply with Section 162(m) shall become exercisable, vested or realizable, as applicable to such Award, unless and until the US Plan has been approved by the Company’s shareholders to the extent shareholders approval is required by Section 162(m) in the manner required under Section 162(m) (including the vote required under Section 162(m)). No Incentive Stock Option shall be granted under the US Plan unless and until the US Plan has been approved by Company shareholders within 12 months before or after the US Plan is adopted by the Board, as required under Treasury Regulation 1.422-2(b). No Award shall be granted under the US Plan after the completion of ten years from the earlier of (i) the date on which the US Plan was adopted by the Board or (ii) the date the US Plan was approved by the Company’s shareholders.

 

26. Compliance with Code Section 409A

To the extent applicable, it is intended that the US Plan and any Awards granted under the US Plan shall comply with the requirements of Section 409A of the Code, or an exemption or exclusion therefrom and any related regulations or other guidance promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service (“Section 409A”). The company shall have no liability to a Grantee, or any other party, if any Award that is intended to be exempt from, or compliant with, Section 409A is not so exempt or compliant (including for any resulting taxes, interest, or penalties imposed under Section 409A), or for any action taken by the Board. Any provision that would cause the US Plan or any Notice of Grant for an Award granted hereunder to fail to remain exempt from or comply with Section 409A shall have no force or effect until amended in the least restrictive manner necessary to remain exempt from or comply with Section 409A,

 

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which amendment may be retroactive to the extent permitted by Section 409A. Notwithstanding the provisions of Section 17 to the contrary, the Board may amend the Plan or a Notice of Grant at any time to the extent it deems necessary to comply with or meet an exception from Section 409A, in its sole and absolute discretion.

 

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Exhibit 99.4

R AVELLO S YSYEMS L TD .

E MPLOYEE S HARE I NCENTIVE P LAN , 2011

I. Name, Purpose and Definitions

 

1 Name

This plan, as amended from time to time, shall be known as the Ravello Systems Ltd. Employee Share Incentive Plan, 2011 or the Plan.

 

2 Purpose

2.1 The purpose and intent of the Plan is to provide incentives to the Israeli employees and directors of Ravello Systems Ltd. and/or its Affiliates (as defined below) by giving them the opportunity to purchase Ordinary Shares of the Company (as defined below), pursuant to an incentive plan approved by the Board of Directors of the Company and the Israeli Tax Authorities, which is designed to benefit from tax benefits available to employees under Section 102 of the Income Tax Ordinance and the rules and regulations promulgated thereunder.

2.2 The Plan is designed to comply with the “Capital Gain Track” under Section 102 of the Income Tax Ordinance; i.e. Options granted hereunder shall be subject to Section 102(b)(2) of the Income Tax Ordinance, as may be amended from time to time.

 

3 Definitions

As used in the Plan, the following terms shall have the meanings assigned to them in this Section 3.

Affiliate ” shall mean a present or future company that controls, is controlled by, or under common control with, the Company.

Board ” shall mean the board of directors of the Company.

Company ” shall mean Ravello Systems Ltd.

Companies Law” shall mean the Israeli Companies Law, 5759-1999, as may be amended from time to time.

Controlling Shareholder ” shall have the meaning ascribed to it in Section 32(9) of the Income Tax Ordinance, as may be amended from time to time.

Date of Grant ” shall have the meaning set forth in Section 9.2.

Director ” shall mean a member of the Board.

Disability” shall mean the inability, due to illness, injury or mental condition to engage in any gainful occupation for which an individual is qualified by education, training or experience, and such condition continues for at least six (6) months.


Employee ” shall mean an Israeli employee of the Company or its Affiliates, including an Israeli Director or other Officer of the Company or its Affiliates, excluding, however, a Controlling Shareholder of the Company or its Affiliates.

Exercise Price ” shall mean the price required to be paid by a Grantee in connection with the exercise of an Option.

Fair Market Value ” shall mean, as of any date, the value of an Ordinary Share, which shall be determined as follows: (i) if the Ordinary Shares are listed or quoted on any established stock exchange or a national market system, including without limitation the NASDAQ National Market system, or the NASDAQ SmallCap Market of the NASDAQ Stock Market, the Fair Market Value shall be the closing sales price for such Ordinary Shares (or the closing bid, if no sales were reported), as quoted on such exchange or system for the last market trading day prior to time of determination, as reported in the Wall Street Journal, or such other source as the Board deems reliable; or (ii) in the absence of an established market for the Ordinary Shares, the Fair Market Value thereof as determined in good faith by the Board.

Grantee ” an Employee to whom Options are granted under the Plan.

Holding Period ” shall have the meaning set forth in Section 10.1.

The “ Income Tax Ordinance ” shall mean the Israeli Income Tax Ordinance (New Version), 1961, as amended from time to time.

M&A Transaction” shall mean a merger, acquisition or reorganization of the Company with one or more other entities in which the Company is not the surviving entity.

Notice of Grant ” shall have the meaning set forth in Section 9.3.

Officer ” shall mean an office holder - “Nose Misra”, as such term is defined in the Companies Law, excluding, however, a Director.

Option ” shall mean an Option to purchase one (1) Ordinary Share.

Ordinary Share ” shall mean an Ordinary Share of the Company, NIS 0.01 par value.

Relative ” shall mean a spouse, sibling, parent, grand-parent, descendant, a spouse’s descendant and a spouse of any of the foregoing.

Successor Corporation ” shall mean the surviving entity in an M&A Transaction.

Trustee ” shall mean a trustee designated by the Board for purposes of the Plan and approved by the Israeli Tax Authorities.

 

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II. General Terms and Conditions of the Plan

 

4 Administration

4.1 The Plan shall be administered by the Board. The Board shall have the full authority in its sole and absolute discretion, from time to time and at any time, to determine:

4.1.1 the identity of the Grantees;

4.1.2 the number of Options to be granted to each Grantee;

4.1.3 the time or times at which the same shall be granted;

4.1.4 the Exercise Price, vesting schedule, expiration date and other terms and conditions relating to Options granted;

4.1.5 the schedule and conditions on which the Options and/or Ordinary Shares issued upon exercise of Options shall be released from the Trustee; and/or

4.1.6 any other matter that, in the Board’s sole and absolute discretion, is necessary or desirable for, or incidental to, the administration of the Plan. Without derogating from the above, in determining the number of Options to be granted to each Grantee, the Board may consider, among other things, the Grantee’s salary, the duration of the Grantee’s employment by the Company, and the Grantee’s contribution to the Company.

4.2 The Board may, from time to time, adopt such rules and regulations for carrying out the Plan as it may deem necessary. No member of the Board shall be liable for any act or determination made in good faith with respect to the Plan or any Option granted hereunder.

4.3 The Board shall be entitled to delegate any or all of its powers hereunder to a committee of the Board, subject to applicable law.

4.4 The interpretation and construction by the Board of any provision of the Plan or of any Option thereunder shall be final and conclusive unless otherwise determined by the Board.

 

5 Limitations on Grant of Options & Shares

5.1 The Board shall be entitled to grant to certain Employees shares of the Company instead of Options, as it may deem desirable. The provisions of the Plan shall apply to such grant of shares mutatis mutandis .

5.2 No shares, and/or options to purchase shares, of the Company may be granted to any Employee of the Company other than pursuant to the “Capital Gain Track” under Section 102 of the Income Tax Ordinance prior to January 1, 2013.

 

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5.3 Notwithstanding Section 5.2, shares, and/or options to purchase shares, of the Company may be granted to Employees pursuant to the “grant of shares without a trustee” track under Section 102(c) of the Income Tax Ordinance prior to January 1, 2013. The provisions of Section 10 below shall not apply to such a grant of shares or options to purchase shares and the other provisions of the Plan shall apply mutatis mutandis .

 

6 Eligible Grantees

6.1 The Board, at its discretion, may grant Options to any Employee, provided , however , that all grants of Options to Directors and other Officers of the Company or any Affiliate shall be authorized and implemented only in accordance with the provisions of the Companies Law.

6.2 The grant of an Option to a Grantee hereunder shall neither entitle such Grantee to participate, nor disqualify him/her from participating, in any other grant of Options pursuant to the Plan or any other share options incentive plan of the Company, or any Affiliate of the Company.

 

7 Grant of Options to Employees of Affiliates

In the event that the Company shall resolve to grant Options under the Plan to an Employee of an Affiliate, all the provisions of the Plan shall apply to such Affiliate mutatis mutandis .

 

8 Reserved Shares

The Board may from time to time reserve certain amounts of authorized but unissued Ordinary Shares for the purpose of granting Options and/or Ordinary Shares under the Plan. If an Option granted under the Plan expires or becomes un-exercisable, the Ordinary Share covered by such Option shall become available for future grants under the Plan, unless the Plan has terminated.

 

9 Grant of Options

9.1 Options may be granted at any time after the passage of thirty (30) days following the delivery by the Company to the Israeli Tax Authorities of the Plan for their approval.

9.2 The Date of Grant of an Option shall be the date specified by the Board in its determination relating to the award of such Option.

9.3 The Board shall remit to each Grantee a Notice of Grant, which shall include the number of Options granted to such Grantee, the vesting schedule, the terms of exercise of such Options and such other terms and conditions as the Board, at its discretion, may prescribe.

 

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10 Trust

10.1 All Options granted under the Plan to Grantees shall be granted by the Company to the Trustee, who shall hold such Options and the Ordinary Shares issued upon exercise thereof in trust for the benefit of the Grantee in respect of whom such Options were granted. All Options and/or Ordinary Shares issued upon exercise thereof shall be held by the Trustee until the later of (i) the lapse of 24 months from the Date of Grant or any other holding period that may be applicable to such Options and/or Ordinary Shares, pursuant to Section 102 of the Income Tax Ordinance or any regulations, rules or orders or procedures promulgated thereunder, as amended from time to time (the “ Holding Period ”), unless the Israeli Tax Authorities shall permit the release of Options and/or Ordinary Shares before the end of the Holding Period; and (ii) such date on which the Grantee shall instruct the Trustee to transfer the Options and/or Ordinary Shares issued upon the exercise of Options to himself/herself or to a third party.

10.2 After the expiration of the Holding Period, Options granted, and/or Ordinary Shares issued to the Trustee shall continue to be held by the Trustee, on behalf of the Grantee.

10.3 From the expiration of the Holding Period and thereafter, upon the written request of a Grantee, the Trustee shall release the Options, and/or the Ordinary Shares issued upon the exercise thereof, from the trust by executing and delivering to the Company such instrument(s) as the Company may require, giving due notice of such release to such Grantee, provided , however , that the Trustee shall not so release any such Options and/or Ordinary Shares to a Grantee unless, prior to, or concurrently with, such release, the latter provides the Trustee with evidence, satisfactory in form and substance to the Trustee, that all taxes, if any, required to be paid upon such release have, in fact, been paid.

10.4 Alternatively, from and after the expiration of the Holding Period, upon the written instructions of the Grantee to sell any Ordinary Shares issued upon exercise of Options to a purchaser provided by the Grantee, and at the price and other terms finalized by the Grantee, the Trustee shall use commercially reasonable efforts to affect such sale subject to and in accordance with the Company’s Articles of Association and any other agreement applicable to the Ordinary Shares, and shall transfer such shares to the purchaser thereof concurrently with the receipt, or after having made suitable arrangements to secure the payment, of the purchase price in such transaction. Notwithstanding the above, the Trustee shall not release any Ordinary Share to the purchaser unless, prior to, or concurrently with, such release, the Grantee provides the Trustee with evidence, satisfactory in form and substance to the Trustee, that all taxes, if any, required to be paid upon such release have, in fact, been paid. If payment of such taxes by the Grantee is not practicable, the Trustee shall withhold from such proceeds any and all taxes required to be paid in respect of such sale and/or release, shall remit the amount so withheld to the appropriate Israeli Tax Authorities, and shall pay the balance thereof directly to the Grantee (after deducting its costs as provided hereunder), reporting to such Grantee and to the Company the amount so withheld and paid to said tax authorities.

 

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Should the Trustee sell Ordinary Shares at the request of the Grantee, the Grantee shall pay the Trustee for its services and for any costs and expenses incurred with respect to such sale of shares, and the Trustee will be entitled to withhold such amounts and pay the balance thereof to said Grantee.

 

11 Dividends and Voting Rights; Rights as Shareholders

11.1 All Ordinary Shares issued upon the exercise of Options granted under the Plan shall entitle the Grantee to all the rights attached to the Ordinary Shares of the Company, including the right to receive dividends with respect thereto and to vote the same at any meeting of the shareholders of the Company, subject however to the provisions of Sections 11.2, 11.3 and 11.4.

11.2 For as long as Ordinary Shares are held by the Trustee on behalf of a Grantee, cash dividends or dividends in kind or assets shall be paid or distributed directly to the Grantee, after withdrawing applicable taxes. However, all share dividends and/or bonus shares and/or securities of the Company issued and/or distributed to the Grantee with respect to Ordinary Shares held by the Trustee on behalf of a Grantee shall be remitted to the Trustee, which shall hold the same for the benefit of such Grantee until the Ordinary Shares are released from trust pursuant to Section 10.1 above, and such share dividends, bonus shares or securities of the Company shall be subject to the provisions of Section 102 of the Income Tax Ordinance.

11.3 Ordinary Shares issued upon the exercise of Options granted under the Plan, whether held by the Trustee or the Grantee, shall be voted by an irrevocable proxy and power of attorney to the Chairman of the Board of Directors of the Company or any other person designated by the Chairman of the Board of Directors. On each and every issue brought before the shareholders of the Company for their resolution, the Chairman of the Board of Directors of the Company (or any other person designated by the Chairman of the Board of Directors) shall vote in accordance with the resolution that would have been adopted by all shareholders of the Company actually voting on such issue other than the shareholders represented by such proxy. Upon the exercise of the Options and as condition to such exercise each Grantee shall sign a proxy, and authorize the Trustee to sign such a proxy, with respect to his or her Ordinary Shares.

11.4 For the avoidance of any doubt, the Grantees shall not be deemed for any purpose whatsoever to be shareholders of the Company before the exercise of the Options granted to them and shall have no rights or privileges as shareholders of the Company, nor shall they be deemed to be a class of shareholders, or creditors, of the Company for purpose of, inter alia , the operation of sections 341, 350 and 351 of the Companies Law and the approvals of mergers thereunder. In addition, and without derogating from the foregoing, Sections 184 and 185 of the Companies Law shall not apply to the Grantees in respect of unexercised Options.

 

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12 Vesting and Term of Options

12.1 Without derogating from the rights and powers of the Board under Section 4.1 hereof, unless otherwise specified in the Notice of Grant, each vested Option shall be exercisable for a term of ten (10) years from the Date of Grant, and the vesting schedule of any quantity of Options granted under the Plan shall be such that twenty-five percent (25%) of such Options shall vest on the first anniversary of the Date of Grant, and an additional two point zero eight three (2.083%) of such Options shall vest on the end of each month thereafter ( i.e. , the entire quantity of Options shall vest four (4) years after the Date of Grant).

12.2 Unless the Board provides otherwise, vesting of Options shall be suspended during any unpaid leave of absence, other than, in the case of any (a) leave of absence which was pre-approved by the Company for purpose of continuing the vesting of Options, or (b) transfers between locations of the Company or between the Company, any affiliate, or any respective successor thereof.

 

13 Exercise Price

Without derogating from the rights and powers of the Board under Section 4.1 hereof, the Exercise Price per Ordinary Share covered by each Option shall not be less than the par value of the Ordinary Shares.

 

14 Exercise of Options

14.1 Options shall, upon vesting, become exercisable pursuant to the terms under which they were awarded and subject to the terms and conditions of the Plan.

14.2 The exercise of an Option shall be made by a written notice of exercise delivered by the Grantee to the Company at its principal executive office specifying the number of Options to be exercised and accompanied by the payment of the exercise price therefor, and containing such other terms and conditions as the Board shall prescribe from time to time. In addition, the Grantee shall deliver a signed proxy as detailed in Section 11 above to the Company with respect to the exercised shares.

14.3 Anything herein to the contrary notwithstanding, but without derogating from the provisions of Section 15 hereof, if any Option has not been exercised within ten (10) years after the Date of Grant (or any shorter period set forth in the Notice of Grant), such Option shall terminate, all interests and rights of the Grantee in and to the same shall ipso facto expire, and, in the event that in connection therewith any Options are still held in trust as aforesaid, the trust with respect thereto shall ipso facto expire.

14.4 Each payment for Ordinary Shares shall be in respect of a whole number of Ordinary Shares, and shall be effected in cash or by a cashier’s check payable to the order of the Company, or such other method of payment acceptable to the Company.

 

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15 Termination of Employment

In the event that a Grantee ceases to be employed by, or to serve as a Director of, the Company for any reason, all Options previously granted to such Grantee shall terminate as follows:

15.1 If the Grantee’s termination of employment or directorship is due to such Grantee’s death or Disability, such Options (to the extent exercisable at the time of the Grantee’s termination of employment or services) shall be exercisable by the Grantee’s legal representative, estate manager or any other person to whom the Grantee’s rights are transferred by will or by laws of descent or distribution, or the Grantee, as the case might be, for a period of six (6) months following such termination of employment or directorship (but in no event after the expiration date of such Options), and shall thereafter terminate.

15.2 If the Grantee’s termination of employment or directorship is due to, or connected with, one of the following instances, the trust with respect to said Grantee’s Options shall ipso facto expire, the Options shall terminate, all interests and rights of the Grantee in and to the same shall ipso facto expire, and the Grantee shall not be entitled to exercise any of the Options, even if such Options had already vested at that time. The said instances are as follows:

15.2.1 The Grantee acts dishonestly or breaches his/her fiduciary duties or duty of loyalty towards the Company and/or its Affiliates;

15.2.2 The Grantee breaches intentionally in a material way the terms of his/her employment agreement, or other agreement with the Company and/or its Affiliates.

15.3 If the Grantee’s termination of employment or services is for any reason other than those described in sub-sections 15.1 or 15.2 above, such Options (to the extent exercisable at the time of the Grantee’s termination of employment or directorship) shall be exercisable for a period of ninety (90) days following such termination of employment or directorship (but in no event after the expiration date of such Options), and shall thereafter terminate.

15.4 Options that have not vested at the time of the Grantee’s termination of employment or directorship shall expire immediately upon the termination of such employment or directorship, for any reason.

15.5 Notwithstanding the foregoing provisions of this Section 15, the Board may provide, either at the time an Option is granted or thereafter, that such Option may be exercised after the periods provided for in Section 15, but in no event beyond the expiration date of the Option.

15.6 For the purpose of this Section 15, the transfer of an Employee from the employ of the Company to the employ of an Affiliate or between Affiliates shall not be deemed to be a termination of employment.

 

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16 Adjustment upon Changes in Capitalization, M&A Transaction or Restructuring

16.1 Subject to any required action by the shareholders of the Company, the number of outstanding Options as well as the Exercise Price of each such outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued Ordinary Shares resulting from a split, reverse split, bonus issue, any other securities dividend, combination of the Ordinary Shares or any other increase or decrease in the number of issued Ordinary Shares effected without receipt of any consideration by the Company, provided, however, that the conversion of any convertible securities of the Company and/or the issuance of shares in connection with anti-dilution rights shall not be deemed to have been “effected without receipt of consideration”. Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of any class, or securities convertible into shares of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number of outstanding Options and Exercise Price thereof.

16.2 In the event of an M&A Transaction, then upon the consummation of such M&A Transaction, each outstanding Option shall be substituted by an equivalent security of the Successor Corporation, and each Grantee shall be entitled to purchase, subject to the conditions herein stated, such Successor Corporation’s replacement securities, as were exchangeable for the number of Ordinary Shares, which such Grantee would have been entitled to purchase except for such M&A Transaction, and the appropriate adjustments in the Exercise Price of such Options shall be made in order to reflect such exchange.

16.3 In addition, subject to any applicable law, the Board shall have full power and authority to determine that, in connection with a proposed M&A Transaction or the sale of all or substantially all of the Company’s assets, the vesting of all, or part of, the Options outstanding and unvested at that time shall be accelerated so that any unvested Option or any portion thereof shall be vested immediately prior to closing of the M&A Transaction or the sale of assets.

16.4 Notwithstanding the above and subject to any applicable law, the Board shall have full power and authority to determine that, in connection with an M&A Transaction, if the Successor Corporation does not agree to assume or substitute the Options, then, in lieu of such assumption or substitution of Options, such Options will be substituted for any other type of asset or property, including cash, which the Board determines, in its sole and absolute discretion, to be fair under the circumstances. Without derogating from the generality of the above, and subject to any applicable law, the Board shall have full power and authority to determine that, in connection with an M&A Transaction, if the Successor Corporation does not agree to assume or substitute the Options, any vested (including pursuant to Section 16.3 above) and unexercised Option shall be automatically exercised by way of a Net Exercise immediately prior to the closing of the M&A Transaction.

 

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For the purpose of this Section 16.4 the term “ Net Exercise ” shall mean the exercise of an Option for a number of Ordinary Shares that shall be computed using the following formula:

 

X   =    A – B   
       A   

Where X = the number of Ordinary Shares to be issued to the Grantee.

A = the Fair Market Value of one Ordinary Share.

B = the Exercise Price.

No fractional Ordinary Shares shall be issued in connection with a Net Exercise hereunder, but in lieu of such fractional shares, the Company shall make cash payment therefor upon the basis of the Fair Market Value of such Ordinary Shares.

16.5 If the Company is liquidated or dissolved while unexercised vested Options remain outstanding under the Plan, then all such outstanding vested Options may be exercised in full by the Grantees as of the effective date of any such liquidation or dissolution of the Company, by a Grantee giving notice in writing to the Company of an intention to exercise, paying the Exercise Price of the Options being exercised, and complying with the other conditions of exercise of such vested Options. The Company will notify the Grantees of Options that are not yet exercised of such event no later than ten (10) days prior thereto. However, if the Company fails to notify any Grantee, it will only be liable to make provisions so that the rights of such Grantee in respect of unexercised vested Option are not impaired or are substituted for any other type of asset or property, including cash, which is fair under the circumstances. All unvested Options, and vested Option that remains unexercised at the end of such ten-day period, shall immediately expire.

16.6 In the event of a restructuring of the Company’s capital that is not regulated under this Section 16, then upon the consummation of such restructuring, each Grantee shall be entitled to purchase, subject to the conditions herein stated, such number of the Company’s replacement securities, as were exchangeable for, or have come in the stead of, the number of Ordinary Shares, which such Grantee would have been entitled to purchase except for such restructuring, and the appropriate adjustments shall be made to reflect such action.

 

17 Non-Transferability

17.1 No Option shall be assignable or transferable by the Grantee to whom it was granted other than by will or the laws of descent and distribution, and an Option may be exercised during the lifetime of the Grantee only by such Grantee or by such Grantee’s guardian or legal representative. The terms of such Option shall be binding upon the beneficiaries, executors, administrators, heirs and successors of such Grantee.

 

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17.2 No Ordinary Share issued upon the exercise of an Option granted to the Grantee, or directly issued to the Grantee under the Plan, shall be transferable, other than by will or the laws of descent and distribution, until the earlier of (i) the closing of an M&A Transaction; or (ii) the closing of an initial public offering of equity securities of the Company (subject to Section 18 below); or (iii) the elapse of ten (10) years from the date of grant of such Option (or from the date of direct issuance of such Ordinary Share under the Plan, as applicable). Thereafter, transfer by a Grantee to any third party of any Ordinary Shares issued upon the exercise of Options granted to the Grantee, or directly issued to the Grantee under the Plan, shall be subject to all conditions and terms set out in the Articles of Association of the Company, as amended from time to time, subject to all conditions and terms set out in the Plan, and subject to all other conditions and terms by which each Grantee is otherwise bound.

 

18 Lock-Up

After the Company’s initial public offering in any stock exchange, all shares held by the Grantee shall be subject to any legal restrictions on the sale of shares of the Company and/or to any restrictions on the sale of shares of the Company required by the underwriters in any public offering, and the Grantee shall be required to cooperate with the Company and sign any document that may be required by the underwriters.

 

19 Amendment of the Plan

The Board may, at any time and from time to time, terminate or amend the Plan in any respect. Subject to Section 16, in no event an action of the Company shall alter or impair the rights of a Grantee, without his/her consent, under any Option previously granted to him/her.

 

20 Tax Consequences

All tax consequences arising from the grant or exercise of any Option, from the payment for, or the subsequent disposition of, Ordinary Shares covered thereby or from any other event or act (of the Company or the Grantee) hereunder, shall be borne solely by the Grantee, and the Grantee shall indemnify the Company and the Trustee, and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon.

 

21 Continuance of Employment

Neither the Plan nor the grant of an Option hereunder shall impose any obligation on the Company to continue the employment or directorship of any Grantee, or restrict the right of the Company to terminate such employment or directorship at any time.

 

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22 Governing Law

The Plan and all instruments issued thereunder or connection therewith, shall be governed by, and interpreted in accordance with the laws of the State of Israel.

 

23 Multiple Agreements

The terms of each Option may differ from other Options granted under the Plan at the same time, or at any other time. The Board may also grant Options to a given Grantee in more than one instance during the term of the Plan, either in addition to, or in substitution for, Options previously granted to that Grantee. The grant of Options in multiple instances may be evidenced by a single Notice of Grant or multiple Notices of Grant, as determined by the Board.

 

24 Non-Exclusivity of the Plan

Unless otherwise agreed to in writing by the Grantee, or otherwise specifically stated in the Notice of Grant, the adoption of the Plan by the Board shall not be construed as amending, modifying or rescinding any previously approved incentive arrangement or as creating any limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable.

 

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