Exhibit 10.4
AQUANTIA CORP.
2004 EQUITY INCENTIVE PLAN
As Adopted on October 14, 2004
1. PURPOSE. The purpose of this Plan is to provide incentives to attract, retain
and motivate eligible persons whose present and potential contributions are
important to the success of the Company, its Parent and Subsidiaries, by
offering them an opportunity to participate in the Company’s future performance
through awards of Options and Restricted Stock. Capitalized terms not defined in
the text are defined in Section 22 hereof. Although this Plan is intended to be
a written compensatory benefit plan within the meaning of Rule 701 promulgated
under the Securities Act, grants may be made pursuant to this plan which do not
qualify for exemption under Rule 701 or Section 25102(o) of the California
Corporations Code. Any requirement of this Plan which is required in law only
because of Section 25102(o) need not apply if the Committee so provides.
2. SHARES SUBJECT TO THE PLAN.
2.1 Number of Shares Available. Subject to Sections 2.2 and 17 hereof, the total
number of Shares reserved and available for grant and issuance pursuant to this
Plan will be Forty-Seven Million Eight Hundred Fifty-Six Thousand Six Hundred
Fifty-Six (47,856,656) Shares or such lesser number of Shares as permitted by
applicable law. Subject to Sections 2.2, 5.10 and 17 hereof, Shares subject to
Awards previously granted will again be available for grant and issuance in
connection with future Awards under this Plan to the extent such Shares:
(i) cease to be subject to issuance upon exercise of an Option, other than due
to exercise of such Option; (ii) are subject to an Award granted hereunder but
the Shares subject to such Award are forfeited or repurchased by the Company at
the original issue price; or (iii) are subject to an Award that otherwise
terminates without Shares being issued. At all times the Company will reserve
and keep available a sufficient number of Shares as will be required to satisfy
the requirements of all Awards granted and outstanding under this Plan.
2.2 Adjustment of Shares. In the event that the number of outstanding shares of
the Company’s Common Stock is changed by a stock dividend, recapitalization,
stock split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then (i) the number of Shares reserved for issuance under this Plan, (ii) the
Exercise Prices of and number of Shares subject to outstanding Options and
(iii) the Purchase Prices of and number of Shares subject to other outstanding
Awards will be proportionately adjusted, subject to any required action by the
Board or the stockholders of the Company and compliance with applicable
securities laws; provided, however, that fractions of a Share will not be issued
but will either be paid in cash at the Fair Market Value of such fraction of a
Share or will be rounded down to the nearest whole Share, as determined by the
Committee.
3. ELIGIBILITY. ISOs (as defined in Section 5 hereof) may be granted only to
employees (including officers and directors who are also employees) of the
Company or of a Parent or Subsidiary of the Company. NQSOs (as defined in
Section 5 hereof) and Restricted Stock Awards may be granted to employees,
officers, directors and consultants of the Company or any Parent or Subsidiary
of the Company; provided such consultants render bona fide services not in
connection with the offer and sale of securities in a capital-raising
transaction. A person may be granted more than one Award under this Plan.
4. ADMINISTRATION.
4.1 Committee Authority. This Plan will be administered by the Committee or the
Board if no Committee is created by the Board. Subject to the general purposes,
terms and conditions of this Plan, and to the direction of the Board, the
Committee will have full power to implement and carry out this Plan. Without
limitation, the Committee will have the authority to:

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(a) construe and interpret this Plan, any Award Agreement and any other
agreement or document executed pursuant to this Plan;
(b) prescribe, amend and rescind rules and regulations relating to this Plan;
(c) approve persons to receive Awards;
(d) determine the form and terms of Awards;
(e) determine the number of Shares or other consideration subject to Awards;
(f) determine whether Awards will be granted singly, in combination with, in
tandem with, in replacement of, or as alternatives to, other Awards under this
Plan or awards under any other incentive or compensation plan of the Company or
any Parent or Subsidiary of the Company;
(g) grant waivers of any conditions of this Plan or any Award;
(h) determine the terms of vesting, exercisability and payment of Awards;
(i) correct any defect, supply any omission, or reconcile any inconsistency in
this Plan, any Award, any Award Agreement, any Exercise Agreement or any
Restricted Stock Purchase Agreement;
(j) determine whether an Award has been earned;
(k) make all other determinations necessary or advisable for the administration
of this Plan; and
(l) extend the vesting period beyond a Participant’s Termination Date.
4.2 Committee Discretion. Unless in contravention of any express terms of this
Plan or Award, any determination made by the Committee with respect to any Award
will be made in its sole discretion either (i) at the time of grant of the
Award, or (ii) subject to Section 5.9 hereof, at any later time. Any such
determination will be final and binding on the Company and on all persons having
an interest in any Award under this Plan. The Committee may delegate to one or
more officers of the Company the authority to grant an Award under this Plan,
provided such officer or officers are members of the Board.
5. OPTIONS. The Committee may grant Options to eligible persons described in
Section 3 hereof and will determine whether such Options will be Incentive Stock
Options within the meaning of the Code (“ISOs”) or Nonqualified Stock Options
(“NQSOs”), the number of Shares subject to the Option, the Exercise Price of the
Option, the period during which the Option may be exercised, and all other terms
and conditions of the Option, subject to the following:
5.1 Form of Option Grant. Each Option granted under this Plan will be evidenced
by an Award Agreement which will expressly identify the Option as an ISO or an
NQSO (“Stock Option Agreement”), and will be in such form and contain such
provisions (which need not be the same for each Participant) as the Committee
may from time to time approve, and which will comply with and be subject to the
terms and conditions of this Plan.
5.2 Date of Grant. The date of grant of an Option will be the date on which the
Committee makes the determination to grant such Option, unless a later date is
otherwise specified by the Committee. The Stock Option Agreement and a copy of
this Plan will be delivered to the Participant within a reasonable time after
the granting of the Option.
5.3 Exercise Period. Options may be exercisable immediately but subject to
repurchase pursuant to Section 11 hereof or may be exercisable within the times
or upon the events determined by the Committee as set forth in the Stock Option
Agreement governing such Option; provided, however, that no Option will be
exercisable

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after the expiration of ten (10) years from the date the Option is granted; and
provided further that no ISO granted to a person who directly or by attribution
owns more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or of any Parent or Subsidiary of the Company
(“Ten Percent Stockholder”) will be exercisable after the expiration of five
(5) years from the date the ISO is granted. The Committee also may provide for
Options to become exercisable at one time or from time to time, periodically or
otherwise, in such number of Shares or percentage of Shares as the Committee
determines. Subject to earlier termination of the Option as provided herein, to
the extent section 25102(o) of the California Corporations Code is intended to
apply, each Participant who is not an officer, director or consultant of the
Company or of a Parent or Subsidiary of the Company shall have the right to
exercise an Option granted hereunder at the rate of no less than twenty percent
(20%) per year over five (5) years from the date such Option is granted.
5.4 Exercise Price. The Exercise Price of an Option will be determined by the
Committee when the Option is granted and may not be less than eighty-five
percent (85%) of the Fair Market Value of the Shares on the date of grant;
provided that (i) the Exercise Price of an ISO will not be less than one hundred
percent (100%) of the Fair Market Value of the Shares on the date of grant and
(ii) the Exercise Price of any Option granted to a Ten Percent Stockholder will
not be less than one hundred ten percent (110%) of the Fair Market Value of the
Shares on the date of grant. Payment for the Shares purchased must be made in
accordance with Section 7 hereof.
5.5 Method of Exercise. Options may be exercised only by delivery to the Company
of a written stock option exercise agreement (the “Exercise Agreement”) in a
form approved by the Committee (which need not be the same for each
Participant). The Exercise Agreement will state (i) the number of Shares being
purchased, (ii) the restrictions imposed on the Shares purchased under such
Exercise Agreement, if any, and (iii) such representations and agreements
regarding Participant’s investment intent and access to information and other
matters, if any, as may be required or desirable by the Company to comply with
applicable securities laws. Participant shall execute and deliver to the Company
the Exercise Agreement together with payment in full of the Exercise Price, and
any applicable taxes, for the number of Shares being purchased.
5.6 Termination. Subject to earlier termination pursuant to Sections 17 and 18
hereof and notwithstanding the exercise periods set forth in the Stock Option
Agreement, exercise of an Option will always be subject to the following:
(a) If the Participant is Terminated for any reason other than death, Disability
or for Cause, then the Participant may exercise such Participant’s Options only
to the extent that such Options are exercisable as to Vested Shares upon the
Termination Date or as otherwise determined by the Committee. Such Options must
be exercised by the Participant, if at all, as to all or some of the Vested
Shares calculated as of the Termination Date or such other date determined by
the Committee, within three (3) months after the Termination Date (or within
such shorter time period, not less than thirty (30) days, or within such longer
time period, not exceeding five (5) years, after the Termination Date as may be
determined by the Committee, with any exercise beyond three (3) months after the
Termination Date deemed to be an NQSO) but in any event, no later than the
expiration date of the Options.
(b) If the Participant is Terminated because of Participant’s death or
Disability (or the Participant dies within three (3) months after a Termination
other than for Cause), then Participant’s Options may be exercised only to the
extent that such Options are exercisable as to Vested Shares by Participant on
the Termination Date or as otherwise determined by the Committee. Such options
must be exercised by Participant (or Participant’s legal representative or
authorized assignee), if at all, as to all or some of the Vested Shares
calculated as of the Termination Date or such other date determined by the
Committee, within twelve (12) months after the Termination Date (or within such
shorter time period, not less than six (6) months, or within such longer time
period, not exceeding five (5) years, after the Termination Date as may be
determined by the Committee, with any exercise beyond (i) three (3) months after
the Termination Date when the Termination is for any reason other than the
Participant’s death or disability, within the meaning of Section 22(e)(3) of the
Code, or (ii) twelve (12) months after the Termination Date when the Termination
is for Participant’s disability, within the meaning of Section 22(e)(3) of the
Code, deemed to be an NQSO) but in any event no later than the expiration date
of the Options.

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(c) If the Participant is terminated for Cause, the Participant may exercise
such Participant’s Options, but not to an extent greater than such Options are
exercisable as to Vested Shares upon the Termination Date and Participant’s
Options shall expire on such Participant’s Termination Date, or at such later
time and on such conditions as are determined by the Committee.
5.7 Limitations on Exercise. The Committee may specify a reasonable minimum
number of Shares that may be purchased on any exercise of an Option, provided
that such minimum number will not prevent Participant from exercising the Option
for the full number of Shares for which it is then exercisable.
5.8 Limitations on ISOs. The aggregate Fair Market Value (determined as of the
date of grant) of Shares with respect to which ISOs are exercisable for the
first time by a Participant during any calendar year (under this Plan or under
any other incentive stock option plan of the Company or any Parent or Subsidiary
of the Company) will not exceed One Hundred Thousand Dollars ($100,000). If the
Fair Market Value of Shares on the date of grant with respect to which ISOs are
exercisable for the first time by a Participant during any calendar year exceeds
One Hundred Thousand Dollars ($100,000), then the Options for the first One
Hundred Thousand Dollars ($100,000) worth of Shares to become exercisable in
such calendar year will be ISOs and the Options for the amount in excess of One
Hundred Thousand Dollars ($100,000) that become exercisable in that calendar
year will be NQSOs. In the event that the Code or the regulations promulgated
thereunder are amended after the Effective Date (as defined in Section 18
hereof) to provide for a different limit on the Fair Market Value of Shares
permitted to be subject to ISOs, then such different limit will be automatically
incorporated herein and will apply to any Options granted after the effective
date of such amendment.
5.9 Modification, Extension or Renewal. The Committee may modify, extend or
renew outstanding Options and authorize the grant of new Options in substitution
therefor, provided that any such action may not, without the written consent of
a Participant, impair any of such Participant’s rights under any Option
previously granted. Any outstanding ISO that is modified, extended, renewed or
otherwise altered will be treated in accordance with Section 424(h) of the Code.
Subject to Section 5.10 hereof, the Committee may reduce the Exercise Price of
outstanding Options without the consent of Participants by a written notice to
them; provided, however, that the Exercise Price may not be reduced below the
minimum Exercise Price that would be permitted under Section 5.4 hereof for
Options granted on the date the action is taken to reduce the Exercise Price.
5.10 No Disqualification. Notwithstanding any other provision in this Plan, no
term of this Plan relating to ISOs will be interpreted, amended or altered, nor
will any discretion or authority granted under this Plan be exercised, so as to
disqualify this Plan under Section 422 of the Code or, without the consent of
the Participant, to disqualify any Participant’s ISO under Section 422 of the
Code. In no event shall the total number of Shares issued (counting each
reissuance of a Share that was previously issued and then forfeited or
repurchased by the Company as a separate issuance) under the Plan upon exercise
of ISOs exceed One Hundred Sixty-Three Million (163,000,000) Shares (adjusted in
proportion to any adjustments under Section 2.2 hereof) over the term of the
Plan.
6. RESTRICTED STOCK. A Restricted Stock Award is an offer by the Company to sell
to an eligible person Shares that are subject to certain specified restrictions.
The Committee will determine to whom an offer will be made, the number of Shares
the person may purchase, the Purchase Price, the restrictions to which the
Shares will be subject, and all other terms and conditions of the Restricted
Stock Award, subject to the following:
6.1 Form of Restricted Stock Award. All purchases under a Restricted Stock Award
made pursuant to this Plan will be evidenced by an Award Agreement (“Restricted
Stock Purchase Agreement”) that will be in such form (which need not be the same
for each Participant) as the Committee will from time to time approve, and will
comply with and be subject to the terms and conditions of this Plan. The
Restricted Stock Award will be accepted by the Participant’s execution and
delivery of the Restricted Stock Purchase Agreement and full payment for the
Shares to the Company within thirty (30) days from the date the Restricted Stock
Purchase Agreement is delivered to the person. If such person does not execute
and deliver the Restricted Stock Purchase Agreement along with full payment for
the Shares to the Company within such thirty (30) days, then the offer will
terminate, unless otherwise determined by the Committee.

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6.2 Purchase Price. The Purchase Price of Shares sold pursuant to a Restricted
Stock Award will be determined by the Committee and will be at least eighty-five
percent (85%) of the Fair Market Value of the Shares on the date the Restricted
Stock Award is granted or at the time the purchase is consummated, except in the
case of a sale to a Ten Percent Stockholder, in which case the Purchase Price
will be one hundred percent (100%) of the Fair Market Value on the date the
Restricted Stock Award is granted or at the time the purchase is consummated.
Payment of the Purchase Price must be made in accordance with Section 7 hereof.
6.3 Restrictions. Restricted Stock Awards may be subject to the restrictions set
forth in Section 11 hereof or such other restrictions not inconsistent with
Section 25102(o) of the California Corporations Code.
 
7. PAYMENT FOR SHARE PURCHASES.
7.1 Payment. Payment for Shares purchased pursuant to this Plan may be made in
cash (by check) or, where expressly approved for the Participant by the
Committee and where permitted by law:
(a) by cancellation of indebtedness of the Company owed to the Participant;
(b) by surrender of shares that: (i) either (A) have been owned by Participant
for more than six (6) months and have been paid for within the meaning of SEC
Rule 144 (and, if such shares were purchased from the Company by use of a
promissory note, such note has been fully paid with respect to such shares) or
(B) were obtained by Participant in the public market and (ii) are clear of all
liens, claims, encumbrances or security interests;
(c) by tender of a full recourse promissory note having such terms as may be
approved by the Committee and bearing interest at a rate sufficient to avoid
(i) imputation of income under Sections 483 and 1274 of the Code and
(ii) variable accounting treatment under Financial Accounting Standards Board
Interpretation No. 44 to APB No. 25; provided, however, that Participants who
are not employees or directors of the Company will not be entitled to purchase
Shares with a promissory note unless the note is adequately secured by
collateral other than the Shares;
(d) by waiver of compensation due or accrued to the Participant from the Company
for services rendered;
(e) with respect only to purchases upon exercise of an Option, and provided that
a public market for the Company’s stock exists:
(i) through a “same day sale” commitment from the Participant and a
broker-dealer that is a member of the National Association of Securities Dealers
(an “NASD Dealer”) whereby the Participant irrevocably elects to exercise the
Option and to sell a portion of the Shares so purchased sufficient to pay the
total Exercise Price, and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the total Exercise Price directly to the
Company; or
(ii) through a “margin” commitment from the Participant and an NASD Dealer
whereby the Participant irrevocably elects to exercise the Option and to pledge
the Shares so purchased to the NASD Dealer in a margin account as security for a
loan from the NASD Dealer in the amount of the total Exercise Price, and whereby
the NASD Dealer irrevocably commits upon receipt of such Shares to forward the
total Exercise Price directly to the Company; or
(f) by any combination of the foregoing.
7.2 Loan Guarantees. The Committee may, in its sole discretion, elect to assist
the Participant in paying for Shares purchased under this Plan by authorizing a
guarantee by the Company of a third-party loan to the Participant.

8. WITHHOLDING TAXES.

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8.1 Withholding Generally. Whenever Shares are to be issued in satisfaction of
Awards granted under this Plan, the Company may require the Participant to remit
to the Company an amount sufficient to satisfy federal, state and local
withholding tax requirements prior to the delivery of any certificate or
certificates for such Shares. Whenever, under this Plan, payments in
satisfaction of Awards are to be made in cash by the Company, such payment will
be net of an amount sufficient to satisfy federal, state, and local withholding
tax requirements.
8.2 Stock Withholding. When, under applicable tax laws, a Participant incurs tax
liability in connection with the exercise or vesting of any Award that is
subject to tax withholding and the Participant is obligated to pay the Company
the amount required to be withheld, the Committee may in its sole discretion
allow the Participant to satisfy the minimum withholding tax obligation by
electing to have the Company withhold from the Shares to be issued that minimum
number of Shares having a Fair Market Value equal to the minimum amount required
to be withheld, determined on the date that the amount of tax to be withheld is
to be determined; but in no event will the Company withhold Shares if such
withholding would result in adverse accounting consequences to the Company. All
elections by a Participant to have Shares withheld for this purpose will be made
in accordance with the requirements established by the Committee for such
elections and be in writing in a form acceptable to the Committee.
9. PRIVILEGES OF STOCK OWNERSHIP.
9.1 Voting and Dividends. No Participant will have any of the rights of a
stockholder with respect to any Shares until the Shares are issued to the
Participant. After Shares are issued to the Participant, the Participant will be
a stockholder and have all the rights of a stockholder with respect to such
Shares, including the right to vote and receive all dividends or other
distributions made or paid with respect to such Shares; provided, that if such
Shares are Restricted Stock, then any new, additional or different securities
the Participant may become entitled to receive with respect to such Shares by
virtue of a stock dividend, stock split or any other change in the corporate or
capital structure of the Company will be subject to the same restrictions as the
Restricted Stock. The Participant will have no right to retain such stock
dividends or stock distributions with respect to Unvested Shares that are
repurchased pursuant to Section 11 hereof. To the extent required, the Company
will comply with Section 260.140.1 of Title 10 of the California Code of
Regulations with respect to the voting rights of Common Stock.
9.2 Financial Statements. The Company will provide financial statements to each
Participant annually during the period such Participant has Awards outstanding,
or as otherwise required under Section 260.140.46 of Title 10 of the California
Code of Regulations. Notwithstanding the foregoing, the Company will not be
required to provide such financial statements to Participants when issuance of
Awards is limited to key employees whose services in connection with the Company
assure them access to equivalent information.
10. TRANSFERABILITY. Except as permitted by the Committee, Awards granted under
this Plan, and any interest therein, will not be transferable or assignable by
Participant, other than by will or by the laws of descent and distribution, and,
with respect to NQSOs, by instrument to an inter vivos or testamentary trust in
which the options are to be passed to beneficiaries upon the death of the
trustor (settlor), or by gift to “immediate family” as that term is defined in
17 C.F.R. 240.16a-1(e), and may not be made subject to execution, attachment or
similar process. During the lifetime of the Participant an Award will be
exercisable only by the Participant or Participant’s legal representative and
any elections with respect to an Award may be made only by the Participant or
Participant’s legal representative.

11. RESTRICTIONS ON SHARES.
11.1 Right of First Refusal. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) in the Award Agreement a right of first
refusal to purchase all Shares that a Participant (or a subsequent transferee)
may propose to transfer to a third party, unless otherwise not permitted by
Section 25102(o) of the California Corporations Code, provided that such right
of first refusal terminates upon the Company’s initial public offering of Common
Stock pursuant to an effective registration statement filed under the Securities
Act.

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11.2 Right of Repurchase. At the discretion of the Committee, the Company may
reserve to itself and/or its assignee(s) in the Award Agreement a right to
repurchase Unvested Shares held by a Participant for cash and/or cancellation of
purchase money indebtedness owed to the Company by the Participant following
such Participant’s Termination at any time within the later of ninety (90) days
after the Participant’s Termination Date and the date the Participant purchases
Shares under the Plan at the Participant’s Exercise Price or Purchase Price, as
the case may be, provided that to the extent Section 25102(o) of the California
Corporations Code is intended to apply, unless the Participant is an officer,
director or consultant of the Company or of a Parent or Subsidiary of the
Company, such right of repurchase lapses at the rate of no less than twenty
percent (20%) per year over five (5) years from: (a) the date of grant of the
Option or (b) in the case of Restricted Stock, the date the Participant
purchases the Shares.
12. CERTIFICATES. All certificates for Shares or other securities delivered
under this Plan will be subject to such stock transfer orders, legends and other
restrictions as the Committee may deem necessary or advisable, including
restrictions under any applicable federal, state or foreign securities law, or
any rules, regulations and other requirements of the SEC or any stock exchange
or automated quotation system upon which the Shares may be listed or quoted.
13. ESCROW; PLEDGE OF SHARES. To enforce any restrictions on a Participant’s
Shares set forth in Section 11 hereof, the Committee may require the Participant
to deposit all certificates representing Shares, together with stock powers or
other instruments of transfer approved by the Committee, appropriately endorsed
in blank, with the Company or an agent designated by the Company to hold in
escrow until such restrictions have lapsed or terminated. The Committee may
cause a legend or legends referencing such restrictions to be placed on the
certificates. Any Participant who is permitted to execute a promissory note as
partial or full consideration for the purchase of Shares under this Plan will be
required to pledge and deposit with the Company all or part of the Shares so
purchased as collateral to secure the payment of Participant’s obligation to the
Company under the promissory note; provided, however, that the Committee may
require or accept other or additional forms of collateral to secure the payment
of such obligation and, in any event, the Company will have full recourse
against the Participant under the promissory note notwithstanding any pledge of
the Participant’s Shares or other collateral. In connection with any pledge of
the Shares, Participant will be required to execute and deliver a written pledge
agreement in such form as the Committee will from time to time approve. The
Shares purchased with the promissory note may be released from the pledge on a
pro rata basis as the promissory note is paid.
14. EXCHANGE AND BUYOUT OF AWARDS. The Committee may, at any time or from time
to time, authorize the Company, with the consent of the respective Participants,
to issue new Awards in exchange for the surrender and cancellation of any or all
outstanding Awards. The Committee may at any time buy from a Participant an
Award previously granted with payment in cash, shares of Common Stock of the
Company (including Restricted Stock) or other consideration, based on such terms
and conditions as the Committee and the Participant may agree.
 
15. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE. Although this Plan is
intended to be a written compensatory benefit plan within the meaning of
Rule 701 promulgated under the Securities Act, grants may be made pursuant to
this plan which do not qualify for exemption under Rule 701 or Section 25102(o)
of the California Corporations Code. Any requirement of this Plan which is
required in law only because of Section 25102(o) need not apply if the Committee
so provides. An Award will not be effective unless such Award is in compliance
with all applicable federal and state securities laws, rules and regulations of
any governmental body, and the requirements of any stock exchange or automated
quotation system upon which the Shares may then be listed or quoted, as they are
in effect on the date of grant of the Award and also on the date of exercise or
other issuance. Notwithstanding any other provision in this Plan, the Company
will have no obligation to issue or deliver certificates for Shares under this
Plan prior to (i) obtaining any approvals from governmental agencies that the
Company determines are necessary or advisable, and/or (ii) compliance with any
exemption, completion of any registration or other qualification of such Shares
under any state or federal law or ruling of any governmental body that the
Company determines to be necessary or advisable. The Company will be under no
obligation to register the Shares with the SEC or to effect compliance with the
exemption, registration, qualification or listing requirements of any state
securities laws, stock exchange or automated quotation system, and the Company
will have no liability for any inability or failure to do so.

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16. NO OBLIGATION TO EMPLOY. Nothing in this Plan or any Award granted under
this Plan will confer or be deemed to confer on any Participant any right to
continue in the employ of, or to continue any other relationship with, the
Company or any Parent or Subsidiary of the Company or limit in any way the right
of the Company or any Parent or Subsidiary of the Company to terminate
Participant’s employment or other relationship at any time, with or without
Cause.
17. CORPORATE TRANSACTIONS.
17.1 Assumption or Replacement of Awards by Successor or Acquiring Company. In
the event of (i) a dissolution or liquidation of the Company, (ii) any
reorganization, consolidation, merger or similar transaction or series of
related transactions (each, a “combination transaction”)) in which the Company
is a constituent corporation or is a party if, as a result of such combination
transaction, the voting securities of the Company that are outstanding
immediately prior to the consummation of such combination transaction
(other than any such securities that are held by an “Acquiring Stockholder”, as
defined below) do not represent, or are not converted into, securities of the
surviving corporation of such combination transaction (or such surviving
corporation’s parent corporation if the surviving corporation is owned by the
parent corporation) that, immediately after the consummation of such combination
transaction, together possess at least fifty percent (50%) of the total voting
power of all securities of such surviving corporation (or its parent
corporation, if applicable) that are outstanding immediately after the
consummation of such combination transaction, including securities of such
surviving corporation (or its parent corporation, if applicable) that are held
by the Acquiring Stockholder; or (b) a sale of all or substantially all of the
assets of the Company, that is followed by the distribution of the proceeds to
the Company’s stockholders, any or all outstanding Awards may be assumed,
converted or replaced by the successor or acquiring corporation (if any), which
assumption, conversion or replacement will be binding on all Participants. In
the alternative, the successor or acquiring corporation may substitute
equivalent Awards or provide substantially similar consideration to Participants
as was provided to stockholders of the Company (after taking into account the
existing provisions of the Awards). The successor or acquiring corporation may
also substitute by issuing, in place of outstanding Shares of the Company held
by the Participant, substantially similar shares or other property subject to
repurchase restrictions and other provisions no less favorable to the
Participant than those which applied to such outstanding Shares immediately
prior to such transaction described in this Section 17.1. For purposes of this
Section 17.1, an “Acquiring Stockholder” means a stockholder or stockholders of
the Company that (i) merges or combines with the Company in such combination
transaction or (ii) owns or controls a majority of another corporation that
merges or combines with the Corporation in such combination transaction. In the
event such successor or acquiring corporation (if any) refuses to assume,
convert, replace or substitute Awards, as provided above, pursuant to a
transaction described in this Section 17.1, then notwithstanding any other
provision in this Plan to the contrary, the vesting of such Awards will
accelerate and the Awards will become exercisable in full prior to the
consummation of such event at such times and on such conditions as the Committee
determines, and if such Awards are not exercised prior to the consummation of
the corporate transaction, they shall terminate in accordance with the
provisions of this Plan.
17.2 Other Treatment of Awards. Subject to any greater rights granted to
Participants under the foregoing provisions of this Section 17, in the event of
the occurrence of any transaction described in Section 17.1 hereof, any
outstanding Awards will be treated as provided in the applicable agreement or
plan of reorganization, merger, consolidation, dissolution, liquidation or sale
of assets.
17.3 Assumption of Awards by the Company. The Company, from time to time, also
may substitute or assume outstanding awards granted by another company, whether
in connection with an acquisition of such other company or otherwise, by either
(i) granting an Award under this Plan in substitution of such other company’s
award or (ii) assuming such award as if it had been granted under this Plan if
the terms of such assumed award could be applied to an Award granted under this
Plan. Such substitution or assumption will be permissible if the holder of the
substituted or assumed award would have been eligible to be granted an Award
under this Plan if the other company had applied the rules of this Plan to such
grant. In the event the Company assumes an award granted by another company, the
terms and conditions of such award will remain unchanged (except that the
exercise price and the number and nature of shares issuable upon exercise of any
such option will be adjusted appropriately pursuant to Section 424(a) of the
Code). In the event the Company elects to grant a new Option rather than
assuming an existing option, such new Option may be granted with a similarly
adjusted Exercise Price.

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18. ADOPTION AND STOCKHOLDER APPROVAL. This Plan will become effective on the
date that it is adopted by the Board (the “Effective Date”). This Plan will be
approved by the stockholders of the Company (excluding Shares issued pursuant to
this Plan), consistent with applicable laws, within twelve (12) months before or
after the Effective Date. Upon the Effective Date, the Board may grant Awards
pursuant to this Plan; provided, however, that: (i) no Option may be exercised
prior to initial stockholder approval of this Plan; (ii) no Option granted
pursuant to an increase in the number of Shares approved by the Board shall be
exercised prior to the time such increase has been approved by the stockholders
of the Company; (iii) in the event that initial stockholder approval is not
obtained within the time period provided herein, all Awards granted hereunder
shall be canceled, any Shares issued pursuant to any Award shall be canceled and
any purchase of Shares issued hereunder shall be rescinded; and (iv) Awards
granted pursuant to an increase in the number of Shares approved by the Board
which increase is not timely approved by stockholders shall be canceled, any
Shares issued pursuant to any such Awards shall be canceled, and any purchase of
Shares subject to any such Award shall be rescinded.
19. TERM OF PLAN/GOVERNING LAW. Unless earlier terminated as provided herein,
this Plan will terminate ten (10) years from the Effective Date or, if earlier,
the date of stockholder approval. This Plan and all agreements hereunder shall
be governed by and construed in accordance with the laws of the State of
California.
 
20. AMENDMENT OR TERMINATION OF PLAN. Subject to Section 5.9 hereof, the Board
may at any time terminate or amend this Plan in any respect, including without
limitation amendment of any form of Award Agreement or instrument to be executed
pursuant to this Plan; provided, however, that the Board will not, without the
approval of the stockholders of the Company, amend this Plan in any manner that
requires such stockholder approval pursuant to Section 25102(o) of the
California Corporations Code or the Code or the regulations promulgated
thereunder as such provisions apply to ISO plans.
21. NONEXCLUSIVITY OF THE PLAN. Neither the adoption of this Plan by the Board,
the submission of this Plan to the stockholders of the Company for approval, nor
any provision of this Plan will be construed as creating any limitations on the
power of the Board to adopt such additional compensation arrangements as it may
deem desirable, including, without limitation, the granting of stock options and
other equity awards otherwise than under this Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.
22. DEFINITIONS. As used in this Plan, the following terms will have the
following meanings:
“Award” means any award under this Plan, including any Option or Restricted
Stock Award.
“Award Agreement” means, with respect to each Award, the signed written
agreement between the Company and the Participant setting forth the terms and
conditions of the Award, including the Stock Option Agreement and Restricted
Stock Agreement.
“Board” means the Board of Directors of the Company.
“Cause” means Termination because of (i) any willful, material violation by the
Participant of any law or regulation applicable to the business of the Company
or a Parent or Subsidiary of the Company, the Participant’s conviction for, or
guilty plea to, a felony or a crime involving moral turpitude, or any willful
perpetration by the Participant of a common law fraud, (ii) the Participant’s
commission of an act of personal dishonesty which involves personal profit in
connection with the Company or any other entity having a business relationship
with the Company, (iii) any material breach by the Participant of any provision
of any agreement or understanding between the Company or any Parent or
Subsidiary of the Company and the Participant regarding the terms of the
Participant’s service as an employee, officer, director or consultant to the
Company or a Parent or Subsidiary of the Company, including without limitation,
the willful and continued failure or refusal of the Participant to perform the
material duties required of such Participant as an employee, officer, director
or consultant of the Company or a Parent or Subsidiary of the Company, other
than as a result of having a Disability, or a breach of any applicable invention
assignment and confidentiality agreement or similar agreement between the
Company or a Parent or Subsidiary of the Company and the Participant,
(iv) Participant’s disregard of the policies of the Company or any Parent or
Subsidiary of the Company so as to cause loss, damage or injury to the property,
reputation or employees

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of the Company or a Parent or Subsidiary of the Company, or (v) any other
misconduct by the Participant which is materially injurious to the financial
condition or business reputation of, or is otherwise materially injurious to,
the Company or a Parent or Subsidiary of the Company.
“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means the committee created and appointed by the Board to administer
this Plan, or if no committee is created and appointed, the Board.
“Company” means Aquantia Corp., or any successor corporation.
Participant shall have been “Constructively Terminated” in the event that
Participant terminates the employment or consultantcy of Participant with the
surviving company in a Change of Control as a result of the surviving company in
a combination transaction (i) materially changing the type of services
Participant is required to provide to the surviving company from those
Participant had been providing to the Company prior to such combination
transaction, (ii) reducing Participant’s level of base compensation (including
base salary and benefits) other than as a part of a comparable reduction
applicable to other similarly-situated employees generally or (iii) requiring
Participant to relocate more than seventy-five (75) miles in order to continue
to provide services to the surviving company in a combination transaction.
“Disability” means a disability, whether temporary or permanent, partial or
total, as determined by the Committee.
“Exercise Price” means the price at which a holder of an Option may purchase the
Shares issuable upon exercise of the Option.
“Fair Market Value” means, as of any date, the value of a share of the Company’s
Common Stock determined as follows:
(a) if such Common Stock is then quoted on the Nasdaq National Market, its
closing price on the Nasdaq National Market on the date of determination as
reported in The Wall Street Journal;
(b) if such Common Stock is publicly traded and is then listed on a national
securities exchange, its closing price on the date of determination on the
principal national securities exchange on which the Common Stock is listed or
admitted to trading as reported in The Wall Street Journal;
(c) if such Common Stock is publicly traded but is not quoted on the Nasdaq
National Market nor listed or admitted to trading on a national securities
exchange, the average of the closing bid and asked prices on the date of
determination as reported by The Wall Street Journal (or, if not so reported, as
otherwise reported by any newspaper or other source as the Board may determine);
or
(d) if none of the foregoing is applicable, by the Committee in good faith.
“Option” means an award of an option to purchase Shares pursuant to Section 5
hereof.
“Parent” means any corporation (other than the Company) in an unbroken chain of
corporations ending with the Company if each of such corporations other than the
Company owns stock representing fifty percent (50%) or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
“Participant” means a person who receives an Award under this Plan.
“Plan” means this Aquantia Corp. 2004 Equity Incentive Plan, as amended from
time to time.
 

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“Purchase Price” means the price at which a Participant may purchase Restricted
Stock.
“Restricted Stock” means Shares purchased pursuant to a Restricted Stock Award.
“Restricted Stock Award” means an award of Shares pursuant to Section 6 hereof.
“SEC” means the Securities and Exchange Commission.
“Securities Act” means the Securities Act of 1933, as amended.
“Shares” means shares of the Company’s Common Stock reserved for issuance under
this Plan, as adjusted pursuant to Sections 2 and 17 hereof, and any successor
security.
“Subsidiary” means any corporation (other than the Company) in an unbroken chain
of corporations beginning with the Company if each of the corporations other
than the last corporation in the unbroken chain owns stock representing fifty
percent (50%) or more of the total combined voting power of all classes of stock
in one of the other corporations in such chain.
“Termination” or “Terminated” means, for purposes of this Plan with respect to a
Participant, that the Participant has for any reason ceased to provide services
as an employee, officer, director or consultant to the Company or a Parent or
Subsidiary of the Company. A Participant will not be deemed to have ceased to
provide services in the case of (i) sick leave, (ii) military leave, or
(iii) any other leave of absence approved by the Committee, provided that such
leave is for a period of not more than ninety (90) days (a) unless reinstatement
(or, in the case of an employee with an ISO, reemployment) upon the expiration
of such leave is guaranteed by contract or statute, or (b) unless provided
otherwise pursuant to formal policy adopted from time to time by the Company’s
Board and issued and promulgated in writing. In the case of any Participant on
(i) sick leave, (ii) military leave or (iii) an approved leave of absence, the
Committee may make such provisions respecting suspension of vesting of the Award
while on leave from the Company or a Parent or Subsidiary of the Company as it
may deem appropriate, except that in no event may an Option be exercised after
the expiration of the term set forth in the Stock Option Agreement. The
Committee will have sole discretion to determine whether a Participant has
ceased to provide services and the effective date on which the Participant
ceased to provide services (the “Termination Date”).
“Unvested Shares” means “Unvested Shares” as defined in the Award Agreement.
“Vested Shares” means “Vested Shares” as defined in the Award Agreement.
 

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AQUANTIA CORP.
2004 EQUITY INCENTIVE PLAN
EARLY EXERCISE NONQUALIFIED STOCK OPTION AGREEMENT
This Stock Option Agreement (the “Agreement”) is made and entered into as of the
date of grant as specified in each Participant’s individual EASi Admin
account by and between Aquantia Corp., a Delaware corporation (the “Company”),
and the participant (the “Participant”). Capitalized terms not defined herein
shall have the meaning ascribed to them in the Company’s 2004 Equity Incentive
Plan (as may be amended from time to time, the “Plan”).
1. GRANT OF OPTION. The Company hereby grants to Participant an option (this
“Option”) to purchase the total number of shares of Common Stock, $0.00001 par
value, of the Company set forth in Participant’s individual EASi Admin account
as Total Option Shares (the “Shares”) at the Exercise Price Per Share set forth
in Participant’s individual EASi Admin account (the “Exercise Price”), subject
to all of the terms and conditions of this Agreement and the Plan.
2. EXERCISE PERIOD.
2.1 Exercise Period of Option; Vesting. This Option shall not be exercisable
with respect to any of the Shares until 181 days after the Date of Grant, at
which time all of the Shares shall be exercisable, although the Shares issued
upon exercise of the Option will be subject to the restrictions on transfer and
Repurchase Options set forth in Sections 7, 9 and 10 below. As of the Date of
Grant, none of the Shares are vested. Provided Participant continues to provide
services to the Company or to any Parent or Subsidiary of the Company,         
of the Shares subject to this Option shall vest and this Option shall become
exercisable for such Shares on the First Vesting Date set forth in Participant’s
individual EASi Admin account; and thereafter on the date as specified in
Participant’s individual EASi Admin account of each succeeding calendar month
after the First Vesting Date, the Shares will become vested as to
                 of the Shares until the Shares are vested with respect to one
hundred percent (100%) of the Shares. If application of the vesting percentage
causes a fractional share, such share shall be rounded down to the nearest whole
share for each month except for the last month in such vesting period, at the
end of which last month this Option shall become vested with respect to the full
remainder of the Shares. Unvested Shares may not be sold or otherwise
transferred by Participant without the Company’s prior written consent.
Notwithstanding any provision in the Plan or this Agreement to the contrary,
Options for Unvested Shares (as defined in Section 2.2 of this Agreement) will
not be exercisable on or after Participant’s Termination Date.
2.2 Definitions. Shares that are vested pursuant to the schedule set forth in
Section 2.1 are “Vested Shares.” Shares that are not vested pursuant to the
schedule set forth in Section 2.1 are “Unvested Shares.”
2.3 Expiration. The Option shall expire on the Expiration Date set forth in
Participant’s individual EASi Admin account or earlier as provided in Section 3
below or pursuant to Section 5.6 of the Plan.
3. TERMINATION.
3.1 Termination for Any Reason Except Death, Disability or Cause. If Participant
is Terminated for any reason, except death, Disability or for Cause, the Option,
to the extent (and only to the extent) that it would have been exercisable by
Participant on the Termination Date, may be exercised by Participant no later
than three (3) months after the Termination Date, but in any event no later than
the Expiration Date.
3.2 Termination Because of Death or Disability. If Participant is Terminated
because of death or Disability of Participant (or Participant dies within three
(3) months of Termination when Termination is for any reason other than
Participant’s Disability or for Cause), the Option, to the extent that it is
exercisable by Participant

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on the Termination Date, may be exercised by Participant (or Participant’s legal
representative) no later than twelve (12) months after the Termination Date, but
in any event no later than the Expiration Date.
3.3 Termination for Cause. If the Participant is terminated for Cause, the
Participant may exercise such Participant’s Options, but not to an extent
greater than such Options are exercisable as to Vested Shares upon the
Termination Date, and Participant’s Options shall expire on such Participant’s
Termination Date or at such later time and on such conditions as are determined
by the Committee.
3.4 No Obligation to Employ. Nothing in the Plan or this Agreement shall confer
on Participant any right to continue in the employ of, or other relationship
with, the Company or any Parent or Subsidiary of the Company, or limit in any
way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant’s employment or other relationship at any time, with or
without Cause.
4. MANNER OF EXERCISE.
4.1 Stock Option Exercise Agreement. To exercise this Option, Participant (or in
the case of exercise after Participant’s death or incapacity, Participant’s
executor, administrator, heir or legatee, as the case may be) must deliver to
the Company an executed stock option exercise agreement in the form attached
hereto as Exhibit A, or in such other form as may be approved by the Committee
from time to time (the “Exercise Agreement”), which shall set forth, inter alia,
(i) Participant’s election to exercise the Option, (ii) the number of Shares
being purchased, (iii) any restrictions imposed on the Shares and (iv) any
representations, warranties and agreements regarding Participant’s investment
intent and access to information as may be required by the Company to comply
with applicable securities laws. If someone other than Participant exercises the
Option, then such person must submit documentation reasonably acceptable to the
Company verifying that such person has the legal right to exercise the Option
and such person shall be subject to all of the restrictions contained herein as
if such person were the Participant.
4.2 Limitations on Exercise. The Option may not be exercised unless such
exercise is in compliance with all applicable federal and state securities laws,
as they are in effect on the date of exercise. The Option may not be exercised
as to fewer than one hundred (100) Shares unless it is exercised as to all
Shares as to which the Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be accompanied by full payment of the
Exercise Price for the shares being purchased in cash (by check), or where
permitted by law:
 
 
(a)
by cancellation of indebtedness of the Company to the Participant;

 
 
(b)
by surrender of shares of the Company’s Common Stock that (i) either (A) have
been owned by Participant and have been paid for within the meaning of SEC Rule
144 (and, if such shares were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such shares); or (B) were
obtained by Participant in the open public
  
market; and (ii) are clear of all liens, claims, encumbrances or security
interests;

 
 
(c)
by waiver of compensation due or accrued to Participant for services rendered;

 
 
(d)
any other form of consideration approved by the Committee; or

 
 
(e)
by any combination of the foregoing.

4.4 Tax Withholding. Prior to the issuance of the Shares upon exercise of the
Option, Participant must pay or provide for any applicable federal, state and
local withholding obligations of the Company. If the Committee

--------------------------------------------------------------------------------

permits, Participant may provide for payment of withholding taxes upon exercise
of the Option by requesting that the Company retain the minimum number of Shares
with a Fair Market Value equal to the minimum amount of taxes required to be
withheld; but in no event will the Company withhold Shares if such withholding
would result in adverse accounting consequences to the Company. In such case,
the Company shall issue the net number of Shares to the Participant by deducting
the Shares retained from the Shares issuable upon exercise.
4.5 Issuance of Shares. Provided that the Exercise Agreement and payment are in
form and substance satisfactory to counsel for the Company, the Company shall
issue the Shares registered in the name of Participant, Participant’s authorized
assignee, or Participant’s legal representative, and shall deliver certificates
representing the Shares with the appropriate legends affixed thereto.
5. RESERVED.
Section 5 is Reserved.
6. COMPLIANCE WITH LAWS AND REGULATIONS. The Plan and this Agreement are
intended to comply with Section 25102(o) of the California Corporations Code and
any regulations relating thereto. Any provision of this Agreement which is
inconsistent with Section 25102(o) or any regulations relating thereto shall,
without further act or amendment by the Company or the Board, be reformed to
comply with the requirements of Section 25102(o) and any regulations relating
thereto. The exercise of the Option and the issuance and transfer of Shares
shall be subject to compliance by the Company and Participant with all
applicable requirements of federal and state securities laws and with all
applicable requirements of any stock exchange on which the Company’s Common
Stock may be listed at the time of such issuance or transfer. Participant
understands that the Company is under no obligation to register or qualify the
Shares with the SEC, any state securities commission or any stock exchange to
effect such compliance.
7. NONTRANSFERABILITY OF OPTION. The Option may not be transferred in any manner
other than by will or by the laws of descent and distribution or by instrument
to an inter vivos or testamentary trust in which the options are to be passed to
beneficiaries upon the death of the trustor (settlor), or by gift to “immediate
family” as that term is defined in 17 C.F.R. 240.16a-1(e), and may be exercised
during the lifetime of Participant only by Participant or in the event of
Participant’s incapacity, by Participant’s legal representative. The terms of
the Option shall be binding upon the executors, administrators, successors and
assigns of Participant.
8. MARKET STAND-OFF AGREEMENT. In connection with any registration of the
Company’s securities, upon the request of the Company or the underwriters
managing any public offering of the Company’s securities, Participant shall not
exercise the Option or engage in any other transaction with respect to any
Shares without the prior written consent of the Company or such underwriters, as
the case may be, for such period of time (not to exceed one hundred eighty
(180) days) after the effective date of such registration requested by such
managing underwriters and subject to all restrictions as the Company or the
underwriters may specify. Participant agrees to enter into any agreement
reasonably required by the underwriters to implement the foregoing.
9. COMPANY’S REPURCHASE OPTION FOR UNVESTED SHARES. The Company, or its
assignee, shall have the option to repurchase Participant’s Unvested Shares (as
defined in Section 2.2 of this Agreement) on the terms and conditions set forth
in the Exercise Agreement (the “Repurchase Option”) if Participant is Terminated
(as defined in the Plan) for any reason, or no reason, including without
limitation Participant’s death, Disability (as defined in the Plan), voluntary
resignation or termination by the Company with or without Cause.
10. COMPANY’S RIGHT OF FIRST REFUSAL. Before any Vested Shares held by
Participant or any transferee of such Vested Shares may be sold or otherwise
transferred (including without limitation a transfer by gift or operation of
law), the Company and/or its assignee(s) shall have an assignable right of first
refusal to purchase the Vested Shares to be sold or transferred on the terms and
conditions set forth in the Exercise Agreement (the “Right of First Refusal”).
The Company’s Right of First Refusal will terminate when the Company’s
securities become publicly traded.

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11. ADJUSTMENTS. In the event that the number of outstanding Shares of the
Company’s Common Stock is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then the Exercise Price of and number of Shares subject to the Option shall be
proportionately adjusted pursuant to the Plan.
12. TAX CONSEQUENCES. Set forth below is a brief summary as of the Effective
Date of the Plan of some of the federal and California tax consequences of grant
and exercise of the Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR
DISPOSING OF THE SHARES.
12.1 Grant of Option. Grant of the Option is generally not a taxable event.
However, options granted at a discount from fair market value may be considered
“deferred compensation” subject to adverse tax consequences under Section 409A
of the Internal Revenue Code of 1986. The Company has made a good faith
determination that the Exercise Price of the Option is not less than the fair
market value of the Shares underlying the Option as of the Date of Grant. It is
possible, however, that the Internal Revenue Service could challenge this
determination and assert that the fair market value of the Shares underlying the
Option was greater on the Date of Grant than the Exercise Price determined by
the Company, which could result in immediate income tax upon the vesting of the
Option (whether or not exercised) and a 20% tax penalty. The Company gives no
assurance that such adverse tax consequences will not occur and specifically
assumes no responsibility therefor. By accepting this Option, Participant
acknowledges that any tax liability or other adverse tax consequences to
Participant resulting from the grant of the Option shall be the responsibility
of, and shall be entirely borne by, Participant.
12.2 Exercise of Option. There may be a regular federal and California income
tax liability upon the exercise of the Option. Participant will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the fair market value of the Vested Shares on the date
of exercise over the Exercise Price. If Participant is a current or former
employee of the Company, the Company may be required to withhold from
Participant’s compensation or collect from Participant and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise. To the extent that the Shares were exercised prior to
vesting coincident with the filing of a Section 83(b) election, the amount taxed
will be based upon the excess, if any, of the fair market value of the Unvested
Shares on the date of exercise over the Exercise Price.
12.3 Disposition of Shares. The following tax consequences may apply upon
disposition of the Shares.
(a) Capital Gain. If the Shares are held for more than twelve (12) months after
the date of purchase of the Shares pursuant to the exercise of the Option, any
gain realized on disposition of the Shares will be treated as long-term capital
gain.
(b) Withholding. The Company may be required to withhold from the Participant’s
compensation or collect from the Participant and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income.
13. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of the rights
of a stockholder with respect to any Shares until the Shares are issued to
Participant.
14. INTERPRETATION. Any dispute regarding the interpretation of this Agreement
shall be submitted by Participant or the Company to the Committee for review.
The resolution of such a dispute by the Committee shall be final and binding on
the Company and Participant.
15. ENTIRE AGREEMENT. The Plan is incorporated herein by reference. This
Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.

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16. NOTICES. Any notice required to be given or delivered to the Company under
the terms of this Agreement shall be in writing and addressed to the Corporate
Secretary of the Company at its principal corporate offices. Any notice required
to be given or delivered to Participant shall be in writing and addressed to
Participant at the address indicated above or to such other address as such
party may designate in writing from time to time to the Company. All notices
shall be deemed to have been given or delivered upon: (i) personal delivery;
(ii) three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); (iii) one (1) business day after
deposit with any return receipt express courier (prepaid); or (iv) one
(1) business day after transmission by facsimile, rapifax or telecopier.
17. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights under this
Agreement including its right to purchase Shares under the Repurchase Option and
the Right of First Refusal. No other party to this Agreement may assign, whether
voluntarily or by operation of law, any of its rights and obligations under this
Agreement, except with the prior written consent of the Company. This Agreement
shall be binding upon and inure to the benefit of the successors and assigns of
the Company. Subject to the restrictions on transfer set forth herein, this
Agreement shall be binding upon Participant and Participant’s heirs, executors,
administrators, legal representatives, successors and assigns.
18. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
that body of laws pertaining to conflict of laws.

19. ACCEPTANCE. Participant hereby acknowledges receipt of a copy of the Plan
and this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and
conditions of the Plan and this Agreement. Participant acknowledges that there
may be adverse tax consequences upon exercise of the Option or disposition of
the Shares and that Participant should consult a tax adviser prior to such
exercise or disposition.
20. FURTHER ASSURANCES. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
21. SEVERABILITY. If any provision of this Agreement is determined by any court
or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable
in any respect, such provision will be enforced to the maximum extent possible
given the intent of the parties hereto. If such clause or provision cannot be so
enforced, such provision shall be stricken from this Agreement and the remainder
of this Agreement shall be enforced as if such invalid, illegal or unenforceable
clause or provision had (to the extent not enforceable) never been contained in
this Agreement. Notwithstanding the foregoing, if the value of this Agreement,
based upon the substantial benefit of the bargain for any party, is materially
impaired, which determination as made by the presiding court or arbitrator of
competent jurisdiction shall be binding, then both parties agree to substitute
such provision through good faith negotiations.
22. HEADINGS. The captions and headings of this Agreement are included for ease
of reference only and will be disregarded in interpreting or construing this
Agreement. All references herein to Sections will refer to Sections of this
Agreement.
23. TAX MATTERS. PARTICIPANT AGREES AND ACKNOWLEDGES THAT THE BOARD OF DIRECTORS
AND THE COMPANY ARE NOT RESPONSIBLE AND WILL NOT BE HELD LIABLE IN THE EVENT
THAT THE EXERCISE PRICE PER SHARE DOES NOT EQUAL THE FAIR MARKET VALUE OF A
SHARE OF THE COMPANY’S COMMON STOCK. PARTICIPANT AGREES TO HOLD HARMLESS THE
BOARD OF DIRECTORS AND THE COMPANY FOR ALL MATTERS RELATED TO THE FOREGOING.
 

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AQUANTIA CORP.
2004 EQUITY INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
This Stock Option Agreement (the “Agreement”) is made and entered into as of the
date of grant as specified in each Participant’s individual EASi Admin
account3 by and between Aquantia Corp., a Delaware corporation (the “Company”),
and the participant (the “Participant”). Capitalized terms not defined herein
shall have the meaning ascribed to them in the Company’s 2004 Equity Incentive
Plan (as may be amended from time to time, the “Plan”).
 

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1. GRANT OF OPTION. The Company hereby grants to Participant an option (this
“Option”) to purchase the total number of shares of Common Stock, $0.00001 par
value, of the Company set forth in Participant’s individual EASi Admin account
as Total Option Shares (the “Shares”) at the Exercise Price Per Share set forth
in Participant’s individual EASi Admin account (the “Exercise Price”), subject
to all of the terms and conditions of this Agreement and the Plan.
2. EXERCISE PERIOD.
2.1 Exercise Period of Option. As of the Date of Grant,                      of
the Shares are                  vested, and the Option is          exercisable
for                  (100%) of the Shares.
2.2 Expiration. The Option shall expire on the Expiration Date set forth in
Participant’s individual EASi Admin account or earlier as provided in Section 3
below or pursuant to Section 5.6 of the Plan
3. TERMINATION.
3.1 Termination for Any Reason Except Death, Disability or Cause. If Participant
is Terminated for any reason, except death, Disability or for Cause, the Option
may be exercised by Participant no later than three (3) months after the
Termination Date, but in any event no later than the Expiration Date.
3.2 Termination Because of Death or Disability. If Participant is Terminated
because of death or Disability of Participant (or Participant dies within three
(3) months of Termination when Termination is for any reason other than
Participant’s Disability or for Cause), the Option may be exercised by
Participant (or Participant’s legal representative) no later than twelve
(12) months after the Termination Date, but in any event no later than the
Expiration Date.
3.3 Termination for Cause. If the Participant is terminated for Cause, the
Participant may exercise such Participant’s Options, and Participant’s Options
shall expire on such Participant’s Termination Date or at such later time and on
such conditions as are determined by the Committee.
3.4 No Obligation to Employ. Nothing in the Plan or this Agreement shall confer
on Participant any right to continue in the employ of, or other relationship
with, the Company or any Parent or Subsidiary of the Company, or limit in any
way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant’s employment or other relationship at any time, with or
without Cause.
4. MANNER OF EXERCISE.

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4.1 Stock Option Exercise Agreement. To exercise this Option, Participant (or in
the case of exercise after Participant’s death or incapacity, Participant’s
executor, administrator, heir or legatee, as the case may be) must deliver to
the Company an executed stock option exercise agreement in the form attached
hereto as Exhibit A, or in such other form as may be approved by the Committee
from time to time (the “Exercise Agreement”), which shall set forth, inter alia,
(i) Participant’s election to exercise the Option, (ii) the number of Shares
being purchased, (iii) any restrictions imposed on the Shares and (iv) any
representations, warranties and agreements regarding Participant’s investment
intent and access to information as may be required by the Company to comply
with applicable securities laws. If someone other than Participant exercises the
Option, then such person must submit documentation reasonably acceptable to the
Company verifying that such person has the legal right to exercise the Option
and such person shall be subject to all of the restrictions contained herein as
if such person were the Participant.
4.2 Limitations on Exercise. The Option may not be exercised unless such
exercise is in compliance with all applicable federal and state securities laws,
as they are in effect on the date of exercise. The Option may not be exercised
as to fewer than one hundred (100) Shares unless it is exercised as to all
Shares as to which the Option is then exercisable.
4.3 Payment. The Exercise Agreement shall be accompanied by full payment of the
Exercise Price for the shares being purchased in cash (by check), or where
permitted by law:
 
 
(a)
by cancellation of indebtedness of the Company to the Participant;

 
 
(b)
by surrender of shares of the Company’s Common Stock that (i) either (A) have
been owned by Participant and have been paid for within the meaning of SEC Rule
144 (and, if such shares were purchased from the Company by use of a promissory
note, such note has been fully paid with respect to such shares); or (B) were
obtained by Participant in the open public market; and (ii) are clear of all
liens, claims, encumbrances or security interests;

 
 
(c)
by waiver of compensation due or accrued to Participant for services rendered;

 
 
(d)
any other form of consideration approved by the Committee; or

 
 
(e)
by any combination of the foregoing.

4.4 Tax Withholding. Prior to the issuance of the Shares upon exercise of the
Option, Participant must pay or provide for any applicable federal, state and
local withholding obligations of the Company. If the Committee permits,
Participant may provide for payment of withholding taxes upon exercise of the
Option by requesting that the Company retain the minimum number of Shares with a
Fair Market Value equal to the minimum amount of taxes required to be withheld;
but in no event will the Company withhold Shares if such withholding would
result in adverse accounting consequences to the Company. In such case, the
Company shall issue the net number of Shares to the Participant by deducting the
Shares retained from the Shares issuable upon exercise.
4.5 Issuance of Shares. Provided that the Exercise Agreement and payment are in
form and substance satisfactory to counsel for the Company, the Company shall
issue the Shares registered in the name of Participant, Participant’s authorized
assignee, or Participant’s legal representative, and shall deliver certificates
representing the Shares with the appropriate legends affixed thereto.
5. RESERVED. Section 5 is Reserved.
6. COMPLIANCE WITH LAWS AND REGULATIONS. The Plan and this Agreement are
intended to comply with Section 25102(o) of the California Corporations Code and
any regulations relating thereto. Any

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provision of this Agreement which is inconsistent with Section 25102(o) or any
regulations relating thereto shall, without further act or amendment by the
Company or the Board, be reformed to comply with the requirements of
Section 25102(o) and any regulations relating thereto. The exercise of the
Option and the issuance and transfer of Shares shall be subject to compliance by
the Company and Participant with all applicable requirements of federal and
state securities laws and with all applicable requirements of any stock exchange
on which the Company’s Common Stock may be listed at the time of such issuance
or transfer. Participant understands that the Company is under no obligation to
register or qualify the Shares with the SEC, any state securities commission or
any stock exchange to effect such compliance.
7. NONTRANSFERABILITY OF OPTIONS. The Option may not be transferred in any
manner other than by will or by the laws of descent and distribution or by
instrument to an inter vivos or testamentary trust in which the options are to
be passed to beneficiaries upon the death of the trustor (senior), or by gift to
“immediate family” as that term is defined in 17 C.F.R. 240.16a-1(e), and may be
exercised during the lifetime of Participant only by Participant or in the event
of Participant’s incapacity, by Participant’s legal representative. The terms of
the Option shall be binding upon the executors, administrators, successors and
assigns of Participant.
8. MARKET STAND-OFF AGREEMENT. In connection with any registration of the
Company’s securities, upon the request of the Company or the underwriters
managing any public offering of the Company’s securities, Participant shall not
exercise the Option or engage in any other transaction with respect to any
Shares without the prior written consent of the Company or such underwriters, as
the case may be, for such period of time (not to exceed one hundred eighty
(180) days) after the effective date of such registration requested by such
managing underwriters and subject to all restrictions as the Company or the
underwriters may specify. Participant agrees to enter into any agreement
reasonably required by the underwriters to implement the foregoing.
9. COMPANY’S RIGHT OF FIRST REFUSAL. Before any Shares held by Participant or
any transferee of such Shares may be sold or otherwise transferred (including
without limitation a transfer by gift or operation of law), the Company and/or
its assignee(s) shall have an assignable right of first refusal to purchase the
Shares to be sold or transferred on the terms and conditions set forth in the
Exercise Agreement (the “Right of First Refusal”). The Company’s Right of First
Refusal will terminate when the Company’s securities become publicly traded.
10. ADJUSTMENTS. In the event that the number of outstanding Shares of the
Company’s Common Stock is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then the Exercise Price of and number of Shares subject to the Option shall be
proportionately adjusted pursuant to the Plan.
11. TAX CONSEQUENCES. Set forth below is a brief summary as of the Effective
Date of the Plan of some of the federal and California tax consequences of grant
and exercise of the Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR
DISPOSING OF THE SHARES.
11.1 Grant of Option. Grant of the Option is generally not a taxable event.
However, options granted at a discount from fair market value may be considered
“deferred compensation” subject to adverse tax consequences under Section 409A
of the Internal Revenue Code of 1986. The Company has made a good faith
determination that the Exercise Price of the Option is not less than the fair
market value of the Shares underlying the Option as of the Date of Grant. It is
possible, however, that the Internal Revenue Service could challenge this
determination and assert that the fair market value of the Shares underlying the
Option was greater on the Date of Grant than the Exercise Price determined by
the Company, which could result in immediate income tax upon the vesting of the
Option (whether or not exercised) and a 20% tax penalty. The Company gives no
assurance that such adverse tax consequences will not occur and specifically
assumes no responsibility therefor. By accepting this Option, Participant
acknowledges that any tax liability or other adverse tax consequences to
Participant resulting from the grant of the Option shall be the responsibility
of, and shall be entirely borne by, Participant.

--------------------------------------------------------------------------------

11.2 Exercise of Option. There may be a regular federal and California income
tax liability upon the exercise of the Option. Participant will be treated as
having received compensation income (taxable at ordinary income tax rates) equal
to the excess, if any, of the fair market value of the Shares on the date of
grant and exercise over the Exercise Price. If Participant is a current or
former employee of the Company, the Company may be required to withhold from
Participant’s compensation or collect from Participant and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.
11.3 Disposition of Shares. The following tax consequences may apply upon
disposition of the Shares.
(a) Capital Gain. If the Shares are held for more than twelve (12) months after
the date of purchase of the Shares pursuant to the exercise of the Option, any
gain realized on disposition of the Shares will be treated as long-term capital
gain.
(b) Withholding. The Company may be required to withhold from the Participant’s
compensation or collect from the Participant and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income.
12. PRIVILEGES OF STOCK OWNERSHIP. Participant shall not have any of the rights
of a stockholder with respect to any Shares until the Shares are issued to
Participant.
13. INTERPRETATION. Any dispute regarding the interpretation of this Agreement
shall be submitted by Participant or the Company to the Committee for review.
The resolution of such a dispute by the Committee shall be final and binding on
the Company and Participant.
14. ENTIRE AGREEMENT. The Plan is incorporated herein by reference. This
Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.
15. NOTICES. Any notice required to be given or delivered to the Company under
the terms of this Agreement shall be in writing and addressed to the Corporate
Secretary of the Company at its principal corporate offices. Any notice required
to be given or delivered to Participant shall be in writing and addressed to
Participant at the address indicated above or to such other address as such
party may designate in writing from time to time to the Company. All notices
shall be deemed to have been given or delivered upon: (i) personal delivery;
(ii) three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); (iii) one (1) business day after
deposit with any return receipt express courier (prepaid); or (iv) one
(1) business day after transmission by facsimile, rapifax or telecopier.

16. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights under this
Agreement including its right to purchase Shares under the Right of First
Refusal. No other party to this Agreement may assign, whether voluntarily or by
operation of law, any of its rights and obligations under this Agreement, except
with the prior written consent of the Company. This Agreement shall be binding
upon and inure to the benefit of the successors and assigns of the Company.
Subject to the restrictions on transfer set forth herein, this Agreement shall
be binding upon Participant and Participant’s heirs, executors, administrators,
legal representatives, successors and assigns.
17. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
that body of law pertaining to conflict of laws.
18. ACCEPTANCE. Participant hereby acknowledges receipt of a copy of the Plan
and this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and
conditions of the Plan and this Agreement. Participant acknowledges that there
may be adverse tax consequences upon exercise of the Option or disposition of
the Shares and that Participant should consult a tax adviser prior to such
exercise or disposition.

--------------------------------------------------------------------------------

19. FURTHER ASSURANCES. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
20. SEVERABILITY. If any provision of this Agreement is determined by any court
or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable
in any respect, such provision will be enforced to the maximum extent possible
given the intent of the parties hereto. If such clause or provision cannot be so
enforced, such provision shall be stricken from this Agreement and the remainder
of this Agreement shall be enforced as if such invalid, illegal or unenforceable
clause or provision had (to the extent not enforceable) never been contained in
this Agreement. Notwithstanding the foregoing, if the value of this Agreement,
based upon the substantial benefit of the bargain for any party, is materially
impaired, which determination as made by the presiding court or arbitrator of
competent jurisdiction shall be binding, then both parties agree to substitute
such provision through good faith negotiations.
21. HEADINGS. The captions and headings of this Agreement are included for ease
of reference only and will be disregarded in interpreting or construing this
Agreement. All references herein to Sections will refer to Sections of this
Agreement.
22. TAX MATTERS. PARTICIPANT AGREES AND ACKNOWLEDGES THAT THE BOARD OF DIRECTORS
AND THE COMPANY ARE NOT RESPONSIBLE AND WILL NOT BE HELD LIABLE IN THE EVENT
THAT THE EXERCISE PRICE PER SHARE DOES NOT EQUAL THE FAIR MARKET VALUE OF A
SHARE OF THE COMPANY’S COMMON STOCK. PARTICIPANT AGREES TO HOLD HARMLESS THE
BOARD OF DIRECTORS AND THE COMPANY FOR ALL MATTERS RELATED TO THE FOREGOING.
 

--------------------------------------------------------------------------------

AQUANTIA CORP.
2004 EQUITY INCENTIVE PLAN
EARLY EXERCISE INCENTIVE STOCK OPTION AGREEMENT
This Stock Option Agreement (the “Agreement”) is made and entered into as of the
date of grant (as specified in each Participant’s individual EASi Admin account)
by and between Aquantia Corp., a Delaware corporation (the “Company”), and the
participant (the “Participant”). Capitalized terms not defined herein shall have
the meaning ascribed to them in the Company’s 2004 Equity Incentive Plan (as may
be amended from time to time, the “Plan”).
23. Grant of Option. The Company hereby grants to Participant an option
(“Option”) to purchase the total number of shares of Common Stock, $0.00001 par
value, of the Company as described in Participant’s individual EASi Admin
account, as Total Option Shares (the “Shares”) at the Exercise Price Per Share
set forth in Participant’s individual EASi Admin account (the “Exercise Price”),
subject to all of the terms and conditions of this Agreement and the Plan. As
designated in Participant’s individual EASi Admin account, the Option is
intended to qualify as an “incentive stock option” (the “ISO”) within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”).
24. Exercise Period.
24.1 Exercise Period of Option; Vesting. This Option shall not be exercisable
with respect to any of the Shares until 181 days after the Date of Grant, at
which time all of the Shares shall be exercisable, although the Shares issued
upon exercise of the Option will be subject to the restrictions on transfer and
Repurchase Options set forth in Sections 7, 9 and 10 below. As of the Date of
Grant, none of the Shares are vested. Provided Participant continues to provide
services to the Company or to any Parent or Subsidiary of the Company, the
Shares issuable upon exercise of this Option will become vested with respect to
                 of the Shares on the First Vesting Date set forth in
Participant’s individual EASi Admin account; and thereafter on the date as
specified in Participant’s individual EASi Admin account of each succeeding
calendar month after the First Vesting Date, the Shares will become vested as to
                 of the Shares until the Shares are vested with respect to one
hundred percent (100%) of the Shares. If application of the vesting percentage
causes a fractional share, such share shall be rounded down to the nearest whole
share for each month except for the last month in such vesting period, at the
end of which last month this Option shall become vested with respect to the full
remainder of the Shares. Unvested Shares may not be sold or otherwise
transferred by Participant without the Company’s prior written consent.
Notwithstanding any provision in the Plan or this Agreement to the contrary,
Options for Unvested Shares (as defined in Section 2.2 of this Agreement) will
not be exercisable on or after Participant’s Termination Date.
24.2 Definitions. Shares that are vested pursuant to the schedule set forth in
Section 2.1 are “Vested Shares.” Shares that are not vested pursuant to the
schedule set forth in Section 2.1 are “Unvested Shares.”
24.3 Expiration. The Option shall expire on the Expiration Date set forth in
Participant’s individual EASi Admin account or earlier as provided in Section 3
below or pursuant to Section 5.6 of the Plan.
 
25. Termination.
25.1 Termination for Any Reason Except Death, Disability or Cause. If
Participant is Terminated for any reason, except death, Disability or for Cause,
the Option, to the extent (and only to the extent) that it would have been
exercisable by Participant on the Termination Date, may be exercised by
Participant no later than three (3) months after the Termination Date, but in
any event no later than the Expiration Date.

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25.2 Termination Because of Death or Disability. If Participant is Terminated
because of death or Disability of Participant (or Participant dies within three
(3) months of Termination when Termination is for any reason other than
Participant’s Disability or for Cause), the Option, to the extent that it is
exercisable by Participant on the Termination Date, may be exercised by
Participant (or Participant’s legal representative) no later than twelve
(12) months after the Termination Date, but in any event no later than the
Expiration Date. Any exercise beyond (i) three (3) months after the Termination
Date when the Termination is for any reason other than the Participant’s death
or disability, within the meaning of Section 22(e)(3) of the Code; or
(ii) twelve (12) months after the Termination Date when the termination is for
Participant’s disability, within the meaning of Section 22(e)(3) of the Code, is
deemed to be an NQSO.
25.3 Termination for Cause. If the Participant is terminated for Cause, the
Participant may exercise such Participant’s Options, but not to an extent
greater than such Options are exercisable as to Vested Shares upon the
Termination Date, and Participant’s Options shall expire on such Participant’s
Termination Date or at such later time and on such conditions as are determined
by the Committee.
25.4 No Obligation to Employ. Nothing in the Plan or this Agreement shall confer
on Participant any right to continue in the employ of, or other relationship
with, the Company or any Parent or Subsidiary of the Company, or limit in any
way the right of the Company or any Parent or Subsidiary of the Company to
terminate Participant’s employment or other relationship at any time, with or
without Cause.
26. Manner of Exercise.
26.1 Stock Option Exercise Agreement. To exercise this Option, Participant (or
in the case of exercise after Participant’s death or incapacity, Participant’s
executor, administrator, heir or legatee, as the case may be) must deliver to
the Company an executed stock option exercise agreement in the form attached
hereto as Exhibit A, or in such other form as may be approved by the Committee
from time to time (the “Exercise Agreement”), which shall set forth, inter alia,
(i) Participant’s election to exercise the Option, (ii) the number of Shares
being purchased, (iii) any restrictions imposed on the Shares and (iv) any
representations, warranties and agreements regarding Participant’s investment
intent and access to information as may be required by the Company to comply
with applicable securities laws. If someone other than Participant exercises the
Option, then such person must submit documentation reasonably acceptable to the
Company verifying that such person has the legal right to exercise the Option
and such person shall be subject to all of the restrictions contained herein as
if such person were the Participant.
26.2 Limitations on Exercise. The Option may not be exercised unless such
exercise is in compliance with all applicable federal and state securities laws,
as they are in effect on the date of exercise. The Option may not be exercised
as to fewer than one hundred (100) Shares unless it is exercised as to all
Shares as to which the Option is then exercisable.
26.3 Payment. The Exercise Agreement shall be accompanied by full payment of the
Exercise Price for the shares being purchased in cash (by check), or where
permitted by law:
(a) by cancellation of indebtedness of the Company to the Participant;
 
(b) by surrender of shares of the Company’s Common Stock that (i) either
(A) have been owned by Participant and have been paid for within the meaning of
SEC Rule 144 (and, if such shares were purchased from the Company by use of a
promissory note, such note has been fully paid with respect to such shares); or
(B) were obtained by Participant in the open public market; and (ii) are clear
of all liens, claims, encumbrances or security interests;
(c) by waiver of compensation due or accrued to Participant for services
rendered;
(d) any other form of consideration approved by the Committee; or

--------------------------------------------------------------------------------

(e) by any combination of the foregoing.
26.4 Issuance of Shares. Provided that the Exercise Agreement and payment are in
form and substance satisfactory to counsel for the Company, the Company shall
issue the Shares registered in the name of Participant, Participant’s authorized
assignee, or Participant’s legal representative, and shall deliver certificates
representing the Shares with the appropriate legends affixed thereto.
27. Notice of Disqualifying Disposition of Option Shares. If Participant sells
or otherwise disposes of any of the Shares acquired pursuant to the Option on or
before the later of (i) the date two (2) years after the Date of Grant, and
(ii) the date one (1) year after transfer of such Shares to Participant upon
exercise of the Option, Participant shall immediately notify the Company in
writing of such disposition. Participant agrees that Participant may be subject
to U.S. federal, California and local income tax withholding by the Company on
the compensation income recognized by Participant from the early disposition by
payment in cash or out of the current wages or other compensation payable to
Participant.
28. Compliance with Laws and Regulations. The Plan and this Agreement are
intended to comply with Section 25102(o) of the California Corporations Code and
any regulations relating thereto. Any provision of this Agreement which is
inconsistent with Section 25102(o) or any regulations relating thereto shall,
without further act or amendment by the Company or the Board, be reformed to
comply with the requirements of Section 25102(o) and any regulations relating
thereto. The exercise of the Option and the issuance and transfer of Shares
shall be subject to compliance by the Company and Participant with all
applicable requirements of federal and state securities laws and with all
applicable requirements of any stock exchange on which the Company’s Common
Stock may be listed at the time of such issuance or transfer. Participant
understands that the Company is under no obligation to register or qualify the
Shares with the SEC, any state securities commission or any stock exchange to
effect such compliance.
29. Nontransferability of Option. The Option may not be transferred in any
manner other than by will or by the laws of descent and distribution, and may be
exercised during the lifetime of Participant only by Participant or in the event
of Participant’s incapacity, by Participant’s legal representative. The terms of
the Option shall be binding upon the executors, administrators, successors and
assigns of Participant.
30. Market Stand-Off Agreement. In connection with any registration of the
Company’s securities, upon the request of the Company or the underwriters
managing any public offering of the Company’s securities, Participant shall not
exercise the Option or engage in any other transaction with respect to any
Shares without the prior written consent of the Company or such underwriters, as
the case may be, for such period of time (not to exceed one hundred eighty
(180) days) after the effective date of such registration requested by such
managing underwriters and subject to all restrictions as the Company or the
underwriters may specify. Participant agrees to enter into any agreement
reasonably required by the underwriters to implement the foregoing.
31. Company’s Repurchase Option for Unvested Shares. The Company, or its
assignee, shall have the option to repurchase Participant’s Unvested Shares (as
defined in Section 2.2 of this Agreement) on the terms and conditions set forth
in the Exercise Agreement (the “Repurchase Option”) if Participant is Terminated
(as defined in the Plan) for any reason, or no reason, including without
limitation Participant’s death, Disability (as defined in the Plan), voluntary
resignation or termination by the Company with or without Cause.
32. Company’s Right of First Refusal. Unvested Shares may not be sold or
otherwise transferred by Participant without the Company’s prior written
consent. Before any Vested Shares held by Participant or any transferee of such
Vested Shares may be sold or otherwise transferred (including without limitation
a transfer by gift or operation of law), the Company and/or its assignee(s)
shall have an assignable right of first refusal to purchase the Vested Shares to
be sold or transferred on the terms and conditions set forth in the Exercise
Agreement (the “Right of First Refusal”). The Company’s Right of First Refusal
will terminate when the Company’s securities become publicly traded.

--------------------------------------------------------------------------------

33. Adjustments. In the event that the number of outstanding Shares of the
Company’s Common Stock is changed by a stock dividend, recapitalization, stock
split, reverse stock split, subdivision, combination, reclassification or
similar change in the capital structure of the Company without consideration,
then the Exercise Price of and number of Shares subject to the Option shall be
proportionately adjusted pursuant to the Plan.
34. Tax Consequences. Set forth below is a brief summary as of the Effective
Date of the Plan of some of the federal and California tax consequences of grant
and exercise of the Option and disposition of the Shares. THIS SUMMARY IS
NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE.
PARTICIPANT SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR
DISPOSING OF THE SHARES.
34.1 Grant of Option. Grant of the Option is generally not a taxable event.
However, options granted at a discount from fair market value may be considered
“deferred compensation” subject to adverse tax consequences under Section 409A
of the Code. The Company has made a good faith determination that the Exercise
Price of the Option is not less than the fair market value of the Shares
underlying the Option as of the Date of Grant. It is possible, however, that the
Internal Revenue Service could challenge this determination and assert that the
fair market value of the Shares underlying the Option was greater on the Date of
Grant than the Exercise Price determined by the Company, which could result in
immediate income tax upon the vesting of the Option (whether or not exercised)
and a 20% tax penalty, as well as the loss of ISO status. The Company gives no
assurance that such adverse tax consequences will not occur and specifically
assumes no responsibility therefor. By accepting this Option, Participant
acknowledges that any tax liability or other adverse tax consequences to
Participant resulting from the grant of the Option shall be the responsibility
of, and shall be entirely borne by, Participant.
34.2 Exercise of Option. There will be no regular U.S. federal income tax
liability or California income tax liability upon the exercise of the Option,
although the excess, if any, of the fair market value of the Shares on the date
of exercise over the Exercise Price will be treated be treated as a tax
preference item for U.S. federal alternative minimum tax purposes and may
subject Participant to the alternative minimum tax in the year of exercise.
 
34.3 Disposition of Shares. The following tax consequences may apply upon
disposition of the Shares.
(a) Capital Gain and Income on Early Disposition. If the Shares are held for
more than twelve (12) months after the date of purchase of the Shares pursuant
to the exercise of the Option and are disposed of more than two (2) years after
the Date of Grant, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal and California income tax
purposes. If Vested Shares purchased under the Option are disposed of within the
applicable one (1)-or two (2)-year period, any gain realized on such disposition
will be treated as compensation income (taxable at ordinary income rates in the
year of the disposition) to the extent of the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price. To the
extent that the Shares were exercised prior to vesting coincident with the
filing of a Section 83(b) election, the amount taxed because of a disqualifying
disposition will be based upon the excess, if any, of the fair market value on
the date of vesting over the Exercise Price.
(b) Withholding. If Participant disposes of any Vested Shares purchased under
the Option within twelve (12) months after the date of purchase pursuant to the
exercise of the Option or more than two (2) years after the Date of Grant, the
Company may be required to withhold from Participant’s compensation or collect
from Participant and pay to the applicable taxing authorities an amount equal to
a percentage of Participant’s compensation income.
35. Privileges of Stock Ownership. Participant shall not have any of the rights
of a stockholder with respect to any Shares until the Shares are issued to
Participant.
36. Interpretation. Any dispute regarding the interpretation of this Agreement
shall be submitted by Participant or the Company to the Committee for review.
The resolution of such a dispute by the Committee shall be final and binding on
the Company and Participant.

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37. Entire Agreement. The Plan is incorporated herein by reference. This
Agreement and the Plan constitute the entire agreement of the parties and
supersede all prior undertakings and agreements with respect to the subject
matter hereof.
38. Notices. Any notice required to be given or delivered to the Company under
the terms of this Agreement shall be in writing and addressed to the Corporate
Secretary of the Company at its principal corporate offices. Any notice required
to be given or delivered to Participant shall be in writing and addressed to
Participant at the address indicated above or to such other address as such
party may designate in writing from time to time to the Company. All notices
shall be deemed to have been given or delivered upon: (i) personal delivery;
(ii) three (3) days after deposit in the United States mail by certified or
registered mail (return receipt requested); (iii) one (1) business day after
deposit with any return receipt express courier (prepaid); or (iv) one
(1) business day after transmission by facsimile, rapifax or telecopier.
39. Successors and Assigns. The Company may assign any of its rights under this
Agreement including its rights to purchase Shares under the Repurchase Option
and the Right of First Refusal. No other party to this Agreement may assign,
whether voluntarily or by operation of law, any of its rights and obligations
under this Agreement, except with the prior written consent of the Company. This
Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer set forth
herein, this Agreement shall be binding upon Participant and Participant’s
heirs, executors, administrators, legal representatives, successors and assigns.
 
40. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
that body of laws pertaining to conflict of laws.
41. Acceptance. Participant hereby acknowledges receipt of a copy of the Plan
and this Agreement. Participant has read and understands the terms and
provisions thereof, and accepts the Option subject to all the terms and
conditions of the Plan and this Agreement. Participant acknowledges that there
may be adverse tax consequences upon exercise of the Option or disposition of
the Shares and that Participant should consult a tax adviser prior to such
exercise or disposition.
42. Further Assurances. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to
carry out the purposes and intent of this Agreement.
43. Severability. If any provision of this Agreement is determined by any court
or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable
in any respect, such provision will be enforced to the maximum extent possible
given the intent of the parties hereto. If such clause or provision cannot be so
enforced, such provision shall be stricken from this Agreement and the remainder
of this Agreement shall be enforced as if such invalid, illegal or unenforceable
clause or provision had (to the extent not enforceable) never been contained in
this Agreement. Notwithstanding the foregoing, if the value of this Agreement,
based upon the substantial benefit of the bargain for any party, is materially
impaired, which determination as made by the presiding court or arbitrator of
competent jurisdiction shall be binding, then both parties agree to substitute
such provision through good faith negotiations.
44. Headings. The captions and headings of this Agreement are included for ease
of reference only and will be disregarded in interpreting or construing this
Agreement. All references herein to Sections will refer to Sections of this
Agreement.
45. Tax Matters. PARTICIPANT AGREES AND ACKNOWLEDGES THAT THE BOARD OF DIRECTORS
AND THE COMPANY ARE NOT RESPONSIBLE AND WILL NOT BE HELD LIABLE IN THE EVENT
THAT THE EXERCISE PRICE PER SHARE DOES NOT EQUAL THE FAIR MARKET VALUE OF A
SHARE OF THE COMPANY’S COMMON STOCK. PARTICIPANT AGREES TO HOLD HARMLESS THE
BOARD OF DIRECTORS AND THE COMPANY FOR ALL MATTERS RELATED TO THE FOREGOING.
 

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AQUANTIA CORP.
2004 EQUITY INCENTIVE PLAN
NONQUALIFIED STOCK OPTION EXERCISE AGREEMENT
This Stock Option Exercise Agreement (the “Exercise Agreement”) is made and
entered into as of                      (the “Effective Date”) by and between
Aquantia Corp., a Delaware corporation (the “Company”), and the purchaser named
below (the “Purchaser”). Capitalized terms not defined herein shall have the
meanings ascribed to them in the Company’s 2004 Equity Incentive Plan (as may be
amended from time to time, the “Plan”).
 
 
 
 
Purchaser:
 
 
 
 
Social Security Number:
 
 
 
 
Address:
 
 
 
 
Total Number of Shares:
 
 
 
 
Exercise Price Per Share:
 
 
 
 
Date of Grant:
 
 
 
 
First Vesting Date:
 
 
 
 
Expiration Date:
 
 
 
 
(Unless earlier terminated under Section 5.6 of the Plan)
Type of Stock Option
 
Nonqualified Stock Option

 
1. Exercise of Option.
1.1 Exercise. Pursuant to exercise of that certain option (the “Option”) granted
to Purchaser under the Plan and subject to the terms and conditions of this
Exercise Agreement, Purchaser hereby purchases from the Company, and the Company
hereby sells to Purchaser, the Total Number of Shares set forth above (the
“Shares”) of the Company’s Common Stock, $0.00001 par value per share, at the
Exercise Price Per Share set forth above (the “Exercise Price”). As used in this
Exercise Agreement, the term “Shares” refers to the Shares purchased under this
Exercise Agreement and includes all securities received (i) in replacement of
the Shares, (ii) as a result of stock dividends or stock splits with respect to
the Shares, and (iii) all securities received in replacement of the Shares in a
merger, recapitalization, reorganization or similar corporate transaction.
1.2 Title to Shares. The exact spelling of the name(s) under which Purchaser
will take title to the Shares is:
 

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Purchaser desires to take title to the Shares as follows:
 
[    ]   Individual, as separate property
 
[    ]   Husband and wife, as community property
 
[    ]   Joint Tenants

To assign the Shares to a trust, a stock transfer agreement in the form provided
by the Company (the “Stock Transfer Agreement”) must be completed and executed.
 
 
 
 
 
[    ]   Other; please specify:
 
 

1.3 Payment. Purchaser hereby delivers payment of the Exercise Price in the
manner permitted in the Stock Option Agreement as follows (check and complete as
appropriate):
 
 
[    ]
in cash (by check) in the amount of $        , receipt of which is acknowledged
by the Company;

 
 
[    ]
by cancellation of indebtedness of the Company owed to Purchaser in the amount
of $        ;

 
 
[    ]
by delivery of                      fully-paid, nonassessable and vested shares
of the Common Stock of the Company owned by Purchaser, which have been paid for
within the meaning of SEC Rule 144, (if purchased by use of a promissory note,
such note has been fully paid with respect to such vested shares) or obtained by
Purchaser in the open public market and owned free and clear of all liens,
claims, encumbrances or security interests, valued at the current Fair Market
Value of $         per share;

 
 
[    ]
by the waiver hereby of compensation due or accrued for services rendered in the
amount of $        .

 

2. DELIVERY.
2.1 Deliveries by Purchaser. Purchaser hereby delivers to the Company (i) this
Exercise Agreement, (ii) two (2) copies of a blank Stock Power and Assignment
Separate from Stock Certificate in the form of Exhibit 1 attached hereto (the
“Stock Powers”), both executed by Purchaser (and Purchaser’s spouse, if any),
(iii) if Purchaser is married, a Consent of Spouse in the form
of Exhibit 2 attached hereto (the “Spouse Consent”) executed by Purchaser’s
spouse, and (iv) the Exercise Price and payment or other provision for any
applicable tax obligations in the form of a check, a copy of which is attached
hereto as Exhibit 3.
2.2 Deliveries by the Company. Upon its receipt of the Exercise Price, payment
or other provision for any applicable tax obligations and all the documents to
be executed and delivered by Purchaser to the Company under Section 2.1, the
Company will issue a duly executed stock certificate evidencing the Shares in
the name of Purchaser to be placed in escrow as provided in Section 10 until
expiration or termination of the Company’s Right of First Refusal described in
Section 8.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
warrants to the Company that:

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3.1 Agrees to Terms of the Plan. Purchaser has received a copy of the Plan and
the Stock Option Agreement, has read and understands the terms of the Plan, the
Stock Option Agreement and this Exercise Agreement, and agrees to be bound by
their terms and conditions. Purchaser acknowledges that there may be adverse tax
consequences upon exercise of the Option or disposition of the Shares, and that
Purchaser should consult a tax adviser prior to such exercise or disposition.
3.2 Purchase for Own Account for Investment. Purchaser is purchasing the Shares
for Purchaser’s own account for investment purposes only and not with a view to,
or for sale in connection with, a distribution of the Shares within the meaning
of the Securities Act. Purchaser has no present intention of selling or
otherwise disposing of all or any portion of the Shares and no one other than
Purchaser has any beneficial ownership of any of the Shares.
3.3 Access to Information. Purchaser has had access to all information regarding
the Company and its present and prospective business, assets, liabilities and
financial condition that Purchaser reasonably considers important in making the
decision to purchase the Shares, and Purchaser has had ample opportunity to ask
questions of the Company’s representatives concerning such matters and this
investment.
3.4 Understanding of Risks. Purchaser is fully aware of: (i) the highly
speculative nature of the investment in the Shares; (ii) the financial hazards
involved; (iii) the lack of liquidity of the Shares and the restrictions on
transferability of the Shares (e.g., that Purchaser may not be able to sell or
dispose of the Shares or use them as collateral for loans); (iv) the
qualifications and backgrounds of the management of the Company; and (v) the tax
consequences of investment in the Shares. Purchaser is capable of evaluating the
merits and risks of this investment, has the ability to protect Purchaser’s own
interests in this transaction and is financially capable of bearing a total loss
of this investment.
3.5 No General Solicitation. At no time was Purchaser presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Shares.

4. COMPLIANCE WITH SECURITIES LAWS.
4.1 Compliance with U.S. Federal Securities Laws. Purchaser understands and
acknowledges that the Shares have not been registered with the SEC under the
Securities Act and that, notwithstanding any other provision of the Stock Option
Agreement to the contrary, the exercise of any rights to purchase any Shares is
expressly conditioned upon compliance with the Securities Act and all applicable
state securities laws. Purchaser agrees to cooperate with the Company to ensure
compliance with such laws.
4.2 Compliance with California Securities Laws. THE PLAN, THE STOCK OPTION
AGREEMENT, AND THIS EXERCISE AGREEMENT ARE INTENDED TO COMPLY WITH SECTION
25102(o) OF THE CALIFORNIA CORPORATIONS CODE AND ANY RULES (INCLUDING
COMMISSIONER RULES, IF APPLICABLE) OR REGULATIONS PROMULGATED THEREUNDER BY THE
CALIFORNIA DEPARTMENT OF CORPORATIONS (THE “REGULATIONS”). ANY PROVISION OF THIS
EXERCISE AGREEMENT THAT IS INCONSISTENT WITH SECTION 25102(o) SHALL, WITHOUT
FURTHER ACT OR AMENDMENT BY THE COMPANY OR THE BOARD, BE REFORMED TO COMPLY WITH
THE REQUIREMENTS OF SECTION 25102(o). THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE CALIFORNIA
COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFICATION, IS SUBJECT
TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL
UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS EXERCISE AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
BEING AVAILABLE.
5. RESTRICTED SECURITIES.

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5.1 No Transfer Unless Registered or Exempt. Purchaser understands that
Purchaser may not transfer any Shares unless such Shares are registered under
the Securities Act or qualified under applicable state securities laws or
unless, in the opinion of counsel to the Company, exemptions from such
registration and qualification requirements are available. Purchaser understands
that only the Company may file a registration statement with the SEC and that
the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all
or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2 SEC Rule 144. In addition, Purchaser has been advised that SEC Rule 144
promulgated under the Securities Act, which permits certain limited sales of
unregistered securities, requires that the Shares be held for a minimum of six
(6) months, and in certain cases one (1) year, after they have been purchased
and paid for (within the meaning of Rule 144). Purchaser understands that Rule
144 may indefinitely restrict transfer of the Shares so long as Purchaser
remains an “affiliate” of the Company.
5.3 SEC Rule 701. The Shares are issued pursuant to SEC Rule 701 promulgated
under the Securities Act and may become freely tradeable by non-affiliates
(under limited conditions regarding the method of sale) ninety (90) days after
the first sale of Common Stock of the Company to the general public pursuant to
a registration statement filed with and declared effective by the SEC, subject
to a market standoff agreement as described in Section 7 of this Exercise
Agreement or any similar agreement entered into by Purchaser. Affiliates must
comply with the provisions of Rule 144.
 
6. RESTRICTIONS ON TRANSFERS.
6.1 Disposition of Shares. Purchaser hereby agrees that Purchaser shall make no
disposition of the Shares (other than as permitted by this Exercise Agreement)
unless and until:
(a) Purchaser shall have notified the Company of the proposed disposition and
provided a written summary of the terms and conditions of the proposed
disposition;
(b) Purchaser shall have complied with all requirements of this Exercise
Agreement applicable to the disposition of the Shares;
(c) Purchaser shall have provided the Company with written assurances, in form
and substance satisfactory to counsel for the Company, that (i) the proposed
disposition does not require registration of the Shares under the Securities Act
or (ii) all appropriate actions necessary for compliance with the registration
requirements of the Securities Act or of any exemption from registration
available under the Securities Act (including Rule 144) have been taken; and
(d) Purchaser shall have provided the Company with written assurances, in form
and substance satisfactory to the Company, that the proposed disposition will
not result in the contravention of any transfer restrictions applicable to the
Shares pursuant to the provisions of the Regulations referred to in Section 4.2
hereof.
6.2 Restriction on Transfer. Purchaser shall not transfer, assign, grant a lien
or security interest in, pledge, hypothecate, encumber or otherwise dispose of
any of the Shares which are subject to the Company’s Right of First Refusal
described below, except as permitted by this Exercise Agreement.
6.3 Transferee Obligations. Each person (other than the Company) to whom the
Shares are transferred by means of one of the permitted transfers specified in
this Exercise Agreement must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Company that such person is bound by the
provisions of this Exercise Agreement and that the transferred Shares are
subject to (i) the Company’s Right of First Refusal granted hereunder and
(ii) the market stand-off provisions of Section 7 hereof, to the same extent
such Shares would be so subject if retained by the Purchaser.

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7. MARKET STANDOFF AGREEMENT. Purchaser agrees in connection with any
registration of the Company’s securities that, upon the request of the Company
or the underwriters managing any public offering of the Company’s securities,
Purchaser will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed one hundred eighty (180) days) after the
effective date of such registration requested by such managing underwriters and
subject to all restrictions as the Company or the underwriters may specify.
Purchaser further agrees to enter into any agreement reasonably required by the
underwriters to implement the foregoing.
8. COMPANY’S RIGHT OF FIRST REFUSAL. Before any Vested Shares held by Purchaser
or any transferee of such Vested Shares (either sometimes referred to herein as
the “Holder”) may be sold or otherwise transferred (including, without
limitation, a transfer by gift or operation of law), the Company and/or its
assignee(s) will have a right of first refusal to purchase the Vested Shares to
be sold or transferred (the “Offered Shares”) on the terms and conditions set
forth in this Section (the “Right of First Refusal”).
8.1 Notice of Proposed Transfer. The Holder of the Offered Shares will deliver
to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona
fide intention to sell or otherwise transfer the Offered Shares; (ii) the name
and address of each proposed purchaser or other transferee (the “Proposed
Transferee”); (iii) the number of Offered Shares to be transferred to each
Proposed Transferee; (iv) the bona fide cash price or other consideration for
which the Holder proposes to transfer the Offered Shares (the “Offered Price”);
and (v) that the Holder acknowledges this Notice is an offer to sell the Offered
Shares to the Company and/or its assignee(s) pursuant to the Company’s Right of
First Refusal at the Offered Price as provided for in this Exercise Agreement.
8.2 Exercise of Right of First Refusal. At any time within thirty (30) days
after the date of the Notice, the Company and/or its assignee(s) may, by giving
written notice to the Holder, elect to purchase all (or, with the consent of the
Holder, less than all) the Offered Shares proposed to be transferred to any one
or more of the Proposed Transferees named in the Notice, at the purchase price,
determined as specified below.
8.3 Purchase Price. The purchase price for the Offered Shares purchased under
this Section will be the Offered Price, provided that if the Offered Price
consists of no legal consideration (as, for example, in the case of a transfer
by gift) the purchase price will be the fair market value of the Offered Shares
as determined in good faith by the Company’s Board of Directors. If the Offered
Price includes consideration other than cash, then the value of the non-cash
consideration, as determined in good faith by the Company’s Board of Directors,
will conclusively be deemed to be the cash equivalent value of such non-cash
consideration.
8.4 Payment. Payment of the purchase price for the Offered Shares will be
payable, at the option of the Company and/or its assignee(s) (as applicable), by
check or by cancellation of all or a portion of any outstanding purchase money
indebtedness owed by the Holder to the Company (or to such assignee, in the case
of a purchase of Offered Shares by such assignee) or by any combination thereof.
The purchase price will be paid without interest within sixty (60) days after
the Company’s receipt of the Notice, or, at the option of the Company and/or its
assignee(s), in the manner and at the time(s) set forth in the Notice.
8.5 Holder’s Right to Transfer. If all of the Offered Shares proposed in the
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section, then the Holder may
sell or otherwise transfer such Offered Shares to each Proposed Transferee at
the Offered Price or at a higher price, provided that (i) such sale or other
transfer is consummated within one hundred twenty (120) days after the date of
the Notice, (ii) any such sale or other transfer is effected in compliance with
all applicable securities laws, and (iii) each Proposed Transferee agrees in
writing that the provisions of this Section will continue to apply to the
Offered Shares in the hands of such Proposed Transferee. If the Offered Shares
described in the Notice are not transferred to each Proposed Transferee within
such one hundred twenty (120) day period, then a new Notice must be given to the
Company pursuant to which the Company will again be offered the Right of First
Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
8.6 Exempt Transfers. Notwithstanding anything to the contrary in this Section,
the following transfers of Vested Shares will be exempt from the Right of First
Refusal: (i) the transfer of any or all of the Vested Shares

--------------------------------------------------------------------------------

during Purchaser’s lifetime by gift or on Purchaser’s death by will or intestacy
to Purchaser’s “Immediate Family” (as defined below) or to a trust for the
benefit of Purchaser or Purchaser’s Immediate Family, provided that each
transferee or other recipient agrees in a writing satisfactory to the Company
that the provisions of this Section will continue to apply to the transferred
Vested Shares in the hands of such transferee or other recipient; (ii) any
transfer or conversion of Vested Shares made pursuant to a statutory merger or
statutory consolidation of the Company with or into another corporation or
corporations except that the Right of First Refusal will continue to apply
thereafter to such Vested Shares, in which case the surviving corporation of
such merger or consolidation shall succeed to the rights of the Company under
this Section unless (i) the common stock of the surviving corporation or any
direct or indirect parent corporation thereof is registered under the Securities
Exchange Act of 1934, as amended; or (ii) the agreement of merger or
consolidation expressly otherwise provides; or (iii) any transfer of Vested
Shares pursuant to the winding up and dissolution of the Company. As used
herein, the term “Immediate Family” will mean Purchaser’s spouse, the lineal
descendant or antecedent, father, mother, brother or sister, child, adopted
child, grandchild or adopted grandchild of Purchaser or Purchaser’s spouse, or
the spouse of any of the above, or Spousal Equivalent, as defined herein. As
used herein, a person is deemed to be a “Spousal Equivalent” provided the
following circumstances are true: (i) irrespective of whether or not Purchaser
and the Spousal Equivalent are the same sex, they are the sole spousal
equivalent of the other for the last twelve (12) months, (ii) they intend to
remain so indefinitely, (iii) neither is married to anyone else, (iv) both are
at least 18 years of age and mentally competent to consent to contract, (v) they
are not related by blood to a degree of closeness which would prohibit legal
marriage in the state in which they legally reside, (vi) they are jointly
responsible for each other’s common welfare and financial obligations, and
(vii) they have resided together in the same residence for the last twelve
(12) months and intend to do so indefinitely.
8.7 Termination of Right of First Refusal. The Right of First Refusal will
terminate as to all Shares (i) on the effective date of the first sale of Common
Stock of the Company to the general public pursuant to a registration statement
filed with and declared effective by the SEC under the 1933 Act (other than a
registration statement relating solely to the issuance of Common Stock pursuant
to a business combination or an employee incentive or benefit plan) or (ii) on
any transfer or conversion of Shares made pursuant to a statutory merger or
statutory consolidation of the Company with or into another corporation or
corporations if the common stock of the surviving corporation or any direct or
indirect parent corporation thereof is registered under the Securities Exchange
Act of 1934, as amended.
8.8 Encumbrances on Vested Shares. Purchaser may grant a lien or security
interest in, or pledge, hypothecate or encumber Vested Shares only if each party
to whom such lien or security interest is granted, or to whom such pledge,
hypothecation or other encumbrance is made, agrees in a writing satisfactory to
the Company that: (i) such lien, security interest, pledge, hypothecation or
encumbrance will not apply to such Vested Shares after they are acquired by the
Company and/or its assignees under this Section; and (ii) the provisions of this
Section will continue to apply to such Vested Shares in the hands of such party
and any transferee of such party. Purchaser may not grant a lien or security
interest in, or pledge, hypothecate or encumber, any Unvested Shares.
9. RIGHTS AS A STOCKHOLDER. Subject to the terms and conditions of this Exercise
Agreement, Purchaser will have all of the rights of a stockholder of the Company
with respect to the Shares from and after the date that Shares are issued to
Purchaser until such time as Purchaser disposes of the Shares or the Company
and/or its assignee(s) exercise(s) the Right of First Refusal. Upon an exercise
of the Right of First Refusal, Purchaser will have no further rights as a holder
of the Shares so purchased upon such exercise, other than the right to receive
payment for the Shares so purchased in accordance with the provisions of this
Exercise Agreement, and Purchaser will promptly surrender the stock
certificate(s) evidencing the Shares so purchased to the Company for transfer or
cancellation.
10. ESCROW. As security for Purchaser’s faithful performance of this Exercise
Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Purchaser and by Purchaser’s spouse, if any
(with the date and number of Shares left blank), to the Secretary of the Company
or other designee of the Company (the “Escrow Holder”), who is hereby appointed
to hold such certificate(s) and Stock Powers in escrow and to take all such
actions and to effectuate all such transfers and/or releases of such Shares as
are in accordance with the terms of this Exercise

--------------------------------------------------------------------------------

Agreement. Purchaser and the Company agree that Escrow Holder will not be liable
to any party to this Exercise Agreement (or to any other party) for any actions
or omissions unless Escrow Holder is grossly negligent or intentionally
fraudulent in carrying out the duties of Escrow Holder under this Exercise
Agreement. Escrow Holder may rely upon any letter, notice or other document
executed with any signature purported to be genuine and may rely on the advice
of counsel and obey any order of any court with respect to the transactions
contemplated by this Exercise Agreement. The Shares will be released from escrow
upon termination of the Right of First Refusal.
11. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
11.1 Legends. Purchaser understands and agrees that the Company will place the
legends set forth below or similar legends on any stock certificate(s)
evidencing the Shares, together with any other legends that may be required by
state or U.S. federal securities laws, the Company’s Articles of Incorporation
or Bylaws, any other agreement between Purchaser and the Company or any
agreement between Purchaser and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF
CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THERE-FROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO
BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON PUBLIC RESALE AND TRANSFER, INCLUDING THE RIGHT FIRST REFUSAL OPTION HELD BY
THE ISSUER AND/OR ITS AS¬SIGNEE(S) AS SET FORTH IN A STOCK OPTION EXERCISE
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF
WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH PUBLIC SALE
AND TRANSFER RESTRICTIONS INCLUDING THE RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET
STANDOFF RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN THE ISSUER AND
THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY
NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF ANY PUBLIC OFFERING
OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON
TRANSFEREES OF THESE SHARES.
 

11.2 Stop-Transfer Instructions. Purchaser agrees that, to ensure compliance
with the restrictions imposed by this Exercise Agreement, the Company may issue
appropriate “stop-transfer” instructions to its transfer agent, if any, and if
the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.

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11.3 Refusal to Transfer. The Company will not be required (i) to transfer on
its books any Shares that have been sold or otherwise transferred in violation
of any of the provisions of this Exercise Agreement or (ii) to treat as owner of
such Shares, or to accord the right to vote or pay dividends to any purchaser or
other transferee to whom such Shares have been so transferred.
12. TAX CONSEQUENCES. PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER ADVERSE
TAX CONSEQUENCES AS A RESULT OF PURCHASER’S PURCHASE OR DISPOSITION OF THE
SHARES. PURCHASER REPRESENTS: (i) THAT PURCHASER HAS CONSULTED WITH ANY TAX
ADVISER THAT PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE. Set forth below is a brief summary as of the date the Plan
was adopted by the Board of some of the U.S. federal and California tax
consequences of exercise of the Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. PURCHASER SHOULD CONSULT HIS OR HER OWN TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.
12.1 Exercise of Option. There may be a regular U.S. federal income tax
liability and a California income tax liability upon the exercise of the Option.
Purchaser will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the fair market value
of the Shares on the date of exercise over the Exercise Price. If Purchaser is
or was an employee of the Company, the Company may be required to withhold from
Purchaser’s compensation or collect from Purchaser and pay to the applicable
taxing authorities an amount equal to a percentage of this compensation income
at the time of exercise.
12.2 Disposition of Shares. The following tax consequences may apply upon
disposition of the Shares.
(a) Capital Gain. If the Shares are held for more than twelve (12) months after
the date of purchase of the Shares pursuant to the exercise of the Option, any
gain realized on disposition of the Shares will be treated as long-term capital
gain.
(b) Withholding. The Company may be required to withhold from Purchaser’s
compensation or collect from Purchaser and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income.
13. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of the
Shares will be subject to and conditioned upon compliance by the Company and
Purchaser with all applicable state and U.S. federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation
system on which the Company’s Common Stock may be listed or quoted at the time
of such issuance or transfer.
14. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights under this
Exercise Agreement, including its right to purchase Shares under the Right of
First Refusal. No other party to this Exercise Agreement may assign, whether
voluntarily or by operation of law, any of its rights and obligations under this
Exercise Agreement, except with the prior written consent of the Company. This
Exercise Agreement shall be binding upon and inure to the benefit of the
successors and assigns of the Company. Subject to the restrictions on transfer
herein set forth, this Exercise Agreement will be binding upon Purchaser and
Purchaser’s heirs, executors, administrators, legal representatives, successors
and assigns.
15. GOVERNING LAW. This Exercise Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without giving
effect to that body of laws pertaining to conflict of laws.
16. NOTICES. Any notice required to be given or delivered to the Company shall
be in writing and addressed to the Corporate Secretary of the Company at its
principal corporate offices. Any notice required to be given or delivered to
Purchaser shall be in writing and addressed to Purchaser at the address
indicated above or to such other address as Purchaser may designate in writing
from time to time to the Company. All notices shall be deemed effectively given
upon personal delivery, (i) three (3) days after deposit in the United States
mail by certified or

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registered mail (return receipt requested), (ii) one (1) business day after its
deposit with any return receipt express courier (prepaid), or (iii) one
(1) business day after transmission by rapifax or telecopier.
17. FURTHER ASSURANCES. The parties agree to execute such further instruments
and to take such further actions as may be reasonably necessary to carry out the
purposes and intent of this Exercise Agreement.
18. SEVERABILITY. If any provision of this Exercise Agreement is determined by
any court or arbitrator of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such provision will be enforced to the maximum
extent possible given the intent of the parties hereto. If such clause or
provision cannot be so enforced, such provision shall be stricken from this
Exercise Agreement, and the remainder of this Exercise Agreement shall be
enforced as if such invalid, illegal or unenforceable clause or provision had
(to the extent not enforceable) never been contained in this Exercise Agreement.
19. HEADINGS. The captions and headings of this Exercise Agreement are included
for ease of reference only and will be disregarded in interpreting or construing
this Exercise Agreement. All references herein to Sections will refer to
Sections of this Exercise Agreement.
20. ENTIRE AGREEMENT. The Plan, the Stock Option Agreement and this Exercise
Agreement, together with all Exhibits thereto, constitute the entire agreement
and understanding of the parties with respect to the subject matter of this
Exercise Agreement, and supersede all prior understandings and agreements,
whether oral or written, between the parties hereto with respect to the specific
subject matter hereof.
 
IN WITNESS WHEREOF, the Company has caused this Exercise Agreement to be
executed in triplicate by its duly authorized representative and Purchaser has
executed this Exercise Agreement in triplicate as of the Effective Date,
indicated above.
 
 
 
 
 
 
 
 
AQUANTIA CORP.
 
 
 
PURCHASER
 
 
 
 
By:
 
 
 
 
 
 
 
 
 
 
 
 
(Signature)
 
 
 
Faraj Aalaei
 
 
 
 
(Please print name)
 
 
 
(Please print name)
 
 
 
President & CEO
 
 
 
 
(Please print title)
 
 
 
 

SIGNATURE PAGE TO AQUANTIA CORP. STOCK OPTION EXERCISE AGREEMENT
 

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AQUANTIA CORP.
2004 EQUITY INCENTIVE PLAN
NONQUALIFIED STOCK OPTION EARLY EXERCISE AGREEMENT
This Stock Option Exercise Agreement (the “Exercise Agreement”) is made and
entered into as of                                          (the “Effective
Date”) by and between Aquantia Corp., a Delaware corporation (the “Company”),
and the purchaser named below (the “Purchaser”). Capitalized terms not defined
herein shall have the meanings ascribed to them in the Company’s 2004 Equity
Incentive Plan (as may be amended from time to time, the “Plan”).
 
 
 
 
Purchaser:
 
 
 
 
Social Security Number:
 
 
 
 
Address:
 
 
 
 
 
 
 
 
 
Total Number of Shares:
 
 
 
 
Exercise Price Per Share:
 
 
 
 
Date of Grant:
 
 
 
 
First Vesting Date:
 
 
 
 
Expiration Date:
 
 
 
 
(Unless earlier terminated under Section 5.6 of the Plan)
Type of Stock Option
 
Nonqualified Stock Option

1. Exercise of Option.
1.1 Exercise. Pursuant to exercise of that certain option (the “Option”) granted
to Purchaser under the Plan and subject to the terms and conditions of this
Exercise Agreement, Purchaser hereby purchases from the Company, and the Company
hereby sells to Purchaser, the Total Number of Shares set forth above (the
“Shares”) of the Company’s Common Stock, $0.00001 par value per share, at the
Exercise Price Per Share set forth above (the “Exercise Price”). As used in this
Exercise Agreement, the term “Shares” refers to the Shares purchased under this
Exercise Agreement and includes all securities received (i) in replacement of
the Shares, (ii) as a result of stock dividends or stock splits with respect to
the Shares, and (iii) all securities received in replacement of the Shares in a
merger, recapitalization, reorganization or similar corporate transaction.
1.2 Title to Shares. The exact spelling of the name(s) under which Purchaser
will take title to the Shares is:
 

--------------------------------------------------------------------------------

 
 
 
Purchaser desires to take title to the Shares as follows:
 
[    ]   Individual, as separate property
 
 
[    ]   Husband and wife, as community property
 
[    ]   Joint Tenants

To assign the Shares to a trust, a stock transfer agreement in the form provided
by the Company (the “Stock Transfer Agreement”) must be completed and executed.
 
 
 
 
 
[    ]   Other; please specify:
 
 

1.3 Payment. Purchaser hereby delivers payment of the Exercise Price in the
manner permitted in the Stock Option Agreement as follows (check and complete as
appropriate):
 
 
[    ]
in cash (by check) in the amount of $        , receipt of which is acknowledged
by the Company;

 
 
[    ]
by cancellation of indebtedness of the Company owed to Purchaser in the amount
of $        ;

 
 
[    ]
by delivery of                      fully-paid, nonassessable and vested shares
of the Common Stock of the Company owned by Purchaser, which have been paid for
within the meaning of SEC Rule 144, (if purchased by use of a promissory note,
such note has been fully paid with respect to such vested shares) or obtained by
Purchaser in the open public market and owned free and clear of all liens,
claims, encumbrances or security interests, valued at the current Fair Market
Value of $         per share;

 
 
[    ]
by the waiver hereby of compensation due or accrued for services rendered in the
amount of $        .

2. DELIVERY.
2.1 Deliveries by Purchaser. Purchaser hereby delivers to the Company (i) this
Exercise Agreement, (ii) two (2) copies of a blank Stock Power and Assignment
Separate from Stock Certificate in the form of Exhibit 1 attached hereto (the
“Stock Powers”), both executed by Purchaser (and Purchaser’s spouse, if any),
(iii) if Purchaser is married, a Consent of Spouse in the form
of Exhibit 2 attached hereto (the “Spouse Consent”) executed by Purchaser’s
spouse, and (iv) the Exercise Price and payment or other provision for any
applicable tax obligations in the form of a check, a copy of which is attached
hereto as Exhibit 3.
2.2 Deliveries by the Company. Upon its receipt of the Exercise Price, payment
or other provision for any applicable tax obligations and all the documents to
be executed and delivered by Purchaser to the Company under Section 2.1, the
Company will issue a duly executed stock certificate evidencing the Shares in
the name of Purchaser to be placed in escrow as provided in Section 11 until
expiration or termination of the Company’s Repurchase Option and Right of First
Refusal described in Sections 8, 9 and 10.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser represents and
warrants to the Company that:

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3.1 Agrees to Terms of the Plan. Purchaser has received a copy of the Plan and
the Stock Option Agreement, has read and understands the terms of the Plan, the
Stock Option Agreement and this Exercise Agreement, and agrees to be bound by
their terms and conditions. Purchaser acknowledges that there may be adverse tax
consequences upon exercise of the Option or disposition of the Shares, and that
Purchaser should consult a tax adviser prior to such exercise or disposition.

3.2 Purchase for Own Account for Investment. Purchaser is purchasing the Shares
for Purchaser’s own account for investment purposes only and not with a view to,
or for sale in connection with, a distribution of the Shares within the meaning
of the Securities Act. Purchaser has no present intention of selling or
otherwise disposing of all or any portion of the Shares and no one other than
Purchaser has any beneficial ownership of any of the Shares.
3.3 Access to Information. Purchaser has had access to all information regarding
the Company and its present and prospective business, assets, liabilities and
financial condition that Purchaser reasonably considers important in making the
decision to purchase the Shares, and Purchaser has had ample opportunity to ask
questions of the Company’s representatives concerning such matters and this
investment.
3.4 Understanding of Risks. Purchaser is fully aware of: (i) the highly
speculative nature of the investment in the Shares; (ii) the financial hazards
involved; (iii) the lack of liquidity of the Shares and the restrictions on
transferability of the Shares (e.g., that Purchaser may not be able to sell or
dispose of the Shares or use them as collateral for loans); (iv) the
qualifications and backgrounds of the management of the Company; and (v) the tax
consequences of investment in the Shares. Purchaser is capable of evaluating the
merits and risks of this investment, has the ability to protect Purchaser’s own
interests in this transaction and is financially capable of bearing a total loss
of this investment.
3.5 No General Solicitation. At no time was Purchaser presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Shares.
4. COMPLIANCE WITH SECURITIES LAWS.
4.1 Compliance with U.S. Federal Securities Laws. Purchaser understands and
acknowledges that the Shares have not been registered with the SEC under the
Securities Act and that, notwithstanding any other provision of the Stock Option
Agreement to the contrary, the exercise of any rights to purchase any Shares is
expressly conditioned upon compliance with the Securities Act and all applicable
state securities laws. Purchaser agrees to cooperate with the Company to ensure
compliance with such laws.
4.2 Compliance with California Securities Laws. THE PLAN, THE STOCK OPTION
AGREEMENT, AND THIS EXERCISE AGREEMENT ARE INTENDED TO COMPLY WITH
SECTION 25102(o) OF THE CALIFORNIA CORPORATIONS CODE AND ANY RULES (INCLUDING
COMMISSIONER RULES, IF APPLICABLE) OR REGULATIONS PROMULGATED THEREUNDER BY THE
CALIFORNIA DEPARTMENT OF CORPORATIONS (THE “REGULATIONS”). ANY PROVISION OF THIS
EXERCISE AGREEMENT THAT IS INCONSISTENT WITH SECTION 25102(o) SHALL, WITHOUT
FURTHER ACT OR AMENDMENT BY THE COMPANY OR THE BOARD, BE REFORMED TO COMPLY WITH
THE REQUIREMENTS OF SECTION 25102(o). THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE CALIFORNIA
COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFICATION, IS SUBJECT
TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL
UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS EXERCISE AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
BEING AVAILABLE.

5. RESTRICTED SECURITIES.

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5.1 No Transfer Unless Registered or Exempt. Purchaser understands that
Purchaser may not transfer any Shares unless such Shares are registered under
the Securities Act or qualified under applicable state securities laws or
unless, in the opinion of counsel to the Company, exemptions from such
registration and qualification requirements are available. Purchaser understands
that only the Company may file a registration statement with the SEC and that
the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all
or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2 SEC Rule 144. In addition, Purchaser has been advised that SEC Rule 144
promulgated under the Securities Act, which permits certain limited sales of
unregistered securities, requires that the Shares be held for a minimum of six
(6) months, and in certain cases one (1) year, after they have been
purchased and paid for (within the meaning of Rule 144). Purchaser understands
that Rule 144 may indefinitely restrict transfer of the Shares so long as
Purchaser remains an “affiliate” of the Company.
5.3 SEC Rule 701. The Shares are issued pursuant to SEC Rule 701 promulgated
under the Securities Act and may become freely tradeable by non-affiliates
(under limited conditions regarding the method of sale) ninety (90) days after
the first sale of Common Stock of the Company to the general public pursuant to
a registration statement filed with and declared effective by the SEC, subject
to a market standoff agreement as described in Section 7 of this Exercise
Agreement or any similar agreement entered into by Purchaser. Affiliates must
comply with the provisions of Rule 144.
6. RESTRICTIONS ON TRANSFERS.
6.1 Disposition of Shares. Purchaser hereby agrees that Purchaser shall make no
disposition of the Shares (other than as permitted by this Exercise Agreement)
unless and until:
(a) Purchaser shall have notified the Company of the proposed disposition and
provided a written summary of the terms and conditions of the proposed
disposition;
(b) Purchaser shall have complied with all requirements of this Exercise
Agreement applicable to the disposition of the Shares;
(c) Purchaser shall have provided the Company with written assurances, in form
and substance satisfactory to counsel for the Company, that (i) the proposed
disposition does not require registration of the Shares under the Securities Act
or (ii) all appropriate actions necessary for compliance with the registration
requirements of the Securities Act or of any exemption from
registration available under the Securities Act (including Rule 144) have been
taken; and
(d) Purchaser shall have provided the Company with written assurances, in form
and substance satisfactory to the Company, that the proposed disposition will
not result in the contravention of any transfer restrictions applicable to the
Shares pursuant to the provisions of the Regulations referred to in Section 4.2
hereof.
6.2 Restriction on Transfer. Purchaser shall not transfer, assign, grant a lien
or security interest in, pledge, hypothecate, encumber or otherwise dispose of
any of the Shares which are subject to the Company’s Repurchase Option or the
Company’s Right of First Refusal described below, except as permitted by this
Exercise Agreement.
6.3 Transferee Obligations. Each person (other than the Company) to whom the
Shares are transferred by means of one of the permitted transfers specified in
this Exercise Agreement must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Company that such person is bound by the
provisions of this Exercise Agreement and that the transferred Shares
are subject to (i) both the Company’s Repurchase Option and the Company’s Right
of First Refusal granted hereunder and (ii) the market stand-off provisions of
Section 7 hereof, to the same extent such Shares would be so subject if retained
by the Purchaser.

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7. MARKET STANDOFF AGREEMENT. Purchaser agrees in connection with any
registration of the Company’s securities that, upon the request of the Company
or the underwriters managing any public offering of the Company’s securities,
Purchaser will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed one hundred eighty (180) days) after the
effective date of such registration requested by such managing underwriters and
subject to all restrictions as the Company or the underwriters may specify.
Purchaser further agrees to enter into any agreement reasonably required by the
underwriters to implement the foregoing.
8. COMPANY’S REPURCHASE OPTION FOR UNVESTED SHARES. The Company, or its
assignee, shall have the option to repurchase all or a portion of the
Purchaser’s Unvested Shares (as defined in Section 2.2 of the Stock Option
Agreement) on the terms and conditions set forth in this Section (the
“Repurchase Option”) if Purchaser is Terminated (as defined in the Plan) for any
reason, or no reason, including without limitation, Purchaser’s death,
Disability (as defined in the Plan), voluntary resignation or termination by the
Company with or without Cause.
8.1 Termination and Termination Date. In case of any dispute as to whether
Purchaser is Terminated, the Committee shall have discretion to determine
whether Purchaser has been Terminated and the effective date of such Termination
(the “Termination Date”).
8.2 Exercise of Repurchase Option. At any time within ninety (90) days after
Purchaser’s Termination Date (or, in the case of securities issued upon exercise
of an Option after Purchaser’s Termination Date, within ninety (90) days after
the date of such exercise), the Company, or its assignee, may elect to
repurchase any or all the Purchaser’s Unvested Shares by giving Purchaser
written notice of exercise of the Repurchase Option.
8.3 Calculation of Repurchase Price for Unvested Shares. The Company or its
assignee shall have the option to repurchase from Purchaser (or from Purchaser’s
personal representative as the case may be) the Unvested Shares at Purchaser’s
Exercise Price, proportionately adjusted for any stock split or similar change
in the capital structure of the Company as set forth in Section 2.2 of the Plan
(the “Repurchase Price”).
8.4 Payment of Repurchase Price. The Repurchase Price shall be payable, at the
option of the Company or its assignee, by check or by cancellation of all or a
portion of any outstanding purchase money indebtedness owed by Purchaser to the
Company or such assignee, or by any combination thereof. The Repurchase Price
shall be paid without interest within the term of the Repurchase Option as
described in Section 8.2.
8.5 Right of Termination Unaffected. Nothing in this Exercise Agreement shall be
construed to limit or otherwise affect in any manner whatsoever the right or
power of the Company (or any Parent or Subsidiary of the Company) to terminate
Purchaser’s employment or other relationship with Company (or the Parent or
Subsidiary of the Company) at any time, for any reason or no reason, with or
without Cause.

9. COMPANY’S RIGHT OF FIRST REFUSAL. Unvested Shares may not be sold or
otherwise transferred by Purchaser without the Company’s prior written consent.
Before any Vested Shares held by Purchaser or any transferee of such Vested
Shares (either sometimes referred to herein as the “Holder”) may be sold or
otherwise transferred (including, without limitation, a transfer by gift or
operation of law), the Company and/or its assignee(s) will have a right of first
refusal to purchase the Vested Shares to be sold or transferred (the “Offered
Shares”) on the terms and conditions set forth in this Section (the “Right of
First Refusal”).
9.1 Notice of Proposed Transfer. The Holder of the Offered Shares will deliver
to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona
fide intention to sell or otherwise transfer the Offered Shares; (ii) the name
and address of each proposed purchaser or other transferee (the “Proposed
Transferee”); (iii) the number of Offered Shares to be transferred to each
Proposed Transferee; (iv) the bona fide cash price or other consideration for
which the Holder proposes to transfer the Offered Shares (the “Offered Price”);
and (v) that the Holder acknowledges this Notice is an offer to sell the Offered
Shares to the Company and/or its assignee(s) pursuant to the Company’s Right of
First Refusal at the Offered Price as provided for in this Exercise Agreement.

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9.2 Exercise of Right of First Refusal. At any time within thirty (30) days
after the date of the Notice, the Company and/or its assignee(s) may, by giving
written notice to the Holder, elect to purchase all (or, with the consent of the
Holder, less than all) the Offered Shares proposed to be transferred to any one
or more of the Proposed Transferees named in the Notice, at the purchase price,
determined as specified below.
9.3 Purchase Price. The purchase price for the Offered Shares purchased under
this Section will be the Offered Price, provided that if the Offered Price
consists of no legal consideration (as, for example, in the case of a transfer
by gift) the purchase price will be the fair market value of the Offered Shares
as determined in good faith by the Company’s Board of Directors. If the Offered
Price includes consideration other than cash, then the value of the non-cash
consideration, as determined in good faith by the Company’s Board of Directors,
will conclusively be deemed to be the cash equivalent value of such non-cash
consideration.
9.4 Payment. Payment of the purchase price for the Offered Shares will be
payable, at the option of the Company and/or its assignee(s) (as applicable), by
check or by cancellation of all or a portion of any outstanding purchase money
indebtedness owed by the Holder to the Company (or to such assignee, in the case
of a purchase of Offered Shares by such assignee) or by any combination thereof.
The purchase price will be paid without interest within sixty (60) days after
the Company’s receipt of the Notice, or, at the option of the Company and/or its
assignee(s), in the manner and at the time(s) set forth in the Notice.
9.5 Holder’s Right to Transfer. If all of the Offered Shares proposed in the
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section, then the Holder may
sell or otherwise transfer such Offered Shares to each Proposed Transferee at
the Offered Price or at a higher price, provided that (i) such sale or other
transfer is consummated within one hundred twenty (120) days after the date of
the Notice, (ii) any such sale or other transfer is effected in compliance with
all applicable securities laws, and (iii) each Proposed Transferee agrees in
writing that the provisions of this Section will continue to apply to the
Offered Shares in the hands of such Proposed Transferee. If the Offered Shares
described in the Notice are not transferred to each Proposed Transferee within
such one hundred twenty (120) day period, then a new Notice must be given to the
Company pursuant to which the Company will again be offered the Right of First
Refusal before any Shares held by the Holder may be sold or otherwise
transferred.

9.6 Exempt Transfers. Notwithstanding anything to the contrary in this Section,
the following transfers of Vested Shares will be exempt from the Right of First
Refusal: (i) the transfer of any or all of the Vested Shares during Purchaser’s
lifetime by gift or on Purchaser’s death by will or intestacy to Purchaser’s
“Immediate Family” (as defined below) or to a trust for the benefit of Purchaser
or Purchaser’s Immediate Family, provided that each transferee or other
recipient agrees in a writing satisfactory to the Company that the provisions of
this Section will continue to apply to the transferred Vested Shares in the
hands of such transferee or other recipient; (ii) any transfer or conversion of
Vested Shares made pursuant to a statutory merger or statutory consolidation of
the Company with or into another corporation or corporations except that the
Right of First Refusal will continue to apply thereafter to such Vested Shares,
in which case the surviving corporation of such merger or consolidation shall
succeed to the rights of the Company under this Section unless (i) the common
stock of the surviving corporation or any direct or indirect parent corporation
thereof is registered under the Securities Exchange Act of 1934, as amended; or
(ii) the agreement of merger or consolidation expressly otherwise provides; or
(iii) any transfer of Vested Shares pursuant to the winding up and dissolution
of the Company. As used herein, the term “Immediate Family” will mean
Purchaser’s spouse, the lineal descendant or antecedent, father, mother, brother
or sister, child, adopted child, grandchild or adopted grandchild of Purchaser
or Purchaser’s spouse, or the spouse of any of the above, or Spousal Equivalent,
as defined herein. As used herein, a person is deemed to be a “Spousal
Equivalent” provided the following circumstances are true: (i) irrespective of
whether or not Purchaser and the Spousal Equivalent are the same sex, they are
the sole spousal equivalent of the other for the last twelve (12) months,
(ii) they intend to remain so indefinitely, (iii) neither is married to anyone
else, both are at least 18 years of age and mentally competent to consent to
contract, (v) they are not related by blood to a degree of closeness which would
prohibit legal marriage in the state in which they legally reside, (vi) they are
jointly responsible for each other’s common welfare and financial
obligations, and (vii) they have resided together in the same residence for the
last twelve (12) months and intend to do so indefinitely.

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9.7 Termination of Right of First Refusal. The Right of First Refusal will
terminate as to all Shares (i) on the effective date of the first sale of Common
Stock of the Company to the general public pursuant to a registration statement
filed with and declared effective by the SEC under the 1933 Act (other than a
registration statement relating solely to the issuance of Common Stock pursuant
to a business combination or an employee incentive or benefit plan) or (ii) on
any transfer or conversion of Shares made pursuant to a statutory merger or
statutory consolidation of the Company with or into another corporation or
corporations if the common stock of the surviving corporation or any direct or
indirect parent corporation thereof is registered under the Securities Exchange
Act of 1934, as amended.
9.8 Encumbrances on Vested Shares. Purchaser may grant a lien or security
interest in, or pledge, hypothecate or encumber Vested Shares only if each party
to whom such lien or security interest is granted, or to whom such pledge,
hypothecation or other encumbrance is made, agrees in a writing satisfactory to
the Company that: (i) such lien, security interest, pledge, hypothecation or
encumbrance will not apply to such Vested Shares after they are acquired by the
Company and/or its assignees under this Section; and (ii) the provisions of this
Section will continue to apply to such Vested Shares in the hands of such party
and any transferee of such party. Purchaser may not grant a lien or security
interest in, or pledge, hypothecate or encumber, any Unvested Shares.
10. RIGHTS AS A STOCKHOLDER. Subject to the terms and conditions of this
Exercise Agreement, Purchaser will have all of the rights of a stockholder of
the Company with respect to the Shares from and after the date that Shares are
issued to Purchaser until such time as Purchaser disposes of the Shares or the
Company and/or its assignee(s) exercise(s) the Repurchase Option or Right of
First Refusal. Upon an exercise of the Repurchase Option or the Right of First
Refusal, Purchaser will have no further rights as a holder of the Shares so
purchased upon such exercise, other than the right to receive payment for the
Shares so purchased in accordance with the provisions of this Exercise
Agreement, and Purchaser will promptly surrender the stock certificate(s)
evidencing the Shares so purchased to the Company for transfer or cancellation.
11. ESCROW. As security for Purchaser’s faithful performance of this Exercise
Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Purchaser and by Purchaser’s spouse, if any
(with the date and number of Shares left blank), to the Secretary of the Company
or other designee of the Company (the “Escrow Holder”), who is hereby appointed
to hold such certificate(s) and Stock Powers in escrow and to take all such
actions and to effectuate all such transfers and/or releases of such Shares as
are in accordance with the terms of this Exercise Agreement. Purchaser and the
Company agree that Escrow Holder will not be liable to any party to this
Exercise Agreement (or to any other party) for any actions or omissions unless
Escrow Holder is grossly negligent or intentionally fraudulent in carrying out
the duties of Escrow Holder under this Exercise Agreement. Escrow Holder may
rely upon any letter, notice or other document executed with any signature
purported to be genuine and may rely on the advice of counsel and obey any order
of any court with respect to the transactions contemplated by this Exercise
Agreement. The Shares will be released from escrow upon termination of both the
Repurchase Option and the Right of First Refusal.
12. RESTRICTIVE LEGENDS AND STOP-TRANSFER ORDERS.
12.1 Legends. Purchaser understands and agrees that the Company will place the
legends set forth below or similar legends on any stock certificate(s)
evidencing the Shares, together with any other legends that may be required by
state or U.S. federal securities laws, the Company’s Articles of Incorporation
or Bylaws, any other agreement between Purchaser and the Company or any
agreement between Purchaser and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF
CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS,

--------------------------------------------------------------------------------

PURSUANT TO REGISTRATION OR EXEMPTION THERE-FROM. INVESTORS SHOULD BE AWARE THAT
THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN
INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT
ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON PUBLIC RESALE AND TRANSFER, INCLUDING THE RIGHT OF REPURCHASE AND RIGHT FIRST
REFUSAL OPTION HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN A STOCK
OPTION EXERCISE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE
SHARES, A COPY OF WHICH MAY BE OB-TAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
SUCH PUBLIC SALE AND TRANSFER RESTRICTIONS INCLUDING THE RIGHT OF REPURCHASE AND
RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET
STANDOFF RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN THE ISSUER AND
THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY
NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF ANY PUBLIC OFFERING
OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON
TRANSFEREES OF THESE SHARES.
12.2 Stop-Transfer Instructions. Purchaser agrees that, to ensure compliance
with the restrictions imposed by this Exercise Agreement, the Company may issue
appropriate “stop-transfer” instructions to its transfer agent, if any, and if
the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.
12.3 Refusal to Transfer. The Company will not be required (i) to transfer on
its books any Shares that have been sold or otherwise transferred in violation
of any of the provisions of this Exercise Agreement or (ii) to treat as owner of
such Shares, or to accord the right to vote or pay dividends to any purchaser or
other transferee to whom such Shares have been so transferred.
13. TAX CONSEQUENCES. PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER ADVERSE
TAX CONSEQUENCES AS A RESULT OF PURCHASER’S PURCHASE OR DISPOSITION OF THE
SHARES. PURCHASER REPRESENTS: (i) THAT PURCHASER HAS CONSULTED WITH ANY TAX
ADVISER THAT PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE. IN PARTICULAR, PURCHASER REPRESENTS THAT PURCHASER HAS
CONSULTED WITH PURCHASER’S OWN TAX ADVISER CONCERNING THE ADVISABILITY OF FILING
A SECTION 83(b) ELECTION WITH THE INTERNAL REVENUE SERVICE, WHICH MUST BE FILED
WITHIN THIRTY (30) DAYS OF THE PURCHASE OF SHARES TO BE EFFECTIVE. Set forth
below is a brief summary as of the date the Plan was adopted by the Board of
some of the U.S. federal and California tax consequences of exercise of the
Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE,
AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PURCHASER SHOULD CONSULT
HIS OR HER OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.

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13.1 Exercise of Option. There may be a regular U.S. federal income tax
liability and a California income tax liability upon the exercise of the Option.
Purchaser will be treated as having received compensation income (taxable at
ordinary income tax rates) equal to the excess, if any, of the fair market value
of the Vested Shares on the date of exercise over the Exercise Price, subject to
Section If Purchaser is or was an employee of the Company, the Company may be
required to withhold from Purchaser’s compensation or collect from Purchaser and
pay to the applicable taxing authorities an amount equal to a percentage of this
compensation income at the time of exercise.
13.2 Disposition of Shares. The following tax consequences may apply upon
disposition of the Shares.
(a) Capital Gain. If the Shares are held for more than twelve (12) months after
the date of purchase of the Shares pursuant to the exercise of the Option, any
gain realized on disposition of the Shares will be treated as long term capital
gain.
(b) Withholding. The Company may be required to withhold from Purchaser’s
compensation or collect from Purchaser and pay to the applicable taxing
authorities an amount equal to a percentage of this compensation income.
13.3 Section 83(b) Election for Unvested Shares. With respect to Unvested
Shares, which are subject to the Repurchase Option, if an election is filed by
Purchaser with the Internal Revenue Service (and, if necessary, the proper state
taxing authorities), within 30 days of the purchase of the Unvested Shares,
electing pursuant to Section 83(b) of the Code (and similar state tax
provisions, if applicable) to be taxed currently on such purchase, there may be
a recognition of taxable income to Purchaser, measured by the excess, if any, of
the fair market value of the Unvested Shares at the time of purchase over the
Exercise Price of the Shares. A Form of Election under Section 83(b) is attached
hereto as Exhibit 4 for reference.
14. COMPLIANCE WITH LAWS AND REGULATIONS. The issuance and transfer of the
Shares will be subject to and conditioned upon compliance by the Company and
Purchaser with all applicable state and U.S. federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation
system on which the Company’s Common Stock may be listed or quoted at the time
of such issuance or transfer.
15. SUCCESSORS AND ASSIGNS. The Company may assign any of its rights under this
Exercise Agreement, including its right to purchase Shares under the Repurchase
Option and the Right of First Refusal. No other party to this Exercise Agreement
may assign, whether voluntarily or by operation of law, any of its rights and
obligations under this Exercise Agreement, except with the prior written consent
of the Company. This Exercise Agreement shall be binding upon and inure to the
benefit of the successors and assigns of the Company. Subject to the
restrictions on transfer herein set forth, this Exercise Agreement will be
binding upon Purchaser and Purchaser’s heirs, executors, administrators, legal
representatives, successors and assigns.
16. GOVERNING LAW. This Exercise Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without giving
effect to that body of laws pertaining to conflict of laws.
17. NOTICES. Any notice required to be given or delivered to the Company shall
be in writing and addressed to the Corporate Secretary of the Company at its
principal corporate offices. Any notice required to be given or delivered to
Purchaser shall be in writing and addressed to Purchaser at the address
indicated above or to such other address as Purchaser may designate in writing
from time to time to the Company. All notices shall be deemed effectively given
upon personal delivery, (i) three (3) days after deposit in the United States
mail by certified or registered mail (return receipt requested), (ii) one
(1) business day after its deposit with any return receipt express courier
(prepaid), or (iii) one (1) business day after transmission by rapifax or
telecopier.

18. FURTHER ASSURANCES. The parties agree to execute such further instruments
and to take such further actions as may be reasonably necessary to carry out the
purposes and intent of this Exercise Agreement.

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19. SEVERABILITY. If any provision of this Exercise Agreement is determined by
any court or arbitrator of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such provision will be enforced to the maximum
extent possible given the intent of the parties hereto. If such clause or
provision cannot be so enforced, such provision shall be stricken from this
Exercise Agreement, and the remainder of this Exercise Agreement shall be
enforced as if such invalid, illegal or unenforceable clause or provision had
(to the extent not enforceable) never been contained in this Exercise Agreement.
20. HEADINGS. The captions and headings of this Exercise Agreement are included
for ease of reference only and will be disregarded in interpreting or construing
this Exercise Agreement. All references herein to Sections will refer to
Sections of this Exercise Agreement.
21. ENTIRE AGREEMENT. The Plan, the Stock Option Agreement and this Exercise
Agreement, together with all Exhibits thereto, constitute the entire agreement
and understanding of the parties with respect to the subject matter of this
Exercise Agreement, and supersede all prior understandings and agreements,
whether oral or written, between the parties hereto with respect to the specific
subject matter hereof.

IN WITNESS WHEREOF, the Company has caused this Exercise Agreement to be
executed in triplicate by its duly authorized representative and Purchaser has
executed this Exercise Agreement in triplicate as of the Effective Date,
indicated above.
 
 
 
 
 
 
 
 
 
 
AQUANTIA CORP.
 
 
 
PURCHASER
 
 
 
 
By:
 
 
 
 
 
 
 
 
 
 
 
 
(Signature)
 
 
 
 
Faraj Aalaei
 
 
 
 
 
 
(Please print name)
 
 
 
 
 
 
 
 
 
 
 
President & CEO
 
 
 
(Please print name)
(Please print title)
 
 
 
 
 
 

SIGNATURE PAGE TO AQUANTIA CORP. STOCK OPTION EXERCISE AGREEMENT

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AQUANTIA CORP.
2004 EQUITY INCENTIVE PLAN
INCENTIVE STOCK OPTION EXERCISE AGREEMENT
This Stock Option Exercise Agreement (the “Exercise Agreement”) is made and
entered into as of                                          (the “Effective
Date”) by and between Aquantia Corp., a Delaware corporation (the “Company”),
and the purchaser named below (the “Purchaser”). Capitalized terms not defined
herein shall have the meanings ascribed to them in the Company’s 2004 Equity
Incentive Plan (as may be amended from time to time, the “Plan”).
 
 
 
 
Purchaser:
 
 
 
 
Social Security Number:
 
 
 
 
Address:
 
 
 
 
 
 
 
 
 
Total Number of Shares:
 
 
 
 
Exercise Price Per Share:
 
 
 
 
Date of Grant:
 
 
 
 
First Vesting Date:
 
 
 
 
Expiration Date:
 
 
 
 
(Unless earlier terminated under Section 5.6 of the Plan)
 
 
Type of Stock Option
 
Incentive Stock Option

1. Exercise of Option.
1.1 Exercise. Pursuant to exercise of that certain option (the “Option”) granted
to Purchaser under the Plan and subject to the terms and conditions of this
Exercise Agreement, Purchaser hereby purchases from the Company and the Company
hereby sells to Purchaser, the Total Number of Shares set forth above (the
“Shares”) of the Company’s Common Stock, $0.00001 par value per share, at the
Exercise Price Per Share set forth above (the “Exercise Price”). As used in this
Exercise Agreement, the term “Shares” refers to the Shares purchased under this
Exercise Agreement and includes all securities received (i) in replacement of
the Shares, (ii) as a result of stock dividends or stock splits with respect to
the Shares, and (iii) all securities received in replacement of the Shares in a
merger, recapitalization, reorganization or similar corporate transaction.
1.2 Title to Shares. The exact spelling of the name(s) under which Purchaser
will take title to the Shares is:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

--------------------------------------------------------------------------------

2
Purchaser desires to take title to the Shares as follows:
 
 
 
 
 
 
 
 
[    ]
 
Individual, as separate property
 
 
 
 
 
[    ]
 
Husband and wife, as community property
 
 
 
 
 
[    ]
 
Joint Tenants
 
 
 
 
 
[    ]
 
Other; please specify:                                          
                                         
                                                           

1.3 Payment. Purchaser hereby delivers payment of the Exercise Price in the
manner permitted in the Stock Option Agreement as follows (check and complete as
appropriate):
 
 
 
 
 
 
 
 
[    ]
 
in cash (by check) in the amount of $        , receipt of which is acknowledged
by the Company;
 
 
 
 
 
[    ]
 
by cancellation of indebtedness of the Company owed to Purchaser in the amount
of $        ;
 
 
 
 
 
[    ]
 
by delivery of                      fully-paid, nonassessable and vested shares
of the Common Stock of the Company owned by Purchaser, which have been paid for
within the meaning of SEC Rule 144, (if purchased by use of a promissory note,
such note has been fully paid with respect to such vested shares) or obtained by
Purchaser in the open public market and owned free and clear of all liens,
claims, encumbrances or security interests, valued at the current Fair Market
Value of $         per share;
 
 
 
 
 
[    ]
 
by the waiver hereby of compensation due or accrued for services rendered in the
amount of $        .

2. Delivery.
2.1 Deliveries by Purchaser. Purchaser hereby delivers to the Company (i) this
Exercise Agreement, (ii) two (2) copies of a blank Stock Power and Assignment
Separate from Stock Certificate in the form of Exhibit 1 attached hereto (the
“Stock Powers”), both executed by Purchaser (and Purchaser’s spouse, if any),
(iii) if Purchaser is married, a Consent of Spouse in the form
of Exhibit 2 attached hereto (the “Spouse Consent”) executed by Purchaser’s
spouse, and (iv) the Exercise Price and payment or other provision for any
applicable tax obligations in the form of a check, a copy of which is attached
hereto as Exhibit 3.
2.2 Deliveries by the Company. Upon its receipt of the Exercise Price, payment
or other provision for any applicable tax obligations and all the documents to
be executed and delivered by Purchaser to the Company under Section 2.1, the
Company will issue a duly executed stock certificate evidencing the Shares in
the name of Purchaser to be placed in escrow as provided in Section 10 until
expiration or termination of the Company’s Right of First Refusal described in
Section 8.
3. Representations and Warranties of Purchaser. Purchaser represents and
warrants to the Company that:
3.1 Agrees to Terms of the Plan. Purchaser has received a copy of the Plan and
the Stock Option Agreement, has read and understands the terms of the Plan, the
Stock Option Agreement and this Exercise Agreement, and agrees to be bound by
their terms and conditions. Purchaser acknowledges that there may be

--------------------------------------------------------------------------------

adverse tax consequences upon exercise of the Option or disposition of the
Shares, and that Purchaser should consult a tax adviser prior to such exercise
or disposition.
 
3.2 Purchase for Own Account for Investment. Purchaser is purchasing the Shares
for Purchaser’s own account for investment purposes only and not with a view to,
or for sale in connection with, a distribution of the Shares within the meaning
of the Securities Act. Purchaser has no present intention of selling or
otherwise disposing of all or any portion of the Shares and no one other than
Purchaser has any beneficial ownership of any of the Shares.
3.3 Access to Information. Purchaser has had access to all information regarding
the Company and its present and prospective business, assets, liabilities and
financial condition that Purchaser reasonably considers important in making the
decision to purchase the Shares, and Purchaser has had ample opportunity to ask
questions of the Company’s representatives concerning such matters and this
investment.
3.4 Understanding of Risks. Purchaser is fully aware of: (i) the highly
speculative nature of the investment in the Shares; (ii) the financial hazards
involved; (iii) the lack of liquidity of the Shares and the restrictions on
transferability of the Shares (e.g., that Purchaser may not be able to sell or
dispose of the Shares or use them as collateral for loans); (iv) the
qualifications and backgrounds of the management of the Company; and (v) the tax
consequences of investment in the Shares. Purchaser is capable of evaluating the
merits and risks of this investment, has the ability to protect Purchaser’s own
interests in this transaction and is financially capable of bearing a total loss
of this investment.
3.5 No General Solicitation. At no time was Purchaser presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Shares.
4. Compliance with Securities Laws.
4.1 Compliance with U.S. Federal Securities Laws. Purchaser understands and
acknowledges that the Shares have not been registered with the SEC under the
Securities Act and that, notwithstanding any other provision of the Stock Option
Agreement to the contrary, the exercise of any rights to purchase any Shares is
expressly conditioned upon compliance with the Securities Act and all applicable
state securities laws. Purchaser agrees to cooperate with the Company to ensure
compliance with such laws.
4.2 Compliance with California Securities Laws. THE PLAN, THE STOCK OPTION
AGREEMENT, AND THIS EXERCISE AGREEMENT ARE INTENDED TO COMPLY WITH SECTION
25102(o) OF THE CALIFORNIA CORPORATIONS CODE AND ANY RULES (INCLUDING
COMMISSIONER RULES, IF APPLICABLE) OR REGULATIONS PROMULGATED THEREUNDER BY THE
CALIFORNIA DEPARTMENT OF CORPORATIONS (THE “REGULATIONS”). ANY PROVISION OF THIS
EXERCISE AGREEMENT THAT IS INCONSISTENT WITH SECTION 25102(o) SHALL, WITHOUT
FURTHER ACT OR AMENDMENT BY THE COMPANY OR THE BOARD, BE REFORMED TO COMPLY WITH
THE REQUIREMENTS OF SECTION 25102(o). THE SALE OF THE SECURITIES THAT ARE THE
SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE CALIFORNIA
COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFI-CATION, IS SUBJECT
TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE RECEIPT OF
ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS UNLAWFUL
UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS EXERCISE AGREEMENT
ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION
BEING AVAILABLE.
 

5. Restricted Securities.
5.1 No Transfer Unless Registered or Exempt. Purchaser understands that
Purchaser may not transfer any Shares unless such Shares are registered under
the Securities Act or qualified under applicable state securities

--------------------------------------------------------------------------------

laws or unless, in the opinion of counsel to the Company, exemptions from such
registration and qualification requirements are available. Purchaser understands
that only the Company may file a registration statement with the SEC and that
the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all
or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2 SEC Rule 144. In addition, Purchaser has been advised that SEC Rule 144
promulgated under the Securities Act, which permits certain limited sales of
unregistered securities requires that the Shares be held for a minimum of six
(6) months, and in certain cases one (1) year, after they have been
purchased and paid for (within the meaning of Rule 144). Purchaser understands
that Rule 144 may indefinitely restrict transfer of the Shares so long as
Purchaser remains an “affiliate” of the Company.
5.3 SEC Rule 701. The Shares are issued pursuant to SEC Rule 701 promulgated
under the Securities Act and may become freely tradeable by non-affiliates
(under limited conditions regarding the method of sale) ninety (90) days after
the first sale of Common Stock of the Company to the general public pursuant to
a registration statement filed with and declared effective by the SEC, subject
to a market standoff agreement as described in Section 7 of this Exercise
Agreement or any similar agreement entered into by Purchaser. Affiliates must
comply with the provisions of Rule 144.
6. Restrictions on Transfers.
6.1 Disposition of Shares. Purchaser hereby agrees that Purchaser shall make no
disposition of the Shares (other than as permitted by this Exercise Agreement)
unless and until:
(a) Purchaser shall have notified the Company of the proposed disposition and
provided a written summary of the terms and conditions of the proposed
disposition;
(b) Purchaser shall have complied with all requirements of this Exercise
Agreement applicable to the disposition of the Shares;
(c) Purchaser shall have provided the Company with written assurances, in form
and substance satisfactory to counsel for the Company, that (i) the proposed
disposition does not require registration of the Shares under the Securities Act
or (ii) all appropriate actions necessary for compliance with the registration
requirements of the Securities Act or of any exemption from registration
available under the Securities Act (including Rule 144) have been taken; and
(d) Purchaser shall have provided the Company with written assurances, in form
and substance satisfactory to the Company, that the proposed disposition will
not result in the contravention of any transfer restrictions applicable to the
Shares pursuant to the provisions of the Regulations referred to in Section 4.2
hereof.
6.2 Restriction on Transfer. Purchaser shall not transfer, assign, grant a lien
or security interest in, pledge, hypothecate, encumber or otherwise dispose of
any of the Shares which are subject to the Company’s Right of First Refusal
described below, except as permitted by this Exercise Agreement.
6.3 Transferee Obligations. Each person (other than the Company) to whom the
Shares are transferred by means of one of the permitted transfers specified in
this Exercise Agreement must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Company that such person is bound by the
provisions of this Exercise Agreement and that the transferred Shares are
subject to (i) the Company’s Right of First Refusal granted hereunder and
(ii) the market stand-off provisions of Section 7 hereof, to the same extent
such Shares would be so subject if retained by the Purchaser.
 
7. Market Standoff Agreement. Purchaser agrees in connection with any
registration of the Company’s securities that, upon the request of the Company
or the underwriters managing any public offering of the Company’s securities,
Purchaser will not sell or otherwise dispose of any Shares without the prior
written consent of the

--------------------------------------------------------------------------------

Company or such underwriters, as the case may be, for such period of time (not
to exceed one hundred eighty (180) days) after the effective date of such
registration requested by such managing underwriters and subject to all
restrictions as the Company or the underwriters may specify. Purchaser further
agrees to enter into any agreement reasonably required by the underwriters to
implement the foregoing.
8. Company’s Right of First Refusal. Before any Vested Shares held by Purchaser
or any transferee of such Vested Shares (either sometimes referred to herein as
the “Holder”) may be sold or otherwise transferred (including, without
limitation, a transfer by gift or operation of law), the Company and/or its
assignee(s) will have a right of first refusal to purchase the Vested Shares to
be sold or transferred (the “Offered Shares”) on the terms and conditions set
forth in this Section (the “Right of First Refusal”).
8.1 Notice of Proposed Transfer. The Holder of the Offered Shares will deliver
to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona
fide intention to sell or otherwise transfer the Offered Shares; (ii) the name
and address of each proposed purchaser or other transferee (the “Proposed
Transferee”); (iii) the number of Offered Shares to be transferred to each
Proposed Transferee; (iv) the bona fide cash price or other consideration for
which the Holder proposes to transfer the Offered Shares (the “Offered Price”);
and (v) that the Holder acknowledges this Notice is an offer to sell the
Offered Shares to the Company and/or its assignee(s) pursuant to the Company’s
Right of First Refusal at the Offered Price as provided for in this Exercise
Agreement.
8.2 Exercise of Right of First Refusal. At any time within thirty (30) days
after the date of the Notice, the Company and/or its assignee(s) may, by giving
written notice to the Holder, elect to purchase all (or, with the consent of the
Holder, less than all) the Offered Shares proposed to be transferred to any one
or more of the Proposed Transferees named in the Notice, at the purchase price,
determined as specified below.
8.3 Purchase Price. The purchase price for the Offered Shares purchased under
this Section will be the Offered Price, provided that if the Offered Price
consists of no legal consideration (as, for example, in the case of a transfer
by gift) the purchase price will be the fair market value of the Offered Shares
as determined in good faith by the Company’s Board of Directors. If the Offered
Price includes consideration other than cash, then the value of the non-cash
consideration, as determined in good faith by the Company’s Board of Directors,
will conclusively be deemed to be the cash equivalent value of such non-cash
consideration.
8.4 Payment. Payment of the purchase price for the Offered Shares will be
payable, at the option of the Company and/or its assignee(s) (as applicable), by
check or by cancellation of all or a portion of any outstanding purchase money
indebtedness owed by the Holder to the Company (or to such assignee, in the case
of a purchase of Offered Shares by such assignee) or by any combination thereof.
The purchase price will be paid without interest within sixty (60) days after
the Company’s receipt of the Notice, or, at the option of the Company and/or its
assignee(s), in the manner and at the time(s) set forth in the Notice.
8.5 Holder’s Right to Transfer. If all of the Offered Shares proposed in the
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in this Section, then the Holder may
sell or otherwise transfer such Offered Shares to each Proposed Transferee at
the Offered Price or at a higher price, provided that (i) such sale or other
transfer is consummated within one hundred twenty (120) days after the date of
the Notice, (ii) any such sale or other transfer is effected in compliance with
all applicable securities laws, and (iii) each Proposed Transferee agrees in
writing that the provisions of this Section will continue to apply to the
Offered Shares in the hands of such Proposed Transferee. If the Offered Shares
described in the Notice are not transferred to each Proposed Transferee within
such one hundred twenty (120) day period, then a new Notice must be given to the
Company pursuant to which the Company will again be offered the Right of First
Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
8.6 Exempt Transfers. Notwithstanding anything to the contrary in this Section,
the following transfers of Vested Shares will be exempt from the Right of First
Refusal: (i) the transfer of any or all of the Vested Shares during Purchaser’s
lifetime by gift or on Purchaser’s death by will or intestacy to Purchaser’s
“Immediate Family” (as defined below) or to a trust for the benefit of Purchaser
or Purchaser’s Immediate Family, provided that each transferee or other
recipient agrees in a writing satisfactory to the Company that the provisions of
this Section

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will continue to apply to the transferred Vested Shares in the hands of such
transferee or other recipient; (ii) any transfer or conversion of Vested Shares
made pursuant to a statutory merger or statutory consolidation of the Company
with or into another corporation or corporations except that the Right of First
Refusal will continue to apply thereafter to such Vested Shares, in which case
the surviving corporation of such merger or consolidation shall succeed to the
rights of the Company under this Section unless (i) the common stock of the
surviving corporation or any direct or indirect parent corporation thereof is
registered under the Securities Exchange Act of 1934, as amended; or (ii) the
agreement of merger or consolidation expressly otherwise provides; or (iii) any
transfer of Vested Shares pursuant to the winding up and dissolution of the
Company. As used herein, the term “Immediate Family” will mean Purchaser’s
spouse, the lineal descendant or antecedent, father, mother, brother or sister,
child, adopted child, grandchild or adopted grandchild of Purchaser or
Purchaser’s spouse, or the spouse of any of the above, or Spousal Equivalent, as
defined herein. As used herein, a person is deemed to be a “Spousal Equivalent”
provided the following circumstances are true: (i) irrespective of whether or
not Purchaser and the Spousal Equivalent are the same sex, they are the sole
spousal equivalent of the other for the last twelve (12) months, (ii) they
intend to remain so indefinitely, (iii) neither is married to anyone else,
(iv) both are at least 18 years of age and mentally competent to consent to
contract, (v) they are not related by blood to a degree of closeness which would
prohibit legal marriage in the state in which they legally reside, (vi) they are
jointly responsible for each other’s common welfare and financial obligations,
and (vii) they have resided together in the same residence for the last twelve
(12) months and intend to do so indefinitely.
8.7 Termination of Right of First Refusal. The Right of First Refusal will
terminate as to all Shares (i) on the effective date of the first sale of Common
Stock of the Company to the general public pursuant to a registration statement
filed with and declared effective by the SEC under the 1933 Act (other than a
registration statement relating solely to the issuance of Common Stock pursuant
to a business combination or an employee incentive or benefit plan) or (ii) on
any transfer or conversion of Shares made pursuant to a statutory merger or
statutory consolidation of the Company with or into another corporation
or corporations if the common stock of the surviving corporation or any direct
or indirect parent corporation thereof is registered under the Securities
Exchange Act of 1934, as amended.
 
8.8 Encumbrances on Vested Shares. Purchaser may grant a lien or security
interest in, or pledge, hypothecate or encumber Vested Shares only if each party
to whom such lien or security interest is granted, or to whom such pledge,
hypothecation or other encumbrance is made, agrees in a writing satisfactory to
the Company that: (i) such lien, security interest, pledge, hypothecation or
encumbrance will not apply to such Vested Shares after they are acquired by the
Company and/or its assignees under this Section; and (ii) the provisions of this
Section will continue to apply to such Vested Shares in the hands of such party
and any transferee of such party. Purchaser may not grant a lien or security
interest in, or pledge, hypothecate or encumber, any Unvested Shares.
9. Rights as a Shareholder. Subject to the terms and conditions of this Exercise
Agreement, Purchaser will have all of the rights of a shareholder of the Company
with respect to the Shares from and after the date that Shares are issued to
Purchaser until such time as Purchaser disposes of the Shares or the Company
and/or its assignee(s) exercise(s) the Right of First Refusal. Upon an exercise
of the Right of First Refusal, Purchaser will have no further rights as a holder
of the Shares so purchased upon such exercise, other than the right to receive
payment for the Shares so purchased in accordance with the provisions of this
Exercise Agreement, and Purchaser will promptly surrender the stock
certificate(s) evidencing the Shares so purchased to the Company for transfer or
cancellation.
10. Escrow. As security for Purchaser’s faithful performance of this Exercise
Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Purchaser and by Purchaser’s spouse, if any
(with the date and number of Shares left blank), to the Secretary of the Company
or other designee of the Company (the “Escrow Holder”), who is hereby appointed
to hold such certificate(s) and Stock Powers in escrow and to take all such
actions and to effectuate all such transfers and/or releases of such Shares as
are in accordance with the terms of this Exercise Agreement. Purchaser and the
Company agree that Escrow Holder will not be liable to any party to this
Exercise Agreement (or to any other party) for any actions or omissions unless
Escrow Holder is grossly negligent or intentionally fraudulent in carrying out
the duties of Escrow Holder under this Exercise Agreement. Escrow Holder may
rely upon any letter, notice or other document executed with any signature
purported to be genuine and may

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rely on the advice of counsel and obey any order of any court with respect to
the transactions contemplated by this Exercise Agreement. The Shares will be
released from escrow upon termination of the Right of First Refusal.
11. Restrictive Legends and Stop-Transfer Orders.
11.1 Legends. Purchaser understands and agrees that the Company will place the
legends set forth below or similar legends on any stock certificate(s)
evidencing the Shares, together with any other legends that may be required by
state or U.S. federal securities laws, the Company’s Certificate of
Incorporation or Bylaws, any other agreement between Purchaser and the Company
or any agreement between Purchaser and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF
CERTAIN STATES. HESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR
EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR
THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE
ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR
RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON PUBLIC RESALE AND TRANSFER, INCLUDING THE RIGHT OF FIRST REFUSAL OPTION HELD
BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN A STOCK OPTION EXERCISE
AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF
WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER. SUCH PUBLIC SALE
AND TRANSFER RESTRICTIONS INCLUDING THE RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET
STANDOFF RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN THE ISSUER AND
THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY
NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF ANY PUBLIC OFFERING
OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON
TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED UNDER EXERCISE OF AN
INCENTIVE STOCK OPTION, AND THE COMPANY MUST BE NOTIFIED IF THE SHARES ARE TO BE
TRANSFERRED BEFORE THE LATER OF THE TWO (2)-YEAR ANNIVERSARY OF THE DATE OF
GRANT OF THE OPTION OR THE ONE (1)-YEAR ANNIVERSARY OF THE DATE ON WHICH THE
OPTION WAS EXERCISED. THE REGISTERED HOLDER OF THESE SHARES MAY RECOGNIZE
ORDINARY INCOME IF THE SHARES ARE TRANSFERRED BEFORE SUCH DATE.

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11.2 Stop-Transfer Instructions. Purchaser agrees that, to ensure compliance
with the restrictions imposed by this Exercise Agreement, the Company may issue
appropriate “stop-transfer” instructions to its transfer agent, if any, and if
the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.
11.3 Refusal to Transfer. The Company will not be required (i) to transfer on
its books any Shares that have been sold or otherwise transferred in violation
of any of the provisions of this Exercise Agreement or (ii) to treat as owner of
such Shares, or to accord the right to vote or pay dividends to any purchaser or
other transferee to whom such Shares have been so transferred.
12. Tax Consequences. PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER ADVERSE
TAX CONSEQUENCES AS A RESULT OF PURCHASER’S PURCHASE OR DISPOSITION OF THE
SHARES. PURCHASER REPRESENTS: (i) THAT PURCHASER HAS CONSULTED WITH ANY TAX
ADVISER THAT PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE. Set forth below is a brief summary as of the date the Plan
was adopted by the Board of some of the U.S. federal and California tax
consequences of exercise of the Option and disposition of the Shares. THIS
SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT
TO CHANGE. PURCHASER SHOULD CONSULT HIS OR HER OWN TAX ADVISER BEFORE EXERCISING
THIS OPTION OR DISPOSING OF THE SHARES.
12.1 Exercise of Option. There will be no regular U.S. federal income tax
liability or California income tax liability upon the exercise of the Option,
although the excess, if any, of the fair market value of the Shares on the date
of exercise over the Exercise Price will be treated as a tax preference item for
U.S. federal alternative minimum tax purposes and may subject Purchaser to the
alternative minimum tax in the year of exercise.
12.2 Disposition of Shares. The following tax consequences may apply upon
disposition of the Shares.
(a) Capital Gain and Income on Early Disposition. If the Shares are held for
more than twelve (12) months after the date of purchase of the Shares pursuant
to the exercise of the Option and are disposed of more than two (2) years after
the Date of Grant, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal and California income tax
purposes. If Vested Shares purchased under the Option are disposed of within the
applicable one (1)-year or two (2)-year period, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates in the year of the disposition) to the extent of the excess, if any, of
the fair market value of the Shares on the date of exercise over the Exercise
Price.
(b) Withholding. If Purchaser disposes of any Vested Shares purchased under the
Option on or before the later of (i) two (2) years after the Date of Grant or
(ii) one (1) year after transfer to Purchaser upon exercise of the Option, then
the Company may be required to withhold from Purchaser’s compensation or collect
from Purchaser and pay to the applicable taxing authorities an amount equal to a
percentage of Purchaser’s compensation income.
13. Compliance with Laws and Regulations. The issuance and transfer of the
Shares will be subject to and conditioned upon compliance by the Company and
Purchaser with all applicable state and U.S. federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation
system on which the Company’s Common Stock may be listed or quoted at the time
of such issuance or transfer.
14. Successors and Assigns. The Company may assign any of its rights and
obligations under this Exercise Agreement, including its rights to purchase
Shares under the Right of First Refusal. No other party to this Exercise
Agreement may assign, whether voluntarily or by operation of law, any of its
rights and obligations under this Exercise Agreement, except with the prior
written consent of the Company. This Exercise Agreement shall be binding upon
and inure to the benefit of the successors and assigns of the Company. Subject
to the restrictions on transfer herein set forth, this Exercise Agreement will
be binding upon Purchaser and Purchaser’s heirs, executors, administrators,
legal representatives, successors and assigns.

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15. Governing Law. This Exercise Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
that body of laws pertaining to conflict of laws.
16. Notices. Any notice required to be given or delivered to the Company shall
be in writing and addressed to the Corporate Secretary of the Company at its
principal corporate offices. Any notice required to be given or delivered to
Purchaser shall be in writing and addressed to Purchaser at the address
indicated above or to such other address as Purchaser may designate in writing
from time to time to the Company. All notices shall be deemed effectively given
upon personal delivery, (i) three (3) days after deposit in the United States
mail by certified or registered mail (return receipt requested), (ii) one
(1) business day after its deposit with any return receipt express courier
(prepaid), or (iii) one (1) business day after transmission by rapifax or
telecopier.
17. Further Assurances. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to
carry out the purposes and intent of this Exercise Agreement.
18. Severability. If any provision of this Exercise Agreement is determined by
any court or arbitrator of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such provision will be enforced to the maximum
extent possible given the intent of the parties hereto. If such clause or
provision cannot be so enforced, such provision shall be stricken from this
Exercise Agreement, and the remainder of this Exercise Agreement shall be
enforced as if such invalid, illegal or unenforceable clause or provision had
(to the extent not enforceable) never been contained in this Exercise Agreement.
19. Headings. The captions and headings of this Exercise Agreement are included
for ease of reference only and will be disregarded in interpreting or construing
this Exercise Agreement. All references herein to Sections will refer to
Sections of this Exercise Agreement.
20. Entire Agreement. The Plan, the Stock Option Agreement and this Exercise
Agreement, together with all Exhibits thereto, constitute the entire agreement
and understanding of the parties with respect to the subject matter of this
Exercise Agreement, and supersede all prior understandings and agreements,
whether oral or written, between or among the parties hereto with respect to the
specific subject matter hereof.

IN WITNESS WHEREOF, the Company has caused this Exercise Agreement to be
executed in triplicate by its duly authorized representative and Purchaser has
executed this Exercise Agreement in triplicate as of the Effective Date,
indicated above.
 
 
 
 
 
 
 
 
AQUANTIA CORP.
 
 
 
PURCHASER
 
 
 
 
By:
 
 
 
 
 
 
 
 
 
 
 
 
(Signature)
 
 
 
Faraj Aalaei
 
 
 
 
(Please print name)
 
 
 
(Please print name)
 
 
 
President & CEO
 
 
 
 
(Please print title)
 
 
 
 

SIGNATURE PAGE TO AQUANTIA CORP. STOCK OPTION EXERCISE AGREEMENT
 

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AQUANTIA CORP.
2004 EQUITY INCENTIVE PLAN
INCENTIVE STOCK OPTION EARLY EXERCISE AGREEMENT
This Stock Option Exercise Agreement (the “Exercise Agreement”) is made and
entered into as of                                      (the “Effective Date”)
by and between Aquantia Corp., a Delaware corporation (the “Company”), and the
purchaser named below (the “Purchaser”). Capitalized terms not defined herein
shall have the meanings ascribed to them in the Company’s 2004 Equity Incentive
Plan (as may be amended from time to time, the “Plan”).
 
 
 
 
 
 
Purchaser:
 
 
 
 
Social Security Number:
 
 
 
 
Address:
 
 
 
 
 
 
 
 
 
Total Number of Shares:
 
 
 
 
Exercise Price Per Share:
 
 
 
 
Date of Grant:
 
 
 
 
First Vesting Date:
 
 
 
 
Expiration Date:
 
 
 
 
(Unless earlier terminated under Section 5.6 of the Plan)
 
 
Type of Stock Option
 
Incentive Stock Option

1. Exercise of Option.
1.1 Exercise. Pursuant to exercise of that certain option (the “Option”) granted
to Purchaser under the Plan and subject to the terms and conditions of this
Exercise Agreement, Purchaser hereby purchases from the Company and the Company
hereby sells to Purchaser, the Total Number of Shares set forth above (the
“Shares”) of the Company’s Common Stock, $0.00001 par value per share, at
the Exercise Price Per Share set forth above (the “Exercise Price”). As used in
this Exercise Agreement, the term “Shares” refers to the Shares purchased under
this Exercise Agreement and includes all securities received (i) in replacement
of the Shares, (ii) as a result of stock dividends or stock splits with respect
to the Shares, and (iii) all securities received in replacement of the Shares in
a merger, recapitalization, reorganization or similar corporate transaction.
1.2 Title to Shares. The exact spelling of the name(s) under which Purchaser
will take title to the Shares is:
 

--------------------------------------------------------------------------------

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
Purchaser desires to take title to the Shares as follows:
 
 
 
 
 
 
 
 
[    ]
 
Individual, as separate property
 
 
 
 
 
[    ]
 
Husband and wife, as community property
 
 
 
 
 
[    ]
 
Joint Tenants
 
 
 
 
 
[    ]
 
Other; please specify:                                          
                                         
                                                           

1.3 Payment. Purchaser hereby delivers payment of the Exercise Price in the
manner permitted in the Stock Option Agreement as follows (check and complete as
appropriate):
 
 
 
 
 
 
 
 
[    ]
 
in cash (by check) in the amount of $        , receipt of which is acknowledged
by the Company;
 
 
 
 
 
[    ]
 
by cancellation of indebtedness of the Company owed to Purchaser in the amount
of $        ;
 
 
 
 
 
[    ]
 
by delivery of                      fully-paid, nonassessable and vested shares
of the Common Stock of the Company owned by Purchaser, which have been paid
for within the meaning of SEC Rule 144, (if purchased by use of a promissory
note, such note has been fully paid with respect to such vested shares) or
obtained by Purchaser in the open public market and owned free and clear of
all liens, claims, encumbrances or security interests, valued at the current
Fair Market Value of $         per share;
 
 
 
 
 
[    ]
 
by the waiver hereby of compensation due or accrued for services rendered in the
amount of $        .

2. Delivery.
2.1 Deliveries by Purchaser. Purchaser hereby delivers to the Company (i) this
Exercise Agreement, (ii) two (2) copies of a blank Stock Power and Assignment
Separate from Stock Certificate in the form of Exhibit 1 attached hereto (the
“Stock Powers”), both executed by Purchaser (and Purchaser’s spouse, if any),
(iii) if Purchaser is married, a Consent of Spouse in the form
of Exhibit 2 attached hereto (the “Spouse Consent”) executed by Purchaser’s
spouse, and (iv) the Exercise Price and payment or other provision for any
applicable tax obligations in the form of a check, a copy of which is attached
hereto as Exhibit 3.
2.2 Deliveries by the Company. Upon its receipt of the Exercise Price, payment
or other provision for any applicable tax obligations and all the documents to
be executed and delivered by Purchaser to the Company under Section 2.1, the
Company will issue a duly executed stock certificate evidencing the Shares in
the name of Purchaser to be placed in escrow as provided in Section 11 until
expiration or termination of the Company’s Repurchase Option and Right of First
Refusal described in Sections 8, 9 and 10.
3. Representations and Warranties of Purchaser. Purchaser represents and
warrants to the Company that:

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3.1 Agrees to Terms of the Plan. Purchaser has received a copy of the Plan and
the Stock Option Agreement, has read and understands the terms of the Plan, the
Stock Option Agreement and this Exercise Agreement, and agrees to be bound by
their terms and conditions. Purchaser acknowledges that there may be adverse tax
consequences upon exercise of the Option or disposition of the Shares, and
that Purchaser should consult a tax adviser prior to such exercise or
disposition.
3.2 Purchase for Own Account for Investment. Purchaser is purchasing the Shares
for Purchaser’s own account for investment purposes only and not with a view to,
or for sale in connection with, a distribution of the Shares within the meaning
of the Securities Act. Purchaser has no present intention of selling or
otherwise disposing of all or any portion of the Shares and no one other than
Purchaser has any beneficial ownership of any of the Shares.
3.3 Access to Information. Purchaser has had access to all information regarding
the Company and its present and prospective business, assets, liabilities and
financial condition that Purchaser reasonably considers important in making the
decision to purchase the Shares, and Purchaser has had ample opportunity to ask
questions of the Company’s representatives concerning such matters and this
investment.
3.4 Understanding of Risks. Purchaser is fully aware of: (i) the highly
speculative nature of the investment in the Shares; (ii) the financial hazards
involved; (iii) the lack of liquidity of the Shares and the restrictions on
transferability of the Shares (e.g., that Purchaser may not be able to sell or
dispose of the Shares or use them as collateral for loans); (iv) the
qualifications and backgrounds of the management of the Company; and (v) the tax
consequences of investment in the Shares. Purchaser is capable of evaluating the
merits and risks of this investment, has the ability to protect Purchaser’s own
interests in this transaction and is financially capable of bearing a total loss
of this investment.
3.5 No General Solicitation. At no time was Purchaser presented with or
solicited by any publicly issued or circulated newspaper, mail, radio,
television or other form of general advertising or solicitation in connection
with the offer, sale and purchase of the Shares.
4. Compliance with Securities Laws.
4.1 Compliance with U.S. Federal Securities Laws. Purchaser understands and
acknowledges that the Shares have not been registered with the SEC under the
Securities Act and that, notwithstanding any other provision of the Stock Option
Agreement to the contrary, the exercise of any rights to purchase any Shares is
expressly conditioned upon compliance with the Securities Act and all applicable
state securities laws. Purchaser agrees to cooperate with the Company to ensure
compliance with such laws.
4.2 Compliance with California Securities Laws. THE PLAN, THE STOCK OPTION
AGREEMENT, AND THIS EXERCISE AGREEMENT ARE INTENDED TO COMPLY WITH SECTION
25102(o) OF THE CALIFORNIA CORPORATIONS CODE AND ANY RULES (INCLUDING
COMMISSIONER RULES, IF APPLICABLE) OR REGULATIONS PROMULGATED THEREUNDER BY THE
CALIFORNIA DEPARTMENT OF CORPORATIONS (THE “REGULATIONS”). ANY PROVISION OF THIS
EXERCISE AGREEMENT THAT IS INCONSISTENT WITH SECTION 25102(o) SHALL,
WITHOUT FURTHER ACT OR AMENDMENT BY THE COMPANY OR THE BOARD, BE REFORMED
TO COMPLY WITH THE REQUIREMENTS OF SECTION 25102(o). THE SALE OF THE SECURITIES
THAT ARE THE SUBJECT OF THIS EXERCISE AGREEMENT, IF NOT YET QUALIFIED WITH THE
CALIFORNIA COMMISSIONER OF CORPORATIONS AND NOT EXEMPT FROM SUCH QUALIFI-CATION,
IS SUBJECT TO SUCH QUALIFICATION, AND THE ISSUANCE OF SUCH SECURITIES, AND THE
RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS
UNLAWFUL UNLESS THE SALE IS EXEMPT. THE RIGHTS OF THE PARTIES TO THIS EXERCISE
AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED OR AN
EXEMPTION BEING AVAILABLE.
 
5. Restricted Securities.

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5.1 No Transfer Unless Registered or Exempt. Purchaser understands that
Purchaser may not transfer any Shares unless such Shares are registered under
the Securities Act or qualified under applicable state securities laws or
unless, in the opinion of counsel to the Company, exemptions from such
registration and qualification requirements are available. Purchaser understands
that only the Company may file a registration statement with the SEC and that
the Company is under no obligation to do so with respect to the Shares.
Purchaser has also been advised that exemptions from registration and
qualification may not be available or may not permit Purchaser to transfer all
or any of the Shares in the amounts or at the times proposed by Purchaser.
5.2 SEC Rule 144. In addition, Purchaser has been advised that SEC Rule 144
promulgated under the Securities Act, which permits certain limited sales of
unregistered securities requires that the Shares be held for a minimum of six
(6) months, and in certain cases one (1) year, after they have been purchased
and paid for (within the meaning of Rule 144). Purchaser understands that Rule
144 may indefinitely restrict transfer of the Shares so long as Purchaser
remains an “affiliate” of the Company.
5.3 SEC Rule 701. The Shares are issued pursuant to SEC Rule 701 promulgated
under the Securities Act and may become freely tradeable by non-affiliates
(under limited conditions regarding the method of sale) ninety (90) days after
the first sale of Common Stock of the Company to the general public pursuant to
a registration statement filed with and declared effective by the SEC, subject
to a market standoff agreement as described in Section 7 of this Exercise
Agreement or any similar agreement entered into by Purchaser. Affiliates must
comply with the provisions of Rule 144.
6. Restrictions on Transfers.
6.1 Disposition of Shares. Purchaser hereby agrees that Purchaser shall make no
disposition of the Shares (other than as permitted by this Exercise Agreement)
unless and until:
(a) Purchaser shall have notified the Company of the proposed disposition and
provided a written summary of the terms and conditions of the proposed
disposition;
(b) Purchaser shall have complied with all requirements of this Exercise
Agreement applicable to the disposition of the Shares;
(c) Purchaser shall have provided the Company with written assurances, in
form and substance satisfactory to counsel for the Company, that (i) the
proposed disposition does not require registration of the Shares under the
Securities Act or (ii) all appropriate actions necessary for compliance with the
registration requirements of the Securities Act or of any exemption from
registration available under the Securities Act (including Rule 144) have been
taken; and
(d) Purchaser shall have provided the Company with written assurances, in
form and substance satisfactory to the Company, that the proposed disposition
will not result in the contravention of any transfer restrictions applicable to
the Shares pursuant to the provisions of the Regulations referred to in
Section 4.2 hereof.
6.2 Restriction on Transfer. Purchaser shall not transfer, assign, grant a lien
or security interest in, pledge, hypothecate, encumber or otherwise dispose of
any of the Shares which are subject to the Company’s Repurchase Option or the
Company’s Right of First Refusal described below, except as permitted by this
Exercise Agreement.
6.3 Transferee Obligations. Each person (other than the Company) to whom the
Shares are transferred by means of one of the permitted transfers specified in
this Exercise Agreement must, as a condition precedent to the validity of such
transfer, acknowledge in writing to the Company that such person is bound by the
provisions of this Exercise Agreement and that the transferred Shares are
subject to (i) both the Company’s Repurchase Option and the Company’s Right of
First Refusal granted hereunder and (ii) the market stand-off provisions of
Section 7 hereof, to the same extent such Shares would be so subject if retained
by the Purchaser.
 

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7. Market Standoff Agreement. Purchaser agrees in connection with any
registration of the Company’s securities that, upon the request of the Company
or the underwriters managing any public offering of the Company’s securities,
Purchaser will not sell or otherwise dispose of any Shares without the prior
written consent of the Company or such underwriters, as the case may be, for
such period of time (not to exceed one hundred eighty (180) days) after the
effective date of such registration requested by such managing underwriters and
subject to all restrictions as the Company or the underwriters may specify.
Purchaser further agrees to enter into any agreement reasonably required by the
underwriters to implement the foregoing.
8. Company’s Repurchase Option for Unvested Shares. The Company, or its
assignee, shall have the option to repurchase all or a portion of the
Purchaser’s Unvested Shares (as defined in Section 2.2 of the Stock Option
Agreement) on the terms and conditions set forth in this Section (the
“Repurchase Option”) if Purchaser is Terminated (as defined in the Plan) for any
reason, or no reason, including without limitation, Purchaser’s death,
Disability (as defined in the Plan), voluntary resignation or termination by the
Company with or without Cause.
8.1 Termination and Termination Date. In case of any dispute as to whether
Purchaser is Terminated, the Committee shall have discretion to determine
whether Purchaser has been Terminated and the effective date of such Termination
(the “Termination Date”).
8.2 Exercise of Repurchase Option. At any time within ninety (90) days after
Purchaser’s Termination Date (or, in the case of securities issued upon exercise
of an Option after Purchaser’s Termination Date, within ninety (90) days after
the date of such exercise), the Company, or its assignee, may elect to
repurchase any or all the Purchaser’s Unvested Shares by giving Purchaser
written notice of exercise of the Repurchase Option.
8.3 Calculation of Repurchase Price for Unvested Shares. The Company or its
assignee shall have the option to repurchase from Purchaser (or from Purchaser’s
personal representative as the case may be) the Unvested Shares at Purchaser’s
Exercise Price, proportionately adjusted for any stock split or similar change
in the capital structure of the Company as set forth in Section 2.2 of the Plan
(the “Repurchase Price”).
8.4 Payment of Repurchase Price. The Repurchase Price shall be payable, at the
option of the Company or its assignee, by check or by cancellation of all or a
portion of any outstanding purchase money indebtedness owed by Purchaser to the
Company or such assignee, or by any combination thereof. The Repurchase Price
shall be paid without interest within the term of the Repurchase Option as
described in Section 8.2.
8.5 Right of Termination Unaffected. Nothing in this Exercise Agreement shall be
construed to limit or otherwise affect in any manner whatsoever the right or
power of the Company (or any Parent or Subsidiary of the Company) to terminate
Purchaser’s employment or other relationship with Company (or the Parent or
Subsidiary of the Company) at any time, for any reason or no reason, with or
without Cause.
 
9. Company’s Right of First Refusal. Unvested Shares may not be sold or
otherwise transferred by Purchaser without the Company’s prior written consent.
Before any Vested Shares held by Purchaser or any transferee of such Vested
Shares (either sometimes referred to herein as the “Holder”) may be sold or
otherwise transferred (including, without limitation, a transfer by gift or
operation of law), the Company and/or its assignee(s) will have a right of first
refusal to purchase the Vested Shares to be sold or transferred (the “Offered
Shares”) on the terms and conditions set forth in this Section (the “Right of
First Refusal”).
9.1 Notice of Proposed Transfer. The Holder of the Offered Shares will deliver
to the Company a written notice (the “Notice”) stating: (i) the Holder’s bona
fide intention to sell or otherwise transfer the Offered Shares; (ii) the name
and address of each proposed purchaser or other transferee (the “Proposed
Transferee”); (iii) the number of Offered Shares to be transferred to each
Proposed Transferee; (iv) the bona fide cash price or other consideration for
which the Holder proposes to transfer the Offered Shares (the “Offered Price”);
and (v) that the Holder acknowledges this Notice is an offer to sell the
Offered Shares to the Company and/or its assignee(s) pursuant to the Company’s
Right of First Refusal at the Offered Price as provided for in this Exercise
Agreement.

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9.2 Exercise of Right of First Refusal. At any time within thirty (30) days
after the date of the Notice, the Company and/or its assignee(s) may, by giving
written notice to the Holder, elect to purchase all (or, with the consent of the
Holder, less than all) the Offered Shares proposed to be transferred to any one
or more of the Proposed Transferees named in the Notice, at the purchase price,
determined as specified below.
9.3 Purchase Price. The purchase price for the Offered Shares purchased under
this Section will be the Offered Price, provided that if the Offered Price
consists of no legal consideration (as, for example, in the case of a transfer
by gift) the purchase price will be the fair market value of the Offered Shares
as determined in good faith by the Company’s Board of Directors. If the Offered
Price includes consideration other than cash, then the value of the non-cash
consideration, as determined in good faith by the Company’s Board of Directors,
will conclusively be deemed to be the cash equivalent value of
such non-cash consideration.
9.4 Payment. Payment of the purchase price for the Offered Shares will be
payable, at the option of the Company and/or its assignee(s) (as applicable), by
check or by cancellation of all or a portion of any outstanding purchase money
indebtedness owed by the Holder to the Company (or to such assignee, in the case
of a purchase of Offered Shares by such assignee) or by any combination thereof.
The purchase price will be paid without interest within sixty (60) days after
the Company’s receipt of the Notice, or, at the option of the Company and/or its
assignee(s), in the manner and at the time(s) set forth in the Notice.
9.5 Holder’s Right to Transfer. If all of the Offered Shares proposed in the
Notice to be transferred to a given Proposed Transferee are not purchased by the
.Company and/or its assignee(s) as provided in this Section, then the Holder
.may sell or otherwise transfer such Offered Shares to each Proposed Transferee
at the Offered Price or at a higher price, provided that (i) such sale or other
transfer is consummated within one hundred twenty (120) days after the date of
the Notice, (ii) any such sale or other transfer is effected in compliance with
all applicable securities laws, and (iii) each Proposed. Transferee agrees in
writing that the provisions of this Section will continue to apply to the
Offered Shares in the hands of such Proposed Transferee. If the Offered Shares
described in the Notice are not transferred to each Proposed Transferee within
such one hundred twenty (120) day period, then a new Notice must be given to the
Company pursuant to which the Company will again be offered the Right of First
Refusal before any Shares held by the Holder may be sold or otherwise
transferred.
 
9.6 Exempt Transfers. Notwithstanding anything to the contrary in this Section,
the following transfers of Vested Shares will be exempt from the Right of First
Refusal: (i) the transfer of any or all of the Vested Shares during Purchaser’s
lifetime by gift or on Purchaser’s death by will or intestacy to Purchaser’s
“Immediate Family” (as defined below) or to a trust for the benefit of Purchaser
or Purchaser’s Immediate Family, provided that each transferee or other
recipient agrees in a writing satisfactory to the Company that the provisions of
this Section will continue to apply to the transferred Vested Shares in the
hands of such transferee or other recipient; (ii) any transfer or conversion of
Vested Shares made pursuant to a statutory merger or statutory consolidation of
the Company with or into another corporation or corporations except that the
Right of First Refusal will continue to apply thereafter to such Vested Shares,
in which case the surviving corporation of such merger or consolidation shall
succeed to the rights of the Company under this Section unless (i) the common
stock of the surviving corporation or any direct or indirect parent corporation
thereof is registered under the Securities Exchange Act of 1934, as amended; or
(ii) the agreement of merger or consolidation expressly otherwise provides; or
(iii) any transfer of Vested Shares pursuant to the winding up and dissolution
of the Company. As used herein, the term “Immediate Family” will mean
Purchaser’s spouse, the lineal descendant or antecedent, father, mother,
brother or sister, child, adopted child, grandchild or adopted grandchild of
Purchaser or Purchaser’s spouse, or the spouse of any of the above, or Spousal
Equivalent, as defined herein. As used herein, a person is deemed to be a
“Spousal Equivalent” provided the following circumstances are true:
(i) irrespective of whether or not Purchaser and the Spousal Equivalent are the
same sex, they are the sole spousal equivalent of the other for the last twelve
(12) months, (ii) they intend to remain so indefinitely, (iii) neither is
married to anyone else, (iv) both are at least 18 years of age and mentally
competent to consent to contract, (v) they are not related by blood to a degree
of closeness which would prohibit legal marriage in the state in which they
legally reside, (vi) they are jointly responsible for each other’s common
welfare and financial obligations, and (vii) they have resided together in the
same residence for the last twelve (12) months and intend to do so indefinitely.

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9.7 Termination of Right of First Refusal. The Right of First Refusal will
terminate as to all Shares (i) on the effective date of the first sale of Common
Stock of the Company to the general public pursuant to a registration statement
filed with and declared effective by the SEC under the 1933 Act (other than a
registration statement relating solely to the issuance of Common Stock pursuant
to a business combination or an employee incentive or benefit plan) or (ii) on
any transfer or conversion of Shares made pursuant to a statutory merger or
statutory consolidation of the Company with or into another corporation
or corporations if the common stock of the surviving corporation or any direct
or indirect parent corporation thereof is registered under the Securities
Exchange Act of 1934, as amended.
9.8 Encumbrances on Vested Shares. Purchaser may grant a lien or security
interest in, or pledge, hypothecate or encumber Vested Shares only if each party
to whom such lien or security interest is granted, or to whom such pledge,
hypothecation or other encumbrance is made, agrees in a writing satisfactory to
the Company that: (i) such lien, security interest, pledge, hypothecation or
encumbrance will not apply to such Vested Shares after they are acquired by the
Company and/or its assignees under this Section; and (ii) the provisions of this
Section will continue to apply to such Vested Shares in the hands of such party
and any transferee of such party. Purchaser may not grant a lien or
security interest in, or pledge, hypothecate or encumber, any Unvested Shares.
10. Rights as a Shareholder. Subject to the terms and conditions of this
Exercise Agreement, Purchaser will have all of the rights of a shareholder of
the Company with respect to the Shares from and after the date that Shares are
issued to Purchaser until such time as Purchaser disposes
 
of the Shares or the Company and/or its assignee(s) exercise(s) the Repurchase
Option or Right of First Refusal. Upon an exercise of the Repurchase Option or
the Right of First Refusal, Purchaser will have no further rights as a holder of
the Shares so purchased upon such exercise, other than the right to receive
payment for the Shares so purchased in accordance with the provisions of this
Exercise Agreement, and Purchaser will promptly surrender the stock
certificate(s) evidencing the Shares so purchased to the Company for transfer or
cancellation.
11. Escrow. As security for Purchaser’s faithful performance of this Exercise
Agreement, Purchaser agrees, immediately upon receipt of the stock
certificate(s) evidencing the Shares, to deliver such certificate(s), together
with the Stock Powers executed by Purchaser and by Purchaser’s spouse, if any
(with the date and number of Shares left blank), to the Secretary of the Company
or other designee of the Company (the “Escrow Holder”), who is hereby appointed
to hold such certificate(s) and Stock Powers in escrow and to take all such
actions and to effectuate all such transfers and/or releases of such Shares as
are in accordance with the terms of this Exercise Agreement. Purchaser and the
Company agree that Escrow Holder will not be liable to any party to this
Exercise Agreement (or to any other party) for any actions or omissions unless
Escrow Holder is grossly negligent or intentionally fraudulent in carrying out
the duties of Escrow Holder under this Exercise Agreement. Escrow Holder may
rely upon any letter, notice or other document executed with any signature
purported to be genuine and may rely on the advice of counsel and obey any order
of any court with respect to the transactions contemplated by this Exercise
Agreement. The Shares will be released from escrow upon termination of both the
Repurchase Option and the Right of First Refusal.
12. Restrictive Legends and Stop-Transfer Orders.
12.1 Legends. Purchaser understands and agrees that the Company will place the
legends set forth below or similar legends on any stock certificate(s)
evidencing the Shares, together with any other legends that may be required by
state or U.S. federal securities laws, the Company’s Certificate of
Incorporation or Bylaws, any other agreement between Purchaser and the Company
or any agreement between Purchaser and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF
CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT AND

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APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION
THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE
FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER
OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE
SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS
IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS
ON PUBLIC RESALE AND TRANSFER, INCLUDING THE RIGHT OF REPURCHASE AND RIGHT OF
FIRST REFUSAL OPTIONS HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S) AS SET FORTH IN
A STOCK OPTION EXERCISE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF
THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE
ISSUER. SUCH PUBLIC SALE AND TRANSFER RESTRICTIONS INCLUDING THE RIGHT OF
REPURCHASE AND RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE
SHARES.
 
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A 180 DAY MARKET
STANDOFF RESTRICTION AS SET FORTH IN A CERTAIN AGREEMENT BETWEEN THE ISSUER AND
THE ORIGINAL HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT THE
PRINCIPAL OFFICE OF THE ISSUER. AS A RESULT OF SUCH AGREEMENT, THESE SHARES MAY
NOT BE TRADED PRIOR TO 180 DAYS AFTER THE EFFECTIVE DATE OF ANY PUBLIC OFFERING
OF THE COMMON STOCK OF THE ISSUER HEREOF. SUCH RESTRICTION IS BINDING ON
TRANSFEREES OF THESE SHARES.
THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED UNDER EXERCISE OF AN
INCENTIVE STOCK OPTION, AND THE COMPANY MUST BE NOTIFIED IF THE SHARES ARE TO BE
TRANSFERRED BEFORE THE LATER OF THE TWO (2)-YEAR ANNIVERSARY OF THE DATE OF
GRANT OF THE OPTION OR THE ONE (*YEAR ANNIVERSARY OF THE DATE ON WHICH THE
OPTION WAS EXERCISED. THE REGISTERED HOLDER OF THESE SHARES MAY RECOGNIZE
ORDINARY INCOME IF THE SHARES ARE TRANSFERRED BEFORE SUCH DATE.
12.2 Stop-Transfer Instructions. Purchaser agrees that, to ensure compliance
with the restrictions imposed by this Exercise Agreement, the Company may issue
appropriate “stop-transfer” instructions to its transfer agent, if any, and if
the Company transfers its own securities, it may make appropriate notations to
the same effect in its own records.
12.3 Refusal to Transfer. The Company will not be required (i) to transfer on
its books any Shares that have been sold or otherwise transferred in violation
of any of the provisions of this Exercise Agreement or (ii) to treat as owner of
such Shares, or to accord the right to vote or pay dividends to any purchaser or
other transferee to whom such Shares have been so transferred.
13. Tax Consequences. PURCHASER UNDERSTANDS THAT PURCHASER MAY SUFFER ADVERSE
TAX CONSEQUENCES AS A RESULT OF PURCHASER’S PURCHASE OR DISPOSITION OF THE
SHARES. PURCHASER REPRESENTS: (i) THAT PURCHASER HAS CONSULTED WITH ANY TAX
ADVISER THAT PURCHASER DEEMS ADVISABLE IN CONNECTION WITH THE PURCHASE OR
DISPOSITION OF THE SHARES AND (ii) THAT PURCHASER IS NOT RELYING ON THE COMPANY
FOR ANY TAX ADVICE. IN

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PARTICULAR, PURCHASER REPRESENTS THAT PURCHASER HAS CONSULTED WITH PURCHASER’S
OWN TAX ADVISER CONCERNING THE ADVISABILITY OF FILING A SECTION 83(b) ELECTION
WITH THE INTERNAL REVENUE SERVICE, WHICH MUST BE FILED WITHIN THIRTY
(30) DAYS OF THE PURCHASE OF SHARES TO BE EFFECTIVE Set forth below is a brief
summary as of the date the Plan was adopted by the Board of some of the U.S.
federal and California tax consequences of exercise of the Option and
disposition of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX
LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. PURCHASER SHOULD CONSULT HIS OR HER
OWN TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.
13.1 Exercise of Option. There will be no regular U.S. federal income tax
liability or California income tax liability upon the exercise of the Option,
although the excess, if any, of the fair market value of the Shares on the date
of exercise over the Exercise Price will be treated as a tax preference item for
U.S. federal alternative minimum tax purposes and may subject Purchaser to the
alternative minimum tax in the year of exercise.
 
13.2 Disposition of Shares. The following tax consequences may apply upon
disposition of the Shares.
(a) Capital Gain and Income on Early Disposition. If the Shares are held for
more than twelve (12) months after the date of purchase of the Shares pursuant
to the exercise of the Option and are disposed of more than two (2) years after
the Date of Grant, any gain realized on disposition of the Shares will be
treated as long-term capital gain for federal and California income tax
purposes. If Vested Shares purchased under the Option are disposed of within the
applicable one (1)-year or two (2)-year period, any gain realized on such
disposition will be treated as compensation income (taxable at ordinary income
rates in the year of the disposition) to the extent of the excess, if any, of
the fair market value of the Shares on the date of exercise over the Exercise
Price.
(b) Withholding. If Purchaser disposes of any Vested Shares purchased under the
Option on or before the later of (i) two (2) years after the Date of Grant or
(ii) one (1) year after transfer to Purchaser upon exercise of the Option, then
the Company may be required to withhold from Purchaser’s compensation or collect
from Purchaser and pay to the applicable taxing authorities an amount equal to a
percentage of Purchaser’s compensation income.
13.3 Section 83(b) Election for Unvested Shares. If an election is filed by
Purchaser with the Internal Revenue Service (and, if necessary, the proper state
taxing authorities) within 30 days of the purchase of Unvested Shares, electing
pursuant to Section 83(b) of the Code (and similar state tax provisions, if
applicable) to be taxed currently on such purchase, then in the event that the
Option is exercised early and the Shares are disposed before the later of two
(2) years after the Date of Grant or (ii) one (1) year after transfer to
Purchaser upon exercise of the Option, there may be a recognition of taxable
income (including, where applicable, alternative minimum taxable income),
measured by the excess, if any, of the fair market value of the Unvested Shares
at the time they cease to be Unvested Shares, over the Exercise Price of the
Unvested Shares. A Form of Election under Section 83(b) is attached hereto
as Exhibit 4 for reference.
14. Compliance with Laws and Regulations. The issuance and transfer of the
Shares will be subject to and conditioned upon compliance by the Company and
Purchaser with all applicable state and U.S. federal laws and regulations and
with all applicable requirements of any stock exchange or automated quotation
system on which the Company’s Common Stock may be listed or quoted at the time
of such issuance or transfer.
15. Successors and Assigns. The Company may assign any of its rights and
obligations under this Exercise Agreement, including its rights to purchase
Shares under the Repurchase Option and the Right of First Refusal. No other
party to this Exercise Agreement may assign, whether voluntarily or by
operation of law, any of its rights and obligations under this Exercise
Agreement, except with the prior written consent of the Company. This Exercise
Agreement shall be binding upon and inure to the benefit of the successors and
assigns of the Company. Subject to the restrictions on transfer herein set
forth, this Exercise Agreement will be binding upon Purchaser and Purchaser’s
heirs, executors, administrators, legal representatives, successors and assigns.

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16. Governing Law. This Exercise Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
that body of laws pertaining to conflict of laws.
17. Notices. Any notice required to be given or delivered to the Company shall
be in writing and addressed to the Corporate Secretary of the Company at its
principal corporate offices. Any notice required to be given or delivered to
Purchaser shall be in writing and addressed to Purchaser at the address
indicated above or to such other address as Purchaser may designate in writing
from time to time to the Company. All notices shall be deemed effectively given
upon personal delivery, (i) three (3) days after deposit in the United States
mail by certified or registered mail (return receipt requested), (ii) one
(1) business day after its deposit with any return receipt express courier
(prepaid), or (iii) one (1) business day after transmission by rapifax or
telecopier.
18. Further Assurances. The parties agree to execute such further documents and
instruments and to take such further actions as may be reasonably necessary to
carry out the purposes and intent of this Exercise Agreement.
19. Severability. If any provision of this Exercise Agreement is determined by
any court or arbitrator of competent jurisdiction to be invalid, illegal or
unenforceable in any respect, such provision will be enforced to the maximum
extent possible given the intent of the parties hereto. If such clause or
provision cannot be so enforced, such provision shall be stricken from this
Exercise Agreement, and the remainder of this Exercise Agreement shall be
enforced as if such invalid, illegal or unenforceable clause or provision had
(to the extent not enforceable) never been contained in this Exercise Agreement.
20. Headings. The captions and headings of this Exercise Agreement are included
for ease of reference only and will be disregarded in interpreting or construing
this Exercise Agreement. All references herein to Sections will refer to
Sections of this Exercise Agreement.
21. Entire Agreement. The Plan, the Stock Option Agreement and this Exercise
Agreement, together with all Exhibits thereto, constitute the entire agreement
and understanding of the parties with respect to the subject matter of this
Exercise Agreement, and supersede all prior understandings and agreements,
whether oral or written, between or among the parties hereto with respect to the
specific subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Exercise Agreement to be
executed in triplicate by its duly authorized representative and Purchaser has
executed this Exercise Agreement in triplicate as of the Effective Date,
indicated above.
 
 
 
 
 
 
 
 
AQUANTIA CORP.
 
 
 
PURCHASER
 
 
 
 
By:
 
 
 
 
 
 
 
 
 
 
 
 
(Signature)
 
 
 
Faraj Aalaei
 
 
 
 
(Please print name)
 
 
 
(Please print name)
 
 
 
President & CEO
 
 
 
 
(Please print title)
 
 
 
 

SIGNATURE PAGE TO AQUANTIA CORP. STOCK OPTION EXERCISE AGREEMENT
 
24