logoa01.jpg [logoa01.jpg]
Long-Term Incentive Plan of LivePerson, Inc.
Effective July 31, 2018

SECTION 1. PURPOSE

The purpose of the Long-Term Performance Incentive Plan of LivePerson, Inc. (the
“Plan”) is to advance the interests of LivePerson, Inc. (the “Company”) by
providing a competitive level of incentive for eligible senior executives, which
will encourage them to more closely identify with share-owner interests and to
achieve financial results consistent with the Company's long range business
plans. It will also enhance the Company’s ability to attract and retain key
executives who are responsible for moving the business forward.

The Plan consists of two (2) award components, as follows:
(1) the Accelerated Growth Plan, a non-recurring program, (the “AGP Component”);
and
(2) the Three Year Plan Achieves Rule of 40 for SAAS1, an annual program, (the
“Rule of 40 Component”).

SECTION 2. ADMINISTRATION

The Plan will be administered by the Compensation Committee of the Board of
Directors of the Company or a subcommittee thereof (the “Committee”) consisting
of not less than two independent members of the Board of Directors of the
Company (the “Board”); provided however, with respect to a Long-Term Incentive
Award granted to a Participant (as defined herein) who is subject to Section 16
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), the
Committee shall consist solely of two or more “nonemployee” directors for
purposes of the Exchange Act. The Committee will determine which of the eligible
key employees of the Company and its Related Companies (as defined herein) to
whom, and the time or times at which, an award under the AGP Component and/or
the Rule of 40 Component (each award, a “Long-Term Incentive Award”) will be
granted under the Plan, and the other terms and conditions of the grant of a
Long-Term Incentive Award. The terms and conditions of each grant of a Long-Term
Incentive Award need not be the same with respect to each grantee or with
respect to each type of Long-Term Incentive Award under the AGP Component or
Rule of 40 Component.

The Committee will, subject to the provisions of the Plan, establish such rules
and regulations as it deems necessary or advisable for the proper administration
of the Plan, and will make determinations and will take such other action in
connection with or in relation to accomplishing the objectives of the Plan as it
deems necessary or advisable. Each determination or other action made or taken
pursuant to the Plan, including interpretation of the Plan and the specific
conditions and provisions of the Long-Term Incentive Awards granted hereunder by
the Committee will be final and conclusive for all purposes and upon all
_________________________
1 The rule of 40%: The “rule of 40%” is notion by investors and the stock market
participants to analyze the health of a software/SaaS business. It takes into
consideration two of the most important metrics for a software/SaaS company:
growth and profit (Adjusted EBITDA). The rule of 40% states that a company’s
growth rate plus its profit should add up to 40%.

1

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

persons including, but without limitation, the Company, its Related Companies,
the Committee, the Board, officers, the affected employees of the Company and/or
its Related Companies, and any participant or former participant under the Plan,
as well as their respective successors in interest. The Committee’s
determinations under the Plan need not be uniform and may be made by it
selectively among Participants who receive Long-Term Incentive Awards and/or
RSUs (in each case, whether or not such Participants are similarly situated).

SECTION 3. ELIGIBILITY

The Chief Executive Officer, the President (if any), each executive officer and
such other senior officers of the Company as the Committee may designate (the
executive officers and designated senior officers, together the “Eligible
Officers”) will be eligible to participate in the Plan, but no individual will
have a right to participate. Long-Term Incentive Awards may be granted to such
Eligible Officers of the Company and its Related Companies as determined in the
sole discretion of the Committee. An Eligible Officer may be granted a Long-Term
Incentive Award under one or both the AGP Component and Rule of 40 Component in
the sole discretion of the Committee.

The term “Related Company” or “Related Companies” will mean any corporation or
business organization in which the Company owns, directly or indirectly, during
the relevant time, either: (i) 50% or more of the voting stock or capital where
such entity is not publicly held, or (ii) an interest which causes the other
entity's financial results to be consolidated with the Company's financial
results for financial reporting purposes.

An Eligible Officer must be employed by the Company or a Related Company as of
June 30, 2018 to participate in either the ACP Component or the initial grants
under the Rule of 40 Component. Eligible Officers who commence employment after
June 30, 2018, are eligible to participate in the Rule of 40 Component for
Performance Periods beginning January 1, 2019, but may not participate in the
AGP Component, unless the Committee authorizes the additional Performance
Periods.

SECTION 4. GRANTS OF LONG-TERM INCENTIVE AWARDS; CREATION OF BONUS POOLS

(a)Selection by the Committee of Participants. The Committee will select those
Eligible Officers who will receive a Long-Term Incentive Award (x) for the AGP
Component and for the initial grants under the Rule of 40 Component, within 90
days of the date of effectiveness of the Plan, and (y) following the
effectiveness of the Plan, for the Rule of 40 Component, annually within 90 days
after the beginning of each three-year Performance Period (as defined below).
Following such selection by the Committee, the selected Eligible Officers will
be notified in writing that such person is a participant in the Plan, and shall
specify whether such person has been granted an award under the AGP Component
and/or the Rule of 40 Component, (each such notified person, a “Participant”).

(b)Performance Period. Long-Term Incentive Awards granted under each of the AGP
Component and Rule of 40 Component are measured based on a performance period of
three years, commencing on the first day of January of the applicable year and
ending on December 31 of the third year (each, a “Performance Period”). In
respect of the AGP Component, the initial Performance Period shall be January 1,
2018 – December 31, 2020 and whether an additional Performance Period for the
AGP Component will be implemented is at the discretion of the Board. In respect
of the Rule of 40 Component,

2

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

a new Performance Period will commence each year. For the avoidance of doubt, an
individual who is a Participant in the Rule of 40 Component for one Performance
Period shall not be a Participant in any other Performance Periods unless the
individual is again selected by the Committee in accordance with Section 4(a) of
the Plan for such new Performance Period.

(c)Calculation of Performance Incentive Base and Creation of Bonus Pool. If the
applicable performance conditions set forth below are satisfied, a bonus pool
(the “Bonus Pool”) for the applicable Plan Component shall be created as
follows:

(1) AGP Component. If the Company achieves Company Revenue goals, as such goals
shall be set by the Board at the time of its adoption of the Plan in respect of
the Initial Performance Period, or as set promptly following the beginning of
any additional Performance Periods, if any, a Bonus Pool shall be created for
the AGP Component Participants in an amount equal to 2% of the incremental
difference of the Company’s Market Cap at December 31, 2020 less the Market Cap
at December 31, 2017 of $686.1 million. For purposes of the Plan, “Market Cap”
shall be determined by reference to the market capitalization of the Company on
the relevant date based on the number of outstanding shares and closing share
price of a share of Common Stock as reported on The NASDAQ Stock Market (or the
national securities exchange on which the Company’s shares of common stock are
then traded) (the “Relevant Exchange”).

(2) Rule of 40 Component. For the initial Performance Period of the Rule of 40
Component, if the Company achieves annual Revenue and annual Adjusted EBITDA
goals, as such goals shall be set by the Board at the time of its adoption of
the Plan, in any fiscal year ending at or before December 31, 2020, a Bonus Pool
is created for the Rule of 40 Component Participants in an amount equal to 0.5%
of the incremental difference of the Company’s Market Cap at December 31, 2020
less the Market Cap at December 31, 2017 of $686.1 million. Notwithstanding the
foregoing, if 90% of the Revenue and Adjusted EBITDA performance goals are met,
the Bonus Pool shall be created in respect of 0.25% of the incremental
difference of the Company’s Market Cap at December 31, 2020 less the Market Cap
at December 31,2017 of $686.1 million. The Committee in its sole discretion in
consideration of the Company’s budget projections shall determine the relevant
performance metrics and performance targets for a Performance Period after the
initial Performance Period.

(d)Bonus Pool Allocations. In the event that the creation of a Bonus Pool is
triggered, such portions of the applicable Bonus Pool shall be allocated to each
Participant, depending on the assignment of the Participant to one of three
“Tiers,” (“Tier 1”, “Tier 2”, and “Tier 3,” respectively), with each
Participant’s Tier being set forth in the Participant’s notice of participation
in the AGP Component and/or Rule of 40 Component. Each Participant in a
particular Tier will be eligible to receive an equal portion of that Tier’s
allocated amount.

(1)
AGP Component. Tier 1, Tier 2 and Tier 3 participation is as follows:

•
Tier 1 (CEO) - Receives 14% of applicable Bonus Pool

•
Tier 2 - Receives 49% of applicable Bonus Pool

•
Tier 3 - Receives 37% of applicable Bonus Pool

(2)
Rule of 40 Component. Three Tiers of Participation which are as follows:

•
Tier 1 (CEO) - Receives 14% of applicable Bonus Pool

•
Tier 2- Receives 49% of applicable Bonus Pool

3

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

•
Tier 3 - Receives 37% of applicable Bonus Pool

(3)
In each case of the AGP Component Bonus Pool and Rule of 40 Component Bonus
Pool, any allocated amounts forfeited by Participants in accordance with Section
5(f), shall not be reallocated to other Participants.

(e)Funding of Bonus Pools. Each Bonus Pool that is triggered to be created shall
be funded by the contribution by the Company of that number of shares of Common
Stock (as defined herein) having a fair market value on April 1, 2021, or in the
case of the Rule of 40 Component on the April 1 first following the last day of
the relevant Performance Period, equal to the required funding amounts as set
forth in Section 4(c) above, subject to the maximum funding levels set forth in
Section 6(a) below. In the event (x) stockholders of the Company have not
approved the shares of Common Stock reserved for issuance under the terms of the
Plan prior to the date on which the funding for either the AGP Component Bonus
Pool or Rule of 40 Component Bonus Pool is triggered, or have not approved a
sufficient number of shares of Common Stock to fund such Bonus Pools, (y) the
Committee has determined it will not fund the Bonus Pools with shares of Common
Stock authorized under the Equity Plan or Successor Plan (as such terms are
defined herein) as set forth in Section 6(a)(2), or (z) the Committee has
otherwise determined that it is desirable to do so, the AGP Component Bonus Pool
and/or the Rule of 40 Component Bonus Pool, as applicable, will be funded, in
whole or in part, in cash.

SECTION 5. LONG-TERM INCENTIVE AWARD TERMS AND CONDITIONS
Long-Term Incentive Awards shall be subject to the following terms and
conditions:
(a)
Performance will be measured based upon the achievement of the objective
triggering events set forth in Section 4(c), as measured at end of the
applicable Performance Period.

(b)
Participants will be notified of their participation tier at the time of grant
of an award under the AGP Component and/or Rule of 40 Component.

(c)
All Participants in each participation Tier of the applicable Bonus Pool will
receive an equal share of such Tier allocation, subject to a Participant’s
forfeiture of his or her participation right pursuant to Section 5(f).

(d)
Unless otherwise determined by the Committee prior to the time payment becomes
due, Long-Term Incentive Awards will be paid in the form of RSUs, with the
number of RSUs to be determined using the closing stock price of a share of the
Company’s common stock on April 1st (or the last trading day preceding April 1,
if April 1 is not a trading day) following the conclusion of the applicable
Performance Period, subject to the following vesting conditions:

a.
For the AGP Component:

•
50% of the RSUs will be fully vested at the time of grant, on April 1, 2021;

•
25% of the RSUs will become vested on January 1, 2022; and

•
25% of the RSUs will become vested on January 1, 2023.

b.
For the Rule of 40 Component:

•
100% of the RSUs will be fully vested at the time of grant, on the applicable
April 1.

(e)
RSUs will be subject to the terms and conditions of an RSU award agreement in a
form to be provided by the Company at the time of grant.

(f)
Notwithstanding anything to the contrary and unless otherwise set forth in an
RSU agreement, a Participant must be employed by LivePerson or a Related Company
on the relevant vesting date

4

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

to receive payment of a Long-Term Incentive Award, and any unvested portion of
the Long-Term Incentive Award, or subsequently granted RSUs in payment of such
Award, shall be forfeited if the Participant incurs a separation from service
from the Company and the Related Companies.
(g)
In settlement of the RSUs, within 10 days following the vesting of a portion of
the RSUs, the Participant shall be issued that number of shares of Common Stock
equal to the number of RSUs for which then vested; subject to payment by the
Participant to the Company of any Federal, state, or local income and employment
taxes that the Participant is obligated to pay in connection with the RSU’s
settlement (collectively, the “Tax Obligations”) provided, however,
notwithstanding anything to the contrary, the Company will have the right to
withhold from the number of shares of Common Stock that would otherwise be
issuable to the Participant in settlement of the RSUs, that number of shares of
Common Stock having the fair market value equal to the amount of the
Participant’s Tax Obligations. .

(h)
Notwithstanding anything to the contrary, a Participant may elect to defer the
settlement of all or a portion of the RSUs granted to the Participant, under the
terms and in accordance with the LivePerson, Inc. Deferred Compensation Plan
(the “Deferred Compensation Plan”), effective as of August 1, 2015, as amended.
Such election to defer must be made, in accordance with Section 409A of the Code
and the terms of the Deferred Compensation Plan, by the end of the calendar year
immediately preceding the last calendar year of the Performance Period.

(i)
Prior to the grant of the RSUs, the Committee may, at its sole discretion,
reduce the amount of any potential Long-Term Incentive Award or refuse to pay
any Long-Term Incentive Award.

SECTION 6. SHARES RESERVED FOR ISSUANCE; RSUs

(a)Shares Authorized.

(1) Subject to stockholder approval in accordance with the requirements of the
rules of The NASDAQ Stock Market (or the national securities exchange on which
the Company’s shares of common stock are then traded), the total aggregate
number of shares of common stock $0.001 par value per share, of the Company (the
“Common Stock”) that may be issued or transferred under the Plan in the form of
RSUs in satisfaction of Long-Term Incentive Awards is 500,000 shares, subject to
adjustment as described below, which number of shares of Common Stock may be
amended by the Committee prior to the time, and if, the Plan is submitted to the
Company’s stockholders for approval. The shares may be authorized but unissued
shares of Common Stock or reacquired shares of Common Stock, including shares
purchased by the Company on the open market for purposes of the Plan. For
administrative purposes, when the Committee makes a grant of an RSU payable in
Common Stock, the Committee shall reserve shares of Common Stock equal to the
maximum number of shares of Common Stock that may be payable under the RSU. If
any RSUs are forfeited or terminated, or otherwise are not paid in full, the
shares subject to such RSU which have not been issued shall again be available
for purposes of the Plan. Shares of Common Stock withheld for purposes of
satisfying the Company’s applicable tax withholding obligations with respect to
the RSU granted under the Plan shall not be available for re-issuance or
transfer under the Plan. To the extent that any RSUs are settled in cash and not
shares of Common Stock, such grants of RSUs shall not count against the share
limits set forth above.

5

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

(2) Notwithstanding anything to the contrary in Section 6(a)(1) above, the
Committee may in its discretion utilize shares of Common Stock duly authorized
for issuance under the terms of the Company’s 2009 Stock Incentive Plan, as
amended (the “Equity Plan”), or a successor or replacement plan to the 2009
Stock Incentive Plan (a “Successor Equity Plan”), for grants of RSUs in
satisfaction of any portion or all of the Long-Term Incentive Awards granted
under the terms of this Plan. In this case, (i) such RSUs shall be subject to
the terms of the Equity Plan or Successor Equity Plan, as well as the terms of
this Plan; and (ii) the terms of the Equity Plan or Successor Equity Plan
regarding number of shares, share counting, and fungible share pool set forth in
Section 4(a) of the Equity Plan or similar provisions of a Successor Equity Plan
shall govern in lieu of Section 6(a)(1) of this Plan.

(b)    Adjustments. In the case that shares of Common Stock are authorized
exclusively for use under the terms of the Plan, following the date of
stockholder approval of the Plan, if there is any change in the number or kind
of shares of Common Stock outstanding (i) by reason of a stock dividend,
spinoff, recapitalization, stock split, or combination or exchange of shares,
(ii) by reason of a merger, reorganization or consolidation, (iii) by reason of
a reclassification or change in par value, or (iv) by reason of any other
extraordinary or unusual event affecting the outstanding Common Stock as a class
without the Company’s receipt of consideration, or if the value of outstanding
shares of Common Stock is substantially reduced as a result of a spinoff or the
Company’s payment of an extraordinary dividend or distribution, the maximum
number of shares of Common Stock available for issuance under the Plan, the
maximum number of shares of Common Stock for which any individual may receive
pursuant to Long-Term Incentive Awards in any year, the number of shares covered
by outstanding RSU grants, the kind of shares to be issued or transferred under
the Plan, and any applicable performance goals tied to the number of outstanding
shares shall be equitably adjusted by the Committee, in such manner as the
Committee deems appropriate, to reflect any increase or decrease in the number
of, or change in the kind or value of, issued shares of Common Stock to
preclude, to the extent practicable, the enlargement or dilution of rights and
benefits under the Plan; provided, however, that any fractional shares resulting
from such adjustment shall be eliminated. Any adjustments to outstanding RSUs
shall be consistent with section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”), to the extent applicable. Any adjustments determined by
the Committee shall be final, binding and conclusive. If shares of Common Stock
authorized under the terms of the Equity Plan or a Successor Equity Plan are
used for issuance of RSU grants under the terms of this Plan, in accordance with
Section 6(a)(2) above, Section 9 of the Equity Plan, or similar provision of a
Successor Equity Plan, shall govern the adjustment of shares in respect of
outstanding RSUs, in lieu of this Section 6(b).

(c)     Conditions to Payment of Long-Term Incentive Awards. Prior to the
payment of any Long-Term Incentive Award, the Committee will determine whether
the performance criteria under the applicable Plan component has been met,
therefore triggering the funding of the applicable Bonus Pool. In addition, no
Long-Term Incentive Award will be payable pursuant to this Plan in the form of
stock-settled RSUs until stockholder approval of the Plan has been obtained,
unless the Committee has, in its discretion, determined to utilize shares of
Common Stock authorized under the Equity Plan or a Successor Equity Plan in
accordance with Section 6(a)(2) above. Notwithstanding the foregoing, any
portion or all of the Long-Term Incentive Awards may be payable in cash at the
discretion of the Committee (whether or not stockholder approval is obtained or
whether shares of the Equity Plan or a Successor Equity Plan are utilized).
Long-Term Incentive Awards are subject to forfeiture as provided below.

6

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

(d)     Form of Payment; Forfeiture. All Long-Term Incentive Awards will be paid
in the form of a stock-settled RSU, as described in Section 5(d), except as set
forth below, as subject to the terms and conditions of an RSU award agreement
(consistent with the provisions of the Plan and, if applicable, the Equity Plan)
provided to the Participant at the time the RSU is granted in payment of the
Long-Term Incentive Award. As set forth above and as shall be memorialized in
the RSU award agreement, portions of the RSUs may be subject to forfeiture until
vested. Unless otherwise provided in the RSU award agreement, any portion of the
RSU that has not vested prior to the date of a Participants termination of
employment with the Company shall be forfeited as of the date of Termination for
no consideration. In the event the AGP Component Bonus Pool or Rule of 40
Component Bonus Pool has been funded, in whole or in part, in cash, payment of
the applicable Long-Term Incentive Awards shall be, to the extent necessary in
the discretion of the Committee, in the form of a cash-settled RSU, but shall
otherwise be subject to the same provisions as set forth herein applicable to a
stock-settled RSU.

SECTION 7. TERMINATION OF EMPLOYMENT DURING A PERFORMANCE PERIOD

(a)If a Participant participates in the AGP Component and/or Rule of 40
Component, but the Participant’s employment with the Company terminates for any
reason prior to the occurrence of the applicable component’s triggering event
for the AGP Pool or Rule of 40 Pool, respectively, the right to a payment of the
AGP Component Award or Rule of 40 Component Award, in the form of an RSU or
otherwise, shall be forfeited in full and cancelled without consideration.

(b)Unless otherwise provided in the RSU award agreement granted in payment of a
Long Term Incentive Award, any portion of the RSU that has not vested prior to
the date of a Participant’s termination of employment with the Company for any
reason shall be forfeited as of the date of Termination and cancelled for no
consideration.

SECTION 8. AMENDMENTS, MODIFICATION AND TERMINATION OF THE PLAN

The Board or the Committee may terminate the Plan at any time. From time to
time, the Board or the Committee may suspend the Plan, in whole or in part. From
time to time, the Board or the Committee may amend the Plan or RSU award
agreement, including the adoption of amendments deemed necessary or desirable to
correct any defect or supply an omission or reconcile any inconsistency in the
Plan or in any Long-Term Incentive Award or RSU award agreement granted
hereunder so long as share-owner approval has been obtained if required. No
amendment, termination or modification of the Plan, Long-Term Incentive Award or
RSU award agreement may in any manner affect Long-Term Incentive Awards or RSUs
heretofore granted without the consent of the participant unless the Committee
has made a determination that an amendment or modification is in the best
interest of all persons to whom Long-Term Incentive Awards or RSUs have
heretofore been granted, but in no event may such amendment or modification
result in an increase in the amount of compensation payable pursuant to such
Long-Term Incentive Award or RSU.

SECTION 9. GOVERNING LAW

The Plan and all determinations made and actions taken pursuant thereto will be
governed by the laws of the State of New York and construed in accordance
therewith.

7

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

SECTION 10. EFFECT ON BENEFIT PLANS

Compensation received upon settlement of the RSUs granted in payment of
Long-Term Incentive Awards under the Plan will not be included in the
computation of benefits under any other employee benefit plan maintained by the
Company under which the Participant may be covered, unless required by
applicable laws.

SECTION 11. REORGANIZATION EVENT

If there is a Reorganization Event (as hereinafter defined) while the Plan
remains in effect, then notwithstanding that the Performance Period has not
expired at the time of the Reorganization Event, if the performance targets
triggering the Bonus Pool funding are reached in connection with, or as a result
of the Reorganization Event, the Bonus Pool(s) shall be funded, and RSU grants
made in accordance with the terms of the Plan as if the funding event had
occurred as a result of reaching the targets at the end of the Performance
Period; provided, however, that in the case of the payment of Long-Term
Incentive Awards in the event of a Reorganization Event, payment shall be made
in a lump sum in cash or settled in fully vested RSUs promptly after the date of
such Change in Control, in lieu of any other additional payments under the Plan
for the related Performance Periods.

A “Reorganization Event” for purposes of this Section 11 will have the same
meaning as assigned to such term in the Company’s 2009 Stock Incentive Plan, as
amended or such similar term in a Successor Equity Plan.

SECTION 12. MISCELLANEOUS

(a)Compliance with Section 409A. All Long Term Incentive Awards and RSUs granted
under the Plan are intended either not to be subject to Section 409A of the Code
or, if subject to Section 409A of the Code, to be administered, operated and
construed in compliance with Section 409A of the Code. Notwithstanding this or
any other provision of the Plan or any RSU award agreement to the contrary, the
Committee may amend the Plan or any award agreement granted hereunder in any
manner or take any other action that it determines, in its sole discretion, is
necessary, appropriate or advisable (including replacing any Long-Term Incentive
Award or RSU) to cause the Plan or any award granted hereunder to comply with
Section 409A of the Code and all regulations and other guidance issued
thereunder or to not be subject to Section 409A of the Code. In no event will
the Company reimburse a Participant for any taxes or other penalties that may be
imposed on the Participant as a result of Section 409A of the Code.

(b)Compliance with Law. The obligation of the Company to sell or deliver shares
of Common Stock with respect to awards granted under the Plan shall be subject
to all applicable laws, rules and regulations, including all applicable federal
and state securities laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the
Committee.

(c)Employment Status; Claims to Long-Term Incentive Awards. Nothing in the Plan
shall be construed to limit in any way the right of the Company or its Related
Companies to terminate the employment of any person at any time. The Long-Term
Incentive Awards and RSUs represent unfned and unsecured obligations of the
Company and Participant in respect of the Plan shal have no rights other than
those of a general unsecured creditor to the Company.

8

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

(d)Nontransferability. Unless otherwise permitted by the Committee, no Long-Term
Incentive Award or RSU granted under the terms of the Plan shall be (i) sold,
transferred or otherwise disposed of, (ii) pledged or otherwise hypothecated or
(iii) subject to attachment, execution or levy of any kind; and any purported
transfer, pledge, hypothecation, attachment, execution or levy in violation of
this provision shall be null and void.

9