Exhibit 10.38

 

NETSPEND HOLDINGS, INC.

2012 EMPLOYEE STOCK PURCHASE PLAN
Effective October 20, 2011

 

The following constitute the provisions of the NetSpend Holdings, Inc. 2012
Employee Stock Purchase Plan (the “Plan”), as adopted by NetSpend Holdings, Inc.
(“Issuer”) and its Designated Subsidiaries described in Section 2 of this Plan
(collectively, with Issuer, the “Company”).

 

1.                                      Introduction.

 

(a)                                 Purpose.  The purpose of the Plan is to
enable the Company to obtain and retain the services of employees.  In addition,
the Plan provides a convenient, meaningful opportunity for eligible Employees to
purchase Common Stock of Issuer, thereby increasing their personal interest in
the Company’s success.

 

(b)                                 Portion of Plan to Comply with Code
Section 423.  The Company intends to have a portion of the Plan qualify as an
“employee stock purchase plan” within the meaning of Code Section 423; and
intends that such portion of the Plan be treated as a separate plan.  Such
portion of the Plan shall, accordingly, be construed so as to extend and limit
participation in a manner that is consistent with Code Section 423.

 

(c)                                  Portions of Plan Not Complying with Code
Section 423.  Section 20 of this Plan, and any additional provisions adopted by
the Committee pursuant thereto, are intended by Issuer to allow creation of
separate portions of the Plan providing for the offering of Common Stock other
than through the portion of the Plan governed by Code Section 423, for purchase
by individuals who are either (i) generally not subject to income taxation by
the United States or (ii) employed by non-corporate Subsidiaries that are not
eligible to be Designated Subsidiaries because they are described in clause
(ii) of the definition of Subsidiary below.

 

2.                                      Definitions.

 

(a)                                 “Account” means an account established
pursuant to Section 6(b) and maintained on the books and records of the Company
to record the amount of all remaining Contributions accumulated with respect to
a Participant as a result of deductions made from such Participant’s paychecks
for the purpose of purchasing Shares under the Plan.

 

(b)                                 “Applicable Laws” shall mean all applicable
laws, rules, regulations and requirements, including, but not limited to,
corporate and securities laws of any of the United States, United States federal
securities laws, the Code, the rules of any stock exchange or quotation system
on which Shares are listed or quoted; and the applicable laws, rules,
regulations and requirements of any other country or jurisdiction where Options
are granted under the Plan or where Employees reside or provide services, as
such laws, rules, regulations and requirements shall be in effect from time to
time.

 

(c)                                  “Issuer” means NetSpend Holdings, Inc., a
Delaware corporation.

 

(d)                                 “Board” means the Board of Directors of
Issuer.

 

(e)                                  “Business Day” means any day (other than a
Saturday or Sunday) on which the NASDAQ National Market (or the principal
securities exchange on which the Common Stock of Issuer is then listed or
admitted for trading) is permitted to be open for trading.

 

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(f)                                   “Code” means the Internal Revenue Code of
1986, as amended from time to time.

 

(g)                                  “Commencement Date” means the first
calendar day of each Contribution Period of the Plan.

 

(h)                                 “Committee” means the Compensation Committee
of the Board, or any successor committee of the Board with similar
responsibilities; provided, however, that the Board shall have the power to take
any action that may be taken by the Committee under this Plan, except to the
extent such action would not comply with any Applicable Laws.

 

(i)                                     “Common Stock” means the Common Stock,
par value $0.001 per share, of Issuer.

 

(j)                                    “Company” means collectively, Issuer and
the Designated Subsidiaries (but only while a Designated Subsidiary is so
designated).

 

(k)                                 “Compensation” means total cash compensation
received by a Participant from the Company.  Compensation shall be limited to
amounts received by a Participant during the period he or she is participating
in the Plan and includes salary, wages, overtime premiums, bonuses and other
incentive payments, amounts contributed by the Participant to any benefit plan
maintained by the Company (including any Code Section 125 plan, Code
Section 401(k) plan or any other deferred compensation plan), overtime pay,
commissions, draws against commissions, shift differentials, sick pay, vacation
pay, holiday pay and shutdown pay, except to the extent that the exclusion of
any such item (or a subset of any such items) is specifically directed by the
Plan Administrator for all Participants in a manner that does not violate Code
Section 423.  “Compensation” does not include any remuneration paid in a form
other than cash, fringe benefits (including car allowances, tuition assistance
and relocation payments), employee discounts, expense reimbursement or
allowances, long-term disability payments, workers’ compensation payments,
welfare benefits, any contributions that the Company or any other Subsidiary
makes to any benefit plan (including any 401(k) plan or any other welfare or
retirement plan) on behalf of a Participant nor income realized as a result of
participation in any stock option, restricted stock, stock purchase or similar
plans of the Company or any other Subsidiary.

 

(l)                                     “Continuous Status as an Employee”
means, with respect to an Employee, a period of employment by the Company
without any interruption or termination of his or her service as an Employee of
the Company.  Continuous Status as an Employee shall not be considered
interrupted in the case of (i) medical leave; (ii) leave allowed under the
Family and Medical Leave Act; (iii) personal leave; (iv) military leave;
(v) jury duty;  (vi) any other leave of absence approved by the Plan
Administrator; provided, however, that such leave does not exceed the respective
time period designated by Company policy, unless re-employment upon the
expiration of such leave is guaranteed by contract or statute or unless provided
otherwise pursuant to Company policy adopted from time to time; or (vii) 
transfers between locations of the Company, between Issuer and any of the
Designated Subsidiaries, or between any of the Designated Subsidiaries.  See the
definition of “Employee” for the effect of any Designated Subsidiary ceasing to
be a Designated Subsidiary.

 

(m)                             “Contribution Period” means any period of three
(six with respect to the first Contribution Period) consecutive months specified
in Section 4(a), which shall be subject to change pursuant to Section 4(b);
provided, however, that no Contribution Period shall exceed 12 months.

 

(n)                                 “Contributions” means all amounts credited
to the Account of a Participant pursuant to the Plan.

 

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(o)                                 “Designated Subsidiaries” means all
Subsidiaries that are either corporations described in clause (i) of the
definition of Subsidiary below or are treated as corporations under the Code as
described in clause (iii) of that definition.  The initial set of Designated
Subsidiaries includes NetSpend Corporation, a Delaware corporation, Skylight
Acquisition I, Inc., a Delaware corporation, Skylight Financial, Inc., a
Delaware corporation, and NetSpend Payment Services, Inc., a Delaware
corporation.  The Committee may designate additional subsidiaries (whether now
existing or hereafter created or acquired) as employers that are eligible to
participate in the portion of the Plan that is subject to Code Section 423 at
any time and from time to time in its sole discretion.  This definition of
Designated Subsidiaries shall be interpreted consistently with Code
Section 424(f).

 

(p)                                 “Employee” means any individual who is a
common-law employee of the Company for purposes of tax withholding under Code
Section 3401(c), including an officer or director who is also such an employee,
but excluding any individual whose customary employment is (i) less than 20
hours per week or (ii) for not more than 5 months in any calendar year.  If the
Committee determines that any Designated Subsidiary shall no longer be a
Designated Subsidiary or if a Designated Subsidiary ceases to be a Designated
Subsidiary because it is no longer a Subsidiary, the employees of such
Designated Subsidiary shall automatically cease to be Employees or Participants
as of the effective date of such event.

 

(q)                                 “ESPP Broker” means the licensed
broker-dealer or other financial services firm designated from time to time by
the Plan Administrator in accordance with Section 9(a) to assist in
administering this Plan.

 

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

 

(s)                                   “Fair Market Value” means, with respect to
the Common Stock on a given date, the last reported sale price for the Common
Stock for such date, or if such date is not a Business Day, the last reported
sale price for the Common Stock for the last Business Day preceding such date,
as quoted on the NASDAQ National Market (or the principal exchange upon which
shares of the Common Stock of Issuer may then be listed or admitted for
trading); provided, however, that if the Common Stock ceases to be listed for
trading on the NASDAQ National Market or any stock exchange, “Fair Market Value”
of the Common Stock for a given date shall mean the value determined in good
faith by the Committee.

 

(t)                                    “New Purchase Date” shall have the
meaning set forth in Section 13.

 

(u)                                 “Option” shall mean a right granted to a
Participant under Section 7, as of the Commencement Date of a Contribution
Period, to purchase Shares as of the Purchase Date in that Contribution Period.

 

(v)                                 “Participant” means any Employee who is
eligible and has elected to participate in the Plan accordance with Sections 3
and 5; and who has not withdrawn from the Plan or whose participation in the
Plan is not otherwise terminated.

 

(w)                               “Plan” means this NetSpend Holdings, Inc. 2012
Employee Stock Purchase Plan, as it may be amended from time to time.

 

(x)                                 “Plan Administrator” means the Committee or
any employees of the Company designated to administer the Plan; provided,
however, that, notwithstanding any such designation, the Committee shall have
the power to take any action that may be taken by the Plan Administrator under
this Plan, except to the extent such action would not comply with any Applicable
Laws.

 

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(y)                                 “Purchase Date” means the last calendar day
of each Contribution Period of the Plan.

 

(z)                                  “Purchase Price” means, with respect to a
Contribution Period, an amount equal to 85% of the Fair Market Value of a Share
on the Commencement Date or on the Purchase Date, whichever is lower.

 

(aa)                          “Required Holding Period” shall have the meaning
set forth in Section 9(c).

 

(bb)                          “Reserves” means the sum of (i) the number of
Shares covered by Options granted under the Plan that have not yet been
exercised and (ii) the number of Shares that have been authorized for issuance
under the Plan but have not yet been placed under an Option.

 

(cc)                            “Share” means a share of Common Stock, as
adjusted in accordance with Section 12.

 

(dd)                          “Subsidiary” means any of the following entities:

 

(i)                                     a corporation, domestic or foreign, of
which not less than 50% of the total combined voting power of all classes of
stock is held by Issuer or any corporate subsidiary of Issuer, whether or not
such corporation now exists or is hereafter organized or acquired by Issuer or
another such subsidiary of Issuer;

 

(ii)                                  an unincorporated business entity,
domestic or foreign, such as a limited liability company or partnership, in
which Issuer or another Subsidiary holds directly or indirectly not less than
50% of the total combined voting power with respect to all classes of equity
ownership of such entity; or

 

(iii)                               an unincorporated business entity described
in the preceding clause (ii) that either (A) has duly elected under applicable
Treasury Regulations to be an association treated as a corporation for United
States federal income tax purposes, and such election continues in effect; or
(B) is disregarded as a separate entity for United States federal income tax
purposes, has not made an election described in the preceding clause (A) and,
pursuant to applicable Treasury Regulations, its assets are considered to be
owned by Issuer or another Subsidiary that is a corporation or is treated as one
under the preceding clause (A); whether or not such unincorporated business
entity now exists or is hereafter organized or acquired by Issuer or another
Subsidiary of Issuer.

 

(ee)                            “Unforeseen Financial Emergency” means an
unanticipated emergency that is caused by an event beyond the control of the
Participant that would result in severe financial hardship to the Participant,
and which cannot be relieved through other reasonable means available to the
Participant, resulting from (i) a sudden and unexpected illness or accident of
the Participant or his or her spouse or a dependent of the Participant, (ii) a
loss of the Participant’s property due to casualty, or (iii) some other
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant, all as determined in the discretion of
the Plan Administrator

 

3.                                      Eligibility.

 

(a)                                 Eligible Employees.  Any individual who is
an Employee, immediately after he or she has completed 60 calendar days of
Continuous Status as an Employee, shall become eligible to participate in the
Plan on the first day of the month coincident with or next following completion
of such period of service, subject to the requirements of the following
paragraph (b), Sections 5(a), Section

 

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6(c)(i), Section 11 and the limitations imposed by Code Section 423(b).  Except
as otherwise provided in the following paragraph (b), each Employee who is
eligible to participate in this Plan shall have the same rights and privileges
under the Plan.

 

(b)                                 Limitations on Option Grants to Eligible
Employees.  Notwithstanding any contrary provisions of the Plan, no Employee
shall be granted an Option under the Plan (except for Options granted under any
portion of the Plan not intended to be subject to the requirements of Code
Section 423):

 

(i)                                     if, immediately after the grant, such
Employee (together with any other person whose Issuer stock would be attributed
to such Employee pursuant to Section 424(d) of the Code) would own capital stock
of Issuer or of any Subsidiary that is a corporation (or is treated as one under
the Code) and/or hold outstanding options to purchase stock possessing in the
aggregate 5% or more of the total combined voting power or value of all classes
of issued and outstanding stock of Issuer or of any such Subsidiary; or

 

(ii)                                  if such Option would permit his or her
rights to purchase stock under all employee stock purchase plans described in
Section 423 of the Code of Issuer or of any Subsidiary that is a corporation (or
is treated as one under the Code) to accrue at a rate that exceeds $25,000 of
the Fair Market Value of such stock (determined at the time such Option is
granted) or that exceeds 10,000 Shares, for any calendar year in which such
Option is outstanding at any time.

 

Without limiting the Committee’s authority under Section 19, it shall have the
power to amend the Plan by changing the conditions for eligibility to
participate in the Plan with respect to future grants of Options, without
shareholder approval, if such change is announced at least 30 calendar days
before the next Commencement Date on which Options are to be granted, and only
if such eligibility conditions comply with the requirements of Code
Section 423(b)(4).

 

4.                                      Contribution Periods.

 

(a)                                 Initial Contribution Periods.  Subject to
the following paragraph (b), the Plan shall be implemented by a series of
consecutive Contribution Periods commencing on the first calendar day of each
fiscal quarter and ending on the last calendar day of each such quarter;
provided, however, that the first Contribution Period under this Plan shall
commence on January 1, 2012 and shall end on June 30, 2012.  The Plan shall
continue until terminated in accordance with Section 13 or Section 19.

 

(b)                                 Changes.  The Committee shall have the power
to change the duration and/or frequency of Contribution Periods with respect to
future purchases of Shares, without shareholder approval, if such change is
announced to all Employees who are eligible under Section 3 at least five
Business Days before the Commencement Date of the first Contribution Period to
be affected by the change; provided, however, however, that no Contribution
Period shall exceed 12 months.

 

5.                                      Participation.

 

(a)                                 Enrollment Process.  An eligible Employee
may become a Participant by following the established enrollment procedure as
directed by the Plan Administrator, or any other entity designated by the Plan
Administrator, before the Commencement Date of the applicable Contribution
Period, unless an earlier or later time for completing the enrollment procedure
is set by the Plan Administrator for all eligible Employees with respect to a
given Contribution Period.  Each eligible Employee who elects to participate for
a Contribution Period shall determine the percentage of his or her future
Compensation, subject to the limits in Sections 3(b)(ii) and 6(a), to be
deducted from his or her

 

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paychecks after the Commencement Date for that Contribution Period and allocated
to his or her Account as Contributions to the Plan.

 

(b)                                 Payroll Contributions.  Payroll deductions
for a Contribution Period shall commence from the first payroll following the
Commencement Date for such Period and shall end on the last payroll paid on or
before the Purchase Date of the Contribution Period, unless sooner terminated as
provided in Section 10.  A Participant who has elected to participate during a
Contribution Period shall automatically participate in future Contribution
Periods at the same rate of Contributions until the Participant’s rate of
Contributions is changed pursuant to Section 6, or the Participant withdraws
from the Plan or ceases to be an Employee as provided in Section 10.

 

6.                                      Method of Payment of Contributions.

 

(a)                                 Contribution Amounts.  Subject to the
limitations of Sections 3(b) and 11, a Participant shall elect to have
Contributions made as payroll deductions on each payday during the Contribution
Period in any percentage of his or her Compensation that is not less than 1% and
not more than 20% (or such other maximum percentage as the Committee may
establish from time to time before any Commencement Date) of such Participant’s
Compensation on each payday during the Contribution Period.  Contribution
amounts shall be withheld in whole percentages only.

 

(b)                                 Accounts.  Accounts will be maintained for
each Participant in the Plan.  All payroll deductions made by a Participant as
Contributions shall be credited to his or her Account.  A Participant may not
make any additional payments into his or her Account.  A Participant’s Account
balance shall remain the property of the Participant at all times, subject to
the limitations of Sections 16 and 17, but the funds deducted from his or her
paychecks may be commingled with the general funds of the Company, except to the
extent such commingling may be prohibited by any Applicable Laws.  No interest
shall accrue on the Contributions or the Account balance of a Participant in the
Plan, unless otherwise determined necessary by the Plan Administrator for the
Accounts of Participants in any portion of the Plan that is not intended to
qualify under Code Section 423.

 

(c)                                  Contribution Changes by a Participant.

 

(i)                                     A Participant may discontinue his or her
participation in the Plan as provided in Section 10.  A Participant who enrolls
in the Plan and thereafter discontinues his or her participation in the Plan may
not re-enroll in the Plan until the two consecutive Contribution Periods
following the Contribution Period in which such discontinuation was effective
shall have elapsed.  For purposes of the foregoing, a change in a Participant’s
payroll deduction rate to less than 1% shall be treated as an election by the
Participant to discontinue his or her participation in the Plan.

 

(ii)                                  Unless otherwise provided by the Plan
Administrator, a Participant may increase or decrease the payroll deduction rate
applicable to his or her Contributions by following such administrative
procedures as may be established by the Plan Administrator. The rate adjustment
shall be effective as soon as administratively feasible.

 

(d)                                 Contribution Changes by the Company. 
Notwithstanding the foregoing, to the extent necessary to comply with
Section 3(b), Section 11 and Code Section 423(b)(8), the Plan Administrator may
in its sole discretion direct the Company to reduce a Participant’s payroll
deductions for Contributions during any Contribution Period.  If that occurs,
any such Participant’s payroll deductions shall re-commence, at the Contribution
rate provided in the Participant’s most recently submitted enrollment materials,
at the beginning of the first Contribution Period that is scheduled to end

 

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in the next succeeding calendar year, unless any such limit continues to apply
in that Contribution Period or the Participant terminates his or her payroll
deductions as provided in Section 10.

 

7.                                      Grant of Options.  On the Commencement
Date of each Contribution Period, each eligible Employee participating in such
Contribution Period shall be granted the right and option to purchase (an
“Option”), on the next Purchase Date, a number of Shares determined by dividing
(a) such Employee’s Contributions accumulated before such Purchase Date and
retained in the Participant’s Account as of the Purchase Date by (b) the
applicable Purchase Price, subject to the limitations set forth in Sections
3(b) and 11.

 

No Participant shall have any interest or voting right in Shares covered by any
Option granted to him or her under this Plan until the Option has been
exercised.

 

8.                                      Exercise of Options.  Unless a
Participant withdraws from the Plan or ceases to be an eligible Employee, his or
her Option for a Contribution Period shall be exercised automatically on the
Purchase Date of the Contribution Period; and the maximum number of Shares
(which may include a fractional Share) subject to the Option will be purchased
at the applicable Purchase Price with the accumulated Contributions remaining in
his or her Account.  The Shares purchased upon exercise of an Option hereunder
shall be deemed to be transferred to the Participant on the Purchase Date. 
During a Participant’s lifetime, his or her Options shall be exercisable only by
the Participant.  Any Options held by a Participant shall not be exercisable
after his or her death.

 

9.                                      Delivery of Shares, Holding Periods and
Dividends.

 

(a)                                 Delivery of Shares to ESPP Broker.  As
promptly as practicable after the Purchase Date of each Contribution Period, the
number of Shares purchased by each Participant upon exercise of his or her
Option shall be issued by Issuer and deposited into a brokerage account
established in the Participant’s name with the ESPP Broker, for and on behalf of
the Participant, in accordance with procedures established from time to time by
the Plan Administrator.  The terms of such ESPP Broker account shall be at the
sole discretion of the Plan Administrator and a Participant’s participation in
the Plan is expressly conditioned on his or her acceptance of such terms.

 

(b)                                 Conditions Preceding Issuance of Shares. 
Shares shall not be issued with respect to an Option unless the exercise of the
Option and the issuance and delivery of such Shares pursuant thereto shall
comply with all Applicable Laws, including, without limitation, the Securities
Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, applicable state securities laws and the requirements of any stock
exchange upon which the Shares may then be listed, and shall be further subject
to the approval of counsel for Issuer with respect to such compliance.  As a
further condition to the exercise of an Option, Issuer may require the
Participant exercising the Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel Issuer, such a representation is required by any of the
Applicable Laws mentioned above.

 

(c)                                  Disposition of Shares; Holding Periods;
Brokerage Accounts.  Any ESPP Broker account established to hold a Participant’s
Shares shall be titled solely in the name of the Participant, unless the
Participant is notified by the Plan Administrator that the account may be titled
or re-titled jointly with another person, consistent with the policies of the
ESPP Broker and Applicable Law.  The Participant may dispose of the Shares in
his or her ESPP Broker account at any time after the Required Holding Period,
whether by sale, exchange, gift or other transfer of title, in which case
applicable transaction fees will be charged.  After the Required Holding Period
expires with respect to any Shares purchased by a Participant under the Plan,
the Participant, at his or her option, may also elect

 

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to (i) keep the Shares in their ESPP Broker account; (ii) request a DRS transfer
(book entry registration without a certificate) or (iii) transfer, at the
Participant’s expense, all or some of the Shares credited to the Participant’s
ESPP Broker account to an account with another broker chosen by the Participant.

 

A “Required Holding Period” applies to Shares purchased under the Plan.  Shares
purchased under the Plan may not be sold, assigned, pledged or otherwise
transferred of disposed of during the Required Holding Period.  The “Required
Holding Period” shall mean, with respect to a Share in the Participant’s
Account, the period commencing on the Purchase Date of the Share and ending on
the six-month anniversary of such Date, or, if earlier, upon:

 

(i)            termination of the Participant’s Continuous Status as an Employee
(with the Company and all Subsidiaries) for any reason (including death or
retirement) or any other change in a Participant’s employment status that
results in the Participant no longer being eligible to participate in the Plan;

 

(ii)           the Participant’s receipt of disability benefits under a
long-term disability plan covering Employees of the Company (or, if such
Participant is not employed in a classification that is covered by the plan, a
determination by the Plan Administrator that such Participant would be eligible
to receive disability benefits under the plan if such Participant were employed
in an eligible classification);

 

(iii)          the Participant’s experiencing an Unforeseen Financial Emergency;
or

 

(iv)          the occurrence of any event described in Section 13 that would
give rise to a New Purchase Date.

 

(d)                                 Other Transfer Restrictions.  The Committee
shall have the sole and absolute discretion to change the Required Holding
Period and otherwise add or remove restrictions on the Participant’s right to
transfer or otherwise dispose of Shares.  Any increase in the Required Holding
Period or imposition of additional transfer restrictions shall apply only for
Shares purchased during Contribution Periods that begin after all eligible
Employees have been given notice of the new or increased holding period, which
notice shall be given at least five Business Days before the Commencement Date
of the first Contribution Period in which Shares that will be subject to such
new or increased holding period may be purchased.  Notwithstanding the foregoing
sentence, nothing herein shall be construed to limit the Committee’s authority
to impose such transfer restrictions (either retroactively, prospectively or
both) as the Committee determines are necessary or appropriate to ensure
compliance with Applicable Laws.

 

(e)                                  Dividends.  Dividends paid in the form of
cash, Shares or other non-cash consideration with respect to the Common Stock in
a Participant’s ESPP Broker account established under this Section 9 shall be
credited to such ESPP Broker account.  However, if a Participant holding Shares
in any ESPP Broker account is subject to United States withholding taxes on any
dividends payable with respect to the Shares, all cash dividends payable on
those Shares shall be paid by Issuer net of the applicable United States
withholding taxes on such dividends, which taxes shall be withheld by Issuer and
paid to the appropriate United States tax authorities.  The Company or any other
Subsidiary employing each Participant shall annually notify the Participant, as
part of its periodic reporting obligations under Applicable Laws, of the amount
of such withholding applicable to dividends on the Participant’s Shares in an
ESPP Broker account, in order to enable the Participant to apply for any
applicable tax credit in each country in which the Participant is subject to
taxes on such dividends.

 

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10.                               Voluntary Withdrawal; End of Employee Status.

 

(a)                                 Withdrawal.  A Participant may withdraw from
the Plan by following the established administrative procedures as directed by
the Plan Administrator, or other entity designated by the Plan Administrator.
The withdrawal request will be effective as soon as administratively feasible. 
However, any withdrawal request must be made at least 31 calendar days before
the end of a Contribution Period or such withdrawal request shall not be
effective until the next following Contribution Period.  If a withdrawal request
is effective during a Contribution Period, all of the Participant’s
Contributions credited to his or her Account for that Contribution Period will
be paid to him or her, his or her Option granted for that Contribution Period
will be automatically terminated, and the Participant may not make any further
Contributions for the purchase of Shares until he or she re-enrolls.  In order
to re-enroll, the time period described in Section 6(c)(i) must have elapsed and
the Participant must follow the procedures described in Section 5(a).  A request
by a Participant to reduce his or her payroll deduction percentage to less than
1% will be treated as an election to withdraw from the Plan.

 

(b)                                 End of Employee Status.  Upon termination of
the Participant’s Continuous Status as an Employee before the Purchase Date of a
Contribution Period for any reason including his or her death or retirement, or
if the Participant remains employed by a Subsidiary that ceases to be a
Designated Subsidiary before that Purchase Date, the Contributions credited to
his or her Account for that Contribution Period will be returned to him or her
or, in the case of his or her death, to the person or persons entitled thereto
under Section 15; and his or her Option for that Contribution Period will be
automatically terminated.  Whether the Participant’s Continuous Status as an
Employee has been terminated shall be determined by the Plan Administrator in
its sole discretion.

 

(c)                                  Other Plans.  A Participant’s withdrawal
from the Plan shall not have any effect upon his or her eligibility to
participate in any similar plan that may hereafter be adopted by the Company or
any other Subsidiary.

 

11.                               Limit on Shares Available under this Plan.

 

(a)                                 Maximum Number.  Subject to adjustment as
provided in Section 12, the maximum number of Shares that may be offered and
issued under the Plan shall be 2,000,000.  If any Option granted under the Plan
shall for any reason terminate without having been exercised, at a time when
such maximum number of Shares has not been reached, the Shares not purchased
under such Option shall again become available for offering and issuance under
the Plan.

 

(b)                                 Application of Limit.  If the Plan
Administrator determines that, on a given Purchase Date, the number of Shares
with respect to which Options are to be exercised will exceed (i) the number of
Shares that were available for sale under the Plan on the Commencement Date of
the applicable Contribution Period or (ii) the number of Shares available for
sale under the Plan on such Purchase Date, the Plan Administrator may in its
sole discretion provide that the Company shall make a pro rata allocation of the
Shares available for purchase on such Commencement Date or Purchase Date, as
applicable, in as uniform a manner as shall be practicable and as it shall
determine in its sole discretion to be equitable among all Participants on such
Purchase Date.  If such event occurs at the beginning of a Contribution Period,
the Company may appropriately reduce the payroll deductions to be made pursuant
to the Participants’ authorizations for that Contribution Period, and the
Company shall give notice of such reduction to each Participant affected
thereby.  If such event occurs at the end of a Contribution Period, the Company
shall refund to each affected Participant any Contributions made for that
Contribution Period that cannot be used to purchase Shares.

 

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12.                               Adjustments Upon Changes in Capitalization.

 

(a)                                 Adjustments.  Subject to any required action
by the shareholders of Issuer and subject to Section 13, upon (or, as may be
necessary to effect the adjustment, immediately prior to) a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common Stock
(including any such change in the number of Shares effected in connection with a
change in domicile of Issuer), a merger, consolidation or reorganization or any
spin-off, split-up, or similar extraordinary dividend distribution in respect of
the Common Stock, or an exchange of Common Stock or other securities of Issuer,
or any similar, unusual or extraordinary corporate transaction in respect of the
Common Stock, the Committee shall equitably and proportionately adjust (i) the
number of Shares constituting the Reserves, as well as the maximum number of
Shares that may be purchased by a Participant in a calendar year pursuant to
Section 3(b)(ii); (ii) the maximum number of Shares set forth in Section 11;
(iii) the price per Share covered by each Option that has not yet been
exercised; and/or (iv) the securities, cash or other property deliverable upon
exercise or payment of any outstanding Options, in each case to the extent
necessary to preserve (but not increase) the level of incentives intended by the
Plan and the then-outstanding Options and otherwise to account for the effects
of the transaction.  The Committee’s determination with respect to the
adjustment shall be final, binding and conclusive.  Except as expressly provided
herein, no issue by Issuer of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of Shares
reserved hereunder or subject to an Option hereunder.

 

(b)                                 Compliance with Applicable Laws.  It is
intended that, if possible, any adjustments contemplated by the preceding
paragraph be made in a manner that satisfies Applicable Laws (including, without
limitation and as applicable in the circumstances, Code Sections 424 and 409A)
and accounting requirements (so as to not trigger any charge to earnings with
respect to such adjustment).

 

(c)                                  Authority of Committee.  Without limiting
the generality of Section 14, any good faith determination by the Committee as
to whether an adjustment is required in the circumstances pursuant to this
Section 12, and the extent and nature of any such adjustment, shall be
conclusive and binding on all persons.

 

13.                               Effect of Sale, Merger or Liquidation.  If
either (a) Issuer or its shareholders enter into an agreement to dispose of all
or substantially all of the assets or outstanding capital stock of Issuer by
means of a sale, merger or reorganization in which Issuer will not be the
surviving corporation (other than a reorganization effected primarily to change
the state in which Issuer is incorporated, a merger or consolidation with a
wholly-owned Subsidiary that is a corporation (or is treated as one under the
Code) or any other transaction in which there is no substantial change in the
shareholders of Issuer or their relative stock holdings, regardless of whether
Issuer is the surviving corporation) or (b) Issuer is liquidated, then the
Contribution Period in progress at the time of such transaction or liquidation
shall be shortened and a new Purchase Date shall be set (the “New Purchase
Date”), as of which date the Contribution Period then in progress will
terminate.  The New Purchase Date shall be on or before the date of consummation
of such transaction or liquidation, and the Plan Administrator shall notify each
Participant in writing, at least 10 Business Days before the New Purchase Date,
that the Purchase Date for his or her Option has been changed to the New
Purchase Date and that his or her Option will be exercised automatically on the
New Purchase Date, unless before such date, the Participant has withdrawn from
the Plan for that Contribution Period as provided in Section 10.

 

14.                               Administration.  The Plan Administrator shall
supervise and administer the Plan and shall have full power to adopt, amend and
rescind any rules deemed desirable and appropriate for the administration of the
Plan and not inconsistent with the Plan, to construe and interpret the Plan and
to make all other determinations necessary or advisable for the administration
of the Plan.  The Plan

 

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Administrator may delegate ministerial duties to such of the Company’s other
employees, outside entities and outside professionals as the Plan Administrator
so determines.

 

15.                               Death of Participant.  If Participant dies,
the Company shall deliver any Shares and cash in the Participant’s Account to
the executor or administrator of the estate of the Participant or, if no such
executor or administrator has been appointed (to the knowledge of the Company),
the Company, in its discretion, may deliver such Shares and/or cash to the
spouse or to any one or more dependents or relatives of the Participant, or if
no spouse, dependent or relative is known to the Company, then to such other
person as the Company may designate.

 

16.                               Transferability.  Neither Contributions
credited to a Participant’s Account nor any rights with regard to the exercise
of an Option may be assigned, transferred, pledged or otherwise disposed of in
any way (other than as provided in Section 15) by the Participant or any person
entitled to the Account balance or such rights under Section 15.  Any such
attempt at assignment, transfer, pledge or other disposition shall be without
effect, except that the Company may treat such act as an election by the
Participant to withdraw from the Plan in accordance with Section 10. 
Furthermore, no balance in a Participant’s Account or Shares that have not been
delivered shall be subject to any debts, contracts, liabilities, engagements or
torts of the Participant or any person entitled to the Account balance or such
Shares under Section 15.

 

17.                               Use of Funds.  All Contributions received or
held by the Company under the Plan may be used by the Company for any corporate
purpose; and the Company shall not be obligated to segregate such
Contributions.  The Plan is unfunded and shall not create nor be construed to
create a trust or separate fund of any kind or a fiduciary relationship among
the Company, the Board, the Committee, the Plan Administrator and any
Participant.  To the extent a Participant acquires a right to receive payment
from the Company pursuant to the Plan, such right shall be no greater than the
right of any unsecured general creditor of the Company.

 

18.                               Reports.  Account statements will be made
available (at times directed by the Plan Administrator) to participating
Employees by the Company and/or the ESPP Broker.  For each Contribution Period,
those statements will set forth the amounts of Contributions, the per Share
Purchase Price, the number of Shares purchased, the remaining Account balance,
if any, and the balance of any ESPP Broker account.

 

19.                               Amendment or Termination of Plan.

 

(a)                                 General Authority; Mandatory Termination. 
The Committee may at any time terminate the Plan and may from time to time amend
the Plan in any manner it deems necessary or advisable; provided, however, that
no such action shall adversely affect any Options then outstanding under the
Plan unless such action is required to comply with Applicable Laws; and
provided, further, that no such action of the Committee shall be effective
without the approval of Issuer’s shareholders if such approval is required by
Applicable Laws.  The Plan was approved by the Board on October 20, 2011 and the
Plan will automatically terminate if it is not approved by the stockholders of
Issuer at the first annual meeting of the stockholders of Issuer held following
the Board’s approval of the Plan, with any such termination to be effective on
the date of such meeting.  Upon any termination of the Plan, any balance in a
Participant’s Account shall be refunded to him or her as soon as practicable
thereafter, unless the Committee terminates the Plan on a Purchase Date or by
the Committee’s setting a New Purchase Date with respect to a Contribution
Period then in progress.

 

(b)                                 Administrative Amendments and Similar
Actions.  Without shareholder approval and without regard to whether any
Participant rights may be considered to have been adversely

 

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affected, the Committee shall be entitled to change the Contribution Periods,
limit the frequency and/or number of changes in the amount deducted during a
Contribution Period, establish the exchange ratio applicable to amounts deducted
in a currency other than United States dollars, permit payroll deductions in
excess of the amount designated by a Participant in order to adjust for delays
or mistakes in the Company’s processing of properly completed payroll deduction
elections, establish reasonable waiting and adjustment periods and/or accounting
and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each Participant properly correspond with amounts deducted from
the Participant’s Compensation, and establish such other limitations or
procedures as the Committee determines in its sole discretion to be advisable
and consistent with the Plan.

 

(c)                                  Exhaustion of Reserves.  The Plan shall
automatically terminate on the date when all of the Shares that were reserved
under Section 11 for issuance under the Plan have been purchased by Participants
under the Plan.

 

20.                               International Participants and Employees of
Non-corporate Subsidiaries.

 

(a)                                 Adoption of Special Provisions by Certain
Subsidiaries.  The Committee shall have the power and authority to allow any of
Issuer’s Subsidiaries other than Designated Subsidiaries to adopt and join in
one of the following portions of this Plan that is not intended to comply with
Code Section 423, as described in Section 1(c):

 

(i)                                     A portion for employees of any such
Subsidiary who are generally not subject to income taxation by the United States
(the “Non-U.S. Portion”), or

 

(ii)                                  A portion for employees who are employed
by any non-corporate Subsidiary that is not eligible to be a Designated
Subsidiary because it is described in clause (ii) of the definition of
Subsidiary (the “Non-corporate Portion”).

 

(b)                                 Terms and Conditions for Any Non-U.S.
Portion of the Plan.  If the Committee allows any Subsidiary other than a
Designated Subsidiary to adopt the Non-U.S. Portion of the Plan, the Committee
may allow certain employees of such Subsidiaries who work or reside outside of
the United States an opportunity to acquire Shares in accordance with such
special terms and conditions as the Committee may adopt from time to time, which
terms and conditions may modify the terms and conditions set forth elsewhere in
this Plan, with respect to such employees, to the extent permitted under the
following paragraph (d).  Without limiting the authority of the Committee, the
special terms and conditions that may be adopted with respect to any foreign
country need not be the same for all foreign countries; and may include but are
not limited to the right to participate, procedures for elections to
participate, the payment of any interest with respect to amounts received from
or credited to Accounts held for the benefit of such employees who elect to
participate, the purchase price of any Shares to be acquired, the length of any
Contribution Period, the maximum amount of contributions, credits or Shares that
may be acquired by any such participating employees, and a participating
employee’s rights in the event of his or her death, disability, withdrawal from
participation in the purchase of Shares under the Non-U.S. Portion of the Plan,
or termination of employment.

 

(c)                                  Terms and Conditions for Any Non-corporate
Portion of the Plan.  If the Committee allows any non-corporate Subsidiary to
adopt the Non-corporate Portion of the Plan, the Committee may allow certain
employees of such Subsidiaries an opportunity to acquire Shares in accordance
with such special terms and conditions as the Committee may adopt from time to
time, which terms and conditions may modify the terms and conditions set forth
elsewhere in this Plan, with respect to such employees, to the extent permitted
under the following paragraph (d).  Without limiting the authority of the
Committee, the special terms and conditions that may be adopted with respect to
any non-corporate

 

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Subsidiary need not be the same for all non-corporate Subsidiaries; and may
include but are not limited to the right to participate, procedures for
elections to participate, the payment of any interest with respect to amounts
received from or credited to Accounts held for the benefit of such employees who
elect to participate, the purchase price of any Shares to be acquired, the
length of any Contribution Period, the maximum amount of contributions, credits
or Shares that may be acquired by any such participating employees, and a
participating employee’s rights in the event of his or her death, disability,
withdrawal from participation in the purchase of Shares under the Non-corporate
Portion of the Plan, or termination of employment.

 

(d)                                 Compliance with Applicable Laws; Effect of
Code Section 409A.  Any purchases of Common Stock made pursuant to the
provisions of this Section 20 shall not be subject to the requirements of Code
Section 423, but shall be made pursuant to any other Applicable Laws; provided,
however, the granting of any Options under this Section 20 shall be completed
and administered only in a manner that is intended to either (i) comply with
Code section 409A, or (ii) be exempt from taxation imposed by Code section
409A(a)(1)(A) or (B), so as to prevent any such taxation being imposed on
participants receiving any such grant.  For example, Options granted under this
Section 20 may either:

 

(i)                                     comply with Code Section 409A by either
specifying exercise prices that are not less than the fair market value of the
Common Stock at the date of grant, or specifying Purchase Dates that are fixed
dates or made contingent upon the occurrence of certain earlier or later payment
events permitted under Code section 409A, in either case when the Options are
granted; or

 

(ii)                                  be exempt from Code Section 409A if
granted under the Non-U.S. Portion of the Plan to certain non-resident alien
individuals employed by Subsidiaries that are not Designated Subsidiaries and
operate outside the United States, to the extent the latter type of grant is
treated under Section 1.409A-1(b)(8) of the Treasury Regulations as not
providing deferred compensation for such individuals.

 

21.                               Notices.  All notices or other communications
by a Participant to the Company under or in connection with the Plan shall be
deemed to have been duly given when received in the form specified by the
Company at the location, or by the person, designated by the Company for the
receipt thereof.

 

22.                               Term of Plan; Effective Date.  The Plan shall
become effective upon approval by the Board and shall continue in effect until
all of the Reserves are exhausted or such earlier time as the Plan is terminated
pursuant to Section 19.

 

23.                               Governing Law.  Except as otherwise explicitly
stated in the Plan, the validity, construction and effect of the Plan and any
rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware and applicable United States federal
laws.

 

24.                               Severability.  If any provision of the Plan is
or becomes invalid, illegal, or unenforceable in any jurisdiction or would
disqualify the Plan under any law, such provision shall be construed or deemed
amended to conform to Applicable Laws; or if it cannot be so construed or deemed
amended without materially altering the intent of the Plan, such provision shall
be stricken as to such jurisdiction, and the remainder of the Plan shall remain
in full force and effect.

 

25.                               No Rights as an Employee.  Nothing in the Plan
shall be construed to give any individual (including an Employee or Participant)
the right to remain in the employ of Issuer or any Subsidiary, nor to affect the
right of Issuer or any Subsidiary to terminate the employment of any individual
(including the Employee or Participant) at any time with or without cause. 
Nothing in this Plan shall confer on any person any legal or equitable right
against Issuer or any Subsidiary, or give rise

 

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to any cause of action at law or in equity against Issuer or any Subsidiary. 
Neither the Options granted, any Shares purchased hereunder nor any other
benefits conferred hereby, including the right to purchase Common Stock at a
discount, shall form any part of the wages or salary of any eligible Employee
for purposes of any severance pay or termination damages, irrespective of the
reason for termination of employment.  Under no circumstances shall any
individual ceasing to be an Employee be entitled to any compensation for any
loss of any right or benefit under this Plan that such Employee might otherwise
have enjoyed, but for ceasing to be an Employee, whether such compensation is
claimed by way of damages for wrongful or unfair dismissal, breach of contract
or otherwise.

 

26.                               Taxes.  Participants are responsible for the
payment of all income and other taxes relating to any amounts deemed to
constitute income to them under any Applicable Law arising out of their
participation in the Plan, the purchase Shares pursuant to the Plan and their
subsequent sale or other transfer as well as the distribution of Shares or cash
to the Participant in accordance with the Plan.  By electing to participate in
the Plan, each Participant shall be conclusively deemed to have authorized
Issuer or any Designated Subsidiary that pays Compensation to him or her to make
appropriate tax withholding deductions from that Compensation, which deductions
shall be in addition to any other appropriate payroll deductions, and to pay
such withheld taxes to the appropriate tax authorities in the relevant country
or countries in order to satisfy any of the above tax liabilities of a
Participant under any Applicable Law.

 

27.                               Acceptance of Terms.  By participating in the
Plan, each Participant shall be deemed to have accepted all the conditions of
the Plan and the terms and conditions of any rules and regulations adopted by
the Committee or the Plan Administrator and to have agreed to be fully bound
thereby.

 

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