Prepared by R.R. Donnelley Financial -- Amended and Restated 2000 Stock Plan


  
 Exhibit 10.3 
  
 TURNSTONE SYSTEMS, INC. 
  
 2000 STOCK PLAN 
  
 Amended and Restated 
 Adopted by the Board of Directors April 9, 2002 

 
 1.    Purposes of the Plan.    The purposes of this 2000 Stock Plan are: 

 

	 	•
	 
	to attract and retain the best available personnel for positions of substantial responsibility, 
 

  

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	to provide additional incentive to Employees, Directors and Consultants, and 
 

  

	 	•
	 
	to promote the success of the Company’s business. 
 

  
 Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant. Stock Purchase Rights may also be granted under the Plan.

  
 2.    Definitions.    As used herein, the following definitions shall apply:

  
 (a)    “Administrator” means the Board or any of its Committees as shall be administering
the Plan, in accordance with Section 4 of the Plan. 
  
 (b)    “Applicable Laws” means the
requirements relating to the administration of stock option plans under U. S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the
applicable laws of any foreign country or jurisdiction where Options or Stock Purchase Rights are, or will be, granted under the Plan. 
  
 (c)    “Board” means the Board of Directors of the Company. 
  
 (d)    “Cause” means (i) any act of personal dishonesty taken by the Optionee in connection with his responsibilities as an Employee which is intended to result in personal enrichment of the Optionee,
(ii) the Optionee’s conviction of a felony, (iii) any act by the Optionee that constitutes misconduct, and (iv) continued violations by the Optionee of the Optionee’s obligations to the Company. 
  
 (e)    “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (f)    “Committee” means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan.

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

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 (h)    “Company” means Turnstone Systems, Inc., a Delaware
corporation. 
  
 (i)     “Consultant” means any person, including an advisor, engaged by
the Company or a Parent or Subsidiary to render services to such entity. 
  
 (j)     “Director” means a member of the Board. 
  
 (k)    “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code. 
  
 (l)     “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. A Service Provider shall not cease
to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive Stock Options, no
such leave may exceed ninety days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 181st day of such
leave any Incentive Stock Option held by the Optionee shall cease to be treated as an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of a director’s fee by
the Company shall be sufficient to constitute “employment” by the Company. 
  
 (m)   “Exchange
Act” means the Securities Exchange Act of 1934, as amended. 
  
 (n)    “Fair Market
Value” means, as of any date, the value of Common Stock determined as follows: 
  
 (i)    If the
Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales
price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; 
  
 (ii)    If the Common Stock is regularly quoted by a recognized securities
dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 
  
 (iii)    In the absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator. 
  
 (o)    “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and
the regulations promulgated thereunder. 
 

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 (p)    “Inside Director” means a Director who is an
Employee. 
  
 (q)    “IPO Effective Date” means the date upon which the Securities and
Exchange Commission declares the initial public offering of the Company’s Common Stock as effective. 
  
 (r)    “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option. 
  
 (s)    “Notice of Grant” means a written or electronic notice evidencing certain times and conditions of an individual Option or Stock Purchase Right grant. The Notice of Grant is
part of the Option Agreement. 
  
 (t)    “Officer” means a person who is an officer of the
Company within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 
  
 (u)    “Option” means a stock option granted pursuant to the Plan. 
  
 (v)    “Option Agreement” means an agreement between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and
conditions of the Plan. 
  
 (w)    “Option Exchange Program” means a program whereby
outstanding Options are surrendered in exchange for Options with a lower exercise price. 
  
 (x)    “Optioned Stock” means the Common Stock subject to an Option or Stock Purchase Right. 
  
 (y)    “Optionee” means the holder of an outstanding Option or Stock Purchase Right granted under the Plan. 
  
 (z)    “Outside Director” means a Director who is not an Employee. 
  
 (aa)    “Plan” means this 2000 Stock Option Plan, as amended and restated. 
  
 (bb)    “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan.

  
 (cc)    “Restricted Stock Purchase Agreement” means a written agreement between the
Company and the Optionee evidencing the terms and restrictions applying to stock purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the Notice of Grant.

  
 (dd)    “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3,
as in effect when discretion is being exercised with respect to the Plan. 
  
 (ee)    “Section
16(b) “ means Section 16(b) of the Exchange Act. 
  
 (ff)    “Service Provider” means
an Employee, Director or Consultant. 
 

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 (gg)    “Share” means a share of the Common Stock, as
adjusted in accordance with Section 14 of the Plan. 
  
 (hh)    “Stock Purchase Right” means
the right to purchase Common Stock pursuant to Section 11 of the Plan, as evidenced by a Notice of Grant. 
  
 (ii)    “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 3.    Stock Subject to the Plan.    Subject to the provisions of Section 14 of the Plan, the maximum aggregate number of Shares which may
be optioned and sold under the Plan is 5,000,000 Shares, plus the Shares available for future issuance under the Turnstone Systems, Inc. 1998 Stock Plan (the “1998 Stock Plan”) as of the effective date of this Plan and any Shares returned
to the 1998 Stock Plan. The number of Shares reserved for issuance under the Plan shall increase annually on the first day of the Company’s fiscal year beginning in 2000 by an amount of Shares equal to the lesser of (i) 5,000,000 Shares, (ii)
6% of the outstanding Shares on such date or (iii) an amount determined by the Board. The Shares may be authorized, but unissued, or reacquired Common Stock. 
  
 If an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares which were subject thereto
shall become available for future grant or sale under the Plan (unless the Plan has terminated); provided, however, that Shares that have actually been issued under the Plan, whether upon exercise of an Option or Right, shall not be returned to the
Plan and shall not become available for future distribution under the Plan, except that if Shares of Restricted Stock are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the
Plan. 
  
 4.    Administration of the Plan. 
  
 (a)    Procedure. 
  
 (i)    Multiple Administrative Bodies.    The Plan may be administered by different Committees with respect to different groups of Service Providers. 
  
 (ii)    Section 162(m).    To the extent that the Administrator determines it to be desirable to qualify
Options granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more “outside directors” within the meaning of Section 162(m)
of the Code. 
  
 (iii)    Rule 16b-3.    To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3. 
  
 (iv)    Other Administration.    Other than as provided above, the Plan shall be administered by (A) the Board or (B) a Committee, which
committee shall be constituted to satisfy Applicable Laws. 
 

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 (b)    Powers of the Administrator.    Subject
to the provisions of the Plan, and in the case of a Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: 
  
 (i)    to determine the Fair Market Value; 
  
 (ii)    to select the Service Providers to whom Options and Stock Purchase Rights may be granted hereunder; 
  
 (iii)    to determine the number of shares of Common Stock to be covered by each Option and Stock Purchase Right granted hereunder; 
  
 (iv)    to approve forms of agreement for use under the Plan; 
  
 (v)    to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Option or Stock Purchase Right granted hereunder. Such terms and conditions include, but are not
limited to, the exercise price, the time or times when Options or Stock Purchase Rights may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Option or Stock Purchase Right or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 
  
 (vi)    to reduce the exercise price of any Option or Stock Purchase Right to the then current Fair Market Value if the Fair Market Value of the Common Stock covered
by such Option or Stock Purchase Right shall have declined since the date the Option or Stock Purchase Right was granted; 
  
 (vii)    to institute an Option Exchange Program; 
  
 (viii)    to construe and
interpret the terms of the Plan and awards granted pursuant to the Plan; 
  
 (ix)    to prescribe, amend and
rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws; 
  
 (x)    to modify or amend each Option or Stock Purchase Right (subject to Section 16(c) of the Plan), including the discretionary
authority to extend the post-termination exercisability period of Options longer than is otherwise provided for in the Plan; 
  
 (xi)    to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option or Stock Purchase Right that number of Shares having a
Fair Market Value equal to the amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by an Optionee to have Shares
withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; 
 

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 (xii)    to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option or Stock Purchase Right previously granted by the Administrator; 
  
 (xiii)    to make all other determinations deemed necessary or advisable for administering the Plan. 
  
 (c) Effect of Administrator’s Decision.    The Administrator’s decisions, determinations and interpretations shall be final and binding on all Optionees and any other holders of Options or Stock Purchase
Rights. 
  
 5.    Eligibility.    Nonstatutory Stock Options and Stock
Purchase Rights may be granted to Service Providers. Incentive Stock Options may be granted only to Employees. 
  
 6.    Limitations. 
  
 (a)    Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable
for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive
Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. 
  
 (b)    Neither the Plan nor any Option or Stock Purchase Right shall confer upon an Optionee any right with respect to continuing
the Optionee’s relationship as a Service Provider with the Company, nor shall they interfere in any way with the Optionee’s right or the Company’s right to terminate such relationship at any time, with or without Cause. 

 
 (c)    The following limitations shall apply to grants of Options: 
  

(i)    No Service Provider shall be granted, in any fiscal year of the Company, Options to purchase more than 1,000,000 Shares. 
  
 (ii)    In connection with his or her initial service, a Service Provider may be granted Options to purchase up to an additional
2,000,000 Shares, which shall not count against the limit, set forth in subsection (i) above. 
  
 (iii)    The
foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization as described in Section 14. 
  
 (iv)    If an Option is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 14), the cancelled Option will be
counted against the limits set forth in subsections (i) and (ii) above. For this purpose, if the exercise price of an Option is reduced, the transaction will be treated as a cancellation of the Option and the grant of a new Option. 



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 7.    Term of Plan.    Subject to Section 20 of
the Plan, the Plan shall become effective upon its adoption by the Board. It shall continue in effect for a term of ten (10) years unless terminated earlier under Section 16 of the Plan. 
  
 8.    Term of Option.    The term of each Option shall be stated in the Option Agreement. In the case of an Incentive Stock Option, the
term shall be ten (10) years from the date of grant or such shorter term as may be provided in the Option Agreement. Moreover, in the case of an Incentive Stock Option granted to an Optionee who, at the time the Incentive Stock Option is granted,
owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the date of grant or such
shorter term as may be provided in the Option Agreement. 
  
 9.    Option Exercise Price and
Consideration. 
  
 (a)    Exercise Price.    The per share exercise price for
the Shares to be issued pursuant to exercise of an Option shall be determined by the Administrator, subject to the following: 
  
 (i)    In the case of an Incentive Stock Option 
  
 (A)    granted to an Employee
who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than
110% of the Fair Market Value per Share on the date of grant. 
  
 (B)    granted to any Employee other than an
Employee described in paragraph (A) immediately above, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. 
  
 (ii)    In the case of a Nonstatutory Stock Option, the per Share exercise price shall be determined by the Administrator. In the case of a Nonstatutory Stock Option
intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. 

 
 (iii)    Notwithstanding the foregoing, Options may be granted with a per Share exercise price of less than 100% of the
Fair Market Value per Share on the date of grant pursuant to a merger or other corporate transaction. 
  
 (b)    Waiting Period and Exercise Dates.    At the time an Option is granted, the Administrator shall fix the period within which the Option may be exercised and shall determine any conditions
that must be satisfied before the Option may be exercised. 
  
 (c)    Form of
Consideration.    The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine
the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: 
 

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 (i)    cash; 
  
 (ii)    check; 
  
 (iii)    promissory note; 
  
 (iv)    other Shares which (A) in the case of Shares
acquired upon exercise of an option, have been owned by the Optionee for more than six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised; 
  
 (v)    consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan; 
  
 (vi)    a reduction in the amount of any Company
liability to the Optionee, including any liability attributable to the Optionee’s participation in any Company-sponsored deferred compensation program or arrangement; 
  
 (vii)    any combination of the foregoing methods of payment; or 
  
 (viii)    such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws. 
  
 10.    Exercise of Option. 
  
 (a)    Procedure for Exercise; Rights as a Shareholder.    Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as
determined by the Administrator and set forth in the Option Agreement. Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence. An Option may not be exercised for a
fraction of a Share. 
  
 An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of
exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of
payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or
her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder shall exist
with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which
the record date is prior to the date the Shares are issued, except as provided in Section 14 of the Plan. 
 

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 Exercising an Option in any manner shall decrease the number of Shares thereafter available,
both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. 
  
 (b)    Termination of Relationship as a Service Provider.    Subject to Section 14, if an Optionee ceases to be a Service Provider (but not in the event of an Optionee’s change of status
from Employee to Consultant (in which case an Employee’s Incentive Stock Option shall automatically convert to a Nonstatutory Stock Option on the ninety-first (91st) day following such change of status) or from Consultant to Employee), such Optionee may, but only within such period of time as is specified in the Option Agreement (but in no event later
than the expiration date of the term of such Option as set forth in the Option Agreement), exercise his or her Option to the extent that Optionee was entitled to exercise it at the date of such termination. In the absence of a specified time in the
Option Agreement, the Option shall remain exercisable for three (3) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to
the Plan. 
  
 (c)    Disability of Optionee.    If an Optionee ceases to be a
Service Provider as a result of the Optionee’s Disability, the Optionee may, but only within twelve (12) months from the date of such termination (and in no event later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise his or her Option to the extent that the Option is vested on the date of termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion
of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan.

  
 (d)    Death of Optionee.    If an Optionee dies while a Service Provider, the
Option may be exercised at any time within twelve (12) months following the date of death (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee’s estate or by a person who
acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall immediately revert to the Plan. The Option may be exercised by the executor or administrator of the Optionee’s estate or, if none, by the person(s) entitled to exercise the Option under the
Optionee’s will or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (e)    Buyout Provisions.    The Administrator may at any time offer to buy out for a payment in cash or
Shares an Option previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 
 

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 11.    Stock Purchase Rights. 
  
 (a)    Rights to Purchase.    Stock Purchase Rights may be issued either alone, in addition to, or in
tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing or electronically, by
means of a Notice of Grant, of the terms, conditions and restrictions related to the offer, including the number of Shares that the offeree shall be entitled to purchase, the price to be paid, and the time within which the offeree must accept such
offer. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator. 
  
 (b)    Repurchase Option.    Unless the Administrator determines otherwise, the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable upon the voluntary or
involuntary termination of the purchaser’s service with the Company for any reason (including death or Disability). The purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid
by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at a rate determined by the Administrator. 
  
 (c)    Other Provisions.    The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole discretion. 
  
 (d)    Rights as a Shareholder.    Once the Stock Purchase Right is exercised, the purchaser shall have the rights equivalent to those of a shareholder, and shall be a shareholder when his or
her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as
provided in Section 14 of the Plan. 
  
 12.    Non-Transferability of Options and Stock Purchase
Rights.    Unless determined otherwise by the Administrator, an Option or Stock Purchase Right may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the Optionee, only by the Optionee. If the Administrator makes an Option or Stock Purchase Right transferable, such Option or Stock Purchase Right shall contain such additional
terms and conditions as the Administrator deems appropriate. 
  
 13.    Formula Option Grants to Outside
Directors.    Outside Directors shall be granted Options each year in accordance with the following provisions: 
  
 (a)    All Options granted pursuant to this Section shall be Nonstatutory Stock Options and, except as otherwise provided herein, shall be subject to the other terms and conditions of the Plan. 
  
 (b)    Except as provided in subsection (d) below, each person who first becomes an Outside Director on or after the 2002 annual
meeting of stockholders, whether through election by the stockholders of the Company or appointment by the Board to fill a vacancy, shall be
 
 

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automatically granted an Option to purchase 200,000 Shares (the “First Option”), as determined by the Board in its sole and absolute discretion, on the date he or she first becomes an
Outside Director; provided, however, that an Inside Director who ceases to be an Inside Director but who remains a Director shall not receive a First Option. 
  
 (c)    Except as provided in subsection (d) below, each Outside Director shall be automatically granted an Option to purchase 50,000 Shares (a “Subsequent Option”) following each annual
meeting of the stockholders of the Company if (i) such Outside Director has not received any other stock option or stock grant from the Company within the preceding six (6) months and (ii) immediately after such meeting, he or she shall continue to
serve on the Board and shall have served on the Board for at least the preceding six (6) months. 
  
 (d)    Notwithstanding the provisions of subsections (b) and (c) hereof, any exercise of an Option granted before the Company has obtained stockholder approval of the Plan in accordance with Section 20 hereof shall be
conditioned upon obtaining such stockholder approval of the Plan in accordance with Section 20 hereof. 
  
 (e)    The terms of each First Option granted pursuant to this Section shall be as follows: 
  
 (i)    the term of the Option shall be ten (10) years. 
  
 (ii)    the exercise
price per Share shall be 100% of the Fair Market Value per Share on the date of grant of the Option. 
  
 (iii)    the Option shall vest and become exercisable in three (3) equal annual installments on each of the first three anniversaries of its date of grant; provided that the Outside Director shall continue to serve on
the Board on such dates. 
  
 (f)    The terms of each Subsequent Option granted pursuant to this Section shall
be as follows: 
  
 (i)    the term of the Option shall be ten (10) years. 
  
 (ii)    the exercise price per Share shall be 100% of the Fair Market Value per Share on the date of grant of the Option.

  
 (iii)    the Option shall vest and become exercisable on the first anniversary of the date that all stock
options have vested that were granted to the Outside Director by the Company before the Option; provided, however, that the Option shall in all events vest and become exercisable on the last day of its ten-year term; provided, further, that in each
case the Outside Director shall continue to serve on the Board on such date. 
  
 14.    Adjustments Upon
Changes in Capitalization, Merger or Asset Sale. 
  
 (a)    Changes in
Capitalization.    Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Option or Stock Purchase Right, and the number of shares of Common Stock
which have been authorized for
 
 

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issuance under the Plan but as to which no Options or Stock Purchase Rights have yet been granted or which have been returned to the Plan upon cancellation or expiration of an Option or Stock
Purchase Right, as well as the price per share of Common Stock covered by each such outstanding Option or Stock Purchase Right, shall be proportionately adjusted for any increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company.
The conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of 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 of Common Stock subject to an Option or Stock Purchase Right. 
  
 (b)    Dissolution or Liquidation.    In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the
effective date of such proposed transaction. The Administrator in its discretion may provide for an Optionee to have the right to exercise his or her Option or Stock Purchase Right until fifteen (15) days prior to such transaction as to all of the
Optioned Stock covered thereby, including Shares as to which the Option or Stock Purchase Right would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option applicable to any Shares purchased upon
exercise of an Option or Stock Purchase Right shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Option
or Stock Purchase Right will terminate immediately prior to the consummation of such proposed action. 
  
 (c)    Merger or Asset Sale. 
  
 (i)    General.    Subject to subsections (ii) and (iii) below, in the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets of the
Company (a “Merger”), each outstanding Option and Stock Purchase Right shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of the successor corporation (the “Successor
Corporation”). In the event that the Successor Corporation refuses to assume or substitute for the Option or Stock Purchase Right, the Optionee shall fully vest in and have the right to exercise the Option or Stock Purchase Right as to all of
the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option or Stock Purchase Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Merger, the
Administrator shall notify the Optionee in writing or electronically that the Option or Stock Purchase Right shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the Option or Stock Purchase Right
shall terminate upon the expiration of such period. For the purposes of this Section 14(c), the Option or Stock Purchase Right shall be considered assumed if, following the Merger, the option or right confers the right to purchase or receive, for
each Share of Optioned Stock subject to the Option or Stock Purchase Right immediately prior to the Merger, the consideration (whether stock, cash, or other securities or property) received in the Merger by holders of Common Stock for each Share
 
 

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held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the Merger is not solely common stock of the Successor Corporation or its Parent, the Administrator may, with the consent of the Successor Corporation, provide for the consideration to be
received upon the exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock subject to the Option or Stock Purchase Right, to be solely common stock of the Successor Corporation or its Parent equal in fair market value to the
per share consideration received by holders of Common Stock in the Merger. 
  
 (ii)    Employee and
Consultant Options. 
  
 (A)    General.    In the event of a Merger in which
the stockholders immediately prior to the Merger hold less than 50% of the outstanding voting equity securities of the Successor Corporation immediately after such Merger (a “Change of Control Merger”), then (i) the vesting of each
outstanding Option and Stock Purchase Right shall be deemed vested to the extent each such outstanding Option and Stock Purchase Right would have been vested on the date twelve (12) months following the effectiveness of the Change of Control Merger
and (ii) each outstanding Option and Stock Purchase Right held by an Employee or Consultant (and granted to such person in such capacity) shall be assumed or an equivalent option or right substituted by the Successor Corporation. In the event that
the Successor Corporation refuses to assume or substitute for the Option or Stock Purchase Right, the Employee or Consultant shall, as set forth in subsection (i) above, fully vest in and have the right to exercise such Option or Stock Purchase
Right as to all of the Optioned Stock, including Shares as to which the Employee or Consultant would not otherwise be vested or exercisable. 
  
 (B)    Employee and Consultant Options Following Assumption or Substitution.    Following an assumption or substitution in connection with a Merger or Change of Control
Merger, if an Employee or Consultant’s status as an Employee (or employee) or Consultant (or consultant) of the Successor Corporation, as applicable, is terminated by the Successor Corporation as a result of an involuntary termination (other
than for Cause) within twelve months following the Merger, the Optionee shall fully vest in and have the right to exercise Optionee’s Option or Stock Purchase Right as to all of the Optioned Stock, including Shares as to which Optionee would
not otherwise be vested or exercisable. Thereafter, the Option or Stock Purchase Right shall remain exercisable in accordance with Section 10. 
  
 (iii)    Outside Director Options.    In the event of a Change of Control Merger, each outstanding Option and Stock Purchase Right held by an Outside Director (and
granted to such person in such capacity) shall fully vest as to all of the Optioned Stock, including Shares as to which the Outside Director would not otherwise be vested or exercisable. If an Option or Stock Purchase Right becomes fully vested and
exercisable as provided in this paragraph, the Administrator shall notify the Optionee in writing or electronically that the Option or Stock Purchase Right shall be fully vested and exercisable for a period of fifteen (15) days from the date of such
notice, and the Option or Stock Purchase Right shall terminate upon the expiration of such period. 
  
 15.    Date of Grant.    The date of grant of an Option or Stock Purchase Right shall be, for all purposes, the date on which the Administrator makes the determination granting such Option or
 
 

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Stock Purchase Right, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each Optionee within a reasonable time after the date of
such grant. 
  
 16.    Amendment and Termination of the Plan. 
  
 (a)    Amendment and Termination.    The Board may at any time amend, alter, suspend or terminate the
Plan. 
  
 (b)    Shareholder Approval.    The Company shall obtain shareholder
approval of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. 
  
 (c)    Effect of Amendment or Termination.    No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between
the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect
to Options granted under the Plan prior to the date of such termination. 
  
 17.    Conditions Upon Issuance
of Shares. 
  
 (a)    Legal Compliance.    Shares shall not be issued pursuant
to the exercise of an Option or Stock Purchase Right unless the exercise of such Option or Stock Purchase Right and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel
for the Company with respect to such compliance. 
  
 (b)    Investment
Representations.    As a condition to the exercise of an Option or Stock Purchase Right, the Company may require the person exercising such Option or Stock Purchase Right 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 for the Company, such a representation is required. 
  
 18.    Inability to Obtain Authority.    The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been obtained. 
  
 19.    Reservation
of Shares.    The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  
 20.    Shareholder Approval.    The Plan shall be subject to approval by the shareholders of the Company
within twelve (12) months after the date the Plan is adopted. Such shareholder approval shall be obtained in the manner and to the degree required under Applicable Laws. 
 

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 APPENDIX A 
  
 Rules for French Option Grants 
  
 The following rules shall apply in the case of Option
grants to French residents. 
  
 1.    Definitions.    As used herein, the following
definitions shall apply: 
  
 (a)    “Applicable Laws” means the legal requirements relating to
the administration of stock option plans under French corporate, securities, and tax laws. 
  
 (b)    “Disability” means total and permanent disability, as defined under Applicable Laws. 
  
 (c)    “Employee” means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company, (i) who does not own more than 10% of the
voting power of all classes of stock of the Company, or any Parent or Subsidiary of the Company, and (ii) who is a resident of the Republic of France. 
  
 (d)    “Fair Market Value” means, as of any date, the dollar value of Common Stock determined as follows: 
  

	 	(i)
	 
	If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market of the Nasdaq Stock Market,
its Fair Market Value shall be the greater of (i) the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market trading day prior to the time of determination, as
reported in The Wall Street Journal or such other source as the Administrator deems reliable or (ii) the average quotation price for the last 20 days preceding the date of determination for such stock (or the average closing bid for such 20
day period, if no sales were reported) as quoted on such exchange or system and reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
 

  

	 	(ii)
	 
	If the Common Stock is quoted on the Nasdaq Stock market (but not on the Nasdaq National Market thereof) or regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the higher of (i) the average of the high bid and low asked prices for the Common Stock for the last market trading day prior to the time of determination or (ii) the mean between the high bid
and low asked prices for the Common Stock for the last 20 days preceding the date of determination, as applicable; or 
 

  

	 	(iii)
	 
	In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator. 



 

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 2.    Eligibility.    Options granted pursuant
to this Appendix A may be granted only to Employees; provided, however, that the Président Directeur Général, the Directeur Général and other directors who are also Employees of a Subsidiary may be
granted Options hereunder. 
  
 3.    Term of Plan.    Options may be granted under
this Appendix A from the date of the adoption of the Plan by the Board. It shall continue in effect until the date five years from the date of its adoption, unless terminated earlier under Section 14 of the Plan. 
  
 4.    Option Price.    The Option price for the Shares to be issued pursuant to exercise of an Option
shall be determined by the Administrator upon the date of grant of the Option and stated in the Option Agreement, but in no event shall be lower than one hundred percent (100%) of the Fair Market Value on the date the Option is granted. The Option
Price cannot be modified while the Option is outstanding, except as required by Applicable Laws. 
  
 5.    Exercise of Option; Restriction on Sale. 
  
 (a)    Options granted
hereunder may be exercised at any time after the second anniversary of the date of grant to the extent they have vested. Options granted hereunder shall vest, subject to Optionee’s continuing status as an Employee on such dates, in accordance
with the following vesting schedule: 50% of the Shares subject to the Option shall vest on the second (2nd) anniversary
of the Option’s date of grant (the “Initial Vest Date”) and 1/48th of the Shares subject to the Option
shall vest each month thereafter, so that 100% of the Optioned Stock shall be exercisable after four (4) years. 
  
 An Option shall
be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the
Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the
Optionee or, if required by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no
right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the shares are issued, except as provided in Section 12 of the Plan. 
  
 (b)    The Shares subject to this Option may not be transferred, assigned or hypothecated in any manner otherwise than by will or by the laws of descent or
distribution before the date three (3) years from the Initial Vest Date; provided, however, that the duration of this restriction on sale shall be automatically adjusted to conform with any changes to the holding period required for favorable tax
and social security treatment under Applicable Laws. 
  
 (c)    Termination of Employment
Relationship.    In the event that an Optionee’s status as an Employee terminates (other than upon the Optionee’s death or Disability), the Optionee may exercise his or her Option, but only within such period of
time as is determined by the
 
 

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Administrator and only to the extent that the Optionee’s Option has vested at the date of termination (but in no event later than the expiration of the term of such Option as set forth in
the Option Agreement). If, at the date of termination, the Optionee’s Option has not fully vested, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or
her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (d)    Disability of Optionee.    In the event that an Optionee’s status as an Employee terminates as a result of the Optionee’s Disability, the Optionee may
exercise his or her Option at any time within twelve (12) months from the date of such termination, but only to the extent that the Optionee’s Option has vested at the date of such termination (and in no event later than the expiration of the
term of such Option as set forth in the Option Agreement). If, at the date of termination, the Optionee’s Option has not fully vested, the Shares covered by the unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (e)    Death of Optionee.    In the event of the death of an Optionee while an Employee, the Option may be exercised at any time within
twelve (12) months following the date of death by the Optionee’s estate or by a person who acquired the right to exercise the Option by bequest or inheritance, but only to the extent that the Optionee’s Option has vested at the date of
death (and in no event later than the expiration of the term of such Option as set forth in the Option Agreement). If, at the time of death, the Optionee’s Option has not fully vested, the Shares covered by the unexercisable portion of the
Option shall revert to the Plan. If, after death, the Optionee’s estate or a person who acquired the right to exercise the Option by bequest or inheritance does not exercise the Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall immediately revert to the Plan. 
 

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