Nextest Systems Corporation 2006 Equity Incentive Plan



 Exhibit 10.3 
 2006 EQUITY INCENTIVE PLAN 
 OF

 NEXTEST SYSTEMS CORPORATION 
  

	1.	Purpose of this Plan 

 The purpose of this 2006
Equity Incentive Plan is to enhance the long-term stockholder value of Nextest Systems Corporation by offering opportunities to eligible individuals to participate in the growth in value of the equity of Nextest Systems Corporation. 
  

	2.	Definitions and Rules of Interpretation 

 2.1
Definitions. 
 This Plan uses the following defined terms: 
 (a) “Administrator” means the Board or the Committee, or any officer or employee of the Company to whom the Board
or the Committee delegates authority to administer this Plan. 
 (b) “Affiliate” means a
“parent” or “subsidiary” (as each is defined in Section 424 of the Code) of the Company and any other entity that the Board or Committee designates as an “Affiliate” for purposes of this Plan. 
 (c) “Applicable Law” means any and all laws of whatever jurisdiction, within or without the United States, and the
rules of any stock exchange or quotation system on which Shares are listed or quoted, applicable to the taking or refraining from taking of any action under this Plan, including the administration of this Plan and the issuance or transfer of Awards
or Award Shares. 
 (d) “Award” means a Stock Award, SAR, Cash Award, or Option granted in
accordance with the terms of this Plan. 
 (e) “Award Agreement” means the document evidencing the
grant of an Award. 
 (f) “Award Shares” means Shares covered by an outstanding Award or purchased
under an Award. 
  

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 (g) “Awardee” means: (i) a person to whom an Award has been
granted, including a holder of a Substitute Award, (ii) a person to whom an Award has been transferred in accordance with all applicable requirements of Sections 6.5, 7(h), and 17. 
 (h) “Board” means the Board of Directors of the Company. 
 (i) “Cash Award” means the right to receive cash as described in Section 8.3. 
 (j) “Change in Control” means any transaction or event that the Board specifies as a Change in Control under
Section 10.4. 
 (k) “Code” means the Internal Revenue Code of 1986. 
 (l) “Committee” means a committee composed of Company Directors appointed in accordance with the Company’s
charter documents and Section 4. 
 (m) “Company” means Nextest Systems Corporation, a Delaware
corporation. 
 (n) “Company Director” means a member of the Board. 
 (o) “Consultant” means an individual who, or an employee of any entity that, provides bona fide services to the
Company or an Affiliate not in connection with the offer or sale of securities in a capital-raising transaction, but who is not an Employee. 
 (p) “Director” means a member of the Board of Directors of the Company or an Affiliate. 
 (q) “Divestiture” means any transaction or event that the Board specifies as a Divestiture under Section 10.5. 
 (r) “Domestic Relations Order” means a “domestic relations order” as defined
in, and otherwise meeting the requirements of, Section 414(p) of the Code, except that reference to a “plan” in that definition shall be to this Plan. 
 (s) “Effective Date” means the first date of the sale by the Company of shares
of its capital stock in an initial public offering pursuant to a registration statement on Form S-1 filed with the SEC. 
 (t)
“Employee” means a regular employee of the Company or an Affiliate, including an officer or Director, who is treated as an employee in the personnel records of the Company or an Affiliate, but not individuals who are
classified by the Company or an Affiliate as: (i) leased from or otherwise employed by a third party, 

  

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(ii) independent contractors, or (iii) intermittent or temporary workers. The Company’s or an Affiliate’s classification of an individual
as an “Employee” (or as not an “Employee”) for purposes of this Plan shall not be altered retroactively even if that classification is changed retroactively for another purpose as a result of an audit, litigation or otherwise. An
Awardee shall not cease to be an Employee due to transfers between locations of the Company, or between the Company and an Affiliate, or to any successor to the Company or an Affiliate that assumes the Awardee’s Options under Section 10.
Neither service as a Director nor receipt of a director’s fee shall be sufficient to make a Director an “Employee.” 
 (u) “Exchange Act” means the Securities Exchange Act of 1934. 
 (v)
“Executive” means, if the Company has any class of any equity security registered under Section 12 of the Exchange Act, an individual who is subject to Section 16 of the Exchange Act or who is a “covered
employee” under Section 162(m) of the Code, in either case because of the individual’s relationship with the Company or an Affiliate. If the Company does not have any class of any equity security registered under Section 12 of
the Exchange Act, “Executive” means any (i) Director, (ii) officer elected or appointed by the Board, or (iii) beneficial owner of more than 10% of any class of the Company’s equity securities. 
 (w) “Expiration Date” means, with respect to an Award, the date stated in the Award Agreement as the expiration
date of the Award or, if no such date is stated in the Award Agreement, then the last day of the maximum exercise period for the Award, disregarding the effect of an Awardee’s Termination or any other event that would shorten that period.

 (x) “Fair Market Value” means the value of Shares as determined under Section 18.2.

 (y) “Fundamental Transaction” means any transaction or event described in Section 10.3.

 (z) “Grant Date” means the date the Administrator approves the grant of an Award. However, if the
Administrator specifies that an Award’s Grant Date is a future date or the date on which a condition is satisfied, the Grant Date for such Award is that future date or the date that the condition is satisfied. 
 (aa) “Incentive Stock Option” means an Option intended to qualify as an incentive stock option under
Section 422 of the Code and designated as an Incentive Stock Option in the Award Agreement for that Option. 
 (bb)
“Nonstatutory Option” means any Option other than an Incentive Stock Option. 
  

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 (cc) “Non-Employee Director” means any person who is a member of
the Board but is not an Employee of the Company or any Affiliate of the Company and has not been an Employee of the Company or any Affiliate of the Company at any time during the preceding twelve months. Service as a Director does not in itself
constitute employment for purposes of this definition. 
 (dd) “Objectively Determinable Performance
Condition” shall mean a performance condition (i) that is established (A) at the time an Award is granted or (B) no later than the earlier of (1) 90 days after the beginning of the period of
service to which it relates, or (2) before the elapse of 25% of the period of service to which it relates, (ii) that is uncertain of achievement at the time it is established, and (iii) the achievement of which is determinable by a
third party with knowledge of the relevant facts. Examples of measures that may be used in Objectively Determinable Performance Conditions include net order dollars, net profit dollars, net profit growth, net revenue dollars, revenue growth,
individual performance, earnings per share, return on assets, return on equity, and other financial objectives, objective customer satisfaction indicators and efficiency measures, each with respect to the Company and/or an Affiliate or individual
business unit. 
 (ee) “Officer” means an officer of the Company as defined in Rule 16a-1 adopted
under the Exchange Act. 
 (ff) “Option” means a right to purchase Shares of the Company granted under
this Plan. 
 (gg) “Option Price” means the price payable under an Option for Shares, not including
any amount payable in respect of withholding or other taxes. 
 (hh) “Option Shares” means Shares
covered by an outstanding Option or purchased under an Option. 
 (ii) “Plan” means this 2006 Equity
Incentive Plan of Nextest Systems Corporation. 
 (jj) “Prior Plans” means the
Company’s 1998 Equity Incentive Plan. 
 (kk) “Purchase Price” means the price payable under a
Stock Award for Shares, not including any amount payable in respect of withholding or other taxes. 
 (ll) “Rule
16b-3” means Rule 16b-3 adopted under Section 16(b) of the Exchange Act. 
 (mm) “SAR” or
“Stock Appreciation Right” means a right to receive cash based on a change in the Fair Market Value of a specific number of Shares pursuant to an Award Agreement, as described in Section 8.1. 
  

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 (nn) “Securities Act” means the Securities Act of 1933.

 (oo) “Share” means a share of the common stock of the Company or other securities substituted for
the common stock under Section 10. 
 (pp) “Stock Award” means an offer by the Company to sell
shares subject to certain restrictions pursuant to the Award Agreement as described in Section 8.2 or, as determined by the Committee, a notional account representing the right to be paid an amount based on Shares. Types of Awards which may be
granted as Stock Awards include such awards as are commonly known as restricted stock, deferred stock, restricted stock units, performance shares, phantom stock or similar types of awards as determined by the Administrator. 
 (qq) “Substitute Award” means a Substitute Option, Substitute SAR or Substitute Stock Award granted in accordance
with the terms of this Plan. 
 (rr) “Substitute Option” means an Option granted in substitution for,
or upon the conversion of, an option granted by another entity to purchase equity securities in the granting entity. 
 (ss)
“Substitute SAR” means a SAR granted in substitution for, or upon the conversion of, a stock appreciation right granted by another entity with respect to equity securities in the granting entity. 
 (tt) “Substitute Stock Award” means a Stock Award granted in substitution for, or upon the conversion of, a stock
award granted by another entity to purchase equity securities in the granting entity. 
 (uu) “Termination”
means that the Awardee has ceased to be, with or without any cause or reason, an Employee, Director or Consultant. However, unless so determined by the Administrator, or otherwise provided in this Plan, “Termination” shall not
include a change in status from an Employee, Consultant or Director to another such status. An event that causes an Affiliate to cease being an Affiliate shall be treated as the “Termination” of that Affiliate’s Employees, Directors,
and Consultants. 
 2.2 Rules of Interpretation. Any reference to a “Section,” without more, is to a Section of this Plan.
Captions and titles are used for convenience in this Plan and shall not, by themselves, determine the meaning of this Plan. Except when otherwise indicated by the context, the singular includes the plural and vice versa. Any reference to a statute
is also a reference to the applicable rules and regulations adopted under that statute. Any reference to a statute, rule or regulation, or to a section of a statute, rule or regulation, is a reference to that statute, rule, regulation, or section as
amended from time to time, both before and after the Effective Date and including any successor provisions. 
  

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	3.	Shares Subject to this Plan; Term of this Plan 

 3.1
Number of Award Shares. The Shares issuable under this Plan shall be authorized but unissued or reacquired Shares, including Shares repurchased by the Company on the open market. The number of Shares initially reserved for issuance over
the term of this Plan shall be 1,000,000. Notwithstanding the foregoing, the number of Shares reserved for issuance under the Plan shall be increased by (i) the number of Shares available for issuance, as of the Effective Date, under the Prior
Plans as last approved by the Company’s stockholders, (ii) those Shares issued under the Prior Plans that are forfeited or repurchased by the Company or that are issuable upon exercise of awards granted pursuant to the Prior Plans that
expire or become unexercisable for any reason without having been exercised in full after the Effective Date and (iii) any Shares withheld on a net basis to pay either the exercise price or withholding obligation. The maximum number of Shares
shall be cumulatively increased on the first January 1 after the Effective Date and each January 1 thereafter for nine more years, by a number of Shares equal to the lesser of (a) the number of Shares required to replenish the
remaining pool to one million shares, or (b) if specifically addressed by the Board, a number of Shares set by the Board. When an Award is granted, the maximum number of Shares that may be issued under this Plan shall be reduced by the
number of Shares covered by that Award or estimated by the Board to be issued under the Award. However, if an Award later terminates or expires without having been exercised in full, the maximum number of Shares that may be issued under this Plan
shall be increased by the number of Shares that were covered by, but not purchased under, that Award. 
 3.2 Source of Shares. Award
Shares may be: (a) Shares that have never been issued, (b) Shares that have been issued but are no longer outstanding, or (c) Shares that are outstanding and are acquired to discharge the Company’s obligation to deliver Award
Shares. 
 3.3 Term of this Plan 
 (a) This Plan shall be effective on, and Awards may be granted under this Plan on and after, the earliest the date on which the Plan has been both adopted by the Board and approved by the Company’s stockholders.
Upon effectiveness of this Plan, no additional awards will be made under the Prior Plans. 
 (b) Subject to the provisions of
Section 14, Awards may be granted under this Plan for a period of ten years from the earlier of the date on which the Board approves this Plan and the date the Company’s stockholders approve this Plan. Accordingly, Awards may not be
granted under this Plan after the 10th anniversary of the date determined in the preceding sentence. 
  

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	4.	Administration 

 4.1 General 
 (a) The Board shall have ultimate responsibility for administering this Plan. To the extent permitted by Applicable Law, the Board may
delegate certain of its responsibilities to a Committee, which shall consist of at least two members of the Board. In addition, to the extent permitted by Applicable Law, the Board or the Committee may further delegate its responsibilities to any
Employee of the Company or any Affiliate. Where this Plan specifies that an action is to be taken or a determination made by the Board, only the Board may take that action or make that determination. Where this Plan specifies that an action is to be
taken or a determination made by the Committee, only the Committee may take that action or make that determination. Where this Plan references the “Administrator,” the action may be taken or determination made by the Board, the Committee,
or other Administrator. However, only the Board or the Committee may approve grants of Awards to Executives, and an Administrator other than the Board or the Committee may grant Awards only within the guidelines established by the Board or
Committee. Moreover, all actions and determinations by any Administrator are subject to the provisions of this Plan. 
 (b) So
long as the Company has registered and outstanding a class of equity securities under Section 12 of the Exchange Act and to the extent necessary or helpful to comply with Applicable Law with respect to officers and directors subject to
Section 16 of the Exchange Act and/or others, the Committee shall consist of Company Directors who are “Non-Employee Directors” as defined in Rule 16b-3 and, after the expiration of any transition period permitted by Treasury
Regulations Section 1.162-27(h)(3), who are “outside directors” as defined in Section 162(m) of the Code. 
 4.2
Authority of the Board or the Committee. Subject to the other provisions of this Plan, the Board or the Committee shall have the authority to: 
 (a) grant Awards, including Substitute Awards; 
 (b) determine the Fair Market Value of
Shares; 
 (c) determine the Option Price and the Purchase Price of Awards; 
 (d) select the Awardees; 
 (e) determine the times Awards are granted; 
 (f) determine the number of Shares subject to
each Award; 
 (g) determine the methods of payment that may be used to purchase Award Shares; 
  

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 (h) determine the methods of payment that may be used to satisfy withholding tax
obligations; 
 (i) determine the other terms of each Award, including but not limited to the time or times at which Awards
may be exercised, whether and under what conditions an Award is assignable, and whether an Option is a Nonstatutory Option or an Incentive Stock Option; 
 (j) modify or amend any Award; 
 (k) authorize any person to sign any Award Agreement or
other document related to this Plan on behalf of the Company; 
 (l) determine the form of any Award Agreement or other
document related to this Plan, and whether that document, including signatures, may be in electronic form; 
 (m) interpret
this Plan and any Award Agreement or document related to this Plan; 
 (n) correct any defect, remedy any omission, or
reconcile any inconsistency in this Plan, any Award Agreement or any other document related to this Plan; 
 (o) adopt, amend,
and revoke rules and regulations under this Plan, including rules and regulations relating to sub-plans and Plan addenda; 
 (p) adopt, amend, and revoke special rules and procedures which may be inconsistent with the terms of this Plan, set forth (if the Administrator so chooses) in sub-plans regarding (for example) the operation and administration of this Plan
and the terms of Awards, if and to the extent necessary or useful to accommodate non-U.S. Applicable Laws and practices as they apply to Awards and Award Shares held by, or granted or issued to, persons working or resident outside of the United
States or employed by Affiliates incorporated outside the United States; 
 (q) determine whether a transaction or event
should be treated as a Change in Control, a Divestiture or neither; 
 (r) determine the effect of a Fundamental Transaction
and, if the Board determines that a transaction or event should be treated as a Change in Control or a Divestiture, then the effect of that Change in Control or Divestiture; and 
 (s) make all other determinations the Administrator deems necessary or advisable for the administration of this Plan. 
  

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 4.3 Scope of Discretion. Subject to the provisions of this Section 4.3, on all matters for
which this Plan confers the authority, right or power on the Board, the Committee, or other Administrator to make decisions, that body may make those decisions in its sole and absolute discretion. Those decisions will be final, binding and
conclusive. In making its decisions, the Board, Committee or other Administrator need not treat all persons eligible to receive Awards, all Awardees, all Awards or all Award Shares the same way. Notwithstanding anything herein to the contrary, and
except as provided in Section 14.3, the discretion of the Board, Committee or other Administrator is subject to the specific provisions and specific limitations of this Plan, as well as all rights conferred on specific Awardees by Award
Agreements and other agreements. 
  

	5.	Persons Eligible to Receive Awards 

 5.1 Eligible
Individuals. Awards (including Substitute Awards) may be granted to, and only to, Employees, Directors and Consultants, including to prospective Employees, Directors and Consultants conditioned on the beginning of their service for the Company
or an Affiliate. However, Incentive Stock Options may only be granted to Employees, as provided in Section 7(g). 
 5.2
Section 162(m) Limitation. 
 (a) Options and SARs. Subject to the provisions of this Section 5.2, for
so long as the Company is a “publicly held corporation” within the meaning of Section 162(m) of the Code: (i) no Employee may be granted one or more SARs and Options within any fiscal year of the Company under this Plan to
purchase more than 1,500,000 Shares under Options or to receive compensation calculated with reference to more than that number of Shares under SARs, subject to adjustment pursuant to Section 10, (ii) Options and SARs may be granted to an
Executive only by the Committee (and, notwithstanding anything to the contrary in Section 4.1(a), not by the Board). If an Option or SAR is cancelled without being exercised or if the Option Price of an Option is reduced, that cancelled or
repriced Option or SAR shall continue to be counted against the limit on Awards that may be granted to any individual under this Section 5.2. 
 (b) Cash Awards and Stock Awards. Any Cash Award or Stock Award intended as “qualified performance-based compensation” within the meaning of Section 162(m) of the Code must vest or become
exercisable contingent on the achievement of one or more Objectively Determinable Performance Conditions. The Committee shall have the discretion to determine the time and manner of compliance with Section 162(m) of the Code. 
  

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	6.	Terms and Conditions of Options 

 The following
rules apply to all Options: 
 6.1 Price. Except as specifically permitted by the Committee, after taking into account the accounting,
disclosure and other ramifications, including the restrictions applicable to discounted stock options under Code Section 409A, no Option may have an Option Price less than 100% of the Fair Market Value of the Shares on the Grant Date. In no
event will the Option Price of any Option be less than the par value of the Shares issuable under the Option if that is required by Applicable Law. The Option Price of an Incentive Stock Option shall be subject to Section 7(f). 
 6.2 Term. No Option shall be exercisable after its Expiration Date. No Option may have an Expiration Date that is more than ten years after its
Grant Date. Additional provisions regarding the term of Incentive Stock Options are provided in Sections 7(a) and 7(e). 
 6.3
Vesting. Options shall be exercisable: (a) on the Grant Date, or (b) in accordance with a schedule related to the Grant Date, the date the Awardee’s directorship, employment or consultancy begins, or a different date specified
in the Award Agreement. Additional provisions regarding the vesting of Incentive Stock Options are provided in Section 7(c). No Option granted to an individual who is subject to the overtime pay provisions of the Fair Labor Standards Act may be
exercised before the expiration of six months after the Grant Date. 
 6.4 Form and Method of Payment. 
 (a) The Board or Committee shall determine the acceptable form and method of payment for exercising an Option. So long as variable
accounting pursuant to “APB 25” does not apply and the Board or Committee otherwise determines there is no material adverse accounting consequence at the time of exercise, the Board or Committee may require the delivery in Shares for the
value of the net appreciation of the Shares at the time of exercise over the exercise price. The difference between the full number of Shares covered by the exercised portion of the Award and the number of Shares actually delivered shall be restored
to the amount of Shares reserved for issuance under Section 3.1. 
 (b) Acceptable forms of payment for all Option Shares
are cash, check or wire transfer, denominated in U.S. dollars except as specified by the Administrator for non-U.S. Employees or non-U.S. sub-plans. 
 (c) In addition, the Administrator may permit payment to be made by any of the following methods: 
 (i) other Shares, or the designation of other Shares, which (A) if required to avoid variable accounting or other adverse accounting consequences are “mature” shares for such purposes (generally mature shares are those that
have been owned by the Awardee for more than six months on the date of surrender), and (B) have a 

  

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Fair Market Value on the date of surrender equal to the Option Price of the Shares as to which the Option is being exercised; 
 (ii) provided that a public market exists for the Shares and only as permitted under Applicable Law, consideration received by the Company
under a procedure under which a licensed broker-dealer advances funds on behalf of an Awardee or sells Option Shares on behalf of an Awardee (a “Cashless Exercise Procedure”), provided that if the Company extends or arranges
for the extension of credit to an Awardee under any Cashless Exercise Procedure, no Officer or Director may participate in that Cashless Exercise Procedure; 
 (iii) cancellation of any debt owed by the Company or any Affiliate to the Awardee by the Company including without limitation waiver of
compensation due or accrued for services previously rendered to the Company; and 
 (iv) any combination of the methods of
payment permitted by any paragraph of this Section 6.4. 
 (d) The Administrator may also permit any other form or method
of payment for Option Shares permitted by Applicable Law. 
 6.5 Nonassignability of Options. Except as determined by the
Administrator, no Option shall be assignable or otherwise transferable by the Awardee except by will or by the laws of descent and distribution. However, Options may be transferred and exercised in accordance with a Domestic Relations Order and may
be exercised by a guardian or conservator appointed to act for the Awardee. Incentive Stock Options may only be assigned in compliance with Section 7(h). 
 6.6 Substitute Options. The Board may cause the Company to grant Substitute Options in connection with the acquisition by the Company or an Affiliate of equity securities of any entity (including by merger,
tender offer, or other similar transaction) or of all or a portion of the assets of any entity. Any such substitution shall be effective on the effective date of the acquisition. Substitute Options may be Nonstatutory Options or Incentive Stock
Options. Unless and to the extent specified otherwise by the Board, Substitute Options shall have the same terms and conditions as the options they replace, except that (subject to the provisions of Section 10) Substitute Options shall be
Options to purchase Shares rather than equity securities of the granting entity, shall have an Option Price determined by the Board and shall be on terms that, as determined by the Board in its sole and absolute discretion, properly reflect the
substitution. 
 6.7 Repricings. In furtherance of, and not in limitation of the provisions of Section 10, Options may not be
repriced, replaced or regranted through cancellation or modification without approval of the stockholders. 
  

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	7.	Incentive Stock Options. 

 The following rules apply
only to Incentive Stock Options and only to the extent these rules are more restrictive than the rules that would otherwise apply under this Plan. With the consent of the Awardee, or where this Plan provides that an action may be taken
notwithstanding any other provision of this Plan, the Administrator may deviate from the requirements of this Section, notwithstanding that any Incentive Stock Option modified by the Administrator will thereafter be treated as a Nonstatutory Option.

 (a) The Expiration Date of an Incentive Stock Option shall not be later than ten years from its Grant Date, with the result
that no Incentive Stock Option may be exercised after the expiration of ten years from its Grant Date. 
 (b) No Incentive
Stock Option may be granted more than ten years from the date this Plan was approved by the Board. 
 (c) Options intended to
be incentive stock options under Section 422 of the Code that are granted to any single Awardee under all incentive stock option plans of the Company and its Affiliates, including incentive stock options granted under this Plan, may not vest at
a rate of more than $100,000 in Fair Market Value of stock (measured on the grant dates of the options) during any calendar year. For this purpose, an option vests with respect to a given share of stock the first time its holder may purchase that
share, notwithstanding any right of the Company to repurchase that share. Unless the administrator of that option plan specifies otherwise in the related agreement governing the option, this vesting limitation shall be applied by, to the extent
necessary to satisfy this $ 100,000 rule, treating certain stock options that were intended to be incentive stock options under Section 422 of the Code as Nonstatutory Options. The stock options or portions of stock options to be reclassified
as Nonstatutory Options are those with the highest option prices, whether granted under this Plan or any other equity compensation plan of the Company or any Affiliate that permits that treatment. This Section 7(c) shall not cause an Incentive
Stock Option to vest before its original vesting date or cause an Incentive Stock Option that has already vested to cease to be vested. 
 (d) In order for an Incentive Stock Option to be exercised for any form of payment other than those described in Section 6.4(b), that right must be stated at the time of grant in the Award Agreement relating to
that Incentive Stock Option. 
 (e) Any Incentive Stock Option granted to a Ten Percent Stockholder, must have an Expiration
Date that is not later than five years from its Grant Date, with the result that no such Option may be exercised after the expiration of five years from the Grant Date. A “Ten Percent Stockholder” is any person who, directly
or by attribution under Section 424(d) of the Code, owns stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or of any Affiliate on the Grant Date. 
  

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 (f) The Option Price of an Incentive Stock Option shall never be less than the Fair
Market Value of the Shares at the Grant Date. The Option Price for the Shares covered by an Incentive Stock Option granted to a Ten Percent Stockholder shall never be less than 110% of the Fair Market Value of the Shares at the Grant Date.

 (g) Incentive Stock Options may be granted only to Employees. If an Awardee changes status from an Employee to a
Consultant, that Awardee’s Incentive Stock Options become Nonstatutory Options if not exercised within the time period described in Section 7(i) (determined by treating that change in status as a Termination solely for purposes of this
Section 7(g)). 
 (h) No rights under an Incentive Stock Option may be transferred by the Awardee, other than by will or
the laws of descent and distribution. During the life of the Awardee, an Incentive Stock Option may be exercised only by the Optionee. The Company’s compliance with a Domestic Relations Order, or the exercise of an Incentive Stock Option by a
guardian or conservator appointed to act for the Awardee, shall not violate this Section 7(h). 
 (i) An Incentive Stock
Option shall be treated as a Nonstatutory Option if it remains exercisable after, and is not exercised within, the three-month period beginning with the Awardee’s Termination for any reason other than the Awardee’s death or disability (as
defined in Section 22(e) of the Code). In the case of Termination due to death, an Incentive Stock Option shall continue to be treated as an Incentive Stock Option if it remains exercisable after, and is not exercised within, the three-month
period after the Awardee’s Termination provided it is exercised before the Expiration Date. In the case of Termination due to disability, an Incentive Stock Option shall be treated as a Nonstatutory Option if it remains exercisable after, and
is not exercised within, one year after the Awardee’s Termination. 
 (j) An Incentive Stock Option may only be modified
by the Board. 
  

	8.	Stock Appreciation Rights, Stock Awards and Cash Awards 

 8.1 Stock Appreciation Rights. The following rules apply to SARs: 
 (a) General. SARs may be
granted either alone, in addition to, or in tandem with other Awards granted under this Plan. The Administrator may grant SARs to eligible participants subject to terms and conditions not inconsistent with this Plan and determined by the
Administrator. The specific terms and conditions applicable to the Awardee shall be provided for in the Award Agreement. SARs shall be exercisable, in whole or in part, at such times as the Administrator shall specify in the Award Agreement. The
grant or vesting of a SAR may be made contingent on the achievement of Objectively Determinable Performance Conditions. 
  

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 (b) Exercise of SARs. Upon the exercise of a SAR, in whole or in part, an
Awardee shall be entitled to a payment in an amount equal to the excess of the Fair Market Value of a fixed number of Shares covered by the exercised portion of the SAR on the date of exercise, over the Fair Market Value of the Shares covered by the
exercised portion of the SAR on the Grant Date. The amount due to the Awardee upon the exercise of a SAR shall be paid in cash, Shares or a combination thereof, over the period or periods specified in the Award Agreement. An Award Agreement may
place limits on the amount that may be paid over any specified period or periods upon the exercise of a SAR, on an aggregate basis or as to any Awardee. A SAR shall be considered exercised when the Company receives written notice of exercise in
accordance with the terms of the Award Agreement from the person entitled to exercise the SAR. If a SAR has been granted in tandem with an Option, upon the exercise of the SAR, the number of shares that may be purchased pursuant to the Option shall
be reduced by the number of shares with respect to which the SAR is exercised. 
 (c) Nonassignability of SARs.
Except as determined by the Administrator, no SAR shall be assignable or otherwise transferable by the Awardee except by will or by the laws of descent and distribution. Notwithstanding anything herein to the contrary, SARs may be transferred and
exercised in accordance with a Domestic Relations Order. 
 (d) Substitute SARs. The Board may cause the Company
to grant Substitute SARs in connection with the acquisition by the Company or an Affiliate of equity securities of any entity (including by merger) or all or a portion of the assets of any entity. Any such substitution shall be effective on the
effective date of the acquisition. Unless and to the extent specified otherwise by the Board, Substitute SARs shall have the same terms and conditions as the SARS they replace, except that (subject to the provisions of Section 9) Substitute
SARs shall be exercisable with respect to the Fair Market Value of Shares rather than equity securities of the granting entity and shall be on terms that, as determined by the Board in its sole and absolute discretion, properly reflects the
substitution. 
 (e) Repricings. A SAR may not be repriced, replaced or regranted, through cancellation or
modification without the approval of the stockholders. 
 8.2 Stock Awards. The following rules apply to all Stock Awards: 

(a) General. The specific terms and conditions of a Stock Award applicable to the Awardee shall be provided for in the
Award Agreement. The Award Agreement shall state the number of Shares that the Awardee shall be entitled to receive or purchase, the terms and conditions on which the Shares shall vest, the price, if any, to be paid, whether Shares are to be
delivered at the time of grant or at some deferred date specified in the Award Agreement, whether the Award is payable solely in Shares, cash or either and, if applicable, the time within which the Awardee must accept such offer. 

  

 14 








 
The offer shall be accepted by execution of the Award Agreement. The Administrator may require that all Shares subject to a right of repurchase or risk of
forfeiture be held in escrow until such repurchase right or risk of forfeiture lapses. The grant or vesting of a Stock Award may be made contingent on the achievement of Objectively Determinable Performance Conditions. 
 (b) Right of Repurchase. If so provided in the Award Agreement, Award Shares acquired pursuant to a Stock Award may be
subject to repurchase by the Company or an Affiliate if not vested in accordance with the Award Agreement. 
 (c) Form
of Payment. The Administrator shall determine the acceptable form and method of payment for exercising a Stock Award. Acceptable forms of payment for all Award Shares are cash, check or wire transfer, denominated in U.S. dollars except as
specified by the Administrator for non-U.S. sub-plans. In addition, the Administrator may permit payment to be made by any of the methods permitted with respect to the exercise of Options pursuant to Section 6.4. 
 (d) Nonassignability of Stock Awards. Except as determined by the Administrator, no Stock Award shall be assignable
or otherwise transferable by the Awardee except by will or by the laws of descent and distribution. Notwithstanding anything to the contrary herein, Stock Awards may be transferred and exercised in accordance with a Domestic Relations Order.

 (e) Substitute Stock Award. The Board may cause the Company to grant Substitute Stock Awards in connection
with the acquisition by the Company or an Affiliate of equity securities of any entity (including by merger) or all or a portion of the assets of any entity. Unless and to the extent specified otherwise by the Board, Substitute Stock Awards shall
have the same terms and conditions as the stock awards they replace, except that (subject to the provisions of Section 10) Substitute Stock Awards shall be Stock Awards to purchase Shares rather than equity securities of the granting entity and
shall have a Purchase Price and other terms that, as determined by the Board in its sole and absolute discretion, properly reflects the substitution. Any such Substitute Stock Award shall be effective on the effective date of the acquisition.

 8.3 Cash Awards. Cash Awards may be granted either alone, in addition to, or in tandem with other Awards granted under this
Plan. After the Administrator determines that it will offer a Cash Award, it shall advise the Awardee, by means of an Award Agreement, of the terms, conditions and restrictions related to the Cash Award. The grant or vesting of a Cash Award may be
made contingent on the achievement of Objectively Determinable Performance Conditions. 
  

 15 









	9.	Exercise of Awards 

 9.1 In General. An Award
shall be exercisable in accordance with this Plan and the Award Agreement under which it is granted. 
 9.2 Time of Exercise. Options
and Stock Awards shall be considered exercised when the Company receives: (a) written notice of exercise from the person entitled to exercise the Option or Stock Award, (b) full payment, or provision for payment, in a form and method
approved by the Administrator, for the Shares for which the Option or Stock Award is being exercised, and (c) with respect to Nonstatutory Options, payment, or provision for payment, in a form approved by the Administrator, of all applicable
withholding taxes due upon exercise. An Award may not be exercised for a fraction of a Share. SARs shall be considered exercised when the Company receives written notice (in a form approved by the Administrator) of the exercise from the person
entitled to exercise the SAR. 
 9.3 Issuance of Award Shares. The Company shall issue Award Shares in the name of the person properly
exercising the Award. If the Awardee is that person and so requests, the Award Shares shall be issued in the name of the Awardee and the Awardee’s spouse. The Company shall endeavor to issue Award Shares promptly after an Award is exercised or
after the Grant Date of a Stock Award, as applicable. Until Award Shares are actually issued, as evidenced by the appropriate entry on the stock register of the Company or its transfer agent, the Awardee will not have the rights of a stockholder
with respect to those Award Shares, even though the Awardee has completed all the steps necessary to exercise the Award. No adjustment shall be made for any dividend, distribution, or other right for which the record date precedes the date the Award
Shares are issued, except as provided in Section 10. 
 9.4 Termination 
 (a) In General. Except as provided in an Award Agreement or in writing by the Administrator, including in an Award
Agreement, and as otherwise provided in Sections 9.4(b), (c), (d) and (e) after an Awardee’s Termination, the Awardee’s Awards shall be exercisable to the extent (but only to the extent) they are vested and exercisable on
the date of that Termination and only during the 30 days after the Termination, but in no event after the Expiration Date. To the extent the Awardee does not exercise an Award within the time specified for exercise, the Award shall
automatically terminate. 
 (b) Leaves of Absence. Unless otherwise provided in the Award Agreement, no Award
may be exercised more than three months after the beginning of a leave of absence, other than a personal or medical leave approved by the Administrator. Awards shall not continue to vest during a leave of absence, unless otherwise determined 

  

 16 








 
by the Administrator with respect to an approved personal or medical leave with employment guaranteed upon return. 
 (c) Death or Disability. Unless otherwise provided by the Administrator, if an Awardee’s Termination is due to death or
disability (as determined by the Administrator with respect to all Awards other than Incentive Stock Options and as defined by Section 22(e) of the Code with respect to Incentive Stock Options), all Awards of that Awardee to the extent vested
and exercisable at the date of that Termination may be exercised for six months after that Termination, but in no event after the Expiration Date. In the case of Termination due to death, an Award may be exercised as provided in Section 17. In
the case of Termination due to disability, if a guardian or conservator has been appointed to act for the Awardee and been granted this authority as part of that appointment, that guardian or conservator may exercise the Award on behalf of the
Awardee. Death or disability occurring after an Awardee’s Termination shall not cause the Termination to be treated as having occurred due to death or disability. To the extent an Award is not so exercised within the time specified for its
exercise, the Award shall automatically terminate. 
 (d) Divestiture. If an Awardee’s Termination is due
to a Divestiture, the Board may take any one or more of the actions described in Section 10.3 or 10.4 with respect to the Awardee’s Awards. 
 (e) Administrator Discretion. Notwithstanding the provisions of Section 9.4 (a)-(e), the Plan Administrator shall have complete discretion, exercisable either at the time an Award is granted or at
any time while the Award remains outstanding, to: 
 (i) Extend the period of time for which the Award is to remain
exercisable, following the Awardee’s Termination, from the limited exercise period otherwise in effect for that Award to such greater period of time as the Administrator shall deem appropriate, but in no event beyond the Expiration Date; and/or

 (ii) Permit the Award to be exercised, during the applicable post-Termination exercise period, not only with respect to the
number of vested Shares for which such Award may be exercisable at the time of the Awardee’s Termination but also with respect to one or more additional installments in which the Awardee would have vested had the Awardee not been subject to
Termination. 
 (f) Consulting or Employment Relationship. Nothing in this Plan or in any Award Agreement, and
no Award or the fact that Award Shares remain subject to repurchase rights, shall: (A) interfere with or limit the right of the Company or any Affiliate to terminate the employment or consultancy of any Awardee at any time, whether with or
without cause or reason, and with or without the payment of severance or any other compensation or payment, or (B) interfere with the application of any provision 

  

 17 








 
in any of the Company’s or any Affiliate’s charter documents or Applicable Law relating to the election, appointment, term of office, or removal of
a Director. 
  

	10.	Certain Transactions and Events 

 10.1 In
General. Except as provided in this Section 10, no change in the capital structure of the Company, merger, sale or other disposition of assets or a subsidiary, change in control, issuance by the Company of shares of any class of securities
or securities convertible into shares of any class of securities, exchange or conversion of securities, or other transaction or event shall require or be the occasion for any adjustments of the type described in this Section 10. Additional
provisions with respect to the foregoing transactions are set forth in Section 14.3. 
 10.2 Changes in Capital Structure. In the
event of any stock split, reverse stock split, recapitalization, combination or reclassification of stock, stock dividend, spin-off, or similar change to the capital structure of the Company (not including a Fundamental Transaction or Change in
Control), the Board shall make whatever adjustments it concludes are appropriate to: (a) the number and type of Awards that may be granted under this Plan, (b) the number and type of Options that may be granted to any individual under this
Plan, (c) the terms of any SAR, (d) the Purchase Price of any Stock Award, (e) the Option Price and number and class of securities issuable under each outstanding Option, and (f) the repurchase price of any securities substituted
for Award Shares that are subject to repurchase rights. The specific adjustments shall be determined by the Board. Unless the Board specifies otherwise, any securities issuable as a result of any such adjustment shall be rounded down to the next
lower whole security. The Board need not adopt the same rules for each Award or each Awardee. 
 10.3 Fundamental Transactions. Except
for grants to Non-Employee Directors pursuant to Section 11 herein, in the event of (a) a merger or consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction in which there is no substantial change in the stockholders of the Company or their relative stock holdings and the Awards granted under this Plan are assumed,
converted or replaced by the successor corporation, which assumption shall be binding on all participants), (b) a merger in which the Company is the surviving corporation but after which the stockholders of the Company immediately prior to such
merger (other than any stockholder that merges, or which owns or controls another corporation that merges, with the Company in such merger) cease to own their shares or other equity interest in the Company, (c) the sale of all or substantially
all of the assets of the Company, or (d) the acquisition, sale, or transfer of more than 50% of the outstanding shares of the Company by tender offer or similar transaction (each, a “Fundamental Transaction”), any or all
outstanding Awards may be assumed, converted or replaced by the successor corporation (if any), which assumption, conversion or replacement shall be binding on all participants under this Plan. In the alternative, the 
  

 18 








 
successor corporation may substitute equivalent Awards or provide substantially similar consideration to participants as was provided to stockholders (after
taking into account the existing provisions of the Awards). The successor corporation may also issue, in place of outstanding Shares held by the participants, substantially similar shares or other property subject to repurchase restrictions no less
favorable to the participant. In the event such successor corporation (if any) does not assume or substitute Awards, as provided above, pursuant to a transaction described in this Subsection 10.3, the vesting with respect to such Awards shall fully
and immediately accelerate or the repurchase rights of the Company shall fully and immediately terminate, as the case may be, so that the Awards may be exercised or the repurchase rights shall terminate before, or otherwise in connection with the
closing or completion of the Fundamental Transaction or event, but then terminate. Notwithstanding anything in this Plan to the contrary, the Committee may, in its sole discretion, provide that the vesting of any or all Award Shares subject to
vesting or right of repurchase shall accelerate or lapse, as the case may be, upon a transaction described in this Section 10.3. If the Committee exercises such discretion with respect to Options, such Options shall become exercisable in full
prior to the consummation of such event at such time and on such conditions as the Committee determines, and if such Options are not exercised prior to the consummation of the Fundamental Transaction, they shall terminate at such time as determined
by the Committee. Subject to any greater rights granted to participants under the foregoing provisions of this Section 10.3, in the event of the occurrence of any Fundamental Transaction, any outstanding Awards shall be treated as provided in
the applicable agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets. 
 10.4 Changes of Control.
The Board may also, but need not, specify that other transactions or events constitute a “Change in Control”. The Board may do that either before or after the transaction or event occurs. Examples of transactions or events
that the Board may treat as Changes of Control are: (a) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Exchange Act, acquires securities holding 30% or more of the total combined voting power
or value of the Company, or (b) as a result of or in connection with a contested election of Company Directors, the persons who were Company Directors immediately before the election cease to constitute a majority of the Board. In connection
with a Change in Control, notwithstanding any other provision of this Plan, the Board may, but need not, take any one or more of the actions described in Section 10.3. In addition, the Board may extend the date for the exercise of Awards (but
not beyond their original Expiration Date). The Board need not adopt the same rules for each Award or each Awardee. 
 10.5
Divestiture. If the Company or an Affiliate sells or otherwise transfers equity securities of an Affiliate to a person or entity other than the Company or an Affiliate, or leases, exchanges or transfers all or any portion of its assets to
such a person or entity, then the Board may specify that such transaction or event constitutes a “Divestiture”. In connection with a Divestiture, notwithstanding any other provision of 

  

 19 








 
this Plan, the Board may, but need not, take one or more of the actions described in Section 10.3 or 10.4 with respect to Awards of Award Shares held
by, for example, Employees, Directors or Consultants for whom that transaction or event results in a Termination. The Board need not adopt the same rules for each Award or Awardee. 
 10.6 Dissolution. If the Company adopts a plan of dissolution, the Board may cause Awards to be fully vested and exercisable (but not after their
Expiration Date) before the dissolution is completed but contingent on its completion and may cause the Company’s repurchase rights on Award Shares to lapse upon completion of the dissolution. The Board need not adopt the same rules for each
Award or each Awardee. Notwithstanding anything herein to the contrary, in the event of a dissolution of the Company, to the extent not exercised before the earlier of the completion of the dissolution or their Expiration Date, Awards shall
terminate immediately prior to the dissolution. 
  

	11.	Automatic Option Grants to Non-Employee Directors 

 11.1 Automatic Option Grants to Non-Employee Directors 
 (a) Grant Dates. Option grants to
Non-Employee Directors shall be made on the dates specified below: 
 (i) Each Non-Employee Director who is first elected or
appointed to the Board at any time after the effective date of this Plan shall automatically be granted, on the date of such initial election or appointment, an Option to purchase 10,000 Shares (the “Initial Grant”).

 (ii) Commencing in 2007, on the date of each annual stockholders meeting, each individual who is to continue to serve as a
Non-Employee Director shall automatically be granted an Option to purchase 5,000 Shares (the “Annual Grant”). 
 (b) Exercise Price. 
 (i) The Option Price shall be equal to one hundred
percent (100%) of the Fair Market Value of the Shares on the Option grant date. 
 (ii) The Option Price shall be payable
in one or more of the alternative forms authorized pursuant to Section 6.4. Except to the extent the sale and remittance procedure specified thereunder is utilized, payment of the Option Price must be made on the date of exercise. 

 

 20 








 (c) Option Term. Each Option shall have a term of ten (10) years
measured from the Option grant date. 
 (d) Exercise and Vesting of Options. Except as otherwise determined by
the whole Board, the Shares underlying each Option granted pursuant to Section 11.1 shall vest and be exercisable as set forth below. 
 (i) Initial Grant. The Shares underlying each Option issued pursuant to the Initial Grant shall vest and be exercisable as to 25% of the Shares at the end of each full succeeding year from the date of
grant, rounded down to the nearest whole Share, for so long as the Non-Employee Director continuously remains a Director of, or a Consultant to, the Company. 
 (ii) Annual Grant. The Shares underlying each Option issued pursuant to the Annual Grant shall vest and be exercisable as to
100% of the Shares at the earlier of (i) the first anniversary of the date of grant and (ii) the date immediately preceding the date of the annual stockholders meeting for the year following the year of grant of the Option, so long as the
Non-Employee Director continuously remains a Director of, or a Consultant to, the Company through such date. 
 (e)
Termination of Service. The following provisions shall govern the exercise of any Options held by the Awardee at the time the Awardee ceases to serve as a Non-Employee Director, Employee or Consultant: 
 (i) In General. Except as otherwise provided in Section 10.3, after cessation of service (the “Cessation
Date”), the Awardee’s Options shall be exercisable to the extent (but only to the extent) they are vested on the Cessation Date and only during the 30 days after such Cessation Date, but in no event after the Expiration Date. To
the extent the Awardee does not exercise an Option within the time specified for exercise, the Option shall automatically terminate. 
 (ii) Death or Disability. If an Awardee’s cessation of service is due to death or disability (as determined by the Board), all Options of that Awardee, to the extent exercisable upon such Cessation Date, may be exercised
for one year after the Cessation Date, but in no event after the Expiration Date. In the case of a cessation of service due to death, an Option may be exercised as provided in Section 16. In the case of a cessation of service due to disability,
if a guardian or conservator has been appointed to act for the Awardee and been granted this authority as part of that appointment, that guardian or conservator may exercise the Option on behalf of the Awardee. Death or disability occurring after an
Awardee’s cessation of service shall not cause the cessation of service to be treated as having occurred due to death or disability. To the extent an Option is not so exercised within the time specified for its exercise, the Option shall
automatically terminate. 
  

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 (f) Board Discretion. The Awards under this Section 11.1 are not intended as
the exclusive Awards that may be made to Non-Employee Directors under this Plan. The Board may, in its discretion, amend the Plan with respect to the terms of the Awards herein, may add or substitute other types of Awards or may temporarily or
permanently suspend Awards hereunder, all without approval of the Company’s stockholders. 
 11.2 Certain Transactions and Events

 (a) In the event of a Fundamental Transaction while the Awardee remains a Non-Employee Director, the Shares at the time
subject to each outstanding Option held by such Awardee pursuant to Section 11, but not otherwise vested, shall automatically vest in full so that each such Option shall, immediately prior to the effective date of the Fundamental Transaction,
become exercisable for all the Shares as fully vested Shares and may be exercised for any or all of those vested Shares. Immediately following the consummation of the Fundamental Transaction, each Option shall terminate and cease to be outstanding,
except to the extent assumed by the successor corporation (or Affiliate thereof). 
 (b) In the event of a Change in Control
while the Awardee remains a Non-Employee Director, the Shares at the time subject to each outstanding Option held by such Awardee pursuant to Section 11, but not otherwise vested, shall automatically vest in full so that each such Option shall,
immediately prior to the effective date of the Change in Control, become exercisable for all the Shares as fully vested Shares and may be exercised for any or all of those vested Shares. Each such Option shall remain exercisable for such fully
vested Shares until the expiration or sooner termination of the Option term in connection with a Change in Control. 
 (c)
Each Option which is assumed in connection with a Fundamental Transaction shall be appropriately adjusted, immediately after such Fundamental Transaction, to apply to the number and class of securities which would have been issuable to the Awardee
in consummation of such Fundamental Transaction had the Option been exercised immediately prior to such Fundamental Transaction. Appropriate adjustments shall also be made to the Option Price payable per share under each outstanding Option, provided
the aggregate Option Price payable for such securities shall remain the same. To the extent the actual holders of the Company’s outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Fundamental
Transaction, the successor corporation may, in connection with the assumption of the outstanding Options granted pursuant to Section 11, substitute one or more shares of its own common stock with a fair market value equivalent to the cash
consideration paid per share of Common Stock in such Fundamental Transaction. 
 (d) The grant of Options pursuant to
Section 11 shall in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital 

  

 22 








 
or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 
 (e) The remaining terms of each Option granted pursuant to Section 11 shall, as applicable, be the same as terms in effect for Awards
granted under this Plan. Notwithstanding the foregoing, the provisions of Section 9.4 and Section 10 shall not apply to Options granted pursuant to Section 11. 
 11.3 Limited Transferability of Options. Each Option granted pursuant to Section 11 may be assigned in whole or in part during the
Awardee’s lifetime to one or more members of the Awardee’s family or to a trust established exclusively for one or more such family members or to an entity in which the Awardee is majority owner or to the Awardee ‘s former spouse, to
the extent such assignment is in connection with the Awardee ‘s estate or financial plan or pursuant to a Domestic Relations Order. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the
Option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the Option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the
Administrator may deem appropriate. The Awardee may also designate one or more persons as the beneficiary or beneficiaries of his or her outstanding Options under Section 11, and those Options shall, in accordance with such designation,
automatically be transferred to such beneficiary or beneficiaries upon the Awardee ‘s death while holding those Options. Such beneficiary or beneficiaries shall take the transferred Options subject to all the terms and conditions of the
applicable Award Agreement evidencing each such transferred Option, including (without limitation) the limited time period during which the Option may be exercised following the Awardee’s death. 
  

	12.	Withholding and Tax Reporting 

 12.1 Tax
Withholding Alternatives 
 (a) General. Whenever Award Shares are issued or become free of
restrictions, the Company may require the Awardee to remit to the Company an amount sufficient to satisfy any applicable tax withholding requirement, whether the related tax is imposed on the Awardee or the Company. The Company shall have no
obligation to deliver Award Shares or release Award Shares from an escrow or permit a transfer of Award Shares until the Awardee has satisfied those tax withholding obligations. Whenever payment in satisfaction of Awards is made in cash, the payment
will be reduced by an amount sufficient to satisfy all tax withholding requirements. 
 (b) Method of Payment.
The Awardee shall pay any required withholding using the forms of consideration described in Section 6.4(b), except that, in the discretion of the Administrator, the Company may also permit the Awardee to use any of the forms of payment
described in Section 6.4(c). The Administrator, in its sole 

  

 23 








 
discretion, may also permit Award Shares to be withheld to pay required withholding. If the Administrator permits Award Shares to be withheld, the Fair
Market Value of the Award Shares withheld, as determined as of the date of withholding, shall not exceed the amount determined by the applicable minimum statutory withholding rates to the extent the Administrator determines such limit is necessary
or advisable in light of generally accepted accounting principles. 
 12.2 Reporting of Dispositions. Any holder of Option Shares
acquired under an Incentive Stock Option shall promptly notify the Administrator, following such procedures as the Administrator may require, of the sale or other disposition of any of those Option Shares if the disposition occurs during:
(a) the longer of two years after the Grant Date of the Incentive Stock Option and one year after the date the Incentive Stock Option was exercised, or (b) such other period as the Administrator has established. 
  

	13.	Compliance with Law 

 The grant of Awards and the
issuance and subsequent transfer of Award Shares shall be subject to compliance with all Applicable Law, including all applicable securities laws. Awards may not be exercised, and Award Shares may not be transferred, in violation of Applicable Law.
Thus, for example, Awards may not be exercised unless: (a) a registration statement under the Securities Act is then in effect with respect to the related Award Shares, or (b) in the opinion of legal counsel to the Company, those Award
Shares may be issued in accordance with an applicable exemption from the registration requirements of the Securities Act and any other applicable securities laws. The failure or inability of the Company to obtain from any regulatory body the
authority considered by the Company’s legal counsel to be necessary or useful for the lawful issuance of any Award Shares or their subsequent transfer shall relieve the Company of any liability for failing to issue those Award Shares or
permitting their transfer. As a condition to the exercise of any Award or the transfer of any Award Shares, the Company may require the Awardee to satisfy any requirements or qualifications that may be necessary or appropriate to comply with or
evidence compliance with any Applicable Law. 
  

	14.	Amendment or Termination of this Plan or Outstanding Awards 

 14.1 Amendment and Termination. The Board may at any time amend, suspend, or terminate this Plan. 
 14.2 Stockholder
Approval. The Company shall obtain the approval of the Company’s stockholders for any amendment to this Plan if stockholder approval is necessary or desirable to comply with any Applicable Law or with the requirements applicable to the
grant of Awards intended to be Incentive Stock Options. The Board may also, but need not, require that the Company’s stockholders approve any other amendments to this Plan. In order for Awards to be exempt from the rules of Code
Section 162(m), the Board should consider seeking, but is not required to seek, 

  

 24 








 
shareholder approval of the Plan or any plan which awards shares from the Plan at least every five years. 
 14.3 Effect. No amendment, suspension, or termination of this Plan, and no modification of any Award even in the absence of an amendment,
suspension, or termination of this Plan, shall impair any existing contractual rights of any Awardee unless the affected Awardee consents to the amendment, suspension, termination, or modification. Notwithstanding anything herein to the contrary, no
such consent shall be required if the Board determines, in its sole and absolute discretion, that the amendment, suspension, termination, or modification: (a) is required or advisable in order for the Company, this Plan or the Award to satisfy
Applicable Law, to meet the requirements of any accounting standard or to avoid any adverse accounting treatment, or (b) in connection with any transaction or event described in Section 10, is in the best interests of the Company or its
stockholders. The Board may, but need not, take the tax or accounting consequences to affected Awardees into consideration in acting under the preceding sentence. Those decisions shall be final, binding and conclusive. Termination of this Plan shall
not affect the Administrator’s ability to exercise the powers granted to it under this Plan with respect to Awards granted before the termination of Award Shares issued under such Awards even if those Award Shares are issued after the
termination. 
  

	15.	Reserved Rights 

 15.1 Nonexclusivity of this
Plan. This Plan shall not limit the power of the Company or any Affiliate to adopt other incentive arrangements including, for example, the grant or issuance of stock options, stock, or other equity-based rights under other plans. 
 15.2 Unfunded Plan. This Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Awardees, any such accounts will
be used merely as a convenience. The Company shall not be required to segregate any assets on account of this Plan, the grant of Awards, or the issuance of Award Shares. The Company and the Administrator shall not be deemed to be a trustee of stock
or cash to be awarded under this Plan. Any obligations of the Company to any Awardee shall be based solely upon contracts entered into under this Plan, such as Award Agreements. No such obligations shall be deemed to be secured by any pledge or
other encumbrance on any assets of the Company. Neither the Company nor the Administrator shall be required to give any security or bond for the performance of any such obligations. 
  

	16.	Special Arrangements Regarding Award Shares 

 16.1
Escrow of Stock Certificates. To enforce any restrictions on Award Shares, the Administrator may require their holder to deposit the certificates representing Award Shares, with stock powers or other transfer instruments approved by the
Administrator endorsed in blank, with the Company or an agent of the Company to hold 

  

 25 








 
in escrow until the restrictions have lapsed or terminated. The Administrator may also cause a legend or legends referencing the restrictions to be placed on
the certificates. 
 16.2 Repurchase Rights 
 (a) General. If a Stock Award is subject to vesting conditions, the Company shall have the right, during the seven
months after the Awardee’s Termination, to repurchase any or all of the Award Shares that were unvested as of the date of that Termination. The repurchase price shall be determined by the Administrator in accordance with this Section 16.2
which shall be either (i) the Purchase Price for the Award Shares (minus the amount of any cash dividends paid or payable with respect to the Award Shares for which the record date precedes the repurchase) or (ii) the lower of (A) the
Purchase Price for the Shares or (B) the Fair Market Value of those Award Shares as of the date of the Termination. The repurchase price shall be paid in cash. The Company may assign this right of repurchase. 
 (b) Procedure. The Company or its assignee may choose to give the Awardee a written notice of exercise of its repurchase
rights under this Section 16.2. However, the Company’s failure to give such a notice shall not affect its rights to repurchase Award Shares. The Company must, however, tender the repurchase price during the period specified in this
Section 16.2 for exercising its repurchase rights in order to exercise such rights. 
 16.3 Market Standoff. Awardees
shall be prohibited from selling any Shares for a period of 180 days (but subject to such extension or extensions as may be required by the underwriters in order to publish research reports while complying with Rule 2711 of the National Association
of Securities Dealers, Inc.) after the effective date of the registration statement filed under the Securities Act with respect to the initial public offering of the Company’s stock. In addition, if requested by the Company or a representative
of its underwriters, Awardees shall be prohibited from selling some or all of their Shares during a period not to exceed 180 days (but subject to such extension or extensions as may be required by the underwriters in order to publish research
reports while complying with Rule 2711 of the National Association of Securities Dealers, Inc.) after the effective date of any other registration statement of the Company (other than a registration statement on Form S-8 or S-4 or an equivalent).

  

	17.	Beneficiaries 

 An Awardee may file a written
designation of one or more beneficiaries who are to receive the Awardee’s rights under the Awardee’s Awards after the Awardee’s death. An Awardee may change such a designation at any time by written notice. If an Awardee designates a
beneficiary, the beneficiary may exercise the Awardee’s Awards after the Awardee’s death. If an Awardee dies when the Awardee has no living beneficiary designated under this Plan, the Company shall allow the executor or administrator of
the 

  

 26 








 
Awardee’s estate to exercise the Award or, if there is none, the person entitled to exercise the Option under the Awardee’s will or the laws of
descent and distribution. In any case, no Award may be exercised after its Expiration Date. 
  

	18.	Miscellaneous 

 18.1 Governing Law. This
Plan, the Award Agreements and all other agreements entered into under this Plan, and all actions taken under this Plan or in connection with Awards or Award Shares, shall be governed by the laws of the State of Delaware. 
 18.2 Determination of Value. Fair Market Value shall be determined as follows: 
 (a) Listed Stock. If the Shares are traded on any established stock exchange or quoted on a national market system, Fair
Market Value shall be the closing sales price for the Shares as quoted on that stock exchange or system for the date the value is to be determined (the “Value Date”) as reported in The Wall Street Journal or a similar
publication. If no sales are reported as having occurred on the Value Date, Fair Market Value shall be that closing sales price for the last preceding trading day on which sales of Shares are reported as having occurred. If no sales are reported as
having occurred during the five trading days before the Value Date, Fair Market Value shall be the closing bid for Shares on the Value Date. If Shares are listed on multiple exchanges or systems, Fair Market Value shall be based on sales or bid
prices on the primary exchange or system on which Shares are traded or quoted. 
 (b) Stock Quoted by Securities
Dealer. If Shares are regularly quoted by a recognized securities dealer but selling prices are not reported on any established stock exchange or quoted on a national market system, Fair Market Value shall be the mean between the high bid
and low asked prices on the Value Date. If no prices are quoted for the Value Date, Fair Market Value shall be the mean between the high bid and low asked prices on the last preceding trading day on which any bid and asked prices were quoted.

 (c) No Established Market. If Shares are not traded on any established stock exchange or quoted on a national
market system and are not quoted by a recognized securities dealer, the Administrator (following guidelines established by the Board or Committee) will determine Fair Market Value in good faith. The Administrator will consider the following factors,
and any others it considers significant, in determining Fair Market Value: (i) the price at which other securities of the Company have been issued to purchasers other than Employees, Directors, or Consultants, (ii) the Company’s
stockholder’s equity, prospective earning power, dividend-paying capacity, and non-operating assets, if any, and (iii) any other relevant factors, including the economic outlook for the Company and the Company’s industry, the
Company’s position in that 

  

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industry, the Company’s goodwill and other intellectual property, and the values of securities of other businesses in the same industry. 
 18.3 Reservation of Shares. During the term of this Plan, the Company shall at all times reserve and keep available such number of Shares as are
still issuable under this Plan. 
 18.4 Electronic Communications. Any Award Agreement, notice of exercise of an Award, or other
document required or permitted by this Plan may be delivered in writing or, to the extent determined by the Administrator, electronically. Signatures may also be electronic if permitted by the Administrator. 
 18.5 Notices. Unless the Administrator specifies otherwise, any notice to the Company under any Option Agreement or with respect to any Awards or
Award Shares shall be in writing (or, if so authorized by Section 18.4, communicated electronically), shall be addressed to the Secretary of the Company, and shall only be effective when received by the Secretary of the Company. 
 18.6 Conflict. In the event of any conflict between the terms of this Plan and any Award agreement or other document under this Plan, the terms of
the Plan shall prevail. Notwithstanding the foregoing, in connection with documents prepared for Awardees who are residents outside the United States, any terms of an Award Agreement which are necessary or desirable to comply with the foreign
jurisdiction of residence shall prevail even if they conflict with the terms of the Plan. 
  

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