exv10w1






Exhibit 10.1




ONCOTHYREON INC.




2010 EMPLOYEE STOCK PURCHASE PLAN




     1. Purpose. The purpose of the Plan is to provide employees of the Company and its
Designated Subsidiaries with an opportunity to purchase Common Stock through accumulated
Contributions (as defined in Section 2(j) below). The Company’s intention is to have the Plan
qualify as an “employee stock purchase plan” under Section 423 of the Code. The provisions of the
Plan, accordingly, will be construed so as to extend and limit Plan participation in a uniform and
nondiscriminatory basis consistent with the requirements of Section 423 of the Code.



     2. Definitions.



          (a) “Administrator” means the Board or any Committee designated by the Board to
administer the Plan pursuant to Section 14.




          (b) “Applicable Laws” means the requirements relating to the administration of
equity-based awards 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 are, or will be, granted under
the Plan.




          (c) “Board” means the Board of Directors of the Company.




          (d) “Change in Control” means the occurrence of any of the following events:




               (i) Change in Ownership of the Company. A change in the ownership of the Company
which occurs on the date that any one person, or more than one person acting as a group
(“Person”), acquires ownership of the stock of the Company that, together with the stock
held by such Person, constitutes more than fifty percent (50%) of the total voting power of the
stock of the Company. For purposes of this clause (i), if any Person is considered to own more
than fifty percent (50%) of the total voting power of the stock of the Company, the acquisition of
additional stock by the same Person will not be considered a Change in Control; or



               (ii) Change in Effective Control of the Company. If the Company has a class of
securities registered pursuant to Section 12 of the Exchange Act, a change in the effective control
of the Company which occurs on the date that a majority of members of the Board is replaced during
any twelve (12)-month period by Directors whose appointment or election is not endorsed by a
majority of the members of the Board prior to the date of the appointment or election. For
purposes of this clause (ii), if any Person is considered to be in effective control of the
Company, the acquisition of additional control of the Company by the same Person will not be
considered a Change in Control; or



               (iii) Change in Ownership of a Substantial Portion of the Company’s Assets. A change
in the ownership of a substantial portion of the Company’s assets which occurs on



 









 




the date that any
Person acquires (or has acquired during the twelve (12)-month period ending on the date of the most
recent acquisition by such person or persons) assets from the Company that have a total gross fair
market value equal to or more than fifty percent (50%) of the total gross fair market value of all
of the assets of the Company immediately prior to such acquisition or acquisitions. For purposes
of this subsection (iii), gross fair market value means the value of the assets of the Company, or
the value of the assets being disposed of, determined without regard to any liabilities associated
with such assets.




          For purposes of this Section 2(d), persons will be considered to be acting as a group if they
are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of
stock, or similar business transaction with the Company.




          Notwithstanding the foregoing, a transaction will not be deemed a Change in Control unless the
transaction qualifies as a change in control event within the meaning of Code Section 409A, as it
has been and may be amended from time to time, and any proposed or final Treasury Regulations and
Internal Revenue Service guidance that has been promulgated or may be promulgated thereunder from
time to time.




          Further and for the avoidance of doubt, a transaction will not constitute a Change in Control
if: (i) its sole purpose is to change the state of the Company’s incorporation, or (ii) its sole
purpose is to create a holding company that will be owned in substantially the same proportions by
the persons who held the Company’s securities immediately before such transaction.




          (e) “Code” means the U.S. Internal Revenue Code of 1986, as amended. Reference to a
specific section of the Code or Treasury Regulation thereunder will include such section or
regulation, any valid regulation or other official applicable guidance promulgated under such
section, and any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.




          (f) “Committee” means a committee of the Board appointed in accordance with Section 14
hereof.




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




          (h) “Company” means Oncothyreon Inc., a Delaware corporation, or any successor
thereto.




          (i) “Compensation” means (i) the regular base salary paid to a Participant by the
Company and/or Employer plus (ii) all overtime payments, bonuses, commissions, profit-sharing
distributions or other incentive-type payments received during such period. Such Compensation will
be calculated before deduction of (A) any income or employment tax withholdings or (B) any
contributions made by the Participant to any Code Section 401(k) salary deferral plan or any Code
Section 125 cafeteria benefit program now or hereafter established by the Company or Employer.
However, Compensation will not include any contributions made by the Company or any Employer
on the Participant’s behalf to any employee benefit or welfare plan now or hereafter
established





 









 







(other than Code Section 401(k) or Code Section 125 contributions deducted from such
calculation of Compensation).




          (j) “Contributions” means the payroll deductions and other additional payments that
the Company may permit to be made by a Participant to fund the exercise of options granted pursuant
to the Plan.




          (k) “Designated Subsidiary” means any Subsidiary that has been designated by the
Administrator from time to time in its sole discretion as eligible to participate in the Plan.




          (l) “Director” means a member of the Board.




          (m) “Eligible Employee” means any individual who is a common law employee of the
Company or a Designated Subsidiary and is customarily employed for at least twenty (20) hours per
week and more than five (5) months in any calendar year by the Employer, or any lesser number of
hours per week and/or number of months in any calendar year established by the Administrator (if
required under applicable local law) for purposes of any separate Offering. For purposes of the
Plan, the employment relationship will be treated as continuing intact while the individual is on
sick leave or other leave of absence that the Employer approves. Where the period of leave exceeds
three (3) months and the individual’s right to reemployment is not guaranteed either by statute or
by contract, the employment relationship will be deemed to have terminated three (3) months and one
(1) day following the commencement of such leave. The Administrator, in its discretion, from time
to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date,
determine (on a uniform and nondiscriminatory basis) that the definition of Eligible Employee will
or will not include an individual if he or she: (i) has not completed at least two (2) years of
service since his or her last hire date (or such lesser period of time as may be determined by the
Administrator in its discretion), (ii) customarily works not more than twenty (20) hours per week
(or such lesser period of time as may be determined by the Administrator in its discretion), (iii)
customarily works not more than five (5) months per calendar year (or such lesser period of time as
may be determined by the Administrator in its discretion), (iv) is a highly compensated employee
within the meaning of Section 414(q) of the Code with compensation above a certain level or is an
officer or subject to the disclosure requirements of Section 16(a) of the Exchange Act, provided
the exclusion is applied with respect to each Offering in an identical manner to all highly
compensated individuals of the Employer whose Employees are participating in that Offering.




          (n) “Employer” means the employer of the applicable Eligible Employee(s).




          (o) “Enrollment Date” means the first Trading Day of each Offering Period.




          (p) “Exchange Act” means the Securities Exchange Act of 1934, as amended, including
the rules and regulations promulgated thereunder.




          (q) “Exercise Date” means the last Trading Day of each Purchase Period.




          (r) “Fair Market Value” means, as of any date and unless the Administrator determines
otherwise, 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 Global Select Market, the NASDAQ Global Market or
the NASDAQ Capital Market of The NASDAQ Stock Market, its Fair Market Value will be the closing
sales price for such stock as quoted on such exchange or system on the date of determination (or on
the last preceding Trading Day for which such quotation exists if the date of determination is not
a Trading Day), 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, its Fair Market Value will be the mean between the high bid and low asked
prices for the Common Stock on the date of determination (or on the last preceding Trading Day if
the date of determination is not a Trading Day), 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
thereof will be determined in good faith by the Administrator.



          (s) “New Exercise Date” means a new Exercise Date if the Administrator shortens any
Offering Period then in progress.




          (t) “Offering” means an offer under the Plan of an option that may be exercised during
an Offering Period as further described in Section 4. For purposes of this Plan, the Administrator
may designate separate Offerings under the Plan (the terms of which need not be identical) in which
Employees of one or more Employers will participate, even if the dates of the applicable Offering
Periods of each such Offering are identical.




          (u) “Offering Periods” means the periods of approximately eighteen (18) months during
which an option granted pursuant to the Plan may be exercised, commencing on the first Trading Day
on or after June 15 and December 15 of each year and terminating on the last Trading Day in the
periods ending eighteen (18) months later. The duration and timing of Offering Periods may be
changed pursuant to Sections 4 and 20.




          (v) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.




          (w) “Participant” means an Eligible Employee that participates in the Plan.




          (x) “Plan” means this Oncothyreon Inc. 2010 Employee Stock Purchase Plan.




          (y) “Purchase Period” means the approximately six (6) month period commencing after
one Exercise Date and ending with the next Exercise Date, except that the first Purchase Period of
any Offering Period will commence on the Enrollment Date and end with the next Exercise Date.




          (z) “Purchase Price” means an amount equal to eighty-five percent (85%) of the Fair
Market Value of a share of Common Stock on the Enrollment Date or on the Exercise Date, whichever
is lower; provided however, that the Purchase Price may be determined for subsequent






 









 







Offering Periods by the Administrator subject to compliance with Section 423 of the Code (or
any successor rule or provision or any other applicable law, regulation or stock exchange rule) or
pursuant to Section 20.




          (aa) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Section 424(f) of the Code.




          (bb) “Trading Day” means a day on which the national stock exchange upon which the
Common Stock is listed is open for trading.




     3. Eligibility.



          (a) Offering Periods. Any Eligible Employee on a given Enrollment Date will be
eligible to participate in the Plan, subject to the requirements of Section 5. Employees who are
citizens or residents of a non-U.S. jurisdiction may be excluded from participation in the Plan or
an Offering if the participation of such Employees is prohibited under the laws of the applicable
jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or
an Offering to violate Section 423 of the Code.




          (b) Limitations. Any provisions of the Plan to the contrary notwithstanding, no
Eligible Employee will be granted an option under the Plan (i) to the extent that, immediately
after the grant, such Eligible Employee (or any other person whose stock would be attributed to
such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the
Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such
stock possessing five percent (5%) or more of the total combined voting power or value of all
classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii)
to the extent that his or her rights to purchase stock under all employee stock purchase plans (as
defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company
accrues at a rate, which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined
at the Fair Market Value of the stock at the time such option is granted) for each calendar year in
which such option is outstanding at any time, as determined in accordance with Section 423 of the
Code and the regulations thereunder.




     4. Offering Periods. The Plan will be implemented by consecutive and overlapping
Offering Periods with a new Offering Period commencing on the first Trading Day on or after June 15
and December 15 each year, or on such other date as the Administrator will determine. The
Administrator will have the power to change the duration of Purchase Periods and/or Offering
Periods (including the commencement dates thereof) with respect to future Offerings without
stockholder approval if such change is announced prior to the scheduled beginning of the first
Purchase Period and/or Offering Period to be affected thereafter.



     5. Participation. An Eligible Employee may participate in the Plan by (i) submitting
to the Company’s stock administration office (or its designee), on or before a date determined by
the Administrator prior to an applicable Enrollment Date, a properly completed subscription
agreement authorizing Contributions in the form provided by the Administrator for such purpose, or
(ii) following an electronic or other enrollment procedure determined by the Administrator.



 









 





     6. Contributions.



          (a) At the time a Participant enrolls in the Plan pursuant to Section 5, he or she will elect
to have payroll deductions made on each pay day or other Contributions (to the extent permitted by
the Administrator) made during the Offering Period in an amount not exceeding fifteen percent (15%)
of the Compensation, which he or she receives on each pay day during the Offering Period; provided,
however, that should a pay day occur on an Exercise Date, a Participant will have any payroll
deductions made on such day applied to his or her account under the subsequent Purchase Period or
Offering Period. The Administrator, in its sole discretion, may permit all Participants in a
specified Offering to contribute amounts to the Plan through payment by cash, check or other means
set forth in the subscription agreement prior to each Exercise Date of each Purchase Period,
provided that payment through means other than payroll deductions shall be permitted only if the
Participant has not already had the maximum permitted amount withheld through payroll deductions
during the Offering Period. A Participant’s subscription agreement will remain in effect for
successive Offering Periods unless terminated as provided in Section 10 hereof.




          (b) Payroll deductions for a Participant will commence on the first pay day following the
Enrollment Date and will end on the last pay day prior to the Exercise Date of such Offering Period
to which such authorization is applicable, unless sooner terminated by the Participant as provided
in Section 10 hereof.




          (c) All Contributions made for a Participant will be credited to his or her account under the
Plan and payroll deductions will be made in whole percentages only. A Participant may not make any
additional payments into such account.




          (d) A Participant may discontinue his or her participation in the Plan as provided in Section
10, or may increase or decrease the rate of his or her Contributions during the Offering Period by
(i) properly completing and submitting to the Company’s stock administration office (or its
designee), on or before a date determined by the Administrator prior to an applicable Exercise
Date, a new subscription agreement authorizing the change in Contribution rate in the form provided
by the Administrator for such purpose, or (ii) following an electronic or other procedure
prescribed by the Administrator; provided, however, that a Participant may only make one
Contribution change during each month of the Offering Period. If a Participant has not followed
such procedures to change the rate of Contributions, the rate of his or her Contributions will
continue at the originally elected rate throughout the Offering Period and future Offering Periods
(unless terminated as provided in Section 10). The Administrator may, in its sole discretion,
limit the nature and/or number of Contribution rate changes that may be made by Participants during
any Purchase Period or Offering Period, and may establish such other conditions or limitations as
it deems appropriate for Plan administration. Any change in payroll deduction rate made pursuant
to this Section 6(d) will be effective as of the first full payroll period following five (5)
business days after the date on which the change is made by the Participant (unless the
Administrator, in its sole discretion, elects to process a given change in payroll deduction rate
more quickly).




          (e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(b), a Participant’s Contributions may be decreased to zero percent (0%) at
any time during an Offering Period. Subject to Section 423(b)(8) of the Code






 









 







and Section 3(b) hereof, Contributions will recommence at the rate originally elected by the
Participant effective as of the beginning of the first Offering Period scheduled to end in the
following calendar year, unless terminated by the Participant as provided in Section 10.



          (f) Notwithstanding any provisions to the contrary in the Plan, the Administrator may allow
Eligible Employees to participate in the Plan via cash contributions instead of payroll deductions
if (i) payroll deductions are not permitted under applicable local law, and (ii) the Administrator
determines that cash contributions are permissible under Section 423 of the Code.



          (g) At the time the option is exercised, in whole or in part, or at the time some or all of
the Common Stock issued under the Plan is disposed of (or any other time that a taxable event
related to the Plan occurs), the Participant must make adequate provision for the Company’s or
Employer’s federal, state, local or any other tax liability payable to any authority including
taxes imposed by jurisdictions outside of the U.S., national insurance, social security or other
tax withholding obligations, if any, which arise upon the exercise of the option or the disposition
of the Common Stock (or any other time that a taxable event related to the Plan occurs). At any
time, the Company or the Employer may, but will not be obligated to, withhold from the
Participant’s Compensation the amount necessary for the Company or the Employer to meet applicable
withholding obligations, including any withholding required to make available to the Company or the
Employer any tax deductions or benefits attributable to sale or early disposition of Common Stock
by the Eligible Employee. In addition, the Company or the Employer may, but will not be obligated
to, withhold from the proceeds of the sale of Common Stock or any other method of withholding the
Company or the Employer deems appropriate to the extent permitted by U.S. Treasury Regulation
Section 1.423-2(f).




     7. Grant of Option. On the Enrollment Date of each Offering Period, each Eligible
Employee participating in such Offering Period will be granted an option to purchase on each
Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of
shares of Common Stock determined by dividing such Eligible Employee’s Contributions accumulated
prior to such Exercise Date and retained in the Eligible Employee’s account as of the Exercise Date
by the applicable Purchase Price; provided that in no event will an Eligible Employee be permitted
to purchase during each Offering Period more than fifteen thousand (15,000) shares of the Company’s
Common Stock (subject to: (i) the limitations set forth in Section 3(b), (ii) the limitations set
forth in Section 13 and (iii) any adjustment pursuant to Section 19). The Eligible Employee may
accept the grant of such option with respect to an Offering Period by electing to participate in
the Plan in accordance with the requirements of Section 5. The Administrator may, for future
Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of
Common Stock that an Eligible Employee may purchase during each Offering Period. Exercise of the
option will occur as provided in Section 8, unless the Participant has withdrawn pursuant to
Section 10. The option will expire on the last day of the Offering Period.



     8. Exercise of Option.



          (a) Unless a Participant withdraws from the Plan as provided in Section 10, his or her option
for the purchase of shares of Common Stock will be exercised automatically on the Exercise Date,
and the maximum number of full shares subject to the option will be purchased for






 









 







such Participant at the applicable Purchase Price with the accumulated Contributions from his
or her account. No fractional shares of Common Stock will be purchased; any Contributions
accumulated in a Participant’s account, which are not sufficient to purchase a full share will be
retained in the Participant’s account for the subsequent Purchase Period or Offering Period,
subject to earlier withdrawal by the Participant as provided in Section 10. Any other funds left
over in a Participant’s account after the Exercise Date will be returned to the Participant.
During a Participant’s lifetime, a Participant’s option to purchase shares hereunder is exercisable
only by him or her.




          (b) If the Administrator determines that, on a given Exercise Date, the number of shares of
Common Stock with respect to which options are to be exercised may exceed (i) the number of shares
of Common Stock that were available for sale under the Plan on the Enrollment Date of the
applicable Offering Period, or (ii) the number of shares of Common Stock available for sale under
the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the
Company will make a pro rata allocation of the shares of Common Stock available for purchase on
such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable
and as it will determine in its sole discretion to be equitable among all Participants exercising
options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in
effect or (y) provide that the Company will make a pro rata allocation of the shares available for
purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be
practicable and as it will determine in its sole discretion to be equitable among all participants
exercising options to purchase Common Stock on such Exercise Date, and terminate any or all
Offering Periods then in effect pursuant to Section 20. The Company may make a pro rata allocation
of the shares available on the Enrollment Date of any applicable Offering Period pursuant to the
preceding sentence, notwithstanding any authorization of additional shares for issuance under the
Plan by the Company’s stockholders subsequent to such Enrollment Date.




     9. Delivery. As soon as reasonably practicable after each Exercise Date on which a
purchase of shares of Common Stock occurs, the Company will arrange the delivery to each
Participant the shares purchased upon exercise of his or her option in a form determined by the
Administrator (in its sole discretion) and pursuant to rules established by the Administrator. The
Company may permit or require that shares be deposited directly with a broker designated by the
Company or to a designated agent of the Company, and the Company may utilize electronic or
automated methods of share transfer. The Company may require that shares be retained with such
broker or agent for a designated period of time and/or may establish other procedures to permit
tracking of disqualifying dispositions of such shares. No Participant will have any voting,
dividend, or other stockholder rights with respect to shares of Common Stock subject to any option
granted under the Plan until such shares have been purchased and delivered to the Participant as
provided in this Section 9.



     10. Withdrawal.



          (a) A Participant may withdraw all but not less than all the Contributions credited to his or
her account and not yet used to exercise his or her option under the Plan at any time by
(i) submitting to the Company’s stock administration office (or its designee) a written notice of
withdrawal in the form determined by the Administrator for such purpose, or (ii) following an
electronic or other withdrawal procedure determined by the Administrator. All of the Participant’s






 









 







Contributions credited to his or her account will be paid to such Participant promptly after
receipt of notice of withdrawal and such Participant’s option for the Offering Period will be
automatically terminated, and no further Contributions for the purchase of shares will be made for
such Offering Period. If a Participant withdraws from an Offering Period, Contributions will not
resume at the beginning of the succeeding Offering Period, unless the Participant re-enrolls in the
Plan in accordance with the provisions of Section 5.




          (b) A Participant’s withdrawal from an Offering Period will not have any effect upon his or
her eligibility to participate in any similar plan that may hereafter be adopted by the Company or
in succeeding Offering Periods that commence after the termination of the Offering Period from
which the Participant withdraws.




     11. Termination of Employment. Upon a Participant’s ceasing to be an Eligible
Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and
the Contributions credited to such Participant’s account during the Offering Period but not yet
used to purchase shares of Common Stock under the Plan will be returned to such Participant or, in
the case of his or her death, to the person or persons entitled thereto under Section 15, and such
Participant’s option will be automatically terminated.



     12. Interest. No interest will accrue on the Contributions of a participant in the
Plan, except as may be required by applicable law, as determined by the Company, and if so required
by the laws of a particular jurisdiction, shall apply to all Participants in the relevant Offering
except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f).



     13. Stock.



          (a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
19 hereof, the maximum number of shares of Common Stock that will be made available for sale under
the Plan will be nine hundred thousand (900,000) shares of Common Stock.




          (b) 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), a Participant will only have the
rights of an unsecured creditor with respect to such shares, and no right to vote or receive
dividends or any other rights as a stockholder will exist with respect to such shares.




          (c) Shares of Common Stock to be delivered to a Participant under the Plan will be registered
in the name of the Participant or in the name of the Participant and his or her spouse.




     14. Administration. The Plan will be administered by the Board or a Committee
appointed by the Board, which Committee will be constituted to comply with Applicable Laws. The
Administrator will have full and exclusive discretionary authority to construe, interpret and apply
the terms of the Plan, to designate separate Offerings under the Plan, to determine eligibility, to
adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems
necessary for the administration of the Plan (including, without limitation, to adopt such
procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by
employees who are foreign nationals or employed outside the U.S.). Unless otherwise determined by
the



 









 




Administrator, the Employees eligible to participate in each sub-plan will participate in a
separate Offering. Without limiting the generality of the foregoing, the Administrator is
specifically authorized to adopt rules and procedures regarding eligibility to participate, the
definition of Compensation, handling of Contributions, making of Contributions to the Plan
(including, without limitation, in forms other than payroll deductions), establishment of bank or
trust accounts to hold Contributions, payment of interest, conversion of local currency,
obligations to pay payroll tax, determination of beneficiary designation requirements, withholding
procedures and handling of stock certificates that vary with applicable local requirements. Every
finding, decision and determination made by the Administrator will, to the full extent permitted by
law, be final and binding upon all parties.




     15. Designation of Beneficiary.



          (a) If permitted by the Administrator, a Participant may file a designation of a beneficiary
who is to receive any shares of Common Stock and cash, if any, from the Participant’s account under
the Plan in the event of such Participant’s death subsequent to an Exercise Date on which the
option is exercised but prior to delivery to such Participant of such shares and cash. In
addition, if permitted by the Administrator, a Participant may file a designation of a beneficiary
who is to receive any cash from the Participant’s account under the Plan in the event of such
Participant’s death prior to exercise of the option. If a Participant is married and the
designated beneficiary is not the spouse, spousal consent will be required for such designation to
be effective.




          (b) Such designation of beneficiary may be changed by the Participant at any time by notice in
a form determined by the Administrator. In the event of the death of a Participant and in the
absence of a beneficiary validly designated under the Plan who is living at the time of such
Participant’s death, the Company will deliver such shares and/or cash to the executor or
administrator of the estate of the Participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such
shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant,
or if no spouse, dependent or relative is known to the Company, then to such other person as the
Company may designate.




          (c) All beneficiary designations will be in such form and manner as the Administrator may
designate from time to time. Notwithstanding Sections 15(a) and (b) above, the Company and/or the
Administrator may decide not to permit such designations by Participants in non-U.S. jurisdictions
to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).




     16. Transferability. Neither Contributions credited to a Participant’s account nor
any rights with regard to the exercise of an option or to receive shares of Common Stock under the
Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will,
the laws of descent and distribution or as provided in Section 15 hereof) by the Participant. Any
such attempt at assignment, transfer, pledge or other disposition will be without effect, except
that the Company may treat such act as an election to withdraw funds from an Offering Period in
accordance with Section 10 hereof.




 












 





     17. Use of Funds. The Company may use all Contributions received or held by it under
the Plan for any corporate purpose, and the Company will not be obligated to segregate such
Contributions except under Offerings in which applicable local law requires that Contributions to
the Plan by Participants be segregated from the Company’s general corporate funds and/or deposited
with an independent third party for Participants in non-U.S. jurisdictions. Until shares of Common
Stock are issued, Participants will only have the rights of an unsecured creditor with respect to
such shares.



     18. Reports. Individual accounts will be maintained for each Participant in the Plan.
Statements of account will be given to participating Eligible Employees at least annually, which
statements will set forth the amounts of Contributions, the Purchase Price, the number of shares of
Common Stock purchased and the remaining cash balance, if any.



     19. Adjustments, Dissolution, Liquidation, Merger or Change in Control.


          (a) Adjustments. In the event that any dividend or other distribution (whether in the
form of cash, Common Stock, other securities, or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase, or exchange of Common Stock or other securities of the Company, or other change in the
corporate structure of the Company affecting the Common Stock occurs, the Administrator, in order
to prevent dilution or enlargement of the benefits or potential benefits intended to be made
available under the Plan, will, in such manner as it may deem equitable, adjust the number and
class of Common Stock that may be delivered under the Plan, the Purchase Price per share and the
number of shares of Common Stock covered by each option under the Plan that has not yet been
exercised, and the numerical limits of Sections 7 and 13.


          (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, any Offering Period then in progress will be shortened by setting a New
Exercise Date, and will terminate immediately prior to the consummation of such proposed
dissolution or liquidation, unless provided otherwise by the Administrator. The New Exercise Date
will be before the date of the Company’s proposed dissolution or liquidation. The Administrator
will notify each Participant in writing or electronically, prior to the New Exercise Date, that the
Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the
Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such
date the Participant has withdrawn from the Offering Period as provided in Section 10 hereof.


          (c) Merger or Change in Control. In the event of a merger or Change in Control, each
outstanding option will be assumed or an equivalent option substituted by the successor corporation
or a Parent or Subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the option, the Offering Period with respect to
which such option relates will be shortened by setting a New Exercise Date on which such Offering
Period shall end. The New Exercise Date will occur before the date of the Company’s proposed
merger or Change in Control. The Administrator will notify each Participant in writing or
electronically prior to the New Exercise Date, that the Exercise Date for the Participant’s option
has been changed to the New Exercise Date and that the Participant’s option will be exercised
automatically on the New




 









 







Exercise Date, unless prior to such date the Participant has withdrawn
from the Offering Period as provided in Section 10 hereof.



     20. Amendment or Termination.


          (a) The Administrator, in its sole discretion, may amend, suspend, or terminate the Plan, or
any part thereof, at any time and for any reason. If the Plan is terminated, the Administrator, in
its discretion, may elect to terminate all outstanding Offering Periods either immediately or upon
completion of the purchase of shares of Common Stock on the next Exercise Date (which may be sooner
than originally scheduled, if determined by the Administrator in its discretion), or may elect to
permit Offering Periods to expire in accordance with their terms (and subject to any adjustment
pursuant to Section 19). If the Offering Periods are terminated prior to expiration, all amounts
then credited to Participants’ accounts that have not been used to purchase shares of Common Stock
will be returned to the Participants (without interest thereon, except as otherwise required under
local laws, as further set forth in Section 12 hereof) as soon as administratively practicable.


          (b) Without stockholder consent and without limiting Section 20(a), the Administrator will be
entitled to change the Offering Periods, designate separate Offerings, limit the frequency and/or
number of changes in the amount withheld during an Offering Period, establish the exchange ratio
applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in
excess of the amount designated by a Participant in order to adjust for delays or mistakes in the
Company’s processing of properly completed withholding elections, establish reasonable waiting and
adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward
the purchase of Common Stock for each Participant properly correspond with Contribution amounts,
and establish such other limitations or procedures as the Administrator determines in its sole
discretion advisable that are consistent with the Plan.


          (c) In the event the Administrator determines that the ongoing operation of the Plan may
result in unfavorable financial accounting consequences, the Administrator may, in its discretion
and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or
eliminate such accounting consequence including, but not limited to:



               (i) amending the Plan to conform with the safe harbor definition under Statement of Financial
Accounting Standards Codification Topic 718 (or any successor thereto), including with respect to
an Offering Period underway at the time;



               (ii) altering the Purchase Price for any Offering Period including an Offering Period underway
at the time of the change in Purchase Price;



               (iii) shortening any Offering Period by setting a New Exercise Date, including an Offering
Period underway at the time of the Administrator action;



               (iv) reducing the maximum percentage of Compensation a Participant may elect to set aside as
Contributions; and



 









 





               (v) reducing the maximum number of Shares a Participant may purchase during any Purchase
Period or Offering Period.



     Such modifications or amendments will not require stockholder approval or the consent of any
Plan Participants.



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



     22. Conditions Upon Issuance of Shares. Shares of Common Stock will not be issued
with respect to an option unless the exercise of such option and the issuance and delivery of such
shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign,
including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any stock exchange upon which the
shares may then be listed, and will be further subject to the approval of counsel for the Company
with respect to such compliance.


          As a condition to the exercise of an option, the Company may require the person exercising
such option to represent and warrant at the time of any such exercise that the shares are being
purchased only for investment and without any present intention to sell or distribute such shares
if, in the opinion of counsel for the Company, such a representation is required by any of the
aforementioned applicable provisions of law.



     23. Code Section 409A. The Plan is exempt from the application of Code Section 409A
and any ambiguities herein will be interpreted to so be exempt from Code Section 409A. In
furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the
Administrator determines that an option granted under the Plan may be subject to Code Section 409A
or that any provision in the Plan would cause an option under the Plan to be subject to Code
Section 409A, the Administrator may amend the terms of the Plan and/or of an outstanding option
granted under the Plan, or take such other action the Administrator determines is necessary or
appropriate, in each case, without the Participant’s consent, to exempt any outstanding option or
future option that may be granted under the Plan from or to allow any such options to comply with
Code Section 409A, but only to the extent any such amendments or action by the Administrator would
not violate Code Section 409A. Notwithstanding the foregoing, the Company shall have no liability
to a Participant or any other party if the option to purchase Common Stock under the Plan that is
intended to be exempt from or compliant with Code Section 409A is not so exempt or compliant or for
any action taken by the Administrator with respect thereto. The Company makes no representation
that the option to purchase Common Stock under the Plan is compliant with Code Section 409A.



     24. Stockholder Approval. The Plan will be subject to approval by the stockholders of
the Company within twelve (12) months after the date the Plan is adopted by the Board. Such
stockholder approval will be obtained in the manner and to the degree required under Applicable
Laws.



 









 





     25. Term of Plan. The Plan will become effective upon the earlier to occur of its
adoption by the Board or its approval by the stockholders of the Company. It will continue in
effect for a term of ten (10) years, unless sooner terminated under Section 20.



     26. Governing Law. The Plan shall be governed by, and construed in accordance with,
the laws of the State of Washington (except its choice-of-law provisions).



     27. Severability. If any provision of the Plan is or becomes or is deemed to be
invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant,
such invalidity, illegality or unenforceability shall not affect the remaining parts of the Plan,
and the Plan shall be construed and enforced as to such jurisdiction or Participant as if the
invalid, illegal or unenforceable provision had not been included.



     28. Automatic Transfer to Low Price Offering Period. To the extent permitted by
Applicable Laws, if the Fair Market Value of the Common Stock on any Exercise Date in an Offering
Period is lower than the Fair Market Value of the Common Stock on the Enrollment Date of such
Offering Period, then all participants in such Offering Period will be automatically withdrawn from
such Offering Period immediately after the exercise of their option on such Exercise Date and
automatically re-enrolled in the immediately following Offering Period as of the first day thereof.