Exhibit 10.4





Exhibit 10.4




ARUBA NETWORKS, INC.

EMPLOYEE STOCK PURCHASE PLAN

(Amended and restated December 16, 2009)




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 of the Company through
accumulated Contributions (as defined in Section 2(i) below). It is the intention of the Company
to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the Code. The
provisions of the Plan, accordingly, shall be construed so as to extend and limit participation in
a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code.




2. Definitions.



(a) “Administrator” shall mean the Board or any Committee designated by the Board to
administer the plan pursuant to Section 14.




(b) “Board” shall mean the Board of Directors of the Company.




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



(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) other
than a Permitted Transferee (as defined in the Company’s Amended and Restated Certificate of
Incorporation) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of securities of the Company representing fifty percent (50%) or more of
the total voting power represented by the Company’s then outstanding voting securities; or



(ii) The consummation of the sale or disposition by the Company of all or substantially all of
the Company’s assets; or



(iii) A change in the composition of the Board occurring within a two-year period, as a result
of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors”
means directors who either (A) are Directors as of the effective date of the Plan, or (B) are
elected, or nominated for election, to the Board with the affirmative votes of at least a majority
of the Directors at the time of such election or nomination (but will not include an individual
whose election or nomination is in connection with an actual or threatened proxy contest relating
to the election of directors to the Company); or



(iv) The consummation of a merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by remaining outstanding or
by being converted into voting securities of the surviving entity or its parent) at least fifty
percent (50%) of the total voting power represented by the voting securities of the Company or such
surviving entity or its parent outstanding immediately after such merger or consolidation.


 


 









 





(d) “Code” shall mean the Internal Revenue Code of 1986, as amended. Any reference to
a section of the Code herein will be a reference to any successor or amended section of the Code.



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



(f) “Common Stock” shall mean the Common Stock of the Company.



(g) “Company” shall mean Aruba Networks, Inc., a Delaware corporation.



(h) “Compensation” shall mean all base straight time gross earnings, commissions,
overtime and shift premium, incentive compensation, and bonuses, but exclusive of other
compensation.



(i) “Contributions” means the payroll deductions (to the extent permitted under
applicable local law) and other additional payments that the Company may allow to be made by a
participant to fund the exercise of options granted pursuant to the Plan if payroll deductions are
not permitted under applicable local law.



(j) “Designated Subsidiary” shall mean any Subsidiary selected by the Administrator as
eligible to participate in the Plan.



(k) “Director” shall mean a member of the Board.



(l) “Eligible Employee” shall mean any individual who is a common law employee of the
Company or any Designated Subsidiary and whose customary employment with the Company or Designated
Subsidiary is at least fifteen (15) hours per week and more than five (5) months in any calendar
year, 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 shall be treated as
continuing intact while the individual is on sick leave or other leave of absence approved by the
Company. Where the period of leave exceeds 90 days and the individual’s right to reemployment is
not guaranteed either by statute or by contract, the employment relationship shall be deemed to
have terminated on the 91st day of such leave. Notwithstanding the foregoing, to the extent
permitted by Section 1.423-2(e) of the Treasury regulations of the Code, the Administrator may
exclude for eligibility to participate in the Plan employees who are citizens or residents of a
non-U.S. jurisdiction (with regard to whether they are also citizens of the States or “resident
aliens” (within the meaning of Section 7701(b)(1)(A) of the Code) if (i) the grant of an option
under the Plan or Offering to a citizen or resident of the non-U.S. jurisdiction is prohibited
under the laws of such jurisdiction, or (ii) compliance with the laws of the non-U.S. jurisdiction
would cause the Plan or Offering to violate the requirements of Section 423 of the Code.



(m) “Exchange Act” shall mean the U.S. Securities Exchange Act of 1934, as amended,
including the rules and regulations promulgated thereunder.


 


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(n) “Exercise Date” shall mean the first Trading Day on or after September 1 and March
1 of each year. The first Exercise Date under the Plan will be the first Trading Day on or after
September 1, 2007.



(o) “Fair Market Value” shall mean, 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 Market, the Nasdaq Global Select Market or
the Nasdaq Capital Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing
sales price for such stock (or the closing bid, if no sales were reported) as quoted on such
exchange or system on the date of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;



(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, its Fair Market Value shall be the mean of the closing bid and asked
prices for the Common Stock on the date of determination, as reported in The Wall Street Journal or
such other source as the Administrator deems reliable; or



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



(iv) For purposes of the Offering Date of the first Offering Period under the Plan, the Fair
Market Value will be the initial price to the public as set forth in the final prospectus included
within the registration statement on Form S-1 filed with the Securities and Exchange Commission for
the initial public offering of the Common Stock (the “Registration Statement”).



(p) “Offering” shall mean an offer under this Plan of an option that may be exercised
during an Offering Period as further described in Section 4. For purposes of this Plan, if the
Administrator so determines, the employees of the Company and/or of any specified Designated
Subsidiary will be deemed to participate in a separate Offering, even if the dates of the
applicable Offering Period of each such Offering are identical.



(q) “Offering Date” shall mean the first Trading Day of each Offering Period.



(r) “Offering Periods” shall mean the periods of approximately twenty-four (24) months
during which an option granted pursuant to the Plan may be exercised, commencing on the first
Trading Day on or after March 1 and September 1 of each year and terminating on the first Trading
Day on or after the subsequent Offering Period commencement date approximately twenty-four (24)
months later; provided, however, that the first Offering Period under the Plan shall commence with
the first Trading Day on or after the date on which the Securities and Exchange Commission declares
the Company’s Registration Statement on Form S-1 effective and end on the earlier of (i) the first
trading day on or after March 1, 2009 or (ii) twenty-seven (27) months from the beginning of the
first Offering Period; and provided, further,
that the second Offering Period under the Plan will commence on the first Trading Day on or
after September 1, 2007. The duration and timing of Offering Periods may be changed pursuant to
Section 4 of this Plan.


 


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(s) “Plan” shall mean this Employee Stock Purchase Plan.



(t) “Purchase Period” shall mean the period during an Offering Period which shares of
Common Stock may be purchased on a participant’s behalf in accordance with the terms of the Plan.
Unless and until the Administrator provides otherwise, the Purchase Period shall mean the
approximately six (6) month period commencing on one Exercise Date and ending with the next
Exercise Date, except that the first Purchase Period of any Offering Period will commence on the
first day of the Offering Period and end with the next Exercise Date; provided, however, that the
first Purchase Period of the first Offering Period will commence on the first day of such Offering
Period and end on the first Trading Day on or after September 1, 2007.



(u) “Purchase Price” shall mean an amount equal to eighty-five percent (85%) of the
Fair Market Value of a share of Common Stock on the Offering Date or on the Exercise Date,
whichever is lower; provided however, that the Purchase Price may be adjusted by the Administrator
pursuant to Section 20.



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



(w) “Trading Day” shall mean a day on which the U.S. national stock exchange upon
which the Company Common Stock is listed is open for trading.



3. Eligibility.



(a) First Offering Period. Any individual who is an Eligible Employee immediately
prior to the first Offering Period shall be automatically enrolled in the first Offering Period.



(b) Subsequent Offering Periods. Any Eligible Employee on a given Offering Date
subsequent to the First Offering Period shall be eligible to participate in the Plan.



(c) Limitations. Any provisions of the Plan to the contrary notwithstanding, no
Eligible Employee shall 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 Subsidiary 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 Subsidiary, or (ii) to the extent that his or her rights to purchase
stock under all employee stock purchase plans of the Company and its Subsidiaries accrues at a rate
which exceeds Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the fair market
value of the shares at the time such option is granted) for each calendar year in which such option
is outstanding at any time.


 


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4. Offering Periods. The Plan shall be implemented by consecutive, overlapping
Offering Periods with a new Offering Period commencing on the first Trading Day on or after March 1
and September 1 of each year, or on such other date as the Administrator shall determine; provided,
however, that the first Offering Period under the Plan shall commence with the first Trading Day on
or after the date on which the Securities and Exchange Commission declares the Company’s
Registration Statement on Form S-1 effective and end on the earlier of (i) the first trading day on
or after March 1, 2009 or (ii) twenty-seven (27) months from the beginning of the first Offering
Period; and provided, further that the second Offering Period under the Plan will commence on the
first Trading Day on or after September 1, 2007. The Administrator shall have the power to change
the duration of Purchase Periods and/or Offering Periods (including the commencement dates thereof)
with respect to future purchase periods or offerings without stockholder approval if such change is
announced prior to the scheduled beginning of the first Purchase Period or Offering Period, as
applicable, to be affected thereafter.



5. Participation.



(a) First Offering Period. An Eligible Employee shall be entitled to continue to
participate in the first Offering Period pursuant to Section 3(a) only if such individual submits a
subscription agreement authorizing payroll deductions or stating the amount of Contributions to the
Plan expressed as a whole percentage of the Eligible Employee’s Compensation in a form determined
by the Administrator (which may be similar to the form attached hereto as Exhibit A) to the
Company’s designated plan administrator (i) no earlier than the effective date of the Form S-8
registration statement with respect to the issuance of Common Stock under this Plan and (ii) no
later than ten (10) business days following the effective date of such S-8 registration statement
(the “Enrollment Window”). An Eligible Employee’s failure to submit the subscription
agreement during the Enrollment Window shall result in the automatic termination of such
individual’s participation in the Offering Period.



(b) Subsequent Offering Periods. An Eligible Employee may become a participant in the
Plan by completing a subscription agreement in a form and in the timeframe determined by the
Administrator (which may be similar to the form attached hereto as Exhibit A) and filing it
with the Company’s designated Plan administrator prior to the applicable Offering Date (and within
the timeframe determined the Administrator).



6. Contributions.



(a) At the time a participant files his or her subscription agreement, he or she shall elect
to have payroll deductions to the extent permitted under applicable local law made on each pay day
or other Contributions 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.
Where applicable local laws prohibit payroll deductions for the purpose of the Plan, the
Administrator 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 Purchase Period. Unless the Administrator
determines otherwise, should a pay day occur on an Exercise Date for a
Purchase Period, a participant shall have any payroll deductions made on such day applied to
his or her account under such Purchase Period. A participant’s subscription agreement shall remain
in effect for successive Offering Periods unless terminated as provided in Section 10 hereof.


 


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(b) Payroll deductions for a participant shall commence on the first pay day following the
Offering Date and shall end on the last pay day in the Offering Period to which such authorization
is applicable, unless sooner terminated by the participant as provided in Section 10 hereof;
provided, however, that for the first Offering Period, payroll deductions shall commence on the
first pay day on or following the end of the Enrollment Window.



(c) All Contributions made for a participant shall be credited to his or her account under the
Plan and shall 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 hereof, or may increase or decrease the rate of his or her Contributions during the Offering
Period by completing or filing with the Company a new subscription agreement authorizing a change
in Contribution rate. The Administrator may, in its discretion, limit the nature and/or number of
Contribution rate changes during any Purchase Period or Offering Period. The change in rate shall
be effective with the first full payroll period following five (5) business days after the
Company’s receipt of the new subscription agreement unless the Company elects to process a given
change in Contribution more quickly.



(e) Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of
the Code and Section 3(c) hereof, a participant’s payroll deductions may be decreased to zero
percent (0%) at any time during a Purchase Period. Payroll deductions shall recommence at the rate
provided in such participant’s subscription agreement at the beginning of the first Purchase Period
which is scheduled to end in the following calendar year, unless terminated by the participant as
provided in Section 10 hereof.



(f) At the time the option is exercised, in whole or in part, or at the time some or all of
the Company’s 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 its Subsidiary’s federal, state, foreign or any other tax liability payable to any authority,
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) including, for the avoidance of doubt, any liability to pay
secondary Class 1 National Insurance Contributions for which an agreement or election has been
entered into under the UK Social Security Contributions and Benefits Act 1992. At any time, the
Company or its Subsidiary may, but shall not be obligated to, withhold from the participant’s
Compensation the amount necessary for the Company or its Subsidiary to meet applicable withholding
obligations, including any withholding required to make available to the Company or its Subsidiary
any tax deductions or benefits attributable to sale or early disposition of Common Stock by the
Eligible Employee. Further, the Company or its Subsidiary may satisfy its withholding obligations,
if any, through any of the means set forth in the applicable
subscription agreement to the extent permitted by Section 1.423-2(f) of the Treasury
regulations of the Code.


 


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7. Grant of Option. On the Offering Date of each Offering Period, each Eligible
Employee participating in such Offering Period shall 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 the Company’s Common Stock determined by dividing such Eligible Employee’s Contributions
accumulated prior to such Exercise Date by the applicable Purchase Price; provided that in no event
shall an Eligible Employee be permitted to purchase during each Purchase Period more than 3,000
shares of the Company’s Common Stock (subject to any adjustment pursuant to Section 19), and
provided further that such purchase shall be subject to the limitations set forth in Sections 3(c)
and 13 hereof. The Eligible Employee may accept the grant of such option by turning in a completed
subscription agreement to the Company on or prior to an Offering Date, or with respect to the first
Offering Period, prior to the last day of the Enrollment Window. The Administrator may, for future
Offering Periods, increase or decrease, in its absolute discretion, the maximum number of shares of
the Company’s Common Stock an Eligible Employee may purchase during each Purchase Period of an
Offering Period. Exercise of the option shall occur as provided in Section 8 hereof, unless the
participant has withdrawn pursuant to Section 10 hereof. The option shall 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 hereof, his or her
option for the purchase of shares shall be exercised automatically on the Exercise Date, and the
maximum number of full shares subject to such option shall be purchased for such participant at the
applicable Purchase Price with the accumulated Contributions in his or her account.  No fractional
shares shall be purchased; any Contributions accumulated in a participant’s account which are not
sufficient to purchase a full share shall 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 Offering Date of the applicable
Offering Period, or (ii) the number of shares available for sale under the Plan on such Exercise
Date, the Administrator may in its sole discretion provide that the Company shall make a pro rata
allocation of the shares of Common Stock available for purchase on such Offering Date or Exercise
Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in
its sole discretion to be equitable among all participants exercising options to purchase Common
Stock on such Exercise Date, and continue all Offering Periods then in effect or terminate all
Offering Periods then in effect pursuant to Section 20. The Company may make a pro rata allocation
of the shares available on the Offering 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 Offering Date.


 


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9. Delivery. As soon as reasonably practicable after each Exercise Date on which a
purchase of shares of Common Stock occurs, the Company shall arrange the delivery to each
participant the shares purchased upon exercise of his or her option in a form determined by the
Administrator and pursuant to rules established by the Administrator. 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) Under procedures established by the Administrator, 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 giving written notice to the Company in the form and
manner and within the timeframe determined by the Administrator (which may be similar to the form
attached as Exhibit B to this Plan). All of the participant’s Contributions credited to
his or her account shall be paid to such participant promptly after receipt of notice of withdrawal
and such participant’s option for the Offering Period shall be automatically terminated, and no
further Contributions for the purchase of shares shall be made for such Offering Period. If a
participant withdraws from an Offering Period, Contributions shall not resume at the beginning of
the succeeding Offering Period unless the participant delivers to the Company a new subscription
agreement.



(b) A participant’s withdrawal from an Offering Period shall not have any effect upon his or
her eligibility to participate in any similar plan which may hereafter be adopted by the Company or
in succeeding Offering Periods which 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 shall 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 shall 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 shall be automatically terminated.



12. Interest. No interest shall accrue on the payroll deductions 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 Section 1.423-2(f) of the Treasury regulations
of the Code.



13. Stock.



(a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
19 hereof, the maximum aggregate number of Shares that may issued under the Plan is one million
(1,000,000) Shares plus an annual increase to be added on the first day of
the Company’s fiscal year beginning with the Company’s 2008 fiscal year, equal to the lesser
of (A) six million (6,000,000) Shares, or (B) two percent (2%) of the outstanding Shares on the
last day of the immediately preceding Company fiscal year. The Shares may be authorized, but
unissued, or reacquired Common Stock.


 


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(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 shall 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 shall exist with respect to such shares.



(c) Shares to be delivered to a participant under the Plan shall be registered in the name of
the participant or in the name of the participant and his or her spouse.



14. Administration. The Administrator shall administer the Plan and shall have full
and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to
determine eligibility and to adjudicate all disputed claims filed under the Plan. Every finding,
decision and determination made by the Administrator shall, to the full extent permitted by law, be
final and binding upon all parties. Notwithstanding any provision to the contrary in this Plan,
the Administrator may adopt rules or procedures relating to the operation and administration of the
Plan to accommodate the specific requirements of applicable local laws and procedures for
jurisdictions outside of the United States. 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 which vary with applicable local requirements.



15. Designation of Beneficiary.



(a) 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, 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 shall 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 shall 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.


 


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(c) All beneficiary designations shall 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 allow such designations by participants in non-U.S. jurisdictions
to the extent permitted by Section 1.423-2(f) of the Treasury regulations of the Code.



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 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 shall 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. All Contributions received or held by the Company under the Plan
may be used by the Company for any corporate purpose, and the Company shall not be obligated to
segregate such Contributions 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 shall only have the rights of an unsecured
creditor.



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



19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation,
Merger or Change in Control.



(a) Changes in Capitalization. Subject to any required action by the stockholders of
the Company, the maximum number of shares of the Company’s Common Stock which shall be made
available for sale under the Plan, the maximum number of shares each participant may purchase each
Purchase Period (pursuant to Section 7), as well as the price per share and the number of shares of
Common Stock covered by each option under the Plan which has not yet been exercised shall be
proportionately adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other change in the number of shares of Common Stock
effected without receipt of consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Administrator, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance
by the Company of shares of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by
reason thereof shall be made with respect to, the number or price of shares of Common Stock
subject to an option.


 


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(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Offering Period then in progress shall be shortened by setting a
new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the
consummation of such proposed dissolution or liquidation, unless provided otherwise by the
Administrator. The New Exercise Date shall be before the date of the Company’s proposed
dissolution or liquidation. The Administrator shall notify each participant in writing, at least
ten (10) business days 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 shall 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 shall 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 shall be shortened by setting a New Exercise Date and shall
end on the New Exercise Date. The New Exercise Date shall be before the date of the Company’s
proposed merger or Change in Control. The Administrator shall notify each participant in writing
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 shall 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 may at any time and for any reason terminate, suspend or amend the Plan
or any part thereof, at any time and for any reason. Except as provided in Section 19 and this
Section 20 hereof, no amendment may make any change in any option theretofore granted which
adversely affects the rights of any participant unless their consent is obtained. To the extent
necessary to comply with Section 423 of the Code (or any successor rule or provision or any other
applicable law, regulation or stock exchange rule), the Company shall obtain stockholder approval
of any amendment in such a manner and to such a degree as required.



(b) Without stockholder approval and without regard to whether any participant rights may be
considered to have been “adversely affected,” the Administrator shall be entitled to change the
Purchase Periods, Offering Periods, limit the frequency and/or number of changes in the amount
withheld during a Purchase Period or 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 which are
consistent with the Plan.


 


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(c) Without regard to whether any participant’s rights may be considered to have been
“adversely affected”, 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 or amend 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) increasing or otherwise altering the Purchase Price for any Offering Period including an
Offering Period underway at the time of the change in Purchase Price;



(iii) reducing the maximum percentage of Compensation a participant may elect to set aside as
Contributions;



(iv) shortening any Offering Period so that Offering Period ends on a new Exercise Date,
including an Offering Period underway at the time of the Administrator action; and



(v) reducing the number of shares that may be purchased upon exercise of outstanding options.



Such modifications or amendments shall 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 shall 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 shall not be issued with respect to an
option unless the exercise of such option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law, domestic or foreign, including, without
limitation, the U.S. 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 shall 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.


 


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23. Term of Plan. The Plan shall 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 twenty (20) years, unless sooner terminated under Section 20 hereof.



24. Stockholder Approval. The Plan will be subject to the approval by 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
law.



25. Automatic Transfer to Low Price Offering Period. To the extent permitted by
applicable laws, regulations, or stock exchange rules, 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 Offering 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.




 


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