Avanex Corporation 1998 Stock Plan, as amended and restated



 Exhibit 10.1 
  
 AVANEX CORPORATION 
  
 1998 STOCK PLAN 
  
 (as amended and restated effective October 27, 2005) 
  
 1. Purposes of the Plan.    The purposes of this 1998 Stock Plan are: 
  

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

  

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

  

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

  
 Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant.
Stock Purchase Rights and Restricted Stock Units may also be granted under the Plan. 
  
 2. Definitions.    As used herein, the following definitions shall apply: 
  
 (a) “Administrator” means the Board or any of its Committees as shall be administering the Plan, in accordance with
Section 4 of the Plan. 
  
 (b) “Annual
Revenue” means the Company’s, a business unit’s or a specific geographic area of the Company’s net sales for the Fiscal Year; provided, however, that prior to the Fiscal Year, the Committee shall determine whether any
significant item(s) shall be excluded or included from the calculation of Annual Revenue with respect to one or more Participants. 
  
 (c) “Applicable Laws” means the requirements relating to the administration of equity plans under U. S. state corporate
laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under
the Plan. 
  
 (d) “Award” means,
individually or collectively, a grant under the Plan of Options, Stock Purchase Rights or Restricted Stock Units. 
  
 (e) “Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each
Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan. 
  
 (f) “Awarded Stock” means the Common Stock subject to an Award. 
  
 (g) “Board” means the Board of Directors of
the Company. 
  
 (h) “Cash
Position” means as to any Performance Period, the Company’s level of cash and cash equivalents. 
  
 (i) “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (j) “Committee” means a committee of
Directors appointed by the Board in accordance with Section 4 of the Plan. 
  
 (k) “Common Stock” means the common stock of the Company or, in the case of certain Restricted Stock Units, the cash equivalent thereof. 
  
 (l) “Company” means Avanex Corporation, a Delaware corporation. 
  
 (m) “Consultant” means any person,
including an advisor, engaged by the Company or a Parent or Subsidiary to render services to such entity. 
  
 (n) “Director” means a member of the Board. 
  
  







 (o) “Disability” means total and permanent disability as defined in
Section 22(e)(3) of the Code. 
  
 (p)
“Earnings Per Share” means as to any Performance Period, the Company’s or a business unit’s Net Income, divided by a weighted average number of Common Stock outstanding and dilutive common equivalent Shares deemed
outstanding. 
  
 (q) “Employee”
means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii)
transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive Stock Options, no such leave may exceed ninety days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, on the 181st day of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

  
 (r) “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
  
 (s) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows: 
  
 (i) If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq
National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value
of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day prior to the day of determination, as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or 
  
 (iii) In the
absence of an established market for the Common Stock, the Fair Market Value shall be determined in good faith by the Administrator. 
  
 (t) “Fiscal Year” means the fiscal year of the Company. 
  
 (u) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 
  
 (v) “Individual Performance Objective” means as to a Participant for any Performance Period, the objective and measurable
goals set by a “management by objectives” process and approved by the Administrator (in its discretion). 
  
 (w) “IPO Effective Date” means the date upon which the Securities and Exchange Commission declares the initial public
offering of the Company’s common stock as effective. 
  
 (x) “Marketing and Sales Expenses as a Percentage of Sales” means as to any Performance Period, the Company’s or a business unit’s marketing and sales expenses stated as a percentage of
sales. 
  
 (y) “Net Income as a
Percentage of Sales” means as to any Performance Period, the Company’s or a business unit’s Net Income stated as a percentage of sales. 
  
 (z) “Net Income” means as to any Performance Period, the income after taxes of the Company or a business unit, provided
that prior to the beginning of the Performance Period, the Administrator shall determine whether any significant item(s) shall be included or excluded from the calculation of Net Income with respect to one or more Participants. 
  
 (aa) “Nonstatutory Stock Option” means an
Option not intended to qualify as an Incentive Stock Option. 







 (bb) “Notice of Grant” means a written or electronic notice evidencing
certain terms and conditions of an individual Award. The Notice of Grant is part of the Award Agreement. 
  
 (cc) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder. 
  
 (dd) “Operating Cash Flow” means as to any Performance Period, the Company’s or a business unit’s sum of Net Income plus depreciation and amortization less capital expenditures plus changes in working capital
comprised of accounts receivable, inventories, other current assets, trade accounts payable, accrued expenses, product warranty, advance payments from customers and long-term accrued expenses. 
  
 (ee) “Operating Income” means as to any
Performance Period, the Company’s or a business unit’s income from operations but excluding any unusual items. 
  
 (ff) “Option” means a stock option granted pursuant to the Plan. 
  
 (gg) “Option Exchange Program” means a
program whereby outstanding Options are surrendered in exchange for Options with a lower exercise price. 
  
 (hh) “Optionee” means the holder of an outstanding Option granted under the Plan. 
  
 (ii) “Parent” means a “parent
corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  
 (jj) “Participant” means the holder of an outstanding Award granted under the Plan. 
  
 (kk) “Performance Goals” means the goal(s)
(or combined goal(s)) determined by the Administrator (in its discretion) to be applicable to a Participant with respect to an Award. As determined by the Administrator, the Performance Goals applicable to an Award may provide for a targeted level
or levels of achievement using one or more of the following measures: (a) Annual Revenue, (b) Cash Position, (c) Earnings Per Share, (d) Individual Performance Objectives, (e) Marketing and Sales Expenses as a Percentage of Sales, (f) Net Income as
a Percentage of Sales, (g) Net Income, (h) Operating Cash Flow, (i) Operating Income, (j) Return on Assets, (k) Return on Equity, (l) Return on Sales, and (m) Total Shareholder Return. The Performance Goals may differ from Participant to Participant
and from Award to Award. Within any timeframe required to comply with the requirements of Section 162(m) of the Code, the Administrator shall determine whether any significant element(s) shall be included in or excluded from the calculation of any
Performance Goal with respect to any Participant. For example (but not by way of limitation), the Administrator may determine that the measures for one or more Performance Goals shall be based upon the Company’s pro-forma results and/or results
in accordance with generally accepted accounting principles. The Administrator shall appropriately adjust any evaluation of performance under a Performance Goal to exclude (i) any extraordinary non-recurring items as described in Accounting
Principles Board Opinion No. 30 and/or in management’s discussion and analysis of financial conditions and results of operations appearing in the Company’s annual report to shareholders for the applicable year, or (ii) the effect of any
changes in accounting principles affecting the Company’s or a business units’ reported results. Any criteria used may be measured, as applicable, (i) in absolute terms, (ii) in relative terms (including, but not limited to, passage of time
and/or against another company or companies), (iii) on a per-share basis, (iv) against the performance of the Company as a whole or of a business unit of the Company, and/or (v) to the extent not otherwise specified by the definition of the
Performance Goal, on a pre-tax or after-tax basis. 
  
 (ll) “Performance Period” means the time period of any Fiscal Year or such longer period as determined by the Administrator in its sole discretion during which the performance objectives must be met. 
  
 (mm) “Plan” means this 1998 Stock Plan, as
may be amended from time to time. 
  
 (nn)
“Restricted Stock” means shares of Common Stock acquired pursuant to a grant of Stock Purchase Rights under Section 11 of the Plan. 
  
 (oo) “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one
Share, granted pursuant to Section 12. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company. 







 (pp) “Return on Assets” means as to any Performance Period, the
percentage equal to the Company’s or a business unit’s Operating Income before incentive compensation, divided by average net Company or business unit, as applicable, assets. 
  
 (qq) “Return on Equity” means as to any Performance Period, the percentage equal to the
Company’s Net Income divided by average stockholder’s equity. 
  
 (rr) “Return on Sales” means as to any Performance Period, the percentage equal to the Company’s or a business unit’s Operating Income before incentive compensation, divided by the
Company’s or the business unit’s, as applicable, revenue. 
  
 (ss) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 
  
 (tt) “Section 16(b)” means Section 16(b) of
the Exchange Act. 
  
 (uu) “Service
Provider” means an Employee, Director or Consultant. 
  
 (vv) “Share” means a share of the Common Stock, as adjusted in accordance with Section 14 of the Plan. 
  
 (ww) “Stock Purchase Right” means the right to purchase Common Stock pursuant to Section 11 of the Plan, as evidenced by
a Notice of Grant. 
  
 (xx)
“Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 (yy) “Total Stockholder Return” means as to any Performance Period, the total return (change in Share price plus
reinvestment of any dividends) of a Share. 
  
 3. Stock Subject
to the Plan.    Subject to the provisions of Section 14 of the Plan, the maximum aggregate number of Shares that may be optioned and sold under the Plan is 29,550,000 Shares, plus an annual increase to be added on the first
day of the Company’s fiscal year beginning on July 1, 2000, equal to the lesser of (i) 6,000,000 shares, (ii) 4.9% of the outstanding shares on such date or (iii) a lesser amount determined by the Board. The Shares may be authorized, but
unissued, or reacquired Common Stock. 
  
 If an Award expires or
becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, or, with respect to Restricted Stock or Restricted Stock Units is forfeited back to or repurchased by the Company, the unpurchased
Shares (or with respect to Awards other than Options, the forfeited or repurchased Shares) which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated); provided, however, that
Shares that have actually been issued under the Plan under any Award shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if Shares of Restricted Stock or Restricted Stock Units are
repurchased by the Company at their original purchase price or are forfeited to the Company, such Shares shall become available for future grant under the Plan. To the extent an Award under the Plan is paid out in cash rather than stock, such cash
payment shall not reduce the number of Shares available for issuance under the Plan. 
  
 4. Administration of the Plan. 
  
 (a) Procedure. 
  
 (i) Multiple Administrative Bodies.    Different Committees with respect to different groups of Service Providers may administer the Plan. 
  
 (ii) Section 162(m).    To the extent that the Administrator determines it to be
desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more “outside directors” within the
meaning of Section 162(m) of the Code. 
  
 (iii)
Rule 16b-3.    To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3.








 (iv) Other Administration.    Other than as provided above,
the Plan shall be administered by (A) the Board or (B) a Committee, which committee shall be constituted to satisfy Applicable Laws. 
  
 (b) Powers of the Administrator.    Subject to the provisions of the Plan, and in the case of a Committee,
subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: 
  
 (i) to determine the Fair Market Value; 
  
 (ii) to select the Service Providers to whom Awards may be granted hereunder; 
  
 (iii) to determine the number of shares of Common Stock to
be covered by each Award granted hereunder; 
  
 (iv) to approve forms of agreement for use under the Plan; 
  
 (v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times
when Awards may be exercised or purchased (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture or repurchase restrictions, and any restriction or limitation regarding any Award or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 
  
 (vi) to reduce the exercise price of any Option, Stock Purchase Right or Restricted Stock Unit to the then current Fair Market Value if
the Fair Market Value of the Common Stock covered by such Option, Stock Purchase Right or Restricted Stock Unit shall have declined since the date the Option, Stock Purchase Right or Restricted Stock Unit was granted; 
  
 (vii) to institute an Option Exchange Program; 

 
 (viii) to construe and interpret the terms of the Plan
and Awards granted pursuant to the Plan; 
  
 (ix)
to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws or satisfying applicable
foreign laws; 
  
 (x) to modify or amend each
Award (subject to Section 16(c) of the Plan), including the discretionary authority to extend the post-termination exercisability period of Awards longer than is otherwise provided for in the Plan; 
  
 (xi) to allow Participants to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares or cash to be issued upon exercise or vesting of an Award that number of Shares or cash having a Fair Market Value equal to the amount required to be withheld. The Fair Market
Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by a Participant to have Shares or cash withheld for this purpose shall be made in such form and under such
conditions as the Administrator may deem necessary or advisable; 
  
 (xii) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the Administrator; 
  
 (xiii) to make all other determinations deemed necessary or
advisable for administering the Plan. 
  
 (c)
Effect of Administrator’s Decision.    The Administrator’s decisions, determinations and interpretations shall be final and binding on all Participants and any other holders of Awards. 
  
 5. Eligibility.    Nonstatutory Stock Options,
Stock Purchase Rights and Restricted Stock Units may be granted to Service Providers. Incentive Stock Options may be granted only to Employees. 







 6. Limitations. 
  
 (a) Each Option shall be designated in the Award Agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any
calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in
the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. 
  

(b) Neither the Plan nor any Award shall confer upon a Participant any right with respect to continuing the Participant’s
relationship as a Service Provider with the Company, nor shall they interfere in any way with the Participant’s right or the Company’s or its Parent or Subsidiary’s right to terminate such relationship at any time, with or without
cause. 
  
 (c) The following limitations shall
apply to grants of Options: 
  
 (i) No Service
Provider shall be granted, in any fiscal year of the Company, Options to purchase more than 1,500,000 Shares. 
  
 (ii) In connection with his or her initial service, a Service Provider may be granted Options to purchase up to an additional 4,500,000
Shares, which shall not count against the limit set forth in subsection (i) above. 
  
 (iii) The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization as
described in Section 14. 
  
 (iv) If an Option is
cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 14), the cancelled Option will be counted against the limits set forth in subsections (i) and (ii) above. For
this purpose, if the exercise price of an Option is reduced, the transaction will be treated as a cancellation of the Option and the grant of a new Option. 
  
 7. Term of Plan.    Subject to Section 20 of the Plan, the amendment and restatement of the Plan shall become effective upon
the IPO Effective Date. It shall continue in effect for a term of ten (10) years from the date of obtaining stockholder approval of the Plan in December, 1999, unless terminated earlier under Section 16 of the Plan. 
  
 8. Term of Option.    The term of each Option
shall be stated in the Award Agreement. In the case of an Incentive Stock Option, the term shall be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock
Option granted to an Optionee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term
of the Incentive Stock Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Award Agreement. 
  
 9. Option Exercise Price and Consideration. 
  
 (a) Exercise Price.    The per Share exercise price for the Shares to be issued pursuant to exercise of an
Option shall be determined by the Administrator, subject to the following: 
  
 (i) In the case of an Incentive Stock Option 
  
 (A) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. 







 (B) granted to any Employee other than an Employee described in paragraph (A)
immediately above, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of grant. 
  
 (ii) In the case of a Nonstatutory Stock Option, the per Share exercise price shall be determined by the Administrator. In the case of a
Nonstatutory Stock Option intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, the per Share exercise price shall be no less than 100% of the Fair Market Value per Share on the date of
grant. 
  
 (iii) Notwithstanding the foregoing,
Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a merger or other corporate transaction. 
  
 (b) Waiting Period and Exercise Dates.    At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and shall determine any conditions that must be satisfied before the Option may be exercised. 
  
 (c) Form of Consideration.    The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at the time of grant. Such consideration may consist
entirely of: 
  
 (i) cash; 
  
 (ii) check; 
  
 (iii) promissory note; 
  
 (iv) other Shares which (A) in the case of Shares acquired
upon exercise of an option, have been owned by the Optionee for more than six months on the date of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised; 
  
 (v) consideration
received by the Company under a cashless exercise program implemented by the Company in connection with the Plan; 
  
 (vi) a reduction in the amount of any Company liability to the Optionee, including any liability attributable to the Optionee’s
participation in any Company-sponsored deferred compensation program or arrangement; 
  
 (vii) any combination of the foregoing methods of payment; or 
  
 (viii) such other consideration and method of payment for the issuance of Shares to the extent permitted by
Applicable Laws. 
  
 10. Exercise of Option. 
  
 (a) Procedure for Exercise; Rights as a
Shareholder.    Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. Unless
the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence. An Option may not be exercised for a fraction of a Share. 
  
 An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance
with the Award Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the
Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the
Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the 








 
Company), no right to vote or receive dividends or any other rights as a shareholder shall exist with respect to the Awarded Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are
issued, except as provided in Section 14 of the Plan. 
  
 Exercising an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. 
  
 (b) Termination of Relationship as a Service
Provider.    If an Optionee ceases to be a Service Provider, other than upon the Optionee’s death or Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Award
Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the
Option shall remain exercisable for three (3) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall
revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (c) Disability of Optionee.    If
an Optionee ceases to be a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date
of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12) months
following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (d) Death of Optionee.    If an Optionee dies while a Service Provider, the
Option may be exercised within such period of time as is specified in the Award Agreement (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant), by the Optionee’s estate or by a person who
acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for twelve
(12) months following the Optionee’s termination. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. The Option may
be exercised by the executor or administrator of the Optionee’s estate or, if none, by the person(s) entitled to exercise the Option under the Optionee’s will or the laws of descent or distribution. If the Option is not so exercised within
the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (e) Buyout Provisions.    The Administrator may at any time offer to buy out for a payment in cash or Shares an
Option previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 
  
 11. Stock Purchase Rights. 
  

(a) Grant of Stock Purchase Rights.    The Administrator, in its sole discretion, will determine the number
of Shares to be granted to each Participant under Stock Purchase Rights, provided that during any Fiscal Year, no Participant will receive more than an aggregate of 750,000 Shares subject to Stock Purchase Rights. Notwithstanding the foregoing
limitation, in connection with a Participant’s initial service as an Employee, an Employee may be granted an aggregate of up to an additional 2,250,000 Shares subject to Stock Purchase Rights. The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company’s capitalization as described in Section 14. If an Award is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction
described in Section 14), the cancelled Award will be counted against the limits set forth in this Section 11(a). 







 (b) Rights to Purchase.    Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other Awards granted under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree
in writing or electronically, by means of a Notice of Grant, of the terms, conditions and restrictions related to the offer, including the number of Shares that the offeree shall be entitled to purchase, the price to be paid, and the time within
which the offeree must accept such offer. The offer shall be accepted by execution of an Award Agreement in the form determined by the Administrator. 
  
 (c) Repurchase Option.    Unless the Administrator determines otherwise, the Award Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s service with the Company for any reason (including death or Disability). The purchase price for Shares repurchased pursuant to the Award
Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at a rate determined by the Administrator. 
  
 (d) Other Provisions.    The
Award Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. 
  
 (i) General Restrictions.    The Administrator may set restrictions based upon
the achievement of specific performance objectives (Company-wide, divisional, or individual), applicable federal or state securities laws, or any other basis determined by the Administrator in its discretion. 
  
 (ii) Section 162(m) Performance
Restrictions.    For purposes of qualifying grants of Stock Purchase Rights as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set restrictions based upon
the achievement of Performance Goals. The Performance Goals will be set by the Administrator on or before the latest date permissible to enable the Stock Purchase Rights to qualify as “performance-based compensation” under
Section 162(m) of the Code. In granting Stock Purchase Rights which are intended to qualify under Section 162(m) of the Code, the Administrator will follow any procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the Stock Purchase Rights under Section 162(m) of the Code (e.g., in determining the Performance Goals). 
  
 (e) Rights as a Shareholder.    Once the Stock Purchase Right is exercised, the purchaser shall have the rights
equivalent to those of a shareholder, and shall be a shareholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record
date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 14 of the Plan. 
  
 12. Restricted Stock Units. 
  
 (a) Grant.    Restricted Stock Units may be granted at any time and from time to time as determined by the
Administrator. Each Restricted Stock Unit grant shall be evidenced by an Award Agreement that shall specify such other terms and conditions as the Administrator, in its sole discretion, shall determine, including all terms, conditions, and
restrictions related to the grant and the form of payout, which, subject to Section 12(d), may be left to the discretion of the Administrator. The Administrator, in its sole discretion, will determine the number of Restricted Stock Units to be
granted to each Participant, provided that during any Fiscal Year, no Participant will receive more than an aggregate of 750,000 Restricted Stock Units. Notwithstanding the foregoing limitation, in connection with a Participant’s initial
service as an Employee, an Employee may be granted an aggregate of up to an additional 2,250,000 Restricted Stock Units. The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s capitalization
as described in Section 14. If an Award is cancelled in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 14), the cancelled Award will be counted against the limits set
forth in this Section 12(a). 
  
 (b) Vesting
Criteria and Other Terms.    The Administrator shall set vesting or other restriction criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted Stock
Units that will be paid out to the Participant. 







 (i) The Administrator may set vesting or other restriction criteria based upon the
achievement of Company-wide, departmental, business unit, or individual goals (including, but not limited to, continued employment or service), applicable federal or state securities laws, or any other basis determined by the Administrator in its
discretion. 
  
 (ii) Section 162(m)
Performance Restrictions.    For purposes of qualifying grants of Restricted Stock Units as “performance-based compensation” under Section 162(m) of the Code, the Administrator, in its discretion, may set
performance objectives based upon the achievement of Performance Goals. The Performance Goals shall be set by the Administrator on or before the latest date permissible to enable the Restricted Stock Units to qualify as “performance-based
compensation” under Section 162(m) of the Code. In granting Restricted Stock Units that are intended to qualify under Section 162(m) of the Code, the Administrator shall follow any procedures determined by it from time to time to be necessary
or appropriate to ensure qualification of the Restricted Stock Units under Section 162(m) of the Code (e.g., in determining the Performance Goals). 
  
 (c) Earning Restricted Stock Units.    Upon meeting the applicable vesting or other restriction criteria, the
Participant shall be entitled to receive a payout as specified in the Award Agreement. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the Administrator, in its sole discretion, may reduce or waive any vesting
or other restriction criteria that must be met to receive a payout. 
  
 (d) Form and Timing of Payment.    Payment of earned Restricted Stock Units shall be made as soon as practicable after the date(s) set forth in the Award Agreement. The Administrator, in its
sole discretion, may pay earned Restricted Stock Units in cash, Shares, or a combination thereof. Shares represented by Restricted Stock Units that are fully paid in cash again shall be available for grant under the Plan. 
  
 (e) Cancellation.    On the date
set forth in the Award Agreement, all unearned Restricted Stock Units shall be forfeited to the Company. 
  
 13. Non-Transferability of Awards.    Unless determined otherwise by the Administrator, an Award may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator makes an Award
transferable, such Award shall contain such additional terms and conditions as the Administrator deems appropriate. 
  
 14. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale. 
  
 (a) Changes in Capitalization.    Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered by each outstanding Award, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an Award, as well as the price per share of Common Stock covered by each such outstanding Award, and the numerical Share limits in Sections 6, 11, and 12 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, spin-off, combination or reclassification of the Common Stock, or any other
increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company; 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 Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Award. 
  
 (b) Dissolution or
Liquidation.    In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction. The
Administrator in its discretion may provide for a Participant to have the right to exercise his or her Option until ten (10) days prior to such transaction as to all of the Awarded Stock 








 
covered thereby, including Shares as to which the Option would not otherwise be exercisable. In addition, the Administrator may provide that any Company
repurchase option or forfeiture rights applicable to any Award shall lapse 100% and that any Award vesting shall accelerate 100%, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent
it has not been previously exercised (with respect to Options and Stock Purchase Rights) or vested (with respect to other Awards), an Award will terminate immediately prior to the consummation of such proposed action. 
  
 (c) Merger or Asset Sale.    In
the event of a merger of the Company with or into another corporation, or the sale of all or substantially all of the assets of the Company, each outstanding Award shall be assumed or an equivalent award 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 Award, the Participant shall (i) fully vest in and have the right to exercise the Option or Stock Purchase Right
as to all of the Awarded Stock, including Shares as to which it would not otherwise be vested or exercisable, and (ii) fully earn and receive a payout with respect to other Awards. If an Award is not assumed or substituted for in the event of a
merger or sale of assets, the Administrator shall notify the Participant in writing or electronically that (i) the Option or Stock Purchase Right shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice,
and (ii) all outstanding Options and Stock Purchase Rights shall terminate upon the expiration of such period and (iii) all other outstanding Awards shall be paid out immediately prior to the merger or sale of all or substantially all of the assets.
For the purposes of this paragraph, the Award shall be considered assumed if, following the merger or sale of assets, the award confers the right to purchase or receive, for each Share of Awarded Stock subject to the Award immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the
successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise (or payout or vesting, as applicable) of the Award, for each Share of Awarded
Stock subject to the Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the merger or sale of assets. 
  
 15. Date of Grant.    The date of grant of an
Award shall be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each Participant
within a reasonable time after the date of such grant. 
  
 16.
Amendment and Termination of the Plan. 
  
 (a) Amendment and Termination.    The Board may at any time amend, alter, suspend or terminate the Plan. 
  
 (b) Shareholder Approval.    The Company shall obtain shareholder approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable Laws. 
  
 (c) Effect of Amendment or Termination.    No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant, unless mutually agreed otherwise
between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder
with respect to Options granted under the Plan prior to the date of such termination. 
  
 17. Conditions Upon Issuance of Shares. 
  
 (a) Legal Compliance.    Shares shall not be issued pursuant to the exercise of an Award unless the exercise of
such Award and the issuance and delivery of such Shares (or with respect to certain Restricted 








 
Stock Units, the cash equivalent thereof) shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with
respect to such compliance. 
  
 (b) Investment
Representations.    As a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise or receipt that the Shares are being purchased
only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 
  
 18. Inability to Obtain Authority.    The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares (or with respect to certain Restricted Stock Units, the cash equivalent thereof) hereunder,
shall relieve the Company of any liability in respect of the failure to issue or sell such Shares (or with respect to certain Restricted Stock Units, the cash equivalent thereof) as to which such requisite authority shall not have been obtained.

  
 19. Reservation of Shares.    The
Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  
 20. Shareholder Approval.    The Plan shall be subject to approval by the shareholders of the
Company within twelve (12) months after the date the Plan is adopted. Such shareholder approval shall be obtained in the manner and to the degree required under Applicable Laws.