Korn / Ferry International Amended and Restated Employee Stock Purchase Plan



 Exhibit 10.1 

 
 KORN/FERRY INTERNATIONAL 

AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN 
  

 







 TABLE OF CONTENTS 

							
	 	 	  	  	Page	 
	    1.	 	 PURPOSE
	  	 	1	  
	    2.	 	 DEFINITIONS
	  	 	1	  
	    3.	 	 ELIGIBILITY
	  	 	4	  
	    4.	 	 STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS
	  	 	4	  
	    5.	 	 OFFERING PERIODS
	  	 	4	  
	    6.	 	 PARTICIPATION
	  	 	5	  
	    7.	 	 METHOD OF PAYMENT OF CONTRIBUTIONS
	  	 	5	  
	    8.	 	 GRANT OF OPTION
	  	 	7	  
	    9.	 	 EXERCISE OF OPTION
	  	 	7	  
	    10.	 	 DELIVERY
	  	 	8	  
	    11.	 	 TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS
	  	 	8	  
	    12.	 	 ADMINISTRATION
	  	 	9	  
	    13.	 	 DESIGNATION OF BENEFICIARY
	  	 	10	  
	    14.	 	 TRANSFERABILITY
	  	 	11	  
	    15.	 	 USE OF FUNDS; INTEREST
	  	 	11	  
	    16.	 	 REPORTS
	  	 	11	  
	    17.	 	 ADJUSTMENTS OF AND CHANGES IN THE STOCK
	  	 	11	  
	    18.	 	 POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS
	  	 	12	  
	    19.	 	 TERM OF PLAN; AMENDMENT OR TERMINATION
	  	 	12	  
	    20.	 	 NOTICES
	  	 	13	  
	    21.	 	 CONDITIONS UPON ISSUANCE OF SHARES
	  	 	13	  
	    22.	 	 PLAN CONSTRUCTION
	  	 	14	  
	    23.	 	 EMPLOYEES’ RIGHTS
	  	 	14	  
	    24.	 	 MISCELLANEOUS
	  	 	15	  
	    25.	 	 EFFECTIVE DATE
	  	 	15	  
	    26.	 	 TAX WITHHOLDING
	  	 	15	  
	    27.	 	 NOTICE OF SALE
	  	 	16	  
	    28.	 	 ARBITRATION
	  	 	16	  


  
 i 








 KORN/FERRY INTERNATIONAL 

AMENDED AND RESTATED EMPLOYEE STOCK PURCHASE PLAN 
 The following constitute the provisions of the Korn/Ferry International Amended and Restated Employee Stock Purchase Plan (the “Plan”). 

 

	1.	PURPOSE 

 The purpose of
this Plan is to assist Eligible Employees in acquiring a stock ownership interest in the Corporation, at a favorable price and upon favorable terms, pursuant to a plan which is intended to qualify as an “employee stock purchase plan” under
Section 423 of the Code. This Plan is also intended to encourage Eligible Employees to remain in the employ of the Corporation (or a Subsidiary which may be designated by the Committee as “Participating Subsidiary”) and to provide
them with an additional incentive to advance the best interests of the Corporation. 
  

	2.	DEFINITIONS 

 Capitalized
terms used herein which are not otherwise defined shall have the following meanings. 
 “Account” means the
bookkeeping account maintained by the Corporation, or by a recordkeeper on behalf of the Corporation, for a Participant pursuant to Section 7(a). 
 “Board” means the Board of Directors of the Corporation. 

“Code” means the Internal Revenue Code of 1986, as amended from time to time. 

“Committee” means the committee appointed by the Board to administer this Plan pursuant to Section 12. 

“Common Stock” means the Common Stock, par value $0.01 per share, of the Corporation, and such other securities or
property as may become the subject of Options pursuant to an adjustment made under Section 17. 

“Company” means, collectively, the Corporation, its Parent and its Subsidiaries (if any). 

“Compensation” means an Eligible Employee’s regular gross pay. Compensation includes any amounts contributed as
salary reduction contributions to a plan qualifying under Section 401(k), 125 or 129 of the Code. Any other form of remuneration is excluded from Compensation, including (but not limited to) the following: bonuses (including sign-on and
continuation bonuses), overtime payments, commissions, prizes, awards, relocation or housing allowances, stock option exercises, stock appreciation rights, restricted stock exercises, performance awards, auto allowances, tuition reimbursement and
other 







 
forms of imputed income, incentive compensation, special payments, fees and allowances. Notwithstanding the foregoing, Compensation shall not include any amounts deferred under or paid from any
nonqualified deferred compensation plan maintained by the Company. 
 “Contributions” means all bookkeeping
amounts credited to the Account of a Participant pursuant to Section 7(a). 
 “Corporation” means
Korn/Ferry International, a Delaware corporation, and its successors. 
 “Effective Date” means October 1,
2003, the date designated by the Board upon its adoption of this Plan. 
 “Eligible Employee” means any
employee of the Corporation, or of any Subsidiary which has been designated in writing by the Committee as a “Participating Subsidiary” (including any Subsidiaries which have become such after the date that this Plan is approved by the
stockholders of the Corporation). Notwithstanding the foregoing, “Eligible Employee” shall not include any employee: 
  

	 	(a)	who has been employed by the Corporation or a Subsidiary for less than six months; or 


 

	 	(b)	whose customary employment is for 20 hours or less per week. 

 “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time. 
 “Exercise Date” means, with respect to an Offering Period, the last day of that Offering Period. 
 “Fair Market Value” on any date means: 
  

	 	(a)	if the Common Stock is listed on the New York Stock Exchange or on another national securities exchange, the closing price of a Share on the New York Stock Exchange or
such other exchange on such date, or, if there is no trading of the Common Stock as quoted on the New York Stock Exchange or such other exchange on such date, then the closing price of a Share as quoted on the New York Stock Exchange or such other
exchange on the next preceding date on which there was trading in the Shares; 

  

	 	(b)	if the Common Stock is not listed or admitted to trade on a national securities exchange, the last/closing price for a Share on such date, as furnished by the National
Association of Securities Dealers, Inc. (“NASD”) through the NASDAQ National Market Reporting System or a similar organization if the NASD is no longer reporting such information; 


  
 2 









	 	(c)	if the Common Stock is not listed or admitted to trade on a national securities exchange and is not reported on the National Market Reporting System, the mean between
the bid and asked price for a Share on such date, as furnished by the NASD or a similar organization; or 

  

	 	(d)	if the Common Stock is not listed or admitted to trade on a national securities exchange, is not reported on the National Market Reporting System and if bid and asked
prices for the Common Stock are not furnished by the NASD or a similar organization, the value as established by the Committee at such time for purposes of this Plan. 


“Grant Date” means the first day of each Offering Period, as determined by the Committee and announced to potential
Eligible Employees. 
 “Offering Period” means the six-consecutive month period commencing on each Grant Date;
provided, however, that the Committee may declare, as it deems appropriate and in advance of the applicable Offering Period, a shorter (not to be less than three months) Offering Period or a longer (not to exceed 27 months)
Offering Period; provided further that the Grant Date for an Offering Period may not occur on or before the Exercise Date for the immediately preceding Offering Period. 

“Option” means the stock option to acquire Shares granted to a Participant pursuant to Section 8. 

“Option Price” means the per share exercise price of an Option as determined in accordance with Section 8(b).

 “Parent” means any corporation (other than the Corporation) in an unbroken chain of corporations ending with
the Corporation in which each corporation (other than the Corporation) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one or more of the other corporations in the chain. 

“Participant” means an Eligible Employee who has elected to participate in this Plan and who has filed a valid and
effective Subscription Agreement to make Contributions pursuant to Section 6. 
 “Plan” means this
Korn/Ferry International Amended and Restated Employee Stock Purchase Plan, as amended from time to time. 
 “Rule
16b-3” means Rule 16b-3 as promulgated by the Securities Exchange Commission under Section 16, as amended from time to time. 
 “Share” means a share of Common Stock. 
 “Subscription
Agreement” means the written agreement filed by an Eligible Employee with the Corporation pursuant to Section 6 to participate in this Plan. 

  
 3 








 “Subsidiary” means any corporation (other than the Corporation) in an
unbroken chain of corporations (beginning with the Corporation) in which each corporation (other than the last corporation) owns stock possessing 50% or more of the total combined voting power of all classes of stock in one or more of the other
corporations in the chain. 
  

	3.	ELIGIBILITY 

 Any person
employed as an Eligible Employee as of a Grant Date shall be eligible to participate in this Plan during the Offering Period in which such Grant Date occurs, subject to the Eligible Employee satisfying the requirements of Section 6. 

 

	4.	STOCK SUBJECT TO THIS PLAN; SHARE LIMITATIONS 

  

	 	(a)	Subject to the provisions of Section 17, the capital stock that may be delivered under this Plan will be shares of the Corporation’s authorized but unissued
Common Stock and any of its shares of Common Stock held as treasury shares. The maximum number of Shares that may be delivered pursuant to Options granted under this Plan is 3,000,000 Shares, subject to adjustments pursuant to Section 17 (the
“Plan Limit”). 

 In the event that all of the Shares made available under this Plan are
subscribed prior to the expiration of this Plan, this Plan shall terminate at the end of that Offering Period and the Shares available shall be allocated for purchase by Participants in that Offering Period on a pro-rata basis determined with
respect to Participants’ Account balances. 
  

	 	(b)	The maximum number of Shares that anyone individual may acquire upon exercise of his or her Option with respect to anyone Offering Period is 12,500, subject to
adjustments pursuant to Section 17 (the “Individual Limit”); provided, however, that the Committee may amend such Individual Limit, effective no earlier than the first Offering Period commencing after the adoption
of such amendment, without stockholder approval. The Individual Limit shall be proportionately adjusted for any Offering Period of less than six months, and may, at the discretion of the Committee, be proportionately increased for any Offering
Period of greater than six months. 

  

	5.	OFFERING PERIODS 

 During
the term of this Plan, the Corporation will offer Options to purchase Shares in each Offering Period to all Participants in that Offering Period. Unless otherwise specified by the Committee in advance of the Offering Period, an Offering Period that
commences on or about July 1 will end the following December 31 and an Offering Period that commences on or about January 1 will end the following June 30. Each Option shall become effective on the Grant Date. The term of each
Option shall be the duration of the related Offering Period and shall end on the Exercise Date. The first Offering Period shall commence as of a date determined by the Board or Committee, but no earlier than the Effective Date. Offering Periods
shall continue until this Plan is 

  
 4 








 
terminated in accordance with Section 18 or 19, or, if earlier, until no Shares remain available for Options pursuant to Section 4. 

 

	6.	PARTICIPATION 

  

	 	(a)	An Eligible Employee may become a participant in this Plan by completing a Subscription Agreement on a form approved by and in a manner prescribed by the Committee (or
its delegate). To become effective, a Subscription Agreement must be signed by the Eligible Employee and filed with the Corporation at the time specified by the Committee, but in all cases prior to the start of the Offering Period with respect to
which it is to become effective, and must set forth a whole percentage (or, if the Committee so provides, a stated amount) of the Eligible Employee’s Compensation to be credited to the Participant’s Account as Contributions each pay
period. 

  

	 	(b)	Notwithstanding the foregoing, a Participant’s Contribution election shall be subject to the following limitations: 


(i) the 5% ownership and the $25,000 annual purchase limitations set forth in Section 8(c); 

(ii) a Participant may not elect to contribute more than fifteen percent (15%) of his or her Compensation each pay
period as Plan Contributions, provided, however, that the Committee shall have discretion to establish a higher contribution percentage limit for any Offering Period that is less than six (6) months; and 

(iii) such other limits, rules, or procedures as the Committee may prescribe. 

 

	 	(c)	Subscription Agreements shall contain the Eligible Employee’s authorization and consent to the Corporation’s withholding from his or her Compensation the
amount of his or her Contributions. An Eligible Employee must execute and file with the Corporation a new Subscription Agreement, and his or her participation election and withholding consent thereon, for each Offering Period as a condition for
participation in that Offering Period, unless the Committee expressly adopts a policy allowing Subscription Agreements to remain in effect for subsequent Offering Periods. If the Committee adopts such a policy, Subscription Agreements will remain in
effect for subsequent Offering Periods until (i) the Eligible Employee’s participation terminates pursuant to the terms hereof, or (ii) the Eligible Employee files a new Subscription Agreement that becomes effective.


  

	7.	METHOD OF PAYMENT OF CONTRIBUTIONS 

  

	 	(a)	 The Corporation shall maintain on its books, or cause to be maintained by a recordkeeper, an Account in the name of each Participant. The Compensation
elected to be applied as Contributions by a Participant shall be deducted from 



  
 5 









	 	
such Participant’s Compensation on each payday during the period for payroll deductions set forth below and such payroll deductions shall be credited to that Participant’s Account as
soon as administratively practicable after such date. A Participant may not make any additional payments to his or her Account. A Participant’s Account shall be reduced by any amounts used to pay the Option Price of Shares acquired, or by any
other amounts distributed pursuant to the terms hereof. 

  

	 	(b)	Subject to such other rules as the Committee may adopt, payroll deductions with respect to an Offering Period shall commence as of the first pay date which coincides
with or immediately follows the applicable Grant Date and shall end on the last pay date which coincides with or immediately precedes the applicable Exercise Date, unless sooner terminated by the Participant as provided in this Section 7 or
until his or her participation terminates pursuant to Section 11. 

  

	 	(c)	A Participant may terminate his or her Contributions during an Offering Period (and receive a distribution of the balance of his or her Account in accordance with
Section 11) by completing and filing with the Corporation, in such form and on such terms as the Committee (or its delegate) may prescribe, a written withdrawal form which shall be signed by the Participant. Such termination shall be effective
as soon as administratively practicable after its receipt by the Corporation. A withdrawal election pursuant to this Section 7(c) with respect to an Offering Period shall only be effective, however, if it is received by the Corporation prior to
the Exercise Date of that Offering Period (or such earlier deadline that the Committee may reasonably require to process the withdrawal prior to the applicable Exercise Date). Partial withdrawals of Accounts, and other modifications or suspensions
of Subscription Agreements, except as provided in Section 7(e) or 7(f), are not permitted. 

  

	 	(d)	During leaves of absence approved by the Corporation and meeting the requirements of Regulation Section 1.421-7(h)(2) under the Code, a Participant may continue
participation in this Plan by cash payments to the Corporation on his normal paydays equal to the reduction in his Plan Contributions caused by his leave. 

  


	 	(e)	A Participant may increase or decrease the level of his or her Contributions (within Plan limits) by completing and filing with the Corporation, on such terms as the
Committee (or its delegate) may prescribe, a new Subscription Agreement which indicates such election. Subject to any other timing requirements that the Committee may impose, an election pursuant to this Section 7(e) shall be effective with the
first Offering Period that commences after the Corporation’s receipt of such election. 

  

	 	(f)	 A Participant may discontinue (but not increase or otherwise decrease the level of) his or her Contributions, by filing with the Corporation, on such
terms as the Committee (or its delegate) may prescribe, a new Subscription Agreement that indicates such election. Unless otherwise provided by the Committee, an election 



  
 6 









	 	
pursuant to this Section 7(f) shall be effective no earlier than the first payroll period that starts after the Corporation’s receipt of such election. 


 

	8.	GRANT OF OPTION 

  

	 	(a)	On each Grant Date, each Eligible Employee who is a participant during that Offering Period shall be granted an Option to purchase a number of Shares. The Option shall
be exercised on the Exercise Date. The number of Shares subject to the Option shall be determined by dividing the Participant’s Account balance as of the applicable Exercise Date by the Option Price, subject to the maximum determined pursuant
to Section 4(b). 

  

	 	(b)	The Option Price per Share of the Shares subject to an Option for an Offering Period shall be the lesser of: (i) 85% of the Fair Market Value of a Share on the
applicable Grant Date; or (ii) 85% of the Fair Market Value of a Share on the applicable Exercise Date. 

  

	 	(c)	Notwithstanding anything else contained herein, a person who is otherwise an Eligible Employee shall not be granted any Option (or any Option granted shall be subject
to compliance with the following limitations) or other right to purchase Shares under this Plan to the extent: 

 (i) it would, if exercised, cause the person to own “stock” (as such term is defined for purposes of Section 423(b)(3) of the Code) possessing 5% or more of the total combined voting power
or value of all classes of stock of the Corporation, or of any Parent, or of any Subsidiary; or 
 (ii) such
Option causes such individual to have rights to purchase stock under this Plan and any other plan of the Corporation, any Parent, or any Subsidiary which is qualified under Section 423 of the Code which accrue at a rate which exceeds $25,000 of
the fair market value of the stock of the Corporation, of any Parent, or of any Subsidiary (determined at the time the right to purchase such Stock is granted, before giving effect to any discounted purchase price under any such plan) for each
calendar year in which such right is outstanding at any time. 
 For purposes of the foregoing, a right to purchase stock accrues
when it first become exercisable during the calendar year. In determining whether the stock ownership of an Eligible Employee equals or exceeds the 5% limit set forth above, the rules of Section 424(d) of the Code (relating to attribution of
stock ownership) shall apply, and stock which the Eligible Employee may purchase under outstanding options shall be treated as stock owned by the Eligible Employee. 
  

	9.	EXERCISE OF OPTION 


Unless a Participant’s Plan participation is terminated as provided in Section 11, his or her Option for the purchase of Shares
shall be exercised automatically on the Exercise 

  
 7 








 
Date for that Offering Period, without any further action on the Participant’s part, and the maximum number of whole Shares subject to such Option (subject to the Individual Limit set forth
in Section 4(b) and the limitations contained in Section 8(c)) shall be purchased at the Option Price with the balance of such Participant’s Account. 
 If any amount which is not sufficient to purchase a whole Share remains in a Participant’s Account after the exercise of his or her Option on the Exercise Date: (i) such amount shall be credited
to such Participant’s Account for the next Offering Period, if he or she is then a Participant; or (ii) if such Participant is not a Participant in the next Offering Period, or if the Committee so elects, such amount shall be refunded to
such Participant as soon as administratively practicable after such date. If the Share limit of Section 4(a) is reached, any amount that remains in a Participant’s Account after the exercise of his or her Option on the Exercise Date to
purchase the number of Shares that he or she is allocated shall be refunded to the Participant as soon as administratively practicable after such date. 
 If any amount which exceeds the Individual Limit set forth in Section 4(b) or one of the limitations set forth in Section 8(c) remains in a Participant’s Account after the exercise of his
or her Option on the Exercise Date, such amount shall be refunded to the Participant as soon as administratively practicable after such date. 
  

	10.	DELIVERY 

 As soon as
administratively practicable after the Exercise Date, the Corporation shall deliver to each Participant a certificate representing the Shares purchased upon exercise of his or her Option. The Corporation may make available an alternative arrangement
for delivery of Shares to a recordkeeping service. The Committee (or its delegate), in its discretion, may either require or permit Participants to elect that such certificates representing the Shares purchased or to be purchased under the Plan be
delivered to such recordkeeping service. In the event the Corporation is required to obtain from any commission or agency authority to issue any such certificate, the Corporation will seek to obtain such authority. If the Corporation is unable to
obtain from any such commission or agency authority which counsel for the Corporation deems necessary for the lawful issuance of any such certificate, or if for any other reason the Corporation can not issue or deliver Shares and satisfy
Section 21, the Corporation shall be relieved from liability to any Participant except that the Corporation shall return to each Participant the amount of the balance credited to his or her Account. 

 

	11.	TERMINATION OF EMPLOYMENT; CHANGE IN ELIGIBLE STATUS 

  

	 	(a)	 Except as provided in the next paragraph, if a Participant ceases to be an Eligible Employee for any reason, or if the Participant elects to terminate
and withdraw Contributions pursuant to Section 7(c), at any time prior to the last day of an Offering Period in which he or she participates, such Participant’s Account shall be paid to him or her in cash (or, in the event of the
Participant’s death, to the person or persons entitled thereto under Section 13 in cash) as soon as administratively practicable but in no event more than sixty (60) days following




  
 8 









	 	
such cessation or such election, and such Participant’s Option and participation in the Plan shall be automatically terminated. 


If a Participant (i) ceases to be an Eligible Employee during an Offering Period but remains an employee of the Company through the
Exercise Date, (ii) discontinues Contributions pursuant to Section 7(f), or (iii) during an Offering Period commences a sick leave, military leave, or other leave of absence approved by the Company, and the leave meets the
requirements of Treasury Regulation Section 1.421-7(h)(2) and the Participant is an employee of the Company or on such leave as of the applicable Exercise Date, such Participant’s Contributions shall cease (subject to Section 7(d)),
and the Contributions previously credited to the Participant’s Account for that Offering Period shall be used to exercise the Participant’s Option as of the applicable Exercise Date in accordance with Section 9 (unless the Participant
makes a timely election to terminate and withdraw Contributions in accordance with Section 7(c), in which case such Participant’s Account shall be paid to him or her in cash in accordance with the foregoing paragraph). 

 

	 	(b)	A Participant’s termination from Plan participation precludes the Participant from again participating in this Plan during that Offering Period. However, such
termination shall not have any effect upon his or her ability to participate in any succeeding Offering Period, provided that the applicable eligibility and participation requirements are again then met. A Participant’s termination from Plan
participation shall be deemed to be a revocation of that Participant’s Subscription Agreement and such Participant must file a new Subscription Agreement to resume Plan participation in any succeeding Offering Period. 


 

	 	(c)	For purposes of this Plan, if a Participating Subsidiary ceases to be a Subsidiary, each person employed by that Subsidiary will be deemed to have terminated employment
for purposes of this Plan and will no longer be an Eligible Employee, unless the person continues as an Eligible Employee in respect of another Company entity. 


 

	12.	ADMINISTRATION 

  

	 	(a)	The Board shall appoint the Committee, which shall be composed of not less than two members of the Board. The Board may, at any time, increase or decrease the number of
members of the Committee, may remove from membership on the Committee all or any portion of its members, and may appoint such person or persons as it desires to fill any vacancy existing on the Committee, whether caused by removal, resignation, or
otherwise. The Board may also, at any time, assume the administration of this Plan, in which case references to the “Committee” shall be deemed to be references to the Board. 


 

	 	(b)	 The Committee shall supervise and administer this Plan and shall have full power and discretion to adopt, amend and rescind any rules deemed desirable
and appropriate for the administration of this Plan and not inconsistent with the terms 



  
 9 









	 	
of this Plan, and to make all other determinations necessary or advisable for the administration of this Plan. The Committee shall act by majority vote or by unanimous written consent. No member
of the Committee shall be entitled to act on or decide any matter relating solely to himself or herself or solely to any of his or her rights or benefits under this Plan. The Committee shall have full power and discretionary authority to construe
and interpret the terms and conditions of this Plan, which construction or interpretation shall be final and binding on all parties including the Company, Participants and beneficiaries. The Committee may delegate ministerial non-discretionary
functions to third parties, including individuals who are officers or employees of the Corporation. 

  

	 	(c)	Subject only to compliance with the express provisions hereof, the Board and Committee may act in their absolute discretion in matters within their authority related to
this Plan. Any action taken by, or inaction of, the Corporation, any Participating Subsidiary, the Board or the Committee relating or pursuant to this Plan shall be within the absolute discretion of that entity or body and will be conclusive and
binding upon all persons. In making any determination or in taking or not taking any action under this Plan, the Board or Committee, as the case may be, may obtain and may rely on the advice of experts, including professional advisors to the
Corporation. No member of the Board or Committee, or officer or agent of the Company, will be liable for any action, omission or decision under the Plan taken, made or omitted in good faith. 


 

	13.	DESIGNATION OF BENEFICIARY 

  

	 	(a)	A Participant shall file, on a form and in a manner prescribed by the Committee (or its delegate), a written designation of a beneficiary who is to receive any Shares
or cash from such Participant’s Account under this Plan in the event of such Participant’s death. If a Participant’s death occurs subsequent to the end of an Offering Period but prior to the delivery to him or her of any Shares
deliverable under the terms of this Plan, such Shares and any remaining balance of such Participant’s Account shall be paid to such beneficiary (or such other person as set forth in Section l3(b)) as soon as administratively practicable
after the Corporation receives notice (in a form acceptable to the Committee) of such Participant’s death and any outstanding unexercised Option shall terminate. If a Participant’s death occurs at any other time, the balance of such
Participant’s Account shall be paid to such beneficiary (or such other person as set forth in Section l3(b)) in cash as soon as administratively practicable after the Corporation receives notice of such Participant’s death and such
Participant’s Option shall terminate. If a Participant is married and the designated beneficiary is not his or her spouse, spousal consent shall be required for such designation to be effective unless it is established (to the satisfaction of
the Committee or its delegate) that there is no spouse or that the spouse cannot be located. The Committee may rely on the last designation of a beneficiary filed by a Participant in accordance with this Plan. 


  
 10 










	 	(b)	Beneficiary designations may be changed by the Participant (and his or her spouse, if required) at any time on forms provided and in the manner prescribed by the
Committee (or its delegate). If a Participant dies with no validly designated beneficiary under this Plan who is living at the time of such Participant’s death, the Corporation shall deliver all Shares and/or cash payable pursuant to the terms
hereof to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed, the Corporation, in its discretion, may deliver such Shares and/or cash to the spouse or to anyone or more
dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Corporation, then to such other person as the Corporation may designate. 


 

	14.	TRANSFERABILITY 

 Neither
Contributions credited to a Participant’s Account nor any Options or rights with respect to the exercise of Options or right to receive Shares under this Plan may be anticipated, alienated, encumbered, 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 13) by the Participant. Any such attempt at anticipation, alienation, encumbrance, assignment, transfer, pledge or other
disposition shall be without effect and all amounts shall be paid and all Shares shall be delivered in accordance with the provisions of this Plan. Amounts payable or Shares deliverable pursuant to this Plan shall be paid or delivered only to the
Participant or, in the event of the Participant’s death, to the Participant’s beneficiary pursuant to Section 13. 
  

	15.	USE OF FUNDS; INTEREST 


All Contributions received or held by the Corporation under this Plan will be included in the general assets of the Corporation and may be
used for any corporate purpose. Notwithstanding anything else contained herein to the contrary, no interest will be paid to any Participant or credited to his or her Account under this Plan (in respect of Account balances, refunds of Account
balances, or otherwise). 
  

	16.	REPORTS 

 Statements shall
be provided to Participants as soon as administratively practicable following each Exercise Date. Each Participant’s statement shall set forth, as of such Exercise Date, that Participant’s Account balance immediately prior to the exercise
of his or her Option, the Option Price, the number of whole Shares purchased and his or her remaining Account balance, if any. 
  

	17.	ADJUSTMENTS OF AND CHANGES IN THE STOCK 

 Upon or in contemplation of any reclassification, recapitalization, stock split (including a stock split in the form of a stock dividend), or reverse stock split; any merger, combination, consolidation,
or other reorganization; split-up, spin-off, or any similar extraordinary dividend distribution in respect of the Common Stock (whether in the form of securities or property); any exchange of Common Stock or other securities of the


  
 11 









 
Corporation, or any similar, unusual or extraordinary corporate transaction in respect of the Common Stock; or a sale of substantially all the assets of the Corporation as an entirety occurs;
then the Committee shall, in such manner, to such extent (if any) and at such time as it deems appropriate and equitable in the circumstances: 
  

	 	(a)	proportionately adjust any or all of (i) the number and type of Shares or the number and type of other securities that thereafter may be made the subject of
Options (including the specific maxima and numbers of Shares set forth elsewhere in this Plan), (ii) the number, amount and type of Shares (or other securities or property) subject to any or all outstanding Options, (iii) the Option Price
of any or all outstanding Options, or (iv) the securities, cash or other property deliverable upon exercise of any outstanding Options; or 

  

	 	(b)	make provision for a cash payment or for the substitution or exchange of any or all outstanding Options for cash, securities or property to be delivered to the holders
of any or all outstanding Options based upon the distribution or consideration payable to holders of the Common Stock upon or in respect of such event. 

 The Committee may adopt such valuation methodologies for outstanding Options as it deems reasonable in the event of a cash or property settlement and, without limitation on other methodologies, may base
such settlement solely upon the excess (if any) of the amount payable upon or in respect of such event over the exercise or strike price of the Option. 
 In any of such events, the Committee may take such action sufficiently prior to such event to the extent that the Committee deems the action necessary to permit the Participant to realize the benefits
intended to be conveyed with respect to the underlying shares in the same manner as is or will be available to stockholders generally. 
  

	18.	POSSIBLE EARLY TERMINATION OF PLAN AND OPTIONS 

 Upon a dissolution of the Corporation, or any other event described in Section 17 that the Corporation does not survive, the Plan shall terminate, and if such event occurs prior to the last day of an
Offering Period, any outstanding Option granted with respect to that Offering Period shall also terminate. However, termination of the Plan or of any Option under this Section 18 shall be subject to any provision that has been expressly made by
the Board for the survival, substitution, assumption, exchange or other settlement of the Plan and Options. In the event a Participant’s Option is terminated pursuant to this Section 18 without a provision having been made by the Board for
a substitution, exchange or other settlement of the Option, such Participant’s Account shall be paid to him or her in cash without interest. 
  

	19.	TERM OF PLAN; AMENDMENT OR TERMINATION 

  

	 	(a)	 This Plan originally became effective as of the Effective Date. This amendment and restatement of the Plan was adopted by the Board of Directors of the
Company on August 15, 2011 and it will become effective (the “Restatement 



  
 12 










	 	
Effective Date”), when it is approved by the Company’s stockholders. No new Offering Periods shall commence on or after the day before the tenth anniversary of the Restatement Effective
Date and this Plan shall terminate as of the Exercise Date on or immediately following such date unless sooner terminated pursuant to Section 4, Section 18, or this Section 19. 


 

	 	(b)	The Board may, at any time, terminate or, from time to time, amend, modify or suspend this Plan, in whole or in part, without notice (including, without limitation, the
limits of Sections 4(b), 6(b)(ii), and 6(b)(iii)). Stockholder approval for any amendment or modification shall not be required, except to the extent required by applicable law or required under Section 423 of the Code in order to preserve
the intended tax consequences of this Plan, or otherwise deemed necessary or advisable by the Board. No Options may be granted during any suspension of this Plan or after the termination of this Plan, but the Committee will retain jurisdiction as to
Options then outstanding in accordance with the terms of this Plan. No amendment, modification, or termination pursuant to this Section 19(b) shall, without written consent of the Participant, affect in any manner materially adverse to the
Participant any rights or benefits of such Participant or obligations of the Corporation under any Option granted under this Plan prior to the effective date of such change. Changes contemplated by Section 17 or Section 18 shall not be
deemed to constitute changes or amendments requiring Participant consent. Notwithstanding the foregoing, the Committee shall have the right to designate from time to time the Subsidiaries whose employees may be eligible to participate in this Plan
and such designation shall not constitute any amendment to this Plan requiring stockholder approval. 

  

	20.	NOTICES 

 All notices or
other communications by a Participant to the Corporation contemplated by this Plan shall be deemed to have been duly given when received in the form and manner specified by the Committee (or its delegate) at the location, or by the person,
designated by the Committee (or its delegate) for that purpose. 
  

	21.	CONDITIONS UPON ISSUANCE OF SHARES 

 This Plan, the granting of Options under this Plan and the offer, issuance and delivery of Shares are subject to compliance with all applicable federal and state laws, rules and regulations (including but
not limited to state and federal securities laws) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Corporation, be necessary or advisable in connection therewith. The person
acquiring any securities under this Plan will, if requested by the Corporation and as a condition precedent to the exercise of his or her Option, provide such assurances and representations to the Corporation as the Committee may deem necessary or
desirable to assure compliance with all applicable legal and accounting requirements. 

  
 13 










	22.	PLAN CONSTRUCTION 

  

	 	(a)	It is the intent of the Corporation that transactions involving Options under this Plan in the case of Participants who are or may be subject to the prohibitions of
Section 16 of the Exchange Act satisfy the requirements for applicable exemptions under Rule 16 promulgated by the Securities Exchange Commission under Section 16 of the Exchange Act so that such persons (unless they otherwise agree)
will be entitled to the exemptive relief of Rule l6b-3 or other exemptive rules under Section 16 of the Exchange Act in respect of those transactions and will not be subject to avoidable liability thereunder. 


 

	 	(b)	This Plan and Options are intended to qualify under Section 423 of the Code. 


 

	 	(c)	If any provision of this Plan or of any Option would otherwise frustrate or conflict with the intents expressed above, that provision to the extent possible shall be
interpreted so as to avoid such conflict. If the conflict remains irreconcilable, the Committee may disregard the provision if it concludes that to do so furthers the interest of the Corporation and is consistent with the purposes of this Plan as to
such persons in the circumstances. 

  

	23.	EMPLOYEES’ RIGHTS 

  

	 	(a)	Nothing in this Plan (or in any other documents related to this Plan) will confer upon any Eligible Employee or Participant any right to continue in the employ or other
service of the Company, constitute any contract or agreement of employment or other service or effect an employee’s status as an employee at will, nor shall interfere in any way with the right of the Company to change such person’s
compensation or other benefits or to terminate his or her employment or other service with or without cause. Nothing contained in this Section 23(a), however, is intended to adversely affect any express independent right of any such person
under a separate employment or service contract other than a Subscription Agreement. 

  

	 	(b)	No Participant or other person will have any right, title or interest in any fund or in any specific asset (including Shares) of the Company by reason of any Option
hereunder. Neither the provisions of this Plan (or of any related documents), nor the creation or adoption of this Plan, nor any action taken pursuant to the provisions of this Plan will create, or be construed to create, a trust of any kind or a
fiduciary relationship between the Company and any Participant or other person. To the extent that a Participant or other person acquires a right to receive payment pursuant to this Plan, such right will be no greater than the right of any unsecured
general creditor of the Corporation. No special or separate reserve, fund or deposit will be made to assure any such payment. 

  

	 	(c)	 A Participant will not be entitled to any privilege of stock ownership as to any Shares not actually delivered to and held of record by the
Participant. No 



  
 14 










	 	
adjustment will be made for dividends or other rights as a stockholder for which a record date is prior to such date of delivery. 


 

	24.	MISCELLANEOUS 

  

	 	(a)	This Plan, the Options, and related documents shall be governed by, and construed in accordance with, the laws of the State of Delaware. If any provision shall be held
by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions of this Plan shall continue in effect. 

  

	 	(b)	Captions and headings are given to the sections of this Plan solely as a convenience to facilitate reference. Such captions and headings shall not be deemed in any way
material or relevant to the construction of interpretation of this Plan or any provision hereof. 

  

	 	(c)	The adoption of this Plan shall not affect any other Company compensation or incentive plans in effect. Nothing in this Plan will limit or be deemed to limit the
authority of the Board or Committee (i) to establish any other forms of incentives or compensation for employees of the Company (with or without reference to the Common Stock), or (ii) to grant or assume options (outside the scope of and
in addition to those contemplated by this Plan) in connection with any proper corporate purpose; to the extent consistent with any other plan or authority. 


 

	 	(d)	Benefits received by a Participant under an Option granted pursuant to this Plan shall not be deemed a part of the Participant’s compensation for purposes of the
determination of benefits under any other employee welfare or benefit plans or arrangements, if any, provided by the Company, except where the Committee or the Board expressly otherwise provides or authorizes in writing. 


 

	25.	EFFECTIVE DATE 


Notwithstanding anything else contained herein to the contrary, the effectiveness of this Plan is subject to the approval of this Plan by
the stockholders of the Corporation within twelve months of the Effective Date. Notwithstanding anything else contained herein to the contrary, no Shares shall be issued or delivered under this Plan until such stockholder approval is obtained and,
if such stockholder approval is not obtained within such twelve-month period of time, all Contributions credited to a Participant’s Account hereunder shall be refunded to such Participant (without interest) as soon as practicable after the end
of such twelve-month period. 
  

	26.	TAX WITHHOLDING 


Notwithstanding anything else contained in this Plan herein to the contrary, the Company may deduct from a Participant’s Account
balance as of an Exercise Date, before the exercise of the Participant’s Option is given effect on such date, the amount of any taxes which the Company reasonably determines it may be required to withhold with respect to such exercise. In such
event, the maximum number of whole Shares subject to such Option (subject to the other limits set forth in this Plan) shall be purchased at the Option 

  
 15 









 
Price with the balance of the Participant’s Account (after reduction for the tax withholding amount). 
 Should the Company for any reason be unable, or elect not to, satisfy its tax withholding obligations in the manner described in the preceding paragraph with respect to a Participant’s exercise of an
Option, or should the Company reasonably determine that it has a tax withholding obligation with respect to a disposition of Shares acquired pursuant to the exercise of an Option prior to satisfaction of the holding period requirements of
Section 423 of the Code, the Company shall have the right at its option to (i) require the Participant to pay or provide for payment of the amount of any taxes which the Company reasonably determines that it is required to withhold with
respect to such event or (ii) deduct from any amount otherwise payable to or for the account of the Participant the amount of any taxes which the Company reasonably determines that it is required to withhold with respect to such event.

  

	27.	NOTICE OF SALE 

 Any
person who has acquired Shares under this Plan shall give prompt written notice to the Corporation of any sale or other transfer of the Shares if such sale or transfer occurs (i) within the two-year period after the Grant Date of the Offering
Period with respect to which such Shares were acquired, or (ii) within the twelve-month period after the Exercise Date of the Offering Period with respect to which such Shares were acquired. 

 

	28.	ARBITRATION 

 Any
controversy arising out of or relating to this Plan, and/or the Subscription Agreement, their enforcement or interpretation, or because of an alleged breach, default, or misrepresentation in connection with any of their provisions, or any other
controversy arising out of or related to the Option, including, but not limited to, any state or federal statutory claims, shall be submitted to arbitration in Los Angeles County, California, before a sole arbitrator selected from Judicial
Arbitration and Mediation Services, Inc., Los Angeles County, California, or its successor (“JAMS”), or if JAMS is no longer able to supply the arbitrator, such arbitrator shall be selected from the American Arbitration
Association, and shall be conducted in accordance with the provisions of California Code of Civil Procedure §§ 1280 et seq. as the exclusive forum for the resolution of such dispute; provided, however, that
provisional injunctive relief may, but need not, be sought by any interested party to this Plan and/or the Subscription Agreement in a court of law while arbitration proceedings are pending, and any provisional injunctive relief granted by such
court shall remain effective until the matter is finally determined by the arbitrator. Final resolution of any dispute through arbitration may include any remedy or relief which the arbitrator deems just and equitable, including any and all remedies
provided by applicable state or federal statutes. At the conclusion of the arbitration, the arbitrator shall issue a written decision that sets forth the essential findings and conclusions upon which the arbitrator’s award or decision is based.
Any award or relief granted by the arbitrator hereunder shall be final and binding on the parties hereto and may be enforced by any court of competent jurisdiction. The parties acknowledge and agree that they are hereby waiving any rights to trial
by jury in any action, proceeding or 

  
 16 









 
counterclaim brought by either of the parties against the other in connection with any matter whatsoever arising out of or in any way connected with any of the matters referenced in the first
sentence above. The parties agree that Corporation shall be responsible for payment of the forum costs of any arbitration hereunder, including the arbitrator’s fee. The parties further agree that in any proceeding with respect to such matters,
each party shall bear its own attorney’s fees and costs (other than forum costs associated with the arbitration) incurred by it or him or her in connection with the resolution of the dispute. 

  
 17