Document:

exv10w3

Exhibit 10.3

ILLUMINA, INC.

2000 EMPLOYEE STOCK PURCHASE PLAN

As Amended and Restated October 28, 2009

     The following constitute the provisions of the 2000 Employee Stock Purchase Plan of Illumina,
Inc.

1. Purpose. The purpose of the Purchase Plan is to provide Employees of the Company
and its Designated Companies with an opportunity to purchase Common Stock of the Company through
accumulated payroll deductions. It is the intention of the Company to have the Purchase Plan
qualify as an “Employee Stock Purchase Plan” under Section 423 of the Code, although the Company
makes no undertaking or representation to maintain such qualification. The provisions of the
Purchase Plan, accordingly, shall be construed so as to extend and limit participation in a manner
consistent with the requirements of that section of the Code. In addition, the Purchase Plan
authorizes the purchase of Common Stock under a Non-423(b) Component, pursuant to rules, procedures
or sub-plans adopted by the Board and designed to achieve tax, securities law or other objectives.

2. Definitions.

     (a) “Affiliate” shall mean any entity, other than a Subsidiary, in which the Company
has an equity or other ownership interest.

     (b) “Board” shall mean the Board of Directors of the Company or any committee thereof
designated by the Board of Directors of the Company in accordance with Section 14 of the Purchase
Plan.

     (c) “Code” shall mean the Internal Revenue Code of 1986, as amended.

     (d) “Code Section 423(b) Plan” shall mean an employee stock purchase plan which is
designed to meet the requirements set forth in Section 423(b) of the Code, as amended. The
provisions of the Code Section 423(b) Plan should be construed, administered and enforced in
accordance with Section 423(b) of the Code.

     (e) “Common Stock” shall mean the common stock of the Company.

     (f) “Company” shall mean Illumina, Inc., a Delaware corporation and any Designated
Subsidiary of the Company.

     (g) “Compensation” shall mean all base straight time gross earnings, but exclusive of
commissions, payments for overtime, shift premium, incentive compensation, incentive payments,
bonuses and other compensation, unless otherwise determined by the Board. Such Compensation shall
be calculated before deduction of (i) any income or employment tax withholdings or (ii) any
contributions made by the participant to any Code Section 401(k) salary

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deferral plan or any Code Section 125 cafeteria benefit program now or hereafter established
by the Company or any of its Subsidiaries. The Board shall have the discretion to determine what
constitutes Compensation for Employees outside of the United States.

     (h) “Designated Company” shall mean any Subsidiary or Affiliate that has been
designated by the Board from time to time in its sole discretion as eligible to participate in the
Purchase Plan. For purposes of the Code Section 423(b) Plan, only the Company and its Subsidiaries
may be Designated Companies, provided, however, that at any given time, a Subsidiary that is a
Designated Company under the Code Section 423(b) Plan shall not be a Designated Company under the
Non-423(b) Plan.

     (i) “Employee” shall mean any individual whose customary employment with the Company
or a Designated Company for tax purposes is at least twenty (20) hours per week for more than five
(5) months in any calendar year. Under the Non-423(b) Component, the definition may also include an
individual whose customary employment with the Company or a Designated Company for tax purposes is
less than twenty (20) hours per week or for less than five (5) months in any calendar year.

     (j) Enrollment Date” shall mean the first Trading Day of each Offering Period.

     (k) “Exercise Date” shall mean the first Trading Day in February and August of each
year.

     (l) “Fair Market Value” shall mean, 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 selling price per share for
such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on
the date of determination, as reported in The Wall Street Journal or such other source as the Board
deems reliable;

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

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

          (iv) For purposes of the Enrollment Date of the first Offering Period under the Purchase Plan,
the Fair Market Value shall be the initial price per share at which the Common Stock was sold
pursuant to the underwriting agreement for the Company’s initial public offering of the Common
Stock.

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     (m) “Non-423(b) Plan” shall mean an employee stock purchase plan which is not intended
to meet the requirements set forth in Section 423(b) of the Code.

     (n) “Offering Periods” shall mean the periods of approximately twelve (12) months
during which an option granted pursuant to the Purchase Plan may be exercised, commencing on the
first Trading Day in February and August each year and terminating on the first Trading Day in
February or August which is approximately twelve months later. The duration and timing of Offering
Periods may be changed pursuant to Section 4 of this Purchase Plan.

     (o) “Purchase Plan” shall mean this 2000 Employee Stock Purchase Plan, which includes
a Code Section 423(b) Plan and a Non-423(b) Plan.

     (p) “Purchase Period” shall mean the approximately six month period commencing on one
Exercise Date and ending with the next Exercise Date.

     (q) “Purchase Price” shall mean 85% of the Fair Market Value of a share of Common
Stock on the Enrollment Date or on the Exercise Date, whichever is lower; provided, however, that
the Purchase Price may be adjusted by the Board pursuant to Section 20.

     (r) “Reserves” shall mean the number of shares of Common Stock covered by each option
under the Purchase Plan which have not yet been exercised and the number of shares of Common Stock
which have been authorized for issuance under the Purchase Plan but not yet placed under option.

     (s) “Subsidiary” shall mean a corporation, domestic or foreign, of which not less than
50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation
now exists or is hereafter organized or acquired by the Company or a Subsidiary.

     (t) “Trading Day” shall mean a day on which national stock exchanges and the Nasdaq
System are open for trading.

3. Eligibility.

     (a) Any Employee who shall be employed by the Company or a Designated Company on a given
Enrollment Date shall be eligible to participate in the Purchase Plan.

     (b) Any provisions of the Purchase Plan to the contrary notwithstanding, no Employee shall be
granted an option under the Purchase Plan (i) to the extent that, immediately after the grant, such
Employee (or any other person whose stock would be attributed to such Employee pursuant to Section
424(d) of the Code) would own capital stock of the Company and/or hold outstanding options to
purchase such stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of the capital stock of the Company or of any Subsidiary, or (ii) to the
extent that his or her rights to purchase stock under all employee stock purchase plans of the
Company and its subsidiaries accrues at a rate which exceeds Twenty-Five Thousand Dollars
(US$25,000) worth of stock (determined under Section

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423 of the Code at the fair market value of the shares at the time such option is granted) for
each calendar year in which such option is outstanding at any time.

4. Offering Periods. The Purchase Plan shall be implemented by consecutive,
overlapping Offering Periods with a new Offering Period commencing on the first Trading Day in
February and August each year, or on such other date as the Board shall determine, and continuing
thereafter until terminated in accordance with Section 20 hereof. The Board shall have the power to
change the duration of Offering Periods (including the commencement dates thereof) with respect to
future offerings without stockholder approval if such change is announced at least five (5) days
prior to the scheduled beginning of the first Offering Period to be affected thereafter.

5. Participation.

     (a) An eligible Employee may become a participant in the Purchase Plan by completing a
subscription agreement authorizing payroll deductions in a form substantially similar to the form
included in Exhibit A to this Purchase Plan and filing it with the Company prior to the applicable
Enrollment Date. The Board, in its discretion, may decide that an Employee may submit contributions
to the Purchase Plan by means other than payroll deductions.

     (b) Once an eligible Employee becomes a participant in the Purchase Plan, such individual
shall remain a participant until he or she terminates such participation as provided in Section 10
hereof, the Purchase Plan terminates or the participant loses his or her status as an Employee.

     (c) An eligible Employee may be enrolled in only one Offering Period at a time.

6. Payroll Deductions/Contributions.

     (a) At the time a participant files his or her subscription agreement, he or she shall elect
to contribute to the Purchase Plan (in the form of payroll deductions or otherwise) on each pay day
during the Offering Period in an amount not exceeding fifteen percent (15%) of the Compensation
which he or she receives on each pay day during the Offering Period; provided, however that should
a pay day occur on an Exercise Date, a participant shall have the contributions made on such day
applied to his or her account under the new Offering Period or Purchase Period, as the case may be.

     (b) All contributions made for a participant shall be credited to his or her account under the
Purchase Plan and shall be made in whole percentages only. A participant may not make any
additional payments into such account unless required to comply with local law.

     (c) A participant may discontinue his or her participation in the Purchase Plan as provided in
Section 10 hereof, or may decrease the rate of his or her payroll deductions or other contributions
during the Offering Period by completing or filing with the Company a new subscription agreement
authorizing a change in payroll deduction or contribution rate. The

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Company may, in its discretion, limit the nature and/or number of participation rate changes
during any Offering Period, and may establish such other conditions or limitations as it deems
appropriate for Purchase Plan administration. The change in rate shall be effective with the first
full payroll period following five (5) business days after the Company’s receipt of the new
subscription agreement unless the Company elects to process a given change in participation more
quickly. A participant’s subscription agreement shall remain in effect for successive Offering
Periods unless terminated as provided in Section 10 hereof.

     (d) If by reason of the limitations set forth in Sections 3(b), 7 and 13(a) or in any sub-plan
to the Purchase Plan, any option of a Participant does not accrue for a particular Purchase Period,
then the contributions that the Participant made during that Purchase Period with respect to such
option shall be promptly refunded. In addition, to the extent necessary to comply with Section
423(b)(8) of the Code and Section 3(b) hereof, a participant’s contributions may be decreased to
one percent (1%) at any time during a Purchase Period. Contributions shall recommence at the rate
provided in such participant’s subscription agreement at the beginning of the first Purchase Period
which is scheduled to end in the following calendar year, unless terminated by the participant as
provided in Section 10 hereof.

     (e) At the time the option is exercised, in whole or in part, at the time some or all of the
Company’s Common Stock issued under the Purchase Plan is disposed of, or at any other taxable or
tax withholding event, as applicable, the participant must make adequate provision for the
Company’s or a Subsidiary’s or Affiliate’s applicable tax withholding obligations, if any, which
arise upon the taxable or tax withholding event, as applicable. At any time, the Company or a
Subsidiary or Affiliate may, but shall not be obligated to, withhold from the participant’s
compensation the amount necessary for the Company or a Subsidiary or Affiliate to meet applicable
withholding obligations, including any withholding required to make available to the Company or a
Subsidiary or Affiliate any tax deductions or benefits attributable to sale or early disposition of
Common Stock by the Employee. Furthermore, the Company or a Subsidiary or Affiliate may satisfy
any tax withholding obligations by any other means set forth in the applicable subscription
agreement.

7. Grant of Option. On the Enrollment Date of each Offering Period, each eligible
Employee participating in such Offering Period shall be granted an option to purchase on each
Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of
whole shares of the Company’s Common Stock determined by dividing such Employee’s contributions
accumulated prior to such Exercise Date and retained in the Participant’s account as of the
Exercise Date by the applicable Purchase Price; provided that in no event shall an Employee be
permitted to purchase during each Purchase Period more than 25,000 shares of the Company’s Common
Stock (subject to any adjustment pursuant to Section 19), and provided further that such purchase
shall be subject to the limitations set forth in Sections 3(b) and 13 hereof or in any sub-plan to
the Purchase Plan. The Board may, for future Offering Periods, increase or decrease, in its
absolute discretion, the maximum number of shares of the Company’s Common Stock an Employee may
purchase during each Purchase Period of such Offering Period. Exercise of the option shall occur
as provided in Section 8 hereof, unless the participant has withdrawn pursuant to Section 10
hereof. The option shall expire on the last day of the Offering Period.

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8. Exercise of Option.

     (a) Unless a participant withdraws from the Purchase Plan as provided in Section 10 hereof,
his or her option for the purchase of shares shall be exercised automatically on the Exercise Date,
and the maximum number of full shares subject to option shall be purchased for such participant at
the applicable Purchase Price with the accumulated contributions in his or her account. No
fractional shares shall be purchased; any contributions accumulated in a participant’s account
which are not sufficient to purchase a full share shall be retained in the participant’s account
for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the
participant as provided in Section 10 hereof. Any other monies left over in a participant’s
account after the Exercise Date shall be returned to the participant. During a participant’s
lifetime, a participant’s option to purchase shares hereunder is exercisable only by him or her.

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

9. Delivery. As promptly as practicable after each Exercise Date on which a purchase
of shares occurs, the Company shall arrange the delivery to each participant, as appropriate, of a
certificate or the electronic equivalent representing the shares purchased upon exercise of his or
her option.

10. Withdrawal.

     (a) A participant may withdraw all but not less than all the contributions credited to his or
her account and not yet used to exercise his or her option under the Purchase Plan at any time by
giving written notice to the Company in a form substantially similar to the form included in
Exhibit B to this Purchase Plan. All of the participant’s contributions credited to his or her
account shall be paid to such participant promptly after receipt of notice of withdrawal and such
participant’s option for the Offering Period shall be automatically terminated, and no further
contributions for the purchase of shares shall be made for such

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Offering Period. If a participant withdraws from an Offering Period, contributions may not
resume at the beginning of the succeeding Offering Period unless the participant delivers to the
Company a new subscription agreement.

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

11. Termination of Option.

     (a) Upon a participant’s ceasing to be an Employee, for any reason, he or she shall be deemed
to have elected to withdraw from the Purchase Plan and the contributions credited to such
participant’s account during the Offering Period but not yet used to exercise the option shall be
returned to such participant or, in the case of his or her death, to the person or persons entitled
thereto under Section 15 hereof, and such participant’s option shall be automatically terminated.

     (b) Should the participant cease to be an Employee by reason of an approved unpaid leave of
absence, then the participant shall have the right, exercisable up until the last business day of
the Purchase Period in which such leave commences, to (i) withdraw all the contributions collected
for that Purchase Period or (ii) have such funds held for the purchase of shares on his or her
behalf on the next scheduled Exercise Date. Upon the participant’s return to active service (A)
within ninety (90) days following the commencement of such leave or (B) prior to the expiration of
any longer period for which such participant’s right to reemployment with the Company or a
Subsidiary or Affiliate is guaranteed by statute or contract, his or her contributions under the
Purchase Plan shall automatically resume at the rate in effect at the time the leave began, unless
the participant withdraws from the Purchase Plan prior to his or her return. An individual who
returns to active employment following a leave of absence that exceeds in duration the applicable
(A) or (B) time period will be treated as a new Employee for purposes of subsequent participation
in the Purchase Plan and must accordingly re-enroll in the Purchase Plan (by making a timely filing
of the prescribed enrollment forms) on or before the next Enrollment Date.

12. Interest. No interest shall accrue on the payroll deductions of a participant in
the Purchase Plan, unless required by applicable law.

13. Stock.

     (a) Subject to adjustment upon changes in capitalization of the Company as provided in Section
19 hereof, the maximum number of shares of the Company’s Common Stock which shall be made available
for sale under the Purchase Plan shall be 2,917,892 shares, which consists of the (i) 1,000,000
shares initially reserved under the Purchase Plan and (ii) the 1,917,892 share automatic increase
for the fiscal year 2001 pursuant to Section 13(b) below. The Board determined that no automatic
increase would take effect for the fiscal year 2002 pursuant to Section 13(b) below.

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     (b) The share reserve shall increase annually on the first day of each fiscal year of the
Company, beginning for the fiscal year 2001 and ending for the fiscal year 2010, by the number of
shares equal to the lesser of (i) 3,000,000 shares, (ii) 3% of the outstanding shares of Common
Stock on the last day of the immediately preceding fiscal year or (iii) an amount determined by the
Board.

     (c) The participant shall have no interest or voting right in shares covered by his option
until such option has been exercised.

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

     (e) All share numbers in this Section 13 give effect to a two-for-one stock split of Common
Stock on September 22, 2008.

14. Administration. The Purchase Plan shall be administered by the Board or a
committee of members of the Board appointed by the Board. The Board or its committee shall have
full and exclusive discretionary authority to construe, interpret and apply the terms of the
Purchase Plan, to determine eligibility and to adjudicate all disputed claims filed under the
Purchase Plan.

     In addition, the Board or its committee may adopt rules, procedures or sub-plans relating to
the operation and administration of the Purchase Plan to accommodate the specific requirements of
local laws and procedures for jurisdictions outside of the United States. Without limiting the
generality of the foregoing, the Board or its committee is specifically authorized to adopt rules,
procedures or sub-plans regarding eligibility to participate, the definition of Compensation,
handling of payroll deductions, making of contributions to the Purchase Plan (including, without
limitation, in forms other than payroll deductions), establishment of bank or trust accounts to
hold payroll deductions, payment of interest, conversion of local currency, obligations to pay
payroll tax, determination of beneficiary designation requirements, withholding procedures and
handling of stock certificates which vary with local requirements.

     Every finding, decision and determination made by the Board or its committee shall, to the
full extent permitted by law, be final and binding upon all parties.

15. Designation of Beneficiary.

     (a) Unless otherwise determined by the Board, a participant may file a written designation of
a beneficiary who is to receive any shares and cash, if any, from the participant’s account under
the Purchase Plan in the event of such participant’s death subsequent to an Exercise Date on which
the option is exercised but prior to delivery to such participant of such shares and cash. In
addition, unless otherwise determined by the Board, a participant may file a written designation of
a beneficiary who is to receive any cash from the participant’s account under the Purchase Plan in
the event of such participant’s death prior to exercise of the option. If a participant is married
and the designated beneficiary is not the spouse, spousal consent shall be required for such
designation to be effective.

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     (b) Unless otherwise determined by the Board, such designation of beneficiary may be changed
by the participant at any time by written notice. In the event of the death of a participant and
in the absence of a beneficiary validly designated under the Purchase Plan who is living at the
time of such participant’s death, the Company shall deliver such shares and/or cash to the executor
or administrator of the estate of the participant, or if no such executor or administrator has been
appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such
shares and/or cash to the spouse or to any one or more dependents or relatives of the participant,
or if no spouse, dependent or relative is known to the Company, then to such other person as the
Company may designate or determine to be the appropriate recipients of the shares and/or cash under
applicable law.

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

17. Use of Funds. All contributions received or held by the Company under the
Purchase Plan may be used by the Company for any corporate purpose, and the Company shall not be
obligated to segregate such contributions, unless required by applicable law.

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

19. Adjustments Upon Changes in Capitalization, Dissolution, Liquidation, Merger or Asset
Sale.

     (a) Changes in Capitalization. Subject to any required action by the stockholders of
the Company, the Reserves (including the number of shares automatically added annually to the
Purchase Plan pursuant to Section 13(a)(i)), the maximum number of shares each participant may
purchase each Purchase Period (pursuant to Section 7), as well as the price per share and the
number of shares of Common Stock covered by each option under the Purchase Plan which has not yet
been exercised shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration by the Company;
provided, however that conversion of any convertible securities of the Company shall not be deemed
to have been “effected without receipt of consideration.” Such adjustment shall be made by the
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
option.

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     (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Offering Period then in progress shall be shortened by setting a
new Exercise Date (the “New Exercise Date”), and shall terminate immediately prior to the
consummation of such proposed dissolution or liquidation, unless provided otherwise by the Board.
The New Exercise Date shall be before the date of the Company’s proposed dissolution or
liquidation. The Board shall notify each participant in writing, at least ten (10) business days
prior to the New Exercise Date, that the Exercise Date for the participant’s option has been
changed to the New Exercise Date and that the participant’s option shall be exercised automatically
on the New Exercise Date, unless prior to such date the participant has withdrawn from the Offering
Period as provided in Section 10 hereof.

     (c) Merger or Asset Sale. In the event of a proposed sale of all or substantially all
of the assets of the Company, or the merger of the Company with or into another corporation, each
outstanding option shall be assumed or an equivalent option substituted by the successor
corporation or a Parent or Subsidiary of the successor corporation. In the event that the
successor corporation refuses to assume or substitute for the option, any Purchase Periods then in
progress shall be shortened by setting a new Exercise Date (the “New Exercise Date”) and any
Offering Periods then in progress shall end on the New Exercise Date. The New Exercise Date shall
be before the date of the Company’s proposed sale or merger. The Board shall notify each
participant in writing, at least ten (10) business days prior to the New Exercise Date, that the
Exercise Date for the participant’s option has been changed to the New Exercise Date and that the
participant’s option shall be exercised automatically on the New Exercise Date, unless prior to
such date the participant has withdrawn from the Offering Period as provided in Section 10 hereof.

20. Amendment or Termination.

     (a) The Board may at any time and for any reason terminate or amend the Purchase Plan. Except
as provided in Section 19 hereof, no such termination can affect options previously granted,
provided that an Offering Period may be terminated by the Board of Directors immediately following
any Exercise Date if the Board determines that the termination of the Offering Period or the
Purchase Plan is in the best interests of the Company and its stockholders. Except as provided in
Section 19 and this Section 20 hereof, no amendment may make any change in any option theretofore
granted which adversely affects the rights of any participant. To the extent necessary to comply
with Section 423 of the Code (or any successor rule or provision or any other applicable law,
regulation or stock exchange rule), the Company shall obtain stockholder approval in such a manner
and to such a degree as required.

     (b) Without stockholder consent and without regard to whether any participant rights may be
considered to have been “adversely affected,” the Board shall be entitled to change the Offering
Periods, limit the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, permit payroll withholding or contributing to the Purchase Plan in excess of the amount
designated by a participant in order to adjust for delays or mistakes in the Company’s processing
of properly completed withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly

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correspond with amounts withheld from the participant’s Compensation, and establish such other
limitations or procedures as the Board (or its committee) determines in its sole discretion
advisable which are consistent with the Purchase Plan.

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

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

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

          (iii) allocating shares.

     Such modifications or amendments shall not require stockholder approval or the consent of any
Purchase Plan participants.

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

22. Conditions Upon Issuance of Shares. Shares shall not be issued with respect to an
option unless the exercise of such option and the issuance and delivery of such shares pursuant
thereto shall comply with all applicable provisions of law, domestic or foreign, including, without
limitation, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, the rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the shares may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance.

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

23. Code Section 409A. The Code Section 423(b) Plan is exempt from the application of
Section 409A of the Code. The Non-423(b) Plan is intended to be exempt from Section 409A of the
Code under the short-term deferral exception and any ambiguities shall be construed and interpreted
in accordance with such intent. In the case of a participant who would otherwise be subject to
Section 409A of the Code, to the extent an option to purchase shares of Common Stock or the
payment, settlement or deferral thereof is subject to Section 409A of the Code, the option to
purchase shares of Common Stock shall be granted, paid, exercised, settled

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or deferred in a manner that will comply with Section 409A of the Code, including the final
regulations and other guidance issued with respect thereto, except as otherwise determined by the
Board or a committee appointed by the Board. Notwithstanding the foregoing, the Company shall have
no liability to a participant or any other party if the option to purchase Common Stock under the
Purchase Plan that is intended to be exempt from or compliant with Section 409A of the Code is not
so exempt or compliant or for any action taken by the Board with respect thereto.

24. Term of Purchase Plan. The Purchase Plan shall become effective on the effective
date of the Registration Statement. Unless sooner terminated by the Board, the Purchase Plan shall
terminate upon the earliest to occur of (a) the purchase of shares on the Exercise Date
coincidental with the first Trading Day in August 2020, (ii) the date on which all shares available
for issuance under the Purchase Plan shall have been sold pursuant to options exercised under the
Purchase Plan or (iii) the date on which all options are exercised in connection with a dissolution
or liquidation pursuant to Section 19(b) hereof or a merger or asset sale pursuant to Section 19(c)
hereof. No further options shall be granted or exercised, and no further contributions shall be
collected, under the Purchase Plan following such termination.

25. Automatic Transfer to Low Price Offering Period. To the extent permitted by any
applicable laws, regulations, or stock exchange rules if the Fair Market Value of the Common Stock
on any Exercise Date in an Offering Period is lower than the Fair Market Value of the Common Stock
on the Enrollment Date for that Offering Period, then all participants in such Offering Period
shall be automatically withdrawn from such Offering Period immediately after the exercise of their
option on such Exercise Date and automatically enrolled in the new Offering Period beginning
coincident with such Exercise Date.

26. At Will Employment. Nothing in the Purchase Plan shall confer upon the
participant any right to continue in the employ of the Company or any Subsidiary or Affiliate for
any period of specific duration or interfere with or otherwise restrict in any way the rights of
the Company (or any Subsidiary or Affiliate employing such person) or of the participant, which
rights are hereby expressly reserved by each, to terminate such person’s employment at any time for
any reason, with or without cause.

27. Severability. If any particular provision of this Purchase Plan is found to be
invalid or unenforceable, such provision shall not affect the other provisions of the Purchase
Plan, but the Purchase Plan shall be construed in all respects as if such invalid provision had
been omitted.

28. Governing Law. Except to the extent that provisions of this Purchase Plan are
governed by applicable provisions of the Code or any other substantive provision of federal law,
this Purchase Plan shall be construed in accordance with, and shall be governed by, the substantive
laws of the State of Delaware without regard to any provisions of Delaware law relating to the
conflict of laws.

October 28, 2009 Approved Versionexv10w5

Exhibit 10.5

ILLUMINA, INC.

AMENDED AND RESTATED 2005 STOCK AND INCENTIVE PLAN

(as of October 28, 2009)

     1. Purposes of the Plan. The purposes of this 2005 Stock and Incentive Plan are to attract
and retain the best available personnel for positions of substantial responsibility, to provide
additional incentive to Service Providers, 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 Awards (including Stock Grants, Stock
Units and Stock Appreciation Rights) and Cash Awards 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 hereof.
	 
	 	(b)	 	“Applicable Laws” means the requirements relating to the administration of
stock option and restricted stock plans, the grant of options and the issuance of
shares under U.S. state corporate laws, U.S. federal and state securities laws, the
Code, any Nasdaq National Market, stock exchange or quotation system on which the
Common Stock is listed or quoted and the applicable laws of any other country or
jurisdiction where Options or Awards are granted under the Plan, as such laws, rules,
regulations and requirements shall be in place from time to time.
	 
	 	(c)	 	“Award” means an Option, a Stock Award or a Cash Award granted in accordance
with the terms of the Plan.
	 
	 	(d)	 	“Award Agreement” means a Stock Award Agreement, Cash Award Agreement and/or
Option Agreement, which may be in written or electronic format, in such form and with
such terms and conditions as may be specified by the Administrator, evidencing the
terms and conditions of an individual Award. Each Award Agreement is subject to the
terms and conditions of the Plan.
	 
	 	(e)	 	“Board” means the Board of Directors of the Company.
	 
	 	(f)	 	“Cash Award” means a bonus opportunity awarded under Section 15 pursuant to
which a Participant may become entitled to receive an amount based on the satisfaction
of such performance criteria as are specified in the agreement or other documents
evidencing the Award (the “Cash Award Agreement”).
	 
	 	(g)	 	“Code” means the Internal Revenue Code of 1986, as amended.

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	 	(h)	 	“Committee” means a committee of Directors appointed by the Board in
accordance with Section 4 hereof.
	 
	 	(i)	 	“Common Stock” means the common stock of the Company.
	 
	 	(j)	 	“Company” means Illumina, Inc., a Delaware corporation.
	 
	 	(k)	 	“Consultant” means any natural person, including an advisor, engaged by the
Company or a Parent or Subsidiary to render services to such entity.
	 
	 	(l)	 	“Corporate Transaction” means any of the following, unless the Administrator
provides otherwise:

	 	(i)	 	any merger or consolidation in which the Company shall not be
the surviving entity (or survives only as a subsidiary of another entity whose
stockholders did not own all or substantially all of the Common Stock in
substantially the same proportions as immediately prior to such transaction),
	 
	 	(ii)	 	the sale of all or substantially all of the Company’s assets
to any other person or entity (other than a wholly-owned subsidiary),
	 
	 	(iii)	 	the acquisition of beneficial ownership of a controlling
interest (including, without limitation, power to vote) in the outstanding
shares of Common Stock by any person or entity (including a “group” as defined
by or under Section 13(d)(3) of the Exchange Act),
	 
	 	(iv)	 	a contested election of Directors, as a result of which or in
connection with which the persons who were Directors before such election or
their nominees (the “Incumbent Directors”) cease to constitute a majority of
the Board; provided, however, that if the election, or nomination for election
by the Company’s stockholders, of any new Director was approved by a vote of
at least fifty percent (50%) of the Incumbent Directors, such new Director
shall be considered as an Incumbent Director, or
	 
	 	(v)	 	any other event specified by the Board or a Committee,
regardless of whether at the time an Award is granted or thereafter.

	 	(m)	 	“Director” means a member of the Board.
	 
	 	(n)	 	“Disability” means total and permanent disability as defined in Section 21
(e)(3) of the Code.
	 
	 	(o)	 	“Effective Date” means the date on which the Company’s stockholders approve
the Plan.

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	 	(p)	 	“Employee” means any person, including Officers and Inside Directors,
employed by the Company or any Parent or Subsidiary of the Company. An Employee shall
not be deemed to cease Employee status by reason 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, then
three (3) months following the 91st 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 Director
nor payment of a director’s fee by the Company shall be sufficient to constitute
“employment” by the Company.
	 
	 	(q)	 	“Exchange Act” means the Securities Exchange Act of 1934, as amended.
	 
	 	(r)	 	“Fair Market Value” means, as of any date, the value of a Share determined as
follows:

	 	(i)	 	if the Common Stock is listed on any established stock
exchange or traded on a national market system, including without limitation
the Nasdaq National Market or the Nasdaq SmallCap Market of The Nasdaq Stock
Market, the Fair Market Value of a Share shall be the closing selling price
for such stock (or the closing bid, if no sales were reported) as quoted on
such exchange or system on the day 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 shall be the mean between the high bid and low asked prices for the
Common Stock on 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.

	 	(s)	 	“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 and as designated in the applicable Option Agreement.
	 
	 	(t)	 	“Inside Director” means a Director who is an Employee.

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	 	(u)	 	“Nonstatutory Stock Option” means an Option not intended to qualify as an
Incentive Stock Option and/or as designated in the applicable Option Agreement.
	 
	 	(v)	 	“Notice of Grant” means a written or electronic notice evidencing certain
terms and conditions of an individual Option grant. The Notice of Grant is part of
the Option Agreement.
	 
	 	(w)	 	“Officer” means a person who is an executive officer of the Company within
the meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.
	 
	 	(x)	 	“Option” means a stock option granted pursuant to the Plan.
	 
	 	(y)	 	“Option Agreement” means an agreement between the Company and an Optionee
evidencing the terms and conditions of an individual Option grant. The Option
Agreement is subject to the terms and conditions of the Plan.
	 
	 	(z)	 	“Optioned Shares” means the Shares subject to an Option.
	 
	 	(aa)	 	“Optionee” means the holder of an outstanding Option granted under the Plan.
	 
	 	(bb)	 	“Outside Director” means a Director who is not an Employee.
	 
	 	(cc)	 	“Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code or any successor provision.
	 
	 	(dd)	 	“Participant” means any holder of one or more Options, Stock Awards or Cash
Awards, or the Shares issuable or issued upon exercise of such Awards, under the Plan.
	 
	 	(ee)	 	“Plan” means this 2005 Stock and Incentive Plan.
	 
	 	(ff)	 	“Predecessor Plan” means the Illumina, Inc. 2000 Stock Plan, as amended.
	 
	 	(gg)	 	“Qualifying Performance Criteria” means any one or more of the following
performance criteria, either individually, alternatively or in any combination,
applied to either the Company as a whole or to a business unit, Parent, Subsidiary or
business segment, either individually, alternatively or in any combination, and
measured either annually or cumulatively over a period of years, on an absolute basis
or relative to a pre-established target, to previous years’ results or to a designated
comparison group, in each case as specified by the Committee in the Award: (i) cash
flow; (ii) earnings (including gross margin, earnings before interest and taxes,
earnings before taxes, and net earnings); (iii)

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	 	 	 	earnings per share; (iv) growth in earnings or earnings per share; (v) stock price;
(vi) return on equity or average stockholders’ equity; (vii) total stockholder
return; (viii) return on capital; (ix) return on assets or net assets; (x) return
on investment; (xi) revenue; (xii) income or net income; (xiii) operating income or
net operating income; (xiv) operating profit or net operating profit; (xv)
operating margin; (xvi) return on operating revenue; (xvii) market share; (xviii)
contract awards or backlog; (xix) overhead or other expense reduction; (xx) growth
in stockholder value relative to the moving average of the S&P 500 Index or a peer
group index; (xxi) credit rating; (xxii) strategic plan development and
implementation (including individual performance objectives that relate to
achievement of the Company’s or any business unit’s strategic plan); (xxiii)
improvement in workforce diversity, and (xxiv) any other similar criteria as may be
determined by the Administrator. The Committee may appropriately adjust any
evaluation of performance under a Qualifying Performance Criteria to exclude any of
the following events that occurs during a performance period: (A) asset
write-downs; (B) litigation or claim judgments or settlements; (C) the effect of
changes in tax law, accounting principles or other such laws or provisions
affecting reported results; (D) accruals for reorganization and restructuring
programs; and (E) any gains or losses classified as extraordinary or as
discontinued operations in the Company’s financial statements.
	 
	 	(hh)	 	“Rule 16b-3” means Rule 16b-3 of the Exchange Act, as the same may be amended
from time to time, or any successor to Rule 16b-3, as in effect when discretion is
being exercised with respect to the Plan.
	 
	 	(ii)	 	“Service Provider” means (i) an individual rendering services to the Company
or any Parent or Subsidiary of the Company in the capacity of an Employee or
Consultant or (ii) an individual serving as a Director.
	 
	 	(jj)	 	“Share” means a share of the Common Stock, as adjusted in accordance with
Section 17 hereof.
	 
	 	(kk)	 	“Stock Appreciation Right” means a right to receive cash and/or Shares based
on a change in the Fair Market Value of a specific number of Shares granted under
Section 14.
	 
	 	(ll)	 	“Stock Award” means a Stock Grant, a Stock Unit or a Stock Appreciation Right
granted under Sections 13 or 14 below or other similar awards granted under the Plan
(including phantom stock rights).
	 
	 	(mm)	 	“Stock Award Agreement” means a written agreement, the form(s) of which shall
be approved from time to time by the Administrator, between the Company and a holder
of a Stock Award evidencing the terms and conditions of an individual Stock Award
grant. Each Stock Award Agreement shall be subject to the terms and conditions of the
Plan.

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	 	(nn)	 	“Stock Grant” means the award of a certain number of Shares granted under
Section 13 below.
	 
	 	(oo)	 	“Stock Unit” means a bookkeeping entry representing an amount equivalent to
the Fair Market Value of one Share, payable in cash, property or Shares. Stock Units
represent an unfunded and unsecured obligation of the Company, except as otherwise
explicitly provided for by the Administrator.
	 
	 	(pp)	 	“Subsidiary” means a “subsidiary corporation,” whether now or hereafter
existing, as defined in Section 424(f) of the Code, or any successor provision.
	 
	 	(qq)	 	“Withholding Taxes” means the federal, state and local income and employment
withholding taxes, or any other taxes required to be withheld, to which the holder of
an Award may be subject in connection with the grant, exercise, or vesting of an Award
or the issuance or transfer of Shares issued or issuable pursuant to an Award.

     3. Stock Subject to the Plan.

	 	(a)	 	Subject to the provisions of Section 17 hereof, the maximum aggregate number
of Shares that may be issued and sold under the Plan is 11,542,358 Shares. This
maximum number of Shares reserved and available for issuance under the Plan consists
of Shares reserved for issuance under the Predecessor Plan that as of May 2, 2005 were
either (i) available for grant pursuant to awards that may be made under the
Predecessor Plan or (ii) subject to outstanding options granted under the Predecessor
Plan which Shares might be returned to the Predecessor Plan but such Shares shall
become available for issuance hereunder only if and to the extent the options granted
under the Predecessor Plan to which they are subject terminate or expire or become
unexercisable for any reason without having been exercised in full.
	 
	 	(b)	 	An annual increase in the number of Shares reserved for issuance hereunder
shall automatically occur on the first day of each fiscal year of the Company,
beginning with fiscal year 2006 and ending with fiscal year 2010, equal to the lesser
of (i) 1,200,000 Shares (subject to adjustment under Section 17), (ii) 5% of the
outstanding Shares as of the last day of the immediately preceding fiscal year or
(iii) a number of Shares determined by the Board. The Shares may be authorized, but
unissued, or reacquired Shares, including Shares repurchased by the Company on the
open market.
	 
	 	(c)	 	If an outstanding Award expires or terminates for any reason prior to
exercise in full, or without the Shares subject thereto having been issued in full,
the unpurchased or unissued Shares which were subject thereto shall

6

 

	 	 	 	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 pursuant to an Award shall not be returned to the Plan and shall not
become available for future distribution under the Plan, except that if unvested
Shares are repurchased by the Company at their original purchase price or otherwise
forfeited to the Company in connection with termination of a Participant’s status
as a Service Provider, such Shares shall become available for future grant under
the Plan. Should the exercise or purchase price of an Award under the Plan be paid
with Shares (including by withholding Shares from the Award) or should Shares
otherwise issuable under the Plan be withheld by the Company in satisfaction of the
Withholding Taxes incurred in connection with the exercise, purchase or issuance of
Shares under an Award, then the number of Shares available for issuance under the
Plan shall be reduced by the gross number of Shares issued in connection with the
Award, and not by the net number of Shares issued to the holder of such Award.

     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, (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws or (C) subject to the Applicable
Laws, one or more officers of the Company to whom the Board or Committee has
delegated the power to grant Awards to persons eligible to receive Awards
under the Plan provided such grantees may not be officers or Directors.

	 	(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

7

 

	 	 	 	Board to such Committee, the Administrator shall have the authority, in its
discretion:

     (A) to determine the Fair Market Value of the Common Stock in
accordance with Section 2(r) of the Plan;

     (B) to select the Service Providers to whom Awards may be granted
hereunder;

     (C) to determine the number of Shares or amount of cash to be covered
by each Award granted hereunder;

     (D) to approve forms of Award Agreements for use under the Plan;

     (E) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Award granted hereunder, which terms and
conditions include, but are not limited to, the exercise price and/or
purchase price (if applicable), the time or times when Awards may be
exercised (which may be based on performance criteria), the vesting
schedule, any vesting and/or exercisability acceleration or waiver of
forfeiture restrictions, the acceptable forms of consideration, the term
and any restriction or limitation regarding any Award or the Shares
relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine and may be established at the time
an Award is granted or thereafter;

     (F) to construe and interpret the terms of the Plan and Awards
granted pursuant to the Plan;

     (G) 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 satisfying applicable foreign laws;

     (H) to modify or amend each Award (subject to Section 19 hereof),
including the discretionary authority to extend the post-termination
exercisability or purchase period of Awards longer than is originally
provided for in the Award Agreement;

     (I) to allow Participants to satisfy Withholding Tax obligations by
electing to have the Company withhold from the Shares to be issued upon
exercise or settlement of an Award that number of Shares having a Fair
Market Value equal to the minimum 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 Withholding Tax is to be determined. All
elections

8

 

by a Participant to have Shares withheld for this purpose shall be
made in such form and under such conditions as the Administrator may deem
necessary or advisable;

     (J) 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;

     (K) 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 Options, Stock Awards, Cash Awards or Shares issued under the
Plan.

     5. Eligibility. Nonstatutory Stock Options and Stock Awards may be granted to Service
Providers. Incentive Stock Options and Cash Awards may be granted only to Employees.

     6. Limitations.

	 	(a)	 	Each Option shall be designated in the Option Agreement as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
designation as an Incentive Stock Option, no installment under such an Option shall
qualify for favorable tax treatment as an Incentive Stock Option if (and to the
extent) the aggregate Fair Market Value of the Shares (determined at the date of
grant) for which such installment first becomes exercisable hereunder would, when
added to the aggregate value (determined as of the respective date or dates of grant)
of the Shares or other securities for which such Option or any other Incentive Stock
Options granted to Optionee prior to the date of grant (whether under the Plan or any
other plan of the Company or any Parent or Subsidiary of the Company) first become
exercisable during the same calendar year, exceed One Hundred Thousand Dollars
($100,000) in the aggregate. Should such One Hundred Thousand Dollar ($100,000)
limitation be exceeded in any calendar year, the Option shall nevertheless become
exercisable for the excess Optioned Shares in such calendar year as a Nonstatutory
Stock Option. For purposes of this Section 6(a), Incentive Stock Options shall be
taken into account in the order in which they were 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 right to terminate such relationship at any time, with or without cause.

9

 

	 	(c)	 	The following limitations shall apply to grants of Options and Stock Awards:

	 	(i)	 	No Service Provider shall be granted, in any fiscal year of
the Company, Awards covering more than 500,000 Shares, subject to adjustment
as provided in Section 17 below.

	 	(ii)	 	However, in connection with his or her commencement of
Service Provider status, an individual may be granted Awards covering up to an
additional 1,000,000 Shares during the fiscal year in which such commencement
occurs, which shall not count against the limit set forth in subsection (i)
above and subject to adjustment as provided in Section 17 below.

     7. Term of Plan. The Plan shall become effective on the Effective Date. Unless the Plan is
terminated earlier pursuant to Section 19 hereof, the Plan shall terminate upon the earliest to
occur of (a) June 28, 2015, (b) the date on which all Shares available for issuance under the Plan
shall have been issued as fully vested Shares or (c) the termination of all outstanding Awards in
connection with a dissolution or liquidation pursuant to Section 17(b) hereof or a Corporate
Transaction pursuant to Section 17(c) hereof. Should the Plan terminate on June 28, 2015, then all
Awards outstanding at that time shall continue to have force and effect in accordance with the
provisions of the applicable Award Agreement.

     8. Term of Option. The term of each Option shall be stated in the Option Agreement; provided,
however, that the term shall be no more than ten (10) years from the date of grant or such shorter
term as may be provided in the Option 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 Option 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.

10

 

     (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 no less than 100% of the Fair Market Value per Share
on the date of grant.

	 	(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 (including any vesting 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. Such
consideration may consist entirely of:

	 	(i)	 	cash;
	 
	 	(ii)	 	check; 
	 
	 	(iii)	 	other Shares which, in the case of Shares acquired directly
or indirectly from the Company, (A) have been owned by the Optionee for more
than six (6) months on the date of surrender (if it is required to eliminate
or reduce accounting charges incurred by the Company in connection with the
Option, or such other period (if any) required to so eliminate or reduce such
charges), 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;
	 
	 	(iv)	 	consideration received through a special sale and remittance
procedure pursuant to which the Optionee shall concurrently provide
irrevocable instructions to (A) a Company-designated brokerage firm to effect
the immediate sale of the purchased Shares and remit to the Company, out of
the sale proceeds available on the settlement date, sufficient funds to cover
the aggregate exercise price payable for the purchased Shares plus all
Withholding Taxes required to be withheld by the Company by reason of such
exercise and (B) the Company to deliver the certificates for the purchased
Shares directly to such brokerage firm in order to complete the sale;
	 
	 	(v)	 	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;

11

 

	 	(vi)	 	any combination of the foregoing methods of payment; or
	 
	 	(vii)	 	such other consideration and method of payment for the
issuance of Optioned Shares as determined by the Administrator and to the
extent permitted by Applicable Laws.

	 	(d)	 	No Option Repricings. Other than in connection with a change in the
Company’s capitalization (as described in Section 17(a) of the Plan), the exercise
price of an Option may not be reduced without stockholder approval.

     10. Exercise of Option.

	 	(a)	 	Procedure for Exercise; Rights as a Stockholder.

	 	(i)	 	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 Option Agreement. Unless
the Administrator provides otherwise, vesting of Options granted hereunder
shall be suspended during any unpaid leave of absence. An Option may not be
exercised for a fraction of a Share.
	 
	 	(ii)	 	An Option shall be deemed exercised when the Company
receives: (A) written or electronic notice of exercise (in accordance with the
Option Agreement) from the person entitled to exercise the Option, and (B)
full payment for the Optioned Shares with respect to which the Option is
exercised and (C) satisfaction of any Withholding Taxes. Full payment may
consist of any consideration and method of payment authorized by the
Administrator and permitted by the Plan and shall be set forth in the Option
Agreement. 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 stockholder shall exist with respect to the Optioned Shares,
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
17 hereof.
	 
	 	(iii)	 	Exercising an Option in any manner shall decrease the number
of Optioned Shares thereafter available, both for purposes of the Plan

12

 

	 	 	 	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, such
Optionee may exercise his or her Option for a period of three (3) months measured from
the date of termination, or such longer period of time as specified in the Option
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 the Option as set forth in the
Option Agreement); provided, however, that, unless otherwise provided by the
Administrator in the Option Agreement, any Officer or Outside Director (as of the date
of termination) may exercise his or her Option for a period of twelve (12) months
measured from the date of termination, or such longer period of time as specified in
the Option 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 the Option as
set forth in the Option Agreement). If, on the date of termination, the Optionee is
not vested as to his or her entire Option, the Option shall immediately terminate as
to all the Optioned Shares covered by the unvested portion of the Option, and those
Optioned Shares shall revert immediately to the Plan. To the extent the Optionee does
not, within the post-termination time period determined pursuant to this
Section 10(b), exercise the Option for the Optioned Shares in which Optionee is vested
at the time of such termination of Service Provider status, the Option shall terminate
with respect to those vested Optioned Shares at the end of such period, and those
Optioned Shares 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 twelve (12) months of termination, or such longer period of time as specified
in the Option 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 Option Agreement). If, on the date of termination, the Optionee is not vested as
to his or her entire Option, the Option shall immediately terminate as to the Optioned
Shares covered by the unvested portion of the Option, and those Optioned Shares shall
revert immediately to the Plan. To the extent the Optionee does not, within the
post-termination time period determined pursuant to this Section 10(c), exercise the
Option for the Optioned Shares in which Optionee is vested at the time of such
termination of Service Provider status, the Option shall terminate with respect to
those vested Optioned Shares at the end of such period, and those Optioned Shares
shall revert to the Plan.
	 
	 	(d)	 	Death of Optionee. If an Optionee dies while a Service Provider, the Option
may be exercised within twelve (12) months following Optionee’s

13

 

	 	 	 	death, or such longer period of time as specified in the Option Agreement, to the
extent that the Option is vested on the date of death (but in no event later than
the expiration of the term of such Option as set forth in the Option Agreement) by
the Optionee’s designated beneficiary, provided such beneficiary has been
designated prior to Optionee’s death in a form acceptable to the Administrator. If
no such beneficiary has been designated by the Optionee, then such Option may be
exercised by the personal representative of the Optionee’s estate or by the
person(s) to whom the Option is transferred pursuant to the Optionee’s will or in
accordance with the laws of descent and distribution. If, at the time of death,
the Optionee is not vested as to his or her entire Option, the Option shall
immediately terminate as to the Optioned Shares covered by the unvested portion of
the Option, and those Optioned Shares shall immediately revert to the Plan. To the
extent the Option is not, within the post-termination time period determined
pursuant to this Section 10(d), exercised for the Optioned Shares in which Optionee
is vested at the time of such termination of Service Provider status, the Option
shall terminate with respect to those vested Optioned Shares, and those Optioned
Shares shall revert to the Plan.

     11. Formula Option Grants to Outside Directors. Outside Directors shall automatically be
granted Options in accordance with the following provisions:

	 	(a)	 	All Options granted pursuant to this Section shall be Nonstatutory Stock
Options and, except as otherwise provided in this Section 11, shall be subject to the
other terms and conditions of the Plan.
	 
	 	(b)	 	Each individual who becomes an Outside Director after the Effective Date
shall be automatically granted an Option to purchase 20,000 Shares subject to
adjustment as set forth in Section 17(a) below (the “First Option”) on the date such
individual is elected as a Director, whether through election by the stockholders of
the Company or appointment by the Board to fill a vacancy; provided, however, that an
Inside Director who ceases to be an Inside Director but who remains a Director shall
not receive a First Option.
	 
	 	(c)	 	On each annual stockholder meeting commencing with the Effective Date, each
Outside Director who continues to serve in such capacity immediately after such annual
stockholder meeting shall be automatically granted an Option to purchase 7,500 Shares
and 1,000 Stock Units subject to adjustment as set forth in Section 17(a) below (a
“Subsequent Option”); provided that the Outside Director has served on the Board for
at least six calendar months prior to the date of such annual stockholder meeting.
	 
	 	(d)	 	The terms of a First Option or a Subsequent Option granted pursuant to this
Section shall be as follows:

14

 

	 	(i)	 	The term of the Option shall be ten (10) years measured from
the date of grant.
	 
	 	(ii)	 	The Option shall be exercisable only during the time that the
Outside Director remains a Director and, with respect to Optioned Shares
vested on the last day of service as a Director for the twelve (12) month
period following the date of the Optionee’s cessation of service as a
Director, provided, however, that the Option cannot be exercised after the
expiration of the term of the Option. If, at the time of Optionee’s cessation
of service as a Director, the Optionee is not vested as to his or her entire
Option, the Option shall immediately terminate as to the Optioned Shares
covered by the unvested portion of the Option, and those Optioned Shares shall
immediately revert to the Plan. To the extent the Option is not, within the
post-termination time period determined pursuant to this Section 11(d)(ii),
exercised for the Optioned Shares in which the Optionee is vested at the time
of his or her cessation of Director status, the Option shall terminate with
respect to those vested Optioned Shares, and those Optioned Shares shall
revert to the Plan.
	 
	 	(iii)	 	The exercise price per Share shall be 100% of the Fair
Market Value per Share on the date of grant of the Option.
	 
	 	(iv)	 	The First Option shall vest and become exercisable as to
one-third of the Optioned Shares on each of the first three anniversaries of
its date of grant, provided that the Optionee continues to serve as a Director
on such dates.
	 
	 	(v)	 	The Subsequent Option shall vest and become exercisable as to
100% of the Optioned Shares on the earlier of (i) the one year anniversary of
the date of grant of the Option and (ii) the date immediately preceding the
date of the annual meeting of the Company’s stockholders for the year
following the year of grant of the Option, provided that the Optionee
continues to serve as a Director on such date.
	 
	 	(vi)	 	If an Outside Director dies or ceases to serve as a Director
as a result of the Outside Director’s Disability while holding any outstanding
Option under this Section 11, then that Option may be exercised within twelve
(12) months following such Outside Director’s death or termination, or such
longer period of time as specified in the Option Agreement, to the extent that
the Option is vested on the date of death or termination (but in no event
later than the expiration of the term of such Option as set forth in the
Option Agreement) by the Outside Director or the Outside Director’s designated
beneficiary, provided such beneficiary has

15

 

	 	 	 	been designated, prior to the death of the Outside Director, in a form
acceptable to the Administrator. If no such beneficiary has been
designated by the Outside Director, then such Option may be exercised by
the personal representative of such Outside Director’s estate or by the
person(s) to whom the Option is transferred pursuant to such Outside
Director’s will or in accordance with the laws of descent and
distribution. If, at the time of death or termination as a result of
Disability, the Outside Director is not vested as to such Outside
Director’s entire Option, the Option shall immediately terminate as to the
Optioned Shares covered by the unvested portion of the Option, and those
Optioned Shares shall immediately revert to the Plan. To the extent the
Option is not, within the post-termination time period determined pursuant
to this Section 11(d)(vi), exercised for the Optioned Shares in which the
Outside Director is vested at the time of death or termination as a result
of Disability, the Option shall terminate with respect to those vested
Optioned Shares, and those Optioned Shares shall revert to the Plan.
	 
	 	(vii)	 	In the event of a Corporate Transaction, all Options granted
pursuant to this Section 11 shall be subject to the terms and conditions of
Section 17(c); provided that in the event that the successor corporation does
not assume or substitute for each First Option and Subsequent Option, the
Optionee shall fully vest in and have the right to exercise the Option as to
all of the Optioned Shares, including Shares as to which it would not
otherwise be vested or exercisable.

	 	(e)	 	The Board shall have sole and exclusive authority to establish, maintain,
amend, suspend, and terminate any program by which Outside Directors are automatically
granted Nonstatutory Stock Options pursuant to this Section 11.

     12. Limited Transferability of Options. An Option generally 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 Optionee, only by the
Optionee; provided however that Nonstatutory Stock Options may be transferred by instrument to an
inter vivos or testamentary trust in which the Nonstatutory Stock Options are to be passed to
beneficiaries upon the death of the trustor (settlor) or by gift or pursuant to domestic relations
orders to “Immediate Family Members” (as defined below) of the Optionee. “Immediate Family” means
any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling,
niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or
sister-in-law (including adoptive relationships), a trust in which these persons have more than
fifty percent of the beneficial interest, a foundation in which these persons (or the Optionee)
control the management of assets, and any other entity in which these persons (or the Optionee) own
more than fifty percent of the voting interests. The

16

 

Optionee may designate one or more persons as the beneficiary or beneficiaries of his or her
outstanding Options, and those Options shall, in accordance with such designation, automatically be
transferred to such beneficiary or beneficiaries upon the Optionee’s death while holding those
Options. Such beneficiary or beneficiaries shall take the transferred Options subject to all the
terms and conditions of the applicable agreement evidencing each such transferred Option, including
(without limitation) the limited time period during which the Option may be exercised following the
Optionee’s death.

     13. Stock Grants and Stock Unit Awards. Each Stock Award Agreement reflecting the issuance of
a Stock Grant or Stock Unit shall be in such form and shall contain such terms and conditions as
the Administrator shall deem appropriate. The terms and conditions of such agreements may change
from time to time, and the terms and conditions of separate agreements need not be identical, but
each such agreement shall include (through incorporation of provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

	 	(a)	 	Consideration. A Stock Grant or Stock Unit may be awarded in consideration
for such property or services as is permitted under Applicable Law, including for past
services actually rendered to the Company or a Subsidiary for its benefit.
	 
	 	(b)	 	Vesting. Shares of Common Stock awarded under an agreement reflecting a
Stock Grant and a Stock Unit award may, but need not, be subject to a share repurchase
option, forfeiture restriction or other conditions in favor of the Company in
accordance with a vesting or lapse schedule to be determined by the Administrator.
	 
	 	(c)	 	Termination of Participant’s Relationship as a Service Provider. In the
event a Participant’s relationship as a Service Provider terminates, the Company may
reacquire any or all of the Shares held by the Participant which have not vested or
which are otherwise subject to forfeiture or other conditions as of the date of
termination under the terms of the agreement.
	 
	 	(d)	 	Transferability. Except as determined by the Board, no rights to acquire
Shares under a Stock Grant or a Stock Unit shall be assignable or otherwise
transferable by the Participant except by will or by the laws of descent and
distribution.

     14. Stock Appreciation Rights.

	 	(a)	 	General. Stock Appreciation Rights may be granted either alone, in addition
to, or in tandem with other Awards granted under the Plan. The Administrator may
grant Stock Appreciation Rights to eligible Participants subject to terms and
conditions not inconsistent with this Plan and determined by the Administrator. The
specific terms and conditions applicable to the Participant shall be provided for in
the Stock Award Agreement. Stock Appreciation Rights shall be exercisable, in whole
or in

17

 

	 	 	 	part, at such times as the Administrator shall specify in the Stock Award
Agreement.
	 
	 	(b)	 	Exercise of Stock Appreciation Right. Upon the exercise of a Stock
Appreciation Right, in whole or in part, the Participant shall be entitled to a
payment in an amount equal to the excess of the Fair Market Value on the date of
exercise of a fixed number of Shares covered by the exercised portion of the Stock
Appreciation Right, over the Fair Market Value on the grant date of the Shares covered
by the exercised portion of the Stock Appreciation Right (or such other amount
calculated with respect to Shares subject to the award as the Administrator may
determine). The amount due to the Participant upon the exercise of a Stock
Appreciation Right shall be paid in such form of consideration as determined by the
Administrator and may be in cash, Shares or a combination thereof, over the period or
periods specified in the Stock Award Agreement. A Stock Award Agreement may place
limits on the amount that may be paid over any specified period or periods upon the
exercise of a Stock Appreciation Right, on an aggregate basis or as to any
Participant. A Stock Appreciation Right shall be considered exercised when the
Company receives written notice of exercise in accordance with the terms of the Stock
Award Agreement from the person entitled to exercise the Stock Appreciation Right.
	 
	 	(c)	 	Transferability. Except as determined by the Board, no Stock Appreciation
Rights shall be assignable or otherwise transferable by the Participant except by will
or by the laws of descent and distribution.

     15. Cash Awards. Each Cash Award will confer upon the Participant the opportunity to earn a
future payment tied to the level of achievement with respect to one or more performance criteria
established for a performance period of not less than one (1) year.

	 	(a)	 	Cash Award. Each Cash Award shall contain provisions regarding (i) the
target and maximum amount payable to the Participant as a Cash Award, (ii) the
Qualifying Performance Criteria and level of achievement versus these criteria which
shall determine the amount of such payment, (iii) the period as to which performance
shall be measured for establishing the amount of any payment, (iv) the timing of any
payment earned by virtue of performance, (v) restrictions on the alienation or
transfer of the Cash Award prior to actual payment, (vi) forfeiture provisions, and
(vii) such further terms and conditions (including, without limitation, the effect
that a termination as a Service Provider shall have on any Cash Award) in each case
not inconsistent with the Plan, as may be determined from time to time by the
Administrator. The maximum amount payable as a Cash Award may be a multiple of the
target amount payable, but the maximum amount payable pursuant to that portion of a
Cash Award granted under

18

 

	 	 	 	this Plan for any fiscal year to any Participant shall not exceed U.S. $1,000,000.
	 
	 	(b)	 	Performance Criteria. The Administrator shall establish the Qualifying
Performance Criteria and level of achievement versus these criteria which shall
determine the target and the minimum and maximum amount payable under a Cash Award.
The Administrator may specify the percentage of the target Cash Award that is intended
to satisfy the requirements for “performance-based compensation” under Section 162(m)
of the Code. Notwithstanding anything to the contrary herein, the performance
criteria for any portion of a Cash Award that is intended to satisfy the requirements
for “performance-based compensation” under Section 162(m) of the Code shall be a
measure established by the Administrator based on one or more Qualifying Performance
Criteria selected by the Administrator and specified in writing not later than 90 days
after the commencement of the period of service to which the performance goals
relates, provided that the outcome is substantially uncertain at that time (or in such
other manner that complies with Section 162(m)).
	 
	 	(c)	 	Timing and Form of Payment. The Administrator shall determine the timing of
payment of any Cash Award. The Administrator may provide for or, subject to such
terms and conditions as the Administrator may specify and Applicable Laws, may permit
a Participant to elect for the payment of any Cash Award to be deferred to a specified
date or event. The Administrator may specify the form of payment of Cash Awards,
which may be cash or other property, or may provide for a Participant to have the
option for his or her Cash Award, or such portion thereof as the Administrator may
specify, to be paid in whole or in part in cash or other property. Cash Awards shall
be structured to comply with the “short-term deferral” rules of Section 409A of the
Code.

     16. Section 162(m) Compliance. Any Stock Award (other than an Option or any other Stock Award
having a purchase price equal to 100% of the Fair Market Value on the date such award is made) or
Cash Award that is intended as “qualified performance-based compensation” within the meaning of
Section 162(m) of the Code must vest or become exercisable or payable contingent on the achievement
of one or more Qualifying Performance Criteria. Notwithstanding anything to the contrary herein,
the Committee shall have the discretion to determine the time and manner of compliance with Section
162 (m) of the Code as required under applicable regulations and to conform the procedures related
to the Award to the requirements of Section 162(m) and may in its discretion reduce the number of
Shares granted or amount of cash or other property to which a Participant may otherwise have been
entitled with respect to an Award designed to qualify as performance-based compensation under
Section 162(m).

     17. Adjustments Upon Changes in Capitalization, Dissolution or Corporate Transaction.

19

 

	 	(a)	 	Changes in Capitalization. Subject to any required action by the
stockholders of the Company, (i) the number of Shares 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, (ii) the number
of Shares that may be added annually to the Plan pursuant to Section 3(b) hereof,
(iii) the number of Optioned Shares granted under First Options and Subsequent Options
under Section 11 hereof, (iv) the maximum numbers of Shares that may be granted under
Awards to any Service Provider within any fiscal year as set forth in Section 6(c) and
(v) the number of Shares as well as the price per Share subject to each outstanding
Award, shall be proportionately adjusted for any increase or decrease in the number of
issued Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Common Stock, or any other increase or decrease
in the number of issued Shares effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been “effected without receipt of consideration.”
Such adjustment shall be made by the Administrator, whose determination in that
respect shall be final, binding and conclusive. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of Shares.
	 
	 	(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 (but need not) provide for a Participant to have
the right to exercise his or her Option or Stock Award until ten (10) days prior to
such transaction as to all of the Shares covered thereby, including Shares as to which
the Option or Stock Award would not otherwise be exercisable. In addition, the
Administrator may (but need not) provide that any Company repurchase option applicable
to any unvested Shares purchased upon exercise of an Option or issued under a Stock
Award shall lapse as to all such Shares, 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, an Award will terminate immediately prior to the
consummation of such proposed action.
	 
	 	(c)	 	Corporate Transaction.

	 	(i)	 	In the event of a Corporate Transaction, as determined by the
Board or a Committee, the Board or Committee may, in its discretion, (i)
provide for the assumption or substitution of, or adjustment to, each
outstanding Award; (ii) accelerate the vesting of Options and terminate any
restrictions on Cash Awards or Stock

20

 

	 	 	 	Awards; and/or (iii) provide for termination of Awards as a result of the
Corporate Transaction on such terms and conditions as it deems
appropriate, including providing for the cancellation of Awards for a cash
payment to the Participant. For the purposes of this paragraph, the Award
shall be considered assumed if, following the Corporate Transaction, the
Award confers the right to purchase or receive, for each Share or amount
of cash covered by the Award immediately prior to the Corporate
Transaction, the consideration (whether stock, cash, or other securities
or property) received in the Corporate Transaction by holders of Common
Stock for each Share held on the effective date of the Corporate
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 Corporate Transaction 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 of the Award, for each Share covered by 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 Shares in the Corporate Transaction.
	 
	 	(ii)	 	Each Option or Stock Award which is assumed pursuant to this
Section 17(c) shall be appropriately adjusted, immediately after such
Corporate Transaction, to apply to the number and class of securities which
would have been issuable to the Participant in consummation of such Corporate
Transaction had the Option or Stock Award been exercised immediately prior to
such Corporate Transaction. Appropriate adjustments to reflect such Corporate
Transaction shall also be made to (A) the exercise or purchase price payable
per share under each outstanding Option or Stock Award, provided the aggregate
exercise or purchase price payable for such securities shall remain the same,
(B) the maximum number and/or class of securities available for issuance over
the remaining term of the Plan, (C) the maximum number and/or class of
securities for which any one person may be granted Options or Stock Awards
under the Plan per year, (D) the maximum number and/or class of securities by
which the share reserve is to increase automatically each year and (E) the
number and/or class of securities subject to the Options granted under Section
11.
	 
	 	(iii)	 	Notwithstanding the foregoing, as may be determined by the
Administrator, any such adjustment shall not (i) cause an Award which is
exempt from Section 409A of the Code to become subject to Section 409A of the
Code or (ii) cause an Award subject to

21

 

	 	 	 	Section 409A of the Code not to comply with the requirements of Section
409A of the Code.

     18. Date of Grant. The date of grant of a First Option or Subsequent Option shall be the date
on which it was automatically granted pursuant to Section 11 hereof. The date of grant of any
other Award shall be, for all purposes, the date on which the Administrator grants such Award.
Notice of the grant shall be provided to each Participant within a reasonable time after the date
of such grant.

     19. Amendment and Termination of the Plan. The Board may at any time amend, alter, suspend or
terminate the Plan. However, the Company shall obtain stockholder approval of any Plan amendment
to the extent necessary and desirable to comply with Applicable Laws. In addition, no amendment,
alteration, suspension or termination of the Plan shall impair the rights of any Participant under
any grant theretofore made, 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 Awards granted under the Plan prior to the date of such
termination. In addition, unless approved by the stockholders of the Company, no amendment shall
be made that would result in a repricing of Options by (x) reducing the exercise price of
outstanding Options or (y) canceling an outstanding Option held by a Participant and re-granting to
the Participant a new Option with a lower exercise price, in either case other than in connection
with a change in the Company’s capitalization pursuant to Section 17(a) of the Plan.

     20. Conditions Upon Issuance of Shares.

	 	(a)	 	Awards shall not be granted and Shares shall not be issued pursuant to the
exercise of an Award unless the grant of the Award, the exercise or settlement of such
Award and the issuance and delivery of such Shares shall comply with Applicable Laws
and shall be further subject to the approval of counsel for the Company with respect
to such compliance.
	 
	 	(b)	 	No Shares or other assets shall be issued or delivered under the Plan unless
and until there shall have been compliance with all applicable requirements of Federal
and state securities laws, including the filing and effectiveness of the Form S-8
registration statement for the Shares, and all applicable listing requirements of any
stock exchange (or the Nasdaq National Market, if applicable) on which Common Stock is
then listed for trading.

     21. Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction (including under Section 20), which authority is deemed by the
Company’s counsel to be necessary to the lawful grant of Awards and issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure to grant such
Awards or issue or sell such Shares as to which such requisite authority shall not have been
obtained.

22

 

     22. 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.

     23. Stockholder Approval. If required by Applicable Laws, continuance of the Plan shall be
subject to approval by the stockholders of the Company within twelve (12) months after the date the
Plan is adopted or after any amendment requiring stockholder approval is made. Such stockholder
approval shall be obtained in the manner and to the degree required under Applicable Laws.

23

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