Document:

exv10w1

 

Exhibit 10.1

[RemedyTemp, Inc. Letterhead]

September 26, 2005

[Executive Name]

[Address]

     Re: Amendment of Options

Dear [           ]:

RemedyTemp, Inc. (the “Company”) has determined that it is advisable to accelerate the vesting of
all of its outstanding and otherwise unvested stock options issued to executives and employees with
exercise prices that are at or above $8.01 per share. Subject to the condition set forth below,
this letter confirms that your stock options that have been granted by the Company under its 1996
Stock Incentive Plan (amended and restated effective as of August 16, 1999) and that are currently
outstanding and otherwise unvested (the “Plan”) with exercise prices at or above $8.01 per share
(your “Outstanding Options”), are fully vested.

This accelerated vesting of your Outstanding Options is conditioned, however, on your agreement
that you will not sell, transfer, assign, pledge, or otherwise dispose of, alienate, or encumber,
either voluntarily or involuntarily, any shares that you acquire on exercise of the accelerated
portion of your Outstanding Options at any time before that portion of your Outstanding Options
would have vested under the terms of the Plan or grant (without giving effect to this acceleration,
but including any possible acceleration of vesting that would otherwise occur following a change in
control or other circumstances causing accelerated vesting as set forth in the Plan, grant or any
severance, employment or other agreement between you and the Company covering your Outstanding
Options (each, an “Other Agreement”)). Except as provided below, any sale or transfer, or
purported sale or transfer, of any such shares or any interest therein prior to that vesting date
shall be null and void. This restriction on the transfer of shares will not apply to any transfer
that would have been permitted with respect to the underlying option under the terms of the Plan;
provided that any permitted transferee will acquire the shares subject to the same transfer
restrictions.

If you decide to exercise the accelerated portion of your Outstanding Options prior to the time
that portion of your Outstanding Options would have otherwise vested (including accelerated vesting
set forth in the Plan, grant or Other Agreement), the Company will issue shares only in certificate
form evidencing the shares you acquire on exercise with the following legend and such other legends
as may be required or appropriate under applicable law:

“THE OWNERSHIP OF THIS CERTIFICATE AND THE SHARES OF STOCK EVIDENCED HEREBY AND ANY INTEREST
THEREIN ARE SUBJECT TO SUBSTANTIAL RESTRICTIONS ON TRANSFER UNDER AN AGREEMENT

 

 

ENTERED INTO BETWEEN
THE REGISTERED OWNER AND REMEDYTEMP, INC. A COPY OF SUCH AGREEMENT IS ON FILE WITH THE SECRETARY OF
REMEDYTEMP, INC. ”

By executing this agreement, you and the Company agree that this agreement amends, and supersedes
any inconsistent provisions of, the grant or Other Agreements evidencing your Outstanding Options.

Please acknowledge your agreement with the foregoing by signing the enclosed copy of this agreement
where indicated below and returning the executed copy to the Company, attention: Chris Lal,
Director of Legal Affairs. You should return the letter so that it is received by the Company no
later than September 26, 2005.

Sincerely,

Christopher M. Lal

Director of Legal Affairs

Acknowledged and Agreed:

By:

[Executive Name]exv10w2

 

Exhibit
10.2

REMEDYTEMP, INC.

1996 EMPLOYEE STOCK PURCHASE PLAN

(Amended and Restate Effective as of September 26, 2005)

     The following constitutes the provisions of the RemedyTemp, Inc. 1996 Employee Stock Purchase
Plan (the “Plan”).

1. Purpose.

     The purpose of the Plan is to maintain competitive equity compensation programs and to provide
employees of the Company with an opportunity and incentive to acquire a proprietary interest in the
Company through the purchase of the Company’s Class A Common Stock, thereby more closely aligning
the interests of the Company’s employees and shareholders. It is the intention of the Company to
have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the Internal
Revenue Code of 1986, as amended (“Section 423”). Accordingly, the provisions of the Plan shall be
construed to extend and limit participation consistent with the requirements of Section 423.

2. Definitions.

     Capitalized terms used in this Plan and not otherwise defined have the meanings set forth
below.

     “Administrator” means the Committee, or the Board if the Board asserts administrative
authority over the Plan pursuant to Section 13.

     “Board” means the Board of Directors of the Company.

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

     “Committee” means a committee of members of the Board meeting the qualifications described in
Section 12 and appointed by the Board to administer the Plan.

     “Common Stock” shall mean the Class A Common Stock of the Company.

     “Company” means RemedyTemp, Inc., a California corporation, and other subsidiaries or
affiliated companies of RemedyTemp, Inc. that have been or are in the future permitted by
RemedyTemp, Inc. to join the Plan as an additional Company in accordance with this Plan.
Notwithstanding any other provision in the Plan to the contrary, the first listed Company,
RemedyTemp, Inc. shall have the power, acting alone and without the consent of any other entity or
person, to amend or terminate the Plan, to appoint the Trustee and members of the Board or to
exercise other powers reserved to the Company, and such act by RemedyTemp, Inc. shall be binding on
the other Companies that have adopted the Plan and all other persons interested in the Plan. The
Company shall act through a resolution of its Board of Directors or the executive committee of its
Board of Directors, or, if applicable, may act through a delegatee of its Board or executive
committee. A reference to “Company” shall be deemed to include RemedyTemp, Inc., provided that
notwithstanding anything in the Plan to the contrary, any power reserved to the

 

 

Company may be exercised by RemedyTemp, Inc. acting alone, without the necessity of further
action or consent by the Trustee, other Companies, the Board, or any other person.”

     “Compensation” means, with respect to each participant for each pay period, the full base
salary or hourly compensation and any cash bonus paid to such participant. Except as otherwise
determined by the Committee for all participants, “Compensation” does not include (i) commissions,
overtime pay or shift premiums, (ii) any amount contributed on behalf of a participant to any
pension plan or plan of deferred compensation, (iii) any automobile or relocation allowances (or
reimbursement for any such expenses), (iv) any amounts realized as compensation from the exercise
of qualified or nonqualified stock options, (v) any amounts paid as a starting bonus or finder’s
fee, (vi) any amounts paid to a participant in the form of fringe benefits, such as health and
welfare, hospitalization, and group life insurance benefits, or perquisites, or paid in lieu of
such benefits, such as cash-out credits generated under a plan qualified under Code Section 125, or
(vii) other similar forms of extraordinary compensation.

     “Eligible Employee” means an Employee who has been an Employee for at least six months.

     “Employee” means any individual who is customarily employed for at least fifteen (15) hours
per week and more than five (5) months in a calendar year by the Company or a Subsidiary that is
permitted to participate in the Plan under Section 15(b). For purposes of the Plan, the
employment relationship shall be treated as continuing while the individual is on sick leave or
other leave of absence approved by the Company, except that when the period of leave exceeds 90
days and the individual’s right to reemployment is not guaranteed either by statute or by contract,
the employment relationship will be deemed to have terminated on the 91st day of such leave.

     “Enrollment Date” means the first day of each Offering Period, i.e. October 1, 1996 and each
April 1 and October 1 thereafter for the duration of the Plan.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “Exercise Date” means the last day of each Offering Period, i.e. March 31, 1997 and each
September 30 and March 31 thereafter for the duration of the Plan.

     “Fair Market Value” of the Common Stock on any date means the value of Common Stock determined
as follows:

          (1) If the Common Stock is listed on any established stock exchange or a national market
system, including, without limitation, the Nasdaq National Market, its Fair Market Value shall be
the closing sales price for such stock (or the closing bid, if no sales were reported), as quoted
on such exchange or system (or the exchange or system with the greatest volume of trading in the
Common Stock) on the date of such determination (or, if such date is not a Trading Day, then on the
next preceding Trading Day), as reported in the Wall Street Journal or such other source as the
Administrator deems reliable; or

          (2) If the Common Stock is quoted on the National Association of Securities Dealers Automated
Quotation System (but not on the Nasdaq National Market) or is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market Value shall be the mean
between the high and low asked prices for the Common Stock on the date of such determination (or,
if such date is not a Trading Day, then on the next preceding Trading

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Day), as reported in the Wall Street Journal or such other source as the Administrator deems
reliable; or

          (3) In the absence of an established market for the Common Stock, the Fair Market Value of the
Common Stock shall be determined in good faith by the Administrator.

     “Offering Period” means each period of six (6) months, either (i) commencing on October 1,
1996 and each October 1 thereafter for the duration of the Plan and terminating on the March 31 six
(6) months later, or (ii) commencing on April 1, 1997 and each April 1 thereafter for the duration
of the Plan and terminating on the September 30 six (6) months later. The Administrator shall have
the power to change the duration of Offering Periods without shareholder approval as set forth in
Section 11 or if such change is announced at least fifteen (15) days prior to the scheduled
beginning of the first Offering Period to be affected.

     “Option” means the option granted to each participant pursuant to Section 4 upon
enrollment in an Offering Period.

     “Periodic Exercise Limit” has the meaning set forth in Section 4(a).

     “Plan Account” means an account maintained by the Company for each participant in the Plan, to
which are credited the payroll deductions made for such participant pursuant to Section 5
and from which are debited amounts paid for the purchase of shares upon exercise of such
participant’s Option pursuant to Section 6.

     “Purchase Price” with respect to an Offering Period shall be determined by applying a discount
of 5% to the Fair Market Value of a share of Common Stock on the Exercise Date of that Offering
Period; provided, however, that the Administrator may, in its sole discretion, provide prior to the
start of an Offering Period that the Purchase Price for that Offering Period shall instead be
determined by applying a discount greater than 5% (not to exceed 15%) to either (i) the Fair Market
Value of a share of Common Stock on the Enrollment Date of that Offering Period, (ii) the Fair
Market Value of a share of Common Stock on the Exercise Date of that Offering Period or (iii) the
lesser of the Fair Market Value of a share of Common stock on the Enrollment Date of that Offering
Period (or some later date but not later than the Exercise Date of that Offering Period) or the
Fair Market Value of a share of Common Stock on the Exercise Date of that Offering Period.

     “Reserves” means the number of shares of Common Stock covered by each Option that have not yet
been exercised and the number of shares of Common Stock that have been authorized for issuance
under the Plan, but not yet placed under Option.

     “Rule 16b-3” means Rule 16b-3 under the Exchange Act and any successor provision.

     “Subsidiary” has the meaning as set forth under Section 424(f) of the Code.

     “Trading Day” means a day on which national stock exchanges and the National Association of
Securities Dealers Automated Quotation System are open for trading.

3. Offering Periods and Participation.

     The Plan shall be implemented through a series of consecutive Offering Periods. An Eligible
Employee may enroll in an Offering Period by delivering a subscription agreement in the form of
Exhibit A hereto to the Company’s payroll office at least five (5) business days prior to

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the Enrollment Date for that Offering Period. A subscription agreement in effect for a Plan
participant for a particular Offering Period shall continue in effect for subsequent Offering
Periods if the participant remains an Eligible Employee and has not withdrawn pursuant to
Section 7.

4. Options.

     (a) Grants. On the Enrollment Date for each Offering Period, each Eligible Employee
participating in such Offering Period shall be granted an Option to purchase on the Exercise Date
of such Offering Period (at the applicable Purchase Price) up to that number of shares of Common
Stock determined by dividing $12,500 by the Fair Market Value of a share of Common Stock on the
Enrollment Date (such number of shares being the “Periodic Exercise Limit”). The Option shall
expire immediately after the Exercise Date of the Offering Period.

     (b) Grant Limitations. Any provisions of the Plan to the contrary notwithstanding, no
participant shall be granted an Option under the Plan:

     (i) if, immediately after the grant, such participant (taking into account stock held
by other persons that is attributed to such Employee pursuant to Section 424(d) of the Code)
would own stock and/or hold outstanding options to purchase stock possessing five percent
(5%) or more of the total combined voting power or value of all classes of stock of the
Company or of any Subsidiary (as determined under Treasury Regulations Section 1.423-2(d));
or

     (ii) which permits such participant’s rights to purchase stock under all employee stock
purchase plans of the Company and its Subsidiaries to accrue at a rate that exceeds
Twenty-Five Thousand Dollars ($25,000) worth of stock (determined at the Fair Market Value
of the shares at the time such Option is granted) in any calendar year.

     (c) No Rights in Respect of Underlying Stock. The participant will have no interest
or voting right in shares covered by an Option until such Option has been exercised.

5. Payroll Deductions.

     (a) Participant Designations. The subscription agreement applicable to an Offering
Period shall designate payroll deductions to be made on each payday during the Offering Period as a
whole number percentage not exceeding ten percent (10%) of such Eligible Employee’s Compensation
for the pay period preceding such payday, provided that the aggregate of such payroll deductions
during the Offering Period shall not exceed ten percent (10%) of the participant’s Compensation
during said Offering Period.

     (b) Plan Account Balances. The Company shall make payroll deductions as specified in
each participant’s subscription agreement on each payday during the Offering Period and credit such
payroll deductions to such participant’s Plan Account. A participant may not make any additional
payments into such Plan Account. No interest will accrue on any payroll deductions. All payroll
deductions received or held by the Company under the Plan may be used by the Company for any
corporate purpose, and the Company shall not be obligated to segregate such payroll deductions.

     (c) Participant Changes. A participant may discontinue his or her participation in
the Plan as provided in Section 7, or may increase or decrease (subject to such limits as
the Administrator may impose) the rate of his or her payroll deductions during any Offering Period

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by filing with the Company a new subscription agreement authorizing such a change in the
payroll deduction rate. 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.

     (d) Decreases. Notwithstanding the foregoing, to the extent necessary to comply with
Section 423(b)(8) of the Code and Section 4(b) herein, a participant’s payroll deductions
may be decreased to 0% at such time during any Offering Period that is scheduled to end during a
calendar year (the “Current Purchase Period”) when the aggregate of all payroll deductions
previously used to purchase stock under the Plan in a prior Offering Period which ended during that
calendar year plus all payroll deductions accumulated with respect to the Current Purchase Period
equal $21,250. Payroll deductions shall recommence at the rate provided in such participant’s
subscription agreement at the beginning of the first Offering Period that is scheduled to end in
the following calendar year, unless terminated by the participant as provided in Section 7.

     (e) Tax Obligations. At the time of each exercise of a participant’s Option, and at
the time any Common Stock issued under the Plan to a participant is disposed of, the participant
must adequately provide for the Company’s federal, state, or other tax withholding obligations, if
any, that arise upon the exercise of the Option or the disposition of the Common Stock. At any
time, the Company may, but will not be obligated to, withhold from the participant’s compensation
the amount necessary for the Company to meet applicable withholding obligations, including any
withholding required to make available to the Company any tax deductions or benefit attributable to
sale or early disposition of Common Stock by the Employee.

     (f) Statements of Account. The Company shall maintain each participant’s Plan Account
and shall give each Plan participant a statement of account at least annually. Such statements
will set forth the amounts of payroll deductions, the Purchase Price, the number of shares
purchased and the remaining cash balance, if any, for the period covered.

6. Exercise of Options.

     (a) Automatic Exercise on Exercise Dates. Unless a participant withdraws as provided
in Section 7, his or her Option for the purchase of shares will be exercised automatically
on the Exercise Date of the Offering Period in which such participant is enrolled for the maximum
number of shares of Common Stock, including fractional shares, as can then be purchased at the
applicable Purchase Price with the payroll deductions accumulated in such participant’s Plan
Account and not yet applied to the purchase of shares under the Plan, subject to the Periodic
Exercise Limit. During a participant’s lifetime, a participant’s Options to purchase shares
hereunder are exercisable only by the participant.

     (b) Delivery of Shares. 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 book entry transfer representing the shares purchased upon
exercise of his or her Option, provided that the Company may in its discretion hold fractional
shares for the accounts of the participants pending aggregation to whole shares.

     (c) Compliance with Law. 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 comply
with all applicable provisions of law, domestic or foreign, including, without limitation, the
Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares may then be

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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
participant for whom an Option is exercised 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. Shares
issued upon purchase under the Plan may be subject to such transfer restrictions and stop-transfer
instructions as the Administrator deems appropriate.

     (d) Excess Plan Account Balances. If, due to application of the Periodic Exercise
Limit, there remains in a participant’s Plan Account immediately following exercise of such
participant’s Option on an Exercise Date any cash accumulated during the Purchase Period
immediately preceding such Exercise Date and not applied to the purchase of shares under the Plan,
such cash shall promptly be returned to the participant.

7. Withdrawal: Termination of Employment.

     (a) Voluntary Withdrawal. Subject to Section 15(g), a participant may
withdraw from an Offering Period by giving written notice to the Company’s payroll office at least
five (5) business days prior to the Exercise Date. Such withdrawal shall be effective beginning
five business days after receipt by the Company’s payroll office of notice thereof. On or promptly
following the effective date of any withdrawal, all (but not less than all) of the withdrawing
participant’s payroll deductions credited to his or her Plan Account and not yet applied to the
purchase of shares under the Plan will be paid to such participant, and on the effective date of
such withdrawal such participant’s Option for the Offering Period will be automatically terminated,
and no further payroll deductions for the purchase of shares will be made during the Offering
Period. If a participant withdraws from an Offering Period, payroll deductions will not resume at
the beginning of any succeeding Offering Period unless the participant delivers to the Company a
new subscription agreement with respect thereto.

     (b) Termination of Employment. Promptly after a participant’s ceasing to be an
Employee for any reason the payroll deductions credited to such participant’s Plan Account and not
yet applied to the purchase of shares under the Plan will be returned to such participant or, in
the case of his or her death, to the person or persons entitled thereto under Section 9,
and such participant’s Option will be automatically terminated, provided that, if the Company does
not learn of such death more than five (5) business days prior to an Exercise Date, payroll
deductions credited to such participant’s Plan account may be applied to the purchase of shares
under the Plan on such Exercise Date.

8. Transferability.

     Neither payroll deductions credited to a participant’s Plan Account nor any rights with regard
to the exercise of an Option or to receive shares under the Plan may be assigned, transferred,
pledged or otherwise disposed of by the participant in any way other than by will, the laws of
descent and distribution or as provided in Section 9 hereof. Any such attempt at
assignment, transfer, pledge or other disposition shall be without effect, except that the
Administrator may treat such act as an election to withdraw from an Offering Period in accordance
with Section 7. The Administrator may, in its discretion and consistent with applicable
law, restrict the transfer of shares purchased under the Plan by imposing a holding period not to
exceed one year from the date of issuance.

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9. Designation of Beneficiary.

     A participant may file a written designation of a beneficiary who is to receive any cash from
the participant’s Plan Account in the event of such participant’s death and any shares purchased
for the participant upon exercise of his or her Option but not yet issued. If a participant is
married and the designated beneficiary is not the spouse, spousal consent may be required for such
designation to be effective. A designation of beneficiary may be changed by a 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 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.

10. Stock.

     The maximum number of shares of the Company’s Common Stock that shall be made available for
sale under the Plan shall be 250,000 shares, subject to adjustment upon changes in capitalization
of the Company as provided in Section 11. If on a given Enrollment Date or Exercise Date
the number of shares with respect to which Options are to be granted or exercised exceeds the
number of shares then available under the Plan, the Administrator shall make a pro rata allocation
of the shares remaining available for purchase in as uniform a manner as shall be practicable and
as it shall determine to be equitable. Shares of Common Stock subject to unexercised Options that
expire, terminate or are cancelled will again become available for the grant of further Options
under the Plan.

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

     (a) Changes in Capitalization. Subject to any required action by the shareholders of
the Company, the Reserves as well as the Purchase Price, Periodic Exercise Limit, and other
characteristics of the Options, shall be appropriately and proportionately adjusted for any
increase or decrease or exchange in the issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification of the Common Stock, exchange
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 Administrator, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no issue 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. The Administrator may, if it so determines in the exercise of
its sole discretion, provide for adjusting the Reserves, as well as the Purchase Price, Periodic
Exercise Limit, and other characteristics of the Options, in the event the Company effects one or
more reorganizations, recapitalizations, rights offerings or other increases or reductions of
shares of its outstanding Common Stock.

     (b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the pending Offering Period will terminate immediately prior to the

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consummation of such proposed action, unless otherwise provided by the Administrator, and all
Plan Account balances will be paid to participants as appropriate consistent with applicable law.

     (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 or other combination (the “Transaction”) of the Company
with or into another entity, each Option under the Plan shall be assumed or an equivalent option
shall be substituted by such successor entity or a parent or subsidiary of such successor entity,
unless the Administrator determines, in the exercise of its sole discretion and in lieu of such
assumption or substitution, to shorten the Offering Period then in progress by setting a new
Exercise Date (the “New Exercise Date”). If the Administrator shortens the Offering Period then in
progress in lieu of assumption or substitution, the Administrator shall notify each participant in
writing, at least ten (l0) days prior to the New Exercise Date, that the Exercise Date for such
participant’s Option has been changed to the New Exercise Date and that such participant’s Option
will be exercised automatically on the New Exercise Date, unless prior to such date the participant
has withdrawn from the Offering Period as provided in Section 8 (provided that, in such
case, the participant’s withdrawal shall be effective if notice thereof is delivered to the
Company’s payroll office at least two (2) business days prior to the New Exercise Date). For
purposes of this Section, an Option granted under the Plan shall be deemed to be assumed if,
following the Transaction, the Option confers the right to purchase at the Purchase Price (provided
that for such purposes the Fair Market Value of the Common Stock on the New Exercise Date shall be
the value per share of the consideration paid in the Transaction), for each share of stock subject
to the Option immediately prior to the Transaction, the consideration (whether stock, cash or other
securities or property) received in the Transaction by holders of Common Stock for each share of
Common Stock held on the effective date of the transaction (and if such holders were offered a
choice of consideration, the type of consideration chosen by the holders of a majority of the
outstanding shares of Common Stock); provided, however, that if such consideration received in the
Transaction was not solely common equity of the successor entity or its parent (as defined in
Section 424(e) of the Code), the Administrator may, with the consent of the successor entity and
the participant, provide for the consideration to be received upon exercise of the Option to be
solely common equity of the successor entity or its parent equal in fair market value to the per
share consideration received by holders of Common Stock in the Transaction.

12. Administration.

     The Plan shall be administered by the Committee, which shall have the authority to construe,
interpret and apply the terms of the Plan and any agreements defining the rights and obligations of
the Company and participants under the Plan, to prescribe, amend, and rescind rules and regulations
relating to the Plan, to determine eligibility and to adjudicate all disputed claims filed under
the Plan, and to make all other determinations necessary or advisable for the administration of the
Plan. The Administrator may, in its discretion, delegate ministerial responsibilities under the
Plan to the Company. Every finding, decision and determination made by the Committee shall, to the
full extent permitted by law, be final and binding upon all parties. Any action of the Committee
shall be taken pursuant to a majority vote or by the unanimous written consent of its members. The
Committee shall consist of three or more members of the Board, each of whom shall be disinterested
within the meaning of Rule 16b-3, provided, however, that the number of members of the Committee
may be reduced or increased from time to time by the Board to the number required or allowed by
Rule 16b-3. The Board may from time to time in its discretion exercise any responsibilities or
authority allocated to the Committee under the Plan. No member of the Committee or any designee
thereof will be liable for any action or determination made in good faith with respect to the Plan
or any transaction arising under the Plan.

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13. Amendment or Termination.

     (a) Administrator’s Discretion. The Administrator may, at any time and for any
reason, terminate or amend the Plan. Except as provided in Section 11, no such termination
can affect Options previously granted, provided that an Offering Period may be terminated by the
Administrator on any Exercise Date if the Administrator determines that such termination is in the
best interests of the Company and its shareholders. Except as provided herein, no amendment may
make any change in any Option theretofore granted that adversely affects the rights of any
participant. To the extent necessary to comply with and qualify under Rule 16b-3 or under Section
423 (or any successor rule or provision or any other applicable law or regulation), the
Administrator shall obtain shareholder approval of amendments to the Plan in such a manner and to
such a degree as required.

     (b) Administrative Modifications. Without shareholder consent (except as specifically
required by applicable law or regulation) and without regard to whether any participant rights may
be considered to have been “adversely affected,” the Administrator shall be entitled to amend the
Plan to the extent necessary to comply with and qualify under Rule 16b-3 and Section 423, change
the duration of the Offering Period, limit the frequency and/or number of changes in payroll
deductions during an Offering Period, establish the exchange ratio applicable to amounts withheld
in a currency other than U.S. dollars, permit payroll withholding in excess of the amount
designated by a participant to adjust for delays or mistakes in the Company’s processing of
properly completed withholding elections, establish reasonable waiting and adjustment periods
and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of
Common Stock for each participant properly correspond with amounts withheld from the participant’s
Compensation, and establish such other limitations or procedures as the Administrator determines in
its sole discretion to be advisable and which are consistent with the Plan.

14. Term of Plan.

     The Plan shall become effective upon the first Enrollment Date after its approval by the
shareholders of the Company and shall continue in effect for a term of twenty (20) years unless
sooner terminated pursuant to Section 13.

15. Miscellaneous.

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

     (b) Subsidiaries. The Administrator may from time to time in its discretion permit
Employees of any Subsidiary to participate in the Plan on the same terms as Eligible Employees
hereunder.

     (c) Shareholder Approval. The Plan shall be subject to approval by the shareholders
of the Company within twelve months before or after the date the Board adopts the Plan. If such
shareholder approval is not obtained, the Plan and all rights to the Common Stock purchased under
the Plan shall be null and void and shall have no effect.

     (d) Expenses. All costs and expenses incurred in administering the Plan shall be paid
by the Company, except that any stamp duties or transfer taxes applicable to participation in the
Plan may be charged to the account of such participant by the Company. Any brokerage fees for

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the purchase of shares by a participant shall be paid by the Company, but any brokerage fees
for the sale of shares by a participant shall be borne by the participant.

     (e) Equal Rights and Privileges. All Employees of the Company (or of any Subsidiary
that is permitted to participate in the Plan under Section 15(b)) shall have equal rights
and privileges under the Plan so that the Plan qualifies as an “employee stock purchase” within the
meaning of Section 423 (or any successor provision of the Code) and the Treasury regulations
thereunder. Any provision of the Plan which is inconsistent with Section 423 (or any successor
provision of the Code) or applicable Treasury regulations shall, without further act or amendment
by the Company or the Board, be reformed to comply with the requirements of Section 423 (or any
successor provision of the Code) or applicable Treasury regulations. This Section 15(e)
shall take precedence over all other provisions of the Plan.

     (f) Exclusion From Retirement and Fringe Benefit Computation. To the extent not
prohibited by statutory law, no portion of the award of Options under this Plan shall be taken into
account as “wages,” “salary,” or other “compensation” for any purpose, whether in determining
eligibility, benefits, or otherwise, under (i) any pension, retirement, profit sharing or other
qualified or nonqualified plan of deferred compensation, (ii) any employee welfare or fringe
benefit plan including, but not limited to, group insurance, hospitalization, medical, and
disability, or (iii) any form of extraordinary pay including but not limited to, bonuses, sick pay,
and vacation pay.

     (g) Additional Restrictions of Rule 16b-3. The terms and conditions of Options
granted hereunder to, and the purchase of shares by, persons subject to Section 16 of the Exchange
Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed to
contain, and such Options shall contain, and the shares issued upon exercise thereof shall be
subject to, such additional conditions and restrictions as may be required by Rule 16b-3 to qualify
for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.
Without limitation of the foregoing, the election by a person subject to Section 16 of the Exchange
Act to enroll in an Offering Period may be made irrevocable for specific Purchase Period within the
Offering Period.

     (h) No Employment Rights. The Plan does not, directly or indirectly, create any right
for the benefit of an employee or class of employees to purchase any shares under the Plan, or
create in any employee or class of employees any right with respect to continuation of employment
by the Company, and it shall not be deemed to interfere in any way with the Company’s right to
terminate, or otherwise modify, an employee’s employment at any time.

     (i) Applicable Law. The laws of the State of California shall govern all matters
relating to the Plan, except to the extent (if any) superseded by the laws of the United States.

     (j) Headings. Headings used herein are for convenience of reference only and do not
affect the meaning or interpretation of the Plan.

     [Remainder of Page Left Blank]

10

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