Document:

exv10w1

 

Exhibit 10.1

THIRD AMENDMENT TO LEASE 

     THIS THIRD AMENDMENT TO LEASE (this “Third Amendment”) is made as of August 22, 2007, by and
between ARE-3005 FIRST AVENUE, LLC, a Delaware limited liability company (“Landlord”), and DENDREON
CORPORATION, a Delaware corporation (“Tenant”).

RECITALS

     A. Landlord and Tenant are parties to that certain Lease dated as of July 31, 1998, as amended
by that certain First Amendment to Lease dated as of May 3, 2000, and as further amended by that
certain Second Amendment to Lease dated as of November 1, 2000 (as amended, the “Lease”). Tenant
leases certain space containing approximately 70,647 rentable square feet in a building located at
3005 1st Avenue, Seattle, Washington. Capitalized terms used herein without
definition shall have the meanings defined for such terms in the Lease.

     B. The Term of the Lease is scheduled to expire on December 31, 2008.

     C. Landlord and Tenant desire, subject to the terms and conditions set forth herein, to amend
the Lease to extend the Term through December 31, 2011.

     NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated herein by
this reference, the mutual promises and conditions contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Landlord and
Tenant hereby agree as follows:

	1.	 	Extension of Term. The Term Expiration Date of the Lease is hereby extended for a
period of 3 years from December 31, 2008, until December 31, 2011.

	2.	 	Basic Annual Rent. Commencing on January 1, 2009, Basic Annual Rent shall be an
amount equal to $2,784,546.72 multiplied by the Rent Adjustment Percentage and adding the
resulting amount to $2,784,546.72. Thereafter, on each January 1 during the Term of this
Lease (each an “Adjustment Date”), Basic Annual Rent shall be increased by multiplying the
Basic Annual Rent payable immediately before such Adjustment Date by the Rent Adjustment
Percentage and adding the resulting amount to the Basic Annual Rent payable immediately before
such Adjustment Date. Basic Annual Rent, as so adjusted, shall be due in equal monthly
installments each in advance on the first day of each and every calendar month during the
applicable calendar year.
	 
	 	 	“Rent Adjustment Percentage” shall mean the greater of (i) 3% or (ii) the CPI Adjustment
Percentage not to exceed 6%. “CPI Adjustment Percentage” means (i) a fraction, stated as a
percentage, the numerator of which shall be the Index for the calendar month 3 months
before the month in which the Adjustment Date occurs, and the denominator of which shall be
the Index for the calendar month 3 months before the last Adjustment Date except in the
case of the adjustment on January 1, 2009 for which the denominator shall be October 2007,
less (ii) 1.00. “Index” means the “Consumer Price Index-All Urban Consumers-Seattle,
Tacoma, Bremerton WA Area, All Items” compiled by the U.S. Department of Labor, Bureau of
Labor Statistics, (1982-84 = 100). If a
substantial change is made in the Index, the revised Index shall be used, subject to such
adjustments as Landlord may reasonably deem appropriate in order to make the revised Index
comparable to the prior Index. If the Bureau of Labor Statistics ceases to

	 	 	 	 	 
	 

	 	
	 	Copyright ã  2005, Alexandria Real Estate Equities, Inc, ALL

RIGHTS RESERVED, Confidential and Proprietary — Do Not 

Copy or Distributed. Alexandria and the Alexandria Logo are

registered trademarks of Alexandria real Estate Equities, Inc.

 

 

	 	 	publish the
Index, then the successor or most nearly comparable index, as reasonably determined by
Landlord, shall be used, subject to such adjustments as Landlord may reasonably deem
appropriate in order to make the new index comparable to the Index. Landlord shall give
Tenant written notice indicating the Basic Annual Rent, as adjusted pursuant to this
Section, and the method of computation and Tenant shall pay to Landlord an amount equal to
any underpayment of Basic Annual Rent by Tenant within 15 days of Landlord’s notice to
Tenant. Failure to deliver such notice shall not reduce, abate, waive or diminish Tenant’s
obligation to pay the adjusted Basic Annual Rent; provided that Tenant shall not have any
liability for late payment of the increase in the Basic Annual Rent until such notice is
delivered to Tenant.

	3.	 	Landlord’s Work. Landlord hereby agrees to cause Landlord’s Work (as defined below)
to be completed at the Project in a timely manner. Landlord shall use reasonable efforts, at
no additional cost to Landlord, to minimize the impact of Landlord’s Work upon Tenant’s access
or use of the Premises; however, Tenant acknowledges that the performance of Landlord’s Work
may adversely affect Tenant’s access to and use of the Demised Premises on a temporary basis
and Tenant shall have no right to abate, reduce or set-off any Rent in connection with
Landlord’s Work. As used herein, the term “Landlord’s Work” shall mean the repair or
replacement, as determined by Landlord, of the floor tile located in the main lobby of the
Building. In connection with Landlord’s Work, Landlord shall use flooring of comparable
quality to the original floor tile located in the main lobby.

	4.	 	Additional Tenant Improvements. Landlord shall make available to Tenant an additional
tenant improvement allowance of up to $353,235.00 (the “Additional TI Allowance”) for the
construction of improvements in the Demised Premises desired by Tenant and which improvements
shall be of a fixed and permanent nature (the “Additional Improvements”). The Additional TI
Allowance may not be used for the purchase of any personal property. The Additional TI
Allowance shall be available for disbursement to Tenant for the construction of the Additional
Improvements until June 30, 2009, after which date Landlord’s obligation to fund the
Additional TI Allowance shall expire. Tenant acknowledges that (i) Landlord’s prior written
consent shall be required with respect to the Additional Improvements (which consent shall be
granted or withheld in accordance with the standards established in Section 17 of the
Lease), and (ii) upon the expiration of the Term of the Lease, the Additional Improvements
shall become the property of Landlord and may not be removed by Tenant. Except for the
Additional TI Allowance, Tenant shall be solely responsible for all of the costs of the
Additional Improvements. The Additional Improvements shall be treated as alterations and shall
be undertaken pursuant to Section 17 of the Lease. Tenant acknowledges that
construction of the Additional Improvements may adversely affect Tenant’s use and occupancy of
the Demised Premises. Tenant waives all claims against Landlord in connection with Additional
Improvements including, without limitation, claims for rent abatement. Landlord shall have the
right to approve the contractor and construction contracts for the Additional Improvements.
Landlord shall fund the Additional TI Allowance upon completion
of the Additional Improvements and upon presentation to Landlord of a draw request and such
other documents as may be requested by Landlord including, without limitation, (x) sworn
statements setting forth the names of all contractors and subcontractors who did work on
the Additional Improvements and final lien waivers from all such contractors and
subcontractors; and (y) “as built” plans for the Additional Improvements. Notwithstanding
the terms of Section 17.10 of the Lease requiring the

	 	 	 	 	 
	 

	 	
	 	Copyright ã
  2005, Alexandria Real Estate Equities, Inc, ALL

RIGHTS RESERVED, Confidential and Proprietary — Do Not 

Copy or Distributed. Alexandria and the Alexandria Logo are

registered trademarks of Alexandria real Estate Equities, Inc.

 

 

	 	 	payment by Tenant of an
amount equal to 2% of all charges incurred by Tenant in connection with any alterations,
additions or improvements to the Premises, Tenant shall not by required to pay such amount
in connection with the Additional Improvements.
	 
	5.	 	Right to Extend Term. Section 42 of the Lease is hereby deleted in its
entirety and replaced with the following:
	 
	 	 	“42. Right to Extend Term. Tenant shall have the right to extend the Term of the Lease
upon the following terms and conditions:
	 
		 	(a) Extension Rights. Tenant shall have 1 extension right (an “Extension Right”) to extend
the term of this Lease for 5 years (an “Extension Term”) on the same terms and conditions
as this Lease (other than Basic Annual Rent) by giving Landlord written notice of its
election to exercise the Extension Right at least 9 months prior to the Term Expiration
Date. Upon the commencement of the Extension Term, Basic Annual Rent shall be payable at
the Market Rate (as defined below). Basic Annual Rent shall thereafter be adjusted on each
anniversary of the commencement of such Extension Term by a percentage as determined by
Landlord and agreed to by Tenant at the time the Market Rate is determined. As used
herein, “Market Rate” shall mean the then market rental rate as determined by Landlord and
agreed to by Tenant, which shall in no event be less than the Basic Annual Rent payable as
of the date immediately preceding the commencement of such Extension Term increased by the
Rent Adjustment Percentage multiplied by such Basic Annual Rent. In addition, Landlord may
impose a market rent for the parking rights provided hereunder.
	 
	 	 	      Landlord shall provide Tenant with Landlord’s determination of the Market Rate within
30 days after Landlord’s receipt of Tenant’s notice of its election to exercise the
Extension Right. If, on or before the date which is 180 days prior to the expiration of the
Base Term of this Lease, Tenant has not agreed with Landlord’s determination of the Market
Rate and the rent escalations during the Extension Term after negotiating in good faith,
Tenant shall be deemed to have elected arbitration as described in Section 42(b).
Tenant acknowledges and agrees that, if Tenant has elected to exercise the Extension Right
by delivering notice to Landlord as required in this Section 42(a), Tenant shall
have no right thereafter to rescind or elect not to extend the term of the Lease for the
Extension Term.
	 
		 	(b) Arbitration.
	 
	 	 	      Within 10 days of Tenant’s notice to Landlord of its election (or deemed election) to
arbitrate Market Rate and escalations, each party shall deliver to the other a proposal
containing the Market Rate and escalations that the submitting party believes to be correct
(“Extension Proposal”). If either party fails to timely
submit an Extension Proposal, the other party’s submitted proposal shall determine the
Basic Annual Rent and escalations for the Extension Term. If both parties submit Extension
Proposals, then Landlord and Tenant shall meet within 7 days after delivery of the last
Extension Proposal and make a good faith attempt to mutually appoint a single Arbitrator
(as defined below) to determine the Market Rate and escalations. If Landlord and Tenant
are unable to agree upon a single Arbitrator, then each shall, by written notice delivered
to the other within 10 days after the meeting, select an Arbitrator. If either party fails
to timely give notice of its selection for an Arbitrator, the other party’s submitted
proposal

	 	 	 	 	 
	 

	 	
	 	Copyright
ã  2005, Alexandria Real Estate Equities, Inc, ALL

RIGHTS RESERVED, Confidential and Proprietary — Do Not 

Copy or Distributed. Alexandria and the Alexandria Logo are

registered trademarks of Alexandria real Estate Equities, Inc.

 

 

	 	 	shall determine the Basic Annual Rent for the Extension Term. The 2 Arbitrators
so appointed shall, within 5 business days after their appointment, appoint a third
Arbitrator. If the 2 Arbitrators so selected cannot agree on the selection of the third
Arbitrator within the time above specified, then either party, on behalf of both parties,
may request such appointment of such third Arbitrator by application to any state court of
general jurisdiction in the jurisdiction in which the Premises are located, upon 10 days
prior written notice to the other party of such intent.
	 
	 	 	      The decision of the Arbitrator(s) shall be made within 30 days after the appointment
of a single Arbitrator or the third Arbitrator, as applicable. The decision of the single
Arbitrator shall be final and binding upon the parties. The average of the two closest
Arbitrators in a three Arbitrator panel shall be final and binding upon the parties. Each
party shall pay the fees and expenses of the Arbitrator appointed by or on behalf of such
party and the fees and expenses of the third Arbitrator shall be borne equally by both
parties. If the Market Rate and escalations are not determined by the first day of the
Extension Term, then Tenant shall pay Landlord Basic Annual Rent in an amount equal to the
Basic Annual Rent in effect immediately prior to the Extension Term and increased by the
Rent Adjustment Percentage until such determination is made. After the determination of
the Market Rate and escalations, the parties shall make any necessary adjustments to such
payments made by Tenant. Landlord and Tenant shall then execute an amendment recognizing
the Market Rate and escalations for the Extension Term.
	 
	 	 	      An “Arbitrator” shall be any person appointed by or on behalf of either party or
appointed pursuant to the provisions hereof and: (i) shall be (A) a member of the American
Institute of Real Estate Appraisers with not less than 10 years of experience in the
appraisal of improved office and high tech industrial real estate in the greater Seattle
metropolitan area, or (B) a licensed commercial real estate broker with not less than 15
years experience representing landlords and/or tenants in the leasing of high tech or life
sciences space in the greater Seattle metropolitan area, (ii) devoting substantially all of
their time to professional appraisal or brokerage work, as applicable, at the time of
appointment and (iii) be in all respects impartial and disinterested.
	 
		 	(c) Rights Personal. The Extension Right is personal to Tenant and is not assignable
without Landlord’s consent, which may be granted or withheld in Landlord’s sole discretion
separate and apart from any consent by Landlord to an assignment of Tenant’s interest in
the Lease.
	 
		 	(d) Exceptions. Notwithstanding anything set forth above to the contrary, the Extension
Right shall not be in effect and Tenant may not exercise the Extension Right:

	 	(i)	 	during any period of time that Tenant is in
Default under any provision of this Lease; or
	 
	 	(ii)	 	if Tenant has been in Default under any
provision of this Lease 3 or more times, whether or not the Defaults
are cured, during the 12 month period immediately prior to the date
that Tenant intends to exercise the Extension Right, whether or not
the Defaults are cured.

	 	 	 	 	 
	 

	 	
	 	Copyright
ã  2005, Alexandria Real Estate Equities, Inc, ALL

RIGHTS RESERVED, Confidential and Proprietary — Do Not 

Copy or Distributed. Alexandria and the Alexandria Logo are

registered trademarks of Alexandria real Estate Equities, Inc.

 

 

		 	(e) No Extensions. The period of time within which the Extension Right may be exercised
shall not be extended or enlarged by reason of Tenant’s inability to exercise the Extension
Right.
	 
		 	(f) Termination. The Extension Right shall terminate and be of no further force or effect
even after Tenant’s due and timely exercise of the Extension Right, if, after such
exercise, but prior to the commencement date of the Extension Term, (i) Tenant fails to
timely cure any default by Tenant under this Lease; or (ii) Tenant has Defaulted 3 or more
times during the period from the date of the exercise of the Extension Right to the date of
the commencement of the Extension Term, whether or not such Defaults are cured.”
	 
	6.	 	New Lease Termination Right. If, after January 1, 2009, Landlord or any affiliate of
Landlord and Tenant enter into a new lease agreement (“New Lease”) pursuant to which Tenant
shall lease space consisting of at least 150,000 rentable square feet at another property in
Seattle, Washington, owned by Landlord or any of its affiliates (“New Premises”) upon terms
and conditions acceptable to Landlord, or its affiliate, and Tenant in their respective sole
discretion, the Lease shall terminate as of the date (“New Lease Commencement Date”) that
Tenant commences to pay base rent under the New Lease for the New Premises. Tenant
acknowledges that nothing contained herein shall obligate Landlord or any of its affiliates in
any way to enter into the New Lease nor shall anything contained herein be construed to grant
to Tenant any option or right to lease any space at another property owned by Landlord or any
of its affiliates. If the Lease is terminated pursuant to this Section 6, then, upon
the New Lease Commencement Date, Tenant shall vacate the Demised Premises and deliver
possession thereof to Landlord in the condition required by the terms of the Lease on or
before the New Lease Commencement Date and Tenant shall have no further obligations under the
Lease except for those accruing prior to the New Lease Commencement Date, including the
obligation to pay Rent through the New Lease Commencement Date, and those which, pursuant to
the terms of the Lease, survive the expiration or early termination of the Lease.
	 
	7.	 	Broker. Landlord and Tenant each represents and warrants that it has not dealt with
any broker, agent or other person (collectively, “Broker”) in connection with the transaction
reflected in this Third Amendment and that no Broker brought about this transaction other than
Staubach Northwest LLC. Landlord and Tenant each hereby agree to indemnify and hold the other harmless from and against any claims by
any Broker, other than Staubach Northwest LLC, claiming a commission or other form of
compensation by virtue of having dealt with Tenant or Landlord, as applicable, with regard
to this leasing transaction. Landlord shall pay a commission to Staubach Northwest LLC as
provided for in a separate written agreement entered into between Landlord and Staubach
Northwest LLC.
	 
	8.	 	Miscellaneous.
	 
		 	(a)  This Third Amendment is the entire agreement between the parties with respect to the
subject matter hereof and supersedes all prior and contemporaneous oral and written
agreements and discussions. This Third Amendment may be amended only by an agreement in
writing, signed by the parties hereto.

	 	 	 	 	 
	 

	 	
	 	Copyright
ã   2005, Alexandria Real Estate Equities, Inc, ALL

RIGHTS RESERVED, Confidential and Proprietary — Do Not 

Copy or Distributed. Alexandria and the Alexandria Logo are

registered trademarks of Alexandria real Estate Equities, Inc.

 

 

		 	(b)  This Third Amendment is binding upon and shall inure to the benefit of the parties
hereto, their respective agents, employees, representatives, officers, directors,
divisions, subsidiaries, affiliates, assigns, heirs, successors in interest and
shareholders.
	 
		 	(c)  This Third Amendment may be executed in any number of counterparts, each of which shall
be deemed an original, but all of which when taken together shall constitute one and the
same instrument. The signature page of any counterpart may be detached therefrom without
impairing the legal effect of the signature(s) thereon provided such signature page is
attached to any other counterpart identical thereto except having additional signature
pages executed by other parties to this Third Amendment attached thereto.
	 
		 	(d)  Except as amended and/or modified by this Third Amendment, the Lease is hereby ratified
and confirmed and all other terms of the Lease shall remain in full force and effect,
unaltered and unchanged by this Third Amendment. In the event of any conflict between the
provisions of this Third Amendment and the provisions of the Lease, the provisions of this
Third Amendment shall prevail. Whether or not specifically amended by this Third
Amendment, all of the terms and provisions of the Lease are hereby amended to the extent
necessary to give effect to the purpose and intent of this Third Amendment.

[Signatures are on the next page.]

	 	 	 	 	 
	 

	 	
	 	Copyright
ã  2005, Alexandria Real Estate Equities, Inc, ALL

RIGHTS RESERVED, Confidential and Proprietary — Do Not 

Copy or Distributed. Alexandria and the Alexandria Logo are

registered trademarks of Alexandria real Estate Equities, Inc.

 

 

     IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment as of the day and
year first above written.

	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	ARE-3005 FIRST AVENUE, LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	ALEXANDRIA REAL ESTATE EQUITIES, L.P., 

a Delaware limited partnership, 

managing member
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	By:	 	ARE-QRS CORP.,

a Maryland corporation,
general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:	 	/s/ Jennifer Pappas
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Its:	 	SVP-RE General Counsel
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 	 	 
	TENANT:	 	DENDREON CORPORATION,

a Delaware corporation
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Rick Hamm	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Its:
	 	Sr. Vice President, Corporate
Development and General Counsel	 	 	 	 

	 	 	 	 	 
	 

	 	
	 	Copyright
ã   2005, Alexandria Real Estate Equities, Inc, ALL

RIGHTS RESERVED, Confidential and Proprietary — Do Not 

Copy or Distributed. Alexandria and the Alexandria Logo are

registered trademarks of Alexandria real Estate Equities, Inc.exv10w2

 

Exhibit 10.2

DENDREON CORPORATION

AMENDED AND RESTATED

2000 EMPLOYEE STOCK PURCHASE PLAN

2007 OFFERING

Adopted By the Board of Directors

June 6, 2007

Section 1 Introduction

At a meeting on June 6, 2007, the Compensation Committee of the Board of Directors of Dendreon
Corporation approved this Offering to Eligible Employees of Rights to purchase Company Shares
pursuant to the Dendreon Corporation Amended and Restated 2000 Employee Stock Purchase Plan and
recommended adoption of the Offering by the Board of Directors of Dendreon Corporation. The Board
of Directors of Dendreon Corporation adopted this Offering at a meeting on June 6, 2007.

The terms of the Offering are set forth below. Each capitalized word used in this Offering is
intended to have the same meaning as the term is defined in the Plan.

All Offerings are subject to the provisions of the Plan, including any Plan amendments and the
Committee’s interpretations of the Plan provisions. If any term(s) of the Offering conflict with
the provisions of the Plan or the Committee’s interpretations, the Plan provisions control.

Section 2 Eligible Employees

All Employees of the Company and its Affiliates who satisfy the following requirements are
“Eligible Employees”:

     (a) An Employee must be employed (within the meaning of Code Section 3401(c)) by the Company or an
Affiliate on the Offering Date;

     (b) The Employee’s customary employment is more than twenty (20) hours per week;

     (c) The Employee’s customary employment is more than five (5) months per calendar year; and

     (d) The Employee does not own stock (including Rights and unexercised stock options) possessing
five percent (5%) or more of the total combined voting power or value of all classes of stock of
the Company, as described in subparagraph 6(c) of the Plan.

Section 3 Offering and Offering Date

     (a) Offering Date

     (i) Effective for the Offering that began January 1, 2007, unless sooner terminated in
accordance with Section 3(b), all Offerings will end on the day prior to the second
anniversary after the Offering Date of the Offering, and a new
Offering will begin

 

the next day, unless the Board discontinues future Offerings or amends
an Offering pursuant to Section 8.

     (ii) The Offering Date of Rights granted under Section 5 to an Eligible Employee who was
not an Eligible Employee on the Offering Date or to an Eligible Employee who was an
Eligible Employee on the Offering Date but failed to enroll in the Plan on or before the
Offering Date, is determined pursuant to Section 5.

     (b) Early Termination of Offering 

          Notwithstanding Section 3(a), if the Fair Market Value of the Shares on the day after any
Purchase Date during an Offering is less than the Fair Market Value on the Offering Date, then the
Offering will terminate, and the day after the Purchase Date will be the Offering Date of a new
Offering. The new Offering will end on the day prior to the second anniversary after the Offering
Date. Notwithstanding the foregoing, if the Fair Market Value of the Shares on the day after any
Purchase Date during an Offering is less than the Fair Market Value on the Offering Date for
Special Enrollment Rights provided under Section 5 but not less than the Fair Market Value of the
Shares on the Offering Date provided in Section 3(a)(i), then the Offering will not terminate.

Section 4 Participation

     (a) Enrollment

     An Eligible Employee may elect to begin participating in an Offering by submitting an authorization
of payroll deductions. The election must specify deductions of a whole percentage, between one
percent (1%) and fifteen percent (15%), of the Eligible Employee’s Earnings. Except as provided in
Section 5, an Eligible Employee must submit his or her initial payroll withholding election no
later than the Offering Date of the Offering. Payroll deductions will begin on the Offering Date
or as soon as administratively practicable after the Offering Date.

     (b) Increasing, Reducing, Discontinuing and Resuming Payroll Deductions

     (i) Increasing Deduction Percentage

     After enrollment, an Eligible Employee may increase the percentage of his or her future
Earnings that will be deducted to purchase Shares under an Offering. An election to
increase the deduction percentage must specify a greater whole percentage, up to fifteen
percent (15%), than the deduction percentage in effect before the election. An election to
change the deduction percentage will be effective on the later of:

     (A) the next Offering Date or the day after the next Purchase Date, whichever is
earlier, or

     (B) as soon as administratively practicable after the election is submitted.

     (ii) Reducing Deduction Percentage

 

 

     An Eligible Employee may elect to reduce the whole percentage (not below 1%) of his or her
future Earnings that will be deducted to purchase Shares under an Offering. Only one
election to reduce the deduction percentage will be effective each purchase period. An
election to reduce the deduction percentage will be effective beginning as soon as
administratively feasible after the election is submitted.

     (iii) Discontinuing Payroll Deductions

     (A) Election To Discontinue

     An Eligible Employee may elect to discontinue all future payroll deductions and
elect either to withdraw his or her accumulated payroll deductions (reduced to the
extent such deductions have been used to acquire Shares on prior Purchase Dates) or
to purchase Shares on the next Purchase Date with the accumulated payroll
deductions. Payroll deductions will cease as soon as administratively practicable
after the election is submitted. If the Employee elects to withdraw his or her
accumulated deductions, the accumulated payroll deductions (without any increase or
decrease for interest, gains or losses) will be distributed to the Employee as soon
as administratively practicable after the withdrawal election is submitted.

     (B) Resuming Payroll Deductions

     An Eligible Employee who discontinued payroll deductions during an Offering may
resume payroll deductions by submitting an authorization of payroll deductions.
The election must authorize deductions of a whole percentage, between one percent
(1%) and fifteen percent (15%), of the Eligible Employee’s future Earnings.
Payroll deductions will resume on the later of:

     (1) the day after the next Purchase Date after the election is submitted,
or

     (2) as soon as administratively practicable after the election is
submitted.

     (c) Election Procedures

     All elections must be in writing in the form required by the Committee and must be submitted to the
Committee at the time and in the manner required by the Committee. Employee payments will be made
only by payroll deduction in accordance with the Eligible Employee’s election; the Plan will not
accept additional payments.

     (d) Automatic Renewal

     Elections are deemed to continue in effect throughout an Offering and during subsequent Offerings
until changed by the Eligible Employee in accordance with Section 4(b).

     (e) Earnings

 

 

     “Earnings” means the total cash compensation paid to an Employee, including all salary, wages
(including compensation elected to be deferred by the Employee under any plan maintained by the
Company), overtime pay, commissions, bonuses, and other remuneration paid directly to the Employee,
but excluding, the value or cost of employee benefits provided by the Company, education or tuition
reimbursements, imputed income arising under any Company group insurance or benefit program,
traveling expenses, business and moving expense reimbursements, income received in connection with
stock options or stock grants, and contributions made by the Company under any employee benefit
plan.

Section 5 Special Enrollment for New Hires and Late Enrollments

     An Eligible Employee who either (i) was not an Eligible Employee on an Offering Date or (ii) was an
Eligible Employee on the Offering Date but who did not enroll in the Plan on or before the Offering
Date, may elect to participate in the Offering that began on the Offering Date by submitting an
authorization of payroll deductions in accordance with Section 4(a). Rights granted to Eligible
Employees under this Section 5 (“Special Enrollment Rights”) have the same rights, privileges and
terms as other Rights granted during the Offering, except that Special Enrollment Rights have a
special Offering Date for purposes of determining the purchase price and commencement of payroll
deductions. The Offering Date for new hire Rights granted under this Section 5 and Special
Enrollment Rights is the day after the next Purchase Date after the election is submitted. 

Section 6 Purchase Dates and Purchase Price

     (a) Purchase Dates

     On each Purchase Date, each Participant’s accumulated payroll deductions (without any
increase or decrease for interest, gains or losses) will be used to purchase whole Shares,
up to the maximum number of Shares permitted by the Plan and Section 7 below. Effective
for Offerings beginning on or after January 1, 2007, the Purchase Dates are each June 30
and December 31. 

     (b) Purchase Price

     The purchase price of Shares is the lesser of (i) eighty-five percent (85%) of the Fair Market
Value of the Shares on the Offering Date, or (ii) eighty-five percent (85%) of the Fair Market
Value of the Shares on the Purchase Date.

Section 7 Purchase Limitations

     In no event will the following limitations be exceeded by any purchase under the Plan:

     (a) Offering Limit

     During any Offering, an Employee may purchase in the aggregate no more than five thousand (5,000)
Shares.

 

 

     (b) $25,000 Calendar Year Limit

     (i) $25,000 Limit

     The value of Shares that an Eligible Employee may purchase during any calendar year generally
cannot exceed twenty-five thousand dollars ($25,000). For purposes of the $25,000 limit in this
Section 7(b), the value of Shares is the Fair Market Value determined on the Offering Date. The
$25,000 limit may be increased during the second calendar year of an Offering by the excess of
$25,000 over the value of Shares an Eligible Employee purchased in the Offering during the
preceding calendar year. Any Shares purchased during the second calendar year of an Offering will
be applied first to the unused portion of the $25,000 limit for the first calendar year of the
Offering.

     (ii) Example

     Employee Smith first becomes a participant in the Plan on July 1, 2007 and receives a Special
Enrollment Right for an Offering that begins on July 1, 2007 and ends on December 31, 2008. On
July 1, 2007, the Fair Market Value of Shares is $10 per share. The maximum number of Shares that
Employee Smith may purchase during 2007 is 2,500 Shares ($25,000 / $10 per share).

     On December 31, 2007, the first purchase date during Employee Smith’s offering, he purchased 1,500
Shares. The unused portion of Employee Smith’s $25,000 limit for 2007, or 1,000 Shares, is added
to her $25,000 limit for 2008. On June 30, 2008, the next Purchase Date during the Offering,
Employee Smith purchases 1,000 Shares. Employee Smith’s remaining $25,000 limit is 3,000 Shares
(5,000 – 1,500 – 1,000 = 2,500). On December 31, 2008, Employee Smith purchases 1,500 Shares and
1,000 Shares remain unused from her 2008 limit for this Offering.

     January 1, 2009 is a new Offering Date, and a new Offering begins on January 1, 2009. The Fair
Market Value of Shares on the new Offering Date is $25 per Share. The maximum number of Shares
that Employee Smith may purchase during 2009 is 1,000 Shares (1,000 Shares x $25 = $25,000),
because the 1,000 unused Shares from the first Offering do not carry forward to the second
Offering.

     (c) Aggregate Limit

     The maximum aggregate number of Shares available to be purchased by all Eligible Employees during
an Offering is the number of Shares remaining available under Section 4 of the Plan on the Offering
Date. If the aggregate purchase of Shares under an Offering would exceed the maximum available
under the Plan, the Board will make a pro rata allocation of the available Shares.

Section 8 Amendments

     (a) Prospective Amendments

 

 

     The Board may amend the terms of any Offering or discontinue future Offerings to the extent the
Board deems necessary or advisable, as long as the amendment or discontinuance is adopted before
the Offering Date of the Offering to which it applies. An Offering cannot be amended after the
Offering Date of the Offering.

     (b) Exception

     If the terms of an Offering (or the Rights granted pursuant to an Offering) would not meet the
requirements of Code Section 423, the Board may modify the terms of an Offering to the extent
necessary to bring the Offering into compliance with Code Section 423.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00128-of-00352.parquet"}]]