Document:

Registration Rights Agreement

 Exhibit 4.5 
 SUMTOTAL SYSTEMS, INC. 
 REGISTRATION RIGHTS AGREEMENT 
 August 3, 2005 

 TABLE OF CONTENTS 
  

							
	 	  	 	 	 	  	Page
	Section	  	1    DEFINITIONS	  	1
				
		  	1.1	 	 Certain Definitions
	  	1
			
	Section	  	2    DEMAND REGISTRATION RIGHTS	  	4
				
		  	2.1	 	 Demand Registration
	  	4
		  	2.2	 	 Limitations on Demand Rights.
	  	4
		  	2.3	 	 Registration Statement Form
	  	5
		  	2.4	 	 Underwritten Offerings
	  	5
		  	2.5	 	 Priority on Demand Registrations.
	  	5
			
	Section	  	3    PIGGY-BACK REGISTRATION	  	6
				
		  	3.1	 	 Participation.
	  	6
			
	Section	  	4    [reserved]	  	7
			
	Section	  	5    REGISTRATION MATTERS	  	7
				
		  	5.1	 	 Suspension of Registration
	  	7
		  	5.2	 	 Registration Procedures
	  	8
		  	5.3	 	 Additional Information
	  	11
		  	5.4	 	 No Inconsistent Agreements
	  	11
		  	5.5	 	 Registration Expenses.
	  	11
		  	5.6	 	 Indemnification.
	  	12
		  	5.7	 	 Rule 144
	  	13
		  	5.8	 	 Termination of Registration Rights.
	  	14
			
	Section	  	6    MISCELLANEOUS	  	14
				
		  	6.1	 	 Effective Time
	  	14
		  	6.2	 	 Other Remedies; Injunctive Relief
	  	14
		  	6.3	 	 Notices
	  	14
		  	6.4	 	 Entire Agreement; Nonassignability; Third Party Beneficiaries
	  	15
		  	6.5	 	 Governing Law; Forum Selection
	  	15
		  	6.6	 	 Waiver of Jury Trial.
	  	16
		  	6.7	 	 Interpretation
	  	16
		  	6.8	 	 Rules of Construction
	  	16
		  	6.9	 	 Severability
	  	16
		  	6.10	 	 Amendment; Waiver.
	  	16
		  	6.11	 	 Withdrawal from Agreement
	  	17
		  	6.12	 	 Counterparts
	  	17

  

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 SUMTOTAL SYSTEMS, INC. 
 REGISTRATION RIGHTS AGREEMENT 
 This REGISTRATION RIGHTS AGREEMENT (the
“Agreement”) is made as of August 3, 2005, by and among SumTotal Systems, Inc., a Delaware corporation (“SumTotal”), and the persons and entities (each, a “Stockholder” and
collectively, the “Stockholders”) listed on Exhibit A hereto. This Agreement shall become effective only upon the Effective Time of the Mergers. 
 RECITALS 
 WHEREAS, SumTotal, Galaxy Acquisition Corporation, a Delaware
corporation and a wholly owned subsidiary of SumTotal (“Merger Sub”), and Pathlore Software Corporation, a Delaware corporation (“Pathlore”), have entered into an Agreement and Plan of Merger dated as
of August 3, 2005 (the “Merger Agreement”), pursuant to which Merger Sub will merge with and into Pathlore (the “First Merger”) and, as part of the same overall transaction, the statutory merger
of the surviving entity of the First Merger with and into SumTotal (the “Second Merger” and, together with the First Merger, the “Mergers”), and the Stockholders will have the right to receive shares
of SumTotal’s common stock (the “Common Stock”) and cash consideration in exchange for securities of Pathlore; 
 WHEREAS, in connection with the Mergers, SumTotal intends to file an application for a permit from the Commissioner of Corporations for the State of California (after a hearing before such Commissioner) pursuant to Section 25121 and
25142 of the California Corporate Securities Law of 1968 so that the issuance of the Common Stock in the Mergers shall be exempt from registration under the Securities Act of 1933, as amended (the “Securities Act”) pursuant
to the exemption provided by Section 3(a)(10) thereof; 
 WHEREAS, pursuant to Rule 145 of the Securities Act, certain
Stockholders may be subject to limitations on such Stockholders’ ability to sell their Common Stock; 
 WHEREAS, SumTotal and the
Stockholders desire to provide for certain registration rights with respect to shares of Common Stock to be issued to the Stockholders in connection with the Mergers; and 
 WHEREAS, the Merger Agreement contemplates that this Agreement will be executed contemporaneously with the execution of the Merger Agreement. 
 NOW, THEREFORE: In consideration of the foregoing, and other good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows: 
 Section 1 
 DEFINITIONS 
 1.1 Certain Definitions. Capitalized terms used
in this Agreement and not otherwise defined shall have the meanings given to them in the Merger Agreement. As used in this Agreement, the following terms shall have the meanings set forth below: 

 (a) “Adverse Disclosure” means public disclosure of material non-public
information, which disclosure in the good faith judgment of the Board of Directors of SumTotal (after consultation with external legal counsel) would be required to be made in any Registration Statement so that such Registration Statement would not
be materially misleading. 
 (b) “Affiliate” means (i) with respect to any specified Person that is not a
natural Person, any other Person that, directly or indirectly through one or more intermediaries, Controls, is Controlled by, or is under common Control with, such specified Person, and (ii) with respect to any natural Person, any family member
of such natural Person. The term “Control” shall mean, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, either through the ownership of
voting securities or by contract. 
 (c) “Agreement” has the meaning set forth in the preamble to this Agreement.

 (d) “Amendment” has the meaning set forth in Section 7.9(a) of this Agreement. 
 (e) “Closing Date” means the date of the closing under the Merger Agreement. 
 (f) “Commission” shall mean the Securities and Exchange Commission or any other federal agency at the time administering the
Securities Act. 
 (g) “Common Stock” has the meaning set forth in the recitals to this Agreement. 
 (h) “Cutback Notice” has the meaning set forth in Section 2.5. 
 (i) “Demand Registration” has the meaning set forth in Section 2.1. 
 (j) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, or any similar successor federal statute and the
rules and regulations thereunder, all as the same shall be in effect from time to time. 
 (k) “Holder” or
“Holders” means any holder or holders of Registrable Securities who is a party to this Agreement or who otherwise agrees in writing to be bound by the provisions of this Agreement pursuant to Section 6.4. 
 (l) “Incidental Cutback Notice” has the meaning set forth in Section 3.1(d). 
 (m) “Indemnified Party” shall have the meaning set forth in Section 5.6(c) hereto. 
 (n) “Indemnifying Party” shall have the meaning set forth in Section 5.6(c) hereto. 
 (o) “Majority Restricted Holders” means each of Seaport Capital Partners II, L.P. and Seaport Investment, LLC, acting together.

 (p) “Merger Agreement” has the meaning set forth in the recitals to this Agreement. 
  

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 (q) “Minimum Demand Amount” shall mean 1,000,000 shares of the outstanding
Registrable Securities held by the Majority Restricted Holders (as adjusted from time to time for stock splits, stock dividends, combinations, subdivisions, recapitalizations and the like). 
 (r) “Minimum Piggy-Back Amount” shall mean five percent (5%) of the outstanding Registrable Securities held by Holders.

 (s) “NASD” means the National Association of Securities Dealers, Inc. 
 (t) “Participating Holder” means any Restricted Holder exercising its right to participate in a Demand Registration under
Section 2. 
 (u) “Permissible Withdrawal” means a withdrawal (i) based on the reasonable
determination of the Majority Restricted Holders that there has been, since the date of the applicable Request, a material adverse change in the business, financial condition, results of operations or prospects of SumTotal, or in general market
conditions, or (ii) in which each of the withdrawing Holders shall have paid or reimbursed on a pro rata basis SumTotal for all of the reasonable out-of-pocket fees and expenses incurred by SumTotal in connection with the withdrawn
registration. 
 (v) “Person” or “person” means any individual, firm, limited liability
company, partnership, joint venture, corporation, joint stock company, trust or unincorporated organization, incorporated or unincorporated association, government (or any department, agency or political subdivision thereof) or other entity of any
kind. 
 (w) “Prospectus” means the prospectus included in any Registration Statement, all amendments and supplements
to such prospectus and all material incorporated by reference in such prospectus. 
 (x) “Registrable Securities”
shall mean (i) shares of Common Stock issued pursuant to the Merger Agreement and (ii) any Common Stock issued as a dividend or other distribution with respect to or in exchange for or in replacement of the shares referenced in
(i) above; provided, however, that Registrable Securities shall not include any shares of Common Stock described in clause (i) or (ii) above which have been sold to the public either pursuant to a registration statement or
Rule 144 or Rule 145 (or any similar provisions then in force under the Securities Act). 
 (y) The terms
“register,” “registered” and “registration” shall refer to a registration effected by preparing and filing a registration statement in compliance with the Securities Act and
applicable rules and regulations thereunder, and the declaration or ordering of the effectiveness of such registration statement. 
 (z)
“Registration Statement” means any registration statement of SumTotal filed with, or to be filed with, the Commission under the Securities Act, including the Prospectus, amendments, supplements and post-effective amendments
to such registration statement, and all exhibits and all material incorporated by reference in such registration statement. 
 (aa)
“Restricted Holder” means any Holder who owns more than 5% of the outstanding shares of Common Stock measured on the Closing Date after giving effect to the shares of Common Stock issued in the Mergers. 
  

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 (bb) “Request” has the meaning set forth in Section 2.2(b).

 (cc) “Securities Act” shall mean the Securities Act of 1933, as amended, or any similar successor federal statute
and the rules and regulations thereunder, all as the same shall be in effect from time to time. 
 (dd)
“Stockholders” shall mean the persons and entities listed on Exhibit A hereto. 
 (ee)
“SumTotal” has the meaning set forth in the preamble and shall include SumTotal’s successors by merger, acquisition, reorganization or otherwise. 
 (ff) “Underwritten Offering” means a registration in which securities of SumTotal are sold by SumTotal or a Holder to an
underwriter or underwriters on a firm commitment basis for reoffering to the public. 
 Section 2 
 DEMAND REGISTRATION RIGHTS 
 2.1
Demand Registration. At any time following the date on which SumTotal becomes eligible to file a registration statement on Form S-3 and prior to the termination of this Agreement pursuant to Section 5.8, on one
(1) occasion, the Majority Restricted Holders shall have the right (subject to Section 2.2 below) to require SumTotal to register all or part of the Registrable Securities under the Securities Act in an underwritten offering (the
“Demand Right”); provided, that any registration made pursuant to the Demand Right (a “Demand Registration”) must request registration of the resale or distribution by the Majority Restricted
Holders of at least the Minimum Demand Amount. SumTotal shall file with the Commission, as expeditiously as reasonably practicable after the initiation of the Demand Right, a Registration Statement relating to the offer and sale of the Registrable
Securities requested to be included therein by the Restricted Holders thereof in accordance with the methods of distribution elected by such Holders and shall use all reasonable efforts to cause such Registration Statement to be declared effective
under the Securities Act as expeditiously as reasonably practicable thereafter. 
 2.2 Limitations on Demand Rights.

 (a) Participation. Within ten (10) days following receipt of any Request, SumTotal shall deliver written notice of such Request
(a “Demand Participation Notice”) to all other Holders of Registrable Securities whose registration rights have not terminated pursuant to Section 5.8 hereof, at the addresses set forth in Exhibit A (or as
any such address may be subsequent changed pursuant to Section 6.3 hereof). Thereafter, SumTotal shall include in such Demand Registration any additional Registrable Securities held by such Holders who have, within fifteen (15) days
after the Demand Participation Notice has been given, requested in writing that their Registrable Securities be included in such Demand Registration; provided, that nothing in this Section 2.2 shall prohibit any Holder from
exercising Piggy-Back Registration rights in accordance with Section 3. All such requests shall specify the aggregate amount of Registrable Securities to be registered. 
 (b) Demand Notice. The request to initiate the Demand Right must be made by notice (a “Request”): (A) provided to
SumTotal in writing; (B) stating that it is a notice to initiate the Demand Right under this Agreement; (C) identifying the Majority Restricted Holder(s) effecting the request; and (D) stating the number of Registrable Securities to
be included and the intended method(s) of disposition. 
  

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 (c) Demand Withdrawal. The Majority Restricted Holders may withdraw their Registrable Securities
from a Demand Registration at any time prior to effectiveness of the applicable Registration Statement. In the event that such Majority Restricted Holders withdraw their Registrable Securities from a Demand Registration and the withdrawal is a
Permissible Withdrawal, the Majority Restricted Holders will not be deemed to have initiated the Demand Right with respect to such Demand Registration for purposes of Section 2.1 and this Section 2.2. If the Majority
Restricted Holders withdraw their Registrable Securities from a Demand Registration prior to effectiveness of the applicable Registration Statement, SumTotal shall cease all efforts to secure registration under this Section 2. SumTotal
shall not withdraw a Registration Statement prior to effectiveness relating to a Demand Registration without the prior written consent of the Majority Restricted Holders (in which event the Majority Restricted Holders will not be deemed to have
initiated the Demand Right). 
 (d) Effective Registration. SumTotal shall be deemed to have effected a Demand Registration if the
applicable Registration Statement is declared effective by the Commission and remains effective for not less than 180 days, subject to extension as provided in Section 5.1 (or such shorter period as will terminate when all Registrable
Securities covered by such Registration Statement have been sold or withdrawn). 
 2.3 Registration Statement Form. The
Demand Registration shall be effected on such appropriate registration form of the Commission as shall be selected by SumTotal and as shall permit the disposition of the Registrable Securities in accordance with the intended method or methods of
disposition specified in the applicable Restricted Holders’ requests for such registration. 
 2.4 Underwritten
Offerings. If the Majority Restricted Holders exercise their Demand Right, the right of any such Majority Restricted Holder (or any other Holders who request inclusion of their Registrable Securities in such underwritten registration)
to include all or any portion of its Registrable Securities in a registration pursuant to this Section 2 shall be conditioned upon such Holder’s participation in the underwriting and the inclusion of such Holder’s Registrable
Securities to the extent provided herein. If SumTotal shall request inclusion in any registration pursuant to this Section 2 of securities being sold for its own account, it shall be entitled to include such securities in the
underwriting and subject to the condition that it accept all of the applicable provisions of this Section 2.4. SumTotal shall (together with all Holders proposing to distribute their Registrable Securities through such underwriting)
enter into an underwriting agreement in customary form with the representative of the underwriter or underwriters selected for such underwriting by SumTotal, which underwriters are reasonably acceptable to the Majority Restricted Holders.

 2.5 Priority on Demand Registrations. Notwithstanding any other provision of this Section 2, if the managing
underwriter or underwriters of the underwritten offering pursuant to the Demand Right informs SumTotal or the Majority Restricted Holders in writing (a “Cutback Notice”) that, in its or their opinion, the total amount or kind
of securities which such Majority Restricted Holders, other Holders and SumTotal intend to include in such offering exceeds the number which can be sold in such offering without being likely to adversely affect the price, timing or distribution of
the class of the securities offered or the market for the class of securities offered or for the Common Stock, then SumTotal shall include in such registration only the number of shares of Common Stock which, in the good faith opinion of such
underwriter can be included without having such an adverse effect, selected in the following order: (i) first, the Registrable Securities 
  

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 requested to be included by the Majority Restricted Holders and any other Holders requesting to include their Registrable
Securities in such registration statement, on a pro rata basis, (ii) second, the securities requested to be sold by SumTotal and (iii) third, any other securities requested to be included therein by any other holders of securities.

 Section 3 
 PIGGY-BACK REGISTRATION 
 3.1 Participation. 
 (a) At any time or from time to time prior to the second-year anniversary of the Closing Date (or such earlier time with respect to a Holder as the rights
of such Holder under this Agreement may be terminated pursuant to Section 5.8), if SumTotal at any time proposes to file a Registration Statement (including a secondary registration) with respect to any underwritten offering of its
securities for its own account or for the account of any stockholder who holds its securities (it being understood that any rights with respect to a Demand Registration hereunder shall be governed by the terms and conditions of
Section 2) (other than (A) a registration on Form S-4 or S-8 or any successor form to such forms, (B) a registration of securities solely relating to an offering and sale to employees, directors or consultants of SumTotal
pursuant to any employee stock plan or other employee benefit plan arrangement or (C) a registration of debt securities) then, as expeditiously as reasonably practicable (but in no event less than ten (10) days prior to the proposed date
of filing such Registration Statement) and within five (5) business days after receipt of notice of any exercise of demand registration rights other than under this Agreement, SumTotal shall give written notice (the “Piggy-Back
Registration Notice”) of such proposed filing to all Holders of Registrable Securities, and such notice shall offer the Holders of such Registrable Securities the opportunity to register such number of Registrable Securities as each
such Holder may request in writing (a “Piggy-Back Registration Right”); provided, that any registration made pursuant to a Piggy-Back Registration Right must include Registrable Securities held by Holders holding at least the
Minimum Piggy-Back Amount. Subject to Section 3.1(d) below, SumTotal shall include in such Registration Statement (and all related registration and qualifications under blue sky laws) all such Registrable Securities which are requested
to be included therein within fifteen (15) days after the Piggy-Back Registration Notice is given to such Holders. Solely with respect to this Section 3, if at any time after giving written notice of its intention to register any
securities and prior to the effective date of the Registration Statement filed in connection with such registration, SumTotal shall determine for any reason not to register or to delay registration of such securities, SumTotal may, at its election,
give written notice of such determination to each Holder of Registrable Securities and, 
 (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration, and 
 (ii) in
the case of a determination to delay registering, shall be permitted to delay registering any Registrable Securities for the same period as the delay in registering such other securities. 
 (b) Underwritten Offering. Each Holder making a request for its Registrable Securities to be included in the offering referred to in
Section 3.1 must, and SumTotal shall make such arrangements with the underwriters so that each such Holder may, participate in such Underwritten Offering on the same terms as SumTotal and other Persons selling securities in such
Underwritten Offering; provided, however, that no Holder shall be required to make any representation or warranty to SumTotal, other than with respect to 
  

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 authority to enter into the agreements in connection with such Underwritten Offering, its title to the Registrable
Securities and with respect to any written information provided by the Holder to SumTotal expressly for inclusion in the registration statement. In the case of any Underwritten Offering, SumTotal and/or all Holders distributing their securities
through such an underwriting shall enter into an underwriting agreement in customary form with the representative(s) of the underwriter(s) selected for such an underwriting. 
 (c) Withdrawal. Each Holder making a request for a Piggy-Back Registration pursuant to this Section 3 shall be permitted to withdraw
all or part of such Holder’s Registrable Securities from such Piggy-Back Registration at any time prior to effectiveness of the applicable Registration Statement. 
 (d) Priority of Piggy-Back Registration. If the managing underwriter or underwriters of any proposed Underwritten Offering of securities included in a Piggy-Back Registration informs the Holders of Registrable
Securities sought to be included in such registration in writing (an “Incidental Cutback Notice”) that, in its or their opinion, the total amount or kind of securities which such Holders and any other Persons intend to
include in such offering exceeds the number which can be sold in such offering without being likely to adversely affect the price, timing or distribution of the class of the securities offered or the market for the class of securities offered or for
the Common Stock, then SumTotal shall include in such registration only the number of Registrable Securities which, in the good faith opinion of such underwriter can be included without having such an adverse effect, selected in the following order:

 (i) first, the securities, if any, being sold by SumTotal; 
 (ii) second, the securities, if any, being sold by any other Person(s) (other than the Holders of Registrable Securities) whose have exercised any demand registration rights pursuant to applicable registration rights
or similar agreements (excluding “piggyback registration rights”); and 
 (iii) third, the Registrable Securities, if any,
requested to be included by the Holders pursuant to this Section 3, and the securities of any other Persons holding piggyback registration rights, allocated pro rata based on the number of securities requested to be included by each
Holder or Person prior to its receipt of the Incidental Cutback Notice. 
 Section 4 
 [reserved] 
 Section 5

 REGISTRATION MATTERS 
 5.1 Suspension of Registration. If the filing, initial effectiveness or continued use of a Registration Statement, including a Shelf Registration Statement, at any time would require SumTotal, in its reasonable judgment,
to make an Adverse Disclosure, then SumTotal may, upon giving prompt written notice of such action to the Holders which are included in any such Registration Statement, delay the filing or initial effectiveness of, or suspend use of, any such
Registration Statement; provided, that SumTotal shall not be permitted to do so (i) more than three (3) times during any 12-month period or (ii) for a period exceeding twenty-five (25) days on any one occasion;
provided, however, that in the event two such suspensions are 
  

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 separated by fewer than twenty-five (25) days, SumTotal may not again defer or suspend the use of the Registration
Statement until a period of twenty-five (25) days has elapsed after resumption of the use of the Registration Statement following the second suspension. In the event SumTotal exercises its rights under the preceding sentence, the Holders agree
to suspend, promptly upon their receipt of the notice referred to above, their use of the Prospectus relating to the registration in connection with any sale or offer to sell Registrable Securities. SumTotal shall promptly notify the Holders of the
expiration of any period during which SumTotal exercised its rights under this Section 5.1. SumTotal agrees that, in the event it exercises its rights under this Section 5.1, it shall, within twenty-five (25) days
following the Holders’ receipt of the notice of suspension, update the suspended Registration Statement as may be necessary to permit the Holders to resume use thereof in connection with the offer and sale of their Registrable Securities in
accordance with applicable law. 
 5.2 Registration Procedures. In connection with SumTotal’s registration
obligations in this Agreement, SumTotal will, subject to the limitations set forth herein, use all reasonable efforts to effect any such registration so as to permit the sale of the applicable Registrable Securities in accordance with the intended
method or methods of distribution thereof as expeditiously as reasonably practicable, and in connection therewith SumTotal will, subject to its right under Section 5.1: 
 (a) In the case of a registration under Section 2 hereof, before filing a Registration Statement or Prospectus, or any amendments or
supplements thereto and in connection therewith, furnish to one representative of each Holder (and its Affiliates) which has requested that Registrable Securities be covered by such Registration Statement, and to the managing underwriter or
underwriters, if any, copies of all documents prepared to be filed, which documents will be subject to the review of such Holders and such underwriters (if any) and their respective counsel, and SumTotal will not file any Registration Statement or
Prospectus or amendments or supplements thereto to which the Holders of a majority of the Registrable Securities covered by the same or the underwriter or underwriters, if any, shall reasonably object; 
 (b) prepare and file with the Commission a registration statement and all such amendments or supplements to the applicable Registration Statement or
Prospectus as may be (A) necessary to comply with applicable securities laws, (B) reasonably requested by any selling Holder (to the extent such request relates to information relating to such Holder), or (C) necessary to keep such
registration effective for the period of time required by this Agreement and use all reasonable efforts to cause the registration statement to become effective; 
 (c) notify the selling Holders of Registrable Securities and the managing underwriter or underwriters, if any, as expeditiously as reasonably practicable after notice thereof is received by SumTotal (A) when the
applicable Registration Statement or any amendment thereto has been filed or becomes effective and when the applicable Prospectus or any amendment or supplement thereto has been filed, (B) of any written comments by the Commission or any
request by the Commission or any other federal or state governmental authority for amendments or supplements to such Registration Statement or Prospectus or for additional information, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of such Registration Statement or any order preventing or suspending the use of any preliminary or final Prospectus or the initiation or threat of any proceedings for such purposes and (D) of the receipt by SumTotal
of any notification with respect to the suspension of the qualification of the Registrable Securities for offering or sale in any jurisdiction or the initiation or threat of any proceeding for such purpose; 
 (d) promptly notify each selling Holder of Registrable Securities and the managing underwriter or underwriters, if any, when SumTotal becomes aware of
the happening of any event as a result 
  

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 of which the applicable Registration Statement or Prospectus (as then in effect) contains any untrue statement of a
material fact or omits to state a material fact necessary to make the statements therein (in the case of the Prospectus and any preliminary Prospectus, in light of the circumstances under which they were made) not misleading or, if for any other
reason it shall be necessary to amend or supplement such Registration Statement or Prospectus in order to comply with the Securities Act and, in either case as promptly as reasonably practicable thereafter, prepare and file with the Commission an
amendment or supplement to such Registration Statement or Prospectus which will correct such statement or omission or effect such compliance; 
 (e) use all reasonable efforts to prevent or obtain at the earliest possible moment the withdrawal of any stop order with respect to the applicable Registration Statement or other order suspending the use of any preliminary or final
Prospectus; 
 (f) promptly incorporate in a Prospectus supplement or post-effective amendment to the applicable Registration Statement such
information as the managing underwriter or underwriters, if any, or the Holders of a majority of the Registrable Securities being sold agree should be included therein relating to the plan of distribution with respect to such Registrable Securities;
include in the plan of distribution, if so requested by any Restricted Holders who are partnerships, distributions of Registrable Securities from such Restricted Holders to their limited and/or general partners and resales of such securities by such
limited and/or general partners unless such securities are otherwise freely tradable under securities laws without registration; and make all required filings of such Prospectus supplement or post-effective amendment as expeditiously as reasonably
practicable after being notified of the matters to be incorporated in such Prospectus supplement or post-effective amendment; 
 (g) furnish
to each selling Holder of Registrable Securities, its counsel and each managing underwriter, if any, without charge, as many conformed copies as such Holder or managing underwriter may reasonably request of the applicable Registration Statement and
each amendment thereto; 
 (h) deliver to each selling Holder of Registrable Securities and each managing underwriter, if any, without
charge, as many copies of the applicable Prospectus (including each preliminary Prospectus) as such Holder or managing underwriter may reasonably request (it being understood that SumTotal consents to the use of the Prospectus by each of the selling
Holders of Registrable Securities and the underwriter or underwriters, if any, in connection with the offering and sale of the Registrable Securities covered by the Prospectus) and such other documents as such selling Holder or managing underwriter
may reasonably request in order to facilitate the disposition of the Registrable Securities by such Holder or underwriter; 
 (i) on or prior
to the date on which the applicable Registration Statement is declared effective, use all reasonable efforts to register or qualify such Registrable Securities for offer and sale under the securities or “Blue Sky” laws of each state and
other jurisdiction of the United States, as any such selling Holder or underwriter, if any, or their respective counsel reasonably requests in writing, and do any and all other acts or things reasonably necessary or advisable to keep such
registration or qualification in effect so as to permit the commencement and continuance of sales and dealings in such jurisdictions for as long as may be necessary to complete the distribution of the Registrable Securities covered by the
Registration Statement; provided, that SumTotal will not be required to qualify generally to do business in any jurisdiction where it is not then so qualified or to take any action which would subject it to taxation or general service of process in
any such jurisdiction where it is not then so subject; 
  

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 (j) cooperate with the selling Holders of Registrable Securities and the managing underwriter,
underwriters or agent, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; 
 (k) use all reasonable efforts to cause the Registrable Securities covered by the applicable Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to consummate the disposition of such Registrable Securities; 
 (l) not later than the effective date of the applicable Registration Statement, provide a CUSIP number for all Registrable Securities and provide the
applicable transfer agent with printed certificates for the Registrable Securities which certificates shall be in a form eligible for deposit with The Depository Trust Company; 
 (m) cooperate with each selling Holder of Registrable Securities and each underwriter or agent, if any, participating in the disposition of such
Registrable Securities and their respective counsel in connection with any filings required to be made with the NASD; 
 (n) use all
reasonable efforts to comply with all applicable rules and regulations of the Commission and make generally available to its securityholders, as expeditiously as reasonably practicable after the effective date of the applicable Registration
Statement, but not later than 60 days after the date of the most recent fiscal quarter, an earnings statement satisfying the provisions of Section 11(a) of the Securities Act and the rules and regulations promulgated thereunder; 
 (o) provide and cause to be maintained a transfer agent and registrar for all Registrable Securities covered by the applicable Registration Statement
from and after a date not later than the effective date of such Registration Statement; 
 (p) use all reasonable efforts to cause all
Registrable Securities of a class covered by the applicable Registration Statement to be listed on each securities exchange and inter-dealer quotation system on which any of SumTotal’s securities of such class are then listed or quoted;

 (q) make available upon reasonable notice at reasonable times and for reasonable periods for inspection by one representative appointed by
the Holders of a majority of the Registrable Securities covered by the applicable Registration Statement, by any managing underwriter or underwriters participating in any disposition to be effected pursuant to such Registration Statement, and by any
attorney, accountant or other agent retained by such sellers or any such managing underwriter, all pertinent financial and other records, pertinent corporate documents and properties of SumTotal, and cause all of SumTotal’s officers, directors
and employees and the independent public accountants who have certified its financial statements to make themselves available to discuss the business of SumTotal and to supply all information reasonably requested by any such sellers, underwriter or
agent thereof in connection with such Registration Statement as shall be necessary to enable them to exercise their due diligence responsibility (subject to the entry by each party referred to in this clause (p) into customary confidentiality
agreements in a form reasonably acceptable to SumTotal); 
 (r) upon the request of the holders of a majority of the Registrable Securities,
furnish such holders with a customary opinion of counsel; and 
  

 -10- 

 (s) use all reasonable efforts to take all other steps necessary to effect the registration of the
Registrable Securities contemplated hereby. 
 5.3 Additional Information. SumTotal may require each selling Holder of
Registrable Securities as to which any registration is being effected to furnish to SumTotal such information regarding the distribution of such Registrable Securities and such other customary information relating to such Holder and its ownership of
the applicable Registrable Securities as SumTotal may from time to time reasonably request and as shall be reasonably required in connection with any Registration Statement. Each Holder of Registrable Securities agrees to furnish such information to
SumTotal and to reasonably cooperate with SumTotal as necessary to enable SumTotal to comply with the provisions of this Agreement. SumTotal shall have the right to exclude from the applicable registration any Holder that does not comply with the
preceding sentence. 
 5.4 No Inconsistent Agreements. SumTotal will not enter into, and is not currently a party to, any
agreement which is inconsistent with the rights granted to the Holders of Registrable Securities by this Agreement. Notwithstanding anything in this Agreement to the contrary, SumTotal shall have the right to grant any additional registration rights
in its sole discretion (so long as such rights are not inconsistent with the cut-back provisions set forth in this Agreement). 
 5.5
Registration Expenses. 
 (a) SumTotal shall pay all of the expenses incurred in connection with its obligations to register
Common Stock under Sections 2 and 3 hereof, including (i) all registration and filing fees, and any other fees and expenses associated with filings required to be made with the Commission or the NASD, (ii) all fees and
expenses of compliance with state securities or “Blue Sky” laws, including all reasonable fees and disbursements of one counsel in connection with any survey of state securities or “Blue Sky” laws and the preparation of any
memorandum thereon, (iii) all printing, duplicating, word processing, messenger, telephone, facsimile and delivery expenses related to the preparation by SumTotal of any Registration Statement or Prospectus, agreements with underwriters, and
any other ancillary agreements, certificates or documents arising out of or related to the foregoing (including expenses of printing certificates for the Registrable Securities in a form eligible for deposit with The Depository Trust Company and of
printing prospectuses), (iv) all fees and disbursements of counsel for SumTotal and of all independent certified public accountants of SumTotal, and (v) all fees and expenses incurred in connection with the listing of the Registrable
Securities on any securities exchange or the quotation of the Registrable Securities on any inter-dealer quotation system. In addition, in all cases SumTotal shall pay its internal expenses (including all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any audit and the fees and expenses of any Person, including special experts, retained by SumTotal. In addition, SumTotal shall pay all reasonable fees and disbursements of one law
firm or other counsel selected by the Holders of a majority of the Registrable Securities being registered in connection with the registration of the Registrable Securities hereunder. 
 (b) SumTotal shall not be required to pay any other costs or expenses in the course of an offering of Registrable Securities pursuant to this Agreement,
including underwriting discounts and commissions and transfer taxes attributable to the sale of Registrable Securities and the fees and expenses of counsel to any underwriters. 
  

 -11- 

 5.6 Indemnification. 
 (a) Indemnification by SumTotal. To the extent permitted by law, SumTotal will indemnify and hold harmless each Holder, each of its officers,
directors and partners, legal counsel, and accountants and each person controlling such Holder within the meaning of Section 15 of the Securities Act, with respect to which registration, qualification, or compliance has been effected pursuant
to this Agreement, and each underwriter, if any, and each person who controls within the meaning of Section 15 of the Securities Act any underwriter, against all expenses, claims, losses, damages, and liabilities (or actions, proceedings, or
settlements in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such registration (including any amendment or supplement thereto), qualification, or compliance, (ii) any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not misleading, or (iii) any violation (or alleged violation) by SumTotal of the Securities Act, any state securities laws or any rule or regulation thereunder applicable
to SumTotal and relating to action or inaction required of SumTotal in connection with any offering covered by such registration, qualification, or compliance, and SumTotal will reimburse each such Holder, each of its officers, directors, partners,
legal counsel, and accountants and each person controlling such Holder, each such underwriter, and each person who controls any such underwriter, for any legal and any other expenses reasonably incurred in connection with investigating and defending
or settling any such claim, loss, damage, liability, or action; provided that SumTotal will not be liable in any such case to the extent that any such claim, loss, damage, liability, or action arises out of or is based on any untrue statement or
omission based upon written information furnished to SumTotal expressly for use therein by such Holder, any of such Holder’s officers, directors, partners, legal counsel or accountants, any person controlling such Holder, such underwriter or
any person who controls any such underwriter and stated to be specifically for use therein; and provided, further that, the indemnity agreement contained in this Section 5.6(a) shall not apply to amounts paid in settlement of any
such loss, claim, damage, liability, or action if such settlement is effected without the consent of SumTotal (which consent shall not be unreasonably withheld). 
 (b) Indemnification by the Holders. To the extent permitted by law, each Holder will, if Registrable Securities held by such Holder are included in the securities as to which such registration, qualification,
or compliance is being effected, indemnify and hold harmless SumTotal, each of its directors, officers, partners, legal counsel, and accountants and each underwriter, if any, of SumTotal’s securities covered by such a registration statement,
each person who controls SumTotal or such underwriter within the meaning of Section 15 of the Securities Act, each other such Holder, and each of their officers, directors, and partners, and each person controlling such Holder, against all
claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on: (i) any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any such registration
statement, prospectus, offering circular, or other document, or (ii) any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will
reimburse SumTotal and such Holders, directors, officers, partners, legal counsel, and accountants, persons, underwriters, or control persons for any legal or any other expenses reasonably incurred in connection with investigating or defending any
such claim, loss, damage, liability, or action, in each case to the extent, but only to the extent, that such untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement, prospectus,
offering circular, or other document in reliance upon and in conformity with written information furnished to SumTotal by such Holder and stated to be specifically for use therein; provided, however, that the obligations of such Holder
hereunder shall not apply to amounts paid in settlement of any such claims, losses, damages, or liabilities (or actions in respect thereof) if such settlement is effected without the consent of such Holder (which consent shall not be unreasonably
withheld); and 
  

 -12- 

 provided that in no event shall any indemnity under this Section 5.6(b) exceed the net proceeds from the
offering received by such Holder; and provided, further, that the obligation under this Section 5.6(b) shall be individual and not joint and several and shall apply only to the extent that an untrue statement or omission was
contained in written information furnished by such holder. 
 (c) Investigation. The indemnification provided under this Agreement
shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director or controlling Person of such indemnified party and shall survive the transfer of securities. 
 (d) Conduct of Indemnification Proceedings. Each party entitled to indemnification under this Section 5.6 (the “Indemnified
Party”) shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought,
and shall permit the Indemnifying Party to assume the defense of such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom,
shall be approved by the Indemnified Party (whose approval shall not be unreasonably withheld), and the Indemnified Party may participate in such defense at such party’s expense; and provided, further, that the failure of any Indemnified
Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 5.6, to the extent such failure is not prejudicial. No Indemnifying Party, in the defense of any such claim or
litigation, shall, except with the consent of each Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified
Party of a release from all liability in respect to such claim or litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request in writing and as shall be
reasonably required in connection with defense of such claim and litigation resulting therefrom. 
 (e) Contribution. If the
indemnification provided for in this Section 5.6 is held by a court of competent jurisdiction to be unavailable to an Indemnified Party with respect to any loss, liability, claim, damage, or expense referred to herein, then the
Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such Indemnified Party as a result of such loss, liability, claim, damage, or expense in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with the statements or omissions that resulted in such loss, liability, claim, damage, or expense as well as
any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified Party and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement or
omission. 
 5.7 Rule 144. For as long as SumTotal has a class of securities registered under the Exchange Act, SumTotal
covenants that it will file the reports required to be filed by it under the Securities Act and the Exchange Act and the rules and regulations adopted by the Commission thereunder, and it will take such further action as any Holder of Registrable
Securities may reasonably request, all to the extent required from time to time to enable such Holder to sell Registrable Securities without registration under the Securities Act within the limitation of the exemptions provided by
(i) Rule 144 under the Securities Act, as such Rules may be amended from time to time, or (ii) any similar rule or regulation hereafter adopted by the Commission. Upon the request of any Holder of Registrable Securities, SumTotal will
deliver to such Holder a written statement as to whether it has complied with such requirements and, if not, the specifics thereof. 
  

 -13- 

 5.8 Termination of Registration Rights. The right of any Holder to request registration or
inclusion in any registration pursuant to Section 2 or Section 3 of this Agreement shall terminate on the earlier of (i) the date on which all Registrable Securities held by such Holder have been sold, (ii) with
respect to Section 3, as applied to any Holder other than a Restricted Holder, the date on which either (A) all Registrable Securities held by such Holder may immediately be sold without volume limitations under applicable
Securities Act rules and regulations or (B) such Holder holds less than 240,000 Registrable Securities (as adjusted from time to time for stock splits, stock dividends, combinations, subdivisions, recapitalizations and the like
(together, “Stock Splits”)), (iii) with respect to Section 3, as applied to any Restricted Holder, the date on which such Holder holds less than 240,000 Registrable Securities (as adjusted from time to time
for Stock Splits), or (iv) the two-year anniversary of the Closing Date. This Agreement shall terminate in the event of a Change of Control of SumTotal after which SumTotal is no longer subject to the requirements of the Exchange Act (it being
understood that in the event of a Change of Control of SumTotal in which SumTotal is no longer subject to the Exchange Act, but its parent is subject to the Exchange Act, this Agreement shall terminate). For purposes of this Agreement, “Change
of Control” shall mean the acquisition of 50% of more of SumTotal by means of a merger, stock purchase transaction or otherwise. 
 Section 6 
 MISCELLANEOUS 
 6.1 Effective Time. This Agreement shall not be effective (and the parties shall not be bound by any obligations hereunder) until the Effective Time. In the event that the Merger Agreement is
terminated, this Agreement shall automatically terminate without any action on the part of any party to this Agreement. 
 6.2 Other
Remedies; Injunctive Relief. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party will be deemed cumulative with and not exclusive of any other remedy conferred hereby, or by law or equity
upon such party, and the exercise by a party of any one remedy will not preclude the exercise of any other remedy. The parties hereto agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not
performed in accordance with their specific terms or were otherwise breached. It is accordingly agreed that the parties shall be entitled to seek an injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the
terms and provisions hereof in any court of the United States or any state having jurisdiction, this being in addition to any other remedy to which they are entitled at law or in equity. 
 6.3 Notices. All notices and other communications hereunder shall be in writing and shall be deemed duly given (i) on the date of
delivery if delivered personally, (ii) on the date of confirmation of receipt (or, the first Business Day following such receipt if the date is not a Business Day) of transmission by telecopy or facsimile, or (iii) on the date of
confirmation of receipt (or, the first Business Day following such receipt if the date is not a Business Day) if delivered by a nationally recognized courier service. All notices hereunder shall be delivered as set forth below, or pursuant to such
other instructions as may be designated in writing by the party to receive such notice: 
  

 -14- 

 (a) if to SumTotal to: 
 SumTotal Systems, Inc. 
 1808 N. Shoreline Blvd. 
 Mountain View, California 94043 

			
	Attention:	 	   R. Andrew Eckert, Chief Executive Officer
   Erika Rottenberg, Senior Vice President and General Counsel

 Fax No.: (650) 962-5677 
 with a copy to: 
 Wilson Sonsini
Goodrich & Rosati, Professional Corporation 
 650 Page Mill Road 
 Palo Alto, California 94304-1050 

			
	Attn:	 	   Martin Korman, Esq.
   Katharine
Martin, Esq.

 Telephone: (650) 493-9300 
 Facsimile: (650) 493-6811 
 (b) if to
the Stockholders, at the addresses set forth in Exhibit A. 
 Each Holder, by written notice given to SumTotal in accordance with
this Section 6.3 may change the address to which notices, other communications or documents are to be sent to such Holder. 
 6.4
Entire Agreement; Nonassignability; Third Party Beneficiaries. This Agreement and the documents and instruments and other agreements among the parties hereto as contemplated by or referred to herein, including the Proxy,
(a) constitute the entire agreement among the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, both written and oral, among the parties with respect to the subject matter hereof; and
(b) are not intended to confer upon any other person any rights or remedies hereunder. Stockholder may not assign either this Agreement or any of its rights, interests, or obligations hereunder without the prior written approval of SumTotal,
which shall not be unreasonably withheld (except to limited and/or general partners in connection with an assignment of shares to such partners unless such shares are otherwise freely tradable under securities laws without registration). SumTotal
may assign either this Agreement or any of its rights, interests, or obligations hereunder without the consent of or any action by Stockholder upon notice by SumTotal to Stockholder as specified herein; provided, however, that immediately
following any assignment by SumTotal the assignees shall automatically become responsible for all of SumTotal’s obligations hereunder. Subject to the preceding sentences, this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and permitted assigns (including any person to whom any shares are sold, transferred or assigned, provided that such transferee or assignee agrees in writing to be bound by the terms of this
Agreement). 
 6.5 Governing Law; Forum Selection. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, regardless of the laws that might otherwise govern under applicable principles of conflicts of law thereof. Each of parties irrevocably agrees that any legal action or proceeding with respect to this Agreement or
for recognition and enforcement of any judgment in respect hereof brought by the other party hereto or its successors or assigns may be brought and determined in the Chancery or other Courts of the State of Delaware, and each of parties hereby
irrevocably submits with regard to any such action or proceeding for itself and in respect to its property, generally and unconditionally, to the 
  

 -15- 

 nonexclusive jurisdiction of the aforesaid courts. The parties hereby agree that mailing of process or other papers in
connection with any such action or proceeding in the manner provided in Section 6.3 hereof or in such other manner as may be permitted by applicable law, shall be valid and sufficient service thereof. 
 6.6 Waiver of Jury Trial. EACH OF PARENT AND STOCKHOLDER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE ACTIONS OF PARENT AND STOCKHOLDER IN THE NEGOTIATION, ADMINISTRATION, PERFORMANCE AND ENFORCEMENT HEREOF 
 6.7 Interpretation. When a reference is made in this Agreement to Exhibits, such reference shall be to an Exhibit to this Agreement
unless otherwise indicated. The words “include,” “includes” and “including” when used herein shall be deemed in each case to be followed by the words “without limitation.” The
headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 
 6.8 Rules of Construction. The parties hereto agree that they have been represented by counsel during the negotiation and execution of this Agreement and, therefore, waive the application of any
law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document. 
 6.9 Severability. In the event that any provision of this Agreement or the application thereof, becomes or is declared by a court of
competent jurisdiction to be illegal, void or unenforceable, the illegal, void or unenforceable provision shall be replaced by the court of competent jurisdiction by a legal, valid and enforceable provision that most accurately reflects the parties
intent with respect to the illegal, void or unenforceable provision. The remainder of the Agreement shall continue in full force and effect. 
 6.10 Amendment; Waiver. 
 (a) This Agreement may not be amended or modified and waivers and consents to departures
from the provisions hereof (each, an “Amendment”) may not be given, except by an instrument or instruments in writing making specific reference to this Agreement and signed by SumTotal and the Holders of Registrable
Securities representing at least a majority of the aggregate Registrable Securities held by the Stockholders; provided, that any Amendment which materially, disproportionately and adversely effects any Holder shall require the consent of such
affected Holder. Each Holder of any Registrable Securities at the time or thereafter outstanding shall be bound by any Amendment authorized by this Section 6.10. For purposes of this Section 6.10, determinations of an
Amendment’s effect upon any Holder, or whether the Amendment provides a disproportionate benefit, shall be based on such Holder’s contractual rights as of the time of the Amendment. 
 (b) At any time, any party hereto may, to the extent legally allowed, waive any inaccuracies in the representations and warranties made to such party
contained herein or in any document delivered pursuant hereto and waive compliance with any of the agreements or conditions for the benefit of such party contained herein. Any agreement on the part of a party hereto to any such waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party. Without limiting the generality or effect of the preceding sentence, no delay in exercising any right under this Agreement shall constitute a waiver of such right, and no
waiver of any breach or default shall be deemed a waiver of any other breach or default of the same or any other provision in this Agreement. 
  

 -16- 

 6.11 Withdrawal from Agreement. At any time, any Holder may elect to withdraw from
this Agreement and no longer be subject to the obligations of this Agreement or have rights (including Demand Rights) under this Agreement from that date forward; provided, no withdrawal from this Agreement shall terminate a Holder’s rights or
obligations under Section 5.6 above with respect to any prior registration. 
 6.12 Counterparts. This
Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other party, it
being understood that all parties need not sign the same counterpart. 
 [Signature Page Follows] 
  

 -17- 

 IN WITNESS WHEREOF, the parties hereto have executed this Registration Rights Agreement effective as of
the day and year first above written. 
  

			
	SUMTOTAL SYSTEMS, INC.
	a Delaware corporation
		
	By:	 	  

		
	Name:	 	  

		
	Title:	 	  

	
	STOCKHOLDER
	
	  

	(Signature)
	
	  

	(Name of Stockholder)
	
	  

	(Name and Title of Signatory, if Applicable)

  

 -18- 

 EXHIBIT A 
 STOCKHOLDERS 
  

					
	 Stockholder Name
	 	 	  	 Stockholder Address

	 Stephen D. Thomas
	 		  	 4530 Langport Road
 Upper Arlington, OH
43220

			
	 Leonard A. Greenberg Trust
	 		  	 174 S Roosevelt Ave.
 Bexley, OH
43209

			
	 R&D Perry Family Limited Partnership
	 		  	 5522 Fawnbrook Lane
 Dublin, OH
43017

			
	 Philip G. & Lois J. Bookman, Trustees of Bookman Family Living Trust, u/t/a dated February 6, 1990
	 		  	 14855 La Rinconada
 Los Gatos, CA
95032

			
	 Lynn J. Schmitt, Trustee of the Lynn J. Propst Trust
	 		  	 10696 E. Manzanita Trail
 Dewey, AZ
86327

			
	 Richard and Lynn Silton, Trustees of Silton Family Living Trust, u/t/a dated November 10, 1993
	 		  	 4242 Manuela Court
 Palo Alto, CA
94306

			
	 Matthew B. Bookman
	 		  	 936 Schiele Avenue
 San Jose, CA
95126

			
	 Robert E. & Maeve T. Rigler, JTWROS
	 		  	 711 Prince Street
 Alexandria,
VA 22314

					
	 Kathy Armstrong
	 		  	 620 Potomac River Road
 McLean, VA
22102

			
	 Michael Hannon, Trustee Michael Hannon Revocable Trust, u/t/a dated May 5, 1995
  
 Doris H. Hannon, Trustee Doris H. Hannon Revocable Trust, u/t/a dated May 5,
1993
  
 Michael Hannon, custodian for Michael B. Hannon under Virginia
Uniform Transfers to Minors Act
  
 Michael Hannon, custodian for Tyler
Hannon under Virginia Uniform Transfers to Minors Act
	 		  	 482 River Bend Road
 Great Falls, VA
22066

			
	 Legent Corporation
	 		  	 One Computer Associates Plaza
 Islandia, NY
11788

			
	 Earline W. Thomas
	 		  	 2066 Lane Road
 Columbus, OH 43220

			
	 Seaport Capital Partners II, LP
  
 Seaport Investments, LLC
	 		  	 199 Water Street, 20th Floor
 New York, NY
10038

  

 -2-2004 Equity Incentive Plan

 Exhibit 10.4 
 SUMTOTAL SYSTEMS, INC. 
 2004 EQUITY INCENTIVE PLAN 

 TABLE OF CONTENTS 
  

							
	 	  	 	  	 	  	Page
	SECTION	  	1    BACKGROUND AND PURPOSE	  	1
				
		  	1.1	  	 Background
	  	1
		  	1.2	  	 Purpose of the Plan
	  	1
			
	SECTION	  	2     DEFINITIONS	  	1
				
		  	2.1	  	 “1934 Act”
	  	1
		  	2.2	  	 “Acquired Entity”
	  	1
		  	2.3	  	 “Affiliate”
	  	1
		  	2.4	  	 “Affiliated SAR”
	  	1
		  	2.5	  	 “Annual Revenue”
	  	1
		  	2.6	  	 “Award”
	  	2
		  	2.7	  	 “Award Agreement”
	  	2
		  	2.8	  	 “Board” or “Board of Directors”
	  	2
		  	2.9	  	 “Cash Position”
	  	2
		  	2.10	  	 “Cause”
	  	2
		  	2.11	  	 “Change in Control”
	  	2
		  	2.12	  	 “Code”
	  	3
		  	2.13	  	 “Committee”
	  	3
		  	2.14	  	 “Company”
	  	3
		  	2.15	  	 “Consultant”
	  	3
		  	2.16	  	 “Director”
	  	3
		  	2.17	  	 “Disability”
	  	3
		  	2.18	  	 “Earnings Per Share”
	  	3
		  	2.19	  	 “Employee”
	  	3
		  	2.20	  	 “Exercise Price”
	  	3
		  	2.21	  	 “Fair Market Value”
	  	3
		  	2.22	  	 “Fiscal Year”
	  	4
		  	2.23	  	 “Freestanding SAR”
	  	4
		  	2.24	  	 “Grant Date”
	  	4
		  	2.25	  	 “Incentive Stock Option”
	  	4
		  	2.26	  	 “Individual Objectives”
	  	4
		  	2.27	  	 “Merger”
	  	4
		  	2.28	  	 “Net Income”
	  	4
		  	2.29	  	 “Nonemployee Director”
	  	4
		  	2.30	  	 “Nonqualified Stock Option”
	  	4
		  	2.31	  	 “Officer”
	  	4
		  	2.32	  	 “Operating Cash Flow”
	  	4
		  	2.33	  	 “Operating Income”
	  	4
		  	2.34	  	 “Option”
	  	4
		  	2.35	  	 “Participant”
	  	5
		  	2.36	  	 “Performance Goals”
	  	5

  

 i 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	  	 	  	Page
		  	2.37	  	 “Performance Share”
	  	5
		  	2.38	  	 “Performance Unit”
	  	5
		  	2.39	  	 “Period of Restriction”
	  	5
		  	2.40	  	 “Plan”
	  	5
		  	2.41	  	 “Registration Date”
	  	5
		  	2.42	  	 “Restricted Stock”
	  	5
		  	2.43	  	 “Retirement”
	  	5
		  	2.44	  	 “Return on Assets”
	  	5
		  	2.45	  	 “Return on Equity”
	  	5
		  	2.46	  	 “Return on Sales”
	  	6
		  	2.47	  	 “Rule 16b-3”
	  	6
		  	2.48	  	 “Section 16 Person”
	  	6
		  	2.49	  	 “Shares”
	  	6
		  	2.50	  	 “Stock Appreciation Right” or “SAR”
	  	6
		  	2.51	  	 “Stock Award”
	  	6
		  	2.52	  	 “Stock Unit”
	  	6
		  	2.53	  	 “Subsidiary”
	  	6
		  	2.54	  	 “Substitute Awards”
	  	6
		  	2.55	  	 “Tandem SAR”
	  	6
		  	2.56	  	 “Termination of Service”
	  	6
		  	2.57	  	 “Total Stockholder Return”
	  	6
			
	SECTION	  	3    ADMINISTRATION	  	7
				
		  	3.1	  	 The Committee
	  	7
		  	3.2	  	 Authority of the Committee
	  	7
		  	3.3	  	 Delegation by the Committee
	  	7
		  	3.4	  	 Decisions Binding
	  	7
			
	SECTION	  	4    SHARES SUBJECT TO THE PLAN	  	7
				
		  	4.1	  	 Number of Shares
	  	7
		  	4.2	  	 Share Usage
	  	8
		  	4.3	  	 Adjustments in Awards and Authorized Shares
	  	8
			
	SECTION	  	5    STOCK OPTIONS	  	9
				
		  	5.1	  	 Grant of Options
	  	9
		  	5.2	  	 Award Agreement
	  	9
		  	5.3	  	 Exercise Price
	  	9
		  	5.4	  	 Expiration of Options
	  	9
		  	5.5	  	 Exercisability of Options
	  	10
		  	5.6	  	 Payment
	  	10
		  	5.7	  	 Restrictions on Share Transferability
	  	11
		  	5.8	  	 Certain Additional Provisions for Incentive Stock Options
	  	11
			
	SECTION	  	6    STOCK APPRECIATION RIGHTS	  	12
				
		  	6.1	  	 Grant of SARs
	  	12
		  	6.2	  	 Exercise of Tandem SARs
	  	12

  

 ii 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	  	 	  	Page
		  	6.3	  	 Exercise of Affiliated SARs
	  	12
		  	6.4	  	 Exercise of Freestanding SARs
	  	12
		  	6.5	  	 SAR Agreement
	  	12
		  	6.6	  	 Expiration of SARs
	  	12
		  	6.7	  	 Payment of SAR Amount
	  	13
			
	SECTION	  	7    STOCK AWARDS, RESTRICTED STOCK AND STOCK UNITS	  	13
				
		  	7.1	  	 Grant of Stock Awards, Restricted Stock and Stock Units
	  	13
		  	7.2	  	 Award Agreement
	  	13
		  	7.3	  	 Transferability
	  	13
		  	7.4	  	 Other Restrictions
	  	13
		  	7.5	  	 Removal of Restrictions
	  	14
		  	7.6	  	 Voting Rights
	  	14
		  	7.7	  	 Dividends and Other Distributions
	  	14
		  	7.8	  	 Return of Restricted Stock to Company
	  	14
			
	SECTION	  	8    PERFORMANCE UNITS AND PERFORMANCE SHARES	  	15
				
		  	8.1	  	 Grant of Performance Units/Shares
	  	15
		  	8.2	  	 Value of Performance Units/Shares
	  	15
		  	8.3	  	 Performance Objectives and Other Terms
	  	15
		  	8.4	  	 Earning of Performance Units/Shares
	  	15
		  	8.5	  	 Form and Timing of Payment of Performance Units/Shares
	  	16
		  	8.6	  	 Cancellation of Performance Units/Shares
	  	16
			
	SECTION	  	9    SUBSTITUTE AWARDS	  	16
				
		  	9.1	  	 Substitute Awards
	  	16
			
	SECTION	  	10    MISCELLANEOUS	  	16
				
		  	10.1	  	 Change in Control.
	  	16
		  	10.2	  	 Dissolution or Liquidation
	  	17
		  	10.3	  	 Deferrals
	  	17
		  	10.4	  	 No Effect on Employment or Service
	  	18
		  	10.5	  	 Participation
	  	18
		  	10.6	  	 Indemnification
	  	18
		  	10.7	  	 Successors
	  	18
		  	10.8	  	 Beneficiary Designations
	  	18
		  	10.9	  	 Limited Transferability of Awards
	  	18
		  	10.10	  	 No Rights as Stockholder
	  	19
		  	10.11	  	 Issuance of Shares
	  	19
		  	10.12	  	 No Trust or Fund
	  	19
		  	10.13	  	 Vesting of Awards
	  	19
			
	SECTION	  	11    AMENDMENT, TERMINATION, AND DURATION	  	19
				
		  	11.1	  	 Amendment, Suspension, or Termination
	  	19
		  	11.2	  	 Duration of the Plan
	  	20
		  	11.3	  	 Consent of Participant
	  	20

  

 iii 

 TABLE OF CONTENTS 
 (continued) 
  

							
	 	  	 	  	 	  	Page
	SECTION	  	12    TAX WITHHOLDING	  	20
		  	12.1	  	 Withholding Requirements
	  	20
		  	12.2	  	 Withholding Arrangements
	  	20
			
	SECTION	  	13    LEGAL CONSTRUCTION	  	20
				
		  	13.1	  	 Gender and Number
	  	20
		  	13.2	  	 Severability
	  	21
		  	13.3	  	 Requirements of Law
	  	21
		  	13.4	  	 Securities Law Compliance
	  	21
		  	13.5	  	 Governing Law
	  	21
		  	13.6	  	 Captions
	  	21
				
	EXECUTION	  		  		  	22

  

 iv 

 SUMTOTAL SYSTEMS, INC. 
 2004 EQUITY INCENTIVE PLAN 
 SUMTOTAL SYSTEMS, INC. hereby establishes the SumTotal Systems, Inc.
2004 Equity Incentive Plan, effective upon its adoption by the Board of Directors. 
 SECTION 1 
 BACKGROUND AND PURPOSE 
 1.1
Background. The Plan permits the grant of Nonqualified Stock Options, Incentive Stock Options, SARs, Stock Awards, Restricted Stock, Stock Units, Performance Units, and Performance Shares. 
 1.2 Purpose of the Plan. The Plan is intended to attract, motivate, and retain (a) employees of the Company and its Affiliates,
(b) consultants, independent contractors and other persons who provide services to the Company and its Affiliates, and (c) directors of the Company who are employees of neither the Company nor any Affiliate. The Plan also is designed to
encourage stock ownership by Participants, thereby aligning their interests with those of the Company’s stockholders. 
 SECTION 2

 DEFINITIONS 
 The following
words and phrases will have the following meanings unless a different meaning is plainly required by the context: 
 2.1 “1934
Act” means the Securities Exchange Act of 1934, as amended. Reference to a specific section of the 1934 Act or regulation thereunder will include such section or regulation, any valid regulation promulgated under such section, and any
comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation. 
 2.2
“Acquired Entity” means any entity acquired by the Company or an Affiliate or with which the Company or an Affiliate merger or combines. 
 2.3 “Affiliate” means any corporation or any other entity (including, but not limited to, partnerships and joint ventures) controlling, controlled by, or under common control with the
Company.
 2.4 “Affiliated SAR” means an SAR that is granted in connection with a related Option, and which automatically
will be deemed to be exercised at the same time that the related Option is exercised. 
 2.5 “Annual Revenue” means the
Company’s or a business unit’s net sales for the Fiscal Year, determined in accordance with generally accepted accounting principles; provided, however, that prior to the Fiscal Year, the Committee will determine whether any significant
item(s) will be excluded or included from the calculation of Annual Revenue with respect to one or more Participants. 

 2.6 “Award” means, individually or collectively, a grant under the Plan of Nonqualified
Stock Options, Incentive Stock Options, SARs, Stock Awards, Restricted Stock, Stock Units, Performance Units, or Performance Shares. 
 2.7
“Award Agreement” means the written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. 
 2.8 “Board” or “Board of Directors” means the Board of Directors of the Company. 
 2.9 “Cash Position” means the Company’s level of cash and cash equivalents. 
 2.10 “Cause”
unless otherwise defined in the Award Agreement or in a written employment, services or other agreement between the Participant and the Company or an Affiliate, means dishonesty, fraud, serious misconduct, unauthorized use or disclosure of
confidential information or trade secrets, or conduct prohibited by criminal law (except minor violations), in each case as determined by the Company’s chief human resources officer or other person performing that function or, in the case of
Directors and executive officers, the Board, each of whose determination shall be conclusive and binding. 
 2.11 “Change in
Control” means the occurrence of any of the following: 
 (a) Any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act), but excluding the Company and any Subsidiary and any employee benefit plan sponsored or maintained by the Company or any Subsidiary (including any trustee of such plan acting as trustee), becomes the “beneficial
owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting
securities; 
 (b) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets;

 (c) A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the
directors are Incumbent Directors. “Incumbent Directors” means directors who either (A) are Directors as of the effective date of the Plan, or (B) are elected, or nominated for election, to the Board with the affirmative votes of
at least a majority of the Directors at the time of such election or nomination (but will not include an individual whose election or nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the
Company); or 
 (d) The consummation of a merger or consolidation of the Company with any other company, other than a merger or consolidation
which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least
fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation. 
  

 2 

 2.12 “Code” means the Internal Revenue Code of 1986, as amended, and any regulations
thereunder. Reference to a specific section of the Code or regulation thereunder will include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation. 
 2.13 “Committee” means the Board or a committee
appointed by the Board (pursuant to Section 3.1) to administer the Plan. 
 2.14 “Company” means SumTotal Systems,
Inc., a Delaware corporation, or any successor thereto. With respect to the definitions of the Performance Goals, the Committee may determine that “Company” means Hockey Merger Corporation and its consolidated subsidiaries. 
 2.15 “Consultant” means any consultant, independent contractor, or other person who provides services to the Company or its Affiliates,
but who is neither an Employee nor a Nonemployee Director. 
 2.16 “Director” means any individual who is a member of the
Board of Directors of the Company. 
 2.17 “Disability” means a permanent and total disability within the meaning of
Section 22(e)(3) of the Code, provided that in the case of Awards other than Incentive Stock Options, the Committee in its discretion may determine whether a permanent and total disability exists in accordance with uniform and
non-discriminatory standards adopted by the Committee from time to time. 
 2.18 “Earnings Per Share” means as to any Fiscal
Year, the Company’s or a business unit’s Net Income, divided by a weighted average number of common shares outstanding and dilutive common equivalent shares deemed outstanding, determined in accordance with generally accepted accounting
principles. 
 2.19 “Employee” means any employee of the Company or of an Affiliate, whether such employee is so employed at
the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan. 
 2.20 “Exercise Price” means
the price at which a Share may be purchased by a Participant pursuant to the exercise of an Option. 
 2.21 “Fair Market
Value” means, as of any date, the value of a Share determined as follows: 
 (a) If the Shares are listed on any established stock
exchange or a national market system, including without limitation the Nasdaq National Market or the Nasdaq SmallCap Market or the Nasdaq Stock Market, the last quoted per share selling price for the Shares on the relevant date, or if there were no
sales on such date, such price on the last preceding date on which Shares were sold, unless otherwise determined by the Committee using such methods and procedures as it may establish; or 
  

 3 

 (b) In the absence of an established market for the Shares, the Fair Market Value thereof will be
determined in good faith by the Committee. 
 (c) Notwithstanding the preceding, for federal, state, and local income tax reporting purposes,
fair market value will be determined by the Committee (or its delegate) in accordance with uniform and nondiscriminatory standards adopted by it from time to time. 
 2.22 “Fiscal Year” means the fiscal year of the Company. 
 2.23 “Freestanding
SAR” means an SAR that is granted independently of any Option. 
 2.24 “Grant Date” means, with respect to an
Award, the date that the Award was granted. 
 2.25 “Incentive Stock Option” means an Option to purchase Shares which is
designated as an Incentive Stock Option and is intended to meet the requirements of Section 422 of the Code. 
 2.26 “Individual
Objectives” means as to a Participant, the objective and measurable goals set by a “management by objectives” process and approved by the Committee (in its discretion). 
 2.27 “Merger” means the transaction effected pursuant to the Agreement and Plan of Reorganization by and among Docent, Inc.,
Click2learn, Inc., Hockey Merger Corporation, Devil Acquisition Corporation and Canuck Acquisition Corporation dated as of October 20, 2003. 
 2.28 “Net Income” means as to any Fiscal Year, the income after taxes of the Company for the Fiscal Year determined in accordance with generally accepted accounting principles, provided that prior to the Fiscal Year, the
Committee will determine whether any significant item(s) will be included or excluded from the calculation of Net Income with respect to one or more Participants. 
 2.29 “Nonemployee Director” means a Director who is not an Employee. 
 2.30
“Nonqualified Stock Option” means an option to purchase Shares that by its terms does not qualify as an Incentive Stock Option or is not intended to be an Incentive Stock Option. 
 2.31 “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and the rules
and regulations promulgated thereunder. 
 2.32 “Operating Cash Flow” means the Company’s or a business unit’s sum
of Net Income plus depreciation and amortization less capital expenditures plus changes in working capital comprised of accounts receivable, inventories, other current assets, trade accounts payable, accrued expenses, product warranty, advance
payments from customers and long-term accrued expenses, determined in accordance with generally acceptable accounting principles. 
 2.33
“Operating Income” means the Company’s or a business unit’s income from operations but excluding any unusual items, determined in accordance with generally accepted accounting principles. 
 2.34 “Option” means an Incentive Stock Option or a Nonqualified Stock Option. 
  

 4 

 2.35 “Participant” means an Employee, Consultant, or Nonemployee Director who has an
outstanding Award. 
 2.36 “Performance Goals” means the goal(s) (or combined goal(s)) determined by the Committee (in its
discretion) to be applicable to a Participant with respect to an Award. As determined by the Committee, the Performance Goals applicable to an Award may provide for a targeted level or levels of achievement using one or more of the following
measures: (a) Annual Revenue, (b) Cash Position, (c) Earnings Per Share, (d) Individual Objectives, (e) Net Income, (f) Operating Cash Flow, (g) Operating Income, (h) Return on Assets, (i) Return on
Equity, (j) Return on Sales, and (k) Total Stockholder Return. The Performance Goals may differ from Participant to Participant and from Award to Award and may be stated in absolute terms or relative to comparison companies or indices to
be achieved during a period of time. 
 2.37 “Performance Share” means an Award granted to a Participant pursuant to
Section 8. 
 2.38 “Performance Unit” means an Award granted to a Participant pursuant to Section 8. 

2.39 “Period of Restriction” means the period during which the transfer of Shares of Restricted Stock are subject to restrictions and
therefore, the Shares are subject to a substantial risk of forfeiture. As provided in Section 7, such restrictions may be based on the passage of time, the achievement of target levels of performance, or the occurrence of other events as
determined by the Committee, in its discretion. 
 2.40 “Plan” means the Hockey Merger Corporation 2004 Equity Incentive
Plan, as set forth in this instrument and as hereafter amended from time to time. 
 2.41 “Registration Date” means the
effective date of the first registration statement which is filed by the Company and declared effective pursuant to Section 12(g) of the 1934 Act, with respect to any class of the Company’s securities. 
 2.42 “Restricted Stock” means an Award granted to a Participant pursuant to Section 7. 
 2.43 “Retirement” unless otherwise defined in the Award Agreement or in a written employment, services or other agreement between the
Participant and the Company or an Affiliate, will have such meaning as determined by the Committee or the Company’s chief human resources officer or other person performing that function for purposes of the Plan or, if not so defined, will mean
Termination of Service on or after the date the Participant reaches age 55 and has completed ten years of employment or service with the Company or an Affiliate. 
 2.44 “Return on Assets” means the percentage equal to the Company’s or a business unit’s Operating Income before incentive compensation, divided by average net Company or business unit, as
applicable, assets, determined in accordance with generally accepted accounting principles. 
 2.45 “Return on Equity” means
the percentage equal to the Company’s Net Income divided by average stockholder’s equity, determined in accordance with generally accepted accounting principles. 
  

 5 

 2.46 “Return on Sales” means the percentage equal to the Company’s or a business
unit’s Operating Income before incentive compensation, divided by the Company’s or the business unit’s, as applicable, revenue, determined in accordance with generally accepted accounting principles. 
 2.47 “Rule 16b-3” means Rule 16b-3 promulgated under the 1934 Act, and any future regulation amending, supplementing or superseding such
regulation. 
 2.48 “Section 16 Person” means a person who, with respect to the Shares, is subject to Section 16 of the
1934 Act. 
 2.49 “Shares” means the shares of common stock of the Company. 
 2.50 “Stock Appreciation Right” or “SAR” means an Award granted to a Participant, either alone or in connection with a
related Option pursuant to Section 6.
 2.51 “Stock Award” means an Award granted to a Participant pursuant to
Section 7. 
 2.52 “Stock Unit” means an Award granted to a Participant pursuant to Section 7. 
 2.53 “Subsidiary” means any corporation in an unbroken chain of corporations beginning with the Company if each of the corporations
other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
 2.54 “Substitute Awards” means Awards granted or Shares issued by the Company in assumption of, or in substitution or exchange for,
awards previously granted by an Acquired Entity. 
 2.55 “Tandem SAR” means an SAR that is granted in connection with a
related Option, the exercise of which will require forfeiture of the right to purchase an equal number of Shares under the related Option (and when a Share is purchased under the Option, the SAR will be canceled to the same extent). 
 2.56 “Termination of Service” means (a) in the case of an Employee, a cessation of the employee-employer relationship between the
Employee and the Company or an Affiliate for any reason, including, but not by way of limitation, a termination by resignation, discharge, death, Disability or the disaffiliation of an Affiliate, but excluding any such termination where there is a
simultaneous reemployment by the Company or an Affiliate; (b) in the case of a Consultant, a cessation of the service relationship between the Consultant and the Company or an Affiliate for any reason, including, but not by way of limitation, a
termination by resignation, discharge, death, Disability, or the disaffiliation of an Affiliate, but excluding any such termination where there is a simultaneous re-engagement of the consultant by the Company or an Affiliate; and (c) in the
case of a Nonemployee Director, a cessation of the Director’s service on the Board for any reason, including, but not by way of limitation, a termination by resignation, death, Disability or non-reelection to the Board. 
 2.57 “Total Stockholder Return” means the total return (change in share price plus reinvestment of any dividends) of a Share.

  

 6 

 SECTION 3 
 ADMINISTRATION 
 3.1 The Committee. The Committee will administer the Plan. If the Committee is
not the Board then the Committee will (a) consist of not less than two (2) Directors who will be appointed from time to time by, and will serve at the pleasure of, the Board of Directors and (b) be comprised solely of Directors who
both are (i) “non-employee directors” under Rule 16b-3, and (ii) ”outside directors” under Section 162(m) of the Code. 
 3.2 Authority of the Committee. It will be the duty of the Committee to administer the Plan in accordance with the Plan’s provisions. The Committee will have all powers and discretion necessary or
appropriate to administer the Plan and to control its operation, including, but not limited to, the power to (a) determine which Employees, Consultants and Nonemployee Directors will be granted Awards, (b) prescribe the terms and
conditions of the Awards, (c) interpret the Plan and the Awards, (d) adopt such modifications, procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees, Consultants and Nonemployee Directors
who are foreign nationals or employed outside of the United States, (e) adopt rules for the administration, interpretation and application of the Plan as are consistent therewith, (f) interpret, amend or revoke any such rules, and
(g) grant Awards as an alternative to or as the form of payment for grants or rights earned or due under other compensation plans or arrangements of the Company. Notwithstanding the foregoing, the Committee may not modify or amend an Option or
SAR to reduce the exercise price of such Option or SAR after it has been granted (except for adjustments made pursuant to Section 4.3), unless approved by the Company’s stockholders and neither may the Committee, without the approval of
the Company’s stockholders, cancel any outstanding Option or SAR and immediately replace it with a new Option or SAR with a lower exercise price. 
 3.3 Delegation by the Committee. The Committee, in its sole discretion and on such terms and conditions as it may provide, may delegate all or any part of its authority and powers under the Plan to another
committee composed of one or more Directors of the Company; provided, however, that the Committee may not delegate its authority and powers (a) with respect to Section 16 Persons, or (b) in any way which would jeopardize the
Plan’s qualification under Section 162(m) of the Code. To the extent consistent with applicable law, the Committee may also delegate granting authority to one or more officers of the Company to grant Awards to designated classes of
Employees or Consultants, within limits specifically prescribed by the Committee; provided, however, that no such officer shall have or obtain authority to grant Awards to himself or herself or to any Section 16 Person. 
 3.4 Decisions Binding. All determinations and decisions made by the Committee, the Board, and any delegate of the Committee pursuant to the
provisions of the Plan will be final, conclusive, and binding on all persons, and will be given the maximum deference permitted by law. 
 SECTION 4 
 SHARES SUBJECT TO THE PLAN 
 4.1 Number of Shares. Subject to adjustment as provided in Section 4.3, the total number of Shares available for grant under the Plan will not exceed 3,000,000 Shares plus any Shares that would
otherwise return to the Click2learn, Inc. 1998 Equity Incentive Plan, the Docent, Inc. 2000 
  

 7 

 Omnibus Equity Incentive Plan or the Docent, Inc. 1997 Stock Option Plan as a result of termination or cancellation of
options assumed by the Company in connection with the Merger up to an aggregate maximum of 4,700,000 additional Shares.1 Shares granted under the Plan may be either authorized but unissued Shares or treasury Shares. 
 4.2 Share
Usage.
 (a) If an Award is settled in cash, or is cancelled, terminates, expires, or lapses for any reason (with the exception of the
termination of a Tandem SAR upon exercise of the related Option, or the termination of a related Option upon exercise of the corresponding Tandem SAR), any Shares subject to such Award again will be available for issuance under the Plan. Any Shares
tendered by a Participant or retained by the Company as full or partial payment to the Company for the purchase price of an Award or to satisfy tax withholding obligations in connection with an Award shall be available for issuance under the Plan.

 (b) Notwithstanding the foregoing and, subject to adjustment provided in Section 4.3, the maximum number of Shares that may be issued
upon the exercise of Incentive Stock Options shall equal the aggregate Share number stated in Section 4.1, plus, to the extent allowable under Section 422 of the Code, any Shares that become available for issuance under the Plan under
Section 4.2(a). 
 (c) Subject to adjustment as provided in Section 4.3, the maximum number of Shares that may be issued under
Awards other than Options and SARs is 1,200,000 Shares. If any such Award is settled in cash, or is cancelled, terminates, expires, or lapses for any reason, any Shares subject to such Award will not thereafter count against the foregoing limit.

 4.3 Adjustments in Awards and Authorized Shares. In the event that any dividend or other distribution (whether in the form of
cash, Shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Shares or other securities of the Company, or
other change in the corporate structure of the Company affecting the Shares occurs such that an adjustment is determined by the Committee (in its sole discretion) to be appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then the Committee will, in such manner as it may deem equitable, adjust the number and class of Shares which may be issued under the Plan, the number, class, and price of Shares
subject to outstanding Awards, and the numerical limits of Sections 5.1, 6.1.1, 7.1, and 8.1. Notwithstanding the preceding, the number of Shares subject to any Award always will be a whole number. 
  

	1	The aggregate maximum number of additional shares reserved for issuance under the Plan reflects the resolutions of the Board, dated March 19, 2004, taken in
connection with the adoption of the Plan. 

  

 8 

 SECTION 5 
 STOCK OPTIONS 
 5.1 Grant of Options. Subject to the terms and provisions of the Plan, Options
may be granted to Employees, Consultants and Nonemployee Directors at any time and from time to time as determined by the Committee in its sole discretion. The Committee, in its sole discretion, will determine the number of Shares subject to each
Option, provided that during any Fiscal Year, no Participant will be granted Options covering more than 500,000 Shares. Notwithstanding the foregoing limitation, in connection with a Participant’s initial service as an Employee, an Employee may
be granted Options to purchase up to an additional 1,000,000 Shares. The Committee may grant Incentive Stock Options, Nonqualified Stock Options, or a combination thereof. 
 5.2 Award Agreement. Each Option will be evidenced by an Award Agreement that will specify the Exercise Price, the expiration date of the
Option, the number of Shares to which the Option pertains, any conditions to exercise the Option, and such other terms and conditions as the Committee, in its discretion, will determine. The Award Agreement will also specify whether the Option is
intended to be an Incentive Stock Option or a Nonqualified Stock Option. 
 5.3 Exercise Price. Subject to the provisions of this
Section 5.3, the Committee will determine the Exercise Price for each Option in its sole discretion. 
 5.3.1 Nonqualified Stock
Options. In the case of a Nonqualified Stock Option, the Exercise Price will be not less than one hundred percent (100%) of the Fair Market Value of a Share on the Grant Date. 
 5.3.2 Incentive Stock Options. In the case of an Incentive Stock Option, the Exercise Price will be not less than one hundred percent
(100%) of the Fair Market Value of a Share on the Grant Date; provided, however, that if on the Grant Date, the Employee (together with persons whose stock ownership is attributed to the Employee pursuant to Section 424(d) of the Code)
owns stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any of its Subsidiaries, the Exercise Price will be not less than one hundred and ten percent (110%) of the Fair Market Value of a
Share on the Grant Date. 
 5.3.3 Substitute Options. Notwithstanding the provisions of Sections 5.3.1 and 5.3.2, the Committee, in
its sole discretion and consistent with Section 424(a) of the Code, may determine that any Options granted as Substitute Awards will have an exercise price less than one hundred percent (100%) of the Fair Market Value of the Shares on the
Grant Date. 
 5.4 Expiration of Options.
 5.4.1 Expiration Dates. In no event may the term of an Option be more than ten (10) years from the Grant Date. Unless otherwise provided in the Award Agreement or in a written employment, services or other
agreement between the Participant and the Company or an Affiliate, each Option will terminate no later than the first to occur of the following events: 
 (a) The expiration of three (3) months from the date of the Participant’s Termination of Service for any reason other than Cause, Retirement, Disability or death; provided, however, that for Participants who
are Officers or Directors on the date of Termination of Service, it will be the expiration of one (1) year from the date of the Participant’s Termination of Service; 
  

 9 

 (b) The expiration of one (1) year from the date of the Participant’s Termination of Service
due to Retirement, Disability or death; or 
 (c) The expiration of ten (10) years from the Grant Date. 
 Notwithstanding the foregoing, if a Participant dies after the Participant’s Termination of Service but while an Option is otherwise exercisable,
the portion of the Option that is vested and exercisable on the date of such Termination of Service shall expire upon the earlier to occur of (y) the expiration date of the Option and (z) the one-year anniversary of the date of death,
unless the Committee determines otherwise. 
 Also notwithstanding the foregoing, in case a Participant’s Termination of Service occurs
for Cause, all Options granted to the Participant shall automatically expire upon first notification to the Participant of such termination, unless the Committee determines otherwise. If a Participant’s employment or service relationship with
the Company is suspended pending an investigation of whether the Participant shall be terminated for Cause, all the Participant’s rights under any Option shall likewise be suspended during the period of investigation. If any facts that would
constitute termination for Cause are discovered after a Participant’s Termination of Service, any Option then held by the Participant may be immediately terminated by the Committee, in its sole discretion. 
 A Participant’s change in status from an Employee to a Consultant or a change in status from a Consultant to an Employee shall not be considered a
Termination of Service for purposes of this Section. 
 5.4.2 Committee Discretion. Subject to the limits of Section 5.4.1, the
Committee, in its sole discretion, (a) will provide in each Award Agreement when each Option expires and becomes unexercisable, and (b) may, after an Option is granted, extend the maximum term of the Option (subject to Section 5.8.4
regarding Incentive Stock Options). 
 5.5 Exercisability of Options. Options granted under the Plan will be exercisable at such
times and be subject to such restrictions and conditions as the Committee will determine in its sole discretion. After an Option is granted, the Committee, in its sole discretion, may accelerate the exercisability of the Option. 
 5.6 Payment. Options will be exercised by the Participant’s delivery of a written notice of exercise to the Secretary of the Company (or
its designee), setting forth the number of Shares with respect to which the Option is to be exercised, accompanied by full payment for the Shares. 
 Upon the exercise of any Option, the Exercise Price will be payable to the Company in full in cash or its equivalent. The Committee, in its sole discretion, also may permit exercise (a) by tendering (either actually or, if the Shares
are registered under Section 12(b) or 12(g) of the 1934 Act, by attestation) previously acquired Shares having an aggregate Fair Market Value at the time of exercise equal to the total Exercise Price (such Shares must have been owned by the
Participant for at least six months or any shorter period necessary to avoid a charge to the Company’s 
  

 10 

 earnings for financial reporting purposes), (b) to the extent permitted by applicable law, delivery of a properly
executed exercise notice, together with irrevocable instructions to a brokerage firm designated or approved by the Company to deliver promptly to the Company the aggregate amount of sale or loan proceeds to pay the Exercise Price and any tax
withholding obligations that may arise in connection with the exercise, all in accordance with the regulations of the Federal Reserve Board, or (c) by any other means which the Committee, in its sole discretion, determines to both provide legal
consideration for the Shares, and to be consistent with the purposes of the Plan. 
 As soon as practicable after receipt of a written
notification of exercise and full payment for the Shares purchased, the Company will deliver to the Participant (or the Participant’s designated broker), Share certificates (which may be in book entry form) representing such Shares. 

5.7 Restrictions on Share Transferability. The Committee may impose such restrictions on any Shares acquired pursuant to the exercise of
an Option as it may deem advisable, including, but not limited to, restrictions related to applicable federal securities laws, the requirements of any national securities exchange or system upon which Shares are then listed or traded, or any blue
sky or state securities laws. 
 5.8 Certain Additional Provisions for Incentive Stock Options. 
 5.8.1 Exercisability. To the extent the aggregate Fair Market Value (determined on the Grant Date(s)) of the Shares with respect to which Incentive
Stock Options are exercisable for the first time by any Employee during any calendar year (under all plans of the Company and its Subsidiaries) exceeds $100,000, such portion in excess of $100,000 shall be treated as a Nonqualified Stock Option
(with Incentive Stock Options being considered in the order in which they are granted). 
 5.8.2 Termination of Service. An Option
designated as an Incentive Stock Option shall cease to qualify for favorable tax treatment as an Incentive Stock Option to the extent it is exercised (if permitted by the terms of the Option) (a) more than three (3) months after the
Participant’s Termination of Service for any reason other than Disability or death, (b) more than one (1) year after the Participant’s Termination of Service on account of Disability or (c) more than three (3) months
after the Participant has been on leave of absence for more than 90 days, unless the Participant’s reemployment rights are guaranteed by statute or contract. 
 5.8.3 Company and Subsidiaries Only. Incentive Stock Options may be granted only to persons who are employees of the Company or a Subsidiary on the Grant Date. 
 5.8.4 Expiration. Subject to earlier termination in accordance with the terms of the Plan and the Award Agreement, the term for an Incentive Stock
Option shall not exceed ten (10) years from the Grant Date; provided, however, that if the Option is granted to an Employee who, together with persons whose stock ownership is attributed to the Employee pursuant to Section 424(d) of the
Code, owns stock possessing more than 10% of the total combined voting power of all classes of the stock of the Company or any of its Subsidiaries, the term shall not exceed five (5) years from the Grant Date. 
  

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 SECTION 6 
 STOCK APPRECIATION RIGHTS 
 6.1 Grant of SARs. Subject to the terms and conditions of the Plan,
an SAR may be granted to Employees, Nonemployee Directors and Consultants at any time and from time to time as will be determined by the Committee, in its sole discretion. The Committee may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or
any combination thereof. 
 6.1.1 Number of Shares. The Committee will have complete discretion to determine the number of SARs
granted to any Participant, provided that during any Fiscal Year, no Participant will be granted SARs covering more than 500,000 Shares. Notwithstanding the foregoing limitation, in connection with a Participant’s initial service as an
Employee, an Employee may be granted SARs covering up to an additional 1,000,000 Shares. 
 6.1.2 Exercise Price and Other Terms. The
Committee, subject to the provisions of the Plan, will have complete discretion to determine the terms and conditions of SARs granted under the Plan. However, the exercise price of a Freestanding SAR will be not less than one hundred percent
(100%) of the Fair Market Value of a Share on the Grant Date. The exercise price of Tandem or Affiliated SARs will equal the Exercise Price of the related Option. 
 6.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part of the Shares subject to the related Option upon the surrender of the right to exercise the equivalent portion of the related
Option. A Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable. With respect to a Tandem SAR granted in connection with an Incentive Stock Option: (a) the Tandem SAR will expire no later
than the expiration of the underlying Incentive Stock Option; (b) the value of the payout with respect to the Tandem SAR will be for no more than one hundred percent (100%) of the difference between the Exercise Price of the underlying
Incentive Stock Option and the Fair Market Value of the Shares subject to the underlying Incentive Stock Option at the time the Tandem SAR is exercised; and (c) the Tandem SAR will be exercisable only when the Fair Market Value of the Shares
subject to the Incentive Stock Option exceeds the Exercise Price of the Incentive Stock Option. 
 6.3 Exercise of Affiliated
SARs. An Affiliated SAR will be deemed to be exercised upon the exercise of the related Option. The deemed exercise of an Affiliated SAR will not necessitate a reduction in the number of Shares subject to the related Option. 
 6.4 Exercise of Freestanding SARs. Freestanding SARs will be exercisable on such terms and conditions as the Committee, in its sole
discretion, will determine. 
 6.5 SAR Agreement. Each SAR grant will be evidenced by an Award Agreement that will specify the
exercise price, the term of the SAR, the conditions of exercise, and such other terms and conditions as the Committee, in its sole discretion, will determine. 
 6.6 Expiration of SARs. An SAR granted under the Plan will expire upon the date determined by the Committee, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the
rules of Section 5.4 also will apply to SARs. 
  

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 6.7 Payment of SAR Amount. Upon exercise of an SAR, a Participant will be entitled to receive
payment from the Company in an amount determined by multiplying: 
 (a) The difference between the Fair Market Value of a Share on the date of
exercise over the exercise price; times 
 (b) The number of Shares with respect to which the SAR is exercised. 
 At the discretion of the Committee, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

 SECTION 7 
 STOCK AWARDS,
RESTRICTED STOCK AND STOCK UNITS 
 7.1 Grant of Stock Awards, Restricted Stock and Stock Units. Subject to the terms and
provisions of the Plan, the Committee, at any time and from time to time, may grant Stock Awards, Restricted Stock or Stock Units to Employees, Nonemployee Directors and Consultants in such amounts as the Committee, in its sole discretion, will
determine. The Committee, in its sole discretion, will determine the number of Shares to be granted to each Participant under such Awards, provided that during any Fiscal Year, no Participant will receive more than an aggregate of 200,000 Shares
subject to Stock Awards, Restricted Stock or Stock Units. Notwithstanding the foregoing limitation, in connection with a Participant’s initial service as an Employee, an Employee may be granted an aggregate of up to an additional 400,000 Shares
subject to Stock Awards, Restricted Stock or Stock Units. 
 7.2 Award Agreement. Each Stock Award, Restricted Stock Award and
Stock Unit Award will be evidenced by an Award Agreement that will specify the Period of Restriction, if any, the number of Shares granted, and such other terms and conditions as the Committee, in its sole discretion, will determine. Unless the
Committee determines otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until the restrictions on such Shares have lapsed. 
 7.3 Transferability. Except as provided in this Section 7, Shares of Restricted Stock may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated until the end of the
applicable Period of Restriction. 
 7.4 Other Restrictions. The Committee, in its sole discretion, may impose such other
restrictions on Stock Awards, Restricted Stock Awards and Stock Unit Awards as it may deem advisable or appropriate, in accordance with this Section 7.4. 
 7.4.1 General Restrictions. The Committee may set restrictions based upon the achievement of specific performance objectives (Company-wide, divisional, or individual), applicable federal or state securities
laws, or any other basis determined by the Committee in its discretion. 
 7.4.2 Section 162(m) Performance Restrictions. For
purposes of qualifying grants of Restricted Stock or Stock Units as “performance-based compensation” under Section 162(m) of the Code, the Committee, in its discretion, may set restrictions based upon the achievement of 
  

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 Performance Goals. The Performance Goals will be set by the Committee on or before the latest date permissible to enable
the Restricted Stock or Stock Units to qualify as “performance-based compensation” under Section 162(m) of the Code. In granting Restricted Stock or Stock Units which are intended to qualify under Section 162(m) of the Code, the
Committee will follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Restricted Stock or Stock Units under Section 162(m) of the Code (e.g., in determining the Performance Goals).

 7.4.3 Legend on Certificates. The Committee, in its discretion, may legend the certificates representing Restricted Stock to give
appropriate notice of such restrictions. For example, the Committee may determine that some or all certificates representing Shares of Restricted Stock will bear the following legend: 
 “The sale or other transfer of the shares of stock represented by this certificate, whether voluntary, involuntary, or by operation of law, is
subject to certain restrictions on transfer as set forth in the Hockey Merger Corporation 2004 Equity Incentive Plan, and in a Restricted Stock Agreement. A copy of the Plan and such Restricted Stock Agreement may be obtained from the Secretary of
Hockey Merger Corporation.” 
 7.5 Removal of Restrictions. Except as otherwise provided in this Section 7, Shares of
Restricted Stock covered by each Restricted Stock grant made under the Plan will be released from escrow as soon as practicable after the last day of the Period of Restriction. The Committee, in its discretion, may accelerate the time at which any
restrictions will lapse or be removed. After the restrictions have lapsed, the Participant will be entitled to have any legend or legends under Section 7.4.3 removed from his or her Share certificate, and the Shares will be freely transferable
by the Participant. 
 7.6 Voting Rights. During the Period of Restriction, Participants holding Shares of Restricted Stock
granted hereunder may exercise full voting rights with respect to those Shares, unless the Committee determines otherwise. 
 7.7
Dividends and Other Distributions. During the Period of Restriction, Participants holding Shares of Restricted Stock will be entitled to receive all dividends and other distributions paid with respect to such Shares unless otherwise
provided in the Award Agreement. If any such dividends or distributions are paid in Shares, the Shares will be subject to the same restrictions on transferability and forfeitability as the Shares of Restricted Stock with respect to which they were
paid. 
 7.8 Return of Restricted Stock to Company. On the date set forth in the Award Agreement, the Shares subject to
Restricted Stock Awards or Stock Unit Awards for which restrictions have not lapsed will revert to the Company and again will become available for grant under the Plan. 
  

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 SECTION 8 
 PERFORMANCE UNITS AND PERFORMANCE SHARES 
 8.1 Grant of Performance Units/Shares. Performance
Units and Performance Shares may be granted to Employees, Nonemployee Directors and Consultants at any time and from time to time, as will be determined by the Committee, in its sole discretion. The Committee will have complete discretion in
determining the number of Performance Units and Performance Shares granted to each Participant provided that during any Fiscal Year, (a) no Participant will receive Performance Units having an initial value greater than $1,000,000, and
(b) no Participant will receive more than 200,000 Performance Shares. Notwithstanding the foregoing limitation, in connection with a Participant’s initial service as an Employee, an Employee may be granted up to an additional 400,000
Performance Shares. 
 8.2 Value of Performance Units/Shares. Each Performance Unit will have an initial value that is
established by the Committee on or before the Grant Date. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the Grant Date. 
 8.3 Performance Objectives and Other Terms. The Committee will set performance objectives in its discretion which, depending on the extent to which they are met, will determine the number or value of
Performance Units/Shares that will be paid out to the Participants. The time period during which the performance objectives must be met will be called the “Performance Period.” Each Award of Performance Units/Shares will be evidenced by an
Award Agreement that will specify the Performance Period, and such other terms and conditions as the Committee, in its sole discretion, will determine. 
 8.3.1 General Performance Objectives. The Committee may set performance objectives based upon the achievement of Company-wide, divisional, or individual goals, applicable federal or state securities laws, or
any other basis determined by the Committee in its discretion. 
 8.3.2 Section 162(m) Performance Objectives. For purposes of
qualifying grants of Performance Units/Shares as “performance-based compensation” under Section 162(m) of the Code, the Committee, in its discretion, may determine that the performance objectives applicable to Performance Units/Shares
will be based on the achievement of Performance Goals. The Performance Goals will be set by the Committee on or before the latest date permissible to enable the Performance Units/Shares to qualify as “performance-based compensation” under
Section 162(m) of the Code. In granting Performance Units/Shares which are intended to qualify under Section 162(m) of the Code, the Committee will follow any procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the Performance Units/Shares under Section 162(m) of the Code (e.g., in determining the Performance Goals). 
 8.4 Earning of Performance Units/Shares. After the applicable Performance Period has ended, the holder of Performance Units/Shares will be entitled to receive a payout of the number of Performance Units/Shares earned by the
Participant over the Performance Period, to be determined as a function of the extent to which the corresponding performance objectives have been achieved. After the grant of a Performance Unit/Share, the Committee, in its sole discretion, may
reduce or waive any performance objectives for such Performance Unit/Share. 
  

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 8.5 Form and Timing of Payment of Performance Units/Shares. Payment of earned Performance
Units/Shares will be made as soon as practicable after the expiration of the applicable Performance Period. The Committee, in its sole discretion, may pay earned Performance Units/Shares in the form of cash, in Shares (which have an aggregate Fair
Market Value equal to the value of the earned Performance Units/Shares at the close of the applicable Performance Period) or in a combination thereof. 
 8.6 Cancellation of Performance Units/Shares. On the date set forth in the Award Agreement, all unearned or unvested Performance Units/Shares will be forfeited to the Company, and again will be available
for grant under the Plan. 
 SECTION 9 
 SUBSTITUTE AWARDS 
 9.1 Substitute Awards. Notwithstanding anything in the Plan to the contrary, the Committee may grant
Substitute Awards under the Plan. In the event that a written agreement pursuant to which the Company or an Affiliate acquires an entity or pursuant to which the Company or an Affiliate merges or combines with an entity is approved by the Board and
said agreement sets forth the terms and conditions of the Substitute Awards, said terms and conditions shall be deemed to be the action of the Committee without any further action by the Committee, except as may be required for compliance with
Rule 16b-3, and the persons holding such Substitute Awards shall be deemed to be Participants. 
 SECTION 10 
 MISCELLANEOUS 
 10.1 Change in Control.

 10.1.1 Options, SARs and Stock Units. 
 (a) In the event of a Change in Control, each outstanding Option, SAR and Stock Unit will be (i) assumed or an equivalent option, right or unit substituted by the successor corporation or a parent or Subsidiary
of the successor corporation, or (ii) replaced with a cash incentive program of the successor corporation or a parent or Subsidiary of the successor corporation that preserves the spread existing at the time of the Change in Control and
provides for subsequent payout in accordance with the same vesting schedule applicable to the Option, SAR or Stock Unit. The determination of comparability will be made by the Committee, in its sole discretion. 
 (b) In the event that the successor corporation or a parent or Subsidiary of the successor corporation refuses to assume or substitute for the Option,
SAR or Stock Unit, then the Options and SARs held by such Participant will become one hundred percent (100%) exercisable and the Stock Units held by such Participant will become fully vested and will be settled with respect to 100% of the
unvested portion of the Award. If an Option or SAR becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Change in Control, the Company will notify the Participant in writing or electronically that the Option
or SAR will be fully vested and exercisable (subject to the consummation of the Change in Control) for a period of time determined by the Committee, and the Option or SAR will terminate upon the expiration of such period. 
  

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 (c) For the purposes of this Section 10.1.1, the Option, SAR or Stock Unit will be considered
assumed if, following the Change in Control, the option, right or unit confers the right to purchase or receive, for each Share subject to the Option, SAR or Stock Unit immediately prior to the Change in Control, the consideration (whether stock,
cash, or other securities or property) received in the Change in Control by holders of Shares for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by
the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change in Control is not solely common stock of the successor corporation or its parent, the Committee may, with the consent of the
successor corporation, provide for the consideration to be received upon the exercise of the Option, SAR or Stock Unit, for each Share subject to the Option, SAR or Stock Unit 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 Change in Control, as determined on the date of the Change in Control. 
 10.1.2 Restricted Stock. In the event of a Change in Control, any Company repurchase or reacquisition right with respect to outstanding Shares of Restricted Stock held by the Participant will be assigned to the
successor corporation. In the event that the successor corporation refuses to accept the assignment of any such Company repurchase or reacquisition right, such Company repurchase or reacquisition right will lapse and the Participant will become one
hundred percent (100%) vested in such Shares of Restricted Stock immediately prior to the Change in Control. 
 10.1.3 Performance
Shares and Performance Units. In the event of a Change in Control, the Committee or the Board, in its discretion, may provide for any one or more of the following with respect to the Performance Shares and Units: (a) any outstanding
Performance Shares and Units will be assumed by the successor corporation or a parent or Subsidiary of the successor corporation, (b) any outstanding Performance Shares and Units will be terminated immediately prior to the Change in Control, or
(c) with respect to a Change in Control that occurs prior to a Participant’s Termination of Service, one hundred percent (100%) of any outstanding Performance Shares or Units will be deemed to be earned and will be immediately payable
to the Participant, or, in cases where a Participant has received a target award of Performance Units or Shares, one hundred percent (100%) of the target amount will vest. In the event any outstanding Performance Shares and Units are assumed,
the successor corporation will have the ability to reasonably and equitably adjust the Performance Goals. 
 10.2 Dissolution or
Liquidation. To the extent not previously exercised or settled, and unless otherwise determined by the Committee in its sole discretion, Options and Stock Appreciation Rights shall terminate immediately prior to the dissolution or
liquidation of the Company. To the extent a forfeiture provision or repurchase right applicable to an Award has not been waived by the Committee, the Award shall be forfeited immediately prior to the consummation of the dissolution or liquidation.

 10.3 Deferrals. The Committee, in its sole discretion, may permit a Participant to defer receipt of the payment of cash or the
delivery of Shares that would otherwise be due to such Participant under an Award. Any such deferral elections will be subject to such rules and procedures as the Committee will be determine in its sole discretion. 
  

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 10.4 No Effect on Employment or Service. Nothing in the Plan will interfere with or limit in
any way the right of the Company to terminate any Participant’s employment or service at any time, with or without cause. For purposes of the Plan, transfer of employment of a Participant between the Company and any one of its Affiliates (or
between Affiliates) will not be deemed a Termination of Service. Employment with the Company and its Affiliates is on an at-will basis only. 
 10.5 Participation. No Employee will have the right to be selected to receive an Award under this Plan, or, having been so selected, to be selected to receive a future Award. 
 10.6 Indemnification. Each person who is or will have been a member of the Committee, or of the Board, will be indemnified and held harmless
by the Company against and from (a) any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by him or her in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a
party or in which he or she may be involved by reason of any action taken or failure to act under the Plan or any Award Agreement, and (b) from any and all amounts paid by him or her in settlement thereof, with the Company’s approval, or
paid by him or her in satisfaction of any judgment in any such claim, action, suit, or proceeding against him or her, provided he or she will give the Company an opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification will not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Certificate of
Incorporation or Bylaws, by contract, as a matter of law, or otherwise, or under any power that the Company may have to indemnify them or hold them harmless. 
 10.7 Successors. All obligations of the Company under the Plan, with respect to Awards granted hereunder, will be binding on any successor to the Company, whether the existence of such successor is the
result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business or assets of the Company. 
 10.8 Beneficiary Designations. If permitted by the Committee, a Participant under the Plan may name a beneficiary or beneficiaries to whom any vested but unpaid Award will be paid in the event of the Participant’s death.
Each such designation will revoke all prior designations by the Participant and will be effective only if given in a form and manner acceptable to the Committee. In the absence of any such designation, any vested benefits remaining unpaid at the
Participant’s death will be paid to the Participant’s estate and, subject to the terms of the Plan and of the applicable Award Agreement, any unexercised vested Award may be exercised by the administrator or executor of the
Participant’s estate. 
 10.9 Limited Transferability of Awards. No Award granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will, by the laws of descent and distribution, or to the limited extent provided in Section 10.8. All rights with respect to an Award granted to a Participant will be
available during his or her lifetime only to the Participant. Notwithstanding the foregoing, the Participant may transfer a Nonqualified Stock Option in a manner specified by the Committee. 
  

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 10.10 No Rights as Stockholder. Except to the limited extent provided in Sections 7.6
and 7.7, no Participant (nor any beneficiary) will have any of the rights or privileges of a stockholder of the Company with respect to any Shares issuable pursuant to an Award (or exercise thereof), unless and until certificates representing such
Shares will have been issued, recorded on the records of the Company or its transfer agents or registrars, and delivered to the Participant (or beneficiary). 
 10.11 Issuance of Shares. 
 The Company shall be under no obligation to any Participant to register
for offering or resale or to qualify for exemption under the Securities Act of 1933, or to register or qualify under the laws of any state or foreign jurisdiction, any Shares, security or interest in a security paid or issued under, or created by,
the Plan, or to continue in effect any such registrations or qualifications if made. 
 As a condition to the exercise of an Option or any
other receipt of Shares pursuant to an Award under the Plan, the Committee may require (a) the Participant to represent and warrant at the time of any such exercise or receipt that such Shares are being purchased or received only for the
Participant’s own account and without any present intention to sell or distribute such Shares and (b) such other action or agreement by the Participant as may from time to time be necessary to comply with the federal, state and foreign
securities laws. At the option of the Company, a stop-transfer order against any such Shares may be placed on the official stock books and records of the Company, and a legend indicating that such shares may not be pledged, sold or otherwise
transferred, unless an opinion of counsel is provided (concurred in by counsel for the Company) stating that such transfer is not in violation of any applicable law or regulation, may be stamped on stock certificates to ensure exemption from
registration. The Committee may also require the Participant to execute and deliver to the Company a purchase agreement or such other agreement as may be in use by the Company at such time that describes certain terms and conditions applicable to
the Shares. 
 10.12 No Trust or Fund. The Plan is intended to constitute an “unfunded” plan. Nothing contained herein
shall require the Company to segregate any monies or other property, or Shares, or to create any trusts, or to make any special deposits for any immediate or deferred amounts payable to any Participant, and no Participant shall have any rights that
are greater than those of a general unsecured creditor of the Company. 
 10.13 Vesting of Awards. The effect on the vesting of
an Award of a Company-approved leave of absence or a Participant’s working less than full-time shall be determined by the Company’s chief human resources officer or other person performing that function or, in the case of Directors and
executive officers, the Board, each of whose determination shall be conclusive and binding. 
 SECTION 11 
 AMENDMENT, TERMINATION, AND DURATION 
 11.1
Amendment, Suspension, or Termination. The Board or Committee, in its sole discretion, may amend, suspend or terminate the Plan, or any part thereof, at any time and for any reason; provided, however, that, to the extent required by
applicable law, regulation or stock exchange rule, stockholder approval shall be required for any amendment to the Plan. The 
  

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 amendment, suspension, or termination of the Plan will not, without the consent of the Participant, materially adversely
affect any rights or obligations under any Award theretofore granted to such Participant. No Award may be granted during any period of suspension or after termination of the Plan. Subject to Section 11.3, the Committee may amend the terms of
any outstanding Award, prospectively or retroactively. 
 11.2 Duration of the Plan. The Plan will be effective upon its adoption
by the Board, and subject to Section 11.1 (regarding the Board’s and the Committee’s right to amend or terminate the Plan), will remain in effect until ten (10) years following the date of such Board approval. 
 11.3 Consent of Participant. The amendment of an outstanding Award shall not, without the Participant’s consent, materially adversely
affect any rights under any Award theretofore granted to the Participant under the Plan. Any change or adjustment to an outstanding Incentive Stock Option shall not, without the consent of the Participant, be made in a manner so as to constitute a
“modification” that would cause such Incentive Stock Option to fail to continue to qualify as an Incentive Stock Option. Notwithstanding the foregoing, any adjustments made pursuant to Sections 4.3, 10.1 and 10.2 shall not be subject
to these restrictions. 
 SECTION 12 
 TAX WITHHOLDING 
 12.1 Withholding Requirements. Prior to the delivery of any Shares or cash pursuant to an Award (or
exercise thereof), the Company will have the power and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA
obligation) required to be withheld with respect to such Award (or exercise thereof). 
 12.2 Withholding Arrangements. The
Committee, in its sole discretion and pursuant to such procedures as it may specify from time to time, may permit a Participant to satisfy such tax withholding obligation, in whole or in part by (a) paying cash, (b) electing to have the
Company withhold otherwise deliverable cash or Shares having a Fair Market Value equal to the amount required to be withheld, or (c) delivering to the Company already-owned Shares having a Fair Market Value equal to the amount required to be
withheld. The amount of the withholding requirement will be deemed to include any amount which the Committee agrees may be withheld at the time the election is made, not to exceed the amount determined by using the maximum federal, state or local
marginal income tax rates applicable to the Participant with respect to the Award on the date that the amount of tax to be withheld is to be determined. The Fair Market Value of the Shares to be withheld or delivered will be determined as of the
date that the taxes are required to be withheld. 
 SECTION 13 
 LEGAL CONSTRUCTION 
 13.1 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also will include the feminine; the plural will include the singular and the singular will include the plural. 
  

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 13.2 Severability. In the event any provision of the Plan will be held illegal or invalid for
any reason, the illegality or invalidity will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as if the illegal or invalid provision had not been included. 
 13.3 Requirements of Law. The granting of Awards and the issuance of Shares under the Plan will be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required. 
 13.4 Securities
Law Compliance. With respect to Section 16 Persons, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3. To the extent any provision of the Plan, Award Agreement or action by the Committee
fails to so comply, it will be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. 
 13.5
Governing Law. The Plan and all Award Agreements will be construed in accordance with and governed by the laws of the State of Washington. 
 13.6 Captions. Captions are provided herein for convenience only, and will not serve as a basis for interpretation or construction of the Plan. 
  

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