Document:

Contractor Agreement between pSivida Limited and Sol Capital Pty Ltd

 Exhibit 10.3 

							
		 		 	Contractor Agreement	 	
				
		 		 	  
	 	
				
		 		 	pSivida Limited	 	
		 		 	ACN 009 232 026	 	
				
		 		 	Sol Capital Pty Ltd	 	
		 		 	ACN 129 790 478	 	
				
		 		 	Blake Dawson	 	
				
		 		 	Level 32, Exchange Plaza	 	
		 		 	2 The Esplanade	 	
		 		 	Perth WA 6000	 	
		 		 	Australia	 	
		 		 	T 61 8 9366 8000	 	
		 		 	F 61 8 9366 8111	 	
				
		 		 	Reference	 	
		 		 	09-1412-4432	 	
				
		 		 	©Blake Dawson 2008	 	

 Contents 
  

					
			
	1.	  	INTERPRETATION	  	1
			
	2.	  	TERM OF AGREEMENT	  	4
			
	3.	  	PROVISION OF SERVICES	  	4
			
	4.	  	MONTHLY FEE	  	5
			
	5.	  	INVOICES	  	5
			
	6.	  	CONFIDENTIAL INFORMATION	  	6
			
	7.	  	PRIVACY	  	6
			
	8.	  	INTELLECTUAL PROPERTY	  	6
			
	9.	  	OCCUPATIONAL HEALTH AND SAFETY	  	7
			
	10.	  	TAXATION	  	7
			
	11.	  	TERMINATION	  	8
			
	12.	  	AMENDMENT	  	8
			
	13.	  	GENERAL	  	8

 Blake Dawson 
  
  

 Contractor Agreement 
 DATE 29 February 2008 
 PARTIES 
 pSivida Limited ACN 009 232 026 of Level 12, BGC Centre, 28 The Esplanade, Perth WA 6000 (the Principal) 
 Sol Capital Pty Ltd ACN 129 790 478 of Level 12, BGC Centre, 28 The Esplanade, Perth WA 6000 (the Contractor) 
 RECITALS

  

	A.	Mr Aaron Finlay (Finlay) was employed by the Principal from 3 May 2004 as company secretary of the Principal (the Employment). 

  

	B.	Finlay was also the company secretary of pSiNutria Limited and a member of the board of pSiNutria Limited. 

  

	C.	The Employment was terminated on the ground of redundancy on 28 February 2008 (the Termination) as a result of the Principal: 

  

	 	(a)	undertaking a reconstruction scheme of arrangement under section 413 of the Corporations Act (Cth) 2001; and 

  

	 	(b)	ceasing to be an Australian listed company. 

  

	D.	Finlay resigned from the Offices on or before the Termination (the Resignation). 

  

	E.	Finlay and the Principal, executed a Deed of Release with respect to the Employment, the Offices, the Termination and the Resignation (the Deed). 

  

	F.	Finlay has intimate knowledge of the business, trade secrets, functions and work performed by employees of the Principal, customers and clients and processes and operations (among
other things) of the Principal. As a condition precedent to completion of the Deed, the Principal and the Contractor have agreed that the Principal will engage the Contractor as a contractor to provide Finlay’s personal services to the
Principal in accordance with this Agreement. 

  

	G.	The Contractor has agreed to accept the appointment as a contractor to the Principal and to provide the Services to the Principal as and when required by the Principal in accordance
with this Agreement. 

 OPERATIVE PROVISIONS 
  

	1.	INTERPRETATION 

  

	1.1	Definitions 

 The following definitions apply in
this Agreement. 
 Additional Invoice is defined in clause 5 of this Agreement. 
  

  
 Contractor Agreement    1 

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 Agreement means this agreement as amended from time to time in writing and signed by the
Parties. 
 Commencement Date means 29 February 2008. 
 Confidential Information means (a) during the term, all information marked as confidential or advised in writing as being confidential in any
form or medium concerning any past, present or future business, operations or affairs of the Principal, or of any customer of the Principal and (b) after the term all information described in (a) above whether or not so marked.
Confidential Information includes but is not limited to: 
  

	 	(a)	all technical or non-technical data, formulae, patterns, programs, devices, methods, techniques, plans, drawings, models and processes, source and object code, software and computer
records; 

  

	 	(b)	all business and marketing plans and projections, details of agreements and arrangements with third parties, and customer and supplier information and lists;

  

	 	(c)	all financial information, pricing schedules and structures, product margins, remuneration details and investment outlays; 

  

	 	(d)	all information concerning any employee, customer, Contractor or agent of the Principal; 

  

	 	(e)	the Principal’s policies and procedures; and 

  

	 	(f)	all information contained in this Agreement, 

 but
Confidential Information excludes information that has come into the public domain other than by a breach of this Agreement. 
 Contractor
means Sol Capital Pty Ltd ACN 129 790 478. 
 Finlay means Aaron Finlay. 
 GST means the same as in the GST Law. 
 GST Law means the same as “GST law” means in A New Tax System (Goods and Services Tax) Act 1999 (Cth). 
 Intellectual Property Rights means all present and future rights conferred by statute, common law or equity in or in relation to copyright, trade marks, designs, patents, circuit layouts, plant varieties, business and domain names,
inventions and confidential information, and other results of intellectual activity in the industrial, commercial, scientific, literary or artistic fields whether or not registrable, registered or patentable. 
 These rights include: 
  

	 	a)	all rights in all applications to register these rights; 

  

	 	b)	all renewals and extensions of these rights; and 

  

	 	c)	all rights in the nature of these rights, such as Moral Rights. 

 Invoice is defined in clause 5 of this Agreement. 
 Materials means works, ideas, concepts, designs, inventions,
developments, improvements, systems or other material or information, created, made or discovered by the Contractor (either alone or with others and whether before or after the Commencement Date) in the course of the Contractor’s engagement or
as a result of using the resources of the Principal, or in any way relating to any business of the Principal. 
  

  
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 Moral Rights means rights of integrity of authorship, rights of attribution of authorship,
rights not to have authorship falsely attributed and rights of a similar nature, that exist, or may come to exist, anywhere in the world in all Materials made or to be made by the Contractor in the course of the Contractor’s engagement.

 Monthly Fee is defined in clause 4 of this Agreement. 
 Offices means all offices held by Finlay with the Principal and related bodies corporate, including but not limited to: 
  

	 	(a)	company secretary and officer of the Principal; and 

  

	 	(b)	company secretary and member of the board of pSiNutria Limited. 

 Party means a party to this Agreement. 
 Principal means pSivida Limited ACN 009 232 026. 
 Services means the services the Principal and the Contractor agree from time to time as relevant to the Principal’s operations and that are
within the scope of the Contractor’s competence. 
 Term means the period of 6 months from the Commencement Date. 
  

	1.2	Rules for interpreting this Agreement 

 Headings are
for convenience only, and do not affect interpretation. The following rules apply in interpreting this Agreement, except where the context makes it clear that a rule is not intended to apply. 
  

	 	(a)	A reference to: 

  

	 	(i)	any legislation (including subordinate legislation) is to that legislation as amended, re-enacted or replaced, and includes any subordinate legislation issued under it;

  

	 	(ii)	a policy, document or agreement, or a provision of a policy, document or agreement, is to that policy, document, agreement or provision as amended, supplemented, replaced or
novated; 

  

	 	(iii)	a Party to this Agreement or to any other document or agreement includes a permitted substitute or a permitted assign of that Party; 

  

	 	(iv)	a person includes any type of entity or body of persons, whether or not it is incorporated or has a separate legal identity, and any executor, administrator or successor in law of
the person; and 

  

	 	(v)	anything (including a right, obligation, or concept) includes each part of it. 

  

	 	(b)	A singular word includes the plural, and vice versa. 

  

	 	(c)	A word which suggests one gender includes the other gender. 

  

	 	(d)	If a word is defined, another part of speech has a corresponding meaning. 

  

  
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	 	(e)	If an example is given of anything (including a right, obligation or concept), such as by saying it includes something else, the example does not limit the scope of that thing.

  

	 	(f)	A reference to dollars or $ is to an amount in Australian currency. 

  

	2.	TERM OF AGREEMENT 

  

	2.1	This Agreement commences on the Commencement Date and will continue until: 

  

	 	(a)	expiration of the Term, unless this Agreement is extended in accordance with clause 2.2 of this Agreement; or 

  

	 	(b)	it is terminated earlier in accordance with clause 11 of this Agreement. 

  

	2.2	If the Principal and the Contractor agree, in writing, then this Agreement will continue to apply after the expiration of the Term on a month-to-month basis. Either party may
terminate the Agreement at any time after the expiration of the Term by providing the other party with one month’s written notice or payment in lieu of notice. 

  

	3.	PROVISION OF SERVICES 

  

	3.1	Services 

  

	 	(a)	The Contractor will ensure the Services are provided in a proper and efficient manner in accordance with the terms of this Agreement. 

  

	 	(b)	The Contractor will ensure that the Services are performed diligently, competently, with care and skill in a proper and professional manner. 

  

	3.2	Provision of the Services 

 The Contractor will
provide the Services at such reasonable times as the Principal and Contractor agree to a maximum of two days per week. 
  

	3.3	Location and facilities 

  

	 	(a)	The Contractor will provide the Services from a home office located at Finlay’s home, or at any other premises as the Contractor may determine in its sole discretion;

  

	 	(b)	The Principal will provide the Contractor use of a laptop computer, blackberry, mobile phone and desktop computer for the Term. 

  

	3.4	Warranty 

 The Principal does not warrant that the
Contractor has preference or priority in providing any service to the Principal. 
  

	3.5	Services to be provided by Finlay on behalf of the Contractor 

  

	 	(a)	Finlay is required to provide the Services to the Principal on behalf of the Contractor. The Services are not to (and cannot) be provided through any other person (e.g. an employee,
contractor or agent of the Contractor). 

  

  
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	 	(b)	Finlay is made available by the Contractor to provide Services to the Principal pursuant to this Agreement. Finlay is solely the employee or sub-contractor of the Contractor and
will not be construed to be the employee or sub-contractor of the Principal. Nor will the relationship between the Principal and Finlay be construed as one of employer and employee. 

  

	 	(c)	The Contractor will contract with Finlay to ensure that Finlay has obligations to the Contractor similar to the Contractor’s obligation in clauses 6, 8 and 9 of this Agreement.

  

	4.	MONTHLY FEE 

  

	4.1	Monthly Fee 

 As full consideration for the
provision of the Services, the Principal will pay the Contractor a fee of $13,000 gross per month (the Monthly Fee). The Monthly Fee is exclusive of GST. 
  

	4.2	Additional hours 

 If requested in writing by the
Principal to work additional hours per month, the Principal will pay the Contractor an hourly rate of $240 per hour (exclusive of GST). 
  

	4.3	Reimbursement of expenses 

 The Contractor is not
entitled to reimbursement by the Principal for any expenses incurred in providing the Services except with the Principal’s prior written approval. 
  

	4.4	Full payment for the Services 

 The Contractor
agrees that payment of the amounts provided for in this clause constitute full payment for the provision of the Services, and the Principal is not liable to pay any other amount to the Contractor. 
  

	5.	INVOICES 

  

	5.1	Invoice Period 

 The Contractor will issue an
invoice for the Monthly Fee each month in arrears (the Invoice) and also an additional invoice each month detailing any requested additional hours worked and any pre-approved amounts claimed for reimbursement in than month (the Additional
Invoice). 
  

	5.2	Payment of invoice 

 The Principal will pay each
Invoice and Additional Invoice within 7 days of receipt by the Principal of the Invoice and Additional Invoice and any supporting documentation reasonably required by the Principal. 
  

	5.3	Withholding reimbursement 

 The Principal may
withhold any payment (or part of any payment) due to the Contractor under any Additional Invoice until the Contractor provides any supporting documentation reasonably required by the Principal (e.g. documentation supporting the reimbursement for
expenses incurred). 
  

  
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	6.	CONFIDENTIAL INFORMATION 

  

	6.1	Confidential Information 

 The Contractor
acknowledges that all Confidential Information of the Principal which has or may come into the possession of the Contractor remains the property of the Principal. 
  

	6.2	Non-disclosure 

 The Contractor must not, unless the
Principal has first agreed in writing: 
  

	 	(a)	disclose to anyone else, or 

  

	 	(b)	use for a purpose other than the provision of the Services, 

 any of the Confidential Information either before or after the expiration or termination of the Term and/or this Agreement. 
  

	6.3	Return of Confidential Information 

 On termination
or expiry of this Agreement, the Contractor must immediately return or cause to be returned, all originals and copies of any Confidential Information in its possession. 
  

	7.	PRIVACY 

  

	7.1	The Contractor must comply with his obligations under the Privacy Act 1988 (Cth). 

  

	7.2	The Contractor consents to the Principal collecting, using and disclosing information about the Contractor and the Services provided by the Contractor to the extent the
Principal is carrying out its legitimate business. For example, that collection, use or disclosure may involve the Principal collecting information from or disclosing information to its accountants, lawyers, staff, customers or suppliers, insurers
and other third parties for business reasons. 

  

	8.	INTELLECTUAL PROPERTY 

  

	8.1	In this clause Intellectual Property means all present and future rights whether or not conferred by statute, common law or equity in or in relation to any copyright, trade
marks (including service marks), designs, business and domain names, circuit layouts, trade secrets, inventions (including patents), Confidential Information and know how and other results in the industrial, commercial, scientific, literary or
artistic fields (whether registered or not and whether protected by statute or not). 

  

	8.2	The Contractor as beneficial owner assigns to the Principal absolutely all Intellectual Property in any material, work, ideas, concepts, designs, developments, improvements,
systems, software, agreements or other materials prepared or created by the Contractor in connection with this Agreement or the provision of the Services (the Materials). 

  

	8.3	The Contractor must do all things necessary or desirable to give full effect to the assignment under this clause to the Principal. 

  

  
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	8.4	The Contractor warrants that: 

  

	 	(a)	the Materials, or the use or reproduction of the Materials, will not infringe the Intellectual Property Rights of any person; and 

  

	 	(b)	except as required by this clause, the Contractor will not assign, license or otherwise deal with the Materials. 

  

	8.5	On termination or expiry of this Agreement the Contractor must immediately deliver to the Principal all originals and copies of Materials in its possession or Materials that
it can otherwise reasonably obtain. 

  

	8.6	Nothing in this Agreement prevents the Contractor from using any materials, software, formats and precedents that the Contractor owned or was licensed to use at the
Commencement Date, whether or not the Principal has acquired rights under this Agreement (or otherwise) to any adaptation or reproduction of them through the Contractor’s provision of the Services. 

  

	9.	OCCUPATIONAL HEALTH AND SAFETY 

 The Contractor must
comply with occupational health and safety legislation and all occupational health and safety policies and procedures issued by the Principal from time to time. 
  

	10.	TAXATION 

  

	10.1	Definitions in this clause 

 Words defined in the
GST Law have the same meaning in this clause, unless it is clear that a different meaning is intended. 
  

	10.2	Payment of GST 

 In addition to paying the Monthly
Fee under clause 4 or other consideration (which is exclusive of GST) the Principal must: 
  

	 	(a)	pay to the Contractor an amount equal to any GST payable for anything provided or supplied by the Contractor in connection with this Agreement; and 

  

	 	(b)	make that payment as and when the Principal must pay or provide the Monthly Fee or other consideration, but the Principal need not pay until 7 days after receiving a tax invoice.

  

	10.3	Tax invoice 

 The Contractor must issue a tax
invoice (or an adjustment note) to the Principal for any supply for which the Contractor may recover GST from the Principal under this Agreement. 
  

	10.4	Overpayment 

 The Contractor must refund to the
Principal any overpayment by the Principal for GST within 14 days of the Contractor becoming aware of the overpayment. 
  

  
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	10.5	Claim for a cost 

 If a Party has a claim for a cost
on which the Party must pay GST, the claim is for the cost plus all GST (except any GST for which that Party is entitled to an input tax credit). 
  

	10.6	Contractor must be registered for GST 

 The
Contractor must be registered for GST purposes. If the Contractor is not registered for GST the Principal will have no obligation under this clause to pay GST to the Contractor. 
  

	11.	TERMINATION 

  

	11.1	Expiry of Term 

 Unless terminated earlier in
accordance with clause 11.2 of this Agreement or extended in accordance with clause 2.2 of this Agreement this Agreement will terminate by the effluxion of time (without either Party having to provide notice or payment in lieu of notice) on expiry
of the Term. 
  

	11.2	Early termination 

  

	 	(a)	At any time prior to the expiry of the Term either Party may terminate this Agreement by providing the other Party with one month’s written notice or payment in lieu of notice.

  

	 	(b)	If the Principal terminates this Agreement in accordance with clause 11.2(a), the Principal will pay to the Contractor an amount equivalent to the Monthly Fee for each month
remaining in the Term after the expiry of the notice period. 

  

	11.3	No additional payment 

 The Contractor acknowledges
that termination of this Agreement does not entitle it to any form of payment or compensation by the Principal, except for payment of the Monthly Fee for the relevant notice period and, in the case of termination by the Principal, for each month
remaining in the Term. 
  

	12.	AMENDMENT 

 This document can only be amended,
supplemented or replaced by another document signed by the parties. 
  

	13.	GENERAL 

  

	13.1	Governing law 

 This Agreement is governed by the
law in force in Western Australia. 
  

	13.2	Operation of this document 

  

	 	(a)	This Agreement contains the entire agreement between the parties about its subject matter. Any previous understanding, agreement, representation or warranty relating to that subject
matter is replaced by this document and has no further effect. 

  

  
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	 	(b)	Any provision of this Agreement which is unenforceable or partly unenforceable is, where possible, to be severed to the extent necessary to make this Agreement enforceable, unless
this would materially change the intended effect of this Agreement. 

  

	13.3	Inconsistency with other documents 

 If this
Agreement is inconsistent with any other document or agreement between the parties, to the fullest extent permitted by law this Agreement prevails to the extent of the inconsistency. 
  

	13.4	Counterparts 

 This document may be executed in
counterparts. 
 EXECUTED as an agreement 
  

					
	 EXECUTED by pSivida Limited
 ACN 009 232 026:

	 		 	
			
	  
	 		 	 /s/ Lori Freedman

		 		 	Signature of director/secretary
			
	  
	 		 	 Lori Freedman, VP, Corporate Affairs, General Counsel and Company Secretary

		 		 	Name
			
	EXECUTED by Sol Capital Pty Ltd, by its sole director and sole company secretary:	 		 	 /s/ Aaron Finlay

		 		 	Signature of sole director and sole company secretary
			
		 		 	 Aaron Finlay

		 		 	Name

  

  
 Contractor Agreement    92004 Stock Plan, as amended

 Exhibit 10.3A 
 TERCICA, INC. 
 2004 STOCK PLAN 
 Amended by the Board on September 6, 2006 
 Amended by the Board on
February 26, 2008 
 SECTION 1 
 BACKGROUND AND PURPOSE OF THE PLAN 
 1.1 Background. The Plan permits the grant of
Incentive Stock Option, Nonstatutory Stock Options, Stock Purchase Rights, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights, Performance Units and Performance Shares. 
 1.2 Purpose. The purposes of this Plan are (a) to attract and retain the best available personnel for positions of substantial
responsibility, (b) to provide additional incentive to Employees, Directors and Consultants, and (c) to promote the success of the Company’s business. 
 SECTION 2 
 DEFINITIONS 
 As used herein, the following definitions will apply: 
 2.1 “Administrator” means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan. 
 2.2 “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. 
 2.3 “Applicable Laws” means the requirements
relating to the administration of stock option plans under U. S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of
any foreign country or jurisdiction where Awards are, or will be, granted under the Plan. 
 2.4 “Award” means,
individually or collectively, a grant under the Plan of Options, SARs, Stock Purchase Rights, Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares. 
 2.5 “Award Agreement” means the written agreement setting forth the terms and provisions applicable to each Award granted under
the Plan. The Award Agreement is subject to the terms and conditions of the Plan. 
 2.6 “Board” means the Board of
Directors of the Company. 
  

 1 

 2.7 “Change in Control” means the occurrence of any of the following events:

 2.7.1 Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) 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; 
 2.7.2 The consummation of the sale or disposition by the Company of all or substantially all of the Company’s
assets; 
 2.7.3 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 Incumbent 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 
 2.7.4 The consummation of a merger or consolidation of the Company with any other
corporation, 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.

 2.8 “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code herein will
be a reference to any successor or amended section of the Code. 
 2.9 “Committee” means a committee appointed by the
Board in accordance with Section 4 of the Plan. 
 2.10 “Common Stock” means the common stock of the Company.

 2.11 “Company” means Tercica, Inc., a Delaware corporation, or any successor thereto. 
 2.12 “Consultant” means any person, including an advisor, engaged by the Company or a Parent or Subsidiary to render services to
such entity. 
 2.13 “Director” means a member of the Board. 
 2.14 “Disability” means, with respect to a Participant, the inability of such Participant to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, as provided in Sections 22(e)(3) and
409A(a)(2)(c)(i) of the Code. 
  

 2 

 2.15 “Employee” means any person, including Officers and Directors, employed by
the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company will be sufficient to constitute “employment” by the Company. 
 2.16 “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
 2.17 “Exchange Program” means a program under which (a) outstanding Awards are surrendered or cancelled in exchange for
Awards of the same type (which may have lower exercise prices and different terms), Awards of a different type, and/or cash, and/or (b) the exercise price of an outstanding Award is reduced. The terms and conditions of any Exchange Program will
be determined by the Administrator in its sole discretion. 
 2.18 “Fair Market Value” means, as of any date, the
value of Common Stock determined as follows: 
 2.18.1 If the Common Stock is listed on any established stock exchange including the
NASDAQ Global Select Market, NASDAQ Global Market or NASDAQ Capital Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange on the day of determination,
as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
 2.18.2 If the Common Stock is
regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock will be the mean between the high bid and low asked prices for the Common Stock on the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 
 2.18.3 In the absence of an
established market for the Common Stock, the Fair Market Value will be determined in good faith by the Administrator in a manner that complies with Section 409A of the Code. 
 2.19 “Fiscal Year” means the fiscal year of the Company. 
 2.20 “Freestanding SAR” means a SAR that is granted independently of any Option. 
 2.21 “Incentive Stock Option” means an Option intended to qualify as an incentive stock option within the meaning of
Section 422 of the Code and the regulations promulgated thereunder. 
 2.22 “Inside Director” means a Director
who is an Employee. 
 2.23 “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock
Option. 
 2.24 “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. 
  

 3 

 2.25 “Option” means a stock option granted pursuant to the Plan. 
 2.26 “Optioned Stock” means the Common Stock subject to an Award. 
 2.27 “Outside Director” means a Director who is not an Employee. 
 2.28 “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the
Code. 
 2.29 “Participant” means the holder of an outstanding Award granted under the Plan. 
 2.30 “Performance Share” means an Award granted to a Participant pursuant to Section 9. 
 2.31 “Performance Unit” means an Award granted to a Participant pursuant to Section 9. 
 2.32 “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. 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 Administrator,
in its discretion. 
 2.33 “Plan” means this 2004 Stock Plan. 
 2.34 “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 Exchange Act, with respect to any class of the Company’s securities. 
 2.35
“Restricted Stock” means shares of Common Stock acquired pursuant to a grant of Stock Purchase Rights under Section 6 of the Plan or issued pursuant to Section 7 of the Plan. 
 2.36 “Restricted Stock Unit” means a bookkeeping entry representing an amount equal to the Fair Market Value of one Share,
granted pursuant to Section 8. Each Restricted Stock Unit represents an unfunded and unsecured obligation of the Company. 
 2.37
“Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 
 2.38 “Section 16(b)” means Section 16(b) of the Exchange Act. 
 2.39 “Service Provider” means an Employee, Director or Consultant. 
 2.40 “Share” means a share of the Common Stock, as adjusted in accordance with Section 3 of the Plan. 
 2.41 “Stock Appreciation Right” or “SAR” means an Award, granted alone or in connection with a related Option,
that pursuant to Section 8 is designated as an SAR. 
  

 4 

 2.42 “Stock Purchase Right” means the right to purchase Common Stock pursuant to
Section 6 of the Plan. 
 2.43 “Subsidiary” means a “subsidiary corporation”, whether now or hereafter
existing, as defined in Section 424(f) of the Code. 
 2.44 “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). 
 SECTION 3 
 SHARES SUBJECT TO THE PLAN 
 3.1 Stock Subject to the Plan. The maximum aggregate number of Shares that may be
optioned and sold under the Plan includes (a) any Shares which have been reserved but not issued under the Company’s 2002 Executive Stock Plan (the “Executive Plan”), (b) any Shares which have been reserved but not
issued under the Company’s 2002 Stock Plan (the “2002 Plan”), (c) any Shares returned to the Executive Plan or the 2002 Plan as a result of termination of options or repurchase of Shares issued under either such plan, and
(d) an annual increase to be added on the first day of the Company’s fiscal year beginning in 2005, equal to the lesser of (i) 1,250,000 Shares, (ii) 4% of the outstanding Shares on such date or (iii) an amount determined by
the Board. The Shares may be authorized, but unissued, or reacquired Common Stock. Shares shall not be deemed to have been issued pursuant to the Plan with respect to any portion of an Award that is settled in cash. Upon payment in Shares pursuant
to the exercise of an SAR, the number of Shares available for issuance under the Plan shall be reduced only by the number of shares actually issued in such payment. If the exercise price of an Option is paid by tender to the Company, or attestation
to the ownership, of Shares owned by the Participant, the number of shares available for issuance under the Plan shall be reduced by the gross number of shares for which the Option is exercised. 
 3.2 Lapsed Awards. If an Award expires or becomes unexercisable without having been exercised in full, is surrendered pursuant to an
Exchange Program, or, with respect to Restricted Stock, Restricted Stock Units, Performance Units or Performance Shares, is forfeited to or repurchased by the Company due to failure to vest, the unpurchased Shares (or for Awards other than Options
or Stock Appreciation Rights the forfeited or repurchased Shares) which were subject thereto will become available for future grant or sale under the Plan (unless the Plan has terminated). Shares that have actually been issued under the Plan under
any Award will not be returned to the Plan and will not become available for future distribution under the Plan; provided, however, that if Shares issued pursuant to Restricted Stock, Restricted Stock Units, Performance Shares or Performance Units
are repurchased by the Company at their original purchase price or, if less than their original purchase price, their fair market value, or are forfeited to the Company, such Shares will become available for future grant under the Plan. 

3.3 Adjustments. 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 

  

 5 

 
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, the Administrator, to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, shall appropriately and
proportionately adjust (a) the number and class of Shares which may be delivered under the Plan, (b) the number, class, and price of Shares covered by each outstanding Award, (c) the numerical Share limits of Section 5, and
(d) the number of Shares issuable pursuant to Section 11. 
 3.4 Share Reserve. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as will be sufficient to satisfy the requirements of the Plan. 
 SECTION 4 
 ELIGIBILITY/ADMINISTRATION OF THE PLAN 
 4.1 Eligibility. Nonstatutory Stock Options, Stock Purchase Rights, Restricted Stock, Restricted Stock Units, Stock Appreciation Rights,
Performance Units and Performance Shares may be granted to Service Providers. Incentive Stock Options may be granted only to Employees. 
 4.2 Procedure. 
 4.2.1 Multiple Administrative Bodies. Different Committees with respect to different
groups of Service Providers may administer the Plan. 
 4.2.2 Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as “performance-based compensation” within the meaning of Section 162(m) of the Code, the Plan will be administered by a Committee of two or more “outside
directors” within the meaning of Section 162(m) of the Code. 
 4.2.3 Rule 16b-3. To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder will be structured to satisfy the requirements for exemption under Rule 16b-3. 
 4.2.4 Other Administration. Other than as provided above, the Plan will be administered by (A) the Board or (B) a Committee, which committee will be constituted to satisfy Applicable Laws.

 4.3 Powers of the Administrator. Subject to the provisions of the Plan, and in the case of a Committee, subject to the
specific duties delegated by the Board to such Committee, the Administrator will have the authority, in its discretion: (a) to determine the Fair Market Value; (b) to select the Service Providers to whom Awards may be granted hereunder;
(c) to determine the number of shares of Common Stock to be covered by each Award granted hereunder; (d) to approve forms of agreement for use under the Plan; (e) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any Award granted hereunder (such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may 

  

 6 

 
be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation
regarding any Award or the shares of Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, will determine); (f) to institute an Exchange Program; (g) to construe and interpret the
terms of the Plan and awards granted pursuant to the Plan; (h) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying
applicable foreign laws; (i) to modify or amend each Award (subject to Section 18.3 of the Plan), including the discretionary authority to extend the post-termination exercisability period of Options longer than is otherwise provided for
in the Plan; (j) to allow Participants to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Award that number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld (the Fair Market Value of the Shares to be withheld will be determined on the date that the amount of tax to be withheld is to be determined and all elections by a Participant to have Shares withheld for this purpose
will be made in such form and under such conditions as the Administrator may deem necessary or advisable); (k) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously
granted by the Administrator; (l) allow a Participant to defer the receipt of the payment of cash or the delivery of Shares that would otherwise be due to such Participant under an Award, and (m) to make all other determinations deemed
necessary or advisable for administering the Plan. 
 4.4 Effect of Administrator’s Decision. The Administrator’s
decisions, determinations and interpretations will be final and binding on all Participants and any other holders of Awards. 
 SECTION 5

 STOCK OPTIONS 
 5.1 Limitations. 
 5.1.1 Incentive Stock Options may be granted only to Employees. 
 5.1.2 Each Option will be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options will be treated as Nonstatutory Stock Options. For purposes of this Section 5.1.2, Incentive Stock Options will be taken into account in the order in which they were granted.
The Fair Market Value of the Shares will be determined as of the time the Option with respect to such Shares is granted. 
 5.1.3 The
following limitations will apply to grants of Options: 
 (a) No Service Provider will be granted, in any Fiscal Year, Options to
purchase more than 500,000 Shares. 
  

 7 

 (b) In connection with his or her initial service as an Employee, a Service Provider may be
granted Options to purchase up to an additional 250,000 Shares, which will not count against the limit set forth in subsection (a) above. 
 (c) The foregoing limitations will be adjusted proportionately in connection with any change described in Section 3.3. 
 (d) If an Option is cancelled in the same Fiscal Year in which it was granted (other than in connection with a transaction described in Section 14), the cancelled Option will be counted against the limits set forth in
subsections (a) and (b) above. For this purpose, if the exercise price of an Option is reduced, the transaction will be treated as a cancellation of the Option and the grant of a new Option. 
 5.2 Term of Option. The term of each Option will be stated in the Award Agreement. In the case of an Incentive Stock Option, the term will
be ten (10) years from the date of grant or such shorter term as may be provided in the Award Agreement. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns
stock representing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option will be five (5) years from the date of grant or
such shorter term as may be provided in the Award Agreement. 
 5.3 Option Exercise Price and Consideration. 
 5.3.1 Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option will be determined by the
Administrator, subject to the following: 
 (a) In the case of an Incentive Stock Option 
 (i) granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing more than ten percent (10%) of the
voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price will be no less than 110% of the Fair Market Value per Share on the date of grant. 
 (ii) granted to any Employee other than an Employee described in paragraph (i) immediately above, the per Share exercise price will be no
less than 100% of the Fair Market Value per Share on the date of grant. 
 (b) In the case of a Nonstatutory Stock Option, the per
Share exercise price will be determined by the Administrator. In the case of a Nonstatutory Stock Option intended to qualify as “performance-based compensation” within the meaning of Section 162(m) of the Code, the per Share exercise
price will be no less than 100% of the Fair Market Value per Share on the date of grant. 
 (c) Notwithstanding the foregoing,
Options may be granted with a per Share exercise price of less than 100% of the Fair Market Value per Share on the date of grant pursuant to a merger or other corporate transaction. 
  

 8 

 5.3.2 Waiting Period and Exercise Dates. At the time an Option is granted, the
Administrator will fix the period within which the Option may be exercised and will determine any conditions that must be satisfied before the Option may be exercised. 
 5.3.3 Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the
Administrator will determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely of: (i) cash; (ii) check; (iii) promissory note; (iv) other Shares which have a Fair Market Value on
the date of surrender equal to the aggregate exercise price of the Shares as to which said Option will be exercised; (v) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the
Plan; (vi) a reduction in the amount of any Company liability to the Participant, including any liability attributable to the Participant’s participation in any Company-sponsored deferred compensation program or arrangement; (vii) any
combination of the foregoing methods of payment; or (viii) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws. 
 5.4 Exercise of Option. 
 5.4.1 Procedure for Exercise; Rights as a Stockholder. Any Option granted hereunder will be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set
forth in the Award Agreement. An Option may not be exercised for a fraction of a Share. 
 An Option will be deemed exercised when the
Company receives: (i) written or electronic notice of exercise (in accordance with the Award Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised.
Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option will be issued in the name of the Participant or, if
requested by the Participant, in the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to
vote or receive dividends or any other rights as a stockholder will exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company will issue (or cause to be issued) such Shares promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 3.3 of the Plan. 
 Exercising an Option in any manner will decrease the number of Shares thereafter available, both for purposes of the Plan and for sale under the Option,
by the number of Shares as to which the Option is exercised. 
 5.4.2 Termination of Relationship as a Service Provider. If a
Participant ceases to be a Service Provider, other than upon the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent that the Option
is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the 

  

 9 

 
absence of a specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant’s
termination. If, on the date of termination, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option will revert to the Plan. If, after termination, the Participant does not exercise his
or her Option within the time specified by the Administrator, the Option will terminate, and the Shares covered by such Option will revert to the Plan. 
 5.4.3 Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of
time as is specified in the Award Agreement to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time
in the Award Agreement, the Option will remain exercisable for twelve (12) months following the Participant’s termination. If, on the date of termination, the Participant is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option will revert to the Plan. If, after termination, the Participant does not exercise his or her Option within the time specified herein, the Option will terminate, and the Shares covered by such Option will revert to
the Plan. 
 5.4.4 Death of Participant. If a Participant dies while a Service Provider, the Option may be exercised following
the Participant’s death within such period of time as is specified in the Award Agreement to the extent that the Option is vested on the date of death (but in no event may the option be exercised later than the expiration of the term of such
Option as set forth in the Award Agreement), by the Participant’s designated beneficiary, provided such beneficiary has been designated prior to Participant’s death in a form acceptable to the Administrator. If no such beneficiary has been
designated by the Participant, then such Option may be exercised by the personal representative of the Participant’s estate or by the person(s) to whom the Option is transferred pursuant to the Participant’s will or in accordance with the
laws of descent and distribution. In the absence of a specified time in the Award Agreement, the Option will remain exercisable for twelve (12) months following Participant’s death. If, at the time of death, Participant is not vested as to
his or her entire Option, the Shares covered by the unvested portion of the Option will immediately revert to the Plan. If the Option is not so exercised within the time specified herein, the Option will terminate, and the Shares covered by such
Option will revert to the Plan. 
  

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 SECTION 6 
 STOCK PURCHASE RIGHTS 
 6.1 Rights to Purchase. Stock Purchase Rights may be issued
either alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it will advise the offeree
in writing or electronically, by means of an Award Agreement, of the terms, conditions and restrictions related to the offer, including the number of Shares that the offeree will be entitled to purchase, the price to be paid, and the time within
which the offeree must accept such offer. The offer will be accepted by execution of an Award Agreement in the form determined by the Administrator. 
 6.2 Repurchase Option. Unless the Administrator determines otherwise, the Award Agreement will grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the
purchaser’s service with the Company for any reason (including death or Disability). The purchase price for Shares repurchased pursuant to the Award Agreement will be determined by the Administrator and may be paid by cancellation of any
indebtedness of the purchaser to the Company. The repurchase option will lapse at a rate determined by the Administrator. 
 6.3
Other Provisions. The Award Agreement will contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. 
 6.4 Rights as a Stockholder. Once the Stock Purchase Right is exercised, the purchaser will have the rights equivalent to those of a
stockholder, and will be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the record date is prior to the date
the Stock Purchase Right is exercised, except as provided in Section 3.3 of the Plan. 
 SECTION 7 
 RESTRICTED STOCK 
 7.1 Grant
of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator, at any time and from time to time, may grant Shares of Restricted Stock to Service Providers in such amounts as the Administrator, in its sole discretion,
will determine. The Administrator, in its sole discretion, will determine the number of Shares to be granted to each Service Provider. 
 7.2 Restricted Stock Agreement. Each Award of Restricted Stock will be evidenced by an Award Agreement that will specify the Period of Restriction, the number of Shares granted, and such other terms and conditions as the
Administrator, in its sole discretion, will determine. Unless the Administrator determines otherwise, Shares of Restricted Stock will be held by the Company as escrow agent until the restrictions on such Shares have lapsed. 
  

 11 

 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 Administrator, in its sole discretion, may impose such other restrictions on Shares of Restricted Stock as it may deem advisable or appropriate. 
 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 Administrator, in its discretion, may accelerate the time at which any restrictions will lapse or be removed.

 7.6 Voting Rights. During the Period of Restriction, Service Providers holding Shares of Restricted Stock granted hereunder
may exercise full voting rights with respect to those Shares, unless the Administrator determines otherwise. 
 7.7 Dividends and
Other Distributions. During the Period of Restriction, Service Providers 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 Restricted Stock for which restrictions have
not lapsed will revert to the Company and again will become available for grant under the Plan. 
 SECTION 8 
 RESTRICTED STOCK UNITS 
 8.1
Grant of Restricted Stock Units. Restricted Stock Units may be granted at any time and from time to time as determined by the Administrator. After the Administrator determines that it will grant Restricted Stock Units under the Plan, it will
advise the Participant in an Award Agreement of the terms, conditions, and restrictions related to the grant, including the number of Restricted Stock Units. 
 8.2 Vesting Criteria and Other Terms. The Administrator will set vesting criteria in its discretion, which, depending on the extent to which the criteria are met, will determine the number of Restricted
Stock Units that will be paid out to the Participant. The Administrator may set vesting criteria based upon the achievement of Company-wide, business unit, or individual goals (including, but not limited to, continued employment), or any other basis
determined by the Administrator in its discretion. 
 8.3 Earning Restricted Stock Units. Upon meeting the applicable vesting
criteria, the Participant will be entitled to receive a payout as determined by the Administrator. Notwithstanding the foregoing, at any time after the grant of Restricted Stock Units, the 

  

 12 

 
Administrator, in its sole discretion, may reduce or waive any vesting criteria that must be met to receive a payout. 
 8.4 Form and Timing of Payment. Payment of earned Restricted Stock Units will be made after the date(s) determined by the Administrator and
set forth in the Award Agreement. The Administrator, in its sole discretion, may only settle earned Restricted Stock Units in cash, Shares, or a combination of both. 
 8.5 Dividend Equivalents. Dividend equivalents may be credited in respect of Shares covered by Restricted Stock Units, as determined by the Administrator and contained in the Award Agreement. At the sole
discretion of the Administrator, such dividend equivalents may be converted into additional Shares covered by the Restricted Stock Units in such manner as determined by the Administrator. Any additional Shares covered by the Restricted Stock Units
credited by reason of such dividend equivalents will be subject to all the terms and conditions of the underlying Award Agreement to which they relate. 
 8.6 Cancellation. On the date set forth in the Award Agreement, all unearned Restricted Stock Units will be forfeited to the Company. 
 8.7 Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set forth herein, any Restricted Stock Units
granted under the Plan that are not exempt from the requirements of Section 409A of the Code shall incorporate terms and conditions necessary to avoid the consequences of Section 409A(a)(1) of the Code. Such restrictions, if any, shall be
determined by the Administrator and contained in the Award Agreement evidencing such Restricted Stock Units. 
 SECTION 9 

STOCK APPRECIATION RIGHTS 
 9.1 Grant of SARs. Subject to the terms and conditions of the Plan, an SAR may be granted to Service Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion. The
Administrator may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof. 
 9.1.1 Number of Shares.
The Administrator will have complete discretion to determine the number of SARs granted to any Service Provider. 
 9.1.2 Exercise
Price and Other Terms. The Administrator, 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 Tandem or Affiliated SARs will
equal the Exercise Price of the related Option. 
 9.2 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 

  

 13 

 
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. 
 9.3 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. 
 9.4
Exercise of Freestanding SARs. Freestanding SARs will be exercisable on such terms and conditions as the Administrator, in its sole discretion, will determine. 
 9.5 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
Administrator, in its sole discretion, will determine. 
 9.6 Expiration of SARs. An SAR granted under the Plan will expire
upon the date determined by the Administrator, 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. 
 9.7 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 Administrator, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in some combination thereof.

 9.8 Compliance with Section 409A of the Code. Notwithstanding anything to the contrary set forth herein, any SARs
granted under the Plan that are not exempt from the requirements of Section 409A of the Code shall incorporate terms and conditions necessary to avoid the consequences described in Section 409A(a)(1) of the Code. Such restrictions, if any,
shall be determined by the Board and contained in the Award Agreement evidencing such SARs. 
 SECTION 10 
 PERFORMANCE UNITS AND PERFORMANCE SHARES 
 10.1 Grant of Performance Units/Shares. Performance Units and Performance Shares may be granted to Service Providers at any time and from time to time, as will be determined by the Administrator, in its sole discretion. The
Administrator will have complete discretion in 

  

 14 

 
determining the number of Performance Units and Performance Shares granted to each Participant. 
 10.2 Value of Performance Units/Shares. Each Performance Unit will have an initial value that is established by the Administrator on or
before the date of grant. Each Performance Share will have an initial value equal to the Fair Market Value of a Share on the date of grant. 
 10.3 Performance Objectives and Other Terms. The Administrator 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 Service Providers. 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 Administrator, in its sole discretion, will determine. The Administrator 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 Administrator in its discretion. 
 10.4 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 Administrator, in its sole discretion, may
reduce or waive any performance objectives for such Performance Unit/Share. 
 10.5 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 Administrator, 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. 
 10.6 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 11 
 FORMULA OPTION GRANTS TO OUTSIDE DIRECTORS 
 All grants of Options to Outside Directors pursuant to this Section will be automatic and nondiscretionary and will be made in accordance with the following provisions: 
  

 15 

 11.1 Type of Option. All Options granted pursuant to this Section will be Nonstatutory
Stock Options and, except as otherwise provided herein, will be subject to the other terms and conditions of the Plan. 
 11.2 No
Discretion. No person will have any discretion to select which Outside Directors will be granted Options under this Section or to determine the number of Shares to be covered by such Options (except as provided in Section 3).
Notwithstanding the foregoing, the Administrator, in its discretion, may grant an Option that is otherwise issuable to an Outside Director pursuant to this Section 11 to the Outside Director’s employer and such employer shall be deemed an
Outside Director for purposes of the Plan. 
 11.3 First Option. Each person who first becomes an Outside Director following
the Registration Date will be automatically granted an Option to purchase 22,500 Shares (a “First Option”) on or about the date on which such person first becomes an Outside Director, whether through election by the stockholders of
the Company or appointment by the Board to fill a vacancy; provided, however, that an Inside Director who ceases to be an Inside Director but who remains a Director will not receive a First Option. 
 11.4 Subsequent Option. Each Outside Director who also is the Chairman of the Board will be automatically granted an Option to purchase
22,500 Shares and each Outside Director, other than the Chairman of the Board, will be automatically granted an Option to purchase 11,250 Shares (collectively referred to as a “Subsequent Option”) on each date of the annual meeting
of the stockholders of the Company beginning in 2004 or 2005, as the case may be, if as of such date, he or she will have served on the Board for at least the preceding six (6) months. 
 11.5 Terms. The terms of each Option granted pursuant to this Section will be as follows: 
 11.5.1 The term of the Option will be ten (10) years. 
 11.5.2 The exercise price per Share will be 100% of the Fair Market Value per Share on the date of grant of the Option. 
 11.5.3 Subject to Section 14, the First Option will vest and become exercisable as to 1/3 of the Shares subject to the Option on each anniversary of its date of grant, provided that the Participant
continues to serve as a Service Provider on such dates. 
 11.5.4 Subject to Section 14, the Subsequent Option will vest and
become exercisable as to 100% of the Shares subject to the Option on the anniversary of its date of grant, provided that the Participant continues to serve as a Service Provider on such date. 
 11.6 Amendment. The Administrator in its discretion may change the number of Shares subject to the First Options and Subsequent Options.

  

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 SECTION 12 
 LEAVE OF ABSENCE 
 Unless the Administrator provides otherwise, vesting of Awards granted hereunder
will be suspended during any unpaid leave of absence. A Service Provider will not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the
Company, its Parent, or any Subsidiary. For purposes of Incentive Stock Options, no such leave may exceed three (3) months, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration
of a leave of absence approved by the Company is not so guaranteed, then any Incentive Stock Option held by the Participant will cease to be treated as an Incentive Stock Option and will be treated for tax purposes as a Nonstatutory Stock Option
three (3) months following the first day immediately following such three (3)-month period. 
 SECTION 13 
 TRANSFERABILITY OF AWARDS 
 Unless
determined otherwise by the Administrator, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of
the Participant, only by the Participant. If the Administrator makes an Award transferable, such Award will contain such additional terms and conditions as the Administrator deems appropriate. 
 SECTION 14 
 DISSOLUTION OR LIQUIDATION OR CHANGE IN CONTROL 
 14.1 Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator will notify each
Participant as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Award will terminate immediately prior to the consummation of such proposed action. 
 14.2 Change in Control. In the event of a Change in Control, each outstanding Award will be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. 
 In the event that the successor
corporation does not assume or substitute for the Award, the Participant will fully vest in and have the right to exercise the Option, SAR or Stock Purchase Right as to all of the Optioned Stock, including Shares as to which it would not otherwise
be vested or exercisable, all vesting restrictions on Restricted Stock and Restricted Stock Units held by the Participant will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be
deemed achieved at one hundred percent (100%) of target levels and all other terms and conditions met, in each case subject to the consummation of the Change in Control. In addition, if an Option, SAR or Stock Purchase Right becomes fully
vested and exercisable in lieu of assumption or substitution in the 

  

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event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option, SAR or Stock Purchase Right will be
fully vested and exercisable (subject to the consummation of the Change in Control) for a period of fifteen (15) days from the date of such notice, and the Option, SAR or Stock Purchase Right will terminate upon the expiration of such period.

 With respect to Awards granted to an Outside Director that are assumed or substituted for, if on the date of or following such assumption
or substitution the Participant’s status as a Director or a director of the successor corporation, as applicable, is terminated other than upon a voluntary resignation by the Participant, then, with respect to any Option, SAR and/or Stock
Purchase Rights held by the Participant, the Participant will fully vest in and have the right to exercise the Option, SAR and/or Stock Purchase Rights as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or
exercisable, all vesting restrictions on Restricted Stock and Restricted Stock Units held by the Participant will lapse, and, with respect to Awards with performance-based vesting, all performance goals or other vesting criteria will be deemed
achieved at one hundred percent (100%) of target levels and all other terms and conditions met. 
 For the purposes of this
Section 14.2, an Award will be considered assumed if, following the Change in Control, the Award confers the right to purchase or receive, for each Share of Optioned Stock subject to the Award 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 Common Stock 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
Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of an Option, SAR or Stock Purchase Right, or upon the payout of a Restricted Stock Unit, Performance Unit or
Performance Share for each Share of Optioned Stock subject to such Award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the
Change in Control. 
 Notwithstanding anything in this Section 14.2 to the contrary, an Award that vests, is earned or paid-out upon the
satisfaction of one or more performance goals will not be considered assumed if the Company or its successor modifies any of such performance goals without the Participant’s consent; provided, however, a modification to such performance goals
only to reflect the successor corporation’s post-Change in Control corporate structure will not be deemed to invalidate an otherwise valid Award assumption. 
 SECTION 15 
 NO EFFECT ON EMPLOYMENT OR SERVICE 
 Neither the Plan nor any Award will confer upon a Participant any right with respect to continuing the Participant’s relationship as a Service
Provider with the Company, nor will they 

  

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interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time, with or without cause, to the
extent permitted by Applicable Laws. 
 SECTION 16 
 DATE OF GRANT 
 The date of grant of an Award will be, for all purposes, the date on which the
Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination will be provided to each Participant within a reasonable time after the date of such grant.

 SECTION 17 
 TERM OF
PLAN 
 Subject to Section 20 of the Plan, the Plan will become effective following its adoption by the Board and on the day
immediately preceding the date of the Company’s firmly underwritten initial public offering. It will continue in effect for a term of ten (10) years unless terminated earlier under Section 18 of the Plan. 
 SECTION 18 
 AMENDMENT AND
TERMINATION OF THE PLAN 
 18.1 Amendment and Termination. The Administrator may at any time amend, alter, suspend or
terminate the Plan. 
 18.2 Stockholder Approval. The Company will obtain stockholder approval of any Plan amendment to the
extent necessary and desirable to comply with Applicable Laws. 
 18.3 Effect of Amendment or Termination. No amendment,
alteration, suspension or termination of the Plan will impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and signed by the Participant and the
Company. Notwithstanding the foregoing, subject to the limitations of Applicable Laws, if any, the Administrator may amend the terms of any one or more Awards without the affected Participant’s consent if necessary to maintain the qualified
status of the Award as an Incentive Stock Option or to bring the Award into compliance with Section 409A of the Code and the related guidance thereunder. Termination of the Plan will not affect the Administrator’s ability to exercise the
powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. 
 SECTION 19

 CONDITIONS UPON ISSUANCE OF SHARES 
 19.1 Legal Compliance. Shares will not be issued pursuant to the exercise of an Award unless the exercise of such Award and the issuance and delivery of such Shares will comply with 

  

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Applicable Laws and will be further subject to the approval of counsel for the Company with respect to such compliance. 
 19.2 Investment Representations. As a condition to the exercise of an Award, the Company may require the person exercising such Award to
represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation
is required. 
 SECTION 20 
 INABILITY TO OBTAIN AUTHORITY 
 The inability of the Company to obtain authority from any regulatory body having
jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, will relieve the Company of any liability in respect of the failure to issue or sell such Shares as to
which such requisite authority will not have been obtained. 
 SECTION 21 
 STOCKHOLDER APPROVAL 
 The Plan will be subject to approval by the stockholders
of the Company within twelve (12) months after the date the Plan is adopted. Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws. 
 SECTION 22 
 WITHHOLDING 
 22.1 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). 
 22.2 Withholding Arrangements. The Administrator, 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) electing to have the Company withhold otherwise deliverable Shares, or
(b) 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 Administrator 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. 
  

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 SECTION 23 
 MISCELLANEOUS 
 23.1 Corporate Action Constituting Grant of Awards. Corporate action
constituting a grant by the Company of an Award to any Participant shall be deemed completed as of the date of such corporate action, unless otherwise determined by the Administrator, regardless of when the instrument, certificate, or letter
evidencing the Award is communicated to, or actually received or accepted by, the Participant. 
 23.2 Electronic Delivery. Any
reference herein to a “written” agreement or document shall include any agreement or document delivered electronically or posted on the Company’s intranet. 
 23.3 Deferrals. To the extent permitted by applicable law, the Administrator, in its sole discretion, may determine that the delivery of Common Stock or the payment of cash, upon the exercise, vesting or
settlement of all or a portion of any Award may be deferred and may establish programs and procedures for deferral elections to be made by Participants. Deferrals by Participants will be made in accordance with Section 409A of the Code.
Consistent with Section 409A of the Code, the Administrator may provide for distributions while a Participant is still an employee. The Board is authorized to make deferrals of Awards and determine when, and in what annual percentages,
Participants may receive payments, including lump sum payments, following the Participant’s termination of employment or retirement, and implement such other terms and conditions consistent with the provisions of the Plan and in accordance with
applicable law. 
 23.4 Compliance with Section 409A. To the extent that the Administrator determines that any Award
granted under the Plan is subject to Section 409A of the Code, the Award Agreement evidencing such Award shall incorporate the terms and conditions necessary to avoid the consequences described in Section 409A(a)(1) of the Code. To the
extent applicable, the Plan and Award Agreements shall be interpreted in accordance with Section 409A of the Code and Treasury Regulations and other interpretive guidance issued thereunder. Notwithstanding any provision of the Plan to the
contrary, in the event that the Administrator determines that any Award may be subject to Section 409A of the Code and related guidance, the Administrator may adopt such amendments to the Plan and the applicable Award Agreement or adopt other
policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to (1) exempt the Award from Section 409A of the
Code and/or preserve the intended tax treatment of the benefits provided with respect to the Award, or (2) comply with the requirements of Section 409A of the Code and related guidance. 
  

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