Document:

Exhibit

EXHIBIT 10.11

ETSY, INC.  
EXECUTIVE SEVERANCE PLAN 

(Amended and Restated, effective as of January 1, 2019)
The Etsy, Inc. (the “Company”) Executive Severance Plan (the “Plan”) is designed to provide separation pay to eligible executives of the Company whose employment terminates in a Qualifying Termination (as defined in the Plan).  The Plan is an unfunded welfare plan maintained primarily for the purpose of providing severance benefits to a select group of management and highly compensated employees.
This Plan is governed by the laws of the State of Delaware, without regard to conflicts of law principles that might otherwise point to the law of a different jurisdiction.
I.ELIGIBILITY FOR BENEFITS
1.    Participation.  The Company’s Board of Directors (the “Board”) or its Compensation Committee (the “Committee”) will select the Company executives who are eligible to participate in the Plan.  The Plan Administrator (as defined below) will deliver a notice to each such executive, substantially in the form attached hereto as the “Participation Notice,” informing the executive that he or she is eligible to participate in the Plan.  Each executive of the Company who receives a Participation Notice is a “Participant” in the Plan. 
2.    Conditions to Receive Benefits
A.    In order to receive benefits under the Plan, a Participant must: 
(i)    Experience a Qualifying Termination; 
(ii)    Execute, and not revoke, a general release of all claims (the “Release”) in the form provided by the Company; 
(iii)    Return all Company Property to the Company; and 
(iv)    Comply with all agreements between the Company and the Participant relating to confidentiality, non-competition, non-solicitation and non-interference.  
The Company shall deliver the Release to the Participant no later than five days after his or her Qualifying Termination.  The Release will specify a deadline for executing the Release, which date shall be no later than 50 days after the Participant’s Qualifying Termination.  If the Release is not executed, effective, and irrevocable by the 60th day after the Participant’s Qualifying Termination, the Participant will cease to be eligible for benefits under this Plan.

B.    In addition to the conditions in Section I.2.A, a Participant shall not be entitled to benefits under the Plan unless and until such Participant has entered into the Company’s standard form of Employee Proprietary Information and Inventions Agreement or any similar or successor document.
C.    If a Participant has not substantially complied with the material terms of all material agreements between the Company and the Participant, or the Participant has engaged in conduct that would give rise to a termination for Cause (whether such conduct occurred before or after the Participant’s Separation), the Plan Administrator may deny and/or discontinue the payment of the Participant’s Plan benefits and may require the Participant to repay the gross amount (before withholding) of any portion of the benefits already received under the Plan (including to forfeit equity and any gain realized on the vesting, exercise, settlement, sale, transfer or other disposition of any equity-based awards, in each case to the extent attributable to accelerated vesting under the Plan); provided that the Company shall first provide written notice of such noncompliance and repayment obligation to the Participant and allow 10 days after receipt of such notice for the Participant to cure such noncompliance (if capable of being cured).  If the Plan Administrator notifies a Participant that repayment is required, such amounts shall be repaid in cash within 30 calendar days of the date the written notice is sent.  Any remedy under this paragraph C shall be in addition to, and not in place of, any other remedy, including injunctive relief, forfeiture of equity and other compensation rights and money damages, that the Company may have.
II.    Plan Benefits
If a Participant has a Qualifying Termination and satisfies the eligibility conditions set forth in Section I, above, the Company will provide the following severance benefits, subject to the terms of the Plan: 
1.    Salary Continuation.  The Company will pay (or cause to be paid) an amount equal to (x) the Participant’s Monthly Base Salary times (y) the number of months in the Severance Period.  Subject to subparagraphs (A) through (C), below, such amount shall be payable in equal installments on the Company’s regular payroll dates from the Qualifying Termination through the number of months in the Severance Period.  
A.    Subject to any delay required by Section 409A of the Code (as described in Section III.1, below), payment shall commence within 60 days after the Qualifying Termination.  The first payment shall include any unpaid installments accrued from the date of the Participant’s Qualifying Termination.  
B.    If the Participant’s Separation occurs within 12 months after a Change in Control that qualifies as a payment event under Section 409A(a)(2)(A)(v) of the Code, payment shall be made in a lump sum; provided that this provision shall not apply with respect to any amount that is (i) subject to Section 409A of the Code and (ii) payable to a Participant who was selected for participation before February 14, 2018.
C.    If the period during which payments must commence spans two calendar years, then payment of any amounts that are subject to the requirements of Section 409A of the Code shall commence in the second calendar year.

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2.    Pro Rata Bonus.  If the Qualifying Termination occurs after the third month of the fiscal year in which the Qualifying Termination occurs (i.e., after March 31) and the Participant has been employed by the Company for at least three months, the Company will pay (or cause to be paid) an amount equal to the Participant’s target annual cash incentive bonus, if any, under the Etsy, Inc. Management Cash Incentive Plan or successor plan (the “Bonus Plan”) (i.e., including both the Company performance portion and individual performance portion) for the fiscal year in which the Qualifying Termination occurs times a fraction the numerator of which is the number of days from the first day of such fiscal year through the Participant’s Separation and the denominator of which is the total number of days in such fiscal year. Such amount, if any, shall be paid at the time of the first payment required by paragraph 1, above (and only if the Participant participates in the Bonus Plan).
If the Qualifying Termination occurs before the fourth month of the fiscal year in which the Qualifying Termination occurs (i.e., on or before March 31), no bonus will be paid with respect to the fiscal year in which the Qualifying Termination occurs. 
If the Qualifying Termination occurs before the payout of the annual cash bonus award under the Bonus Plan for the prior fiscal year (the “Prior Year Bonus”), for Participants participating in the Bonus Plan, the Company will pay (or cause to be paid) an amount equal to 1) the Company performance portion of the Prior Year Bonus, as approved by the Committee, at the same percentage that is applicable to all other participants in the Bonus Plan and 2) the Participant’s individual performance portion of the Prior Year Bonus, as determined by the Participant’s manager (for VP-level) or by the Committee (for SVP-level and above). Such amount, if any, shall be paid during the calendar year in which the Qualifying Termination occurs, at the same time as Prior Year Bonuses are paid to active employees who are Bonus Plan participants.
3.    Health Benefits.  If the Participant (x) was a participant in the Company’s group health insurance plans (major medical, dental and vision) on the date of such Participant’s Qualifying Termination and (y) timely elects continued coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 (together with any state law of similar effect, “COBRA”), the Company will either provide (or arrange to be provided) such continued coverage at active employee rates through the end of the COBRA Payment Period (as defined below) or pay to the Participant cash in lieu of continued coverage (as described in the paragraph below).  
Cash in lieu of continued coverage shall consist of a payment, for each month during the COBRA Payment Period, equal to the excess of the cost of the elected level of COBRA coverage for such month over the monthly cost charged to active employees for the same coverage. The “COBRA Payment Period” shall begin on the first day after the Participant’s active employee health coverage ends due to Separation and end on the earliest to occur of (A) the end of the COBRA Period, (B) the expiration of the Participant’s eligibility for the continuation coverage under COBRA, and (C) the first month for which the Participant is eligible for health insurance coverage in connection with new employment or self-employment.  Payment of cash in lieu of continued coverage shall be due on the first day of each month during the COBRA Payment Period for which the Company does not provide continued coverage at active employee rates, except that payments shall commence (with any make-up payments) on the date prescribed by subsection 1, above.  

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The amount payable under this subsection 2 will not include any amounts that the Participant has elected to contribute to a health care flexible spending account; such amounts, if any, are the sole responsibility of the Participant.
4.    Vesting of Equity.  
If the Participant’s Separation is a Qualifying CIC Termination, each of the Participant’s then-outstanding equity awards (both time-based and performance-based) shall vest (if not already fully vested) as to a percentage of unvested shares (if any, as of the effective date prescribed by the next following sentence) per equity award equal to the Acceleration Factor.  Such vesting shall be effective as of the later of the Participant’s Qualifying CIC Termination or the date of the Change in Control.
5.    Non-Duplication.  No provision of this Plan shall be interpreted to duplicate any payment or other compensation or benefit that a Participant is entitled to receive under another arrangement.  By way of example, a provision for severance in an offer letter or similar agreement shall be offset against the Participant’s salary continuation under this Plan.

III.    Tax Provisions
1.    Section 409A of the Code
The Plan shall be construed consistently with the intent that payments under the Plan be exempt from the requirements of Section 409A of the Code (and any state law of similar effect) to the extent possible (i.e., applying the “short-term deferral” rule described in Treas. Reg. § 1.409A-1(b)(4), the “two-year, two-time” rule described in Treas. Reg. § 1.409A-1(b)(9), or another exemption), and to comply with the requirements of Section 409A (to avoid taxes thereunder) to the extent that Section 409A applies.  For purposes of Section 409A, each installment in a series of installments shall be treated as a separate payment.
No payment that is subject to Section 409A shall be made to a “specified employee” (determined by the Company as of the Participant’s Separation in accordance with Treas. Reg. § 409A-1(i)) before the first day after the earlier of (A) the date that is six months after the Participant’s Separation or (B) the Participant’s death.  Any payment that is delayed by reason of this six-month delay requirement shall be made, without interest, on the later of the first payment date after the expiration of the six-month delay period required by Section 409A(a)(2)(B)(i) of the Code or the otherwise scheduled payment date.
2.    Golden Parachute Tax Limitation (Section 280G)
The Internal Revenue Code imposes an excise tax on certain payments and other benefits received by certain officers and stockholders of a company in connection with its change of control.  Such payments include severance pay, loan forgiveness and acceleration of vesting.  
A.    Basic Rule.  In the event that it is determined that any payment, benefit, vesting or distribution of any type (cash, equity or otherwise) to or for the benefit of a Participant pursuant to the terms of 

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this Plan or any other agreement, including a benefit plan, Participant’s equity award agreements and loan forgiveness (the “Total Payments”), would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties with respect to such excise tax (such excise tax, together with any such interest or penalties, are collectively referred to as the “Excise Tax”), then the Total Payments shall be made to the Participant either (i) in full or (ii) as to such lesser amount as would result in no portion of the Total Payments being subject to Excise Tax (a “Reduced Payment”), whichever of the foregoing results in the receipt by the Participant on an after-tax basis, of benefits of the greatest value, notwithstanding that all or some portion of the Total Payments may be subject to the Excise Tax.
B.    Rules Applicable to Reduced Payments
(i)    Determination by Accountant.  The determination as to whether any of the Total Payments are “parachute payments” (within the meaning of Section 280G of the Code) and whether to make a Reduced Payment shall be made by an independent accounting firm selected by the Company (the “Accounting Firm”), which shall provide such determination (the “Determination”), together with detailed supporting calculations both to the Company and to the Participant within seven business days of the Participant’s Qualifying CIC Termination, if applicable, or such earlier time as is requested by the Company or by the Participant (if the Participant reasonably believes that any of the Total Payments may be subject to the Excise Tax).  In any event, as promptly as practicable following the Accounting Firm’s Determination, the Company shall pay or transfer to or for the benefit of the Participant such amounts as are then due to him or her and shall promptly pay or transfer to or for the benefit of the Participant in the future such amounts as become due to him or her.  Any Determination by the Accounting Firm shall be binding upon the Company and the Participant, absent manifest error.
(ii)    Reduction of Payments.  For purposes of determining whether to make a Reduced Payment, if applicable, the Company shall cause to be taken into account all federal, state and local income and employment taxes and excise taxes applicable to the Participant (including the Excise Tax).  If a Reduced Payment is made, the Company shall reduce or eliminate the Total Payments in the following order: (1) cancellation of accelerated vesting of options with no intrinsic value (i.e., options for which the exercise price is greater than the fair market value of the underlying shares), (2) reduction of cash payments, (3) cancellation of accelerated vesting of equity awards other than options, (4) cancellation of accelerated vesting of options with intrinsic value and (5) reduction of other benefits paid to the Participant.  In the event that acceleration of vesting is reduced, such acceleration of vesting shall be canceled in the reverse order of the date of grant of the Participant’s equity awards.  In the event that cash payments or other benefits are reduced, such reduction shall occur in reverse order beginning with payments or benefits which are to be paid farthest in time from the date of the Determination. 

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C.    Underpayments and Overpayments.  As a result of uncertainty in the application of Sections 4999 and 280G of the Code at the time of the initial Determination by the Accounting Firm hereunder, it is possible that payments will have been made by the Company which should not have been made (an “Overpayment”) or that additional payments which will not have been made by the Company could have been made (an “Underpayment”), consistent in each case with the calculation of whether and to what extent a Reduced Payment shall be made hereunder.  In either event, the Accounting Firm shall determine the amount of the Underpayment or Overpayment that has occurred.  In the event that the Accounting Firm determines that an Overpayment has occurred, such Overpayment shall be treated for all purposes as a loan to the Participant that he or she shall repay to the Company, together with interest at the applicable federal rate prescribed by Section 1274(d) of the Code; provided, however, that the Participant shall not be required to repay any amount to the extent that such repayment would not reduce the amount that is subject to taxation under Section 4999 of the Code.  In the event that the Accounting Firm determines that an Underpayment has occurred, such Underpayment shall promptly be paid or transferred by the Company to or for the benefit of the Participant, together with interest at the applicable federal rate prescribed by Section 1274(d) of the Code.
If this Section III.2 is applicable with respect to a Participant’s receipt of a Reduced Payment, it shall supersede any contrary provision of any plan, arrangement or agreement governing the Participant’s rights to the Total Payments.
		
	IV.
	CLAIMS AND APPEALS

1.    Application of Claims and Appeals Procedures.  The provisions of this Section IV shall apply to any claim for a benefit under the Plan, regardless of the basis asserted for the claim and regardless of when the act or omission upon which the claim is based occurred.  
2.    Initial Claims.
A.    Any claim for benefits shall be in writing (which may be electronic if permitted by the Plan Administrator) and shall be delivered to the Plan Administrator.
B.    Each claim for benefits shall be decided by the Claims Administrator within a reasonable period of time, but not later than 90 days after such claim is received by the Claims Administrator (without regard to whether the claim submission includes sufficient information to make a determination), unless the Claims Administrator determines that special circumstances require an extension of time for processing the claim.  If the Claims Administrator determines that an extension of time for processing is required, the Claims Administrator shall notify the claimant in writing before the end of the initial 90-day period of the circumstances requiring an extension of time and the date by which a decision is expected.
C.    If a claim is denied in whole or in part, the Claims Administrator shall provide to the claimant a written decision, issued by the end of the period prescribed by paragraph B, above, that includes the following information:
(i)    The specific reason or reasons for denial of the claim;

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(ii)    References to the specific Plan provisions upon which such denial is based;
(iii)    A description of any additional material or information necessary to perfect the claim, and an explanation of why such material or information is necessary;
(iv)    An explanation of the appeal procedures Plan’s and the applicable time limits; and
(v)    A statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA, if his claim is denied upon review.
3.    Appeals.
A.    If a claim for benefits is denied in whole or in part, the claimant may appeal the denial to the Plan Administrator.  Such appeal shall be in writing (which may be electronic, if permitted by the Plan Administrator), may include any written comments, documents, records, or other information relating to the claim for benefits, and shall be delivered to the Plan Administrator within 60 days after the claimant receives written notice that his claim has been denied.
B.    The Plan Administrator shall decide each appeal within a reasonable period of time, but not later than 60 days after such claim is received by the Plan Administrator, unless the Plan Administrator determines that special circumstances require an extension of time for processing the appeal.
(i)    If the Plan Administrator determines that an extension of time for processing is required, the Plan Administrator shall notify the claimant in writing before the end of the initial 60-day period of the circumstances requiring an extension of time and the date by which the claims administrator expects to render a decision.
(ii)    If an extension of time pursuant to subparagraph (i), above, is due to a claimant’s failure to submit information necessary to decide the appeal, the period for deciding the appeal shall be tolled from the date on which the notification of extension is sent to the claimant until the date on which the claimant responds to the request for additional information.
C.    In connection with any appeal, a claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to his claim for benefits.  A document, record, or other information shall be considered relevant to a claim for benefits if such document, record, or other information:
(i)    Was relied upon in making the benefit determination;

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(ii)    Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; or
(iii)    Demonstrates compliance with processes and safeguards designed to ensure and to verify that the benefit determination was made in accordance with the terms of the Plan and that such terms of the Plan have been applied consistently with respect to similarly situated claimants.
D.    The Plan Administrator’s review on appeal shall take into account all comments, documents, records and other information submitted by the claimant, without regard to whether such information was considered in the initial benefit determination.
E.    If an appeal is denied in whole or in part, the Plan Administrator shall provide to the claimant a written decision, issued by the end of the period prescribed by paragraph B, above, that includes the following information:
(i)    The specific reason or reasons for the decision;
(ii)    References to the specific Plan provisions upon which the decision is based;
(iii)    An explanation of the claimant’s right to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to his claim for benefits (as determined pursuant to paragraph C, above); and
(iv)    A statement of the claimant’s right to bring a civil action under Section 502(a) of ERISA.
4.    Other Rules and Rights Regarding Claims and Appeals.
A.    A claimant may authorize a representative to pursue any claim or appeal on his behalf.  The Plan Administrator may establish reasonable procedures for verifying that any representative has in fact been authorized to act on his behalf. 
B.    Notwithstanding the deadlines prescribed by this Section IV, the Plan Administrator and any claimant may agree to a longer period for deciding a claim or appeal or for filing an appeal, provided that the Plan Administrator shall not extend any deadline for filing an appeal unless imposition of the otherwise-applicable deadline would be unreasonable under the applicable circumstances.
5.    Interpretation.
The provisions of this Section IV are intended to comply with Section 503 of ERISA and shall be administered and interpreted in a manner consistent with such intent.

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6.    Litigation and Forum Selection
A.    No Applicable Claim for non-payment or underpayment of benefits allegedly owed under the Plan may be filed in court (I) before the claimant has exhausted the claims review procedures set forth above or (II) more than one year after the earliest of:
(i)    The date the first benefit payment was actually made;
(ii)    The date the first benefit payment was allegedly due;
(iii)    The date the Plan, the Plan Administrator, and the Claims Administrator, or any representative of the Plan first repudiated its alleged obligation to provide such benefits (regardless of whether such repudiation occurred before or during the claims review process described above);
provided that if a request for administrative review, timely made in accordance with Section IV, is pending before the Claims Administrator or Plan Administrator, when the one year period described in this Section IV.6.A expires, the deadline for filing such claim or action in a court with proper jurisdiction shall be extended to the date that is 120 calendar days after the final denial (including a deemed denial) of the claim on administrative review.  
B.    For purposes of this Section IV.6, an “Applicable Claim” is:
(i)    A claim or action to recover benefits allegedly due under the provisions of the Plan or by reason of any law;
(ii)    A claim or action to clarify rights to future benefits under the terms of the Plan;
(iii)    A claim or action to enforce rights under the Plan; or 
(iv)    Any other claim or action that (A) relates to the Plan, and (B) seeks a remedy, ruling, or judgment of any kind against the Plan, the Company, the Claims Administrator or the Plan Administrator with respect to benefits under the Plan or otherwise with respect to the Plan.
C.    In the event of any Applicable Claim brought by or on behalf of two or more claimants, the requirements of this Section IV.6 shall apply separately with respect to each claimant.
D.    To the fullest extent permitted by law, any lawsuit brought in whole or in part under ERISA section 502 (or any successor provision) by a claimant and relating to the Plan, benefits under the Plan, the lawfulness of any Plan provision or the administration of the Plan shall be filed in one of the following courts: (a) the United States District Court for the Eastern District of New York; or (b) the United States District Court for the district in which the plaintiff’s employment was principally based.  This provision does not relieve any claimant from any obligation existing under the Plan or by law to exhaust administrative remedies before initiating litigation.

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E.    Notwithstanding the foregoing, this Section IV.6 (statute of limitations and forum selection) shall not apply with respect to claims related to a Qualifying CIC Termination.
		
	V.
	MISCELLANEOUS

1.    Plan Administration.  The Plan Administrator has full discretionary authority to administer and interpret the Plan, including discretionary authority to determine eligibility for benefits under the Plan and the amount of benefits (if any) payable per Participant. Any determination by the Plan Administrator will be final and conclusive upon all persons. Notwithstanding the Plan Administrator’s discretion, however, the standard of review for a court reviewing any claim related to a Qualifying CIC Termination shall be de novo.
2.    Benefits.  Benefits provided under the Plan are paid from the general assets of the Company and are not funded or assignable.
3.    Treatment of Plan Benefits. Payments made under this Plan shall not be treated as eligible “compensation” for purposes of any 401(k) or other retirement, savings or similar plan of the Company or a parent or subsidiary of the Company.  A Participant will also receive his or her unpaid salary through his or her termination date and a lump sum payment for all accrued and unused vacation (through the termination date) in a final paycheck provided on his or her last day of work.
4.    Indebtedness of Participants. If a Participant is indebted to the Company on the effective date of the Participant’s Separation, the Company reserves the right to offset the payment of any benefits under the Plan by the amount of such indebtedness. Such offset will be made in accordance with all applicable laws. The Participant’s execution of the Participation Notice constitutes knowing written consent to the foregoing.
5.    Plan Terms.  This Plan (first effective in February 14, 2018, and subsequently amended and restated) supersedes the Etsy, Inc. Severance Plan and Etsy, Inc. Change In Control Severance Plan, each of which expired in accordance with its terms, and any and all prior separation, severance and salary continuation arrangements, programs and plans that were previously offered by the Company, either orally or in writing, for which a Participant was eligible.  In no event shall a Participant receive severance benefits under both this Plan and another plan, program or arrangement.  
6.    Plan Amendment or Termination.  The Company, acting through its Board or its Compensation Committee, reserves the right to terminate or amend the Plan at any time and in any manner, subject to this Section V.6.  Any termination or amendment of the Plan may be made effective immediately with respect to any benefits not yet paid, whether or not prior notice of such amendment or termination has been given to affected employees; however, no termination or amendment that negatively impacts the rights or potential benefits of a Participant shall (i) apply with respect to any Participant who experiences a Qualifying Termination before or within two months after the effective date of such termination or amendment, or (ii) become effective within the three months before or 12 months after a Change in Control.
7.    Taxes. All payments and benefits under the Plan will be subject to all applicable deductions and withholdings, including obligations to withhold for federal, state, provincial, foreign and local income and employment taxes.  By becoming a Participant in the Plan, the Participant agrees to 

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review with Participant’s own tax advisors the federal, state, provincial, local, and foreign tax consequences of participation in the Plan. The Participant will rely solely on such advisors and not on any statements or representations of the Company or any of its agents. The Participant understands that the Participant (and not the Company) will be responsible for the Participant’s own tax liability that may arise as a result of becoming a Participant in the Plan, without regard to the amount withheld or reported to the Internal Revenue Service.
8.    No Right to Employment.  This Plan does not provide any Participant or other individual a right to continue employment with the Company (or any parent or subsidiary) or affect the Company’s right (or the right of any parent or subsidiary employing a Participant), which right is hereby expressly reserved, to terminate the employment of any individual at any time for any reason with or without cause. 
VI.    Definitions and Rules of Construction
1.    Definitions
Acceleration Factor shall mean the Acceleration Factor set forth in a Participant’s Participation Notice.
Cause shall mean a Participant’s (i) unauthorized use or disclosure of the Company’s confidential information or trade secrets, (ii) breach of any material terms of any material agreement between the Participant and the Company, (iii) material failure to comply with the Company’s written policies or rules, (iv) conviction of, or plea of “guilty” or “no contest” to, a felony under the laws of the United States or any State, or any crime involving dishonesty, fraud or moral turpitude, (v) gross negligence or willful misconduct in the scope of the Participant’s employment, (vi) continuing failure to perform assigned duties after receiving written notification of the failure from the Company’s Board of Directors or (vii) failure to cooperate in good faith with a governmental or internal investigation of the Company or its directors, officers or employees, if the Company has requested the Participant’s cooperation. 
Change in Control shall mean:
(i)    Any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (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 more than fifty percent (50%) of the total voting power represented by the Company’s then-outstanding voting securities; 
(ii)    The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; 
(iii)    The consummation of a merger or consolidation of the Company with or into any other entity, 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 

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converted into voting securities of the surviving entity or its parent) more than 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; or
(iv)    Individuals who are members of the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board over a period of 12 months; provided, however, that if the appointment or election (or nomination for election) of any new Board member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.
A transaction shall not constitute a Change in Control if its sole purpose is to change the state of the Company’s incorporation or to create a holding company that will be owned in substantially the same proportions by the persons who held the Company’s securities immediately before such transaction.
Claims Administrator shall mean an individual or committee designated by the Plan Administrator.
COBRA Period shall mean the COBRA Period set forth in a Participant’s Participation Notice.
Code shall mean the Internal Revenue Code of 1986, as amended.
Company shall mean Etsy, Inc., a Delaware corporation, and any successor thereto.
Company Property shall mean all material paper and electronic Company documents (and all copies, reproductions or summaries thereof) created and/or received by the Participant during the Participant’s period of employment with the Company and other material Company materials and property (including Company laptop computers and mobile devices), that the Participant has in the Participant’s possession or control, including materials of any kind that contain or embody any proprietary or confidential information of the Company (and all copies, reproductions or summaries thereof, in whole or in part).  For the avoidance of doubt, Company Property does not include the Participant’s personal copies of documents evidencing the Participant’s hire, termination, compensation, benefits and stock options and any other documentation received as a stockholder of the Company.
ERISA means the Employee Retirement Income Security Act of 1974, as amended.
Monthly Base Salary shall mean the Participant’s monthly base salary at the rate in effect immediately before the date of the Participant’s Qualifying Termination; provided that, in the case of a Qualifying CIC Termination occurring after a Change in Control, the rate of Monthly Base Salary shall be no less than the rate in effect immediately before the Change in Control.  For the avoidance of doubt, Monthly Base Salary does not include other elements of compensation, such as bonuses, overtime compensation, incentive pay, sales commissions or expense allowances.

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Plan Administrator shall mean the individual(s) appointed by the Board (or Committee) to administer the terms of the Plan as set forth herein.  If no individual is appointed to serve as the Plan Administrator, the Plan Administrator shall be the senior-most human resources employee of the Company.  Notwithstanding the preceding sentence, in the event the Plan Administrator is entitled to benefits under the Plan (or makes a claim for benefits under the Plan), the Board or its delegate shall act as the Plan Administrator for purposes of administering the terms of the Plan with respect to the Plan Administrator.  The Plan Administrator may delegate all or any portion of its authority under the Plan to any other person(s).
Qualifying Termination shall mean:
(i)    A Separation on account of involuntary dismissal or discharge initiated by the Company (or parent or subsidiary employing the Participant) without Cause, or 
(ii)    For a Participant who is a Senior Vice President of the Company or above, the Participant’s voluntary resignation following: (a) a material diminution in the Participant’s authority, duties or responsibilities, (b) a material reduction in the Participant’s base compensation (other than as part of a broad-based company reduction program prior to a Change in Control), (c) a material change in the geographic location at which the Participant must perform services for the Company or (d) any other action or inaction that constitutes a material breach by the Company (or parent or subsidiary employing the Participant) of a material term of the employment agreement or offer letter under which the Participant provides services (if any).  For a Participant to receive the benefits under this Plan as a result of a voluntary resignation under this paragraph (ii), all of the following requirements must be satisfied:  (1) the Participant must provide notice to the Company of his or her intent to assert a Qualifying Termination under this paragraph (ii) within 90 days of the initial existence of one or more of the conditions set forth in this paragraph (ii); (2) the Company (or parent or subsidiary employing the Participant) will have 30 days from the date of such notice to remedy the condition and, if it does so, the Participant may withdraw his or her resignation or may resign with no Plan benefits; and (3) any termination of employment under this paragraph (ii) must occur within 125 days after the initial existence of one or more of the condition(s).  Should the Company (or parent or subsidiary employing the Participant) remedy the condition as set forth in this paragraph (ii) and then one or more of the conditions arises again, the Participant may assert this paragraph (ii) again, subject to all of the conditions set forth herein.
For the avoidance of doubt, a Separation on account of death or disability shall not be treated as an involuntary dismissal or discharge.  In addition, Separation on account of a sale of assets, merger, liquidation, reorganization, transfer of business to a third party, disposition, or similar transaction will not be a Qualifying Termination, provided that the Participant is offered continued employment with a successor employer under terms that are materially comparable in the aggregate to the terms in effect immediately before such transaction. 
Qualifying CIC Termination shall mean a Qualifying Termination within three months before and 12 months after a Change in Control.
Separation shall mean a “separation from service” as defined in the regulations under Section 409A of the Code.  

13

Severance Period shall mean the severance period set forth in a Participant’s Participation Notice. 
2.    Rules of Construction
A.    The use of the masculine gender shall also include within its meaning the feminine and vice versa.
B.    The use of the singular shall also include within its meaning the plural and vice versa.
C.    The word “include” shall mean to include, but not to be limited to.
D.    Any reference to a stature or section of a statute shall further be a reference to any successor or amended statute or section, and any regulations or other guidance of general applicability issued thereunder.

14

ETSY, INC.
EXECUTIVE SEVERANCE PLAN
PARTICIPATION NOTICE
To: _______________________
Date: _____________________
You have been designated as eligible to participate in the Etsy, Inc. Executive Severance Plan (the “Plan”). A copy of the Plan document is attached to this Participation Notice. The terms and conditions of your participation in the Plan are as set forth in the Plan document and this Participation Notice. 
Severance Period:    _____ months if not a Qualifying CIC Termination
_____ months for Qualifying CIC Termination 
COBRA Period:     _____ months
Acceleration Factor:     _____%
Please return to the Company a copy of this Participation Notice signed by you and retain a copy of this Participation Notice, along with the Plan document and related materials, for your records. 
I acknowledge and agree that the Severance Plan and benefits provided thereunder pursuant to this Participation Notice supersede any and all prior separation, severance and salary continuation arrangements, programs and plans that were previously offered to me by the Company, either orally or in writing.
	
		
	

_______________________________
 
Signature
_______________________________
 
Print Name
	

_______________________________
 
Date

2

ETSY, INC.
EXECUTIVE SEVERANCE PLAN
SUPPLEMENT TO PARTICIPATIOIN NOTICE (UK)
[Name]
[Address]
[Date]
As noted in your Participation Notice, you have been designated as a participant of the Etsy, Inc. Executive Severance Plan (the “Plan”). This supplement sets forth clarifications and revisions that apply for employees located in the UK.  This supplement forms part of the terms and conditions of the Plan and therefore the terms set forth herein are contractually binding between you, Etsy UK Limited and Etsy, Inc.
The following clarifications and revisions apply for employees located in the UK: 
		
	•
	Entity - All references in the Plan to Etsy, Inc. shall also refer to Etsy UK Limited.

		
	•
	Coordination with Substantive Entitlements – Your rights under the Plan do not vary your substantive entitlements; provided, however, that any payment that you receive under your employment agreement (or otherwise) in lieu of notice (i.e., pay for any period after your separation from service) shall count toward your benefit under the Plan such that the payment you received under the calculations set out in the Plan will be reduced by any amounts you receive by way of payment in lieu of notice.  If you are entitled to payment in lieu of notice, such payment(s) shall be made first, followed by payments under the Plan for the remainder (if any) of your Severance Period.

		
	•
	Conditions to Receive Benefits – The Release (as defined within the Plan) that you will be required to enter into as a condition of you receiving benefits under the Plan will be an English law governed binding settlement agreement.  The Release will be intended to satisfy all statutory requirements for validly waiving claims under English law (such as, but not limited to, the requirement that you obtain advice from a legal representative).

		
	•
	Health Benefits – You are not eligible for the health benefits described in Section II of the Plan.  You will not be eligible for company-provided health benefits after your employment with Etsy UK Limited ends.

		
	•
	Tax – As noted in Section V.7 of the Plan, all sums paid to you under the Plan will be subject to applicable deductions and withholdings.  Such withholdings include legally required withholdings in respect of income tax and national insurance contributions at the applicable rates.

Please return to [INSERT] a copy of this supplement signed by you to evidence your agreement to its terms, and retain a copy of the supplement along with the other Plan documents and related materials for your records.

[Name]                            [Name]
On behalf of Etsy, Inc.                    On behalf of Etsy UK Limited

I acknowledge and agree to the points as set out in this Supplement to Participation Notice (UK) in relation to the Executive Severance Plan.
	
		
	

_______________________________
 
Signature
_______________________________
 
Print Name
	

_______________________________
 
Date

2Exhibit

EXHIBIT 10.3.1

ETSY, INC. 
2015 EQUITY INCENTIVE PLAN
NOTICE OF STOCK UNIT AWARD

You have been granted stock units representing shares of common stock of Etsy, Inc. (the "Company") on the following terms:
		
	Name of Recipient:
	Name

		
	Total Number of Stock Units Granted:
	TotalUnits

		
	Date of Grant:
	DateGrant

		
	Vesting Commencement Date:
	VestDay

		
	Vesting Schedule:
	TBD

These stock units are granted under and governed by the terms and conditions of the Company’s 2015 Equity Incentive Plan (the "Plan") and the Stock Unit Agreement, both of which are incorporated into this document.
You agree to accept by email all documents relating to the Plan or this award (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements).  You also agree that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. 
 You further agree to comply with the Company’s Insider Trading Policy.
BY ACKNOWLEDGING AND ACCEPTING THIS NOTICE, THE STOCK UNIT AGREEMENT AND THE PLAN, YOU AGREE TO THE
TERMS AND CONDITIONS DESCRIBED IN THESE DOCUMENTS 

    

ETSY, INC. 
2015 EQUITY INCENTIVE PLAN
STOCK UNIT AGREEMENT
	
		
	Grant of Units
	Subject to all of the terms and conditions set forth in the Notice of Stock Unit Award, this Stock Unit Agreement (the "Agreement") and the Plan, the Company has granted to you the number of stock units set forth in the Notice of Stock Unit Award.  
All capitalized terms used in this Agreement shall have the meanings assigned to them in this Agreement, the Notice of Stock Unit Award or the Plan.

	 
	 

	Payment for Units
	No payment is required for the stock units that you are receiving.

	 
	 

	Vesting
	The stock units vest in accordance with the vesting schedule set forth in the Notice of Stock Unit Award.  No additional stock units will vest after your Service has terminated for any reason.

	 
	 

	Forfeiture
	If your Service terminates for any reason, then your stock units will be forfeited to the extent that they have not vested before the termination date and do not vest as a result of the termination of your Service.  This means that any stock units that have not vested under this Agreement will be cancelled immediately.  You receive no payment for stock units that are forfeited.  The Company determines when your Service terminates for all purposes of your stock units.

	 
	 

	Leaves of Absence and Part-Time Work
	For purposes of this award, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by applicable law, the Company’s leave of absence policy, or the terms of your leave.  However, your Service terminates when the approved leave ends, unless you immediately return to active work.

	 
	 

	 
	If you go on a leave of absence, then the vesting schedule specified in the Notice of Stock Unit Award may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave.  If you commence working on a part-time basis, the Company may adjust the vesting schedule so that the rate of vesting is commensurate with your reduced work schedule.  

	
		
	Settlement of Units
	Each stock unit will be settled when it vests; provided, that in the event of a Change in Control in which Administrator determines to accelerate the vesting of the stock units upon the occurrence of such Change in Control in accordance with Section 9.3 of the Plan, then notwithstanding anything in Section 9.3 of the Plan to the contrary, your stock units will vest upon the occurrence of such Change in Control; provided, however, that if it is determined that the settlement of these stock units is not exempt from Code Section 409A, then these stock units will not be settled until the earliest of (i) the Change in Control, if such Change in Control constitutes a "change in control event" as defined in Treasury Regulation Section 1.409A-3(i)(5); (ii) the date these stock units would otherwise be settled pursuant to the terms of this Agreement, and (iii) your "separation of service" within the meaning of Section 409A of the Code.

At the time of settlement, you will receive one share of the Company’s common stock for each vested stock unit.  The Company, in its sole discretion, may substitute an equivalent amount of cash.  The amount of cash will be determined on the basis of the market value of the Company’s common stock at the time of settlement.

No fractional shares will be issued upon settlement.  

	 
	 

	Section 409A
	This paragraph applies only if the Company determines that you are a "specified employee," as defined in the regulations under Code Section 409A at the time of your "separation from service," as defined in Treasury Regulation Section 1.409A-1(h) and it is determined that settlement of these stock units is not exempt from Code Section 409A.  If this paragraph applies, and the event triggering settlement is your "separation from service," then any stock units that otherwise would have been settled during the first six months following your "separation from service" will instead be settled on the first business day following the earlier of (i) the six-month anniversary of your separation from service or (ii) your death. 

Each installment of stock units that vests is hereby designated as a separate payment for purposes of Code Section 409A.

	 
	 

	Nature of Units
	Your stock units are mere bookkeeping entries.  They represent only the Company’s unfunded and unsecured promise to issue shares of common stock (or distribute cash) on a future date.  As a holder of stock units, you have no rights other than the rights of a general creditor of the Company.

	 
	 

	No Voting Rights or Dividends
	Your stock units carry neither voting rights nor rights to cash dividends.  You have no rights as a stockholder of the Company unless and until your stock units are settled by issuing shares of the Company’s common stock.

	 
	 

	Units Nontransferable
	You may not sell, transfer, assign, pledge or otherwise dispose of any stock units.  For instance, you may not use your stock units as security for a loan.

	 
	 

	Beneficiary Designation
	You may dispose of your stock units in a written beneficiary designation.  A beneficiary designation must be filed with the Company on the proper form and must have been received before your death.  If you file no beneficiary designation or if none of your designated beneficiaries survives you, then your estate will receive any vested stock units that you hold at the time of your death.

	 
	 

	
		
	Withholding Taxes
	No stock certificates (or their electronic equivalent) or cash will be distributed to you unless you have paid any withholding taxes that are due as a result of the vesting or settlement of stock units.  Withholding taxes will be paid (a) by the Company withholding shares of Company stock from those that otherwise would be issued to you when the stock units are settled, (b) if permitted by the Company, by the Company withholding cash from cash compensation otherwise payable to you or (c) if required at the Company’s discretion (or with the Company’s permission, at your election), by paying cash to the Company or by payment from the proceeds of the sale of shares through a Company-approved broker.

	 
	 

	Restrictions on Resale
	You agree not to sell any shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale.  This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.

	 
	 

	Retention Rights
	Your award or this Agreement does not give you the right to be retained by the Company, a Parent, Subsidiary, or an Affiliate in any capacity.  The Company and its Parents, Subsidiaries, and Affiliates reserve the right to terminate your Service at any time, with or without cause.

	 
	 

	Adjustments
	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of your stock units will be adjusted accordingly, as the Company may determine pursuant to the Plan.

	 
	 

	Effect of Significant Corporate Transactions
	If the Company is a party to a merger, consolidation, or certain change in control transactions, then your stock units will be subject to the applicable provisions of Article 9 of the Plan, provided that any action taken must either (a) preserve the exemption of your stock units from Code Section 409A or (b) comply with Code Section 409A.  

	 
	 

	Recoupment Policy
	This award, and the shares acquired upon settlement of this award, shall be subject to any Company recoupment or clawback policy in effect from time to time.

	 
	 

	Applicable Law
	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to its choice-of-law provisions).

	 
	 

	The Plan and Other Agreements
	The text of the Plan is incorporated in this Agreement by reference.  
The Plan, this Agreement and the Notice of Stock Unit Award constitute the entire understanding between you and the Company regarding this award.  Any prior agreements, commitments or negotiations concerning this award are superseded.  This Agreement may be amended only by another written agreement between the parties.

By Acknowledging and Accepting this Agreement, you agree to all of the
terms and conditions described above and in the Plan.

    

ETSY, INC. 
2015 EQUITY INCENTIVE PLAN
NOTICE OF STOCK OPTION GRANT
You have been granted the following option to purchase shares of the common stock of Etsy, Inc. (the "Company"):
	
		
	Name of Optionee:
	Name

	Total Number of Shares:
	TotalShares

	Type of Option:
	ISO Incentive Stock Option
NSO Nonstatutory Stock Option

	Exercise Price per Share:
	$PricePerShare

	Date of Grant:
	DateGrant

	Vesting Commencement Date:
	VestDay

	Vesting Schedule:
	[TBD]

	Expiration Date:
	ExpDate This option expires earlier if your Service terminates earlier, as described in the Stock Option Agreement, and may terminate earlier in connection with certain corporate transactions as described in Article 9 of the Plan.

You and the Company agree that this option is granted under and governed by the terms and conditions of the Company’s 2015 Equity Incentive Plan (the "Plan") and the Stock Option Agreement, both of which are made a part of this document.

You further agree to accept by email all documents relating to the Plan or this option (including, without limitation, prospectuses required by the Securities and Exchange Commission) and all other documents that the Company is required to deliver to its security holders (including, without limitation, annual reports and proxy statements).  You also agree that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company.  If the Company posts these documents on a website, it will notify you by email.  
You further agree to comply with the Company’s Insider Trading Policy when selling shares of the Company’s common stock.
BY ACKNOWLEDGING AND ACCEPTING THIS NOTICE, THE STOCK OPTION AGREEMENT AND THE PLAN, YOU AGREE TO THE
TERMS AND CONDITIONS DESCRIBED IN THESE DOCUMENTS

ETSY, INC. 
2015 EQUITY INCENTIVE PLAN
STOCK OPTION AGREEMENT
	
		
	Grant of Option
	Subject to all of the terms and conditions set forth in the Notice of Stock Option Grant, this Stock Option Agreement (the "Agreement") and the Plan, the Company has granted you an option to purchase up to the total number of shares specified in the Notice of Stock Option Grant at the exercise price indicated in the Notice of Stock Option Grant.  

All capitalized terms used in this Agreement shall have the meanings assigned to them in this Agreement, the Notice of Stock Option Grant or the Plan.

For all purposes applicable to this option, "Service" means your continuous service as an Employee.

	 
	 

	Tax Treatment
	This option is intended to be an incentive stock option under Section 422 of the Code or a nonstatutory stock option, as provided in the Notice of Stock Option Grant.  However, even if this option is designated as an incentive stock option in the Notice of Stock Option Grant, it shall be deemed to be a nonstatutory stock option to the extent it does not qualify as an incentive stock option under federal tax law, including under the $100,000 annual limitation under Section 422(d) of the Code.

	 
	 

	Vesting
	This option vests and becomes exercisable in accordance with the vesting schedule set forth in the Notice of Stock Option Grant.  
In no event will this option vest or become exercisable for additional shares after your Service has terminated for any reason.

	 
	 

	Term
	This option expires in any event at the close of business at Company headquarters on the day before the 10th anniversary of the Date of Grant, as shown in the Notice of Stock Option Grant.  (This option will expire earlier if your Service terminates, as described below, and this option may be terminated earlier as provided in Article 9 of the Plan.)

	 
	 

	Termination of Service
	If your Service terminates for any reason, this option will expire immediately to the extent the option is unvested as of your termination date and does not vest as a result of your termination of Service. The Company determines when your Service terminates for all purposes of this option.

	 
	 

	Regular Termination
	If your Service terminates for any reason except death or total and permanent disability, then this option, to the extent vested as of your termination date, will expire at the close of business at Company headquarters on the date three months after your termination date.  

	 
	 

	Death
	If you die before your Service terminates, then this option will expire at the close of business at Company headquarters on the date 12 months after the date of death.

	 
	 

	
		
	Disability
	If your Service terminates because of your total and permanent disability, then this option will expire at the close of business at Company headquarters on the date 12 months after your termination date.

For all purposes under this Agreement, "total and permanent disability" means that you are unable 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 which has lasted, or can be expected to last, for a continuous period of not less than one year.

	 
	 

	Leaves of Absence and Part-Time Work
	For purposes of this option, your Service does not terminate when you go on a military leave, a sick leave or another bona fide leave of absence, if the leave was approved by the Company in writing and if continued crediting of Service is required by applicable law, the Company’s leave of absence policy, or the terms of your leave.  However, your Service terminates when the approved leave ends, unless you immediately return to active work.
If you go on a leave of absence, then the vesting schedule specified in the Notice of Stock Option Grant may be adjusted in accordance with the Company’s leave of absence policy or the terms of your leave.  If you commence working on a part-time basis, the Company may adjust the vesting schedule so that the rate of vesting is commensurate with your reduced work schedule.

	 
	 

	Notice Concerning Incentive Stock Option Treatment
	Even if this option is designated as an incentive stock option in the Notice of Stock Option Grant, it ceases to qualify for favorable tax treatment as an incentive stock option to the extent that it is exercised: (a) more than three months after the date when you cease to be an Employee for any reason other than death or permanent and total disability (as defined in Section 22(e)(3) of the Code), (b) more than 12 months after the date when you cease to be an Employee by reason of permanent and total disability (as defined in Section 22(e)(3) of the Code) or (c) more than three months after the date when you have been on a leave of absence for three months, unless your reemployment rights following such leave were guaranteed by statute or by contract.

	 
	 

	Restrictions on Exercise
	The Company will not permit you to exercise this option if the issuance of shares at that time would violate any law or regulation.

	 
	 

	Notice of Exercise
	When you wish to exercise this option, you must notify the Company by filing the proper "Notice of Exercise" form at the address given on the form or, if the Company has designated a brokerage firm to administer the Plan, you must notify such brokerage firm in the manner such brokerage firm requires.  Your notice must specify how many shares you wish to purchase.  The notice will be effective when the Company receives it.

However, if you wish to exercise this option by executing a same-day sale (as described below), you must follow the instructions of the Company and the broker who will execute the sale.

If someone else wants to exercise this option after your death, that person must prove to the Company’s satisfaction that he or she is entitled to do so.

You may only exercise your option for whole shares.

	
		
	Form of Payment
	When you submit your notice of exercise, you must include payment of the option exercise price for the shares that you are purchasing.  To the extent permitted by applicable law, payment may be made in one (or a combination of two or more) of the following forms:

By delivering to the Company your personal check, a cashier’s check or a money order, or arranging for a wire transfer.

By delivering to the Company certificates for shares of Company stock that you own, along with any forms needed to effect a transfer of those shares to the Company.  The value of the shares, determined as of the effective date of the option exercise, will be applied to the option exercise price.  Instead of surrendering shares of Company stock, you may attest to the ownership of those shares on a form provided by the Company and have the same number of shares subtracted from the option shares issued to you.

By giving to a securities broker approved by the Company irrevocable directions to sell all or part of your option shares and to deliver to the Company, from the sale proceeds, an amount sufficient to pay the option exercise price and any withholding taxes.  (The balance of the sale proceeds, if any, will be delivered to you.)  The directions must be given in accordance with the instructions of the Company and the broker.  This exercise method is sometimes called a "same-day sale."

	 
	 

	Withholding Taxes
	You will not be allowed to exercise this option unless you make arrangements acceptable to the Company to pay any withholding taxes that may be due as a result of the option exercise.  These arrangements include payment in cash. With the Company’s consent, these arrangements may also include (a) payment from the proceeds of the sale of shares through a Company-approved broker, (b) withholding shares of Company stock that otherwise would be issued to you when you exercise this option with a fair market value no greater than the minimum amount required to be withheld by law, (c) surrendering shares that you previously acquired with a fair market value no greater than the minimum amount required to be withheld by law, or (d) withholding cash from other compensation.  The fair market value of withheld or surrendered shares, determined as of the date when taxes otherwise would have been withheld in cash, will be applied to the withholding taxes.

	 
	 

	Restrictions on Resale
	You agree not to sell any option shares at a time when applicable laws, Company policies or an agreement between the Company and its underwriters prohibit a sale.  This restriction will apply as long as your Service continues and for such period of time after the termination of your Service as the Company may specify.

	 
	 

	
		
	Transfer of Option
	Prior to your death, only you may exercise this option.  You cannot transfer or assign this option.  For instance, you may not sell this option or use it as security for a loan.  If you attempt to do any of these things, this option will immediately become invalid.  You may, however, dispose of this option in your will or by means of a written beneficiary designation; provided, however, that your beneficiary or a representative of your estate acknowledges and agrees in writing in a form reasonably acceptable to the Company, to be bound by the provisions of this Agreement and the Plan as if such beneficiary of the estate were you.
Regardless of any marital property settlement agreement, the Company is not obligated to honor a notice of exercise from your former spouse, nor is the Company obligated to recognize your former spouse’s interest in your option in any other way.

	 
	 

	Retention Rights
	Your option or this Agreement does not give you the right to be retained by the Company, a Parent, Subsidiary, or an Affiliate in any capacity.  The Company and its Parents, Subsidiaries, and Affiliates reserve the right to terminate your Service at any time, with or without cause.

	 
	 

	Stockholder Rights
	You, or your estate or heirs, have no rights as a stockholder of the Company until you have exercised this option by giving the required notice to the Company, paying the exercise price, and satisfying any applicable withholding taxes.  No adjustments are made for dividends or other rights if the applicable record date occurs before you exercise this option, except as described in the Plan.

	 
	 

	Recoupment Policy
	This option, and the shares acquired upon exercise of this option, shall be subject to any Company recoupment policy in effect from time to time.

	 
	 

	Adjustments
	In the event of a stock split, a stock dividend or a similar change in Company stock, the number of shares covered by this option and the exercise price per share will be adjusted pursuant to the Plan.

	 
	 

	Effect of Significant Corporate Transactions
	If the Company is a party to a merger, consolidation, or certain change in control transactions, then this option will be subject to the applicable provisions of Article 9 of the Plan.

	 
	 

	Applicable Law
	This Agreement will be interpreted and enforced under the laws of the State of Delaware (without regard to its choice-of-law provisions).

	 
	 

	The Plan and Other Agreements
	The text of the Plan is incorporated in this Agreement by reference.  Notwithstanding anything to in Sections 5.6 or 5.7 of the Plan to the contrary, the option may not be (i) modified to reduce the exercise price thereof (other than adjustments in accordance with the Plan), (ii) substituted or exchanged for a new option with a lower exercise price (other than substitutions in accordance with the Plan) or (iii) repurchased or surrendered for the payment of cash when the exercise price per share of Common Stock subject to the option exceeds the Fair Market Value of a share of Common Stock, in each case, unless such action is approved by the stockholders of the Company.
This Plan, this Agreement and the Notice of Stock Option Grant constitute the entire understanding between you and the Company regarding this option.  Any prior agreements, commitments or negotiations concerning this option are superseded.  This Agreement may be amended only by another written agreement between the parties.

BY ACKNOWLEDGING AND ACCEPTING THIS AGREEMENT, YOU AGREE TO ALL OF THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.

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