Document:

License agreement, settlement and mutual release dated April 1, 2002

 EXHIBIT 10.15 
  
 LICENSE AGREEMENT, SETTLEMENT, AND MUTUAL RELEASE 
  
 This License Agreement, Settlement, and Mutual Release (hereinafter “Agreement”) is made and entered into,
effective as of April l, 2002 (“Effective Date”), by AlphaSmart, Inc., a corporation organized under the laws of the State of California, and Douglas J. Kelly (“Kelly”), an individual and named inventor of [*]. AlphaSmart
and Kelly are collectively referred to herein as the “Settling Parties” and each individually as a “Settling Party.” 
  
 RECITALS 
  
 WHEREAS, the Settling Parties previously entered into an Assignment and Royalty Agreement dated July 27, 1995 and an Amendment to Assignment and
Royalty Agreement dated December 15, 1998, pursuant to which AlphaSmart became assignee of [*]; 
  
 WHEREAS, [*] (“Kelly Patent”); 
  
 WHEREAS, the Settling Parties now wish to enter into this Agreement, in full satisfaction and accord of the Assignment and Royalty Agreement dated
July 27, 1995 and Amendment to Assignment and Royalty Agreement dated December 15, 1998, and thereby resolve any and all disputes arising from the Assignment and Royalty Agreement and Amendment to Assignment and Royalty Agreement amicably, without
the necessity of legal action, and without admission of any liability or wrongdoing by any Settling Party. 
  
 NOW, THEREFORE, in consideration of the foregoing and the mutual covenants recited below, the Settling Parties hereby agree as follows: 

 
 AGREEMENT 
  
 1.    Assignment.    As of the
Effective Date, AlphaSmart hereby reassigns the Kelly Patent back to Kelly. AlphaSmart and Kelly will execute any documents reasonably necessary to effect this reassignment. 
  
 2.    License to AlphaSmart.    As of the Effective Date, Kelly hereby grants
to AlphaSmart a non-exclusive and worldwide license under the Kelly Patent, including all related patents and patent applications, reexaminations, reissues, continuations, continuations-in-part, foreign counterparts, corresponding foreign patent
applications, and any other patent or application, U.S. and foreign, that claims priority in whole or in part to the Kelly Patent. This License includes the rights to make, have made, use, sell, have sold, import, and have imported any product
covered thereunder or made by a process covered thereunder, and is irrevocable provided all payments are made to Kelly by AlphaSmart in accordance with the terms of this Agreement. 
  
 3.    Term of License.    The License to AlphaSmart shall be in full force
and effect for a period commencing on the Effective Date of this Agreement and concluding as of [*] (the “License Term”). 
  
 4.    No Marking Requirement.    This Agreement imposes no obligation upon AlphaSmart to mark any of its
products with any patent number or other identifying indicia or notices. 
  

 * This provision is the subject of a Confidential Treatment Request. 
  

 5.    Payment to Kelly.    In full consideration of the
promises and mutual covenants contained herein, AlphaSmart agrees to provide Kelly with [*] options in AlphaSmart, Inc. stock, exercisable at any time at [*] per share (pursuant to a separate Stock Option Agreement
attached hereto as Exhibit ”A” and executed contemporaneously), and to pay a total of [*], subject to the requirements of Paragraphs 6 and 7, in the following manner: 
  

	 	5.1	 	Upon execution of this Agreement, AlphaSmart will pay Kelly [*]. 

  

	 	5.2	 	During the year ending [*], AlphaSmart will pay Kelly a total of [*]. 

  

	 	5.3	 	During the year ending [*], AlphaSmart will pay Kelly a total of [*]. 

  

	 	5.4	 	During the year ending [*], A1phaSmart will pay Kelly a total of [*]. 

  

	 	5.5	 	During the year ending [*], AlphaSmart will pay Kelly a total of [*]. 

  

	 	5.6	 	During the year ending [*], AlphaSmart will pay Kelly a total of [*]. 

  

	 	5.7	 	During the year ending [*], AlphaSmart will pay Kelly a total of [*]. 

  
 5.8 Payments made pursuant to Paragraph 5 shall be accorded a reasonable grace period of [*] days] from the end of
each [*] to allow for mail or transit time. 
  
 6.    Most Favored Nations.    Because the License to AlphaSmart under this Agreement is non-exclusive, Kelly retains the right to license the Kelly Patent after the Effective Date to any third
party on any terms without prior approval or consent front AlphaSmart, including as part of any settlement of any future litigation involving the Kelly Patent. However, in the event that Kelly chooses to license the Kelly Patent to a third party for
less than [*], then Kelly shall promptly give notice to AlphaSmart in accordance with Paragraph 17, and AlphaSmart’s remaining payment obligations as of the effective date of such third party license shall be reduced by [*] that
such rate falls short of [*], such that for example, if the third party license rate is [*], then as of the effective date of that third party license, AlphaSmart’s remaining payment obligations shall be reduced by [*].

  
 7.    Validity or Enforceability of
Kelly Patent. 
  
 7.1    Litigation or
Arbitration Proceedings.    In the event all of the independent claims of the Kelly Patent that cover AlphaSmart’s products are found invalid or unenforceable in any future, final, appealable determination as a result of
litigation or arbitration, AlphaSmart’s obligations for payments set forth in Paragraph 5 shall cease immediately upon such finding by any tribunal with authority to make such a determination, and shall not resume unless and until such finding
is reversed or vacated in a decision from which no appeal can be taken. Kelly shall promptly provide notice to AlphaSmart in accordance with Paragraph 17 of any such future, final, appealable determination. 
  
 7.2    Patent Office
Proceedings.    Should the Kelly Patent become subject to any re-examination or reissue proceeding, the payments under the schedule set forth in Paragraph 5 shall cease immediately upon the issuance of a final Office Action
from the U.S. Patent and Trademark Office (“Patent 
  

 * This provision is the subject of a Confidential Treatment Request. 
  

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 Office”) rejecting as unpatentable all of the independent claims of the Kelly Patent that cover AlphaSmart’s
products, and shall not resume unless and until such final rejection is reversed or vacated and the Patent Office formally issues or affirms issuance of the Kelly Patent. Kelly shall promptly provide notice to AlphaSmart in accordance with Paragraph
17 of any such final rejection. 
  
 7.3    Resumption of Payments.    The events described in Paragraphs 7.1 and 7.2 shall cause suspension of the payments set forth in Paragraph 5 by AlphaSmart to Kelly, but do not terminate or
suspend any rights or licenses provided to either party under this Agreement. Once any finding of invalidity or unenforceability has been reversed or vacated in a decision from which no appeal can be taken (per Paragraph 7.1), or the Patent Office
reverses or vacates a final rejection in a re-examination or reissue proceeding and formally issues or affirms issuance of the Kelly patent (per Paragraph 7.2), the payments to Kelly under Paragraph 5 shall resume (albeit delayed by the period of
suspension) until the total amount set forth in Paragraph 5 has been paid, subject to the requirements of Paragraph 6. 
  
 7.4    No Duty To Enforce.    As of the Effective Date of this Agreement, Kelly has no affirmative duty to
enforce the Kelly Patent against any third party. 
  
 8.    Mutual Releases. 
  
 8.1    Releases by Kelly.    Except for the obligations created by this Agreement, Kelly hereby forever releases and discharges AlphaSmart from any and all claims, demands, debts, liabilities,
accounts, obligations, costs, expenses, liens, actions, rights, attorney fees, and claims for relief and claims of action of every kind and nature, whether known or unknown, fixed or contingent, suspected or unsuspected, foreseen or unforeseen, that
he now owns or holds, related to any matter, cause, fact, thing, act or omission whatsoever occurring prior to the Effective Date, including, without limitation, all claims and causes of action related to or in any way concerning or arising out of
the Assignment and Royalty Agreement and Amendment to Assignment and Royalty Agreement. 
  
 8.2    Releases by AlphaSmart.    Except for the obligations created by this Settlement Agreement, AlphaSmart hereby forever releases and discharges Kelly from any and
all claims, demands, debts, liabilities, accounts, obligations, costs, expenses, liens, actions, rights, attorney fees, and claims for relief and causes of action of every kind and nature, whether known or unknown, fixed or contingent, suspected or
unsuspected, foreseen or unforeseen, that it now owns or holds, related to any matter, cause, fact, thing, act or omission whatsoever occurring prior to the Effective Date, including, without limitation, all claims and causes of action related to or
in any way concerning or arising out of the Assignment and Royalty Agreement and Amendment to Assignment and Royalty Agreement. 
  
 8.3    Waiver of California Civil Code Section 1542.    Each of the Settling Parties acknowledges that they
are familiar with Section 1542 of the Civil Code of the State of California, which provides as follows: 
  
 A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. 
  
 Section 1542 of the California Civil Code and any similar statute of any other state or territory are hereby expressly waived with respect to the releases stated in this Settlement Agreement. Each of the Settling Parties acknowledges that
it or its attorneys may hereafter discover facts different from or in addition to those which it or its attorneys now know or believe to be true with respect to the claims, demands, liabilities, accounts, 
  

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 reckonings, obligations, costs, expenses, liens, actions, claims, and causes of action released in this Settlement
Agreement, and each of the Settling Parties agrees that the Settlement Agreement shall be and remain in effect as a full and complete release notwithstanding the discovery or existence of any such different or additional facts. 
  
 9.    Successors and
Assigns.    This Agreement shall be binding upon each of the Settling Parties and each of the Settling Parties’ respective agents, representatives, successors, heirs, and assigns. Kelly may assign his rights and
obligations under this Agreement only in connection with an assignment of all rights to the Kelly Patent. AlphaSmart may assign its rights and obligations under this Agreement in connection with a sale of either (a) all or substantially all of the
assets of AlphaSmart, or (b) a controlling interest in AlphaSmart. Any assignment not falling within the express rights to assign set forth herein shall be subject to the prior written consent of the other party to this Agreement, which consent
shall not be unreasonably withheld. Whether expressly authorized or subject to consent, any assignment of the rights and obligations under this Agreement shall require written notice to the other party. 
  
 10.    Governing Law.    This
Agreement shall be construed and enforced in accordance with the laws of the State of California and federal law where applicable. If any dispute arises out of or relating to this Agreement or the Stock Option Agreement, or the breach of either
agreement, the Settling Parties agree first to try in good faith to resolve the dispute through negotiation, which may be conducted with or without a mediator by agreement of the Settling Parties. If the dispute is not resolved by such negotiation
or mediation, either party may initiate arbitration under the Streamlined Arbitration Rules and Procedures of JAMS by providing written notice to the other party in accordance with Paragraph 17. The Settling Parties agree that any such arbitration
shall proceed in Northern California and waive their rights to proceed in any other forum or jurisdiction. 
  
 11.    Entire Agreement.    This Agreement constitutes the complete and exclusive statement of the
agreement between the Settling Parties, the terms and conditions of which supersede and merge all prior proposals, understandings and all other agreements, oral and written, between the Settling Parties relating to the subject of this Agreement.

  
 12.    Waiver and
Modification.    No modification of any of the terms of this Agreement will be valid unless in writing and signed by each affected Settling Party. No waiver by any Settling Party of a breach of this Agreement will be deemed a
waiver by such Settling Party of any subsequent breach. 
  
 13.    Severability.    If any provision of this Agreement is judicially determined to be invalid, illegal, or otherwise unenforceable in whole or in part, that provision will be deemed severed
from the remainder of this Agreement, and shall in no way affect, impair or invalidate the force and effect of any other provision of this Agreement. If any provision is deemed invalid due to its scope or breadth, the provision shall be deemed valid
to the extent of the scope or breadth permitted by law. 
  
 14.    Authority and Warrants. 
  
 14.1    Each Settling Party has the right to enter into this Settlement Agreement. Also, each Settling Party represents and warrants that the individual signing below is authorized to execute this Agreement and the
related Stock Option Agreement on behalf of that Settling Party and has the power to bind that Settling Party. 
  
 14.2    Each Settling Party warrants that it has the right to grant the licenses and to convey the rights provided in this Agreement,
and that it has not and will not enter into any contract or arrangement with any third party that is in conflict with, inconsistent with, or in derogation of the terms of this Agreement. 
  

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 14.3 The Settling Parties represent and warrant that neither party has actual knowledge or notice of any
pending or future challenge to the Kelly Patent. 
  
 15.    Rule of Construction.    This Agreement shall be deemed to have been drafted by all of the Settling Parties and, therefore, no rule of construction shall be applied against any of the
Settling Parties as the drafter. This Agreement shall be interpreted and effected as a whole such that one provision will not be construed to negate or override any other provision, subject to the requirements of Paragraph 13. 
  
 16.    Consultation with
Counsel.    Each of the Selling Parties acknowledges that it has had the full opportunity to consult with counsel regarding this Settlement Agreement. In executing the Settlement Agreement, each of the Selling Parties
declares that it has read this Settlement Agreement and, as a result, knows and understands its contents, and comprehends and agrees to all of its term and conditions. 
  
 17.    Notices.    Any written notice or communication herein to be given or
sent by either party to the other shall be deemed to have been duly given or sent for the purposes hereof when delivered in person or by overnight courier addressed to the party to receive the same at its address set forth below, or such new address
that may be given by notice hereunder: 
  

	 	 	 For Kelly:
	 	For AlphaSmart:
			
	 	 	 Douglas J. Kelly
	 	Jim Walker
	 	 	 12854 Mackenzie Drive
	 	Chief Financial Officer
	 	 	 Tustin, California 92782-0923
	 	AlphaSmart, Inc.
	 	 	 	 	973 University Avenue
	 	 	 	 	Los Gatos, California 95032
			
	 	 	 With a copy to:
	 	With a copy to:
			
	 	 	 Michael D. Stewart, Esq.
	 	Stephen J. Rosenman, Esq.
	 	 	 Sheppard, Mullin, Richter & Hampton LLP
	 	Brobeck, Phleger & Harrison LLP
	 	 	 650 Town Center Drive, Fourth Floor
	 	2000 University Avenue
	 	 	 Costa Mesa, California 92626
	 	East Palo Alto, California 94303

  
 18.    Confidentiality.    The Settling Parties agree that the terms and contents of this Agreement shall be kept confidential, except as provided herein. Neither of the Settling Parties shall
disclose this Agreement or its terms or contents, or permit such information to be disclosed, to any third party (other than each party’s respective accountants, insurers, or attorneys with a need to know) except as required by law or court
order or unless consented to by the other party in writing prior to disclosure to any third party. This Paragraph does not, however, prohibit any Settling Party from disclosing the fact that a license under the Kelly Patent exists, including the
Most Favored Nations royalty factor of [*], but all other terms shall otherwise remain confidential. In the event a disclosure is required by law or court order, the disclosing party shall give notice to the other party as such
in accordance with Paragraph 17. 
  
 19.    Counterparts.    This Agreement may be executed in counterparts and by facsimile signature, which taken together shall constitute a single document. 
  

 * This provision is the subject
of a Confidential Treatment Request. 
  

 5 

 20.    Titles.    Heading titles in this Agreement are for
convenience only and should not be used to interpret this Agreement. 
  
 IN WITNESS WHEREOF, the Settling Parties have executed this Agreement by their respective duly authorized representatives. 
  

	 DOUGLAS J. KELLY
	 	 	 	 ALPHASMART, INC.

					
	By:	  	 /S/    DOUGLAS J.
KELLY              

	 	 	 	 By:
	  	 /s/    JAMES M.
WALKER          

	 Dated:
	  	 7/8/02

	 	 	 	Dated:	  	 7/8/02

  

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 EXHIBIT A 
  

ALPHASMART, INC. 
 COMMON STOCK
OPTION AGREEMENT 
  
 THIS COMMON STOCK OPTION AGREEMENT
(“Stock Option Agreement”) is made as of April l, 2002 (“Effective Date”), by and between AlphaSmart, Inc., a California corporation (“AlphaSmart”), and Douglas J. Kelly, a California resident (“Kelly”).

  
 RECITALS 
  
 A.    Pursuant to Paragraph 5 of the License Agreement,
AlphaSmart agreed to grant Kelly options to purchase shares of Common Stock. 
  
 B.    The options granted under this Stock Option Agreement and the shares issuable upon exercise of such options shall not be issued under the AlphaSmart, Inc. 1998 Stock Option Plan or any other
stock or option plan maintained by AlphaSmart. 
  
 C.    Unless otherwise defined herein, all capitalized terms in this Stock Option Agreement shall have the meaning assigned to them in the attached Appendix. 
  
 NOW, THEREFORE, it is hereby agreed as follows: 
  
 1.    Grant of Option.    AlphaSmart hereby grants to Kelly, as of the
Grant Date, an option to purchase up to [*] shares of Common Stock at a price per share of [*] (the “Option Shares”), which shall be purchasable by Kelly from time to time during the option term specified in
Paragraph 2 below. 
  
 2.    Option
Term.    This option shall have a term of [*] years measured from the Grant Date and shall accordingly expire at the close of business on the Expiration Date, unless sooner terminated in accordance with Paragraph 5
below. 
  
 3.    No
Transferability.    This option shall be neither transferable nor assignable by Kelly. 
  
 4.    Dates of Exercise.    Effective as of the Grant Date, this option shall be fully vested and
all of the Option Shares shall be immediately exercisable. 
  
 5.    Termination of the Option. 
  
 (a)    In the event of a Corporate Transaction, at least [*] days prior to the closing of such Corporate Transaction, AlphaSmart shall give Kelly written notice of (i) the
pending consummation and the anticipated date of the closing of such Transaction, and (ii) whether this option shall be terminated or assumed in connection with such Corporate Transaction. If upon receipt of such notice Kelly elects not to exercise
this option, he shall expressly and timely notify AlphaSmart of such election not to exercise in accordance with 
  

 * This provision is the subject of a Confidential Treatment Request. 

 Section 14 below at least [*] prior to the anticipated date of the closing of such Corporate
Transaction as specified in the notice and this option shall terminate and cease to be outstanding immediately upon the closing of such Corporate Transaction, except to the extent assumed by the successor corporation (or parent thereof) in
connection with the Corporate Transaction. If Kelly expressly elects to exercise this option, this option shall be exercised in accordance with Section 8 below. If, upon receipt of such notice from AlphaSmart, Kelly does not expressly and timely
notify AlphaSmart one way or the other, Kelly shall be deemed to have elected to exercise this option in accordance with Section 8(b) below (a “Deemed Exercise”). 
  
 (b)    If this option is assumed in connection with a Corporate Transaction, then this option shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply to the number and class of securities which would have been issuable to Kelly in consummation of such Corporate Transaction had the option been exercised immediately
prior to such Corporate Transaction, and appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same. 
  
 (c)    This Stock Option Agreement shall not in any way affect the right of AlphaSmart to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 
  
 6.    Adjustment in Option Shares.    Should any change be made to the
Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares or other change affecting either the outstanding Common Stock or outstanding Common Stock, as a class, without AlphaSmart’s
receipt of consideration, appropriate adjustments shall be made to (i) the total number and/or class of securities subject to this option and (ii) the Exercise Price in order to reflect such change and thereby preclude a dilution or enlargement of
benefits hereunder. 
  
 7.    Stockholder Rights.    Kelly shall not have any stockholder rights with respect to the Option Shares until Kelly shall have exercised the option, paid the Exercise Price (or
exercised pursuant to Section 8(b) below) and become the record holder of the purchased shares. 
  
 8.    Manner of Exercising Options. 
  
 (a)    In order to exercise this option with respect to all or any part of the Option Shares, Kelly (or
any other person or persons exercising the option) must take the following actions: 
  
 (i)    Execute and deliver to AlphaSmart a Restricted Stock Purchase Agreement for the Option Shares, for which the option is exercised; provided, however, that in the event of a Deemed Exercise,
Section 8(b)(ii) below shall apply. 
  
 (ii)    Pay the aggregate Exercise Price for the purchased shares by cash or check made payable to AlphaSmart or exercise in accordance with Section 8(b) below. Except in the event of exercise in accordance with Section
8(b) below, payment of the Exercise Price must accompany the Restricted Stock Purchase Agreement delivered to AlphaSmart in connection with the option exercise. 
  
 (iii)    Furnish to AlphaSmart appropriate documentation that the person or persons exercising the
option (if other than Kelly) have the right to exercise this option. 
  

 * This provision is the subject of a Confidential Treatment Request. 
  

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 (iv)    Execute and deliver to AlphaSmart such written representations as may be
requested by AlphaSmart in order for it to comply with the applicable requirements of Federal and state securities laws. 
  
 (v)    Make appropriate arrangements with AlphaSmart (or Parent or Subsidiary) for the satisfaction of all applicable Federal, state
and local income tax withholding requirements applicable to the option exercise. 
  
 (b)    At his election, Kelly may also exercise this option in the manner described in this Section 8(b); provided, however, that in the event of a Deemed Exercise, the following will automatically
apply to any such Deemed Exercise: 
  
 (i)    In the event of a Deemed Exercise (in which case no delivery of notice by Kelly is required hereunder) or in lieu of exercising this option in the manner otherwise provided above in Section 8(a) above, Kelly may,
by delivery at the principal office of AlphaSmart of a notice of exercise stating such election, elect to receive, without the payment by Kelly of any additional consideration, a number of shares computed using the following formula: 
  

	 	 	 	 	X=	 	 Y(A–B)

 A
	 	 	 	 

  

	 	 	 Where:
	 	X = The number of shares to be issued to Kelly.	 	 
				
	 	 	 	 	Y = The number of shares in respect of which the net exercise election is made (as of the date such notice is delivered).	 	 
				
	 	 	 	 	A = The fair market value of one share (as of the date such notice is delivered, or in the case of a Deemed Exercise, one day prior to the anticipated closing date of the
Corporate Transaction as specified by AlphaSmart in its notice to Kelly regarding the Corporate Transaction).	 	 
				
	 	 	 	 	B = The Exercise Price (as adjusted to the date such notice is delivered or the date of the Deemed Exercise).	 	 

  
 For purposes of this Section 8(b), the
fair market value of a share shall be determined as follows: (x) if traded on a securities exchange or through the Nasdaq National Market, the value shall be deemed to be the average of the closing prices of the securities on such exchange over the
[*] day period ending [*] days prior to the net exercise election; (y) if traded over-the-counter, the value shall be deemed to be the average of the closing bid or sale prices (whichever is applicable) over the [*]
period ending [*] prior to the net exercise; and (z) if there is no active public market, the fair market value shall be the price per share which (A) AlphaSmart could obtain from a willing buyer for AlphaSmart’s common stock, sold
by AlphaSmart from authorized but unissued shares, as (B) such price shall be determined in good faith by the Board to be the fair market value to AlphaSmart of such shares; provided, that, if the option is being exercised upon the closing of an
initial public offering, the value will be the initial “Price to Public” of one share of the stock offered as specified in the final prospectus with respect to such offering. 
  

 * This provision is the subject of a Confidential Treatment Request.

  

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 (ii)    Kelly agrees that in the event of a Deemed Exercise, Kelly shall
automatically be bound by all of the terms and conditions of the Restricted Stock Purchase Agreement. At the request of AlphaSmart or its representatives, Kelly shall promptly take any and all actions necessary to evidence the intent of the
foregoing, including, without limitation, execution of the Restricted Stock Purchase Agreement. 
  
 (c)    As soon as practical after the Exercise Date, AlphaSmart shall issue to or on behalf of Kelly (or any other person or persons
exercising this option) a certificate for the purchased Option Shares, with the appropriate legends affixed thereto. 
  
 (d)    In no event may this option be exercised for any fractional shares. 
  
 9.    Compliance with Laws and
Regulations.    The exercise of this option and the issuance of the Option Shares upon such exercise shall be subject to compliance by AlphaSmart and Kelly with all applicable requirements of law relating thereto and with
all applicable regulations of any Stock Exchange (or the Nasdaq National Market, if applicable) on which the Common Stock may be listed for trading at the time of such exercise and issuance. 
  
 10.    Representations and Warranties of
Kelly.    Kelly hereby represents, warrants and covenants to AlphaSmart with respect to the options granted hereunder that: 
  
 (a)    Authorization.    Kelly has full power and authority to enter into this Stock Option Agreement, and
this Stock Option Agreement constitutes the valid and legally binding obligation, of Kelly enforceable in accordance with its terms. 
  
 (b)    Purchase Entirely for Own Account.    Kelly acknowledges that AlphaSmart enters this Stock
Option Agreement in reliance upon Kelly’s representation to AlphaSmart, which by Kelly’s execution of this Stock Option Agreement Kelly hereby confirms, that the options received by Kelly and the Common Stock issuable upon exercise thereof
(collectively, the “Securities”) will be acquired for investment for Kelly’s own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that Kelly has no present intention of
selling, granting any participation in or otherwise distributing the same. By executing this Stock Option Agreement, Kelly further represents that Kelly does not have any contract, undertaking, agreement or arrangement with any person to sell,
transfer or grant participations to such person or to any third person, with respect to any of the Securities. 
  
 (c)    Disclosure of Information.    Kelly believes he has received all the information he considers
necessary or appropriate for deciding whether to acquire the Securities. Kelly further represents that he has had an opportunity to ask questions and receive answers from AlphaSmart regarding the terms and conditions of the offering of the
Securities and the business, properties, prospects and financial condition of AlphaSmart. 
  
 (d)    Investment Experience.    Kelly is an investor in securities of companies in the development stage and acknowledges that he is able to fend for himself, can
bear the economic risk of his investment, and has such knowledge and experience in financial or business matters that he is capable of evaluating the merits and risks of the investment in the Securities. 
  
 (e)    Accredited
Investor.    Kelly is an “accredited investor” within the meaning of Securities and Exchange Commission Rule 501 of Regulation D, as presently in effect. 
  

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 (f)    Tax Advisors.    Kelly has reviewed with his
own tax advisors the federal, state and local tax consequences of this investment, where applicable, and the transactions contemplated by this Stock Option Agreement. Kelly is relying solely on such advisors and not on any statements or
representations of AlphaSmart or any of its agents and understands that Kelly (and not AlphaSmart) shall be responsible for Kelly’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Stock
Option Agreement. 
  
 (g)    Legal
Counsel.    Kelly acknowledges that Kelly has had the opportunity to review this Stock Option Agreement, and the transactions contemplated by this Stock Option Agreement with Kelly’s own legal counsel. Kelly is
relying solely on Kelly’s legal counsel and not on any statements or representations of AlphaSmart or any of AlphaSmart’s agents, including Brobeck Phleger & Harrison LLP, for legal advice with respect to this investment or the
transactions contemplated by this Stock Option Agreement. Notwithstanding the foregoing, Kelly shall be entitled to rely upon the express representations and warranties of AlphaSmart herein and in the License Agreement. Furthermore, A1phaSmart
represents and warrants that the documents provided to Kelly in connection with the License Agreement and this Stock Option Agreement pursuant to the terms of the Non-Disclosure Agreement between AlphaSmart and Kelly dated June
     , 2002 are true, accurate and complete copies of the documents they purport to be. 
  
 11.    Representations and Warranties of AlphaSmart.    AlphaSmart hereby represents, warrants and
covenants to Kelly that: 
  
 (a)    Authorization.    AlphaSmart has full corporate power and authority to enter into this Stock Option Agreement, and this Stock Option Agreement constitutes the valid and legally
binding obligation, of AlphaSmart enforceable in accordance with its terms. 
  
 (b)    Reservation of Shares.    AlphaSmart has duly reserved for issuance the number of authorized but unissued shares adequate to fulfill its obligations
hereunder. Up to and through the earlier of (i) Kelly’s exercise of this option or (ii) the Expiration Date, AlphaSmart shall take such action as may be necessary to maintain at all times an adequate number of shares reserved for issuance to
fulfill its obligations hereunder. 
  
 12.    Restrictive Legends. 
  
 (a)    NEITHER THIS OPTION NOR THE SECURITIES ISSUABLE UPON EXERCISE OF THIS OPTION HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE. NEITHER THIS OPTION NOR THE
SECURITIES ISSUABLE UPON EXERCISE OF THIS OPTION NOR ANY INTEREST OR PARTICIPATION HEREIN OR THEREIN MAY BE SOLD, OFFERED FOR SALE, ASSIGNED, PLEDGED, HYPOTHECATED, ENCUMBERED OR IN ANY OTHER MANNER TRANSFERRED OR DISPOSED OF IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE SECURITIES UNDER SUCH ACT AND SUCH LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO ALPHASMART THAT SUCH REGISTRATION IS NOT REQUIRED. 
  
 (b)    NEITHER THIS OPTION NOR THE SECURITIES ISSUABLE
UPON EXERCISE OF THIS OPTION MAY BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT IN CONFORMITY WITH THE TERMS OF THE RESTRICTED STOCK PURCHASE AGREEMENT BETWEEN ALPHASMART AND THE REGISTERED HOLDER OF THIS OPTION (OR
THE PREDECESSOR IN INTEREST TO THE OPTION). ALPHASMART WILL 
  

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 UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE. 
  
 (c)    California Securities
Law.    THE OFFERING OF THE SECURITIES THAT ARE THE SUBJECT OF THIS OPTION HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE OFFERING OF SUCH SECURITIES OR THE PAYMENT OR
RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE ISSUANCE IS EXEMPT FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO
THIS STOCK OPTION AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE OFFERING IS SO EXEMPT. 
  
 13.    Successors and Assigns.    Except to the extent otherwise provided in Paragraph 5 above, the
provisions of this Stock Option Agreement shall inure to the benefit of, and be binding upon, AlphaSmart and its successors and assigns and Kelly, Kelly’s permitted assigns and the legal representatives, heirs and legatees of Kelly’s
estate. 
  
 14.    Notices.    Any notice required to be given or delivered to AlphaSmart under the terms of this Stock Option Agreement shall be in writing and addressed to AlphaSmart at its
principal corporate offices. Any notice required to be given or delivered to Kelly shall be in writing and addressed to Kelly at the address indicated on the signature page hereto. All notices shall be deemed effective upon personal delivery or upon
deposit in the U.S. mail or overnight courier, postage prepaid and properly addressed to the party to be notified. 
  
 15.    Counterparts.    This Stock Option Agreement may be executed in counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute one and the same instrument. 
  
 16.    Amendments and Waivers.    This Stock Option Agreement shall not be amended nor any Section
hereof waived by AlphaSmart in the absence of approval of such amendment or waiver by a majority of AlphaSmart’s Board. 
  
 17.    Arbitration.    Any controversy between the parties hereto involving any claim arising out of
or relating to this Stock Option Agreement shall be resolved in accordance with Paragraph 10 of the License Agreement. 
  
 18.    Governing Law.    The interpretation, performance and enforcement of this Stock Option
Agreement shall be governed by the laws of the State of California without resort to that State’s conflict-of-laws rules. 
  
 [Remainder of page intentionally left blank] 
  
  

 6 

 IN WITNESS WHEREOF, the parties have executed this Stock Option Agreement. 
  

	 ALPHASMART, INC.:

		
	 Date:
	  	7/8/02
		
	 By:
	  	 /s/    JAMES M. WALKER

	 Name:
	  	James M. Walker
	 Title:
	  	VP, CFO
	 Address:
	  	973 University Avenue
	 	  	Los Gatos, CA 95032

  

	 DOUGLAS J. KELLY:

		
	 Date:
	  	7/8/02
		
	 By:
	  	 /s/    DOUGLAS J. KELLY

	 Address:
	  	12854 Mackenzie Drive
	 	  	Tustin, CA 92782

  

 APPENDIX 
  

The following definitions shall be in effect under the Stock Option Agreement: 
  
 A.    Board shall mean AlphaSmart’s Board of Directors. 
  
 B.    Common Stock shall mean
AlphaSmart’s common stock. 
  
 C.    Corporate Transaction shall mean either of the following stockholder-approved transactions to which AlphaSmart is a party: 
  
 a merger or consolidation in which securities possessing more than fifty percent (50%) of the total combined
voting power of AlphaSmart’s outstanding securities are transferred to a person or persons different from the persons holding those securities immediately prior to such transaction, or 
  
 the sale, transfer or other disposition of all or
substantially all of AlphaSmart’s assets in complete liquidation or dissolution of AlphaSmart. 
  
 D.    Exercise Date shall mean the date on which the option shall have been exercised in accordance with Paragraph 8 of
the Stock Option Agreement. 
  
 E.    Exercise Price shall mean [*] (as adjusted for stock splits, stock dividends, combinations and other recapitalizations). 
  
 F.    Expiration Date shall mean
[*]. 
  
 G.    Grant Date
shall mean April 1, 2002. 
  
 H.    License Agreement shall mean the License Agreement, Settlement and Mutual Release effective as of April 1, 2002 by and between Kelly and AlphaSmart. 
  
 I.     Option Shares shall mean the
[*] shares of Common Stock subject to the option. 
  
 J.     Parent shall mean any corporation (other than AlphaSmart) in an unbroken chain of corporations ending with AlphaSmart, provided each corporation in the unbroken chain (other than AlphaSmart)
owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
  
 K.    Restricted Stock Purchase Agreement
shall mean the restricted stock purchase agreement in substantially the form of Exhibit B hereto. 
  
 L.    Stock Exchange shall mean the American Stock Exchange or the New York Stock Exchange. 
  

 * This provision is the subject
of a Confidential Treatment Request. 

 M.    Subsidiary. shall mean any corporation (other than AlphaSmart) in
an unbroken chain of corporations beginning with AlphaSmart, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other corporations in such chain. 
  
  

 2 

 EXHIBIT B 
  

RESTRICTED STOCK PURCHASE AGREEMENT 
  
 THIS RESTRICTED STOCK PURCHASE AGREEMENT (“Purchase Agreement”) is made as of this
             day of             , 200_, by and between AlphaSmart, Inc., a California corporation
(“AlphaSmart”), and Douglas J. Kelly, a California resident (“Kelly”). 
  
 WHEREAS, pursuant to that certain option granted by AlphaSmart to Kelly under the Common Stock Option Agreement (the “Option Agreement”) by and between AlphaSmart and Kelly, dated as of April 1, 2002,
to purchase up to [*] shares of Common Stock (the “Shares”) at the exercise price of [*] per share (the “Exercise Price”). 
  
 NOW, THEREFORE, in consideration of the promises of the parties set forth in this Purchase Agreement, the parties
hereby agree as follows: 
  
 I.    PURCHASE OF SHARES

  
 1.1    Purchase.    Kelly hereby purchases, and AlphaSmart hereby sells to Kelly,
                                 
(            ) of the Shares. 
  
 1.2    Payment.    Prior to or concurrently with the execution of this Purchase Agreement,
Kelly has delivered the aggregate Purchase Price payable for the Shares. 
  
 II.    REPRESENTATIONS AND WARRANTIES OF KELLY 
  
 Kelly hereby represents, warrants and covenants to AlphaSmart with respect to Kelly’s purchase of the Shares that: 
  
 2.1    Authorization.    Kelly has full power and authority to enter into this Purchase
Agreement, and this Purchase Agreement constitutes the valid and legally binding obligation of Kelly enforceable in accordance with its terms. 
  
 2.2    Purchase Entirely for Own Account.    Kelly acknowledges that AlphaSmart enters this
Purchase Agreement in reliance upon Kelly’s representation to AlphaSmart, which by Kelly’s execution of this Purchase Agreement Kelly hereby confirms that, except in compliance with the applicable state and federal securities laws, the
Shares to be received by Kelly and the Common Stock issuable upon conversion thereof (collectively, the “Securities”) will be acquired for investment for Kelly’s own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that Kelly has no present intention of selling, granting any participation in or otherwise distributing the same. By executing this Purchase Agreement, Kelly further represents that Kelly does not have
any contract, undertaking, agreement or arrangement with any person to sell, transfer or grant participations to such person or to any third person, with respect to any of the Securities. 
  

 * This provision is the subject of a Confidential Treatment Request.

 2.3    Disclosure of Information.    Kelly
believes he has received all the information he considers necessary or appropriate for deciding whether to purchase the Shares. Kelly further represents that he has had an opportunity to ask questions and receive answers from AlphaSmart regarding
the terms and conditions of the offering of the Shares and the business, properties, prospects and financial condition of AlphaSmart. 
  
 2.4    Investment Experience.    Kelly is an investor in securities of companies in the
development stage and acknowledges that he is able to fend for himself, can bear the economic risk of his investment, and has such knowledge and experience in financial or business matters that he is capable of evaluating the merits and risks of the
investment in the Shares. 
  
 2.5    Accredited Investor.    Kelly is an “accredited investor” within the meaning of Securities and Exchange Commission (“SEC”) Rule 501 of Regulation D, as
presently in effect. 
  
 2.6    Tax Advisors.    Kelly has reviewed with Kelly’s own tax advisors the federal, state and local tax consequences of this investment, where applicable, and the
transactions contemplated by this Purchase Agreement. Kelly is relying solely on such advisors and not on any statements or representations of AlphaSmart or any of its agents and understands that Kelly (and not AlphaSmart) shall be responsible for
Kelly’s own tax liability that may arise as a result of this investment or the transactions contemplated by this Purchase Agreement. 
  
 2.7    Legal Counsel.    Kelly acknowledges that he has had the opportunity to review this
Purchase Agreement, and the transactions contemplated by this Purchase Agreement with his own legal counsel. Kelly is relying solely on Kelly’s legal counsel and not on any statements or representations of AlphaSmart or any of AlphaSmart’s
agents, including Brobeck, Phleger & Harrison LLP, for legal advice with respect to this investment or the transactions contemplated by this Purchase Agreement. Notwithstanding the foregoing, Kelly shall be entitled to rely upon the express
representations and warranties of AlphaSmart herein and in the Option Agreement. 
  
 III.    SECURITIES LAW COMPLIANCE 
  
 3.1    Restricted Securities.    Kelly acknowledges that the Shares must be held indefinitely unless subsequently registered under the Securities Act of 1933, as amended (the
“Securities Act”) or unless an exemption from such registration is available. Kelly is aware of the provisions of Rule 144 promulgated under the Securities Act (“Rule 144”) which permit limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions, which may include, among other things, the existence of a public market for the shares, the availability of certain current public information about AlphaSmart, the resale
occurring not less than one year after a party has purchased and paid for the security to be sold, the sale being effected through a “broker’s transaction” or in transactions directly with a “market-maker” and the number of
shares being sold during any three-month period not exceeding specified limitations. Accordingly, Kelly hereby acknowledges that Kelly is prepared to hold the Shares for an indefinite period and that Kelly is aware that Rule 144 may not be available
to exempt the sale of the Shares from the registration requirements of the 1933 Act. 
  

 2 

 3.2    Limitations on Disposition of
Shares.    Subject to the terms of this Purchase Agreement, Kelly hereby agrees that Kelly shall make no disposition of the Shares (other than a permitted transfer under Paragraph 4.1) unless and until there is compliance
with all of the following requirements: 
  
 (a)    Kelly shall have notified AlphaSmart of the proposed disposition and provided a written summary of the terms and conditions of the proposed disposition; 
  
 (b)    Kelly shall have complied with all requirements
of this Purchase Agreement applicable to the disposition of the Shares; 
  
 (c)    In connection with any sale under Rule 144, Kelly shall have provided AlphaSmart with assurances (including, without limitation, copies of applicable broker’s and seller’s
representation letters and a Notice on Form 144, or, with respect to a sale under 144(k), a standard form stockholder representation letter), in form and substance satisfactory to AlphaSmart, necessary for compliance with the registration
requirements of the 1933 Act or of any exemption from registration available under the 1933 Act (including Rule 144); and 
  
 (d)    Kelly shall have provided AlphaSmart with written assurances, in form and substance satisfactory to AlphaSmart that the
proposed disposition will not result in the contravention of any transfer restrictions applicable to the Shares. 
  
 AlphaSmart shall not be required (i) to transfer on its books any Shares that have been sold or transferred in violation of the provisions of this
Article III nor (ii) to treat as the owner of the Shares, or otherwise to accord voting or dividend rights to, any transferee to whom the Shares have been transferred in contravention of this Purchase Agreement. 
  
 3.3    Restrictive
Legends.    In order to reflect the restrictions on disposition of the Shares, the stock certificates for the Shares will be endorsed with restrictive legends, including one or more of the following legends: 

 
 (a)    “THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SHARES MAY NOT BE SOLD OR OFFERED FOR SALE IN THE ABSENCE OF (1) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SHARES UNDER SUCH ACT, (2) A ‘NO ACTION’
LETTER OF THE SEC WITH RESPECT TO SUCH SALE OR OFFER, OR (3) SATISFACTORY ASSURANCES TO ALPHASMART THAT REGISTRATION UNDER SUCH ACT IS NOT REQUIRED WITH RESPECT TO SUCH SALE OR OFFER.” 
  
 (b)    “ALL OF THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED, OR IN ANY MANNER DISPOSED OF EXCEPT IN CONFORMITY WITH THE TERMS OF THE RESTRICTED HOLDER OF THE SHARES (OR THE PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS A FIRST
REFUSAL RIGHT TO ALPHASMART (OR ITS ASSIGNEES) UPON THE SALE, ASSIGNMENT, TRANSFER, ENCUMBRANCE OR OTHER DISPOSITION OF ALPHASMART’S SHARES. THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH AGREEMENT TO THE HOLDER HEREOF WITHOUT
CHARGE.” 
  

 3 

 IV.    FURTHER RESTRICTIONS ON TRANSFER 
  
 4.1    Restrictions on Transfer.

  
 (a)    The Shares shall not be
transferred, assigned, encumbered or otherwise made the subject of disposition by Kelly in contravention of Paragraph 3.2 or AlphaSmart’s First Refusal Right under Article V or as otherwise limited herein except that Kelly may
transfer the Shares to a partner of such partnership or a retired partner of such partnership who retires after the date hereof, or to the estate of any such partner or retired partner or the transfer is by gift, will or intestate succession of any
such partner to his or her spouse or to the siblings, lineal descendants or ancestors of such partner or his or her spouse, or to a family trust; provided and only if such transferee furnishes Kelly and AlphaSmart with a
written agreement to be bound by the terms of this Purchase Agreement. 
  
 (b)    Each person (other than AlphaSmart) to whom the Shares are transferred by means of one of the permitted transfers specified in Paragraph 4.1 must, as a condition precedent to the validity of such transfer,
acknowledge in writing to AlphaSmart that such person is bound by the provisions of this Purchase Agreement and that the transferred Shares are subject to (i) AlphaSmart’s First Refusal Right pursuant to Article V hereunder and (ii) the market
stand-off provisions of Paragraph 4.2, to the same extent such Shares would be so subject if retained by Kelly. 
  
 (c)    Any and all subsequent holders of the Securities who derive their chain of ownership through a permitted transfer from Kelly in
accordance with this Paragraph 4.1 shall be bound by the terms of this Purchase Agreement. 
  
 4.2    Market Stand-Off.    (a) In connection with the first underwritten public offering by AlphaSmart of its equity securities pursuant to an effective
registration statement filed under the 1933 Act, Kelly shall not sell, make any short sale of, loan, hypothecate, pledge, grant any option for the purchase of, or otherwise dispose or transfer for value or otherwise agree to engage in any of the
foregoing transactions with respect to, any Shares without the prior written consent of AlphaSmart or its underwriters. Such limitations shall be in effect for such period of time from and after the effective date of such registration statement as
may be requested by AlphaSmart or such underwriters; provided, however, that in no event shall such period exceed one hundred eighty (180) days. 
  

(a)    In the event of any stock dividend, stock split, recapitalization or other change affecting AlphaSmart’s outstanding
Common Stock effected without receipt of consideration, then any new, substituted or additional securities distributed with respect to the Shares shall be immediately subject to the provisions of this Paragraph 4.2, to the same extent the Shares are
at such time covered by such provisions. 
  
 (b)    In order to enforce the limitations of this Paragraph 4.2, AlphaSmart may impose stop-transfer instructions with respect to the Shares until the end of the applicable stand-off period. 
  
 V.    COMPANY RIGHT OF FIRST REFUSAL 
  
 5.1    Company Right of First
Refusal.    Subject to the terms and conditions specified in this Article V, each time Kelly proposes to sell any of the Shares (the “Offered Shares”), Kelly shall first make an offering of such Offered Shares
to AlphaSmart in accordance with this Article V (the “First Refusal Right”). 
  

 4 

 5.2    Notice of Intended
Disposition.    Kelly shall deliver a notice (a “Notice”) to AlphaSmart stating (i) its bona fide intention to offer such Offered Shares, (ii) the number of such Offered Shares to be offered, and (iii) the price
and terms, if any, upon which it proposes to offer such Offered Shares. 
  
 5.3    Exercise of Right.    Within twenty (20) days after receipt of the Notice, AlphaSmart may elect by written notice to purchase or obtain, at the price and on the terms
specified in the Notice, the number of Offered Shares as specified in the Notice. 
  
 5.4    Non-Exercise of Right.    If AlphaSmart does not elect to purchase all of the Offered Shares, Kelly may, during the [*] day
period following the expiration of the period provided in Paragraph 5.3 hereof, offer the remaining unsubscribed portion of such Offered Shares to any person or persons at a price not less than, and upon terms no more favorable to the offeree than
those specified in the Notice. If Kelly does not enter into an agreement for the sale of the Offered Shares within such period, or if such agreement is not consummated within [*] of the execution thereof, the right provided hereunder shall be
deemed to be revived and such Offered Shares shall not be offered unless first reoffered to AlphaSmart in accordance herewith. 
  
 5.5    Assignment.    AlphaSmart may assign its First Refusal Right under Article V to any
person or entity selected by AlphaSmart’s Board of Directors, including (without limitation) one or more stockholders of AlphaSmart. 
  
 5.6    Notices.    Any notice required in connection with (i) the First Refusal Right or (ii)
the disposition of any Shares covered thereby shall be given in writing and shall be deemed effective upon personal delivery or upon deposit in the United States mail, registered or certified, postage prepaid and addressed to the party entitled to
such notice at the address indicated below such party’s signature line on this Purchase Agreement or at such other address as such party may designate by [*] advance written notice under this Paragraph 5.6 to all other parties to this
Purchase Agreement. 
  
 5.7    No
Waiver.    The failure of AlphaSmart (or its assignee) in any instance to exercise the First Refusal Right granted under this Article V shall not constitute a waiver of any other repurchase right and/or right of first
refusal that may subsequently arise under the provisions of this Purchase Agreement or any other agreement between AlphaSmart and Kelly. 
  
 5.8    Cancellation of Shares.    If AlphaSmart (or its assignees) shall make available, at
the time and place and in the amount and form provided in this Purchase Agreement, the consideration for the Offered Shares to be repurchased in accordance with the provisions of this Section 5, then from and after such time, the person from whom
such shares are to be repurchased shall no longer have any rights as a holder of such shares (other than the right to receive payment of such consideration in accordance with this Purchase Agreement), and such shares shall be deemed purchased in
accordance with the applicable provisions hereof and AlphaSmart (or its assignees) shall be deemed the owner and holder of such shares, whether or not the certificates therefor have been delivered as required by this Purchase Agreement. 

 
 5.9    Termination of First Refusal
Right.    The First Refusal Right shall automatically terminate upon the occurrence of (i) a Corporate Transaction as defined in the Option Agreement, or (ii) a firm commitment underwritten initial public offering by
AlphaSmart. 
  

 *
This provision is the subject of a Confidential Treatment Request. 
  

 5 

 VI.    MISCELLANEOUS PROVISIONS 
  
 6.1    Kelly Undertaking.    Kelly hereby agrees to take
whatever additional action and execute whatever additional documents AlphaSmart may in its judgment deem necessary or advisable in order to carry out or effect one or more of the obligations or restrictions imposed on either Kelly or the Shares
pursuant to the express provision of this Purchase Agreement. 
  
 6.2    Entire Contract.    This Purchase Agreement constitutes the entire contract between the parties hereto with regard to the subject matter hereof. 
  
 6.3    Governing
Law.    This Purchase Agreement shall be governed by, and construed in accordance with, the laws of the State of California, as such laws are applied to contracts entered into and performed in such State without resort to
that State’s conflict-of-laws rules. 
  
 6.4    Counterparts.    This Purchase Agreement may be executed in counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one
and the same instrument. 
  
 6.5    Successors and Assigns.    The provisions of this Purchase Agreement shall inure to the benefit of, and be binding upon, AlphaSmart and its successors and assigns and Kelly
and Kelly’s legal representatives, legatees, distributees, assigns and transferees by operation of law, whether or not any such person shall have become a party to this Purchase Agreement and have agreed in writing to join herein and be bound
by the terms and conditions hereof. 
  
 6.6    Amendment and Waiver.    This Purchase Agreement shall not be amended nor any Section hereof waived by AlphaSmart in the absence of a writing executed by AlphaSmart. No
waiver of any breach or condition of this Purchase Agreement shall be deemed to be a waiver of any other or subsequent breach or condition, whether of like or different matters. 
  
 6.7    Arbitration.    Any controversy between the parties
hereto involving any claim arising out of or relating to this Purchase Agreement shall be resolved in accordance with Paragraph 10 of the License Agreement, Settlement and Mutual Release. 
  
  

 6 

 IN WITNESS WHEREOF, the parties have executed this Purchase Agreement on the day and year first
indicated above. 
  

	ALPHASMART, INC.:
		
	 By:
	 	

	 Name:

	 Title:
	 	 

  

	DOUGLAS J. KELLY:The 2003 Stock Plan

 Exhibit 4.8 
  

GENESIS MICROCHIP INC. 
  
 2003 STOCK PLAN 
  
 1. Purposes of the Plan. The purposes of this Plan are: 
  

	 	•	 	to attract and retain the best available personnel for positions of substantial responsibility, 

  

	 	•	 	to provide additional incentive to Employees, and 

  

	 	•	 	to promote the success of the Company’s business. 

  
 The Plan permits the grant of Options, Stock Purchase Rights, Restricted Stock, Stock Appreciation Rights, Performance Units and Performance Shares.

  
 2. Definitions. As used herein, the following
definitions will apply: 
  
 (a) “Administrator”
means the Board or any of its Committees as will be administering the Plan, in accordance with Section 4 of the Plan. 
  
 (b) “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. 
  
 (c) “Applicable Laws” means the requirements relating to the administration of stock-based awards 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. 
  

(d) “Award” means, individually or collectively, a grant under the Plan of Options, SARs, Stock Purchase Rights, Restricted Stock,
Performance Units or Performance Shares. 
  
 (e) “Award
Agreement” means the written or electronic 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. 
  
 (f) “Board” means the Board of Directors of the Company.

  
 (g) “Change in Control” means the occurrence
of any of the following events: 

 (i) 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, except that any change in the beneficial ownership of the securities of the Company as a result of a private financing of the Company that is approved by the Board, shall not be deemed to be a Change in Control; or

  
 (ii) The consummation of the sale or disposition by the
Company of all or substantially all of the Company’s assets; 
  
 (iii) A change in the composition of the Board occurring within a two (2)-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 
  

(iv) 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. 
  
 (h) “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. 
  
 (i) “Committee” means a committee of Directors appointed by the Board in accordance with Section 4 of the Plan. 
  

(j) “Common Stock” means the common stock of the Company. 
  
 (k) “Company” means Genesis Microchip Inc., a Delaware corporation, or any successor thereto. 

 
 (l) “Consultant” means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such entity. 
  
 (m) “Director” means a member of the Board. 
  
 (n) “Disability” means total and permanent disability as determined by the Administrator in its sole discretion. The Administrator’s determination shall be in accordance with uniform and
non-discriminatory standards adopted by the Administrator from time to time. 
  

 -2- 

 (o) “Employee” means any person, including Officers and Directors, employed by the
Company or any 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. 
  
 (p) “Exchange Act” means the Securities Exchange Act of
1934, as amended. 
  
 (q) “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. 
  
 (r) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows: 
  
 (i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock 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 or system on the date of determination (unless the date of determination is not a market trading day, in which case the Fair Market Value shall be the closing sales price of the last market trading day prior to
such date of determination), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (ii) 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 (unless the date of determination is not a market trading day, in which case the Fair Market Value shall be the mean between the
high bid and low asked prices for the Common Stock on the last market trading day prior to such date of determination), as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 
  
 (iii) In the absence of an established market for the Common Stock, the Fair
Market Value will be determined in good faith by the Administrator. 
  
 (s) “Fiscal Year” means the fiscal year of the Company. 
  
 (t) “Freestanding SAR” means an SAR that is granted independently of any Option. 
  
 (u) “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. 
  
 (v)
“Option” means a nonstatutory stock option granted pursuant to the Plan that is not intended to qualify, or which by its terms does not so qualify, as an incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder. 
  
 (w) “Optioned
Stock” means the Common Stock subject to an Award. 
  

 -3- 

 (x) “Parent” means a “parent corporation,” whether now or hereafter existing,
as defined in Section 424(e) of the Code. 
  
 (y)
“Participant” means the holder of an outstanding Award granted under the Plan. 
  
 (z) “Performance Share” means an Award granted to a Participant pursuant to Section 11. 
  
 (aa) “Performance Unit” means an Award granted to a
Participant pursuant to Section 11. 
  
 (bb) “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. 
  
 (cc) “Plan” means this 2003 Stock Plan. 
  
 (dd) “Registration Date” means the effective date of the first registration statement that 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. 
  
 (ee) “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of Stock Purchase Rights under Section 8 of the Plan,
issued pursuant to a Restricted Stock award under Section 9 of the Plan, or issued pursuant to the early exercise of an Option. 
  
 (ff) “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. 
  
 (gg) “Section
16(b)” means Section 16(b) of the Exchange Act. 
  
 (hh)
“Service Provider” means an Employee, Director, or Consultant. 
  
 (ii) “Share” means a share of the Common Stock, as adjusted in accordance with Section 14 of the Plan. 
  
 (jj) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in connection with an Option, that pursuant to
Section 10 is designated as a SAR. 
  
 (kk) “Stock
Purchase Right” means the right to purchase Common Stock pursuant to Section 8 of the Plan. 
  
 (ll) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the
Code. 
  
 (mm) “Tandem SAR” means a 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). 
  

 -4- 

 3. Stock Subject to the Plan. Subject to the provisions on Section 14, the maximum aggregate
number of Shares that may be issued pursuant to the Plan is 1,000,000 Shares. The Shares may be authorized but unissued Common Stock. 
  
 If an Option expires or becomes exercisable without having been exercised in full, the unpurchased Shares which were subject thereto shall become
available for future grant under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan, upon exercise of an Option, shall not be returned to the Plan and shall not become available for future
distribution under the Plan. 
  
 4. Administration of the
Plan. 
  
 (a) Procedure. 
  
 (i) Multiple Administrative Bodies. Different Committees with respect
to different groups of Service Providers may administer the Plan. 
  
 (ii) 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. 

 
 (iii) 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. 
  
 (b) 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: 
  
 (i) to determine the Fair Market Value; 
  
 (ii) to select the Employees to whom Awards may be granted hereunder; 
  
 (iii) to determine the number of Shares to be covered by each Award granted hereunder; 
  
 (iv) to approve forms of agreement for use under the Plan; 
  
 (v) 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 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 relating thereto, based in each case on such factors as the Administrator will determine; 
  

 -5- 

 (vi) to institute an Exchange Program; 
  
 (vii) to construe and interpret the terms of the Plan and Awards granted pursuant to the Plan; 
  
 (viii) 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; 
  
 (ix) to modify or amend each Award (subject to Section 18(c) of the Plan), including the discretionary authority to extend the post-termination
exercisability period of Awards longer than is otherwise provided for in the Plan; 
  
 (x) 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); 
  
 (xi) 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; 
  
 (xii) to 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 
  
 (xiii) to make all other determinations deemed necessary or advisable for administering the Plan. 
  
 (c) 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. 
  
 5. Eligibility. Options, Stock Purchase Rights, Restricted Stock, Stock Appreciation Rights, Performance Units and Performance Shares may be
granted to Employees, so long as the all following requirements are met: 
  
 (a) the Employee was not previously an Employee or Director, or the Employee is returning to the employment of the Company following a bona-fide period of non-employment; and 
  
 (b) the grant of an Award under the Plan is a material inducement to the
Employee’s decision to enter into the employment of the Company. 
  

 -6- 

 6. Approval of Awards. All awards granted under this Plan (a) must be approved by a Committee
comprised of a majority of “independent directors” or (b) a majority of the Company’s “independent directors” has approved the grant. For purposes of this section, “independent directors” shall have the meaning
assigned to the term under the National Association of Securities Dealers (NASD) Rules. 
  
 7. Stock Options. 
  
 (a)
Term of Option. The term of each Option will be stated in the Award Agreement. 
  
 (b) Option Exercise Price and Consideration. 
  
 (i) Exercise Price. The per share exercise price for the Shares to be issued pursuant to the exercise of an Option will be determined by the Administrator. 
  
 (ii) 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. 
  
 (iii) Form of Consideration. The Administrator will determine the acceptable form of consideration for exercising an
Option, including the method of payment. Such consideration may consist of (without limitation): 
  
 (1) cash; 
  
 (2) check; 
  
 (3) promissory note; 
  
 (4) other Shares, provided Shares acquired directly or indirectly from the Company, (A) have been owned by the Participant and not subject to substantial
risk of forfeiture for more than six (6) months on the date of surrender, and (B) 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; 
  
 (5) consideration received by the Company under a cashless exercise program
implemented by the Company in connection with the Plan; 
  
 (6) 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; 
  
 (7) any combination of the foregoing methods of payment; or 
  
 (8) such other consideration and method of payment for the issuance of
Shares to the extent permitted by Applicable Laws. 
  

 -7- 

 (c) Exercise of Option. 
  
 (i) 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 14 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. 
  
 (ii) 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 absence of a
specified time in the Award Agreement, the Option will remain exercisable for three (3) months following the Participant’s termination. Unless otherwise provided by the Administrator, 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. 
  
 (iii) 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. Unless otherwise provided by the Administrator, 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. 
  

 -8- 

 (iv) 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. Unless otherwise provided by the
Administrator, 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. 
  
 8. Stock Purchase Rights. 
  
 (a) 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 as
determined by the Administrator. 
  
 (b) 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. 
  
 (c) 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. 
  
 (d) 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 14 of the Plan. 
  

 -9- 

 9. Restricted Stock. 
  
 (a) Grant of Restricted Stock. Subject to the terms and provisions of the Plan, the Administrator may grant Shares of
Restricted Stock in such amounts as the Administrator, in its sole discretion, will determine. 
  
 (b) 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.

  
 (c) Transferability. Except as provided in this Section
9, 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. 
  
 (d) 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. 
  
 (e)
Removal of Restrictions. Except as otherwise provided in this Section 9, 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. 
  
 (f) 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. 
  
 (g) 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. 
  
 (h) 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. 
  
 10. Stock Appreciation Rights. 
  
 (a) Grant of SARs. Subject to the terms and conditions of the Plan,
the Administrator may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof. 
  
 (b) Number of Shares. The Administrator will have complete discretion to determine the number of SARs granted to each Participant. 
  

 -10- 

 (c) 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. 
  
 (d) 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. 
  
 (e) 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. 
  
 (f) Exercise of Freestanding SARs. Freestanding SARs will be
exercisable on such terms and conditions as the Administrator, in its sole discretion, will determine. 
  
 (g) 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. 
  
 (h) 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 7(c) also will apply to SARs. 
  
 (i) 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: 
  
 (i) The difference between the Fair Market Value
of a Share on the date of exercise over the exercise price; times 
  
 (ii) 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. 
  
 11. Performance Units and Performance Shares. 
  
 (a) Grant of Performance Units/Shares. Subject to the terms and conditions of the Plan, Performance Units and
Performance Shares may be granted by the Administrator in its sole discretion. 
  
 (b) 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. 
  

 -11- 

 (c) 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. 
  
 (d) 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. 
  
 (e) 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. 
  
 (f) 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. 
  

12. Leaves of Absence. Unless the Administrator provides otherwise or unless otherwise required by Applicable Laws, vesting of Awards granted
hereunder will be suspended during any unpaid leave of absence. A Service Provider will not cease to be Service Provider 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. 
  
 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. 
  
 14. Adjustments; Dissolution or Liquidation; Merger or Change in
Control. 
  
 (a) 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 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, in order to prevent diminution or 

  

 -12- 

 
enlargement of the benefits or potential benefits intended to be made available under the Plan, may (in its sole discretion) adjust the number and class of
Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, the numerical Share limits in Sections 3 and 7 of the Plan. 
  
 (b) 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. 
  
 (c) Change in Control. In the event of
a Change in Control, each outstanding Option, Stock Purchase Right and Stock Appreciation Right 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 refuses to assume or substitute for the Option, Stock Purchase Right or Stock Appreciation Right, the Participant will fully vest in and have the right to exercise the Option, Stock Purchase Right or Stock
Appreciation Right as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable (subject to consummation of the Change in Control). If an Option, Stock Purchase Right or Stock Appreciation Right
becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Change in Control, the Administrator will notify the Participant in writing or electronically that the Option, Stock Purchase Right or Stock Appreciation
Right will be fully vested and exercisable for a period of time determined by the Administrator in its sole discretion, and the Option, Stock Purchase Right or Stock Appreciation Right will terminate upon the expiration of such period. 

 
 For the purposes of this subsection (c), the Option, Stock Purchase Right
or Stock Appreciation Right will be considered assumed if, following the Change in Control, the option or right confers the right to purchase or receive, for each Share subject to the Option, Stock Purchase Right or Stock Appreciation Right
immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) or, in the case of a Stock Appreciation Right upon the exercise of which the Administrator determines to pay cash, the fair market
value of the consideration, received in the merger or 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 the Option, Stock Purchase Right or Stock Appreciation Right, for each Share subject to the Option, Stock Purchase Right or Stock Appreciation Right, 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. 
  
 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 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. 
  

 -13- 

 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.

  
 17. Term of Plan. The Plan will become effective upon
its adoption by the Board. It will continue in effect for a term of ten (10) years unless terminated earlier under Section 18 of the Plan. 
  
 18. Amendment and Termination of the Plan. 
  
 (a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan. 
  
 (b) Stockholder Approval. The Company will obtain stockholder approval
of any Plan amendment to the extent necessary and desirable to comply with Applicable Laws. 
  
 (c) 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. 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. 
  
 19. Conditions Upon Issuance of Shares. 
  
 (a)
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 Applicable Laws and will be further subject to the approval of
counsel for the Company with respect to such compliance. 
  
 (b)
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. 
  
 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. 
  

 -14-

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