Document:

Indigo 2001 Incentive Stock Plan Option and Non-Qualified Stock Option Plan

 Exhibit 4.2 
  

INDIGO SYSTEMS CORPORATION 
  
 2001 INCENTIVE STOCK OPTION  
  
 AND 
  
 NON-QUALIFIED STOCK OPTION PLAN 
  

	1.	Purpose. 

  

	 	1.1.	This Incentive Stock Option Plan and Non-Qualified Stock Option Plan (the “Plan”) is intended to provide a means by which certain employees and related persons of Indigo
Systems Corporation, a California corporation (the “Company”) may acquire an equity interest in the Company, thereby encouraging and rewarding their continued efforts on behalf of the Company and promoting the interests of the Company and
its stockholders. The Company will, therefore, grant to such persons as may be selected in the manner provided for herein, options to purchase shares of the Company’s stock, (“Options”) subject to the conditions set forth herein.

  

	2.	Administration of the Plan. 

  

	 	2.1.	The Board of Directors of the Company (the “Board”) shall appoint a Stock Incentive Plan Committee (the “Committee”) of not less than 3 individuals who may but
need not be Directors of the Company. The Board shall fill vacancies on the Committee and may from time to time remove members from or add members to the Committee. The Committee shall be responsible for the general administration and management of
the Plan. The Committee shall have all powers and duties necessary to fulfill its responsibilities, including, but not limited to, the following: 

  

	 	2.1.1.	To determine all questions relating to the eligibility of individuals to participate; 

	 	2.1.2.	To maintain all records necessary for the administration of the Plan and to provide for disclosure of all information and provision of all reports and statements to Participants or
government agencies as required by law; and 

  

	 	2.1.3.	To adopt and modify plan rules for the regulation and administration of the Plan. 

  

	 	2.2.	The Committee shall interpret the Plan in accordance with its terms and intended meaning. All actions taken and all determinations made by the Committee in good faith shall be final
and binding upon all Participants and any person interested in the Plan. 

  

	 	2.3.	The Committee shall act pursuant to a majority vote or the written consent of the majority of its members, and minutes shall be kept of all of its meetings and copies thereof
provided to the Board. 

  

	 	2.4.	The Company shall indemnify and save harmless any individual serving as a member of the Committee against any and all expenses, liabilities and claims (including legal fees incurred
to defend against such liabilities and claims) arising out of their discharge in good faith of responsibilities under or incident to the Plan. Expenses and liabilities arising out of willful misconduct shall not be covered under this indemnity.

  

	3.	Eligible Participants. 

  

	 	3.1.	All full-time employees of the Company shall be eligible to participate under the Plan. In addition, Directors or consultants of the Company who are not employees shall be eligible
to participate under the Plan. From this eligible class of persons, the Committee shall have complete discretion to select those to whom Options shall be granted. 

  

	 	3.2.	Notwithstanding any other provisions of the Plan, no person may be granted Options under this Plan while he or she is serving as a member of the Committee. 

 

	4.	Shares Subject to the Plan. 

  

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	 	4.1.	Class of Stock. The stock subject to the Options granted under this Plan shall be the authorized but unissued shares of the Company’s common stock (the
“Stock”).  

  

	 	4.2.	Maximum Shares Subject to the Plan. Subject to adjustment as provided in Section 6 of this Plan, the total number of shares of Stock issuable upon exercise of all
outstanding Options that may be granted under this Plan shall be 20,728 . However, no further Options under this Plan shall be granted if the total number of shares of Stock subject to Options granted under this Plan plus the total number of shares
called for under any similar plan of the Company will as a result of such grant exceed 30 percent of the then outstanding shares of the Company Stock (exclusive of shares subject to promotional waivers, if any). 

  

	 	4.3.	If any Option under this Plan expires or terminates for any reason without having been exercised in full, then the shares subject to the unexercised Option shall be made available
for the grant of new Options under the Plan. 

  

	5.	Terms and Conditions of Options. 

  

	 	5.1.	Options granted pursuant to the Plan shall be authorized by the Committee and approved by the Board. Options shall be designated as either Incentive Stock Options or Non-Qualified
Stock Options, shall be set forth in a written option agreement in such form as the Committee shall from time to time approve, and shall be subject to the following terms and conditions: 

  

	 	5.1.1.	Exercise Price. Each Option shall state the price (the “exercise price”) at which the shares subject to the Option may be purchased. Under no circumstances shall
the exercise price be less than 100 percent of the fair market value of the Company’s Stock on the date the Option is granted. The determination of fair market value shall be made by the Committee and approved by the Board. If at the time an
Incentive Stock Option is granted, the recipient of the Incentive Stock Option owns more than 10 percent of the total combined voting power of all classes of stock of the Company, the exercise price shall not be less than 110 percent of the fair
market value of the Company’s Stock on the date the Incentive Stock Option is granted. 

  

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	 	5.1.2.	Number of Shares. Each Option shall state the number of shares of Stock to which it relates. 

  

	 	5.1.3.	Annual Limitation. The aggregate fair market value of the Stock (determined at the time the Option is granted) for which any employee may be granted Incentive Stock Options
in any calendar year by the Company shall not exceed $100,000. To the extent the aggregate fair market value of the Stock for which an employee is granted Incentive Stock Options exceeds the $100,000, then such Options shall be Non-Qualified Stock
Options. 

  

	 	5.1.4.	Payment for Stock. Full payment of the exercise price for the Stock purchased shall be made at the time of exercise. No shares shall be issued until full payment has been
made. The exercise price shall be paid in cash, by check, or in shares of Stock, or in any combination of thereof.  

  

	 	5.1.5.	Term of Option. Each Option shall state the term of its duration, provided that no Option shall be exercisable more than 10 years from the date the Option is granted. If at
the time an Incentive Stock Option is granted, the recipient of the Incentive Stock Option owns more than 10 percent of the total combined voting power of all classes of stock of the Company, the Incentive Stock Option shall not exercisable by the
recipient more than 5 years from the date the Incentive Stock Option is granted. In addition, the Committee may designate in the Option agreement other events (such as death, retirement, termination of Employment or bankruptcy) that will operate to
terminate the Option. 

  

	 	5.1.6.	Vesting of Option. No Option may be exercised either in whole or in part prior to 1 year from the date the Option is granted. Thereafter, unless the Committee shall
specify otherwise, each Option shall be exercisable to the nearest whole share in four approximately equal annual installments. To the extent not exercised, installments (if more than one) shall accumulate and be exercisable, in whole or in part, in
any subsequent year. 

  

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	 	5.1.7.	Non-Assignability. Options granted pursuant to this Plan shall not be transferable by the Participant other than by will or by the laws of descent and shall be exercisable
during the Participant’s lifetime only by the Participant. Any attempted transfer or assignment of the Option shall be void. 

  

	 	5.2.	Termination of Employment. If a Participant ceases to be employed by the Company on account of his or her death, Retirement or termination of Employment without cause, then
the Participant, or in the event of death his or her personal representative or person entitled to succeed to the Option, shall have the right to exercise the Option within the following periods: 

  

	 	5.2.1.	In the case of the Participant’s Retirement on account of disability, within 1 year following the date of the Participant’s termination of Employment;

  

	 	5.2.2.	In the case of the Participant’s death, within the earlier of 6 months following the date of issuance of letters testamentary or letters of administration to the executor or
administrator of the deceased Participant’s estate or 1 year after the Participant’s death; and 

  

	 	5.2.3.	In the case of the Participant’s Retirement on account of age or the Participant’s termination of Employment without cause, within 90 days following the Participant’s
termination of Employment. 

  
 Provided that the
Option may be exercised only to the extent that such Option had vested and the Participant could have exercised the Option as of the date on which the Participant terminated his or her Employment. If a Participant is a Director of the Company but
not an Employee of the Company and he or she ceases to be a Director for any reason, then his or her cessation as a Director shall be treated as a termination of Employment for purposes of determining his or her right to exercise the Option.

  

	 	5.3.	Termination of Employment for Cause. If a Participant’s employment by the Company is terminated for cause, his or her Options shall terminate immediately. The
determination of the Committee with respect to whether the Participant’s termination of Employment was for “cause” shall be final and conclusive. 

  

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	 	5.4.	Other Provisions. Subject only to the express provisions of the Plan, the Committee may impose other terms and conditions on any Option granted hereunder, including, without
limitation, restrictions to assure compliance with federal and state securities laws. Options granted under this Plan may be exercised without regard to the holding of unexercised Options previously or subsequently granted under this Plan or any
other Plan of the Company. 

  

	6.	Adjustment of and Changes in the Stock.  

  

	 	6.1.	If the outstanding shares of Stock of the Company are hereafter increased or decreased or changed into or exchanged for a different number or kind of shares of other securities of
the Company or of another corporation, by reason of reorganization, merger, consolidation, recapitalization, reclassification, stock split-up, combination of shares, or dividend payable in capital stock, appropriate adjustment shall be made by the
Committee in the number and kind of shares for the purchase of which options may be granted under the Plan, including the maximum number that may be granted to any one participant. 

  
 In addition, the Committee shall make appropriate adjustments in the number
and kind of shares as to which outstanding Options, or portions thereof then unexercised, shall be exercisable, to the end that the Participant’s proportionate interest shall be maintained as before the occurrence of such event; such adjustment
in outstanding Options shall be made without change in the total price applicable to the unexercised portion of the Option and with a corresponding adjustment in the Option price per share. Provided, however, that each adjustment in the number and
kind of shares subject to outstanding Options, including any adjustment in the Option price, shall not be made in a manner that causes the Option or Options to fail to continue to qualify as an incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986. Any such adjustment made by the Committee shall be conclusive. 
  

	 	6.2.	In the event of the disposition of substantially all of the assets of the Company or its merger, consolidation, reorganization or acquisition, the Board may amend all outstanding
Options to fully vest all such Options prior to the effective date of any such transaction. 

  

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	 	6.3.	Fractional shares resulting from any adjustment in Options pursuant to this Section may be settled in cash or otherwise as the Board determines. 

  

	 	6.4.	Notice of any adjustment shall be given by the Company to each holder of an Option which shall have been so adjusted and such adjustment shall be effective and binding for all
purposes of this Plan. 

  

	7.	Rights as a Shareholder.  

  

	 	7.1.	A Participant shall have no rights as a shareholder with respect to any shares covered by his or her Options until the date of issuance of a stock certificate to him or her for such
shares. No adjustment shall be made for dividends or distributions or other rights for which the record date is prior to the date such stock certificate is issued, except as expressly provided for in Section 6.1, hereof. 

  

	8.	Use of Proceeds. The proceeds received by the Company from the sale of Stock pursuant to the Plan will be used for general corporate purposes. 

  

	9.	Listing and Regulatory Requirements. Each Option shall be subject to the requirement that if at anytime the Board determines in its sole discretion that the listing or
qualification of the shares of Stock subject to the Option under any securities exchange requirement or applicable law, or that the consent or approval of any governmental regulatory body is necessary or desirable as a condition of, or in connection
with the granting of such Option or the issue of shares thereunder, then such Option may not be exercised in whole or in part unless and until such listing, qualification, consent or approval has been obtained free of any conditions not acceptable
to the Board.  

  

	10.	Term of the Plan. Options may be granted pursuant to the Plan from time to time within a period of 10 years from the date the Plan is adopted, or the date the Plan is
approved by the Company’s stockholders, whichever is earlier. 

  

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	11.	Amendment and Termination of the Plan. The Board may amend, suspend or terminate the Plan and may make changes to the terms and conditions of Options as it shall deem
advisable, provided that no such amendment shall, without approval of the Company’s stockholders: 

  

	 	11.1.	Change the class of persons eligible to receive Options, 

  

	 	11.2.	Increase the total number of shares for which Options may be granted under the Plan, 

  

	 	11.3.	Extend the term of the Plan or the maximum option period hereunder, or 

  

	 	11.4.	Decrease the minimum exercise price or reduce the price at which shares may be purchased under any Option granted under the Plan (except as provided herein for changes in the
Company’s capitalization). 

  

	12.	Definitions. The following terms, when capitalized, shall have the meaning specified below unless the context clearly indicates to the contrary:

  

	 	12.1.	“Employment” shall mean the period during which an individual is an employee of the Company. Employment shall commence on the day the individual first performs services
for the Company and shall terminate on the day such services cease; provided that the Committee shall have authority to determine the duration and purpose of leaves of absence that may be granted to Participants without constituting termination of
Employment for purposes of the Plan. 

  

	 	12.2.	“Participant” shall mean those employees, Directors and consultants of the Company to whom Options are granted from time to time by the Committee.

  

	 	12.3.	“Plan” shall mean this document. 

  

	 	12.4.	“Retirement” shall mean a Participant’s termination of Employment on or after having attained age 65 or after having suffered a disability. A Participant shall have
suffered a disability if the Participant becomes unable to perform his or her usual work by reason of a medically determinable physical or mental impairment. Determination of 

  

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 whether a Participant has suffered a disability and the date on which the disability commenced shall be
made solely by the Committee and shall be based on medical evidence. 
  

	13.	Approval of Shareholders. This Plan shall take effect on the date it is adopted by the Company’s Board, provided the Company’s shareholders duly approve it no later
than 1 year after the date on which it is adopted by the Board. 

  
 Date Plan adopted by Board of Directors: February 1, 2001 
  
 Date Plan adopted by Shareholders: February 1, 2001 
  

 9Indigo 2002 Stock Plan

 Exhibit 4.3 
  
 INDIGO SYSTEMS CORPORATION 
  
 2002 STOCK PLAN 
 as Amended on
September 25, 2003 
  
 1. Purposes of the Plan. The
purposes of this Stock Plan are to attract and retain the best available personnel for positions of substantial responsibility, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company’s
business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as determined by the Administrator at the time of grant. Stock Purchase Rights may also be granted under the Plan. 
  
 2. Definitions. As used herein, the following definitions shall apply:

  
 (a) “Administrator” means
the Board or any of its Committees as shall be administering the Plan in accordance with Section 4 hereof. 
  
 (b) “Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state
corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Options or Stock Purchase
Rights are granted under the Plan. 
  
 (c)
“Board” means the Board of Directors of the Company. 
  
 (d) “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (e) “Committee” means a committee of Directors appointed by the Board in accordance with Section 4 hereof. 
  
 (f) “Common Stock” means the Common Stock
of the Company. 
  
 (g)
“Company” means Indigo Systems Corporation, a California corporation. 
  
 (h) “Consultant” means any person who is engaged by the Company or any Parent or Subsidiary to render consulting or
advisory services and is compensated for such services. 
  
 (i) “Director” means a member of the Board of Directors of the Company. 
  
 (j) “Employee” means any person, including Officers and Directors, employed by the Company or any Parent or Subsidiary of
the Company. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of the Company or between the Company, its Parent, any Subsidiary, or any
successor. For purposes of Incentive Stock Options, no such leave may exceed ninety days, unless reemployment upon expiration of such leave is guaranteed by statute or contract. If reemployment upon expiration of a leave of absence approved by the
Company is not so guaranteed, on the 181st 

 day of such leave any Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company.

  
 (k) “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 
  
 (l) “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 shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the last market
trading day prior to the time 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, its 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 the day of determination; or 
  
 (iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the
Administrator. 
  
 (m) “Incentive Stock
Option” means an Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code. 
  
 (n) “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option. 
  
 (o) “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. 
  
 (p) “Option” means a stock option granted pursuant to the Plan. 
  
 (q) “Option Agreement” means an agreement
between the Company and an Optionee evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. 
  
 (r) “Option Exchange Program” means a program whereby outstanding Options are exchanged for
Options with a lower exercise price. 
  
 (s)
“Optioned Stock” means the Common Stock subject to an Option or a Stock Purchase Right. 
  

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 (t) “Optionee” means the holder of an outstanding Option or Stock
Purchase Right granted under the Plan. 
  
 (u)
“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  
 (v) “Plan” means this 2002 Stock Plan. 
  
 (w) “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of a Stock
Purchase Right under Section 11 below. 
  
 (x)
“Section 16(b) “ means Section 16(b) of the Securities Exchange Act of 1934, as amended. 
  
 (y) “Service Provider” means an Employee, Director or Consultant. 
  
 (z) “Share” means a share of the Common
Stock, as adjusted in accordance with Section 12 below. 
  
 (aa) “Stock Purchase Right” means a right to purchase Common Stock pursuant to Section 11 below. 
  
 (bb) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section
424(f) of the Code. 
  
 3. Stock Subject to the Plan.
Subject to the provisions of Section 12 of the Plan, the maximum aggregate number of Shares which may be subject to option and sold under the Plan is 1,154,845 Shares. The Shares may be authorized but unissued, or reacquired Common Stock.

  
 If an Option or Stock Purchase Right expires
or becomes unexercisable without having been exercised in full, or is surrendered pursuant to an Option Exchange Program, the unpurchased Shares which were subject thereto shall become available for future grant or sale under the Plan (unless the
Plan has terminated). However, Shares that have actually been issued under the Plan, upon exercise of either an Option or Stock Purchase Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at their original purchase price, such Shares shall become available for future grant under the Plan. 
  
 4. Administration of the Plan. 
  
 (a) The Plan shall be administered by the Board or a Committee appointed by the Board, which Committee shall
be constituted to comply with Applicable Laws. 
  
 (b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board to such Committee, and subject to the approval of any relevant authorities, the
Administrator shall have the authority in its discretion: 
  
 (i) to determine the Fair Market Value; 
  

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 (ii) to select the Service Providers to whom Options and Stock Purchase Rights may from
time to time be granted hereunder; 
  
 (iii) to
determine the number of Shares to be covered by each such award granted hereunder; 
  
 (iv) to approve forms of agreement for use under the Plan; 
  
 (v) to determine the terms and conditions, of any Option or Stock Purchase Right granted hereunder. Such
terms and conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights 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 Option or Stock Purchase Right or the Common Stock relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall determine; 
  
 (vi) to determine whether and under what circumstances an
Option may be settled in cash under subsection 9(f) instead of Common Stock; 
  
 (vii) to reduce the exercise price of any Option to the then current Fair Market Value if the Fair Market Value of the Common Stock covered by such Option has declined since the date the Option was granted;

  
 (viii) to initiate an Option Exchange
Program; 
  
 (ix) 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 qualifying for preferred tax treatment under foreign tax laws; 
  
 (x) to allow Optionees to satisfy withholding tax
obligations by electing to have the Company withhold from the Shares to be issued upon exercise of an Option or Stock Purchase Right that number of Shares having a Fair Market Value equal to the amount required to be withheld. The Fair Market Value
of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by Optionees to have Shares withheld for this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and 
  
 (xi) to construe and interpret the terms of the Plan and awards granted pursuant to the Plan. 
  
 (c) Effect of Administrator’s Decision. All decisions, determinations and interpretations of the Administrator shall be final
and binding on all Optionees. 
  

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 5. Eligibility. 
  
 (a) Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service Providers. Incentive
Stock Options may be granted only to Employees. 
  
 (b) Each Option shall be designated in the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with
respect to which Incentive Stock Options are exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock
Options. For purposes of this Section 5(b), Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is
granted. 
  
 (c) Neither the Plan nor any Option
or Stock Purchase Right shall confer upon any Optionee any right with respect to continuing the Optionee’s relationship as a Service Provider with the Company, nor shall it interfere in any way with his or her right or the Company’s right
to terminate such relationship at any time, with or without cause. 
  
 6. Term of Plan. The Plan shall become effective upon its adoption by the Board. It shall continue in effect for a term of ten (10) years unless sooner terminated under Section 14 of the Plan. 
  
 7. Term of Option. The term of each Option shall be stated in the
Option Agreement; provided, however, that the term shall be no more than ten (10) years from the date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option
Agreement. 
  
 8. Option Exercise Price and Consideration.

  
 (a) The per share exercise price for the
Shares to be issued upon exercise of an Option shall be such price as is determined by the Administrator, but shall be subject to the following: 
  
 (i) In the case of an Incentive Stock Option 
  
 (A) granted to an Employee who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. 
  
 (B) granted to any other Employee, the per Share exercise price shall be no less than 100% of the Fair
Market Value per Share on the date of grant. 
  

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 (ii) In the case of a Nonstatutory Stock Option 
  
 (A) granted to a Service Provider who, at the time of grant
of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the date
of the grant. 
  
 (B) granted to any other
Service Provider, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of grant. 
  
 (iii) Notwithstanding the foregoing, Options may be granted with a per Share exercise price other than as required above pursuant to a
merger or other corporate transaction. 
  
 (b)
The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment, shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant).
Such consideration may consist of (1) cash, (2) check, (3) promissory note, (4) other Shares which (x) in the case of Shares acquired upon exercise of an Option, have been owned by the Optionee for more than six months on the date of surrender, and
(y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which such Option shall be exercised, (5) consideration received by the Company under a cashless exercise program implemented by the
Company in connection with the Plan, or (6) any combination of the foregoing methods of payment. In making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company. 
  
 9. Exercise of
Option. 
  
 (a) Procedure for Exercise;
Rights as a Shareholder. Any Option granted hereunder shall be exercisable according to the terms hereof at such times and under such conditions as determined by the Administrator and set forth in the Option Agreement, but in no case at a rate
of less than 20% per year over five (5) years from the date the Option is granted. Unless the Administrator provides otherwise, vesting of Options granted hereunder shall be tolled during any unpaid leave of absence. An Option may not be exercised
for a fraction of a Share. 
  
 An Option shall be
deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option 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 Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the
Optionee or, if requested by the Optionee, in the name of the Optionee 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 shareholder shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall 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 12 of the Plan. 
  

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 Exercise of an Option in any manner shall result in a decrease in 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. 
  
 (b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, such Optionee may exercise
his or her Option within such period of time as is specified in the Option Agreement (of at least thirty (30) days) 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 the
Option as set forth in the Option Agreement). To the extent that the Optionee is not entitled to exercise the Option on the date of such termination, or if the Optionee does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of Optionee’s disability, the Optionee
may within twelve (12) months from the date of such termination (but in no event later than the expiration date of the term of such Option as set forth in the Option Agreement), exercise an Option to the extent otherwise entitled to exercise it at
the date of such termination. If such disability is not a “disability” as such term is defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such Incentive Stock Option shall automatically cease to be treated as
an Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option on the day three months and one day following such termination. To the extent that the Optionee is not entitled to exercise the Option on the date of
termination, or if the Optionee does not exercise such Option to the extent so entitled within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (d) Death of Optionee. If an Optionee dies while a
Service Provider, the Option may be exercised at any time within twelve (12) months following the date of death (but in no event later than the expiration of the term of such Option as set forth in the Notice of Grant) to the extent vested on the
date of death. If, at the time of death, the Optionee is not vested as to the entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. The Option may be exercised by the executor or administrator of the
Optionee’s estate or, if none, by the person(s) entitled to exercise the Option under the Optionee’s will or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (e) Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares, an Option previously granted, based on such terms and conditions as the Administrator shall establish
and communicate to the Optionee at the time that such offer is made. 
  
 10. Non-Transferability of Options and Stock Purchase Rights. Options and Stock Purchase Rights 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 Optionee, only by the Optionee. 
  

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 11. 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 shall advise the offeree in writing or electronically of the
terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase, the price to be paid, and the time within which such person must accept such offer. The terms of the offer shall
comply in all respects with Section 260.140.42 of Title 10 of the California Code of Regulations. The offer shall be accepted by execution of a Restricted Stock purchase agreement in the form determined by the Administrator. 
  
 (b) Repurchase Option. Unless the Administrator
determines otherwise, the Restricted Stock purchase agreement shall 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 Restricted Stock purchase agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may determine, but in no case at a rate of less than 20% per year over five years from the date of purchase. 
  
 (c) Other Provisions. The Restricted Stock purchase agreement shall contain such other terms,
provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. 
  
 (d) Rights as a Shareholder. Once the Stock Purchase Right is exercised, the purchaser shall have rights equivalent to those of a
shareholder and shall be a shareholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment shall 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 12 of the Plan. 
  
 12. Adjustments Upon Changes in Capitalization, Merger or Asset Sale. 
  
 (a) Changes in Capitalization. Subject to any required action by the shareholders of the Company, the number of shares of Common
Stock covered by each outstanding Option or Stock Purchase Right, and the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Options or Stock Purchase Rights have yet been granted or which have
been returned to the Plan upon cancellation or expiration of an Option or Stock Purchase Right, as well as the price per share of Common Stock covered by each such outstanding Option or Stock Purchase Right, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued
shares of Common Stock effected without receipt of consideration by the Company. The conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment
shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly 
  

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 provided herein, no issuance by the Company of shares of stock of any class, or securities convertible
into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Option or Stock Purchase Right. 
  
 (b) Dissolution or Liquidation. In the event of the
proposed dissolution or liquidation of the Company, the Administrator shall notify the Optionee at least fifteen (15) days prior to such proposed action. To the extent it has not been previously exercised, the Option or Stock Purchase Right shall
terminate immediately prior to the consummation of such proposed action. 
  
 (c) Merger or Asset Sale. In the event of a merger of the Company with or into another corporation, or the sale of substantially all of the assets of the Company, each outstanding Option and Stock Purchase
Right shall 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 or
Stock Purchase Right, the Optionee shall fully vest in and have the right to exercise the Option or Stock Purchase Right as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option or
Stock Purchase Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the Administrator shall notify the Optionee in writing or electronically that the Option or Stock Purchase
Right shall be fully exercisable for a period of fifteen (15) days from the date of such notice, and the Option or Stock Purchase Right shall terminate upon the expiration of such period. For the purposes of this paragraph, the Option or Stock
Purchase Right shall be considered assumed if, following the merger or sale of assets, the option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option or Stock Purchase Right immediately prior to
the merger or sale of assets, the consideration (whether stock, cash, or other securities or property) received in the merger or sale of assets 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 merger or sale of assets 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 or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase 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 merger or sale of assets.

  
 13. Time of Granting Options and Stock Purchase Rights.
The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such other date as is determined by the Administrator.
Notice of the determination shall be given to each Employee or Consultant to whom an Option or Stock Purchase Right is so granted within a reasonable time after the date of such grant. 
  

 -9- 

 14. Amendment and Termination of the Plan. 
  
 (a) Amendment and Termination. The Board may at any
time amend, alter, suspend or terminate the Plan. 
  
 (b) Shareholder Approval. The Board shall obtain shareholder 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 shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by the Optionee and the Company. Termination of the Plan shall not affect the
Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination. 
  
 15. Conditions Upon Issuance of Shares. 
  
 (a) Legal Compliance. Shares shall not be issued pursuant to the exercise of an Option unless the
exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws and shall 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 Option, the Administrator may require the person exercising such Option 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. 
  
 16. 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, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained. 
  
 17. Reservation of
Shares. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  
 18. Shareholder Approval. The Plan shall be subject to approval by the shareholders of the Company within twelve (12)
months after the date the Plan is adopted. Such shareholder approval shall be obtained in the degree and manner required under Applicable Laws. 
  
 19. Information to Optionees and Purchasers. The Company shall provide to each Optionee and to each individual who acquires Shares pursuant to the
Plan, not less frequently than annually during the period such Optionee or purchaser has one or more Options or Stock Purchase Rights outstanding, and, in the case of an individual who acquires Shares pursuant to the Plan, during the period such
individual owns such Shares, copies of annual financial statements. The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to equivalent information. 

 

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