Document:

2003 Equity Incentive Plan

 Exhibit 10.2 
  
 SIGMATEL, INC. 
 2003 EQUITY INCENTIVE PLAN 
  
 1.
ESTABLISHMENT, PURPOSE AND TERM OF PLAN. 
  

1.1 Establishment. SigmaTel, Inc., a Delaware corporation, hereby establishes the SigmaTel, Inc. 2003 Equity Incentive Plan (the
“Plan”) effective as of the effective date of the initial registration by the Company of its Stock under Section 12 of the Securities Exchange Act of 1934, as amended (the “Effective Date”).

  
 1.2 Purpose. The purpose of the Plan is to advance the
interests of the Participating Company Group and its stockholders by providing an incentive to attract, retain and reward persons performing services for the Participating Company Group and by motivating such persons to contribute to the growth and
profitability of the Participating Company Group. The Plan seeks to achieve this purpose by providing for Awards in the form of Options, Stock Appreciation Rights, Stock Purchase Rights, Stock Bonuses, Performance Shares and Performance Units.

  
 1.3 Term of Plan. The Plan shall continue in effect
until the earlier of its termination by the Board or the date on which all of the shares of Stock available for issuance under the Plan have been issued and all restrictions on such shares under the terms of the Plan and the agreements evidencing
Awards granted under the Plan have lapsed. However, all Incentive Stock Options shall be granted, if at all, within ten (10) years from the earlier of the date the Plan is adopted by the Board or the date the Plan is duly approved by the
stockholders of the Company. 
  
 2.
DEFINITIONS AND CONSTRUCTION. 
  
 2.1 Definitions. Whenever used herein, the following terms shall have their respective meanings set forth below: 
  
 (a) “Affiliate” means (i) an entity, other than a
Parent Corporation, that directly, or indirectly through one or more intermediary entities, controls the Company or (ii) an entity, other than a Subsidiary Corporation, that is controlled by the Company directly, or indirectly through one or more
intermediary entities. For this purpose, the term “control” (including the term “controlled by”) means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of the
relevant entity, whether through the ownership of voting securities, by contract or otherwise; or shall have such other meaning assigned such term for the purposes of registration on Form S-8 under the Securities Act. 
  
 (b) “Award” means any Option, SAR, Stock Purchase
Right, Stock Bonus, Performance Share or Performance Unit granted under the Plan. 
  

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 (c) “Award Agreement” means a written agreement between the Company and a
Participant setting forth the terms, conditions and restrictions of the Award granted to the Participant. An Award Agreement may be an “Option Agreement,” an “SAR Agreement,” a “Stock Purchase Agreement,” a “Stock
Bonus Agreement,” a “Performance Share Agreement” or a “Performance Unit Agreement.” 
  
 (d) “Board” means the Board of Directors of the Company. 
  
 (e) “Code” means the Internal
Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder. 
  
 (f) “Committee” means the Compensation Committee or other committee of the Board duly appointed to administer the Plan and having such powers as shall be specified by the
Board. If no committee of the Board has been appointed to administer the Plan, the Board shall exercise all of the powers of the Committee granted herein, and, in any event, the Board may in its discretion exercise any or all of such powers.

  
 (g) “Company”
means SigmaTel, Inc., a Delaware corporation, or any successor corporation thereto. 
  
 (h) “Consultant” means a person engaged to provide consulting or advisory services (other than as an Employee or a member of the Board) to a Participating Company, provided
that the identity of such person, the nature of such services or the entity to which such services are provided would not preclude the Company from offering or selling securities to such person pursuant to the Plan in reliance on registration on a
Form S-8 Registration Statement under the Securities Act. 
  
 (i) “Director” means a member of the Board or of the board of directors of any other Participating Company. 
  
 (j) “Disability” means the permanent and total disability of the Participant,
within the meaning of Section 22(e)(3) of the Code. 
  
 (k)
“Dividend Equivalent” means a credit, made at the discretion of the Committee or as otherwise provided by the Plan, to the account of a Participant in an amount equal to the cash dividends paid on one share of Stock for each
share of Stock represented by an Award held by such Participant. 
  
 (l) “Employee” means any person treated as an employee (including an Officer or a member of the Board who is also treated as an employee) in the records of a Participating Company and, with
respect to any Incentive Stock Option granted to such person, who is an employee for purposes of Section 422 of the Code; provided, however, that neither service as a member of the Board nor payment of a director’s fee shall be sufficient to
constitute employment for purposes of the Plan. 
  
 (m)
“Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  

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 (n) “Fair Market Value” means, as of any date, the value of
a share of Stock or other property as determined by the Committee, in its discretion, or by the Company, in its discretion, if such determination is expressly allocated to the Company herein, subject to the following: 
  
 (i) If, on such date, the Stock is listed on a national or regional
securities exchange or market system, the Fair Market Value of a share of Stock shall be the closing price of a share of Stock (or the mean of the closing bid and asked prices of a share of Stock if the Stock is so quoted instead) as quoted on the
Nasdaq National Market, The Nasdaq SmallCap Market or such other national or regional securities exchange or market system constituting the primary market for the Stock, as reported in The Wall Street Journal or such other source as the
Company deems reliable. If the relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system, the date on which the Fair Market Value shall be established shall be the last day on which the Stock was
so traded prior to the relevant date, or such other appropriate day as shall be determined by the Committee, in its discretion. 
  
 (ii) If, on such date, the Stock is not listed on a national or regional securities exchange or market system, the Fair Market Value of a share of Stock
shall be as determined by the Committee in good faith without regard to any restriction other than a restriction which, by its terms, will never lapse. 
  
 (o) “Incentive Stock Option” means an Option intended to be (as set forth in the Award Agreement) and which qualifies as an
incentive stock option within the meaning of Section 422(b) of the Code. 
  
 (p) “Insider” means an Officer, a Director or any other person whose transactions in Stock are subject to Section 16 of the Exchange Act. 
  
 (q) “Nonstatutory Stock
Option” means an Option not intended to be (as set forth in the Award Agreement) an incentive stock option within the meaning of Section 422(b) of the Code. 
  
 (r) “Officer” means any person designated by the
Board as an officer of the Company. 
  
 (s)
“Option” means the right to purchase Stock at a stated price for a specified period of time granted to a participant pursuant to Section 6 of the Plan or to an Outside Director pursuant to Section 7 of
the Plan. An Option may be either an Incentive Stock Option or a Nonstatutory Stock Option. 
  
 (t) “Outside Director” means a Director who is not an Employee of the Company or of any Parent Corporation or Subsidiary Corporation. 
  
 (u) “Parent Corporation” means
any present or future “parent corporation” of the Company, as defined in Section 424(e) of the Code. 
  

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 (v) “Participant” means any eligible person who has been granted one or more
Awards. 
  
 (w) “Participating
Company” means the Company or any Parent Corporation, Subsidiary Corporation or Affiliate. 
  
 (x) “Participating Company Group” means, at any point in time, all corporations collectively which are then
Participating Companies. 
  
 (y) “Performance
Award” means an Award of Performance Shares or Performance Units. 
  
 (z) “Performance Award Formula” means, for any Performance Award, a formula or table established by the Committee pursuant to Section 10.3 of the Plan which provides the basis for computing the
value of a Performance Award at one or more threshold levels of attainment of the applicable Performance Goal(s) measured as of the end of the applicable Performance Period. 
  
 (aa) “Performance Goal” means a performance goal established by the Committee pursuant to Section
10.3 of the Plan. 
  
 (bb) “Performance
Period” means a period established by the Committee pursuant to Section 10.3 of the Plan at the end of which one or more Performance Goals are to be measured. 
  
 (cc) “Performance Share” means a bookkeeping entry representing a right granted to a Participant
pursuant to Section 10 of the Plan to receive a payment equal to the value of a Performance Share, as determined by the Committee, based on performance. 
  
 (dd) “Performance Unit” means a bookkeeping entry representing a right granted to a Participant pursuant to Section 10 of the
Plan to receive a payment equal to the value of a Performance Unit, as determined by the Committee, based upon performance. 
  
 (ee) “Prior Plan Options” means any option granted pursuant to the Company’s 1995 Stock Option/Stock Issuance Plan which is
outstanding on or after the date on which the Board adopts the Plan or which is granted thereafter and prior to the Effective Date.  
  
 (ff) “Restriction Period” means the period established in accordance with Section 9.5 of the Plan during which shares subject to
a Stock Award are subject to Vesting Conditions. 
  
 (gg)
“Rule 16b-3” means Rule 16b-3 under the Exchange Act, as amended from time to time, or any successor rule or regulation. 
  
 (hh) “SAR” or “Stock Appreciation Right” means a bookkeeping entry representing, for each share of Stock
subject to such SAR, a right granted to a Participant pursuant to Section 8 of the Plan to receive payment of an amount equal to the excess, if any, of 
  

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	the	 	Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. 

  
 (ii) “Section 162(m)” means Section 162(m) of the Code. 
  
 (jj) “Securities Act” means
the Securities Act of 1933, as amended. 
  
 (kk)
“Service” means a Participant’s employment or service with the Participating Company Group as an Employee, a Director or a Consultant, whichever such capacity the Participant held on the date of
grant of an Award or, if later, the date on which the Participant commenced Service. Unless otherwise determined by the Board, a Participant’s Service shall be deemed to have terminated if the Participant ceases to render service to the
Participating Company Group in such initial capacity. However, a Participant’s Service shall not be deemed to have terminated merely because of a change in the Participating Company for which the Participant renders such Service in such initial
capacity, provided that there is no interruption or termination of the Participant’s Service. Furthermore, a Participant’s Service shall not be deemed to have terminated if the Participant takes any bona fide leave of absence approved by
the Company of ninety (90) days or less. In the event of a leave in excess of ninety (90) days, the Participant’s Service shall be deemed to terminate on the ninety-first (91st) day of the leave unless the Participant’s right to return to
Service is guaranteed by statute or contract. Notwithstanding the foregoing, unless otherwise designated by the Company or required by law, a leave of absence shall not be treated as Service for purposes of determining vesting under the
Participant’s Award Agreement. A Participant’s Service shall be deemed to have terminated either upon an actual termination of Service or upon the corporation for which the Participant performs Service ceasing to be a Participating
Company. Subject to the foregoing, the Company, in its discretion, shall determine whether the Participant’s Service has terminated and the effective date of such termination. 
  
 (ll) “Stock” means the common stock of the Company, as adjusted from time to
time in accordance with Section 4.2 of the Plan. 
  
 (mm)
“Stock Award” means an Award of a Stock Bonus or a Stock Purchase Right. 
  
 (nn) “Stock Bonus” means Stock granted to a Participant pursuant to Section 9 of the Plan. 
  
 (oo) “Stock Purchase Right” means a right to
purchase Stock granted to a Participant pursuant to Section 9 of the Plan. 
  
 (pp) “Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code. 
  
 (qq) “Ten Percent Owner” means a Participant who,
at the time an Option is granted to the Participant, owns stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of a Participating Company (other than an Affiliate) within the meaning of Section
422(b)(6) of the Code. 
  

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 (rr) “Vesting Conditions” mean those conditions established in accordance
with Section 9.5 of the Plan prior to the satisfaction of which shares subject to a Stock Award remain subject to forfeiture or a repurchase option in favor of the Company. 
  
 2.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or
interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the
context clearly requires otherwise. 
  
 3.
ADMINISTRATION. 
  
 3.1 Administration by the Committee. The Plan shall be administered by the Committee. All questions of interpretation of the Plan or of any Award shall be determined by the Committee, and such determinations shall be final and
binding upon all persons having an interest in the Plan or such Award. 
  
 3.2 Authority of Officers. Any Officer shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election which is the responsibility of or which is allocated to the
Company herein, provided the Officer has apparent authority with respect to such matter, right, obligation, determination or election. The Board may, in its discretion, delegate to a committee comprised of one or more Officers the authority to grant
one or more Options, without further approval of the Board or the Committee, to any Employee, other than a person who, at the time of such grant, is an Insider; provided, however, that (i) such Awards shall not be granted for shares in excess of the
maximum aggregate number of shares of Stock authorized for issuance pursuant to Section 4.1, (ii) the exercise price per share of each Option shall be not less than the Fair Market Value per share of the Stock on the effective date of grant (or, if
the Stock has not traded on such date, on the last day preceding the effective date of grant on which the Stock was traded), and (iii) each such Award shall be subject to the terms and conditions of the appropriate standard form of Award Agreement
approved by the Board or the Committee and shall conform to the provisions of the Plan and such other guidelines as shall be established from time to time by the Board or the Committee. 
  
 3.3 Administration with Respect to Insiders. With respect to participation by Insiders in the Plan, at any time that
any class of equity security of the Company is registered pursuant to Section 12 of the Exchange Act, the Plan shall be administered in compliance with the requirements, if any, of Rule 16b-3. 
  
 3.4 Committee Complying with Section 162(m). If the Company is a
“publicly held corporation” within the meaning of Section 162(m), the Board may establish a Committee of “outside directors” within the meaning of Section 162(m) to approve the grant of any Award which might reasonably be
anticipated to result in the payment of employee remuneration that would otherwise exceed the limit on employee remuneration deductible for income tax purposes pursuant to Section 162(m). 
  

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 3.5 Powers of the Committee. In addition to any other powers set forth in the Plan and subject to
the provisions of the Plan, the Committee shall have the full and final power and authority, in its discretion: 
  
 (a) to determine the persons to whom, and the time or times at which, Awards shall be granted and the number of shares of Stock or units to be subject to
each Award; 
  
 (b) to determine the type of Award granted and
to designate Options as Incentive Stock Options or Nonstatutory Stock Options; 
  
 (c) to determine the Fair Market Value of shares of Stock or other property; 
  
 (d) to determine the terms, conditions and restrictions applicable to each Award (which need not be identical) and any shares acquired pursuant thereto,
including, without limitation, (i) the exercise or purchase price of shares purchased pursuant to any Award, (ii) the method of payment for shares purchased pursuant to any Award, (iii) the method for satisfaction of any tax withholding obligation
arising in connection with Award, including by the withholding or delivery of shares of Stock, (iv) the timing, terms and conditions of the exercisability or vesting of any Award or any shares acquired pursuant thereto, (v) the Performance Award
Formula and Performance Goals applicable to any Award and the extent to which such Performance Goals have been attained, (vi) the time of the expiration of any Award, (vii) the effect of the Participant’s termination of Service on any of the
foregoing, and (viii) all other terms, conditions and restrictions applicable to any Award or shares acquired pursuant thereto not inconsistent with the terms of the Plan; 
  
 (e) to determine whether an Award of SARs, Performance Shares or Performance Units will be settled in shares of Stock,
cash, or in any combination thereof; 
  
 (f) to approve one or
more forms of Award Agreement; 
  
 (g) to amend, modify, extend,
cancel or renew any Award or to waive any restrictions or conditions applicable to any Award or any shares acquired pursuant thereto; 
  
 (h) to accelerate, continue, extend or defer the exercisability or vesting of any Award or any shares acquired pursuant thereto, including with respect
to the period following a Participant’s termination of Service; 
  
 (i) to prescribe, amend or rescind rules, guidelines and policies relating to the plan, or to adopt sub-plans or supplements to, or alternative versions of, the Plan, including, without limitation, as the Committee deems necessary or
desirable to comply with the laws of or to accommodate the laws, regulations, tax or accounting effectiveness, accounting principles or custom of, foreign jurisdictions whose citizens may be granted Awards; and 
  
 (j) to correct any defect, supply any omission or reconcile any
inconsistency in the Plan or any Award Agreement and to make all other determinations and take such other actions with respect to the Plan or any Award as the Committee may deem advisable to the extent not inconsistent with the provisions of the
Plan or applicable law. 
  

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 3.6 Option Repricing. Without the affirmative vote of holders of a majority of the shares of
Stock cast in person or by proxy at a meeting of the stockholders of the Company at which a quorum representing a majority of all outstanding shares of Stock is present or represented by proxy, the Board shall not approve a program providing for
either (a) the cancellation of outstanding Options and the grant in substitution therefore of new Options having a lower exercise price or (b) the amendment of outstanding Options to reduce the exercise price thereof. This paragraph shall not be
construed to apply to “issuing or assuming a stock option in a transaction to which section 424(a) applies,” within the meaning of Section 424 of the Code. 
  
 3.7 Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or
the Committee or as officers or employees of the Participating Company Group, members of the Board or the Committee and any officers or employees of the Participating Company Group to whom authority to act for the Board, the Committee or the Company
is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or
proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the
Company, in writing, the opportunity at its own expense to handle and defend the same. 
  
 4. SHARES SUBJECT TO PLAN. 
  
 4.1 Maximum Number of Shares Issuable. Subject to adjustment as provided in Section 4.2, the maximum aggregate
number of shares of Stock that may be issued under the Plan shall be Six Million Eight Hundred and Sixty Six Thousand Seven Hundred and Forty Seven (6,866,747) (determined after taking into account the one-for-three reverse stock split to be
completed by the Company prior to the initial registration by the Company of its Stock under Section 12 of the Exchange Act), reduced at any time by the number of shares subject to the Prior Plan Options. Such shares shall consist of
authorized but unissued or reacquired shares of Stock or any combination thereof. If any outstanding Award, including any Prior Plan Options, for any reason expires or is terminated or canceled without having been exercised or settled in full, or if
shares of Stock acquired pursuant to an Award subject to forfeiture or repurchase, including any Prior Plan Options, are forfeited or repurchased by the Company, the shares of Stock allocable to the terminated portion of such Award, including any
Prior Plan Options, or such forfeited or repurchases shares of Stock shall again be available for issuance under the Plan. Shares of Stock shall not be deemed to have been issued pursuant to the Plan (i) with respect to any portion of an Award that
is settled in cash or (ii) to the extent such shares are withheld in satisfaction of tax withholding obligations pursuant to Section 14.2. Upon payment in shares of Stock pursuant to the exercise of an SAR, the number of shares available for
issuance under the Plan shall be reduced only by the number of shares actually issued in such payment. If the exercise price of an Option is paid by tender to the Company, or attestation to 
  

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 the ownership, of shares of Stock owned by the Participant, the number of shares available for issuance under the Plan
shall be reduced by the gross number of shares for which the Option is exercised. 
  
 4.2 Adjustments for Changes in Capital Structure. In the event of any change in the Stock through merger, consolidation, reorganization, reincorporation, recapitalization, reclassification, stock dividend,
stock split, reverse stock split, split-up, split-off, spin-off, combination of shares, exchange of shares or similar change in the capital structure of the Company, or in the event of payment of a dividend or distribution to the stockholders of the
Company in a form other than Stock (excepting normal cash dividends) that has a material effect on the Fair Market Value of shares of Stock, appropriate adjustments shall be made in the number and class of shares subject to the Plan, in the ISO
Share Limit set forth in Section 5.3(b), the Award limits set forth in Section 5.4 and to any outstanding Awards, and in the exercise or purchase price per share under any outstanding Award. Notwithstanding the foregoing, any fractional share
resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number, and in no event may the exercise or purchase price under any Award be decreased to an amount less than the par value, if any, of the stock
subject to such Award. The adjustments determined by the Committee pursuant to this Section 4.2 shall be final, binding and conclusive. 
  
 5. ELIGIBILITY AND AWARD LIMITATIONS. 
  
 5.1 Persons Eligible for Awards. Awards may be granted only to
Employees, Directors and Consultants. For purposes of the foregoing sentence, “Employees,” “Consultants,” and “Directors” shall include prospective Employees, prospective Consultants and prospective Directors to whom
Awards are granted in connection with written offers of an employment or other service relationship with the Participating Company Group; provided, however, that no Stock subject to any such Award shall vest, become exercisable or be issued prior to
the date on which such person commences Service. 
  
 5.2
Participation. Awards are granted solely at the discretion of the Committee. Eligible persons may be granted more than one (1) Award. However, eligibility in accordance with this Section shall not entitle any person to be granted an Award,
or, having been granted an Award, to be granted an additional Award. 
  
 5.3 Incentive Stock Option Limitations. 
  
 (a)
Persons Eligible. An Incentive Stock Option may be granted only to a person who, on the effective date of grant, is an Employee of the Company, a Parent Corporation or a Subsidiary Corporation (each being an “ISO-Qualifying
Corporation”). Any person who is not an Employee of an ISO-Qualifying Corporation on the effective date of the grant of an Option to such person may be granted only a Nonstatutory Stock Option. An Incentive Stock Option granted to a
prospective Employee upon the condition that such person become an Employee of an ISO-Qualifying Corporation shall be deemed granted effective on the date such person commences Service with an ISO-Qualifying Corporation, with an exercise price
determined as of such date in accordance with Section 6.1. 
  

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 (b) ISO Share Limit. Subject to adjustment as provided in Section 4.2, in no event shall
more than Six Million Eight Hundred and Sixty Six Thousand Seven Hundred and Forty Seven (6,866,747) shares of Stock be available for issuance pursuant to the exercise of Incentive Stock Options granted under the Plan or the Predecessor Plans (the
“ISO Share Limit”). 
  
 (c) Fair
Market Value Limitation. To the extent that options designated as Incentive Stock Options (granted under all stock option plans of the Participating Company Group, including the Plan) become exercisable by a Participant for the first time
during any calendar year for stock having a Fair Market Value greater than One Hundred Thousand Dollars ($100,000), the portion of such options which exceeds such amount shall be treated as Nonstatutory Stock Options. For purposes of this Section,
options designated as Incentive Stock Options shall be taken into account in the order in which they were granted, and the Fair Market Value of stock shall be determined as of the time the option with respect to such stock is granted. If the Code is
amended to provide for a different limitation from that set forth in this Section, such different limitation shall be deemed incorporated herein effective as of the date and with respect to such Options as required or permitted by such amendment to
the Code. If an Option is treated as an Incentive Stock Option in part and as a Nonstatutory Stock Option in part by reason of the limitation set forth in this Section, the Participant may designate which portion of such Option the Participant is
exercising. In the absence of such designation, the Participant shall be deemed to have exercised the Incentive Stock Option portion of the Option first. Upon exercise, each portion shall be separately identified. 
  
 5.4 Award Limits. 
  
 (a) Aggregate Limit on Stock Awards and Performance Awards.
Subject to adjustment as provided in Section 4.2, in no event shall more than One Million (1,000,000) shares of Stock in the aggregate be issued under the Plan pursuant to the exercise or settlement of Stock Awards and Performance Awards.

  
 (b) Section 162(m) Award Limits. The following
limits shall apply to the grant of any Award if, at the time of grant, the Company is a “publicly held corporation” within the meaning of Section 162(m). 
  
 (i) Options and SARs. Subject to adjustment as provided in Section 4.2, no Employee shall be granted within any
fiscal year of the Company one or more Options or Freestanding SARs which in the aggregate are for more than One Million (1,000,000) shares of Stock. An Option which is canceled (or a Freestanding SAR as to which the exercise price is reduced to
reflect a reduction in the Fair Market Value of the Stock) in the same fiscal year of the Company in which it was granted shall continue to be counted against such limit for such fiscal year. 
  
 (ii) Stock Awards. Subject to adjustment as provided in Section 4.2,
no Employee shall be granted within any fiscal year of the Company one or more Stock Awards, subject to Vesting Conditions based on the attainment of Performance Goals, for more than One Hundred Thousand (100,000) shares of Stock. 
  

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 (iii) Performance Awards. Subject to adjustment as provided in Section 4.2, no Employee shall be
granted (A) Performance Shares which could result in such Employee receiving more than One Hundred Thousand (100,000) shares of Stock for each full fiscal year of the Company contained in the Performance Period for such Award, or (B) Performance
Units which could result in such Employee receiving more than One Million dollars ($1,000,000) for each full fiscal year of the Company contained in the Performance Period for such Award. No Participant may be granted more than one Performance Award
for the same Performance Period. 
  
 6. TERMS
AND CONDITIONS OF OPTIONS. 
  
 Options shall be evidenced by Award Agreements specifying the number of shares of Stock covered thereby, in such form as the Committee shall from time to
time establish. No Option or purported Option shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Options may incorporate all or any of the terms of the Plan by
reference and shall comply with and be subject to the following terms and conditions: 
  
 6.1 Exercise Price. The exercise price for each Option shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share shall be not less than the Fair Market
Value of a share of Stock on the effective date of grant of the Option and (b) no Incentive Stock Option granted to a Ten Percent Owner shall have an exercise price per share less than one hundred ten percent (110%) of the Fair Market Value of a
share of Stock on the effective date of grant of the Option. Notwithstanding the foregoing, an Option (whether an Incentive Stock Option or a Nonstatutory Stock Option) may be granted with an exercise price lower than the minimum exercise price set
forth above if such Option is granted pursuant to an assumption or substitution for another option in a manner qualifying under the provisions of Section 424(a) of the Code. 
  
 6.2 Exercisability and Term of Options. Options shall be exercisable at such time or times, or upon such event or
events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such Option; provided, however, that (a) no Option shall be exercisable
after the expiration of ten (10) years after the effective date of grant of such Option, (b) no Incentive Stock Option granted to a Ten Percent Owner shall be exercisable after the expiration of five (5) years after the effective date of grant of
such Option, and (c) no Option granted to a prospective Employee or prospective Consultant may become exercisable prior to the date on which such person commences Service. Subject to the foregoing, unless otherwise specified by the Committee in the
grant of an Option, any Option granted hereunder shall terminate ten (10) years after the effective date of grant of the Option, unless earlier terminated in accordance with its provisions. 
  
 6.3 Payment of Exercise Price. 
  
 (a) Forms of Consideration Authorized. Except as otherwise
provided below, payment of the exercise price for the number of shares of Stock being purchased pursuant to any Option shall be made (i) in cash, by check or cash equivalent, (ii) by tender to 
  

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 the Company, or attestation to the ownership, of shares of Stock owned by the Participant having a Fair Market Value not
less than the exercise price, (iii) by delivery of a properly executed notice of exercise together with irrevocable instructions to a broker providing for the assignment to the Company of the proceeds of a sale or loan with respect to some or all of
the shares being acquired upon the exercise of the Option (including, without limitation, through an exercise complying with the provisions of Regulation T as promulgated from time to time by the Board of Governors of the Federal Reserve System) (a
“Cashless Exercise”), (iv) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (v) by any combination thereof. The Committee may at any time or from
time to time grant Options which do not permit all of the foregoing forms of consideration to be used in payment of the exercise price or which otherwise restrict one or more forms of consideration. 
  
 (b) Limitations on Forms of Consideration. 
  
 (i) Tender of Stock. Notwithstanding the foregoing, an Option may
not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock to the extent such tender or attestation would constitute a violation of the provisions of any law, regulation or agreement restricting the redemption of
the Company’s stock. Unless otherwise provided by the Committee, an Option may not be exercised by tender to the Company, or attestation to the ownership, of shares of Stock unless such shares either have been owned by the Participant for more
than six (6) months (and not used for another Option exercise by attestation during such period) or were not acquired, directly or indirectly, from the Company. 
  
 (ii) Cashless Exercise. The Company reserves, at any and all times, the right, in the Company’s sole and
absolute discretion, to establish, decline to approve or terminate any program or procedures for the exercise of Options by means of a Cashless Exercise. 
  
 6.4 Effect of Termination of Service. An Option shall be exercisable after a Participant’s termination of Service to such extent and during
such period as determined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Option. 
  
 6.5 Transferability of Options. During the lifetime of the Participant, an Option shall be exercisable only by the Participant or the
Participant’s guardian or legal representative. No Option shall be assignable or transferable by the Participant, except by will or by the laws of descent and distribution. Notwithstanding the foregoing, to the extent permitted by the
Committee, in its discretion, and set forth in the Award Agreement evidencing such Option, an Option shall be assignable or transferable subject to the applicable limitations, if any, described in the General Instructions to Form S-8 Registration
Statement under the Securities Act. 
  
 7.
TERMS AND CONDITIONS OF OUTSIDE DIRECTOR OPTIONS. 
  
 Outside Director Options shall be evidenced by Award Agreements specifying the number of shares of Stock covered thereby,
in such form as the Board shall from time to time establish. Outside Director Award Agreements may incorporate all or any of the terms of the 
  

 12 

 Plan by reference and shall comply with and be subject to the terms and conditions of Section 6 to the extent no
inconsistent with this Section and the following terms and conditions: 
  
 7.1 Automatic Grant. Subject to the execution by an Outside Director of an appropriate Award Agreement, Options shall be granted automatically and without further action of the Board, as follows: 
  
 (a) Initial Option. Each person who first becomes an Outside
Director after the Effective Date shall be granted on the date such person first becomes an Outside Director an Option to purchase Thirty Thousand (30,000) shares of Stock (an “Initial Option”) (determined after taking into
account the one-for-three reverse stock split to be completed by the Company prior to the initial registration by the Company of its Stock under Section 12 of the Exchange Act).  
  
 (b) Annual Option. Each Outside Director shall be granted on the date of each annual meeting of the
stockholders of the Company which occurs on or after the Effective Date (an “Annual Meeting”) immediately following which such person remains an Outside Director an Option to purchase Ten Thousand (10,000) shares of Stock (an
“Annual Option”) (determined after taking into account the one-for-three reverse stock split to be completed by the Company prior to the initial registration by the Company of its Stock under Section 12 of the Exchange Act);
provided, however, that an Outside Director granted an Initial Option on, or within a period of six (6) months prior to, the date of an Annual Meeting shall not be granted an Annual Option pursuant to this Section with respect to the same Annual
Meeting. 
  
 (c) Right to Decline Outside Director
Option. Notwithstanding the foregoing, any person may elect not to receive an Outside Director Option by delivering written notice of such election to the Board no later than the day prior to the date such Option would otherwise be granted.
A person so declining an Outside Director Option shall receive no payment or other consideration in lieu of such declined Outside Director Option. A person who has declined an Outside Director Option may revoke such election by delivering written
notice of such revocation to the Board no later than the day prior to the date such Outside Director Option would be granted pursuant to Section 7.1(a) or (b), as the case may be. 
  
 7.2 Exercisability and Term of Outside Director Options. Each Outside Director Option shall vest and become
exercisable as set forth below and shall terminate and cease to be exercisable on the tenth (10th) anniversary of the date of grant of the Outside Direct Option, unless earlier terminated in accordance with the terms of the Plan or the Award
Agreement evidencing such Outside Director Option. 
  
 (a)
Initial Options. Except as otherwise provided in the Plan or in the Award Agreement evidencing such Outside Director Option, each Initial Option shall vest and become exercisable in four (4) substantially equal installments on each of
the first four (4) anniversaries of the date of grant of the Initial Option, provided that the Outside Director’s Service has not terminated prior to the relevant date. 
  
 (b) Annual Options. Except as otherwise provided in the Plan or in the Award Agreement evidencing such
Outside Director Option, each Annual Option shall vest 
  

 13 

 and become exercisable in four (4) substantially equal installments on each of the first four (4) anniversaries of the
date of grant of the Annual Option, provided that the Outside Director’s Service has not terminated prior to the relevant date. 
  
 7.3 Effect of Change in Control on Outside Director Options. In the event of a Change in Control, as defined in Section 12.1, any unexercisable or
unvested portions of outstanding Outside Director Options and any shares acquired upon the exercise thereof held by Outside Directors whose Service has not terminated prior to such date shall be immediately exercisable and vested in full as of the
date ten (10) days prior to the date of the Change in Control. The exercise or vesting of any Outside Director Option and any shares acquired upon the exercise thereof that was permissible solely by reason of this Section 7.3 shall be conditioned
upon the consummation of the Change in Control. In addition, the surviving, continuing, successor, or purchasing corporation or parent corporation thereof, as the case may be (the “Acquiring Corporation”), may either assume
the Company’s rights and obligations under outstanding Outside Director Options or substitute for outstanding Options substantially equivalent options for the Acquiring Corporation’s stock. Any Outside Director Options which are neither
assumed or substituted for by the Acquiring Corporation in connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the Change in Control.
Notwithstanding the foregoing, if the corporation the stock of which is subject to the outstanding Outside Director Options immediately prior to an Ownership Change Event described in Section 12.1(a)(i) constituting a Change in Control is the
surviving or continuing corporation and immediately after such Ownership Change Event less than fifty percent (50%) of the total combined voting power of its voting stock is held by another corporation or by other corporations that are members of an
affiliated group within the meaning of Section 1504(a) of the Code without regard to the provisions of Section 1504(b) of the Code, the outstanding Outside Director Options shall not terminate. 
  
 8. TERMS AND CONDITIONS
OF STOCK APPRECIATION RIGHTS. 
  
 SARs shall be evidenced by Award Agreements specifying the number of shares of Stock subject to the Award, in such form as the Committee shall from time
to time establish. No SAR or purported SAR shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing SARs may incorporate all or any of the terms of the Plan by reference
and shall comply with and be subject to the following terms and conditions: 
  
 8.1 Types of SARs Authorized. SARs may be granted in tandem with all or any portion of a related Option (a “Tandem SAR”) or may be granted independently of any Option (a
“Freestanding SAR”). A Tandem SAR may be granted either concurrently with the grant of the related Option or at any time thereafter prior to the complete exercise, termination, expiration or cancellation of such related
Option. 
  
 8.2 Exercise Price. The exercise price for
each SAR shall be established in the discretion of the Committee; provided, however, that (a) the exercise price per share subject to a Tandem SAR shall be the exercise price per share under the related Option and (b) the 
  

 14 

 exercise price per share subject to a Freestanding SAR shall be not less than the Fair Market Value of a share of Stock
on the effective date of grant of the SAR. 
  
 8.3
Exercisability and Term of SARs. 
  
 (a) Tandem
SARs. Tandem SARs shall be exercisable only at the time and to the extent that the related Option is exercisable, subject to such provisions as the Committee may specify where the Tandem SAR is granted with respect to less than the full
number of shares of Stock subject to the related Option. The Committee may, in its discretion, provide in any Award Agreement evidencing a Tandem SAR that such SAR may not be exercised without the advance approval of the Company and, if such
approval is not given, then the Option shall nevertheless remain exercisable in accordance with its terms. A Tandem SAR shall terminate and cease to be exercisable no later than the date on which the related Option expires or is terminated or
canceled. Upon the exercise of a Tandem SAR with respect to some or all of the shares subject to such SAR, the related Option shall be canceled automatically as to the number of shares with respect to which the Tandem SAR was exercised. Upon the
exercise of an Option related to a Tandem SAR as to some or all of the shares subject to such Option, the related Tandem SAR shall be canceled automatically as to the number of shares with respect to which the related Option was exercised.

  
 (b) Freestanding SARs. Freestanding SARs shall
be exercisable at such time or times, or upon such event or events, and subject to such terms, conditions, performance criteria and restrictions as shall be determined by the Committee and set forth in the Award Agreement evidencing such SAR;
provided, however, that no Freestanding SAR shall be exercisable after the expiration of ten (10) years after the effective date of grant of such SAR. 
  
 8.4 Exercise of SARs. Upon the exercise (or deemed exercise pursuant to Section 8.5) of a SAR, the Participant (or the Participant’s legal
representative or other person who acquired the right to exercise the SAR by reason of the Participant’s death) shall be entitled to receive payment of an amount for each share with respect to which the SAR is exercised equal to the excess, if
any, of the Fair Market Value of a share of Stock on the date of exercise of the SAR over the exercise price. Payment of such amount shall be made in cash, shares of Stock, or any combination thereof as determined by the Committee. Unless otherwise
provided in the Award Agreement evidencing such SAR, payment shall be made in a lump sum as soon as practicable following the date of exercise of the SAR. The Award Agreement evidencing any SAR may provide for deferred payment in a lump sum or in
installments. When payment is to be made in shares of Stock, the number of shares to be issued shall be determined on the basis of the Fair Market Value of a share of Stock on the date of exercise of the SAR. For purposes of Section 8, an SAR shall
be deemed exercised on the date on which the Company receives notice of exercise from the Participant. 
  
 8.5 Deemed Exercise of SARs. If, on the date on which an SAR would otherwise terminate or expire, the SAR by its terms remains exercisable
immediately prior to such termination or expiration and, if so exercised, would result in a payment to the holder of such SAR, then any portion of such SAR which has not previously been exercised shall automatically be deemed to be exercised as of
such date with respect to such portion. 
  

 15 

 8.6 Effect of Termination of Service. An SAR shall be exercisable after a Participant’s
termination of Service to such extent and during such period as determined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such SAR. 
  
 8.7 Nontransferability of SARs. SARs may not be assigned or transferred in any manner except by will or the laws of
descent and distribution, and, during the lifetime of the Participant, shall be exercisable only by the Participant or the Participant’s guardian or legal representative. 
  
 9. TERMS AND CONDITIONS OF STOCK
AWARDS. 
  
 Stock Awards
shall be evidenced by Award Agreements specifying whether the Award is a Stock Bonus or a Stock Purchase Right and the number of shares of Stock subject to the Award, in such form as the Committee shall from time to time establish. No Stock Award or
purported Stock Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Stock Awards may incorporate all or any of the terms of the Plan by reference and shall
comply with and be subject to the following terms and conditions: 
  
 9.1 Types of Stock Awards Authorized. Stock Awards may be in the form of either a Stock Bonus or a Stock Purchase Right. Stock Awards may be granted upon such conditions as the Committee shall determine, including, without
limitation, upon the attainment of one or more Performance Goals described in Section 10.4. If either the grant of a Stock Award or the lapsing of the Restriction Period is to be contingent upon the attainment of one or more Performance Goals, the
Committee shall follow procedures substantially equivalent to those set forth in Sections 10.3 through 10.5(a). 
  
 9.2 Purchase Price. The purchase price for shares of Stock issuable under each Stock Purchase Right shall be established by the Committee in its
discretion. No monetary payment (other than applicable tax withholding) shall be required as a condition of receiving shares of Stock pursuant to a Stock Bonus, the consideration for which shall be services actually rendered to a Participating
Company or for its benefit. Notwithstanding the foregoing, the Participant shall furnish consideration in the form of cash or past services rendered to a Participating Company or for its benefit having a value not less than the par value of the
shares of Stock subject to such Stock Award. 
  
 9.3 Purchase
Period. A Stock Purchase Right shall be exercisable within a period established by the Committee, which shall in no event exceed thirty (30) days from the effective date of the grant of the Stock Purchase Right; provided, however, that no Stock
Purchase Right granted to a prospective Employee or prospective Consultant may become exercisable prior to the date on which such person commences Service. 
  
 9.4 Payment of Purchase Price. Except as otherwise provided below, payment of the purchase price for the number of shares of Stock being purchased
pursuant to any Stock Purchase Right shall be made (i) in cash, by check, or cash equivalent, (ii) by such other consideration as may be approved by the Committee from time to time to the extent permitted by applicable law, or (iii) by any
combination thereof. The Committee may at any time or from 
  

 16 

 time to time grant Stock Purchase Rights which do not permit all of the foregoing forms of consideration to be used in
payment of the purchase price or which otherwise restrict one or more forms of consideration. Stock Bonuses shall be issued in consideration for past services actually rendered to a Participating Company or for its benefit. 
  
 9.5 Vesting and Restrictions on Transfer. Shares issued pursuant to
any Stock Award may or may not be made subject to vesting conditioned upon the satisfaction of such Service requirements, conditions, restrictions or performance criteria, including, without limitation, Performance Goals as described in Section 10.4
(the “Vesting Conditions”), as shall be established by the Committee and set forth in the Award Agreement evidencing such Award. During any period (the “Restriction Period”) in which shares acquired
pursuant to a Stock Award remain subject to Vesting Conditions, such shares may not be sold, exchanged, transferred, pledged, assigned or otherwise disposed of other than pursuant to an Ownership Change Event, as defined in Section 12.1, or as
provided in Section 9.8. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and all
certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions. 
  
 9.6 Voting Rights; Dividends and Distributions. Except as provided in this Section, Section 9.5 and any Award
Agreement, during the Restriction Period applicable to shares subject to a Stock Award, the Participant shall have all of the rights of a stockholder of the Company holding shares of Stock, including the right to vote such shares and to receive all
dividends and other distributions paid with respect to such shares. However, in the event of a dividend or distribution paid in shares of Stock or any other adjustment made upon a change in the capital structure of the Company as described in
Section 4.2, then any and all new, substituted or additional securities or other property (other than normal cash dividends) to which the Participant is entitled by reason of the Participant’s Stock Award shall be immediately subject to the
same Vesting Conditions as the shares subject to the Stock Award with respect to which such dividends or distributions were paid or adjustments were made. 
  
 9.7 Effect of Termination of Service. Unless otherwise provided by the Committee in the grant of a Stock Award and set forth in the Award
Agreement, if a Participant’s Service terminates for any reason, whether voluntary or involuntary (including the Participant’s death or Disability), then (i) the Company shall have the option to repurchase for the purchase price paid by
the Participant any shares acquired by the Participant pursuant to a Stock Purchase Right which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service and (ii) the Participant shall forfeit to the
Company any shares acquired by the Participant pursuant to a Stock Bonus which remain subject to Vesting Conditions as of the date of the Participant’s termination of Service. The Company shall have the right to assign at any time any
repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be selected by the Company. 
  
 9.8 Nontransferability of Stock Award Rights. Rights to acquire shares of Stock pursuant to a Stock Award may not be subject in any manner to
anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance or garnishment by creditors of the Participant or the Participant’s beneficiary, except by will or the laws of descent and distribution, 
  

 17 

 and, during the lifetime of the Participant, shall be exercisable only by the Participant or the Participant’s
guardian or legal representative. 
  
 10.
TERMS AND CONDITIONS OF PERFORMANCE AWARDS. 
  
 Performance Awards shall be evidenced by Award Agreements in such form as the Committee shall from time to time establish.
No Performance Award or purported Performance Award shall be a valid and binding obligation of the Company unless evidenced by a fully executed Award Agreement. Award Agreements evidencing Performance Awards may incorporate all or any of the terms
of the Plan by reference and shall comply with and be subject to the following terms and conditions:  
  
 10.1 Types of Performance Awards Authorized. Performance Awards may be in the form of either Performance Shares or Performance Units. Each Award
Agreement evidencing a Performance Award shall specify the number of Performance Shares or Performance Units subject thereto, the Performance Award Formula, the Performance Goal(s) and Performance Period applicable to the Award, and the other terms,
conditions and restrictions of the Award. 
  
 10.2 Initial
Value of Performance Shares and Performance Units. Unless otherwise provided by the Committee in granting a Performance Award, each Performance Share shall have an initial value equal to the Fair Market Value of one (1) share of Stock, subject
to adjustment as provided in Section 4.2, on the effective date of grant of the Performance Share, and each Performance Unit shall have an initial value of one hundred dollars ($100). The final value payable to the Participant in settlement of a
Performance Award determined on the basis of the applicable Performance Award Formula will depend on the extent to which Performance Goals established by the Committee are attained within the applicable Performance Period established by the
Committee. 
  
 10.3 Establishment of Performance Period,
Performance Goals and Performance Award Formula. In granting each Performance Award, the Committee shall establish in writing the applicable Performance Period, Performance Award Formula and one or more Performance Goals which, when measured at
the end of the Performance Period, shall determine on the basis of the Performance Award Formula the final value of the Performance Award to be paid to the Participant. Unless otherwise permitted in compliance with the requirements under Section
162(m) with respect to “performance-based compensation,” the Committee shall establish the Performance Goal(s) and Performance Award Formula applicable to each Performance Award no later than the earlier of (a) the date ninety (90) days
after the commencement of the applicable Performance Period or (b) the date on which 25% of the Performance Period has elapsed, and, in any event, at a time when the outcome of the Performance Goals remains substantially uncertain. Once established,
the Performance Goals and Performance Award Formula shall not be changed during the Performance Period. The Company shall notify each Participant granted a Performance Award of the terms of such Award, including the Performance Period, Performance
Goal(s) and Performance Award Formula. 
  

 18 

 10.4 Measurement of Performance Goals. Performance Goals shall be established by the Committee on
the basis of targets to be attained (“Performance Targets”) with respect to one or more measures of business or financial performance (each, a “Performance Measure”), subject to the following:

  
 (a) Performance Measures. Performance Measures
shall have the same meanings as used in the Company’s financial statements, or, if such terms are not used in the Company’s financial statements, they shall have the meaning applied pursuant to generally accepted accounting principles, or
as used generally in the Company’s industry. Performance Measures shall be calculated with respect to the Company and each Subsidiary Corporation consolidated therewith for financial reporting purposes or such division or other business unit as
may be selected by the Committee. For purposes of the Plan, the Performance Measures applicable to a Performance Award shall be calculated in accordance with generally accepted accounting principles, but prior to the accrual or payment of any
Performance Award for the same Performance Period and excluding the effect (whether positive or negative) of any change in accounting standards or any extraordinary, unusual or nonrecurring item, as determined by the Committee, occurring after the
establishment of the Performance Goals applicable to the Performance Award. Performance Measures may be one or more of the following, as determined by the Committee: 
  
 (i) growth in revenue; 
  
 (ii) growth in the market price of the Stock; 
  
 (iii) operating margin; 
  
 (iv) gross margin; 
  
 (v) operating income; 
  
 (vi) pre-tax profit; 
  
 (vii) earnings before interest, taxes and depreciation; 
  
 (viii) net income; 
  
 (ix) total return on shares of Stock relative to the increase in an appropriate index as may be selected by the Committee; 
  
 (x) earnings per share; 
  
 (xi) return on stockholder equity; 
  
 (xii) return on net assets; 
  
 (xiii) expenses; 
  
 (xiv) return on capital; 
  

 19 

 (xv) economic value added; 
  
 (xvi) market share; and 
  
 (xvii) cash flow, as indicated by book earnings before interest, taxes, depreciation and amortization. 
  
 (b) Performance Targets. Performance Targets may include a
minimum, maximum, target level and intermediate levels of performance, with the final value of a Performance Award determined under the applicable Performance Award Formula by the level attained during the applicable Performance Period. A
Performance Target may be stated as an absolute value or as a value determined relative to a standard selected by the Committee. 
  
 10.5 Settlement of Performance Awards. 
  
 (a) Determination of Final Value. As soon as practicable following the completion of the Performance Period applicable to a Performance
Award, the Committee shall certify in writing the extent to which the applicable Performance Goals have been attained and the resulting final value of the Award earned by the Participant and to be paid upon its settlement in accordance with the
applicable Performance Award Formula. 
  
 (b)
Discretionary Adjustment of Award Formula. In its discretion, the Committee may, either at the time it grants a Performance Award or at any time thereafter, provide for the positive or negative adjustment of the Performance Award
Formula applicable to a Performance Award granted to any Participant who is not a “covered employee” within the meaning of Section 162(m) (a “Covered Employee”) to reflect such Participant’s individual
performance in his or her position with the Company or such other factors as the Committee may determine. If permitted under a Covered Employee’s Award Agreement, the Committee shall have the discretion, on the basis of such criteria as may be
established by the Committee, to reduce some or all of the value of the Performance Award that would otherwise be paid to the Covered Employee upon its settlement notwithstanding the attainment of any Performance Goal and the resulting value of the
Performance Award determined in accordance with the Performance Award Formula. No such reduction may result in an increase in the amount payable upon settlement of another Participant’s Performance Award. 
  
 (c) Effect of Leaves of Absence. Unless otherwise required by
law, payment of the final value, if any, of a Performance Award held by a Participant who has taken in excess of thirty (30) days of leaves of absence during a Performance Period shall be prorated on the basis of the number of days of the
Participant’s Service during the Performance Period during which the Participant was not on a leave of absence. 
  
 (d) Notice to Participants. As soon as practicable following the Committee’s determination and certification in accordance with
Sections 10.5(a) and (b), the Company shall notify each Participant of the determination of the Committee. 
  
 (e) Payment in Settlement of Performance Awards. As soon as practicable following the Committee’s determination and certification in
accordance with Sections 10.5(a) and (b), payment shall be made to each eligible Participant (or such 
  

 20 

 Participant’s legal representative or other person who acquired the right to receive such payment by reason of the
Participant’s death) of the final value of the Participant’s Performance Award. Payment of such amount shall be made in cash, shares of Stock, or a combination thereof as determined by the Committee. Unless otherwise provided in the Award
Agreement evidencing a Performance Award, payment shall be made in a lump sum. An Award Agreement may provide for deferred payment in a lump sum or in installments. If any payment is to be made on a deferred basis, the Committee may, but shall not
be obligated to, provide for the payment during the deferral period of Dividend Equivalents or interest. 
  
 (f) Provisions Applicable to Payment in Shares. If payment is to be made in shares of Stock, the number of such shares shall be determined
by dividing the final value of the Performance Award by the value of a share of Stock determined by the method specified in the Award Agreement. Such methods may include, without limitation, the closing market price on a specified date (such as the
settlement date) or an average of market prices over a series of trading days. Shares of Stock issued in payment of any Performance Award may be fully vested and freely transferable shares or may be shares of Stock subject to Vesting Conditions as
provided in Section 9.5. Any shares subject to Vesting Conditions shall be evidenced by an appropriate Award Agreement and shall be subject to the provisions of Sections 9.5 through 9.8 above. 
  
 10.6 Dividend Equivalents. In its discretion, the Committee may
provide in the Award Agreement evidencing any Performance Share Award that the Participant shall be entitled to receive Dividend Equivalents with respect to the payment of cash dividends on Stock having a record date prior to the date on which the
Performance Shares are settled or forfeited. Dividend Equivalents may be paid currently or may be accumulated and paid to the extent that Performance Shares become nonforfeitable, as determined by the Committee. Settlement of Dividend Equivalents
may be made in cash, shares of Stock, or a combination thereof as determined by the Committee, and may be paid on the same basis as settlement of the related Performance Share as provided in Section 10.5. Dividend Equivalents shall not be paid with
respect to Performance Units. 
  
 10.7 Effect of Termination
of Service. The effect of a Participant’s termination of Service on the Participant’s Performance Award shall be as determined by the Committee, in its discretion, and set forth in the Award Agreement evidencing such Performance Award.

  
 10.8 Nontransferability of Performance Awards. Prior
to settlement in accordance with the provisions of the Plan, no Performance Award may be subject in any manner to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by creditors of the Participant or
the Participant’s beneficiary, except by will or by the laws of descent and distribution. All rights with respect to a Performance Award granted to a Participant hereunder shall be exercisable during his or her lifetime only by such Participant
or the Participant’s guardian or legal representative. 
  

 21 

 11. STANDARD FORMS OF AWARD
AGREEMENT. 
  
 11.1
Award Agreements. Each Award shall comply with and be subject to the terms and conditions set forth in the appropriate form of Award Agreement approved by the Committee and as amended from time to time. Any Award Agreement may consist of an
appropriate form of Notice of Grant and a form of Agreement incorporated therein by reference, or such other form or forms as the Committee may approve from time to time. 
  
 11.2 Authority to Vary Terms. The Committee shall have the authority from time to time to vary the terms of any
standard form of Award Agreement either in connection with the grant or amendment of an individual Award or in connection with the authorization of a new standard form or forms; provided, however, that the terms and conditions of any such new,
revised or amended standard form or forms of Award Agreement are not inconsistent with the terms of the Plan. 
  
 12. CHANGE IN CONTROL. 
  
 12.1 Definitions. 
  
 (a) An “Ownership Change
Event” shall be deemed to have occurred if any of the following occurs with respect to the Company: (i) the direct or indirect sale or exchange by the stockholders of the Company of all or substantially all of the
voting stock of the Company; (ii) a merger or consolidation in which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the Company (other than a sale, exchange or transfer to one or more
subsidiaries of the Company); or (iv) a liquidation or dissolution of the Company. 
  
 (b) A “Change in Control” shall mean an Ownership Change Event or series of related Ownership Change Events (collectively, a “Transaction”) in which
the stockholders of the Company immediately before the Transaction do not retain immediately after the Transaction, direct or indirect beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting
securities of the Company or, in the case of an Ownership Change Event described in Section 12.1(a)(iii), the entity to which the assets of the Company were transferred. 
  
 12.2 Effect of Change in Control on Options and SARs. In the event of a Change in Control, the surviving,
continuing, successor, or purchasing entity or parent thereof, as the case may be (the “Acquiror”), may, without the consent of any Participant, either assume the Company’s rights and obligations
under outstanding Options and SARs or substitute for outstanding Options and SARs substantially equivalent options and SARs (as the case may be) for the Acquiror’s stock. In the event the Acquiror elects not to assume or substitute for
outstanding Options or SARs in connection with a Change in Control, the Committee shall provide that any unexercised and/or unvested portions of outstanding Options and SARs shall be immediately exercisable and vested in full as of the date thirty
(30) days prior to the date of the Change in Control. The exercise and/or vesting of any Option or SAR that was permissible solely by reason of this paragraph 12.2 shall be conditioned upon the consummation of the Change in Control. Any Options or
SARs which are not assumed by the Acquiror in connection 
  

 22 

 with the Change in Control nor exercised as of the time of consummation of the Change in Control shall terminate and
cease to be outstanding effective as of the time of consummation of the Change in Control. 
  
 12.3 Effect of Change in Control on Stock Awards. The Committee may, in its discretion, provide in any Award Agreement evidencing a Stock Award that, in the event of a Change in Control, the lapsing of the
Restriction Period applicable to the shares subject to the Stock Award held by a Participant whose Service has not terminated prior to such date shall be accelerated effective as of the date of the Change in Control to such extent as specified in
such Award Agreement. Any acceleration of the lapsing of the Restriction Period that was permissible solely by reason of this Section 12.3 and the provisions of such Award Agreement shall be conditioned upon the consummation of the Change in
Control. 
  
 12.4 Effect of Change in Control on Performance
Awards. The Committee may, in its discretion, provide in any Award Agreement evidencing a Performance Award that, in the event of a Change in Control, the Performance Award held by a Participant whose Service has not terminated prior to such
date shall become payable effective as of the date of the Change in Control to such extent as specified in such Award Agreement. 
  
 13. COMPLIANCE WITH SECURITIES LAW. 
  
 The grant of Awards and the issuance of shares of Stock pursuant to any
Award shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities and the requirements of any stock exchange or market system upon which the Stock may then be listed. In addition,
no Award may be exercised or shares issued pursuant to an Award unless (i) a registration statement under the Securities Act shall at the time of such exercise or issuance be in effect with respect to the shares issuable pursuant to the Award or
(ii) in the opinion of legal counsel to the Company, the shares issuable pursuant to the Award may be issued in accordance with the terms of an applicable exemption from the registration requirements of the Securities Act. The inability of the
Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal 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. As a condition to issuance of any Stock, the Company may require the Participant to satisfy any qualifications that may be
necessary or appropriate, to evidence compliance with any applicable law or regulation and to make any representation or warranty with respect thereto as may be requested by the Company. 
  
 14. TAX WITHHOLDING. 
  
 14.1 Tax Withholding in General. The Company shall have the right to
deduct from any and all payments made under the Plan, or to require the Participant, through payroll withholding, cash payment or otherwise, including by means of a Cashless Exercise of an Option, to make adequate provision for, the federal, state,
local and foreign taxes, if any, required by law to be withheld by the Participating Company Group with respect to an Award or the shares acquired pursuant thereto. The Company shall have no obligation to deliver shares of Stock, to release shares
of Stock from an escrow established pursuant to an Award Agreement, 
  

 23 

 or to make any payment in cash under the Plan until the Participating Company Group’s tax withholding obligations
have been satisfied by the Participant. 
  
 14.2 Withholding
in Shares. The Company shall have the right, but not the obligation, to deduct from the shares of Stock issuable to a Participant upon the exercise or settlement of an Award, or to accept from the Participant the tender of, a number of whole
shares of Stock having a Fair Market Value, as determined by the Company, equal to all or any part of the tax withholding obligations of the Participating Company Group. The Fair Market Value of any shares of Stock withheld or tendered to satisfy
any such tax withholding obligations shall not exceed the amount determined by the applicable minimum statutory withholding rates. 
  
 15. TERMINATION OR AMENDMENT OF PLAN. 

 
 The Committee may terminate or amend the Plan at any time. However,
without the approval of the Company’s stockholders, there shall be (a) no increase in the maximum aggregate number of shares of Stock that may be issued under the Plan (except by operation of the provisions of Section 4.2), (b) no change in the
class of persons eligible to receive Incentive Stock Options, and (c) no other amendment of the Plan that would require approval of the Company’s stockholders under any applicable law, regulation or rule. No termination or amendment of the Plan
shall affect any then outstanding Award unless expressly provided by the Committee. In any event, no termination or amendment of the Plan may adversely affect any then outstanding Award without the consent of the Participant, unless such termination
or amendment is necessary to comply with any applicable law, regulation or rule. 
  
 16. MISCELLANEOUS PROVISIONS. 
  
 16.1 Repurchase Rights. Shares issued under the Plan may be subject to one or more repurchase options, or other conditions and restrictions as
determined by the Committee in its discretion at the time the Award is granted. The Company shall have the right to assign at any time any repurchase right it may have, whether or not such right is then exercisable, to one or more persons as may be
selected by the Company. Upon request by the Company, each Participant shall execute any agreement evidencing such transfer restrictions prior to the receipt of shares of Stock hereunder and shall promptly present to the Company any and all
certificates representing shares of Stock acquired hereunder for the placement on such certificates of appropriate legends evidencing any such transfer restrictions. 
  
 16.2 Provision of Information. Each Participant shall be given access to information concerning the Company
equivalent to that information generally made available to the Company’s common stockholders. 
  
 16.3 Rights as Employee, Consultant or Director. No person, even though eligible pursuant to Section 5, shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant. Nothing in the Plan or any Award granted under the Plan shall confer on any Participant a right to remain an Employee, Consultant or Director, or interfere with or
limit in any way any right of a Participating Company to terminate the Participant’s Service at any time. To the extent that an Employee of a Participating Company other than the Company receives an Award under the Plan, that Award can in no
event be 
  

 24 

 understood or interpreted to mean that the Company is the Employee’s employer or that the Employee has an employment
relationship with the Company. 
  
 16.4 Rights as a
Stockholder. A Participant shall have no rights as a stockholder with respect to any shares covered by an Award until the date of the issuance of such shares (as evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date such shares are issued, except as provided in Section 4.2 or another provision of the
Plan. 
  
 16.5 Fractional Shares. The Company shall not be
required to issue fractional shares upon the exercise or settlement of any Award. 
  
 16.6 Beneficiary Designation. Subject to local laws and procedures, each Participant may file with the Company a written designation of a beneficiary who is to receive any benefit under the Plan to which the
Participant is entitled in the event of such Participant’s death before he or she receives any or all of such benefit. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Company,
and will be effective only when filed by the Participant in writing with the Company during the Participant’s lifetime. If a married Participant designates a beneficiary other than the Participant’s spouse, the effectiveness of such
designation may be subject to the consent of the Participant’s spouse. If a Participant dies without an effective designation of a beneficiary who is living at the time of the Participant’s death, the Company will pay any remaining unpaid
benefits to the Participant’s legal representative. 
  
 16.7
Unfunded Obligation. Participants shall have the status of general unsecured creditors of the Company. Any amounts payable to Participants pursuant to the Plan shall be unfunded and unsecured obligations for all purposes, including, without
limitation, Title I of the Employee Retirement Income Security Act of 1974. No Participating Company shall be required to segregate any monies from its general funds, or to create any trusts, or establish any special accounts with respect to such
obligations. The Company shall retain at all times beneficial ownership of any investments, including trust investments, which the Company may make to fulfill its payment obligations hereunder. Any investments or the creation or maintenance of any
trust or any Participant account shall not create or constitute a trust or fiduciary relationship between the Committee or any Participating Company and a Participant, or otherwise create any vested or beneficial interest in any Participant or the
Participant’s creditors in any assets of any Participating Company. The Participants shall have no claim against any Participating Company for any changes in the value of any assets which may be invested or reinvested by the Company with
respect to the Plan. 
  

 25 

 TABLE OF CONTENTS 
  

	 	  	 	  	 	  	Page

			
	 1.
	  	Establishment, Purpose and Term of Plan	  	1
	 	  	1.1	  	Establishment	  	1
	 	  	1.2	  	Purpose	  	1
	 	  	1.3	  	Term of Plan	  	1
			
	 2.
	  	Definitions and Construction	  	1
	 	  	2.1	  	Definitions	  	1
	 	  	2.2	  	Construction	  	5
			
	 3.
	  	Administration	  	6
	 	  	3.1	  	Administration by the Committee	  	6
	 	  	3.2	  	Authority of Officers	  	6
	 	  	3.3	  	Administration with Respect to Insiders	  	6
	 	  	3.4	  	Committee Complying with Section 162(m)	  	6
	 	  	3.5	  	Powers of the Committee	  	6
	 	  	3.6	  	Option Repricing	  	7
	 	  	3.7	  	Indemnification	  	7
			
	 4.
	  	Shares Subject to Plan	  	8
	 	  	4.1	  	Maximum Number of Shares Issuable	  	8
	 	  	4.2	  	Adjustments for Changes in Capital Structure	  	8
			
	 5.
	  	Eligibility and Award Limitations	  	9
	 	  	5.1	  	Persons Eligible for Awards	  	9
	 	  	5.2	  	Participation	  	9
	 	  	5.3	  	Incentive Stock Option Limitations	  	9
	 	  	5.4	  	Award Limits	  	10
			
	 6.
	  	Terms and Conditions of Options	  	10
	 	  	6.1	  	Exercise Price	  	11
	 	  	6.2	  	Exercisability and Term of Options	  	11
	 	  	6.3	  	Payment of Exercise Price	  	11
	 	  	6.4	  	Effect of Termination of Service	  	12
	 	  	6.5	  	Transferability of Options	  	12
			
	 7.
	  	Terms and Conditions of Stock Appreciation Rights	  	12
	 	  	7.1	  	Types of SARs Authorized	  	12
	 	  	7.2	  	Exercise Price	  	12
	 	  	7.3	  	Exercisability and Term of SARs	  	13
	 	  	7.4	  	Exercise of SARs	  	13
	 	  	7.5	  	Deemed Exercise of SARs	  	13
	 	  	7.6	  	Effect of Termination of Service	  	14
	 	  	7.7	  	Nontransferability of SARs	  	14
			
	 8.
	  	Terms and Conditions of Stock Awards	  	14
	 	  	8.1	  	Types of Stock Awards Authorized	  	14

  
 -i- 

 TABLE OF CONTENTS 
 (continued) 
  

	 	  	 	  	 	  	Page

				
	 	  	8.2	  	Purchase Price	  	14
	 	  	8.3	  	Purchase Period	  	14
	 	  	8.4	  	Payment of Purchase Price	  	14
	 	  	8.5	  	Vesting and Restrictions on Transfer	  	15
	 	  	8.6	  	Voting Rights; Dividends and Distributions	  	15
	 	  	8.7	  	Effect of Termination of Service	  	15
	 	  	8.8	  	Nontransferability of Stock Award Rights	  	15
			
	 9.
	  	Terms and Conditions of Performance Awards	  	16
	 	  	9.1	  	Types of Performance Awards Authorized	  	16
	 	  	9.2	  	Initial Value of Performance Shares and Performance Units	  	16
	 	  	9.3	  	Establishment of Performance Period, Performance Goals and Performance Award Formula	  	16
	 	  	9.4	  	Measurement of Performance Goals	  	17
	 	  	9.5	  	Settlement of Performance Awards	  	18
	 	  	9.6	  	Dividend Equivalents	  	19
	 	  	9.7	  	Effect of Termination of Service	  	19
	 	  	9.8	  	Nontransferability of Performance Awards	  	19
			
	 10.
	  	Standard Forms of Award Agreement	  	20
	 	  	10.1	  	Award Agreements	  	20
	 	  	10.2	  	Authority to Vary Terms	  	20
			
	 11.
	  	Change in Control	  	20
	 	  	11.1	  	Definitions	  	20
	 	  	11.2	  	Effect of Change in Control on Options and SARs	  	20
	 	  	11.3	  	Effect of Change in Control on Stock Awards	  	21
	 	  	11.4	  	Effect of Change in Control on Performance Awards	  	21
			
	 12.
	  	Compliance with Securities Law	  	21
			
	 13.
	  	Tax Withholding	  	21
	 	  	13.1	  	Tax Withholding in General	  	21
	 	  	13.2	  	Withholding in Shares	  	22
			
	 14.
	  	Termination or Amendment of Plan	  	22
			
	 15.
	  	Miscellaneous Provisions	  	22
	 	  	15.1	  	Repurchase Rights	  	22
	 	  	15.2	  	Provision of Information	  	22
	 	  	15.3	  	Rights as Employee or Consultant	  	22
	 	  	15.4	  	Rights as a Stockholder	  	23
	 	  	15.5	  	Fractional Shares	  	23
	 	  	15.6	  	Beneficiary Designation	  	23
	 	  	15.7	  	Unfunded Obligation	  	23

  
 -ii-2003 Employee Stock Purchase Plan

 Exhibit 10.3 
  
 SIGMATEL, INC. 
 2003 EMPLOYEE STOCK PURCHASE PLAN 
  
 1.
ESTABLISHMENT, PURPOSE AND TERM OF PLAN. 
  
 1.1 Establishment. SigmaTel, Inc., a Delaware corporation, hereby establishes the SigmaTel, Inc. 2003 Employee Stock Purchase Plan (the
“Plan”) effective as of the effective date of the initial registration by the Company of its Stock under Section 12 of the Securities Exchange Act of 1934, as amended (the “Effective Date”).

  
 1.2 Purpose. The purpose of the Plan is to advance the
interests of the Company and its stockholders by providing an incentive to attract, retain and reward Eligible Employees of the Participating Company Group and by motivating such persons to contribute to the growth and profitability of the
Participating Company Group. The Plan provides such Eligible Employees with an opportunity to acquire a proprietary interest in the Company through the purchase of Stock. The Company intends that the Plan qualify as an “employee stock purchase
plan” under Section 423 of the Code (including any amendments or replacements of such section), and the Plan shall be so construed. 
  
 1.3 Term of Plan. The Plan shall continue in effect until the earlier of its termination by the Board, the date on which all of the shares of
Stock available for issuance under the Plan have been issued, or the date ten (10) years after the Effective Date. 
  
 2. DEFINITIONS AND CONSTRUCTION. 
  
 2.1 Definitions. Any term not expressly defined in the Plan but defined for purposes of Section 423 of the Code
shall have the same definition herein. Whenever used herein, the following terms shall have their respective meanings set forth below: 
  
 (a) “Board” means the Board of Directors of the Company. If one or more Committees have been appointed by the Board to administer
the Plan, “Board” also means such Committee(s). 
  
 (b) “Code” means the Internal Revenue Code of 1986, as amended, and any applicable regulations promulgated thereunder. 
  
 (c) “Committee” means a committee of the Board duly appointed to administer the Plan and having such powers as specified by the
Board. Unless the powers of the Committee have been specifically limited, the Committee shall have all of the powers of the Board granted herein, including, without limitation, the power to amend or terminate the Plan at any time, subject to the
terms of the Plan and any applicable limitations imposed by law. 
  
 (d) “Company” means SigmaTel, Inc., a Delaware corporation, or any successor corporation thereto. 
  

 1 

 (e) “Compensation” means, with respect to any Offering Period, base wages or
salary, overtime, bonuses, commissions, shift differentials, payments for paid time off, payments in lieu of notice, and compensation deferred under any program or plan, including, without limitation, pursuant to Section 401(k) or Section 125 of the
Code. Compensation shall be limited to amounts actually payable in cash or deferred during the Offering Period. Compensation shall not include moving allowances, payments pursuant to a severance agreement, termination pay, relocation payments,
sign-on bonuses, any amounts directly or indirectly paid pursuant to the Plan or any other stock purchase or stock option plan, or any other compensation not included above. 
  
 (f) “Eligible Employee” means an Employee who meets the requirements set forth in Section 5 for
eligibility to participate in the Plan. 
  
 (g)
“Employee” means a person treated as an employee of a Participating Company for purposes of Section 423 of the Code. A Participant shall be deemed to have ceased to be an Employee either upon an actual termination of
employment or upon the corporation employing the Participant ceasing to be a Participating Company. For purposes of the Plan, an individual shall not be deemed to have ceased to be an Employee while on any military leave, sick leave, or other bona
fide leave of absence approved by the Company of ninety (90) days or less. If an individual’s leave of absence exceeds ninety (90) days, the individual shall be deemed to have ceased to be an Employee on the ninety-first (91st) day of such
leave unless the individual’s right to reemployment with the Participating Company Group is guaranteed either by statute or by contract. 
  
 (h) “Fair Market Value” means, as of any date: 
  
 (i) If the Stock is then listed on a national or regional securities exchange or market system or is regularly quoted by a
recognized securities dealer, the closing sale price of a share of Stock (or the mean of the closing bid and asked prices if the Stock is so quoted instead) as quoted on the Nasdaq National Market, the Nasdaq SmallCap Market or such other national
or regional securities exchange or market system constituting the primary market for the Stock, or by such recognized securities dealer, as reported in The Wall Street Journal or such other source as the Company deems reliable. If the
relevant date does not fall on a day on which the Stock has traded on such securities exchange or market system or has been quoted by such securities dealer, the date on which the Fair Market Value is established shall be the last day on which the
Stock was so traded or quoted prior to the relevant date, or such other appropriate day as determined by the Board, in its discretion. 
  
 (ii) If, on the relevant date, the Stock is not then listed on a national or regional securities exchange or market system or regularly quoted by a
recognized securities dealer, the Fair Market Value of a share of Stock shall be as determined in good faith by the Board. 
  
 (iii) Notwithstanding the foregoing, the Fair Market Value of a share of Stock on the Effective Date shall be deemed to be the public offering price set
forth in the final prospectus filed with the Securities and Exchange Commission in connection with the Company’s initial public offering of the Stock. 
  

 2 

 (i) “Initial Offering Period Cash Exercise Notice” means a written notice in
such form as specified by the Company, which states a Participant’s election to exercise, as of the next Purchase Date, a Purchase Right granted to such Participant with respect to the Initial Offering Period. 
  
 (j) “Offering” means an offering of Stock as
provided in Section 6. 
  
 (k) “Offering
Date” means, for any Offering, the first day of the Offering Period. 
  
 (l) “Offering Period” means a period established in accordance with Section 6. 
  
 (m) “Parent Corporation” means any present or future “parent corporation” of the Company, as defined in Section 424(e)
of the Code. 
  
 (n) “Participant” means
an Eligible Employee who has become a participant in an Offering Period in accordance with Section 7 and remains a participant in accordance with the Plan. 
  
 (o) “Participating Company” means the Company or any Parent Corporation or Subsidiary Corporation designated by the Board as a
corporation the Employees of which may, if Eligible Employees, participate in the Plan. The Board shall have the sole and absolute discretion to determine from time to time which Parent Corporations or Subsidiary Corporations shall be Participating
Companies. 
  
 (p) “Participating Company
Group” means, at any point in time, the Company and all other corporations collectively which are then Participating Companies. 
  
 (q) “Purchase Date” means, for any Offering Period, the last day of such period. 
  
 (r) “Purchase Price” means the price at which a
share of Stock may be purchased under the Plan, as determined in accordance with Section 9. 
  
 (s) “Purchase Right” means an option granted to a Participant pursuant to the Plan to purchase such shares of Stock as provided in Section 8, which the Participant may or may not exercise
during the Offering Period in which such option is outstanding. Such option arises from the right of a Participant to withdraw any accumulated payroll deductions of the Participant not previously applied to the purchase of Stock under the Plan and
to terminate participation in the Plan at any time during an Offering Period. 
  
 (t) “Registration Date” means the effective date of the initial registration on Form S-8 of shares of Stock issuable pursuant to the Plan. 
  
 (u) “Stock” means the common stock of the Company,
as adjusted from time to time in accordance with Section 4.2. 
  

 3 

 (v) “Subscription Agreement” means a written agreement in such form as specified
by the Company, stating an Employee’s election to participate in the Plan and authorizing payroll deductions under the Plan from the Employee’s Compensation. 
  
 (w) “Subscription Date” means the last business day prior to the Offering Date of an Offering
Period or such earlier date as the Company shall establish. 
  
 (x) “Subsidiary Corporation” means any present or future “subsidiary corporation” of the Company, as defined in Section 424(f) of the Code. 
  
 2.2 Construction. Captions and titles contained herein are for convenience only and shall not affect the meaning or
interpretation of any provision of the Plan. Except when otherwise indicated by the context, the singular shall include the plural and the plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless the
context clearly requires otherwise. 
  
 3.
ADMINISTRATION. 
  
 3.1
Administration by the Board. The Plan shall be administered by the Board. All questions of interpretation of the Plan, of any form of agreement or other document employed by the Company in the administration of the Plan, or of any Purchase
Right shall be determined by the Board, and such determinations shall be final, binding and conclusive upon all persons having an interest in the Plan or the Purchase Right, unless fraudulent or made in bad faith. Subject to the provisions of the
Plan, the Board shall determine all of the relevant terms and conditions of Purchase Rights; provided, however, that all Participants granted Purchase Rights pursuant to an Offering shall have the same rights and privileges within the meaning of
Section 423(b)(5) of the Code. Any and all actions, decisions and determinations taken or made by the Board in the exercise of its discretion pursuant to the Plan or any agreement thereunder (other than determining questions of interpretation
pursuant to the second sentence of this Section 3.1) shall be final, binding and conclusive upon all persons having an interest therein. All expenses incurred in connection with the administration of the Plan shall be paid by the Company.

  
 3.2 Authority of Officers. Any officer of the Company
shall have the authority to act on behalf of the Company with respect to any matter, right, obligation, determination or election that is the responsibility of or that is allocated to the Company herein, provided that the officer has apparent
authority with respect to such matter, right, obligation, determination or election. 
  
 3.3 Policies and Procedures Established by the Company. The Company may, from time to time, consistent with the Plan and the requirements of Section 423 of the Code, establish, change or terminate such rules,
guidelines, policies, procedures, limitations, or adjustments as deemed advisable by the Company, in its discretion, for the proper administration of the Plan, including, without limitation, (a) a minimum payroll deduction amount required for
participation in an Offering, (b) a limitation on the frequency or number of changes permitted in the rate of payroll deduction during an Offering, (c) an exchange ratio applicable to amounts withheld in a currency other than United States dollars,
(d) a payroll deduction greater than or 
  

 4 

 less than the amount designated by a Participant in order to adjust for the Company’s delay or mistake in processing
a Subscription Agreement or in otherwise effecting a Participant’s election under the Plan or as advisable to comply with the requirements of Section 423 of the Code, and (e) determination of the date and manner by which the Fair Market Value
of a share of Stock is determined for purposes of administration of the Plan. All such actions by the Company shall be taken consistent with the requirement under Section 423(b)(5) of the Code that all Participants granted Purchase Rights pursuant
to an Offering shall have the same rights and privileges within the meaning of such section. 
  
 3.4 Indemnification. In addition to such other rights of indemnification as they may have as members of the Board or officers or employees of the Participating Company Group, members of the Board and any
officers or employees of the Participating Company Group to whom authority to act for the Board or the Company is delegated shall be indemnified by the Company against all reasonable expenses, including attorneys’ fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan, or
any right granted hereunder, and against all amounts paid by them in settlement thereof (provided such settlement is approved by independent legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be adjudged in such action, suit or proceeding that such person is liable for gross negligence, bad faith or intentional misconduct in duties; provided, however, that within
sixty (60) days after the institution of such action, suit or proceeding, such person shall offer to the Company, in writing, the opportunity at its own expense to handle and defend the same. 
  
 4. SHARES SUBJECT TO
PLAN. 
  
 4.1 Maximum Number of Shares
Issuable. Subject to adjustment as provided in Section 4.2, the maximum aggregate number of shares of Stock that may be issued under the Plan shall be Five Hundred Thousand (500,000) (determined after taking into account the three-for-one
reverse stock split to be completed by the Company prior to the initial registration by the Company of its Stock under Section 12 of the Exchange Act), cumulatively increased on January 1, 2004 and each January 1 thereafter until and including
January 1, 2013 (the “Annual Increase”) by the lesser of (a) 1% of the number of shares of Stock issued and outstanding on the immediately preceding December 31, (b) 500,000 shares, or (c) such lesser number of shares
determined by the Board, and shall consist of authorized but unissued or reacquired shares of Stock, or any combination thereof. If an outstanding Purchase Right for any reason expires or is terminated or canceled, the shares of Stock allocable to
the unexercised portion of that Purchase Right shall again be available for issuance under the Plan. 
  
 4.2 Adjustments for Changes in Capital Structure. In the event of any stock dividend, stock split, reverse stock split, recapitalization,
combination, reclassification or similar change in the capital structure of the Company, or in the event of any merger (including a merger effected for the purpose of changing the Company’s domicile), sale of assets or other reorganization in
which the Company is a party, appropriate adjustments shall be made in the number and class of shares subject to the Plan, the Annual Increase, the limit on the shares which may be purchased by any Participant during an Offering (as described in
Section 8.1) and each 
  

 5 

 Purchase Right, and in the Purchase Price. If a majority of the shares of the same class as the shares subject to
outstanding Purchase Rights are exchanged for, converted into, or otherwise become (whether or not pursuant to an Ownership Change Event) shares of another corporation (the “New Shares”), the Board may unilaterally
amend the outstanding Purchase Rights to provide that such Purchase Rights are exercisable for New Shares. In the event of any such amendment, the number of shares subject to, and the Purchase Price of, the outstanding Purchase Rights shall be
adjusted in a fair and equitable manner, as determined by the Board, in its discretion. Notwithstanding the foregoing, any fractional share resulting from an adjustment pursuant to this Section 4.2 shall be rounded down to the nearest whole number,
and in no event may the Purchase Price be decreased to an amount less than the par value, if any, of the stock subject to the Purchase Right. The adjustments determined by the Board pursuant to this Section 4.2 shall be final, binding and
conclusive. 
  
 5.
ELIGIBILITY. 
  
 5.1
Employees Eligible to Participate. Each Employee of a Participating Company is eligible to participate in the Plan and shall be deemed an Eligible Employee, except the following: 
  
 (a) Any Employee who is customarily employed by the Participating Company Group for less than twenty (20) hours per week;
or 
  
 (b) Any Employee who is customarily employed by the
Participating Company Group for not more than five (5) months in any calendar year. 
  
 5.2 Exclusion of Certain Stockholders. Notwithstanding any provision of the Plan to the contrary, no Employee shall be treated as an Eligible Employee and granted a Purchase Right under the Plan if, immediately
after such grant, the Employee would own or hold options to purchase stock of the Company or of any Parent Corporation or Subsidiary Corporation possessing five percent (5%) or more of the total combined voting power or value of all classes of stock
of such corporation, as determined in accordance with Section 423(b)(3) of the Code. For purposes of this Section 5.2, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of such Employee. 

 
 5.3 Determination by Company. The Company shall determine in good
faith and in the exercise of its discretion whether an individual has become or has ceased to be an Employee or an Eligible Employee and the effective date of such individual’s attainment or termination of such status, as the case may be. For
purposes of an individual’s participation in or other rights, if any, under the Plan as of the time of the Company’s determination, all such determinations by the Company shall be final, binding and conclusive, notwithstanding that the
Company or any court of law or governmental agency subsequently makes a contrary determination. 
  
 6. OFFERINGS. 
  
 The Plan shall be implemented on and after the Effective Date by sequential Offerings of approximately six (6) months duration or such other duration as
the Board shall determine (an “Offering Period”); provided, however, that the first Offering Period (the “Initial 
  

 6 

 Offering Period”) shall commence on the Effective Date and end on January 31, 2004. Subsequent
Offering Periods shall commence on or about February 1 and August 1 of each year and end on or about January 31 and July 31, respectively, occurring thereafter. Notwithstanding the foregoing, the Board may establish a different duration for one or
more Offering Periods or different commencing or ending dates for such Offering Periods; provided, however, that no Offering Period may have a duration exceeding twenty-seven (27) months. If the first or last day of an Offering Period is not a day
on which the national securities exchanges or Nasdaq Stock Market are open for trading, the Company shall specify the trading day that will be deemed the first or last day, as the case may be, of the Offering Period. 
  
 7. PARTICIPATION IN THE
PLAN. 
  
 7.1 Initial
Participation. 
  
 (a) Generally. Except as provided
in Section 7.1(b), an Eligible Employee may become a Participant in an Offering Period by delivering a properly completed Subscription Agreement to the office designated by the Company not later than the close of business for such office on the
Subscription Date established by the Company for that Offering Period. An Eligible Employee who does not deliver a properly completed Subscription Agreement to the Company’s designated office on or before the Subscription Date for an Offering
Period shall not participate in the Plan for that Offering Period or for any subsequent Offering Period unless the Eligible Employee subsequently delivers a properly completed Subscription Agreement to the appropriate office of the Company on or
before the Subscription Date for such subsequent Offering Period. An Employee who becomes an Eligible Employee after the Offering Date of an Offering Period shall not be eligible to participate in that Offering Period but may participate in any
subsequent Offering Period provided the Employee is still an Eligible Employee as of the Offering Date of such subsequent Offering Period. 
  
 (b) Automatic Participation in Initial Offering Period. Notwithstanding Section 7.1(a), each Employee who is an Eligible Employee as of the
Effective Date shall automatically become a Participant in the Initial Offering Period and shall be granted automatically a Purchase Right consisting of an option to purchase the lesser of (a) a number of whole shares of Stock determined in
accordance with Section 8 or (b) a number of whole shares of Stock determined by dividing fifteen percent (15%) of such Participant’s Compensation paid during the Initial Offering Period by the Purchase Price applicable to the Initial Offering
Period. The Company shall not require or permit any Participant to deliver a Subscription Agreement for participation in the Initial Offering Period; provided, however, that following the Registration Date a Participant may deliver a Subscription
Agreement to the office designated by the Company if the Participant wishes to change the terms of the Participant’s participation in the Initial Offering Period. Such changes may include, for example, an election to commence payroll deductions
in accordance with Section 10. 
  
 7.2 Continued
Participation. 
  
 (a) Generally. Except as provided
in Section 7.2(b), a Participant shall automatically participate in the next Offering Period commencing immediately after the Purchase Date of each Offering Period in which the Participant participates provided that the 
  

 7 

 Participant remains an Eligible Employee on the Offering Date of the new Offering Period and has not either (a) withdrawn
from the Plan pursuant to Section 12.1 or (b) terminated employment as provided in Section 13. A Participant who may automatically participate in a subsequent Offering Period, as provided in this Section, is not required to deliver any additional
Subscription Agreement for the subsequent Offering Period in order to continue participation in the Plan. However, a Participant may deliver a new Subscription Agreement for a subsequent Offering Period in accordance with the procedures set forth in
Section 7.1(a) if the Participant desires to change any of the elections contained in the Participant’s then effective Subscription Agreement. 
  
 (b) Participation in Subsequent Offering Period. Notwithstanding Section 7.2(a), an Eligible Employee who was automatically enrolled in the
Initial Offering Period and who wishes to participate in an Offering Period which begins after the Initial Offering Period shall deliver a Subscription Agreement in accordance with Section 7.1(a) no earlier than the Registration Date and no later
than the Subscription Date for such Offering Period, unless such Employee was a Participant in the Initial Offering Period who delivered a Subscription Agreement with respect to the Initial Offering Period as provided in Section 7.1(b). 

 
 8. RIGHT TO PURCHASE
SHARES. 
  
 8.1 Grant of Purchase
Right. Except as provided in Section 7.1 with respect to the Initial Offering Period or as set forth below (or otherwise specified by the Board prior to the Offering Date), on the Offering Date of each Offering Period, each Participant in such
Offering Period shall be granted automatically, on the Offering Date, a Purchase Right consisting of an option to purchase the lesser of (a) that number of whole shares of Stock determined by dividing Twelve Thousand Five Hundred Dollars ($12,500)
by the Fair Market Value of a share of Stock on such Offering Date or (b) one thousand five hundred (1,500) shares of Stock. No Purchase Right shall be granted on an Offering Date to any person who is not, on such Offering Date, an Eligible
Employee. 
  
 8.2 Calendar Year Purchase Limitation.
Notwithstanding any provision of the Plan to the contrary, no Participant shall be granted a Purchase Right which permits his or her right to purchase shares of Stock under the Plan to accrue at a rate which, when aggregated with such
Participant’s rights to purchase shares under all other employee stock purchase plans of a Participating Company intended to meet the requirements of Section 423 of the Code, exceeds Twenty-Five Thousand Dollars ($25,000) in Fair Market Value
(or such other limit, if any, as may be imposed by the Code) for each calendar year in which such Purchase Right is outstanding at any time. For purposes of the preceding sentence, the Fair Market Value of shares purchased during a given Offering
Period shall be determined as of the Offering Date for such Offering Period. The limitation described in this Section shall be applied in conformance with applicable regulations under Section 423(b)(8) of the Code. 
  
 9. PURCHASE PRICE. 
  
 The Purchase Price at which each share of Stock may be acquired in an
Offering Period upon the exercise of all or any portion of a Purchase Right shall be established by the Board; provided, however, that the Purchase Price on each Purchase Date shall not be less than 
  

 8 

 eighty-five percent (85%) of the lesser of (a) the Fair Market Value of a share of Stock on the Offering Date of the
Offering Period or (b) the Fair Market Value of a share of Stock on the Purchase Date. 
  
 10. ACCUMULATION OF PURCHASE PRICE THROUGH PAYROLL DEDUCTION. 
  
 Except as provided in Section 11.1(b) with respect to the Initial Offering
Period, shares of Stock acquired pursuant to the exercise of all or any portion of a Purchase Right may be paid for only by means of payroll deductions from the Participant’s Compensation accumulated during the Offering Period for which such
Purchase Right was granted, subject to the following: 
  
 10.1
Amount of Payroll Deductions. Except as otherwise provided herein, the amount to be deducted under the Plan from a Participant’s Compensation on each payday during an Offering Period shall be determined by the Participant’s
Subscription Agreement. The Subscription Agreement shall set forth the percentage of the Participant’s Compensation to be deducted on each payday during an Offering Period in whole percentages of not less than one percent (1%) (except as a
result of an election pursuant to Section 10.3 to stop payroll deductions effective following the first payday during an Offering) or more than fifteen percent (15%). The Board may change the foregoing limits on payroll deductions effective as of
any Offering Date. 
  
 10.2 Commencement of Payroll
Deductions. Payroll deductions shall commence on the first payday following the Offering Date and shall continue to the end of the Offering Period unless sooner altered or terminated as provided herein; provided, however, that with respect to
the Initial Offering Period, payroll deductions shall commence as soon as practicable following the Company’s receipt of the Participant’s Subscription Agreement (delivered no earlier than the Registration Date), if any. 
  
 10.3 Election to Change or Stop Payroll Deductions. During an
Offering Period, a Participant may elect to increase or decrease the rate of or to stop deductions from his or her Compensation by delivering to the Company’s designated office an amended Subscription Agreement authorizing such change on or
before the “Change Notice Date.” The “Change Notice Date” shall be a date prior to the beginning of the first pay period for which such election is to be effective as established by the Company from time to time and
announced to the Participants. A Participant who elects, effective following the first payday of an Offering Period, to decrease the rate of his or her payroll deductions to zero percent (0%) shall nevertheless remain a Participant in the current
Offering Period unless such Participant withdraws from the Plan as provided in Section 12.1. 
  
 10.4 Administrative Suspension of Payroll Deductions. The Company may, in its sole discretion, suspend a Participant’s payroll deductions under the Plan as the Company deems advisable to avoid accumulating
payroll deductions in excess of the amount that could reasonably be anticipated to purchase the maximum number of shares of Stock permitted (a) under the Participant’s Purchase Right or (b) during a calendar year under the limit set forth in
Section 8.2. Payroll deductions shall be resumed at the rate specified in the Participant’s then effective Subscription Agreement at the beginning of the next Offering Period, unless the 
  
  

 9 

 Participant has either withdrawn from the Plan as provided in Section 12.1 or has ceased to be an Eligible Employee.

  
 10.5 Participant Accounts. Individual bookkeeping
accounts shall be maintained for each Participant. All payroll deductions from a Participant’s Compensation (and other amounts received from the Participant in the Initial Offering Period) shall be credited to such Participant’s Plan
account and shall be deposited with the general funds of the Company. All such amounts received or held by the Company may be used by the Company for any corporate purpose. 
  
 10.6 No Interest Paid. Interest shall not be paid on sums deducted from a Participant’s Compensation pursuant
to the Plan or otherwise credited to the Participant’s Plan account. 
  
 11. PURCHASE OF SHARES. 
  
 11.1 Exercise of Purchase Right. 
  
 (a) Generally. Except as provided in Section 11.1(b), on each Purchase Date of an Offering Period, each Participant who has not withdrawn from the
Plan and whose participation in the Offering has not otherwise terminated before such Purchase Date shall automatically acquire pursuant to the exercise of the Participant’s Purchase Right the number of whole shares of Stock determined by
dividing (a) the total amount of the Participant’s payroll deductions accumulated in the Participant’s Plan account during the Offering Period and not previously applied toward the purchase of Stock by (b) the Purchase Price. However, in
no event shall the number of shares purchased by the Participant during an Offering Period exceed the number of shares subject to the Participant’s Purchase Right. No shares of Stock shall be purchased on a Purchase Date on behalf of a
Participant whose participation in the Offering or the Plan has terminated before such Purchase Date. 
  
 (b) Purchase in Initial Offering Period. Notwithstanding Section 11.1(a), on the Purchase Date of the Initial Offering Period, each Participant
who has not withdrawn from the Plan and whose participation in such Offering has not otherwise terminated before such Purchase Date shall automatically acquire pursuant to the exercise of the Participant’s Purchase Right (i) a number of whole
shares of Stock determined in accordance with Section 11.1(a) to the extent of the total amount of the Participant’s payroll deductions accumulated in the Participant’s Plan account during the Initial Offering Period, if any, and not
previously applied toward the purchase of Stock and (ii) such additional shares of Stock (not exceeding in the aggregate the Participant’s Purchase Right) as determined in accordance with an Initial Offering Period Cash Exercise Notice
delivered to the office designated by the Company no earlier than the Registration Date and not later than the close of business for such office on the business day immediately preceding the Purchase Date or such earlier date as the Company shall
establish, accompanied by payment in cash or by check of the Purchase Price for such additional shares. However, in no event shall the number of shares purchased by a Participant during the Initial Offering Period exceed the number of shares subject
to the Participant’s Purchase Right. In addition, if a Participant delivers a Subscription Agreement to the Company after the Registration Date, the Participant may not elect to exercise a Purchase Right pursuant to 
  

 10 

 an Initial Offering Period Cash Exercise Notice in an amount which exceeds fifteen percent (15%) of the Compensation paid
such Participant prior to the effectiveness of such initial Subscription Agreement. The Company shall refund to the Participant in accordance with Section 11.4 any excess Purchase Price payment received from the Participant. 
  
 11.2 Pro Rata Allocation of Shares. If the number of shares of Stock
which might be purchased by all Participants in the Plan on a Purchase Date exceeds the number of shares of Stock available in the Plan as provided in Section 4.1, the Company shall make a pro rata allocation of the remaining shares in as uniform a
manner as practicable and as the Company determines to be equitable. Any fractional share resulting from such pro rata allocation to any Participant shall be disregarded. 
  
 11.3 Delivery of Certificates. As soon as practicable after each Purchase Date, the Company shall arrange the
delivery to each Participant of a certificate representing the shares acquired by the Participant on such Purchase Date; provided that the Company may deliver such shares to a broker designated by the Company that will hold such shares for the
benefit of the Participant. Shares to be delivered to a Participant under the Plan shall be registered in the name of the Participant, or, if requested by the Participant, in the name of the Participant and his or her spouse, or, if applicable, in
the names of the heirs of the Participant. 
  
 11.4 Return of
Cash Balance. Any cash balance remaining in a Participant’s Plan account following any Purchase Date shall be refunded to the Participant as soon as practicable after such Purchase Date. However, if the cash balance to be returned to a
Participant pursuant to the preceding sentence is less than the amount that would have been necessary to purchase an additional whole share of Stock on such Purchase Date, the Company may retain the cash balance in the Participant’s Plan
account to be applied toward the purchase of shares of Stock in the subsequent Offering Period, as the case may be. 
  
 11.5 Tax Withholding. At the time a Participant’s Purchase Right is exercised, in whole or in part, or at the time a Participant disposes of
some or all of the shares of Stock he or she acquires under the Plan, the Participant shall make adequate provision for the federal, state, local and foreign tax withholding obligations, if any, of the Participating Company Group which arise upon
exercise of the Purchase Right or upon such disposition of shares, respectively. The Participating Company Group may, but shall not be obligated to, withhold from the Participant’s compensation the amount necessary to meet such withholding
obligations. 
  
 11.6 Expiration of Purchase Right. Any
portion of a Participant’s Purchase Right remaining unexercised after the end of the Offering Period to which the Purchase Right relates shall expire immediately upon the end of the Offering Period. 
  
 11.7 Provision of Reports and Stockholder Information to
Participants. Each Participant who has exercised all or part of his or her Purchase Right shall receive, as soon as practicable after the Purchase Date, a report of such Participant’s Plan account setting forth the total amount credited to
his or her Plan account prior to such exercise, the number of shares of Stock purchased, the Purchase Price for such shares, the date of purchase and the cash balance, if any, remaining immediately after such purchase that is to be refunded or
retained in the Participant’s Plan account pursuant to Section 11.4. The report required by this Section may 
  

 11 

 be delivered in such form and by such means, including by electronic transmission, as the Company may determine. In
addition, each Participant shall be provided information concerning the Company equivalent to that information provided generally to the Company’s common stockholders. 
  
 12. WITHDRAWAL FROM PLAN OR
OFFERING. 
  
 12.1
Voluntary Withdrawal from the Plan. A Participant may withdraw from the Plan by signing and delivering to the Company’s designated office a written notice of withdrawal on a form provided by the Company for this purpose. Such withdrawal
may be elected at any time prior to the end of an Offering Period; provided, however, that if a Participant withdraws from the Plan after a Purchase Date, the withdrawal shall not affect shares of Stock acquired by the Participant on such Purchase
Date. A Participant who voluntarily withdraws from the Plan is prohibited from resuming participation in the Plan in the same Offering from which he or she withdrew, but may participate in any subsequent Offering by again satisfying the requirements
of Sections 5 and 7.1. The Company may impose, from time to time, a requirement that the notice of withdrawal from the Plan be on file with the Company’s designated office for a reasonable period prior to the effectiveness of the
Participant’s withdrawal. 
  
 12.2 Return of Payroll
Deductions. Upon a Participant’s voluntary withdrawal from the Plan pursuant to Section 12.1, the Participant’s accumulated Plan account balance which has not been applied toward the purchase of shares of Stock shall be refunded to the
Participant as soon as practicable after the withdrawal, without the payment of any interest, and the Participant’s interest in the Plan or the Offering, as applicable, shall terminate. Such amounts to be refunded in accordance with this
Section may not be applied to any other Offering under the Plan. 
  
 13. TERMINATION OF EMPLOYMENT OR ELIGIBILITY. 
  

Upon a Participant’s ceasing, prior to a Purchase Date, to be an Employee of the Participating Company Group for any reason, including
retirement, disability or death, or upon the failure of a Participant to remain an Eligible Employee, the Participant’s participation in the Plan shall terminate immediately. In such event, the Participant’s Plan account balance which has
not been applied toward the purchase of shares shall, as soon as practicable, be returned to the Participant or, in the case of the Participant’s death, to the Participant’s beneficiary designated in accordance with Section 20, if any, or
legal representative, and all of the Participant’s rights under the Plan shall terminate. Interest shall not be paid on sums returned pursuant to this Section 13. A Participant whose participation has been so terminated may again become
eligible to participate in the Plan by satisfying the requirements of Sections 5 and 7.1. 
  
 14. CHANGE IN CONTROL. 
  
 14.1 Definitions. 
  
 (a) An “Ownership Change Event” shall be deemed to have occurred if any of the following occurs with respect to the Company: (i)
the direct or indirect sale or exchange in a single or series of related transactions by the stockholders of the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or consolidation in 
  

 12 

 which the Company is a party; (iii) the sale, exchange, or transfer of all or substantially all of the assets of the
Company; or (iv) a liquidation or dissolution of the Company. 
  
 (b) A “Change in Control” shall mean an Ownership Change Event or a series of related Ownership Change Events (collectively, the “Transaction”) wherein the stockholders of the Company
immediately before the Transaction do not retain immediately after the Transaction, in substantially the same proportions as their ownership of shares of the Company’s voting stock immediately before the Transaction, direct or indirect
beneficial ownership of more than fifty percent (50%) of the total combined voting power of the outstanding voting securities of the Company or, in the case of a Transaction described in Section 14.1(a)(iii), the corporation or other business entity
to which the assets of the Company were transferred (the “Transferee”), as the case may be. For purposes of the preceding sentence, indirect beneficial ownership shall include, without limitation, an interest resulting from
ownership of the voting securities of one or more corporations or other business entities which own the Company or the Transferee, as the case may be, either directly or through one or more subsidiary corporations or other business entities. The
Board shall have the right to determine whether multiple sales or exchanges of the voting securities of the Company or multiple Ownership Change Events are related, and its determination shall be final, binding and conclusive. 
  
 14.2 Effect of Change in Control on Purchase Rights. In the event of
a Change in Control, the surviving, continuing, successor, or purchasing corporation or other business entity or parent thereof, as the case may be (the “Acquiring Corporation”), may, without the consent of any Participant,
assume the Company’s rights and obligations under the Plan. If the Acquiring Corporation elects not to assume the Company’s rights and obligations under the Plan, the Purchase Date of the then current Offering Period shall be accelerated
to a date before the date of the Change in Control specified by the Board, but the number of shares of Stock subject to outstanding Purchase Rights shall not be adjusted. All Purchase Rights which are neither assumed by the Acquiring Corporation in
connection with the Change in Control nor exercised as of the date of the Change in Control shall terminate and cease to be outstanding effective as of the date of the Change in Control. 
  
 15. NONTRANSFERABILITY OF PURCHASE
RIGHTS. 
  
 Neither
payroll deductions or other amounts credited to a Participant’s Plan account nor a Participant’s Purchase Right may be assigned, transferred, pledged or otherwise disposed of in any manner other than as provided by the Plan or by will or
the laws of descent and distribution. (A beneficiary designation pursuant to Section 20 shall not be treated as a disposition for this purpose.) Any such attempted assignment, transfer, pledge or other disposition shall be without effect, except
that the Company may treat such act as an election to withdraw from the Plan as provided in Section 12.1. A Purchase Right shall be exercisable during the lifetime of the Participant only by the Participant. 
  
 16. COMPLIANCE WITH
SECURITIES LAW. 
  
 The issuance of shares under the Plan shall be subject to compliance with all applicable requirements of federal, state and foreign law with respect to such securities. A 
  

 13 

 Purchase Right may not be exercised if the issuance of shares upon such exercise would constitute a violation of any
applicable federal, state or foreign securities laws or other law or regulations or the requirements of any securities exchange or market system upon which the Stock may then be listed. In addition, no Purchase Right may be exercised unless (a) a
registration statement under the Securities Act of 1933, as amended, shall at the time of exercise of the Purchase Right be in effect with respect to the shares issuable upon exercise of the Purchase Right, or (b) in the opinion of legal counsel to
the Company, the shares issuable upon exercise of the Purchase Right may be issued in accordance with the terms of an applicable exemption from the registration requirements of said Act. The inability of the Company to obtain from any regulatory
body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance and sale of any shares under the Plan 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. As a condition to the exercise of a Purchase Right, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate, to
evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company. 
  

17. RIGHTS AS A STOCKHOLDER AND
EMPLOYEE. 
  
 A
Participant shall have no rights as a stockholder by virtue of the Participant’s participation in the Plan until the date of the issuance of a certificate for the shares purchased pursuant to the exercise of the Participant’s Purchase
Right (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the date
such certificate is issued, except as provided in Section 4.2. Nothing herein shall confer upon a Participant any right to continue in the employ of the Participating Company Group or interfere in any way with any right of the Participating Company
Group to terminate the Participant’s employment at any time. 
  
 18. LEGENDS. 
  
 The Company may at any time place legends or other identifying symbols referencing any applicable federal, state or foreign securities law restrictions or any provision convenient in the administration of the Plan on some or all of the
certificates representing shares of Stock issued under the Plan. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates representing shares acquired pursuant to a Purchase Right in the
possession of the Participant in order to carry out the provisions of this Section. Unless otherwise specified by the Company, legends placed on such certificates may include but shall not be limited to the following: 
  
 “THE SHARES EVIDENCED BY THIS CERTIFICATE WERE ISSUED BY THE CORPORATION TO THE
REGISTERED HOLDER UPON THE PURCHASE OF SHARES UNDER AN EMPLOYEE STOCK PURCHASE PLAN AS DEFINED IN SECTION 423 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE TRANSFER AGENT FOR THE SHARES EVIDENCED HEREBY SHALL NOTIFY THE CORPORATION
IMMEDIATELY OF ANY TRANSFER OF THE SHARES BY THE REGISTERED HOLDER 
  

 14 

 HEREOF. THE REGISTERED HOLDER SHALL HOLD ALL SHARES PURCHASED UNDER THE PLAN IN THE REGISTERED HOLDER’S NAME (AND
NOT IN THE NAME OF ANY NOMINEE).” 
  
 19.
NOTIFICATION OF DISPOSITION OF SHARES. 
  
 The Company may require the Participant to give the Company prompt notice of any disposition of shares acquired by exercise of a Purchase Right. The
Company may require that until such time as a Participant disposes of shares acquired upon exercise of a Purchase Right, the Participant shall hold all such shares in the Participant’s name (or, if elected by the Participant, in the name of the
Participant and his or her spouse but not in the name of any nominee) until the later of two years after the date of grant of such Purchase Right or one year after the date of exercise of such Purchase Right. The Company may direct that the
certificates evidencing shares acquired by exercise of a Purchase Right refer to such requirement to give prompt notice of disposition. 
  
 20. DESIGNATION OF BENEFICIARY. 
  
 20.1 Designation Procedure. A Participant may file a written
designation of a beneficiary who is to receive (a) shares and cash, if any, from the Participant’s Plan account if the Participant dies subsequent to a Purchase Date but prior to delivery to the Participant of such shares and cash or (b) cash,
if any, from the Participant’s Plan account if the Participant dies prior to the exercise of the Participant’s Purchase Right. If a married Participant designates a beneficiary other than the Participant’s spouse, the effectiveness of
such designation shall be subject to the consent of the Participant’s spouse. A Participant may change his or her beneficiary designation at any time by written notice to the Company. 
  
 20.2 Absence of Beneficiary Designation. If a Participant dies
without an effective designation pursuant to Section 20.1 of a beneficiary who is living at the time of the Participant’s death, the Company shall deliver any shares or cash credited to the Participant’s Plan account to the
Participant’s legal representative. 
  
 21.
NOTICES. 
  
 All
notices or other communications by a Participant to the Company under or in connection with the Plan shall be deemed to have been duly given when received in the form specified by the Company at the location, or by the person, designated by the
Company for the receipt thereof. 
  
 22.
AMENDMENT OR TERMINATION OF THE PLAN. 
  
 The Board may at any time amend or terminate the Plan, except that (a) no such amendment or termination shall affect Purchase Rights previously granted
under the Plan unless expressly provided by the Board and (b) no such amendment or termination may adversely affect a Purchase Right previously granted under the Plan without the consent of the Participant, except to the extent permitted by the Plan
or as may be necessary to qualify the Plan as an employee stock purchase plan pursuant to Section 423 of the Code or to comply with any applicable law, regulation or rule. In addition, an amendment to the Plan must be approved by the stockholders

  

 15 

 of the Company within twelve (12) months of the adoption of such amendment if such amendment would authorize the sale of
more shares than are then authorized for issuance under the Plan or would change the definition of the corporations that may be designated by the Board as Participating Companies. 
  

 16 

 SIGMATEL, INC. 
 2003 EMPLOYEE STOCK PURCHASE PLAN 
 SUBSCRIPTION AGREEMENT 
  

	 NAME (Please print):
	 	  

	 	 	 (Last)
	 	 (First)
	 	 (Middle)

  

	  ̈
	  	Original application for the Offering Period beginning (date):
		
	  ̈
	  	Stop payroll deductions effective with the pay period ending (date):
		
	  ̈
	  	Change of beneficiary.

  
 I. SUBSCRIPTION 
  
 I elect to participate in the 2003 Employee Stock Purchase Plan (the
“Plan”) of SigmaTel, Inc. (the “Company”) and to subscribe to purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan. 
  
 I authorize payroll deductions of
             percent (in whole percentages not less than 1%, unless an election to stop deductions is being made, or more than 15%) of my “Compensation” on each
payday throughout the “Offering Period” in accordance with the Plan. I understand that these payroll deductions will be accumulated for the purchase of shares of Common Stock at the applicable purchase price determined in accordance
with the Plan. Except as otherwise provided by the Plan, I will automatically purchase shares on each “Purchase Date” unless I withdraw from the Plan by giving written notice on a form provided by the Company or unless my
eligibility or employment terminates. 
  
 I understand that I will
automatically participate in each subsequent Offering that commences immediately after the last day of an Offering in which I am participating until I withdraw from the Plan by giving written notice on a form provided by the Company or my
eligibility or employment terminates. 
  
 Shares I purchase under
the Plan should be issued in the name(s) set forth below. (Shares may be issued in the participant’s name alone or together with the participant’s spouse as community property or in joint tenancy.) 
  

	 NAME(S) (please print):
	 	  

		
	 ADDRESS:
	 	  

		
	 MY SOCIAL SECURITY NUMBER:
	 	  

  
 I agree to make
adequate provision for the federal, state, local and foreign tax withholding obligations, if any, which arise upon my purchase of shares under the Plan and/or my disposition of shares. The Company may withhold from my compensation the amount
necessary to meet such withholding obligations. 
  
 I agree that,
unless otherwise permitted by the Company, until I dispose of shares I purchase under the Plan, I will hold such shares in the name(s) entered above (and not in the name of any nominee) until the later of (i) two years after the first day of the
Offering Period in which I purchased the shares and (ii) one year after the Purchase Date on which I purchased the shares. This restriction only applies to the name(s) in which shares are held and does not affect my ability to dispose of Plan
shares. 
  
 I agree that I will notify the Chief Financial
Officer of the Company in writing within 30 days after any sale, gift, transfer or other disposition of any kind prior to the end of the periods referred to in the preceding paragraph (a “Disqualifying Disposition”) of any shares I
purchased 
  

 17 

 under the Plan. If I do not respond within 30 days of the date of a Disqualifying Disposition Survey delivered to me
by certified mail, the Company is authorized to treat my nonresponse as my notice to the Company of a Disqualifying Disposition and to compute and report to the Internal Revenue Service the ordinary income I must recognize upon such Disqualifying
Disposition. 
  
 II. BENEFICIARY DESIGNATION 
  
 In the event of my death, I designate the following as my beneficiary
to receive all payments and shares then due me under the Plan: 
  

	 BENEFICIARY’S NAME (Please print):
	 	  

	 	 	 (Last)
	 	 (First)
	 	 (Middle)

  

	 RELATIONSHIP:
	 	  

	  	SOC. SEC. NO.:	 	  

		
	 ADDRESS:
	 	  

  
 If you are
married and your beneficiary is someone other than your spouse, then your spouse must sign and date this form as indicated below. If you are not married when you designate a beneficiary and you later become married, or if you later become married to
a different person, the beneficiary designation previously made will be automatically revoked. Payments and shares then due you upon your death will be delivered to your then spouse unless you have completed a new beneficiary designation and it is
consented to by your then spouse. 
  
 III. CONSENT OF SPOUSE 
  
 I am the spouse of
                                       
         . I consent to the above designation of a beneficiary other than me to receive payments and shares due my spouse under the Plan. 
  

	 Date:
	 	  

	 	 	 	  

	 	 	 	 	 	 	 Signature of Participant’s Spouse

  
 IV. PARTICIPANT DECLARATION

  
 Any election I have made on this form revokes all prior
elections with regard to this form. 
  
 I am familiar with the
provisions of the Plan and agree to participate in the Plan subject to all of its provisions. I understand that the Board of Directors of the Company reserves the right to terminate the Plan or to amend the Plan and my right to purchase stock under
the Plan to the extent provided by the Plan. I understand that the effectiveness of this Subscription Agreement is dependent upon my eligibility to participate in the Plan. 
  

	 Date:
	 	  

	 	 	 	  

	 	 	 	 	 	 	 Signature of Participant

  
  

 18 

 SIGMATEL, INC. 
 2003 EMPLOYEE STOCK PURCHASE PLAN 
 NOTICE OF WITHDRAWAL 
  

	 NAME (Please print):
	 	  

	 	 	 (Last)
	 	 (First)
	 	 (Middle)

  
 I elect to withdraw
from the SigmaTel, Inc. 2003 Employee Stock Purchase Plan (the “Plan”) and the Offering which began on (date)
                             and in which I am participating (the “Current
Offering”). 
  
 I elect to terminate immediately my
participation in the Current Offering and the Plan. I request that the Company cease all further payroll deductions under the Plan (provided I have given sufficient notice before the next payday). My payroll deductions not previously used to
purchase shares should not be used to purchase shares in the Current Offering. Instead, I request that all such amounts be paid to me as soon as practicable. I understand that this election immediately terminates my interest in the Current
Offering and in the Plan. 
  
 I understand that I am terminating
my interest in the Plan and that no further payroll deductions will be made (provided I have given sufficient notice before the next payday), unless I elect to become a participant in another Offering by filing a new Subscription Agreement with the
Company. I understand that I will receive no interest on the amounts paid to me from my Plan account, and that I may not apply such amounts to any other Offering under the Plan or any other employee stock purchase plan of the Company. 
  

					
	 Date:            
	 	  

	  	 	 	 Signature:
	 	  

  

 19

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