Document:

SonicWall, Inc. Employee Stock Purchase Plan, as amended

 Exhibit 10.3 
  
 SONICWALL, INC. 
 1999 EMPLOYEE STOCK PURCHASE PLAN 
  
 Adopted August 24,
1999 
 As Amended Through December 12, 2003 
  
 The following constitute the provisions of the 1999 Employee Stock Purchase Plan of SonicWALL, Inc. 
  
 1. Purpose. The purpose of the Plan is to provide employees of the
Company and its Designated Subsidiaries with an opportunity to purchase Common Stock of the Company. It is the intention of the Company to have the Plan qualify as an “Employee Stock Purchase Plan” under Section 423 of the Code. The
provisions of the Plan shall, accordingly, be construed so as to extend and limit participation in a manner consistent with the requirements of that section of the Code. 
  
 2. Definitions. 
  
 (a) “Board” means the Board of Directors of the Company. 
  
 (b) “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (c) “Common Stock” means the Common Stock
of the Company. 
  
 (d)
“Company” means SonicWALL, Inc., a California corporation. 
  
 (e) “Compensation” means total cash compensation received by an Employee from the Company or a Designated Subsidiary. By way of illustration, but not limitation, Compensation includes regular
compensation such as salary, wages, overtime, shift differentials, bonuses, commissions and incentive compensation, but excludes relocation, expense reimbursements, tuition or other reimbursements and income realized as a result of participation in
any stock option, stock purchase, or similar plan of the Company or any Designated Subsidiary. 
  
 (f) “Continuous Status As An Employee” means the absence of any interruption or termination of service as an Employee.
Continuous Status as an Employee shall not be considered interrupted in the case of (i) sick leave; (ii) military leave; (iii) any other leave of absence approved by the Administrator, provided that such leave is for a period of not more than 90
days, unless reemployment upon the expiration of such leave is guaranteed by contract or statute, or unless provided otherwise pursuant to Company policy adopted from time to time; or (iv) in the case of transfers between locations of the Company or
between the Company and its Designated Subsidiaries. 
  
 (g) “Contributions” means all amounts credited to the account of a participant pursuant to the Plan. 
  

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 (h) “Corporate Transaction” means a sale of all or substantially all of
the Company’s assets, or a merger, consolidation or other capital reorganization of the Company with or into another corporation. 
  
 (i) “Designated Subsidiaries” means the Subsidiaries which have been designated by the Board from time to time in its
sole discretion as eligible to participate in the Plan; provided however that the Board shall only have the discretion to designate Subsidiaries if the issuance of options to such Subsidiary’s Employees pursuant to the Plan would not cause the
Company to incur adverse accounting charges. 
  
 (j) “Employee” means any person (other than an Officer who is also “highly compensated” under Code Section 414(q)), who is customarily employed for at least twenty (20) hours per week and more than five (5) months
in a calendar year by the Company or one of its Designated Subsidiaries. Employee does not include any individual who provides services to the Company or any Subsidiary as an independent contractor whether or not such individual is reclassified as a
common law employee, unless the Company or a Subsidiary withholds or is required to withhold U.S. Federal employment taxes for such individual pursuant to Section 3402 of the Code. 
  
 (k) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 (l) “Offering Date” means the first
business day of each Offering Period of the Plan. 
  
 (m) “Offering Period” means a period of twelve (12) months commencing on February 1 and August 1 of each year. 
  
 (n) “Officer” means a person who is an officer of the Company within the meaning of Section 16 of the Exchange Act and
the rules and regulations promulgated thereunder, as well as each vice-president level employee of the Company. 
  
 (o) “Plan” means this Employee Stock Purchase Plan. 
  
 (p) “Purchase Date” means the last day of each Purchase Period of the Plan. 
  
 (q) “Purchase Period” means a period of six
(6) months within an Offering Period. 
  
 (r)
“Purchase Price” means with respect to a Purchase Period an amount equal to 85% of the Fair Market Value (as defined in Section 7(b) below) of a Share of Common Stock on the Offering Date or on the Purchase Date, whichever is lower;
provided, however, that in the event (i) of any increase in the number of Shares available for issuance under the Plan as a result of a shareholder-approved amendment to the Plan, and (ii) all or a portion of such additional Shares are to be issued
with respect to one or more Offering Periods that are underway at the time of such increase (“Additional Shares”), and (iii) the Fair Market Value of a Share of Common Stock on the date of such increase (the “Approval Date Fair Market
Value”) is higher 

  

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than the Fair Market Value on the Offering Date for any such Offering Period, then in such instance the Purchase Price with respect to Additional Shares
shall be 85% of the Approval Date Fair Market Value or the Fair Market Value of a Share of Common Stock on the Purchase Date, whichever is lower. 
  
 (s) “Share” means a share of Common Stock, as adjusted in accordance with Section 19 of the Plan. 
  
 (t) “Subsidiary” means a corporation,
domestic or foreign, of which not less than 50% of the voting shares are held by the Company or a Subsidiary, whether or not such corporation now exists or is hereafter organized or acquired by the Company or a Subsidiary. 
  
 3. Eligibility. 
  
 (a) Any person who is an Employee as of the Offering Date of
a given Offering Period shall be eligible to participate in such Offering Period under the Plan, subject to the requirements of Section 5(a) and the limitations imposed by Section 423(b) of the Code; provided however that eligible Employees may not
participate in more than one Offering Period at a time. 
  
 (b) Any provisions of the Plan to the contrary notwithstanding, no Employee shall be granted an option under the Plan (i) if, immediately after the grant, such Employee (or any other person whose stock would be
attributed to such Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company and/or hold outstanding options to purchase stock possessing five percent (5%) or more of the total combined voting power or value of all
classes of stock of the Company or of any Subsidiary of the Company, or (ii) if such option would permit his or her rights to purchase stock under all employee stock purchase plans (described in Section 423 of the Code) of the Company and its
Subsidiaries to accrue at a rate which exceeds Twenty-Five Thousand Dollars ($25,000) of the Fair Market Value (as defined in Section 7(b) below) of such stock (determined at the time such option is granted) for each calendar year in which such
option is outstanding at any time. 
  
 4. Offering Periods And
Purchase Periods. 
  
 (a) Offering
Periods. The Plan shall be implemented by a series of Offering Periods of twelve (12) months’ duration, with new Offering Periods commencing on or about February 1 and August 1 of each year (or at such other time or times as may be
determined by the Board of Directors). The Plan shall continue until terminated in accordance with Section 19 hereof. The Board of Directors of the Company shall have the power to change the duration and/or the frequency of Offering Periods with
respect to future offerings without shareholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Offering Period to be affected. 
  
 (b) Purchase Periods. Each Offering Period shall consist of two (2) consecutive purchase periods of
six (6) months’ duration. The last day of each Purchase Period shall be the “Purchase Date” for such Purchase Period. A Purchase Period commencing on 

  

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February 1 shall end on the next July 31. A Purchase Period commencing on August 1 shall end on the next January 31. The Board of Directors of the Company
shall have the power to change the duration and/or frequency of Purchase Periods with respect to future purchases without shareholder approval if such change is announced at least five (5) days prior to the scheduled beginning of the first Purchase
Period to be affected. 
  
 5. Participation. 
  
 (a) An eligible Employee may become a participant in the
Plan by completing a subscription agreement on the form provided by the Company and filing it with the Company’s payroll office prior to the applicable Offering Date, unless a later time for filing the subscription agreement is set by the Board
for all eligible Employees with respect to a given Offering Period. The subscription agreement shall set forth the percentage of the participant’s Compensation (subject to Section 6(a) below) to be paid as Contributions pursuant to the Plan.

  
 (b) Payroll deductions shall commence on the
first payroll following the Offering Date and shall end on the last payroll paid on or prior to the last Purchase Period of the Offering Period to which the subscription agreement is applicable, unless sooner terminated by the participant as
provided in Section 10. 
  
 6. Method Of Payment Of
Contributions. 
  
 (a) A participant shall
elect to have payroll deductions made on each payday during the Offering Period in an amount not less than one percent (1%) and not more than fifteen percent (15%) (or such greater percentage as the Board may establish from time to time before an
Offering Date) of such participant’s Compensation on each payday during the Offering Period. All payroll deductions made by a participant shall be credited to his or her account under the Plan. A participant may not make any additional payments
into such account. 
  
 (b) A participant may
discontinue his or her participation in the Plan as provided in Section 10, or, on one occasion only during a Purchase Period may increase and on one occasion only during a Purchase Period may decrease the rate of his or her Contributions with
respect to the Offering Period by completing and filing with the Company a new subscription agreement authorizing a change in the payroll deduction rate. The change in rate shall be effective as of the beginning of the next calendar month following
the date of filing of the new subscription agreement, if the agreement is filed at least ten (10) business days prior to such date and, if not, as of the beginning of the next succeeding calendar month. 
  
 (c) Notwithstanding the foregoing, to the extent necessary
to comply with Section 423(b)(8) of the Code and Section 3(b) herein, a participant’s payroll deductions may be decreased during any Purchase Period to 0%. Payroll deductions shall re-commence at the rate provided in such participant’s
subscription agreement at the beginning of the first Purchase Period which is scheduled to end in the following calendar year, unless terminated by the participant as provided in Section 10. 
  

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 7. Grant Of Option. 
  
 (a) On the Offering Date of each Offering Period, each eligible Employee participating in such Offering
Period shall be granted an option to purchase on each Purchase Date a number of Shares of the Company’s Common Stock determined by dividing such Employee’s Contributions accumulated prior to such Purchase Date and retained in the
participant’s account as of the Purchase Date by the applicable Purchase Price; provided however, that the maximum number of Shares an Employee may purchase during each Purchase Period shall be 2,000 Shares (subject to any adjustment pursuant
to Section 19 below), and provided further that such purchase shall be subject to the limitations set forth in Sections 3(b) and 13. 
  
 (b) The fair market value of the Company’s Common Stock on a given date (the “Fair Market Value”) shall be determined by
the Board based on the closing sales price of the Common Stock for such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported by the National Association of Securities
Dealers Automated Quotation (Nasdaq) National Market or, if such price is not reported, the mean of the bid and asked prices per share of the Common Stock as reported by Nasdaq or, in the event the Common Stock is listed on a stock exchange, the
Fair Market Value per share shall be the closing sales price on such exchange on such date (or, in the event that the Common Stock is not traded on such date, on the immediately preceding trading date), as reported in The Wall Street Journal.

  
 8. Exercise Of Option. Unless a participant withdraws
from the Plan as provided in Section 10, his or her option for the purchase of Shares will be exercised automatically on each Purchase Date of an Offering Period, and the maximum number of full Shares subject to the option will be purchased at the
applicable Purchase Price with the accumulated Contributions in his or her account. No fractional Shares shall be issued. The Shares purchased upon exercise of an option hereunder shall be deemed to be transferred to the participant on the Purchase
Date. During his or her lifetime, a participant’s option to purchase Shares hereunder is exercisable only by him or her. 
  
 9. Delivery. As promptly as practicable after each Purchase Date of each Offering Period, the Company shall arrange the delivery to each
participant, as appropriate, the Shares purchased upon exercise of his or her option. No fractional Shares shall be purchased; any payroll deductions accumulated in a participant’s account which are not sufficient to purchase a full Share shall
be retained in the participant’s account for the subsequent Purchase Period or Offering Period, subject to earlier withdrawal by the participant as provided in Section 10 below. Any other amounts left over in a participant’s account after
a Purchase Date shall be returned to the participant. 
  
 10.
Voluntary Withdrawal; Termination Of Employment. 
  
 (a) A participant may withdraw all but not less than all the Contributions credited to his or her account under the Plan at any time prior to each Purchase Date by giving written notice to the Company. All of the
participant’s Contributions credited to his or her 

  

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account will be paid to him or her promptly after receipt of his or her notice of withdrawal and his or her option for the current period will be
automatically terminated, and no further Contributions for the purchase of Shares will be made during the Offering Period. 
  
 (b) Upon termination of the participant’s Continuous Status as an Employee prior to the Purchase Date of an Offering Period for any
reason, including retirement or death, the Contributions credited to his or her account will be returned to him or her or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and his or her option will be
automatically terminated. 
  
 (c) In the event an
Employee fails to remain in Continuous Status as an Employee of the Company and remain customarily employed for at least twenty (20) hours per week and five (5) months per calendar year during the Offering Period in which the employee is a
participant, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to his or her account will be returned to him or her and his or her option terminated. 
  
 (d) A participant’s withdrawal from an offering will
not have any effect upon his or her eligibility to participate in a succeeding offering or in any similar plan which may hereafter be adopted by the Company. 
  
 11. Automatic Withdrawal. If the Fair Market Value of the Shares on any Purchase Date of an Offering Period is less
than the Fair Market Value of the Shares on the Offering Date for such Offering Period (or, in the event of a purchase price adjustment pursuant to a shareholder-approved Plan Share increase, less than the Fair Market Value of the Shares on the date
of obtaining such shareholder approval), then every participant shall automatically (i) be withdrawn from such Offering Period at the close of such Purchase Date and after the acquisition of Shares for such Purchase Period, and (ii) be enrolled in
the Offering Period commencing on the first business day subsequent to such Purchase Period. 
  
 12. Interest. No interest shall accrue on the Contributions of a participant in the Plan. 
  
 13. Stock. 
  
 (a) Subject to adjustment as provided in Section 19, the maximum number of Shares which shall be made available for sale under the Plan
shall be 2,525,000 Shares. If the Board determines that, on a given Purchase Date, the number of shares with respect to which options are to be exercised may exceed (i) the number of shares of Common Stock that were available for sale under the Plan
on the Offering Date of the applicable Offering Period, or (ii) the number of shares available for sale under the Plan on such Purchase Date, the Board may in its sole discretion provide (x) that the Company shall make a pro rata allocation of the
Shares of Common Stock available for purchase on such Offering Date or Purchase Date, as applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising
options to purchase Common Stock on such Purchase Date, and continue all Offering Periods then in effect, or (y) that the Company shall make a pro rata allocation of the shares available for purchase on such Offering Date or Purchase Date, as

  

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applicable, in as uniform a manner as shall be practicable and as it shall determine in its sole discretion to be equitable among all participants exercising
options to purchase Common Stock on such Purchase Date, and terminate any or all Offering Periods then in effect pursuant to Section 20 below. The Company may make pro rata allocation of the Shares available on the Offering Date of any applicable
Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company’s shareholders subsequent to such Offering Date. 
  
 (b) The participant shall have no interest or voting right
in Shares covered by his or her option until such option has been exercised. 
  
 (c) Shares to be delivered to a participant under the Plan will be registered in the name of the participant or in the name of the participant and his or her spouse. 
  
 14. Administration. The Board, or a committee named by the Board,
shall supervise and administer the Plan and shall have full power to adopt, amend and rescind any rules deemed desirable and appropriate for the administration of the Plan and not inconsistent with the Plan, to construe and interpret the Plan, and
to make all other determinations necessary or advisable for the administration of the Plan. 
  
 15. Designation Of Beneficiary. 
  
 (a) A participant may file a written designation of a beneficiary who is to receive any Shares and cash, if any, from the participant’s account under the Plan in the event of such participant’s death
subsequent to the end of a Purchase Period but prior to delivery to him or her of such Shares and cash. In addition, a participant may file a written designation of a beneficiary who is to receive any cash from the participant’s account under
the Plan in the event of such participant’s death prior to the Purchase Date of an Offering Period. If a participant is married and the designated beneficiary is not the spouse, spousal consent shall be required for such designation to be
effective. 
  
 (b) Such designation of
beneficiary may be changed by the participant (and his or her spouse, if any) at any time by written notice. In the event of the death of a participant and in the absence of a beneficiary validly designated under the Plan who is living at the time
of such participant’s death, the Company shall deliver such Shares and/or cash to the executor or administrator of the estate of the participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the
Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company
may designate. 
  
 16. Transferability. Neither
Contributions credited to a participant’s account nor any rights with regard to the exercise of an option or to receive Shares under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the
laws of descent and distribution, or as provided in Section 15) by the participant. Any such attempt at 

  

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assignment, transfer, pledge or other disposition shall be without effect, except that the Company may treat such act as an election to withdraw funds in
accordance with Section 10. 
  
 17. Use Of Funds. All
Contributions received or held by the Company under the Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated to segregate such Contributions. 
  
 18. Reports. Individual accounts will be maintained for each participant in the Plan. Statements of account will be
given to participating Employees at least annually, which statements will set forth the amounts of Contributions, the per Share Purchase Price, the number of Shares purchased and the remaining cash balance, if any. 
  
 19. Adjustments Upon Changes In Capitalization; Corporate
Transactions. 
  
 (a) Adjustment.
Subject to any required action by the shareholders of the Company, the number of Shares covered by each option under the Plan which has not yet been exercised and the number of Shares which have been authorized for issuance under the Plan but have
not yet been placed under option (collectively, the “Reserves”), as well as the maximum number of shares of Common Stock which may be purchased by a participant in a Purchase Period, the number of shares of Common Stock set forth in
Section 13(a)(i) above, and the price per Share of Common Stock covered by each option under the Plan which has not yet been exercised, shall be proportionately adjusted for any increase or decrease in the number of issued Shares resulting from a
stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock (including any such change in the number of Shares of Common Stock effected in connection with a change in domicile of the Company), or any other
increase or decrease in the number of Shares effected without receipt of consideration by the Company; provided however that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of
consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of Shares subject to an option. 
  
 (b) Corporate Transactions. In the event of a dissolution or liquidation of the Company, any Purchase
Period and Offering Period then in progress will terminate immediately prior to the consummation of such action, unless otherwise provided by the Board. In the event of a Corporate Transaction, each option outstanding under the Plan shall be assumed
or an equivalent option shall be substituted by the successor corporation or a parent or Subsidiary of such successor corporation. In the event that the successor corporation refuses to assume or substitute for outstanding options, each Purchase
Period and Offering Period then in progress shall be shortened and a new Purchase Date shall be set (the “New Purchase Date”), as of which date any Purchase Period and Offering Period then in progress will terminate. The New Purchase Date
shall be on or before the date of consummation of the transaction and the Board shall notify each participant in writing, at least ten (10) days prior to the New Purchase Date, that the Purchase Date for his or her option has been changed to the New
Purchase Date and that his or her option will be exercised automatically on the New Purchase Date, unless prior to such date 

  

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he or she has withdrawn from the Offering Period as provided in Section 10. For purposes of this Section 19, an option granted under the Plan shall be deemed
to be assumed, without limitation, if, at the time of issuance of the stock or other consideration upon a Corporate Transaction, each holder of an option under the Plan would be entitled to receive upon exercise of the option the same number and
kind of shares of stock or the same amount of property, cash or securities as such holder would have been entitled to receive upon the occurrence of the transaction if the holder had been, immediately prior to the transaction, the holder of the
number of Shares of Common Stock covered by the option at such time (after giving effect to any adjustments in the number of Shares covered by the option as provided for in this Section 19); provided however that if the consideration received in the
transaction is not solely common stock of the successor corporation or its parent (as defined in Section 424(e) of the Code), the Board may, with the consent of the successor corporation, provide for the consideration to be received upon exercise of
the option to be solely common stock of the successor corporation or its parent equal in Fair Market Value to the per Share consideration received by holders of Common Stock in the transaction. The Board may, if it so determines in the exercise of
its sole discretion, also make provision for adjusting the Reserves, as well as the price per Share of Common Stock covered by each outstanding option, in the event that the Company effects one or more reorganizations, recapitalizations, rights
offerings or other increases or reductions of Shares of its outstanding Common Stock, and in the event of the Company’s being consolidated with or merged into any other corporation. 
  
 20. Amendment Or Termination. 
  
 (a) The Board may at any time and for any reason terminate or amend the Plan. Except as provided in Section
19, no such termination of the Plan may affect options previously granted, provided that the Plan or an Offering Period may be terminated by the Board on a Purchase Date or by the Board’s setting a new Purchase Date with respect to an Offering
Period and Purchase Period then in progress if the Board determines that termination of the Plan and/or the Offering Period is in the best interests of the Company and the shareholders or if continuation of the Plan and/or the Offering Period would
cause the Company to incur adverse accounting charges as a result of a change after the effective date of the Plan in the generally accepted accounting rules applicable to the Plan. Except as provided in Section 19 and in this Section 20, no
amendment to the Plan shall make any change in any option previously granted which adversely affects the rights of any participant. In addition, to the extent necessary to comply with Rule 16b-3 under the Exchange Act, or under Section 423 of the
Code (or any successor rule or provision or any applicable law or regulation), the Company shall obtain shareholder approval in such a manner and to such a degree as so required. 
  
 (b) Without shareholder consent and without regard to whether any participant rights may be considered to
have been adversely affected, the Board (or its committee) shall be entitled to change the Offering Periods and Purchase Periods, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange
ratio applicable to amounts withheld in a currency other than U.S. dollars, permit payroll withholding in excess of the amount designated by a participant in order to adjust for delays or mistakes in the Company’s processing of properly
completed withholding elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures 

  

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to ensure that amounts applied toward the purchase of Common Stock for each participant properly correspond with amounts withheld from the participant’s
Compensation, and establish such other limitations or procedures as the Board (or its committee) determines in its sole discretion advisable which are consistent with the Plan. 
  
 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. Conditions Upon Issuance Of Shares. Shares shall not be issued with respect to an option unless the exercise of
such option and the issuance and delivery of such Shares pursuant thereto shall comply with all applicable provisions of law, domestic or foreign, including, without limitation, the Securities Act of 1933, as amended, the Exchange Act, the rules and
regulations promulgated thereunder, applicable state securities laws and the requirements of any stock exchange upon which the Shares may then be listed, and shall be further subject to the approval of counsel for the Company with respect to such
compliance. As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any
present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law. 
  
 23. Term Of Plan. Unless sooner terminated by the Board, the Plan
shall terminate upon the earliest of (i) the last business day in July 2009, (ii) the date on which all shares available for issuance under the Plan shall have been sold pursuant to purchase rights exercised under the Plan or (iii) the date on which
all purchase rights are exercised in connection with a Corporate Transaction. No further purchase rights shall be granted or exercised, and no further payroll deductions shall be collected, under the Plan following such termination. 
  
 24. Additional Restrictions of Rule 16b-3. The terms and conditions of
options granted hereunder to, and the purchase of Shares by, persons subject to Section 16 of the Exchange Act shall comply with the applicable provisions of Rule 16b-3. This Plan shall be deemed to contain, and such options shall contain, and the
Shares issued upon exercise thereof shall be subject to, such additional conditions and restrictions as may be required by Rule 16b-3 to qualify for the maximum exemption from Section 16 of the Exchange Act with respect to Plan transactions.

  
 25. General Provisions. 
  
 (a) All costs and expenses incurred in the administration of
the Plan shall be paid by the Company; however, each Plan participant shall bear all costs and expenses incurred by such individual in the sale or other disposition of any shares purchased under the Plan. 
  

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 (b) Nothing in the Plan shall confer upon any participant any right to continue in the
employ of the Company or any Subsidiary for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Company (or any Subsidiary employing such person) or of the participant, which rights are hereby
expressly reserved by each, to terminate such person’s employment at any time for any reason, with or without cause. 
  
 (c) The provisions of the Plan shall be governed by the laws of the State of California without resort to its conflict-of-laws rules.

  

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 SONICWALL, INC. 
 1999 EMPLOYEE STOCK PURCHASE PLAN 
 SUBSCRIPTION AGREEMENT 
  
 New Election
             
 Change of Election
             
  
 1. I,
                                        
    , hereby elect to participate in the SonicWALL, Inc. 1999 Employee Stock Purchase Plan (the “Plan”) for the Offering Period
                        ,              to
                            ,
            , and subscribe to and purchase shares of the Company’s Common Stock in accordance with this Subscription Agreement and the Plan. 
  
 2. I elect to have Contributions in the amount of
      % of my Compensation, as those terms are defined in the Plan, applied to this purchase. I understand that this amount must not be less than 1% and not more than 15% of my Compensation during the Offering
Period. (Please note that no fractional percentages are permitted). 
  
 3. I hereby authorize payroll deductions from each paycheck during the Offering Period at the rate stated in Item 2 of this Subscription Agreement. I understand that all payroll deductions made by me shall be credited to my account under
the Plan and that I may not make any additional payments into such account. I understand that all payments made by me shall be accumulated for the purchase of shares of Common Stock at the applicable purchase price determined in accordance with the
Plan. I further understand that, except as otherwise set forth in the Plan, shares will be purchased for me automatically on the Purchase Date of each Offering Period unless I otherwise withdraw from the Plan by giving written notice to the Company
for such purpose. 
  
 4. I understand that I may discontinue at
any time prior to the Purchase Date my participation in the Plan as provided in Section 10 of the Plan. I also understand that I can increase or decrease the rate of my Contributions on one occasion only with respect to any increase and one occasion
only with respect to any decrease during any Purchase Period by completing and filing a new Subscription Agreement with such increase or decrease taking effect as of the beginning of the calendar month following the date of filing of the new
Subscription Agreement, if filed at least ten (10) business days prior to the beginning of such month. Further, I may change the rate of deductions for future Offering Periods by filing a new Subscription Agreement, and any such change will be
effective as of the beginning of the next Offering Period. In addition, I acknowledge that, unless I discontinue my participation in the Plan as provided in Section 10 of the Plan, my election will continue to be effective for each successive
Offering Period. 
  
 5. I have received a copy of the
Company’s most recent description of the Plan and a copy of the complete “SonicWALL, Inc. 1999 Employee Stock Purchase Plan.” I understand that my participation in the Plan is in all respects subject to the terms of the Plan.

  

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 6. Shares purchased for me under the Plan should be issued in the name(s) of (name of employee or
employee and spouse only):
                                        
                                        
                                        

  
 7. In the event of my death, I hereby designate the following
as my beneficiary(ies) to receive all payments and shares due to me under the Plan: 
  

					
	NAME: (Please print)	  	 	  	 
	 	  	 	  	(First)             (Middle)             (Last)
			
	 	  	 	  	 
	(Relationship)	  	 	  	(Address)
			
	 	  	 	  	 

  
 8. I understand that
if I dispose of any shares received by me pursuant to the Plan within two (2) years after the Offering Date (the first day of the Offering Period during which I purchased such shares) or within one (1) year after the Purchase Date, I will be treated
for federal income tax purposes as having received ordinary compensation income at the time of such disposition in an amount equal to the excess of the fair market value of the shares on the Purchase Date over the price which I paid for the shares,
regardless of whether I disposed of the shares at a price less than their fair market value at the Purchase Date. The remainder of the gain or loss, if any, recognized on such disposition will be treated as capital gain or loss. 
  
 I hereby agree to notify the Company in writing within thirty (30) days after
the date of any such disposition, and I will make adequate provision for federal, state or other tax withholding obligations, if any, which arise upon the disposition of the Common Stock. The Company may, but will not be obligated to, withhold from
my compensation the amount necessary to meet any applicable withholding obligation including any withholding necessary to make available to the Company any tax deductions or benefits attributable to the sale or early disposition of Common Stock by
me. 
  
 9. If I dispose of such shares at any time after
expiration of the two (2) year and one (1) year holding periods, I understand that I will be treated for federal income tax purposes as having received compensation income only to the extent of an amount equal to the lesser of (1) the excess of the
fair market value of the shares at the time of such disposition over the purchase price which I paid for the shares under the option, or (2) 15% of the fair market value of the shares on the Offering Date. The remainder of the gain or loss, if any,
recognized on such disposition will be treated as capital gain or loss. 
  
 I understand that this tax summary is only a summary and is subject to change. I further understand that I should consult a tax advisor concerning the tax implications of the purchase and sale of stock under the Plan. 
  

 -13- 

 10. I hereby agree to be bound by the terms of the Plan. The effectiveness of this Subscription Agreement
is dependent upon my eligibility to participate in the Plan. 
  

			
		
	SIGNATURE:
                                        
                                	  	 
		
	SOCIAL SECURITY NUMBER:
                                       
 	  	 
		
	DATE:
                                        
                                        
    	  	 

  

	
	SPOUSE’S SIGNATURE (necessary if beneficiary is not spouse):
	
	  
	 (Signature)

  

	
	
	  
	 (Print name)

  

 -14- 

 SONICWALL, INC. 
 1999 EMPLOYEE STOCK PURCHASE PLAN 
 NOTICE OF WITHDRAWAL 
  
 I,
                                        
        , hereby elect to withdraw my participation in the SonicWALL, Inc. 1999 Employee Stock Purchase Plan (the “Plan”) for the Offering Period that began on
                         ,             . This
withdrawal covers all Contributions credited to my account and is effective on the date designated below. I understand that all Contributions credited to my account will be paid to me within ten (10) business days of receipt by the Company of this
Notice of Withdrawal and that my option for the current period will automatically terminate, and that no further Contributions for the purchase of shares can be made by me during the Offering Period. The undersigned further understands and agrees
that he or she shall be eligible to participate in succeeding offering periods only by delivering to the Company a new Subscription Agreement. 
  

			
		
	Dated:	 	  

  

	
	
	  
	 Signature of Employee

  

	
	
	  
	 Social Security Number

  

 -15-Defferred Compensation Plan

 Exhibit 10.4 
  
 SonicWALL 
  
 DEFERRED COMPENSATION PLAN 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

		
	 ARTICLE I TITLE AND DEFINITIONS
	  	1
			
	 1.1
	  	 Definitions.
	  	1
		
	 ARTICLE II PARTICIPATION
	  	4
		
	 ARTICLE III DEFERRAL ELECTIONS
	  	5
			
	 3.1
	  	 Elections to Defer Compensation.
	  	5
			
	 3.2
	  	 Investment Elections.
	  	6
		
	 ARTICLE IV DEFERRAL ACCOUNTS AND TRUST FUNDING
	  	6
			
	 4.1
	  	 Deferral Accounts.
	  	6
			
	 4.2
	  	 Trust Funding.
	  	7
		
	 ARTICLE V VESTING
	  	7
		
	 ARTICLE VI DISTRIBUTIONS
	  	8
			
	 6.1
	  	 Distribution of Deferred Compensation and Discretionary Company Contributions.
	  	8
			
	 6.2
	  	 Early Non-Scheduled Distributions.
	  	9
			
	 6.3
	  	 Hardship Distribution.
	  	10
			
	 6.4
	  	 Inability to Locate Participant.
	  	10
		
	 ARTICLE VII ADMINISTRATION
	  	11
			
	 7.1
	  	 Committee.
	  	11
			
	 7.2
	  	 Committee Action.
	  	11
			
	 7.3
	  	 Powers and Duties of the Committee.
	  	11
			
	 7.4
	  	 Construction and Interpretation.
	  	12
			
	 7.5
	  	 Information.
	  	12
			
	 7.6
	  	 Compensation, Expenses and Indemnity.
	  	12
			
	 7.7
	  	 Quarterly Statements.
	  	13

  

 (i) 

					
	 	  	 	  	Page

			
	 7.8
	  	 Disputes.
	  	13
			
	 7.9
	  	 Arbitration
	  	14
		
	 ARTICLE VIII MISCELLANEOUS
	  	14
			
	 8.1
	  	 Unsecured General Creditor.
	  	14
			
	 8.2
	  	 Restriction Against Assignment.
	  	14
			
	 8.3
	  	 Withholding.
	  	14
			
	 8.4
	  	 Amendment, Modification, Suspension or Termination.
	  	15
			
	 8.5
	  	 Governing Law.
	  	15
			
	 8.6
	  	 Receipt or Release.
	  	15
			
	 8.7
	  	 Payments on Behalf of Persons Under Incapacity.
	  	15
			
	 8.8
	  	 Limitation of Rights and Employment Relationship
	  	15
			
	 8.9
	  	 Headings.
	  	15
			
	 8.10
	  	 Entire Agreement.
	  	16

  

 (ii) 

 SonicWALL 
 DEFERRED COMPENSATION PLAN 
  
 WHEREAS, the Company has set forth its desire to establish this Deferred Compensation Plan for a select group of management or highly compensated employees; 
  
 NOW, THEREFORE, as of the effective date set forth herein, this Plan is hereby adopted to read as follows: 
  
 ARTICLE I 
  
 TITLE AND DEFINITIONS 
  

1.1 Definitions. 
  
 Whenever the following words and phrases are used in this Plan, with the first letter capitalized, they shall have the meanings specified below.

  
 (a) “Account” or
“Accounts” shall mean all of such accounts as are specifically authorized for inclusion in this Plan. 
  
 (b) “Base Salary” shall mean a Participant’s annual base salary, excluding bonus, commissions, incentive and all other
remuneration for services rendered to Company and prior to reduction for any salary contributions to a plan established pursuant to Section 125 of the Code or qualified pursuant to Section 401(k) of the Code. 
  
 (c) “Beneficiary” or “Beneficiaries”
shall mean the person or persons, including a trustee, personal representative or other fiduciary, last designated in writing by a Participant in accordance with procedures established by the Committee to receive the benefits specified hereunder in
the event of the Participant’s death. No beneficiary designation shall become effective until it is filed with the Committee. Any designation shall be revocable at any time through a written instrument filed by the Participant with the
Committee with or without the consent of the previous Beneficiary. No designation of a Beneficiary other than the Participant’s spouse shall be valid unless consented to in writing by such spouse. If there is no such designation or if there is
no surviving designated Beneficiary, then the Participant’s surviving spouse shall be the Beneficiary. If there is no surviving spouse to receive any benefits payable in accordance with the preceding sentence, the duly appointed and currently
acting personal representative of the Participant’s estate (which shall include either the Participant’s probate estate or living trust) shall be the Beneficiary. In any case where there is no such personal representative of the
Participant’s estate duly appointed and acting in that capacity within 90 days after the Participant’s death (or such extended period as the Committee determines is reasonably necessary to allow such personal representative to be
appointed, but not to exceed 180 days after the Participant’s death), then Beneficiary shall mean the person or persons who can verify by affidavit or court order to the satisfaction of the Committee that they are legally entitled to receive
the benefits specified hereunder. In the event any amount is payable under the Plan to a minor, payment shall not be made to the minor, but instead be paid (a) to that person’s living 

  

 
parent(s) to act as custodian, (b) if that person’s parents are then divorced, and one parent is the sole custodial parent, to such custodial parent, or
(c) if no parent of that person is then living, to a custodian selected by the Committee to hold the funds for the minor under the Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which the minor resides. If no parent is
living and the Committee decides not to select another custodian to hold the funds for the minor, then payment shall be made to the duly appointed and currently acting guardian of the estate for the minor or, if no guardian of the estate for the
minor is duly appointed and currently acting within 60 days after the date the amount becomes payable, payment shall be deposited with the court having jurisdiction over the estate of the minor. Payment by Company pursuant to any unrevoked
Beneficiary designation, or to the Participant’s estate if no such designation exists, of all benefits owed hereunder shall terminate any and all liability of Company. 
  
 (d) “Board of Directors” or “Board” shall mean the Board of Directors of Company or, in
the case of a delegation from the Board, the Compensation Committee of the board of Directors of the Company. 
  
 (e) “Bonuses” shall mean the bonuses earned as of the last day of the Plan Year, provided a Participant is in the employ of the
Company on the last day of the Plan Year. 
  
 (f)
“Change of Control” means the occurrence of any of the following events, in one or a series of related transactions: 
  
 (g) any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), other than the Company, a subsidiary of the Company or a Company employee benefit plan, including any trustee of such plan acting as trustee, is or becomes the “beneficial owner” (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors;
or 
  
 (h) a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of the surviving entity) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation; or 
  
 (i) the sale or disposition by the Company of all or substantially all the Company’s assets. 
  
 (j) “Code” shall mean the Internal Revenue Code of 1986, as amended. 
  
 (k) “Committee” shall mean the Committee appointed
by the Board to administer the Plan in accordance with Article VII. 
  
 (l) “Company” shall mean SonicWALL. 
  

 -2- 

 (m) “Compensation” shall be (i) for employee Participants, base salary, bonus,
commissions, and (ii) for non-employee Director Participants, Directors’ meeting fees and retainers. 
  
 (n) “Deferral Account” shall mean the bookkeeping account maintained by the Committee for each Participant that is credited with
amounts equal to (1) the portion of the Participant’s Compensation that he or she elects to defer, and (2) earnings and losses pursuant to Section 4.1. 
  
 (o) “Distributable Amount” shall mean the balance in the Participant’s Deferral Account. 
  
 (p) “Early Distribution” shall mean an election by
Participant in accordance with Section 6.2 to receive a withdrawal of amounts from his or her Deferral Account prior to the time at which such Participant would otherwise be entitled to such amounts. 
  
 (q) “Effective Date” shall be, for Employee
Participants, June 21, 2004, and for non-employee Director Participants, July 1, 2004. 
  
 (r) “Eligible Service Provider” shall be (i) a group identified by the Committee as highly compensated employees, and (ii)
non-employee Directors. 
  
 (s) “Fund”
or “Funds” shall mean one or more of the investment funds selected by the Committee pursuant to Section 3.2(b). 
  
 (t) “Hardship Distribution” shall mean a severe financial hardship to the Participant resulting from a sudden and unexpected
illness or accident of the Participant or of his or her Dependent (as defined in Section 152(a) of the Code), loss of a Participant’s property due to casualty, or other similar or extraordinary and unforseeable circumstances arising as a result
of events beyond the control of the Participant. The circumstances that would constitute an unforseeable emergency will depend upon the facts of each case, but, in any case, a Hardship Distribution may not be made to the extent that such hardship is
or may be relieved (i) through reimbursement or compensation by insurance or otherwise, (ii) by liquidation of the Participant’s assets, to the extent the liquidation of assets would not itself cause severe financial hardship, or (iii) by
cessation of deferrals under this Plan. 
  
 (u)
“Initial Election Period” shall mean the 30-day period prior to the Effective Date, or the 30-day period following the time the Company designates an employee as an Eligible Service Provider. 
  
 (v) “Interest Rate” shall mean, for each Fund, an
amount equal to the net gain or loss on the assets of such Fund during each month. 
  
 (w) “Participant” shall mean any Eligible Service Provider who becomes a Participant in this Plan in accordance with Article II
and maintains an account balance. 
  
 (x)
“Payment Date” shall mean (i) in the case of a Participant who has elected a Scheduled Withdrawal Date, a payment commencing on or about February 1 of the year(s) 

  

 -3- 

 
elected; or (ii) for any other Participant, on or about the month following the Participant’s termination of employment, Retirement or the date upon
which the Participant qualifies for long-term disability under the Company’s long-term disability plan. The amount distributed will be based on the valuation of the Account as determined on the last business day of the prior month. 

 
 (y) “Plan” shall be SonicWALL Deferred
Compensation Plan. 
  
 (z) “Plan Year”
shall be January 1 to December 31; provided, however that the first Plan Year shall be a short plan year from the Effective Date to December 31, 2004. 
  
 (aa) “Retire” means the Participant’s (i) termination of service with the Company at age 55 or later following at least
five years of service, or (ii) termination of service with the Company following at least fifteen years of service. 
  
 (bb) “Scheduled Withdrawal Date” shall mean the distribution date elected by the Participant for an in-service withdrawal of
amounts from such Accounts deferred in a given Plan Year, and earnings and losses attributable thereto, as set forth on the election form for such Plan Year. 
  

(cc) “Trust” shall mean the Company Deferred Compensation Plan Trust. 
  
 (dd) “Trustee” shall mean the trustee of the
Trust. 
  
 ARTICLE II 
  
 PARTICIPATION 
  
 An Eligible Service Provider shall become a Participant in the Plan by
completing such requirements as are designated by the Company, including but not limited to: 
  
 (a) Electing to defer a portion of his or her Compensation in accordance with Section 3.1, 
  
 (b) Completing an investment election form as set forth in
Section 3.2, and 
  
 (c) Filing a life insurance
application form, if applicable. 
  
 An Eligible Service Provider
who completes the requirements of the preceding sentence shall commence participation in this Plan as of the date on which Compensation is deferred. Notwithstanding any provision to the contrary, if it is determined or reasonably believed, based on
a judicial or administrative determination or an opinion of Company’s legal counsel that a Plan Participant is not a highly compensated employee or member of a select group of management, such individual shall cease to be a Participant and his
Distributable Amount shall be paid to him in a lump sum as soon as practicable after the determination is made that he is not a highly compensated employee or member of a select group of management. 
  

 -4- 

 ARTICLE III 
  
 DEFERRAL ELECTIONS 
  
 3.1 Elections to Defer Compensation. 
  
 (a) Initial Election Period. Subject to the provisions of Article II, each Eligible Service Provider may elect to defer
Compensation by filing with the Committee an election that conforms to the requirements of this Section 3.1, on a form provided by the Committee, no later than the last day of his or her Initial Election Period. 
  
 (b) General Rule. The amount of Compensation which an
Eligible Service Provider may elect to defer is such Compensation earned on or after the time at which the Eligible Service Provider elects to defer in accordance with Sections 1.1(q) and 3.1(a) and shall be a percentage which shall not exceed
eighty (80) percent of the Eligible Service Provider’s base salary, plus up to 100% of bonus compensation and 100% of commissions. Employee Participant deferrals shall be reduced by the amount(s), if any, which may be necessary: 
  
 (1) To satisfy all applicable income and employment tax
withholding and FICA contributions; 
  
 (2) To
pay all contributions elected by the employee Participant pursuant to the Company’s employee stock purchase plan, and other fringe benefit programs; and 
  

(3) To satisfy all garnishments or other amounts required to be withheld by applicable law or court order. 
  
 (c) Any deferral elections made under the Company’s
401(k) Plan shall be determined based on the employee Participant’s compensation after reduction for the Deferral Amounts made pursuant to the Plan. Members of the Board of Directors may defer up to 100% of their Compensation. 
  
 (d) Duration of Compensation Deferral Election. An
Eligible Service Provider’s initial election to defer Compensation must be prior to the Effective Date and is to be effective with respect to Compensation earned beginning (i) for employee Participants with the next payroll period commencing
after such deferral election is processed, and (ii) for non-employee Director Participants, commencing with the Company’s next fiscal year quarter. A Participant may increase, decrease or terminate a deferral election with respect to
Compensation for any subsequent Plan Year by filing a new election not less than 15 days prior to the beginning of the next Plan Year, which election shall be effective on the first day of the next following Plan Year. In the case of an employee who
becomes an Eligible Service Provider after the Effective Date, such Eligible Service Provider shall have 30 days from the date he or she has become an Eligible Service Provider to make an Initial Election with respect to Compensation. Such election
shall be for the remainder of the Plan Year, in the event the Plan Year has commenced. 
  
 (e) Elections other than Elections during the Initial Election Period. Subject to the limitations of Section 3.1(b) above, any
Eligible Service Provider who has terminated a prior Compensation deferral election may elect to again defer Compensation, by filing an 

  

 -5- 

 
election, on a form provided by the Committee, to defer Compensation as described in Sections 3.1(b) and 3.1(c) above. An election to defer Compensation must
be filed in a timely manner in accordance with Section 3.1(c). 
  
 3.2 Investment Elections. 
  
 (a)
At the time of making the deferral elections described in Section 3.1, the Participant shall designate, on a form provided by the Committee, the types of investment funds in which the Participant’s Account will be deemed to be invested for
purposes of determining the amount of earnings to be credited to that Account. In making the designation pursuant to this Section 3.2, the Participant may specify that all or any multiple of his or her Account be deemed to be invested, in whole
percentage increments, in one or more of the types of investment funds provided under the Plan as communicated from time to time by the Committee. On a form provided by the Committee, a participant may change each of the investment allocations daily
while employed or after termination. Changes made will be effective the first business day following receipt of the change. If a Participant fails to elect a type of fund under this Section 3.2, he or she shall be deemed to have elected the Money
Market type of investment fund. 
  
 (b) The
Committee shall select from time to time, in its sole and absolute discretion, commercially available investments of each of the types communicated by the Committee to the Participant pursuant to Section 3.2(a) above to be the Funds. The Interest
Rate of each such commercially available investment fund shall be used to determine the amount of earnings or losses to be credited to Participant’s Account under Article IV. 
  
 ARTICLE IV 
  
 DEFERRAL ACCOUNTS AND TRUST FUNDING 
  
 4.1 Deferral Accounts. 
  
 The Committee shall establish and maintain a Deferral Account for each Participant under the Plan. Each Participant’s Deferral Account shall be
further divided into separate subaccounts (“investment fund subaccounts”), each of which corresponds to an investment fund elected by the Participant pursuant to Section 3.2(a). A Participant’s Deferral Account shall be credited as
follows: 
  
 (a) On the third business day after
amounts are withheld and deferred from a Participant’s Compensation, the Committee shall credit the investment fund subaccounts of the Participant’s Deferral Account with an amount equal to Compensation deferred by the Participant in
accordance with the Participant’s election under Section 3.2(a); that is, the portion of the Participant’s deferred Compensation that the Participant has elected to be deemed to be invested in a certain type of investment fund shall be
credited to the investment fund subaccount corresponding to that investment fund; 
  
 (b) Each business day, each investment fund subaccount of a Participant’s Deferral Account shall be credited with earnings or losses
in an amount equal to that determined by multiplying the balance credited to such investment fund subaccount as of the prior day plus 

  

 -6- 

 
contributions credited that day to the investment fund subaccount by the Interest Rate for the corresponding fund selected by the Company pursuant to Section
3.2(b). 
  
 (c) In the event that a Participant
elects for a given Plan Year’s deferral of Compensation to have a Scheduled Withdrawal Date, all amounts attributed to the deferral of Compensation for such Plan Year shall be accounted for in a manner which allows separate accounting for the
deferral of Compensation and investment gains and losses associated with such Plan Year’s deferral of Compensation. 
  
 4.2 Trust Funding. 
  
 The Company has created a Trust with First American Trust. The Company shall cause the Trust to be funded each year. The Company shall contribute
to the Trust an amount equal to the amount deferred by each Participant. 
  
 Although the principal of the Trust and any earnings thereon shall be held separate and apart from other funds of Company and shall be used exclusively for the uses and purposes of Plan Participants and Beneficiaries
as set forth therein, neither the Participants nor their Beneficiaries shall have any preferred claim on, or any beneficial ownership in, any assets of the Trust prior to the time such assets are paid to the Participants or Beneficiaries as benefits
and all rights created under this Plan shall be unsecured contractual rights of Plan Participants and Beneficiaries against the Company. Any assets held in the Trust will be subject to the claims of Company’s general creditors under federal and
state law in the event of insolvency as defined in Section 3.1 of the Trust. 
  
 The assets of the Plan and Trust shall never inure to the benefit of the Company and the same shall be held for the exclusive purpose of providing benefits to Participants and their Beneficiaries and for deferring
reasonable expenses of administering the Plan and Trust. 
  
 ARTICLE V 
  
 VESTING 
  
 A Participant shall be 100% vested in his or her Deferral Account.

  

 -7- 

 ARTICLE VI 
  

DISTRIBUTIONS 
  
 6.1 Distribution of Deferred Compensation and Discretionary Company Contributions. 
  
 (a) Retirement or Long Term Disability (LTD). In the case of a Participant who Retires or qualifies
for long-term disability under the Company’s long-term disability plan and has an Account balance of more than $50,000, the Distributable Amount shall be paid to the Participant in substantially equal annual installments over ten (10) years
commencing on the Participant’s Payment Date. An optional form of benefit may be elected by the Participant, on the form provided by Company, during his or her Initial Election Period from among the following: 
  
 (1) Substantially equal annual installments over two (2) to
fifteen (15) years beginning on the Participant’s Payment Date, or 
  
 (2) A lump sum distribution on the Participant’s Payment Date. 
  
 (3) A Participant may modify the form of benefit that he or she has previously elected, provided such modification occurs at least one (1)
year before the Participant terminates employment with Company. 
  
 In the case of a Participant who Retires or qualifies for long-term disability under the Company’s long-term disability plan and has an Account balance of less than $50,000, the Distributable Amount shall be paid to the Participant in
a lump sum distribution on the Participant’s Payment Date. 
  
 The Participant’s Account shall continue to be credited with earnings pursuant to Section 4.1 of the Plan until all amounts credited to his or her Account under the Plan have been distributed. 
  
 (b) Termination. In the case of a Participant who
terminates employment with the Company for reasons other than Retirement or becoming qualified to receive payments under the Company’s long-term disability plan, the Distributable Amount shall be paid to the Participant in a lump sum beginning
on the Participant’s Payment Date. An optional form of benefit may be elected by the Participant during his or her Initial Election Period as follows: 
  
 (1) substantially equal annual installments over five (5) years beginning on the Participant’s Payment Date, if their account balance
is $50,000 or greater. 
  
 A Participant may modify the form of
benefit that he or she has previously elected, provided such modification occurs at least one (1) year before the Participant terminates employment with Company. 
  

 -8- 

 In the case of a Participant who terminates with the Company and has an Account balance of less than
$50,000, the Distributable Amount shall be paid to the Participant in a lump sum distribution on the Participant’s Payment Date. 
  
 The Participant’s Account shall continue to be credited with earnings pursuant to Section 4.1 of the Plan until all amounts credited to his or her
Account under the Plan have been distributed. 
  
 (c) Distribution With Scheduled Withdrawal Date. In the case of a Participant who has elected a Scheduled Withdrawal Date for a distribution while still in the employ of the Company, such Participant shall receive his or her
Distributable Amount, as has been elected by the Participant to be subject to the Scheduled Withdrawal Date in accordance with Section 4.1(c) of the Plan. 
  
 (d) In the case of a Participant with an Account balance of at least $25,000, the Distributable Amount shall be paid to the Participant
from among the following: 
  
 (1) A lump sum
distribution beginning on the Participant’s Payment Date. 
  
 (2) Annual installments over two (2) to five (5) years beginning on the Participant’s Payment Date. 
  
 (e) A Participant’s Scheduled Withdrawal Date with respect to deferrals of Compensation, deferred in a given Plan Year can be no
earlier than two years from the last day of the Plan Year for which the deferrals of Compensation, are made. A Participant may extend the Scheduled Withdrawal Date for any Plan Year, provided such extension occurs at least one year before the
Scheduled Withdrawal Date and is for a period of not less than two years from the Scheduled Withdrawal Date. The Participant shall have the right to twice modify any Scheduled Withdrawal Date. In the event a Participant terminates employment with
Company prior to a Scheduled Withdrawal Date, other than by reason of death, the portion of the Participant’s Account associated with a Scheduled Withdrawal Date, which has not occurred prior to such termination, shall be distributed as elected
for Retirement, qualifying for payments under the Company’s long-term disability plan or termination. 
  
 (f) Distribution for Termination of Employment due to Death. In the case of a Participant who dies while employed by the Company,
the Participant’s Beneficiary will receive the total undistributed account balance in a lump sum. 
  
 6.2 Early Non-Scheduled Distributions. 
  
 A Participant shall be permitted to elect an Early Distribution from his or her Account prior to the Payment Date, subject to the following restrictions:

  
 (a) The election to take an Early
Distribution shall be made by filing a form provided by and filed with the Committee prior to the end of any calendar month. 
  

 -9- 

 (b) The amount of the Early Distribution shall equal up to 90% of his or her Account
balance. 
  
 (c) The amount of the Early
Distribution shall be a minimum of $10,000 or 90% of the entire account balance, whichever is the lesser. 
  
 (d) The amount described in subsection (b) above shall be paid in a single cash lump sum as soon as practicable after the end of the
calendar month in which the Early Distribution election is made. 
  
 (e) If a Participant requests an Early Distribution of his or her entire vested Account, the remaining balance of his or her Account (10% of the Account) shall be permanently forfeited and the Company shall have no
obligation to the Participant or his Beneficiary with respect to such forfeited amount. If a Participant receives an Early Distribution of less than his or her entire vested Account, such Participant shall forfeit 10% of the gross amount to be
distributed from the Participant’s Account and the Company shall have no obligation to the Participant or his or her Beneficiary with respect to such forfeited amount. 
  
 (f) If a Participant receives an Early Distribution of either all or a part of his or her Account, the
Participant will be ineligible to participate in the Plan for the balance of the Plan Year and the following Plan Year. All distributions shall be made on a pro rata basis from among a Participant’s Accounts. 
  
 6.3 Hardship Distribution. 
  
 A Participant shall be permitted to elect a Hardship Distribution from his or
her vested Accounts in accordance with Section 1.1(p) of the Plan prior to the Payment Date, subject to the following restrictions: 
  
 (a) The election to take a Hardship Distribution shall be made by filing a form provided by and filed with the Committee prior to the end
of any calendar month. 
  
 (b) The Committee
shall have made a determination that the requested distribution constitutes a Hardship Distribution in accordance with Section 1.1(t) of the Plan. 
  
 (c) The amount determined by the Committee as a Hardship Distribution shall be paid in a single cash lump sum as soon as practicable after
the end of the calendar month in which the Hardship Distribution election is made and approved by the Committee. 
  
 (d) If a Participant receives a Hardship Distribution, the Participant will be ineligible to participate in the Plan for the balance of
the Plan Year. 
  
 6.4 Inability to Locate Participant.

  
 In the event that the Committee is unable to locate a
Participant or Beneficiary within two years following the required Payment Date, the amount allocated to the Participant’s Deferral Account shall be forfeited. If, after such forfeiture, the Participant or Beneficiary later claims such benefit,
such benefit shall be reinstated without interest or earnings. 
  

 -10- 

 ARTICLE VII 
  
 ADMINISTRATION 
  
 7.1 Committee. 
  
 A committee shall be appointed by, and serve at the pleasure of, the Compensation Committee of the Board. The number of members comprising the Committee
shall be determined by the Compensation Committee of the Board, which may from time to time vary the number of members. A member of the Committee may resign by delivering a written notice of resignation to the Compensation Committee of the Board.
The Board may remove any member by delivering a certified copy of its resolution of removal to such member. Vacancies in the membership of the Committee shall be filled promptly by the Compensation Committee of the Board. Following a Change of
Control, however, the Board’s authority regarding the Committee shall automatically be transferred to the Committee, so that thereafter, only the Committee may take any actions affecting the Committee, including determining the number of
members of the Committee, removing Committee members and appointing new members. 
  
 7.2 Committee Action. 
  
 The Committee shall act at meetings by affirmative vote of a majority of the members of the Committee. Any action permitted to be taken at a meeting may be taken without a meeting if, prior to such action, a written consent to the action is
signed by all members of the Committee and such written consent is filed with the minutes of the proceedings of the Committee. A member of the Committee shall not vote or act upon any matter which relates solely to himself or herself as a
Participant. The Chairman or any other member or members of the Committee designated by the Chairman may execute any certificate or other written direction on behalf of the Committee. 
  
 7.3 Powers and Duties of the Committee. 
  
 (a) The Committee, on behalf of the Participants and their Beneficiaries, shall enforce the Plan in
accordance with its terms, shall be charged with the general administration of the Plan, and shall have all powers necessary to accomplish its purposes, including, but not by way of limitation, the following: 
  
 (1) To select the Funds in accordance with Section 3.2(b)
hereof; 
  
 (2) To construe and interpret the
terms and provisions of this Plan; 
  
 (3) To
compute and certify to the amount and kind of benefits payable to Participants and their Beneficiaries; 
  
 (4) To maintain all records that may be necessary for the administration of the Plan; 
  

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 (5) To provide for the disclosure of all information and the filing or provision of all
reports and statements to Participants, Beneficiaries or governmental agencies as shall be required by law; 
  
 (6) To make and publish such rules for the regulation of the Plan and procedures for the administration of the Plan as are not
inconsistent with the terms hereof; 
  
 (7) To
appoint a Plan administrator or any other agent, and to delegate to them such powers and duties in connection with the administration of the Plan as the Committee may from time to time prescribe; and 
  
 (8) To take all actions necessary for the administration of
the Plan, including determining whether to hold or discontinue the Policies. 
  
 7.4 Construction and Interpretation. 
  
 The Committee shall have full discretion to construe and interpret the terms and provisions of this Plan, which interpretations or construction shall be final and binding on all parties, including but not limited to
the Company and any Participant or Beneficiary. The Committee shall administer such terms and provisions in a uniform and nondiscriminatory manner and in full accordance with any and all laws applicable to the Plan. 
  
 7.5 Information. 
  
 To enable the Committee to perform its functions, the Company shall supply
full and timely information to the Committee on all matters relating to the Compensation of all Participants, their death or other events which cause termination of their participation in this Plan, and such other pertinent facts as the Committee
may require. 
  
 7.6 Compensation, Expenses and Indemnity.

  
 (a) The members of the Committee shall serve
without compensation for their services hereunder. 
  
 (b) Expenses and fees associated with the administration of the Plan shall be paid by the Company. 
  
 (c) To the extent permitted by applicable state law, the Company shall indemnify and hold harmless the Committee and each member thereof,
the Board of Directors and any delegate of the Committee who is an employee of the Company against any and all expenses, liabilities and claims, including legal fees to defend against such liabilities and claims arising out of their discharge in
good faith of responsibilities under or incident to the Plan, other than expenses and liabilities arising out of willful misconduct. This indemnity shall not preclude such further indemnities as may be available under insurance purchased by the
Company or provided by the Company under any bylaw, agreement or otherwise, as such indemnities are permitted under state law. 
  

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 7.7 Quarterly Statements. 
  
 Under procedures established by the Committee, a Participant shall receive a statement with respect to such
Participant’s Accounts on a quarterly basis. 
  
 7.8
Disputes. 
  
 (a) Claim.

  
 A person who believes that he or she is being denied a benefit
to which he or she is entitled under this Plan (hereinafter referred to as “Claimant”) must file a written request for such benefit with the Company, setting forth his or her claim. The request must be addressed to the General Counsel of
the Company at its then principal place of business. 
  
 (b) Claim Decision. 
  
 Upon receipt of a claim,
the Company shall advise the Claimant that a reply will be forthcoming within ninety (90) days and shall, in fact, deliver such reply within such period. The Company may, however, extend the reply period for an additional ninety (90) days for
special circumstances. 
  
 If the claim is denied in whole or in
part, the Company shall inform the Claimant in writing, using language calculated to be understood by the Claimant, setting forth: (A) the specified reason or reasons for such denial; (B) the specific reference to pertinent provisions of this Plan
on which such denial is based; (C) a description of any additional material or information necessary for the Claimant to perfect his or her claim and an explanation of why such material or such information is necessary; (D) appropriate information
as to the steps to be taken if the Claimant wishes to submit the claim for review; and (E) the time limits for requesting a review under subsection (c). 
  
 (c) Request For Review. 
  
 Within sixty (60) days after the receipt by the Claimant of the written opinion described above, the Claimant may request in writing that the Committee
review the determination of the Company. Such request must be addressed to the Secretary of the Company, at its then principal place of business. The Claimant or his or her duly authorized representative may, but need not, review the pertinent
documents and submit issues and comments in writing for consideration by the Committee. If the Claimant does not request a review within such sixty (60) day period, he or she shall be barred and estopped from challenging the Company’s
determination. 
  
 (d) Review of Decision.

  
 Within sixty (60) days after the Committee’s receipt of a
request for review, after considering all materials presented by the Claimant, the Committee will inform the Participant in writing, in a manner calculated to be understood by the Claimant, the decision setting forth the specific reasons for the
decision containing specific references to the pertinent provisions of this Plan on which the decision is based. If special circumstances require that the sixty (60) day time 

  

 -13- 

 
period be extended, the Committee will so notify the Claimant and will render the decision as soon as possible, but no later than one hundred twenty (120)
days after receipt of the request for review. 
  
 7.9
Arbitration. Any dispute or claim relating to or arising out of this Plan shall be fully and finally resolved by binding arbitration conducted by the American Arbitration Association in Santa Clara County, California. 
  
 ARTICLE VIII 
  
 MISCELLANEOUS 
  
 8.1 Unsecured General Creditor. 
  
 Participants and their Beneficiaries, heirs, successors, and assigns shall
have no legal or equitable rights, claims, or interest in any specific property or assets of the Company. No assets of the Company shall be held in any way as collateral security for the fulfilling of the obligations of the Company under this Plan.
Any and all of the Company’s assets shall be, and remain, the general unpledged, unrestricted assets of the Company. The Company’s obligation under the Plan shall be merely that of an unfunded and unsecured promise of the Company to pay
money in the future, and the rights of the Participants and Beneficiaries shall be no greater than those of unsecured general creditors. It is the intention of the Company that this Plan be unfunded for purposes of the Code and for purposes of Title
1 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). 
  
 8.2 Restriction Against Assignment. 
  
 The Company shall pay all amounts payable hereunder only to the person or persons designated by the Plan and not to any other person or corporation; provided, however, that a Deferral Account hereunder may be
transferred to a Participant’s former spouse pursuant to a court order that would qualify as a qualified domestic relations order under ERISA Section 206(d)(3)(B)(i) if this Plan was subject to that section of ERISA. No part of a
Participant’s Accounts shall be liable for the debts, contracts, or engagements of any Participant, his or her Beneficiary, or successors in interest, nor shall a Participant’s Accounts be subject to execution by levy, attachment, or
garnishment or by any other legal or equitable proceeding, nor shall any such person have any right to alienate, anticipate, sell, transfer, commute, pledge, encumber, or assign any benefits or payments hereunder in any manner whatsoever. If any
Participant, Beneficiary or successor in interest is adjudicated bankrupt or purports to anticipate, alienate, sell, transfer, commute, assign, pledge, encumber or charge any distribution or payment from the Plan, voluntarily or involuntarily, the
Committee, in its discretion, may cancel such distribution or payment (or any part thereof) to or for the benefit of such Participant, Beneficiary or successor in interest in such manner as the Committee shall direct. 
  
 8.3 Withholding. 
  
 There shall be deducted from each payment made under the Plan or any other
Compensation payable to the Participant (or Beneficiary) all taxes which are required to be withheld by the Company in respect to such payment or this Plan. The Company shall have the right 

  

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to reduce any payment (or compensation) by the amount of cash sufficient to provide the amount of said taxes. 
  
 8.4 Amendment, Modification, Suspension or Termination. 
  
 The Committee may amend, modify, suspend or terminate the Plan in whole or in
part, except that no amendment, modification, suspension or termination shall have any retroactive effect to reduce any amounts allocated to a Participant’s Accounts. In the event that this Plan is terminated, the amounts allocated to a
Participant’s Accounts shall be distributed to the Participant or, in the event of his or her death, his or her Beneficiary in a lump sum within thirty (30) days following the date of termination. 
  
 8.5 Governing Law. 
  
 This Plan shall be construed, governed and administered in accordance with
the laws of the State of California, except where pre-empted by federal law. 
  
 8.6 Receipt or Release. 
  
 Any payment to a Participant or the Participant’s Beneficiary in accordance with the provisions of the Plan shall, to the extent thereof, be in full satisfaction of all claims against the Committee and the Company. The Committee may
require such Participant or Beneficiary, as a condition precedent to such payment, to execute a receipt and release to such effect. 
  
 8.7 Payments on Behalf of Persons Under Incapacity. 
  
 In the event that any amount becomes payable under the Plan to a person who, in the sole judgment of the Committee, is considered by reason of physical or
mental condition to be unable to give a valid receipt therefore, the Committee may direct that such payment be made to any person found by the Committee, in its sole judgment, to have assumed the care of such person. Any payment made pursuant to
such determination shall constitute a full release and discharge of the Committee and the Company. 
  
 8.8 Limitation of Rights and Employment Relationship 
  
 Neither the establishment of the Plan and Trust nor any modification thereof, nor the creating of any fund or account, nor the payment of any benefits
shall be construed as giving to any Participant, or Beneficiary or other person any legal or equitable right against the Company or the trustee of the Trust except as provided in the Plan and Trust; and in no event shall the terms of employment of
any Employee or Participant be modified or in any way be affected by the provisions of the Plan and Trust. 
  
 8.9 Headings. 
  
 Headings and subheadings in this Plan are inserted for convenience of reference only and are not to be considered in the construction of the provisions
hereof. 
  

 -15- 

 8.10 Entire Agreement. 
  
 This Plan and any applicable deferral election forms constitute the entire understanding and agreement with respect to the
Plan, and there are no agreements, understandings, restrictions, representations or warranties among Participants and the Company other than those as set forth or provided for therein. 
  

 -16-

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