Document:

Registrant's 2001 Stock Plan

 Exhibit 10.1 
  
 PALMSOURCE, INC. 
  
 2001 STOCK PLAN 
  
 1. Purposes of the Plan. The purposes of this Stock Plan are to attract and retain the best available personnel for positions of substantial
responsibility, to provide additional incentive to Employees, Directors and Consultants and to promote the success of the Company’s business. Options granted under the Plan may be Incentive Stock Options or Nonstatutory Stock Options, as
determined by the Administrator at the time of grant. Stock Purchase Rights may also be granted under the Plan. 
  
 2. Definitions. As used herein, the following definitions shall apply: 
  
 (a) “Administrator” means the Board or any of its Committees as shall be administering the Plan in
accordance with Section 4 hereof. 
  
 (b) “Applicable
Laws” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed
or quoted and the applicable laws of any other country or jurisdiction where Options or Stock Purchase Rights are granted under the Plan. 
  
 (c) “Board” means the Board of Directors of the Company. 
  
 (d) “Cause” means (i) an act of personal dishonesty taken by the Optionee in connection with his or her
responsibilities as a Service Provider and intended to result in substantial personal enrichment of the Optionee, (ii) Optionee being convicted of a felony, (iii) a willful act by the Optionee which constitutes gross misconduct and which is
injurious to the Company, (iv) following delivery to the Optionee of a written demand for performance from the Company which describes the basis for the Company’s reasonable belief that the Optionee has not substantially performed his duties,
continued violations by the Optionee of the Optionee’s obligations to the Company which are demonstrably willful and deliberate on the Optionee’s part. 
  
 (e) “Change in Control” means the occurrence of any of the following events: 
  
 (i) Any “person” (as such term is used in Sections 13(d) and 14(d)
of the Exchange Act) other than Palm, Inc. or a person controlled by Palm, Inc. becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent
(50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or 
  
 (ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets; or 

 (iii) The consummation of a merger or consolidation of the Company with any other corporation, other
than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving
entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation. 
  
 (f) “Code” means the Internal Revenue Code of 1986, as
amended. 
  
 (g) “Committee” means a committee of
Directors or of other individuals satisfying Applicable Laws appointed by the Board in accordance with Section 4 hereof. 
  
 (h) “Common Stock” means Class A Common Stock of the Company. 
  
 (i) “Company” means PalmSource, Inc. 
  
 (j) “Consultant” means any person who is engaged by the Company or any Parent or Subsidiary to render
consulting or advisory services to such entity. 
  
 (k)
“Director” means a member of the Board. 
  
 (l)
“Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code. 
  
 (m) “Employee” means any person, including officers and Directors, employed by the Company or any Parent or Subsidiary of the Company.
Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company. 
  
 (n) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 (o) “Fair Market Value” means, as of any date, the value of Common Stock determined as follows: 

 
 (i) If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 
  
 (ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, its
Fair Market Value shall be the mean between the high bid and low asked prices for the Common Stock on the day of determination; or 
  
 (iii) In the absence of an established market for the Common Stock, the Fair Market Value thereof shall be determined in good faith by the Administrator.

  
  

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 (p) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code. 
  
 (q)
“Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock Option. 
  
 (r) “Option” means a stock option granted pursuant to the Plan. 
  
 (s) “Option Agreement” means a written or electronic agreement between the Company and an Optionee
evidencing the terms and conditions of an individual Option grant. The Option Agreement is subject to the terms and conditions of the Plan. 
  
 (t) “Optioned Stock” means the Common Stock subject to an Option or a Stock Purchase Right. 
  
 (u) “Optionee” means the holder of an outstanding Option or
Stock Purchase Right granted under the Plan. 
  
 (v)
“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code. 
  
 (w) “Plan” means this 2001 Stock Plan. 
  
 (x) “Restricted Stock” means shares of Common Stock acquired pursuant to a grant of a Stock Purchase Right under Section 11 below or
Shares of restricted stock issued pursuant to an Option. 
  
 (y)
“Restricted Stock Purchase Agreement” means a written agreement between the Company and the Optionee evidencing the terms and restrictions applying to stock purchased under a Stock Purchase Right. The Restricted Stock Purchase
Agreement is subject to the terms and conditions of the Plan and the notice of grant. 
  
 (z) “Service Provider” means an Employee, Director or Consultant. 
  
 (aa) “Share” means a share of the Common Stock, as adjusted in accordance with Section 12 below. 
  
 (bb) “Stock Purchase Right” means a right to purchase Common
Stock pursuant to Section 11 below. 
  
 (cc)
“Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code. 
  
 3. Stock Subject to the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares that may be subject to
option and sold under the Plan is 10,000,000 Shares. In no event shall the number of Shares issued pursuant to Incentive Stock Options exceed 10,000,000 Shares. The Shares may be authorized but unissued, or reacquired Common Stock. 
  

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 If an Option or Stock Purchase Right expires or becomes unexercisable without having been exercised in
full, the unpurchased Shares that were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan, upon exercise of either an Option
or Stock Purchase Right, shall not be returned to the Plan and shall not become available for future distribution under the Plan, except that if Shares of Restricted Stock are repurchased by the Company at their original purchase price, such Shares
shall become available for future grant under the Plan. 
  
 4.
Administration of the Plan. 
  
 (a) Administrator.
The Plan shall be administered by the Board or a Committee appointed by the Board, which Committee shall be constituted to comply with Applicable Laws. 
  
 (b) Powers of the Administrator. Subject to the provisions of the Plan and, in the case of a Committee, the specific duties delegated by the Board
to such Committee, and subject to the approval of any relevant authorities, the Administrator shall have the authority in its discretion: 
  
 (i) to determine the Fair Market Value; 
  
 (ii) to select the Service Providers to whom Options and Stock Purchase Rights may from time to time be granted hereunder; 
  
 (iii) to determine the number of Shares to be covered by each such award
granted hereunder; 
  
 (iv) to approve forms of agreement for use
under the Plan; 
  
 (v) to determine the terms and conditions of
any Option or Stock Purchase Right granted hereunder. Such terms and conditions include, but are not limited to, the exercise price, the time or times when Options or Stock Purchase Rights may be exercised (which may be based on performance
criteria), any vesting acceleration or waiver of forfeiture restrictions, and any restriction or limitation regarding any Option or Stock Purchase Right or the Common Stock relating thereto, based in each case on such factors as the Administrator,
in its sole discretion, shall determine; 
  
 (vi) to prescribe,
amend and rescind rules and regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of satisfying applicable foreign laws; 
  
 (vii) to allow Optionees to satisfy withholding tax obligations by electing to have the Company withhold from the Shares to
be issued upon exercise of an Option or Stock Purchase Right that number of Shares having a Fair Market Value equal to the minimum amount required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date
that the amount of tax to be withheld is to be determined. All elections by Optionees to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; and 

 

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 (viii) to construe and interpret the terms of the Plan and Options granted pursuant to the Plan.

  
 (c) Effect of Administrator’s Decision. All
decisions, determinations and interpretations of the Administrator shall be final and binding on all Optionees. 
  
 5. Eligibility. Nonstatutory Stock Options and Stock Purchase Rights may be granted to Service Providers. Incentive Stock Options may be granted
only to Employees. 
  
 6. Limitations. 
  
 (a) Incentive Stock Option Limit. Each Option shall be designated in
the Option Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under all plans of the Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a),
Incentive Stock Options shall be taken into account in the order in which they were granted. The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. 
  
 (b) At-Will Employment. Neither the Plan nor any Option or Stock
Purchase Right shall confer upon any Optionee any right with respect to continuing the Optionee’s relationship as a Service Provider with the Company, nor shall it interfere in any way with his or her right or the Company’s right to
terminate such relationship at any time, with or without cause, and with or without notice. 
  
 7. Term of Plan. Subject to shareholder approval in accordance with Section 19, the Plan shall become effective upon its adoption by the Board and shall continue in effect until terminated by the Board. No
Incentive Stock Options may be granted after the date that is ten (10) years after the effective date of the Plan. 
  
 8. Term of Option. The term of each Option shall be stated in the Option Agreement; provided, however, that the term shall be no more than ten (10)
years from the date of grant thereof. In the case of an Incentive Stock Option granted to an Optionee who, at the time the Option is granted, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five (5) years from the date of grant or such shorter term as may be provided in the Option Agreement. 
  
 9. Option Exercise Price and Consideration. 
  
 (a) Exercise Price. The per share exercise price for the Shares to be issued upon exercise of an Option shall be such
price as is determined by the Administrator, but shall be subject to the following: 
  
 (i) In the case of an Incentive Stock Option 
  

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 (A) granted to an Employee who, at the time of grant of such Option, owns stock representing more than
ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. 
  
 (B) granted to any other Employee, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date of grant. 
  
 (ii) In the case of a Nonstatutory Stock Option 
  
 (A) granted to a Service Provider who, at the time of grant of such Option, owns stock representing more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary,
the exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. 
  
 (B) granted to any other Service Provider, the per Share exercise price shall be no less than 85% of the Fair Market Value per Share on the date of
grant. 
  
 (iii) Notwithstanding the foregoing, Options may be
granted with a per Share exercise price other than as required above pursuant to a merger or other corporate transaction. 
  
 (b) Forms of Consideration. The consideration to be paid for the Shares to be issued upon exercise of an Option, including the method of payment,
shall be determined by the Administrator (and, in the case of an Incentive Stock Option, shall be determined at the time of grant). Such consideration may consist of, without limitation, (1) cash, (2) check, (3) promissory note, (4) other Shares,
provided Shares acquired directly from the Company (x) have been owned by the Optionee for more than six (6) months on the date of surrender, and (y) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which such Option shall be exercised, (5) consideration received by the Company under a cashless exercise program implemented by the Company in connection with the Plan, or (6) any combination of the foregoing methods of payment. In
making its determination as to the type of consideration to accept, the Administrator shall consider if acceptance of such consideration may be reasonably expected to benefit the Company. 
  
 10. Exercise of Option. 
  
 (a) Procedure for Exercise; Rights as a Shareholder. Any Option granted hereunder shall be exercisable according to the terms hereof at such times
and under such conditions as determined by the Administrator and set forth in the Option Agreement. An Option may not be exercised for a fraction of a Share. Except in the case of Options granted to officers, Directors and Consultants, Options shall
become exercisable at a rate of no less than 20% per year over five (5) years from the date the Options are granted. 
  
 An Option shall be deemed exercised when the Company receives (i) written or electronic notice of exercise (in accordance with the Option Agreement) from
the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the
Option Agreement and the Plan. Shares issued upon exercise of 
  

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 an Option shall be issued in the name of the Optionee or, if requested by the Optionee, in the name of the Optionee and
his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any other rights as a shareholder
shall exist with respect to the Shares, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made for a dividend or other right for
which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan. 
  
 Exercise of an Option in any manner shall result in a decrease in the number of Shares thereafter available, both for purposes of the Plan and for sale
under the Option, by the number of Shares as to which the Option is exercised. 
  
 (b) Termination of Relationship as a Service Provider. If an Optionee ceases to be a Service Provider, such Optionee may exercise his or her Option within thirty (30) days of termination, or such longer period
of time as specified in the Option Agreement, to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of the Option as set forth in the Option Agreement). If, on the date of
termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (c) Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee’s Disability, the Optionee may exercise
his or her Option within six (6) months of termination, or such longer period of time as specified in the Option Agreement, to the extent the Option is vested on the date of termination (but in no event later than the expiration of the term of such
Option as set forth in the Option Agreement). If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 (d) Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within six (6)
months following Optionee’s death, or such longer period of time as specified in the Option Agreement, to the extent that the Option is vested on the date of death (but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement) by the Optionee’s designated beneficiary, provided such beneficiary has been designated prior to Optionee’s death in a form acceptable to the Administrator. If no such beneficiary has been designated by the
Optionee, then such Option may be exercised by the personal representative of the Optionee’s estate or by the person(s) to whom the Option is transferred pursuant to the Optionee’s will or in accordance with the laws of descent and
distribution. If, at the time of death, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. If the Option is not so exercised within the time
specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  

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 (e) Leaves of Absence. Unless the Administrator provides otherwise, vesting of Options granted
hereunder to officers and Directors shall be suspended during any unpaid leave of absence. A Service Provider shall not cease to be an Employee in the case of (i) any leave of absence approved by the Company or (ii) transfers between locations of
the Company or between the Company, its Parent, any Subsidiary, or any successor. For purposes of Incentive Stock Options, no such leave may exceed ninety (90) days, unless reemployment upon expiration of such leave is guaranteed by statute or
contract. If reemployment upon expiration of a leave of absence approved by the Company is not so guaranteed, then three (3) months following the 91st day of such leave, any Incentive Stock Option held by the Optionee shall cease to be treated as an
Incentive Stock Option and shall be treated for tax purposes as a Nonstatutory Stock Option. 
  
 11. Stock Purchase Rights. 
  
 (a) Rights to Purchase. Stock Purchase Rights may be issued either alone, in addition to, or in tandem with other awards granted under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it
will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing or electronically of the terms, conditions and restrictions related to the offer, including the number of Shares that such person shall be entitled to purchase,
the price to be paid, and the time within which such person must accept such offer. The offer shall be accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator. 
  
 (b) Repurchase Option. Unless the Administrator determines otherwise,
the Restricted Stock Purchase Agreement shall grant the Company a repurchase option exercisable within 90 days of the voluntary or involuntary termination of the purchaser’s service with the Company for any reason (including death or
disability). The purchase price for Shares repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The
repurchase option shall lapse at such rate as the Administrator may determine. 
  
 (c) Other Provisions. The Restricted Stock Purchase Agreement shall contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole
discretion. 
  
 (d) Rights as a Shareholder. Once the Stock
Purchase Right is exercised, the purchaser shall have rights equivalent to those of a shareholder and shall be a shareholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment
shall be made for a dividend or other right for which the record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 13 of the Plan. 
  
 12. Limited Transferability of Options and Stock Purchase Rights. Unless determined otherwise by the Administrator,
Options and Stock Purchase Rights may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or the laws of descent and distribution, and may be exercised during the lifetime of the Optionee, only
by the Optionee. If the Administrator in its sole discretion makes an Option or Stock Purchase Right transferable, such Option or Stock Purchase Right may only be transferred by (i) will, (ii) the laws of descent and distribution, (iii) instrument
to an inter vivos or testamentary trust in which the Option 
  

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 or Stock Purchase Right is to be passed to beneficiaries upon the death of the Optionee, or (iv) gift to a member of
Optionee’s immediate family (as such term is defined in Rule 16a-1(e) of the Exchange Act). In addition, any transferable Option or Stock Purchase Right shall contain additional terms and conditions as the Administrator deems appropriate.

  
 13. Adjustments Upon Changes in Capitalization, Merger or
Change in Control. 
  
 (a) Changes in Capitalization.
Subject to any required action by the shareholders of the Company, the number and type of Shares which have been authorized for issuance under the Plan but as to which no Options or Stock Purchase Rights have yet been granted or which have been
returned to the Plan upon cancellation or expiration of an Option or Stock Purchase Right, and the number and type of Shares covered by each outstanding Option or Stock Purchase Right, as well as the price per Share covered by each such outstanding
Option, shall be proportionately adjusted for any increase or decrease in the number or type of issued Shares resulting from a reorganization, stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or
any other increase or decrease in the number of issued shares of Common Stock effected without receipt of consideration by the Company. The conversion of any convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect to, the number, type or price of Shares subject to an Option or Stock Purchase Right. 
  
 (b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall notify each Optionee as soon as practicable prior to the effective date of such proposed transaction. To the extent it has not been previously exercised, an Option or Stock Purchase
Right will terminate immediately prior to the consummation of such proposed action. 
  
 (c) Merger or Change in Control. In the event of a merger of the Company with or into another corporation, or a Change in Control, each outstanding Option and Stock Purchase Right shall be assumed or an
equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation. In the event that the successor corporation in a merger or Change in Control refuses to assume or substitute for the Option or Stock
Purchase Right, then the Optionee shall fully vest in and have the right to exercise the Option or Stock Purchase Right as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested or exercisable. If an Option or
Stock Purchase Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or Change in Control, the Administrator shall notify the Optionee in writing or electronically that this Option or Stock
Purchase Right shall be fully exercisable for a period of fifteen (15) days from the date of such notice, and the Option or Stock Purchase Right shall terminate upon expiration of such period. For the purposes of this paragraph, the Option or Stock
Purchase Right shall be considered assumed if, following the merger or Change in Control, the option or right confers the right to purchase or receive, for each Share of Optioned Stock subject to the Option or Stock Purchase Right immediately prior
to the merger or Change in Control, the consideration (whether stock, cash, or other securities or property) received in the merger or Change in Control by holders of Common Stock for each Share held on the effective date 
  

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 of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the
holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the merger or Change in Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the
consent of the successor corporation, provide for the consideration to be received upon the exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock subject to the Option or Stock Purchase Right, to be solely common stock of
the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of common stock in the merger or Change in Control. 
  
 Notwithstanding the foregoing, if an Optionee’s status as a Service Provider is terminated for reasons other than Cause
within twelve (12) months following a Change of Control, then the vesting and exercisability of each of the Optionee’s outstanding Options and Stock Purchase Rights shall accelerate upon such termination with respect to fifty percent (50%) of
the then unvested Shares subject to or acquired under each such Option or Stock Purchase Right. 
  
 14. Time of Granting Options and Stock Purchase Rights. The date of grant of an Option or Stock Purchase Right shall, for all purposes, be the date
on which the Administrator makes the determination granting such Option or Stock Purchase Right, or such later date as is determined by the Administrator. Notice of the determination shall be given to each Service Provider to whom an Option or Stock
Purchase Right is so granted within a reasonable time after the date of such grant. 
  
 15. Amendment and Termination of the Plan. 
  
 (a) Amendment and Termination. The Board may at any time amend, alter, suspend or terminate the Plan. 
  
 (b) Shareholder Approval. The Board shall obtain stockholder approval of any Plan amendment to the extent necessary or desirable to comply with
Applicable Laws. 
  
 (c) Effect of Amendment or
Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Optionee, unless mutually agreed otherwise between the Optionee and the Administrator, which agreement must be in writing and signed by
the Optionee and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Options granted under the Plan prior to the date of such termination. 

 
 16. Conditions Upon Issuance of Shares. 
  
 (a) Legal Compliance. Shares shall not be issued pursuant to the
exercise of an Option unless the exercise of such Option and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance.

  
 (b) Investment Representations. As a condition to the
exercise of an Option, the Administrator may require the person exercising such Option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 
  

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 17. Inability to Obtain Authority. The inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or
sell such Shares as to which such requisite authority shall not have been obtained. 
  
 18. Reservation of Shares. The Company, during the term of this Plan, shall at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

  
 19. Information to Optionees. The Company shall provide
to each Optionee and to each individual who acquires Shares pursuant to the Plan, not less frequently than annually during the period such Optionee has one or more Options outstanding, and, in the case of an individual who acquires Shares pursuant
to the Plan, during the period such individual owns such Shares, copies of annual financial statements. The Company shall not be required to provide such statements to key employees whose duties in connection with the Company assure their access to
equivalent information. 
  

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 PALMSOURCE, INC. 
  
 2001 STOCK PLAN 
  
 STOCK OPTION AGREEMENT 
  
 1. Grant of Option. The Plan Administrator of the Company hereby grants to the Optionee named in the Notice of Grant (the “Optionee”), an
option (the “Option”) to purchase the number of Shares set forth in the Notice of Grant, at the exercise price per Share set forth in the Notice of Grant (the “Exercise Price”), and subject to the terms and conditions of the
Plan, which is incorporated herein by reference. Subject to Section 15(c) of the Plan, in the event of a conflict between the terms and conditions of the Plan and this Option Agreement, the terms and conditions of the Plan shall prevail. 

 
 If designated in the Notice of Grant as an Incentive Stock Option
(“ISO”), this Option is intended to qualify as an Incentive Stock Option as defined in Section 422 of the Code. Nevertheless, to the extent that it exceeds the $100,000 rule of Code Section 422(d), this Option shall be treated as a
Nonstatutory Stock Option (“NSO”). 
  
 2. Exercise of
Option. 
  
 (a) Right to Exercise. This Option shall be
exercisable during its term in accordance with the Vesting Schedule set out in the Notice of Grant and with the applicable provisions of the Plan and this Option Agreement. 
  
 (b) Method of Exercise. This Option shall be exercisable by delivery of an exercise notice in the form and manner
specified by the Company (the “Exercise Notice”). As determined by the Company, the Exercise Notice shall state the election to exercise the Option, the number of Shares with respect to which the Option is being exercised, and such other
representations and agreements as may be required by the Company. The Exercise Notice shall be accompanied by payment of the aggregate Exercise Price as to all Exercised Shares. This Option shall be deemed to be exercised upon receipt by the Company
of such fully executed Exercise Notice accompanied by the aggregate Exercise Price. 
  
 No Shares shall be issued pursuant to the exercise of an Option unless such issuance and such exercise complies with Applicable Laws. Assuming such compliance, for income tax purposes the Shares shall be considered
transferred to the Optionee on the date on which the Option is exercised with respect to such Shares. 
  
 3. Optionee’s Representations. In the event the Shares have not been registered under the Securities Act of 1933, as amended, at the time this
Option is exercised, the Optionee shall, if required by the Company, concurrently with the exercise of all or any portion of this Option, deliver 
  

 to the Company an investment representation statement (the “Investment Representation Statement”) which is
attached as an exhibit to the Exercise Notice. 
  
 4. Lock-Up
Period. Optionee hereby agrees that Optionee shall not offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any Common Stock (or other securities) of the Company or enter into any swap, hedging or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership
of any Common Stock (or other securities) of the Company held by Optionee (other than those included in the registration) for a period specified by the representative of the underwriters of Common Stock (or other securities) of the Company not to
exceed one hundred eighty (180) days following the effective date of any registration statement of the Company filed under the Securities Act. 
  
 Optionee agrees to execute and deliver such other agreements as may be reasonably requested by the Company or the underwriter which are consistent with
the foregoing or which are necessary to give further effect thereto. In addition, if requested by the Company or the representative of the underwriters of Common Stock (or other securities) of the Company, Optionee shall provide, within ten (10)
days of such request, such information as may be required by the Company or such representative in connection with the completion of any public offering of the Company’s securities pursuant to a registration statement filed under the Securities
Act. The obligations described in this Section shall not apply to a registration relating solely to employee benefit plans on Form S-1 or Form S-8 or similar forms that may be promulgated in the future, or a registration relating solely to a
Commission Rule 145 transaction on Form S-4 or similar forms that may be promulgated in the future. The Company may impose stop-transfer instructions with respect to the shares of Common Stock (or other securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day period. Optionee agrees that any transferee of the Option or shares acquired pursuant to the Option shall be bound by this Section. 
  
 5. Method of Payment. Payment of the aggregate Exercise Price shall be
by any of the following, or a combination thereof, at the election of the Optionee: 
  
 (a) cash or check; 
  
 (b)
consideration received by the Company under a formal cashless exercise program adopted by the Company in connection with the Plan; or 
  
 (c) surrender of other Shares which, (i) in the case of Shares acquired from the Company, either directly or indirectly, have been owned by the Optionee
for more than six (6) months on the date of surrender, and (ii) have a Fair Market Value on the date of surrender equal to the aggregate Exercise Price of the Exercised Shares. 
  
 6. Restrictions on Exercise. This Option may not be exercised until such time as the Plan has been approved by the
shareholders of the Company, or if the issuance of such Shares upon such exercise or the method of payment of consideration for such shares would constitute a violation of any Applicable Law. 
  

 2 

 7. Non-Transferability of Option. This Option may not be transferred in any manner otherwise than
by will or by the laws of descent or distribution and may be exercised during the lifetime of Optionee only by Optionee. The terms of the Plan and this Option Agreement shall be binding upon the executors, administrators, heirs, successors and
assigns of the Optionee. 
  
 8. Term of Option. This Option
may be exercised only within the term set out in the Notice of Grant, and may be exercised during such term only in accordance with the Plan and the terms of this Option. 
  
 9. Tax Obligations. 
  
 (a) Withholding Taxes. Optionee agrees to make appropriate arrangements with the Company (or the Parent or Subsidiary employing or retaining
Optionee) for the satisfaction of all Federal, state, local and foreign income and employment tax withholding requirements applicable to the Option exercise. Optionee acknowledges and agrees that the Company may refuse to honor the exercise and
refuse to deliver Shares if such withholding amounts are not delivered at the time of exercise. 
  
 (b) Notice of Disqualifying Disposition of ISO Shares. If the Option granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the later of (1) the date two years after the Date of Grant, or (2) the date one year after the date of exercise, the Optionee shall immediately notify the Company in writing of
such disposition. Optionee agrees that Optionee may be subject to income tax withholding by the Company on the compensation income recognized by the Optionee. 
  

10. Entire Agreement; Governing Law. The Plan is incorporated herein by reference. The Plan and this Option Agreement constitute the entire
agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and Optionee with respect to the subject matter hereof, and may not be modified adversely to the
Optionee’s interest except by means of a writing signed by the Company and Optionee. This agreement is governed by the internal substantive laws but not the choice of law rules of California. 
  
 11. No Guarantee of Continued Service. OPTIONEE ACKNOWLEDGES AND
AGREES THAT THE VESTING OF SHARES PURSUANT TO THE VESTING SCHEDULE HEREOF IS EARNED ONLY BY CONTINUING AS A SERVICE PROVIDER AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER).
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT THIS AGREEMENT, THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS A SERVICE PROVIDER FOR THE
VESTING PERIOD, FOR ANY PERIOD, OR AT ALL, AND SHALL NOT INTERFERE IN ANY WAY WITH OPTIONEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE OPTIONEE’S RELATIONSHIP AS A SERVICE PROVIDER AT ANY TIME, WITH OR WITHOUT CAUSE. 
  

 3 

 12. Company Call Right. In the circumstances described in this Section 12, Palm, Inc.
(“Palm”) shall have the right, but not the obligation, to purchase any or all of the Shares held by Optionee that Optionee purchased under the Option (the “Call Right”). If Palm, in its discretion, chooses to exercise the Call
Right, the Optionee shall be obligated to sell to Palm the Shares designated by Palm for purchase. The purchase price shall equal the Fair Market Value of the Shares on the date of purchase. The purchase price may be paid either in cash or by
delivery to Optionee of Palm common stock having a fair market value equal to the cash amount foregone, or by some combination thereof (as determined in the discretion of Palm). The fair market value of Palm common stock shall be determined in the
same manner as Fair Market Value. The Call Right also shall apply to unexercised Shares covered by the Option, except that the purchase price for any such Shares shall be reduced by the Exercise Price for the Shares and any applicable withholding
amounts. The Call Right shall apply to any transferee of the Option or the Shares subject to the Option. The Call Right shall be exercisable by Palm only if both (a) the Company has not issued any Common Stock to the general public, and (b) Palm (in
its discretion) determines (1) to spin off the Company without an initial public offering of the Common Stock and exercise of the Call Right is necessary or appropriate to preserve favorable tax treatment of the spin-off, or (2) that a sale of
substantially all of Palm’s assets or common stock is likely and exercise of the Call Right is necessary or appropriate in furtherance of the sale of Palm’s assets or common stock. The Call Right shall terminate immediately after the
occurrence (as determined by Palm in its discretion) of the first “all hands” organizational meeting for either an initial public offering of the Common Stock or a spin off the Company without an initial public offering of the Common Stock

  
 Optionee acknowledges receipt of a copy of the Plan and
represents that he or she is familiar with the terms and provisions thereof, and hereby accepts this Option subject to all of the terms and provisions thereof. Optionee has reviewed the Plan and this Option in their entirety, has had an opportunity
to obtain the advice of counsel prior to executing this Option and fully understands all provisions of the Option. Optionee hereby agrees to accept as binding, conclusive and final all decisions or interpretations of the Administrator upon any
questions arising under the Plan or this Option. Optionee further agrees to notify the Company upon any change in the residence address indicated below. 
  

	 OPTIONEE
	 	 	 	 PALMSOURCE, INC.

			
	
 Signature
	 	 	 	
 By

			
	
 Print Name
	 	 	 	
 Title

			
	
  

 Residence Address
	 	 	 	 

  

 4Registrant's Employee Stock Purchase Plan

 Exhibit 10.2 
  
 PALMSOURCE, INC. 
  
 EMPLOYEE STOCK PURCHASE PLAN 

 TABLE OF CONTENTS 
  

	 	  	 	  	Page

	 SECTION 1
	  	 PURPOSE
	  	1
			
	 SECTION 2
	  	 DEFINITIONS
	  	1
			
	 2.1
	  	“1934 Act”	  	1
	 2.2
	  	“Board”	  	1
	 2.3
	  	“Code”	  	1
	 2.4
	  	“Committee”	  	1
	 2.5
	  	“Common Stock”	  	1
	 2.6
	  	“Company”	  	1
	 2.7
	  	“Compensation”	  	1
	 2.8
	  	“Eligible Employee”	  	1
	 2.9
	  	“Employee”	  	2
	 2.10
	  	“Employer” or “Employers”	  	2
	 2.11
	  	“Enrollment Date”	  	2
	 2.12
	  	“Grant Date”	  	2
	 2.13
	  	“Participant”	  	2
	 2.14
	  	“Plan”	  	2
	 2.15
	  	“Purchase Date”	  	2
	 2.16
	  	“Subsidiary”	  	2
			
	 SECTION 3
	  	 SHARES SUBJECT TO THE PLAN
	  	2
			
	 3.1
	  	Number Available	  	2
	 3.2
	  	Adjustments	  	2
			
	 SECTION 4
	  	 ENROLLMENT
	  	3
			
	 4.1
	  	Participation	  	3
	 4.2
	  	Payroll Withholding	  	3
			
	 SECTION 5
	  	 OPTIONS TO PURCHASE COMMON STOCK
	  	3
			
	 5.1
	  	Grant of Option	  	3
	 5.2
	  	Duration of Option	  	3
	 5.3
	  	Number of Shares Subject to Option	  	3
	 5.4
	  	Other Terms and Conditions	  	3
			
	 SECTION 6
	  	 PURCHASE OF SHARES
	  	4
			
	 6.1
	  	Exercise of Option	  	4
	 6.2
	  	Delivery of Shares	  	4
	 6.3
	  	Exhaustion of Shares	  	4
			
	 SECTION 7
	  	 WITHDRAWAL
	  	4
			
	 7.1
	  	Withdrawal	  	4
			
	 SECTION 8
	  	 CESSATION OF PARTICIPATION
	  	5
			
	 8.1
	  	Termination of Status as Eligible Employee	  	5

 TABLE OF CONTENTS 
  

	 	  	 	  	Page

	 SECTION 9
	  	DESIGNATION OF BENEFICIARY	  	5
			
	 9.1
	  	Designation	  	5
	 9.2
	  	Changes	  	5
	 9.3
	  	Failed Designations	  	5
			
	 SECTION 10
	  	ADMINISTRATION	  	5
			
	 10.1
	  	Plan Administrator	  	5
	 10.2
	  	Actions by Committee	  	5
	 10.3
	  	Powers of Committee	  	5
	 10.4
	  	Decisions of Committee	  	6
	 10.5
	  	Administrative Expenses	  	6
	 10.6
	  	Eligibility to Participate	  	6
	 10.7
	  	Indemnification	  	6
			
	 SECTION 11
	  	AMENDMENT, TERMINATION, AND DURATION	  	7
			
	 11.1
	  	Amendment, Suspension, or Termination	  	7
	 11.2
	  	Duration of the Plan	  	7
			
	 SECTION 12
	  	GENERAL PROVISIONS	  	7
			
	 12.1
	  	Participation by Subsidiaries	  	7
	 12.2
	  	Inalienability	  	7
	 12.3
	  	Severability	  	7
	 12.4
	  	Requirements of Law	  	7
	 12.5
	  	Compliance with Rule 16b-3	  	7
	 12.6
	  	No Enlargement of Employment Rights	  	8
	 12.7
	  	Apportionment of Costs and Duties	  	8
	 12.8
	  	Construction and Applicable Law	  	8
	 12.9
	  	Captions	  	8
			
	 EXECUTION
	  	 	  	8

  
  

 -ii- 

 PALMSOURCE, INC. 
 EMPLOYEE STOCK PURCHASE PLAN 
  
 SECTION 1 
 PURPOSE 
  
 PalmSource, Inc. hereby establishes the PalmSource, Inc. Employee Stock Purchase Plan, effective as of
                    , 2003, in order to provide eligible employees of the Company and its participating Subsidiaries with the opportunity to
purchase Common Stock through payroll deductions. The Plan is intended to qualify as an employee stock purchase plan under Section 423(b) of the Code. 
  
 SECTION 2 
 DEFINITIONS 
  
 2.1 “1934 Act” means the Securities Exchange Act of 1934, as
amended. Reference to a specific section of the 1934 Act or regulation thereunder shall include such section or regulation, any valid regulation promulgated under such section, and any comparable provision of any future legislation or regulation
amending, supplementing or superseding such section or regulation. 
  
 2.2 “Board” means the Board of Directors of the Company. 
  
 2.3 “Code” means the Internal Revenue Code of 1986, as amended. Reference to a specific section of the Code or regulation thereunder shall include such section or regulation, any valid regulation
promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation. 
  
 2.4 “Committee” shall mean the Board or a committee appointed by the Board to administer the Plan. Any
member of the Committee may resign at any time by notice in writing mailed or delivered to the Secretary of the Company. 
  
 2.5 “Common Stock” means the common stock of the Company. 
  
 2.6 “Company” means PalmSource, Inc., a Delaware corporation. 
  
 2.7 “Compensation” means a Participant’s base salary or
regular wages (including sick pay and vacation pay), bonuses and any sales commissions. The Committee, in its discretion, may (on a uniform and nondiscriminatory basis) establish a different definition of Compensation prior to an Enrollment Date for
all options to be granted on such Enrollment Date. 
  
 2.8
“Eligible Employee” means every Employee of an Employer, except (a) any Employee who immediately after the grant of an option under the Plan, would own stock 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 (including stock attributed to such Employee pursuant to Section 424(d) of the Code), (b) any Employee who
customarily works not more than 20 hours per week (or such lesser period of time as may be determined by the Committee in its discretion), (c) any Employee who customarily works not more than 5 months per calendar year (or such lesser period of time
as may be determined by the Committee in its discretion), or (d) as provided in this Section 2.8. The Committee, in its discretion, from time to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date, determine
(on a uniform and nondiscriminatory basis) that an Employee shall not be an Eligible Employee if he or she: (1) has not completed at 
  

 1 

 least two years of service since his or her last hire date (or such lesser period of time as may be determined by the
Committee in its discretion), (2) is an officer or other manager, or (3) is a highly compensated employee under Section 414(q) of the Code. An Employee who otherwise is an Eligible Employee shall be treated as continuing to be such while the
Employee is on sick leave or other leave of absence approved by the Employer, except that if the period of leave exceeds ninety days and the Employee’s right to reemployment is not guaranteed by statute or contract, he or she shall cease to be
an Eligible Employee on the 91st day of such leave. 
  
 2.9 “Employee” means an individual who is a common-law
employee of any Employer, whether such employee is so employed at the time the Plan is adopted or becomes so employed subsequent to the adoption of the Plan. With respect to a particular Participant, Employer means the Company or Subsidiary (as the
case may be) that directly employs the Participant. 
  
 2.10
“Employer” or “Employers” means any one or all of the Company and those Subsidiaries which, with the consent of the Board or the Committee, have adopted the Plan. 
  
 2.11 “Enrollment Date” means such dates as may be determined
by the Committee (in its discretion and on a uniform and nondiscriminatory basis) from time to time. 
  
 2.12 “Grant Date” means any date on which a Participant is granted an option under the Plan. 
  
 2.13 “Participant” means an Eligible Employee who (a) has
become a Participant in the Plan pursuant to Section 4.1 and (b) has not ceased to be a Participant pursuant to Section 7 or Section 8. 
  
 2.14 “Plan” means the PalmSource, Inc. Employee Stock Purchase Plan, as set forth in this instrument and as hereafter amended from time
to time. 
  
 2.15 “Purchase Date” means such
dates as may be determined by the Committee (in its discretion and on a uniform and nondiscriminatory basis) from time to time prior to an Enrollment Date for all options to be granted on such Enrollment Date. 
  
 2.16 “Subsidiary” means any corporation in an unbroken chain
of corporations beginning with the Company if each of the corporations other than the last corporation in the unbroken chain then owns stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain. 
  
 SECTION 3 
 SHARES SUBJECT TO THE PLAN 
  
 3.1 Number Available. A maximum of 400,000 shares of Common Stock shall be available for issuance pursuant to the Plan, plus an annual increase to
be added on January 1st of each year beginning in the 2005 calendar year, equal to the lesser of (a) 180,000 shares
of Common Stock, (b) 1.5% of the outstanding shares of Common Stock on the immediately preceding date, or (c) an amount determined by the Board. Shares sold under the Plan may be newly issued shares or treasury shares.  
  
 3.2 Adjustments. In the event that any dividend or other distribution
(whether in the form of cash, shares, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of shares or other
securities of the Company, or other change in the 
  

 2 

 corporate structure of the Company affecting the shares occurs such that an adjustment is determined by the Committee (in
its sole discretion) to be appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee may make such adjustment, if any, as it deems appropriate in
the number, kind and purchase price of the shares available for purchase under the Plan, the maximum number of shares subject to any option under the Plan and the number of shares that may be added annually to the shares reserved under the Plan.
 
  
 SECTION 4 
 ENROLLMENT 
  
 4.1 Participation. Each Eligible Employee may elect to become a Participant by enrolling or re-enrolling in the Plan effective as of any Enrollment
Date; provided, however, each Eligible Employee shall be automatically become a Participant on the first Enrollment Date. In order to enroll or, with respect to the first Enrollment Date, remain a Participant, an Eligible Employee must complete,
sign and submit to the Company an enrollment form in such form, manner and by such deadline as may be specified by the Committee from time to time (in its discretion and on a nondiscriminatory basis). In no event may a Participant make an election
to participate in this Plan prior to the effective date of the Form S-8 registration statement with respect to the issuance of Common Stock under this Plan. Any Participant whose option expires and who has not withdrawn from the Plan automatically
will be re-enrolled in the Plan on the Enrollment Date immediately following the Purchase Date on which his or her option expires. 
  
 4.2 Payroll Withholding. On his or her enrollment form, each Participant must elect to make Plan contributions via payroll withholding from his or
her Compensation. Pursuant to such procedures as the Committee may specify from time to time, a Participant may elect to have withholding equal to a whole percentage from 1% to 20% (or such lesser percentage that the Committee may establish from
time to time for all options to be granted on any Enrollment Date). If permitted by the Committee, a Participant instead may elect to have a specific dollar amount withheld (subject to such uniform and nondiscriminatory rules as the Committee in its
discretion may specify). A Participant may elect to increase or decrease his or her rate of payroll withholding by submitting a new enrollment election in accordance with such procedures as may be established by the Committee from time to time. In
order to be effective as of a specific date, an enrollment election must be received by the Company no later than the deadline specified by the Committee, in its discretion and on a nondiscriminatory basis, from time to time. Any Participant who is
automatically re-enrolled in the Plan will be deemed to have elected to continue his or her contributions at the percentage last elected by the Participant. 
  
 SECTION 5 
 OPTIONS TO PURCHASE COMMON STOCK

  
 5.1 Grant of Option. On each Enrollment Date on which
the Participant enrolls or re-enrolls in the Plan, he or she shall be granted an option to purchase shares of Common Stock. 
  
 5.2 Duration of Option. Each option granted under the Plan shall expire on the earliest to occur of (a) the completion of the purchase of shares on
the last Purchase Date occurring within 27 months of the Grant Date of such option, (b) such shorter option period as may be established by the Committee from time to time prior to an Enrollment Date for all options to be granted on such Enrollment
Date, or (c) the date on which the Participant ceases to be such for any reason. 
  
 5.3 Number of Shares Subject to Option. The number of shares available for purchase by each Participant under the option will be established by the Committee from time to 
  

 3 

 time prior to an Enrollment Date for all options to be granted on such Enrollment Date. In addition and notwithstanding
the preceding, to the extent required under Section 423(b) of the Code, an option (taken together with all other options then outstanding under this Plan and under all other similar employee stock purchase plans of the Employers) shall not give the
Participant the right to purchase shares at a rate which accrues in excess of $25,000 of fair market value at the applicable Grant Dates of such shares in any calendar year during which such Participant is enrolled in the Plan at any time.

  
 5.4 Other Terms and Conditions. Each option shall be
subject to the following additional terms and conditions: 
  
 (a) payment for shares purchased under the option shall be made only through payroll withholding under Section 4.2;  
  
 (b) purchase of shares upon exercise of the option will be accomplished only in accordance with Section 6.1; 
  
 (c) the price per share under the option will be determined
as provided in Section 6.1; and 
  
 (d) the
option in all respects shall be subject to such other terms and conditions (applied on a uniform and nondiscriminatory basis), as the Committee shall determine from time to time in its discretion. 
  
 SECTION 6 
 PURCHASE OF SHARES 
  
 6.1 Exercise of Option. Subject to Section 6.2, on each Purchase Date, the funds then credited to each Participant’s account shall be used to purchase whole shares of Common Stock. Any cash remaining that is not sufficient to
purchase a full share of Common Stock shall be rolled over and used to purchase shares on the next Purchase Date (unless the individual no longer is a Participant, in which case the cash shall be refunded to him or her). Any other cash remaining
after a Purchase Date shall be returned to the Participant. The price per Share of the Shares purchased under any option granted under the Plan shall be eighty-five percent (85%) of the lower of: 
  
 (a) the closing price per Share on the Grant Date for such
option on Nasdaq; or 
  
 (b) the closing price
per Share on the Purchase Date on Nasdaq. 
  
 6.2 Delivery of
Shares. As directed by the Committee in its sole discretion, shares purchased on any Purchase Date shall be delivered directly to the Participant or to a custodian or broker (if any) designated by the Committee to hold shares for the benefit of
the Participants. As determined by the Committee from time to time, such shares shall be delivered as physical certificates or by means of a book entry system. 
  

6.3 Exhaustion of Shares. If at any time the shares available under the Plan are over-enrolled, enrollments shall be reduced to eliminate the
over-enrollment, as the Committee determines (in a uniform and nondiscriminatory manner). For example, the Committee may determine that such reduction method shall be “bottom up”, with the result that all option exercises for one share
shall be satisfied first, followed by all exercises for two shares, and so on, until all available shares have been exhausted. Any funds that, due to over- 
  

 4 

 enrollment, cannot be applied to the purchase of whole shares shall be refunded to the Participants (without interest
thereon). 
  
 SECTION 7 
 WITHDRAWAL 
  
 7.1 Withdrawal. A Participant may withdraw from the Plan by submitting a withdrawal form to the Company in such form and manner as the Committee
may specify. A withdrawal will be effective only if it is received by the Company by the deadline specified by the Committee (in its discretion and on a uniform and nondiscriminatory basis) from time to time. When a withdrawal becomes effective, the
Participant’s payroll contributions shall cease and all amounts then credited to the Participant’s account shall be distributed to him or her as soon as practicable (without interest thereon). 
  
 SECTION 8 
 CESSATION OF PARTICIPATION 
  
 8.1 Termination of Status as Eligible Employee. A Participant shall cease to be a Participant immediately upon the cessation of his or her status as an Eligible Employee (for example, because of his or her
termination of employment from all Employers for any reason). As soon as practicable after such cessation, the Participant’s payroll contributions shall cease and all amounts then credited to the Participant’s account shall be distributed
to him or her (without interest thereon). 
  
 SECTION 9 

DESIGNATION OF BENEFICIARY 
  
 9.1 Designation. Each Participant may, pursuant to such uniform and nondiscriminatory procedures as the Committee may specify from time to time,
designate one or more Beneficiaries to receive any amounts credited to the Participant’s account at the time of his or her death. Notwithstanding any contrary provision of this Section 9, Sections 9.1 and 9.2 shall be operative only after (and
for so long as) the Committee determines (on a uniform and nondiscriminatory basis) to permit the designation of Beneficiaries. 
  
 9.2 Changes. A Participant may designate different Beneficiaries (or may revoke a prior beneficiary designation) at any time by delivering a new
designation (or revocation of a prior designation) in like manner. Any designation or revocation shall be effective only if it is received by the Committee. However, when so received, the designation or revocation shall be effective as of the date
the designation or revocation is executed (whether or not the Participant still is living), but without prejudice to the Committee on account of any payment made before the change is recorded. The last effective designation received by the Committee
shall supersede all prior designations. 
  
 9.3 Failed
Designations. If a Participant dies without having effectively designated a beneficiary, or if no beneficiary survives the Participant, the Participant’s account shall be payable to his or her estate. 
  

 5 

 SECTION 10 
 ADMINISTRATION 
  
 10.1 Plan
Administrator. The Plan shall be administered by the Committee. The Committee shall have the authority to control and manage the operation and administration of the Plan. 
  
 10.2 Actions by Committee. Each decision of a majority of the members of the Committee then in office shall
constitute the final and binding act of the Committee. The Committee may act with or without a meeting being called or held and shall keep minutes of all meetings held and a record of all actions taken by written consent. 
  
 10.3 Powers of Committee. The Committee shall have all powers and
discretion necessary or appropriate to supervise the administration of the Plan and to control its operation in accordance with its terms, including, but not by way of limitation, the following discretionary powers: 
  
 (a) To interpret and determine the meaning and validity of
the provisions of the Plan and the options and to determine any question arising under, or in connection with, the administration, operation or validity of the Plan or the options; 
  
 (b) To determine any and all considerations affecting the eligibility of any employee to become a
Participant or to remain a Participant in the Plan; 
  
 (c) To cause an account or accounts to be maintained for each Participant; 
  
 (d) To determine the time or times when, and the number of shares for which, options shall be granted; 
  
 (e) To establish and revise an accounting method or formula
for the Plan; 
  
 (f) To designate a custodian or
broker to receive shares purchased under the Plan and to determine the manner and form in which shares are to be delivered to the designated custodian or broker; 
  
 (g) To determine the status and rights of Participants and their Beneficiaries or estates; 
  
 (h) To employ such brokers, counsel, agents and advisers,
and to obtain such broker, legal, clerical and other services, as it may deem necessary or appropriate in carrying out the provisions of the Plan; 
  
 (i) To establish, from time to time, rules for the performance of its powers and duties and for the administration of the Plan;

  
 (j) To adopt such procedures and subplans as
are necessary or appropriate to permit participation in the Plan by employees who are foreign nationals or employed outside of the United States; and 
  
 (k) To delegate to any one or more of its members or to any other person (including, but not limited to, employees of any Employer)
severally or jointly, the authority to perform for and on behalf of the Committee one or more of the functions of the Committee under the Plan. 
  

 6 

 10.4 Decisions of Committee. All actions, interpretations, and decisions of the Committee shall be
conclusive and binding on all persons, and shall be given the maximum deference permitted by law. 
  
 10.5 Administrative Expenses. All expenses incurred in the administration of the Plan by the Committee, or otherwise, including legal fees and
expenses, shall be paid and borne by the Employers, except any stamp duties or transfer taxes applicable to the purchase of shares may be charged to the account of each Participant. Any brokerage fees for the purchase of shares by a Participant
shall be paid by the Company, but fees and taxes (including brokerage fees) for the transfer, sale or resale of shares by a Participant, or the issuance of physical share certificates, shall be borne solely by the Participant. 
  
 10.6 Eligibility to Participate. No member of the Committee who is
also an employee of an Employer shall be excluded from participating in the Plan if otherwise eligible, but he or she shall not be entitled, as a member of the Committee, to act or pass upon any matters pertaining specifically to his or her own
account under the Plan. 
  
 10.7 Indemnification. Each of
the Employers shall, and hereby does, indemnify and hold harmless the members of the Committee and the Board, from and against any and all losses, claims, damages or liabilities (including attorneys’ fees and amounts paid, with the approval of
the Board or the Committee, in settlement of any claim) arising out of or resulting from the implementation of a duty, act or decision with respect to the Plan, so long as such duty, act or decision does not involve gross negligence or willful
misconduct on the part of any such individual. 
  
 SECTION 11

 AMENDMENT, TERMINATION, AND DURATION 
  
 11.1 Amendment, Suspension, or Termination. The Board or the Committee, in its sole discretion, may amend or terminate the Plan, or any part
thereof, at any time and for any reason. If the Plan is terminated, the Board or the Committee, in its discretion, may elect to terminate all outstanding options either immediately or upon completion of the purchase of shares on the next Purchase
Date (which, notwithstanding Section 2.15, may be sooner than originally scheduled, if determined by the Board or the Committee in its discretion), or may elect to permit options to expire in accordance with their terms (and participation to
continue through such expiration dates). If the options are terminated prior to expiration, all amounts then credited to Participants’ accounts which have not been used to purchase shares shall be returned to the Participants (without interest
thereon) as soon as administratively practicable. 
  
 11.2
Duration of the Plan. The Plan shall commence on the date specified herein, and subject to Section 11.1 (regarding the Board’s and the Committee’s right to amend or terminate the Plan), shall remain in effect thereafter. 

 
 SECTION 12 
 GENERAL PROVISIONS 
  
 12.1 Participation by Subsidiaries. One or more Subsidiaries of the Company may become participating Employers by adopting the Plan and obtaining approval for such adoption from the Board or the Committee. By adopting the Plan, a
Subsidiary shall be deemed to agree to all of its terms, including (but not limited to) the provisions granting exclusive authority (a) to the Board and the Committee to amend the Plan, and (b) to the Committee to administer and interpret the Plan.
An Employer may terminate its participation in the Plan at any time. The liabilities incurred under the Plan to the Participants employed by each Employer shall 
  

 7 

 be solely the liabilities of that Employer, and no other Employer shall be liable for benefits accrued by a Participant
during any period when he or she was not employed by such Employer. 
  
 12.2 Inalienability. In no event may either a Participant, a former Participant or his or her beneficiary, spouse or estate sell, transfer, anticipate, assign, hypothecate, or otherwise dispose of any right or interest under the
Plan; and such rights and interests shall not at any time be subject to the claims of creditors nor be liable to attachment, execution or other legal process. Accordingly, for example, a Participant’s interest in the Plan is not transferable
pursuant to a domestic relations order. 
  
 12.3
Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the
illegal or invalid provision had not been included. 
  
 12.4
Requirements of Law. The granting of options and the issuance of shares shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or securities exchanges as the Committee may determine
are necessary or appropriate. 
  
 12.5 Compliance with Rule
16b-3. Any transactions under this Plan with respect to officers (as defined in Rule 16a-1 promulgated under the 1934 Act) are intended to comply with all applicable conditions of Rule 16b-3. To the extent any provision of the Plan or action by
the Committee fails to so comply, it shall be deemed null and void, to the extent permitted by law and deemed advisable by the Committee. Notwithstanding any contrary provision of the Plan, if the Committee specifically determines that compliance
with Rule 16b-3 no longer is required, all references in the Plan to Rule 16b-3 shall be null and void. 
  
 12.6 No Enlargement of Employment Rights. Neither the establishment or maintenance of the Plan, the granting of options, the purchase of shares,
nor any action of any Employer or the Committee, shall be held or construed to confer upon any individual any right to be continued as an employee of the Employer nor, upon dismissal, any right or interest in any specific assets of the Employers
other than as provided in the Plan. Each Employer expressly reserves the right to discharge any employee at any time, with or without cause. 
  
 12.7 Apportionment of Costs and Duties. All acts required of the Employers under the Plan may be performed by the Company for itself and its
Subsidiaries, and the costs of the Plan may be equitably apportioned by the Committee among the Company and the other Employers. Whenever an Employer is permitted or required under the terms of the Plan to do or perform any act, matter or thing, it
shall be done and performed by any officer or employee of the Employers who is thereunto duly authorized by the Employers. 
  
 12.8 Construction and Applicable Law. The Plan is intended to qualify as an “employee stock purchase plan” within the meaning of Section
423(b) of the Code. Any provision of the Plan which is inconsistent with Section 423(b) of the Code shall, without further act or amendment by the Company or the Committee, be reformed to comply with the requirements of Section 423(b). The
provisions of the Plan shall be construed, administered and enforced in accordance with such Section and with the laws of the State of California (excluding California’s conflict of laws provisions). 
  
 12.9 Captions. The captions contained in and the table of contents
prefixed to the Plan are inserted only as a matter of convenience, and in no way define, limit, enlarge or describe the scope or intent of the Plan nor in any way shall affect the construction of any provision of the Plan. 
  

 8

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