Document:

exv10w5

 

Exhibit 10.5

SONICS, INC.

2007 STOCK INCENTIVE PLAN

     1. Purposes of the Plan. The purposes of this Plan are to attract and retain the best
available personnel, to provide additional incentives to Employees, Directors and Consultants and
to promote the success of the Company’s business.

     2. Definitions. The following definitions shall apply as used herein and in the
individual Award Agreements except as defined otherwise in an individual Award Agreement. In the
event a term is separately defined in an individual Award Agreement, such definition shall
supersede the definition contained in this Section 2.

          (a) “Administrator” means the Board or any of the Committees appointed to administer
the Plan.

          (b) “Affiliate” and “Associate” shall have the respective meanings ascribed to
such terms in Rule 12b-2 promulgated under the Exchange Act.

          (c) “Applicable Laws” means the legal requirements relating to the Plan and the Awards
under applicable provisions of federal and state securities laws, the corporate laws of California
and, to the extent other than California, the corporate law of the state of the Company’s
incorporation, the Code, the rules of any applicable stock exchange or national market system, and
the rules of any non-U.S. jurisdiction applicable to Awards granted to residents therein.

          (d) “Assumed” means that pursuant to a Corporate Transaction either (i) the Award is
expressly affirmed by the Company or (ii) the contractual obligations represented by the Award are
expressly assumed (and not simply by operation of law) by the successor entity or its Parent in
connection with the Corporate Transaction with appropriate adjustments to the number and type of
securities of the successor entity or its Parent subject to the Award and the exercise or purchase
price thereof which at least preserves the compensation element of the Award existing at the time
of the Corporate Transaction as determined in accordance with the instruments evidencing the
agreement to assume the Award.

          (e) “Award” means the grant of an Option, SAR, Restricted Stock, Restricted Stock Unit
or other right or benefit under the Plan.

          (f) “Award Agreement” means the written agreement evidencing the grant of an Award
executed by the Company and the Grantee, including any amendments thereto.

          (g) “Board” means the Board of Directors of the Company.

          (h) “Cause” means, with respect to the termination by the Company or a Related Entity
of the Grantee’s Continuous Service, that such termination is for “Cause” as such term (or word of
like import) is expressly defined in a then-effective written agreement between the Grantee and the
Company or such Related Entity, or in the absence of such then-effective written agreement and
definition, is based on, in the determination of the Administrator, the

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Grantee’s: (i) performance of any act or failure to perform any act in bad faith and to the
detriment of the Company or a Related Entity; (ii) dishonesty, intentional misconduct or material
breach of any agreement with the Company or a Related Entity; or (iii) commission of a crime
involving dishonesty, breach of trust, or physical or emotional harm to any person; provided,
however, that with regard to any agreement that defines “Cause” on the occurrence of or in
connection with a Corporate Transaction, such definition of “Cause” shall not apply until a
Corporate Transaction actually occurs.

          (i) “Code” means the Internal Revenue Code of 1986, as amended.

          (j) “Committee” means any committee composed of members of the Board appointed by the
Board to administer the Plan.

          (k) “Common Stock” means the voting common stock of the Company.

          (l) “Company” means Sonics, Inc., a Delaware corporation, or any successor entity that
adopts the Plan in connection with a Corporate Transaction.

          (m) “Consultant” means any person (other than an Employee or a Director, solely with
respect to rendering services in such person’s capacity as a Director) who is engaged by the
Company or any Related Entity to render consulting or advisory services to the Company or such
Related Entity.

          (n) “Continuous Service” means that the provision of services to the Company or a
Related Entity in any capacity of Employee, Director or Consultant is not interrupted or
terminated. In jurisdictions requiring notice in advance of an effective termination as an
Employee, Director or Consultant, Continuous Service shall be deemed terminated upon the actual
cessation of providing services to the Company or a Related Entity notwithstanding any required
notice period that must be fulfilled before a termination as an Employee, Director or Consultant
can be effective under Applicable Laws. A Grantee’s Continuous Service shall be deemed to have
terminated either upon an actual termination of Continuous Service or upon the entity for which the
Grantee provides services ceasing to be a Related Entity. Continuous Service shall not be
considered interrupted in the case of (i) any approved leave of absence, (ii) transfers among the
Company, any Related Entity, or any successor, in any capacity of Employee, Director or Consultant,
or (iii) any change in status as long as the individual remains in the service of the Company or a
Related Entity in any capacity of Employee, Director or Consultant (except as otherwise provided in
the Award Agreement). An approved leave of absence shall include sick leave, military leave, or
any other authorized personal leave. For purposes of each Incentive Stock Option granted under the
Plan, if such leave exceeds three (3) months, and reemployment upon expiration of such leave is not
guaranteed by statute or contract, then the Incentive Stock Option shall be treated as a
Non-Qualified Stock Option on the day three (3) months and one (1) day following the expiration of
such three (3) month period.

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          (o) “Corporate Transaction” means any of the following transactions, provided,
however, that the Administrator shall determine under parts (iv) and (v) whether multiple
transactions are related, and its determination shall be final, binding and conclusive:

               (i) a merger or consolidation in which the Company is not the surviving entity, except for a
transaction the principal purpose of which is to change the state in which the Company is
incorporated;

               (ii) the sale, transfer or other disposition of all or substantially all of the assets of the
Company;

               (iii) the complete liquidation or dissolution of the Company;

               (iv) any reverse merger or series of related transactions culminating in a reverse merger
(including, but not limited to, a tender offer followed by a reverse merger) in which the Company
is the surviving entity but (A) the shares of Common Stock outstanding immediately prior to such
merger are converted or exchanged by virtue of the merger into other property, whether in the form
of securities, cash or otherwise, or (B) in which securities possessing more than fifty percent
(50%) of the total combined voting power of the Company’s outstanding securities are transferred to
a person or persons different from those who held such securities immediately prior to such merger
or the initial transaction culminating in such merger, but excluding any such transaction or series
of related transactions that the Administrator determines shall not be a Corporate Transaction; or

               (v) acquisition in a single or series of related transactions by any person or related group
of persons (other than the Company or by a Company-sponsored employee benefit plan) of beneficial
ownership (within the meaning of Rule 13d-3 of the Exchange Act) of securities possessing more than
fifty percent (50%) of the total combined voting power of the Company’s outstanding securities but
excluding any such transaction or series of related transactions that the Administrator determines
shall not be a Corporate Transaction.

          (p) “Covered Employee” means an Employee who is a “covered employee” under Section
162(m)(3) of the Code.

          (q) “Director” means a member of the Board or the board of directors of any Related
Entity.

          (r) “Disability” means as defined under the long-term disability policy of the Company
or the Related Entity to which the Grantee provides services regardless of whether the Grantee is
covered by such policy. If the Company or the Related Entity to which the Grantee provides service
does not have a long-term disability plan in place, “Disability” means that a Grantee is unable to
carry out the responsibilities and functions of the position held by the Grantee by reason of any
medically determinable physical or mental impairment for a period of not less than ninety (90)
consecutive days. A Grantee will not be considered to have incurred a Disability unless he or she
furnishes proof of such impairment sufficient to satisfy the Administrator in its discretion.

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          (s) “Employee” means any person, including an Officer or Director, who is in the
employ of the Company or any Related Entity, subject to the control and direction of the Company or
any Related Entity as to both the work to be performed and the manner and method of performance.
The payment of a director’s fee by the Company or a Related Entity shall not be sufficient to
constitute “employment” by the Company.

          (t) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (u) “Fair Market Value” means, as of any date, the value of Common Stock determined as
follows:

               (i) If the Common Stock is listed on one or more established stock exchanges or national
market systems, including without limitation The NASDAQ Global Select Market, The NASDAQ Global
Market or The NASDAQ Capital Market of The NASDAQ Stock Market LLC, 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
the principal exchange or system on which the Common Stock is listed (as determined by the
Administrator) on the date of determination (or, if no closing sales price or closing bid was
reported on that date, as applicable, on the last trading date such closing sales price or closing
bid was reported), as reported in The Wall Street Journal or such other source as the Administrator
deems reliable;

               (ii) If the Common Stock is regularly quoted on an automated quotation system (including the
OTC Bulletin Board) or by a recognized securities dealer, its Fair Market Value shall be the
closing sales price for such stock as quoted on such system or by such securities dealer on the
date of determination, but if selling prices are not reported, the Fair Market Value of a share of
Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on
the date of determination (or, if no such prices were reported on that date, on the last date such
prices were reported), as reported in The Wall Street Journal or such other source as the
Administrator deems reliable; or

               (iii) In the absence of an established market for the Common Stock of the type described in
(i) and (ii), above, the Fair Market Value thereof shall be determined by the Administrator in good
faith and in a manner consistent with Section 260.140.50 of Title 10 of the California Code of
Regulations which requires that consideration be given to (A) the price at which securities of
reasonably comparable corporations (if any) in the same industry are being traded, or (B) if there
are no securities of reasonably comparable corporations in the same industry being traded, the
earnings history, book value and prospects of the issuer in light of market conditions generally.

          (v) “Good Reason” means the occurrence after a Corporate Transaction of any of the
following events or conditions unless consented to by the Grantee (and the Grantee shall be deemed
to have consented to any such event or condition unless the Grantee provides written notice of the
Grantee’s non-acquiescence within thirty (30) days of the effective time of such event or
condition):

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               (i) a change in the Grantee’s responsibilities or duties which represents a material and
substantial diminution in the Grantee’s responsibilities or duties as in effect immediately
preceding the consummation of a Corporate Transaction;

               (ii) a reduction in the Grantee’s base salary to a level below that in effect at any time
within six (6) months preceding the consummation of a Corporate Transaction or at any time
thereafter; provided that an across-the-board reduction in the salary level of substantially all
other individuals in positions similar to the Grantee’s by the same percentage amount shall not
constitute such a salary reduction; or

               (iii) requiring the Grantee to be based at any place outside a 50-mile radius from the
Grantee’s job location prior to the Corporate Transaction except for reasonably required travel on
business which is not materially greater than such travel requirements prior to the Corporate
Transaction.

          (w) “Grantee” means an Employee, Director or Consultant who receives an Award under
the Plan.

          (x) “Immediate Family” means any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in
law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships, any
person sharing the Grantee’s household (other than a tenant or employee), a trust in which these
persons (or the Grantee) have more than fifty percent (50%) of the beneficial interest, a
foundation in which these persons (or the Grantee) control the management of assets, and any other
entity in which these persons (or the Grantee) own more than fifty percent (50%) of the voting
interests.

          (y) “Incentive Stock Option” means an Option intended to qualify as an incentive stock
option within the meaning of Section 422 of the Code.

          (z) “Non-Qualified Stock Option” means an Option not intended to qualify as an
Incentive Stock Option.

          (aa) “Officer” means a person who is an officer of the Company or a Related Entity
within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder.

          (bb) “Option” means an option to purchase Shares pursuant to an Award Agreement
granted under the Plan.

          (cc) “Parent” means a “parent corporation,” whether now or hereafter existing, as
defined in Section 424(e) of the Code.

          (dd) “Performance-Based Compensation” means compensation qualifying as
“performance-based compensation” under Section 162(m) of the Code.

          (ee) “Plan” means this 2007 Stock Incentive Plan.

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          (ff) “Post-Termination Exercise Period” means the period specified in the Award
Agreement of not less than thirty (30) days commencing on the date of termination (other than
termination by the Company or any Related Entity for Cause) of the Grantee’s Continuous Service, or
such longer period as may be applicable upon death or Disability.

          (gg) “Registration Date” means the first to occur of (i) the closing of the first sale
to the general public pursuant to a registration statement filed with and declared effective by the
Securities and Exchange Commission under the Securities Act of 1933, as amended, of (A) the Common
Stock or (B) the same class of securities of a successor corporation (or its Parent) issued
pursuant to a Corporate Transaction in exchange for or in substitution of the Common Stock; and
(ii) in the event of a Corporate Transaction, the date of the consummation of the Corporate
Transaction if the same class of securities of the successor corporation (or its Parent) issuable
in such Corporate Transaction shall have been sold to the general public pursuant to a registration
statement filed with and declared effective by the Securities and Exchange Commission under the
Securities Act of 1933, as amended, on or prior to the date of consummation of such Corporate
Transaction.

          (hh) “Related Entity” means any Parent or Subsidiary of the Company.

          (ii) “Replaced” means that pursuant to a Corporate Transaction the Award is replaced
with a comparable stock award or a cash incentive program of the Company, the successor entity (if
applicable) or Parent of either of them which preserves the compensation element of such Award
existing at the time of the Corporate Transaction and provides for subsequent payout in accordance
with the same (or a more favorable) vesting schedule applicable to such Award. The determination
of Award comparability shall be made by the Administrator and its determination shall be final,
binding and conclusive.

          (jj) “Restricted Stock” means Shares issued under the Plan to the Grantee for such
consideration, if any, and subject to such restrictions on transfer, rights of first refusal,
repurchase provisions, forfeiture provisions, and other terms and conditions as established by the
Administrator.

          (kk) “Restricted Stock Units” means an Award which may be earned in whole or in part
upon the passage of time or the attainment of performance criteria established by the Administrator
and which may be settled for cash, Shares or other securities or a combination of cash, Shares or
other securities as established by the Administrator.

          (ll) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or any successor
thereto.

          (mm) “SAR” means a stock appreciation right entitling the Grantee to Shares or cash
compensation, as established by the Administrator, measured by appreciation in the value of Common
Stock.

          (nn) “Share” means a share of the Common Stock.

          (oo) “Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing,
as defined in Section 424(f) of the Code.

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     3. Stock Subject to the Plan.

          (a) Subject to the provisions of Section 10 below, the maximum aggregate number of Shares
which may be issued pursuant to all Awards is five million (625,000) Shares (the “Initial
Reserve”), plus an annual increase to be added on the first business day of each calendar year
beginning on January 2, 2008 equal to three percent (3%) of the number of Shares outstanding as of
such date or a lesser number of Shares determined by the Administrator (the “Annual Increase”).
Notwithstanding the foregoing, the maximum aggregate number of Shares which may be issued pursuant
to Incentive Stock Options equals (i) the Initial Reserve, plus (ii) up to five hundred thousand
(62,500) Shares of each Annual Increase.

          (b) Any Shares covered by an Award (or portion of an Award) which is forfeited, canceled or
expires (whether voluntarily or involuntarily) shall be deemed not to have been issued for purposes
of determining the maximum aggregate number of Shares which may be issued under the Plan. Shares
that actually have been issued under the Plan pursuant to an Award shall not be returned to the
Plan and shall not become available for future issuance under the Plan, except that if unvested
Shares are forfeited or repurchased by the Company, such Shares shall become available for future
grant under the Plan. To the extent not prohibited by the listing requirements of The NASDAQ Stock
Market LLC (or other established stock exchange or national market system on which the Common Stock
is traded) and Applicable Law, any Shares covered by an Award which are surrendered (i) in payment
of the Award exercise or purchase price or (ii) in satisfaction of tax withholding obligations
incident to the exercise of an Award shall be deemed not to have been issued for purposes of
determining the maximum number of Shares which may be issued pursuant to all Awards under the Plan,
unless otherwise determined by the Administrator.

     4. Administration of the Plan.

          (a) Plan Administrator.

               (i) Administration with Respect to Directors and Officers. Prior to the Registration
Date, with respect to grants of Awards to Directors or Employees who are also Officers or Directors
of the Company, the Plan shall be administered by (A) the Board or (B) a Committee designated by
the Board, which Committee shall be constituted in such a manner as to satisfy the Applicable Laws.
On or after the Registration Date, with respect to grants of Awards to Directors or Employees who
are also Officers or Directors of the Company, the Plan shall be administered by (A) the Board or
(B) a Committee designated by the Board, which Committee shall be constituted in such a manner as
to satisfy the Applicable Laws and to permit such grants and related transactions under the Plan to
be exempt from Section 16(b) of the Exchange Act in accordance with Rule 16b-3. Once appointed,
such Committee shall continue to serve in its designated capacity until otherwise directed by the
Board.

               (ii) Administration With Respect to Consultants and Other Employees. With respect to
grants of Awards to Employees or Consultants who are neither Directors nor Officers of the Company,
the Plan shall be administered by (A) the Board or (B) a Committee designated by the Board, which
Committee shall be constituted in such a manner as to satisfy the

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Applicable Laws. Once appointed, such Committee shall continue to serve in its designated
capacity until otherwise directed by the Board.

               (iii) Administration With Respect to Covered Employees. Notwithstanding the
foregoing, as of and after the date that the exemption for the Plan under Section 162(m) of the
Code expires, as set forth in Section 19 below, grants of Awards to any Covered Employee intended
to qualify as Performance-Based Compensation shall be made only by a Committee (or subcommittee of
a Committee) which is comprised solely of two or more Directors eligible to serve on a committee
making Awards qualifying as Performance-Based Compensation. In the case of such Awards granted to
Covered Employees, references to the “Administrator” or to a “Committee” shall be deemed to be
references to such Committee or subcommittee.

          (b) Multiple Administrative Bodies. The Plan may be administered by different bodies
with respect to Directors, Officers, Consultants, and Employees who are neither Directors nor
Officers.

          (c) Powers of the Administrator. Subject to Applicable Laws and the provisions of the
Plan (including any other powers given to the Administrator hereunder), and except as otherwise
provided by the Board, the Administrator shall have the authority, in its discretion:

               (i) to select the Employees, Directors and Consultants to whom Awards may be granted from time
to time hereunder;

               (ii) to determine whether and to what extent Awards are granted hereunder;

               (iii) to determine the number of Shares or the amount of other consideration to be covered by
each Award granted hereunder;

               (iv) to approve forms of Award Agreements for use under the Plan;

               (v) to determine the terms and conditions of any Award granted hereunder;

               (vi) to establish additional terms, conditions, rules or procedures to accommodate the rules
or laws of applicable non-U.S. jurisdictions and to afford Grantees favorable treatment under such
rules or laws; provided, however, that no Award shall be granted under any such additional terms,
conditions, rules or procedures with terms or conditions which are inconsistent with the provisions
of the Plan;

               (vii) to amend the terms of any outstanding Award granted under the Plan, provided that any
amendment that would adversely affect the Grantee’s rights under an outstanding Award shall not be
made without the Grantee’s written consent; provided, however, that an amendment or modification
that may cause an Incentive Stock Option to become a Non-Qualified Stock Option shall not be
treated as adversely affecting the rights of the Grantee;

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               (viii) to construe and interpret the terms of the Plan and Awards, including without
limitation, any notice of award or Award Agreement, granted pursuant to the Plan; and

               (ix) to take such other action, not inconsistent with the terms of the Plan, as the
Administrator deems appropriate.

The express grant in the Plan of any specific power to the Administrator shall not be construed as
limiting any power or authority of the Administrator; provided that the Administrator may not
exercise any right or power reserved to the Board. Any decision made, or action taken, by the
Administrator or in connection with the administration of this Plan shall be final, conclusive and
binding on all persons having an interest in the Plan.

          (d) Indemnification. In addition to such other rights of indemnification as they may
have as members of the Board or as Officers or Employees of the Company or a Related Entity,
members of the Board and any Officers or Employees of the Company or a Related Entity to whom
authority to act for the Board, the Administrator or the Company is delegated shall be defended and
indemnified by the Company to the extent permitted by law on an after-tax basis against all
reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection
with the defense of any claim, investigation, action, suit or proceeding, or in connection with any
appeal therein, to which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan, or any Award granted hereunder, and against
all amounts paid by them in settlement thereof (provided such settlement is approved by the
Company) or paid by them in satisfaction of a judgment in any such claim, investigation, action,
suit or proceeding, except in relation to matters as to which it shall be adjudged in such claim,
investigation, action, suit or proceeding that such person is liable for gross negligence, bad
faith or intentional misconduct; provided, however, that within thirty (30) days after the
institution of such claim, investigation, action, suit or proceeding, such person shall offer to
the Company, in writing, the opportunity at the Company’s expense to defend the same.

     5. Eligibility. Awards other than Incentive Stock Options may be granted to
Employees, Directors and Consultants. Incentive Stock Options may be granted only to Employees of
the Company or a Parent or a Subsidiary of the Company. An Employee, Director or Consultant who
has been granted an Award may, if otherwise eligible, be granted additional Awards. Awards may be
granted to such Employees, Directors or Consultants who are residing in non-U.S. jurisdictions as
the Administrator may determine from time to time.

     6. Terms and Conditions of Awards.

          (a) Types of Awards. The Administrator is authorized under the Plan to award any type
of arrangement to an Employee, Director or Consultant that is not inconsistent with the provisions
of the Plan and that by its terms involves or might involve the issuance of (i) Shares, (ii) cash
or (iii) an Option, a SAR, or similar right with a fixed or variable price related to the Fair
Market Value of the Shares and with an exercise or conversion privilege related to the passage of
time, the occurrence of one or more events, or the satisfaction of performance criteria or other
conditions. Such awards include, without limitation, Options, SARs, sales or bonuses of

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Restricted Stock or Restricted Stock Units, and an Award may consist of one such security or
benefit, or two (2) or more of them in any combination or alternative.

          (b) Designation of Award. Each Award shall be designated in the Award Agreement. In
the case of an Option, the Option shall be designated as either an Incentive Stock Option or a
Non-Qualified Stock Option. However, notwithstanding such designation, an Option will qualify as
an Incentive Stock Option under the Code only to the extent the $100,000 limitation of Section
422(d) of the Code is not exceeded. The $100,000 limitation of Section 422(d) of the Code is
calculated based on the aggregate Fair Market Value of the Shares subject to Options designated as
Incentive Stock Options which become exercisable for the first time by a Grantee during any
calendar year (under all plans of the Company or any Parent or Subsidiary of the Company). For
purposes of this calculation, Incentive Stock Options shall be taken into account in the order in
which they were granted, and the Fair Market Value of the Shares shall be determined as of the
grant date of the relevant Option.

          (c) Conditions of Award. Subject to the terms of the Plan, the Administrator shall
determine the provisions, terms, and conditions of each Award including, but not limited to, the
Award vesting schedule, repurchase provisions, rights of first refusal, forfeiture provisions, form
of payment (cash, Shares, or other consideration) upon settlement of the Award, payment
contingencies, and satisfaction of any performance criteria. The performance criteria established
by the Administrator may be based on any one of, or combination of, increase in share price,
earnings per share, total shareholder return, return on equity, return on assets, return on
investment, net operating income, cash flow, revenue, economic value added, personal management
objectives, or other measure of performance selected by the Administrator. Partial achievement of
the specified criteria may result in a payment or vesting corresponding to the degree of
achievement as specified in the Award Agreement.

          (d) Acquisitions and Other Transactions. The Administrator may issue Awards under the
Plan in settlement, assumption or substitution for, outstanding awards or obligations to grant
future awards in connection with the Company or a Related Entity acquiring another entity, an
interest in another entity or an additional interest in a Related Entity whether by merger, stock
purchase, asset purchase or other form of transaction.

          (e) Deferral of Award Payment. The Administrator may establish one or more programs
under the Plan to permit selected Grantees the opportunity to elect to defer receipt of
consideration upon exercise of an Award, satisfaction of performance criteria, or other event that
absent the election would entitle the Grantee to payment or receipt of Shares or other
consideration under an Award. The Administrator may establish the election procedures, the timing
of such elections, the mechanisms for payments of, and accrual of interest or other earnings, if
any, on amounts, Shares or other consideration so deferred, and such other terms, conditions, rules
and procedures that the Administrator deems advisable for the administration of any such deferral
program.

          (f) Separate Programs. The Administrator may establish one or more separate programs
under the Plan for the purpose of issuing particular forms of Awards to one or more classes of
Grantees on such terms and conditions as determined by the Administrator from time to time.

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          (g) Individual Option and SAR Limit. Following the date that the exemption from
application of Section 162(m) of the Code described in Section 19 (or any exemption having similar
effect) ceases to apply to Awards, the maximum number of Shares with respect to which Options and
SARs may be granted to any Grantee in any calendar year shall be five million (5,000,000) Shares.
In connection with a Grantee’s commencement of Continuous Service, a Grantee may be granted Options
and SARs for up to an additional five million (5,000,000) Shares which shall not count against the
limit set forth in the previous sentence. The foregoing limitations shall be adjusted
proportionately in connection with any change in the Company’s capitalization pursuant to Section
10, below. To the extent required by Section 162(m) of the Code or the regulations thereunder, in
applying the foregoing limitations with respect to a Grantee, if any Option or SAR is canceled, the
canceled Option or SAR shall continue to count against the maximum number of Shares with respect to
which Options and SARs may be granted to the Grantee. For this purpose, the repricing of an Option
(or in the case of a SAR, the base amount on which the stock appreciation is calculated is reduced
to reflect a reduction in the Fair Market Value of the Common Stock) shall be treated as the
cancellation of the existing Option or SAR and the grant of a new Option or SAR.

          (h) Early Exercise. The Award Agreement may, but need not, include a provision
whereby the Grantee may elect at any time while an Employee, Director or Consultant to exercise any
part or all of the Award prior to full vesting of the Award. Any unvested Shares received pursuant
to such exercise may be subject to a repurchase right in favor of the Company or a Related Entity
or to any other restriction the Administrator determines to be appropriate.

          (i) Term of Award. The term of each Award shall be the term stated in the Award
Agreement, provided, however, that the term shall be no more than ten (10) years from the date of
grant thereof. However, in the case of an Incentive Stock Option granted to a Grantee 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 of the Company, the term of the
Incentive Stock Option shall be five (5) years from the date of grant thereof or such shorter term
as may be provided in the Award Agreement. Notwithstanding the foregoing, the specified term of
any Award shall not include any period for which the Grantee has elected to defer the receipt of
the Shares or cash issuable pursuant to the Award.

          (j) Transferability of Awards. Incentive Stock Options may not be sold, pledged,
assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws
of descent or distribution and may be exercised, during the lifetime of the Grantee, only by the
Grantee. Other Awards shall be transferable (i) by will and by the laws of descent and
distribution and (ii) during the lifetime of the Grantee, to the extent and in the manner
authorized by the Administrator by gift or pursuant to a domestic relations order to members of the
Grantee’s Immediate Family. Notwithstanding the foregoing, the Grantee may designate one or more
beneficiaries of the Grantee’s Award in the event of the Grantee’s death on a beneficiary
designation form provided by the Administrator.

          (k) Time of Granting Awards. The date of grant of an Award shall for all purposes be
the date on which the Administrator makes the determination to grant such Award, or such other
later date as is determined by the Administrator.

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     7. Award Exercise or Purchase Price, Consideration and Taxes.

          (a) Exercise or Purchase Price. The exercise or purchase price, if any, for an Award
shall be as follows:

               (i) In the case of an Incentive Stock Option:

                    (A) granted to an Employee who, at the time of the grant of such Incentive Stock 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 of the Company, the per Share exercise price shall be not less
than one hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or

                    (B) granted to any Employee other than an Employee described in the preceding paragraph, the
per Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value
per Share on the date of grant.

               (ii) In the case of a Non-Qualified Stock Option:

                    (A) granted to a person who, at the time of the 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 of the Company, the per Share exercise price shall be not less than one
hundred ten percent (110%) of the Fair Market Value per Share on the date of grant; or

                    (B) granted to any person other than a person described in the preceding paragraph, the per
Share exercise price shall be not less than one hundred percent (100%) of the Fair Market Value per
Share on the date of grant.

               (iii) In the case of Awards intended to qualify as Performance-Based Compensation, the
exercise or purchase price, if any, shall be not less than one hundred percent (100%) of the Fair
Market Value per Share on the date of grant.

               (iv) In the case of the sale of Shares:

                    (A) granted to a person who, at the time of the grant of such Award, or at the time the
purchase is consummated, 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 of the Company, the per Share
purchase price shall be not less than one hundred percent (100%) of the Fair Market Value per Share
on the date of grant; or

                    (B) granted to any person other than a person described in the preceding paragraph, the per
Share purchase price shall be not less than eighty-five percent (85%) of the Fair Market Value per
Share on the date of grant.

               (v) In the case of other Awards, such price as is determined by the Administrator.

12

 

               (vi) Notwithstanding the foregoing provisions of this Section 7(a), in the case of an Award
issued pursuant to Section 6(d), above, the exercise or purchase price for the Award shall be
determined in accordance with the provisions of the relevant instrument evidencing the agreement to
issue such Award.

          (b) Consideration. Subject to Applicable Laws, the consideration to be paid for the
Shares to be issued upon exercise or purchase of an Award including the method of payment, shall be
determined by the Administrator. In addition to any other types of consideration the Administrator
may determine, the Administrator is authorized to accept as consideration for Shares issued under
the Plan the following provided that the portion of the consideration equal to the par value of the
Shares must be paid in cash or other legal consideration permitted by the Delaware General
Corporation Law:

               (i) cash;

               (ii) check;

               (iii) delivery of Grantee’s promissory note with such recourse, interest, security, and
redemption provisions as the Administrator determines as appropriate (but only to the extent that
the acceptance or terms of the promissory note would not violate an Applicable Law);

               (iv) surrender of Shares or delivery of a properly executed form of attestation of ownership
of Shares as the Administrator may require which have a Fair Market Value on the date of surrender
or attestation equal to the aggregate exercise price of the Shares as to which said Award shall be
exercised;

               (v) with respect to Options, if the exercise occurs on or after the Registration Date, payment
through a broker-dealer sale and remittance procedure pursuant to which the Grantee (A) shall
provide written instructions to a Company designated brokerage firm to effect the immediate sale of
some or all of the purchased Shares and remit to the Company sufficient funds to cover the
aggregate exercise price payable for the purchased Shares and (B) shall provide written directives
to the Company to deliver the certificates for the purchased Shares directly to such brokerage firm
in order to complete the sale transaction; or

               (vi) with respect to Options, payment through a “net exercise” such that, without the payment
of any funds, the Grantee may exercise the Option and receive the net number of Shares equal to (i)
the number of Shares as to which the Option is being exercised, multiplied by (ii) a fraction, the
numerator of which is the Fair Market Value per Share (on such date as is determined by the
Administrator) less the Exercise Price per Share, and the denominator of which is such Fair Market
Value per Share;

               (vii) any combination of the foregoing methods of payment.

The Administrator may at any time or from time to time, by adoption of or by amendment to the
standard forms of Award Agreement described in Section 4(c)(iv), or by other means, grant Awards
which do not permit all of the foregoing forms of consideration to be used in payment for the
Shares or which otherwise restrict one or more forms of consideration.

13

 

          (c) Taxes. No Shares shall be delivered under the Plan to any Grantee or other person
until such Grantee or other person has made arrangements acceptable to the Administrator for the
satisfaction of any non-U.S., federal, state, or local income and employment tax withholding
obligations, including, without limitation, obligations incident to the receipt of Shares. Upon
exercise or vesting of an Award the Company shall withhold or collect from Grantee an amount
sufficient to satisfy such tax obligations, including, but not limited too, by surrender of the
whole number of Shares covered by the Award sufficient to satisfy the minimum applicable tax
withholding obligations incident to the exercise or vesting of an Award.

     8. Exercise of Award.

          (a) Procedure for Exercise; Rights as a Shareholder.

               (i) Any Award granted hereunder shall be exercisable at such times and under such conditions
as determined by the Administrator under the terms of the Plan and specified in the Award Agreement
but in the case of an Option, in no case at a rate of less than twenty percent (20%) per year over
five (5) years from the date the Option is granted, subject to reasonable conditions such as
continued employment. Notwithstanding the foregoing, in the case of an Option granted to an
Officer, Director or Consultant, the Award Agreement may provide that the Option may become
exercisable, subject to reasonable conditions such as such Officer’s, Director’s or Consultant’s
Continuous Service, at any time or during any period established in the Award Agreement.

               (ii) An Award shall be deemed to be exercised when written notice of such exercise has been
given to the Company in accordance with the terms of the Award by the person entitled to exercise
the Award and full payment for the Shares with respect to which the Award is exercised has been
made, including, to the extent selected, use of the broker-dealer sale and remittance procedure to
pay the purchase price as provided in Section 7(b)(v).

          (b) Exercise of Award Following Termination of Continuous Service. In the event of
termination of a Grantee’s Continuous Service for any reason other than Disability or death (but
not in the event of a Grantee’s change of status from Employee to Consultant or from Consultant to
Employee), such Grantee may, but only during the Post-Termination Exercise Period (but in no event
later than the expiration date of the term of such Award as set forth in the Award Agreement),
exercise the portion of the Grantee’s Award that was vested at the date of such termination or such
other portion of the Grantee’s Award as may be determined by the Administrator. The Grantee’s
Award Agreement may provide that upon the termination of the Grantee’s Continuous Service for
Cause, the Grantee’s right to exercise the Award shall terminate concurrently with the termination
of Grantee’s Continuous Service. In the event of a Grantee’s change of status from Employee to
Consultant, an Employee’s Incentive Stock Option shall convert automatically to a Non-Qualified
Stock Option on the day three (3) months and one (1) day following such change of status. To the
extent that the Grantee’s Award was unvested at the date of termination, or if the Grantee does not
exercise the vested portion of the Grantee’s Award within the Post-Termination Exercise Period, the
Award shall terminate.

14

 

          (c) Disability of Grantee. In the event of termination of a Grantee’s Continuous
Service as a result of his or her Disability, such Grantee may, but only within twelve (12) months
from the date of such termination (or such longer period as specified in the Award Agreement but in
no event later than the expiration date of the term of such Award as set forth in the Award
Agreement), exercise the portion of the Grantee’s Award that was vested at the date of such
termination; provided, however, that if such Disability is not a “disability” as such term is
defined in Section 22(e)(3) of the Code, in the case of an Incentive Stock Option such Incentive
Stock Option shall automatically convert to a Non-Qualified Stock Option on the day three (3)
months and one (1) day following such termination. To the extent that the Grantee’s Award was
unvested at the date of termination, or if Grantee does not exercise the vested portion of the
Grantee’s Award within the time specified herein, the Award shall terminate.

          (d) Death of Grantee. In the event of a termination of the Grantee’s Continuous
Service as a result of his or her death, or in the event of the death of the Grantee during the
Post-Termination Exercise Period or during the twelve (12) month period following the Grantee’s
termination of Continuous Service as a result of his or her Disability, the Grantee’s estate or a
person who acquired the right to exercise the Award by bequest or inheritance may exercise the
portion of the Grantee’s Award that was vested as of the date of termination, within twelve (12)
months from the date of death (or such longer period as specified in the Award Agreement but in no
event later than the expiration of the term of such Award as set forth in the Award Agreement). To
the extent that, at the time of death, the Grantee’s Award was unvested, or if the Grantee’s estate
or a person who acquired the right to exercise the Award by bequest or inheritance does not
exercise the vested portion of the Grantee’s Award within the time specified herein, the Award
shall terminate.

          (e) Extension if Exercise Prevented by Law. Notwithstanding the foregoing, if the
exercise of an Award within the applicable time periods set forth in this Section 8 is prevented by
the provisions of Section 9 below, the Award shall remain exercisable until one (1) month after the
date the Grantee is notified by the Company that the Award is exercisable, but in any event no
later than the expiration of the term of such Award as set forth in the Award Agreement.

     9. Conditions Upon Issuance of Shares.

          (a) If at any time the Administrator determines that the delivery of Shares pursuant to the
exercise, vesting or any other provision of an Award is or may be unlawful under Applicable Laws,
the vesting or right to exercise an Award or to otherwise receive Shares pursuant to the terms of
an Award shall be suspended until the Administrator determines that such delivery is lawful and
shall be further subject to the approval of counsel for the Company with respect to such
compliance. The Company shall have no obligation to effect any registration or qualification of
the Shares under federal or state laws.

          (b) As a condition to the exercise of an Award, the Company may require the person exercising
such Award to represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or

15

 

distribute such Shares if, in the opinion of counsel for the Company, such a representation is
required by any Applicable Laws.

     10. Adjustments Upon Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of Shares covered by each outstanding Award, and the number
of Shares which have been authorized for issuance under the Plan but as to which no Awards have yet
been granted or which have been returned to the Plan, the exercise or purchase price of each such
outstanding Award, the maximum number of Shares with respect to which Options and SARs may be
granted to any Grantee in any calendar year, the maximum number of Shares that may be issued
pursuant to Incentive Stock Options, as well as any other terms that the Administrator determines
require adjustment shall be proportionately adjusted for (i) 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 Shares, or similar transaction affecting the Shares, (ii) any other
increase or decrease in the number of issued Shares effected without receipt of consideration by
the Company, or (iii) any other transaction with respect to Common Stock including a corporate
merger, consolidation, acquisition of property or stock, separation (including a spin-off or other
distribution of stock or property), reorganization, liquidation (whether partial or complete) or
any similar transaction; provided, however that conversion of any convertible securities of the
Company shall not be deemed to have been “effected without receipt of consideration.” In
connection with the foregoing adjustments, the Administrator may, in its discretion, prohibit the
exercise of Awards or other issuance of Shares, cash or other consideration pursuant to Awards
during certain periods of time. Except as the Administrator determines, no issuance by the Company
of shares of any class, or securities convertible into shares of any class, shall affect, and no
adjustment by reason hereof shall be made with respect to, the number or price of Shares subject to
an Award.

     11. Corporate Transactions.

          (a) Termination of Award to Extent Not Assumed in Corporate Transaction. Effective
upon the consummation of a Corporate Transaction, all outstanding Awards under the Plan shall
terminate. However, all such Awards shall not terminate to the extent they are Assumed in
connection with the Corporate Transaction.

          (b) Acceleration of Award Upon Corporate Transaction. The Administrator shall have
the authority, exercisable either in advance of any actual or anticipated Corporate Transaction or
at the time of an actual Corporate Transaction and exercisable at the time of the grant of an Award
under the Plan or any time while an Award remains outstanding, to provide for the full or partial
automatic vesting and exercisability of one or more outstanding unvested Awards under the Plan and
the release from restrictions on transfer and repurchase or forfeiture rights of such Awards in
connection with a Corporate Transaction, on such terms and conditions as the Administrator may
specify. The Administrator also shall have the authority to condition any such Award vesting and
exercisability or release from such limitations upon the subsequent termination of the Continuous
Service of the Grantee within a specified period following the effective date of the Corporate
Transaction.

          (c) Effect of Acceleration on Incentive Stock Options. Any Incentive Stock Option
accelerated under this Section 11 in connection with a Corporate Transaction shall

16

 

remain exercisable as an Incentive Stock Option under the Code only to the extent the $100,000
limitation of Section 422(d) of the Code is not exceeded.

     12. Effective Date and Term of Plan. The Plan shall become effective upon the earlier
to occur of its adoption by the Board or its approval by the shareholders of the Company. It shall
continue in effect for a term of ten (10) years unless sooner terminated. Subject to Section 17
below, and Applicable Laws, Awards may be granted under the Plan upon its becoming effective.

     13. Amendment, Suspension or Termination of the Plan.

          (a) The Board may at any time amend, suspend or terminate the Plan. To the extent necessary to
comply with Applicable Laws, the Company shall obtain shareholder approval of any Plan amendment in
such a manner and to such a degree as required.

          (b) No Award may be granted during any suspension of the Plan or after termination of the
Plan.

          (c) No suspension or termination of the Plan (including termination of the Plan under Section
12, above) shall adversely affect any rights under Awards already granted to a Grantee.

     14. Reservation of Shares.

          (a) The Company, during the term of the Plan, will at all times reserve and keep available
such number of Shares as shall be sufficient to satisfy the requirements of the Plan.

          (b) 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.

     15. No Effect on Terms of Employment/Consulting Relationship. The Plan shall not
confer upon any Grantee any right with respect to the Grantee’s Continuous Service, nor shall it
interfere in any way with his or her right or the right of the Company or a Related Entity to
terminate the Grantee’s Continuous Service at any time, with or without Cause, and with or without
notice. The ability of the Company or any Related Entity to terminate the employment of a Grantee
who is employed at will is in no way affected by its determination that the Grantee’s Continuous
Service has been terminated for Cause for the purposes of this Plan.

     16. No Effect on Retirement and Other Benefit Plans. Except as specifically provided
in a retirement or other benefit plan of the Company or a Related Entity, Awards shall not be
deemed compensation for purposes of computing benefits or contributions under any retirement plan
of the Company or a Related Entity, and shall not affect any benefits under any other benefit plan
of any kind or any benefit plan subsequently instituted under which the availability or

17

 

amount of benefits is related to level of compensation. The Plan is not a “Retirement Plan”
or “Welfare Plan” under the Employee Retirement Income Security Act of 1974, as amended.

     17. Shareholder Approval. Continuance of the Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months before or after the date the Plan is adopted.
Such shareholder approval shall be obtained in the degree and manner required under Applicable
Laws. Any Award exercised before shareholder approval is obtained shall be rescinded if
shareholder approval is not obtained within the time prescribed, and Shares issued on the exercise
of any such Award shall not be counted in determining whether shareholder approval is obtained.

     18. Information to Grantees. The Company shall provide to each Grantee, during the
period for which such Grantee has one or more Awards outstanding, copies of financial statements at
least annually. The Company shall not be required to provide such information to persons whose
duties in connection with the Company assure them access to equivalent information.

     19. Effect of Section 162(m) of the Code. Section 162(m) of the Code does not apply
to the Plan prior to the Registration Date or such earlier time that the Company first becomes
subject to the reporting obligations of Section 12 of the Exchange Act. Following the Registration
Date or such earlier time that the Company first becomes subject to the reporting obligations of
Section 12 of the Exchange Act, the Plan, and all Awards (except Awards of Restricted Stock that
vest over time) issued thereunder, are intended to be exempt from the application of Section 162(m)
of the Code, which restricts under certain circumstances the Federal income tax deduction for
compensation paid by a public company to named executives in excess of $1 million per year. The
exemption is based on Treasury Regulation Section 1.162-27(f), in the form existing on the
effective date of the Plan, with the understanding that such regulation generally exempts from the
application of Section 162(m) of the Code compensation paid pursuant to a plan that existed before
a company becomes publicly held. Under such Treasury Regulation, this exemption is available to
the Plan for the duration of the period that lasts until the earliest of (i) the expiration of the
Plan, (ii) the material modification of the Plan, (iii) the exhaustion of the maximum number of
shares of Common Stock available for Awards under the Plan, as set forth in Section 3(a), (iv) the
first meeting of shareholders at which directors are to be elected that occurs after the close of
the third calendar year following the calendar year in which the Company first becomes subject to
the reporting obligations of Section 12 of the Exchange Act, or (v) such other date required by
Section 162(m) of the Code and the rules and regulations promulgated thereunder. To the extent
that the Administrator determines as of the date of grant of an Award that (i) the Award is
intended to qualify as Performance-Based Compensation and (ii) the exemption described above is no
longer available with respect to such Award, such Award shall not be effective until any
shareholder approval required under Section 162(m) of the Code has been obtained.

     20. Unfunded Obligation. Grantees shall have the status of general unsecured
creditors of the Company. Any amounts payable to Grantees pursuant to the Plan shall be unfunded
and unsecured obligations for all purposes, including, without limitation, Title I of the Employee
Retirement Income Security Act of 1974, as amended. Neither the Company nor any Related Entity
shall be required to segregate any monies from its general funds, or to create any

18

 

trusts, or establish any special accounts with respect to such obligations. The Company shall
retain at all times beneficial ownership of any investments, including trust investments, which the
Company may make to fulfill its payment obligations hereunder. Any investments or the creation or
maintenance of any trust or any Grantee account shall not create or constitute a trust or fiduciary
relationship between the Administrator, the Company or any Related Entity and a Grantee, or
otherwise create any vested or beneficial interest in any Grantee or the Grantee’s creditors in any
assets of the Company or a Related Entity. The Grantees shall have no claim against the Company or
any Related Entity for any changes in the value of any assets that may be invested or reinvested by
the Company with respect to the Plan.

     21. Construction. Captions and titles contained herein are for convenience only and
shall not affect the meaning or interpretation of any provision of the Plan. Except when otherwise
indicated by the context, the singular shall include the plural and the plural shall include the
singular. Use of the term “or” is not intended to be exclusive, unless the context clearly
requires otherwise.

19exv10w6a

 

Exhibit 10.6A

SONICS, INC.

2007 STOCK INCENTIVE PLAN

NOTICE OF STOCK OPTION AWARD

	 	 	 	 	 	 	 	 	 	 	 
	     Grantee’s Name and Address:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     You (the “Grantee”) have been granted an option to purchase shares of Common Stock, subject to
the terms and conditions of this Notice of Stock Option Award (the “Notice”), the Sonics, Inc. 2007
Stock Incentive Plan, as amended from time to time (the “Plan”) and the Stock Option Award
Agreement (the “Option Agreement”) attached hereto, as follows. Unless otherwise defined herein,
the terms defined in the Plan shall have the same defined meanings in this Notice.
	 
	 	 	 	 	 	 	 	 	 	 
	     Award Number
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     Date of Award
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     Vesting Commencement Date
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     Exercise Price per Share

	 	$	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     Total Number of Shares Subject
	 	 	 	 	 	 	 	 	 	 
	     to the Option (the “Shares”)
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     Total Exercise Price

	 	$	 	 	 	 	 	 	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     Type of Option:

	 	 	 	 	 	 	 	Incentive Stock Option	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Non-Qualified Stock Option	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     Expiration Date:
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	     Post-Termination Exercise Period:	 	Three (3) Months	 	 

Vesting Schedule:

     Subject to the Grantee’s Continuous Service and other limitations set forth in this Notice,
the Plan and the Option Agreement, the Option may be exercised, in whole or in part, in accordance
with the following schedule:

     12.5% of the Shares subject to the Option shall vest six (6) months after the Vesting
Commencement Date, and 1/48 of the Shares subject to the Option shall vest on each monthly
anniversary of the Vesting Commencement Date thereafter.

     Notwithstanding the foregoing, in the event of a Corporate Transaction:

          (a) for the portion of the Option that is Assumed, the Option automatically shall become
vested and exercisable for the lesser of (i) 25% of the Shares subject to the Assumed

1

 

portion of the Option or (ii) 1/48 of the Shares subject to the Assumed portion of the Option
for each full month that the Grantee was in the service of the Company from the Date of Award until
the Corporate Transaction, immediately upon termination of the Grantee’s Continuous Service as an
Employee, Director or Consultant if such Continuous Service as an Employee, Director or Consultant
is terminated by the successor company or the Company other than for Cause, or the Grantee
terminates for Good Reason, within six (6) months after the Corporate Transaction; and

          (b) for the portion of Option that is not Assumed, such portion of the Option shall
automatically become vested and exercisable, immediately prior to the specified effective date of
such Corporate Transaction, for the lesser of (i) 25% of the Shares subject to the portion of the
Option that is not Assumed or (ii) 1/48 of the Shares subject to the portion of the Option that is
not Assumed for each full month that the Grantee was in the service of the Company from the Date of
Award until the Corporate Transaction.

     During any authorized leave of absence, the vesting of the Option as provided in this schedule
shall be suspended after the leave of absence exceeds a period of three (3) months. Vesting of the
Option shall resume upon the Grantee’s termination of the leave of absence and return to service to
the Company or a Related Entity. The Vesting Schedule of the Option shall be extended by the
length of the suspension.

     In the event of termination of the Grantee’s Continuous Service for Cause, the Grantee’s right
to exercise the Option shall terminate concurrently with the termination of the Grantee’s
Continuous Service, except as otherwise determined by the Administrator.

     IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the
Option is to be governed by the terms and conditions of this Notice, the Plan, and the Option
Agreement.

	 	 	 	 	 	 	 
	 	 	Sonics, Inc.,
	 	 	a Delaware corporation
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL,
ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE
ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR
SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE RIGHT OF THE COMPANY OR RELATED
ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE, WITH
OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE
GRANTEE HAS A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO

2

 

THE CONTRARY, THE GRANTEE’S STATUS IS AT WILL.

     The Grantee acknowledges receipt of a copy of the Plan and the Option Agreement, and
represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the
Option subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed
this Notice, the Plan, and the Option Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Notice, and fully understands all provisions of this
Notice, the Plan and the Option Agreement. The Grantee hereby agrees that all questions of
interpretation and administration relating to this Notice, the Plan and the Option Agreement shall
be resolved by the Administrator in accordance with Section 18 of the Option Agreement. The
Grantee further agrees to the venue selection in accordance with Section 19 of the Option
Agreement. The Grantee further agrees to notify the Company upon any change in the residence
address indicated in this Notice.

	 	 	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Signed:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Grantee	 	 

3

 

Award Number:                     

SONICS, INC.

2007 STOCK INCENTIVE PLAN

STOCK OPTION AWARD AGREEMENT

     1. Grant of Option. Sonics, Inc., a Delaware corporation, (the “Company”), hereby
grants to the Grantee (the “Grantee”) named in the Notice of Stock Option Award (the “Notice”), an
option (the “Option”) to purchase the Total Number of Shares of Common Stock subject to the Option
(the “Shares”) set forth in the Notice, at the Exercise Price per Share set forth in the Notice
(the “Exercise Price”) subject to the terms and provisions of the Notice, this Stock Option Award
Agreement (the “Option Agreement”) and the Company’s 2007 Stock Incentive Plan, as amended from
time to time (the “Plan”), which are incorporated herein by reference. Unless otherwise defined
herein, the terms defined in the Plan shall have the same defined meanings in this Option
Agreement.

     If designated in the Notice as an Incentive Stock Option, the Option is intended to qualify as
an Incentive Stock Option as defined in Section 422 of the Code. However, notwithstanding such
designation, the Option will qualify as an Incentive Stock Option under the Code only to the extent
the $100,000 limitation of Section 422(d) of the Code is not exceeded. The $100,000 limitation of
Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of the Shares
subject to options designated as Incentive Stock Options which become exercisable for the first
time by the Grantee during any calendar year (under all plans of the Company or any Parent or
Subsidiary of the Company). For purposes of this calculation, Incentive Stock Options shall be
taken into account in the order in which they were granted, and the Fair Market Value of the shares
subject to such options shall be determined as of the grant date of the relevant option.

     2. Exercise of Option.

          (a) Right to Exercise. The Option shall be exercisable during its term in accordance
with the Vesting Schedule set out in the Notice and with the applicable provisions of the Plan and
this Option Agreement. The Option shall be subject to the provisions of Section 11 of the Plan
relating to the exercisability or termination of the Option in the event of a Corporate
Transaction. The Grantee shall be subject to reasonable limitations on the number of requested
exercises during any monthly or weekly period as determined by the Administrator. In no event
shall the Company issue fractional Shares.

          (b) Method of Exercise. The Option shall be exercisable by delivery of an exercise
notice (a form of which is attached as Exhibit A) or by such other procedure as specified from time
to time by the Administrator which shall state the election to exercise the Option, the whole
number of Shares in respect of which the Option is being exercised, and such other provisions as
may be required by the Administrator. The exercise notice shall be delivered in person, by
certified mail, or by such other method (including electronic transmission) as determined from time
to time by the Administrator to the Company accompanied by payment of the Exercise Price. The
Option shall be deemed to be exercised upon receipt by the Company of

1

 

such notice accompanied by the Exercise Price, which, to the extent selected, shall be deemed
to be satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price
provided in Section 4(d), below.

          (c) Taxes. No Shares will be delivered to the Grantee or other person pursuant to the
exercise of the Option until the Grantee or other person has made arrangements acceptable to the
Administrator for the satisfaction of applicable income tax and employment tax withholding
obligations, including, without limitation, such other tax obligations of the Grantee incident to
the receipt of Shares. Upon exercise of the Option, the Company or the Grantee’s employer may
offset or withhold (from any amount owed by the Company or the Grantee’s employer to the Grantee)
or collect from the Grantee or other person an amount sufficient to satisfy such tax withholding
obligations.

     3. Grantee’s Representations. The Grantee understands that neither the Option nor the
Shares exercisable pursuant to the Option have been registered under the Securities Act of 1933, as
amended or any United States securities laws. In the event the Shares purchasable pursuant to the
exercise of the Option have not been registered under the Securities Act of 1933, as amended, at
the time the Option is exercised, the Grantee shall, if requested by the Company, concurrently with
the exercise of all or any portion of the Option, deliver to the Company his or her Investment
Representation Statement in the form attached hereto as Exhibit B.

     4. Method of Payment. Payment of the Exercise Price shall be made by any of the
following, or a combination thereof, at the election of the Grantee; provided, however, that such
exercise method does not then violate any Applicable Law and, provided further, that the portion of
the Exercise Price equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

          (a) cash;

          (b) check;

          (c) if the exercise occurs on or after the Registration Date, surrender of Shares or delivery
of a properly executed form of attestation of ownership of Shares as the Administrator may require
which have a Fair Market Value on the date of surrender or attestation equal to the aggregate
Exercise Price of the Shares as to which the Option is being exercised; or

          (d) if the exercise occurs on or after the Registration Date, payment through a broker-dealer
sale and remittance procedure pursuant to which the Grantee (i) shall provide written instructions
to a Company-designated brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for
the purchased Shares and (ii) shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in order to complete the sale
transaction.

     5. Restrictions on Exercise. The Option may not be exercised if the issuance of the
Shares subject to the Option upon such exercise would constitute a violation of any Applicable
Laws. In addition, the Option may not be exercised until such time as the Plan has been approved
by the shareholders of the Company. If the exercise of the Option within the

2

 

applicable time periods set forth in Section 6, 7 and 8 of this Option Agreement is prevented
by the provisions of this Section 5, the Option shall remain exercisable until one (1) month after
the date the Grantee is notified by the Company that the Option is exercisable, but in any event no
later than the Expiration Date set forth in the Notice.

     6. Termination or Change of Continuous Service. In the event the Grantee’s Continuous
Service terminates, other than for Cause, the Grantee may, but only during the Post-Termination
Exercise Period, exercise the portion of the Option that was vested at the date of such termination
(the “Termination Date”). The Post-Termination Exercise Period shall commence on the Termination
Date. In the event of termination of the Grantee’s Continuous Service for Cause, the Grantee’s
right to exercise the Option shall, except as otherwise determined by the Administrator, terminate
concurrently with the termination of the Grantee’s Continuous Service (also the “Termination
Date”). In no event, however, shall the Option be exercised later than the Expiration Date set
forth in the Notice. In the event of the Grantee’s change in status from Employee, Director or
Consultant to any other status of Employee, Director or Consultant, the Option shall remain in
effect and the Option shall continue to vest in accordance with the Vesting Schedule set forth in
the Notice consistent with any minimum vesting requirements set forth in the Plan; provided,
however, with respect to any Incentive Stock Option that shall remain in effect after a change in
status from Employee to Director or Consultant, such Incentive Stock Option shall cease to be
treated as an Incentive Stock Option and shall be treated as a Non-Qualified Stock Option on the
day three (3) months and one (1) day following such change in status. Except as provided in
Sections 7 and 8 below, to the extent that the Option was unvested on the Termination Date, or if
the Grantee does not exercise the vested portion of the Option within the Post-Termination Exercise
Period, the Option shall terminate.

     7. Disability of Grantee. In the event the Grantee’s Continuous Service terminates as
a result of his or her Disability, the Grantee may, but only within twelve (12) months commencing
on the Termination Date (but in no event later than the Expiration Date), exercise the portion of
the Option that was vested on the Termination Date; provided, however, that if such Disability is
not a “disability” as such term is defined in Section 22(e)(3) of the Code and the Option is an
Incentive Stock Option, such Incentive Stock Option shall cease to be treated as an Incentive Stock
Option and shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1)
day following the Termination Date. To the extent that the Option was unvested on the Termination
Date, or if the Grantee does not exercise the vested portion of the Option within the time
specified herein, the Option shall terminate. Section 22(e)(3) of the Code provides that an
individual is permanently and totally disabled if he or she is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months.

     8. Death of Grantee. In the event of the termination of the Grantee’s Continuous
Service as a result of his or her death, or in the event of the Grantee’s death during the
Post-Termination Exercise Period or during the twelve (12) month period following the Grantee’s
termination of Continuous Service as a result of his or her Disability, the person who acquired the
right to exercise the Option pursuant to Section 9 may exercise the portion of the Option that was
vested at the date of termination within twelve (12) months commencing on the date of death (but in
no event later than the Expiration Date). To the extent that the Option was

3

 

unvested on the date of death, or if the vested portion of the Option is not exercised within
the time specified herein, the Option shall terminate.

     9. Transferability of Option. The Option, if an Incentive Stock Option, may not be
transferred in any manner other than by will or by the laws of descent and distribution and may be
exercised during the lifetime of the Grantee only by the Grantee. The Option, if a Non-Qualified
Stock Option, may not be transferred in any manner other than by will or by the laws of descent and
distribution, provided, however, that a Non-Qualified Stock Option may be transferred during the
lifetime of the Grantee by gift or pursuant to a domestic relations order to members of the
Grantee’s Immediate Family to the extent and in the manner determined by the Administrator.
Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries of the Grantee’s
Incentive Stock Option or Non-Qualified Stock Option in the event of the Grantee’s death on a
beneficiary designation form provided by the Administrator. Following the death of the Grantee,
the Option, to the extent provided in Section 8, may be exercised (a) by the person or persons
designated under the deceased Grantee’s beneficiary designation or (b) in the absence of an
effectively designated beneficiary, by the Grantee’s legal representative or by any person
empowered to do so under the deceased Grantee’s will or under the then applicable laws of descent
and distribution. The terms of the Option shall be binding upon the executors, administrators,
heirs, successors and transferees of the Grantee.

     10. Term of Option. The Option must be exercised no later than the Expiration Date
set forth in the Notice or such earlier date as otherwise provided herein. After the Expiration
Date or such earlier date, the Option shall be of no further force or effect and may not be
exercised.

     11. Company’s Right of First Refusal.

          (a) Transfer Notice. Neither the Grantee nor a transferee (either being sometimes
referred to herein as the “Holder”) shall sell, hypothecate, encumber or otherwise transfer any
Shares or any right or interest therein without first complying with the provisions of this Section
11 or obtaining the prior written consent of the Company. In the event the Holder desires to
accept a bona fide third-party offer for any or all of the Shares, the Holder shall provide the
Company with written notice (the “Transfer Notice”) of:

	 	(i)	 	The Holder’s intention to transfer;
	 
	 	(ii)	 	The name of the proposed transferee;
	 
	 	(iii)	 	The number of Shares to be transferred; and
	 
	 	(iv)	 	The proposed transfer price or value and terms thereof.

If the Holder proposes to transfer any Shares to more than one transferee, the Holder shall provide
a separate Transfer Notice for the proposed transfer to each transferee. The Transfer Notice shall
be signed by both the Holder and the proposed transferee and must constitute a binding commitment
of the Holder and the proposed transferee for the transfer of the Shares to the proposed transferee
subject to the terms and conditions of this Option Agreement.

4

 

          (b) Bona Fide Transfer. If the Company determines that the information provided by
the Holder in the Transfer Notice is insufficient to establish the bona fide nature of a proposed
voluntary transfer, the Company shall give the Holder written notice of the Holder’s failure to
comply with the procedure described in this Section 11, and the Holder shall have no right to
transfer the Shares without first complying with the procedure described in this Section 11. The
Holder shall not be permitted to transfer the Shares if the proposed transfer is not bona fide.

          (c) First Refusal Exercise Notice. The Company shall have the right to purchase (the
“Right of First Refusal”) all but not less than all, of the Shares which are described in the
Transfer Notice (the “Offered Shares”) at any time within ninety (90) days after receipt of the
Transfer Notice (the “Option Period”), provided, however, that if the Offered Shares are not Mature
Shares (as defined below) then the Option Period shall be extended by the number of days necessary
for the Offered Shares to become Mature Shares. The Offered Shares shall be repurchased at (i) the
per share price or value and in accordance with the terms stated in the Transfer Notice (subject to
Section 11(d) below) or (ii) the Fair Market Value of the Shares on the date on which the purchase
is to be effected if no consideration is paid pursuant to the terms stated in the Transfer Notice,
which Right of First Refusal shall be exercised by written notice (the “First Refusal Exercise
Notice”) to the Holder. “Mature Shares” shall mean the Shares that have been held by the Holder
(and any successor Holder) for a period of more than six (6) months.

          (d) Payment Terms. The Company shall consummate the purchase of the Offered Shares on
the terms set forth in the Transfer Notice within 30 days after delivery of the First Refusal
Exercise Notice; provided, however, that in the event the Transfer Notice provides for the payment
for the Offered Shares other than in cash, the Company and/or its assigns shall have the right to
pay for the Offered Shares by the discounted cash equivalent of the consideration described in the
Transfer Notice as reasonably determined by the Administrator. Upon payment for the Offered Shares
to the Holder or into escrow for the benefit of the Holder, the Company or its assigns shall become
the legal and beneficial owner of the Offered Shares and all rights and interest therein or related
thereto, and the Company shall have the right to transfer the Offered Shares to its own name or its
assigns without further action by the Holder.

          (e) Assignment. Whenever the Company shall have the right to purchase Shares under
this Right of First Refusal, the Company may designate and assign one or more employees, officers,
directors or shareholders of the Company or other persons or organizations, to exercise all or a
part of the Company’s Right of First Refusal.

          (f) Non-Exercise. If the Company and/or its assigns do not collectively elect to
exercise the Right of First Refusal within the Option Period or such earlier time if the Company
and/or its assigns notifies the Holder that it will not exercise the Right of First Refusal, then
the Holder may transfer the Shares upon the terms and conditions stated in the Transfer Notice,
provided that:

               (i) The transfer is made within forty-five (45) days of the earlier of (A) the date the
Company and/or its assigns notify the Holder that the Right of First Refusal will not be exercised
or (B) the expiration of the Option Period; and

5

 

               (ii) The transferee agrees in writing that such Shares shall be held subject to the provisions
of this Option Agreement.

The Company shall have the right to demand further assurances from the Holder and the transferee
(in a form satisfactory to the Company) that the transfer of the Offered Shares was actually
carried out on the terms and conditions described in the Transfer Notice. No Offered Shares shall
be transferred on the books of the Company until the Company has received such assurances, if so
demanded, and has approved the proposed transfer as bona fide.

          (g) Expiration of Transfer Period. Following such 45-day period, no transfer of the
Offered Shares and no change in the terms of the transfer as stated in the Transfer Notice
(including the name of the proposed transferee) shall be permitted without a new written Transfer
Notice prepared and submitted in accordance with the requirements of this Right of First Refusal.

          (h) Termination of Right of First Refusal. The provisions of this Right of First
Refusal shall terminate as to all Shares upon the Registration Date.

          (i) Additional Shares or Substituted Securities. In the event of any transaction
described in Sections 10 or 11 of the Plan, any new, substituted or additional securities or other
property which is by reason of any such transaction distributed with respect to the Shares shall be
immediately subject to the Right of First Refusal, but only to the extent the Shares are at the
time covered by such right.

     12. Stop-Transfer Notices. In order to ensure compliance with the restrictions on
transfer set forth in this Option Agreement, the Notice or the Plan, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and, if the Company
transfers its own securities, it may make appropriate notations to the same effect in its own
records.

     13. Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Option Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or
pay dividends to any purchaser or other transferee to whom such Shares shall have been so
transferred.

     14. Tax Consequences.

          (a) The Grantee may incur tax liability as a result of the Grantee’s purchase or disposition
of the Shares. THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR DISPOSING
OF THE SHARES.

          (b) Notwithstanding the Company’s good faith determination of the Fair Market Value of the
Company’s Common Stock for purposes of determining the Exercise Price Per Share of the Option as
set forth in the Notice, the taxing authorities may assert that the Fair Market Value of the Common
Stock on the Date of Award was greater than the Exercise Price Per Share. If designated in the
Notice as an Incentive Stock Option, the Option may fail to qualify as an Incentive Stock Option if
the Exercise Price Per Share of the Option is less than the Fair Market Value of the Common Stock
on the Date of Award. In addition, under Section 409A

6

 

of the Code, if the Exercise Price Per Share of the Option is less than the Fair Market Value
of the Common Stock on the Date of Award, the Option may be treated as a form of deferred
compensation and the Grantee may be subject to an acceleration of income recognition, an additional
20% tax, plus interest and possible penalties. The Grantee is encouraged to consult a tax adviser
regarding the potential impact of Section 409A of the Code.

     15. Lock-Up Agreement.

          (a) Agreement. The Grantee, if requested by the Company and the lead underwriter of
any public offering of the Common Stock (the “Lead Underwriter”), hereby irrevocably agrees not to
sell, contract to sell, grant any option to purchase, transfer the economic risk of ownership in,
make any short sale of, pledge or otherwise transfer or dispose of any interest in any Common Stock
or any securities convertible into or exchangeable or exercisable for or any other rights to
purchase or acquire Common Stock (except Common Stock included in such public offering or acquired
on the public market after such offering) during the 180-day period following the effective date of
a registration statement of the Company filed under the Securities Act of 1933, as amended, or such
shorter or longer period of time as the Lead Underwriter shall specify. The Grantee further agrees
to sign such documents as may be requested by the Lead Underwriter to effect the foregoing and
agrees that the Company may impose stop-transfer instructions with respect to such Common Stock
subject to the lock-up period until the end of such period. The Company and the Grantee
acknowledge that each Lead Underwriter of a public offering of the Company’s stock, during the
period of such offering and for the lock-up period thereafter, is an intended beneficiary of this
Section 15.

          (b) No Amendment Without Consent of Underwriter. During the period from
identification of a Lead Underwriter in connection with any public offering of the Company’s Common
Stock until the earlier of (i) the expiration of the lock-up period specified in Section 15(a) in
connection with such offering or (ii) the abandonment of such offering by the Company and the Lead
Underwriter, the provisions of this Section 15 may not be amended or waived except with the consent
of the Lead Underwriter.

     16. Entire Agreement: Governing Law. The Notice, 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 the Grantee
with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s
interest except by means of a writing signed by the Company and the Grantee. Nothing in the
Notice, the Plan and this Option Agreement (except as expressly provided therein) is intended to
confer any rights or remedies on any persons other than the parties. The Notice, the Plan and this
Option Agreement are to be construed in accordance with and governed by the internal laws of the
State of California without giving effect to any choice of law rule that would cause the
application of the laws of any jurisdiction other than the internal laws of the State of California
to the rights and duties of the parties. Should any provision of the Notice, the Plan or this
Option Agreement be determined to be illegal or unenforceable, such provision shall be enforced to
the fullest extent allowed by law and the other provisions shall nevertheless remain effective and
shall remain enforceable.

7

 

     17. Construction. The captions used in the Notice and this Option Agreement are
inserted for convenience and shall not be deemed a part of the Option for construction or
interpretation. Except when otherwise indicated by the context, the singular shall include the
plural and the plural shall include the singular. Use of the term “or” is not intended to be
exclusive, unless the context clearly requires otherwise.

     18. Administration and Interpretation. Any question or dispute regarding the
administration or interpretation of the Notice, the Plan or this Option Agreement shall be
submitted by the Grantee or by the Company to the Administrator. The resolution of such question
or dispute by the Administrator shall be final and binding on all persons.

     19. Venue. The Company, the Grantee, and the Grantee’s assignees pursuant to Section
9 (the “parties”) agree that any suit, action, or proceeding arising out of or relating to the
Notice, the Plan or this Option Agreement shall be brought in the United States District Court for
the Northern District of California (or should such court lack jurisdiction to hear such action,
suit or proceeding, in a California state court in the County of Santa Clara) and that the parties
shall submit to the jurisdiction of such court. The parties irrevocably waive, to the fullest
extent permitted by law, any objection the party may have to the laying of venue for any such suit,
action or proceeding brought in such court. If any one or more provisions of this Section 19 shall
for any reason be held invalid or unenforceable, it is the specific intent of the parties that such
provisions shall be modified to the minimum extent necessary to make it or its application valid
and enforceable.

     20. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown in these instruments, or to such other address
as such party may designate in writing from time to time to the other party.

     21. Confidentiality. The Company shall provide to the Grantee, during the period the
Option is outstanding, copies of financial statements of the Company at least annually. The
Grantee understands and agrees that such financial statements are confidential and shall not be
disclosed by the Grantee, to any entity or person, for any reason, at any time, without the prior
written consent of the Company, unless required by law. If disclosure of such financial statements
is required by law, whether through subpoena, request for production, deposition, or otherwise, the
Grantee promptly shall provide written notice to Company, including copies of the subpoena, request
for production, deposition, or otherwise, within five (5) business days of their receipt by the
Grantee and prior to any disclosure so as to provide Company an opportunity to move to quash or
otherwise to oppose the disclosure. Notwithstanding the foregoing, the Grantee may disclose the
terms of such financial statements to his or her spouse or domestic partner, and for legitimate
business reasons, to legal, financial, and tax advisors.

END OF AGREEMENT

8

 

EXHIBIT A

SONICS, INC.

2007 STOCK INCENTIVE PLAN

EXERCISE NOTICE

                    

Attention: Secretary

     1. Effective as of today,                     , the undersigned (the “Grantee”) hereby elects to
exercise the Grantee’s option to purchase                                 shares of the Common Stock (the “Shares”) of
Sonics, Inc., (the “Company”) under and pursuant to the Company’s 2007 Stock Incentive Plan, as
amended from time to time (the “Plan”) and the [ ] Incentive [ ] Non-Qualified Stock Option Award
Agreement (the “Option Agreement”) and Notice of Stock Option Award (the “Notice”) dated
                    ,                     . Unless otherwise defined herein, the terms defined in the Plan shall
have the same defined meanings in this Exercise Notice.

     2. Representations of the Grantee. The Grantee acknowledges that the Grantee has
received, read and understood the Notice, the Plan and the Option Agreement and agrees to abide by
and be bound by their terms and conditions.

     3. Rights as Shareholder. Until the stock certificate evidencing such Shares is
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 stock certificate 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 stock certificate is issued, except as provided in Section 10 of the Plan.

     The Grantee shall enjoy rights as a shareholder until such time as the Grantee disposes of the
Shares or the Company and/or its assignee(s) exercises the Right of First Refusal. Upon such
exercise, the Grantee shall have no further rights as a holder of the Shares so purchased except
the right to receive payment for the Shares so purchased in accordance with the provisions of the
Option Agreement, and the Grantee shall forthwith cause the certificate(s) evidencing the Shares so
purchased to be surrendered to the Company for transfer or cancellation.

     4. Delivery of Payment. The Grantee herewith delivers to the Company the full
Exercise Price for the Shares, which, to the extent selected, shall be deemed to be satisfied by
use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in
Section 4(d) of the Option Agreement.

     5. Tax Consultation. The Grantee understands that the Grantee may suffer adverse tax
consequences as a result of the Grantee’s purchase or disposition of the Shares. The Grantee
represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in
connection with the purchase or disposition of the Shares and that the Grantee is not relying on
the Company for any tax advice.

1

 

     6. Taxes. The Grantee agrees to satisfy all applicable federal, state and local
income and employment tax withholding obligations and herewith delivers to the Company the full
amount of such obligations or has made arrangements acceptable to the Company to satisfy such
obligations. In the case of an Incentive Stock Option, the Grantee also agrees, as partial
consideration for the designation of the Option as an Incentive Stock Option, to notify the Company
in writing within thirty (30) days of any disposition of any shares acquired by exercise of the
Option if such disposition occurs within two (2) years from the Date of Award or within one (1)
year from the date the Shares were transferred to the Grantee.

     7. Restrictive Legends. The Grantee understands and agrees that the Company shall
cause the legends set forth below or legends substantially equivalent thereto, to be placed upon
any certificate(s) evidencing ownership of the Shares together with any other legends that may be
required by the Company or by state or federal securities laws:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE “ACT”) OR ANY STATE SECURITIES LAWS AND
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR, IN THE
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS IN
COMPLIANCE THEREWITH.

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
RESTRICTIONS ON TRANSFER AND A RIGHT OF FIRST REFUSAL HELD BY THE
ISSUER OR ITS ASSIGNEE(S) AS SET FORTH IN THE OPTION AGREEMENT
BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES, A COPY
OF WHICH MAY BE OBTAINED AT THE PRINCIPAL OFFICE OF THE ISSUER.
SUCH TRANSFER RESTRICTIONS AND RIGHT OF FIRST REFUSAL ARE BINDING ON
TRANSFEREES OF THESE SHARES.

     8. Successors and Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this agreement shall inure to the benefit of
the successors and assigns of the Company. Subject to the restrictions on transfer herein set
forth, this Exercise Notice shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and assigns.

     9. Construction. The captions used in this Exercise Notice are inserted for
convenience and shall not be deemed a part of this agreement for construction or interpretation.
Except when otherwise indicated by the context, the singular shall include the plural and the
plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless
the context clearly requires otherwise.

2

 

     10. Administration and Interpretation. The Grantee hereby agrees that any question or
dispute regarding the administration or interpretation of this Exercise Notice shall be submitted
by the Grantee or by the Company to the Administrator. The resolution of such question or dispute
by the Administrator shall be final and binding on all persons.

     11. Governing Law; Severability. This Exercise Notice is to be construed in
accordance with and governed by the internal laws of the State of California without giving effect
to any choice of law Rule that would cause the application of the laws of any jurisdiction other
than the internal laws of the State of California to the rights and duties of the parties. Should
any provision of this Exercise Notice be determined by a court of law to be illegal or
unenforceable, such provision shall be enforced to the fullest extent allowed by law and the other
provisions shall nevertheless remain effective and shall remain enforceable.

     12. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown below beneath its signature, or to such other
address as such party may designate in writing from time to time to the other party.

     13. Further Instruments. The parties agree to execute such further instruments and to
take such further action as may be reasonably necessary to carry out the purposes and intent of
this agreement.

     14. Entire Agreement. The Notice, the Plan and the Option Agreement are incorporated
herein by reference and together with this Exercise Notice 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 the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing
signed by the Company and the Grantee. Nothing in the Notice, the Plan, the Option Agreement and
this Exercise Notice (except as expressly provided therein) is intended to confer any rights or
remedies on any persons other than the parties.

	 	 	 	 	 	 	 	 	 
	Submitted by:	 	 	 	Accepted by:
	 
	 	 	 	 	 	 	 	 
	GRANTEE:
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	(Signature)
	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Address:	 	 	 	Address:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

3

 

EXHIBIT B

SONICS, INC.

2007 STOCK INCENTIVE PLAN

INVESTMENT REPRESENTATION STATEMENT

	 	 	 	 	 
	GRANTEE:

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	COMPANY:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	SECURITY:

	 	COMMON STOCK	 	 
	 
	 	 	 	 
	AMOUNT:
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	DATE:
	 	 	 	 
	 

	 	 	 	 

In connection with the purchase of the above-listed Securities, the undersigned Grantee represents
to the Company the following:

          (a) Grantee is aware of the Company’s business affairs and financial condition and has
acquired sufficient information about the Company to reach an informed and knowledgeable decision
to acquire the Securities. Grantee is acquiring these Securities for investment for Grantee’s own
account only and not with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

          (b) Grantee acknowledges and understands that the Securities constitute “restricted
securities” under the Securities Act and have not been registered under the Securities Act in
reliance upon a specific exemption therefrom, which exemption depends upon among other things, the
bona fide nature of Grantee’s investment intent as expressed herein. Grantee further understands
that the Securities must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Grantee further acknowledges
and understands that the Company is under no obligation to register the Securities. Grantee
understands that the certificate evidencing the Securities will be imprinted with a legend which
prohibits the transfer of the Securities unless they are registered or such registration is not
required in the opinion of counsel satisfactory to the Company.

          (c) Grantee is familiar with the provisions of Rule 701 and Rule 144, each promulgated under
the Securities Act, which, in substance, permit limited public resale of “restricted securities”
acquired, directly or indirectly from the issuer thereof, in a non-public offering subject to the
satisfaction of certain conditions. Rule 701 provides that if the issuer qualifies under Rule 701
at the time of the grant of the Option to the Grantee, the exercise will be exempt from
registration under the Securities Act. In the event the Company becomes subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, ninety (90) days
thereafter (or such longer period as any market stand-off agreement may require) the Securities
exempt under Rule 701 may be resold, subject to the satisfaction of certain of the conditions
specified by Rule 144, including: (1) the resale being made through a broker in an unsolicited
“broker’s transaction” or in transactions directly with a market maker (as said term is defined
under the Securities Exchange Act of 1934); and, in the case of an affiliate, (2) the

1

 

availability of certain public information about the Company, (3) the amount of Securities
being sold during any three month period not exceeding the limitations specified in Rule 144(e),
and (4) the timely filing of a Form 144, if applicable.

     In the event that the Company does not qualify under Rule 701 at the time of grant of the
Option, then the Securities may be resold in certain limited circumstances subject to the
provisions of Rule 144, which requires the resale to occur not less than one year after the later
of the date the Securities were sold by the Company or the date the Securities were sold by an
affiliate of the Company, within the meaning of Rule 144; and, in the case of acquisition of the
Securities by an affiliate, or by a non-affiliate who subsequently holds the Securities less than
two (2) years, the satisfaction of the conditions set forth in sections (1), (2), (3) and (4) of
the paragraph immediately above.

          (d) Grantee further understands that in the event all of the applicable requirements of Rule
701 or 144 are not satisfied, registration under the Securities Act, compliance with Regulation A,
or some other registration exemption will be required; and that, notwithstanding the fact that
Rules 144 and 701 are not exclusive, the Staff of the Securities and Exchange Commission has
expressed its opinion that persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rules 144 or 701 will have a substantial burden
of proof in establishing that an exemption from registration is available for such offers or sales,
and that such persons and their respective brokers who participate in such transactions do so at
their own risk. Grantee understands that no assurances can be given that any such other
registration exemption will be available in such event.

          (e) Grantee represents that Grantee is a resident of the state of                     .

	 	 	 	 	 	 	 
	 	 	Signature of Grantee:
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	Date:	 	 	 	 
	 

	 	 	 	 	 	 

2

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