Document:

exv10w18

Exhibit 10.18

NOTICE OF GRANT OF RESTRICTED STOCK AWARD

PRIMO WATER CORPORATION

2010 OMNIBUS LONG-TERM INCENTIVE PLAN

     FOR GOOD AND VALUABLE CONSIDERATION, Primo Water Corporation (the “Company”) hereby grants,
pursuant to the provisions of the Company’s 2010 Omnibus Long-Term Incentive Plan (the “Plan”), to
the Grantee designated in this Notice of Grant of Restricted Stock Award (the “Notice”) the number
of shares of the Common Stock of the Company set forth in the Notice, subject to certain
restrictions as outlined below in this Notice and the additional provisions set forth in the
attached Terms and Conditions of Restricted Stock Award (collectively, the “Agreement”).

	 	 	 

	Grantee:

	 	[                    ]
	 
	 	 
	Grant Date:

	 	[                    ]

	 	 	 

	#
of Shares of Restricted Stock:
   [                    ]

Purchase Price: The Grantee is not required to pay any cash Purchase Price for the Restricted
Shares. The Grantee’s service to the Company during the Restricted Period is deemed to be the
consideration for the Restricted Shares.

Vesting Schedule: Subject to the provisions contained in Paragraphs 4, 5 and 6 of the Terms and
Conditions, this Restricted Stock Award shall vest, and the applicable Restrictions set forth in
the Terms and Conditions shall lapse, in accordance with the following schedule, in the event the
Grantee does not have a Separation from Service prior to the applicable vesting date:

	 	 	 

	Date of Vesting
	 	Cumulative Amount Vested
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

Acceleration of Vesting: Notwithstanding the foregoing Vesting Schedule, the Restricted Stock Award
shall be deemed fully vested and no longer subject to forfeiture in the event of the Grantee’s
death or Disability. Further, vesting of the Restricted Stock Award shall be accelerated in
accordance with the terms of any applicable employment, change in control or similar agreement
between the Grantee and the Company or an Affiliate which is in effect during the Restricted Period
(the “Employment Agreement”).

By signing below, the Grantee agrees that this Restricted Stock Award is granted under and governed
by the terms and conditions of the Company’s 2010 Omnibus Long-Term Incentive Plan and the attached
Terms and Conditions.

	 	 	 	 	 	 	 	 	 

	 

	 	 	 	 	 	 	 	 
	Grantee	 	Primo Water Corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	Title:	 	 	 
	 

	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	Date:	 	 	 
	 

	 	 
	 	 	 	 	 	 

 

TERMS AND CONDITIONS OF RESTRICTED STOCK AWARD

The Restricted Stock Award granted to the Grantee and described in the Notice of Grant is subject
to the terms and conditions of the Plan, which is incorporated by reference in its entirety into
these Terms and Conditions of Restricted Stock Award.

The Board of Directors of the Company has authorized and approved the 2010 Omnibus Long-Term
Incentive Plan (the “Plan”), which has been approved by the stockholders of the Company. The
[Board/Committee] has approved an award to the Grantee of a number of shares of the Company’s
Common Stock, conditioned upon the Grantee’s acceptance of the provisions set forth in the Notice
and these Terms and Conditions within 60 days after the Notice and these Terms and Conditions are
presented to the Grantee for review. For purposes of the Notice and these Terms and Conditions,
any reference to the Company shall include a reference to any Affiliate.

	1.	 	Grant of Restricted Stock.

     (a) Subject to the terms and conditions of the Plan, as of the Grant Date, the Company
grants to the Grantee the number of shares of Common Stock set forth in the Notice (the
“Restricted Shares”), subject to the restrictions set forth in Paragraph 2 of these Terms
and Conditions, the provisions of the Plan and the other provisions contained in these Terms
and Conditions. If and when the restrictions set forth in Paragraph 2 expire in accordance
with these Terms and Conditions without forfeiture of the Restricted Shares, and upon the
satisfaction of all other applicable conditions as to the Restricted Shares, such shares
shall no longer be considered Restricted Shares for purposes of these Terms and Conditions.

     (b) As soon as practicable after the Grant Date, the Company shall direct that a stock
certificate or certificates representing the applicable Restricted Shares be registered in
the name of and issued to the Grantee. Such certificate or certificates shall be held in
the custody of the Company or its designee until the expiration of the applicable Restricted
Period (as defined in Paragraph 3). Upon the request of the Company, the Grantee shall
deliver to the Company one or more stock powers endorsed in blank relating to the Restricted
Shares.

     (c) Except as provided in Paragraph 1(d), in the event that a certificate for the
Restricted Shares is delivered to the Grantee, such certificate shall bear the following
legend (the “Legend”):

The ownership and transferability of this certificate and the shares
of stock represented hereby are subject to the terms and conditions
(including forfeiture) of the Primo Water Corporation 2010 Omnibus
Long-Term Incentive Plan and a Restricted Stock Award Notice entered
into between the registered owner and Primo Water Corporation.
Copies of such Plan and Notice are on file in the executive offices
of Primo Water Corporation.

In addition, the stock certificate or certificates for the Restricted Shares shall be
subject to such stop-transfer orders and other restrictions as the Company may deem
advisable under the rules, regulations, and other requirements of the Securities and
Exchange Commission, any stock exchange upon which the Common Stock is then listed, and any
applicable federal or state securities law, and the Company may cause a legend or legends to
be placed on such certificate or certificates to make appropriate reference to such
restrictions.

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     (d) As soon as administratively practicable following the expiration of the Restricted
Period without a forfeiture of the Restricted Shares, and upon the satisfaction of all other
applicable conditions as to the Restricted Shares, including, but not limited to, the
payment by the Grantee of all applicable withholding taxes, the Company shall deliver or
cause to be delivered to the Grantee a certificate or certificates for the applicable
Restricted Shares which shall not bear the Legend.

     (e) Notwithstanding the foregoing, to the extent that this Agreement or the Plan
provide for or otherwise refer to issuance of certificates to reflect the transfer of shares
of Common Stock pursuant to the terms of this Award, the transfer of such shares may be
effected, in the Company’s discretion, on a book entry or such other noncertificated basis,
to the extent not prohibited by applicable law or the rules of any stock exchange on which
such shares are listed.

	2.	 	Restrictions.

     (a) The Grantee shall have all rights and privileges of a stockholder as to the
Restricted Shares, including the right to vote [and receive dividends or other
distributions] with respect to the Restricted Shares, except that the following restrictions
shall apply:

     (i) the Grantee shall not be entitled to delivery of the certificate or
certificates for the Restricted Shares until the expiration of the Restricted Period
without a forfeiture of the Restricted Shares and upon the satisfaction of all other
applicable conditions;

     (ii) none of the Restricted Shares may be sold, transferred, assigned, pledged
or otherwise encumbered or disposed of during the Restricted Period applicable to
such shares, except a transfer to a Family Member as provided in Section 17.12.2 of
the Plan or as otherwise permitted by the [Board/Committee] in its sole discretion
or pursuant to rules adopted by the [Board/Committee] in accordance with the Plan;
and

     (iii) all of the Restricted Shares shall be forfeited and returned to the
Company and all rights of the Grantee with respect to the Restricted Shares shall
terminate in their entirety on the terms and conditions set forth in Paragraph 4.

     (b) Any attempt to dispose of Restricted Shares or any interest in the Restricted
Shares in a manner contrary to the restrictions set forth in these Terms and Conditions
shall be void and of no effect.

	3.	 	Restricted Period and Vesting. The “Restricted Period” is the period beginning on
the Grant Date and ending on the date the Restricted Shares, or such applicable portion of the
Restricted Shares, are deemed vested under the schedule set forth in the Notice. The
Restricted Shares shall be deemed vested and no longer subject to forfeiture under Paragraph 4
in accordance with the vesting schedule set forth in the Notice.

	4.	 	Forfeiture.

     (a) Subject to Paragraph 6 below, if during the Restricted Period (i) the Grantee
incurs a Separation from Service, (ii) there occurs a material breach of the Notice or these
Terms and Conditions by the Grantee or (iii) the Grantee fails to meet the tax withholding
obligations described in Paragraph 5(b), all rights of the Grantee to the Restricted Shares
that have not vested in accordance with Paragraph 3 as of the date of such Separation from
Service (including pursuant to any applicable accelerated vesting provisions set forth in
the Notice) shall terminate immediately and be forfeited in their entirety.

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     (b) In the event of any forfeiture under this Paragraph 4, the certificate or
certificates representing the forfeited Restricted Shares shall be canceled to the extent of
any Restricted Shares that were forfeited.

	5.	 	Withholding.

     (a) The [Board/Committee] shall determine the amount of any withholding or other tax
required by law to be withheld or paid by the Company with respect to any income recognized
by the Grantee with respect to the Restricted Shares.

     (b) The Grantee shall be required to meet any applicable tax withholding obligation in
accordance with the provisions of Section 17.3 of the Plan.

     (c) Subject to any rules prescribed by the [Board/Committee], the Grantee shall have
the right to elect to meet any withholding requirement (i) by having withheld from this
Award at the appropriate time that number of whole shares of common stock whose Fair Market
Value is equal to the amount of any taxes required to be withheld with respect to such
Award, (ii) by direct payment to the Company in cash of the amount of any taxes required to
be withheld with respect to such Award or (iii) by a combination of shares and cash.

	6.	 	[Board/Committee] Discretion. Notwithstanding any provision of the Notice or these
Terms and Conditions to the contrary, the [Board/Committee] shall have discretion under the
Plan to waive any forfeiture of the Restricted Shares as set forth in Paragraph 4, the
Restricted Period and any other conditions set forth in the Notice or these Terms and
Conditions.

	7.	 	Defined Terms. Capitalized terms used but not defined in the Notice and Agreement
shall have the meanings set forth in the Plan, unless such term is defined in any Employment
Agreement. Any terms used in the Notice and Agreement, but defined in the Grantee’s
Employment Agreement are incorporated herein by reference and shall be effective for purposes
of the Notice and these Terms and Conditions without regard to the continued effectiveness of
such Employment Agreement.

	8.	 	Nonassignability. The Restricted Shares may not be sold, assigned, transferred
(other than by will or the laws of descent and distribution, or a transfer to a Family Member
as provided in Section 17.12.2 of the Plan), pledged, hypothecated, or otherwise encumbered or
disposed of until the restrictions on such Shares, as set forth in the Agreement, have lapsed
or been removed.

	9.	 	Grantee Representations. The Grantee hereby represents to the Company that the
Grantee has read and fully understands the provisions of the Notice, these Terms and
Conditions and the Plan and the Grantee’s decision to participate in the Plan is completely
voluntary. Further, the Grantee acknowledges that the Grantee is relying solely on his or her
own advisors with respect to the tax consequences of this restricted stock award.

	10.	 	Regulatory Restrictions on the Restricted Shares. Notwithstanding the other
provisions of this Agreement, the [Board/Committee] shall have the sole discretion to impose
such conditions, restrictions and limitations on the issuance of Common Stock with respect to
this Award unless and until the [Board/Committee] determines that such issuance complies with
(i) any applicable registration requirements under the Securities Act or the [Board/Committee]
has determined that an exemption therefrom is available, (ii) any applicable listing
requirement of any stock exchange on which the Common Stock is listed, (iii) any applicable
Company policy or administrative

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	 	 	rules, and (iv) any other applicable provision of state, federal or foreign law, including
foreign securities laws where applicable

	11.	 	Miscellaneous.

	 	11.1	 	Notices. All notices, requests, deliveries, payments, demands and
other communications which are required or permitted to be given under these Terms and
Conditions shall be in writing and shall be either delivered personally or sent by
registered or certified mail, or by private courier, return receipt requested, postage
prepaid to the parties at their respective addresses set forth herein, or to such other
address as either shall have specified by notice in writing to the other. Notice shall
be deemed duly given hereunder when delivered or mailed as provided herein.
	 
	 	11.2	 	Waiver. The waiver by any party hereto of a breach of any provision of
the Notice or these Terms and Conditions shall not operate or be construed as a waiver
of any other or subsequent breach.
	 
	 	11.3	 	Entire Agreement. These Terms and Conditions, the Notice, the Plan and
any applicable Employment Agreement constitute the entire agreement between the parties
with respect to the subject matter hereof.
	 
	 	11.4	 	Binding Effect; Successors. These Terms and Conditions shall inure to
the benefit of and be binding upon the parties hereto and to the extent not prohibited
herein, their respective heirs, successors, assigns and representatives. Nothing in
these Terms and Conditions, express or implied, is intended to confer on any person
other than the parties hereto and as provided above, their respective heirs,
successors, assigns and representatives any rights, remedies, obligations or
liabilities.
	 
	 	11.5	 	Governing Law. The Notice and these Terms and Conditions shall be
governed by and construed in accordance with the laws of the State of North Carolina
without giving effect to the principles of conflicts of law, provided that the
provisions set forth herein that are required to be governed by the Delaware General
Corporation Law shall be governed by such law.
	 
	 	11.6	 	Headings. The headings contained herein are for the sole purpose of
convenience of reference, and shall not in any way limit or affect the meaning or
interpretation of any of the terms or provisions of these Terms and Conditions.
	 
	 	11.7	 	Conflicts; Amendment. The provisions of the Plan are incorporated in
these Terms and Conditions in their entirety. In the event of any conflict between the
provisions of this Agreement and the Plan, the provisions of the Plan shall control.
Further, in the event of any conflict between the provisions of this Agreement and any
Employment Agreement, the provisions of such Employment Agreement shall control. The
Agreement may be amended at any time by the [Board/Committee], provided that no
amendment may, without the consent of the Grantee, materially impair the Grantee’s
rights with respect to the Restricted Stock Award.
	 
	 	11.8	 	No Right to Continued Employment. Nothing in the Notice or these Terms
and Conditions shall confer upon the Grantee any right to continue in the employ or
service of the Company or affect the right of the Company to terminate the Grantee’s
employment or service at any time.

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	 	11.9	 	Further Assurances. The Grantee agrees, upon demand of the Company or
the [Board/Committee], to do all acts and execute, deliver and perform all additional
documents, instruments and agreements which may be reasonably required by the Company
or the [Board/Committee], as the case may be, to implement the provisions and purposes
of the Notice and these Terms and Conditions and the Plan.

5exv10w19

Exhibit 10.19

PRIMO WATER CORPORATION

2010 EMPLOYEE STOCK PURCHASE PLAN

ARTICLE I

PURPOSE

     The purposes of this Primo Water Corporation 2010 Employee Stock Purchase Plan (the “Plan”)
are to assist Eligible Employees of the Company and its Subsidiaries in acquiring a stock ownership
interest in the Company pursuant to a plan which is intended to qualify as an “employee stock
purchase plan” within the meaning of Section 423(b) of the Code, and to help Eligible Employees
provide for their future security and to encourage them to remain in the employment of the Company
and its Subsidiaries.

ARTICLE II

DEFINITIONS AND CONSTRUCTION

     Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.

     2.1 “Administrator” means the entity that conducts the general administration of the Plan as
provided herein. The term “Administrator” shall refer to the Committee unless the Board has assumed
the authority for administration of the Plan generally as provided in Article 3.

     2.2 “Board” shall mean the Board of Directors of the Company.

     2.3 “Change in Control” means and includes each of the following:

     (a) Any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act (a “Person”) becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of either (i) the then-outstanding shares of
common stock of the Company (the “Outstanding Company Common Stock”) or (ii) the combined voting
power of the then-outstanding voting securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”); provided, however, that, for
purposes of this Section 2.3, the following acquisitions shall not constitute a Change of Control:
(A) any acquisition directly from the Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company
or any Parent or Subsidiary, (D) any acquisition pursuant to a transaction that complies with
Sections 2.3(c)(i), 2.3(c)(ii) and 2.3(c)(iii); or

     (b) Individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease
for any reason to constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as though such individual was a
member of the Incumbent Board, but excluding, for this purpose, any such

 

 

individual whose initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the Board; or

     (c) Consummation of a reorganization, merger, statutory share exchange or consolidation or
similar transaction involving the Company or any of its Subsidiaries, a sale or other disposition
of all or substantially all of the assets of the Company, or the acquisition of assets or stock of
another entity by the Company or any of its Subsidiaries (each, a “Business Combination”), in each
case unless, following such Business Combination, (i) all or substantially all of the individuals
and entities that were the beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50% of the then-outstanding shares of common stock (or, for
a non-corporate entity, equivalent securities) and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the election of directors (or, for
a non-corporate entity, equivalent governing body), as the case may be, of the entity resulting
from such Business Combination (including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the Company’s assets either directly
or through one or more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding any
corporation resulting from such Business Combination or any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the then-outstanding shares of common
stock of the corporation resulting from such Business Combination or the combined voting power of
the then-outstanding voting securities of such corporation, except to the extent that such
ownership existed prior to the Business Combination, and (iii) at least a majority of the members
of the board of directors (or, for a non-corporate entity, equivalent governing body) of the entity
resulting from such Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board providing for such Business
Combination; or

     (d) Approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company.

     2.4 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the
regulations issued thereunder.

     2.5 “Committee” means the Compensation Committee of the Board, or such other committee as
determined by the Board. The Compensation Committee of the Board may, in its discretion, designate
a subcommittee of its members to serve as the Committee (to the extent the Board has not designated
another person, committee or entity as the Committee). Following the Company’s initial public
offering, (i) the Board will cause the Committee to satisfy the applicable requirements of any
stock exchange on which the Common Stock may then be listed; and (ii) “Committee” means all of the
members of the Compensation Committee who are “non-employee directors” within the meaning of Rule
16b-3 adopted under the Exchange Act.

     2.6 “Company” shall mean Primo Water Corporation, a Delaware corporation, or any successor
corporation.

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     2.7 “Compensation” of an Eligible Employee shall mean the gross base compensation received by
such Eligible Employee as compensation for services to the Company or any Designated Subsidiary,
excluding overtime payments, sales commissions, incentive compensation, bonuses, expense
reimbursements, fringe benefits and other special payments.

     2.8 “Designated Subsidiary” shall mean any Subsidiary designated by the Administrator in
accordance with Section 3.3(ii).

     2.9 “Eligible Employee” shall mean an Employee of the Company or a Designated Subsidiary: (i)
who does not, immediately after any rights under this Plan are granted, own (directly or through
attribution) stock possessing 5% or more of the total combined voting power or value of all classes
of Stock or other stock of the Company, a Parent or a Subsidiary (as determined under Section
423(b)(3) of the Code); (ii) whose customary employment is for more than twenty hours per week; and
(iii) whose customary employment is for more than five months in any calendar year; provided,
however, that the Administrator may provide in an Offering Document that (x) Employees who are
highly compensated employees within the meaning of Section 423(b)(4)(D) of the Code, and/or (y)
Employees who have not met a service requirement designated by the Administrator pursuant to
Section 423(b)(4)(A) of the Code (which service requirement may not exceed two years), shall not be
eligible to participate in an Offering Period. For purposes of clause (i) above, the rules of
Section 424(d) of the Code with regard to the attribution of stock ownership shall apply in
determining the stock ownership of an individual, and stock which an Employee may purchase under
outstanding options shall be treated as stock owned by the Employee. For purposes of the Plan, the
employment relationship shall be treated as continuing intact while the individual is on sick leave
or other leave of absence approved by the Company or a Designated Subsidiary and meeting the
requirements of Treasury Regulation Section 1.421-7(h)(2).

     In addition, “Eligible Employee” shall not include any Employee of a Designated Subsidiary who
is a citizen or resident of a foreign jurisdiction if the grant of a right to purchase Stock under
the Plan to such Employee would be prohibited under the laws of such foreign jurisdiction or the
grant of an option to such Employee in compliance with the laws of such foreign jurisdiction would
cause the Plan to violate the requirements of Section 423 of the Code, as determined by the
Administrator in its sole discretion.

     2.10 “Employee” means any officer or other employee (as defined in accordance with Section
3401(c) of the Code) of the Company or any Designated Subsidiary.

     2.11 “Enrollment Date” shall mean the first day of each Offering Period.

     2.12 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

     2.13 “Fair Market Value” of a share of Stock as of a particular date shall mean (1) if the
Stock is listed on a national securities exchange, the closing or last price of the Stock on the
composite tape or other comparable reporting system for the applicable date, or if the applicable
date is not a trading day, the trading day immediately preceding the applicable date, or (2) if the
shares of Stock are not then listed on a national securities exchange, or the value of such shares
is not otherwise determinable, such value as determined by the Board in good faith in its sole
discretion (but in any event not less than fair market value within the meaning of Section 409A).

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     2.14 “Offering Document” shall have the meaning given to such term in Section 5.1.

     2.15 “Offering Period” shall mean each Offering Period designated by the Administrator in the
applicable Offering Document pursuant to Section 5.1.

     2.16 “Parent” means any corporation, other than the Company, in an unbroken chain of
corporations ending with the Company if, at the time of the determination, each of the corporations
other than the Company owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

     2.17 “Participant” means any Eligible Employee who has executed a participation agreement and
been granted rights to purchase Stock pursuant to the Plan.

     2.18 “Plan” shall mean this Primo Water Corporation 2010 Employee Stock Purchase Plan, as it
may be amended from time to time.

     2.19 “Public Trading Date” shall mean the first date upon which the Company is subject to the
reporting requirements of Section 13 or 15(d)(2) of the Exchange Act.

     2.20 “Purchase Date” shall mean the last day of each Purchase Period.

     2.21 “Purchase Period” shall mean each Purchase Period designated by the Administrator in the
applicable Offering Document pursuant to Section 5.1. A new Purchase Period will begin on the day
immediately following a Purchase Date.

     2.22 “Purchase Price” shall mean the purchase price designated by the Administrator in the
applicable Offering Document (which purchase price shall not be less than 85% of the Fair Market
Value of a share of Stock on the Enrollment Date or on the Purchase Date, whichever is lower);
provided, however, that, in the event no purchase price is designated by the Administrator in the
applicable Offering Document, the purchase price for the Offering Periods covered by such Offering
Document shall be 85% of the Fair Market Value of a share of Stock on the Enrollment Date or on the
Purchase Date, whichever is lower); provided, further, that the Purchase Price may be adjusted by
the Administrator pursuant to Article 9; provided, further, that the Purchase Price shall not be
less than the par value of a share of Stock.

     2.23 “Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

     2.24 “Stock” means a share of common stock of the Company, par value $0.001 per share.

     2.25 “Subsidiary” shall mean any corporation, other than the Company, in an unbroken chain of
corporations beginning with the Company if, at the time of the determination, each of the
corporations other than the last corporation in an unbroken chain owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of the other corporations in such
chain.

ARTICLE III

ADMINISTRATION

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     3.1 Administrator. The Administrator of the Plan shall be the Committee. Appointment
of Committee members shall be effective upon acceptance of appointment. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan.

     3.2 Authority of Administrator. The Administrator shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:

     (i) To determine when and how rights to purchase stock of the Company shall be granted and the
provisions of each offering of such rights (which need not be identical).

     (ii) To designate from time to time which Subsidiaries of the Company shall be Designated
Subsidiaries, which designation may be made without the approval of the stockholders of the
Company.

     (iii) To construe and interpret the Plan and rights granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Administrator, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the extent
it shall deem necessary or expedient to make the Plan fully effective.

     (iv) To amend the Plan as provided in Article 10.

     (v) Generally, to exercise such powers and to perform such acts as the Administrator deems
necessary or expedient to promote the best interests of the Company and its Subsidiaries and to
carry out the intent that the Plan be treated as an “employee stock purchase plan” within the
meaning of Section 423 of the Code.

     3.4 Decisions Binding. The Administrator’s interpretation of the Plan, any rights
granted pursuant to the Plan, any participation agreement and all decisions and determinations by
the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

ARTICLE IV

SHARES SUBJECT TO THE PLAN

     4.1 Number of Shares. Subject to Article 9, the aggregate number of shares of Stock
which may be issued pursuant to rights granted under the Plan shall be 250,000 shares. Any Stock
distributed pursuant to the Plan may consist, in whole or in part, of authorized and unissued
Stock, treasury stock or Stock purchased on the open market.

ARTICLE V

OFFERING PERIODS; OFFERING DOCUMENTS; PURCHASE DATES

     5.1 Offering Periods. The Administrator may from time to time grant or provide for the
grant of rights to purchase Stock of the Company under the Plan to Eligible Employees during one or
more periods (each, an “Offering Period”) selected by the Administrator commencing on such dates
(each, an “Enrollment Date”) selected by the Administrator. The

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terms and conditions applicable to each Offering Period shall be set forth in an “Offering
Document” adopted by the Administrator, which Offering Document shall be in such form and shall
contain such terms and conditions as the Administrator shall deem appropriate and shall be
incorporated by reference into and made part of the Plan and shall be attached hereto as part of
the Plan. The Administrator shall establish in each Offering Document one or more dates during an
Offering Period (the “Purchase Date(s)”) on which rights granted under the Plan shall be exercised
and purchases of Stock carried out during such Offering Period in accordance with such Offering
Document and the Plan. The provisions of separate Offering Periods under the Plan need not be
identical.

     5.2 Offering Documents. Each Offering Document with respect to an Offering Period
shall specify (through incorporation of the provisions of this Plan by reference or otherwise):

          (i) the length of the Offering Period, which period shall not exceed twenty-seven (27) months;

          (ii) the Enrollment Date for such Offering Period;

          (iii) the Purchase Price for such Offering Period;

          (iv) the Purchase Date(s) during such Offering Period;

          (v) the maximum number of shares that may be purchased by any Eligible Employee during such
Offering Period, which, in the absence of a contrary designation by the Administrator, shall be
50,000 shares;

          (vi) in connection with each Offering Period that contains more than one Purchase Date, the
maximum aggregate number of shares which may be purchased by any Eligible Employee on any given
Purchase Date during the Offering Period; and

          (vii) such other provisions as the Administrator determines are appropriate, subject to the
Plan.

     5.3 Initial Offering Terms. The first Offering Period under the Plan (the “Initial
Offering”) shall be subject to the following terms and conditions:

          (i) The Initial Offering shall begin on the Public Trading Date and shall end on December 31,
2010.

          (ii) The Initial Offering shall consist of one Purchase Period with a Purchase Date of
December 31, 2010.

          (iii) The Purchase Price for the Initial Offering shall be 85% of the Fair Market Value of a
share of Stock on (A) the Public Trading Date or (B) the Purchase Date, whichever is lower, and in
each case rounded up to the nearest whole cent per share. For the Initial Offering, the Fair Market
Value of a share of Stock on the Public Trading Date shall be the price per share at which shares
are first sold to the public in the Company’s initial public offering as specified in the final
prospectus for that initial public offering.

          (iv) A Participant may increase the amount of the Participant’s payroll deductions to the Plan
(up to the maximum percentage permitted under Section 6.2) once during

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a Purchase Period and may decrease such deductions (including a decrease to zero percent (0%))
once during a Purchase Period. Any such change in participation level shall be made by delivering a
notice to the Company on a form approved by the Administrator.

     5.4 Subsequent Offerings. Subject to the Committee’s authority to terminate any
Offering Period or establish different terms for any Offering Period in accordance the provisions
of the Plan and an applicable Offering Document, a new Offering Period shall automatically begin
over the term of the Plan (each, a “Subsequent Offering”) subject to the following terms and
conditions:

          (i) Each Subsequent Offering shall start as of each January 1st, beginning with January 1,
2011.

          (ii) Each Subsequent Offering shall be approximately twelve (12) months in duration and shall
consist of two (2) Purchase Periods approximately six (6) months in length ending with Purchase
Dates on June 30 and December 31 of each year (or the nearest business day immediately prior to
each such dates).

          (iii) The Purchase Price for each Subsequent Offering shall be 85% of the Fair Market Value of
a share of Stock on (A) the Enrollment Date for such Offering Period, or (B) the Purchase Date,
whichever is lower, and in each case rounded up to the nearest whole cent per share.

          (iv) With respect to each Subsequent Offering, a Participant may increase the amount of the
Participant’s payroll deductions to the Plan (up to the maximum percentage permitted under Section
6.2) once during a Purchase Period and may decrease such deductions (including a decrease to zero
percent (0%)) once during a Purchase Period. Any such change in participation level shall be made
by delivering a notice to the Company on a form approved by the Administrator.

ARTICLE VI

PARTICIPATION

     6.1 Eligibility. Any Eligible Employee who shall be employed by the Company or a
Designated Subsidiary on the day immediately preceding a given Enrollment Date for an Offering
Period shall be eligible to participate in the Plan during such Offering Period, subject to the
requirements of this Article VI and the limitations imposed by Section 423(b) of the Code.

     6.2 Enrollment in Plan. Except as otherwise set forth in an Offering Document, an
Eligible Employee may become a Participant in the Plan for an Offering Period by delivering a
participation agreement to the Company prior to the Enrollment Date for such Offering Period (or
such other date specified in the Offering Document), in such form as the Administrator provides.
Each such agreement shall designate a whole percentage of such Eligible Employee’s Compensation to
be withheld by the Company or the Designated Subsidiary employing such Eligible Employee on each
payday during the Offering Period as payroll deductions under the Plan. An Eligible Employee may
designate any whole percentage of Compensation which is not less than 1% and not more than the
maximum percentage specified by the Administrator in the applicable Offering Document (which
percentage shall be 15% in the absence of any such

 - 7 - 

 

designation) as payroll deductions. The payroll deductions made for each Participant shall be
credited to an account for such Participant under the Plan and shall be deposited with the general
funds of the Company. A Participant may change the percentage of Compensation designated in his or
her participation agreement, subject to the limits of this Section 6.2, or may suspend his or her
payroll deductions, or may resume payroll deductions pursuant to a new participation agreement, at
any time during an Offering Period; provided, however, that the Administrator may limit the number
of changes a Participant may make to his or her payroll deduction elections during each Offering
Period and/or Purchase Period in the applicable Offering Document. Any such change, suspension or
resumption of payroll deductions shall be effective with the first full payroll period following
five business days after the Company’s receipt of the new participation agreement (or such shorter
or longer period as may be specified by the Administrator in the applicable Offering Document). In
the event a Participant suspends his or her payroll deductions, such Participant’s cumulative
payroll deductions prior to the suspension shall remain in his or her account and shall not be paid
to such Participant unless he or she withdraws from participation in the Plan pursuant to Article
8. Except as otherwise set forth in an Offering Document, a Participant may participate in the Plan
only by means of payroll deduction and may not make contributions by lump sum payment for any
Offering Period.

     6.3 Payroll Deductions. Except as otherwise provided in the applicable Offering
Document, payroll deductions for a Participant shall commence on the first payroll following the
Enrollment Date and shall end on the last payroll in the Offering Period to which such
authorization is applicable, unless sooner terminated by the Participant as provided in Article 8.

     6.4 Effect of Enrollment. A Participant’s completion of a participation agreement will
enroll such Participant in the Plan for each successive Purchase Period and each subsequent
Offering Period on the terms contained therein until the Participant either submits a new
participation agreement, withdraws from participation under the Plan as provided in Article 8 or
otherwise becomes ineligible to participate in the Plan.

     6.5 Limitation on Purchase of Stock. An Eligible Employee may be granted rights under
the Plan only if such rights, together with any other rights granted to such Eligible Employee
under an “employee stock purchase plan” of the Company, any Parent or any Subsidiary, as specified
by Section 423(b)(8) of the Code, do not permit such employee’s rights to purchase stock of the
Company or any Parent or Subsidiary to accrue at a rate which exceeds $25,000 of fair market value
of such stock (determined as of the first day of the Offering Period during which such rights are
granted) for each calendar year in which such rights are outstanding at any time. This limitation
shall be applied in accordance with Section 423(b)(8) of the Code.

     6.6 Decrease or Suspension of Payroll Deductions. Notwithstanding the foregoing, to
the extent necessary to comply with Section 423(b)(8) of the Code and Section 6.5 or the other
limitations set forth in this Plan, a Participant’s payroll deductions may be suspended by the
Administrator at any time during an Offering Period. The balance of the amount credited to the
account of each Participant which has not been applied to the purchase of shares of Stock by reason
of Section 423(b)(8) of the Code, Section 6.5 or the other limitations set forth in this Plan shall
be paid to such Participant in one lump sum in cash as soon as reasonably practicable after the
Purchase Date.

 - 8 - 

 

     6. Foreign Employees. In order to facilitate participation in the Plan, the
Administrator may provide for such special terms applicable to Participants who are citizens or
residents of a foreign jurisdiction, or who are employed by a Designated Subsidiary outside of the
United States, as the Administrator may consider necessary or appropriate to accommodate
differences in local law, tax policy or custom. Such special terms may not be more favorable than
the terms of rights granted under the Plan to Eligible Employees who are residents of the United
States. Moreover, the Administrator may approve such supplements to, or amendments, restatements or
alternative versions of, this Plan as it may consider necessary or appropriate for such purposes
without thereby affecting the terms of this Plan as in effect for any other purpose. No such
special terms, supplements, amendments or restatements shall include any provisions that are
inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended
to eliminate such inconsistency without further approval by the stockholders of the Company.

ARTICLE VII

GRANT AND EXERCISE OF RIGHTS

     7.1 Grant of Rights. On the Enrollment Date of each Offering Period, each Eligible
Employee participating in such Offering Period shall be granted a right to purchase the maximum
number of shares of Stock specified under Section 5.2(iv), subject to the limits in Section 6.5,
and shall have the right to buy, on each Purchase Date during such Offering Period (at the
applicable Purchase Price), such number of shares of the Company’s Stock as is determined by
dividing (a) such Participant’s payroll deductions accumulated prior to such Purchase Date and
retained in the Participant’s account as of the Purchase Date, by (b) the applicable Purchase
Price. The right shall expire on the last day of the Offering Period.

     7.2 Exercise of Rights. On each Purchase Date, each Participant’s accumulated payroll
deductions and any other additional payments specifically provided for in the applicable Offering
Document will be applied to the purchase of whole shares of Stock of the Company, up to the maximum
number of shares permitted pursuant to the terms of the Plan and the applicable Offering Document,
at the Purchase Price. No fractional shares shall be issued upon the exercise of rights granted
under the Plan, unless the Offering Document specifically provides otherwise. Any cash in lieu of
fractional shares of Stock remaining after the purchase of whole shares of Stock upon exercise of
purchase right will be credited to such Participant’s account and carried forward and applied
toward the purchase of whole shares of Stock for the next following Offering Period. Shares issued
pursuant to the Plan may be evidenced in such manner as the Committee may determine and may be
issued in certificated form or issued pursuant to book-entry procedures.

     7.3 Pro Rata Allocation of Shares. If the Administrator determines that, on a given
Purchase Date, the number of shares of Stock with respect to which rights are to be exercised may
exceed (i) the number of shares of Stock that were available for issuance under the Plan on the
Enrollment Date of the applicable Offering Period, or (ii) the number of shares of Stock available
for issuance under the Plan on such Purchase Date, the Administrator may in its sole discretion
provide that the Company shall make a pro rata allocation of the shares of Stock available for
purchase on such Enrollment Date or Purchase Date, as applicable, in as uniform a manner as shall
be practicable and as it shall determine in its sole discretion to be equitable

 - 9 - 

 

among all Participants for whom rights to purchase Stock are to be exercised pursuant to this
Article 7 on such Purchase Date, and shall either (x) continue all Offering Periods then in effect,
or (y) terminate any or all Offering Periods then in effect pursuant to Article 10. The Company may
make pro rata allocation of the shares available on the Enrollment Date of any applicable Offering
Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares
for issuance under the Plan by the Company’s stockholders subsequent to such Enrollment Date. The
balance of the amount credited to the account of each Participant which has not been applied to the
purchase of shares of Stock shall be paid to such Participant in one lump sum in cash as soon as
reasonably practicable after the Purchase Date.

     7.4 Withholding. At the time a Participant’s rights under the Plan are exercised, in
whole or in part, or at the time some or all of the Stock issued under the Plan is disposed of, the
Participant must make adequate provision for the Company’s federal, state, or other tax withholding
obligations, if any, which arise upon the exercise of the right or the disposition of the Stock. At
any time, the Company may, but shall not be obligated to, withhold from the Participant’s
compensation the amount necessary for the Company to meet applicable withholding obligations,
including any withholding required to make available to the Company any tax deductions or benefits
attributable to sale or early disposition of Stock by the Participant.

     7.5 Conditions to Issuance of Stock. The Company shall not be required to issue or
deliver any certificate or certificates for, or make any book entries evidencing, shares of Stock
upon the exercise of rights under the Plan prior to fulfillment of all of the following conditions:

          (a) The admission of such shares to listing on all stock exchanges, if any, on which the Stock
is then listed; and

          (b) The completion of any registration or other qualification of such shares under any state
or federal law or under the rulings or regulations of the Securities and Exchange Commission or any
other governmental regulatory body, which the Administrator shall, in its absolute discretion, deem
necessary or advisable; and

          (c) The obtaining of any approval or other clearance from any state or federal governmental
agency which the Administrator shall, in its absolute discretion, determine to be necessary or
advisable; and

          (d) The payment to the Company of all amounts which it is required to withhold under federal,
state or local law upon exercise of the rights, if any; and

          (e) The lapse of such reasonable period of time following the exercise of the rights as the
Administrator may from time to time establish for reasons of administrative convenience.

ARTICLE VIII

WITHDRAWAL; TERMINATION OF EMPLOYMENT OR ELIGIBILITY

     8.1 Withdrawal. A Participant may withdraw all but not less than all of the payroll
deductions credited to his or her account and not yet used to exercise his or her rights under the
Plan at any time by giving written notice to the Company in a form acceptable to the Administrator.
All of the Participant’s payroll deductions credited to his or her account during the Offering
Period shall be paid to such Participant as soon as reasonably practicable after

 - 10 - 

 

receipt of notice of withdrawal and such Participant’s rights for the Offering Period shall be
automatically terminated, and no further payroll deductions for the purchase of shares shall be
made for such Offering Period. If a Participant withdraws from an Offering Period, payroll
deductions shall not resume at the beginning of the next Offering Period unless the Participant
delivers to the Company a new participation agreement.

     8.2 Future Participation. A Participant’s withdrawal from an Offering Period shall not
have any effect upon his or her eligibility to participate in any similar plan which may hereafter
be adopted by the Company or a Designated Subsidiary or in subsequent Offering Periods which
commence after the termination of the Offering Period from which the Participant withdraws.

     8.3 Cessation of Eligibility. Upon a Participant’s ceasing to be an Eligible Employee,
for any reason, he or she shall be deemed to have elected to withdraw from the Plan pursuant to
this Article 8 and the payroll deductions credited to such Participant’s account during the
Offering Period shall be paid to such Participant or, in the case of his or her death, to the
person or persons entitled thereto under 13.4, as soon as reasonably practicable and such
Participant’s rights for the Offering Period shall be automatically terminated.

ARTICLE IX

ADJUSTMENTS UPON CHANGES IN STOCK

     9.1 Changes in Capitalization. Subject to Section 9.3, if (i) the number of
outstanding shares of Stock is increased or decreased or the shares of Stock are changed into or
exchanged for a different number or kind of shares or other securities of the Company on account of
any recapitalization, reclassification, stock split, reverse split, combination of shares, exchange
of shares, stock dividend or other distribution payable in capital stock, or other increase or
decrease in such shares effected without receipt of consideration by the Company occurring after
the Effective Date or (ii) there occurs any spin-off, split-up, extraordinary cash dividend or
other distribution of assets by the Company, the Administrator shall make such proportionate
adjustments, if any, as the Administrator in its discretion may deem appropriate to reflect such
change with respect to (a) the aggregate number and type of shares of Stock (or other securities or
property) that may be issued under the Plan (including, but not limited to, adjustments of the
limitations in Section 3.1 and the limitations established in each Offering Document pursuant to
Section 5.2 on the maximum number of shares of Stock that may be purchased); (b) the class(es) and
number of shares and price per share of Stock subject to outstanding rights; and (c) the Purchase
Price with respect to any outstanding rights.

     9.2 Other Adjustments. Subject to Section 9.3, in the event of any transaction or
event described in Section 9.1 or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the Company or any affiliate
(including without limitation any Change in Control), or of changes in applicable laws, regulations
or accounting principles, and whenever the Administrator determines that such action is appropriate
in order to prevent the dilution or enlargement of the benefits or potential benefits intended to
be made available under the Plan or with respect to any right under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or principles, the
Administrator, in its sole discretion and on such terms and conditions as it deems appropriate, is
hereby authorized to take any one or more of the following actions:

 - 11 - 

 

          (a) To provide for either (i) termination of any outstanding right in exchange for an amount
of cash, if any, equal to the amount that would have been obtained upon the exercise of such right
had such right been currently exercisable or (ii) the replacement of such outstanding right with
other rights or property selected by the Administrator in its sole discretion;

          (b) To provide that the outstanding rights under the Plan be assumed by the successor or
survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar
rights covering the stock of the successor or survivor corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and prices; and

          (d) To make adjustments in the number and type of shares of Stock (or other securities or
property) subject to outstanding rights under the Plan and/or in the terms and conditions of
outstanding rights and rights which may be granted in the future;

          (d) To provide that Participants’ accumulated payroll deductions may be used to purchase Stock
prior to the next occurring Purchase Date on such date as the Administrator determines in its sole
discretion and the Participants’ rights under the ongoing Offering Period(s) terminated; and

          (e) To provide that all outstanding rights shall terminate without being exercised.

     9.3 No Adjustment Under Certain Circumstances. No adjustment or action described in
this Article 9 or in any other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to fail to satisfy the requirements of Section 423 of the
Code.

     9.4 No Other Rights. Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend, any increase or decrease in the number of shares of stock of any class or
any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan,
no issuance by the Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award.

 - 12 - 

 

ARTICLE X

AMENDMENT, MODIFICATION AND TERMINATION

     10.1 Amendment, Modification and Termination. The Administrator may amend, suspend or
terminate the Plan at any time and from time to time; provided, however, that an amendment shall be
contingent on approval of the Company’s stockholders to the extent that it : (a) changes the
aggregate number or type of shares that may be sold pursuant to rights under the Plan under Section
4.1 (other than any adjustment as provided by Article 9); (b) changes the corporations or classes
of corporations whose employees may be granted rights under the Plan; or (c) changes the Plan in
any manner that would cause the Plan to no longer be an “employee stock purchase plan” within the
meaning of Section 423(b) of the Code.

     10.2 Rights Previously Granted. Except as provided in Article 9 or this Article 10, no
termination, amendment or modification may make any change in any right theretofore granted which
adversely affects the rights of any Participant without the consent of such Participant, provided
that an Offering Period may be terminated, amended or modified by the Administrator if the
Administrator determines that the termination of the Offering Period or the Plan is in the best
interests of the Company and its stockholders.

     10.3 Certain Changes to Plan. Without stockholder consent and without regard to
whether any Participant rights may be considered to have been adversely affected, to the extent
permitted by Section 423 of the Code, the Administrator shall be entitled to change the Offering
Periods, limit the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, permit payroll withholding in excess of the amount designated by a Participant in order to
adjust for delays or mistakes in the Company’s processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Stock for each Participant
properly correspond with amounts withheld from the Participant’s Compensation, and establish such
other limitations or procedures as the Administrator determines in its sole discretion advisable
which are consistent with the Plan.

ARTICLE XI

TERM OF PLAN

     The Plan shall be effective on the day prior to the Public Trading Date (the “Effective
Date”). The effectiveness of the Plan shall be subject to approval of the Plan by the stockholders
of the Company prior to the Effective Date. No right may be granted under the Plan prior to such
stockholder approval. The Plan shall be in effect until the tenth anniversary of the Effective
Date, unless sooner terminated under Article 10. No rights may be granted under the Plan during any
period of suspension of the Plan or after termination of the Plan.

 - 13 - 

 

ARTICLE XII

MISCELLANEOUS

     12.1 Restriction upon Assignment. A right granted under the Plan shall not be
transferable other than by will or the laws of descent and distribution, and is exercisable during
the Participant’s lifetime only by the Participant. Except as provided in Section 12.4 hereof, a
right under the Plan may not be exercised to any extent except by the Participant. The Company
shall not recognize and shall be under no duty to recognize any assignment or alienation of the
Participant’s interest in the Plan, the Participant’s rights under the Plan or any rights
thereunder.

     12.2 Rights as a Stockholder. With respect to shares of Stock subject to a right
granted under the Plan, a Participant shall not be deemed to be a stockholder of the Company, and
the Participant shall not have any of the rights or privileges of a stockholder, until such shares
have been issued to the Participant or his or her nominee following exercise of the Participant’s
rights under the Plan. No adjustments shall be made for dividends (ordinary or extraordinary,
whether in cash, securities, or other property) or distribution or other rights for which the
record date occurs prior to the date of such issuance, except as otherwise expressly provided
herein.

     12.3 Interest. No interest shall accrue on the payroll deductions or lump sum
contributions of a Participant under the Plan.

     12.4 Designation of Beneficiary.

          (a) A Participant may, in the manner determined by the Administrator, file a written
designation of a beneficiary who is to receive any shares and cash, if any, from the Participant’s
account under the Plan in the event of such Participant’s death subsequent to a Purchase Date on
which the Participant’s rights are exercised but prior to delivery to such Participant of such
shares and cash. In addition, a Participant may file a written designation of a beneficiary who is
to receive any cash from the Participant’s account under the Plan in the event of such
Participant’s death prior to exercise of the Participant’s rights under the Plan. If the
Participant is married and resides in a community property state, a designation of a person other
than the Participant’s spouse as his or her beneficiary shall not be effective without the prior
written consent of the Participant’s spouse.

          (b) Such designation of beneficiary may be changed by the Participant at any time by written
notice to the Company. In the event of the death of a Participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such Participant’s
death, the Company shall deliver such shares and/or cash to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to
the spouse or to any one or more dependents or relatives of the Participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the Company may
designate.

     12.5 Notices. All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given when received in the
form specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.

 - 14 - 

 

     12.6 Equal Rights and Privileges. Subject to Section 6.7, all Eligible Employees of
the Company or any Designated Subsidiary will have equal rights and privileges under this Plan so
that this Plan qualifies as an “employee stock purchase plan” within the meaning of Section 423 of
the Code. Subject to Section 6.7, any provision of this Plan that is inconsistent with Section 423
of the Code will, without further act or amendment by the Company, the Board or the Administrator,
be reformed to comply with the equal rights and privileges requirement of Section 423 of the Code.

     12.7 Use of Funds. All payroll deductions received or held by the Company under the
Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated
to segregate such payroll deductions.

     12.8 Reports. Statements of account shall be given to participating Employees at least
annually, which statements shall set forth the amounts of payroll deductions, the Purchase Price,
the number of shares purchased and the remaining cash balance, if any.

     12.9 No Employment Rights. Nothing in the Plan shall be construed to give any person
(including any Eligible Employee or Participant) the right to remain in the employ of the Company
or any Parent or Subsidiary or to affect the right of the Company or any Parent or Subsidiary to
terminate the employment of any person (including any Eligible Employee or Participant) at any
time, with or without cause.

     12.10 Notice of Disposition of Shares. Each Participant shall give prompt notice to
the Company of any disposition or other transfer of any shares of stock purchased upon exercise of
a right under the Plan if such disposition or transfer is made: (a) within two years from the
Enrollment Date of the Offering Period in which the shares were purchased or (b) within one year
after the Purchase Date on which such shares were purchased. Such notice shall specify the date of
such disposition or other transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by the Participant in such disposition or other transfer.

     12.11 Governing Law. The validity and enforceability of this Plan shall be governed by
and construed in accordance with the laws of the State of North Carolina without giving effect to
the principles of conflicts of law, provided that the provisions set forth herein that are required
to be governed by the Delaware General Corporation Law shall be governed by such law.

 - 15 -

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