Document:

Ex-4.1 Specimen Stock Certificate

 

	Stock Certificate Cusip 052660 10 7

 

 

     The Corporation is authorized to issue more than one class or series of stock. The
Corporation will furnish without charge to each stockholder who so requests a statement of the
powers, designations, preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.

     The following abbreviations, when used in the inscription on the face of this certificate, shall be
construed as though they were written out in full according to applicable laws or regulations:

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TEN COM	 	—	 	as tenants in commn	 	 	 	UNIF GIFT MIN ACT —	 	                                        	 	Custodian	 	                                        
	TEN ENT	 	—	 	as tenants by the entireties	 	 	 	 	 	(Cust)
	 	 	 	(Minor)
	JT TEN	 	—	 	as joint tenants with right of survivorship and not as tenants in common	 	 	 	 	 	under unifrom gifts to minors	 	 
	 

	 	 	 	 	 	 	 	 	Act	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	(State)
	 	 

Additional abbreviations may also be used though not in the above list.

For value received,                                          hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE

 

 

 

 

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

 

 

 

	 	 	 
	 

	 	shares
	 	 	 
	of the capital stock represented by the within Certificate, and do hereby irrevocably constitute and appoint

	 	 	 
	 

	 	Attorney
	 	 	 
	to transfer the said stock on the books of the within named Corporation with full
power of substitution in the premises.

Dated                                         

	 	 	 
	 
	 	 
	 	 	 
	NOTICE:

	 	THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.

Signature(s) Guaranteed:

	 	 	 
	 
	 	 
	 	 	 
	THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE
GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS
AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE
MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.Ex-10.10.1 Amendment to Larsen Employment Agreemen

 

EXHIBIT 10.10.1

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

     This First Amendment to Employment Agreement effective as of June 7, 2007 is
between AuthenTec, Inc., a Delaware corporation (the “Company”), and Gary R. Larsen (“Employee” or
“Player”) and modifies that Employment Agreement entered into between the parties and having an
effective date of December 12, 2006 (the “Agreement”). AuthenTec and Player agree as follows:

	1.	 	Paragraph 2.(b)(ii)(B)(I) is deleted from the Agreement in its entirety and replaced with:

	 	(I)	 	Payment in an aggregate amount equal to nine (9) months of Player’s
then-applicable annual Base Compensation, plus an amount equal to 9/12ths of Player’s
annual bonus as most recently paid by the Company for the period immediately preceding
the year of termination, if any such bonus was achieved, less applicable withholding,
payable as a lump sum in Player’s final paycheck.
	 
	 	 	 	Payment in an aggregate amount equal to nine (9) months of the COBRA costs associated
with continuation of benefits under the Company’s player healthcare benefit plans
(medical, dental, prescription) in which Player participated immediately prior to
Player’s termination of employment. Payment will be made to the Player as part of
Player’s final paycheck.

	2.	 	Paragraph 2.(b)(ii)(B)(III) is deleted from the Agreement in its entirety and replaced
with:

	 	(III)	 	If, employment is terminated Without Cause by the Company or for Good Reason by
the Player at any time after the date hereof, and within twelve (12) months after a
Change in Control, then Player is entitled to additional vesting of all stock option
awards granted to the Player under each stock incentive plan of the Company, such vesting
shall be credited as of the date of employment termination such that Player will vest
with respect to that number of additional shares that would have vested through the
second anniversary of the Change of Control. For example, if Player is terminated within
six months of the Change of Control, then Player’s options would vest with respect to an
additional 18 months.
	 
	 	 	 	The options so vested shall remain exercisable until the later of (i) 90 days after the
date the exercise period otherwise terminates or (ii) December 31 of the year in which
the exercise period otherwise would terminate; provided, however, that to the extent any
stock options are “incentive stock options”, such options shall cease to be “incentive
stock options”. The parties acknowledge and agree that this letter serves to amend the
applicable stock option grant agreements to comport with the provisions set forth
herein.

 

 

	3.	 	The following paragraph will be inserted in the Agreement after Paragraph 4(f) (ii):

	 	(iii)	 	If the Company shall fail to make the payments provided for herein and is in
breach hereof at the time of termination (no inference being created that the Company
shall have any right to withhold payment), Player shall be entitled to retain counsel at
the Company’s expense to receive advice regarding Player’s rights hereunder; the Company
also agrees to advance as incurred (upon receipt of Player’s undertaking to repay if the
Company shall prevail in the arbitration) the reasonable fees and expenses of counsel for
such advice or for bringing or defending any proceedings arising directly or indirectly
out of this agreement. Player shall also be entitled to receive interest (at the Wall
Street Journal prime rate) on any overdue payments of severance compensation (accruing
from the tenth day after termination) or expenses hereunder.

	4.	 	Notwithstanding anything in this letter agreement to the contrary, if the Player remains in
the continuous employment of the Company for a period of twelve (12) months following a Change
of Control, Player shall be entitled at such time to an additional twelve (12) months of
vesting of all stock options awards granted to Player under each stock incentive plan of the
Company.

Notwithstanding anything to the contrary contained herein, in the event that the Company determines
that any payments under this letter agreement are subject to Section 409A of the Internal Revenue
Code of 1986, as amended (“Section 409A”), such payments shall not be made until six months after
Player’s separation from service to the extent necessary to avoid the imposition upon Player of the
additional 20% tax under Section 409A. The Company and Player agree that it and Player will
execute any and all amendments to this letter agreement as is mutually agreed in good faith may be
necessary to ensure compliance with the distribution provisions of Section 409A or as otherwise
needed to ensure that this letter agreement complies with Section 409A.

IN WITNESS WHEREOF, the parties have executed this First Amendment to Employment Agreement as of
the date first written above.

THE COMPANY

AuthenTec, Inc.

PLAYER:

 

	 	 	 	 
	 	 
	By:  	
/s/ Anthony Iantosca
 	 
	 	Name: 	Anthony Iantosca 	 
	 	Title: 	Vice President 	 
	 

/s/ Gary R. Larsen 

Gary R. Larsen

 

2Ex-10.12 2007 Stock Incentive Plan

 

Exhibit 10.12

AUTHENTEC, INC. 2007 STOCK INCENTIVE PLAN

	1.	 	Establishment, Purpose and Types of Awards

          AUTHENTEC, INC., a Delaware corporation (the “Company”), hereby establishes the AUTHENTEC,
INC. 2007 STOCK INCENTIVE PLAN (the “Plan”). The purpose of the Plan is to promote the long-term
growth and profitability of the Company by (i) providing key people with incentives to improve
stockholder value and to contribute to the growth and financial success of the Company through
their future services, and (ii) enabling the Company to attract, retain and reward the
best-available persons.

          The Plan permits the granting of stock options (including incentive stock options qualifying
under Code section 422 and nonstatutory stock options), stock appreciation rights, restricted or
unrestricted stock awards, phantom stock, performance awards, other stock-based awards, or any
combination of the foregoing.

	2.	 	Definitions

          Under this Plan, except where the context otherwise indicates, the following definitions
apply:

     (a) “Administrator” means the Board or the committee(s) or officer(s) appointed by the
Board that have authority to administer the Plan as provided in Section 3 hereof.

     (b) “Affiliate” means any entity, whether now or hereafter existing, which controls, is
controlled by, or is under common control with, the Company (including, but not limited to,
joint ventures, limited liability companies, and partnerships). For this purpose, “control”
shall mean ownership of 50% or more of the total combined voting power or value of all
classes of stock or interests of the entity, or the power to direct the management and
policies of the entity, by contract or otherwise.

     (c) “Award” means any stock option, stock appreciation right, stock award, phantom
stock award, performance award, or other stock-based award.

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

     (e) “Change in Control” means: (i) the acquisition (other than from the Company) by
any Person, as defined in this Section 2(e), of the beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of
50% or more of (A) the then outstanding shares of the securities of the Company, or (B) the
combined voting power of the then outstanding securities of the Company entitled to vote
generally in the election of directors (the “Company Voting Stock”); (ii) the closing of a
sale or other conveyance of all or substantially all of the assets of the Company; or (iii)
the effective time of any merger, share exchange, consolidation, or other business
combination involving the Company if immediately after such transaction persons who hold a
majority of the outstanding voting securities entitled to vote generally in the election of
directors of the surviving entity (or the entity owning 100% of such surviving entity) are
not persons who, immediately prior to such transaction, held the Company Voting Stock;
provided, however, that a Change in Control shall not include a public
offering of capital stock of the Company; and provided, further, that for
purposes of any Award or subplan that constitutes a “nonqualified deferred compensation
plan,” within the meaning of Code section 409A, the Administrator, in its discretion, may
specify a different definition of Change in Control in order to comply with the provisions
of Code section 409A. For purposes of this Section 2(e), a “Person” means any individual,
entity or group within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended, other than: employee benefit plans sponsored or
maintained by the Company and by entities controlled by the Company or an underwriter
of the Common Stock in a registered public offering.

     (f) “Code” means the Internal Revenue Code of 1986, as amended, and any regulations
promulgated thereunder.

     (g) “Common Stock” means shares of common stock of the Company, par value of one cent
($0.01) per share.

 

 

     (h) “Fair Market Value” means, with respect to a share of the Company’s Common Stock
for any purpose on a particular date, the value determined by the Administrator in good
faith. However, if the Common Stock is registered under Section 12(b) or 12(g) of the
Securities Exchange Act of 1934, as amended, and listed for trading on a national exchange
or market, “Fair Market Value” means, as applicable, (i) either the closing price or the
average of the high and low sale price on the relevant date, as determined in the
Administrator’s discretion, quoted on the New York Stock Exchange, the American Stock
Exchange, the Nasdaq Global Select Market, or the Nasdaq Global Market; (ii) the last sale
price on the relevant date quoted on the Nasdaq Capital Market; (iii) the average of the
high bid and low asked prices on the relevant date quoted on the Nasdaq OTC Bulletin Board
Service or by the National Quotation Bureau, Inc. or a comparable service as determined in
the Administrator’s discretion; or (iv) if the Common Stock is not quoted by any of the
above, the average of the closing bid and asked prices on the relevant date furnished by a
professional market maker for the Common Stock, or by such other source, selected by the
Administrator. If no public trading of the Common Stock occurs on the relevant date but the
            shares are so listed, then Fair Market Value shall be determined as of the next preceding
date on which trading of the Common Stock does occur. For all purposes under this Plan, the
term “relevant date” as used in this Section 2(h) means either the date as of which Fair
Market Value is to be determined or the next preceding date on which public trading of the
Common Stock occurs, as determined in the Administrator’s discretion.

     (i) “Grant Agreement” means a written document memorializing the terms and conditions
of an Award granted pursuant to the Plan and which shall incorporate the terms of the Plan.

	3.	 	Administration

     (a) Administration of the Plan. The Plan shall be administered by the Board or by such
committee or committees as may be appointed by the Board from time to time. To the extent
allowed by applicable state law, the Board by resolution may authorize an officer or
officers to grant Awards (other than Stock Awards) to other officers and employees of the
Company and its Affiliates, and, to the extent of such authorization, such officer or
officers shall be the Administrator.

     (b) Powers of the Administrator. The Administrator shall have all the powers vested in
it by the terms of the Plan, such powers to include authority, in its sole and absolute
discretion, to grant Awards under the Plan, prescribe Grant Agreements evidencing such
Awards and establish programs for granting Awards.

     The Administrator shall have full power and authority to take all other actions
necessary to carry out the purpose and intent of the Plan, including, but not limited to,
the authority to: (i) determine the eligible persons to whom, and the time or times at
which Awards shall be granted; (ii) determine the types of Awards to be granted; (iii)
determine the number of shares to be covered by or used for reference purposes for each
Award; (iv) impose such terms, limitations, restrictions and
conditions upon any such Award as the Administrator shall deem appropriate; (v) modify,
amend, extend or renew outstanding Awards, or accept the surrender of outstanding Awards and
substitute new Awards (provided however, that, except as provided in Section 6 or 7(c) of
the Plan, any modification that would materially adversely affect any outstanding Award
shall not be made without the consent of the holder); (vi) accelerate or otherwise change
the time in which an Award may be exercised or becomes payable and to waive or accelerate
the lapse, in whole or in part, of any restriction or condition with respect to such Award,
including, but not limited to, any restriction or condition with respect to the vesting or
exercisability of an Award following termination of any grantee’s employment or other
relationship with the Company; (vii) establish objectives and conditions, if any, for
earning Awards and determining whether Awards will be paid with respect to a performance
period; and (viii) for any purpose, including but not limited to, qualifying for preferred
tax treatment under foreign tax laws or otherwise complying with the regulatory requirements
of local or foreign jurisdictions, to establish, amend, modify, administer or terminate
sub-plans, and prescribe, amend and rescind rules and regulations relating to such
sub-plans.

-2-

 

     The Administrator shall have full power and authority, in its sole and absolute
discretion, to administer, construe and interpret the Plan, Grant Agreements and all other
documents relevant to the Plan and Awards issued thereunder, to establish, amend, rescind
and interpret such rules, regulations, agreements, guidelines and instruments for the
administration of the Plan and for the conduct of its business as the Administrator deems
necessary or advisable, and to correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any Award in the manner and to the extent the Administrator
shall deem it desirable to carry it into effect.

     (c) Non-Uniform Determinations. The Administrator’s determinations under the Plan
(including without limitation, determinations of the persons to receive Awards, the form,
amount and timing of such Awards, the terms and provisions of such Awards and the Grant
Agreements evidencing such Awards) need not be uniform and may be made by the Administrator
selectively among persons who receive, or are eligible to receive, Awards under the Plan,
whether or not such persons are similarly situated.

     (d) Limited Liability. To the maximum extent permitted by law, no member of the
Administrator shall be liable for any action taken or decision made in good faith relating
to the Plan or any Award thereunder.

     (e) Indemnification. To the maximum extent permitted by law and by the Company’s
charter and by-laws, the members of the Administrator shall be indemnified by the Company in
respect of all their activities under the Plan.

     (f) Effect of Administrator’s Decision. All actions taken and decisions and
determinations made by the Administrator on all matters relating to the Plan pursuant to the
powers vested in it hereunder shall be in the Administrator’s sole and absolute discretion
and shall be conclusive and binding on all parties concerned, including the Company, its
stockholders, any participants in the Plan and any other employee, consultant, or director
of the Company, and their respective successors in interest.

	4.	 	Shares Available for the Plan; Maximum Awards

          Subject to adjustments as provided in Section 7(c) of the Plan, the shares of Common Stock
that may be issued with respect to Awards granted under the Plan shall not exceed the number of
shares of Common Stock equal to ten percent (10%) of the sum of (i) the total number of issued and
outstanding shares of Common Stock immediately following the closing of the Company’s initial
public offering (the “IPO”), (ii) the number of shares of Common Stock issuable upon exercise of
warrants outstanding
immediately following the effectiveness of the proposed reverse stock split to occur immediately
prior to the closing of the IPO (the “Effective Date”), and (iii) the number of shares of Common
Stock issuable upon the exercise of options outstanding as of the Effective Date; provided,
however, that no more than an aggregate of 3,524,348 shares of Common Stock may be issued
pursuant to incentive stock options intended to qualify under Code section 422. The Company shall
reserve such number of shares for Awards under the Plan, subject to adjustments as provided in
Section 7(c) of the Plan. If any Award, or portion of an Award, under the Plan expires or
terminates unexercised, becomes unexercisable, is settled in cash without delivery of shares of
Common Stock, or is forfeited or otherwise terminated, surrendered or canceled as to any shares, or
if any shares of Common Stock are repurchased by or surrendered to the Company in connection with
any Award (whether or not such surrendered shares were acquired pursuant to any Award), or if any
shares are withheld by the Company, the shares subject to such Award and the repurchased,
surrendered and withheld shares shall thereafter be available for further Awards under the Plan;
provided, however, that any such shares that are surrendered to or repurchased or withheld by the
Company in connection with any Award or that are otherwise forfeited after issuance shall not be
available for purchase pursuant to incentive stock options intended to qualify under Code section
422.

          Subject to adjustments as provided in Section 7(c) of the Plan, the maximum number of shares
of Common Stock subject to Awards of any combination that may be granted during any one fiscal year
of the Company to any one individual under this Plan shall be limited to 500,000 shares. Such
per-individual limit shall not be adjusted to effect a restoration of shares of Common Stock with
respect to which the related Award is terminated, surrendered or canceled.

-3-

 

	5.	 	Participation

          Participation in the Plan shall be open to all employees, officers, and directors of, and
other individuals providing bona fide services to or for, the Company, or of any Affiliate of the
Company, as may be selected by the Administrator from time to time. The Administrator may also
grant Awards to individuals in connection with hiring, retention or otherwise, prior to the date
the individual first performs services for the Company or an Affiliate, provided that such Awards
shall not become vested or exercisable, and no shares shall be issued to such individual, prior to
the date the individual first commences performance of such services.

	6.	 	Awards

          The Administrator, in its sole discretion, establishes the terms of all Awards granted under
the Plan. Awards may be granted individually or in tandem with other types of Awards, concurrently
with or with respect to outstanding Awards. All Awards are subject to the terms and conditions
provided in the Grant Agreement. The Administrator may permit or require a recipient of an Award
to defer such individual’s receipt of the payment of cash or the delivery of Common Stock that
would otherwise be due to such individual by virtue of the issuance of, exercise of, payment of, or
lapse or waiver of restrictions respecting, any Award. If any such payment deferral is required or
permitted, the Administrator shall, in its sole discretion, establish rules and procedures for such
payment deferrals.

     (a) Stock Options. The Administrator may from time to time grant to eligible
participants Awards of incentive stock options as that term is defined in Code section 422
or nonstatutory stock options; provided, however, that Awards of incentive
stock options shall be limited to employees of the Company or of any current or hereafter
existing “parent corporation” or “subsidiary corporation,” as defined in Code sections
424(e) and (f), respectively, of the Company and any other individuals who are eligible to
receive incentive stock options under the provisions of Code section 422. Options must have
an exercise price at least equal to Fair Market Value as of the date of grant. No stock
option shall be an incentive stock option unless so designated by the Administrator at the
time of grant or in the Grant Agreement evidencing such stock option.

     (b) Stock Appreciation Rights. The Administrator may from time to time grant to
eligible participants Awards of Stock Appreciation Rights (“SAR”). A SAR entitles the
grantee to receive, subject to the provisions of the Plan and the Grant Agreement, a payment
having an aggregate value equal to the product of (i) the excess of (A) the Fair Market
Value on the exercise date of one share of Common Stock over (B) the base price per share
specified in the Grant Agreement, times (ii) the number of shares specified by the SAR, or
portion thereof, which is exercised. The base price per share specified in the Grant
Agreement shall not be less than the lower of the Fair Market Value on the grant date or the
exercise price of any tandem stock option Award to which the SAR is related. Payment by the
Company of the amount receivable upon any exercise of an SAR may be made by the delivery of
Common Stock or cash, or any combination of Common Stock and cash, as determined in the sole
discretion of the Administrator. If upon settlement of the exercise of an SAR a grantee is
to receive a portion of such payment in shares of Common Stock, the number of shares shall
be determined by dividing such portion by the Fair Market Value of a share of Common Stock
on the exercise date. No fractional shares shall be used for such payment and the
Administrator shall determine whether cash shall be given in lieu of such fractional shares
or whether such fractional shares shall be eliminated.

     (c) Stock Awards. The Administrator may from time to time grant restricted or
unrestricted stock Awards to eligible participants in such amounts, on such terms and
conditions, and for such consideration, including no consideration or such minimum
consideration as may be required by law, as it shall determine. A stock Award may be paid
in Common Stock, in cash, or in a combination of Common Stock and cash, as determined in the
sole discretion of the Administrator.

     (d) Phantom Stock. The Administrator may from time to time grant Awards to eligible
participants denominated in stock-equivalent units (“phantom stock”) in such amounts and on
such terms and conditions as it shall determine. Phantom stock units granted to a
participant shall be credited to a bookkeeping reserve account solely for accounting
purposes and shall not require a segregation of any of the Company’s assets. An Award of
phantom stock may be settled in Common Stock, in cash, or in a combination of Common Stock
and cash, as determined in the sole discretion of the Administrator. Except as otherwise
provided in the applicable Grant Agreement, the grantee shall not have the rights of a
stockholder with respect to any shares of Common Stock represented by a phantom stock unit
solely as a result of the grant of a phantom stock unit to the grantee.

-4-

 

     (e) Performance Awards. The Administrator may, in its discretion, grant performance
awards which become payable on account of attainment of one or more performance goals
established by the Administrator. Performance awards may be paid by the delivery of Common
Stock or cash, or any combination of Common Stock and cash, as determined in the sole
discretion of the Administrator. Performance goals established by the Administrator may be
based on the Company’s or an Affiliate’s operating income or one or more other business
criteria selected by the Administrator that apply to an individual or group of individuals,
a business unit, or the Company or an Affiliate as a whole, over such performance period as
the Administrator may designate.

     (f) Other Stock-Based Awards. The Administrator may from time to time grant other
stock-based awards to eligible participants in such amounts, on such terms and conditions,
and for such consideration, including no consideration or such minimum consideration as may
be required by law, as it shall determine. Other stock-based awards may be denominated in
cash, in Common Stock or other securities, in stock-equivalent units, in stock appreciation
units, in securities or debentures convertible into Common Stock, or in any combination of
the foregoing and may be paid
in Common Stock or other securities, in cash, or in a combination of Common Stock or
other securities and cash, all as determined in the sole discretion of the Administrator.

	7.	 	Miscellaneous

     (a) Withholding of Taxes. Grantees and holders of Awards shall pay to the Company or
its Affiliate, or make provision satisfactory to the Administrator for payment of, any taxes
required to be withheld in respect of Awards under the Plan no later than the date of the
event creating the tax liability. The Company or its Affiliate may, to the extent permitted
by law, deduct any such tax obligations from any payment of any kind otherwise due to the
grantee or holder of an Award. In the event that payment to the Company or its Affiliate of
such tax obligations is made in shares of Common Stock, such shares shall be valued at Fair
Market Value on the applicable date for such purposes and shall not exceed in amount the
minimum statutory tax withholding obligation.

     (b) Transferability. Except as otherwise determined by the Administrator, and in any
event in the case of an incentive stock option or a stock appreciation right granted with
respect to an incentive stock option, no Award granted under the Plan shall be transferable
by a grantee otherwise than by will or the laws of descent and distribution. Unless
otherwise determined by the Administrator in accord with the provisions of the immediately
preceding sentence, an Award may be exercised during the lifetime of the grantee, only by
the grantee or, during the period the grantee is under a legal disability, by the grantee’s
guardian or legal representative.

     (c) Adjustments for Corporate Transactions and Other Events.

	 	(i)	 	Stock Dividend, Stock Split and Reverse Stock
Split. In the event of a stock dividend of, or stock split or reverse
stock split affecting, the Common Stock, (A) the maximum number of shares
of such Common Stock as to which Awards may be granted under this Plan
and the maximum number of shares with respect to which Awards may be
granted during any one fiscal year of the Company to any individual, as
provided in Section 4 of the Plan, and (B) the number of shares covered
by and the exercise price and other terms of outstanding Awards, shall,
without further action of the Board, be adjusted to reflect such event.
The Administrator shall round up fractional shares and round fractional
cents that arise with respect to outstanding Awards as a result of the
stock dividend, stock split or reverse stock split.

-5-

 

	 	(ii)	 	Non-Change in Control Transactions. Except with
respect to the transactions set forth in Section 7(c)(i), in the event of
any change affecting the Common Stock, the Company or its capitalization,
by reason of a spin-off, split-up, dividend, recapitalization, merger,
consolidation or share exchange, other than any such change that is part
of a transaction resulting in a Change in Control of the Company, the
Administrator, in its discretion and without the consent of the holders
of the Awards, shall make (A) appropriate adjustments to the maximum
number and kind of shares reserved for issuance or with respect to which
Awards may be granted under the Plan, in the aggregate and with respect
to any individual during any one fiscal year of the Company, as provided
in Section 4 of the Plan; and (B) may make any other adjustments in
outstanding Awards, including but not limited to modifying the number,
kind and price of securities subject to Awards.
	 
	 	(iii)	 	Change in Control Transactions. In the event of
any transaction resulting in a Change in Control of the Company,
outstanding stock options and other Awards that are payable in or
convertible into Common Stock under this Plan will terminate upon the
effective time of such Change in Control unless provision is made in
connection with the transaction for the continuation or assumption of
such Awards by, or for the substitution of the equivalent awards of, the
surviving or successor entity or a parent thereof. In the event of such
termination, (A) the outstanding stock options and other Awards that will
terminate upon the effective time of the Change in Control shall become
fully vested immediately before the effective time of the Change in
Control, and (B) the holders of stock options and other Awards under the
Plan will be permitted, immediately before the Change in Control, to
exercise or convert all portions of such stock options or other Awards
under the Plan that are then exercisable or convertible or which become
exercisable or convertible upon or prior to the effective time of the
Change in Control.
	 
	 	(iv)	 	Unusual or Nonrecurring Events. The Administrator
is authorized to make, in its discretion and without the consent of
holders of Awards, adjustments in the terms and conditions of, and the
criteria included in, Awards in recognition of unusual or nonrecurring
events affecting the Company, or the financial statements of the Company
or any Affiliate, or of changes in applicable laws, regulations, or
accounting principles, whenever the Administrator determines that such
adjustments are appropriate in order to prevent dilution or enlargement
of the benefits or potential benefits intended to be made available under
the Plan.

     (d) Substitution of Awards in Mergers and Acquisitions. Awards may be granted under
the Plan from time to time in substitution for awards held by employees, officers,
consultants or directors of entities who become or are about to become employees, officers,
consultants or directors of the Company or an Affiliate as the result of a merger or
consolidation of the employing entity with the Company or an Affiliate, or the acquisition
by the Company or an Affiliate of the assets or stock of the employing entity. The terms
and conditions of any substitute Awards so granted may vary from the terms and conditions
set forth herein to the extent that the Administrator deems appropriate at the time of grant
to conform the substitute Awards to the provisions of the awards for which they are
substituted.

     (e) Termination, Amendment and Modification of the Plan. The Board may terminate,
amend or modify the Plan or any portion thereof at any time. Except as otherwise determined
by the Board, termination of the Plan shall not affect the Administrator’s ability to
exercise the powers granted to it hereunder with respect to Awards granted under the Plan
prior to the date of such termination.

     (f) Non-Guarantee of Employment or Service. Nothing in the Plan or in any Grant
Agreement thereunder shall confer any right on an individual to continue in the service of
the Company or shall interfere in any way with the right of the Company to terminate such
service at any time with or without cause or notice and whether or not such termination
results in (i) the failure of any Award to vest; (ii) the forfeiture of any unvested or
vested portion of any Award; and/or (iii) any other adverse effect on the individual’s
interests under the Plan.

-6-

 

     (g) No Trust or Fund Created. Neither the Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary relationship between
the Company and a grantee or any other person. To the extent that any grantee or other
person acquires a right to receive payments from the Company pursuant to an Award, such right
shall be no greater than the right of any unsecured general creditor of the Company.

     (h) Governing Law. The validity, construction and effect of the Plan, of Grant
Agreements entered into pursuant to the Plan, and of any rules, regulations, determinations
or decisions made by the Administrator relating to the Plan or such Grant Agreements, and
the rights of any and all persons having or claiming to have any interest therein or
thereunder, shall be determined exclusively in accordance with applicable federal laws and
the laws of the State of Delaware, without regard to its conflict of laws principles.

     (i) Effective Date; Termination Date. The Plan is effective as of the date on which
the Plan is adopted by the Board, subject to approval of the stockholders within twelve
months before or after such date. No Award shall be granted under the Plan after the close
of business on the day immediately preceding the tenth anniversary of the effective date of
the Plan, or if earlier, the tenth anniversary of the date this Plan is approved by the
stockholders. Subject to other applicable provisions of the Plan, all Awards made under the
Plan prior to such termination of the Plan shall remain in effect until such Awards have
been satisfied or terminated in accordance with the Plan and the terms of such Awards.

PLAN APPROVAL

Date Approved by the Board: __________________________________

Date Approved by the Stockholders: _____________________________

-7-

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