Document:

tues-ex102_716.htm

EXHIBIT 10.2

CONFIDENTIAL GENERAL RELEASE AND SEPARATION AGREEMENT

This Confidential General Release and Separation Agreement (“Agreement”) is made and entered into by and between Tuesday Morning, Inc., its related and affiliated entities (collectively, “Tuesday Morning”), on the one hand, and Melissa Phillips (“Employee”), on the other, hereinafter collectively referred to as the “Parties.”

 

RECITALS

WHEREAS, Employee has been employed with the Company since April 21, 2014, and, most recently, in the position of President and Chief Operating Officer; and 

 

WHEREAS, Employee’s employment with the Company is terminated effective January 16, 2017 (the “Separation Date”); and

 

WHEREAS, the Parties desire to settle and compromise any and all claims and differences between them, including, but not limited to, those arising from Employee’s employment with and termination from the Company; and

 

WHEREAS, the Parties wish to end the employment relationship amicably and to enter into certain covenants below to provide assurances and peace of mind to each Party.

 

NOW, THEREFORE, in consideration of the Recitals and the mutual promises, covenants, and agreements set forth herein, the receipt and sufficiency of which are hereby acknowledged, the Parties covenant and agree as follows:

 

1.Employee’s Release of Claims.

	
 
	
(a)
	
Employee, individually and on behalf of Employee’s attorneys, heirs, assigns, successors, executors, and administrators, hereby GENERALLY RELEASES, ACQUITS, AND DISCHARGES the Company and its parents, subsidiaries, affiliated, and related corporations, firms, associations, partnerships, and entities, their successors and assigns, and the current and former owners, shareholders, directors, officers, employees, agents, attorneys, representatives, and insurers of said corporations, firms, associations, partnerships, and entities, and their guardians, successors, assigns, heirs, executors, and administrators (hereinafter collectively referred to as the “Company Releasees” and individually as a “Company Releasee”) from and against any and all claims, complaints, grievances, liabilities, obligations, promises, agreements, damages, causes of action, rights, debts, demands, controversies, costs, losses, and expenses (including attorneys’ fees and expenses) whatsoever, under any local, state, or federal law, common or statutory -- including, but in no way limited to, claims arising under the United States and Texas Constitutions; the Age Discrimination in Employment Act of 1967 (“ADEA”); Title VII of the Civil Rights Act of 1964, as amended (including the Civil Rights Act of 1991); Sections 1981 through 1988 of Title 42 of the United States Code; the Americans with Disabilities Act of 1990, as amended by the Americans with Disabilities Amendment Act; the Patient Protection and Affordable Care Act of 2010; the Employee Retirement Income Security Act of 1974, (“ERISA”), as amended; the Occupational Safety and Health Act, as amended; the Worker Adjustment and Retraining Notification Act (“WARN”); the Consolidated Omnibus Budget Reconciliation Act (“COBRA”); the Texas Commission on Human Rights Act; the Texas Payday Act; Section 451.001 of the Texas Workers Compensation Act; the Sabine Pilot doctrine and/or any other claims, including claims in equity or at law -- for any actions or omissions whatsoever, whether known or unknown and whether connected with the employment relationship between Employee and the Company that existed or may have existed prior to, or contemporaneously with, the date Employee executes this Agreement (collectively, the “Employee Released Claim(s)”).  Employee agrees that this Agreement includes a release of any and all negligence claims, contractual claims (express and implied), wrongful discharge claims, fraud, misrepresentation, defamation, and claims of discrimination, harassment, or retaliation of every possible kind.  

 

 

 

	
 
	
(b)
	
Employee understands that nothing in this Agreement is intended to interfere with or deter Employee’s right to challenge the waiver of an ADEA claim or state law age discrimination claim or the filing of an ADEA charge or ADEA complaint or state law age discrimination complaint or charge with the EEOC or any state discrimination agency or commission or to participate in any investigation or proceeding conducted by those agencies.  Further, Employee understands that nothing in this Agreement would require Employee to tender back the money received under this Agreement if Employee seeks to challenge the validity of the ADEA or state law age discrimination waiver, nor does the Employee agree to ratify any ADEA or state law age discrimination waiver that fails to comply with the Older Workers’ Benefit Protection Act by retaining the money received under the Agreement.  Further, nothing in this Agreement is intended to require the payment of damages, attorneys’ fees or costs to the Company should Employee challenge the waiver of an ADEA or state law age discrimination claim or file an ADEA or state law age discrimination suit except as authorized by federal or state law.

 

	
 
	
(c)
	
This release specifically excludes:  (i) any claim which cannot be released by private agreement, such as workers’ compensation claims, claims after the Effective Date of this Agreement (as defined below); (ii) the right to file administrative charges with certain government agencies; and (iii) any and all contractual and/or statutory rights Employee may have to be indemnified by the Company or any Releasee, by virtue or as a result of Employee’s role as an executive and officer of the of the Company, for acts or omissions occurring during Employee’s employment.  In particular, nothing in this Agreement shall be construed to prohibit Employee from filing a charge with, making a complaint to, or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission, National Labor Relations Board, or a comparable state or local agency, or to the Securities Exchange Commission or Internal Revenue Service. Employee agrees to waive the right to receive future monetary recovery directly from Employer, including Employer payments that result from any complaints or charges that Employee files with any governmental agency or that are filed on Employee’s behalf.

 

	
 
	
(d)
	
This general release covers both claims that Employee knows about and those that Employee may not know about, except that it does not waive any rights or claims, including claims under the ADEA that may arise after the Effective Date of this Agreement (as defined below).  Employee further represents and warrants that: (i) Employee has been fully and properly paid for all hours worked, (ii) Employee has received all leave to which Employee is entitled in accordance with applicable law; and (iii) Employee has not suffered any on the job injury for which Employee has not already filed a claim.  Employee further acknowledges, agrees and hereby stipulates that: (i) during Employee’s employment with the Company, Employee was allowed to take all leave and afforded all other rights to which Employee was entitled under the Family and Medical Leave Act (“FMLA”); and (ii) the Company has not in any way interfered with, restrained or denied the exercise of (or attempt to exercise) any FMLA rights, nor terminated or otherwise discriminated against Employee for exercising (or attempting to exercise) any such rights.

 

2.Nondisclosure.  Employee and the Company acknowledge and agree that Employee and the Company (which, for purposes of this paragraph, includes the Company’s officers and directors) will keep any discussions leading up to or related to the entering of this Agreement STRICTLY AND COMPLETELY CONFIDENTIAL, and that Employee and the Company will not communicate or otherwise disclose such information to any employee of the Company (past, present, or future), or to any member of the general public, except as may be required by law or compulsory process; provided, however, that Employee may make such disclosures to the Employee’s spouse, tax/financial advisors or legal counsel as long as they agree to keep the information confidential, and that the Company may make such disclosures to its managers, officers, and directors.  If asked about any of such matters, Employee’s response shall be limited to the following or words to this effect: “The Company conducted a restructuring of certain management positions and functions,  and, in the course of that restructuring, the COO position was eliminated. As a result, we mutually agreed that I would resign my position so I could pursue other opportunities.”  For the avoidance of doubt, this paragraphs 2 and 3 are intended to cover, but are not limited to, communications with the media and independent investment research professionals who are working with, or on behalf of, expert networks.  In the event of a breach of the confidentiality provisions set forth in this paragraph of the Agreement by Employee, the Company may suspend any payments due under this Agreement 

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pending the outcome of litigation regarding such claimed breach of this Agreement by Employee. The Parties agree that this paragraph is a material inducement to the Parties entering into this Agreement.  Additionally, the Parties agree that a breach of this paragraph by a Party will cause the non-breaching Party irreparable harm and that the non-breaching Party may enforce this paragraph without posting a bond. Nothing in this Agreement is intended to or will be used in any way to limit Employee’s rights to communicate with a government agency, as provided for, protected under or warranted by applicable law.

3.Non-Disparagement.

	
 
	
(a) 
	
Employee expressly acknowledges, agrees, and covenants that Employee will not make any negative public or private statements, comments, or communications in any form, oral, written, or electronic, which in any way could constitute libel, slander, or disparagement of the Company or any other Releasee or which may be considered to be derogatory or detrimental to the name or business reputation of the Company or any other Releasee; provided, however, that the terms of this paragraph shall not apply to communications between Employee and the Employee’s spouse and/or clergy, or attorneys, which are subject to a claim of privilege existing under common law, statute, or rule of procedure.

	
 
	
(b)
	
The Company expressly acknowledges, agrees, and covenants that neither the Company’s CEO nor any of the member of the Company’s Board of Directors will make any negative public or private statements, comments, or communications in any form, oral, written, or electronic, which in any way could constitute libel or slander of Employee; provided, however, that the terms of this paragraph shall not apply to communications within the Company and/or between the Company and its financial and/or tax advisors, and attorneys, which are subject to a claim of privilege existing under common law, statute, or rule of procedure.

	
 
	
(c)
	
The Parties agree that this paragraph is a material inducement to the Parties entering into this Agreement. Additionally, the Parties agree that a breach of this paragraph by a Party will cause the non-breaching Party irreparable harm and that the non-breaching Party may enforce this paragraph without posting a bond.

4.Consideration.  In exchange for Employee executing and not revoking the general release set forth in this Agreement and other valuable consideration given and received by the Parties, the Parties agree as follows:

	
 
	
(a)
	
The Company will pay to Employee the gross amount of Two Hundred Seventeen Thousand Eight Hundred Twelve Dollars and no/100 cents ($217,812.00), subject to applicable payroll taxes and withholding (“Separation Payment”). This Separation Payment will be paid on the Company’s regular payroll schedule over a period of six (6) months (“Severance Period”).  The first Separation Payment shall be paid to Employee in the first regularly scheduled payroll period following expiration of the 21 day and 7 day revocation periods, provided Employee has executed and not revoked this Agreement and is otherwise in compliance with this Agreement.

 

	
 
	
(b)
	
If, after 90 days following the Separation Date, Employee has not obtained employment or an engagement as an independent contractor on a full-time basis in a position substantially similar to the position Employee held with the Company immediately prior to the Separation Date in terms of responsibility and compensation, the Company will pay to Employee the gross amount of Two Hundred Seventeen Thousand Eight Hundred Twelve Dollars and no/100 cents ($217,812.00), subject to applicable payroll taxes and withholdings (“Extended Separation Payment”).  This Extended Separation Payment will be paid on the Company’s regular payroll schedule over a period of six (6) months (“Extended Severance Period”).  The first Extended Separation Payment shall be paid to Employee on the first regularly scheduled payroll in the month following the last Separation Payment made pursuant to paragraph 4(a) above, provided Employee is otherwise in compliance with this Agreement.

 

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(c)
	
The Company will pay to Employee the gross sum of Fifteen Thousand Dollars and no/100 ($15,000.00), subject to applicable payroll taxes and withholdings (“Enhanced Severance”), within seven (7) business days of the Effective Date of this Agreement (as defined below), provided Employee has executed and not revoked this Agreement and is otherwise in compliance with this Agreement.

 

	
 
	
(d)
	
Provided Employee timely and properly elects continued coverage under the Company’s group health plan pursuant to COBRA following the Separation Date, the Company agrees to pay on Employee’s behalf an amount equal to the amount the Company previously paid as the Company portion of Employee’s monthly premiums for health benefits, until the earliest of (1) the date on which Employee obtains either (i) employment with an employer or (ii) an independent contractor engagement with a service recipient, either of which that offer health benefits to Employee; (2) the expiration of 12 months following the Separation Date; or (3) the date on which Employee is no longer entitled to COBRA continuation coverage under the Company’s group health plan but in no event longer than 12 months; provided, however, that the Company may unilaterally amend this paragraph 4(d) or eliminate the benefit provided thereunder to the extent it deems necessary to avoid the imposition of excise taxes, penalties or similar charges on the Company or its affiliates (or any of their successors), including, without limitation, under Section 4980D of the Internal Revenue Code of 1986, as amended.

 

	
 
	
(e)
	
During the Severance Period and the Extended Severance Period (as applicable), Employee agrees to provide the Company with written notice of her acceptance of any new employment or engagement as an independent contractor not later than five (5) business days after her acceptance of same.  Notice shall be sent to Bridgett Zeterberg, Sr. Vice President and General Counsel, Tuesday Morning, Inc., 6250 LBJ Freeway, Dallas, Texas 75240, email:  bzeterberg@tuesdaymorning.com.

 

	
 
	
(f)
	
Employee acknowledges and agrees that the Separation and Extended Separation Payments referenced in paragraphs 4(a), 4(b), 4(c) and 4(d) constitute new and adequate consideration to support the release set forth in this paragraph 1 of this Agreement and fully compensate Employee for the claims Employee is releasing. For purposes of this paragraph, “Consideration” means the payments and benefits set forth in paragraph 4(a), 4(b), 4(c) and 4(d), which are payments and benefits to which Employee is not already entitled.

 

	
 
	
(g)
	
Unless already provided, Employee agrees to return to the Company all Company-owned property, equipment and documents (paper and electronic) no later than January 16, 2017, and will not maintain copies of the same in any form, whether tangible or intangible.

 

5.Non-Solicitation or Hiring.  Employee agrees that Employee shall not, directly or indirectly, for a period of twelve (12) months from the Separation Date, hire, solicit, interfere with, induce or attempt to hire, solicit, interfere with or induce, engage or hire, on behalf of the Employee or any other person or entity, any person who is an employee of the Company or who was employed by the Company within the preceding 12 months.

6.Cooperation.  Employee agrees to cooperate reasonably with the Company in connection with any Company-related matters for which Employee’s involvement or input is requested and, specifically including any attorney or other consultant retained by the Company, pending or future litigation, arbitration, business, or investigatory matter. The Parties acknowledge and agree that such cooperation may include, but shall in no way be limited to, Employee being available for interview by the Company, or any attorney or other consultant retained by the Company, and providing to the Company any documents in Employee’s possession or under Employee’s control. The Company agrees to provide Employee with reasonable notice of the need for assistance when feasible and reimburse Employee for reasonable, agreed-upon expenses (for example, parking, required travel etc.)  incurred in association with such cooperation.

7.Company Trade Secret Protection.  Employee acknowledges that during Employee’s employment, Employee has had access to and become familiar with various trade secrets and proprietary and confidential information of the Company, its subsidiaries and affiliates, including, but not limited to, operations, 

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procedures, computer systems, customer information, pricing techniques, methods of doing business, merchandise, marketing plans, pending and/or planned Company transactions, financial and accounting information, policies and practices, employee salary and benefit information and other confidential information (collectively, referred to as “Trade Secrets”) that are owned by the Company, its subsidiaries and/or affiliates and regularly used in the operation of its business, and as to which the Company, its subsidiaries and/or affiliates take precautions to prevent dissemination to persons other than certain directors, officers and employees.  Employee acknowledges and agrees that the Trade Secrets (1) are secret and not known in the industry; (2) give the Company or its subsidiaries and/or affiliates an advantage over competitors who do not know or use the Trade Secrets; (3) are of such value and nature as to make it reasonable and necessary to protect and preserve the confidentiality and secrecy of the Trade Secrets; and (4) are valuable and special and unique assets of the Company or its subsidiaries and/or affiliates, the disclosure of which could cause substantial injury and loss of profits and goodwill to the Company or its subsidiaries and/or affiliates.  

	
 
	
(a)
	
All files, records, documents, information, data, and similar items relating to the business of the Company, whether prepared by Employee or otherwise coming into Employee’s possession, remain the exclusive property of the Company, and in any event must be promptly delivered to the Company upon Employee’s departure from the Company

 

	
 
	
(b)
	
Employee represents and agrees that she has not improperly during her employment disclosed Company Trade Secrets and further agrees that she has not and will not following the Separation Date, directly or indirectly disclose Confidential Information, access the Company’s computer systems, download files or information from the Company’s computer systems or in any way interfere, disrupt, modify or change any computer program used by the Company or any data stored on the Company’s computer system.

 

	
 
	
(c)
	
Employee agrees that upon receipt of any formal or informal request, requirement, subpoena, process, or other action seeking Employee’s direct or indirect disclosure or production of any Trade Secrets to any entity, agency, tribunal, or person, or in connection with a judicial, administrative or other proceeding, Employee shall promptly and timely notify the Company, and promptly and timely provide a description and, if applicable, hand deliver a copy of such request, requirement, subpoena, process or other action to the Company.  In all such instances, Employee irrevocably nominates and appoints the Company (including any attorney retained by the Company) as Employee’s true and lawful attorney-in-fact to act in Employee’s name, place and stead to perform any act that Employee might perform to defend and protect against any disclosure of any Trade Secret.  For purposes of this paragraph 7, this Agreement shall be considered a Trade Secret.

 

8.Non-Admission.  By entering into this Agreement, the Company does not admit, and specifically denies, any violation of any contract (express or implied), local, state, or federal law, common or statutory. Neither the execution of this Agreement nor compliance with its terms, nor the consideration provided for herein shall constitute or be construed as an admission by the Company (or any of its agents, representatives, attorneys, or employers) of any fault, wrongdoing, or liability whatsoever, and Employee acknowledges and understands that all such liability is expressly denied. This Agreement has been entered into in release and compromise of claims as stated herein and to avoid the expense and burden of dispute resolution.  

9.No Knowledge of Violations.  Employee represents and warrants that Employee is not aware of any illegal acts committed by or on behalf of the Company and represents that if Employee is or had been aware of any such conduct that Employee has properly reported the same in accordance with the Company’s policies.  Employee further represents and warrants that Employee is not aware of (a) any violations, allegations or claims that the Company has violated any federal, state or foreign law of any kind, or (b) any facts or circumstances relating to any alleged violations, allegations or claims that the Company has violated any federal, state or foreign law of any kind, of which Employee has not previously made the Board of Directors of the Company aware.  

10.Severability.  If any provision or term of this Agreement is held to be illegal, invalid, or unenforceable, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised part of this Agreement; and the remaining 

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provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of each such illegal, invalid, or unenforceable provision or term there shall be added automatically as a part of this Agreement another provision or term as similar to the illegal, invalid, or unenforceable provision as may be possible and that is legal, valid, and enforceable.

11.Entire Agreement.  This Agreement constitutes the entire Agreement of the Parties regarding the subject matter hereof, and supersedes all prior and contemporaneous negotiations and agreements, oral or written, express or implied, regarding the subject hereof.  All prior and contemporaneous negotiations and agreements regarding the subject hereof are deemed incorporated and merged into this Agreement and are deemed to have been abandoned if not so incorporated.  No representations, oral or written, are being relied upon by any party in executing this Agreement other than the express representations of this Agreement.  This Agreement cannot be changed or terminated without the express written consent of the Parties.  The rights under this Agreement may not be assigned by Employee, unless the Company consents in writing to said assignment.  Employee represents that Employee has not assigned any of the claims related to the matters set forth herein.

12.Governing Law; Venue.  This Agreement shall be exclusively governed by and construed in accordance with the laws of the State of Texas without regard to the conflicts of laws provisions of Texas law, or of any other jurisdiction, except where preempted by federal law. All parties hereto hereby irrevocably submit to the nonexclusive jurisdiction of the state and federal courts of the State of Texas and agree and consent that service of process may be made upon them in any proceeding arising out of this Agreement by service of process as provided by Texas law and that any and all disputes arising under or related to this Agreement shall be brought in Dallas County, Texas.

13.No Waiver.  One or more waivers of a breach of any covenant, term, or provision of this Agreement by any party shall not be construed as a waiver of a subsequent breach of the same covenant, term, or provision, nor shall it be considered a waiver of any other then existing or subsequent breach of a different covenant, term, or provision.

14.Important Notice Regarding Release of Claims Under the Age Discrimination in Employment Act of 1967 (“ADEA”):  Without in any way limiting the generality or scope of the Release of Claims set forth in paragraph 1, Employee hereby acknowledges that Employee knowingly and voluntarily enters into this Agreement with the purpose of waiving and releasing any age discrimination claims she may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), and acknowledges and agrees that:

	
 
	
(a)
	
This Agreement is written in a manner in which Employee fully understands; Employee specifically waives any rights or claims arising under the ADEA;

 

	
 
	
(b)
	
This Agreement does not waive rights or claims under the ADEA that may arise after the date this Agreement is executed;

 

	
 
	
(c)
	
The rights and claims waived in this Agreement are in exchange for consideration over and above anything to which Employee is already entitled;

 

	
 
	
(d)
	
Employee has been advised in writing to consult with an attorney prior to executing this Agreement, and has, in fact had an opportunity to do so; 

 

	
 
	
(e)
	
Employee has been given a period of up to at least twenty-one (21) days, if desired, within which to consider this Agreement;  

 

	
 
	
(f)
	
Once executed, the Employee has a period of seven (7) days within which she can revoke this Agreement (“Revocation Period”).  If Employee chooses to revoke this Agreement, she must do so in writing, and the revocation must be addressed and delivered to Bridgett Zeterberg, Sr. Vice President and General Counsel, Tuesday Morning, Inc., 6250 LBJ Freeway, Dallas, Texas 75240, email:  bzeterberg@tuesdaymorning.com before the expiration of the seven (7) day revocation period. If Employee delivers the revocation by hand, the revocation will be considered timely if 

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delivered to Bridgett Zeterberg of the Company, at the above address within 7 days of Employee’s execution of this Agreement. If Employee delivers the revocation by mail or email, the revocation will be considered timely if it is mailed or emailed to Bridgett Zeterberg at the above address(es) and postmarked (as to mail) within seven (7) days of Employee’s execution of this Agreement; and

 

	
 
	
(g)
	
Any changes made to this Agreement, whether material or immaterial, will not restart the running of this 21-day period.

 

15.Effective Date.  The “Effective Date” of this Agreement is the date that is eight (8) days following the Revocation Date, so long as Employee has not revoked acceptance of this Agreement before such date.

16.Separate Representation.  By executing this Agreement, Employee also acknowledges that Employee: (a) is not relying upon any statements, understandings, representations, expectations, or agreements other than those expressly set forth in this Agreement; (b) has made Employee’s own investigation of the facts and is relying solely upon Employee’s own knowledge and the advice of Employee’s own legal counsel; and (c) knowingly waives any claim that this Agreement was induced by any misrepresentation or nondisclosure and any right to rescind or avoid this Agreement based upon presently existing facts, known or unknown.  The Parties stipulate that each Party is relying upon these representations and warranties in entering into this Agreement.  These representations and warranties shall survive the execution of this Agreement.  The Parties represent that they have the sole and exclusive right and full capacity to execute this Agreement.

17.Negotiation.  All terms and provisions of this Agreement, and the drafting of this Agreement, have been negotiated by the Parties at arm’s length and to mutual agreement, with consideration by and participation of each, and no party shall be deemed the scrivener of this Agreement.

18.Section 409A Compliance. 

	
 
	
(a)
	
Notwithstanding any provisions of this Agreement to the contrary, to the extent (i) any payments to which Employee becomes entitled under this Agreement, constitute deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), (ii) Employee is deemed at the time of such termination of employment to be a “specified employee” as defined in the applicable Final Treasury Regulations under Section 409A of the Code, or any successor provision thereto, and (iii) at the time of Employee’s separation from service the Company is publicly traded (as defined in Section 409A of the Code) and the provisions of this Section 18(a) otherwise apply to Employee, then such payment or payments shall not be made or commence until the earliest of (x) the expiration of the six-month period measured from the date of Employee’s Termination Date (or, if earlier, the date of death of Employee). Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Section 18 shall be paid to Employee or Employee’s beneficiary in one lump sum.

 

	
 
	
(b)
	
It is intended that this Agreement comply with or be exempt from the provisions of Section 409A of the Code and the Final Treasury Regulations and guidance of general applicability issued thereunder so as to not subject Employee to the payment of additional interest and taxes under Section 409A of the Code, and in furtherance of this intent, this Agreement shall be interpreted, operated and administered in a manner consistent with these intentions.

 

	
 
	
(c)
	
Notwithstanding any provision of this Agreement to the contrary, if the 28-day period (consisting of the 21-day review period plus the seven day revocation period) described in paragraph 14 of this Agreement commences in one taxable year and ends in another taxable year, the Separation Payment shall be paid beginning on the first regularly scheduled payday in the later taxable year.

 

	
 
	
(d)
	
For purposes of Section 409A of the Code, each payment made under this Agreement shall be treated as a separate and distinct payment and the right to a series of installment payments under this Agreement shall be treated as the right to a series of separate and distinct payments.

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PLEASE READ CAREFULLY. THIS CONFIDENTIAL RELEASE AGREEMENT INCLUDES THE RELEASE OF ALL CLAIMS AGAINST THE COMPANY, KNOWN OR UNKNOWN, THAT MAY HAVE OCCURRED AS OF THE DATE OF THIS AGREEMENT.

 

The Parties have signed this Agreement on the dates written by the signatures below, to be effective on the Effective Date.  Notwithstanding any other provision in this Agreement, if Employee does not sign and deliver this Agreement to Bridgett Zeterberg on or before 21 days following Employee’s receipt of this Agreement, then this Agreement will be null and void, and Employee will not be entitled to the Consideration, or any other consideration described in this Agreement.

 

 

 

EXECUTED in Dallas, Texas on this 1st day of February, 2017.

 

MELISSA PHILLIPS

 

/s/ Melissa Phillips__________________

 

 

 

 

EXECUTED in Dallas, Texas on this 1st day of February, 2017.

 

 

TUESDAY  MORNING, INC.

 

By:/s/ Steven R. Becker  ______________

 

 Its: Chief Executive Officer

 

 

Page 8 of 8EX-10.1

 Exhibit 10.1 

NUANCE COMMUNICATIONS, INC. 

2000 STOCK PLAN 
 (As
Amended and Restated January 30, 2017) 
 1. Purposes of the Plan.    The purposes of this Plan are:

  

	 	•	 	to attract and retain the best available personnel for positions of substantial responsibility, 

  

	 	•	 	to provide additional incentive to Employees, Directors and Consultants, and 

  

	 	•	 	to promote the success of the Company’s business. 

 The Plan permits the grant of
Incentive Stock Options, Nonstatutory Stock Options, Stock Purchase Rights, Stock Appreciation Rights, and Restricted Stock Units. 

2. Definitions.    As used herein, the following definitions shall apply: 

(a) “Administrator” means the Board or any of its Committees as shall be administering the Plan, in accordance
with Section 4 of the Plan. 
 (b) “Affiliate” means any corporation or other entity (including, but
not limited to partnerships and joint ventures) controlled by, or under common control with the Company. 
 (c)
“Affiliated SAR” means a SAR that is granted in connection with a related Option, and which automatically will be deemed to be exercised at the same time that the related Option is exercised. 

(d) “Applicable Laws” means the requirements relating to the administration of equity-based awards under
U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards
are, or will be, granted under the Plan. 
 (e) “Annual Revenue” means the Company’s or a business
unit’s net sales for the Fiscal Year, determined in accordance with generally accepted accounting principles; provided, however, that prior to the Fiscal Year, the Committee shall determine whether any significant item(s) shall be excluded or
included from the calculation of Annual Revenue with respect to one or more Participants. 

(f) “Award” means, individually or collectively, a grant under the Plan of Options, Stock Purchase
Rights, Stock Appreciation Rights, and Restricted Stock Units. 
 (g) “Award Agreement” means the
written or electronic agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan. 

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

(i) “Cash Position” means the Company’s level of cash and cash equivalents. 

(j) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a section of the Code
herein will be a reference to any successor or amended section of the Code. 
 (k) “Committee” means a
committee of Directors appointed by the Board in accordance with Section 4 of the Plan. 
 (l) “Common
Stock” means the common stock of the Company. 
 (m) “Company” means Nuance Communications,
Inc., a Delaware corporation. With respect to the definitions of the Performance Goals, the Committee may determine that “Company” means Nuance Communications, Inc. and its consolidated subsidiaries. 

 (n) “Consultant” means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such entity; provided, that a Consultant will include only those persons to whom the issuance of Shares may be registered under Form S-8 of the Securities Act of 1933, as
amended. 
 (o) “Controllable Profits” means as to any Fiscal Year, a business unit’s Annual
Revenue minus (a) cost of sales, (b) research, development, and engineering expense, (c) marketing and sales expense, (d) general and administrative expense, (e) extended receivables expense, and (f) shipping
requirement deviation expense. 
 (p) “Customer Satisfaction MBOs” means as to any Participant for any
Performance Period, the objective and measurable individual goals set by a “management by objectives” process and approved by the Committee, which goals relate to the satisfaction of external or internal customer requirements. 

(q) “Director” means a member of the Board. 

(r) “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code.

 (s) “Earnings Per Share” means as to any Fiscal Year, the Company’s or a business unit’s
Net Income, divided by a weighted average number of common shares outstanding and dilutive common equivalent shares deemed outstanding, determined in accordance with generally accepted accounting principles. 

(t) “Employee” means any person, including Officers and Directors, employed by the Company or any Parent
or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company. 

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

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

(i) If the Common Stock is listed on any established stock exchange or a national market system, including without
limitation the NASDAQ Global Select Market, the NASDAQ Global Market or the NASDAQ Capital Market of The NASDAQ Stock Market, its Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as
quoted on such exchange or system on the day of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; 

(ii) If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the
Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low asked prices for the Common Stock on the last market trading day on the day of determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable; or 
 (iii) In the absence of an established market for the Common
Stock, the Fair Market Value shall be determined in good faith by the Administrator. 
 (w) “Fiscal
Year” means the fiscal year of the Company. 
 (x) “Freestanding SAR” means a SAR that is
granted independent of any Option. 
 (y) “Incentive Stock Option” means an Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 

(z) “Individual Objectives” means as to a Participant, the objective and measurable goals set by a
“management by objectives” process and approved by the Committee (in its discretion). 
 (aa) “Net
Income” means as to any Fiscal Year, the income after taxes of the Company for the Fiscal Year determined in accordance with generally accepted accounting principles, provided that prior to the Fiscal Year, the Committee shall determine
whether any significant item(s) shall be included or excluded from the calculation of Net Income with respect to one or more Participants. 

 (bb) “New Orders” means as to any Performance Period, the
firm orders for a system, product, part, or service that are being recorded for the first time as defined in the Company’s order Recognition Policy. 

(cc) “Non-Employee Director” means a Director who is not an Employee. 

(dd) “Nonstatutory Stock Option” means an Option that by its terms does not qualify or is not intended to
qualify as an Incentive Stock Option. 
 (ee) “Officer” means a person who is an officer of the Company
within the meaning of Section 16 of the Exchange Act and the rules and regulations promulgated thereunder. 

(ff) “Operating Cash Flow” means the Company’s or a business unit’s sum of Net Income plus
depreciation and amortization less capital expenditures plus changes in working capital comprised of accounts receivable, inventories, other current assets, trade accounts payable, accrued expenses, product warranty, advance payments from customers
and long-term accrued expenses, determined in accordance with generally acceptable accounting principles. 

(gg) “Operating Income” means the Company’s or a business unit’s income from operations but
excluding any unusual items, determined in accordance with generally accepted accounting principles. 

(hh) “Option” means a stock option granted pursuant to the Plan. 

(ii) “Optionee” means the holder of an outstanding Option or Stock Purchase Right granted under the Plan.

 (jj) “Optioned Stock” means the Shares subject to an Award. 

(kk) “Parent” means a “parent corporation,” whether now or hereafter existing, as defined in
Section 424(e) of the Code. 
 (ll) “Participant” means the holder of an outstanding Award, which
shall include an Optionee. 
 (mm) “Performance Goals” means the goal(s) (or combined goal(s))
determined by the Committee (in its discretion) to be applicable to a Participant with respect to an Award. As determined by the Committee, the Performance Goals applicable to an Award may provide for a targeted level or levels of achievement using
one or more of the following measures: (a) Annual Revenue, (b) Cash Position, (c) Controllable Profits, (d) Customer Satisfaction MBOs, (e) Earnings Per Share, (f) Individual Objectives, (g) Net Income,
(h) New Orders, (i) Operating Cash Flow, (j) Operating Income, (k) Return on Assets, (l) Return on Equity, (m) Return on Sales, and (n) Total Shareholder Return. The Performance Goals may differ from Participant to
Participant and from Award to Award. The Committee shall have the authority to make equitable adjustments to Performance Goals in recognition of extraordinary or non-recurring events affecting the Company or any Subsidiary or the financial
statements of the Company or any Subsidiary, in response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the
disposal of a segment of a business or related to a change in accounting principles. 
 (nn) “Performance
Period” means a period, from one quarter to twenty (20) quarters in duration, selected by the Administrator during which the performance of the Company or any Subsidiary, division, segment or strategic business unit thereof or any
individual is measured for the purpose of determining the extent to which an Award has been earned. 
 (oo)
“Plan” means this 2000 Stock Plan, as amended and restated. 
 (pp) “Restricted Stock”
means Shares acquired pursuant to a grant of Stock Purchase Rights under Section 9 of the Plan or pursuant to the early exercise of an Option. 

(qq) “Restricted Stock Purchase Agreement” means a written agreement between the Company and the
Participant evidencing the terms and restrictions applying to stock purchased under a Stock Purchase Right. The Restricted Stock Purchase Agreement is subject to the terms and conditions of the Plan and the Notice of Grant. 

 (rr) “Restricted Stock Unit” means an Award granted to a
Participant pursuant to Section 11. 
 (ss) “Return on Assets” means the percentage equal to the
Company’s or a business unit’s Operating Income before incentive compensation, divided by average net Company or business unit, as applicable, assets, determined in accordance with generally accepted accounting principles. 

(tt) “Return on Equity” means the percentage equal to the Company’s Net Income divided by average
stockholder’s equity, determined in accordance with generally accepted accounting principles. 

(uu) “Return on Sales” means the percentage equal to the Company’s or a business unit’s
Operating Income before incentive compensation, divided by the Company’s or the business unit’s, as applicable, revenue, determined in accordance with generally accepted accounting principles. 

(vv) “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to
Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 

(ww) “Section 16(b)” means Section 16(b) of the Exchange Act. 

(xx) “Service Provider” means an Employee, Director or Consultant. 

(yy) “Share” means a share of the Common Stock, as adjusted in accordance with Section 14 of the
Plan. 
 (zz) “Stock Appreciation Right” or “SAR” means an Award, granted alone or in
connection with an Option, which pursuant to Section 10 is designated as a SAR. 
 (aaa) “Stock Purchase
Right” means the right to purchase Shares pursuant to Section 9 of the Plan. 

(bbb) “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as
defined in Section 424(f) of the Code. 
 (ccc) “Tandem SAR” means an SAR that is granted in
connection with a related Option, the exercise of which will require forfeiture of the right to purchase an equal number of Shares under the related Option (and when a Share is purchased under the Option, the SAR will be canceled to the same
extent). 
 (ddd) “Total Shareholder Return” means the total return (change in share price plus reinvestment
of any dividends) of a Share. 
 3. Stock Subject to the Plan.    Subject to the provisions of
Section 14 of the Plan, the maximum aggregate number of Shares that may be issued under the Plan is 75,850,000 Shares (the “Plan Maximum”). If any outstanding Award for any reason expires or is terminated or canceled without
having been exercised or settled in full, or if Shares acquired pursuant to an Award subject to forfeiture or repurchase are forfeited to or repurchased by the Company, the Shares allocable to the terminated portion of such Award or such forfeited
or repurchased Shares shall again be available for grant under the Plan. Shares shall not be deemed to have been granted pursuant to the Plan (a) with respect to any portion of an Award that is settled in cash or (b) to the extent such
Shares are withheld in satisfaction of tax withholding obligations. Upon payment in Shares pursuant to the exercise of a Stock Appreciation Right, the number of Shares available for grant under the Plan shall be reduced by the total number of Shares
subject to the Stock Appreciation Right regardless of the number of Shares actually issued in such payment. If the exercise price of an Option is paid by tender to the Company of Shares underlying the Option, the number of Shares available for grant
under the Plan shall be reduced by the net number Shares for which the Option is exercised. The Shares may be authorized, but unissued, or reacquired Common Stock. 

4. Administration of the Plan.  

(a) Procedure.  

(i) Multiple Administrative Bodies.    Different Committees with respect to different groups of
Service Providers may administer the Plan. 
 (ii) Section 162(m).    To the extent that
the Administrator determines it to be desirable to qualify Awards granted hereunder as “performance-based compensation” within the meaning of Section 162(m) 

 
of the Code, the Plan shall be administered by a Committee of two or more “outside directors” within the meaning of Section 162(m) of the Code. For purposes of qualifying grants of
Awards as “performance-based compensation” under Section 162(m) of the Code, the Committee, in its discretion, may set restrictions based upon the achievement of Performance Goals during a specified Performance Period. The Performance
Goals shall be set by the Committee on or before the latest date permissible to enable the Awards to qualify as “performance-based compensation” under Section 162(m) of the Code. In granting Awards which are intended to qualify under
Section 162(m) of the Code, the Committee shall follow any procedures determined by it from time to time to be necessary or appropriate to ensure qualification of the Awards under Section 162(m) of the Code (e.g., in determining the
Performance Goals). Following the completion of each Performance Period, the Committee will certify in writing whether the applicable Performance Goals have been achieved for such Performance Period. A Participant will be eligible to receive payment
pursuant to an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code for a Performance Period only if the Performance Goals for such period are achieved, unless otherwise permitted under
Section 162(m) of the Code. In determining the amounts earned by a Participant pursuant to an Award intended to qualify as “performance-based compensation” under Section 162(m) of the Code, the Committee will have the right to
reduce or eliminate (but not to increase) the amount payable at a given level of performance to take into account additional factors that the Committee may deem relevant to the assessment of individual or corporate performance for the Performance
Period. 
 (iii) Rule 16b-3.    To the extent desirable to qualify
transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be structured to satisfy the requirements for exemption under Rule 16b-3. 

(iv) Other Administration.    Other than as provided above, the Plan shall be administered by
(A) the Board or (B) a Committee, which committee shall be constituted to satisfy Applicable Laws. 

(b) Powers of the Administrator.    Subject to the provisions of the Plan, and in the case of a
Committee, subject to the specific duties delegated by the Board to such Committee, the Administrator shall have the authority, in its discretion: 

(i) to determine the Fair Market Value; 

(ii) to select the Service Providers to whom Awards may be granted hereunder; 

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

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

(v) to determine the terms and conditions, not inconsistent with the terms of the Plan, of any Award granted hereunder.
Such terms and conditions include, but are not limited to, the exercise price, the time or times when Awards may be exercised (which may be based on performance criteria), any vesting acceleration or waiver of forfeiture restrictions in connection
with the termination of a Participant’s status as a Service Provider, and any restriction or limitation regarding any Award or the Shares relating thereto, based in each case on such factors as the Administrator, in its sole discretion, shall
determine; 
 (vi) to construe and interpret the terms of the Plan and awards granted pursuant to the Plan; 

(vii) to prescribe, amend and rescind rules and regulations relating to the Plan, including rules and regulations relating
to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws; 
 (viii) to
modify or amend each Award (subject to Section 17(c) of the Plan), including the discretionary authority to extend the post-termination exercisability period of Awards longer than is otherwise provided for in the Plan; 

(ix) to allow Participants to satisfy withholding tax obligations by electing to have the Company withhold from the Shares
to be issued upon exercise of an Award that number of Shares having a Fair 

 
Market Value up to the maximum statutory withholding rate that does not result in adverse accounting consequences. The Fair Market Value of the Shares to be withheld shall be determined on the
date that the amount of tax to be withheld is to be determined. All elections by a Participant to have Shares withheld for this purpose shall be made in such form and under such conditions as the Administrator may deem necessary or advisable; 

(x) to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award
previously granted by the Administrator; 
 (xi) to allow a Participant to defer the receipt of payment of cash or the
delivery of Shares that would otherwise be due to such Participant under an Award; or 
 (xii) to make all other
determinations deemed necessary or advisable for administering the Plan. 
 (c) Effect of Administrator’s
Decision.    The Administrator’s decisions, determinations and interpretations shall be final and binding on all Participants and any other holders of Awards. 

5. Eligibility.    Nonstatutory Stock Options, Stock Purchase Rights, Stock Appreciation Rights, and
Restricted Stock Units may be granted to Service Providers. Incentive Stock Options may be granted only to Employees. 

6. Limitations.  

(a) Each Option shall be designated in the Award Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options are exercisable for the first time by the Participant during any calendar year (under all plans of the
Company and any Parent or Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory Stock Options. For purposes of this Section 6(a), Incentive Stock Options shall be taken into account in the order in which they were granted.
The Fair Market Value of the Shares shall be determined as of the time the Option with respect to such Shares is granted. 
 (b) The
following limitations shall apply to grants of Options and Stock Appreciation Rights: 
 (i) No Service Provider shall
be granted, in any Fiscal Year, Options or Stock Appreciation Rights covering more than 1,500,000 Shares. 

(ii) In connection with his or her initial service, a Service Provider may be granted Options or Stock Appreciation Rights
covering up to an additional 1,500,000 Shares, which shall not count against the limit set forth in subsection (i) above. 

(iii) The foregoing limitations shall be adjusted proportionately in connection with any change in the Company’s
capitalization as described in Section 14. 
 (iv) If an Option or Stock Appreciation Right is cancelled in the
same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 14), the cancelled Option or Stock Appreciation Right will be counted against the limits set forth in subsections (i)
and (ii) above. For this purpose, if the exercise price of an Option or Stock Appreciation Right is reduced, the transaction will be treated as a cancellation of the Option or Stock Appreciation Right and the grant of a new Option or Stock
Appreciation Right. 
 (c) The exercise price of any Option or SAR outstanding or to be granted in the future under the Plan shall not
be reduced or cancelled and re-granted at a lower exercise price, regardless of whether or not the Shares subject to the cancelled Options or SARs are put back into the available pool for grant. In addition, the Administrator shall not replace
underwater Options or SARs with restricted stock or cash in an exchange, buy-back or other scheme. Moreover, the Administrator shall not replace any Options or SARs with new options or stock appreciation rights having a lower exercise price or
accelerated vesting schedule in an exchange, buy-back or other scheme. 
 (d) Non-Employee Director
Awards.    Notwithstanding any contrary provision in the Plan, no Participant who is a Non-Employee Director may be granted Awards during any Fiscal Year having a grant date fair value in

 
excess of $750,000, increased to $1,000,000 in connection with his or her initial service, calculated using the assumptions and methods used for recording compensation expense in the
Company’s financial statements. 
 7. Term of Plan.    Subject to Section 20 of the Plan, the Plan
shall become effective upon its adoption by the Board. It shall continue until December 31, 2023 unless terminated earlier under Section 17 of the Plan. 

8. Stock Options  

(a) Term of Option.    The term of each Option shall be stated in the Award Agreement, but in no event shall
the term of an Option be more than seven (7) years from the date of grant. Moreover, in the case of an Incentive Stock Option granted to a Participant who, at the time the Incentive Stock Option is granted, owns stock representing more than ten
percent (10%) of the total combined voting power of all classes of stock of the Company or any Parent or Subsidiary, the term of the Incentive Stock Option shall be five (5) years from the date of grant or such shorter term as may be
provided in the Award Agreement. 
 (b) Option Exercise Price and Consideration. 

(i) Exercise Price.    The per Share exercise price for the Shares to be issued pursuant to the
exercise of an Option shall be no less than 100% of the Fair Market Value per Share on the date of grant. In the case of an Incentive Stock Option granted to an Employee who, at the time the Incentive Stock Option is granted, owns stock representing
more than ten percent (10%) of the voting power of all classes of stock of the Company or any Parent or Subsidiary, the per Share exercise price shall be no less than 110% of the Fair Market Value per Share on the date of grant. 

(ii) Waiting Period and Exercise Dates.    At the time an Option is granted, the Administrator
shall fix the period within which the Option may be exercised and shall determine any conditions that must be satisfied before the Option may be exercised. 

(iii) Form of Consideration.    The Administrator shall determine the acceptable form of
consideration for exercising an Option, including the method of payment. In the case of an Incentive Stock Option, the Administrator shall determine the acceptable form of consideration at the time of grant. Such consideration may consist entirely
of: 
 (1) cash; 

(2) check; 

(3) other Shares which have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the
Shares as to which said Option shall be exercised; 
 (4) consideration received by the Company under a cashless
exercise program implemented by the Company in connection with the Plan; 
 (5) a reduction in the amount of any Company
liability to the Participant, including any liability attributable to the Participant’s participation in any Company-sponsored deferred compensation program or arrangement; 

(6) any combination of the foregoing methods of payment; or 

(7) such other consideration and method of payment for the issuance of Shares to the extent permitted by Applicable Laws.

 (c) Exercise of Option.  

(i) Procedure for Exercise; Rights as a Stockholder.    Any Option granted hereunder shall be
exercisable according to the terms of the Plan and at such times and under such conditions as determined by the Administrator and set forth in the Award Agreement. An Option may not be exercised for a fraction of a Share. 

(1) An Option shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in
such form as the Administrator may specify from time to time) from the person entitled to 

 
exercise the Option, and (ii) full payment for the Shares with respect to which the Option is exercised (together with any applicable withholding taxes). Full payment may consist of any
consideration and method of payment authorized by the Administrator and permitted by the Award Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of the Participant or, if requested by the Participant, in
the name of the Participant and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), no right to vote or receive dividends or any
other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the Option is exercised. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 14 of the Plan. 

(2) Exercising an Option in any manner shall decrease the number of Shares thereafter available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. 
 (ii) Termination
of Relationship as a Service Provider.    If a Participant ceases to be a Service Provider, other than upon the Participant’s death or Disability, the Participant may exercise his or her Option within such period of time
as is specified in the Award Agreement to the extent that the Option is vested on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time
in the Award Agreement, the Option shall remain exercisable for three (3) months following the Participant’s termination. If, on the date of termination, the Participant is not vested as to his or her entire Option, the Shares covered by
the unvested portion of the Option shall revert to the Plan. If, after termination, the Participant does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan. 
 (iii) Disability of Participant.    If a Participant ceases to
be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Option within such period of time as is specified in the Award Agreement to the extent the Option is vested on the date of termination
(but in no event later than the expiration of the term of such Option as set forth in the Award Agreement). In the absence of a specified time in the Award Agreement, the Option shall remain exercisable for twelve (12) months following the
Participant’s termination. If, on the date of termination, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Participant
does not exercise his or her Option within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

(iv) Death of Participant.    If a Participant dies while a Service Provider, the Option may be
exercised following the Participant’s death within such period of time as is specified in the Award Agreement (but in no event may the Option be exercised later than the expiration of the term of such Option as set forth in the Award
Agreement), by the Participant’s estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested on the date of death. In the absence of a specified time in the
Award Agreement, the Option shall remain exercisable for twelve (12) months following the Participant’s termination. If, at the time of death, the Participant is not vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall immediately revert to the Plan. The Option may be exercised by the executor or administrator of the Participant’s estate or, if none, by the person(s) entitled to exercise the Option under the Participant’s will
or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 

9. Stock Purchase Rights.  

(a) Rights to Purchase.    Stock Purchase Rights may be issued either alone, in addition to, or in tandem with
other Awards granted under the Plan and/or cash awards made outside of the Plan. After the Administrator determines that it will offer Stock Purchase Rights under the Plan, it shall advise the offeree in writing or electronically, of the terms,
conditions and restrictions related to the offer, including the number of Shares that the 

 
offeree shall be entitled to purchase (subject to the limits set forth in Section 3), the price to be paid, and the time within which the offeree must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form determined by the Administrator. The following limitations shall apply to grants of Stock Purchase Rights: 

(i) No Service Provider shall be granted, in any Fiscal Year, Stock Purchase Rights covering more than
1,000,000 Shares. 
 (ii) The foregoing limitation shall be adjusted proportionately in connection with any change
in the Company’s capitalization as described in Section 14. 
 (iii) If a Stock Purchase Right is cancelled in
the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 14), the cancelled Stock Purchase Right will be counted against the limit set forth in subsection (i) above. 

(b) Repurchase Option.    Unless the Administrator determines otherwise, the Restricted Stock Purchase
Agreement shall grant the Company a repurchase option exercisable upon the voluntary or involuntary termination of the purchaser’s service with the Company for any reason (including death or Disability). The purchase price for Shares
repurchased pursuant to the Restricted Stock Purchase Agreement shall be the original price paid by the purchaser and may be paid by cancellation of any indebtedness of the purchaser to the Company. The repurchase option shall lapse at a rate
determined by the Administrator. 
 (c) Other Provisions.    The Restricted Stock Purchase Agreement shall
contain such other terms, provisions and conditions not inconsistent with the Plan as may be determined by the Administrator in its sole discretion. 

(d) Rights as a Stockholder.    Once the Stock Purchase Right is exercised, the purchaser shall have the
rights equivalent to those of a stockholder, and shall be a stockholder when his or her purchase is entered upon the records of the duly authorized transfer agent of the Company. No adjustment will be made for a dividend or other right for which the
record date is prior to the date the Stock Purchase Right is exercised, except as provided in Section 14 of the Plan. 

10. Stock Appreciation Rights  

(a) Grant of SARs.    Subject to the terms and conditions of the Plan, a SAR may be granted to Service
Providers at any time and from time to time as will be determined by the Administrator, in its sole discretion. The Administrator may grant Affiliated SARs, Freestanding SARs, Tandem SARs, or any combination thereof. 

(b) Number of Shares.    The Administrator will have complete discretion to determine the number of SARs
granted to any Service Provider, subject to the limits set forth in Section 3 of the Plan. 
 (c) Exercise Price and Other
Terms.    The Administrator, subject to the provisions of the Plan, will determine the terms and conditions of SARs granted under the Plan; provided, that, the exercise price of a SAR is at least 100% of the Fair Market Value
of the Shares subject to the SAR; provided, further, the exercise price of Tandem or Affiliated SARs will equal the exercise price of the related Option. 

(d) Exercise of Tandem SARs.    Tandem SARs may be exercised for all or part of the Shares subject to the
related Option upon the surrender of the right to exercise the equivalent portion of the related Option. A Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable. With respect to a Tandem SAR
granted in connection with an Incentive Stock Option: (i) the Tandem SAR will expire no later than the expiration of the underlying Incentive Stock Option; (ii) the value of the payout with respect to the Tandem SAR will be for no more
than one hundred percent (100%) of the difference between the exercise price of the underlying Incentive Stock Option and the Fair Market Value of the Shares subject to the underlying Incentive Stock Option at the time the Tandem SAR is
exercised; and (iii) the Tandem SAR will be exercisable only when the Fair Market Value of the Shares subject to the Incentive Stock Option exceeds the Exercise Price of the Incentive Stock Option. 

(e) Exercise of Affiliated SARs.    An Affiliated SAR will be deemed to be exercised upon the exercise of the
related Option. The deemed exercise of an Affiliated SAR will not necessitate a reduction in the number of Shares subject to the related Option. 

 (f) Exercise of Freestanding SARs.    Freestanding SARs will be
exercisable on such terms and conditions as the Administrator, in its sole discretion, will determine. 
 (g) SAR
Agreement.    Each SAR grant will be evidenced by an Award Agreement that will specify the exercise price, the term of the SAR, the conditions of exercise, and such other terms and conditions as the Administrator, in its sole
discretion, will determine. 
 (h) Expiration of SARs.    An SAR granted under the Plan will expire upon the
date determined by the Administrator, in its sole discretion, and set forth in the Award Agreement. Notwithstanding the foregoing, the rules of Section 8(c) also will apply to SARs. 

(i) Payment of SAR Amount.    Upon exercise of a SAR, a Participant will be entitled to receive payment from
the Company in an amount determined by multiplying: 
 (i) The difference between the Fair Market Value of a Share on
the date of exercise over the exercise price; times 
 (ii) The number of Shares with respect to which the SAR is
exercised. 
 At the discretion of the Administrator, the payment upon SAR exercise may be in cash, in Shares of equivalent value, or in
some combination thereof. 
 11. Restricted Stock Units.  

(a) Grant of Restricted Stock Units.    Restricted Stock Units may be granted to Service Providers at any time
and from time to time, as will be determined by the Administrator, in its sole discretion. The Administrator will have complete discretion in determining the number of Restricted Stock Units granted to each Participant, subject to the limits set
forth in Section 3 of the Plan. The following limitations shall apply to grants of Restricted Stock Units: 

(i) No Service Provider shall be granted, in any Fiscal Year, Restricted Stock Units covering more than
1,000,000 Shares. 
 (ii) The foregoing limitation shall be adjusted proportionately in connection with any change
in the Company’s capitalization as described in Section 14. 
 (iii) If a Restricted Stock Unit is cancelled
in the same fiscal year of the Company in which it was granted (other than in connection with a transaction described in Section 14), the cancelled Restricted Stock Unit will be counted against the limit set forth in subsection (i) above.

 (b) Value of Restricted Stock Units.    Each Restricted Stock Unit will have an initial value that is
established by the Administrator on or before the date of grant. 
 (c) Performance Objectives and Other
Terms.    The Administrator will set performance objectives or other vesting provisions (including, without limitation, continued status as a Service Provider) in its discretion which, depending on the extent to which they
are met, will determine the number or value of Restricted Stock Units that will be paid out to the Service Providers. Each award of Restricted Stock Units will be evidenced by an Award Agreement that will specify the Performance Period, and such
other terms and conditions as the Administrator, in its sole discretion, will determine. The Administrator may set performance objectives based upon the achievement of Company-wide, divisional, or individual goals, applicable federal or state
securities laws, or any other basis determined by the Administrator in its discretion. 
 (d) Earning of Restricted Stock
Units.    After the applicable Performance Period has ended, the holder of Restricted Stock Units will be entitled to receive a payout of the number of Restricted Stock Units earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding performance objectives or other vesting provisions have been achieved. After the grant of a Restricted Stock Units, the Administrator, in its sole discretion, may reduce
or waive any performance objectives or other vesting provisions for such Restricted Stock Unit. 

 (e) Form and Timing of Payment of Restricted Stock
Units.    Payment of earned Restricted Stock Units will be made as soon as practicable after the expiration of the applicable Performance Period. The Administrator, in its sole discretion, may pay earned Restricted Stock
Units in the form of cash, in Shares (which have an aggregate Fair Market Value equal to the value of the earned Restricted Stock Units at the close of the applicable Performance Period) or in a combination thereof. 

(f) Cancellation of Restricted Stock Units.    On the date set forth in the Award Agreement, all unearned or
unvested Restricted Stock Units will be forfeited to the Company, and again will be available for grant under the Plan. 

12. Leaves of Absence.    Unless the Administrator provides otherwise or as otherwise required by applicable
law, vesting of Awards granted hereunder will be treated as follows during a leave of absence of a Participant: 
 (a) Statutory Leave of
Absence.    Vesting credit will continue during a leave of absence if the leave satisfies each of the following requirements: (a) the leave is approved by the Company, (b) the leave is mandated by applicable law,
and (c) the Participant takes the leave in accordance with such law and complies with applicable Company leave policies (a leave meeting all such requirements being a “Statutory Leave of Absence”). 

(b) Approved Personal Leave of Absence.    Vesting credit will not continue (and instead will be tolled or
suspended) during any leave of absence that is not a Statutory Leave of Absence (a “Personal Leave of Absence”). For purposes of clarification, a Participant will not cease to be a Service Provider during any Company-approved Personal
Leave of Absence so long as the Participant complies with applicable law and applicable Company leave policies. 
 (c) Incentive Stock
Options.    For purposes of Incentive Stock Options, if a leave of absence continues for more than ninety (90) days, then the Option shall be treated for tax purposes as a Nonstatutory Stock Option at the end of the
three (3)-month period measured from the 91st day of such leave, unless Optionee’s reemployment upon expiration of such leave is guaranteed by statute or contract. 

13. Non-Transferability of Awards.    Unless determined otherwise by the Administrator, an Award may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or distribution and may be exercised, during the lifetime of the Participant, only by the Participant. If the Administrator
makes an Award transferable, such Award shall contain such additional terms and conditions as the Administrator deems appropriate. 

14. Adjustments Upon Changes in Capitalization, Dissolution, Merger or Asset Sale.  

(a) Changes in Capitalization.    Subject to any required action by the stockholders of the Company, the
number and class of Shares that may be delivered under the Plan and/or the number, class, and price of Shares covered by each outstanding Award, and the numerical Share limits in Sections 3, 6, 9 and 11 of the Plan, shall be proportionately
adjusted for any increase or decrease in the number of issued Shares resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Shares, or any other increase or decrease in the number of issued Shares
effected without receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall
be made by the Board, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no 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 or price of Shares subject to an Award. 

(b) Dissolution or Liquidation.    In the event of the proposed dissolution or liquidation of the Company, the
Administrator shall notify each Participant as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for a Participant to have the right to exercise his or her Award until ten
(10) days prior to such transaction as to all of the Optioned Stock covered thereby, including Shares as to which the Award would not otherwise be exercisable. In addition, the Administrator may provide that any Company repurchase option
applicable to any Shares purchased upon exercise of an Award shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously
exercised, an Award will terminate immediately prior to the consummation of such proposed action. 

 (c) Merger or Asset Sale.    In the event of a merger of the
Company with or into another corporation, or the sale of substantially all of the assets of the Company, each outstanding Award shall be assumed or an equivalent option or right substituted by the successor corporation or a Parent or Subsidiary of
the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Award, the Participant will fully vest in and have the right to exercise all of his or her outstanding Options and Stock Appreciation
Rights, including Shares as to which such Awards would not otherwise be vested or exercisable, all restrictions on Restricted Stock will lapse, and, with respect to Restricted Stock Units, all Performance Goals or other vesting criteria will be
deemed achieved at target levels and all other terms and conditions met. In addition, if an Option or Stock Appreciation Right becomes fully vested and exercisable in lieu of assumption or substitution in the event of a merger or sale of assets, the
Administrator will notify the Participant in writing or electronically that the Option or Stock Appreciation Right will be fully vested and exercisable for a period of 15 days from the date of such notice, and the Option or Stock Appreciation
Right will terminate upon the expiration of such period. 
 For the purposes of this paragraph, the Award shall be considered assumed if,
following the merger or sale of assets, the Award confers the right to purchase or receive, for each Share subject to the Award immediately prior to the merger or sale of assets, the consideration (whether stock, cash, or other securities or
property) or, in the case of a Stock Appreciation Right upon the exercise of which the Administrator determines to pay cash or a Restricted Stock Unit which the Administrator can determine to pay in cash, the fair market value of the consideration
received in the merger or sale of assets by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of
the outstanding Shares); provided, however, that if such consideration received in the merger or sale of assets is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise of an Option or Stock Appreciation Right or upon the payout of a Restricted Stock Unit, for each Share subject to such Award (or in the case of Restricted Stock Units, the
number of implied shares determined by dividing the value of the Restricted Stock Units by the per Share consideration received by holders of Common Stock in the merger or sale of assets), to be solely common stock of the successor corporation or
its Parent equal in fair market value to the per Share consideration received by holders of Common Stock in the merger or sale of assets. 

Notwithstanding anything in this Section 14(c) to the contrary, an Award that vests, is earned or paid-out upon the satisfaction of one
or more Performance Goals will not be considered assumed if the Company or its successor modifies any of such Performance Goals without the Participant’s consent; provided, however, a modification to such Performance Goals only to reflect the
successor corporation’s corporate structure post-merger or post-sale of assets will not be deemed to invalidate an otherwise valid Award assumption. 

15. No Effect on Employment or Service.    Neither the Plan nor any Award will confer upon a Participant any
right with respect to continuing the Participant’s relationship as a Service Provider with the Company, nor will they interfere in any way with the Participant’s right or the Company’s right to terminate such relationship at any time,
with or without cause, to the extent permitted by Applicable Laws. 
 16. Date of Grant.    The date of
grant of an Award shall be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each
Participant within a reasonable time after the date of such grant. 
 17. Amendment and Termination of the Plan.  

(a) Amendment and Termination.    The Board may at any time amend, alter, suspend or terminate the Plan. 

(b) Stockholder Approval.    The Company shall obtain stockholder approval of any Plan amendment to the extent
necessary and desirable to comply with Applicable Law. Notwithstanding the foregoing, the Company shall also obtain stockholder approval of any Plan amendment or any exchange, buy-back or other scheme which would purport to reprice or otherwise
cancel and replace any Option or SAR as described in Section 6(c) of the Plan. 
 (c) Effect of Amendment or
Termination.    No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the

 
Administrator, which agreement must be in writing and signed by the Participant and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers
granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination. 
 18. Conditions Upon
Issuance of Shares.  
 (a) Legal Compliance.    Shares shall not be issued pursuant to the exercise of
an Award unless the exercise of such Award and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to such compliance. 

(b) Investment Representations.    As a condition to the exercise of an Award, the Company may require the
person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the
Company, such a representation is required. 
 19. Inability to Obtain Authority.    The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in
respect of the failure to issue or sell such Shares as to which such requisite authority shall not have been obtained. 

20. Stockholder Approval.    The Plan shall be subject to approval by the stockholders of the Company within
twelve (12) months after the date the Plan is adopted. Such stockholder approval shall be obtained in the manner and to the degree required under Applicable Laws.

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