Document:

2008 American Water Senior Management Annual Incentive Plan

 Exhibit 10.25 
 

 
 The 2008 Annual Incentive Plan 
 REWARDING ACHIEVEMENT 
 Senior Management Incentive Plan 
 

 

 The 2008 American Water Annual Incentive Plan 
 The 2008 American Water Annual Incentive Plan (AIP) recognizes the opportunity and the accountability we share for achieving our goals. Your accomplishments have helped to build American Water’s success to this
point, and the AIP will reward you for the contribution you make to the achievement of our 2008 goals. 
 Who Is Eligible for the 2008 AIP 

 All full-time employees in Management Levels ML1 – ML4 in American Water are eligible to participate in the 2008 AIP. 
 Eligible employees who join American Water on or before September 30th of a plan year (January 1 – December 31) are also eligible to participate in the plan on a prorated basis. 
 Target levels for assignees seconded from Germany are aligned with incentive opportunities for German based employees to maintain the “home country terms and conditions” approach adopted for assignees.

 Individuals who do not meet their individual performance expectations will not be eligible to receive an incentive award. The American Water Board, or its
designee for these purposes, reserves the right to determine whether incentives are payable to any individual or group of individuals. The Board may withhold all incentive payments in certain circumstances. 
 Your Award Opportunity 
 Your award opportunity is based on
your role. Your manager will confirm your award opportunity to you in writing. Any award you earn is based on your salary as of December 31, 2008. 
 If
you are promoted during the plan year to a position with a higher target level, your bonus plan will be prorated to reflect participation at each award level. Similarly, if you are reclassified to a position with a lower AIP award level, your bonus
plan will be prorated to reflect your participation at each award level. 
  

 2 

 What the Plan Measures 
 The AIP is designed to reward participants for the performance results they and the Company attain during the plan year. There are three performance components: ‘Financial’ (Corporate, Divisional/Regional and State),
‘Operational’ and ‘Individual’. 
  

	 	•	 	 The Financial component is based on Operating Income. The performance level will be determined at the Corporate and Divisional/Regional/State levels. For
2008, more than 85% of the Operating Income target for the entire Company must be achieved before any payment will be made on the Corporate financial component of the Plan (although a payment could be made on the Divisional/Regional and State
financial component if the Divisional/Regional/State operating income exceeds 85% of target). In addition, more than 75% of the Corporate Operating Income target must be achieved before any payment will be made on any component of the Plan
for the entire Company (including Divisional/Regional/State financial, operational and individual components). 

 Operating Income – is defined as earnings before interest, taxes and other non-operating expenses. (This definition applies to Corporate, Divisional, Regional and State Operating Income.) 
 See Attachment A for the 2008 Target Level Achievement Schedule. 
  

	 	•	 	 The Operational component is based on the following: 

 Environmental Compliance (NOV) 
 Environmental Compliance is measured by “Notice of
Violation” (NOV) count defined as the number of times an official notice is issued by a primacy agency for failure to comply with a federal, state, or local environmental statute or regulation that is covered under the scope of the American
Water Environmental Management Policy. 
 Safety Performance 
 Safety performance will be measured on an OSHA Total Recordable Incident Rate (ORIR) which is defined as the rate of total injuries requiring treatment
beyond first aid per 200,000 hours worked. ORIR focuses on total injury reduction which by extension improves Lost Work Day Case Rate (LWCR) and correlates more closely to workers compensation claims and costs. LWCR will remain a personal
performance goal for the Operations and Operational Risk Management functions. 
 Customer Satisfaction 
 Customer Satisfaction is based on the results of the annual Customer Satisfaction Survey (CSS) conducted in the fourth quarter each year through randomly
selected customer contacts in each State. This survey will ask our customers “Overall, how satisfied have you been with (Company Name) in general during the past twelve months?” This has a five-point response scale (Extremely Satisfied,
Very Satisfied, Somewhat Satisfied, Somewhat Dissatisfied, Very Dissatisfied). 
  

 3 

 Service Quality 
 Service Quality is based on the annual results of the Service Quality Surveys (SQS) conducted throughout the year with customers having had recent contact with an AW Customer Service (CSR) or Field Service (FSR)
Representative. This survey will ask the customer, “Overall, how satisfied were you with the outcome of your service contact?” having a five point response scale (Extremely Satisfied, Very Satisfied, Somewhat Satisfied, Somewhat
Dissatisfied, Very Dissatisfied), is used to measure performance by evaluating the response percentage total for the top two categories (extremely or very satisfied). 
 Service Level 
  

	 	•	 	 Percentage of calls answered in the Customer Service Center within a certain timeframe. 

 Quality Measures (Shared Services Center - SSC): 
  

	 	•	 	 SSC Error Rate - Number of Financial Statements errors (Annual). 

  

	 	•	 	 Reconciliations - Calendar Year Average of accounts beyond policy. 

  

	 	•	 	 Timeliness of Processes - Annual percentage of processes conducted according to schedule -Tax Filings, Financial Statements available for consolidation, External
Audit information submissions, days to image and process invoices, and Orcom rate changes. 

 Compliance (Shared
Services Center - SSC): 
  

	 	•	 	 External Audit Findings - Number of unrecorded differences and topside entries. 

  

	 	•	 	 Internal Audit Findings - Number of instances of deviations from policy/procedures during SOX testing. 

  

	 	•	 	 External Filing Requirements - Annual Reports and Commission Reports completed by established deadlines for SSC. 

  

	 	•	 	 The Individual component includes Performance Targets as agreed by you and your manager within the companywide standard performance management process.

 Your AIP letter will provide you with your Company component targets. 
 How Your Award Is Weighted 
 Your award opportunity is based on
two, three or four performance components (see pages 3 and 4), depending on your role. However, you could earn part of your award based on individual, operational and divisional/regional/state financial components if Corporate Operating Income is
more than 75%. If Corporate Operating Income is 75% or less, no award will be paid on any component. 
  

 4 

 The portion of your award opportunity you can earn for each component is reflected in weightings assigned to each, based
on your role in the organization, as the following charts show. The award has a target and a maximum opportunity. 
 BUSINESS CENTER –
2008 
  

																
	 Management Level
	 	Corporate
Financial	 	 	Individual (1)	 	 	Target
Opportunity	 	 	 Management Positions

		  	ML1	  		 			 			 			 	
	 Financial
 70%
	  		  	Individual 30%
	 	56	%	 	24	%	 	80	%	 	CEO
		  	ML2	  		 			 			 			 	
	 Financial
 50%
	  		  	Individual 50%
	 	25	%	 	25	%	 	50	%	 	COO, CFO
		  	ML3	  		 			 			 			 	
	 Financial
 40%
	  		  	Individual 60%
	 	16	%	 	24	%	 	40	%	 	Senior Management
		  	ML4	  		 			 			 			 	
	 Financial
 40%
	  		  	Individual 60%
	 	10	%	 	15	%	 	25	%	 	 Vice President
 Directors

  

	(1)	This component is defined as Target Agreement or Performance Targets. 

 SHARED SERVICES CENTER / CUSTOMER SERVICE CENTER – 2008 
  

																			
	 Management Level
	  	Corporate
Financial
(40%)	 	 	Individual (1)
(30%)	 	 	Operational (2)
(30%)	 	 	Target
Opportunity	 	 	 Management Position

		  	ML4	  		  			 			 			 			 	
	 Financial
	  		  	Individual/ Operational
	  	10	%	 	7.5	%	 	7.5	%	 	25	%	 	 Vice President
 Director

	 40%
	  		  	60%	  			 			 			 			 	

  

	(1)	This component is defined as Target Agreement or Performance Targets. 

  

	(2)	This component is defined by Customer Service Center as: 34% Customer Satisfaction; 33% Service Quality; 33% Service Level. 

  

 5 

 Divisional/Regional/State – 2008 
  

																						
	 Management Level
	 	Corporate
Financial
(40%)	 	 	Divisional/
Regional/
State
Financial
(20%)	 	 	Individual (1)
(20%)	 	 	Operational (2)
(20%)	 	 	Target
Opportunity	 	 	 
		  	ML3	  		 			 			 			 			 			 	
	 Financial
	  		  	Individual/
Operational/
Divisional/
Regional/
State
Financial	 	16	%	 	8	%	 	8	%	 	8	%	 	40	%	 	 Divisional/
 Regional/
 State Presidents

	 40%
	  		  	60%	 			 			 			 			 			 	
		  	ML4	  		 			 			 			 			 			 	
	 Financial
	  		  	Individual/ Operational/
 Divisional/
 Regional/
 State
 Financial
	 	10	%	 	5	%	 	5	%	 	5	%	 	25	%	 	 State Presidents,
 Directors

	 40%
	  		  	60%	 			 			 			 			 			 	

  

	(1)	This component is defined as Target Agreement or Performance Targets. 

  

	(2)	50% of the Operational component is allocated to Customer Satisfaction/Customer Service Quality. 

  

 6 

 How the Weightings Come Together 
 Here is an example of how the performance components and their weightings come together. As you can see, the measures within each component are also weighted. 
 EXAMPLE 
 

 
  

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 Operational 
 Divisional/Regional/State Operational components are performance measures tied to the American Water objectives. Each component percentage is as follows: Service Quality (25%); Environmental Compliance (NOVs) (25%); Safety Performance
(25%); Customer Satisfaction (25%); and Shared Services and Customer Service operational components are described in Attachments B & C. 
 Operational
components are evaluated on a range from 0 to 120%. 
 Performance You Can Impact 
 We believe it is essential that you are accountable for, measured on and rewarded for performance that you can directly impact or influence. 
 You and your manager have agreed on your individual performance targets. These targets should relate back to the performance scorecard for your business unit, division/region/state and should directly reflect your
role. 
 Individual Performance 
 Individual
performance will be assessed using American Water’s Performance Management and Development Review (PDR) process. The first section of the PDR form contains a scorecard in which your individual Performance Targets will be documented. You and
your supervisor will jointly identify and agree to your individual Performance Targets and relative weightings to be achieved during the year. 
 In
overview, the PDR requires each individual to have five Performance Targets. The Performance Targets should be specific and measurable and aligned with the Company performance targets. Each target needs to be evaluated on a range of 0 to 120%
according to its importance relative to other targets. In this way excelling at your highest priority target, which has the heaviest weighting, will drive a bigger award. At least one of the targets should be linked to a personal development
objective. At the beginning of 2009, a structured performance review will be conducted to determine how well you performed against your targets in 2008. It will be the Performance Scorecard Summary Rating for these 5 Performance Targets and NOT
the “overall” performance rating that will be used for AIP award purposes (see below). 
  

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 Performance Category 
 Each participant in the AIP plan should have 5 performance targets. An assessment should be made of performance against each target. Once evaluated, each individual performance target rating will be added and averaged to determine an
overall rating. 
 Example #1 
  

														
	 Performance Target Rating (PT)
	  	AIP Performance Rating	  	Percentage
Amount	  	Weighting	  	Subtotal
	 PT#1 (Meets Expectations)
	  	Target fully achieved	  	100	  	x	  	20	%	 	=	  	20
	 PT#2 (Meets Expectations)
	  	Target largely achieved	  	85	  	x	  	20	%	 	=	  	17
	 PT#3 (Does Not Meet Expectations)
	  	Target not achieved	  	0	  	x	  	20	%	 	=	  	0
	 PT #4 (Progressing)
	  	Target partially achieved	  	60	  	x	  	20	%	 	=	  	12
	 PT #5 (Exceeds Expectations)
	  	Target exceeds expectations	  	120	  	x	  	20	%	 	=	  	24

 Take each performance target percentage amount and multiply it by its assigned weight. Add the subtotal numbers =
73 (Individual Weighting Factor) 73% would be used as the INDIVIDUAL weighting factor in the AIP plan. 
 Example #2 
  

														
	 Performance Target Rating (PT)
	  	AIP Performance Rating	  	Percentage
Amount	  	Weighting	  	Subtotal
	 PT#1 (Exceeds Expectations)
	  	Target exceeds expectations	  	120	  	x	  	10	%	 	=	  	12
	 PT#2 (Meets Expectations)
	  	Target largely achieved	  	90	  	x	  	20	%	 	=	  	18
	 PT#3 (Does Not Meet Expectations)
	  	Target not achieved	  	0	  	x	  	10	%	 	=	  	0
	 PT #4 (Progressing)
	  	Target partially achieved	  	55	  	x	  	20	%	 	=	  	11
	 PT #5 (Meets Expectations)
	  	Target fully achieved	  	100	  	x	  	40	%	 	=	  	40

 81 would be the subtotal and 81% would be used as the INDIVIDUAL weighting factor in the AIP plan. 
  

 9 

 2008 Target Rating Scale 
  

				
	 Rating
	  	Scale	 
	 Exceeds Expectations
	  	101 – 120	%
	 Meets Expectations
	  		
	 - Target Fully Achieved
	  	100	%
	 - Target Largely Achieved
	  	75 – 99	%
	 Progressing
	  		
	 - Target Partially Achieved
	  	25 – 74	%
	 Does Not Meet Expectations
	  	0	%
	 - Not Achieved
	  		
	 Too Soon to Rate
	  	0	%

 Performance ratings can range from 0% - 120%. The degree of percentage given will be based on the
supervisor’s assessment of performance on the performance target. The maximum payment you can receive under the Individual component is 120%. This would only be awarded if an individual exceeded all 5 performance targets. This should be used
only in cases of exceptional and outstanding performance against a target. If an individual received a “too soon to rate” or “does not meet expectations” on their performance scorecard they would not be eligible for an AIP award.

 How Your Payout Is Determined 
 At the end of
the year, the amount for each component is based on performance against each goal within the component and its relative weighting. Here is a simplified way to think of it. 
 

 
 (See example on page 11.) 
  

 10 

 2008 AIP Payout Example 
 ML4 EXAMPLE: 
 Target Opportunity is 25% with 40% Corporate Operating Income 20% Divisional/Regional/State
Operating Income, 20% Operational and 20% Individual Components
 Financial Performance 
 Corporate Operating Income 
 Achievement against financial target = 103.000% x 10.000% (Target) =10.300%
 Divisional/Regional/State Operating Income 
 Achievement against financial
target = 100.000% x 5.000% (Target) =5.000%
 Operational Performance 
 Achievement against operational targets = 96.50% x 5.000% (Target) =4.825% 
 Individual Performance 
 Achievement against 5 Performance targets = 97.50% x 5.000% (Target) = 4.875% 
 Total AIP payable is 10.300%(Corporate Operating Income) + 5.000% (Divisional/Regional/State Operating Income) + 4.825% (Operational) + 4.875% (Individual) is 25.00% of annual base salary of $150,000 or $37,500 
  

											
	 Salary
	  	x	  	 AIP Target
	  	equals	  	 Target Payout
	  	 Maximum Payout

	$150,000	  		  	25%	  		  	$37,500	  	$51,750
	Operating
Income
(40%)	  		  		  		  	Financial/
Operational/
Individual (60%)	  	
	 Corporate
Operating
Income
 =10%
	  		  	 Divisional/Regional/State Operating
Income
 =5%
	  		  	 Operational
Results
 =5%
	  	 Individual Performance Targets
 =5%

	Target	  		  	Target	  		  	Target	  	Target
	$15,000	  		  	$7,500	  		  	$7,500	  	$7,500
	Actual	  		  	Actual	  		  	Actual	  	Actual
	$15,450	  		  	$7,500	  		  	$7,238	  	$7,313
	Maximum =
150%	  		  	Maximum =
150%	  		  	Maximum=
120%	  	Maximum=
120%
	$22,500	  		  	$11,250	  		  	$9,000	  	$9,000

  

 11 

 Target Bonuses 
 You will have received a letter which states your target bonus opportunity. Target bonus is defined as the bonus paid at 100% for both financial and individual awards. This means business plan is achieved for the financial and
operational element, and the employee has met his/her objectives for the individual element. 
 The maximum bonus you can receive is 150% of your Financial
element (both Corporate and Divisional/Regional/State), 120% of Operational and 120% of your Individual element. 
 Adjustments for Uncontrollable
Events 
 The financial data included in the appendices has been prepared on the basis of the business plans agreed in 2008, using the assumptions set
at that time. As in previous years, the actual results used for assessment may be amended to reflect the impact of events that are not considered to be within the control of local management. Any such amendments will require the explicit approval of
the Chief Executive Officer and the Chief Financial Officer, and if material, the Board, whose decision will be final. The following items are those most likely to be considered for amendment: 
  

	 	•	 	 Weather conditions having a material impact on the financial results 

  

	 	•	 	 The impact of movements in foreign exchange rates 

  

	 	•	 	 Disposal/acquisition of businesses not anticipated in the business plan, but subsequently mandated by the Board of Directors 

  

	 	•	 	 Goodwill impairments 

  

	 	•	 	 Costs related to the public offering 

 Award
Payments 
 To be eligible to receive an AIP award, you must be actively employed on the date the payment is made. However, in case of disability,
retirement, layoff or death during the plan year, a prorated award based on participation in the plan may be payable. Employees who resign or are terminated for cause at any time prior to payment are not eligible. 
 Awards are usually determined and paid in cash as soon as possible after the release of financial results. Awards
are paid by March 15th of the following year. Awards are subject to all federal, state and local income tax withholdings. 
 If you become eligible to join the AIP during a plan year, any payout for that year will be prorated to reflect your participation in the plan. 
 The American Water Board, or its designee for these purposes, reserves the right to determine whether incentives are payable to any individual or group of individuals.
The Board may withhold all incentive payments in certain circumstances, such as failing to reach minimum financial goals. Individuals who do not meet their individual performance expectations will not be eligible to receive an incentive award.

  

 12 

 Rewarding Achievement 
 Our AIP goals are challenging, but with your focus and contribution and effective teamwork, they can be achieved. Remember, your individual results do matter; our overall performance is the collective results of all our employees.

 It is important that you clearly understand your goals, how we are performing against the goals, and how the AIP works so you know how you personally
affect our performance. Be sure to talk to your manager or your local HR representative if you have questions. 
 This brochure describes the 2008 American
Water Annual Incentive Plan. The American Water Board or its Designee, whose decisions will be final and binding, will determine interpretations of the Plan. The Company reserves the right to amend, modify, or discontinue the Plan during the plan
year or at any time in the future. Participation in the Plan does not convey any commitment to ongoing employment. If there are any differences between the information contained here and the Plan Document, the Plan Documents will govern. 

 

 13TiVo Inc. Amended & Restated 1999 Employee Stock Purchase Plan Offering Document

 Exhibit 10.6 
 TIVO INC. 
 1999 EMPLOYEE STOCK PURCHASE PLAN 
 OFFERING 
 Adopted July 14, 1999

 Amended and Restated August 15, 2002 
 Amended and Restated by Board of Directors September 9, 2005 
 Amended and Restated by Board of
Directors December 12, 2007 
 Stockholder Approval Not Required 
  

	1.	Grant of Rights. 

 (a) The Board of Directors
(“Board”) of TiVo Inc., a Delaware corporation (the “Company”), pursuant to the Company’s 1999 Employee Stock Purchase Plan (the “Plan”), hereby authorizes the grant of Rights to purchase Shares of the Company to
all Eligible Employees (an “Offering”). Defined terms not explicitly defined in this Offering but defined in the Plan shall have the same definitions as in the Plan. In the event of any conflict between the provisions of an Offering and
those of the Plan (including interpretations, amendments, rules and regulations that may from time to time be promulgated and adopted pursuant to the Plan), the provisions of the Plan shall control. 
 (b) An “Offering Date” is the first day of an Offering, provided, however if the Company’s common stock is listed on any established stock
exchange and shares of the Company’s common stock are not traded on such scheduled first day of an Offering, then the next day in which shares of the Company’s common stock are traded on such stock exchange shall be the first day of an
Offering. An Offering may consist of one purchase period or may be divided into shorter purchase periods (“Purchase Periods”). A “Purchase Date” is the last day of a Purchase Period or the Offering, as the case may be, and if the
Company’s common stock is listed on any established stock exchange and shares of the Company’s common stock are not traded on such scheduled end date, then the last day of a Purchase Period or the Offering, as the case may be, shall
instead be on the most recent preceding day in which shares of the Company’s common stock were traded on such stock exchange. 
 (c)
Except as otherwise provided herein, each Offering hereunder shall be divided into two (2) shorter Purchase Periods approximately six (6) months in length. 
 (d) Currently, Offerings begin on each July 1 and are divided into two (2) shorter Purchase Periods of six (6) months in length. The Purchase Periods begin on each July 1 and January 1 and end
on each December 31 and June 30; provided, however, that if on the first Purchase Date during an Offering the fair market value of the Shares is less than it was on the Offering Date for that Offering, the day after such Purchase Date
shall become the next Offering Date and the Offering that would otherwise have continued in effect shall immediately terminate. Each Offering shall end prior to the first anniversary of its Offering Date. 

 (e) The next Offering shall commence January 1, 2008 and end December 31, 2008, unless sooner
terminated as provided herein. It shall be divided into two (2) Purchase Periods, the first of which shall be eight (8) months in length, commencing January 1, 2008 and ending on August 31, 2008, and the second of which shall be
four (4) months in length, commencing September 1, 2008 and ending December 31, 2008; provided, however, that if on the first Purchase Date of the such Offering the fair market value of the Shares is less than it was on the Offering
Date for the Offering, then September 1, 2008 shall become a new Offering Date and the Offering that would otherwise have continued in effect shall immediately terminate. In the event a new Offering is commenced on September 1, 2008, then
such new Offering shall be divided into two (2) Purchase Periods, the first of which shall be four (4) months in length, commencing September 1, 2008 and ending on December 31, 2008, and the second of which shall be six
(6) months in length, commencing January 1, 2009 and ending June 30, 2009; provided, however, that if on the first Purchase Date of the such Offering the fair market value of the Shares is less than it was on the Offering Date for the
Offering, then January 1, 2009 shall become a new Offering Date and the Offering that would otherwise have continued in effect shall immediately terminate. Thereafter, Offerings shall commence each January 1 or July 1, as applicable,
and be divided into two (2) shorter Purchase Periods of six (6) months in length. Such subsequent Purchase Periods shall begin on each January 1 and July 1 and end on each June 30 and December 31. Notwithstanding the
preceding two sentences, if on the first Purchase Date during an Offering the fair market value of the Shares is less than it was on the Offering Date for that Offering, the next January 1 or July 1 (which ever is sooner) after such
Purchase Date shall become the next Offering Date and the Offering that would otherwise have continued in effect shall immediately terminate. Each Offering shall end prior to the first anniversary of its Offering Date. 
 (f) Prior to the commencement of any Offering, the Board may change any or all terms of such Offering and any subsequent Offerings. The granting of
Rights pursuant to each Offering hereunder shall occur on each respective Offering Date unless, prior to such date (i) the Board determines that such Offering shall not occur, or (ii) no Shares remain available for issuance under the Plan
in connection with the Offering. 
 (g) Notwithstanding any other provisions of an Offering, if the terms of an Offering as previously
established by the Board would, as a result of a change to applicable accounting standards, generate a charge to earnings, such Offering shall terminate effective as of the day prior to the date such change to accounting standards would otherwise
first apply to the Offering (the “Offering Termination Date”), and such Offering Termination Date shall be the final Purchase Date of such Offering. A subsequent Offering shall commence on such date and on such terms as shall be provided
by the Board. 
  

	2.	Eligible Employees. 

 (a) All employees of the
Company and each of its Affiliates incorporated in the United States shall be granted Rights to purchase Shares under each Offering on the Offering Date of such Offering, provided that each such employee otherwise meets the 

  

 2 

 
employment requirements of subparagraph 6(a) of the Plan and has been continuously employed for at least ten (10) days on the Offering Date of such
Offering (an “Eligible Employee”). 
 (b) Notwithstanding the foregoing, the following employees shall not be Eligible Employees or
be granted Rights under an Offering: (i) part-time or seasonal employees whose customary employment is twenty (20) hours or less per week or not more than five (5) months per calendar year or (ii) 5% stockholders (including
ownership through unexercised options) described in subparagraph 6(c) of the Plan. 
 (c) Notwithstanding the foregoing, each person who
first becomes an Eligible Employee ten (10) or more days prior to the end of the first Purchase Period of an Offering may, as of the first day of the second Purchase Period during that Offering, receive a Right under such Offering, which Right
shall thereafter be deemed to be a part of the Offering. Such Right shall have the same characteristics as any Rights originally granted under the Offering except that: 
 (i) the date on which such Right is granted shall be the “Offering Date” of such Right for all purposes, including determination of the exercise price of such Right; and 
 (ii) the Offering for such Right shall begin on its Offering Date and end coincident with the end of the ongoing Offering. 
  

	3.	Rights. 

 (a) Subject to the limitations contained
herein and in the Plan, on each Offering Date each Eligible Employee shall be granted the Right to purchase the number of Shares purchasable with up to fifteen percent (15%) of such Eligible Employee’s Earnings paid during such Offering
after the Eligible Employee first commences participation; provided, however, that no employee may purchase Shares on a particular Purchase Date that would result in more than fifteen percent (15%) of such employee’s Earnings in the period
from the Offering Date to such Purchase Date having been applied to purchase Shares under all ongoing Offerings under the Plan and all other Company plans intended to qualify as “employee stock purchase plans” under Section 423 of the
Internal Revenue Code of 1986, as amended (the “Code”). 
 (b) For this Offering, “Earnings” means the total compensation
paid to an employee, including all salary, wages (including amounts elected to be deferred by the employee, that would otherwise have been paid, under any cash or deferred arrangement established by the Company), overtime pay, commissions, bonuses,
and other remuneration paid directly to the employee, but excluding profit sharing, the cost of employee benefits paid for by the Company, education or tuition reimbursements, imputed income arising under any Company group insurance or benefit
program, traveling expenses, business and moving expense reimbursements, income received in connection with stock options, contributions made by the Company under any employee benefit plan, and similar items of compensation. 
  

 3 

 (c) Notwithstanding the foregoing, the maximum number of Shares an Eligible Employee may purchase on any
Purchase Date in an Offering shall be such number of Shares as has a fair market value (determined as of the Offering Date for such Offering) equal to (x) $25,000 multiplied by the number of calendar years in which the Right under such Offering
has been outstanding at any time, minus (y) the fair market value of any other Shares (determined as of the relevant Offering Date with respect to such Shares) which, for purposes of the limitation of Section 423(b)(8) of the Code, are
attributed to any of such calendar years in which the Right is outstanding. The amount in clause (y) of the previous sentence shall be determined in accordance with regulations applicable under Section 423(b)(8) of the Code based on
(i) the number of Shares previously purchased with respect to such calendar years pursuant to such Offering or any other Offering under the Plan, or pursuant to any other Company plans intended to qualify as “employee stock purchase
plans” under Section 423 of the Code, and (ii) the number of Shares subject to other Rights outstanding on the Offering Date for such Offering pursuant to the Plan or any other such Company plan. 
 (d) With respect to any Offering commencing on or after November 1, 2002, the maximum number of Shares that may be purchased by any Eligible
Employee in each Offering shall be 20,000 Shares. The maximum aggregate number of Shares available to be purchased by all Eligible Employees under an Offering shall be the number of Shares remaining available under the Plan on the Offering Date. If
the aggregate purchase of Shares upon exercise of Rights granted under the Offering would exceed the maximum aggregate number of Shares available, the Board shall make a pro rata allocation of the Shares available in a uniform and equitable manner.

  

	4.	Purchase Price. 

 The purchase price of the Shares
under the Offering shall be the lesser of eighty-five percent (85%) of the fair market value of the Shares on the Offering Date or eighty-five percent (85%) of the fair market value of the Shares on the Purchase Date, in each case rounded
up to the nearest whole cent per Share. 
  

	5.	Participation. 

 (a) An Eligible Employee may elect
to participate in an Offering only at the beginning of the Offering or such later date specified in subparagraph 2(c). 
 (b) A Participant
who is enrolled in an Offering automatically will be enrolled in the next Offering that commences after the current Offering ends. 
 (c) An
Eligible Employee shall become a Participant in an Offering by delivering an agreement authorizing payroll deductions. Such deductions must be in whole percentages, with a minimum percentage of one percent (1%) and a maximum percentage of
fifteen percent (15%) of Earnings. A Participant may not make additional payments into his or her account. The agreement shall be made on such enrollment form as the Company provides, and must be delivered to the Company at least ten
(10) days before the Offering Date, or before such later date specified in subparagraph 2(c), in 

  

 4 

 
advance of the date of participation to be effective, unless a later time for filing the enrollment form is set by the Board for all Eligible Employees with
respect to a given Offering Date. 
 (d) If the agreement authorizing payroll deductions is required to be delivered to the Company or
designated Affiliate a specified number of days before the Offering Date to be effective, then an employee who becomes eligible during the required delivery period shall not be considered to be an Eligible Employee at the beginning of the Offering
but may elect to participate during the Offering as provided in subparagraph 2(c). 
  

	6.	Changing Participation Level during Offering; Withdrawal from Offering. 

 (a) A Participant may not increase his or her deductions during the course of a Purchase Period. A Participant may increase or decrease his or her deductions prior to the beginning of a new Purchase Period or a new
Offering, to be effective at the beginning of such new Purchase Period or new Offering. A Participant shall make a change in his or her participation level by delivering a notice to the Company in such form and at such time as the Company provides.

 (b) A Participant may reduce (including to zero) his or her deductions once (and only once) during a Purchase Period, effective as soon as
administratively practicable. A Participant shall make a change in his or her participation level by delivering a notice to the Company in such form and at such time as the Company provides. 
 (c) Except as otherwise specifically provided herein, a Participant may not increase or decrease his or her participation level during the course of an
Offering. 
 (d) Notwithstanding the foregoing, a Participant may withdraw from an Offering and receive his or her accumulated payroll
deductions from the Offering (reduced to the extent, if any, such deductions have been used to acquire Shares for the Participant on any prior Purchase Dates), without interest, at any time prior to the end of the Offering, excluding only each ten
(10) day period immediately preceding a Purchase Date (or such shorter period of time determined by the Company and communicated to Participants) by delivering a withdrawal notice to the Company in such form as the Company provides. 

 

	7.	Purchases. 

 Subject to the limitations contained
herein, on each Purchase Date, each Participant’s accumulated payroll deductions (without any increase for interest) shall be applied to the purchase of whole Shares, up to the maximum number of Shares permitted under the Plan and the Offering.

  

	8.	Notices and Agreements. 

  

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 Any notices or agreements provided for in an Offering or the Plan shall be given in writing, in a form
provided by the Company, and unless specifically provided for in the Plan or this Offering shall be deemed effectively given upon receipt or, in the case of notices and agreements delivered by the Company, five (5) days after deposit in the
United States mail, postage prepaid. 
  

	9.	Exercise Contingent on Stockholder Approval. 

 The
Rights granted under an Offering are subject to the approval of the Plan by the Shareholders as required for the Plan to obtain treatment as a tax-qualified employee stock purchase plan under Section 423 of the Code. 
  

	10.	Offering Subject to Plan. 

 Each Offering is
subject to all the provisions of the Plan, and its provisions are hereby made a part of the Offering, and is further subject to all interpretations, amendments, rules and regulations which may from time to time be promulgated and adopted pursuant to
the Plan. 
  

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