Document:

2005 Non-Employee Directors' Stock Option Plan

  
 Exhibit 10.10

  
 RACKABLE SYSTEMS,
INC. 
  
 2005
NON-EMPLOYEE DIRECTORS’ STOCK OPTION PLAN 
  
 ADOPTED: JANUARY 12, 2005 
 APPROVED BY STOCKHOLDERS:             , 2005 
  

	1.	GENERAL. 

  
 (a) Eligible Option Recipients. The persons eligible to receive Options are the Eligible Directors of the Company. 
  
 (b) General Purpose. The Company, by means of the Plan, seeks to
retain the services of its Eligible Directors, to secure and retain the services of new Eligible Directors and to provide incentives for such persons to exert maximum efforts for the success of the Company and any Affiliate by giving them an
opportunity to benefit from increases in value of the Common Stock through the automatic grant of Nonstatutory Stock Options. 
  

	2.	DEFINITIONS. 

  
 As used in the Plan, the following definitions shall apply to the capitalized terms indicated below: 
  
 (a) “Accountant” means the independent public
accountants of the Company. 
  
 (b)
“Affiliate” means (i) any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, provided each corporation in the unbroken chain (other than the Company) owns, at the time of
the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain, and (ii) any corporation (other than the Company) in an unbroken chain of
corporations beginning with the Company, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain. The Board shall have the authority to determine (i) the time or times at which the ownership tests are applied, and (ii) whether “Affiliate” includes entities other than
corporations within the foregoing definition. 
  
 (c)
“Annual Grant” means an Option granted annually to all Eligible Directors who meet the specified criteria pursuant to Section 6(b) or Section 6(d). 
  
 (d) “Annual Meeting” means the annual meeting of the stockholders of the Company. 

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

 1. 

 (f) “Capitalization Adjustment” has the meaning ascribed to that term in
Section 11(a). 
  
 (g) “Change in
Control” means the occurrence, in a single transaction or in a series of related transactions, of any one or more of the following events: 
  
 (i) any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the Company representing more than fifty
percent (50%) of the combined voting power of the Company’s then outstanding securities other than by virtue of a merger, consolidation or similar transaction. Notwithstanding the foregoing, a Change in Control shall not be deemed to occur (A)
on account of the acquisition of securities of the Company by an investor, any affiliate thereof or any other Exchange Act Person from the Company in a transaction or series of related transactions the primary purpose of which is to obtain financing
for the Company through the issuance of equity securities or (B) solely because the level of Ownership held by any Exchange Act Person (the “Subject Person”) exceeds the designated percentage threshold of the outstanding
voting securities as a result of a repurchase or other acquisition of voting securities by the Company reducing the number of shares outstanding, provided that if a Change in Control would occur (but for the operation of this sentence) as a result
of the acquisition of voting securities by the Company, and after such share acquisition, the Subject Person becomes the Owner of any additional voting securities that, assuming the repurchase or other acquisition had not occurred, increases the
percentage of the then outstanding voting securities Owned by the Subject Person over the designated percentage threshold, then a Change in Control shall be deemed to occur; 
  
 (ii) there is consummated a merger, consolidation or similar transaction involving (directly or
indirectly) the Company and, immediately after the consummation of such merger, consolidation or similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly or indirectly, either (A) outstanding voting
securities representing more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the combined outstanding voting power
of the parent of the surviving Entity in such merger, consolidation or similar transaction, in each case in substantially the same proportions as their Ownership of the outstanding voting securities of the Company immediately prior to such
transaction; 
  
 (iii) the
stockholders of the Company approve or the Board approves a plan of complete dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company shall otherwise occur; 
  
 (iv) there is consummated a sale, lease, exclusive
license or other disposition of all or substantially all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease, license or other disposition of all or substantially all of the consolidated assets of the Company and
its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of the voting securities of which are Owned by stockholders of the Company in substantially the same proportions as their Ownership of the outstanding voting
securities of the Company immediately prior to such sale, lease, license or other disposition; or 
  

 2. 

 (v) individuals who, on the date this Plan is adopted by the Board, are members of
the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the members of the Board; provided, however, that if the appointment or election (or nomination for election) of any new Board
member was approved or recommended by a majority vote of the members of the Incumbent Board then still in office, such new member shall, for purposes of this Plan, be considered as a member of the Incumbent Board.  
  
 The term Change in Control shall not include a sale of assets, merger or
other transaction effected exclusively for the purpose of changing the domicile of the Company. 
  
 Notwithstanding the foregoing or any other provision of this Plan, the definition of Change in Control (or any analogous term) in an individual written
agreement between the Company or any Affiliate and the Optionholder shall supersede the foregoing definition with respect to Options subject to such agreement; provided, however, that if no definition of Change in Control or any analogous
term is set forth in such an individual written agreement, the foregoing definition shall apply. 
  
 (h) “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (i) “Common Stock” means the common stock of
the Company. 
  
 (j) “Company”
means Rackable Systems, Inc., a Delaware corporation. 
  
 (k)
“Consultant” means any person, including an advisor, who is (i) engaged by the Company or an Affiliate to render consulting or advisory services and is compensated for such services, or (ii) serving as a member of the
Board of Directors of an Affiliate and is compensated for such services. However, service solely as a Director, or payment of a fee for such service, shall not cause a Director to be considered a “Consultant” for purposes of the Plan.

  
 (l) “Continuous Service” means
that the Optionholder’s service with the Company or an Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A change in the capacity in which the Optionholder renders service to the Company or an
Affiliate as an Employee, Consultant or Director or a change in the entity for which the Optionholder renders such service, provided that there is no interruption or termination of the Optionholder’s service with the Company or an Affiliate,
shall not terminate an Optionholder’s Continuous Service. For example, a change in status from an Eligible Director of the Company to a Consultant of an Affiliate or an Employee of the Company will not constitute an interruption of Continuous
Service. To the extent permitted by law, the Board or the chief executive officer of the Company, in that party’s sole discretion, may determine whether Continuous Service shall be considered interrupted in the case of any leave of absence
approved by that party, including sick leave, military leave or any other personal leave. Notwithstanding the foregoing, a leave of absence shall be treated as Continuous Service for purposes of vesting in an Option only to such extent as may be
provided in the Company’s leave of absence policy or in the written terms of the Optionholder’s leave of absence. 
  
 (m) “Corporate Transaction” means the occurrence, in a single transaction or in a series of related transactions, of any
one or more of the following events: 
  
 (i)
a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated assets of the Company and its Subsidiaries; 
  

 3. 

 (ii) a sale or other disposition of at least ninety percent (90%) of the
outstanding securities of the Company; 
  
 (iii) the consummation of a merger, consolidation or similar transaction following which the Company is not the surviving corporation; or 
  
 (iv) the consummation of a merger, consolidation or similar transaction following which the Company is the surviving corporation
but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged by virtue of the merger, consolidation or similar transaction into other property, whether in the form of
securities, cash or otherwise. 
  
 (n)
“Director” means a member of the Board. 
  
 (o) “Disability” means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code. 
  
 (p) “Eligible Director” means each Director of the Company who (i) is not an Employee of the
Company; (ii) is not acting in the capacity of a Consultant to the Company; and (iii) cannot exercise, individually or collectively with any entity or group of entities affiliated with such Director, voting control over more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company. 
  
 (q) “Employee” means any person employed by the Company or an Affiliate. However, service solely as a Director, or payment of a fee for such services, shall not cause a Director to be
considered an “Employee” for purposes of the Plan. 
  
 (r) “Entity” means a corporation, partnership or other entity. 
  
 (s) “Exchange Act” means the Securities Exchange Act of 1934, as amended. 
  
 (t) “Exchange Act Person” means any natural
person, Entity or “group” (within the meaning of Section 13(d) or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not include (i) the Company or any Subsidiary of the Company, (ii) any employee benefit plan of
the Company or any Subsidiary of the Company or any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any Subsidiary of the Company, (iii) an underwriter temporarily holding securities pursuant to an
offering of such securities, (iv) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their Ownership of stock of the Company; or (v) any natural person, Entity or “group”
(within the meaning of Section 13(d) or 14(d) of the Exchange Act) that, as of the effective date of the Plan as set forth in Section 14, is the Owner, directly or indirectly, of securities of the Company representing more than fifty percent (50%)
of the combined voting power of the Company’s then outstanding securities. 
  

 4. 

 (u) “Fair Market Value” means, as of any date, the value of the Common
Stock determined as follows: 
  
 (i) If
the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid,
if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of trading in the Common Stock) on the date in question, as reported in The Wall Street Journal or such other source as the
Board deems reliable. If there is no closing sales price (or closing bid if no sales were reported) for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price (or closing bid if no sales were
reported) on the last preceding date for which such quotation exists. 
  
 (ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be determined by the Board in good faith. 
  
 (v) “Initial Grant” means an Option granted to an Eligible Director who meets the specified
criteria pursuant to Section 6(a) or Section 6(c). 
  
 (w)
“IPO Date” means the date of the underwriting agreement between the Company and the underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial
public offering. 
  
 (x) “Nonstatutory Stock
Option” means an Option not intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and the regulations promulgated thereunder. 
  
 (y) “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. 
  
 (z) “Option” means a Nonstatutory Stock Option granted pursuant to the Plan. 
  
 (aa) “Option Agreement” means a written agreement between the Company and an Optionholder evidencing the terms and
conditions of an individual Option grant. Each Option Agreement shall be subject to the terms and conditions of the Plan. 
  
 (bb) “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if applicable, such other person
who holds an outstanding Option. 
  
 (cc)
“Own,” “Owned,” “Owner,” “Ownership” A person or Entity shall be deemed to “Own,” to have “Owned,” to be the “Owner” of, or to have acquired
“Ownership” of securities if such person or Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has or shares voting power, which includes the power to vote or to direct the voting,
with respect to such securities. 
  
 (dd)
“Plan” means this Rackable Systems, Inc. 2005 Non-Employee Directors’ Stock Option Plan. 
  

 5. 

 (ee) “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act or
any successor to Rule 16b-3, as in effect from time to time. 
  
 (ff) “Securities Act” means the Securities Act of 1933, as amended. 
  
 (gg) “Subsidiary” means, with respect to the Company, (i) any corporation of which more than fifty percent (50%) of the
outstanding capital stock having ordinary voting power to elect a majority of the board of directors of such corporation (irrespective of whether, at the time, stock of any other class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company, and (ii) any partnership in which the Company has a direct or indirect interest (whether in the form of voting or participation in
profits or capital contribution) of more than fifty percent (50%). 
  

	3.	ADMINISTRATION. 

  
 (a) Administration by Board. The Board shall administer the Plan. The Board may not delegate administration of the Plan. 
  
 (b) Powers of Board. The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan: 
  
 (i) To determine the provisions of each Option to the extent not specified in the Plan. 
  
 (ii) To construe and interpret the Plan and Options granted under it, and to establish, amend and revoke rules and regulations for
its administration. The Board, in the exercise of this power, may correct any defect, omission or inconsistency in the Plan or in any Option Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully
effective. 
  
 (iii) To amend the Plan or
an Option as provided in Section 12. 
  
 (iv)
To terminate or suspend the Plan as provided in Section 13. 
  
 (v) Generally, to exercise such powers and to perform such acts as the Board deems necessary or expedient to promote the best interests of the Company and that are not in conflict with the provisions of the
Plan. 
  
 (c) Effect of Board’s Decision. All
determinations, interpretations and constructions made by the Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons. 
  

	4.	SHARES SUBJECT TO THE PLAN. 

  
 (a) Share Reserve. Subject to the provisions of Section 11(a)
relating to Capitalization Adjustments, the number of shares of Common Stock that may be issued pursuant to Options shall not exceed in the aggregate one hundred thousand (100,000) [pre-split], plus an 

  

 6. 

 
automatic annual increase beginning on January 1, 2006 and ending on (and including) January 1, 2015, in an amount equal to the number of shares subject to
Options granted during the preceding calendar year; provided, however, that such automatic annual increase shall not exceed one hundred thousand (100,000) shares. Notwithstanding the foregoing, the Board may act prior to the first day of any
calendar year, to provide that there shall be no increase in the share reserve for such calendar year or that the increase in the share reserve for such calendar year shall be a lesser number of shares of Common Stock than would otherwise occur
pursuant to the preceding sentence. 
  
 (b) Reversion of
Shares to the Share Reserve. If an Option shall for any reason expire or otherwise terminate, in whole or in part, without having been exercised in full, the shares of Common Stock not acquired under such Option shall revert to and again become
available for issuance under the Plan in accordance with the limitations contained herein. If any shares subject to an Option are not delivered to an Optionholder because such shares are withheld for the payment of taxes or the Option is exercised
through a reduction of shares subject to the Option (i.e., “net exercised”), the number of shares that are not delivered to the Optionholder shall remain available for issuance under the Plan. If the exercise price of an Option is
satisfied by tendering shares of Common Stock held by the Optionholder (either by actual delivery or attestation), then the number of shares so tendered shall remain available for issuance under the Plan. 
  
 (c) Source of Shares. The stock issuable under the Plan shall be
shares of authorized but unissued or reacquired Common Stock, including shares repurchased by the Company on the open market. 
  

	5.	ELIGIBILITY. 

  
 The Options shall automatically be granted under the Plan as set forth in Section 6 to all Eligible Directors who meet the specified criteria. 

 

	6.	NON-DISCRETIONARY GRANTS. 

  

(a) Initial Grants to Eligible Directors. Without any further action of the Board, each person who after the IPO Date is elected or
appointed for the first time to be an Eligible Director automatically shall, upon the date of his or her initial election or appointment to be an Eligible Director, be granted an Initial Grant to purchase seventeen thousand (17,000) [pre-split]
shares of Common Stock on the terms and conditions set forth herein. 
  
 (b) Annual Grants to Eligible Directors. Without any further action of the Board, on the date of each Annual Meeting, commencing with the Annual Meeting in 2006, each person who is then an Eligible Director automatically shall
be granted an Annual Grant to purchase four thousand two hundred fifty (4,250) [pre-split] shares of Common Stock on the terms and conditions set forth herein; provided, however, that if the person has not been serving as an Eligible Director
for the entire period since the preceding Annual Meeting, then the number of shares subject to such Annual Grant shall be reduced pro rata for each full quarter prior to the date of grant during which such person did not serve as an Eligible
Director. 
  

 7. 

 (c) Initial Grants to Committee Chairpersons. Without any further action of the Board, (i)
each person who after the IPO Date is elected or appointed for the first time to be Chairperson of the Company’s Audit Committee automatically shall be granted an Initial Grant to purchase fifteen thousand (15,000) [pre-split] shares of Common
Stock, (ii) each person who after the IPO Date is elected or appointed for the first time to be Chairperson of the Company’s Compensation Committee automatically shall be granted an Initial Grant to purchase five thousand (5,000) [pre-split]
shares of Common Stock, and (iii) each person who after the IPO Date is elected or appointed for the first time to be Chairperson of the Company’s Nominating and Corporate Governance Committee automatically shall be granted an Initial Grant to
purchase five thousand (5,000) [pre-split] shares of Common Stock, in each case on the terms and conditions set forth herein.  
  
 (d) Annual Grants to Committee Chairpersons. Without any further action of the Board, on the date of each Annual Meeting, commencing with
the Annual Meeting in 2006, (i) each person who is then an Eligible Director and the Chairperson of the Company’s Audit Committee automatically shall be granted an Annual Grant to purchase three thousand seven hundred fifty (3,750) [pre-split]
shares of Common Stock, (ii) each person who is then an Eligible Director and the Chairperson of the Company’s Compensation Committee automatically shall be granted an Annual Grant to purchase one thousand two hundred fifty (1,250) [pre-split]
shares of Common Stock, and (iii) each person who is then an Eligible Director and the Chairperson of the Company’s Nominating and Corporate Governance Committee automatically shall be granted an Annual Grant to purchase one thousand two
hundred fifty (1,250) [pre-split] shares of Common Stock, in each case on the terms and conditions set forth herein; provided, however, that if the person has not been serving as such Chairperson for the entire period since the preceding
Annual Meeting, then the number of shares subject to such Annual Grant shall be reduced pro rata for each full quarter prior to the date of grant during which such person did not serve as such Chairperson.  
  

	7.	OPTION PROVISIONS. 

  
 Each Option shall be in such form and shall contain such terms and conditions as required by the Plan. Each Option shall contain such additional terms and
conditions, not inconsistent with the Plan, as the Board shall deem appropriate. Each Option shall include (through incorporation of provisions hereof by reference in the Option or otherwise) the substance of each of the following provisions:

  
 (a) Term. No Option shall be exercisable after the
expiration of ten (10) years from the date it was granted. 
  
 (b) Exercise Price. The exercise price of each Option shall be one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the Option on the date the Option is granted. 
  
 (c) Consideration. The purchase price of Common Stock acquired
pursuant to an Option may be paid, to the extent permitted by applicable law, in any combination of (i) cash or check, (ii) delivery to the Company (either by actual delivery or attestation) of shares of Common Stock held for more than six (6)
months (or such longer or shorter period of time 

  

 8. 

 
necessary to avoid a charge to earnings for financial accounting purposes), or (iii) to the extent permitted by law, pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check) by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds. 
  
 (d)
Transferability. Except as otherwise provided for in this Section 7(d) an Option shall not be transferable except by will or by the laws of descent and distribution and shall be exercisable only by the Optionholder during the life of the
Optionholder. However, an Option may be transferred for no consideration upon written consent of the Board if (i) at the time of transfer, a Form S-8 registration statement under the Securities Act is available for the issuance of shares by the
Company upon the exercise of such transferred Option, or (ii) the transfer is to the Optionholder’s employer at the time of transfer or an affiliate of the Optionholder’s employer at the time of transfer. Any such transfer is subject to
such limits as the Board may establish, and subject to the transferee agreeing to remain subject to all the terms and conditions applicable to the Option prior to such transfer. The forgoing right to transfer the Option shall apply to the right to
consent to amendments to the Stock Option Agreement for such Option. In addition, until the Optionholder transfers the Option, an Optionholder may, by delivering written notice to the Company, in a form provided by or otherwise satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall thereafter be entitled to exercise the Option. 
  
 (e) Vesting. Options shall vest as follows: 
  
 (i) Initial Grant. The Initial Grant shall vest in a series of forty-eight (48) successive equal monthly installments during the
Optionholder’s Continuous Service over the four (4)-year period measured from the date of grant. 
  
 (ii) Annual Grant. The Annual Grant shall vest in a series of twelve (12) successive equal monthly installments during the
Optionholder’s Continuous Service over the twelve (12)-month period measured from the third anniversary of the date of grant. 
  
 (f) Early Exercise. The Option may, but need not, include a provision whereby the Optionholder may elect at any time before the
Optionholder’s Continuous Service terminates to exercise the Option as to any part or all of the shares of Common Stock subject to the Option prior to the full vesting of the Option. Any unvested shares of Common Stock so purchased may be
subject to a repurchase option in favor of the Company or to any other restriction the Board determines to be appropriate. The Company will not exercise its repurchase option until at least six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes) have elapsed following exercise of the Option unless the Board otherwise specifically provides in the Option. 
  
 (g) Termination of Continuous Service. In the event that an Optionholder’s Continuous Service terminates (other
than upon the Optionholder’s death or Disability or upon a Change in Control), the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination of Continuous
Service) but only within such period of time ending on the earlier of (i) the date three (3) months 

  

 9. 

 
following the termination of the Optionholder’s Continuous Service (or such longer or shorter period specified in the Option Agreement), or (ii) the
expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the Optionholder does not exercise his or her Option within the time specified herein or in the Option Agreement (as applicable),
the Option shall terminate. 
  
 (h) Extension of Termination
Date. If the exercise of the Option following the termination of the Optionholder’s Continuous Service (other than upon the Optionholder’s death or Disability or upon a Change in Control) would be prohibited at any time solely because
the issuance of shares of Common Stock would violate the registration requirements under the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of a period of three (3) months after the termination of the
Optionholder’s Continuous Service during which the exercise of the Option would not be in violation of such registration requirements, or (ii) the expiration of the term of the Option as set forth in the Option Agreement. 
  
 (i) Disability of Optionholder. In the event that an
Optionholder’s Continuous Service terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her Option (to the extent that the Optionholder was entitled to exercise it as of the date of termination), but
only within such period of time ending on the earlier of (i) the date twelve (12) months following such termination of Continuous Service, or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination,
the Optionholder does not exercise his or her Option within the time specified herein or in the Option Agreement, the Option shall terminate. 
  
 (j) Death of Optionholder. In the event that (i) an Optionholder’s Continuous Service terminates as a result of the Optionholder’s death,
or (ii) the Optionholder dies within the three-month period after the termination of the Optionholder’s Continuous Service for a reason other than death, then the Option may be exercised (to the extent the Optionholder was entitled to exercise
such Option as of the date of death) by the Optionholder’s estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by a person designated to exercise the Option upon the Optionholder’s death, but only
within the period ending on the earlier of (i) the date eighteen (18) months following the date of death, or (ii) the expiration of the term of such Option as set forth in the Option Agreement. If, after the Optionholder’s death, the Option is
not exercised within the time specified herein, the Option shall terminate. 
  
 (k) Termination Upon Change in Control. In the event that an Optionholder’s Continuous Service terminates as of, or within twelve (12) months following a Change in Control, the Optionholder may exercise
his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of termination of Continuous Service) within such period of time ending on the earlier of (i) the date twelve (12) months following the
effective date of the Change in Control (or such longer or shorter period specified in the Option Agreement), or (ii) the expiration of the term of the Option as set forth in the Option Agreement. If, after termination of Continuous Service, the
Optionholder does not exercise his or her Option within the time specified herein or in the Option Agreement (as applicable), the Option shall terminate. 
  

 10. 

	8.	SECURITIES LAW COMPLIANCE. 

  
 The Company shall seek to obtain from each regulatory commission or agency having jurisdiction over the Plan such authority
as may be required to grant Options and to issue and sell shares of Common Stock upon exercise of the Options; provided, however, that this undertaking shall not require the Company to register under the Securities Act the Plan, any Option or
any Common Stock issued or issuable pursuant to any such Option. If, after reasonable efforts, the Company is unable to obtain from any such regulatory commission or agency the authority that counsel for the Company deems necessary for the lawful
issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon exercise of such Options unless and until such authority is obtained. 
  

	9.	USE OF PROCEEDS FROM SALES OF COMMON STOCK.

  
 Proceeds from the sale of shares of Common
Stock pursuant to Options shall constitute general funds of the Company. 
  

	10.	MISCELLANEOUS. 

  
 (a) Stockholder Rights. No Optionholder shall be deemed to be the holder of, or to have any of the rights of a holder with respect to, any
shares of Common Stock subject to such Option unless and until such Optionholder has satisfied all requirements for exercise of the Option pursuant to its terms. 
  
 (b) No Service Rights. Nothing in the Plan, any instrument executed, or Option granted pursuant thereto shall
confer upon any Optionholder any right to continue to serve the Company as a Director or shall affect the right of the Company or an Affiliate to terminate the service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any
applicable provisions of the corporate law of the state in which the Company or the Affiliate is incorporated, as the case may be. 
  
 (c) Investment Assurances. The Company may require an Optionholder, as a condition of exercising or acquiring Common Stock under any Option,
(i) to give written assurances satisfactory to the Company as to the Optionholder’s knowledge and experience in financial and business matters and/or to employ a purchaser representative reasonably satisfactory to the Company who is
knowledgeable and experienced in financial and business matters and that he or she is capable of evaluating, alone or together with the purchaser representative, the merits and risks of exercising the Option; and (ii) to give written assurances
satisfactory to the Company stating that the Optionholder is acquiring the Common Stock subject to the Option for the Optionholder’s own account and not with any present intention of selling or otherwise distributing the Common Stock. The
foregoing requirements, and any assurances given pursuant to such requirements, shall be inoperative if (i) the issuance of the shares upon the exercise or acquisition of Common Stock under the Option has been registered under a then currently
effective registration statement under the Securities Act, or (ii) as to any particular requirement, a determination is made by counsel for the Company that such requirement need not be met in the circumstances under the then applicable securities
laws. The Company may, upon advice of counsel to the Company, place legends on stock certificates issued under the Plan 

  

 11. 

 
as such counsel deems necessary or appropriate in order to comply with applicable securities laws, including, but not limited to, legends restricting the
transfer of the Common Stock. 
  
 (d) Withholding
Obligations. The Optionholder may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Option by any of the following means (in addition to the Company’s right to
withhold from any compensation paid to the Optionholder by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares from the shares of the Common Stock otherwise issuable to the
Optionholder as a result of the exercise or acquisition of Common Stock under the Option; provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii)
delivering to the Company owned and unencumbered shares of the Common Stock. 
  
 (e) Electronic Delivery. Any reference herein to a “written” agreement or document shall include any agreement or document delivered electronically or posted on the Company’s intranet.

  

	11.	ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE
TRANSACTIONS. 

  
 (a)
Capitalization Adjustments. If any change is made in, or other events occur with respect to, the Common Stock subject to the Plan or subject to any Option after the effective date of the Plan set forth in Section 14 without the receipt of
consideration by the Company (through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares,
change in corporate structure or other transaction not involving the receipt of consideration by the Company (each a “Capitalization Adjustment”)), the Plan shall be appropriately adjusted in the class(es) and maximum number
of securities subject both to the Plan pursuant to Section 4 and to the nondiscretionary Options specified in Section 6, and the outstanding Options will be appropriately adjusted in the class(es) and number of securities and price per share of
stock subject to such outstanding Options. The Board shall make such adjustments, and its determination shall be final, binding and conclusive. (Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall not be
treated as a transaction “without receipt of consideration” by the Company.) 
  
 (b) Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company, all outstanding Options shall terminate immediately prior to the completion of such dissolution or liquidation.

  
 (c) Corporate Transaction. 
  
 (i) Options May Be Assumed. In the event of a
Corporate Transaction, any surviving corporation or acquiring corporation (or the surviving or acquiring corporation’s parent company) may assume or continue any or all Options outstanding under the Plan or may substitute similar stock options
for Options outstanding under the Plan (including but not limited to, options to acquire the same consideration paid to the stockholders of the Company pursuant to the Corporate Transaction), and any reacquisition or repurchase rights held by the
Company in 

  

 12. 

 
respect of Common Stock issued pursuant to Options may be assigned by the Company to the successor of the Company (or the successor’s parent company, if
any), in connection with such Corporate Transaction. A surviving corporation or acquiring corporation not choose to assume or continue only a portion of an Option or substitute a similar option for only a portion of an Option. 
  
 (ii) Options Held by Active Optionholders. In
the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Options or substitute similar stock options for such outstanding Options, then with
respect to Options that have not been assumed, continued or substituted and that are held by Optionholders whose Continuous Service has not terminated prior to the effective time of the Corporate Transaction (referred to as the “Recent
Optionholders”), the vesting of such Options (and, if applicable, the time at which such Options may be exercised) shall (contingent upon the effectiveness of the Corporate Transaction) be accelerated in full to a date prior to the
effective time of such Corporate Transaction as the Board shall determine (or, if the Board shall not determine such a date, to the date that is five (5) days prior to the effective time of the Corporate Transaction), and the Options shall terminate
if not exercised (if applicable) at or prior to the effective time of the Corporate Transaction, and any reacquisition or repurchase rights held by the Company with respect to such Options shall lapse (contingent upon the effectiveness of the
Corporate Transaction). 
  
 (iii)
Options Held by Former Optionholders. In the event of a Corporate Transaction in which the surviving corporation or acquiring corporation (or its parent company) does not assume or continue such outstanding Options or substitute similar
stock options for such outstanding Options, then with respect to any other Options that have not been assumed, continued or substituted and that are held by persons other than Recent Optionholders, the vesting of such Options (and, if applicable,
the time at which such Options may be exercised) shall not be accelerated unless otherwise provided in Section 11(d) or in a written agreement between the Company or any Affiliate and the holder of such Options, and such Options shall terminate if
not exercised (if applicable) prior to the effective time of the Corporate Transaction; provided, however, that any reacquisition or repurchase rights held by the Company with respect to such Options shall not terminate and may continue to be
exercised notwithstanding the Corporate Transaction. 
  
 (iv) Payment for Options in Lieu of Exercise. Notwithstanding the foregoing, in the event an Option will terminate if not exercised prior to the effective time of a Corporate Transaction, the Board may provide, in its sole
discretion, that the holder of such Option may not exercise such Option but will receive a payment, in such form as may be determined by the Board, equal in value to the excess, if any, of (i) the value of the property the holder of the Option would
have received upon the exercise of the Option, over (ii) the exercise price payable by the Optionholder in connection with such exercise. 
  
 (d) Change in Control. If a Change in Control occurs and an Optionholder’s Continuous Service with the Company has not terminated prior to the
effective time of the Change in Control, then immediately prior to the effective time of such Change in Control (and contingent upon the effectiveness of the Change in Control), the vesting and exercisability of an Optionholder’s Options shall
be accelerated in full. In the event that an Optionholder is required 

  

 13. 

 
to resign his or her position as an Eligible Director as a condition of a Change in Control, the outstanding Options of such Optionholder shall become fully
vested and exercisable immediately prior to the effectiveness of such resignation (and contingent upon the effectiveness of the Change in Control). 
  
 (e) Parachute Payments. 
  
 (i) If the acceleration of the vesting and exercisability of Options provided for in Sections 11(c) and 11(d), together with
payments and other benefits of an Optionholder, (collectively, the “Payment”) (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, or any comparable successor provisions, and (ii) but
for this Section 11(e) would be subject to the excise tax imposed by Section 4999 of the Code, or any comparable successor provisions (the “Excise Tax”), then such Payment shall be either (1) provided to such Optionholder in
full, or (2) provided to such Optionholder as to such lesser extent that would result in no portion of such Payment being subject to the Excise Tax, whichever of the foregoing amounts, when taking into account applicable federal, state, local and
foreign income and employment taxes, the Excise Tax, and any other applicable taxes, results in the receipt by such Optionholder, on an after-tax basis, of the greatest amount of the Payment, notwithstanding that all or some portion of the Payment
may be subject to the Excise Tax. 
  
 (ii)
Unless the Company and such Optionholder otherwise agree in writing, any determination required under this Section 11(e) shall be made in writing in good faith by the Accountant. If a reduction in the Payment is to be made as provided above,
reductions shall occur in the following order unless the Optionholder elects in writing a different order (provided, however, that such election shall be subject to Company approval if made on or after the date that triggers the Payment or a
portion thereof): (i) reduction of cash payments; (ii) cancellation of accelerated vesting of Options; and (iii) reduction of other benefits paid to the Optionholder. If acceleration of vesting of Options is to be reduced, such acceleration of
vesting shall be cancelled in the reverse order of date of grant of Options (i.e., the earliest granted Option cancelled last) unless the Optionholder elects in writing a different order for cancellation. 
  
 (iii) For purposes of making the calculations
required by this Section 11(e), the Accountant may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of the Code and other applicable legal
authority. The Company and the Optionholder shall furnish to the Accountant such information and documents as the Accountant may reasonably request in order to make such a determination. The Company shall bear all costs the Accountant may reasonably
incur in connection with any calculations contemplated by this Section 11(e). 
  
 (iv) If, notwithstanding any reduction described above, the Internal Revenue Service (the “IRS”) determines that the Optionholder is liable for the Excise Tax as a result of the Payment,
then the Optionholder shall be obligated to pay back to the Company, within thirty (30) days after a final IRS determination or, in the event that the Optionholder challenges the final IRS determination, a final judicial determination, a portion of
the Payment (the “Repayment Amount”). The Repayment Amount with respect to the Payment shall be the smallest such amount, if any, as shall be required to be paid to the Company so that the Optionholder’s net after-tax
proceeds with respect to the Payment (after taking into account the 

  

 14. 

 
payment of the Excise Tax and all other applicable taxes imposed on the Payment) shall be maximized. The Repayment Amount with respect to the Payment shall
be zero if a Repayment Amount of more than zero would not result in the Optionholder’s net after-tax proceeds with respect to the Payment being maximized. If the Excise Tax is not eliminated pursuant to this paragraph, the Optionholder shall
pay the Excise Tax. 
  
 (v)
Notwithstanding any other provision of this Section 11(e), if (i) there is a reduction in the Payment as described above, (ii) the IRS later determines that the Optionholder is liable for the Excise Tax, the payment of which would result in the
maximization of the Optionholder’s net after-tax proceeds of the Payment (calculated as if the Payment had not previously been reduced), and (iii) the Optionholder pays the Excise Tax, then the Company shall pay or otherwise provide to the
Optionholder that portion of the Payment that was reduced pursuant to this Section 11(e) contemporaneously or as soon as administratively possible after the Optionholder pays the Excise Tax so that the Optionholder’s net after-tax proceeds with
respect to the Payment are maximized. 
  
 (vi)
If the Optionholder either (i) brings any action to enforce rights pursuant to this Section 11(e), or (ii) defends any legal challenge to his or her rights under this Section 11(e), the Optionholder shall be entitled to recover attorneys’
fees and costs incurred in connection with such action, regardless of the outcome of such action; provided, however, that if such action is commenced by the Optionholder, the court finds that the action was brought in good faith. 

 

	12.	AMENDMENT OF THE PLAN AND OPTIONS. 

  
 (a) Amendment of Plan. Subject to the limitations, if any, of
applicable law, the Board, at any time and from time to time, may amend the Plan. However, except as provided in Section 11(a) relating to Capitalization Adjustments, no amendment shall be effective unless approved by the stockholders of the Company
to the extent stockholder approval is necessary to satisfy applicable law. 
  
 (b) Stockholder Approval. The Board, in its sole discretion, may submit any other amendment to the Plan for stockholder approval. 
  
 (c) No Impairment of Rights. Rights under any Option granted before amendment of the Plan shall not be impaired by
any amendment of the Plan unless (i) the Company requests the consent of the affected Optionholder, and (ii) such Optionholder consents in writing. 
  
 (d) Amendment of Options. The Board, at any time and from time to time, may amend the terms of any one or more Options; provided, however,
that the rights under any Option shall not be impaired by any such amendment unless (i) the Company requests the consent of the Optionholder, and (ii) the Optionholder consents in writing. 
  

	13.	TERMINATION OR SUSPENSION OF THE PLAN. 

  
 (a) Plan Term. The Board may suspend or terminate the Plan at any
time. No Options may be granted under the Plan while the Plan is suspended or after it is terminated. 
  

 15. 

 (b) No Impairment of Rights. Suspension or termination of the Plan shall not impair rights
and obligations under any Option granted while the Plan is in effect except with the written consent of the Optionholder. 
  

	14.	EFFECTIVE DATE OF PLAN. 

  
 The Plan shall become effective on the IPO Date, but no Option shall be exercised unless and until the Plan has been
approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. In the event that the terms of the Option Agreement shall conflict with the terms of the Plan,
the terms of the Plan will control. 
  

	15.	CHOICE OF LAW. 

  
 The law of the state of Delaware shall govern all questions concerning the construction, validity and interpretation of this Plan, without regard to such
state’s conflict of laws rules. 
  

 16.2005 Employee Stock Purchase Plan

 Exhibit 10.11 
  
 RACKABLE SYSTEMS, INC. 
  
 2005 EMPLOYEE STOCK PURCHASE
PLAN 
  
 ADOPTED:
JANUARY 12, 2005 
 APPROVED BY STOCKHOLDERS:
            , 2005 
  

	1.	GENERAL. 

  
 (a) The purpose of the Plan is to provide a means by which Employees of the Company and certain designated Related Corporations may be given an
opportunity to purchase shares of the Common Stock of the Company. 
  
 (b) The Company, by means of the Plan, seeks to retain the services of such Employees, to secure and retain the services of new Employees and to provide incentives for such persons to exert maximum efforts for the success of the
Company and its Related Corporations. 
  
 (c) The Company
intends that the Purchase Rights be considered options issued under an Employee Stock Purchase Plan. 
  

	2.	DEFINITIONS. 

  
 As used in the Plan, the following definitions shall apply to the capitalized terms indicated below: 
  
 (a) “Board” means the Board of Directors of
the Company. 
  
 (b) “Capitalization
Adjustment” has the meaning ascribed to that term in Section 14(a). 
  
 (c) “Code” means the Internal Revenue Code of 1986, as amended. 
  
 (d) “Committee” means a committee of one (1) or more members of the Board to whom authority has been delegated by the Board
in accordance with Section 3(c). 
  
 (e) “Common
Stock” means the common stock of the Company. 
  
 (f) “Company” means Rackable Systems, Inc., a Delaware corporation. 
  
 (g) “Contributions” means the payroll deductions and other additional payments specifically provided for in the Offering,
that a Participant contributes to fund the exercise of a Purchase Right. A Participant may make additional payments into his or her account, if specifically provided for in the Offering, and then only if the Participant has not already had the
maximum permitted amount withheld during the Offering through payroll deductions. 
  

 1. 

 (h) “Corporate Transaction” means the occurrence, in a single transaction
or in a series of related transactions, of any one or more of the following events: 
  
 (i) a sale or other disposition of all or substantially all, as determined by the Board in its sole discretion, of the consolidated
assets of the Company and its Subsidiaries; 
  
 (ii) a sale or other disposition of at least ninety percent (90%) of the outstanding securities of the Company; 
  
 (iii) the consummation of a merger, consolidation or similar transaction following which the Company is not the surviving
corporation; or 
  
 (iv) the consummation
of a merger, consolidation or similar transaction following which the Company is the surviving corporation but the shares of Common Stock outstanding immediately preceding the merger, consolidation or similar transaction are converted or exchanged
by virtue of the merger, consolidation or similar transaction into other property, whether in the form of securities, cash or otherwise. 
  
 (i) “Director” means a member of the Board. 
  
 (j) “Eligible Employee” means an Employee who meets the requirements set forth in the
Offering for eligibility to participate in the Offering, provided that such Employee also meets the requirements for eligibility to participate set forth in the Plan. 
  
 (k) “Employee” means any person, including Officers and Directors, who is employed for
purposes of Section 423(b)(4) of the Code by the Company or a Related Corporation. However, service solely as a Director, or payment of a fee for such services, shall not cause a Director to be considered an “Employee” for purposes of the
Plan. 
  
 (l) “Employee Stock Purchase
Plan” means a plan that grants Purchase Rights intended to be options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b) of the Code. 
  
 (m) “Exchange Act” means the Securities
Exchange Act of 1934, as amended. 
  
 (n) “Fair
Market Value” means, as of any date, the value of the Common Stock determined as follows: 
  
 (i) If the Common Stock is listed on any established stock exchange or traded on the Nasdaq National Market or the Nasdaq SmallCap
Market, the Fair Market Value of a share of Common Stock shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or market (or the exchange or market with the greatest volume of
trading in the Common Stock) on the date in question, as reported in The Wall Street Journal or such other source as the Board deems reliable. 
  
 (ii) In the absence of such markets for the Common Stock, the Fair Market Value shall be determined by the Board in good faith.

  

 2. 

 (o) “IPO Date” means the date of the underwriting agreement between the
Company and the underwriter(s) managing the initial public offering of the Common Stock, pursuant to which the Common Stock is priced for the initial public offering. 
  
 (p) “Offering” means the grant of Purchase Rights to purchase shares of Common Stock under
the Plan to Eligible Employees. 
  
 (q)
“Offering Date” means a date selected by the Board for an Offering to commence. 
  
 (r) “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. 
  
 (s)
“Participant” means an Eligible Employee who holds an outstanding Purchase Right granted pursuant to the Plan. 
  
 (t) “Plan” means this Rackable Systems, Inc. 2005 Employee Stock Purchase Plan. 
  
 (u) “Purchase Date” means one or more dates
during an Offering established by the Board on which Purchase Rights shall be exercised and as of which purchases of shares of Common Stock shall be carried out in accordance with such Offering. 
  
 (v) “Purchase Period” means a period of time
specified within an Offering beginning on the Offering Date or on the next day following a Purchase Date within an Offering and ending on a Purchase Date. An Offering may consist of one or more Purchase Periods. 
  
 (w) “Purchase Right” means an option to
purchase shares of Common Stock granted pursuant to the Plan. 
  
 (x) “Related Corporation” means any “parent corporation” or “subsidiary corporation” of the Company whether now or subsequently established, as those terms are defined in Sections 424(e)
and (f), respectively, of the Code. 
  
 (y)
“Securities Act” means the Securities Act of 1933, as amended. 
  
 (z) “Trading Day” means any day on which the exchange(s) or market(s) on which shares of Common Stock are listed, whether it be an established stock exchange, the Nasdaq National Market,
the Nasdaq SmallCap Market or otherwise, is open for trading. 
  

	3.	ADMINISTRATION. 

  
 (a) The Board shall administer the Plan unless and until the Board delegates administration of the Plan to a Committee, as provided in Section
3(c). 
  
 (b) The Board shall have the power, subject to,
and within the limitations of, the express provisions of the Plan: 
  
 (i) To determine when and how Purchase Rights to purchase shares of Common Stock shall be granted and the provisions of each Offering of such Purchase Rights (which need not be identical). 
  

 3. 

 (ii) To designate from time to time which Related Corporations of the Company
shall be eligible to participate in the Plan. 
  
 (iii) To construe and interpret the Plan and Purchase Rights, and to establish, amend and revoke rules and regulations for its administration. The Board, in the exercise of this power, may correct any defect, omission or
inconsistency in the Plan, in a manner and to the extent it shall deem necessary or expedient to make the Plan fully effective. 
  
 (iv) To adopt such procedures and sub-plans as are necessary or appropriate to permit participation in the Plan by Employees who
are foreign nationals or employed outside the United States. 
  
 (v) To amend the Plan as provided in Section 15. 
  
 (vi) Generally, to exercise such powers and to perform such acts as it deems necessary or expedient to promote the best interests
of the Company and its Related Corporations and to carry out the intent that the Plan be treated as an Employee Stock Purchase Plan. 
  
 (c) The Board may delegate some or all of the administration of the Plan to a Committee or Committees. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board that have been delegated to the Committee, including the power to delegate to a subcommittee any of the
administrative powers the Committee is authorized to exercise (and references in this Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Board may retain the authority to concurrently administer the Plan with the Committee and may, at any time, revest in the Board some or all of the powers previously delegated. 
  
 (d) All determinations, interpretations and constructions made by the
Board in good faith shall not be subject to review by any person and shall be final, binding and conclusive on all persons. 
  

	4.	SHARES OF COMMON STOCK SUBJECT TO THE PLAN.

  
 (a) Subject to the provisions of
Section 14 relating to Capitalization Adjustments, the shares of Common Stock that may be sold pursuant to Purchase Rights shall not exceed in the aggregate six hundred thousand (600,000) [pre-split] shares of Common Stock. In addition, the number
of shares of Common Stock available for issuance under the Plan shall automatically increase on January 1st of each year, commencing in 2006 and ending on (and including) January 1, 2015, in an amount equal to the lesser of (i) one percent (1%) of
the total number of shares of Common Stock outstanding on December 31st of the preceding calendar year, (ii) six hundred thousand (600,000) [pre-split] shares of Common Stock, or (iii) the greatest number of shares of Common Stock that could be
added to the Plan as of such date without causing the 

  

 4. 

 
number of shares that may be sold pursuant to Purchase Rights under the Plan as of that date to exceed three percent (3%) of the number of shares of Common
Stock outstanding on December 31st of the preceding calendar year. Notwithstanding the foregoing, the Board may act, prior to the first day of any calendar year, to provide that the increase in the share reserve for such calendar year shall be a
lesser number of shares of Common Stock that would otherwise occur pursuant to the preceding sentence, specifying such lesser number, or that there shall be no increase for that calendar year. 
  
 (b) If any Purchase Right granted under the Plan shall for any reason
terminate without having been exercised, the shares of Common Stock not purchased under such Purchase Right shall again become available for issuance under the Plan. 
  
 (c) The stock purchasable under the Plan shall be shares of authorized but unissued or reacquired Common Stock,
including shares repurchased by the Company on the open market. 
  

	5.	GRANT OF PURCHASE RIGHTS; OFFERING. 

  
 (a) The Board may from time to time grant or provide for the grant of
Purchase Rights to purchase shares of Common Stock under the Plan to Eligible Employees in an Offering (consisting of one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board. Each Offering shall be in such form and
shall contain such terms and conditions as the Board shall deem appropriate and consistent with this Plan, which shall comply with the requirement of Section 423(b)(5) of the Code that all Employees granted Purchase Rights shall have the same rights
and privileges. The terms and conditions of an Offering shall be incorporated by reference into the Plan and treated as part of the Plan. The provisions of separate Offerings need not be identical, but each Offering shall include (through
incorporation of the provisions of this Plan by reference in the document comprising the Offering or otherwise) the period during which the Offering shall be effective, which period shall not exceed twenty-seven (27) months beginning with the
Offering Date, and the substance of the provisions contained in Sections 6 through 9, inclusive. 
  
 (b) If a Participant has more than one Purchase Right outstanding under the Plan, unless he or she otherwise indicates in agreements or notices
delivered hereunder: (i) each agreement or notice delivered by that Participant shall be deemed to apply to all of his or her Purchase Rights under the Plan, and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase
Right, if different Purchase Rights have identical exercise prices) shall be exercised to the fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted Purchase Right if different Purchase Rights have identical
exercise prices) shall be exercised. 
  
 (c) The Board
shall have the discretion to structure an Offering so that if the Fair Market Value of the shares of Common Stock on the first day of a new Purchase Period within that Offering is less than or equal to the Fair Market Value of the shares of Common
Stock on the Offering Date, then (i) that Offering shall terminate immediately, and (ii) the Participants in such terminated Offering shall be automatically enrolled in a new Offering beginning on the first day of such new Purchase Period.

  

 5. 

	6.	ELIGIBILITY. 

  
 (a) Purchase Rights may be granted only to Employees of the Company or, as the Board may designate as provided in Section 3(b), to Employees of a
Related Corporation. Except as provided in Section 6(b), an Employee shall not be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee has been in the employ of the Company or the Related Corporation, as
the case may be, for such continuous period preceding such Offering Date as the Board may require, but in no event shall the required period of continuous employment be greater than two (2) years. In addition, the Board may provide that no Employee
shall be eligible to be granted Purchase Rights under the Plan unless, on the Offering Date, such Employee’s customary employment with the Company or the Related Corporation is more than twenty (20) hours per week and more than five (5) months
per calendar year or such other criteria as the Board may determine consistent with Section 423 of the Code. 
  
 (b) The Board may provide that each person who, during the course of an Offering, first becomes an Eligible Employee shall, on a date or dates
specified in the Offering which coincides with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive a Purchase Right under that Offering, which Purchase Right shall thereafter be deemed to be a part of that
Offering. Such Purchase Right shall have the same characteristics as any Purchase Rights originally granted under that Offering, as described herein, except that: 
  
 (i) the date on which such Purchase Right is granted shall be the “Offering Date” of such
Purchase Right for all purposes, including determination of the exercise price of such Purchase Right; 
  
 (ii) the period of the Offering with respect to such Purchase Right shall begin on its Offering Date and end coincident with the
end of such Offering; and 
  
 (iii) the
Board may provide that if such person first becomes an Eligible Employee within a specified period of time before the end of the Offering, he or she shall not receive any Purchase Right under that Offering. 
  
 (c) No Employee shall be eligible for the grant of any Purchase Rights
under the Plan if, immediately after any such Purchase Rights are granted, such Employee owns stock possessing five percent (5%) or more of the total combined voting power or value of all classes of stock of the Company or of any Related
Corporation. For purposes of this Section 6(c), the rules of Section 424(d) of the Code shall apply in determining the stock ownership of any Employee, and stock which such Employee may purchase under all outstanding Purchase Rights and options
shall be treated as stock owned by such Employee. 
  
 (d)
As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted Purchase Rights under the Plan only if such Purchase Rights, together with any other rights granted under all Employee Stock Purchase Plans of the Company and any
Related Corporations, do not permit such Eligible Employee’s rights to purchase stock of the Company or any Related Corporation to accrue at a rate which exceeds twenty five thousand dollars ($25,000) of Fair Market Value of such stock
(determined at the time such rights are granted, and 

  

 6. 

 
which, with respect to the Plan, shall be determined as of their respective Offering Dates) for each calendar year in which such rights are outstanding at
any time. 
  
 (e) Officers of the Company and any
designated Related Corporation, if they are otherwise Eligible Employees, shall be eligible to participate in Offerings under the Plan. Notwithstanding the foregoing, the Board may provide in an Offering that Employees who are highly compensated
Employees within the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to participate. 
  

	7.	PURCHASE RIGHTS; PURCHASE PRICE. 

  
 (a) On each Offering Date, each Eligible Employee, pursuant to an Offering made under the Plan, shall be granted a
Purchase Right to purchase up to that number of shares of Common Stock purchasable either with a percentage or with a maximum dollar amount, as designated by the Board, but in either case not exceeding fifteen percent (15%) of such Employee’s
earnings (as defined by the Board in each Offering) during the period that begins on the Offering Date (or such later date as the Board determines for a particular Offering) and ends on the date stated in the Offering, which date shall be no later
than the end of the Offering. 
  
 (b) The Board shall
establish one (1) or more Purchase Dates during an Offering as of which Purchase Rights granted pursuant to that Offering shall be exercised and purchases of shares of Common Stock shall be carried out in accordance with such Offering. 

 
 (c) In connection with each Offering made under the Plan, the Board
may specify a maximum number of shares of Common Stock that may be purchased by any Participant on any Purchase Date during such Offering. In connection with each Offering made under the Plan, the Board may specify a maximum aggregate number of
shares of Common Stock that may be purchased by all Participants pursuant to such Offering. In addition, in connection with each Offering that contains more than one Purchase Date, the Board may specify a maximum aggregate number of shares of Common
Stock that may be purchased by all Participants on any Purchase Date under the Offering. If the aggregate purchase of shares of Common Stock issuable upon exercise of Purchase Rights granted under the Offering would exceed any such maximum aggregate
number, then, in the absence of any Board action otherwise, a pro rata allocation of the shares of Common Stock available shall be made in as nearly a uniform manner as shall be practicable and equitable. 
  
 (d) The purchase price of shares of Common Stock acquired pursuant to
Purchase Rights shall be not less than the lesser of: 
  
 (i) an amount equal to eighty-five percent (85%) of the Fair Market Value of the shares of Common Stock on the Offering Date; or 
  
 (ii) an amount equal to eighty-five percent (85%) of the Fair Market Value of the shares of Common Stock on the applicable Purchase
Date. 
  

 7. 

	8.	PARTICIPATION; WITHDRAWAL; TERMINATION. 

  
 (a) A Participant may elect to authorize payroll deductions pursuant to an Offering under the Plan by completing and
delivering to the Company, within the time specified in the Offering, an enrollment form (in such form as the Company may provide). Each such enrollment form shall authorize an amount of Contributions expressed as a percentage of the submitting
Participant’s earnings (as defined in each Offering) during the Offering (not to exceed the maximum percentage specified by the Board). Each Participant’s Contributions shall be credited to a bookkeeping account for such Participant under
the Plan and shall be deposited with the general funds of the Company except where applicable law requires that Contributions be deposited with a third party. To the extent provided in the Offering, a Participant may begin such Contributions after
the beginning of the Offering. To the extent provided in the Offering, a Participant may thereafter reduce (including to zero) or increase his or her Contributions. To the extent specifically provided in the Offering, in addition to making
Contributions by payroll deductions, a Participant may make Contributions through the payment by cash or check prior to each Purchase Date of the Offering. 
  
 (b) During an Offering, a Participant may cease making Contributions and withdraw from the Offering by delivering to the Company a notice of
withdrawal in such form as the Company may provide. Such withdrawal may be elected at any time prior to the end of the Offering, except as provided otherwise in the Offering. Upon such withdrawal from the Offering by a Participant, the Company shall
distribute to such Participant all of his or her accumulated Contributions (reduced to the extent, if any, such Contributions have been used to acquire shares of Common Stock for the Participant) under the Offering, and such Participant’s
Purchase Right in that Offering shall thereupon terminate. A Participant’s withdrawal from an Offering shall have no effect upon such Participant’s eligibility to participate in any other Offerings under the Plan, but such Participant
shall be required to deliver a new enrollment form in order to participate in subsequent Offerings. 
  
 (c) Purchase Rights granted pursuant to any Offering under the Plan shall terminate immediately upon a Participant ceasing to be an Employee for
any reason or for no reason (subject to any post-employment participation period required by law) or other lack of eligibility. The Company shall distribute to such terminated or otherwise ineligible Employee all of his or her accumulated
Contributions (reduced to the extent, if any, such Contributions have been used to acquire shares of Common Stock for the terminated or otherwise ineligible Employee) under the Offering. 
  
 (d) Purchase Rights shall not be transferable by a Participant except by will, the laws of descent and distribution,
or by a beneficiary designation as provided in Section 13. During a Participant’s lifetime, Purchase Rights shall be exercisable only by such Participant. 
  

(e) Unless otherwise specified in an Offering, the Company shall have no obligation to pay interest on Contributions. 
  

 8. 

	9.	EXERCISE. 

  
 (a) On each Purchase Date during an Offering, each Participant’s accumulated Contributions shall be applied to the purchase of shares of
Common Stock up to the maximum number of shares of Common Stock permitted pursuant to the terms of the Plan and the applicable Offering, at the purchase price specified in the Offering. No fractional shares shall be issued upon the exercise of
Purchase Rights unless specifically provided for in the Offering. 
  
 (b) If any amount of accumulated Contributions remains in a Participant’s account after the purchase of shares of Common Stock and such remaining amount is less than the amount required to purchase one share of Common Stock on
the final Purchase Date of an Offering, then such remaining amount shall be held in such Participant’s account for the purchase of shares of Common Stock under the next Offering under the Plan, unless such Participant withdraws from such next
Offering, as provided in Section 8(b), or is not eligible to participate in such Offering, as provided in Section 6, in which case such amount shall be distributed to such Participant after the final Purchase Date, without interest. If the amount of
Contributions remaining in a Participant’s account after the purchase of shares of Common Stock is at least equal to the amount required to purchase one (1) whole share of Common Stock on the final Purchase Date of the Offering, then such
remaining amount shall be distributed in full to such Participant at the end of the Offering without interest. 
  
 (c) No Purchase Rights may be exercised to any extent unless the shares of Common Stock to be issued upon such exercise under the Plan are covered
by an effective registration statement pursuant to the Securities Act and the Plan is in material compliance with all applicable federal, state, foreign and other securities and other laws applicable to the Plan. If on a Purchase Date during any
Offering hereunder the shares of Common Stock are not so registered or the Plan is not in such compliance, no Purchase Rights or any Offering shall be exercised on such Purchase Date, and the Purchase Date shall be delayed until the shares of Common
Stock are subject to such an effective registration statement and the Plan is in such compliance, except that the Purchase Date shall not be delayed more than twelve (12) months and the Purchase Date shall in no event be more than twenty-seven (27)
months from the Offering Date. If, on the Purchase Date under any Offering hereunder, as delayed to the maximum extent permissible, the shares of Common Stock are not registered and the Plan is not in such compliance, no Purchase Rights or any
Offering shall be exercised and all Contributions accumulated during the Offering (reduced to the extent, if any, such Contributions have been used to acquire shares of Common Stock) shall be distributed to the Participants without interest.

  

	10.	COVENANTS OF THE COMPANY. 

  
 The Company shall seek to obtain from each federal, state, foreign or other regulatory commission or agency having
jurisdiction over the Plan such authority as may be required to issue and sell shares of Common Stock upon exercise of the Purchase Rights. If, after commercially reasonable efforts, the Company is unable to obtain from any such regulatory
commission or agency the authority that counsel for the Company deems necessary for the lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any liability for failure to issue and sell Common Stock upon
exercise of such Purchase Rights unless and until such authority is obtained. 
  

 9. 

	11.	USE OF PROCEEDS FROM SALES OF COMMON STOCK.

  
 Proceeds from the sale of shares of Common
Stock pursuant to Purchase Rights shall constitute general funds of the Company. 
  

	12.	RIGHTS AS A STOCKHOLDER. 

  
 A Participant shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to, shares of
Common Stock subject to Purchase Rights unless and until the Participant’s shares of Common Stock acquired upon exercise of Purchase Rights are recorded in the books of the Company (or its transfer agent). 
  

	13.	DESIGNATION OF BENEFICIARY. 

  
 (a) A Participant may file a written designation of a beneficiary who is to receive any shares of Common Stock and/or
cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to the end of an Offering but prior to delivery to the Participant of such shares of Common Stock or cash. In addition, a
Participant may file a written designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death during an Offering. Any such designation shall be on a form
provided by or otherwise acceptable to the Company. 
  
 (b)
The Participant may change such designation of beneficiary at any time by written notice to the Company. In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time
of such Participant’s death, the Company shall deliver such shares of Common Stock and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of
the Company), the Company, in its sole discretion, may deliver such shares of Common Stock and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company,
then to such other person as the Company may designate. 
  

	14.	ADJUSTMENTS UPON CHANGES IN COMMON STOCK; CORPORATE
TRANSACTIONS. 

  
 (a) If
any change is made in, or other events occur with respect to, the Common Stock subject to the Plan or subject to any Purchase Right after the effective date of the Plan set forth in Section 17 without the receipt of consideration by the Company
(through merger, consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating dividend, combination of shares, exchange of shares, change in corporate structure or
other transaction not involving the receipt of consideration by the Company (each a “Capitalization Adjustment”)), the Plan shall be appropriately adjusted in the class(es) and maximum number of securities
subject to the Plan pursuant to Section 4(a), and the outstanding Purchase Rights shall be appropriately adjusted in the class(es), number of shares and purchase limits of such outstanding Purchase Rights. The Board shall make such adjustments, and
its determination shall be final, binding and conclusive. (Notwithstanding the foregoing, the conversion of any convertible securities of the Company shall not be treated as a transaction “without receipt of consideration” by the Company.)

  

 10. 

 (b) In the event of a Corporate Transaction, then: (i) any surviving corporation or acquiring
corporation (or the surviving or acquiring corporation’s parent company) may assume or continue Purchase Rights outstanding under the Plan or may substitute similar rights (including a right to acquire the same consideration paid to the
stockholders in the Corporate Transaction) for those outstanding under the Plan, or (ii) if any surviving or acquiring corporation (or its parent company) does not assume or continue such Purchase Rights or does not substitute similar rights for
Purchase Rights outstanding under the Plan, then the Participants’ accumulated Contributions shall be used to purchase shares of Common Stock within ten (10) business days prior to the Corporate Transaction under the ongoing Offering, and the
Participants’ Purchase Rights under the ongoing Offering shall terminate immediately after such purchase. 
  

	15.	AMENDMENT OF THE PLAN. 

  
 (a) The Board at any time, and from time to time, may amend the Plan. However, except as provided in Section 14(a)
relating to Capitalization Adjustments and except as to amendments solely to benefit the administration of the Plan, to take account of a change in legislation or to obtain or maintain favorable tax, exchange control or regulatory treatment for
Participants or the Company or any Related Corporation, no amendment shall be effective unless approved by the stockholders of the Company to the extent stockholder approval is necessary for the Plan to satisfy the requirements of Section 423 of the
Code or other applicable laws or regulations. 
  
 (b) It is
expressly contemplated that the Board may amend the Plan in any respect the Board deems necessary or advisable to provide Employees with the maximum benefits provided or to be provided under the provisions of the Code and the regulations promulgated
thereunder relating to Employee Stock Purchase Plans and/or to bring the Plan and/or Purchase Rights into compliance therewith. 
  
 (c) The rights and obligations under any Purchase Rights granted before amendment of the Plan shall not be impaired by any amendment of the Plan
except: (i) with the consent of the person to whom such Purchase Rights were granted, or (ii) as necessary to comply with any laws or governmental regulations (including, without limitation, the provisions of the Code and the regulations promulgated
thereunder relating to Employee Stock Purchase Plans). 
  

	16.	TERMINATION OR SUSPENSION OF THE PLAN. 

  
 (a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate at the time that all of the shares of Common Stock reserved for issuance under the Plan, as increased and/or adjusted from time to time, have been issued under the terms of the Plan. No Purchase Rights may
be granted under the Plan while the Plan is suspended or after it is terminated. 
  
 (b) Any benefits, privileges, entitlements and obligations under any Purchase Rights while the Plan is in effect shall not be impaired by suspension or termination of the Plan except (i) as expressly provided
in the Plan or with the consent of the person to whom such Purchase Rights were granted, (ii) as necessary to comply with any laws, regulations or listing 

  

 11. 

 
requirements, or (iii) as necessary to ensure that the Plan and/or Purchase Rights comply with the requirements of Section 423 of the Code. Notwithstanding
the foregoing, if the Company’s accountants advise the Company that the accounting treatment of purchases under the Plan will change or has changed in a manner that the Company determines is detrimental to its best interests, then the Company
may, in its discretion, take any or all of the following actions: (i) terminate each Offering hereunder that is then ongoing as of the next Purchase Date (after the purchase of Common Stock on such Purchase Date) under such Offering; (ii) set a new
Purchase Date for each ongoing Offering and terminate such Offerings after the purchase of Common Stock on such Purchase Date; (iii) amend the Plan and the ongoing Offering so that such Offering will no longer have an accounting treatment that is
detrimental to the Company’s best interests and (iv) terminate each ongoing Offering and refund any Contributions (reduced to the extent, if any, such Contributions have been used to acquire shares of Common Stock) without interest to the
participants. 
  

	17.	EFFECTIVE DATE OF PLAN. 

  
 The Plan shall become effective on the IPO Date, but no Purchase Rights shall be exercised unless and until the Plan has
been approved by the stockholders of the Company, which approval shall be within twelve (12) months before or after the date the Plan is adopted by the Board. 
  

	18.	MISCELLANEOUS PROVISIONS. 

  
 (a) The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in the Offering shall in any way alter the at will
nature of a Participant’s employment or be deemed to create in any way whatsoever any obligation on the part of any Participant to continue in the employ of the Company or a Related Corporation, or on the part of the Company or a Related
Corporation to continue the employment of a Participant. 
  
 (b) The provisions of the Plan shall be governed by the laws of the State of Delaware without resort to that state’s conflicts of laws rules. 
  

 12.

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