Document:

EX-10.1

 Exhibit 10.1 

FIRST AMENDMENT TO THE 

NONQUALIFIED SUPPLEMENTAL 

EXECUTIVE RETIREMENT AGREEMENT 

This First Amendment to the Nonqualified Supplemental Executive Retirement Agreement (this “Amendment”) is entered into
between PENNSYLVANIA REAL ESTATE INVESTMENT TRUST, a Pennsylvania business trust (“Company”), and JOSEPH F. CORADINO (“Executive”) on August 9, 2021. 

BACKGROUND 
 WHEREAS,
Executive and Company are parties to a Nonqualified Supplemental Executive Retirement Agreement, as amended and restated effective as of January 1, 2012 (the “Agreement”); 

WHEREAS, the Compensation and Human Resources Committee of the Board of Trustees of the Company (the “Committee”) approved
the termination of the Agreement on May 12, 2021; and 
 WHEREAS, the parties wish to amend the Agreement to reflect its termination.

 NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows: 

1.    Effective on the date hereof, Section 1 of the Agreement is amended by the addition of the following,
immediately at the end thereof: 
 Notwithstanding the foregoing, the deemed contribution credited as of January 1, 2021 will be the
last contribution credited under this Agreement and the arrangement memorialized by this Agreement is hereby terminated. Accordingly, the Pre-2005 Account will be promptly distributed to the Executive in a
lump sum, and the Post-2004 Account will be distributed to the Executive in a lump sum within the time contemplated by Treas. Reg. § 1.409A-3(j)(4)(ix). In each case, interest will continue to be credited
on the account balances until the date of payout at a rate of five percent per annum. 
 2.    This Amendment may be
executed in multiple counterparts, each of which shall be an original but all of which together shall constitute one instrument. 

 IN WITNESS WHEREOF, Executive and Company have each executed this Amendment on the date
first above written. 
  

			
	PENNSYLVANIA REAL ESTATE
	INVESTMENT TRUST
		
	By:	 	 /s/ Lisa M. Most

	Name:	 	Lisa M. Most
	Title:	 	EVP & General Counsel
	
	JOSEPH F. CORADINO
	
	 /s/ Joseph F. Coradino

  
 -2-exhibit101

Exhibit 10.1  1    SONOS, INC.  2018 EQUITY INCENTIVE PLAN  1. PURPOSE & DEFINITIONS.  The purpose of this Plan is to provide incentives to  attract, retain and motivate eligible persons whose present and potential contributions are  important to the success of the Company, and any Parents, Subsidiaries and Affiliates that exist  now or in the future, by offering them an opportunity to participate in the Company’s future  performance through the grant of Awards.  As used in this Plan, and except as elsewhere defined  herein, the following capitalized terms will have the following meanings:  1.1. “Affiliate” means any person or entity that directly or indirectly through one or  more intermediaries controls, or is controlled by, or is under common control with, the  Company, including any general partner, managing member, officer or director of the Company,  in each case as of the date on which, or at any time during the period for which, the  determination of affiliation is being made.  For purposes of this definition, the term “control”  (including the correlative meanings of the terms “controlled by” and “under common control  with”), as used with respect to any person or entity, means the possession, directly or indirectly,  of the power to direct or cause the direction of the management policies of such person or entity,  whether through the ownership of voting securities or by contract or otherwise.  1.2. “Award” means any award under the Plan, including any Option, RSA, Stock  Bonus Award, SAR, RSU or award of Performance Shares.  1.3. “Award Agreement” means, with respect to each Award, the written or electronic  agreement between the Company and the Participant setting forth the terms and conditions of the  Award, and international supplement thereto for grants to non-U.S. Participants, which shall be  in substantially a form (which need not be the same for each Participant) that the Committee (or  in the case of Award agreements that are not used for Insiders, the Committee’s delegate(s)) has  from time to time approved, and will comply with and be subject to the terms and conditions of  this Plan.  1.4. “Award Transfer Program” means any program instituted by the Committee  which would permit Participants the opportunity to transfer any outstanding Awards to a  financial institution or other person or entity approved by the Committee.  1.5. “Board” means the Board of Directors of the Company.  1.6. “Cause” means Participant’s (a) willful failure substantially to perform his or her  duties and responsibilities to the Company or deliberate violation of a Company policy;  (b) commission of any act of fraud, embezzlement, dishonesty or any other willful misconduct  that has caused or is reasonably expected to result in material injury to the Company;  (c) unauthorized use or disclosure of any proprietary information or trade secrets of the Company  or any other party to whom the Participant owes an obligation of nondisclosure as a result of his  or her relationship with the Company; (d) misappropriation of a business opportunity of the  Company; (e) provision of material aid to a competitor of the Company; or (f) willful breach of  any of his or her obligations under any written agreement or covenant with the Company.  The  determination as to whether a Participant’s Service is being terminated for Cause shall be made  

 

  2    in good faith by the Company and shall be final and binding on the Participant.  The foregoing  definition does not in any way limit the Company’s ability to terminate a Participant’s  employment or consulting relationship at any time as provided in Section 20, and the term  “Company” will be interpreted to include any Subsidiary or Parent, as appropriate.   Notwithstanding the foregoing, the definition of “Cause” may, in part or in whole, be modified  or replaced in each individual employment agreement or Award Agreement with any Participant,  provided that such document supersedes the definition provided in this Section 1.6.  1.7. “Code” means the United States Internal Revenue Code of 1986, as amended, and  the regulations promulgated thereunder.  1.8. “Committee” means the Compensation Committee of the Board or those persons  to whom administration of the Plan, or part of the Plan, has been delegated as permitted by law.  1.9. “Common Stock” means the common stock of the Company.  1.10. “Company” means Sonos, Inc., or any successor corporation.  1.11. “Consultant” means any natural person, including an advisor or independent  contractor, engaged by the Company or a Parent, Subsidiary or Affiliate to render services to  such entity.  1.12. “Corporate Transaction” means the occurrence of any of the following events:  (a) any “Person” (as such term is used in Sections 13(d) and 14(d) of the  Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the  Exchange Act), directly or indirectly, of securities of the Company representing more  than fifty percent (50%) of the total voting power represented by the Company’s then- outstanding voting securities; provided, however, that for purposes of this subclause (a)  the acquisition of additional securities by any one Person who is considered to own more  than fifty percent (50%) of the total voting power of the securities of the Company will  not be considered a Corporate Transaction;  (b) the consummation of the sale or disposition by the Company of all or  substantially all of the Company’s assets;  (c) the consummation of a merger or consolidation of the Company with any  other corporation, other than a merger or consolidation which would result in the voting  securities of the Company outstanding immediately prior thereto continuing to represent  (either by remaining outstanding or by being converted into voting securities of the  surviving entity or its parent) at least fifty percent (50%) of the total voting power  represented by the voting securities of the Company or such surviving entity or its parent  outstanding immediately after such merger or consolidation;  (d) any other transaction which qualifies as a “corporate transaction” under  Section 424(a) of the Code wherein the stockholders of the Company give up all of their  equity interest in the Company (except for the acquisition, sale or transfer of all or  substantially all of the outstanding shares of the capital stock of the Company) or  

 

  3    (e) a change in the effective control of the Company that occurs on the date  that a majority of members of the Board is replaced during any twelve (12) month period  by members of the Board whose appointment or election is not endorsed by a majority of  the members of the Board prior to the date of the appointment or election.  For purpose of  this subclause (e), if any Person is considered to be in effective control of the Company,  the acquisition of additional control of the Company by the same Person will not be  considered a Corporate Transaction.  For purposes of this definition, Persons will be considered to be acting as a group if they  are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of  stock, or similar business transaction with the Company.  Notwithstanding the foregoing, to the  extent that any amount constituting deferred compensation (as defined in Section 409A of the  Code) would become payable under this Plan by reason of a Corporate Transaction, such amount  shall become payable only if the event constituting a Corporate Transaction would also qualify  as a change in ownership or effective control of the Company or a change in the ownership of a  substantial portion of the assets of the Company, each as defined within the meaning of Code  Section 409A, as it has been and may be amended from time to time, and any proposed or final  Treasury regulations and IRS guidance that has been promulgated or may be promulgated  thereunder from time to time.  1.13. “Director” means a member of the Board.  1.14. “Disability” means in the case of incentive stock options, total and permanent  disability as defined in Section 22(e)(3) of the Code and in the case of other Awards, that the  Participant is unable to engage in any substantial gainful activity by reason of any medically  determinable physical or mental impairment that can be expected to result in death or can be  expected to last for a continuous period of not less than 12 months.  1.15. “Dividend Equivalent Right” means the right of a Participant, granted at the  discretion of the Committee or as otherwise provided by the Plan, to receive a credit for the  account of such Participant in an amount equal to the cash, stock or other property dividends in  amounts equal equivalent to cash, stock or other property dividends for each Share represented  by an Award held by such Participant.  1.16. “Effective Date” means the day immediately preceding the pricing of the  Company’s initial public offering, provided that the Board has adopted the Plan prior to, or on  such date, subject to approval of the Plan by the Company’s stockholders.  1.17. “Employee” means any person, including Officers and Directors, employed by the  Company or any Parent, Subsidiary or Affiliate.  For the avoidance of doubt, neither service as a  Director nor payment of a director’s fee by the Company will be sufficient to constitute  “employment” by the Company and the definition of “Employee” herein shall not include Non- Employee Directors.  1.18. “Exchange Act” means the United States Securities Exchange Act of 1934, as  amended.  

 

  4    1.19. “Exchange Program” means a program pursuant to which (a) outstanding  Awards are surrendered, cancelled or exchanged for cash, the same type of Award or a different  Award (or combination thereof) or (b) the exercise price of an outstanding Award is increased or  reduced.  1.20. “Exercise Price” means, with respect to an Option, the price at which a holder  may purchase the Shares issuable upon exercise of an Option and with respect to a SAR, the  price at which the SAR is granted to the holder thereof.  1.21. “FMV” means, as of any date, the value of a share of the Company’s Common  Stock determined as follows:  (a) if such Common Stock is publicly traded and is then listed on a national  securities exchange, its closing price on the date of determination on the principal  national securities exchange on which the Common Stock is listed or admitted to trading  as reported in such source as the Committee may determine;  (b) if such Common Stock is publicly traded but is neither listed nor admitted  to trading on a national securities exchange, the average of the closing bid and asked  prices on the date of determination as reported in such source as the Committee deems  reliable; or  (c) if none of the foregoing is applicable, by the Board or the Committee in  good faith.  Notwithstanding the foregoing, with respect to any Award granted after the effectiveness  of the Company’s registration statement relating to its initial public offering and prior to the first  date upon which the Shares of the Company are listed (or approved for listing) on any securities  exchange or designated (or approved for designation) as a national market security on an  interdealer quotation system, the FMV shall mean the initial public offering price of a Share as  set forth in the Company’s final prospectus relating to its initial public offering.  1.22. “Insider” means an officer or director of the Company or any other person whose  transactions in the Company’s Common Stock are subject to Section 16 of the Exchange Act.  1.23. “IRS” means the United States Internal Revenue Service.  1.24. “ISO” has the meaning given to that term in Section 5.  1.25. “Non-Employee Director” means a Director who is not an Employee of the  Company or any Parent, Subsidiary or Affiliate.  1.26. “NSO” has the meaning given to that term in Section 5.  1.27. “Option” means an award of an option to purchase Shares pursuant to Section 5.  1.28. “Parent” means any corporation (other than the Company) in an unbroken chain  of corporations ending with the Company if each of such corporations other than the Company  

 

  5    owns 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.  1.29. “Participant” means a person who holds an Award under this Plan.  1.30. “Performance Award” means an award covering cash, Shares or other property  granted pursuant to Section 10 or Section 12 of the Plan.  1.31. “Performance Factors” means any of the factors selected by the Committee and  specified in an Award Agreement, from among the following objective measures, either  individually, alternatively or in any combination, applied to the Company as a whole or any  business unit or Subsidiary, either individually, alternatively, or in any combination, on a GAAP  or non-GAAP basis, and measured, to the extent applicable on an absolute basis or relative to a  pre-established target, to determine whether the performance goals established by the Committee  with respect to applicable Awards have been satisfied:  (a) Profit Before Tax;  (b) Sales;  (c) Expenses;  (d) Billings;  (e) Revenue;  (f) Net revenue;  (g) Earnings (which may include earnings before interest and taxes, earnings  before taxes, net earnings, stock-based compensation expenses, depreciation and  amortization);  (h) Operating income;  (i) Operating margin;  (j) Operating profit;  (k) Controllable operating profit, or net operating profit;  (l) Net Profit;  (m) Gross margin;  (n) Operating expenses or operating expenses as a percentage of revenue;  (o) Net income;  (p) Earnings per share;  

 

  6    (q) Total stockholder return;  (r) Market share;  (s) Return on assets or net assets;  (t) The Company’s stock price;  (u) Growth in stockholder value relative to a pre-determined index;  (v) Return on equity;  (w) Return on invested capital;  (x) Cash Flow (including free cash flow or operating cash flows) ;  (y) Balance of cash, cash equivalents and marketable securities;  (z) Cash conversion cycle;  (aa) Economic value added;  (bb) Individual confidential business objectives;  (cc) Contract awards or backlog;  (dd) Overhead or other expense reduction;  (ee) Credit rating;  (ff) Completion of an identified special project;  (gg) Completion of a joint venture or other corporate transaction;  (hh) Strategic plan development and implementation;  (ii) Succession plan development and implementation;  (jj) Improvement in workforce diversity;  (kk) Employee satisfaction;  (ll) Employee retention;  (mm) Customer indicators and/or satisfaction;  (nn) New product invention or innovation;  (oo) Research and development expenses;  

 

  7    (pp) Attainment of research and development milestones;  (qq) Improvements in productivity;  (rr) Bookings;  (ss) Working-capital targets and changes in working capital;  (tt) Attainment of objective operating goals and employee metrics; and  (uu) Any other metric that is capable of measurement as determined by the  Committee in its sole discretion.  The Committee may, in recognition of unusual or non-recurring items such as  acquisition-related activities or changes in applicable accounting rules, provide for one or more  equitable adjustments (based on objective standards) to the Performance Factors to preserve the  Committee’s original intent regarding the Performance Factors at the time of the initial award  grant.  It is within the sole discretion of the Committee to make or not make any such equitable  adjustments.  1.32. “Performance Period” means one or more periods of time, which may be of  varying and overlapping durations, as the Committee may select, over which the attainment of  one or more Performance Factors will be measured for the purpose of determining a Participant’s  right to, and the payment of, a Performance Award.  1.33. “Performance Share” means an Award granted pursuant to Section 10 or  Section 12 of the Plan, consisting of a unit valued by reference to a designated number of Shares,  the value of which may be paid to the Participant by delivery of Shares or, if set forth in the  instrument evidencing the Award, of such property as the Committee shall determine, including,  without limitation, cash, other property, or any combination thereof, upon the attainment of  performance goals, as established by the Committee, and other terms and conditions specified by  the Committee.  1.34. “Performance Unit” means an Award granted pursuant to Section 10 or  Section 12 of the Plan, consisting of a unit valued by reference to a designated amount of  property other than Shares, which value may be paid to the Participant by delivery of such  property as the Committee shall determine, including, without limitation, cash, Shares, other  property, or any combination thereof, upon the attainment of performance goals, as established  by the Committee, and other terms and conditions specified by the Committee.  1.35. “Permitted Transferee” means any child, stepchild, grandchild, parent,  stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in- law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law (including adoptive  relationships) of the Employee, any person sharing the Employee’s household (other than a  tenant or employee), a trust in which these persons (or the Employee) have more than 50% of the  beneficial interest, a foundation in which these persons (or the Employee) control the  management of assets, and any other entity in which these persons (or the Employee) own more  than 50% of the voting interests.  

 

  8    1.36. “Plan” means this Sonos, Inc., 2018 Equity Incentive Plan.  1.37. “Purchase Price” means the price to be paid for Shares acquired under the Plan,  other than Shares acquired upon exercise of an Option or SAR.  1.38. “RSA” means an award of Shares pursuant to Section 7 or Section 12 of the Plan,  or issued pursuant to the early exercise of an Option.  1.39. “RSU” means an Award granted pursuant to Section 6 or Section 12 of the Plan.  1.40. “SAR” means an Award granted pursuant to Section 9 or Section 12 of the Plan.  1.41. “Service” shall mean service as an Employee, Consultant, Director or Non- Employee Director, subject to such further limitations as may be set forth in the Plan or the  applicable Award Agreement.  An Employee will not be deemed to have ceased to provide  Service in the case of any leave of absence approved by the Company.  In the case of any  Employee on an approved leave of absence or a reduction in hours worked (for illustrative  purposes only, a change in schedule from that of full-time to part-time), the Committee may  make such provisions, including pursuant to a policy that the Committee may adopt, revoke  and/or modify from time to time in the Committee’s sole discretion, respecting suspension of or  modification to vesting of the Award while the Employee is on leave from the employ of the  Company or a Parent, Subsidiary or Affiliate, or during such change in working hours, as the  Committee may deem appropriate, except that in no event may an Award be exercised after the  expiration of the term set forth in the applicable Award Agreement.  In the event of military or  other protected leave, if required by applicable laws, vesting shall continue for the longest period  that vesting continues under any other statutory or Company approved leave of absence and,  upon a Participant’s returning from such leave (under conditions that would entitle him or her to  protection upon such return under the Uniform Services Employment and Reemployment Rights  Act or other applicable law), he or she shall be given vesting credit with respect to Awards to the  same extent as would have applied had the Participant continued to provide Service to the  Company throughout the leave on the same terms as he or she was providing Service  immediately prior to such leave.  An employee shall have terminated employment as of the date  he or she ceases to provide Service (regardless of whether the termination is in breach of local  employment laws or is later found to be invalid) and employment shall not be extended by any  notice period or garden leave mandated by local law, provided, however, that a change in status  between an employee, consultant, advisor or director shall not terminate the service provider’s  Service, unless determined by the Committee, in its discretion.  The Committee will have sole  discretion to determine whether a Participant has ceased to provide Service and the effective date  on which the Participant ceased to provide Service.  1.42. “Shares” means shares of Common Stock and the common stock of any successor  entity.  1.43. “Stock Bonus Award” means an Award granted pursuant to Section 8 or  Section 12 of the Plan.  1.44. “Subsidiary” means any corporation (other than the Company) in an unbroken  chain of corporations beginning with the Company if each of the corporations other than the last  

 

  9    corporation in the unbroken chain owns 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.  1.45. “Unvested Shares” means Shares that have not yet vested or are subject to a right  of repurchase in favor of the Company (or any successor thereto).  2. SHARES SUBJECT TO THE PLAN.  2.1. Number of Shares Available.  Subject to Sections 2.6 and 21 and any other  applicable provisions hereof, the total number of Shares reserved and available for grant and  issuance pursuant to this Plan as of the date of adoption of the Plan by the Board, is 21,200,000,1  plus (a) any reserved shares not issued or subject to outstanding grants under the Company’s  Amended and Restated 2003 Stock Plan (the “Prior Plan”) on the Effective Date, (b) shares that  are subject to stock options or other awards granted under the Prior Plan that cease to be subject  to such stock options or other awards, by forfeiture or otherwise, after the Effective Date,  (c) shares issued under the Prior Plan before or after the Effective Date pursuant to the exercise  of stock options that are forfeited after the Effective Date, and (d) shares issued under the Prior  Plan that are repurchased by the Company at the original issue price; however, shares that are  subject to stock options or other awards under the Prior Plan that are used to pay the exercise  price of an option or withheld to satisfy the tax withholding obligations related to any award will  not become available for future grant or sale under the Plan.  2.2. Lapsed, Returned Awards.  Shares subject to Awards, and Shares issued under the  Plan under any Award, will again be available for grant and issuance in connection with  subsequent Awards under this Plan to the extent such Shares:  (a) are subject to issuance upon  exercise of an Option or SAR granted under this Plan but which cease to be subject to the Option  or SAR for any reason other than exercise of the Option or SAR; (b) are subject to Awards  granted under this Plan that are forfeited or are repurchased by the Company at the original issue  price; (c) are subject to Awards granted under this Plan that otherwise terminate without such  Shares being issued; or (d) are surrendered pursuant to an Exchange Program.  To the extent an  Award under the Plan is paid out in cash or other property rather than Shares, such cash payment  will not result in reducing the number of Shares available for issuance under the Plan.  Shares  used to pay the exercise price of an Award or withheld to satisfy the tax withholding obligations  related to an Award will not become available for future grant or sale under the Plan.  For the  avoidance of doubt, Shares that otherwise become available for grant and issuance because of the  provisions of this Section 2.2 shall not include Shares subject to Awards that initially became  available because of the substitution clause in Section 21.2 hereof.  2.3. Minimum Share Reserve.  At all times the Company shall reserve and keep  available a sufficient number of Shares as shall be required to satisfy the requirements of all  outstanding Awards granted under this Plan.  2.4. Automatic Share Reserve Increase.  The number of Shares available for grant and  issuance under the Plan shall be increased on January 1, of each of 2019 through 2028, by the  lesser of (a) five percent (5%) of the number of Shares and common stock equivalents (including  options, RSUs, warrants and preferred stock on an as-converted basis) issued and outstanding on    1 Adjusted to reflect a 2-for-1 stock split that was effected on July 19, 2018.  

 

  10    each December 31 immediately prior to the date of increase and (b) such number of Shares  determined by the Board.  2.5. ISO Limitation.  No more than 42,400,000,2 Shares shall be issued pursuant to the  exercise of ISOs.  2.6. Adjustment of Shares.  If the outstanding Shares are changed by a stock dividend,  extraordinary dividends or distributions (whether in cash, shares or other property, other than a  regular cash dividend), spin-off, recapitalization, stock split, reverse stock split, subdivision,  combination, reclassification or similar change in the capital structure of the Company, without  consideration, then (a) the number and class of Shares reserved for issuance and future grant  under the Plan set forth in Section 2.1, (b) the Exercise Prices of and number and class of Shares  subject to outstanding Options and SARs, (c) the number and class of Shares subject to other  outstanding Awards, and (d) the maximum number and class of Shares that may be issued as  ISOs set forth in Section 2.5 shall be proportionately adjusted, subject to any required action by  the Board or the stockholders of the Company and in compliance with applicable securities laws;  provided that fractions of a Share will not be issued.  If, by reason of an adjustment pursuant to this Section 2.6, a Participant’s Award  Agreement or other agreement related to any Award or the Shares subject to such Award covers  additional or different shares of stock or securities, then such additional or different shares, and  the Award Agreement or such other agreement in respect thereof, shall be subject to all of the  terms, conditions and restrictions which were applicable to the Award or the Shares subject to  such Award prior to such adjustment.  3. ELIGIBILITY.  ISOs may be granted only to Employees.  All other Awards may be  granted to Employees, Consultants, Directors and Non-Employee Directors; provided such  Consultants, Directors and Non-Employee Directors render bona fide services not in connection  with the offer and sale of securities in a capital-raising transaction.  4. ADMINISTRATION.  4.1. Committee Composition; Authority.  This Plan will be administered by the  Committee or by the Board acting as the Committee.  Subject to the general purposes, terms and  conditions of this Plan, and to the direction of the Board, the Committee will have full power to  implement and carry out this Plan, except, however, the Board shall establish the terms for the  grant of an Award to Non-Employee Directors.  The Committee will have the authority to:  (a) construe and interpret this Plan, any Award Agreement and any other  agreement or document executed pursuant to this Plan;  (b) prescribe, amend and rescind rules and regulations relating to this Plan or  any Award;  (c) select persons to receive Awards;    2 Adjusted to reflect a 2-for-1 stock split that was effected on July 19, 2018.  

 

  11    (d) determine the form and terms and conditions, not inconsistent with the  terms of the Plan, of any Award granted hereunder.  Such terms and conditions include,  but are not limited to, the exercise price, the time or times when Awards may vest and be  exercised (which may be based on performance criteria) or settled, any vesting  acceleration or waiver of forfeiture restrictions, the method to satisfy tax withholding  obligations or any other tax liability legally due and any restriction or limitation  regarding any Award or the Shares relating thereto, based in each case on such factors as  the Committee will determine;  (e) determine the number of Shares or other consideration subject to Awards;  (f) determine the FMV in good faith and interpret the applicable provisions of  this Plan and the definition of FMV in connection with circumstances that impact the  FMV, if necessary;  (g) determine whether Awards will be granted singly, in combination with, in  tandem with, in replacement of, or as alternatives to, other Awards under this Plan or any  other incentive or compensation plan of the Company or any Parent, Subsidiary or  Affiliate;  (h) grant waivers of Plan or Award conditions;  (i) determine the vesting, exercisability and payment of Awards;  (j) correct any defect, supply any omission or reconcile any inconsistency in  this Plan, any Award or any Award Agreement;  (k) determine whether an Award has been earned or has vested;  (l) determine the terms and conditions of any, and to institute any Exchange  Program;  (m) reduce or waive any criteria with respect to Performance Factors;  (n) adjust Performance Factors to take into account changes in law and  accounting or tax rules as the Committee deems necessary or appropriate to reflect the  impact of extraordinary or unusual items, events or circumstances to avoid windfalls or  hardships;  (o) adopt rules and/or procedures (including the adoption of any subplan  under this Plan) relating to the operation and administration of the Plan to accommodate  requirements of local law and procedures outside of the United States or qualify Awards  for special tax treatment under laws of jurisdictions other than the United States;  (p) make all other determinations necessary or advisable for the  administration of this Plan;  

 

  12    (q) delegate any of the foregoing to one or more executive officers pursuant to  a specific delegation as permitted by applicable law, including Section 157(c) of the  Delaware General Corporation Law; and  (r) to exercise negative discretion on Performance Awards, reducing or  eliminating the amount to be paid to Participants.  4.2. Committee Interpretation and Discretion.  Any determination made by the  Committee with respect to any Award shall be made in its sole discretion at the time of grant of  the Award or, unless in contravention of any express term of the Plan or Award, at any later  time, and such determination shall be final and binding on the Company and all persons having  an interest in any Award under the Plan.  Any dispute regarding the interpretation of the Plan or  any Award Agreement shall be submitted by the Participant or Company to the Committee for  review.  The resolution of such a dispute by the Committee shall be final and binding on the  Company and the Participant.  The Committee may delegate to one or more executive officers  the authority to review and resolve disputes with respect to Awards held by Participants who are  not Insiders, and such resolution shall be final and binding on the Company and the Participant.  4.3. Documentation.  The Award Agreement for a given Award, the Plan and any  other documents may be delivered to, and accepted by, a Participant or any other person in any  manner (including electronic distribution or posting) that meets applicable legal requirements.  4.4. Foreign Award Recipients.  Notwithstanding any provision of the Plan to the  contrary, in order to comply with the laws and practices in other countries in which the Company  and its Subsidiaries and Affiliates operate or have employees or other individuals eligible for  Awards, the Committee, in its sole discretion, shall have the power and authority to:   (a) determine which Subsidiaries and Affiliates shall be covered by the Plan; (b) determine  which individuals outside the United States are eligible to participate in the Plan, which may  include individuals who provide services to the Company, Subsidiary or Affiliate under an  agreement with a foreign nation or agency; (c) modify the terms and conditions of any Award  granted to individuals outside the United States or foreign nationals to comply with applicable  foreign laws, policies, customs and practices; (d) establish subplans and modify exercise  procedures and other terms and procedures, to the extent the Committee determines such actions  to be necessary or advisable (and such subplans and/or modifications shall be attached to this  Plan as appendices); provided, however, that no such subplans and/or modifications shall  increase the share limitations contained in Section 2.1 hereof; and (e) take any action, before or  after an Award is made, that the Committee determines to be necessary or advisable to obtain  approval or comply with any local governmental regulatory exemptions or approvals.   Notwithstanding the foregoing, the Committee may not take any actions hereunder, and no  Awards shall be granted, that would violate the Exchange Act or any other applicable United  States securities law, the Code, or any other applicable United States governing statute or law.  5. OPTIONS.  An Option is the right but not the obligation to purchase a Share, subject to  certain conditions, if applicable.  The Committee will determine whether such Options will be  Incentive Stock Options within the meaning of the Code (“ISOs”) or Nonqualified Stock Options  (“NSOs”) and may grant Options to eligible Employees, Consultants and Directors and the  number of Shares subject to the Option, the Exercise Price of the Option, the period during  

 

  13    which the Option may vest and be exercised, and all other terms and conditions of the Option,  subject to the following terms of this section.  5.1. Option Grant.  Each Option granted under this Plan will identify the Option as an  ISO or an NSO.  An Option may be, but need not be, awarded upon satisfaction of such  Performance Factors during any Performance Period as are set out in advance in the Participant’s  individual Award Agreement.  If the Option is being earned upon the satisfaction of Performance  Factors, then the Committee will:  (a) determine the nature, length and starting date of any  Performance Period for each Option; and (b) select from among the Performance Factors to be  used to measure the performance, if any.  Performance Periods may overlap and Participants may  participate simultaneously with respect to Options that are subject to different performance goals  and other criteria.  5.2. Date of Grant.  The date of grant of an Option will be the date on which the  Committee makes the determination to grant such Option, or a specified future date.  The Award  Agreement will be delivered to the Participant within a reasonable time after the granting of the  Option.  5.3. Exercise Period.  Options may be vested and exercisable within the times or upon  the conditions as set forth in the Award Agreement governing such Option; provided, however,  that no Option will be exercisable after the expiration of ten (10) years from the date the Option  is granted; and provided further that no ISO granted to a person who, at the time the ISO is  granted, directly or by attribution owns more than ten percent (10%) of the total combined voting  power of all classes of stock of the Company or of any Parent or Subsidiary (“Ten Percent  Stockholder”), will be exercisable after the expiration of five (5) years from the date the ISO is  granted.  The Committee also may provide for Options to become exercisable at one time or  from time to time, periodically or otherwise, in such number of Shares or percentage of Shares as  the Committee determines.  5.4. Exercise Price.  The Exercise Price of an Option will be determined by the  Committee when the Option is granted; provided that:  (a) the Exercise Price of an Option will  be not less than one hundred percent (100%) of the FMV of the Shares on the date of grant and  (b) the Exercise Price of any ISO granted to a Ten Percent Stockholder will not be less than  one hundred ten percent (110%) of the FMV of the Shares on the date of grant.  Payment for the  Shares purchased may be made in accordance with Section 11 and the Award Agreement and in  accordance with any procedures established by the Company.  5.5. Method of Exercise.  Any Option granted hereunder will be vested and  exercisable according to the terms of the Plan and at such times and under such conditions as  determined by the Committee and set forth in the Award Agreement.  An Option may not be  exercised for a fraction of a Share.  An Option will be deemed exercised when the Company  receives:  (a) notice of exercise (in such form as the Committee may specify from time to time)  from the person entitled to exercise the Option (and/or via electronic execution through the  authorized third-party administrator), and (b) full payment for the Shares with respect to which  the Option is exercised together with applicable withholding taxes.  Full payment may consist of  any consideration and method of payment authorized by the Committee and permitted by the  Award Agreement and the Plan.  Shares issued upon exercise of an Option will be issued in the  

 

  14    name of the Participant.  Until the Shares are issued (as evidenced by the appropriate entry on the  books of the Company or of a duly authorized transfer agent of the Company), no right to vote or  receive dividends or any other rights as a stockholder will exist with respect to the Shares,  notwithstanding the exercise of the Option.  The Company will issue (or cause to be issued) such  Shares promptly after the Option is exercised.  No adjustment will be made for a dividend or  other right for which the record date is prior to the date the Shares are issued, except as provided  in Section 2.6 of the Plan.  Exercising an Option in any manner will decrease the number of  Shares thereafter available, both for purposes of the Plan and for sale under the Option, by the  number of Shares as to which the Option is exercised.  5.6. Termination of Service.  If the Participant’s Service terminates for any reason  except for Cause or the Participant’s death or Disability, then the Participant may exercise such  Participant’s Options only to the extent that such Options would have been exercisable by the  Participant on the date Participant’s Service terminates no later than three (3) months after the  date Participant’s Service terminates (or such shorter or longer time period as may be determined  by the Committee, with any exercise beyond three (3) months after the date Participant’s  employment terminates deemed to be the exercise of an NSO), but in any event no later than the  expiration date of the Options, except as required by applicable law.  (a) Death.  If the Participant’s Service terminates because of the Participant’s  death (or the Participant dies within three (3) months after Participant’s Service  terminates other than for Cause or because of the Participant’s Disability), then the  Participant’s Options may be exercised only to the extent that such Options would have  been exercisable by the Participant on the date Participant’s Service terminates and must  be exercised by the Participant’s legal representative, or authorized assignee, no later than  twelve (12) months after the date Participant’s Service terminates (or such shorter or  longer time period as may be determined by the Committee), but in any event no later  than the expiration date of the Options, except as required by applicable law.  (b) Disability.  If the Participant’s Service terminates because of the  Participant’s Disability, then the Participant’s Options may be exercised only to the  extent that such Options would have been exercisable by the Participant on the date  Participant’s Service terminates and must be exercised by the Participant (or the  Participant’s legal representative or authorized assignee) no later than twelve (12) months  after the date Participant’s Service terminates (or such shorter or longer time period as  may be determined by the Committee, with any exercise beyond (a) three (3) months  after the date Participant’s employment terminates when the termination of Service is for  a Disability that is not a “permanent and total disability” as defined in Section 22(e)(3) of  the Code, or (b) twelve (12) months after the date Participant’s employment terminates  when the termination of Service is for a Disability that is a “permanent and total  disability” as defined in Section 22(e)(3) of the Code, deemed to be exercise of an NSO),  but in any event no later than the expiration date of the Options.  5.7. Limitations on ISOs.  With respect to Awards granted as ISOs, to the extent that  the aggregate FMV of the Shares with respect to which such ISOs are exercisable for the first  time by the Participant during any calendar year (under all plans of the Company and any Parent  or Subsidiary) exceeds one hundred thousand dollars ($100,000), such Options will be treated as  

 

  15    NSOs.  For purposes of this Section 5.7, ISOs will be taken into account in the order in which  they were granted.  The FMV of the Shares will be determined as of the time the Option with  respect to such Shares is granted.  In the event that the Code or the regulations promulgated  thereunder are amended after the Effective Date to provide for a different limit on the FMV of  Shares permitted to be subject to ISOs, such different limit will be automatically incorporated  herein and will apply to any Options granted after the effective date of such amendment.  5.8. Modification, Extension or Renewal.  The Committee may modify, extend or  renew outstanding Options and authorize the grant of new Options in substitution therefor,  provided that any such action may not, without the written consent of a Participant, impair any of  such Participant’s rights under any Option previously granted, unless for the purpose of  complying with applicable laws and regulations.  Any outstanding ISO that is modified,  extended, renewed or otherwise altered will be treated in accordance with Section 424(h) of the  Code.  Subject to Section 18 of this Plan, by written notice to affected Participants, the  Committee may reduce the Exercise Price of outstanding Options without the consent of such  Participants by a written notice to them; provided, however, that the Exercise Price may not be  reduced below the minimum Exercise Price that would be permitted under Section 5.4 for  Options granted on the date the action is taken to reduce the Exercise Price.  5.9. No Disqualification.  Notwithstanding any other provision in this Plan, no term of  this Plan relating to ISOs will be interpreted, amended or altered, nor will any discretion or  authority granted under this Plan be exercised, so as to disqualify this Plan under Section 422 of  the Code or, without the written consent of the Participant, to disqualify any Participant’s ISO  under Section 422 of the Code.  6. RESTRICTED STOCK UNITS.  A restricted stock unit (“RSU”) is an award to an  eligible Employee, Consultant, or Director covering a number of Shares that may be settled in  cash or by issuance of those Shares (which may consist of Restricted Stock).  No Purchase Price  shall apply to an RSU settled in Shares.  All RSUs shall be made pursuant to an Award  Agreement.  6.1. Terms of RSUs.  The Committee will determine the terms of an RSU including,  without limitation:  (a) the number of Shares subject to the RSU; (b) the time or times during  which the RSU may be settled; (c) the consideration to be distributed on settlement; and (d) the  effect of the Participant’s termination of Service on each RSU; provided that no RSU shall have  a term longer than ten (10) years.  An RSU may be awarded upon satisfaction of such  performance goals based on Performance Factors during any Performance Period as are set out in  advance in the Participant’s Award Agreement.  If the RSU is being earned upon satisfaction of  Performance Factors, then the Committee will:  (i) determine the nature, length and starting date  of any Performance Period for the RSU; (ii) select from among the Performance Factors to be  used to measure the performance, if any; and (iii) determine the number of Shares deemed  subject to the RSU.  Performance Periods may overlap and participants may participate  simultaneously with respect to RSUs that are subject to different Performance Periods and  different performance goals and other criteria.  6.2. Form and Timing of Settlement.  Payment of earned RSUs shall be made as soon  as practicable after the date(s) determined by the Committee and set forth in the Award  

 

  16    Agreement.  The Committee, in its sole discretion, may settle earned RSUs in cash, Shares, or a  combination of both.  The Committee may also permit a Participant to defer payment under a  RSU to a date or dates after the RSU is earned provided that the terms of the RSU and any  deferral satisfy the requirements of Section 409A of the Code.  6.3. Termination of Service.  Except as may be set forth in the Participant’s Award  Agreement, vesting ceases on such date Participant’s Service terminates (unless determined  otherwise by the Committee).  6.4. Dividend Equivalent Payments.  The Committee may permit Participants holding  RSUs to receive dividend equivalent payments on outstanding RSUs if and when dividends are  paid to stockholders on Shares.  In the discretion of the Committee, such dividend equivalent  payments may be paid in cash or Shares, and they may either be paid at the same time as  dividend payments are made to stockholders or be delayed until Shares are issued pursuant to the  RSU grants and may be subject to the same vesting or performance requirements as the RSUs.  If  the Committee permits dividend equivalent payments to be made on RSUs, the terms and  conditions for such dividend equivalent payments will be set forth in the RSU Agreement.  7. RESTRICTED STOCK AWARDS.  A restricted stock award (“RSA”) is an offer by  the Company to sell to an eligible Employee, Consultant, or Director Shares that are subject to  restrictions (“Restricted Stock”).  The Committee will determine to whom an offer will be made,  the number of Shares the Participant may purchase, the Purchase Price, the restrictions under  which the Shares will be subject and all other terms and conditions of the RSA, subject to the  Plan.  7.1. Restricted Stock Purchase Agreement.  All purchases under an RSA will be  evidenced by an Award Agreement.  Except as may otherwise be provided in an Award  Agreement, a Participant accepts an RSA by signing and delivering to the Company an Award  Agreement with full payment of the Purchase Price, within thirty (30) days from the date the  Award Agreement was delivered to the Participant.  If the Participant does not accept such  Award within thirty (30) days, then the offer of such RSA will terminate, unless the Committee  determines otherwise.  7.2. Purchase Price.  The Purchase Price for shares sold pursuant to an RSA will be  determined by the Committee on the date the RSA is granted, and if permitted by law, no cash  consideration will be required in connection with the payment for the Purchase Price where  consideration is services rendered.  Payment of the Purchase Price must be made in accordance  with Section 11 of the Plan, and the Award Agreement and in accordance with any procedures  established by the Company.  7.3. Terms of RSAs.  RSAs will be subject to such restrictions as the Committee may  impose or are required by law.  These restrictions may be based on completion of a specified  number of years of service with the Company or upon completion of Performance Factors, if  any, during any Performance Period as set out in advance in the Participant’s Award Agreement.   Prior to the grant of an RSA, the Committee shall:  (a) determine the nature, length and starting  date of any Performance Period for the RSA; (b) select from among the Performance Factors to  be used to measure performance goals, if any; and (c) determine the number of Shares that may  

 

  17    be awarded to the Participant.  Performance Periods may overlap and a Participant may  participate simultaneously with respect to RSAs that are subject to different Performance Periods  and having different performance goals and other criteria.  7.4. Termination of Service.  Except as may be set forth in the Participant’s Award  Agreement, vesting ceases on such date Participant’s Service terminates (unless determined  otherwise by the Committee).  7.5. Dividends and Other Distributions.  Participants holding RSAs will be entitled to  receive all dividends and other distributions paid with respect to such Shares, unless the  Committee provides otherwise at the time the Award is granted.  In the discretion of the  Committee, such dividends and other distributions may be paid in cash or Shares, and unless  otherwise specified in the applicable Award Agreement, all such dividends and distributions will  be subject to the same restrictions on transferability and forfeitability as apply to the RSAs with  respect to which they were paid and may either be paid at the same time as dividend payments  are made to other stockholders or be delayed until the vesting or performance requirements are  satisfied for the RSAs with respect to which such dividends or distributions are paid.  8. STOCK BONUS AWARDS.  A stock bonus award (“Stock Bonus Award”) is an award  to an eligible Employee, Consultant, or Director of Shares for Services to be rendered or for past  Services already rendered to the Company or any Parent, Subsidiary or Affiliate.  All Stock  Bonus Awards shall be made pursuant to an Award Agreement.  No payment from the  Participant will be required for Shares awarded pursuant to a Stock Bonus Award.  8.1. Terms of Stock Bonus Awards.  The Committee will determine the number of  Shares to be awarded to the Participant under a Stock Bonus Award and any restrictions thereon.   These restrictions may be based upon completion of a specified number of years of service with  the Company or upon satisfaction of performance goals based on Performance Factors during  any Performance Period as set out in advance in the Participant’s Stock Bonus Agreement.  Prior  to the grant of any Stock Bonus Award the Committee shall:  (a) determine the nature, length and  starting date of any Performance Period for the Stock Bonus Award; (b) select from among the  Performance Factors to be used to measure performance goals; and (c) determine the number of  Shares that may be awarded to the Participant.  Performance Periods may overlap and a  Participant may participate simultaneously with respect to Stock Bonus Awards that are subject  to different Performance Periods and different performance goals and other criteria.  8.2. Form of Payment to Participant.  Payment may be made in the form of cash,  whole Shares, or a combination thereof, based on the FMV of the Shares earned under a Stock  Bonus Award on the date of payment, as determined in the sole discretion of the Committee.  8.3. Termination of Service.  Except as may be set forth in the Participant’s Award  Agreement, vesting ceases on such date Participant’s Service terminates (unless determined  otherwise by the Committee).  9. STOCK APPRECIATION RIGHTS.  A stock appreciation right (“SAR”) is an award  to an eligible Employee, Consultant, or Director that may be settled in cash, or Shares (which  may consist of Restricted Stock), having a value equal to (a) the difference between the FMV on  

 

  18    the date of exercise over the Exercise Price multiplied by (b) the number of Shares with respect  to which the SAR is being settled (subject to any maximum number of Shares that may be  issuable as specified in an Award Agreement).  All SARs shall be made pursuant to an Award  Agreement.  9.1. Terms of SARs.  The Committee will determine the terms of each SAR including,  without limitation:  (a) the number of Shares subject to the SAR; (b) the Exercise Price and the  time or times during which the SAR may be settled; (c) the consideration to be distributed on  settlement of the SAR; and (d) the effect of the Participant’s termination of Service on each  SAR.  The Exercise Price of the SAR will be determined by the Committee when the SAR is  granted, and may not be less than FMV on the date of grant.  A SAR may be awarded upon  satisfaction of Performance Factors, if any, during any Performance Period as are set out in  advance in the Participant’s individual Award Agreement.  If the SAR is being earned upon the  satisfaction of Performance Factors, then the Committee will:  (i) determine the nature, length  and starting date of any Performance Period for each SAR; and (ii) select from among the  Performance Factors to be used to measure the performance, if any.  Performance Periods may  overlap and Participants may participate simultaneously with respect to SARs that are subject to  different Performance Factors and other criteria.  9.2. Exercise Period and Expiration Date.  A SAR will be exercisable within the times  or upon the occurrence of events determined by the Committee and set forth in the Award  Agreement governing such SAR.  The SAR Agreement shall set forth the expiration date;  provided that no SAR will be exercisable after the expiration of ten (10) years from the date the  SAR is granted.  The Committee may also provide for SARs to become exercisable at one time  or from time to time, periodically or otherwise (including, without limitation, upon the  attainment during a Performance Period of performance goals based on Performance Factors), in  such number of Shares or percentage of the Shares subject to the SAR as the Committee  determines.  Except as may be set forth in the Participant’s Award Agreement, vesting ceases on  the date Participant’s Service terminates (unless determined otherwise by the Committee).   Notwithstanding the foregoing, the rules of Section 5.6 also will apply to SARs.  9.3. Form of Settlement.  Upon exercise of a SAR, a Participant will be entitled to  receive payment from the Company in an amount determined by multiplying (a) the difference  between the FMV of a Share on the date of exercise over the Exercise Price; times (b) the  number of Shares with respect to which the SAR is exercised.  At the discretion of the  Committee, the payment from the Company for the SAR exercise may be in cash, in Shares of  equivalent value, or in some combination thereof.  The portion of a SAR being settled may be  paid currently or on a deferred basis with such interest or Dividend Equivalent Right, if any, as  the Committee determines, provided that the terms of the SAR and any deferral satisfy the  requirements of Section 409A of the Code.  9.4. Termination of Service.  Except as may be set forth in the Participant’s Award  Agreement, vesting ceases on such date Participant’s Service terminates (unless determined  otherwise by the Committee).  10. PERFORMANCE AWARDS.  A Performance Award is an award to an eligible  Employee, Consultant, or Director that is based upon the attainment of performance goals, as  

 

  19    established by the Committee, and other terms and conditions specified by the Committee, and  may be settled in cash, Shares (which may consist of, without limitation, Restricted Stock), other  property, or any combination thereof.  Grants of Performance Awards shall be made pursuant to  an Award Agreement that cites Section 10 of the Plan.  10.1. Types of Performance Awards.  Performance Awards shall include Performance  Shares, Performance Units, and cash-based Awards as set forth in Sections 10.1(a), 10.1(b), and  10.1(c) below.  (a) Performance Shares.  The Committee may grant Awards of Performance  Shares, designate the Participants to whom Performance Shares are to be awarded and  determine the number of Performance Shares and the terms and conditions of each such  Award.  (b) Performance Units.  The Committee may grant Awards of Performance  Units, designate the Participants to whom Performance Units are to be awarded and  determine the number of Performance Units and the terms and conditions of each such  Award.  (c) Cash-Settled Performance Awards.  The Committee may also grant cash- settled Performance Awards to Participants under the terms of this Plan.  (d) Dividend Equivalent Payments.  The Committee may permit Participants  holding Performance Shares and/or Performance Units (collectively, “Performance  Awards”) to receive dividends, distributions and/or dividend equivalent payments on  outstanding Performance Awards if and when dividends are paid to stockholders on  Shares.  In the discretion of the Committee, such dividends, distributions and/or dividend  equivalent payments may be paid in cash or Shares, and they may either be paid at the  same time as dividend payments are made to stockholders or be delayed until Shares are  issued (if applicable) pursuant to the Performance Awards and may be subject to the  same performance requirements as apply to the Performance Awards.  If the Committee  permits dividends, distributions and/or dividend equivalent payments to be made on  Performance Awards, the terms and conditions for such dividends, distributions and/or  dividend equivalent payments will be set forth in the applicable Award Agreement(s).  The amount to be paid under any Performance Award may be adjusted on the basis of such  further consideration as the Committee shall determine in its sole discretion.  10.2. Terms of Performance Awards.  Performance Awards will be based on the  attainment of performance goals using the Performance Factors within this Plan that are  established by the Committee for the relevant Performance Period.  The Committee will  determine, and each Award Agreement shall set forth, the terms of each Performance Award  including, without limitation:  (a) the amount of any cash bonus, (b) the number of Shares  deemed subject to an award of Performance Shares; (c) the Performance Factors and  Performance Period that shall determine the time and extent to which each award of Performance  Shares shall be settled; (d) the consideration to be distributed on settlement, and (e) the effect of  the Participant’s termination of Service on each Performance Award.  In establishing  

 

  20    Performance Factors and the Performance Period the Committee will:  (i) determine the nature,  length and starting date of any Performance Period; (ii) select from among the Performance  Factors to be used; and (z) determine the number of Shares deemed subject to the award of  Performance Shares.  Each Performance Share will have an initial value equal to the FMV of a  Share on the date of grant.  Prior to settlement the Committee shall determine the extent to which  Performance Awards have been earned.  Performance Periods may overlap and Participants may  participate simultaneously with respect to Performance Awards that are subject to different  Performance Periods and different performance goals and other criteria.  10.3. Termination of Service.  Except as may be set forth in the Participant’s Award  Agreement, vesting ceases on the date Participant’s Service terminates (unless determined  otherwise by the Committee).  11. PAYMENT FOR SHARE PURCHASES.  Payment from a Participant for Shares  acquired pursuant to this Plan may be made in cash or cash equivalents or, where approved for  the Participant by the Committee and where permitted by law (and to the extent not otherwise set  forth in the applicable Award Agreement):  (a) by cancellation of indebtedness of the Company owed to the Participant;  (b) by surrender of shares of Company capital stock held by the Participant  that are clear of all liens, claims, encumbrances or security interests that have an FMV on  the date of surrender equal to the aggregate exercise price of the Shares as to which said  Award will be exercised or settled;  (c) by waiver of compensation due or accrued to the Participant for services  rendered or to be rendered to the Company or a Parent, Subsidiary or Affiliate;  (d) by consideration received by the Company pursuant to a broker-assisted or  other form of cashless exercise program implemented by the Company in connection  with the Plan;  (e) by any combination of the foregoing; or  (f) by any other method of payment as is permitted by applicable law.  The Committee may limit the availability of any method of payment, to the extent the Committee  determines, in its discretion, that such limitation is necessary or advisable to comply with  applicable law or facilitate the administration of the Plan.  12. GRANTS TO NON-EMPLOYEE DIRECTORS.  Non-Employee Directors are  eligible to receive any type of Award offered under this Plan except ISOs.  Awards pursuant to  this Section 12 may be automatically made pursuant to policy adopted by the Board, or made  from time to time as determined in the discretion of the Board.  The aggregate grant date fair  value of Awards granted to a Non-Employee Director pursuant to this Section 12 in any calendar  year shall not exceed $600,000.  

 

  21    12.1. Eligibility.  Awards pursuant to this Section 12 shall be granted only to Non- Employee Directors.  A Non-Employee Director who is elected or re-elected as a member of the  Board will be eligible to receive an Award under this Section 12.  12.2. Vesting, Exercisability and Settlement.  Except as set forth in Section 21, Awards  shall vest, become exercisable and be settled as determined by the Board.  With respect to  Options and SARs, the exercise price granted to Non-Employee Directors shall not be less than  the FMV of the Shares at the time that such Option or SAR is granted.  12.3. Election to receive Awards in Lieu of Cash.  A Non-Employee Director may elect  to receive his or her annual retainer payments and/or meeting fees from the Company in the form  of cash or Awards or a combination thereof, as determined by the Committee.  Such Awards  shall be issued under the Plan.  An election under this Section 12.3 shall be filed with the  Company on the form prescribed by the Company.  13. WITHHOLDING TAXES.  Prior to any relevant taxable or tax withholding events in  connection with the Awards under this Plan, the Company may require the Participant to pay or  make adequate arrangements satisfactory to the Company with respect to any or all income tax,  social insurance, payroll tax, fringe benefits tax, payment on account and other tax-related items  related to the Participant’s participation in this Plan and legally applicable to the Participant  (collectively, “Tax-Related Obligations”).  The Committee may, in its sole discretion and  pursuant to such procedures as it may specify from time to time, require or permit a Participant  to satisfy withholding obligations for such Tax-Related Obligations, in whole or in part by  (without limitation) (a) paying cash, (b) having the Company withhold otherwise deliverable  cash or Shares having a value equal to the Tax-Related Obligations to be withheld, (c) delivering  to the Company already-owned Shares having a value equal to the Tax-Related Obligations to be  withheld, or (d) withholding from proceeds of the sale of Shares issued pursuant to an Award  either through a voluntary sale or through a mandatory sale arranged by the Company, provided  that, in all instances, the satisfaction of the Tax-Related Obligations will not result in any adverse  accounting consequence to the Company, as the Committee may determine in its sole discretion.   The Company may withhold or account for these Tax-Related Obligations by considering  applicable statutory withholding rates or other applicable withholding rates, including maximum  rates for the applicable tax jurisdiction to the extent consistent with applicable laws.  Unless  otherwise determined by the Committee, the FMV of the Shares will be determined as of the date  that the taxes are required to be withheld and such Shares shall be valued based on the FMV of  the Shares as of the previous trading day, unless otherwise determined by the Committee.  14. TRANSFERABILITY.  14.1. Transfer Generally.  Unless determined otherwise by the Committee or pursuant  to Section 14.2, an Award may not be sold, pledged, assigned, hypothecated, transferred, or  disposed of in any manner other than by will or by the laws of descent or distribution.  If the  Committee makes an Award transferable, including, without limitation, by instrument to an inter  vivos or testamentary trust in which the Awards are to be passed to beneficiaries upon the death  of the trustor (settlor) or by gift or by domestic relations order to a Permitted Transferee, such  Award will contain such additional terms and conditions as the Committee deems appropriate.   All Awards shall be exercisable:  (a) during the Participant’s lifetime only by (i) the Participant,  

 

  22    or (ii) the Participant’s guardian or legal representative; (b) after the Participant’s death, by the  legal representative of the Participant’s heirs or legatees; and (c) in the case of all awards except  ISOs, by a Permitted Transferee.  14.2. Award Transfer Program.  Notwithstanding any contrary provision of the Plan,  the Committee shall have all discretion and authority to determine and implement the terms and  conditions of any Award Transfer Program instituted pursuant to this Section 14.2 and shall have  the authority to amend the terms of any Award participating, or otherwise eligible to participate  in, the Award Transfer Program, including (but not limited to) the authority to (a) amend  (including to extend) the expiration date, post-termination exercise period and/or forfeiture  conditions of any such Award, (b) amend or remove any provisions of the Award relating to the  Award holder’s continued Service to the Company or its Parent, Subsidiary, or Affiliate,  (c) amend the permissible payment methods with respect to the exercise or purchase of any such  Award, (d) amend the adjustments to be implemented in the event of changes in the  capitalization and other similar events with respect to such Award, and (e) make such other  changes to the terms of such Award as the Committee deems necessary or appropriate in its sole  discretion.  15. PRIVILEGES OF STOCK OWNERSHIP; RESTRICTIONS ON SHARES.  15.1. Voting and Dividends.  No Participant will have any of the rights of a stockholder  with respect to any Shares until the Shares are issued to the Participant, except for any Dividend  Equivalent Rights permitted by an applicable Award Agreement.  In addition, the Committee  may provide that any Dividend Equivalent Rights permitted by an applicable Award Agreement  shall be deemed to have been reinvested in additional Shares or otherwise reinvested.  After  Shares are issued to the Participant, the Participant will be a stockholder and have all the rights  of a stockholder with respect to such Shares, including the right to vote and receive all dividends  or other distributions made or paid with respect to such Shares; provided, that if such Shares are  Restricted Stock, then any new, additional or different securities the Participant may become  entitled to receive with respect to such Shares by virtue of a stock dividend, stock split or any  other change in the corporate or capital structure of the Company will be subject to the same  restrictions as the Restricted Stock; provided, further, that the Participant will have no right to  retain such stock dividends or stock distributions with respect to Shares that are repurchased at  the Participant’s Purchase Price or Exercise Price, as the case may be, pursuant to Section 15.2.   However, the Committee, in its discretion, may provide in the Award Agreement evidencing any  Award that the Participant shall be entitled to Dividend Equivalent Rights with respect to the  payment of cash dividends on Shares underlying an Award during the period beginning on the  date the Award is granted and ending, with respect to each Share subject to the Award, on the  earlier of the date on which the Award is exercised or settled or the date on which it is forfeited.   Such Dividend Equivalent Rights, if any, shall be credited to the Participant in the form of cash  or additional whole Shares, as determined by the Committee in its sole discretion, as of the date  of payment of such cash dividends on Shares.  Notwithstanding the foregoing, dividends and  Dividend Equivalent Rights may accrue with respect to unvested Awards, but will not be paid or  issued until such Award is fully vested and the Shares are issued to Participant and such Shares  are no longer subject to any vesting requirements or repurchase rights on behalf of the Company.  

 

  23    15.2. Restrictions on Shares.  At the discretion of the Committee, the Company may  reserve to itself and/or its assignee(s) a right to repurchase (a “Right of Repurchase”) a portion  of any or all Unvested Shares held by a Participant following such Participant’s termination of  Service at any time within ninety (90) days (or such longer or shorter time determined by the  Committee) after the later of the date Participant’s Service terminates and the date the Participant  purchases Shares under this Plan, for cash and/or cancellation of purchase money indebtedness,  at the Participant’s Purchase Price or Exercise Price, as the case may be.  16. CERTIFICATES.  All Shares or other securities whether or not certificated, delivered  under this Plan will be subject to such stock transfer orders, legends and other restrictions as the  Committee may deem necessary or advisable, including restrictions under any applicable  U.S. federal, state or foreign securities law, or any rules, regulations and other requirements of  any stock exchange or automated quotation system upon which the Shares may be listed or  quoted and any non-U.S. exchange controls or securities law restrictions to which the Shares are  subject.  17. ESCROW; PLEDGE OF SHARES.  To enforce any restrictions on a Participant’s  Shares, the Committee may require the Participant to deposit all written or electronic certificates  (if any) representing Shares, together with stock powers or other instruments of transfer  approved by the Committee, appropriately endorsed in blank, with the Company or an agent  designated by the Company to hold in escrow until such restrictions have lapsed or terminated,  and the Committee may cause a legend or legends referencing such restrictions to be placed on  the certificate.  Any Participant who is permitted to execute a promissory note as partial or full  consideration for the purchase of Shares under this Plan will be required to pledge and deposit  with the Company all or part of the Shares so purchased as collateral to secure the payment of  Participant’s obligation to the Company under the promissory note; provided, however, that the  Committee may require or accept other or additional forms of collateral to secure the payment of  such obligation and, in any event, the Company will have full recourse against the Participant  under the promissory note notwithstanding any pledge of the Participant’s Shares or other  collateral.  In connection with any pledge of the Shares, Participant will be required to execute  and deliver a written pledge agreement in such form as the Committee will from time to time  approve.  The Shares purchased with the promissory note may be released from the pledge on a  pro rata basis as the promissory note is paid.  18. REPRICING; EXCHANGE AND BUYOUT OF AWARDS.  Without prior  stockholder approval, the Committee may (a) reprice Options or SARs (and where such repricing  is a reduction in the Exercise Price of outstanding Options or SARs, the consent of the affected  Participants is not required provided written notice is provided to them, notwithstanding any  adverse tax consequences to them arising from the repricing), and (b) with the consent of the  respective Participants (unless not required pursuant to Section 5.8 of the Plan), pay cash or issue  new Awards in exchange for the surrender and cancellation of any, or all, outstanding Awards.  19. SECURITIES LAW AND OTHER REGULATORY COMPLIANCE.  An Award  will not be effective unless such Award is in compliance with all applicable U.S. and foreign  federal and state securities and exchange control laws, rules and regulations of any governmental  body, and the requirements of any stock exchange or automated quotation system upon which  the Shares may then be listed or quoted, as they are in effect on the date of grant of the Award  

 

  24    and also on the date of exercise or other issuance.  Notwithstanding any other provision in this  Plan, the Company will have no obligation to issue or deliver written or electronic certificates (if  any) for Shares under this Plan prior to:  (a) obtaining any approvals from governmental agencies  that the Company determines are necessary or advisable; and/or (b) completion of any  registration or other qualification of such Shares under any state or federal or foreign law or  ruling of any governmental body that the Company determines to be necessary or advisable.  The  Company will be under no obligation to register the Shares or to effect compliance with the  registration, qualification or listing requirements of any foreign, national or state securities laws,  exchange control laws, stock exchange or automated quotation system, and the Company will  have no liability for any inability or failure to do so.  20. NO OBLIGATION TO EMPLOY.  Nothing in this Plan or any Award granted under  this Plan will confer or be deemed to confer on any Participant any right to continue in the  employ of, or to continue any other relationship with, the Company or any Parent, Subsidiary or  Affiliate or limit in any way the right of the Company or any Parent, Subsidiary or Affiliate to  terminate Participant’s employment or other relationship at any time.  21. CORPORATE TRANSACTIONS.  21.1. Assumption or Replacement of Awards by Successor.  In the event that the  Company is subject to a Corporate Transaction, outstanding Awards acquired under the Plan  shall be subject to the agreement evidencing the Corporate Transaction, which need not treat all  outstanding Awards in an identical manner.  Such agreement, without the Participant’s consent,  shall provide for one or more of the following with respect to all outstanding Awards as of the  effective date of such Corporate Transaction:  (a) The continuation of an outstanding Award by the Company (if the  Company is the successor entity).  (b) The assumption of an outstanding Award by the successor or acquiring  entity (if any) of such Corporate Transaction (or by its parents, if any), which  assumption, will be binding on all selected Participants; provided that the exercise price  and the number and nature of shares issuable upon exercise of any such option or stock  appreciation right, or any award that is subject to Section 409A of the Code, will be  adjusted appropriately pursuant to Section 424(a) of the Code and/or Section 409A of the  Code, as applicable.  (c) The substitution by the successor or acquiring entity in such Corporate  Transaction (or by its parents, if any) of equivalent awards with substantially the same  terms for such outstanding Awards (except that the exercise price and the number and  nature of shares issuable upon exercise of any such option or stock appreciation right, or  any award that is subject to Section 409A of the Code, will be adjusted appropriately  pursuant to Section 424(a) of the Code and/or Section 409A of the Code, as applicable).  (d) The full or partial acceleration of exercisability or vesting and accelerated  expiration of an outstanding Award and lapse of the Company’s right to repurchase or re- 

 

  25    acquire shares acquired under an Award or lapse of forfeiture rights with respect to shares  acquired under an Award.  (e) The settlement of the full value of such outstanding Award (whether or not  then vested or exercisable) in cash, cash equivalents, or securities of the successor entity  (or its parent, if any) with a FMV equal to the required amount, followed by the  cancellation of such Awards; provided however, that such Award may be cancelled if  such Award has no value, as determined by the Committee, in its discretion.  Subject to  Section 409A of the Code, such payment may be made in installments and may be  deferred until the date or dates the Award would have become exercisable or vested.   Such payment may be subject to vesting based on the Participant’s continued service,  provided that the vesting schedule shall not be less favorable to the Participant than the  schedule under which the Award would have become vested or exercisable.  For purposes  of this Section 21.1(e), the FMV of any security shall be determined without regard to  any vesting conditions that may apply to such security.  (f) The cancellation of outstanding Awards in exchange for no consideration.  The Board shall have full power and authority to assign the Company’s right to  repurchase or re-acquire or forfeiture rights to such successor or acquiring corporation.  In  addition, in the event such successor or acquiring corporation (if any) refuses to assume, convert,  replace or substitute Awards, as provided above, pursuant to a Corporate Transaction, the  Committee will notify the Participant in writing or electronically that such Award will be  exercisable for a period of time determined by the Committee in its sole discretion, and such  Award will terminate upon the expiration of such period.  Awards need not be treated similarly  in a Corporate Transaction.  21.2. Assumption of Awards by the Company.  The Company, from time to time, also  may substitute or assume outstanding awards granted by another company, whether in  connection with an acquisition of such other company or otherwise, by either; (a) granting an  Award under this Plan in substitution of such other company’s award; or (b) assuming such  award as if it had been granted under this Plan if the terms of such assumed award could be  applied to an Award granted under this Plan.  Such substitution or assumption will be  permissible if the holder of the substituted or assumed award would have been eligible to be  granted an Award under this Plan if the other company had applied the rules of this Plan to such  grant.  In the event the Company assumes an award granted by another company, the terms and  conditions of such award will remain unchanged (except that the Purchase Price or the Exercise  Price, as the case may be, and the number and nature of Shares issuable upon exercise or  settlement of any such Award will be adjusted appropriately pursuant to Section 424(a) of the  Code and/or Section 409A of the Code, as applicable).  In the event the Company elects to grant  a new Option in substitution rather than assuming an existing option, such new Option may be  granted with a similarly adjusted Exercise Price.  Substitute Awards shall not be deducted from  the number of Shares authorized for grant under the Plan or authorized for grant to a Participant  in a calendar year.  21.3. Non-Employee Directors’ Awards.  Notwithstanding any provision to the contrary  herein, in the event of a Corporate Transaction, the vesting of all Awards granted to Non- 

 

  26    Employee Directors shall accelerate and such Awards shall become exercisable (as applicable) in  full prior to the consummation of such event at such times and on such conditions as the  Committee determines.  22. ADOPTION AND STOCKHOLDER APPROVAL.  This Plan shall be submitted for  the approval of the Company’s stockholders, consistent with applicable laws, within twelve  (12) months before or after the date this Plan is adopted by the Board.  23. TERM OF PLAN/GOVERNING LAW.  Unless earlier terminated as provided herein,  this Plan will become effective on the Effective Date and will terminate ten (10) years from the  date this Plan is adopted by the Board.  This Plan and all Awards granted hereunder shall be  governed by and construed in accordance with the laws of the State of Delaware (excluding its  conflict of law rules).  24. AMENDMENT OR TERMINATION OF PLAN.  The Board may at any time  terminate or amend this Plan in any respect, including, without limitation, amendment of any  form of Award Agreement or instrument to be executed pursuant to this Plan; provided, however,  that the Board will not, without the approval of the stockholders of the Company, amend this  Plan in any manner that requires such stockholder approval; provided further, that a Participant’s  Award shall be governed by the version of this Plan then in effect at the time such Award was  granted.  No termination or amendment of the Plan shall affect any then-outstanding Award  unless expressly provided by the Committee; in any event, no termination or amendment of the  Plan or any outstanding Award may adversely affect any then outstanding Award without the  consent of the Participant, unless such termination or amendment is necessary to comply with  applicable law, regulation or rule.  25. NON-EXCLUSIVITY OF THE PLAN.  Neither the adoption of this Plan by the Board,  the submission of this Plan to the stockholders of the Company for approval, nor any provision  of this Plan will be construed as creating any limitations on the power of the Board to adopt such  additional compensation arrangements as it may deem desirable, including, without limitation,  the granting of stock options and other equity awards and bonuses otherwise than under this  Plan, and such arrangements may be either generally applicable or applicable only in specific  cases.  26. INSIDER TRADING POLICY.  Each Participant who receives an Award shall comply  with any policy adopted by the Company from time to time covering transactions in the  Company’s securities by Employees, officers and/or directors of the Company, as well as with  any applicable insider trading or market abuse laws to which the Participant may be subject.  27. ALL AWARDS SUBJECT TO COMPANY CLAWBACK OR RECOUPMENT  POLICY.  All Awards shall, subject to applicable law, be subject to clawback or recoupment  pursuant to any compensation clawback or recoupment policy adopted by the Board or the  Committee or required by law during the term of Participant’s employment or other service with  the Company that is applicable to executive officers, employees, directors or other service  providers of the Company, and in addition to any other remedies available under such policy and  applicable law, may require the cancelation of outstanding Awards and the recoupment of any  gains realized with respect to Awards.  

 

  1    NOTICE OF STOCK OPTION GRANT    SONOS, INC.  2018 EQUITY INCENTIVE PLAN  GRANT NUMBER: _________  Unless otherwise defined herein, the terms defined in the Sonos, Inc. (the “Company”),  2018 Equity Incentive Plan (the “Plan”) shall have the same meanings in this Notice of Stock  Option Grant (the “Notice of Grant”) and the attached Stock Option Agreement, including the  International Supplement attached hereto (the “Supplement”), which is generally applicable to  you if you live or work outside the United States, and any special terms and conditions for your  country set forth therein (collectively, the “Option Agreement”).  You have been granted an  Option to purchase shares of Common Stock of the Company under the Plan subject to the terms  and conditions of the Plan, this Notice of Grant and the Option Agreement.  Name:    Address:    Number of Shares:    Exercise Price Per Share:    Date of Grant:    Vesting Commencement Date:    Type of Option:    Expiration Date: _________; this Option expires earlier if your  Service terminates earlier, as described in the  Option Agreement.  Vesting Schedule:   Vesting Acceleration:     This Notice of Grant may be executed and delivered electronically, whether via the Company’s  intranet or the Internet site of a third party or via email or any other means of electronic delivery  specified by the Company.  You acknowledge that the vesting of the Shares pursuant to this  Notice of Grant is earned only by continuing Service, but you understand that your employment  or consulting relationship with the Company or a Parent, Subsidiary or Affiliate is for an  unspecified duration, can be terminated at any time, and that nothing in this Notice of Grant, the  Option Agreement or the Plan changes the nature of that relationship.  By accepting this Option,  you and the Company agree that this Option is granted under and governed by the terms and  conditions of the Plan, this Notice of Grant and the Option Agreement.  By accepting this  

 

  2    Option, you consent to the electronic delivery and acceptance as further set forth in the Option  Agreement.    

 

  1    STOCK OPTION AGREEMENT  SONOS, INC.  2018 EQUITY INCENTIVE PLAN  You have been granted an Option by Sonos, Inc. (the “Company”), under the  2018 Equity Incentive Plan (the “Plan”) to purchase Shares (the “Option”), subject to the terms,  restrictions and conditions of the Plan, the Notice of Stock Option Grant (the “Notice of Grant”)  and this Stock Option Agreement, including the Supplement, which is generally applicable to  you if you live or work outside the United States, and any special terms and conditions for your  country set forth therein (collectively, the “Agreement”).  1. Grant of Option.  You have been granted the Option for the number of Shares set  forth in the Notice of Grant at the Exercise Price per Share set forth in the Notice of Grant.  In  the event of a conflict between the terms and conditions of the Plan and the terms and conditions  of this Agreement, the terms and conditions of the Plan shall prevail.  If you are a U.S. taxpayer and the Option is designated in the Notice of Grant as an  Incentive Stock Option (“ISO”), this Option is intended to qualify as an Incentive Stock Option  under Section 422 of the Code.  However, if this Option is intended to be an ISO, to the extent  that it exceeds the $100,000 limit under Code Section 422(d), it shall be treated as a  Nonqualified Stock Option (“NSO”).  2. Termination.  (a) General Rule.  If your Service terminates for any reason except death or  Disability, then this Option will expire at the close of business at Company headquarters on the  date three months after your termination of Service (subject to the expiration detailed in  Section 6).  You acknowledge and agree that the vesting schedule set forth in the Notice of Grant  may change prospectively in the event that your service status changes between full and  part-time status in accordance with Company policies relating to work schedules and vesting of  awards.  You acknowledge that the vesting of the Shares pursuant to this Agreement is earned  only by continuing Service.  (b) Death; Disability.  If you die before your Service terminates or you die  within three months of your termination of Service, then this Option will expire at the close of  business at Company headquarters on the date 12 months after the date of death (subject to the  expiration detailed in Section 6).  If your Service terminates because of your Disability, then this  Option will expire at the close of business at Company headquarters on the date 12 months after  your termination date (subject to the expiration detailed in Section 6).  (c) Termination Date.  For purposes of this Option, your Service will be  considered terminated as of the date you are no longer actively providing services to the  Company or a Parent, Subsidiary or Affiliate (regardless of the reason for such termination and  whether or not later found to be invalid or in breach of labor laws in the jurisdiction where you  are employed or engaged or the terms of your employment or consulting agreement, if any), and  your period of Service will not include any contractual notice period or any period of “garden  

 

  2    leave” or similar period mandated under labor laws in the jurisdiction where you are employed  or engaged or the terms of your employment or consulting agreement, if any.  The Committee  shall have the exclusive discretion to determine when you are no longer actively providing  services for purposes of this Option (including whether you may still be considered to be  providing services while on a leave of absence).  (d) No Notice.  You are responsible for keeping track of these exercise  periods following your termination of Service for any reason.  The Company will not provide  further notice of such periods.  In no event shall this Option be exercised later than the  Expiration Date set forth in the Notice of Grant.  3. Exercise of Option.  (a) Right to Exercise.  This Option is exercisable during its term in  accordance with the vesting schedule set forth in the Notice of Grant and the applicable  provisions of the Plan and this Agreement.  In the event of your death, Disability, or other  cessation of Service, the exercisability of the Option is governed by the applicable provisions of  the Plan, the Notice of Grant and this Agreement.  This Option may not be exercised for a  fraction of a Share.  (b) Method of Exercise.  This Option is exercisable by delivery of an exercise  notice in a form specified by the Company (the “Exercise Notice”), which shall state the election  to exercise the Option, the number of Shares in respect of which the Option is being exercised  (the “Exercised Shares”), and such other representations and agreements as may be required by  the Company pursuant to the provisions of the Plan.  The Exercise Notice shall be delivered in  person, by mail, via electronic mail or by other authorized method to the Secretary of the  Company or other person designated by the Company.  The Exercise Notice shall be  accompanied by payment of the aggregate Exercise Price as to all Exercised Shares.  This Option  shall be deemed to be exercised upon receipt by the Company of a fully executed Exercise  Notice accompanied by the aggregate Exercise Price and any applicable withholding of  Tax-Related Items as detailed in Section 8 below.  4. Method of Payment.  Payment of the aggregate Exercise Price shall be by any of  the following, or a combination thereof, at your election:  (a) your personal check, wire transfer, or a cashier’s check;  (b) for U.S. taxpayers only:  certificates for shares of Company stock that you  own, along with any forms needed to effect a transfer of those shares to the Company; the value  of the shares, determined as of the effective date of the Option exercise, will be applied to the  Exercise Price.  Instead of surrendering shares of Company stock, you may attest to the  ownership of those shares on a form provided by the Company and have the same number of  shares subtracted from the Exercised Shares issued to you.  However, you may not surrender, or  attest to the ownership of, shares of Company stock in payment of the Exercise Price of your  Option if your action would cause the Company to recognize compensation expense (or  additional compensation expense) with respect to this Option for financial reporting purposes;  

 

  3    (c) cashless exercise through irrevocable directions to a securities broker  approved by the Company to sell all or part of the Exercised Shares and to deliver to the  Company from the sale proceeds an amount sufficient to pay the Exercise Price and any  withholding of Tax-Related Items.  The balance of the sale proceeds, if any, will be delivered to  you.  The directions must be given by signing a special notice of exercise form provided by the  Company; or  (d) other method authorized by the Company.  5. Non-Transferability of Option.  In general, except as provided below, only you  may exercise this Option prior to your death.  You may not transfer or assign this Option, except  as provided below.  For instance, you may not sell this Option or use it as security for a loan.  If  you attempt to do any of these things, this Option will immediately become invalid.  However, if you are a U.S. taxpayer, you may dispose of this Option in your will or in a  beneficiary designation.  If you are a U.S. taxpayer and this Option is designated as a NSO in the  Notice of Grant, then the Committee may, in its sole discretion, allow you to transfer vested  Shares subject to this Option (whether exercised or unexercised) as a gift to one or more family  members.  For purposes of this Agreement, “family member” means a child, stepchild,  grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew,  mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law  (including adoptive relationships), any individual sharing your household (other than a tenant or  employee), a trust in which one or more of these individuals have more than 50% of the  beneficial interest, a foundation in which you or one or more of these persons control the  management of assets, and any entity in which you or one or more of these persons own more  than 50% of the voting interest.  The Committee will allow you to transfer this Option only if  both you and the transferee(s) execute the forms prescribed by the Committee, which include the  consent of the transferee(s) to be bound by this Agreement.  This Option may not be transferred in any manner other than by will or by the laws of  descent or distribution or court order and may be exercised during the lifetime of you only by  you, your guardian, or legal representative, as permitted in the Plan and applicable local laws.   The terms of the Plan and this Agreement shall be binding upon the executors, administrators,  heirs, successors and assigns of you.  6. Term of Option.  This Option shall in any event expire on the expiration date set  forth in the Notice of Grant, which date is ten years after the grant date (five years after the grant  date if this Option is designated as an ISO in the Notice of Grant and Section 5.3 of the Plan  applies).  7. Tax Obligations.  You should consult a tax adviser for tax obligations relating to  this Option in the jurisdiction in which you are subject to tax.  YOU SHOULD CONSULT A  TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE SHARES.  (a) Exercising the Option.  You will not be allowed to exercise this Option  unless you make arrangements acceptable to the Company to pay any withholding of  Tax-Related Items.  

 

  4    (b) Notice of Disqualifying Disposition of ISO Shares.  If you sell or  otherwise dispose of any of the Shares acquired pursuant to an ISO on or before the later of  (i) two years after the grant date, or (ii) one year after the exercise date, you shall immediately  notify the Company in writing of such disposition.  You agree that you may be subject to income  tax withholding by the Company on the compensation income recognized from such early  disposition of ISO Shares by payment in cash or out of the current compensation paid to you.  8. Responsibility for Taxes.  Regardless of any action the Company or, if different,  your actual employer (the “Employer”) takes with respect to any or all income tax, social  insurance contributions, payroll tax, fringe benefits tax, payment on account or other tax-related  withholding (“Tax-Related Items”), you acknowledge that the ultimate liability for all  Tax-Related Items legally due by you is and remains your responsibility and that the Company  and/or the Employer (1) make no representations or undertakings regarding the treatment of any  Tax-Related Items in connection with any aspect of this Option, including the grant, vesting or  exercise of this Option, the subsequent sale of Shares acquired pursuant to such exercise and the  receipt of any dividends; and (2) do not commit to structure the terms of the grant or any aspect  of this Option to reduce or eliminate your liability for Tax-Related Items or achieve any  particular tax result.  You acknowledge that if you are subject to Tax-Related Items in more than  one jurisdiction, the Company and/or the Employer may be required to withhold or account for  Tax-Related Items in more than one jurisdiction.  Prior to exercise of the Option, you shall pay or make adequate arrangements satisfactory  to the Company and/or the Employer to satisfy all Tax-Related Item withholding and payment on  account obligations of the Company and/or the Employer.  In this regard, you authorize the  Company and/or the Employer, and their respective agents, to withhold taxes from the proceeds  of the sale of the Shares, through a mandatory sale arranged by the Company (on your behalf and  pursuant to this authorization).  If any amount of Tax-Related Items that the Company or the Employer may be required  to withhold as a result of your participation in the Plan or your purchase of Shares cannot be  satisfied by the means previously described, then you authorize the Company or the Employer,  and their respective agents, at their discretion, to withhold all applicable Tax-Related Items  legally payable by you, if permissible under local law, from your wages or other cash  compensation paid to you by the Company and/or the Employer.  With the Company’s consent,  you may request alternative withholding arrangements, which may also include, if permissible  under local law, (a) withholding Shares that otherwise would be issued to you when you exercise  this Option, provided that the Company only withholds the amount of Shares necessary to satisfy  the minimum statutory withholding amount, (b) having the Company withhold taxes from the  proceeds of the sale of the Shares through a voluntary sale arranged by the Company, (c) your  payment of a cash amount or (d) any other arrangement approved by the Company; all under  such rules as may be established by the Committee and in compliance with the Company’s  Insider Trading Policy and 10b5-1 Trading Plan Policy, if applicable; provided, however, that if  you are a Section 16 officer of the Company under the Exchange Act, then the Committee (as  constituted in accordance with Rule 16b-3 under the Exchange Act) shall establish the method of  withholding prior to the taxable or withholding event.  The Fair Market Value of these Shares,  determined as of the effective date of the Option exercise, will be applied as a credit against the  Tax-Related Items.  

 

  5    Depending on the withholding method, the Company may withhold or account for  Tax-Related Items by considering applicable minimum statutory withholding rates or other  applicable withholding rates, including maximum applicable rates, as determined in the sole  discretion of the Company or the Employer.  In any case, you will not receive a refund from the  Company of any over-withheld amount in cash and will have no entitlement to the Shares  equivalent.  If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax  purposes, you are deemed to have been issued the full number of Shares subject to the vested  Shares, notwithstanding that a number of the Shares are held back solely for the purpose of  paying the Tax-Related Items.  You acknowledge that the Company has no obligation to deliver  Shares to you until you have satisfied the obligations in connection with the Tax-Related Items  as described in this Section.  9. Nature of Grant.  In accepting this Option, you acknowledge, understand and  agree that:  (a) the Plan is established voluntarily by the Company, it is discretionary in  nature and it may be modified, suspended or terminated by the Company at any time, to the  extent permitted by the Plan;  (b) the grant of this Option is voluntary and occasional and does not create  any contractual or other right to receive future grants of stock options, or benefits in lieu of stock  options, even if stock options have been granted in the past;  (c) all decisions with respect to future stock options or other grants, if any,  will be at the sole discretion of the Company;  (d) you are voluntarily participating in the Plan;  (e) this Option and any Shares acquired under the Plan, and the income and  value of same, are not intended to replace any pension rights or compensation;  (f) this Option and any Shares acquired under the Plan, and the income and  value of same, are not part of normal or expected compensation for purpose of calculating any  severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses,  long-service awards, pension or retirement benefits or payments or welfare benefits or similar  payments;  (g) unless otherwise agreed with the Company, this Option and any Shares  acquired under the Plan, and the income and value of same, are not granted as consideration for,  or in connection with, any Service you may provide as a director of any Parent, Subsidiary or  Affiliate;  (h) the future value of the Shares underlying this Option is unknown,  indeterminable, and cannot be predicted with certainty;  (i) if the underlying Shares do not increase in value, this Option will have no  value;  

 

  6    (j) if you exercise this Option and acquire Shares, the value of such Shares  may increase or decrease in value, even below the Exercise Price;  (k) no claim or entitlement to compensation or damages shall arise from  forfeiture of this Option resulting from the termination of your Service (for any reason  whatsoever, whether or not later found to be invalid or in breach of labor laws in the jurisdiction  where you are employed or engaged or the terms of your employment or service agreement, if  any), and in consideration of the grant of this Option to which you are otherwise not entitled, you  irrevocably agree never to institute any claim against the Company, the Employer or any Parent,  Subsidiary or Affiliate, waive your ability, if any, to bring any such claim, and release the  Company, the Employer or any Parent, Subsidiary or Affiliate from any such claim; if,  notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction,  then, by participating in the Plan, you shall be deemed irrevocably to have agreed not to pursue  such claim and agree to execute any and all documents necessary to request dismissal or  withdrawal of such claim; and  (l) if you are providing Service outside the United States, neither the  Employer, the Company nor any Parent, Subsidiary or Affiliate shall be liable for any foreign  exchange rate fluctuation between your local currency and the United States Dollar that may  affect the value of this Option or of any amounts due to you pursuant to the exercise of this  Option or the subsequent sale of any Shares acquired upon exercise.  10. Acknowledgement.  The Company and you agree that this Option is granted  under and governed by the Notice of Grant, this Agreement and the provisions of the Plan  (incorporated herein by reference).  You:  (i) acknowledge receipt of a copy of the Plan  prospectus, (ii) represent that you have carefully read and are familiar with the provisions in the  grant documents, and (iii) hereby accept this Option subject to all of the terms and conditions set  forth in this Agreement and those set forth in the Plan and the Notice of Grant.  You hereby  agree to accept as binding, conclusive and final all decisions or interpretations of the Committee  upon any questions relating to the Plan, the Notice of Grant and this Agreement.  11. Consent to Electronic Delivery and Acceptance of All Plan Documents and  Disclosures.  By your acceptance of this Option, you consent to the electronic delivery of the  Notice of Grant, this Agreement, account statements, Plan prospectuses required by the SEC,  U.S. financial reports of the Company, and all other documents that the Company is required to  deliver to its stockholders (including, without limitation, annual reports and proxy statements) or  other communications or information related to this Option.  Electronic delivery may include the  delivery of a link to a Company intranet or the internet site of a third party involved in  administering the Plan, the delivery of the document via e-mail or such other delivery  determined at the Company’s discretion.  You acknowledge that you may receive from the  Company a paper copy of any documents delivered electronically at no cost if you contact the  Company by telephone, through a postal service or electronic mail at  sonos-stockadmin@sonos.com.  You further acknowledge that you will be provided with a paper  copy of any documents delivered electronically if electronic delivery fails; similarly, you  understand that you must provide on request to the Company or any designated third party a  paper copy of any documents delivered electronically if electronic delivery fails.  You agree to  participate in the Plan through an on-line or electronic system established and maintained by the  

 

  7    Company or a third party designated by the Company.  Also, you understand that your consent  may be revoked or changed, including any change in the electronic mail address to which  documents are delivered (if you have provided an electronic mail address), at any time by  notifying the Company of such revised or revoked consent by telephone, postal service or  electronic mail at sonos-stockadmin@sonos.com.  Finally, you understand that you are not  required to consent to electronic delivery.  12. Compliance with Laws and Regulations.  The exercise of this Option will be  subject to and conditioned upon compliance by the Company and you with all applicable state,  federal and foreign laws and regulations and with all applicable requirements of any stock  exchange or automated quotation system on which the Company’s Common Stock may be listed  or quoted at the time of such issuance or transfer, which compliance the Company shall, in its  absolute discretion, deem necessary or advisable.  You understand that the Company is under no  obligation to register or qualify the Common Stock with any state, federal or foreign securities  commission or to seek approval or clearance from any governmental authority for the issuance or  sale of the Shares.  Further, you agree that the Company shall have unilateral authority to amend  the Plan and this Agreement without your consent to the extent necessary to comply with  securities or other laws applicable to issuance of Shares.  Finally, the Shares issued pursuant to  this Agreement shall be endorsed with appropriate legends, if any, determined by the Company.  13. No Advice Regarding Grant.  The Company is not providing any tax, legal or  financial advice, nor is the Company making any recommendations regarding your participation  in the Plan, or your acquisition or sale of the underlying Shares.  You are hereby advised to  consult with your own personal tax, legal and financial advisors regarding your participation in  the Plan before taking any action related to the Plan.  14. Governing Law; Venue.  This Agreement and all acts and transactions pursuant  hereto and the rights and obligations of the parties hereto shall be governed, construed and  interpreted in accordance with the laws of the State of Delaware, without giving effect to  principles of conflicts of law.  For purposes of litigating any dispute that may arise directly or  indirectly from the Plan, the Notice of Grant and this Agreement, the parties hereby submit and  consent to litigation in the exclusive jurisdiction of the State of California and agree that any  such litigation shall be conducted only in the courts of California in Santa Barbara County,  California, or the federal courts of the United States for the Southern District of California and  no other courts.  15. Severability.  If one or more provisions of this Agreement are held to be  unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.   In the event that the parties cannot reach a mutually agreeable and enforceable replacement for  such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of  this Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of  this Agreement shall be enforceable in accordance with its terms.  16. No Rights as Employee, Director or Consultant.  Nothing in this Agreement  shall affect in any manner whatsoever the right or power of the Company, or a Parent, Subsidiary  or Affiliate of the Company, to terminate your Service, for any reason, with or without Cause.  

 

  8    17. Adjustment.  In the event of a stock split, a stock dividend or a similar change in  Company stock, the number of Shares covered by this Option and the Exercise Price per Share  may be adjusted pursuant to the Plan.  18. Lock-Up Agreement.  In connection with the initial public offering of the  Company’s securities and upon request of the Company or the underwriters managing any  underwritten offering of the Company’s securities, you hereby agree not to sell, make any short  sale of, loan, grant any option for the purchase of, or otherwise dispose of any securities of the  Company however and whenever acquired (other than those included in the registration), except  pursuant to a transfer for no consideration in accordance with Section 5 above, without the prior  written consent of the Company or such underwriters, as the case may be, for such period of time  (not to exceed one hundred eighty (180) days) from the effective date of such registration as may  be requested by the Company or such managing underwriters and to execute an agreement  reflecting the foregoing as may be requested by the underwriters at the time of the public  offering; provided however that, if during the last seventeen (17) days of the restricted period the  Company issues an earnings release or material news or a material event relating to the Company  occurs, or prior to the expiration of the restricted period the Company announces that it will  release earnings results during the sixteen (16)-day period beginning on the last day of the  restricted period, then, upon the request of the managing underwriter, to the extent required by  any FINRA rules, the restrictions imposed by this Section shall continue to apply until the end of  the third trading day following the expiration of the fifteen (15)-day period beginning on the  issuance of the earnings release or the occurrence of the material news or material event.  In no  event will the restricted period extend beyond two hundred sixteen (216) days after the effective  date of the registration statement.  19. Award Subject to Company Clawback or Recoupment.  To the extent  permitted by applicable law, the Option shall be subject to clawback or recoupment pursuant to  any clawback or recoupment policy adopted by the Board or required by law during the term of  your employment or other Service that is applicable to you.  In addition to any other remedies  available under such policy, applicable law may require the cancellation of your Option (whether  vested or unvested) and the recoupment of any gains realized with respect to your Option.  20. Entire Agreement; Enforcement of Rights.  This Agreement, the Plan and the  Notice of Grant constitute the entire agreement and understanding of the parties relating to the  subject matter herein and supersede all prior discussions between them.  Any prior agreements,  commitments or negotiations concerning this Option are superseded.  No modification of or  amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be  effective unless in writing and signed by the parties to this Agreement.  The failure by either  party to enforce any rights under this Agreement shall not be construed as a waiver of any rights  of such party.  21. Insider Trading Restrictions/Market Abuse Laws.  You acknowledge that you  may be subject to insider trading restrictions and/or market abuse laws, which may affect your  ability to acquire or sell the Shares or rights to Shares under the Plan during such times as you  are considered to have “inside information” regarding the Company (as defined by the laws in  your country).  Any restrictions under these laws or regulations are separate from and in addition  to any restrictions that may be imposed under any applicable Company insider trading policy.   

 

  9    You acknowledge that it is your responsibility to comply with any applicable restrictions, and  you are advised to speak to your personal advisor on this matter.  22. Language.  If you have received this Agreement or any other document related to  the Plan translated into a language other than English and if the meaning of the translated version  is different than the English version, the English version will control.  23. International Supplement.  Notwithstanding any provisions in this Agreement,  this Option shall be subject to the Supplement if you live or work outside the United States,  including any special terms and conditions set forth therein for your country.  Moreover, if you  relocate to a country other than the United States, then the Supplement, including the special  terms and conditions for such country, will apply to you to the extent the Company determines  that the application of such terms and conditions is necessary or advisable for legal or  administrative reasons.  The Supplement constitutes part of this Agreement.  24. Imposition of Other Requirements.  The Company reserves the right to impose  other requirements on your participation in the Plan, on this Option and on any Shares acquired  under the Plan, to the extent the Company determines it is necessary or advisable for legal or  administrative reasons, and to require you to sign any additional agreements or undertakings that  may be necessary to accomplish the foregoing.  25. Waiver.  You acknowledge that a waiver by the Company of breach of any  provision of this Agreement shall not operate or be construed as a waiver of any other provision  of this Agreement, or of any subsequent breach by you or any other Participant.  BY ACCEPTING THIS OPTION, YOU AGREE TO ALL OF THE TERMS AND  CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.    

 

  97013815_2  NOTICE OF RESTRICTED STOCK UNIT AWARD    SONOS, INC.  2018 EQUITY INCENTIVE PLAN  GRANT NUMBER:      Unless otherwise defined herein, the terms defined in the Sonos, Inc. (the “Company”), 2018  Equity Incentive Plan (as amended from time to time, the “Plan”) shall have the same meanings  in this Notice of Restricted Stock Unit Award (the “Notice”) and the attached Award Agreement,  including the International Supplement attached thereto (the “Supplement”) (which is generally  applicable to you if you live or work outside the United States) and any special terms and  conditions for your country set forth therein (collectively, the “RSU Agreement”).  You (“you”)  have been granted an award of Restricted Stock Units (“RSUs”) under the Plan subject to the terms  and conditions of the Plan, this Notice and the attached RSU Agreement.  Each RSU represents  the conditional right to receive, without payment but subject to the terms, conditions and  limitations set forth in this Notice, the RSU Agreement and in the Plan, one Share, subject to  adjustment pursuant to Section 2.6 of the Plan in respect of transactions or events occurring after  the Date of Grant.  Name:               Address:              Number of RSUs:             Date of Grant:             Vesting Commencement Date:           Vesting Dates:           Vesting Schedule:           Vesting Acceleration: [Notwithstanding the foregoing and anything contrary in the  RSU Agreement or the Plan, if your Service is terminated by  the Company or a successor corporation as a result of an  Involuntary Termination (as defined below) within the  period of time commencing two (2) months prior to a  Corporate Transaction and ending twelve (12) months  following a Corporate Transaction, to the extent that the  RSUs are then outstanding, you shall also fully vest in the  Accelerated RSUs (as defined below).  Notwithstanding anything contrary in the RSU Agreement  or the Plan, if you are subject to an Involuntary Termination  prior to a Corporate Transaction, your then-unvested RSUs  

 

-ii-  97013815_2  shall remain outstanding for two (2) months, but shall not  continue to vest following such Involuntary Termination,  other than pursuant to the vesting acceleration described  immediately above upon a Corporate Transaction that occurs  within such period.  “Involuntary Termination” means, without your express  written consent, any of the following:  (i) your resignation  following (A) a significant reduction of your duties, position  or responsibilities relative to your duties, position or  responsibilities in effect immediately prior to such  reduction; (B) a material reduction by the Company of your  base salary, as in effect immediately prior to such reduction;  and/or (C) your relocation by the Company to a facility or a  location more than fifty (50) miles from your current  location; or (ii) any termination of your Service by the  Company other than for Cause (as defined below); in either  of the foregoing cases, to the extent required by Section  409A, provided that such resignation or termination  constitutes a “separation from service” within the meaning  of Section 409A.  “Cause” means any of the following:  (i) any act of personal  dishonesty, taken by you in connection with your  responsibilities as a service provider of the Company, which  is intended to result in your personal enrichment, (ii) your  conviction of, or plea of nolo contendere to, a felony,  (iii) any act by you that constitutes material misconduct and  is injurious to the Company, or (iv) continued violations by  you of your obligations to the Company.  “Accelerated RSUs” means 100% of the then-unvested  RSUs.]  This Grant Notice may be executed and delivered electronically, whether via the Company’s  intranet or the Internet site of a third party or via email or any other means of electronic delivery  specified by the Company.  You acknowledge that the vesting of the RSUs pursuant to this Notice  is earned only by continuing Service, but you understand that your employment or consulting  relationship with the Company or a Parent, Subsidiary or Affiliate is for an unspecified duration,  can be terminated at any time, and that nothing in this Notice of Grant, the RSU Agreement or the  Plan changes the nature of that relationship.  By accepting this award, you and the Company agree  that this award is granted under and governed by the terms and conditions of the Plan, this Notice  and the RSU Agreement.  By accepting this award of RSUs, you consent to the electronic delivery  and acceptance as further set forth in the RSU Agreement.  

 

  97013815_2  RESTRICTED STOCK UNIT AWARD AGREEMENT  SONOS, INC.  2018 EQUITY INCENTIVE PLAN  You have been granted Restricted Stock Units (“RSUs”) by Sonos, Inc. (the “Company”), subject  to the terms, restrictions and conditions of the Sonos, Inc. 2018 Equity Incentive Plan (the “Plan”),  the attached Notice of Restricted Stock Unit Award (the “Notice”) and this Restricted Stock Unit  Award Agreement, including the International Supplement attached hereto (the “Supplement”)  (which is generally applicable to you if you live or work outside the United States) and any special  terms and conditions for your country set forth therein (collectively, this “RSU Agreement”).  1. Nature of Grant.  In accepting this award of RSUs, you acknowledge, understand and  agree that:  (a) the Plan is established voluntarily by the Company, it is discretionary in nature and  it may be modified, amended, suspended or terminated by the Company at any time, to the extent  permitted by the Plan;  (b) the grant of the RSUs is voluntary and occasional and does not create any  contractual or other right to receive future awards of RSUs, or benefits in lieu of RSUs, even if  RSUs have been granted in the past;  (c) all decisions with respect to future RSUs or other grants, if any, will be at the sole  discretion of the Company;  (d) you are voluntarily participating in the Plan;  (e) the RSUs and the Shares subject to the RSUs, and the income and value of same,  are not intended to replace any pension rights or compensation;  (f) the RSUs and the Shares subject to the RSUs, and the income and value of same,  are not part of normal or expected compensation for purposes of calculating any severance,  resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service  awards, pension or retirement or welfare benefits or similar payments;  (g) unless otherwise agreed with the Company, the RSUs and any Shares acquired  under the Plan, and the income and value of same, are not granted as consideration for, or in  connection with, any service you may provide as a director of the Company or of a Parent or  Subsidiary of the Company;  (h) the future value of the underlying Shares is unknown, indeterminable and cannot  be predicted with certainty;  (i) no claim or entitlement to compensation or damages shall arise from forfeiture of  the RSUs resulting from the termination of your Service (for any reason whatsoever whether or  not later found to be invalid or in breach of labor laws in the jurisdiction where you are providing  Service or the terms of your employment or service agreement, if any), and in consideration of the  

 

  -2-  97013815_2  grant of the RSUs to which you are otherwise not entitled, you irrevocably agree never to institute  any claim against the Company, the Employer (as defined below), or any other Parent or  Subsidiary of the Company, waive your ability, if any, to bring any such claim, and release the  Company, the Employer and its Parent or Subsidiaries from any such claim; if, notwithstanding  the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating  in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to  execute any and all documents necessary to request dismissal or withdrawal of such claim; and  (j) the following provisions apply only if you are providing Service outside the United  States:  (i) the RSUs and the Shares subject to the RSUs, and the income and value of  same, are not part of normal or expected compensation or salary for any purpose; and  (ii) neither the Company, the Employer nor any Parent or Subsidiary of the  Company shall be liable for any foreign exchange rate fluctuation between your local  currency and the United States Dollar that may affect the value of the RSUs or the  subsequent sale of any Shares acquired upon settlement.  2. Settlement.  Settlement of RSUs shall be made, in any case, on or before March 15 of the  calendar year following the calendar year of the applicable date of vesting under the vesting  schedule set forth in the Notice.  Settlement of RSUs shall be in Shares.  Settlement means the  delivery to you of the Shares vested under the RSUs.  Fractional Shares will not be issued.  3. No Stockholder Rights.  Unless and until such time as Shares are issued in settlement of  vested RSUs, you shall have no ownership of the Shares allocated to the RSUs and shall have no  right to dividends or to vote such Shares.  4. Dividend Equivalents.  Dividend equivalents, if any, shall not be credited to you, except  as otherwise permitted by the Committee.  5. No Transfer.  RSUs may not be sold, assigned, transferred, pledged, hypothecated or  otherwise disposed of in any manner, other than by will or by the laws of descent or distribution,  by court order, or as otherwise permitted by the Committee on a case-by-case basis.  6. Termination.  Except as otherwise expressly provided in the Notice, if your Service  terminates for any reason, all unvested RSUs shall be forfeited to the Company forthwith, and all  rights you have to such RSUs shall immediately terminate, without payment of any consideration  to you.  For purposes of this award of RSUs, your Service will be considered terminated as of the  date you are no longer providing Service (regardless of the reason for such termination and whether  or not later found to be invalid or in breach of labor laws in the jurisdiction where you are employed  or the terms of your employment or service agreement, if any) and will not be extended by any  notice period mandated under local employment laws (e.g., Service would not include a period of  “garden leave” or similar period).  In case of any dispute as to whether your termination of Service  has occurred, the Committee shall have sole discretion to determine whether such termination has  occurred (including whether you may still be considered to be providing Services while on a leave  of absence) and the effective date of such termination.  

 

  -3-  97013815_2  7. Tax Consequences.  You acknowledge that there will be certain consequences with regard  to income tax, national or social insurance contributions, payroll tax, fringe benefits tax, payment  on account or other tax-related items (“Tax-Related Items”) upon vesting and/or settlement of the  RSUs or disposition of the Shares, if any, received in connection therewith, and you should consult  a tax adviser regarding such tax obligations in the jurisdiction where you are subject to tax.  8. Responsibility for Taxes.  Regardless of any action the Company or, if different, your  actual employer (the “Employer”) takes with respect to any or all Tax-Related Items withholding  or required deductions, you acknowledge that the ultimate liability for all Tax-Related Items  legally due by you is and remains your responsibility and that the Company and/or the Employer  (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in  connection with any aspect of the award, including the grant, vesting or settlement of the RSUs,  the subsequent sale of Shares acquired pursuant to such settlement, and the receipt of any  dividends; and (ii) do not commit to structure the terms of the award or any aspect of the RSUs to  reduce or eliminate your liability for Tax-Related Items or achieve any particular tax result.  You  acknowledge that if you are subject to Tax-Related Items in more than one jurisdiction, the  Company and/or the Employer may be required to withhold or account for Tax-Related Items in  more than one jurisdiction.  You acknowledge that the Company’s obligation to issue or deliver Shares shall be subject to your  satisfaction of all Company and/or Employer withholding obligations for Tax-Related Items that  arise as a result of this Award and the vesting and/or settlement of the RSUs that are subject to this  Award.  In this regard, you authorize the Company and/or the Employer, and their respective  agents, to withhold Shares that otherwise would be issued to you upon settlement of the RSUs to  satisfy the Company and/or the Employer’s tax withholding obligations.  You acknowledge that  you will not receive a refund in cash or Shares from the Company and/or the Employer with respect  to any withheld Shares, the value of which exceeds the Company and/or the Employer’s  withholding obligations for Tax-Related Items, and that the Company and/or the Employer will  include such excess amount in the taxes that the Company will pay to the applicable tax authorities  on your behalf.  You must pay to the Company and/or the Employer any amount of the Tax-Related  Items that the Company and/or the Employer may be required to withhold that cannot be satisfied  through share withholding.  For tax purposes, you will be deemed to have been issued the full  number of Shares subject to the vested RSUs, notwithstanding that a number of the Shares are held  back for the purpose of paying the Tax-Related Items.  You acknowledge that the Company has  no obligation to deliver Shares to you until you have satisfied the obligations in connection with  the Tax-Related Items as described in this Section 8.  9. Acknowledgement.  The Company and you agree that the RSUs are granted under and  governed by the Notice, this RSU Agreement and the provisions of the Plan.  You:   (i) acknowledge receipt of a copy of the Plan and the Plan’s prospectus,; (ii) represent that you  have carefully read and are familiar with the provisions in the grant documents; and (iii) hereby  accept the RSUs subject to all of the terms and conditions set forth in the Plan, the Notice and this  RSU Agreement.  You hereby agree to accept as binding, conclusive and final all decisions or  interpretations of the Committee upon any questions relating to the Plan, the Notice and this RSU  Agreement.  

 

  -4-  97013815_2  10. Entire Agreement; Enforcement of Rights.  This RSU Agreement, the Plan and the  Notice constitute the entire agreement and understanding of the parties relating to the subject  matter herein and supersede all prior discussions between them.  Any prior agreements,  commitments or negotiations concerning the purchase of the Shares hereunder are superseded.  No  modification of or amendment to this RSU Agreement, nor any waiver of any rights under this  RSU Agreement, shall be effective unless in writing and signed by the parties to this RSU  Agreement.  The failure by either party to enforce any rights under this RSU Agreement shall not  be construed as a waiver of any rights of such party.  11. Compliance with Laws and Regulations.  The issuance of Shares will be subject to and  conditioned upon compliance by the Company and you with all applicable state, federal and  foreign laws and regulations and with all applicable requirements of any stock exchange or  automated quotation system on which the Company’s Common Stock may be listed or quoted at  the time of such issuance or transfer, which compliance the Company shall, in its absolute  discretion, deem necessary or advisable.  You understand that the Company is under no obligation  to register or qualify the Common Stock with any state, federal or foreign securities commission  or to seek approval or clearance from any governmental authority for the issuance or sale of the  Shares.  Further, you agree that the Company shall have unilateral authority to amend the Plan and  this RSU Agreement without your consent to the extent necessary to comply with securities or  other laws applicable to issuance of Shares.  Finally, the Shares issued pursuant to this RSU  Agreement shall be endorsed with appropriate legends, if any, determined by the Company.  12. No Advice Regarding Grant.  The Company is not providing any tax, legal or financial  advice, nor is the Company making any recommendations regarding your participation in the Plan,  or your acquisition or sale of the underlying Shares.  You are hereby advised to consult with your  own personal tax, legal and financial advisors regarding your participation in the Plan before taking  any action related to the Plan.  13. Governing Law; Venue.  This RSU Agreement, the Notice and all acts and transactions  pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed  and interpreted in accordance with the laws of the State of Delaware, without giving effect to  principles of conflicts of law.  For purposes of litigating any dispute that may arise directly or  indirectly from the Plan, the Notice and this RSU Agreement, the parties hereby submit and  consent to litigation in the exclusive jurisdiction of the State of California and agree that any such  litigation shall be conducted only in the courts of California in Santa Barbara County, California,  or the federal courts of the United States for the Southern District of California and no other courts.  14. Severability.  If one or more provisions of this RSU Agreement are held to be  unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.   In the event that the parties cannot reach a mutually agreeable and enforceable replacement for  such provision, then (i) such provision shall be excluded from this RSU Agreement; (ii) the  balance of this RSU Agreement shall be interpreted as if such provision were so excluded; and  (iii) the balance of this RSU Agreement shall be enforceable in accordance with its terms.  15. No Rights as Employee, Director or Consultant.  Nothing in this RSU Agreement shall  affect in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of  the Company, to terminate your Service, for any reason, with or without Cause.  

 

  -5-  97013815_2  16. Consent to Electronic Delivery and Acceptance of All Plan Documents and  Disclosures.  By your acceptance of this award of RSUs, you consent to the electronic delivery of  the Notice, this RSU Agreement, the Plan, account statements, Plan prospectuses required by the  United States Securities and Exchange Commission, United States financial reports of the  Company, and all other documents that the Company is required to deliver to its stockholders  (including, without limitation, annual reports and proxy statements) or other communications or  information related to the RSUs.  Electronic delivery may include the delivery of a link to a  Company intranet or the internet site of a third party involved in administering the Plan, the  delivery of the document via email or such other delivery determined at the Company’s discretion.   You acknowledge that you may receive from the Company a paper copy of any documents  delivered electronically at no cost if you contact the Company by telephone, through a postal  service or email at sonos-stockadmin@sonos.com.  You further acknowledge that you will be  provided with a paper copy of any documents delivered electronically if electronic delivery fails;  similarly, you understand that you must provide on request to the Company or any designated third  party a paper copy of any documents delivered electronically if electronic delivery fails.  You  agree to participate in the Plan through an online or electronic system established and maintained  by the Company or a third party designated by the Company.  Also, you understand that your  consent may be revoked or changed, including any change in the email address to which documents  are delivered (if you have provided an email address), at any time by notifying the Company of  such revised or revoked consent by telephone, postal service or email at sonos- stockadmin@sonos.com.  Finally, you understand that you are not required to consent to electronic  delivery.  17. Insider Trading Restrictions/Market Abuse Laws.  You acknowledge that, depending  on your country, you may be subject to insider trading restrictions and/or market abuse laws, which  may affect your ability to acquire or sell the Shares or rights to Shares under the Plan during such  times as you are considered to have “inside information” regarding the Company (as defined by  the laws in your country).  Any restrictions under these laws or regulations are separate from and  in addition to any restrictions that may be imposed under any applicable Company insider trading  policy.  You acknowledge that it is your responsibility to comply with any applicable restrictions,  and you are advised to speak to your personal advisor on this matter.  18. Language.  If you have received this RSU Agreement or any other document related to the  Plan translated into a language other than English and if the meaning of the translated version is  different than the English version, the English version will control.  19. International Supplement.  Notwithstanding any provisions in this RSU Agreement, this  award of RSUs shall be subject to the Supplement if you live or work outside the United States,  including any special terms and conditions set forth therein for your country.  Moreover, if you  relocate to a country other than the United States, then the Supplement, including the special terms  and conditions for such country will, apply to you to the extent the Company determines that the  application of such terms and conditions is necessary or advisable for legal or administrative  reasons.  The Supplement constitutes part of this RSU Agreement.  20. Imposition of Other Requirements.  The Company reserves the right to impose other  requirements on your participation in the Plan, on the RSUs and on any Shares acquired under the  Plan, to the extent the Company determines it is necessary or advisable for legal or administrative  

 

  -6-  97013815_2  reasons, and to require you to sign any additional agreements or undertakings that may be  necessary to accomplish the foregoing.  21. Waiver.  You acknowledge that a waiver by the Company of breach of any provision of  this RSU Agreement shall not operate or be construed as a waiver of any other provision of this  RSU Agreement, or of any subsequent breach by you or any other Participant.  22. Code Section 409A.  For purposes of this RSU Agreement, a termination of employment  will be determined consistent with the rules relating to a “separation from service” as defined in  Section 409A of the Code and the regulations thereunder (“Section 409A”).  Notwithstanding  anything else provided herein, to the extent any payments provided under this RSU Agreement in  connection with your termination of employment constitute deferred compensation subject to  Section 409A, and you are deemed at the time of such termination of employment to be a  “specified employee” under Section 409A, then such payment shall not be made or commence  until the earlier of (i) the expiration of the six- (6) month period measured from your separation  from service from the Company and (ii) the date of your death following such a separation from  service; provided, however, that such deferral shall only be effected to the extent required to avoid  adverse tax treatment to you including, without limitation, the additional tax for which you would  otherwise be liable under Section 409A(a)(1)(B) in the absence of such a deferral.  To the extent  any payment under this RSU Agreement may be classified as a “short-term deferral” within the  meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also  qualify for an exemption from Section 409A under another provision of Section 409A.  Payments  pursuant to this Section 22 are intended to constitute separate payments for purposes of  Section 1.409A-2(b)(2) of the Treasury Regulations.  23. Award Subject to Company Clawback or Recoupment.  To the extent permitted by  applicable law, the RSUs shall be subject to clawback or recoupment pursuant to any clawback or  recoupment policy adopted by the Board or required by law during the term of your employment  or other Service that is applicable to you.  In addition to any other remedies available under such  policy, applicable law may require the cancellation of the RSUs (whether vested or unvested) and  the recoupment of any gains realized with respect to the RSUs.  * * * *  BY ACCEPTING THIS RESTRICTED STOCK UNIT AWARD, YOU AGREE TO ALL OF  THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.  [Remainder of Page Intentionally Left Blank]  

 

  [Signature Page to Restricted Stock Unit Award Agreement]    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first  written above.    SONOS, INC.      By:         Name: [●]  Title: [●]          Accepted and agreed:              [NAME]      

 

  97013815_2  INTERNATIONAL SUPPLEMENT    SONOS, INC.  2018 EQUITY INCENTIVE PLAN    (attached)    

 

  97021013_2  NOTICE OF RESTRICTED STOCK UNIT AWARD  (NON-EMPLOYEE DIRECTOR)  SONOS, INC.  2018 EQUITY INCENTIVE PLAN  GRANT NUMBER:      Unless otherwise defined herein, the terms defined in the Sonos, Inc. (the “Company”), 2018  Equity Incentive Plan (as amended from time to time, the “Plan”) shall have the same meanings  in this Notice of Restricted Stock Unit Award (the “Notice”) and the attached Award Agreement,  including the International Supplement attached thereto (the “Supplement”) (which is generally  applicable to you if you live or work outside the United States) and any special terms and  conditions for your country set forth therein (collectively, the “RSU Agreement”).  You (“you”)  have been granted an award of Restricted Stock Units (“RSUs”) under the Plan subject to the terms  and conditions of the Plan, this Notice and the attached RSU Agreement.  Each RSU represents  the conditional right to receive, without payment but subject to the terms, conditions and  limitations set forth in this Notice, the RSU Agreement and in the Plan, one Share, subject to  adjustment pursuant to Section 2.6 of the Plan in respect of transactions or events occurring after  the Date of Grant.  Name:               Address:              Number of RSUs:             Date of Grant:             Vesting Commencement Date:           Vesting Schedule: The earlier of (i) the one- (1) year anniversary of the Date of  Grant and (ii) the next annual meeting of the Company’s  stockholders following the Date of Grant (i.e., the [     ]  annual meeting), in each case, subject to your continued  service as a director as described herein (such earlier date,  the “Vesting Date”).  Vesting Acceleration: Notwithstanding the foregoing and anything contrary in the  RSU Agreement or the Plan, if a Corporate Transaction  occurs prior to the Vesting Date, your RSUs will vest in full  upon such Corporate Transaction.  In addition, if you cease to provide service as a director prior  to the Vesting Date for any reason other than Cause (as  defined in the Plan), your RSUs will vest upon such  cessation of service on a pro-rata basis determined by  multiplying the total number of shares covered by the RSUs  

 

-ii-  97021013_2  by a fraction, the numerator of which is the number of whole  months that you provided service  as a director since the Date  of Grant, and the denominator of which is twelve (12).  This Grant Notice may be executed and delivered electronically, whether via the Company’s  intranet or the Internet site of a third party or via email or any other means of electronic delivery  specified by the Company.  You acknowledge that the vesting of the RSUs pursuant to this Notice  is earned only by continuing Service, but you understand that your employment or consulting  relationship with the Company or a Parent, Subsidiary or Affiliate is for an unspecified duration,  can be terminated at any time, and that nothing in this Notice of Grant, the RSU Agreement or the  Plan changes the nature of that relationship.  By accepting this award, you and the Company agree  that this award is granted under and governed by the terms and conditions of the Plan, this Notice  and the RSU Agreement.  By accepting this award of RSUs, you consent to the electronic delivery  and acceptance as further set forth in the RSU Agreement.    

 

  97021013_2  RESTRICTED STOCK UNIT AWARD AGREEMENT  SONOS, INC.  2018 EQUITY INCENTIVE PLAN  You have been granted Restricted Stock Units (“RSUs”) by Sonos, Inc. (the “Company”), subject  to the terms, restrictions and conditions of the Sonos, Inc. 2018 Equity Incentive Plan (the “Plan”),  the attached Notice of Restricted Stock Unit Award (the “Notice”) and this Restricted Stock Unit  Award Agreement, including the International Supplement attached hereto (the “Supplement”)  (which is generally applicable to you if you live or work outside the United States) and any special  terms and conditions for your country set forth therein (collectively, this “RSU Agreement”).  1. Nature of Grant.  In accepting this award of RSUs, you acknowledge, understand and  agree that:  (a) the Plan is established voluntarily by the Company, it is discretionary in nature and  it may be modified, amended, suspended or terminated by the Company at any time, to the extent  permitted by the Plan;  (b) the grant of the RSUs is voluntary and occasional and does not create any  contractual or other right to receive future awards of RSUs, or benefits in lieu of RSUs, even if  RSUs have been granted in the past;  (c) all decisions with respect to future RSUs or other grants, if any, will be at the sole  discretion of the Company;  (d) you are voluntarily participating in the Plan;  (e) the RSUs and the Shares subject to the RSUs, and the income and value of same,  are not intended to replace any pension rights or compensation;  (f) the RSUs and the Shares subject to the RSUs, and the income and value of same,  are not part of normal or expected compensation for purposes of calculating any severance,  resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service  awards, pension or retirement or welfare benefits or similar payments;  (g) unless otherwise agreed with the Company, the RSUs and any Shares acquired  under the Plan, and the income and value of same, are not granted as consideration for, or in  connection with, any service you may provide as a director of the Company or of a Parent or  Subsidiary of the Company;  (h) the future value of the underlying Shares is unknown, indeterminable and cannot  be predicted with certainty;  (i) no claim or entitlement to compensation or damages shall arise from forfeiture of  the RSUs resulting from the termination of your Service (for any reason whatsoever whether or  not later found to be invalid or in breach of labor laws in the jurisdiction where you are providing  Service or the terms of your employment or service agreement, if any), and in consideration of the  

 

  -2-  97021013_2  grant of the RSUs to which you are otherwise not entitled, you irrevocably agree never to institute  any claim against the Company, the Employer (as defined below), or any other Parent or  Subsidiary of the Company, waive your ability, if any, to bring any such claim, and release the  Company, the Employer and its Parent or Subsidiaries from any such claim; if, notwithstanding  the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating  in the Plan, you shall be deemed irrevocably to have agreed not to pursue such claim and agree to  execute any and all documents necessary to request dismissal or withdrawal of such claim; and  (j) the following provisions apply only if you are providing Service outside the United  States:  (i) the RSUs and the Shares subject to the RSUs, and the income and value of  same, are not part of normal or expected compensation or salary for any purpose; and  (ii) neither the Company, the Employer nor any Parent or Subsidiary of the  Company shall be liable for any foreign exchange rate fluctuation between your local  currency and the United States Dollar that may affect the value of the RSUs or the  subsequent sale of any Shares acquired upon settlement.  2. Settlement.  Settlement of RSUs shall be made, in any case, within thirty (30) days  following the date the RSUs vest as provided for in the Notice; provided, however, that settlement  of the RSUs will be governed by the terms of the applicable deferral election if you have elected  to defer settlement in accordance with the policies of the Company in effect from time to time (it  being understood that, in the case of any portion of the RSUs the settlement of which is deferred,  the proviso set forth in Section 6.1 of the Plan shall not apply).  Settlement of RSUs shall be in  Shares.  Settlement means the delivery to you of the Shares vested under the RSUs.  Fractional  Shares will not be issued.  3. No Stockholder Rights.  Unless and until such time as Shares are issued in settlement of  vested RSUs, you shall have no ownership of the Shares allocated to the RSUs and shall have no  right to dividends or to vote such Shares.  4. Dividend Equivalents.  Dividend equivalents, if any, shall not be credited to you, except  as otherwise permitted by the Committee.  5. No Transfer.  RSUs may not be sold, assigned, transferred, pledged, hypothecated or  otherwise disposed of in any manner, other than by will or by the laws of descent or distribution,  by court order, or as otherwise permitted by the Committee on a case-by-case basis.  6. Termination.  Except as otherwise expressly provided in the Notice, if your Service  terminates for any reason, all unvested RSUs shall be forfeited to the Company forthwith, and all  rights you have to such RSUs shall immediately terminate, without payment of any consideration  to you.  For purposes of this award of RSUs, your Service will be considered terminated as of the  date you are no longer providing Service (regardless of the reason for such termination and whether  or not later found to be invalid or in breach of labor laws in the jurisdiction where you are employed  or the terms of your employment or service agreement, if any) and will not be extended by any  notice period mandated under local employment laws (e.g., Service would not include a period of  “garden leave” or similar period).  In case of any dispute as to whether your termination of Service  

 

  -3-  97021013_2  has occurred, the Committee shall have sole discretion to determine whether such termination has  occurred (including whether you may still be considered to be providing Services while on a leave  of absence) and the effective date of such termination.  7. Tax Consequences.  You acknowledge that there will be certain consequences with regard  to income tax, national or social insurance contributions, payroll tax, fringe benefits tax, payment  on account or other tax-related items (“Tax-Related Items”) upon vesting and/or settlement of the  RSUs or disposition of the Shares, if any, received in connection therewith, and you should consult  a tax adviser regarding such tax obligations in the jurisdiction where you are subject to tax.  8. Responsibility for Taxes.  You acknowledge that you are responsible for satisfying and  paying all Tax-Related Items arising from or due in connection with the vesting and/or settlement  of the RSUs or disposition of the Shares, if any, received in connection therewith.  The Company  will have no liability or obligation related to the foregoing.  9. Acknowledgement.  The Company and you agree that the RSUs are granted under and  governed by the Notice, this RSU Agreement and the provisions of the Plan.  You:   (i) acknowledge receipt of a copy of the Plan and the Plan’s prospectus; (ii) represent that you have  carefully read and are familiar with the provisions in the grant documents; and (iii) hereby accept  the RSUs subject to all of the terms and conditions set forth in the Plan, the Notice and this RSU  Agreement.  You hereby agree to accept as binding, conclusive and final all decisions or  interpretations of the Committee upon any questions relating to the Plan, the Notice and this RSU  Agreement.  10. Entire Agreement; Enforcement of Rights.  This RSU Agreement, the Plan and the  Notice constitute the entire agreement and understanding of the parties relating to the subject  matter herein and supersede all prior discussions between them.  Any prior agreements,  commitments or negotiations concerning the purchase of the Shares hereunder are superseded.  No  modification of or amendment to this RSU Agreement, nor any waiver of any rights under this  RSU Agreement, shall be effective unless in writing and signed by the parties to this RSU  Agreement.  The failure by either party to enforce any rights under this RSU Agreement shall not  be construed as a waiver of any rights of such party.  11. Compliance with Laws and Regulations.  The issuance of Shares will be subject to and  conditioned upon compliance by the Company and you with all applicable state, federal and  foreign laws and regulations and with all applicable requirements of any stock exchange or  automated quotation system on which the Company’s Common Stock may be listed or quoted at  the time of such issuance or transfer, which compliance the Company shall, in its absolute  discretion, deem necessary or advisable.  You understand that the Company is under no obligation  to register or qualify the Common Stock with any state, federal or foreign securities commission  or to seek approval or clearance from any governmental authority for the issuance or sale of the  Shares.  Further, you agree that the Company shall have unilateral authority to amend the Plan and  this RSU Agreement without your consent to the extent necessary to comply with securities or  other laws applicable to issuance of Shares.  Finally, the Shares issued pursuant to this RSU  Agreement shall be endorsed with appropriate legends, if any, determined by the Company.  

 

  -4-  97021013_2  12. No Advice Regarding Grant.  The Company is not providing any tax, legal or financial  advice, nor is the Company making any recommendations regarding your participation in the Plan,  or your acquisition or sale of the underlying Shares.  You are hereby advised to consult with your  own personal tax, legal and financial advisors regarding your participation in the Plan before taking  any action related to the Plan.  13. Governing Law; Venue.  This RSU Agreement, the Notice and all acts and transactions  pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed  and interpreted in accordance with the laws of the State of Delaware, without giving effect to  principles of conflicts of law.  For purposes of litigating any dispute that may arise directly or  indirectly from the Plan, the Notice and this RSU Agreement, the parties hereby submit and  consent to litigation in the exclusive jurisdiction of the State of California and agree that any such  litigation shall be conducted only in the courts of California in Santa Barbara County, California,  or the federal courts of the United States for the Southern District of California and no other courts.  14. Severability.  If one or more provisions of this RSU Agreement are held to be  unenforceable under applicable law, the parties agree to renegotiate such provision in good faith.   In the event that the parties cannot reach a mutually agreeable and enforceable replacement for  such provision, then (i) such provision shall be excluded from this RSU Agreement; (ii) the  balance of this RSU Agreement shall be interpreted as if such provision were so excluded; and  (iii) the balance of this RSU Agreement shall be enforceable in accordance with its terms.  15. No Rights as Employee, Director or Consultant.  Nothing in this RSU Agreement shall  affect in any manner whatsoever the right or power of the Company, or a Parent or Subsidiary of  the Company, to terminate your Service, for any reason, with or without Cause.  16. Consent to Electronic Delivery and Acceptance of All Plan Documents and  Disclosures.  By your acceptance of this award of RSUs, you consent to the electronic delivery of  the Notice, this RSU Agreement, the Plan, account statements, Plan prospectuses required by the  United States Securities and Exchange Commission, United States financial reports of the  Company, and all other documents that the Company is required to deliver to its stockholders  (including, without limitation, annual reports and proxy statements) or other communications or  information related to the RSUs.  Electronic delivery may include the delivery of a link to a  Company intranet or the internet site of a third party involved in administering the Plan, the  delivery of the document via email or such other delivery determined at the Company’s discretion.   You acknowledge that you may receive from the Company a paper copy of any documents  delivered electronically at no cost if you contact the Company by telephone, through a postal  service or email at sonos-stockadmin@sonos.com.  You further acknowledge that you will be  provided with a paper copy of any documents delivered electronically if electronic delivery fails;  similarly, you understand that you must provide on request to the Company or any designated third  party a paper copy of any documents delivered electronically if electronic delivery fails.  You  agree to participate in the Plan through an online or electronic system established and maintained  by the Company or a third party designated by the Company.  Also, you understand that your  consent may be revoked or changed, including any change in the email address to which documents  are delivered (if you have provided an email address), at any time by notifying the Company of  such revised or revoked consent by telephone, postal service or email at sonos- 

 

  -5-  97021013_2  stockadmin@sonos.com.  Finally, you understand that you are not required to consent to electronic  delivery.  17. Insider Trading Restrictions/Market Abuse Laws.  You acknowledge that, depending  on your country, you may be subject to insider trading restrictions and/or market abuse laws, which  may affect your ability to acquire or sell the Shares or rights to Shares under the Plan during such  times as you are considered to have “inside information” regarding the Company (as defined by  the laws in your country).  Any restrictions under these laws or regulations are separate from and  in addition to any restrictions that may be imposed under any applicable Company insider trading  policy.  You acknowledge that it is your responsibility to comply with any applicable restrictions,  and you are advised to speak to your personal advisor on this matter.  18. Language.  If you have received this RSU Agreement or any other document related to the  Plan translated into a language other than English and if the meaning of the translated version is  different than the English version, the English version will control.  19. International Supplement.  Notwithstanding any provisions in this RSU Agreement, this  award of RSUs shall be subject to the Supplement if you live or work outside the United States,  including any special terms and conditions set forth therein for your country.  Moreover, if you  relocate to a country other than the United States, then the Supplement, including the special terms  and conditions for such country will, apply to you to the extent the Company determines that the  application of such terms and conditions is necessary or advisable for legal or administrative  reasons.  The Supplement constitutes part of this RSU Agreement.  20. Imposition of Other Requirements.  The Company reserves the right to impose other  requirements on your participation in the Plan, on the RSUs and on any Shares acquired under the  Plan, to the extent the Company determines it is necessary or advisable for legal or administrative  reasons, and to require you to sign any additional agreements or undertakings that may be  necessary to accomplish the foregoing.  21. Waiver.  You acknowledge that a waiver by the Company of breach of any provision of  this RSU Agreement shall not operate or be construed as a waiver of any other provision of this  RSU Agreement, or of any subsequent breach by you or any other Participant.  22. Code Section 409A.  For purposes of this RSU Agreement, a termination of employment  will be determined consistent with the rules relating to a “separation from service” as defined in  Section 409A of the Code and the regulations thereunder (“Section 409A”).  Notwithstanding  anything else provided herein, to the extent any payments provided under this RSU Agreement in  connection with your termination of employment constitute deferred compensation subject to  Section 409A, and you are deemed at the time of such termination of employment to be a  “specified employee” under Section 409A, then such payment shall not be made or commence  until the earlier of (i) the expiration of the six- (6) month period measured from your separation  from service from the Company and (ii) the date of your death following such a separation from  service; provided, however, that such deferral shall only be effected to the extent required to avoid  adverse tax treatment to you including, without limitation, the additional tax for which you would  otherwise be liable under Section 409A(a)(1)(B) in the absence of such a deferral.  To the extent  any payment under this RSU Agreement may be classified as a “short-term deferral” within the  

 

  -6-  97021013_2  meaning of Section 409A, such payment shall be deemed a short-term deferral, even if it may also  qualify for an exemption from Section 409A under another provision of Section 409A.  Payments  pursuant to this Section 22 are intended to constitute separate payments for purposes of  Section 1.409A-2(b)(2) of the Treasury Regulations.  23. Award Subject to Company Clawback or Recoupment.  To the extent permitted by  applicable law, the RSUs shall be subject to clawback or recoupment pursuant to any clawback or  recoupment policy adopted by the Board or required by law during the term of your employment  or other Service that is applicable to you.  In addition to any other remedies available under such  policy, applicable law may require the cancellation of the RSUs (whether vested or unvested) and  the recoupment of any gains realized with respect to the RSUs.  * * * *  BY ACCEPTING THIS RESTRICTED STOCK UNIT AWARD, YOU AGREE TO ALL OF  THE TERMS AND CONDITIONS DESCRIBED ABOVE AND IN THE PLAN.  [Remainder of Page Intentionally Left Blank]  

 

  [Signature Page to Restricted Stock Unit Award Agreement]    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first  written above.    SONOS, INC.      By:         Name: [●]  Title: [●]          Accepted and agreed:              [NAME]      

 

  97021013_2  INTERNATIONAL SUPPLEMENT    SONOS, INC.  2018 EQUITY INCENTIVE PLAN    (attached)    

 

  Sonos, Inc.  Election to Defer Delivery of Shares –  Initial Restricted Stock Unit (RSU) Award  Under the Sonos, Inc. 2018 Equity Incentive Plan (“Plan”) and as permitted by the Compensation, People  and Diversity & Inclusion Committee, I hereby elect to defer the delivery of ____%1 of the shares  underlying my initial RSU award to the following Elected Delivery Date (check one)2:  ____ Separation from Service3  ____ On ____ / ____ / ____ (must be after the one-year anniversary of the date of grant)4  In witness whereof, I have executed this Election to Defer Delivery of Shares.5                  Date   Director’s Signature   Director’s Printed Name    /1/  The number of shares is not determined until the date of grant; accordingly, please indicate a  percentage of total shares rather than a number of shares.  For reference, under Sonos’ Director  Compensation Policy, new non-employee directors who are appointed or elected on a date other than the  annual meeting of stockholders will receive an initial grant with a fair market value on the date of grant  equal to $________. The date of grant for your initial RSU award is expected to be the date you are  appointed to serve on Sonos’ Board of Directors.    /2/  If you make an Elected Delivery Date election, the delivery date will be within thirty (30) days following  such Elected Delivery Date, or, if earlier, within thirty (30) days following the date of your death occurring  prior to such Elected Delivery Date.  In addition, in the event of a change in the ownership or effective  control of Sonos, or in the event of a change in the ownership of a substantial portion of the assets of  Sonos, each as determined in accordance with Section 409A (a “Section 409A Change of Control”), your  delivery date for purposes of this election will instead be the date of closing of the Section 409A Change  of Control.    /3/  If you make a “Separation from Service” election the delivery date will be within thirty (30) days  following the date that you terminate service on the Board, regardless of the reason for such termination.   To receive payment upon such termination of Service, it must constitute a “separation from service” within  the meaning of Section 409A.  In the event of a termination of Service on the Board that meets the  requirements set forth herein, to the extent necessary to comply with Section 409A, your delivery date will  be the date that is six (6) months and one (1) day following the date of such separation (or, if earlier, upon  your death following such separation).  In addition, in the event of a Section 409A Change of Control,  your delivery date for purposes of this election will instead be the date of closing of the Section 409A  Change of Control.      /4/  Your initial RSU award is expected to vest ______.  /5/  An election to defer delivery of shares must be made prior to your date of grant.  Therefore, this  Election to Defer Delivery of Shares must be made by and becomes irrevocable as of ____, except that  you may change your Elected Delivery Date with respect to the shares deferred under this election by  filing a new Election to Defer Delivery of Shares form at least 12 months before, and only to defer to a  date that is at least five years after, the original distribution date, as determined in compliance with  Section 409A.  All terms of the Award Agreement other than the terms regarding settlement, including the  terms regarding the accrual of dividend equivalents, shall apply during the period of deferral.  This  deferral is intended to comply with the requirements of Code Section 409A and shall be construed and  interpreted accordingly.  Capitalized terms not otherwise defined herein shall have the meaning given  them in the Plan.  

 

97005477_2  This signed Election to Defer Delivery of Shares form must be received on or before 12:00 p.m.  EST on _______ via email at ___________-.  

 

  Sonos, Inc.  Election to Defer Delivery of Shares –  _____ Restricted Stock Unit (RSU) Award  Under the Sonos, Inc. 2018 Equity Incentive Plan (“Plan”) and as permitted by the Compensation, People  and Diversity & Inclusion Committee, I hereby elect to defer the delivery of ____%1 of the shares  underlying my ____ RSU award to the following Elected Delivery Date (check one)2:  ____ Separation from Service3  ____ On ____ / ____ / ____ (must be after the one-year anniversary of the date of grant)4  In witness whereof, I have executed this Election to Defer Delivery of Shares.5                  Date   Director’s Signature   Director’s Printed Name    /1/  The number of shares is not determined until the date of grant; accordingly, please indicate a  percentage of total shares rather than a number of shares.  For reference, under Sonos’ Director  Compensation Policy, non-employee directors currently receive an annual grant of RSUs with a fair  market value on the date of grant equal to $______.  The date of grant for the ____ RSU award is  expected to be the date of the ____ annual meeting of Sonos, which is expected to occur in the first  quarter of ____.  /2/  If you make an Elected Delivery Date election the delivery date will be within thirty (30) days following  such Elected Delivery Date, or, if earlier, within within thirty (30) days following the date of your death  occurring prior to such Elected Delivery Date.  In addition, in the event of a change in the ownership or  effective control of Sonos, or in the event of a change in the ownership of a substantial portion of the  assets of Sonos, each as determined in accordance with Section 409A (a “Section 409A Change of  Control”), your delivery date for purposes of this election will instead be the date of closing of the  Section 409A Change of Control.    /3/  If you make a “Separation from Service” election the delivery date will be within thirty (30) days  following the date that you terminate service on the Board, regardless of the reason for such termination.   To receive payment upon such termination of Service, it must constitute a “separation from service” within  the meaning of Section 409A.  In the event of a termination of Service on the Board that meets the  requirements set forth herein, to the extent necessary to comply with Section 409A, your delivery date will  be the date that is six (6) months and one (1) day following the date of such separation (or, if earlier, upon  your death following such separation).  In addition, in the event of a Section 409A Change of Control,  your delivery date for purposes of this election will instead be the date of closing of the Section 409A  Change of Control.      /4/  Your ____ RSU award is expected to vest in full on the earlier of (i) the next annual meeting of  shareholders following the ____ annual meeting of shareholders or (ii) ______.  /5/  An election to defer delivery of shares must be made before the calendar year of an RSU award date  of grant.  Therefore, this Election to Defer Delivery of Shares must be made by and becomes irrevocable  as of December 31, ____, except that you may change your Elected Delivery Date with respect to the  shares deferred under this election by filing a new Election to Defer Delivery of Shares form at least 12  months before, and only to defer to a date that is at least five years after, the original distribution date, as  determined in compliance with Section 409A.  All terms of the Award Agreement other than the terms  regarding settlement, including the terms regarding the accrual of dividend equivalents, shall apply during  the period of deferral.  This deferral is intended to comply with the requirements of Code Section 409A  and shall be construed and interpreted accordingly.  Capitalized terms not otherwise defined herein shall  have the meaning given them in the Plan.  

 

97005477_2  This signed Election to Defer Delivery of Shares form must be received on or before 12:00 p.m.  EST on December 31, ____ via email at ___________.

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