Document:

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                                  EXHIBIT 10.2

                                    AGREEMENT

     THIS AGREEMENT is made to be effective this day of August 11, 2005, by and
between R.G. BARRY CORPORATION, an Ohio corporation with its principal executive
offices at 13405 Yarmouth Road, N.W., Pickerington, Ohio (the "Company"), and
FLORENCE ZACKS MELTON, whose principal residence address is ___________________,
Columbus, Ohio ("Mrs. Melton").

                                   WITNESSETH:

     WHEREAS, the Company and Mrs. Melton are parties to an Agreement dated
February 7, 1952, as amended by an Agreement of Amendment dated September 18,
1961, a Second Amendment dated April 15, 1968, and a Third Amendment dated
October 31, 2000 (together, the "Royalty Agreement") pursuant to which Mrs.
Melton has granted to the Company the exclusive right to utilize product designs
owned by her, including designs created by her after the original date of the
Royalty Agreement, in exchange for the Company's agreement to pay to Mrs. Melton
royalties on its sale of products based on Mrs. Melton's designs; and

     WHEREAS, pursuant to the Royalty Agreement, Mrs. Melton has also granted to
the Company the option to purchase and acquire her ownership interest in her
product designs and patent rights, if any, upon the occurrence of her death or a
change of control of the Company; and

     WHEREAS, pursuant to the Royalty Agreement, the Company has granted to Mrs.
Melton and her assigns and estate, the right to require the Company to purchase
and acquire her product designs and patent rights, if any, on the occurrence of
a change of control of the Company; and

     WHEREAS, on the terms and conditions set forth below, the Company desires
to purchase from Mrs. Melton and Mrs. Melton desires to sell to the Company all
of her product designs and patent rights, and to terminate the Royalty
Agreement, effective immediately;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
of the parties contained herein and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:

     1. Purchase and Sale of Rights. Mrs. Melton hereby sells, assigns,
transfers and conveys to the Company, and the Company hereby purchases from Mrs.
Melton, all of Mrs. Melton's right, title and interest in and to the following
(the "Property"): (i) all slippers and other footwear products or components or
designs thereof that have been designed, created or conceptualized by Mrs.
Melton, either alone or with others, including all product designs,
constructions, inventions, know-how and rights related thereto, (ii) all other
items, products, designs and constructions created, designed or conceptualized
by Mrs. Melton which have been sold or offered for sale by the Company or which
have been presented to the Company for possible sale by the Company, and (iii)
all patents and patent rights and any other intellectual property of Mrs. Melton
which relate to slippers or other footwear products. The Property includes,
without limitation, the product designs described on Annex A to this Agreement
and the patent rights described on Annex B to this Agreement. Mrs. Melton agrees
that she will provide, upon reasonable notice, such information and assistance
to the Company as may reasonably be requested by the Company in connection with
the Company's use of the Property. Mrs. Melton also agrees that she will execute
and deliver to the Company, upon the Company's request, such further assignments
and other instruments as the Company determines are desirable in order to
reflect the Company's exclusive ownership rights in and to the Property and/or
the transfer by Mrs. Melton of her ownership rights in the Property to the
Company including, without limitation, any and all patent assignment documents
prescribed by the federal government.
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     2. Purchase Price for the Property.

     (a) Purchase Price. In consideration of (1) the sale and transfer by Mrs.
Melton to the Company of the Property, (2) the Covenant Not to Compete provided
for in Section 4 below and (3) the Release of Claims provided for in Section 5
below, the Company agrees to pay to Mrs. Melton the sum of Six Hundred Thousand
Dollars ($600,000), payable in twenty-four (24) quarterly payments of
Twenty-Five Thousand Dollars ($25,000) each, commencing on the date of this
Agreement and continuing on the last business day of each and every October,
January, April and July ("Quarterly Payment Dates") until the last business day
in April 2011, on which date the final payment shall be due and owing. In the
event of the death of Mrs. Melton prior to the time that all payments owing
under the first sentence of this Section 2 have been made, the Company shall pay
to the then acting trustee of the Florence Zacks Melton Trust dated November 9,
1997, as restated in its entirety on September 27, 2000, and as amended (or to
such other designee as may be provided to the Company in writing by Mrs. Melton
prior to her death), the remaining quarterly payments as provided under this
Section 2 as such payments become due and payable. In the event of a Change of
Control (as defined below) of the Company prior to the time that all payments
owing under this Section 2 have been made in full, the time for payment of all
remaining amounts then owing under this Section 2 shall be accelerated and the
Company shall pay all such amounts to Mrs. Melton, or if she is then deceased,
to the then acting trustee of the Florence Zacks Melton Trust dated November 9,
1997, as restated in its entirety on September 27, 2000, and as amended (or to
such to other designee as may be provided to the Company in writing by Mrs.
Melton prior to her death), within ten (10) days following the occurrence of the
Change of Control.

     (b) Definition of a Change of Control. For purposes of this Agreement, a
"Change of Control" of the Company shall be deemed to have occurred if (i) any
individual or entity or group of related individuals or entities (an "Acquiring
Person"), shall hereafter acquire (or disclose the previous acquisition of)
beneficial ownership of common shares of the Company which results in the
Acquiring Person possessing more than a majority of the total voting power of
the Company's outstanding common shares; or (ii) as the result of, or in
connection with, any tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any combination of the
foregoing transactions, the individuals who were directors of the Company
immediately before the completion of such transaction shall cease to constitute
a majority of the Board of Directors of the Company.

     3. Representations and Warranties of Mrs. Melton. In order to induce the
Company to purchase the Property and make the payments provided for in Section 2
above, Mrs. Melton hereby represents and warrants to the Company as follows:

     (a) She is the sole owner of the Property and has good and transferable
title to the Property free and clear of any and all agreements (other than with
the Company), liens, charges, encumbrances, security agreements, options and
adverse claims or rights. She has not conveyed to anyone any interest in or to
the Property, and no other person or entity holds any interest in the Property.

     (b) She has the full right, power and authority to enter into this
Agreement and to transfer, convey and sell to the Company the Property. Upon
execution of this Agreement, the Company will acquire from Mrs. Melton good and
marketable title to the Property, free and clear of any and all agreements,
liens, charges, encumbrances, security agreements, options and adverse claims or
rights.

     (c) She is not a party to or bound by any agreement which would prevent,
prohibit, condition or limit the execution of delivery of this Agreement or the
transfer, conveyance and sale of the Property to the Company pursuant hereto.

     (d) Other than the Property, Mrs. Melton does not own or have rights in and
to any property that would fall within the descriptions set forth in clauses
(i), (ii) and (iii) of Section 1 of this Agreement.

     (e) No authorization, consent or approval of any third party is necessary
for the transfer of the Property by Mrs. Melton to the Company.
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     4. Covenant Not to Compete.

     (a) During the period that payments are owing to Mrs. Melton pursuant to
this Agreement and for a period of one year thereafter, Mrs. Melton will not,
directly or indirectly, individually or on behalf of another person or entity,
engage or be interested in (whether as owner, stockholder, partner, consultant,
agent, designer or otherwise) any business, activity or enterprise which is then
competitive with the Company Business (as defined below) in any region of the
United States. Mrs. Melton's ownership of less than 1% of any class of stock in
a publicly-traded corporation shall not be deemed a breach of this Section 4.
For purposes of this Agreement, the term "Company Business" means the business
of designing, sourcing and selling slippers and other comfort footwear products.

     (b) If at any time following the date of this Agreement, Mrs. Melton
develops new product designs or other creations that would have constituted
Property if in existence on the date of this Agreement ("New Property"), the
Company shall have a royalty-free, permanent license to use such designs or
creations. Mrs. Melton will notify the Company of the development of any New
Property.

     (c) Mrs. Melton acknowledges that a violation of this Section 4 would cause
irreparable harm to the Company, and that the Company's remedy at law for any
such violation would be inadequate. In recognition of the foregoing, Mrs. Melton
agrees that, in addition to any other relief afforded by law or this Agreement,
and without the necessity or proof of actual damages, the Company shall have the
right to enforce this Agreement by specific remedies, which shall include, among
other things, temporary and permanent injunctions.

     5. Release of Claims. In consideration of the Company's agreement to
purchase the Property and to make the payments provided for in Section 2 above,
Mrs. Melton, on her own behalf and on behalf of her executors, legal
representatives, administrators, successors, heirs, assigns, distributees and
legatees (together, the "Releasing Parties"), does hereby release, acquit and
forever discharge the Company and its subsidiaries (and all of their
predecessors and all former subsidiaries) and each of their current and former
respective officers, directors, employees, representatives, attorneys and
affiliates (each, a "released party") of and from any and all past, present and
future claims, demands, obligations, actions, causes of action, rights, damages,
costs, expenses, attorneys' fees and obligations for compensation of any nature
whatsoever, including, without limitation, claims for unpaid royalties under the
Royalty Agreement, whether based on tort, contract or any other theory of
recovery, and whether for compensatory or punitive damages which Mrs. Melton (or
any of the other Releasing Parties) now has, or which may hereafter accrue or
otherwise be acquired, but excluding claims arising under this Agreement. This
full release includes, without limitation, any and all known or unknown claims
for injury or damage to Mrs. Melton which have resulted or may result from any
alleged acts or omissions of each released party, it being intended to release
all claims of any kind which Mrs. Melton might have against those hereby
released because of any matter or any thing which ever happened from the
beginning of the world up to the time this full release is executed, known or
unknown, whether asserted at this time or not, and it constitutes a fully
binding and complete settlement and release of disputed claims between Mrs.
Melton and the released party.

     It is further understood and agreed that this full release is a general
release, and that Mrs. Melton expressly waives and assumes the risk of any and
all claims for financial injuries or damages which exist as of the date hereof
but of which she does not know or suspect to exist whether through ignorance,
oversight, error or negligence or otherwise and which, if known, would affect
Mrs. Melton's decision to enter into this full release.

     Mrs. Melton further expressly warrants, represents, covenants and agrees in
consideration of the recitals and payments set forth above that:

     (a) No other person or entity has or has had any interest in the claims,
demands, obligations or causes of action referred to in this full release.
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     (b) Before executing this full release, Mrs. Melton has fully informed
herself of its terms, content, conditions and effects, and Mrs. Melton has been
similarly informed by legal counsel of its terms, contents, conditions and
effects.

     Notwithstanding any of the foregoing, the parties hereto agree that this
release shall not operate so as to impair or affect the obligations of the
parties undertaken by or pursuant to this Agreement.

     6. Termination of Royalty Agreement. Effective upon the execution of this
Agreement, the Royalty Agreement is hereby terminated. Both the Company and Mrs.
Melton hereby release any and all rights and claims against the other arising
out of the Royalty Agreement.

     7. Complete Agreement. This Agreement embodies the complete agreement and
understanding between the parties with respect to the subject matter of this
Agreement and supersedes and preempts any prior understandings, agreements or
representations between the parties, written or oral, which may have related to
the subject matter hereof in any way.

     8. Counterparts. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together shall
constitute one and the same agreement.

     9. Applicable Law. THE CONSTRUCTION, VALIDITY AND INTERPRETATION OF THIS
AGREEMENT WILL BE GOVERNED BY THE INTERNAL LAW, AND NOT THE LAW OF CONFLICTS, OF
THE STATE OF OHIO.

     10. Successors, Etc. This Agreement shall inure to the benefit of and be
binding upon the Company, its successors and assigns. This Agreement shall inure
to the benefit of and be binding upon Mrs. Melton and Mrs. Melton's heirs,
legatees, personal representatives, administrators, executors, and assigns.

     11. Validity of the Agreement. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of this Agreement.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

                                        R.G. BARRY CORPORATION

                                        By /s/ Thomas Von Lehman
                                           -------------------------------------
                                           Thomas Von Lehman, President and CEO

                                           /s/ Florence Zacks Melton
                                           -------------------------------------
                                           Florence Zacks Meltonexv10w12

 

EXHIBIT 10.12

Kona Grill, Inc.

Employee Stock Purchase Plan

Adopted June 29, 2005

(Amended
as of August 15, 2005)

1. Purpose.

     (a) The purpose of the Plan is to provide a means by which Employees of the Company and
certain designated Related Corporations may be given an opportunity to purchase shares of the
Common Stock of the Company.

     (b) The Company, by means of the Plan, seeks to retain the services of such Employees, to
secure and retain the services of new Employees and to provide incentives for such persons to exert
maximum efforts for the success of the Company and its Related Corporations.

     (c) The Company intends that the Purchase Rights be considered options issued under an
Employee Stock Purchase Plan.

2. Definitions.

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

     (b) “Code”means the Internal Revenue Code of 1986, as amended.

     (c) “Committee”means a committee appointed by the Board in accordance with Section 3(c) of
the Plan.

     (d) “Common Stock”means the common stock of the Company.

     (e) “Company”means Kona Grill, Inc., a Delaware corporation.

     (f) “Contributions”means the payroll deductions and other additional payments that a
Participant contributes to fund the exercise of a Purchase Right. A Participant may make payments
not through payroll deductions only if specifically provided for in the Offering, and then only if
the Participant has not already had the maximum permitted amount withheld through payroll
deductions during the Offering.

     (g) “Corporate Transaction”means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

          (i) a sale, lease, license or other disposition of all or substantially all of the
consolidated assets of the Company;

          (ii) a sale or other disposition of at least ninety percent (90%) of the outstanding
securities of the Company; or

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          (iii) a merger, consolidation or similar transaction whether or not the Company is the
surviving corporation.

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

     (i) “Eligible Employee”means an Employee who meets the requirements set forth in the Offering
for eligibility to participate in the Offering, provided that such Employee also meets the
requirements for eligibility to participate set forth in the Plan.

     (j) “Employee”means any person, including Officers and Directors, who is employed for
purposes of Section 423(b)(4) of the Code by the Company or a Related Corporation. Neither service
as a Director nor payment of a director’s fee shall be sufficient to make an individual an Employee
of the Company or a Related Corporation.

     (k) “Employee Stock Purchase Plan”means a plan that grants Purchase Rights intended to be
options issued under an “employee stock purchase plan,” as that term is defined in Section 423(b)
of the Code.

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

     (m) “Fair Market Value”means the value of a security, as determined in good faith by the
Board. If the security is listed on any established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the Fair Market Value of the security, unless
otherwise determined by the Board, shall be the closing sales price (rounded up where necessary to
the nearest whole cent) for such security (or the closing bid, if no sales were reported) as quoted
on such exchange or market (or the exchange or market with the greatest volume of trading in the
relevant security of the Company) on the Trading Day prior to the relevant determination date, as
reported in The Wall Street Journalor such other source as the Board deems reliable.

     (n) “IPO”means the first offering of the Common Stock to the public under a registration
statement declared effective under the Securities Act.

     (o) “IPO Date”the date the Common Stock is first offered to the public in an IPO.

     (p) “Offering”means the grant of Purchase Rights to purchase shares of Common Stock under the
Plan to Eligible Employees.

     (q) “Offering Date”means a date selected by the Board for an Offering to commence.

     (r) “Officer” means a person who is an officer of the Company within the meaning of Section 16
of the Exchange Act and the rules and regulations promulgated thereunder.

     (s) “Participant”means an Eligible Employee who holds an outstanding Purchase Right granted
pursuant to the Plan.

     (t) “Plan”means this Kona Grill, Inc. Employee Stock Purchase Plan.

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     (u) “Purchase Date”means one or more dates during an Offering established by the Board on
which Purchase Rights shall be exercised and as of which purchases of shares of Common Stock shall
be carried out in accordance with such Offering.

     (v) “Purchase Period”means a period of time specified within an Offering beginning on the
Offering Date or on the next day following a Purchase Date within an Offering and ending on a
Purchase Date. An Offering may consist of one or more Purchase Periods.

     (w) “Purchase Right”means an option to purchase shares of Common Stock granted pursuant to
the Plan.

     (x) “Related Corporation”means any parent corporation or subsidiary corporation, whether now
or hereafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the
Code.

     (y) “Securities Act”means the Securities Act of 1933, as amended.

     (z) "Trading Day” means any day on which the exchange(s) or market(s) on which shares of
Common Stock are listed, whether it be an established stock exchange, the Nasdaq National Market,
the Nasdaq SmallCap Market or otherwise, is open for trading.

3. Administration.

     (a) The Board shall administer the Plan unless and until the Board delegates administration to
a Committee, as provided in Section 3(c). Whether or not the Board has delegated administration,
the Board shall have the final power to determine all questions of policy and expediency that may
arise in the administration of the Plan.

     (b) The Board (or the Committee) shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

          (i) To determine when and how Purchase Rights to purchase shares of Common Stock shall be
granted and the provisions of each Offering of such Purchase Rights (which need not be identical).

          (ii) To designate from time to time which Related Corporations of the Company shall be
eligible to participate in the Plan.

          (iii) To construe and interpret the Plan and Purchase Rights, and to establish, amend and
revoke rules and regulations for the administration of the Plan. The Board, in the exercise of
this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective.

          (iv) To amend the Plan as provided in Section 15.

          (v) Generally, to exercise such powers and to perform such acts as it deems necessary or
expedient to promote the best interests of the Company and its Related Corporations and to carry
out the intent that the Plan be treated as an Employee Stock Purchase Plan.

3.

 

     (c) The Board may delegate administration of the Plan to a Committee of the Board composed of
one (1) or more members of the Board. If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers theretofore possessed by
the Board, subject, however, to such resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Board may abolish the Committee at any time
and revest in the Board the administration of the Plan. If administration is delegated to a
Committee, references to the Board in this Plan and in the Offering document shall thereafter be
deemed to be to the Board or the Committee, as the case may be.

     (d) All determinations, interpretations and constructions made by the Board in good faith
shall not be subject to review by any person and shall be final, binding and conclusive on all
persons.

4. Shares of Common Stock Subject to the Plan.

     Subject to the provisions of Section 14 relating to adjustments upon changes in securities,
the shares of Common Stock that may be sold pursuant to Purchase Rights shall not exceed in the
aggregate 125,000 shares of Common Stock, plus an annual increase to be added on the first day of
the fiscal year of the Company for a period of ten (10) years, commencing on the first day of the
fiscal year that begins on January 1, 2006 and ending on (and including) the first day of the
fiscal year that begins on January 1, 2015 (each such day, a “Calculation Date”), equal to the
lesser of (i) one and one-half percent (1.5%) of the shares of Common Stock outstanding on each
such Calculation Date (rounded down to the nearest whole share); or (ii) 100,000 shares of Common
Stock. Notwithstanding the foregoing, the Board may act, prior to the first day of any fiscal year
of the Company, to increase the share reserve by such number of shares of Common Stock as the Board
shall determine, which number shall be less than each of (i) and (ii). If any Purchase Right
granted under the Plan shall for any reason terminate without having been exercised, the shares of
Common Stock not purchased under such Purchase Right shall again become available for issuance
under the Plan.

5. Grant of Purchase Rights; Offering.

     (a) The Board may from time to time grant or provide for the grant of Purchase Rights to
purchase shares of Common Stock under the Plan to Eligible Employees in an Offering (consisting of
one or more Purchase Periods) on an Offering Date or Offering Dates selected by the Board. Each
Offering shall be in such form and shall contain such terms and conditions as the Board shall deem
appropriate, which shall comply with the requirement of Section 423(b)(5) of the Code that all
Employees granted Purchase Rights shall have the same rights and privileges. The terms and
conditions of an Offering shall be incorporated by reference into the Plan and treated as part of
the Plan. The provisions of separate Offerings need not be identical, but each Offering shall
include (through incorporation of the provisions of this Plan by reference in the document
comprising the Offering or otherwise) the period during which the Offering shall be effective,
which period shall not exceed twenty-seven (27) months beginning with the Offering Date, and the
substance of the provisions contained in Sections 6 through 9, inclusive.

4.

 

     (b) If a Participant has more than one Purchase Right outstanding under the Plan, unless he or
she otherwise indicates in agreements or notices delivered hereunder: (i) each agreement or notice
delivered by that Participant shall be deemed to apply to all of his or her Purchase Rights under
the Plan, and (ii) a Purchase Right with a lower exercise price (or an earlier-granted Purchase
Right, if different Purchase Rights have identical exercise prices) shall be exercised to the
fullest possible extent before a Purchase Right with a higher exercise price (or a later-granted
Purchase Right if different Purchase Rights have identical exercise prices) shall be exercised.

6. Eligibility.

     (a) Purchase Rights may be granted only to Employees of the Company or, as the Board may
designate as provided in Section 3(b), to Employees of a Related Corporation. Except as provided
in Section 6(b), an Employee shall not be eligible to be granted Purchase Rights under the Plan
unless, on the Offering Date, such Employee has been in the employ of the Company or the Related
Corporation, as the case may be, for such continuous period preceding such Offering Date as the
Board may require, but in no event shall the required period of continuous employment be greater
than two (2) years. In addition, the Board may provide that no Employee shall be eligible to be
granted Purchase Rights under the Plan unless, on the Offering Date, such Employee’s customary
employment with the Company or the Related Corporation is more than twenty (20) hours per week
and/or more than five (5) months per calendar year.

     (b) The Board may provide that each person who, during the course of an Offering, first
becomes an Eligible Employee shall, on a date or dates specified in the Offering which coincides
with the day on which such person becomes an Eligible Employee or which occurs thereafter, receive
a Purchase Right under that Offering, which Purchase Right shall thereafter be deemed to be a part
of that Offering. Such Purchase Right shall have the same characteristics as any Purchase Rights
originally granted under that Offering, as described herein, except that:

          (i) the date on which such Purchase Right is granted shall be the “Offering Date” of such
Purchase Right for all purposes, including determination of the exercise price of such Purchase
Right;

          (ii) the period of the Offering with respect to such Purchase Right shall begin on its
Offering Date and end coincident with the end of such Offering; and

          (iii) the Board may provide that if such person first becomes an Eligible Employee within a
specified period of time before the end of the Offering, he or she shall not receive any Purchase
Right under that Offering.

     (c) No Employee shall be eligible for the grant of any Purchase Rights under the Plan if,
immediately after any such Purchase Rights are granted, such Employee owns stock possessing five
percent (5%) or more of the total combined voting power or value of all classes of stock of the
Company or of any Related Corporation. For purposes of this Section 6(c), the rules of Section
424(d) of the Code shall apply in determining the stock ownership of any

5.

 

Employee, and stock which such Employee may purchase under all outstanding Purchase Rights and
options shall be treated as stock owned by such Employee.

     (d) As specified by Section 423(b)(8) of the Code, an Eligible Employee may be granted
Purchase Rights under the Plan only if such Purchase Rights, together with any other rights granted
under all Employee Stock Purchase Plans of the Company and any Related Corporations, do not permit
such Eligible Employee’s rights to purchase stock of the Company or any Related Corporation to
accrue at a rate which exceeds twenty five thousand dollars ($25,000) of Fair Market Value of such
stock (determined at the time such rights are granted, and which, with respect to the Plan, shall
be determined as of their respective Offering Dates) for each calendar year in which such rights
are outstanding at any time.

     (e) Officers of the Company and any designated Related Corporation, if they are otherwise
Eligible Employees, shall be eligible to participate in Offerings under the Plan. Notwithstanding
the foregoing, the Board may provide in an Offering that Employees who are highly compensated
Employees within the meaning of Section 423(b)(4)(D) of the Code shall not be eligible to
participate.

7. Purchase Rights; Purchase Price.

     (a) On each Offering Date, each Eligible Employee, pursuant to an Offering made under the
Plan, shall be granted a Purchase Right to purchase up to that number of shares of Common Stock
purchasable either with a percentage of the Eligible Employee’s Earnings or with a maximum dollar
amount, as designated by the Board, but, except for the first Offering under the Plan, in either
case not exceeding fifteen percent (15%), of such Employee’s Earnings (as defined by the Board in
each Offering) during the period that begins on the Offering Date (or such later date as the Board
determines for a particular Offering) and ends on the date stated in the Offering, which date shall
be no later than the end of the Offering. With respect to the first Offering under the Plan, the
Purchase Right granted to each Eligible Employee shall allow for the purchase of shares of Common
Stock with a Fair Market Value of up to twenty five thousand dollars ($25,000) (determined as of
the Offering Date of the first Offering under the Plan, using the price per share at which shares
of Common Stock are first sold to the public in the Company’s IPO as specified in the final
prospectus for the IPO).

     (b) The Board shall establish one (1) or more Purchase Dates during an Offering as of which
Purchase Rights granted pursuant to that Offering shall be exercised and purchases of shares of
Common Stock shall be carried out in accordance with such Offering.

     (c) In connection with each Offering made under the Plan, the Board may specify a maximum
number of shares of Common Stock that may be purchased by any Participant on any Purchase Date
during such Offering. In connection with each Offering made under the Plan, the Board may specify
a maximum aggregate number of shares of Common Stock that may be purchased by all Participants
pursuant to such Offering. In addition, in connection with each Offering that contains more than
one Purchase Date, the Board may specify a maximum aggregate number of shares of Common Stock that
may be purchased by all Participants on any Purchase Date under the Offering. If the aggregate
purchase of shares of Common Stock issuable upon exercise of Purchase Rights granted under the
Offering would exceed any such

6.

 

maximum aggregate number, then, in the absence of any Board action otherwise, a pro rata
allocation of the shares of Common Stock available shall be made in as nearly a uniform manner as
shall be practicable and equitable.

     (d) The purchase price of shares of Common Stock acquired pursuant to Purchase Rights shall be
not less than the lesser of:

          (i) an amount equal to eighty-five percent (85%) of the Fair Market Value of the shares of
Common Stock on the Offering Date; or

          (ii) an amount equal to eighty-five percent (85%) of the Fair Market Value of the shares of
Common Stock on the applicable Purchase Date.

8. Participation; Withdrawal; Termination.

     (a) A Participant may elect to authorize payroll deductions pursuant to an Offering under the
Plan by completing and delivering to the Company, within the time specified in the Offering, an
enrollment form (in such form as the Company may provide). Each such enrollment form shall
authorize an amount of Contributions expressed as a percentage of the submitting Participant’s
Earnings (as defined in each Offering) during the Offering (not to exceed the maximum percentage
specified by the Board). Each Participant’s Contributions shall remain the property of the
Participant at all times prior to the purchase of Common Stock, but such Contributions may be
commingled with the assets of the Company and used for general corporate purposes except where
applicable law requires that Contributions be deposited with an independent third party. To the
extent provided in the Offering, a Participant may begin making Contributions after the beginning
of the Offering. To the extent provided in the Offering, a Participant may thereafter reduce
(including to zero) or increase his or her Contributions. To the extent specifically provided in
the Offering, all Eligible Employees may participate in an Offering without submitting an
enrollment form and in addition to making Contributions by payroll deductions, a Participant may
make Contributions through the payment by cash or check prior to each Purchase Date of the
Offering.

     (b) During an Offering, a Participant may cease making Contributions and withdraw from the
Offering by delivering to the Company a notice of withdrawal in such form as the Company may
provide. Such withdrawal may be elected at any time prior to the end of the Offering, except as
provided otherwise in the Offering. Upon such withdrawal from the Offering by a Participant, the
Company shall distribute to such Participant all of his or her accumulated Contributions (reduced
to the extent, if any, such Contributions have been used to acquire shares of Common Stock for the
Participant) under the Offering, and such Participant’s Purchase Right in that Offering shall
thereupon terminate. A Participant’s withdrawal from an Offering shall have no effect upon such
Participant’s eligibility to participate in any other Offerings under the Plan, but such
Participant shall be required to deliver a new enrollment form in order to participate in
subsequent Offerings.

     (c) Purchase Rights granted pursuant to any Offering under the Plan shall terminate
immediately upon a Participant ceasing to be an Employee for any reason or for no reason (subject
to any post-employment participation period required by law) or other lack of eligibility.

7.

 

The Company shall distribute to such terminated or otherwise ineligible Employee all of his or
her accumulated Contributions (reduced to the extent, if any, such Contributions have been used to
acquire shares of Common Stock for the terminated or otherwise ineligible Employee) under the
Offering.

     (d) Purchase Rights shall not be transferable by a Participant otherwise than by will, the
laws of descent and distribution, or a beneficiary designation as provided in Section 13. During a
Participant’s lifetime, Purchase Rights shall be exercisable only by such Participant.

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

9. Exercise.

     (a) On each Purchase Date during an Offering, each Participant’s accumulated Contributions
shall be applied to the purchase of shares of Common Stock up to the maximum number of shares of
Common Stock permitted pursuant to the terms of the Plan and the applicable Offering, at the
purchase price specified in the Offering. No fractional shares shall be issued upon the exercise
of Purchase Rights unless specifically provided for in the Offering.

     (b) If any amount of accumulated Contributions remains in a Participant’s account after the
purchase of shares of Common Stock and such remaining amount is less than the amount required to
purchase one share of Common Stock on the final Purchase Date of an Offering, then such remaining
amount shall be held in such Participant’s account for the purchase of shares of Common Stock under
the next Offering under the Plan, unless such Participant withdraws from such next Offering, as
provided in Section 8(b), or is not eligible to participate in such Offering, as provided in
Section 6, in which case such amount shall be distributed to such Participant after the final
Purchase Date, without interest. If the amount of Contributions remaining in a Participant’s
account after the purchase of shares of Common Stock is at least equal to the amount required to
purchase one (1) whole share of Common Stock on the final Purchase Date of the Offering, then such
remaining amount shall be distributed in full to such Participant at the end of the Offering.

     (c) No Purchase Rights may be exercised to any extent unless the shares of Common Stock to be
issued upon such exercise under the Plan are covered by an effective registration statement
pursuant to the Securities Act and the Plan is in material compliance with all laws applicable to
the Plan. If on a Purchase Date during any Offering hereunder the shares of Common Stock are not
so registered or the Plan is not in such compliance, no Purchase Rights or any Offering shall be
exercised on such Purchase Date, and the Purchase Date shall be delayed until the shares of Common
Stock are subject to such an effective registration statement and the Plan is in such compliance,
except that the Purchase Date shall not be delayed more than twelve (12) months and the Purchase
Date shall in no event be more than twenty-seven (27) months from the Offering Date. If, on the
Purchase Date under any Offering hereunder, as delayed to the maximum extent permissible, the
shares of Common Stock are not registered and the Plan is not in such compliance, no Purchase
Rights or any Offering shall be exercised and all Contributions accumulated during the Offering
(reduced to the extent, if any, such Contributions have been used to acquire shares of Common
Stock) shall be distributed to the Participants.

8.

 

10. Covenants of the Company.

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

11. Use of Proceeds from Shares of Common Stock.

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

12. Rights as a stockholder.

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

13. Designation of Beneficiary.

     (a) A Participant may file a written designation of a beneficiary who is to receive any shares
of Common Stock and/or cash, if any, from the Participant’s account under the Plan in the event of
such Participant’s death subsequent to the end of an Offering but prior to delivery to the
Participant of such shares of Common Stock or cash. In addition, a Participant may file a written
designation of a beneficiary who is to receive any cash from the Participant’s account under the
Plan in the event of such Participant’s death during an Offering. Any such designation shall be on
a form provided by or otherwise acceptable to the Company.

     (b) The Participant may change such designation of beneficiary at any time by written notice
to the Company. In the event of the death of a Participant and in the absence of a beneficiary
validly designated under the Plan who is living at the time of such Participant’s death, the
Company shall deliver such shares of Common Stock and/or cash to the executor or administrator of
the estate of the Participant, or if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in its sole discretion, may deliver such shares of Common
Stock and/or cash to the spouse or to any one or more dependents or relatives of the Participant,
or if no spouse, dependent or relative is known to the Company, then to such other person as the
Company may designate.

14. Adjustments upon Changes in Securities; Corporate Transactions.

     (a) If any change is made in the shares of Common Stock, subject to the Plan, or subject to
any Purchase Right, without the receipt of consideration by the Company (through merger,
consolidation, reorganization, recapitalization, reincorporation, stock dividend, dividend

9.

 

in property other than cash, stock split, liquidating dividend, combination of shares,
exchange of shares, change in corporate structure or other transaction not involving the receipt of
consideration by the Company), the Plan shall be appropriately adjusted in the type(s), class(es)
and maximum number of shares of Common Stock subject to the Plan pursuant to Section 4(a), and the
outstanding Purchase Rights shall be appropriately adjusted in the type(s), class(es), number of
shares and purchase limits of such outstanding Purchase Rights. The Board shall make such
adjustments, and its determination shall be final, binding and conclusive. (The conversion of any
convertible securities of the Company shall not be treated as a “transaction not involving the
receipt of consideration by the Company.”)

     (b) In the event of a Corporate Transaction, then: (i) any surviving or acquiring corporation
may continue or assume Purchase Rights outstanding under the Plan or may substitute similar rights
(including a right to acquire the same consideration paid to stockholders in the Corporate
Transaction) for those outstanding under the Plan, or (ii) if any surviving or acquiring
corporation does not continue or assume such Purchase Rights or does not substitute similar rights
for Purchase Rights outstanding under the Plan, then, the Participants’ accumulated Contributions
shall be used to purchase shares of Common Stock within twenty (20) business days prior to the
Corporate Transaction under the ongoing Offering, and the Participants’ Purchase Rights under the
ongoing Offering shall terminate immediately after such purchase.

15. Amendment of the Plan.

     (a) The Board at any time, and from time to time, may amend the Plan. However, except as
provided in Section 14 relating to adjustments upon changes in securities and except as to
amendments solely to benefit the administration of the Plan, to take account of a change in
legislation or to obtain or maintain favorable tax, exchange control or regulatory treatment for
Participants or the Company or any Related Corporation, no amendment shall be effective unless
approved by the stockholders of the Company to the extent stockholder approval is necessary for the
Plan to satisfy the requirements of Section 423 of the Code or other applicable laws or
regulations.

     (b) It is expressly contemplated that the Board may amend the Plan in any respect the Board
deems necessary or advisable to provide Employees with the maximum benefits provided or to be
provided under the provisions of the Code and the regulations promulgated thereunder relating to
Employee Stock Purchase Plans or to bring the Plan and/or Purchase Rights into compliance
therewith.

     (c) The rights and obligations under any Purchase Rights granted before amendment of the Plan
shall not be impaired by any amendment of the Plan except: (i) with the consent of the person to
whom such Purchase Rights were granted, or (ii) as necessary to comply with any laws or
governmental regulations (including, without limitation, the provisions of the Code and the
regulations promulgated thereunder relating to Employee Stock Purchase Plans).

16. Termination or Suspension of the Plan.

     (a) The Board in its discretion may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate at the time that all of the shares of Common Stock

10.

 

reserved for issuance under the Plan, as increased and/or adjusted from time to time, have
been issued under the terms of the Plan. No Purchase Rights may be granted under the Plan while
the Plan is suspended or after it is terminated.

     (b) Any benefits, privileges, entitlements and obligations under any Purchase Rights while the
Plan is in effect shall not be impaired by suspension or termination of the Plan except (i) as
expressly provided in the Plan or with the consent of the person to whom such Purchase Rights were
granted, (ii) as necessary to comply with any laws, regulations, or listing requirements, or (iii)
as necessary to ensure that the Plan and/or Purchase Rights comply with the requirements of Section
423 of the Code.

17. Effective Date of Plan.

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

18. Miscellaneous Provisions.

     (a) The Plan and Offering do not constitute an employment contract. Nothing in the Plan or in
the Offering shall in any way alter the at will nature of a Participant’s employment or be deemed
to create in any way whatsoever any obligation on the part of any Participant to continue in the
employ of the Company or a Related Corporation, or on the part of the Company or a Related
Corporation to continue the employment of a Participant.

     (b) The provisions of the Plan shall be governed by the laws of the State of Arizona without
resort to that state’s conflicts of laws rules.

11.

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