Document:

2003 Employment Inducement Award Plan

 EXHIBIT 10.11 
  
 VERSATA, INC. 
  
 2003 EMPLOYMENT INDUCEMENT AWARD PLAN 

 TABLE OF CONTENTS 
  

	 	  	 	  	 	  	Page

	 1.
	  	 Purposes of the Plan
	  	 1

			
	 2.
	  	 Definitions
	  	 1

				
	 	  	 (a)
	  	 “Administrator”
	  	 1

	 	  	 (b)
	  	 “Applicable Laws”
	  	 1

	 	  	 (c)
	  	 “Award”
	  	 1

	 	  	 (d)
	  	 “Award Agreement”
	  	 1

	 	  	 (e)
	  	 “Change in Control”
	  	 1

	 	  	 (f)
	  	 “Code”
	  	 1

	 	  	 (g)
	  	 “Committee”
	  	 1

	 	  	 (h)
	  	 “Common Stock”
	  	 2

	 	  	 (i)
	  	 “Company”
	  	 2

	 	  	 (j)
	  	 “Consultant”
	  	 2

	 	  	 (k)
	  	 “Director”
	  	 2

	 	  	 (l)
	  	 “Disability”
	  	 2

	 	  	 (m)
	  	 “Employee”
	  	 2

	 	  	 (n)
	  	 “Exchange Act”
	  	 2

	 	  	 (o)
	  	 “Fair Market Value”
	  	 2

	 	  	 (p)
	  	 “Independent Director”
	  	 2

	 	  	 (q)
	  	 “Misconduct”
	  	 2

	 	  	 (r)
	  	 “Nonstatutory Stock Option”
	  	 2

	 	  	 (s)
	  	 “Notice of Grant”
	  	 2

	 	  	 (t)
	  	 “Officer”
	  	 2

	 	  	 (u)
	  	 “Option”
	  	 2

	 	  	 (v)
	  	 “Optioned Stock”
	  	 2

	 	  	 (w)
	  	 “Parent”
	  	 3

	 	  	 (x)
	  	 “Participant”
	  	 3

	 	  	 (y)
	  	 “Plan”
	  	 3

	 	  	 (z)
	  	 “Restricted Stock”
	  	 3

	 	  	 (aa)
	  	 “Rule 16b-3”
	  	 3

	 	  	 (bb)
	  	 “Section 16(b)”
	  	 3

	 	  	 (cc)
	  	 “Service Provider”
	  	 3

	 	  	 (dd)
	  	 “Share”
	  	 3

	 	  	 (ee)
	  	 “Stock Appreciation Right” or “SAR”
	  	 3

	 	  	 (ff)
	  	 “Subsidiary”
	  	 3

			
	 3.
	  	 Stock Subject to the Plan
	  	 3

			
	 4.
	  	 Administration of the Plan
	  	 4

  

 -i- 

 TABLE OF CONTENTS 
 (Continued) 
  

	 	  	 	  	 	  	Page

	 	  	 (b)
	  	 Powers of the Administrator
	  	4
	 	  	 (c)
	  	 Effect of Administrator’s Decision
	  	4
			
	 5.
	  	 Eligibility
	  	4
			
	 6.
	  	 Limitations
	  	4
			
	 7.
	  	 Term of Plan
	  	4
			
	 8.
	  	 Stock Options
	  	5
				
	 	  	 (a)
	  	 Term of Option
	  	5
	 	  	 (b)
	  	 Option Exercise Price, Waiting Period and Consideration
	  	5
	 	  	 (c)
	  	 Termination of Relationship as a Service Provider
	  	5
	 	  	 (d)
	  	 Disability of Optionee
	  	6
	 	  	 (e)
	  	 Death of Optionee
	  	6
	 	  	 (f)
	  	 Misconduct of Optionee
	  	6
	 	  	 (g)
	  	 Buyout Provisions
	  	6
			
	 9.
	  	 Restricted Stock
	  	6
				
	 	  	 (a)
	  	 Grant of Restricted Stock
	  	6
	 	  	 (b)
	  	 Exercise Price and other Terms
	  	7
	 	  	 (c)
	  	 Restricted Stock Award Agreement
	  	7
			
	 10.
	  	 Stock Appreciation Rights
	  	7
				
	 	  	 (a)
	  	 Grant of SARs
	  	7
	 	  	 (b)
	  	 Exercise Price and other Terms
	  	7
	 	  	 (c)
	  	 Payment of SAR Amount
	  	7
	 	  	 (d)
	  	 Payment upon Exercise of SAR
	  	7
	 	  	 (e)
	  	 Cash Settlements and Plan Share Allocation
	  	7
	 	  	 (f)
	  	 SAR Agreement
	  	7
	 	  	 (g)
	  	 Expiration of SARs
	  	7
	 	  	 (h)
	  	 Termination of Relationship as a Service Provider
	  	8
	 	  	 (i)
	  	 Disability of Participant
	  	8
	 	  	 (j)
	  	 Death of Participant
	  	8
	 	  	 (k)
	  	 Misconduct of Participant
	  	8
	 	  	 (l)
	  	 Buyout Provisions
	  	8
			
	 11.
	  	 Leaves of Absence
	  	9
			
	 12.
	  	 Non-Transferability of Awards
	  	9
			
	 13.
	  	 Adjustments Upon Changes in Capitalization, Dissolution, Liquidation or Change of Control
	  	9

  
  

 -ii- 

 TABLE OF CONTENTS 
 (Continued) 
  

	 	  	 	  	 	  	Page

	 	  	(a)	  	Changes in Capitalization	  	9
	 	  	(b)	  	Dissolution or Liquidation	  	9
	 	  	(c)	  	Change of Control	  	9
			
	 14.
	  	Award Date of Grant	  	10
			
	 15.
	  	Amendment and Termination of the Plan	  	10
				
	 	  	(a)	  	Amendment and Termination	  	10
	 	  	(b)	  	Stockholder Approval	  	10
	 	  	(c)	  	Effect of Amendment or Termination	  	10
			
	 16.
	  	Conditions Upon Issuance of Shares	  	10
				
	 	  	(a)	  	Legal Compliance	  	10
	 	  	(b)	  	Investment Representations	  	10
			
	 17.
	  	Inability to Obtain Authority	  	10
			
	 18.
	  	Reservation of Shares	  	10

  

 -iii- 

 VERSATA, INC. 
  
 2003 EMPLOYMENT INDUCEMENT AWARD PLAN 
  
 Purposes of the Plan. The purposes of this 2003 Stock Plan are: 
  

	 	•	 	to provide a material inducement for the best available employees to join the Company; and 

  

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

  
 The Plan permits the grant of Nonstatutory Stock Options, Restricted Stock and Stock Appreciation Rights. 
  
 Definitions. As used herein, the following definitions shall
apply: 
  
 “Administrator” means the
Committee as shall be administering the Plan in accordance with Section 4 of the Plan. 
  
 “Applicable Laws” means the requirements relating to the administration of stock option plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock
exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are granted under the Plan. 
  
 “Award” means, individually or collectively, a grant under the Plan of Options, SARs or Restricted
Stock. 
  
 “Award Agreement” means the
written agreement setting forth the terms and provisions applicable to each Award granted under the Plan. The Award Agreement is subject to the terms and conditions of the Plan. 
  
 “Change in Control” means the occurrence of any of the following events: 
  
 Any Person becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities; or 

 
 The consummation of the sale or disposition by the Company of all
or substantially all the Company’s assets; or 
  
 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) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation; or 
  
 A change in the composition of the Board occurring within a two-year period, as a result of which fewer than a majority of the directors are Incumbent Directors. “Incumbent Directors” shall mean directors who either (A) are
directors of the Company as of the date upon which this Agreement was entered into, or (B) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of those directors whose election or nomination was not
in connection with any transaction described in subsections (i), (ii), or (iii) above, or in connection with an actual or threatened proxy contest relating to the election of directors to the Company. 
  
 “Code” means the U.S. Internal Revenue Code of 1986,
as amended. 
  
 “Committee” means a
committee of independent Directors appointed by the Board in accordance with Section 4 of the Plan. 
  

 1 

 “Common Stock” means the common stock of the Company. 
  
 “Company” means Versata, Inc. 
  
 “Consultant” means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary to render services to such entity. 
  
 “Director” means a member Versata’s Board of Directors. 
  
 “Disability” means total and permanent disability as defined in Section 22(e)(3) of the Code. 
  
 “Employee” means any person, including Officers and
Directors, employed by the Company or any Parent or Subsidiary of the Company. Neither service as a Director nor payment of a director’s fee by the Company shall be sufficient to constitute “employment” by the Company. 
  
 “Exchange Act” means the Securities Exchange Act of
1934, as amended. 
  
 “Fair Market Value”
means, as of any date, the value of Common Stock determined as follows: 
  
 If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system on the date of determination, as reported in The Wall Street
Journal or such other source as the Administrator deems reliable; 
  
 If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported, the Fair Market Value of a Share of Common Stock shall be the mean between the high bid and low
asked prices for the Common Stock on the date of determination, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or 
  
 in the absence of an established market for the Common Stock, the Fair
Market Value shall be determined in good faith by the Administrator. 
  
 “Independent Director” means a Director who is not an Employee and who qualifies as an Independent Director under the applicable rules of Nasdaq (and/or the similar rules of any other stock
exchange(s) on which the Company’s securities become publicly traded). 
  
 “Misconduct” means the commission of any act of fraud, embezzlement or dishonesty by the Participant, any unauthorized use of disclosure by such person of confidential information or trade
secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by such person adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition
shall not be deemed to be inclusive of all the acts or omissions which the Corporation (or any Parent or Subsidiary) may consider as grounds for the dismissal or discharge of any Participant or other person in the Service of the Corporation (or any
Parent or Subsidiary). 
  
 “Nonstatutory Stock
Option” means an Option not intended to qualify as an Incentive Stock Option. 
  
 “Notice of Grant” means a written or electronic notice evidencing certain terms and conditions of an individual Award. The Notice of Grant is part of the Award Agreement. 
  
 “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. 
  
 “Option” means a stock option granted pursuant to the Plan. 
  
 “Optioned Stock” means the Common Stock subject to an Option or SAR. 
  

 2 

 “Parent” means a “parent corporation,” whether now or hereafter
existing, as defined in Section 424(e) of the Code. 
  
 “Participant” means the holder of an outstanding Award granted under the Plan. 
  
 “Plan” means this 2003 Employment Inducement Award Plan. 
  
 “Restricted Stock” means shares of Common Stock or units/rights to acquire shares of Common Stock
granted pursuant to Section 9 of the Plan that are subject to vesting. 
  
 “Rule 16b-3” means Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is being exercised with respect to the Plan. 
  
 “Section 16(b)” means Section 16(b) of the Exchange
Act. 
  
 “Service Provider” means an
Employee, Director or Consultant. 
  
 “Share” means a share of the Common Stock, as adjusted in accordance with Section 13 of the Plan. 
  
 “Stock Appreciation Right” or “SAR” means an Award, granted alone or in connection with a related Option, that
pursuant to Section 10 is designated as an SAR. 
  
 “Subsidiary” means a “subsidiary corporation”, whether now or hereafter existing, as defined in Section 424(f) of the Code and also include partnerships, limited liability companies and other entities that
are at least 30% owned by the Company. 
  
 Stock Subject to
the Plan. Subject to the provisions of Section 13 of the Plan, the maximum aggregate number of Shares which may be issued under the Plan is 800,000 Shares; provided, however, that commencing October 1, 2004, on the first day of each fiscal
year of the Company during the term of the Plan, an additional 400,000 shares shall automatically be added to the Plan; provided, further, that in no event shall more than 50% of the Shares issuable under the Plan be granted pursuant to Awards with
an exercise price or purchase price that is less than 100% of Fair Market Value on the date of grant. The Shares may be authorized, but unissued, or reacquired Common Stock. 
  
 If an Award expires or becomes unexercisable without having been exercised in full, or, with respect to Restricted Stock, is
forfeited back to or repurchased by the Company, the unpurchased Shares (or for Restricted Stock, the forfeited or repurchased shares) which were subject thereto shall become available for future grant or sale under the Plan (unless the Plan has
terminated). With respect to SARs, only shares actually issued pursuant to an SAR (or in the event of a cash payout, the share equivalent) shall cease to be available under the Plan; all remaining shares under SARs, shall remain available for future
grant or sale under the Plan (unless the Plan has terminated). However, Shares that have actually been issued under the Plan under any Award shall not be returned to the Plan and shall not become available for future distribution under the Plan,
except that if Shares of Restricted Stock are repurchased by the Company at their original purchase price or are forfeited to the Company, such Shares shall become available for future grant under the Plan. 
  

 3 

 Administration of the Plan. 
  
 (a) Procedure. 
  
 Rule 16b-3. To the extent desirable to qualify transactions hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder shall be
structured to satisfy the requirements for exemption under Rule 16b-3. 
  
 Plan Administration. The Plan shall be administered by either (i) the Company’s Compensation Committee (so long as such committee is comprised of a majority of Independent Directors), or (ii) a majority of
Independent Directors. 
  
 Powers of the
Administrator. Subject to the provisions of the Plan the Administrator shall have the authority, in its discretion: 
  
 to determine the Fair Market Value; 
  
 to select the Employees to whom Awards may be granted hereunder; 
  
 to determine the number of shares of Common Stock to be covered by each Award granted hereunder; 

 
 to approve forms of agreement for use under the Plan;

  
 to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any Award granted hereunder. Such terms and conditions include, but are not limited to, the exercise or purchase price, the time or times when Awards may be vested, exercised, purchased or granted (which may be based
on performance criteria), any vesting acceleration or waiver of forfeiture restrictions or repurchase rights, and any restriction or limitation regarding any Award or the shares of Common Stock relating thereto, based in each case on such factors as
the Administrator, in its sole discretion, shall determine; 
  
 to construe and interpret the terms of the Plan and awards granted pursuant to the Plan, including, but not limited to, a determination of a Participant’s date of termination with respect to any Award granted under the
Plan; 
  
 to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to sub-plans established for the purpose of qualifying for preferred tax treatment under foreign tax laws, satisfying foreign securities law or achieving other foreign legal
compliance objectives; 
  
 to modify or amend each
Award (subject to Section 15 of the Plan), including the discretionary authority to extend the post-termination vesting or exercisability or Offering Period of Awards longer than is otherwise provided for in the Plan; 
  
 to allow Participants to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise of an Option or SAR or upon the vesting or earlier tax recognition of Restricted Stock that number of Shares having a Fair Market Value equal to the minimum amount
required to be withheld. The Fair Market Value of the Shares to be withheld shall be determined on the date that the amount of tax to be withheld is to be determined. All elections by a Participant to have Shares withheld for this purpose shall be
made in such form and under such conditions as the Administrator may deem necessary or advisable; 
  
 to authorize any person to execute on behalf of the Company any instrument required to effect the grant of an Award previously granted by the
Administrator; and 
  
 to make all other
determinations deemed necessary or advisable for administering the Plan. 
  
 Effect of Administrator’s Decision. The Administrator’s decisions, determinations and interpretations shall be final and binding on all Participants and any other holders of Awards. 

 
 Eligibility. Awards may be granted only to Employees as a
material inducement to entering into their initial employment with the Company; provided, however, that a former employee who is returning to the employ of the Company following a bona-fide period of non-employment by the Company may also receive an
Award hereunder. 
  
 Limitations. 
  
 (a) Each Option shall be designated in the Option Agreement as a
Nonstatutory Stock Option. 
  
 (b) Neither the Plan nor any Award
shall confer upon a Participant any right with respect to continuing their relationship as a Service Provider, nor shall they interfere in any way with the right of the Participant or the right of the Company or its Parent or Subsidiaries to
terminate such relationship at any time, with or without cause. 
  
 Term of Plan. The Plan shall become effective upon September 30, 2003. It shall continue in effect for a term of ten (10) years from the date upon which the Board approved the Plan, namely through September 29, 2013.

  

 4 

     Stock Options. 
  
 Term of Option. The term of each Option shall be stated in the
Option Agreement and shall be no more than ten (10) years from the date of grant. 
  
 Option Exercise Price, Waiting Period and Consideration. 
  
 (i) Exercise Price. The per share exercise price for the Shares to be issued pursuant to exercise of an Option shall be determined by the
Administrator, with a minimum exercise price equal to par value. 
  
 (ii) Waiting Period and Exercise Dates. At the time an Option is granted, the Administrator shall fix the period within which the Option may become vested or be exercised and shall determine any conditions which must be satisfied
before the Option may vest or be exercised. 
  
 (iii) Form of
Consideration. The Administrator shall determine the acceptable form of consideration for exercising an Option, including the method of payment. Such consideration, subject to Applicable Laws, may consist entirely of: 
  
 cash; 
  
 check; 
  
 other Shares which (A) in the case of Shares acquired upon exercise of an option, have been owned by the Optionee for more than six months on the date
of surrender, and (B) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares as to which said Option shall be exercised; 
  
 consideration received by the Company under a broker-assisted cashless exercise program acceptable to the Company, in
its sole discretion; 
  
 any combination of the foregoing
methods of payment; or 
  
 such other consideration and
method of payment for the issuance of Shares to the extent permitted by Applicable Laws. 
  
 (iv) Exercise of Option; Rights as a Stockholder. Any Option granted hereunder shall be exercisable according to the terms of the Plan and at such times and under such conditions as determined by the
Administrator and set forth in the Option Agreement. 
  
 An Option
shall be deemed exercised when the Company receives: (i) written or electronic notice of exercise (in accordance with the Option Agreement) from the person entitled to exercise the Option, and (ii) full payment for the Shares with respect to which
the Option is exercised. Full payment may consist of any consideration and method of payment authorized by the Administrator and permitted by the Option Agreement and the Plan. Shares issued upon exercise of an Option shall be issued in the name of
the Optionee or, if requested by the Optionee, in the name of the Optionee and his or her spouse. Until the Shares are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company),
no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the Optioned Stock, notwithstanding the exercise of the Option. The Company shall issue (or cause to be issued) such Shares promptly after the
Option is exercised. No adjustment will be made for a dividend or other right for which the record date is prior to the date the Shares are issued, except as provided in Section 13 of the Plan. 
  
 Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the Option, by the number of Shares as to which the Option is exercised. An Option may not be exercised for a fraction of a Share. 
  
 Termination of Relationship as a Service Provider. If an
Optionee ceases to be a Service Provider, other than upon the Optionee’s death or Disability or Misconduct, the Optionee may exercise his 
  

 5 

 or her Option within such period of time as is specified in the Option Agreement to the extent that the Option is vested
and exercisable on the date of termination (but in no event later than the expiration of the term of such Option as set forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable
for three (3) months following the Optionee’s termination. If, on the date of termination, the Optionee is not vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time specified by the Administrator, the Option shall terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 Notwithstanding the above, in the event of an Optionee’s change in
status from Employee to Consultant, an Optionee’s status as a Service Provider shall continue notwithstanding the change in status. 
  
 Disability of Optionee. If an Optionee ceases to be a Service Provider as a result of the Optionee’s Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the Option Agreement to the extent the Option is vested and exercisable on the date of termination (but in no event later than the expiration of the term of such Option as set
forth in the Option Agreement). In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s termination. If, on the date of termination, the Optionee is not
vested as to his or her entire Option, the Shares covered by the unvested portion of the Option shall revert to the Plan. If, after termination, the Optionee does not exercise his or her Option within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the Plan. 
  
 Death of Optionee. If an Optionee dies while a Service Provider, the Option may be exercised within such period of time as is specified in the Option Agreement (but in no event later than the expiration
of the term of such Option as set forth in the Notice of Grant), by the Optionee’s estate or by a person who acquires the right to exercise the Option by bequest or inheritance, but only to the extent that the Option is vested and exercisable
on the date of death. In the absence of a specified time in the Option Agreement, the Option shall remain exercisable for twelve (12) months following the Optionee’s termination. If, at the time of death, the Optionee is not vested as to his or
her entire Option, the Shares covered by the unvested portion of the Option shall immediately revert to the Plan. The Option may be exercised by the executor or administrator of the Optionee’s estate or, if none, by the person(s) entitled to
exercise the Option under the Optionee’s will or the laws of descent or distribution. If the Option is not so exercised within the time specified herein, the Option shall terminate, and the Shares covered by such Option shall revert to the
Plan. 
  
 Misconduct of Optionee. If an Optionee is
terminated for Misconduct, or should a Service Provider engage in Misconduct while holding one or more Options, then all of his or her Options shall terminate immediately and cease to be outstanding. 
  
 Buyout Provisions. The Administrator may at any time offer to
buy out for a payment in cash or Shares an Option previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Optionee at the time that such offer is made. 
  
 Restricted Stock. 
  
 Grant of Restricted Stock. Subject to the terms and conditions
of the Plan, Restricted Stock may be granted to Employees as shall be determined by the Administrator, in its sole discretion. The Administrator shall have complete discretion to determine (i) the number of Shares subject to a Restricted Stock award
granted to any Employee, (ii) whether the form of the award shall be Shares or units/rights to acquire Shares, and (iii) the conditions that must be satisfied, including performance-based milestones, upon which is conditioned the grant or vesting of
Restricted Stock. For Restricted Stock granted in the form of units/rights to acquire Shares, each such unit/right shall be the equivalent of one Share of Common Stock for purposes of determining the number of Shares subject to an Award. Until the
Shares are issued, no right to vote or receive dividends or any other rights as a stockholder shall exist with respect to the units/rights to acquire Shares. 
  

 6 

 Exercise Price and other Terms. The Administrator, subject to the provisions of the Plan,
shall have complete discretion to determine the terms and conditions of Restricted Stock granted under the Plan. Restricted Stock grants shall be subject to the terms, conditions, and restrictions determined by the Administrator at the time the
stock is awarded, which may include such performance-based milestones as are determined appropriate by the Administrator. The Administrator may require the recipient to sign a Restricted Stock Agreement as a condition of the award. Any certificates
representing the shares of Stock awarded shall bear such legends as shall be determined by the Administrator. 
  
 Restricted Stock Award Agreement. Each Restricted Stock grant shall be evidenced by an Award Agreement that shall specify the purchase price
(if any) and such other terms and conditions as the Administrator, in its sole discretion, shall determine; provided; however, that if the Restricted Stock grant has a purchase price, such purchase price must be paid no more than ten (10) years
following the date of grant. 
  
 Stock Appreciation
Rights. 
  
 Grant of SARs. Subject to the
terms and conditions of the Plan, SARs may be granted to Employees at any time and from time to time as shall be determined by the Administrator, in its sole discretion. The Administrator shall have complete discretion to determine the number of
SARs granted to any Employee. 
  
 Exercise Price and other
Terms. The Administrator, subject to the provisions of the Plan, shall have complete discretion to determine the terms and conditions of SARs granted under the Plan; provided, however, that no SAR may have a term of more than ten (10) years
from the date of grant. 
  
 Payment of SAR Amount.
Upon exercise of a SAR, a Participant shall be entitled to receive payment from the Company in an amount determined by multiplying: 
  
 The difference between the Fair Market Value of a Share on the date of exercise over the exercise price; times 
  
 The number of Shares with respect to which the SAR is
exercised. 
  
 Payment upon Exercise of SAR.
At the discretion of the Administrator, payment for a SAR may be in cash, Shares or a combination thereof. 
  
 Cash Settlements and Plan Share Allocation. Cash payments of Stock Appreciation Rights as well as Common Stock issued upon exercise of Stock
Appreciation Rights shall be applied against the maximum number of shares of Common Stock that may be issued pursuant to the Plan. The number of shares to be applied against such maximum number of shares in such circumstances shall be the number of
shares equal to the amount of the cash payment divided by the Fair Market Value of a share of Common Stock on the date the Stock Appreciation Right is granted. 
  

SAR Agreement. Each SAR grant shall be evidenced by an Award Agreement that shall specify the exercise price, the term of the SAR, the
conditions of exercise, and such other terms and conditions as the Administrator, in its sole discretion, shall determine. 
  
 Expiration of SARs. A SAR granted under the Plan shall expire upon the date determined by the Administrator, in its sole discretion, and set
forth in the Award Agreement. 
  

 7 

 Termination of Relationship as a Service Provider. If a Participant ceases to be a Service
Provider, other than upon the Participant’s death or Disability, the Participant may exercise his or her Stock Appreciation Right within such period of time as is specified in the Stock Appreciation Right Agreement to the extent that the Stock
Appreciation Right is vested and exercisable on the date of termination (but in no event later than the expiration of the term of such Stock Appreciation Right as set forth in the Stock Appreciation Right Agreement). In the absence of a specified
time in the Stock Appreciation Right Agreement, the Stock Appreciation Right shall remain exercisable for three (3) months following the Participant’s termination. If, on the date of termination, the Participant is not vested as to his or her
entire Stock Appreciation Right, the Shares covered by the unvested portion of the Stock Appreciation Right shall revert to the Plan. If, after termination, the Participant does not exercise his or her Stock Appreciation Right within the time
specified by the Administrator, the Stock Appreciation Right shall terminate, and the Shares covered by such Stock Appreciation Right shall revert to the Plan. 
  

Notwithstanding the above, in the event of a Participant’s change in status from Employee to Consultant, a Participant’s status as a Service
Provider shall continue notwithstanding the change in status. 
  
 Disability of Participant. If a Participant ceases to be a Service Provider as a result of the Participant’s Disability, the Participant may exercise his or her Stock Appreciation Right within such period of time as is
specified in the Stock Appreciation Right Agreement to the extent the Stock Appreciation Right is vested and exercisable on the date of termination (but in no event later than the expiration of the term of such Stock Appreciation Right as set forth
in the Stock Appreciation Right Agreement). In the absence of a specified time in the Stock Appreciation Right Agreement, the Stock Appreciation Right shall remain exercisable for twelve (12) months following the Participant’s termination. If,
on the date of termination, the Participant is not vested as to his or her entire Stock Appreciation Right, the Shares covered by the unvested portion of the Stock Appreciation Right shall revert to the Plan. If, after termination, the Participant
does not exercise his or her Stock Appreciation Right within the time specified herein, the Stock Appreciation Right shall terminate, and the Shares covered by such Stock Appreciation Right shall revert to the Plan. 
  
 Death of Participant. If a Participant dies while a Service
Provider, the Stock Appreciation Right may be exercised within such period of time as is specified in the Stock Appreciation Right Agreement (but in no event later than the expiration of the term of such Stock Appreciation Right as set forth in the
Notice of Grant), by the Participant’s estate or by a person who acquires the right to exercise the Stock Appreciation Right by bequest or inheritance, but only to the extent that the Stock Appreciation Right is vested and exercisable on the
date of death. In the absence of a specified time in the Stock Appreciation Right Agreement, the Stock Appreciation Right shall remain exercisable for twelve (12) months following the Participant’s termination. If, at the time of death, the
Participant is not vested as to his or her entire Stock Appreciation Right, the Shares covered by the unvested portion of the Stock Appreciation Right shall immediately revert to the Plan. The Stock Appreciation Right may be exercised by the
executor or administrator of the Participant’s estate or, if none, by the person(s) entitled to exercise the Stock Appreciation Right under the Participant’s will or the laws of descent or distribution. If the Stock Appreciation Right is
not so exercised within the time specified herein, the Stock Appreciation Right shall terminate, and the Shares covered by such Stock Appreciation Right shall revert to the Plan. 
  
 Misconduct of Participant. If a Participant is terminated for Misconduct, or should a Service Provider engage
in Misconduct while holding one or more Stock Appreciation Rights, then all of his or her Stock Appreciation Rights shall terminate immediately and cease to be outstanding. 
  
 Buyout Provisions. The Administrator may at any time offer to buy out for a payment in cash or Shares a Stock
Appreciation Right previously granted based on such terms and conditions as the Administrator shall establish and communicate to the Participant at the time that such offer is made. 
  

 8 

 Leaves of Absence. The effect of leaves of absence on Award vesting, if any, shall be as
set forth in the applicable Award Agreement. 
  
 Limited
Transferability of Awards. Except as otherwise specified in an individual Award Agreement, an Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner other than by will or by the laws of descent or
distribution and may be exercised, during the lifetime of the Participant, only by the Participant. 
  
 Adjustments Upon Changes in Capitalization, Dissolution, Liquidation or Change of Control. 
  
 Changes in Capitalization. Subject to any required action by
the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Award, the number of shares of Common Stock which have been authorized for issuance under the Plan but as to which no Awards have yet been granted or
which have been returned to the Plan upon cancellation or expiration of an Award, as well as the price per share of Common Stock covered by each such outstanding Award shall be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock resulting from a stock split, reverse stock split, stock dividend, combination or reclassification of the Common Stock, or any other increase or decrease in the number of issued shares of Common Stock effected without
receipt of consideration by the Company; provided, however, that conversion of any convertible securities of the Company shall not be deemed to have been “effected without receipt of consideration.” Such adjustment shall be made by the
Committee, whose determination in that respect shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of shares of stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to, the number or price of shares of Common Stock subject to an Award. 
  
 Dissolution or Liquidation. In the event of the proposed dissolution or liquidation of the Company, the Administrator shall notify each
Participant as soon as practicable prior to the effective date of such proposed transaction. The Administrator in its discretion may provide for a Participant to have the right to exercise his or her Award until ten (10) days prior to such
transaction as to all of the stock covered thereby, including Shares as to which the Award would not otherwise be vested or exercisable. In addition, the Administrator may provide that any Company repurchase option or forfeiture applicable to any
Shares covered by an Award shall lapse as to all such Shares, provided the proposed dissolution or liquidation takes place at the time and in the manner contemplated. To the extent it has not been previously exercised, an Award will terminate
immediately prior to the consummation of such proposed action. 
  
 Change of Control. 
  
 SARs and
Options. In the event of a Change of Control, each outstanding SAR and Option shall be assumed or an equivalent option substituted by the successor corporation or a Parent or subsidiary of the successor corporation. In the event that the successor
corporation refuses to assume or substitute for the SAR and Option, the Participant shall fully vest in and have the right to exercise the SAR or Option as to all of the Optioned Stock, including Shares as to which it would not otherwise be vested
or exercisable. If an SAR or Option becomes fully vested and exercisable in lieu of assumption or substitution in the event of a Change of Control, the Administrator shall notify the Participant in writing or electronically that the SAR or Option
shall be fully vested and exercisable for a period of fifteen (15) days from the date of such notice, and the SAR or Option shall terminate upon the expiration of such period. For the purposes of this paragraph, the SAR or Option shall be considered
assumed if, following the Change of Control, the SAR or option confers the right to purchase or receive, for each Share of Optioned Stock subject to the SAR or Option immediately prior to the Change of Control, the consideration (whether stock,
cash, or other securities or property) received in the Change of Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the Change of Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent
of the successor corporation, provide for the consideration to be received upon the exercise of the SAR or Option, for each Share of Optioned Stock subject to the SAR or Option, to be solely common stock of the successor corporation or its Parent
equal in fair market value to the per share consideration received by holders of Common Stock in the Change of Control. 
  
 Restricted Stock. In the event of a Change of Control, each outstanding Restricted Stock award shall be assumed or an equivalent award substituted
by the successor corporation or a Parent or subsidiary of the successor corporation. In the event that the successor corporation refuses to assume or substitute for the Restricted Stock, the Participant shall fully vest in the Restricted Stock,
including Shares as to which it would not otherwise be vested. For the purposes of this paragraph, the Restricted Stock shall be considered assumed if, following the Change of Control, the Restricted Stock confers the right to receive, for each
Share and each unit/right to acquire a Share that is subject to the Restricted Stock award immediately prior to the Change of Control, the consideration (whether stock, cash, or other securities or property) received in the Change of Control by
holders of Common Stock for each Share and each unit/right to acquire a Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by 
  

 9 

 the holders of a majority of the outstanding Shares); provided, however, that if such consideration received in the
Change of Control is not solely common stock of the successor corporation or its Parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received, for each Share and each unit/right to
acquire a Share subject to the Restricted Stock award, to be solely common stock of the successor corporation or its Parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change of
Control. 
  
 Award Date of Grant. The date
of grant of an Award shall be, for all purposes, the date on which the Administrator makes the determination granting such Award, or such other later date as is determined by the Administrator. Notice of the determination shall be provided to each
new Employee within a reasonable time after the date of such grant. 
  
 Amendment and Termination of the Plan. 
  
 Amendment and Termination. The Committee may at any time amend, alter, suspend or terminate the Plan. 
  
 Stockholder Approval. The Company shall obtain stockholder approval of any Plan amendment to the extent necessary and desirable to comply
with Applicable Laws. 
  
 Effect of Amendment or
Termination. No amendment, alteration, suspension or termination of the Plan shall impair the rights of any Participant, unless mutually agreed otherwise between the Participant and the Administrator, which agreement must be in writing and
signed by the Participant and the Company. Termination of the Plan shall not affect the Administrator’s ability to exercise the powers granted to it hereunder with respect to Awards granted under the Plan prior to the date of such termination.

  
 Conditions Upon Issuance of Shares. 

 
 Legal Compliance. Shares shall not be issued pursuant to
the exercise or vesting of an Award unless the exercise or vesting of such Award and the issuance and delivery of such Shares shall comply with Applicable Laws and shall be further subject to the approval of counsel for the Company with respect to
such compliance. 
  
 Investment Representations. As
a condition to the exercise of an Award, the Company may require the person exercising such Award to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to
sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required. 
  
 Inability to Obtain Authority. The inability of the Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company’s counsel to be necessary to the lawful issuance and sale of any Shares hereunder, shall relieve the Company of any liability in respect of the failure to issue or sell such Shares as to which such requisite
authority shall not have been obtained. 
  
 Reservation of
Shares. The Company, during the term of this Plan, will at all times reserve and keep available such number of Shares as shall be sufficient to satisfy the requirements of the Plan. 
  

 10Employee Stock Purchase Program, as amended and restated

 EXHIBIT 10.16 
  
 SYNOPSYS, INC. 
  
 EMPLOYEE STOCK PURCHASE PLAN 
  
 (As amended on August 1, 1999, January 11, 2001, 
 March 8, 2000, February 28, 2001 and April 23, 2003) 
  

	I.	PURPOSE 

  
 The Synopsys, Inc. Employee Stock Purchase Plan (the “Plan”) is intended to provide Eligible Employees of the Company and one or more of its
Corporate Affiliates with the opportunity to acquire a proprietary interest in the Company through the periodic application of their payroll deductions to the purchase of shares of the Company’s common stock. 
  

	II.	DEFINITIONS 

  
 For purposes of plan administration, the following terms shall have the meanings indicated. 
  
 Base Salary means all compensation paid as wages, salaries, commissions, overtime, and bonuses (other than bonuses
subject to repayment as a result of a specified future event), but excluding all of the following items (even if included in taxable income): reimbursements, car allowances or other expense allowances, severance pay, fringe benefits (cash and
noncash), moving expenses, deferred compensation, income attributable to stock options, restricted stock grants, SARs and other equity-related incentive programs, and welfare benefits. 
  
 Code means the Internal Revenue Code of 1986, as amended from time to time. 
  
 Company means Synopsys, Inc., a Delaware corporation, and any
corporate successor to all or substantially all of the assets or voting stock of Synopsys, Inc. which shall by appropriate action adopt the Plan. 
  
 Common Stock means shares of the Company’s common stock. 
  
 Corporate Stock means shares of the Company’s common stock. 
  
 Corporate Affiliate means any company which is a parent or subsidiary
corporation of the Company (as determined in accordance with Code Section 424), including any parent or subsidiary corporation which becomes such after the Effective Date. 
  
 Effective Date means the first day of the initial offering 

 
period scheduled to commence upon the later of (i) February 1, 1992 or (ii) the effective date of the S-8 Registration Statement covering the share of
Common Stock issuable under the Plan. However, for any Corporate Affiliate which becomes a participating Company in the Plan after the first day of the initial offering period, a subsequent Effective Date shall be designated with respect to
participation by its Eligible Employees. 
  
 Eligible
Employee means any person who is engaged, on a regularly-scheduled basis of more than twenty (20) hours per week and more than five (5) months per calendar year, in the rendition of personal services to the Company or any other Participating
Company for earnings considered wages under Section 3121(a) of the Code. 
  
 Enrollment Date has the meaning ascribed to it in Section V.A. 
  
 Participant means any Eligible Employee of a Participating Company who is actively participating in the Plan. 
  
 Participating Company means the Company and such Corporate Affiliate
or Affiliates as may be designated from time to time by the Board. 
  
 Semi-Annual Entry Date means (i) during 1999 and each preceding calendar year within an offering period in effect under the Plan, the first business day of May and the first business day of November and (ii) during 2000 and all
subsequent calendar years within an offering period under the Plan, the first business day of March and the first business day of September. The earliest Semi-Annual Entry Date under the Plan shall be November 2, 1992. 
  
 Semi-Annual Period of Participation means each period for which the
Participant actually participates in an offering period in effect under the Plan. There shall be a maximum of four (4) periods of participation within each offering period. Except as otherwise designated by the Plan Administrator, each such period
shall commence on the applicable Semi-Annual Entry Date. 
  
 Semi-Annual Purchase Date means (i) during 1999 and each preceding year on which shares of Common Stock are automatically purchased for Participants under the Plan, the last business day of April and October, and (ii) during 2000 and
each subsequent year on which shares of Common Stock are automatically purchased for Participants under the Plan, the last business day of February and August. 
  

 -2- 

	III.	ADMINISTRATION 

  
 The Plan shall be administered by the Board of Directors of the Company or a committee that will satisfy Rule 16b-3 of the Securities and Exchange
Commission, as in effect with respect to the Company from time to time (in either case, the “Board”). The Board may from time to time select a committee or persons (the “Plan Administrator”) to be responsible for any transactions
not subject to Rule 16b-3. Subject to the express provisions of the Plan, to the overall supervision of the Board, and to the limitations of Section 423 of the Code, the Plan Administrator may administer, interpret and amend the Plan in any manner
it believes to be desirable (including amendments to outstanding options/purchase rights and the designation of a brokerage firm at which accounts for the holding of shares purchased under the Plan must be established by each employee desiring to
participate in the Plan), and any such interpretation shall be final and binding on all parties who have an interest in the Plan; provided, however, that the Plan Administrator may not, without the approval of the Company’s Board, (i) increase
the number of shares issuable under the Plan or the maximum number of shares which may be purchased per Participant or in the aggregate during any one Semi-Annual Period of Participation under the Plan, except that the Plan Administrator shall have
the authority, exercisable without such stockholder approval, to effect adjustments to the extent necessary to reflect changes in the Company’s capital structure pursuant to Section VI.B; (ii) alter the purchase price formula so as to reduce
the purchase price payable for the shares issuable under the Plan; or (iii) materially increase the benefits accruing to Participants under the Plan or materially modify the requirements for eligibility to participate in the Plan 
  

	IV.	OFFERING PERIODS 

  
 The Plan shall be implemented in a series of offering periods. Each offering period shall be of a duration of twenty-four (24) months or less as
designated by the Plan Administrator prior to the start date of any offering period, except that offering periods that include the Semi-Annual Entry Date on November 1, 1999 shall be of a duration of twenty-two (22) months. Within each offering
period, there shall be a maximum of four (4) Semi-Annual Periods of Participation. 
  

	V.	ELIGIBILITY AND PARTICIPATION 

  
 A.    Each Eligible Employee will be automatically enrolled in the Plan in the offering period that begins on the first Semi-Annual
Entry Date following the commencement of employment; thereafter, any Eligible Employee may enroll or re-enroll in the 

  

 -3- 

 
Plan in the offering period that begins as of any Semi-Annual Entry Date, or such other days as may be established by the Board from time to time (each, an
“Enrollment Date”). To participate, an Eligible Employee must complete, sign, and submit to the Company an enrollment form prescribed by the Plan Administrator. Any enrollment form received by the Company by the 15th day of the month
preceding an Enrollment Date (or by the Enrollment Date in the case of employees hired after such 15th day), or such other date established by the Plan Administrator from time to time, will be effective on that Enrollment Date. Enrollment or
re-enrollment by a Participant in the Plan on an Enrollment Date will constitute the grant by the Company to the Participant of an option to purchase shares of Common Stock from the Company under the Plan. At the end of each offering period, each
Participant who has not withdrawn from the Plan will automatically be re-enrolled in the Plan in the offering period that begins on the Enrollment Date immediately following the date on which the option expires. Furthermore, except as may otherwise
be determined by the Plan Administrator, each Participant who has not withdrawn from the Plan will automatically be re-enrolled in the Plan in each offering period that begins on an Enrollment Date on which the fair market value per share of the
Company’s Common Stock is lower than the fair market value per share of the Company’s Common Stock on the Enrollment Date for the offering period in which the Participant is then enrolled. Notwithstanding anything in the Plan to the
contrary, if the fair market value (the “Authorization Date FVM”) on the date (the “Authorization Date”) on which additional shares of Common Stock are authorized for issuance hereunder by the Company’s shareholders is
higher than the fair market value at the beginning of any Offering Period that commenced prior to the Authorization Date, then, with respect to any of such authorized shares available to be issued on Purchase Dates relating to such Offering Period,
the Authorization Date FMV shall be used instead of the fair market value on the Enrollment Date for the purposes of the preceding sentence, provided that the Plan Administrator, in its discretion, may waive application of this sentence with respect
to the first Purchase Date occurring after the Authorization Date. 
  
 B.    The payroll deduction authorized by the Participant for purposes of acquiring shares of Common Stock under the Plan may be zero percent (0%) or any whole multiple of one percent (1%) of the Base Salary paid to the
Participant during each Semi-Annual Period of Participation within the offering period, up to a maximum of ten percent (10%). The deduction rate so authorized shall continue in effect for the entire Semi-Annual Period of Participation and for each
successive Semi-Annual Period of Participation unless (i) the Participant shall change the rate for a subsequent Semi-Annual Period of Participation by filing 

  

 -4- 

 
the appropriate form with the Plan Administrator prior to the commencement of that Semi-Annual Period of Participation or (ii) the Participant shall change
the rate within a Semi-Annual Period of Participation by filing the appropriate form with the Plan Administrator. The new rate shall become effective as soon as practicable following the filing of such form. A Participant may not increase or
decrease the deduction rate more than once per Semi-Annual Period of Participation in addition to fixing the rate at the beginning of the Semi-Annual Period of Participation. Payroll deductions, however, will automatically cease upon the termination
of the Participant’s purchase right in accordance with Article VII below. 
  
 C.    In no event may any Participant’s payroll deductions for any one Semi-Annual Period of Participation exceed Seven Thousand Five Hundred Dollars ($7,500.00). 
  

	VI.	STOCK SUBJECT TO PLAN 

  
 A.    The Common Stock purchasable by Participants under the Plan shall, solely in the discretion of the Plan Administrator, be made
available from either authorized but unissued shares of the Common Stock or from shares of Common Stock reacquired by the Company, including shares of Common Stock purchased on the open market. The total number of shares which may be issued under
the Plan shall not exceed 17,700,000 shares, less any shares sold under the Synopsys, Inc. International Employee Stock Purchase Plan (subject to adjustment under Section VI.B below). 
  
 B.    In the event any change is made to the Company’s outstanding Common Stock by reason of any
stock dividend, stock split, combination of shares or other change affecting such outstanding Common Stock as a class without receipt of consideration, then appropriate adjustments shall be made by the Plan Administrator to (i) the class and maximum
number of shares issuable over the term of the Plan, (ii) the class and maximum number of shares purchasable per Participant during each Semi-Annual Period of Participation, (iii) the class and maximum number of shares purchasable in the aggregate
by all Participants on any one purchase date under the Plan and (iv) the class and number of shares and the price per share of the Common Stock subject to each purchase right at the time outstanding under the Plan. Such adjustments shall be designed
to preclude the dilution or enlargement of rights and benefits under the Plan. 
  

	VII.	PURCHASE RIGHTS 

  
 An Employee who participates in the Plan for a particular offering period shall have the right to purchase shares of Common Stock, in a series of
successive installments during such offering period, upon the terms and conditions set forth below 

  

 -5- 

 
and shall execute a purchase agreement embodying such terms and conditions and such other provisions (not inconsistent with the Plan) as the Plan
Administrator may deem advisable. 
  
 Purchase
Price.    Common Stock shall be issuable on each Semi-Annual Purchase Date at a purchase price equal to 85 percent of the lower of (i) the fair market value per share on the Participant’s Enrollment Date or (ii) the fair
market value per share on the Semi-Annual Purchase Date. Notwithstanding anything in the Plan to the contrary, if the Authorization Date FVM is higher than the fair market value at the beginning of any Offering Period that commenced prior to the
Authorization Date, then, with respect to any of such authorized shares available to be issued on Purchase Dates relating to such Offering Period, the Authorization Date FMV shall be used instead of the fair market value on the Enrollment Date for
the purposes of clause (i) of the preceding sentence, provided that the Plan Administrator, in its discretion, may waive application of this sentence with respect to the first Purchase Date occurring after the Authorization Date. 
  
 Valuation.    For purposes of determining the fair
market value per share of Common Stock on any relevant date, the following procedures shall be in effect: 
  
 (i)    If such fair market value is to be determined on any date on or after the date the Common Stock is first
registered under Section 12(g) of the Securities Exchange Act of 1934, then the fair market value shall be the closing selling price on that date, as officially quoted on the Nasdaq National Market System. If there is no quoted selling price for
such date, then the closing selling price on the next preceding day for which there does exist such a quotation shall be determinative of fair market value. 
  
 (ii)    If such fair market value is to be determined on any date prior to the time of such Section 12(g) registration
of the Common Stock, then the fair market value of the Common Stock on such date shall be determined by the Plan Administrator, after taking into account such factors as the Plan Administrator deems appropriate. 
  
 Number of Purchasable Shares.    The number of
shares purchasable per Participant on each Semi-Annual Purchase Date shall be the number of whole shares obtained by dividing the amount collected from the Participant through payroll deductions during the corresponding Semi-Annual Period of
Participation by the purchase price in effect for the Semi-Annual Purchase Date. 

  

 -6- 

 
However, no Participant may, during any Semi-Annual Purchase Period, purchase more than 2,000 shares of Common Stock, subject to periodic adjustment under
Section VI.B. 
  
 Under no circumstances shall purchase rights be
granted under the Plan to any Eligible Employee if such individual would, immediately after the grant, own (within the meaning of Code Section 424(d)) or hold outstanding options or other rights to purchase, stock possessing five percent (5%) or
more of the total combined voting power or value of all classes of stock of the Company or any of its Corporate Affiliates. 
  
 Payment.    Payment for the Common Stock purchased under the Plan shall be effected by means of the Participant’s
authorized payroll deductions. Such deductions shall begin on the first pay day coincident with or immediately following the Participant’s Enrollment Date and shall (unless sooner terminated by the Participant) continue through the pay day
ending with or immediately prior to the last day of the offering period. 
  
 The amounts so collected shall be credited to the Participant’s book account under the Plan, but no interest shall be paid on the balance from time to time outstanding in such account. The amounts collected from
a Participant may be commingled with the general assets of the Company and may be used for general corporate purposes. 
  
 Termination of Purchase Right.    The following provisions shall govern the termination of outstanding purchase rights:

  
 (i)    A Participant may,
at any time prior to the last five (5) business days of the Semi-Annual Period of Participation, terminate his/her outstanding purchase right under the Plan by filing the prescribed notification form with the Plan Administrator. No further payroll
deductions shall be collected from the Participant with respect to the terminated purchase right, and any payroll deductions collected for the Semi-Annual Period of Participation in which such termination occurs shall, at the Participant’s
election, be immediately refunded or held for the purchase of shares on the next Semi-Annual Purchase Date. If no such election is made, then such funds shall be refunded as soon as possible after the close of such Semi-Annual Period of
Participation. 
  
 (ii)    The termination of such purchase right shall be irrevocable, and the Participant may not subsequently rejoin the offering period for which such terminated purchase right was granted. In order to 

  

 -7- 

 
resume participation in any subsequent offering period, such individual must re-enroll in the Plan in accordance with Section V.A. 
  
 (iii)    Should a Participant cease to
remain an Eligible Employee while his/her purchase right remains outstanding or should there otherwise occur a change in such individual’s employee status so that he/she is no longer an Eligible Employee while holding such purchase right, then
such purchase right shall immediately terminate upon such termination of service or change in status and all sums previously collected from the Participant during the Semi-Annual Period of Participation in which the purchase right so terminates
shall be promptly refunded to the Participant. However, should the Participant die or become permanently disabled while in service or should the Participant cease employment by reason of a leave of absence, then the Participant (or the person or
persons to whom the rights of the deceased Participant under the Plan are transferred by will or the laws of inheritance) shall have the election, exercisable up until the end of the Semi-Annual Period of Participation in which the Participant dies
or becomes permanently disabled or in which the leave of absence commences, to (i) withdraw all the funds credited to the Participant’s account at the time of his/her cessation of service or at the commencement of such leave or (ii) have such
funds held for the purchase of shares of Common Stock at the next Semi-Annual Purchase Date. If no such election is made, then such funds shall automatically be held for the purchase of shares of Common Stock at the next Semi-Annual Purchase Date.
In no event, however, shall any further payroll deductions be added to the Participant’s account following his/her cessation of service or the commencement of such leave. Should the Participant return to active service following a leave of
absence, then his/her payroll deductions under the Plan shall automatically resume at the rate in effect at the time the leave began, provided such return to service occurs prior to the end of the offering period in which such leave began. For
purpose of the Plan: (i) the Participant shall be considered to remain in service for so long as such Participant remains in the active employ of the Company or one or more other Participating Companies and (ii) the Participant shall be deemed to be
permanently disabled if he/she is unable to engage in any substantial gainful employment, by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of at least twelve (12)
months. 
  

 -8- 

 Stock Purchase.    Shares of Common Stock shall automatically be purchased on
behalf of each Participant (other than Participants whose payroll deductions have previously been refunded or set aside for refund in accordance with the “Termination of Purchase Right” provisions above) on each Semi-Annual Purchase Date.
The purchase shall be effected by applying each Participant’s payroll deductions for the Semi-Annual Period of Participation ending on such Semi-Annual Purchase Date () to the purchase of whole shares of Common Stock (subject to the limitation
on the maximum number of purchasable shares set forth above) at the purchase price in effect for such Semi-Annual Period of Participation. Any payroll deductions not applied to such purchase (a) because they are not sufficient to purchase a whole
share or (b) by reason of the limitation on the maximum number of shares purchasable by the Participant for that Semi-Annual Period of Participation shall be promptly refunded to the Participant. 
  
 Proration of Purchase Rights.    Not more than
500,000 shares of Common Stock, subject to periodic adjustment under Section VI.B, may be purchased in the aggregate by all Participants on any one Semi-Annual Purchase Date. Should the total number of shares of Common Stock which are to be
purchased pursuant to outstanding purchase rights on any particular date exceed either (i) the maximum limitation on the number of shares purchasable in the aggregate on such date or (ii) the number of shares then available for issuance under the
Plan, the Plan Administrator shall make a pro-rata allocation of the available shares on a uniform and non-discriminatory basis, and the payroll deductions for each Participant, to the extent in excess of the aggregate purchase price payable for the
Common Stock pro-rated to such individual, shall be refunded to such Participant. 
  
 Rights as Stockholder.    A Participant shall have no stockholder rights with respect to the shares subject to his/her outstanding purchase right until the shares are actually purchased on
the Participant’s behalf in accordance with the applicable provisions of the Plan. No adjustments shall be made for dividends, distributions or other rights for which the record date is prior to the date of such purchase. 
  
 Assignability.    No purchase right granted under
the Plan shall be assignable or transferable by the Participant other than by will or by the laws of descent and distribution following the participant’s death, and during the Participant’s lifetime the purchase right shall be exercisable
only by the Participant. 
  

 -9- 

 Change in Ownership.    Should the Company or its stockholders enter into an
agreement to dispose of all or substantially all of the assets or outstanding capital stock of the Company by means of: 
  
 (i)    a sale, merger or other reorganization in which the Company will not be the surviving corporation (other than a
reorganization effected primarily to change the State in which the Company is incorporated), or 
  
 (ii)    a reverse merger in which the Company is the surviving corporation but in which more than fifty percent (50%)
of the Company’s outstanding voting stock is transferred to holders different from those who held the stock immediately prior to the reverse merger, then all outstanding purchase rights under the Plan shall automatically be exercised
immediately prior to the consummation of such sale, merger, reorganization or reverse merger by applying the payroll deductions of each Participant for the Semi-Annual Period of participation in which such transaction occurs to the purchase of whole
shares of Common Stock at eighty-five percent (85%) of the lower of (i) the fair market value of the Common Stock on the Participant’s Enrollment Date for the offering period in which such transaction occurs or (ii) the fair market value of the
Common Stock immediately prior to the consummation of such transaction. However, the applicable share limitations of Articles VII and VIII shall continue to apply to any such purchase, and the clause (i) amount above shall not, for any Participant
whose Enrollment Date for the offering period is other than the start date of such offering period, be less than the fair market value of the Common Stock on such start date. 
  
 The Company shall use its best efforts to provide at least ten (10) days’ advance written notice of the occurrence of
any such sale, merger, reorganization or reverse merger, and Participants shall, following the receipt of such notice, have the right to terminate their outstanding purchase rights in accordance with the applicable provisions of this Article VII.

  

	VIII.	ACCRUAL LIMITATIONS 

  
 A.    No Participant shall be entitled to accrue rights to acquire Common Stock pursuant to any purchase right outstanding under this
Plan if and to the extent such accrual, when 

  

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aggregated with (I) rights to purchase Common Stock accrued under any other purchase right outstanding under this Plan and (II) similar rights accrued under
other employee stock purchase plans (within the meaning of Section 423 of the Code) of the Company or its Corporate Affiliates, would otherwise permit such Participant to purchase more than $25,000 worth of stock of the Company or any Corporate
Affiliate (determined on the basis of the fair market value of such stock on the date or dates such rights are granted to the Participant) for each calendar year such rights are at any time outstanding. 
  
 B.    For purposes of applying such accrual limitations,
the right to acquire Common Stock pursuant to each purchase right outstanding under the Plan shall accrue as follows: 
  
 (i)    The right to acquire Common Stock under each such purchase right shall accrue in a series of successive
semi-annual installments as and when the purchase right first becomes exercisable for each semi-annual installment on the last business day of each Semi-Annual Period of Participation for which the right remains outstanding. 
  
 (ii)    No right to acquire Common Stock
under any outstanding purchase right shall accrue to the extent the Participant has already accrued in the same calendar year the right to acquire $25,000 worth of Common Stock (determined on the basis of the fair market value on the date or dates
of grant) pursuant to one or more purchase rights held by the Participant during such calendar year. 
  
 (iii)    If by reason of such accrual limitations, any purchase right of a Participant does not accrue for a
particular Semi-Annual Period of Participation, then the payroll deductions which the Participant made during that Semi-Annual Period of Participation with respect to such purchase right shall be promptly refunded. 
  
 C.    In the event there is any conflict between the
provisions of this Article VIII and one or more provisions of the Plan or any instrument issued thereunder, the provisions of this Article VIII shall be controlling. 
  

	IX.	STATUS OF PLAN UNDER FEDERAL TAX LAWS 

  
 The Plan is designed to qualify as an employee stock purchase plan under Code Section 423. 
  

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	X.	AMENDMENT AND TERMINATION 

  
 A.    The Board may amend, alter, suspend, discontinue, or terminate the Plan at any time, including amendments to outstanding
options/purchase rights. However, the Board may not, without the approval of the Company’s stockholders: 
  
 (i)    increase the number of shares issuable under the Plan or the maximum number of shares which may be purchased
per Participant or in the aggregate during any one Semi-Annual Period of Participation under the Plan, except that the Plan Administrator shall have the authority, exercisable without such stockholder approval, to effect adjustments to the extent
necessary to reflect changes in the Company’s capital structure pursuant to Section VI.B; 
  
 (ii)    alter the purchase price formula so as to reduce the purchase price payable for the shares issuable under the
Plan; or 
  
 (iii)    materially increase the benefits accruing to Participants under the Plan or materially modify the requirements for eligibility to participate in the Plan. 
  
 B.    The Board may elect to terminate any or all
outstanding purchase rights at any time. In the event the Plan is terminated, the Board may also elect to terminate outstanding purchase rights either immediately or upon completion of the purchase of shares on the next Semi-Annual Purchase Date, or
may elect to permit purchase rights to expire in accordance with their terms (and participation to continue through such expiration dates). If purchase rights are terminated prior to expiration, all funds contributed to the Plan that have not been
used to purchase shares shall be returned to the Participants as soon as administratively feasible. 
  

	IX.	GENERAL PROVISIONS 

  
 A.    The Plan shall become effective on the designated Effective Date, provided that no offering period shall commence, and no shares
of Common Stock shall be issued hereunder, until (i) the Plan shall have been approved by the stockholders and (ii) the Company shall have complied with all applicable requirements of the Securities Act of 1933 (as amended), all applicable listing
requirements of any securities exchange on which shares of the Common Stock are listed and all other applicable requirements established by law or regulation. In the event such stockholder approval is not obtained, or such Company 

  

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compliance is not effected, within twelve (12) months after the date on which the Plan is adopted by the Board, the Plan shall terminate and have no further
force of effect. 
  
 B.    All costs and
expenses incurred in the administration of the Plan shall be paid by the Company. 
  
 C.    Neither the action of the Company in establishing the Plan, nor any action taken under the Plan by the Board or the Plan Administrator, nor any provision of the Plan itself shall be construed
so as to grant any person the right to remain in the employ of the Company or any of its Corporate Affiliates for any period of specific duration, and such person’s employment may be terminated at any time, with or without cause. 
  
 D.    The provisions of the Plan shall be governed by the
laws of the State of California without resort to that State’s conflict-of-laws rules. 
  

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