Document:

2004 Amended and Restated Equity Incentive Plan

 Exhibit 10.20 
  
 2004 AMENDED AND RESTATED EQUITY INCENTIVE
PLAN 
 OF 
 THRESHOLD PHARMACEUTICALS, INC. 
  
 1. Purpose of this Plan 
  
 The purpose of this 2004 Amended and Restated Equity Incentive Plan is to enhance the long-term stockholder value of Threshold Pharmaceuticals, Inc. by
offering opportunities to eligible individuals to participate in the growth in value of the equity of Threshold Pharmaceuticals, Inc. 
  
 2. Definitions and Rules of Interpretation 
  
 2.1 Definitions. 
  
 This Plan uses the following defined terms: 
  
 (a) “Administrator” means the Board or the Committee, or any officer or employee of the Company to
whom the Board or the Committee delegates authority to administer this Plan. 
  
 (b) “Affiliate” means a “parent” or “subsidiary” (as each is defined in Section 424 of the Code) of the Company and any other entity that the
Board or Committee designates as an “Affiliate” for purposes of this Plan. 
  
 (c) “Applicable Law” means any and all laws of whatever jurisdiction, within or without the United States, and the rules of any stock exchange or quotation system on
which Shares are listed or quoted, applicable to the taking or refraining from taking of any action under this Plan, including the administration of this Plan and the issuance or transfer of Awards or Award Shares. 
  
 (d) “Award” means a Stock
Award, SAR, Cash Award, or Option granted in accordance with the terms of this Plan. 
  
 (e) “Award Agreement” means the document evidencing the grant of an Award. 
  

(f) “Award Shares” means Shares covered by an outstanding Award or purchased under an Award.

  
 (g) “Awardee”
means: (i) a person to whom an Award has been granted, including a holder of a Substitute Award, (ii) a person to whom an Award has been transferred in accordance with all applicable requirements of Sections 6.5, 7(h), and 16. 
  
 (h) “Board” means the
Board of Directors of the Company. 

 (i) “Cash Award” means the right to receive cash as
described in Section 8.3. 
  
 (j) “Cause”
means employment related dishonesty, fraud, misconduct or disclosure or misuse of confidential information, or other employment related conduct that is likely to cause significant injury to the Company, an Affiliate, or any of their respective
employees, officers or directors (including, without limitation, commission of a felony or similar offense), in each case as determined by the Administrator. “Cause” shall not require that a civil judgment or criminal conviction have been
entered against or guilty plea shall have been made by the Awardee regarding any of the matters referred to in the previous sentence. Accordingly, the Administrator shall be entitled to determine “Cause” based on the Administrator’s
good faith belief. If the Awardee is criminally charged with a felony or similar offense that shall be a sufficient, but not a necessary, basis for such belief. 
  

(k) “Change in Control” means any transaction or event that the Board specifies as a Change in
Control under Section 10.4. 
  
 (l)
“Code” means the Internal Revenue Code of 1986. 
  
 (m) “Committee” means a committee composed of Company Directors appointed in accordance with the
Company’s charter documents and Section 4. 
  
 (n)
“Company” means Threshold Pharmaceuticals, Inc., a Delaware corporation. 
  
 (o) “Company Director” means a member of the Board. 
  
 (p) “Consultant” means an
individual who, or an employee of any entity that, provides bona fide services to the Company or an Affiliate not in connection with the offer or sale of securities in a capital-raising transaction, but who is not an Employee. 
  
 (q) “Director” means a
member of the Board of Directors of the Company or an Affiliate. 
  
 (r) “Divestiture” means any transaction or event that the Board specifies as a Divestiture under Section 10.5. 
  
 (s) “Domestic Relations Order” means a “domestic relations order” as defined in,
and otherwise meeting the requirements of, Section 414(p) of the Code, except that reference to a “plan” in that definition shall be to this Plan. 
  
 (t) “Effective Date” means the first date of the sale by the Company of shares of its capital stock in an initial public
offering pursuant to a registration statement on Form S-1 filed with the SEC. 
  

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 (u) “Employee” means a regular employee of the
Company or an Affiliate, including an officer or Director, who is treated as an employee in the personnel records of the Company or an Affiliate, but not individuals who are classified by the Company or an Affiliate as: (i) leased from or otherwise
employed by a third party, (ii) independent contractors, or (iii) intermittent or temporary workers. The Company’s or an Affiliate’s classification of an individual as an “Employee” (or as not an “Employee”) for
purposes of this Plan shall not be altered retroactively even if that classification is changed retroactively for another purpose as a result of an audit, litigation or otherwise. An Awardee shall not cease to be an Employee due to transfers between
locations of the Company, or between the Company and an Affiliate, or to any successor to the Company or an Affiliate that assumes the Awardee’s Options under Section 10. Neither service as a Director nor receipt of a director’s fee shall
be sufficient to make a Director an “Employee.” 
  
 (v)
“Exchange Act” means the Securities Exchange Act of 1934. 
  
 (w) “Executive” means, if the Company has any class of any equity security registered under Section 12
of the Exchange Act, an individual who is subject to Section 16 of the Exchange Act or who is a “covered employee” under Section 162(m) of the Code, in either case because of the individual’s relationship with the Company or an
Affiliate. If the Company does not have any class of any equity security registered under Section 12 of the Exchange Act, “Executive” means any (i) Director, (ii) officer elected or appointed by the Board, or (iii) beneficial owner of more
than 10% of any class of the Company’s equity securities. 
  
 (x) “Expiration Date” means, with respect to an Award, the date stated in the Award Agreement as the expiration date of the Award or, if no such date is stated in the Award Agreement, then
the last day of the maximum exercise period for the Award, disregarding the effect of an Awardee’s Termination or any other event that would shorten that period. 
  
 (y) “Fair Market Value” means the value of Shares as determined under
Section 17.2. 
  
 (z) “Fundamental
Transaction” means any transaction or event described in Section 10.3. 
  
 (aa) “Good Reason” means (i) a material diminution in responsibility or compensation, or (ii) requiring Awardee to work in a location (other than normal business travel) which is more than 50
miles from Awardee’s principal place of business before the change. 
  
 (bb) “Grant Date” means the date the Administrator approves the grant of an Award. However, if the Administrator specifies that an Award’s Grant Date is a
future date or the date on which a condition is satisfied, the Grant Date for such Award is that future date or the date that the condition is satisfied. 
  

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 (cc) “Incentive Stock Option” means an Option
intended to qualify as an incentive stock option under Section 422 of the Code and designated as an Incentive Stock Option in the Award Agreement for that Option. 
  
 (dd) “Involuntary Termination” means termination by the Company without Cause or termination by the
Awardee for Good Reason. 
  
 (ee)
“Nonstatutory Option” means any Option other than an Incentive Stock Option. 
  
 (ff) “Objectively Determinable Performance Condition” shall mean a performance condition (i) that is established (A) at the
time an Award is granted or (B) no later than the earlier of (1) 90 days after the beginning of the period of service to which it relates, or (2) before the elapse of 25% of the period of service to which it relates, (ii) that is uncertain of
achievement at the time it is established, and (iii) the achievement of which is determinable by a third party with knowledge of the relevant facts. Examples of measures that may be used in Objectively Determinable Performance Conditions include net
order dollars, net profit dollars, net profit growth, net revenue dollars, revenue growth, individual performance, earnings per share, return on assets, return on equity, and other financial objectives, objective customer satisfaction indicators and
efficiency measures, each with respect to the Company and/or an Affiliate or individual business unit. 
  
 (gg) “Officer” means an officer of the Company as defined in Rule 16a-1 adopted under the Exchange
Act. 
  
 (hh)
“Option” means a right to purchase Shares of the Company granted under this Plan. 
  
 (ii) “Option Price” means the price payable under an Option for Shares, not including any amount
payable in respect of withholding or other taxes. 
  
 (jj)
“Option Shares” means Shares covered by an outstanding Option or purchased under an Option. 
  
 (kk) “Plan” means this 2004 Amended and Restated Equity Incentive Plan of Threshold Pharmaceuticals,
Inc. 
  
 (ll) “Prior Plan” means the
Company’s 2001 Equity Incentive Plan. 
  
 (mm)
“Purchase Price” means the price payable under a Stock Award for Shares, not including any amount payable in respect of withholding or other taxes. 
  

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 (nn) “Rule 16b-3” means Rule 16b-3 adopted under
Section 16(b) of the Exchange Act. 
  
 (oo)
“SAR” or “Stock Appreciation Right” means a right to receive cash and/or Shares based on a change in the Fair Market
Value of a specific number of Shares pursuant to an Award Agreement, as described in Section 8.1. 
  
 (pp) “Securities Act” means the Securities Act of 1933. 
  
 (qq) “Share” means a
share of the common stock of the Company or other securities substituted for the common stock under Section 10. 
  
 (rr) “Stock Award” means an offer by the Company to sell shares subject to certain restrictions
pursuant to the Award Agreement as described in Section 8.2 or, as determined by the Committee, a notional account representing the right to be paid an amount based on Shares. 
  
 (ss) “Substitute Award” means a Substitute Option, Substitute SAR or
Substitute Stock Award granted in accordance with the terms of this Plan. 
  
 (tt) “Substitute Option” means an Option granted in substitution for, or upon the conversion of, an option granted by another entity to purchase equity securities in
the granting entity. 
  
 (uu) “Substitute
SAR” means a SAR granted in substitution for, or upon the conversion of, a stock appreciation right granted by another entity with respect to equity securities in the granting entity. 
  
 (vv) “Substitute Stock Award”
means a Stock Award granted in substitution for, or upon the conversion of, a stock award granted by another entity to purchase equity securities in the granting entity. 
  
 (ww) “Termination” means that the Awardee has ceased to be, with or
without any cause or reason, an Employee, Director or Consultant. However, unless so determined by the Administrator, or otherwise provided in this Plan, “Termination” shall not include a change in status from an Employee, Consultant or
Director to another such status. An event that causes an Affiliate to cease being an Affiliate shall be treated as the “Termination” of that Affiliate’s Employees, Directors, and Consultants. 
  
 2.2 Rules of Interpretation. Any reference to a “Section,”
without more, is to a Section of this Plan. Captions and titles are used for convenience in this Plan and shall not, by themselves, determine the meaning of this Plan. Except when otherwise indicated by the context, the singular includes the plural
and vice versa. Any reference to a statute 
  

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 is also a reference to the applicable rules and regulations adopted under that statute. Any reference to a statute, rule
or regulation, or to a section of a statute, rule or regulation, is a reference to that statute, rule, regulation, or section as amended from time to time, both before and after the Effective Date and including any successor provisions. 

 
 3. Shares Subject to this Plan; Term of this Plan 
  
 3.1 Number of Award Shares. The Shares issuable under this Plan shall
be authorized but unissued or reacquired Shares, including Shares repurchased by the Company on the open market. The number of Shares initially reserved for issuance over the term of this Plan shall be 2,428,8051. Except as required by Applicable Law, Shares shall not reduce the number of Shares reserved for issuance under this Plan until the earlier of the
date such Shares are vested pursuant to the terms of the applicable Award or the actual date of delivery of the Shares to the Awardee. Notwithstanding the foregoing, the maximum number of Shares shall be increased by (i) the number of shares
available for issuance, as of the Effective Date, under the Prior Plan as last approved by the Company’s stockholders, including the Shares subject to outstanding awards under the Prior Plan, plus (ii) those Shares issued under the Plan or
Prior Plan that are forfeited or repurchased by the Company at the original purchase price or less or that are issuable upon exercise of awards granted under the Plan or Prior Plan that expire or become unexercisable for any reason after the
Effective Date, plus (iii) those Shares that are Restored pursuant to the decision of the Board or Committee pursuant to Section 6.4(a) to deliver only such Shares as are necessary to award the net Share appreciation. The repurchase of Shares by the
Company shall not increase the maximum number of Shares that may be issued under this Plan to the extent the Company repurchases Shares that were originally exercised or purchased with other previously owned Shares. The maximum number of Shares
shall be cumulatively increased on the first January 1 after the Effective Date and each January 1 thereafter for 9 more years, by a number of Shares equal to the lesser of (a) 5% of the number of Shares issued and outstanding on the immediately
preceding December 31, (b) 1,214,4022 Shares, and (c) a number of Shares set by the Board. 
  

	1	Reflects stock split effective January 26, 2005. 

	2	Reflects stock split effective January 26, 2005. 

  

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 3.2 Source of Shares. Award Shares may be: (a) Shares that have never been issued, (b) Shares that
have been issued but are no longer outstanding, or (c) Shares that are outstanding and are acquired to discharge the Company’s obligation to deliver Award Shares. 
  
 3.3 Term of this Plan 
  
 (a) This Plan shall be effective on, and Awards may be granted under this Plan on and after, the earliest the date on which the Plan has been both adopted
by the Board and approved by the Company’s stockholders. 
  
 (b) Subject to the provisions of Section 13, Awards may be granted under this Plan for a period of ten years from the earlier of the date on which the Board approves this Plan and the date the Company’s stockholders approve this Plan.
Accordingly, Awards may not be granted under this Plan after the earlier of those dates. 
  
 4. Administration 
  
 4.1
General 
  
 (a) The Board shall have ultimate
responsibility for administering this Plan. The Board may delegate certain of its responsibilities to a Committee, which shall consist of at least two members of the Board. The Board or the Committee may further delegate its responsibilities to any
Employee of the Company or any Affiliate. Where this Plan specifies that an action is to be taken or a determination made by the Board, only the Board may take that action or make that determination. Where this Plan specifies that an action is to be
taken or a determination made by the Committee, only the Committee may take that action or make that determination. Where this Plan references the “Administrator,” the action may be taken or determination made by the Board, the Committee,
or other Administrator. However, only the Board or the Committee may approve grants of Awards to Executives, and an Administrator other than the Board or the Committee may grant Awards only within the guidelines established by the Board or
Committee. Moreover, all actions and determinations by any Administrator are subject to the provisions of this Plan. 
  
 (b) So long as the Company has registered a class of equity securities under Section 12 of the Exchange Act, the Committee shall consist of Company
Directors who are “Non-Employee Directors” as defined in Rule 16b-3 and, after the expiration of any transition period permitted by Treasury Regulations Section 1.162-27(h)(3), who are “outside directors” as defined in Section
162(m) of the Code. 
  

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 4.2 Authority of the Board or the Committee. Subject to the other provisions of this Plan, the
Board or the Committee shall have the authority to: 
  
 (a) grant
Awards, including Substitute Awards; 
  
 (b) determine the Fair
Market Value of Shares; 
  
 (c) determine the Option Price and the
Purchase Price of Awards; 
  
 (d) select the Awardees; 

 
 (e) determine the times Awards are granted; 
  
 (f) determine the number of Shares subject to each Award; 
  
 (g) determine the methods of payment that may be used to purchase Award
Shares; 
  
 (h) determine the methods of payment that may be used
to satisfy withholding tax obligations; 
  
 (i) determine the
other terms of each Award, including but not limited to the time or times at which Awards may be exercised, whether and under what conditions an Award is assignable, and whether an Option is a Nonstatutory Option or an Incentive Stock Option;

  
 (j) modify or amend any Award; 
  
 (k) authorize any person to sign any Award Agreement or other document
related to this Plan on behalf of the Company; 
  
 (l) determine
the form of any Award Agreement or other document related to this Plan, and whether that document, including signatures, may be in electronic form; 
  
 (m) interpret this Plan and any Award Agreement or document related to this Plan; 
  
 (n) correct any defect, remedy any omission, or reconcile any inconsistency in this Plan, any Award Agreement or any other
document related to this Plan; 
  
 (o) adopt, amend, and revoke
rules and regulations under this Plan, including rules and regulations relating to sub-plans and Plan addenda; 
  
 (p) adopt, amend, and revoke special rules and procedures which may be inconsistent with the terms of this Plan, set forth (if the Administrator so
chooses) in sub-plans regarding (for example) the operation and administration of this Plan and the terms 
  

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 of Awards, if and to the extent necessary or useful to accommodate non-U.S. Applicable Laws and practices as they apply
to Awards and Award Shares held by, or granted or issued to, persons working or resident outside of the United States or employed by Affiliates incorporated outside the United States; 
  
 (q) determine whether a transaction or event should be treated as a Change in Control, a Divestiture or neither; 

 
 (r) determine the effect of a Fundamental Transaction and, if the Board
determines that a transaction or event should be treated as a Change in Control or a Divestiture, then the effect of that Change in Control or Divestiture; and 
  

(s) make all other determinations the Administrator deems necessary or advisable for the administration of this Plan. 
  
 4.3 Scope of Discretion. Subject to the provisions of this Section
4.3, on all matters for which this Plan confers the authority, right or power on the Board, the Committee, or other Administrator to make decisions, that body may make those decisions in its sole and absolute discretion. Those decisions will be
final, binding and conclusive. In making its decisions, the Board, Committee or other Administrator need not treat all persons eligible to receive Awards, all Awardees, all Awards or all Award Shares the same way. Notwithstanding anything herein to
the contrary, and except as provided in Section 13.3, the discretion of the Board, Committee or other Administrator is subject to the specific provisions and specific limitations of this Plan, as well as all rights conferred on specific Awardees by
Award Agreements and other agreements. 
  
 5. Persons Eligible to Receive
Awards 
  
 5.1 Eligible Individuals. Awards (including
Substitute Awards) may be granted to, and only to, Employees, Directors and Consultants, including to prospective Employees, Directors and Consultants conditioned on the beginning of their service for the Company or an Affiliate. However, Incentive
Stock Options may only be granted to Employees, as provided in Section 7(g). 
  
 5.2 Section 162(m) Limitation. 
  
 (a) Options and SARs. Subject to the provisions of this Section 5.2, for so long as the Company is a “publicly held corporation” within the meaning of Section 162(m) of the Code: (i) no Employee may be granted one or more
SARs and Options within any fiscal year of the Company under this Plan to purchase more than 1,214,4023 Shares under
Options or to receive compensation calculated with reference to 
  

	3	Reflects stock split effective January 26, 2005. 

  

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 more than that number of Shares under SARs, subject to adjustment pursuant to Section 10, (ii) Options and SARs may be
granted to an Executive only by the Committee (and, notwithstanding anything to the contrary in Section 4.1(a), not by the Board). If an Option or SAR is cancelled without being exercised or if the Option Price of an Option is reduced, that
cancelled or repriced Option or SAR shall continue to be counted against the limit on Awards that my be granted to any individual under this Section 5.2. Notwithstanding anything herein to the contrary, a new Employee of the Company or an Affiliate
shall be eligible to receive up to a maximum of 1,821,6044 Shares under Options in the calendar year which they
commence employment, or such compensation calculated with reference to such number of Shares under SARs, subject to adjustment pursuant to Section 10. 
  
 (b) Cash Awards and Stock Awards. Any Cash Award or Stock Award intended as “qualified performance-based compensation” within the meaning
of Section 162(m) of the Code must vest or become exercisable contingent on the achievement of one or more Objectively Determinable Performance Conditions. The Committee shall have the discretion to determine the time and manner of compliance with
Section 162(m) of the Code. 
  
 6. Terms and Conditions of Options

  
 The following rules apply to all Options: 
  
 6.1 Price. Except as specifically provided herein, no Nonstatutory
Option may have an Option Price less than 85% of the Fair Market Value of the Shares on the Grant Date. No Option intended as “qualified incentive-based compensation” within the meaning of Section 162(m) of the Code may have an Option
Price less than 100% of the Fair Market Value of the Shares on the Grant Date. In no event will the Option Price of any Option be less than the par value of the Shares issuable under the Option if that is required by Applicable Law. The Option Price
of an Incentive Stock Option shall be subject to Section 7(f). 
  
 6.2 Term. No Option shall be exercisable after its Expiration Date. No Option may have an Expiration Date that is more than ten years after its Grant Date. Additional provisions regarding the term of Incentive Stock Options are
provided in Sections 7(a) and 7(e). 
  
 6.3 Vesting.
Options shall be exercisable: (a) on the Grant Date, or (b) in accordance with a schedule related to the Grant Date, the date the Optionee’s directorship, employment or consultancy begins, or a different date specified in the Option Agreement.
Additional provisions regarding the vesting of Incentive Stock 
  

	4	Reflects stock split effective January 26, 2005. 

  

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 Options are provided in Section 7(c). No Option granted to an individual who is subject to the overtime pay provisions of
the Fair Labor Standards Act may be exercised before the expiration of six months after the Grant Date. 
  
 6.4 Form and Method of Payment. 
  
 (a) The Board or Committee shall determine the acceptable form and method of payment for exercising an Option. So long as variable accounting pursuant to
“APB 25” does not apply and the Board or Committee otherwise determines there is no material adverse accounting consequence at the time of exercise, the Board or Committee may require the delivery in Shares for the value of the net
appreciation of the Shares at the time of exercise over the exercise price. The difference between full number of Shares covered by the exercised portion of the Award and the number of Shares actually delivered shall be restored to the amount of
Shares reserved for issuance under Section 3.1. 
  
 (b) Acceptable
forms of payment for all Option Shares are cash, check or wire transfer, denominated in U.S. dollars except as specified by the Administrator for non-U.S. Employees or non-U.S. sub-plans. 
  
 (c) In addition, the Administrator may permit payment to be made by any of the following methods: 
  
 (i) other Shares, or the designation of other Shares, which (A) are
“mature” shares for purposes of avoiding variable accounting treatment under generally accepted accounting principles (generally mature shares are those that 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 Option Price of the Shares as to which the Option is being exercised; 
  
 (ii) provided that a public market exists for the Shares, consideration received by the Company under a procedure under which a licensed broker-dealer
advances funds on behalf of an Optionee or sells Option Shares on behalf of an Optionee (a “Cashless Exercise Procedure”), provided that if the Company extends or arranges for the extension of credit to an Optionee under any
Cashless Exercise Procedure, no Officer or Director may participate in that Cashless Exercise Procedure; 
  
 (iii) cancellation of any debt owed by the Company or any Affiliate to the Optionee by the Company including without limitation waiver of compensation
due or accrued for services previously rendered to the Company; and 
  
 (iv) any combination of the methods of payment permitted by any paragraph of this Section 6.4. 
  

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 (d) The Administrator may also permit any other form or method of payment for Option Shares permitted by
Applicable Law. 
  
 6.5 Nonassignability of Options. Except
as determined by the Administrator, no Option shall be assignable or otherwise transferable by the Optionee except by will or by the laws of descent and distribution. However, Options may be transferred and exercised in accordance with a Domestic
Relations Order and may be exercised by a guardian or conservator appointed to act for the Optionee. Incentive Stock Options may only be assigned in compliance with Section 7(h). 
  
 6.6 Substitute Options. The Board may cause the Company to grant Substitute Options in connection with the
acquisition by the Company or an Affiliate of equity securities of any entity (including by merger, tender offer, or other similar transaction) or of all or a portion of the assets of any entity. Any such substitution shall be effective on the
effective date of the acquisition. Substitute Options may be Nonstatutory Options or Incentive Stock Options. Unless and to the extent specified otherwise by the Board, Substitute Options shall have the same terms and conditions as the options they
replace, except that (subject to the provisions of Section 10) Substitute Options shall be Options to purchase Shares rather than equity securities of the granting entity and shall have an Option Price determined by the Board. 
  
 6.7 Repricings. Options may be repriced, replaced or regranted through
cancellation or modification. 
  
 7. Incentive Stock Options. 

 
 The following rules apply only to Incentive Stock Options and only to the
extent these rules are more restrictive than the rules that would otherwise apply under this Plan. With the consent of the Optionee, or where this Plan provides that an action may be taken notwithstanding any other provision of this Plan, the
Administrator may deviate from the requirements of this Section, notwithstanding that any Incentive Stock Option modified by the Administrator will thereafter be treated as a Nonstatutory Option. 
  
 (a) The Expiration Date of an Incentive Stock Option shall not be later than
ten years from its Grant Date, with the result that no Incentive Stock Option may be exercised after the expiration of ten years from its Grant Date. 
  
 (b) No Incentive Stock Option may be granted more than ten years from the date this Plan was approved by the Board. 
  
 (c) Options intended to be incentive stock options under Section 422 of the
Code that are granted to any single Optionee under all incentive stock option plans of the Company and its Affiliates, including incentive stock options granted under this Plan, may not vest at a rate of more than $100,000 in Fair Market Value of
stock (measured on 
  

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 the grant dates of the options) during any calendar year. For this purpose, an option vests with respect to a given share
of stock the first time its holder may purchase that share, notwithstanding any right of the Company to repurchase that share. Unless the administrator of that option plan specifies otherwise in the related agreement governing the option, this
vesting limitation shall be applied by, to the extent necessary to satisfy this $ 100,000 rule, treating certain stock options that were intended to be incentive stock options under Section 422 of the Code as Nonstatutory Options. The stock options
or portions of stock options to be reclassified as Nonstatutory Options are those with the highest option prices, whether granted under this Plan or any other equity compensation plan of the Company or any Affiliate that permits that treatment. This
Section 7(c) shall not cause an Incentive Stock Option to vest before its original vesting date or cause an Incentive Stock Option that has already vested to cease to be vested. 
  
 (d) In order for an Incentive Stock Option to be exercised for any form of payment other than those described in Section
6.4(b), that right must be stated at the time of grant in the Option Agreement relating to that Incentive Stock Option. 
  
 (e) Any Incentive Stock Option granted to a Ten Percent Stockholder, must have an Expiration Date that is not later than five years from its Grant Date,
with the result that no such Option may be exercised after the expiration of five years from the Grant Date. A “Ten Percent Stockholder” is any person who, directly or by attribution under Section 424(d) of the Code, owns
stock possessing more than ten percent of the total combined voting power of all classes of stock of the Company or of any Affiliate on the Grant Date. 
  
 (f) The Option Price of an Incentive Stock Option shall never be less than the Fair Market Value of the Shares at the Grant Date. The Option Price for the
Shares covered by an Incentive Stock Option granted to a Ten Percent Stockholder shall never be less than 110% of the Fair Market Value of the Shares at the Grant Date. 
  
 (g) Incentive Stock Options may be granted only to Employees. If an Optionee changes status from an Employee to a
Consultant, that Optionee’s Incentive Stock Options become Nonstatutory Options if not exercised within the time period described in Section 7(i) (determined by treating that change in status as a Termination solely for purposes of this Section
7(g)). 
  
 (h) No rights under an Incentive Stock Option may be
transferred by the Optionee, other than by will or the laws of descent and distribution. During the life of the Optionee, an Incentive Stock Option may be exercised only by the Optionee. The Company’s compliance with a Domestic Relations Order,
or the exercise of an Incentive Stock Option by a guardian or conservator appointed to act for the Optionee, shall not violate this Section 7(h). 
  

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 (i) An Incentive Stock Option shall be treated as a Nonstatutory Option if it remains exercisable after,
and is not exercised within, the three-month period beginning with the Optionee’s Termination for any reason other than the Optionee’s death or disability (as defined in Section 22(e) of the Code). In the case of Termination due to death,
an Incentive Stock Option shall continue to be treated as an Incentive Stock Option if it remains exercisable after, and is not exercised within, the three month period after the Optionee’s Termination provided it is exercised before the
Expiration Date. In the case of Termination due to disability, an Incentive Stock Option shall be treated as a Nonstatutory Option if it remains exercisable after, and is not exercised within, one year after the Optionee’s Termination.

  
 (j) An Incentive Stock Option may only be modified by the
Board. 
  
 8. Stock Appreciation Rights, Stock Awards and Cash Awards

  
 8.1 Stock Appreciation Rights. The following rules
apply to SARs: 
  
 (a) General. SARs may be granted
either alone, in addition to, or in tandem with other Awards granted under this Plan. The Administrator may grant SARs to eligible participants subject to terms and conditions not inconsistent with this Plan and determined by the Administrator. The
specific terms and conditions applicable to the Awardee shall be provided for in the Award Agreement. SARs shall be exercisable, in whole or in part, at such times as the Administrator shall specify in the Award Agreement. The grant or vesting of a
SAR may be made contingent on the achievement of Objectively Determinable Performance Conditions. 
  
 (b) Exercise of SARs. Upon the exercise of an SAR, in whole or in part, an Awardee shall be entitled to a payment in an amount equal to the
excess of the Fair Market Value of a fixed number of Shares covered by the exercised portion of the SAR on the date of exercise, over the Fair Market Value of the Shares covered by the exercised portion of the SAR on the Grant Date. The amount due
to the Awardee upon the exercise of a SAR shall be paid in cash, Shares or a combination thereof, over the period or periods specified in the Award Agreement. An Award Agreement may place limits on the amount that may be paid over any specified
period or periods upon the exercise of a SAR, on an aggregate basis or as to any Awardee. A SAR shall be considered exercised when the Company receives written notice of exercise in accordance with the terms of the Award Agreement from the person
entitled to exercise the SAR. If a SAR has been granted in tandem with an Option, upon the exercise of the SAR, the number of shares that may be purchased pursuant to the Option shall be reduced by the number of shares with respect to which the SAR
is exercised. 
  
 (c) Nonassignability of SARs.
Except as determined by the Administrator, no SAR shall be assignable or otherwise transferable by the Awardee except by will or by the laws of descent and distribution. Notwithstanding anything herein to the contrary, SARs may be transferred and
exercised in accordance with a Domestic Relations Order. 
  

 14 

 (d) Substitute SARs. The Board may cause the Company to grant Substitute SARs in connection
with the acquisition by the Company or an Affiliate of equity securities of any entity (including by merger) or all or a portion of the assets of any entity. Any such substitution shall be effective on the effective date of the acquisition. Unless
and to the extent specified otherwise by the Board, Substitute SARs shall have the same terms and conditions as the options they replace, except that (subject to the provisions of Section 9) Substitute SARs shall be exercisable with respect to the
Fair Market Value of Shares rather than equity securities of the granting entity and shall be on terms that, as determined by the Board in its sole and absolute discretion, properly reflects the substitution. 
  
 (e) Repricings. A SAR may be repriced, replaced or regranted,
through cancellation or modification. 
  
 8.2 Stock Awards.
The following rules apply to all Stock Awards: 
  
 (a)
General. The specific terms and conditions of a Stock Award applicable to the Awardee shall be provided for in the Award Agreement. The Award Agreement shall state the number of Shares that the Awardee shall be entitled to receive or
purchase, the terms and conditions on which the Shares shall vest, the price to be paid, whether Shares are to be delivered at the time of grant or at some deferred date specified in the Award Agreement, whether the Award is payable solely in
Shares, cash or either and, if applicable, the time within which the Awardee must accept such offer. The offer shall be accepted by execution of the Award Agreement. The Administrator may require that all Shares subject to a right of repurchase or
risk of forfeiture be held in escrow until such repurchase right or risk of forfeiture lapses. The grant or vesting of a Stock Award may be made contingent on the achievement of Objectively Determinable Performance Conditions. 
  
 (b) Right of Repurchase. If so provided in the Award Agreement,
Award Shares acquired pursuant to a Stock Award may be subject to repurchase by the Company or an Affiliate if not vested in accordance with the Award Agreement. 
  
 (c) Form of Payment. The Administrator shall determine the acceptable form and method of payment for
exercising a Stock Award. Acceptable forms of payment for all Award Shares are cash, check or wire transfer, denominated in U.S. dollars except as specified by the Administrator for non-U.S. sub-plans. In addition, the Administrator may permit
payment to be made by any of the methods permitted with respect to the exercise of Options pursuant to Section 6.4. 
  

 15 

 (d) Nonassignability of Stock Awards. Except as determined by the Administrator, no Stock
Award shall be assignable or otherwise transferable by the Awardee except by will or by the laws of descent and distribution. Notwithstanding anything to the contrary herein, Stock Awards may be transferred and exercised in accordance with a
Domestic Relations Order. 
  
 (e) Substitute Stock
Award. The Board may cause the Company to grant Substitute Stock Awards in connection with the acquisition by the Company or an Affiliate of equity securities of any entity (including by merger) or all or a portion of the assets of any
entity. Unless and to the extent specified otherwise by the Board, Substitute Stock Awards shall have the same terms and conditions as the stock awards they replace, except that (subject to the provisions of Section 10) Substitute Stock Awards shall
be Stock Awards to purchase Shares rather than equity securities of the granting entity and shall have a Purchase Price that, as determined by the Board in its sole and absolute discretion, properly reflects the substitution. Any such Substituted
Stock Award shall be effective on the effective date of the acquisition. 
  
 8.3 Cash Awards. The following rules apply to all Cash Awards: 
  
 Cash Awards may be granted either alone, in addition to, or in tandem with other Awards granted under this Plan. After the Administrator determines that
it will offer a Cash Award, it shall advise the Awardee, by means of an Award Agreement, of the terms, conditions and restrictions related to the Cash Award. 
  
 9. Exercise of Awards 
  
 9.1 In General. An Award shall be exercisable in accordance with this Plan and the Award Agreement under which it is granted. 
  
 9.2 Time of Exercise. Options and Stock Awards shall be considered
exercised when the Company receives: (a) written notice of exercise from the person entitled to exercise the Option or Stock Award, (b) full payment, or provision for payment, in a form and method approved by the Administrator, for the Shares for
which the Option or Stock Award is being exercised, and (c) with respect to Nonstatutory Options, payment, or provision for payment, in a form approved by the Administrator, of all applicable withholding taxes due upon exercise. An Award may not be
exercised for a fraction of a Share. SARs shall be considered exercised when the Company receives written notice of the exercise from the person entitled to exercise the SAR. 
  
 9.3 Issuance of Award Shares. The Company shall issue Award Shares in the name of the person properly exercising the
Award. If the Awardee is that person and so requests, the Award Shares shall be issued in the name of the Awardee and the Awardee’s spouse. The Company shall endeavor to issue Award Shares promptly after an Award is exercised or after the Grant
Date of a Stock Award, as applicable. Until 
  

 16 

 Award Shares are actually issued, as evidenced by the appropriate entry on the stock register of the Company or its
transfer agent, the Awardee will not have the rights of a stockholder with respect to those Award Shares, even though the Awardee has completed all the steps necessary to exercise the Award. No adjustment shall be made for any dividend,
distribution, or other right for which the record date precedes the date the Award Shares are issued, except as provided in Section 10. 
  
 9.4 Termination 
  
 (a) In General. Except as provided in an Award Agreement or in writing by the Administrator, including in an Award Agreement, and as
otherwise provided in Sections 9.4(b), (c), (d) and (e) after an Awardee’s Termination for other than Cause, the Awardee’s Awards shall be exercisable to the extent (but only to the extent) they are vested on the date of that Termination
and only during the ninety (90) days after the Termination, but in no event after the Expiration Date. Unless otherwise provided in the Award Agreement, in the event of termination for Cause the Award may not be exercised after the date of
Termination. To the extent the Awardee does not exercise an Award within the time specified for exercise, the Award shall automatically terminate. 
  
 (b) Leaves of Absence. Unless otherwise provided in the Award Agreement, no Award may be exercised more than three months after the
beginning of a leave of absence, other than a personal or medical leave approved by an authorized representative of the Company with employment guaranteed upon return. Awards shall not continue to vest during a leave of absence, unless otherwise
determined by the Administrator with respect to an approved personal or medical leave with employment guaranteed upon return. 
  
 (c) Death or Disability. Unless otherwise provided by the Administrator, if an Awardee’s Termination is due to death or disability (as
determined by the Administrator with respect to all Awards other than Incentive Stock Options and as defined by Section 22(e) of the Code with respect to Incentive Stock Options), all Awards of that Awardee to the extent exercisable at the date of
that Termination may be exercised for one year after that Termination, but in no event after the Expiration Date. In the case of Termination due to death, an Award may be exercised as provided in Section 16. In the case of Termination due to
disability, if a guardian or conservator has been appointed to act for the Awardee and been granted this authority as part of that appointment, that guardian or conservator may exercise the Award on behalf of the Awardee. Death or disability
occurring after an Awardee’s Termination shall not cause the Termination to be treated as having occurred due to death or disability. To the extent an Award is not so exercised within the time specified for its exercise, the Award shall
automatically terminate. 
  

 17 

 (d) Divestiture. If an Awardee’s Termination is due to a Divestiture, the Board may
take any one or more of the actions described in Section 10.3 or 10.4 with respect to the Awardee’s Awards. 
  
 (e) Administrator Discretion. Notwithstanding the provisions of Section 9.4 (a)-(e), the Plan Administrator shall have complete discretion,
exercisable either at the time an Award is granted or at any time while the Award remains outstanding, to: 
  
 (i) Extend the period of time for which the Award is to remain exercisable, following the Awardee’s Termination, from the limited exercise period
otherwise in effect for that Award to such greater period of time as the Administrator shall deem appropriate, but in no event beyond the Expiration Date; and/or 
  
 (ii) Permit the Award to be exercised, during the applicable post-Termination exercise period, not only with respect to the
number of vested Shares for which such Award may be exercisable at the time of the Awardee’s Termination but also with respect to one or more additional installments in which the Awardee would have vested had the Awardee not been subject to
Termination. 
  
 (f) Consulting or Employment
Relationship. Nothing in this Plan or in any Award Agreement, and no Award or the fact that Award Shares remain subject to repurchase rights, shall: (A) interfere with or limit the right of the Company or any Affiliate to terminate the
employment or consultancy of any Awardee at any time, whether with or without cause or reason, and with or without the payment of severance or any other compensation or payment, or (B) interfere with the application of any provision in any of the
Company’s or any Affiliate’s charter documents or Applicable Law relating to the election, appointment, term of office, or removal of a Director. 
  
 10. Certain Transactions and Events 
  
 10.1 In General. Except as provided in this Section 10, no change in the capital structure of the Company, merger, sale or other disposition of
assets or a subsidiary, change in control, issuance by the Company of shares of any class of securities or securities convertible into shares of any class of securities, exchange or conversion of securities, or other transaction or event shall
require or be the occasion for any adjustments of the type described in this Section 10. Additional provisions with respect to the foregoing transactions are set forth in Section 13.3. 
  
 10.2 Changes in Capital Structure. In the event of any stock split, reverse stock split, recapitalization,
combination or reclassification of stock, stock dividend, spin-off, or similar change to the capital structure of the Company (not including a Fundamental Transaction or Change in Control), the Board shall make whatever adjustments it concludes are
appropriate to: (a) the number and type of Awards that may be granted under this Plan, (b) the number and type of Options that may be granted to any 
  

 18 

 individual under this Plan, (c) the terms of any SAR, (d) the Purchase Price of any Stock Award, (e) the Option Price and
number and class of securities issuable under each outstanding Option, and (f) the repurchase price of any securities substituted for Award Shares that are subject to repurchase rights. The specific adjustments shall be determined by the Board.
Unless the Board specifies otherwise, any securities issuable as a result of any such adjustment shall be rounded down to the next lower whole security. The Board need not adopt the same rules for each Award or each Awardee. 
  
 10.3 Fundamental Transactions. In the event of (a) a merger or
consolidation in which the Company is not the surviving corporation (other than a merger or consolidation with a wholly-owned subsidiary, a reincorporation of the Company in a different jurisdiction, or other transaction in which there is no
substantial change in the stockholders of the Company or their relative stock holdings and the Awards granted under this Plan are assumed, converted or replaced by the successor corporation, which assumption shall be binding on all Participants),
(b) a merger in which the Company is the surviving corporation but after which the stockholders of the Company immediately prior to such merger (other than any stockholder that merges, or which owns or controls another corporation that merges, with
the Company in such merger) cease to own their shares or other equity interest in the Company, (c) the sale of all or substantially all of the assets of the Company, or (d) the acquisition, sale, or transfer of more than 50% of the outstanding
shares of the Company by tender offer or similar transaction (each, a “Fundamental Transaction”), any or all outstanding Awards may be assumed, converted or replaced by the successor corporation (if any), which assumption,
conversion or replacement shall be binding on all participants under this Plan. In the alternative, the successor corporation may substitute equivalent Awards or provide substantially similar consideration to participants as was provided to
stockholders (after taking into account the existing provisions of the Awards). The successor corporation may also issue, in place of outstanding Shares held by the participants, substantially similar shares or other property subject to repurchase
restrictions no less favorable to the participant. In the event such successor corporation (if any) does not assume or substitute Awards, as provided above, pursuant to a transaction described in this Subsection 10.3, the vesting with respect to
such Awards shall fully and immediately accelerate or the repurchase rights of the Company shall fully and immediately terminate, as the case may be, so that the Awards may be exercised or the repurchase rights shall terminate before, or otherwise
in connection with the closing or completion of the Fundamental Transaction or event, but then terminate. Notwithstanding anything in this Plan to the contrary, the Committee may, in its sole discretion, provide that the vesting of any or all Award
Shares subject to vesting or right of repurchase shall accelerate or lapse, as the case may be, upon a transaction described in this Section 10.3. If the Committee exercises such discretion with respect to Options, such Options shall become
exercisable in full prior to the consummation of such event at such time and on such conditions as the Committee determines, and if such Options are not exercised prior to the consummation of the Fundamental Transaction, they shall terminate at such
time as determined by the 
  

 19 

 Committee. Subject to any greater rights granted to participants under the foregoing provisions of this Section 10.3, in
the event of the occurrence of any Fundamental Transaction, any outstanding Awards shall be treated as provided in the applicable agreement or plan of merger, consolidation, dissolution, liquidation, or sale of assets. 
  
 10.4 Changes of Control. The Board may also, but need not, specify
that other transactions or events constitute a “Change in Control”. The Board may do that either before or after the transaction or event occurs. Examples of transactions or events that the Board may treat as Changes of
Control are: (a) any person or entity, including a “group” as contemplated by Section 13(d)(3) of the Exchange Act, acquires securities holding 30% or more of the total combined voting power or value of the Company, or (b) as a result of
or in connection with a contested election of Company Directors, the persons who were Company Directors immediately before the election cease to constitute a majority of the Board. In connection with a Change in Control, notwithstanding any other
provision of this Plan, the Board may, but need not, take any one or more of the actions described in Section 10.3. In addition, the Board may extend the date for the exercise of Awards (but not beyond their original Expiration Date). The Board need
not adopt the same rules for each Award or each Awardee. Notwithstanding anything in this Plan to the contrary, in the event of an Involuntary Termination of services for any reason other than death, disability or Cause, within 18 months following
the consummation of a Fundamental Transaction or Change in Control, any Awards, assumed or substituted in a Fundamental Transaction or Change in Control, which are subject to vesting conditions and/or the right of repurchase in favor of the Company
or a successor entity, shall accelerate for 12 months of vesting so that such Award Shares are immediately exercisable upon Termination or, if subject to the right of repurchase in favor of the Company, such repurchase rights shall lapse as of the
date of Termination. Such Awards shall be exercisable for a period of three (3) months following termination. 
  
 10.5 Divestiture. If the Company or an Affiliate sells or otherwise transfers equity securities of an Affiliate to a person or entity other than
the Company or an Affiliate, or leases, exchanges or transfers all or any portion of its assets to such a person or entity, then the Board may specify that such transaction or event constitutes a “Divestiture”. In connection
with a Divestiture, notwithstanding any other provision of this Plan, the Board may, but need not, take one or more of the actions described in Section 10.3 or 10.4 with respect to Awards of Award Shares held by, for example, Employees, Directors or
Consultants for whom that transaction or event results in a Termination. The Board need not adopt the same rules for each Award or Awardee. 
  
 10.6 Dissolution. If the Company adopts a plan of dissolution, the Board may cause Awards to be fully vested and exercisable (but not after their
Expiration Date) before the dissolution is completed but contingent on its completion and may cause the Company’s repurchase rights on Award Shares to lapse upon completion of the dissolution. The Board need not adopt the same rules for each
Award or each Awardee. 
  

 20 

 Notwithstanding anything herein to the contrary, in the event of a dissolution of the Company, to the extent not
exercised before the earlier of the completion of the dissolution or their Expiration Date, Awards shall terminate immediately prior to the dissolution. 
  
 10.7 Cut-Back to Preserve Benefits. If the Administrator determines that the net after-tax amount to be realized by any Awardee, taking into
account any accelerated vesting, termination of repurchase rights, or cash payments to that Awardee in connection with any transaction or event set forth in this Section 10 would be greater if one or more of those steps were not taken or payments
were not made with respect to that Awardee’s Awards or Award Shares, then, at the election of the Awardee, to such extent, one or more of those steps shall not be taken and payments shall not be made. 
  
 11. Automatic Option Grants to Non-Employee Directors and Non-Employee Director Fee Option
Grants 
  
 11.1 Automatic Option Grants to Non-Employee
Directors. 
  
 (a) Grant Dates. Option grants to
Non-Employee Directors shall be made on the dates specified below: 
  
 (i) Each Non-Employee Director who is first elected or appointed to the Board at any time after the effective date of this Plan shall automatically be granted, on the date of such initial election or appointment, an Option to purchase
30,0005 Shares (the “Initial Grant”). 
  
 (ii) Commencing in 2005, on the date of each annual stockholders meeting, each individual who is to continue to serve as a
Non-Employee Director shall automatically be granted an Option to purchase 15,0006 Shares (the “Annual
Grant”), provided, however, that such individual has served as a Non-Employee Director for at least six (6) months. 
  
 (b) Exercise Price. 
  
 (i) The Option Price shall be equal to one hundred percent (100%) of the Fair Market Value of the Shares on the Option grant date. 
  
 (ii) The Option Price shall be payable in one or more of the alternative
forms authorized pursuant to Section 6.4. Except to the extent the sale and remittance procedure specified thereunder is utilized, payment of the Option Price must be made on the date of exercise. 
  

	5	Reflects amendment by the Board effective May 19, 2005. 

	6	Reflects amendment by the Board effective May 19, 2005. 

	

  

 21 

 (c) Option Term. Each Option shall have a term of ten (10) years measured from the Option grant
date. 
  
 (d) Exercise and Vesting of Options.
Except as otherwise determined by the whole Board, the Shares underlying each Option granted pursuant to Section 11.1 shall vest and be exercisable as set forth below. 
  
 (i) Initial Grant. The Shares underlying each Option issued pursuant to the Initial Grant shall vest and be
exercisable as to 2.7777% of the Shares on each monthly anniversary of the date of grant, rounded down to the nearest whole Share, for so long as the Non-Employee Director continuously remains a Director of, or a Consultant to, the Company.

  
 (ii) Annual Grant. The Shares underlying each
Option issued pursuant to the Annual Grant shall vest and be exercisable as to 8.3333% of the Shares on each monthly anniversary of the date of grant for the first 11 months following the date of grant and as to the remaining Shares on the date of
the annual stockholders meeting for the year following the year of grant for such Option, rounded down to the nearest whole Share, for so long as the Non-Employee Director continuously remains a Director of, or a Consultant to, the Company.

  
 (e) Termination of Service. The following provisions
shall govern the exercise of any Options held by the Awardee at the time the Awardee ceases to serve as a Non-Employee Director, Employee or Consultant: 
  

(i) In General. Except as otherwise provided in Section 10.3, after cessation of service (the “Cessation Date”), the
Awardee’s Options shall be exercisable to the extent (but only to the extent) they are vested on the Cessation Date and only during the three months after such Cessation Date, but in no event after the Expiration Date. To the extent the Awardee
does not exercise an Option within the time specified for exercise, the Option shall automatically terminate. 
  
 (ii) Death or Disability. If an Awardee’s cessation of service is due to death or disability (as determined by the Board), all Options
of that Awardee, to the extent exercisable upon such Cessation Date, may be exercised for one year after the Cessation Date, but in no event after the Expiration Date. In the case of a cessation of service due to death, an Option may be exercised as
provided in Section 16. In the case of a cessation of service due to disability, if a guardian or conservator has been appointed to act for the Awardee and been granted this authority as part of that appointment, that guardian or conservator may
exercise the Option on behalf of the Awardee. Death or disability occurring after an Awardee’s cessation of service shall not cause the cessation of service to be treated as having occurred due to death or disability. To the extent an Option is
not so exercised within the time specified for its exercise, the Option shall automatically terminate. 
  

 22 

 (f) Board Discretion. The Awards under this Section 11.1 are not intended as the exclusive Awards
that may be made to Non-Employee Directors under this Plan. The Board may, in its discretion, amend the Plan with respect to the terms of the Awards herein, may add or substitute other types of Awards or may temporarily or permanently suspend Awards
hereunder, all without approval of the Company’s stockholders. 
  
 11.2 Director Fee Option Grants 
  
 (a) Option Grants. The Board shall have the sole and exclusive authority to determine the calendar year or years for which the Director fee option grant program (the “Director Fee Option Program”) is to be in effect.
For each such calendar year the program is in effect, each Non-Employee Director may elect to apply all or any portion of the annual retainer fee otherwise payable in cash, for his or her service on the Board for that year, to the acquisition of a
special Option grant under this Director Fee Option Program. Such election must be filed with the Company’s Chief Financial Officer prior to first day of the calendar year for which the annual retainer fee which is the subject of that election
is otherwise payable. Each Non-Employee Director who files such a timely election shall automatically be granted an Option under this Director Fee Option Program on the first trading day in January in the calendar year for which the annual retainer
fee which is the subject of that election would otherwise be payable in cash.  
  
 (b) Option Terms. Each Option shall be a Nonstatutory Option governed by the terms and conditions specified below. 
  

(i) Exercise Price. 
  
 A. The Purchase Price shall be thirty-three and one-third percent (33 1/3%) of the Fair Market Value per Share on the Option grant date. 
  
 B. The Purchase Price shall become immediately due upon exercise of the Option and shall be payable in one or more of the alternative forms
authorized pursuant to Section 6.4 of this Plan. Except to the extent the sale and remittance procedure specified thereunder is utilized, payment of the Purchase Price must be made on the date that the Option is exercised. 
  
 (ii) Number of Option Shares. The number of Shares subject to
the Option shall be determined pursuant to the following formula (rounded down to the nearest whole number): 
  
 X = A ÷ (B x 66 2/3%), where 
  
 X is the number of Option
Shares, 
  
 A is the portion of the annual retainer fee subject
to the Non-Employee Director’s election, and 
  
 B is the
Fair Market Value of a Share on the option grant date. 
  

 23 

 (iii) Exercise and Term of Options. The Option shall become exercisable in a series of
twelve (12) equal monthly installments upon the Awardee’s completion of each month of Board service over the twelve (12)-month period measured from the grant date. Each Option shall have a maximum term of ten (10) years measured from the Option
grant date.  
  
 (iv) Termination of Board Service.
Should the Awardee cease Board service for any reason (other than death or permanent disability) while holding one or more Options under this Director Fee Option Program, then each such Option shall remain exercisable, for any or all of the
Shares for which the Option is exercisable at the time of such cessation of Board service, until the earlier of (x) the expiration of the ten (10)-year Option term or (y) the expiration of the three (3)-year period measured from the date of such
cessation of Board service. However, each Option held by the Awardee under this Director Fee Option Program at the time of his or her cessation of Board service shall immediately terminate and cease to remain outstanding with respect to any and all
Shares for which the Option is not otherwise at that time exercisable.  
  
 (v) Death or Permanent Disability. Should the Awardee’s service as a Board member cease by reason of death or permanent disability, then each Option held by such Awardee under this Director Fee
Option Program shall immediately become exercisable for all the Shares at the time subject to that Option, and the Option may be exercised for any or all of those Shares as fully-vested Shares until the earlier of (x) the expiration of the ten
(10)-year option term or (y) the expiration of the three (3)-year period measured from the date of such cessation of Board service. 
  
 Should the Awardee die after cessation of his or her Board service but while holding one or more Options under this Director Fee Option Program, then each
such Option may be exercised, for any or all of the shares for which the Option is exercisable at the time of the Awardee’s cessation of Board service (less any Shares subsequently purchased by the Awardee prior to death), by the personal
representative of the Awardee’s estate or by the person or persons to whom the Option is transferred pursuant to the Awardee’s will or in accordance with the laws of descent and distribution or by the designated beneficiary or
beneficiaries of such option. Such right of exercise shall lapse, and the Option shall terminate, upon the earlier of (xx) the expiration of the ten (10)-year Option term or (yy) the three (3)-year period measured from the date of the Awardee’s
cessation of Board service. 
  

 24 

 11.3 Certain Transactions and Events 
  
 (a) In the event of a Fundamental Transaction while the Awardee remains a
Non-Employee Director, the Shares at the time subject to each outstanding Option held by such Awardee pursuant to Section 11, but not otherwise vested, shall automatically vest in full so that each such Option shall, immediately prior to the
effective date of the Fundamental Transaction, become exercisable for all the Shares as fully vested Shares and may be exercised for any or all of those vested Shares. Immediately following the consummation of the Fundamental Transaction, each
Option shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or Affiliate thereof). 
  
 (b) In the event of a Change in Control while the Awardee remains a Non-Employee Director, the Shares at the time subject to each outstanding Option held
by such Awardee pursuant to Section 11, but not otherwise vested, shall automatically vest in full so that each such Option shall, immediately prior to the effective date of the Change in Control, become exercisable for all the Shares as fully
vested Shares and may be exercised for any or all of those vested Shares. Each such Option shall remain exercisable for such fully vested Shares until the expiration or sooner termination of the Option term in connection with a Change in Control.

  
 (c) Each Option which is assumed in connection with a
Fundamental Transaction shall be appropriately adjusted, immediately after such Fundamental Transaction, to apply to the number and class of securities which would have been issuable to the Awardee in consummation of such Fundamental Transaction had
the Option been exercised immediately prior to such Fundamental Transaction. Appropriate adjustments shall also be made to the Option Price payable per share under each outstanding Option, provided the aggregate Option Price payable for such
securities shall remain the same. To the extent the actual holders of the Company’s outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Fundamental Transaction, the successor corporation may, in
connection with the assumption of the outstanding Options granted pursuant to Section 11, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such
Fundamental Transaction. 
  
 (d) The grant of Options pursuant to
Section 11 shall in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or
assets. 
  
 (e) The remaining terms of each Option granted
pursuant to Section 11 shall, as applicable, be the same as terms in effect for Awards granted under this Plan. Notwithstanding the foregoing, the provisions of Section 9.4 and Section 10 shall not apply to Options granted pursuant to Section 11.

  

 25 

 11.4 Limited Transferability of Options. Each Option granted pursuant to Section 11 may be
assigned in whole or in part during the Awardee’s lifetime to one or more members of the Awardee’s family or to a trust established exclusively for one or more such family members or to an entity in which the Awardee is majority owner or
to the Awardee ‘s former spouse, to the extent such assignment is in connection with the Awardee ‘s estate or financial plan or pursuant to a Domestic Relations Order. The assigned portion may only be exercised by the person or persons who
acquire a proprietary interest in the Option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the Option immediately prior to such assignment and shall be set forth in such documents
issued to the assignee as the Administrator may deem appropriate. The Awardee may also designate one or more persons as the beneficiary or beneficiaries of his or her outstanding Options under Section 11, and those Options shall, in accordance with
such designation, automatically be transferred to such beneficiary or beneficiaries upon the Awardee ‘s death while holding those Options. Such beneficiary or beneficiaries shall take the transferred Options subject to all the terms and
conditions of the applicable Award Agreement evidencing each such transferred Option, including (without limitation) the limited time period during which the Option may be exercised following the Awardee ‘s death. 
  
 12. Withholding and Tax Reporting 
  
 12.1 Tax Withholding Alternatives 
  
 (a) General. Whenever Award Shares are issued or become free
of restrictions, the Company may require the Awardee to remit to the Company an amount sufficient to satisfy any applicable tax withholding requirement, whether the related tax is imposed on the Awardee or the Company. The Company shall have no
obligation to deliver Award Shares or release Award Shares from an escrow or permit a transfer of Award Shares until the Awardee has satisfied those tax withholding obligations. Whenever payment in satisfaction of Awards is made in cash, the payment
will be reduced by an amount sufficient to satisfy all tax withholding requirements. 
  
 (b) Method of Payment. The Awardee shall pay any required withholding using the forms of consideration described in Section 6.4(b), except that, in the discretion of the Administrator, the Company may
also permit the Awardee to use any of the forms of payment described in Section 6.4(c). The Administrator, in its sole discretion, may also permit Award Shares to be withheld to pay required withholding. If the Administrator permits Award Shares to
be withheld, the Fair Market Value of the Award Shares withheld, as determined as of the date of withholding, shall not exceed the amount determined by the applicable minimum statutory withholding rates. 
  

 26 

 12.2 Reporting of Dispositions. Any holder of Option Shares acquired under an Incentive Stock
Option shall promptly notify the Administrator, following such procedures as the Administrator may require, of the sale or other disposition of any of those Option Shares if the disposition occurs during: (a) the longer of two years after the Grant
Date of the Incentive Stock Option and one year after the date the Incentive Stock Option was exercised, or (b) such other period as the Administrator has established. 
  
 13. Compliance with Law 
  
 The grant of Awards and the issuance and subsequent transfer of Award Shares shall be subject to compliance with all Applicable Law, including all
applicable securities laws. Awards may not be exercised, and Award Shares may not be transferred, in violation of Applicable Law. Thus, for example, Awards may not be exercised unless: (a) a registration statement under the Securities Act is then in
effect with respect to the related Award Shares, or (b) in the opinion of legal counsel to the Company, those Award Shares may be issued in accordance with an applicable exemption from the registration requirements of the Securities Act and any
other applicable securities laws. The failure or inability of the Company to obtain from any regulatory body the authority considered by the Company’s legal counsel to be necessary or useful for the lawful issuance of any Award Shares or their
subsequent transfer shall relieve the Company of any liability for failing to issue those Award Shares or permitting their transfer. As a condition to the exercise of any Award or the transfer of any Award Shares, the Company may require the Awardee
to satisfy any requirements or qualifications that may be necessary or appropriate to comply with or evidence compliance with any Applicable Law. 
  
 14. Amendment or Termination of this Plan or Outstanding Awards 
  
 14.1 Amendment and Termination. The Board may at any time amend, suspend, or terminate this Plan. 
  
 14.2 Stockholder Approval. The Company shall obtain the approval of
the Company’s stockholders for any amendment to this Plan if stockholder approval is necessary or desirable to comply with any Applicable Law or with the requirements applicable to the grant of Awards intended to be Incentive Stock Options. The
Board may also, but need not, require that the Company’s stockholders approve any other amendments to this Plan. 
  
 14.3 Effect. No amendment, suspension, or termination of this Plan, and no modification of any Award even in the absence of an amendment,
suspension, or termination of this Plan, shall impair any existing contractual rights of any Awardee unless the affected Awardee consents to the amendment, suspension, termination, or modification. Notwithstanding anything herein to the contrary, no
such consent shall be required if the Board determines, in its sole and absolute discretion, that the amendment, suspension, termination, or modification: (a) is required or advisable in order for the 
  

 27 

 Company, this Plan or the Award to satisfy Applicable Law, to meet the requirements of any accounting standard or to
avoid any adverse accounting treatment, or (b) in connection with any transaction or event described in Section 10, is in the best interests of the Company or its stockholders. The Board may, but need not, take the tax or accounting consequences to
affected Awardees into consideration in acting under the preceding sentence. Those decisions shall be final, binding and conclusive. Termination of this Plan shall not affect the Administrator’s ability to exercise the powers granted to it
under this Plan with respect to Awards granted before the termination of Award Shares issued under such Awards even if those Award Shares are issued after the termination. 
  
 15. Reserved Rights 
  
 15.1 Nonexclusivity of this Plan. This Plan shall not limit the power of the Company or any Affiliate to adopt other incentive arrangements
including, for example, the grant or issuance of stock options, stock, or other equity-based rights under other plans. 
  
 15.2 Unfunded Plan. This Plan shall be unfunded. Although bookkeeping accounts may be established with respect to Awardees, any such accounts will
be used merely as a convenience. The Company shall not be required to segregate any assets on account of this Plan, the grant of Awards, or the issuance of Award Shares. The Company and the Administrator shall not be deemed to be a trustee of stock
or cash to be awarded under this Plan. Any obligations of the Company to any Awardee shall be based solely upon contracts entered into under this Plan, such as Award Agreements. No such obligations shall be deemed to be secured by any pledge or
other encumbrance on any assets of the Company. Neither the Company nor the Administrator shall be required to give any security or bond for the performance of any such obligations. 
  
 16. Special Arrangements Regarding Award Shares 
  
 16.1 Escrow of Stock Certificates. To enforce any restrictions on Award Shares, the Administrator may require their
holder to deposit the certificates representing Award Shares, with stock powers or other transfer instruments approved by the Administrator endorsed in blank, with the Company or an agent of the Company to hold in escrow until the restrictions have
lapsed or terminated. The Administrator may also cause a legend or legends referencing the restrictions to be placed on the certificates. 
  
 16.2 Repurchase Rights 
  
 (a) General. If a Stock Award is subject to vesting conditions, the Company shall have the right, during the seven months after the
Awardee’s Termination, to repurchase any or all of the Award Shares that were unvested as of the date of that Termination. The repurchase price shall be determined by the Administrator in accordance with this Section 16.2 which shall be either
(i) the Purchase Price for the 
  

 28 

 Award Shares (minus the amount of any cash dividends paid or payable with respect to the Award Shares for which the
record date precedes the repurchase) or (ii) the lower of (A) the Purchase Price for the Shares or (B) the Fair Market Value of those Award Shares as of the date of the Termination. The repurchase price shall be paid in cash. The Company may assign
this right of repurchase. 
  
 (b) Procedure. The
Company or its assignee may choose to give the Awardee a written notice of exercise of its repurchase rights under this Section 16.2. However, the Company’s failure to give such a notice shall not affect its rights to repurchase Award Shares.
The Company must, however, tender the repurchase price during the period specified in this Section 16.2 for exercising its repurchase rights in order to exercise such rights. 
  
 17. Beneficiaries 
  
 An Awardee may file a written designation of one or more beneficiaries who are to receive the Awardee’s rights under the Awardee’s Awards after
the Awardee’s death. An Awardee may change such a designation at any time by written notice. If an Awardee designates a beneficiary, the beneficiary may exercise the Awardee’s Awards after the Awardee’s death. If an Awardee dies when
the Awardee has no living beneficiary designated under this Plan, the Company shall allow the executor or administrator of the Awardee’s estate to exercise the Award or, if there is none, the person entitled to exercise the Option under the
Awardee’s will or the laws of descent and distribution. In any case, no Award may be exercised after its Expiration Date. 
  
 18. Miscellaneous 
  
 18.1 Governing Law. This Plan, the Award Agreements and all other agreements entered into under this Plan, and all actions taken under this Plan or
in connection with Awards or Award Shares, shall be governed by the laws of the State of Delaware. 
  
 18.2 Determination of Value. Fair Market Value shall be determined as follows: 
  
 (a) Listed Stock. If the Shares are traded on any established stock exchange or quoted on a national market
system, Fair Market Value shall be the closing sales price for the Shares as quoted on that stock exchange or system for the date the value is to be determined (the “Value Date”) as reported in The Wall Street
Journal or a similar publication. If no sales are reported as having occurred on the Value Date, Fair Market Value shall be that closing sales price for the last preceding trading day on which sales of Shares are reported as having occurred. If
no sales are reported as having occurred during the five trading days before the Value Date, Fair Market Value shall be the closing bid for Shares on the Value Date. If Shares are listed on multiple exchanges or systems, Fair Market Value shall be
based on sales or bid prices on the primary exchange or system on which Shares are traded or quoted. 
  

 29 

 (b) Stock Quoted by Securities Dealer. If Shares are regularly quoted by a recognized
securities dealer but selling prices are not reported on any established stock exchange or quoted on a national market system, Fair Market Value shall be the mean between the high bid and low asked prices on the Value Date. If no prices are quoted
for the Value Date, Fair Market Value shall be the mean between the high bid and low asked prices on the last preceding trading day on which any bid and asked prices were quoted. 
  
 (c) No Established Market. If Shares are not traded on any established stock exchange or quoted on a national
market system and are not quoted by a recognized securities dealer, the Administrator (following guidelines established by the Board or Committee) will determine Fair Market Value in good faith. The Administrator will consider the following factors,
and any others it considers significant, in determining Fair Market Value: (i) the price at which other securities of the Company have been issued to purchasers other than Employees, Directors, or Consultants, (ii) the Company’s
stockholder’s equity, prospective earning power, dividend-paying capacity, and non-operating assets, if any, and (iii) any other relevant factors, including the economic outlook for the Company and the Company’s industry, the
Company’s position in that industry, the Company’s goodwill and other intellectual property, and the values of securities of other businesses in the same industry. 
  
 18.3 Reservation of Shares. During the term of this Plan, the Company shall at all times reserve and keep available
such number of Shares as are still issuable under this Plan. 
  
 18.4 Electronic Communications. Any Award Agreement, notice of exercise of an Award, or other document required or permitted by this Plan may be delivered in writing or, to the extent determined by the Administrator, electronically.
Signatures may also be electronic if permitted by the Administrator. 
  
 18.5 Notices. Unless the Administrator specifies otherwise, any notice to the Company under any Option Agreement or with respect to any Awards or Award Shares shall be in writing (or, if so authorized by Section 17.4, communicated
electronically), shall be addressed to the Secretary of the Company, and shall only be effective when received by the Secretary of the Company. 
  

 302005 Employee Stock Purchase Plan

 Exhibit 10.1 
  
 LIFELINE SYSTEMS, INC. 
  
 2005 EMPLOYEE STOCK PURCHASE PLAN 
  
 The purpose of this Plan is to provide eligible employees of Lifeline Systems, Inc. (the “Company”) and certain of its subsidiaries with
opportunities to purchase shares of the Company’s common stock, $0.02 par value (the “Common Stock”), commencing on June 1, 2005. Two hundred thousand (200,000) shares of Common Stock in the aggregate have been approved for this
purpose. This Plan is intended to qualify as an “employee stock purchase plan” as defined in Section 423 of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations promulgated thereunder, and shall be
interpreted consistent therewith. 
  
 1. Administration.
The Plan will be administered by the Company’s Board of Directors (the “Board”) or by a Committee appointed by the Board (the “Committee”). The Board or the Committee has authority to make rules and regulations for the
administration of the Plan and its interpretation and decisions with regard thereto shall be final and conclusive. 
  
 2. Eligibility. All employees of the Company, including Directors who are employees, and all employees of any subsidiary of the Company (as defined
in Section 424(f) of the Code) designated by the Board or the Committee from time to time (a “Designated Subsidiary”), are eligible to participate in any one or more of the offerings of Options (as defined in Section 9) to purchase Common
Stock under the Plan provided that: 
  
 (a) they
are customarily employed by the Company or a Designated Subsidiary for more than 20 hours a week and for more than five months in a calendar year; 
  
 (b) they have been employed by the Company or a Designated Subsidiary (or by a business entity acquired by the Company or a designated
subsidiary) for at least six months prior to enrolling in the Plan; and 
  
 (c) they are employees of the Company or a Designated Subsidiary on the first day of the applicable Plan Period (as defined below). 
  
 No employee may be granted an option hereunder if such employee, immediately after the option is granted, owns 5% or more of
the total combined voting power or value of the stock of the Company or any subsidiary. For purposes of the preceding sentence, the attribution rules of Section 424(d) of the Code shall apply in determining the stock ownership of an employee, and
all stock which the employee has a contractual right to purchase shall be treated as stock owned by the employee. 
  
 3. Offerings. The Company will make one or more offerings (“Offerings”) to employees to purchase stock under this Plan; provided,
however, that no offering may extend beyond May 31, 2010. Offerings will begin on each June 1 and December 1, or the first business day thereafter (the “Offering Commencement Dates”). Each Offering Commencement Date will begin a six month
period (a “Plan Period”) during which payroll deductions will be made and held for the purchase of Common Stock at the end of the Plan Period. The Board or the Committee may, at its discretion, choose a different Plan Period of twelve (12)
months or less for subsequent Offerings. 

 4. Participation. An employee eligible on the Offering Commencement Date of any Offering may
participate in such Offering by completing and forwarding a payroll deduction authorization form to the Company’s office of Human Resources at least seven, but not more than 30, days prior to the applicable Offering Commencement Date. The form
will authorize a regular payroll deduction from the Compensation received by the employee during the Plan Period. Unless an employee files a new form or withdraws from the Plan, his deductions and purchases will continue at the same rate for future
Offerings under the Plan as long as the Plan remains in effect. The term “Compensation” means the amount of money reportable on the employee’s Federal Income Tax Withholding Statement and includes any amounts deferred under a salary
reduction agreement under an IRS Code Section 401(k) plan or Section 125 plan. Compensation excludes allowances and reimbursements for expenses such as relocation, executive medical and tax preparation/estate planning services, income or gains on
the exercise of Company stock options or stock appreciation rights, and similar items, whether or not shown on the employee’s Federal Income Tax Withholding Statement. 
  
 5. Deductions. The Company will maintain payroll deduction accounts for all participating employees. With respect to
any Offering made under this Plan, an employee may authorize a payroll deduction in any dollar amount up to a maximum of 15% of the Compensation he or she receives during the Plan Period or such shorter period during which deductions from payroll
are made. Payroll deductions may be at the rate of 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14 or 15% of Compensation with any change in compensation during the Plan Period to result in an automatic corresponding change in the dollar amount
withheld. 
  
 6. Deduction Changes. An employee may not
increase or decrease his or her payroll deduction during a Plan Period. 
  
 7. Interest. Interest will not be paid on any employee accounts, except as otherwise provided herein. 
  
 8. Withdrawal of Funds. An employee may at any time prior to the close of business on the last business day in a Plan Period and for any reason
permanently draw out the balance accumulated in the employee’s account and thereby withdraw from participation in an Offering by providing written notice of withdrawal to the office of Human Resources of the Company. Partial withdrawals are not
permitted. The employee may not begin participation again during the remainder of the Plan Period. The employee may participate in any subsequent Offering in accordance with terms and conditions established by the Board or the Committee. 

 
 9. Purchase of Shares. On the Offering Commencement Date of each
Plan Period, the Company will grant to each eligible employee who is then a participant in the Plan an option (“Option”) to purchase on the last business day of such Plan Period (the “Exercise Date”), at the applicable purchase
price (the “Option Price”), the largest number of whole shares of Common Stock of the Company as does not exceed the employee’s accumulated payroll deductions as of the Exercise Date divided by the Option Price for such Plan Period;
provided, however, that no employee may be granted an Option which permits his rights to purchase Common Stock under this Plan and any other employee stock purchase plan (as defined in Section 423(b) of the Code) of the Company and its subsidiaries,
to accrue at a rate which exceeds $25,000 of the fair market value of such Common Stock for each calendar year in which the Option is outstanding at any time. Notwithstanding the foregoing, the maximum number of shares that an employee may

  

 2 

 purchase in any Plan Period may not exceed the lesser of (a) the number of shares determined by multiplying
831/3 by the number of full months in the Plan Period (rounding down to the nearest whole number) and (b) the maximum number determined in the previous sentence. 
  
 The purchase price for each share purchased will be 95% of the closing price of the Common Stock on the Exercise Date (the
“Option Price”). Such closing price shall be (a) the closing price on any national securities exchange on which the Common Stock is listed, (b) the closing price of the Common Stock on the Nasdaq National Market or (c) the average of the
closing bid and asked prices in the over-the-counter-market, whichever is applicable, as published in The Wall Street Journal. If no sales of Common Stock were made on such a day, the price of the Common Stock for purposes of clauses (a) and
(b) above shall be the reported price for the next preceding day on which sales were made. 
  
 Each employee who continues to be a participant in the Plan on the Exercise Date shall be deemed to have exercised his Option at the Option Price on such date and shall be deemed to have purchased from the Company the
number of full shares of Common Stock reserved for the purpose of the Plan that his accumulated payroll deductions on such date will pay for, subject to the limitations set forth above. 
  
 Any balance remaining in an employee’s payroll deduction account at the end of a Plan Period will be automatically
refunded to the employee. 
  
 10. Issuance of Certificates.
Certificates representing shares of Common Stock purchased under the Plan may be issued only in the name of the employee, in the name of the employee and another person of legal age as joint tenants with rights of survivorship, or (in the
Company’s sole discretion) in the name of a brokerage firm, bank or other nominee holder designated by the employee. The Company may, in its sole discretion and in compliance with applicable laws, authorize the use of book entry registration of
shares in lieu of issuing stock certificates. 
  
 11. Rights on
Retirement, Death or Termination of Employment. In the event of a participating employee’s termination of employment prior to the last business day of a Plan Period, no payroll deduction shall be taken from any pay due and owing to an
employee and the balance in the employee’s account shall be paid to the employee or, in the event of the employee’s death, (a) to a beneficiary previously designated in a revocable notice signed by the employee (with any spousal consent
required under state law) or (b) in the absence of such a designated beneficiary, to the executor or administrator of the employee’s estate or (c) if no such executor or administrator has been appointed to the knowledge of the Company, to such
other person(s) as the Company may, in its discretion, designate. If, prior to the last business day of the Plan Period, the Designated Subsidiary by which an employee is employed shall cease to be a subsidiary of the Company, or if the employee is
transferred to a subsidiary of the Company that is not a Designated Subsidiary, the employee shall be deemed to have terminated employment for the purposes of this Plan. 
  
 12. Optionees Not Shareholders. Neither the granting of an Option to an employee nor the deductions from his pay
shall constitute such employee a shareholder of the shares of Common Stock covered by an Option under this Plan until such shares have been purchased by and issued to him. 
  

 3 

 13. Rights Not Transferable. Rights under this Plan are not transferable by a participating
employee other than by will or the laws of descent and distribution, and are exercisable during the employee’s lifetime only by the employee. 
  
 14. Application of Funds. All funds received or held by the Company under this Plan may be combined with other corporate funds and may be used for
any corporate purpose. 
  
 15. Adjustment in Case of Changes
Affecting Common Stock. In the event of a subdivision of outstanding shares of Common Stock, or the payment of a dividend in Common Stock, the number of shares approved for this Plan, and the share limitation set forth in Section 9, shall be
increased proportionately, and such other adjustment shall be made as may be deemed equitable by the Board or the Committee. In the event of any other change affecting the Common Stock, such adjustment shall be made as may be deemed equitable by the
Board or the Committee to give proper effect to such event. 
  
 16. Merger. If the Company shall at any time merge or consolidate with another corporation and the holders of the capital stock of the Company immediately prior to such merger or consolidation continue to hold at least 80% by voting
power of the capital stock of the surviving corporation (“Continuity of Control”), the holder of each Option then outstanding will thereafter be entitled to receive at the next Exercise Date upon the exercise of such Option for each share
as to which such Option shall be exercised the securities or property which a holder of one share of the Common Stock was entitled to upon and at the time of such merger or consolidation, and the Board or the Committee shall take such steps in
connection with such merger or consolidation as the Board or the Committee shall deem necessary to assure that the provisions of Section 15 shall thereafter be applicable, as nearly as reasonably may be, in relation to the said securities or
property as to which such holder of such Option might thereafter be entitled to receive thereunder. 
  
 In the event of a merger or consolidation of the Company with or into another corporation which does not involve Continuity of Control, or of a sale of
all or substantially all of the assets of the Company while unexercised Options remain outstanding under the Plan, (a) subject to the provisions of clauses (b) and (c), after the effective date of such transaction, each holder of an outstanding
Option shall be entitled, upon exercise of such Option, to receive in lieu of shares of Common Stock, shares of such stock or other securities as the holders of shares of Common Stock received pursuant to the terms of such transaction; or (b) all
outstanding Options may be cancelled by the Board or the Committee as of a date prior to the effective date of any such transaction and all payroll deductions shall be paid out to the participating employees; or (c) all outstanding Options may be
cancelled by the Board or the Committee as of the effective date of any such transaction, provided that notice of such cancellation shall be given to each holder of an Option, and each holder of an Option shall have the right to exercise such Option
in full based on payroll deductions then credited to his account as of a date determined by the Board or the Committee, which date shall not be less than ten (10) days preceding the effective date of such transaction. 
  
 17. Amendment of the Plan. The Board may at any time, and from time to
time, amend this Plan in any respect, except that (a) if the approval of any such amendment by the shareholders of the Company is required by Section 423 of the Code, such amendment shall not be effected without such approval, and (b) in no event
may any amendment be made which would cause the Plan to fail to comply with Section 423 of the Code. 
  

 4 

 18. Insufficient Shares. In the event that the total number of shares of Common Stock specified in
elections to be purchased under any Offering plus the number of shares purchased under previous Offerings under this Plan exceeds the maximum number of shares issuable under this Plan, the Board or the Committee will allot the shares then available
on a pro rata basis. 
  
 19. Termination of the Plan. This
Plan may be terminated at any time by the Board. Upon termination of this Plan all amounts in the accounts of participating employees shall be promptly refunded. 
  
 20. Governmental Regulations. The Company’s obligation to sell and deliver Common Stock under this Plan is
subject to listing on a national stock exchange or quotation on the Nasdaq National Market (to the extent the Common Stock is then so listed or quoted) and the approval of all governmental authorities required in connection with the authorization,
issuance or sale of such stock. 
  
 21. Governing Law. The
Plan shall be governed by Massachusetts law except to the extent that such law is preempted by federal law. 
  
 22. Issuance of Shares. Shares may be issued upon exercise of an Option from authorized but unissued Common Stock, from shares held in the treasury
of the Company, or from any other proper source. 
  
 23.
Notification upon Sale of Shares. Each employee agrees, by entering the Plan, to promptly give the Company notice of any disposition of shares purchased under the Plan where such disposition occurs within two years after the date of grant of
the Option pursuant to which such shares were purchased. 
  
 24.
Withholding. Each employee shall, no later than the date of the event creating the tax liability, make provision satisfactory to the Board for payment of any taxes required by law to be withheld in connection with any transaction related to
Options granted to or shares acquired by such employee pursuant to the Plan. The Company may, to the extent permitted by law, deduct any such taxes from any payment of any kind otherwise due to an employee. 
  
 25. Effective Date and Approval of Shareholders. The Plan shall take
effect on March 24, 2005, subject to approval by the shareholders of the Company as required by Section 423 of the Code, which approval must occur within twelve months of the adoption of the Plan by the Board. 
  

	
	 Adopted by the Board of Directors
 on March 24, 2005

	
	 Approved by the shareholders on
 May 18, 2005

  

 5

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